As filed with the Securities and Exchange Commission on July 3, 2014
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CGG
(Exact Name of Registrant as Specified in its Charter)
CGG
(Translation of Registrants Name Into English)
Republic of France | 1382 | 74-1734402 | ||
(State or Other Jurisdiction of Incorporation or Organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
Tour Maine Montparnasse
33 avenue de Maine
75015 Paris
France
+33 1 64 47 45 00
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrants Principal Executive Offices)
CT Corporation System
111 Eighth Avenue
New York, New York 10011
(212) 894-8400
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Copies to:
Beatrice Place-Faget Group General Counsel CGG Tour Maine Montparnasse 33 avenue de Maine 75015 Paris France +33 1 64 47 45 00 |
Luis Roth Linklaters LLP 25, rue de Marignan 75008 Paris France +33 1 56 43 56 43 |
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earliest effective registration statement for the same offering. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer: |
x |
Accelerated filers: |
¨ | |||
Non-accelerated filer; |
¨ |
Smaller reporting company: |
¨ |
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to be Registered |
Amount to be Registered |
Proposed Offering Price Per Senior Note(1) |
Proposed Aggregate Offering Price(1) |
Amount of Registration Fee(2) | ||||
6.875% Senior Notes due 2022 |
$500,000,000 | 100% | $500,000,000 | $64,400 | ||||
Guarantees of 6.875% Senior Notes due 2022(3) |
$500,000 000 | | | (4) | ||||
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(1) | The notes being registered are being offered in exchange for 6.875% Senior Notes due 2022 previously sold in transactions exempt from registration under the Securities Act. The registration fee was computed based on the face value of the 6.875% Senior Notes due 2022 solely for the purpose of calculating the registration fee pursuant to Rule 457 under the Securities Act. |
(2) | Calculated pursuant to Rule 457(f) under the Securities Act of 1933. |
(3) | The 6.875% Senior Notes due 2022 are unconditionally guaranteed, on a joint and several basis, by certain subsidiaries on a senior unsecured basis. No separate consideration will be paid in respect of these guarantees. See inside facing page for the registrant guarantors. |
(4) | Pursuant to Rule 457(n) under the Securities Act, no registration fee is required with respect to the guarantees. |
The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants will file a further amendment which specifically states that this Registration Statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement will become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Table of Additional Registrants
Name and Address, Including Zip Code and Telephone Number, Including Area Code, of Principal Executive Offices |
State or Other Jurisdiction of Incorporation |
I.R.S. Employer Identification No. |
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Alitheia Resources Inc. 10300 Town Park Drive Houston, Texas 77072 (832) 351 8300 |
Delaware | 56 2475147 | ||||
CGG Canada Services Ltd. 2200, 715 5th Avenue S.W. Calgary, Alberta T2P 5A2 Canada (403) 266 1011 |
Alberta, Canada | N/A | ||||
CGG Holding B.V. Schiphol Boulevard 299 1118 BH Schiphol The Netherlands +31 20 799 7654 |
The Netherlands | N/A | ||||
CGG Holding (U.S.) Inc. 10300 Town Park Drive Houston, Texas 77072 (832) 351 8300 |
Delaware | 74 1813790 | ||||
CGG Land (U.S.) Inc. 10300 Town Park Drive Houston, Texas 77072 (832) 351 8300 |
Delaware | 76 0542437 | ||||
CGG Marine B.V. Schiphol Boulevard 299 1118 BH Schiphol The Netherlands |
The Netherlands | N/A | ||||
CGG Marine Resources Norge AS OH Bangs Vei 70 N-1363 Høvik Norway +47 67 11 34 72 |
Norway | N/A | ||||
CGG Services (U.S.) Inc. 10300 Town Park Drive Houston, Texas 77072 (832) 351 8300 |
Delaware | 20 8026762 | ||||
Sercel Australia Pty Ltd. Level 5, Deutsche Bank Place 126 Philip Street Sydney, NSW, 2000 Australia +61 2 9230 4706 |
New South Wales, Australia | N/A |
Name and Address, Including Zip Code and Telephone Number, Including Area Code, of Principal Executive Offices |
State or Other Jurisdiction of Incorporation |
I.R.S. Employer Identification No. |
||||
Sercel Canada Ltd. 1108 55th Avenue, NE Calgary, Alberta TZE 6Y Canada (403) 275 3544 |
New Brunswick, Canada | N/A | ||||
Sercel, Inc. 17200 Park Row Houston, Texas 77084 (281) 492 6688 |
Oklahoma | 73 1396603 | ||||
Sercel-GRC Corp. 17200 Park Row Houston, Texas 77084 (281) 492 6688 |
Oklahoma | 45 4121837 | ||||
Veritas Geophysical (Mexico) LLC c/o Corporation Trust Center 1209 Orange Street Wilmington, DE 19801 |
Delaware | 76 0670383 | ||||
Veritas Investments Inc. c/o Corporation Trust Center 1209 Orange Street Wilmington, DE 19801 |
Delaware | 76 0569069 | ||||
Viking Maritime Inc. c/o Corporation Trust Center 1209 Orange Street Wilmington, DE 19801 |
Delaware | 76 0677405 |
Offer to Exchange All Outstanding
6.875% Initial Senior Notes due 2022
Guaranteed on a senior basis by certain subsidiaries
(US$500,000,000 aggregate principal amount outstanding)
for
6.875% Exchange Senior Notes due 2022
Guaranteed on a senior basis by certain subsidiaries
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We are offering to exchange all of our outstanding unregistered 6.875% Senior Notes due 2022 issued on May 1, 2014 for new registered 6.875% Senior Notes due 2022. The outstanding notes and the new notes are sometimes collectively referred to as the notes. The terms of the new notes are identical to the terms of the outstanding notes except that the new notes are registered under the Securities Act of 1933 (the Securities Act) and, therefore, are freely transferable.
Please consider the following:
| You should carefully review the Risk Factors beginning on page 18 of this prospectus. |
| Our offer to exchange outstanding notes for new notes will be open until 5:00 p.m., New York City time, on [ ], 2014, unless we extend the exchange offer. |
| The exchange offer is not conditional upon any minimum aggregate principal amount of outstanding notes being tendered. |
| Tenders of outstanding notes may be withdrawn any time prior to the expiration of the exchange offer. |
| The exchange of outstanding notes for new notes will not be a taxable event for U.S. federal income tax purposes. |
| You should also carefully review the procedures for tendering the outstanding notes beginning on page 47 of this prospectus. |
| If you fail to tender your outstanding notes, you will continue to hold unregistered securities and your ability to transfer them could be adversely affected. |
| No public market currently exists for the notes. Application will be made to admit the new notes to listing on the Luxembourg Stock Exchange and to trading on the Euro MTF market. |
Information about the Notes:
| The notes will mature on January 15, 2022. |
| We will pay interest on the notes semi-annually on January 15 and July 15 of each year, beginning January 15, 2015, at the rate of 6.875% per annum. |
| We may redeem the notes on or after July 15, 2017 at the redemption prices set forth on page 58 of this prospectus. |
| We have the option until July 15, 2017, to redeem up to 35% of the original aggregate principal amount of the notes originally issued and the notes with the net proceeds of certain types of equity offerings. |
| At any time prior to July 15, 2017, we may also redeem all or a part of the notes at a redemption price equal to 100% of the principal amount of the notes plus the applicable premium described in this prospectus. |
| We may also redeem all, but not fewer than all, of the notes at a redemption price equal to 100% of the principal amount of the notes in the event of certain changes affecting tax laws. |
| The notes are our senior unsecured obligations and will rank equally in right of payment with all of our other existing and future senior unsecured indebtedness and senior in right of payment to all our existing and future subordinated indebtedness. |
| The notes will be initially guaranteed on a senior unsecured basis by certain of our subsidiaries. The notes and the subsidiary guarantees will be effectively subordinated to all our secured obligations, all secured obligations of our subsidiaries that guarantee the notes and all obligations of our subsidiaries that do not guarantee the notes. |
| If we undergo a change of control or sell some of our assets, we may be required to offer to purchase notes from you. |
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is [ ], 2014
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F-1 |
This prospectus is part of a registration statement we filed with the Securities and Exchange Commission. You should rely only on the information or representations provided in this prospectus. We have not authorized any person to provide information other than that provided in this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of this document.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the reporting requirements of the Securities Exchange Act of 1934 (the Exchange Act) applicable to foreign private issuers. In accordance with the Exchange Act, we electronically file reports, including annual reports on Form 20-F and interim reports on Form 6-K, and other information with the Securities and Exchange Commission. You may obtain these reports and other information by sending a written request to CGG, Tour Maine-Montparnasse, 33 avenue de Maine, 75015 Paris, France, Attention: Investor Relations Officer, Telephone: +33 1 64 47 45 00.
You can inspect and copy these reports, and other information, without charge, at the Public Reference Room of the Commission located at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission also maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. In addition, you can inspect
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material filed by us at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which American Depositary Shares representing shares of our common stock are listed. As a foreign private issuer, we are not subject to the proxy rules under Section 14 or the short-swing insider profit disclosure rules under Section 16 of the Exchange Act.
All information referred to above will, for so long as the notes are listed on the Luxembourg Stock Exchange, also be available, without charge, at the specified office of the Paying Agent in Luxembourg during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) from the date of this prospectus.
In this prospectus, references to United States or U.S. are to the United States of America, references to U.S. dollars, $ or US$ are to United States dollars, references to France are to the Republic of France and references to euro or are to the single currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty Establishing the European Union.
Unless otherwise indicated, statements in this prospectus relating to market share, ranking and data are derived from management estimates based, in part, on independent industry publications, reports by market research firms or other published independent sources. Any discrepancies in any table between totals and the sums of the amounts listed in such table are due to rounding.
As used in this prospectus, CGG, the Group, we, us and our refer to CGG and its subsidiaries, except as otherwise indicated.
The Commission allows us to incorporate by reference the information we file with the Commission in other documents, which means:
| incorporated documents are considered part of this prospectus; |
| we can disclose important information to you by referring you to those documents; and |
| information that we file with the Commission after the date of this prospectus automatically updates and supersedes this prospectus. |
We incorporate by reference each of the following documents:
| our annual report on Form 20-F for the financial year ended December 31, 2013 filed with the Commission on April 10, 2014; |
| our report on Form 6-K submitted to the Commission on May 7, 2014 announcing our first quarter 2014 results; |
| our report on Form 6-K submitted to the Commission on May 7, 2014 containing our unaudited interim financial statements for the three months ended March 31, 2014; |
| our report on Form 6-K submitted to the Commission on May 20, 2014 with respect to our multi-client survey of the Espirito Santo basin; |
| our report on Form 6-K submitted to the Commission on June 14, 2014 with respect to the volume of trading of CGG shares; |
| our report on Form 6-K submitted to the Commission on June 16, 2014 with respect to a major land seismic contract awarded by Saudi Aramco to ARGAS, our joint venture with TAQA; |
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| our report on Form 6-K submitted to the Commission on June 18, 2014 with respect to the release of the Fast Trax processed data from our Deux multi-client survey in the Gulf of Mexico; |
| our report on Form 6-K submitted to the Commission on June 19, 2014 with respect to our agreement with Sovcomflot to form a joint venture dedicated to conducting high-end 3D marine seismic acquisition services in Arctic and sub-Arctic waters; and |
| our report on Form 6-K submitted to the Commission on June 19, 2014 with respect to the first two Sercel 508XT systems being delivered to the industry this month and Sercels sale of a system to PanAmerican Geophysical for delivery in July. |
In addition, we incorporate by reference each of the following documents that we will file with the Commission after the date of this prospectus from now until the first anniversary of the effective date of the registration statement pertaining to the new notes:
| reports filed under Section 13(a), 13(c) or 15(d) of the Exchange Act; and |
| any future reports filed on Form 6-K that indicate that they are incorporated by reference in this prospectus. |
You may obtain a copy of any of the documents referred to above (excluding exhibits) at no cost by contacting us at the following address:
CGG
Tour Maine-Montparnasse
33 avenue de Maine
75015 Paris, France
Attention: Investor Relations Officer
Telephone: +33 1 64 47 45 00
To obtain timely delivery, you must request any document no later than five business days before the date of the expiration of this exchange offer, meaning no later than [ ], 2014.
This prospectus includes and incorporates by reference forward-looking statements within the meaning of the federal securities laws, which involve risks and uncertainties, including, without limitation, certain statements made in Item 4: Information on the Company and Item 5: Operating and Financial Review and Prospects in our 2013 annual report incorporated by reference herein. You can identify forward-looking statements because they contain words such as believes, expects, may, should, seeks, approximately, intends, plans, estimates, or anticipates or similar expressions that relate to our strategy, plans or intentions. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. We have based these forward-looking statements on our current views and assumptions about future events. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are based upon information available to us on the date of this prospectus.
Important factors that could cause actual results to differ materially from our expectations (cautionary statements) are disclosed under Risk Factors and elsewhere in this prospectus, including, without limitation, in conjunction with the forward-looking statements included in this prospectus. All forward-looking information in this prospectus and subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Some of the factors that we believe could affect our actual results include:
| the impact of the current economic and credit environment, including on our customers and suppliers; |
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| the social, political and economic risks of our global operations; |
| our ability to integrate successfully the businesses or assets we acquire; |
| the risks associated with activities operated through joint-ventures in which we hold a minority interest; |
| any write-downs of goodwill on our balance sheet; |
| our ability to sell our seismic data library; |
| exposure to foreign exchange rate risk; |
| our ability to finance our operations on acceptable terms; |
| the impact of fluctuations in fuel costs on our marine acquisition business; |
| the weight of intra-group production on our results of operations; |
| the timely development and acceptance of our new products and services; |
| difficulties and costs in protecting intellectual property rights and exposure to infringement claims by others; |
| our ability to attract and retain qualified employees; |
| ongoing operational risks and our ability to have adequate insurance against such risks; |
| the level of capital expenditures by the oil and gas industry and changes in demand for seismic products and services; |
| our clients ability to unilaterally delay or terminate certain contracts in our backlog; |
| the effects of competition; |
| difficulties in adapting our fleet to changes in the seismic market; |
| high level of fixed costs that are incurred regardless of business activity; |
| the seasonal nature of our revenues; |
| the costs of compliance with governmental regulation, including environmental, health and safety laws; |
| our substantial indebtedness and the restrictive covenants in our debt agreements; |
| our ability to access the debt and equity markets during the periods covered by the forward-looking statements, which will depend on general market conditions and on our credit ratings for our debt obligations; |
| exposure to interest rate risk; and |
| our success at managing the foregoing risks. |
We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in this prospectus, including those described in the Risk Factors section of this prospectus.
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This summary highlights selected information from this prospectus to help you understand our business and the terms of the notes. You should carefully read all of this prospectus, including the consolidated financial statements and related notes, to understand fully our business and the terms of the notes, as well as some of the other considerations that may be important to you in making your investment decision. You should pay special attention to the Risk Factors section of this prospectus to determine whether an investment in the notes is appropriate for you.
CGG
We are a global participant in the geoscience industry, as a manufacturer of geophysical equipment, as a provider of marine, land and airborne data acquisition services, and as a provider of a wide range of other geoscience services, including data imaging, seismic data characterization, geoscience and petroleum engineering consulting services, and collecting, developing and licensing geological data. Our clients are principally in the oil and gas exploration and production industry.
We have more than 100 years of combined operating experience (through CGG, Veritas and Fugro Geoscience) and a recognized track record of technological leadership in the science of geophysics and geology. We believe we are well placed to capitalize on the growing importance of seismic and geoscience technologies to enhance the exploration and production performance of our broad base of clients, which includes independent, international and national oil companies.
CGG SA is the parent company of the CGG Group. We are a société anonyme incorporated under the laws of the Republic of France, registered at the Paris Commercial Registry under number 969 202 241 and operating under the French Commercial Code. Our registered office is at Tour Maine Montparnasse, 33, avenue du Maine, 75015 Paris, France. Our telephone number is (33) 1 64 47 45 00.
Our Business
The following is an overview of the business activities of our Equipment, Acquisition and Geology, Geophysics and Reservoir (GGR) business segments.
The following table sets forth our consolidated operating revenues by activity in millions of dollars and the total percentage of consolidated operating revenues represented thereby, for the periods indicated:
Three months ended March 31, |
Year ended December 31, | |||||||||||||||
2014 | 2013 | 2012 (restated) |
2011 (restated) |
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(In millions of US dollars) | ||||||||||||||||
Marine Acquisition |
453 | 1,786 | 1,310 | 1,073 | ||||||||||||
Land and Airborne Acquisition |
106 | 440 | 568 | 445 | ||||||||||||
Acquisition Division Production |
559 | 2,226 | 1,878 | 1,518 | ||||||||||||
Multi-client, Basin data and Data Management |
127 | 585 | 472 | 497 | ||||||||||||
Imaging and Reservoir |
163 | 711 | 478 | 442 | ||||||||||||
Geology, Geophysics & Reservoir Division Revenues |
290 | 1,296 | 950 | 939 | ||||||||||||
Equipment Division Production |
206 | 1,045 | 1,204 | 1,142 | ||||||||||||
Eliminated production and others |
(249 | ) | (801 | ) | (621 | ) | (418 | ) | ||||||||
Total Consolidated |
806 | 3,766 | 3,411 | 3,181 | ||||||||||||
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The following table sets forth our consolidated operating revenues by region in millions of dollars and the total percentage of consolidated operating revenues represented thereby, for the periods indicated:
Three months ended March 31, |
Year ended December 31, | |||||||||||||||||||||||||||||||
2014 | 2013 | 2012 (restated) |
2011 (restated) |
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MUS$ | % | MUS$ | % | MUS$ | % | MUS$ | % | |||||||||||||||||||||||||
North America |
215 | 27 | % | 872 | 23 | % | 730 | 21 | % | 705 | 22 | % | ||||||||||||||||||||
Central and South Americas |
132 | 16 | % | 310 | 8 | % | 500 | 15 | % | 641 | 20 | % | ||||||||||||||||||||
Europe Africa and Middle East |
301 | 37 | % | 1,666 | 45 | % | 1,246 | 37 | % | 1,134 | 36 | % | ||||||||||||||||||||
Asia Pacific |
158 | 20 | % | 918 | 24 | % | 935 | 27 | % | 701 | 22 | % | ||||||||||||||||||||
Total Consolidated |
806 | 100 | % | 3,766 | 100 | % | 3,411 | 100 | % | 3,181 | 100 | % | ||||||||||||||||||||
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The Groups clients can be broadly categorized as national oil companies, international oil companies (the Majors) and independent companies. In 2013, our top two clients represented respectively 5.1% and 3.9% of consolidated revenues, respectively.
Acquisition Division
Our Acquisition Division encompasses our geophysical acquisition services offering, including land, marine, airborne and seabed, being operated either directly or through joint ventures. Our worldwide crews operate in all environments. In land and marine environments, they use the latest geophysical equipment manufactured by Sercel.
Marine Acquisition Business Line
With a fleet of 21 seismic vessels at the end of 2013, we provide a complete range of marine seismic 2D and 3D services, focusing mainly on the Gulf of Mexico, the North Sea, West Africa and Brazil, as well as the Asia Pacific region. We also deliver marine seismic contract data acquisition in frontier areas and are a pioneer in the Arctic basin, offshore Eastern Africa and in the Black Sea. CGG provides both marine seismic contract data acquisition and multi-client surveys. Since the acquisition of Fugros geoscience activities, we also provide in-house acquisition and data processing of marine magnetic, gravity and bathymetry in conjunction with seismic surveys or on a stand-alone basis.
Land and Airborne Acquisition Business Lines
Land acquisition is principally focused on the acquisition and onsite processing of seismic data acquired on land areas. We are one of the main land seismic acquisition contractors operating worldwide, especially in North America and the Middle East, and particularly in areas requiring specific technologies, Health, Safety and Environment (HSE) excellence and operational expertise. Our operation in Artic areas, transition zones and high-resolution crews market in North Africa and the Middle East are good examples of our positioning. We now intend to focus on technological differentiation.
Airborne acquisition is principally focused on the acquisition, processing and interpretation of airborne geophysical data on land or offshore, all over the world. We are the largest airborne acquisition contractor, operating worldwide and offering a diverse portfolio of airborne geophysical technologies, with particular emphasis and expertise in electromagnetics and gravity. Our activities are conducted out of operational centers located in Canada, Brazil, South Africa and Australia, and are based on a foundation of HSE excellence.
Land and airborne surveys are performed through exclusive contract activity or non-exclusive multi-client activity. In 2013, we operated an average of 22 active land crews performing 3D and 2D seismic surveys (19 crews dedicated to exclusive contract surveys and three dedicated to non-exclusive surveys), and a fleet of 29
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airplanes since the integration of airborne activities on September 2, 2013. The description of 2013 airborne activities below reflects only the period of September to December.
Geology, Geophysics & Reservoir Division
With its worldwide footprint, our GGR Division encompasses several activities ranging from developing and licensing multi-client seismic surveys, to processing seismic data, selling seismic data processing and reservoir characterization software (under the geovation, Hampson-Russell and Jason brands), providing geoscience and petroleum engineering consulting services, collecting, developing and licensing geological data (through Robertson) and providing data management services and software to our clients. With an extended scope of competencies, our GGR Division plays a key role in identifying and developing integrated services that we can offer to our clients as a full geoscience company.
On January 31, 2013, we acquired the Geoscience Division of Fugro, adding the Robertson, Jason and Data Management Services Business Lines to the GGR Division.
Equipment
We conduct our equipment development and production operations through Sercel and its subsidiaries. Sercel is the market leader in the development and production of seismic equipment in the land and marine seismic markets. Sercel makes most of its sales to purchasers other than CGG. As of December 31, 2013, Sercel operated seven seismic equipment manufacturing facilities, located in Nantes and Saint Gaudens in France, Houston and Tulsa in the United States of America, Alfreton in England, Krimpen aan de Lek in The Netherlands and Singapore. In China, Sercel operates through Hebei Sercel-JunFeng Geophysical Prospecting Equipment Co. Ltd. (Sercel-Junfeng), based in Hebei, in which Sercel has a 51% equity stake. In addition, four sites in Toulouse, Les Ulis, Toulon and Brest (France) are dedicated to borehole tools (for the first two sites), marine sources and submarine acoustic instrumentation, respectively.
Industry Conditions
Both oil and gas market operators and major consumer countries are becoming increasingly aware of the growing imbalance between hydrocarbon supply and demand. This was reflected in a very significant and continuous increase in energy prices, coupled with a widely held conviction that there would be a need to produce oil and gas in a sustained manner over the long term in order to meet global demand. Rates at which oil reserves are being replenished have fallen short of being able to replace, year on year, the quantities of subsurface hydrocarbons extracted and consumed or to compensate for the natural depletion of reserves in the ground. The need to discover new reserves and to seek to recover the quantities of oil and gas in place as carefully as possible led, except in 2009, to several years of high levels of investment in Exploration & Production and, by extension, to favorable long-term prospects for the geophysics market.
Since 2010, Exploration & Production investments have grown annually on a double-digit basis, despite the manifestation over the period of certain major risks to which these activities are exposed, in particular:
| the technological risk associated with the Deepwater Horizon platform accident in the Gulf of Mexico; |
| the geopolitical risk associated with the Arab spring uprising in North Africa in 2011, and the subsequent political changes in Libya and Egypt; |
| risks related the rapid growth of unconventional shale hydrocarbons production in North America since 2011, which significantly modifies the worldwide equation of supply and demand given the current weight of the North American consumption; |
| general economic risks associated with slower growth in 2013 of certain key consumer countries as Brazil and China. |
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2013 has been a contrasted year with growth in both the oil services segment and, consequently, the seismic sector, which then significantly slowed down during the year mostly because major oil companies decided not to pursue certain exploration-production projects and more generally to cut investments in Exploration & Production to improve their cash generation on a short-term basis. This trend must be assessed more generally in an environment where exploration-production projects have become more costly because of their complexity, while the oil and gas prices have remained relatively stable and the oil and gas companies are under continuous pressure to keep a sustained level of dividends for their shareholders.
Longer term, we believe that the outlook for a fully integrated geoscience company is fundamentally positive for a number of reasons:
| First, oil and gas companies (including both international and national oil companies) and the large oil and gas consuming nations have perceived a growing and potentially lasting imbalance between reserves and future demand for hydrocarbons. A rapid rise in world consumption requirements, particularly in China and India, has resulted in a growth in demand for hydrocarbons that is higher than anticipated, despite the recent economic downturn. In response to this growth, we expect oil and gas companies to continue to increase their Exploration & Production investments in order to improve existing reservoirs and regularly replace reserves. |
| Client demand is changing as clients use geophysical data in new ways. The geological and geophysical challenges they face require new Geoscience solutions. From the very early exploration phase to the optimization of existing reservoirs, and throughout the entire development and production cycle, the demand for improved understanding of complex subsurface structure is increasing. This requires higher technology content, higher resolution, better illumination, and overall better imaging. In such a market environment, the CGG Group, with its assets, expertise, people and track record, is now firmly established on the three solid technological pillars represented by its Equipment, Acquisition and GGR (Geology, Geophysics & Reservoir) divisions. |
| Each year, three to four million barrels of new oil have to be found in deeper and more complex geology in order to offset the declining rates of the existing reserves. Gas production from shale rocks, where seismic studies are used to enhance the yield, has developed remarkably well in North America, and may expand to other continents. We expect these fundamental trends to continue to drive increased demand for high-end seismic equipment and services in the medium-term. We believe that we are in a strong position to benefit from these long term trends. |
Our views regarding the state of the market in 2013 and the outlook for future periods are forward-looking statements, based upon information available to us on the date of this prospectus and are subject to risks and uncertainties that may change at any time.
Our Strategy
We intend to continue to provide leading geological, geophysical and reservoir capabilities to our broad base of customers primarily from the global oil and gas industry. Our goal is to capitalize on growth opportunities resulting from the application of new technologies in every sector of the oil and gas business from exploration to production and reservoir management and from the worldwide presence of our three complementary business segments (Equipment, Acquisition, and Geology, Geophysics & Reservoir (GGR).
To achieve this objective, we have adopted the following strategies:
Rebalance our profile towards more profitable and less capital intensive businesses
We believe that our Acquisition businesses, which are cyclical, highly capital-intensive and have generated lower profitability in recent years, need to be downsized significantly. We plan to position the Acquisition
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businesses more on the high-end of the market, where technological differentiation is a critical factor, in order to increase profitability. This should also allow us to increase the relative weight of the Equipment and GGR segments contributions to Group results, which we believe will increase our overall profitability, reduce the volatility of our earnings and improve our cash generation.
Our plan for the Marine Acquisition business is to reduce the capacity of our directly-operated fleet by 25%, which should lead to a significant reduction in fixed costs and capital expenditure, while maintaining the critical size needed to support our world-leading position, address global regional markets and consolidate our leadership in the high-end broadband and global solution marine markets.
In the Land Acquisition business, our plan is to expand the scope of our partnership with TAQA throughout the Middle East by regrouping the existing joint ventures under the sole umbrella of ARGAS, owned 51% by TAQA and 49% by CGG. In the rest of the world, we intend to focus and concentrate our presence on high-end niche markets, adopting a technology provider business model to the extent possible.
Improve our operational efficiency, profitability and cash generation
In line with what has been achieved over the last three years as a result of the Performance Plan that we launched at the end of 2010, we intend to continue our tight cost control, maintain a low level of general and administrative expenses and, more generally, reduce our fixed cost base. We expect notably to reduce our break-even point in line with the right-sizing of our Acquisition businesses and particularly our marine assets.
We will also continue to maintain a strong focus on operational performance and on cash generation through tight monitoring of working capital and capital expenditures.
Focus on growth areas
We intend to focus on developing our technological capabilities in emerging markets for geoscience-related services, including reservoir appraisal and production monitoring. We also believe that we have unique experience and expertise in very dense and productive seismic acquisition projects, such as high channel count land crews in the Middle East and full azimuth high resolution offshore surveys in the Gulf of Mexico. Furthermore, we believe our geographic footprint will allow us to respond to the growing demand for all kinds of seismic imaging and reservoir solutions.
We also intend to maintain our position in the onshore and offshore seismic multi-client markets by developing our multi-client data library. We believe that a strong position in this market segment enhances our global competitive position and may provide opportunities for continuing future sales. In developing our multi-client data library, we carefully select survey opportunities in order to maximize our return on investment. We also intend to apply the latest advances in depth imaging and wide azimuth technologies to a selected part of our existing library.
Given the growing importance of geophysics in reservoir characterization, and the strong reputation of Jason and Robertson, two activities formerly belonging to Fugro that we acquired on January 31, 2013, we intend to further develop the synergies between our leading network of 42 data processing centers and reservoir services. We pursue continuous innovation to allow for increased integration of data processing into reservoir studies, which will provide enhanced reservoir knowledge and allow for improved exploitation. This approach places us in a better position to meet the requirements of our clients with an extensive range of integrated solutions.
With the increasing use of wide-azimuth and high resolution surveys and the growing demand for advanced imaging capabilities, we also intend to increase our processing capability in developing disciplines, such as reservoir description and monitoring, including wide-azimuth, multi-component and 4D studies. We also plan to continue promoting and developing our dedicated subsurface imaging centers within our clients offices and developing our regional centers.
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We plan as well to develop reservoir interpretative solutions, notably through the creation of two new business lines, GeoSoftware and GeoConsulting, within our GGR Division. GeoSoftware is the worldwide leader in advanced seismic reservoir characterization technology. It brings together CGGs commercial software, including Jason and Hampson-Russell, and the associated sales, marketing and product services, such as training, product support and product mentoring. GeoConsulting is a full-spectrum geological and geophysical consulting services organization. In addition to our seismic reservoir characterization services supporting our Jason and Hampson-Russell technologies, GeoConsulting offers the our unique line of Robertson geoscience consulting services and multi-client products, including a full range of geological, petroleum engineering and economic disciplines. It also contains NPA Satellite Mapping and the global training services relating to GeoConsulting.
In 2014, we intend to extend cross-divisional strengths within our organization and to leverage our relationships with external partners such as Baker Hughes International in key and growing business sectors such as shale in North America and the Middle East.
We also intend to set up additional targeted partnerships through joint ventures in order to address specific market segments or to gain privileged access to high-potential local geographical markets. We established a joint venture with Gardline in the marine market segment in May 2010 and a joint venture with Petrovietnam Technical Services Corporation (PTSC) for the Vietnamese offshore market in March 2012 (announced in December 2010). In early 2013, we created Seabed Geosolutions BV (a joint venture owned 60% by Fugro and 40% by CGG), a world-leader in the shallow water and ocean bottom systems market.
Develop technological synergies for products and capitalize on new generation equipment
We believe Sercel is the leading manufacturer of land, marine and subsea geophysical equipment. We plan to continue developing synergies among the technologies available to Sercel and to capitalize fully on our position as a market leader. Through our research and development, we seek to improve existing products and maintain an active new product development program in all segments of the geophysical equipment market (land, marine and ocean-bottom).
Develop and utilize innovative technology
The significant technological developments in seismic services over the last decade have produced a marked change in the sector. The development of 4D and wide-azimuth techniques (providing time lapse views and enhanced illumination of the reservoir as well as improved image resolution) now allows operators to better locate and monitor reservoir performance. This possibility broadens the use of seismic techniques from pure exploration (early cycle) into a tool for reservoir development, management and production (late cycle). Importantly, these techniques require more vessel time than traditional data acquisition. For example, three to six times more vessel time is required to shoot wide-azimuth data than is required for traditional 3D.
Conventional marine streamer acquisition lacks sufficient signal-to-noise ratios in the 2-7 Hz bandwidth due to streamer depth, streamer tow noise, source array configuration, source depth and source bubble. BroadSeis, a variable-depth streamer broadband solution, improves considerably the quality of data acquired by streamers by widening the range of recorded frequencies. BroadSeis relies on the combination of three differentiation factors developed by us: (i) the Sercel solid streamer, the quietest in the market; (ii) an original acquisition set-up based on a specific positioning of streamers at variable depth in water; and (iii) innovative processing algorithms that are adapted to this specific acquisition configuration. Patent applications have been filed for the different components to ensure we maintain exclusive rights over this technique. BroadSeis was launched in 2010. Since its introduction, more than 100 acquisitions have been carried out, most of them in association with customers, which we believe indicates a real interest for this new technology. The commercialization phase of BroadSeis enabled us to quickly expand the use of this process, a key differentiation factor for our marine acquisition
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activities starting in 2012. BroadSource, the broadband marine seismic source, launched in November 2012, should reinforce the benefits of BroadSeis to deliver the ultimate in high-resolution, broad-bandwidth, ghost-free seismic data, achieving a bandwidth of 2-200Hz.
We believe that growth in demand for geophysical services will continue to be driven in part by the development of new technologies. The industry is increasingly demanding clearer seismic imaging and better visibility, particularly underneath salt layers. We expect multi-azimuth, wide azimuth, multi-component (3C/4C) surveys and time-lapse (4D) surveys to become increasingly important for new production-related applications, particularly in the marine sector, and expect specialized recording equipment for difficult terrain to become more important in land seismic data acquisition, particularly in transition zones, shallow water and arctic areas. We believe that to remain competitive, geophysical services companies will need to combine advanced data acquisition technology with consistently improving processing capacity in order to further reduce delivery times for seismic services.
Our strategy is to continue our high level of investment in research and development to reinforce our technological leadership. We also intend to take advantage of our full range of integrated geoscience services to enhance our position as a market leader in:
| land seismic data acquisition systems and know-how; |
| innovative marine acquisition systems and services; |
| seismic imaging and reservoir services; and |
| manufacturing of land, marine and subsea data acquisition equipment. |
Emphasize client service
We believe it is important to operate in close proximity to our clients to develop a better understanding of their individual needs and to add measurable value to their business processes. We respond to these needs by creating new products or product enhancements that improve the quality of data and reduce the data delivery time to clients. We believe that our regional multi-client and dedicated data processing centers in our clients offices provide us with an advantage in identifying contract opportunities, optimizing service to clients and developing products responsive to new market demands, such as seismic techniques applied to reservoir management. We believe that we are well positioned to benefit from the industry trend towards increased outsourcing. This trend is leading oil and gas companies to place greater emphasis on relationships and service quality (including health, safety and protection of the environment) in their selection of third party service providers, including geophysical services providers.
Provide integrated services
We are committed to providing clients with a full array of seismic data services, from acquisition and processing to data interpretation and management. We believe that integration of compatible technology and equipment increases the accuracy of data acquisition and processing, enhances the quality of our client service and thereby improves productivity in oil and gas exploration and production. Our clients increasingly seek integrated solutions to better evaluate known reserves and improve the ratio of recoverable hydrocarbons from producing fields. We are continuing to develop our ability to provide geosciences solutions through a combination of various exploration and production services, including technical data management, reservoir characterization and interpretation of well information.
Develop well-positioned data libraries
We will continue to develop large multi-client libraries in key basins throughout the world where the industry focuses its exploration budgets. We intend to take advantage of our recent vintage, well-positioned seismic data libraries and will capitalize on our strong experience in wide-azimuth technology. For instance in
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the Gulf of Mexico, the industrys growing interest in wide-azimuth technology to explore complex geological environments has translated into high pre-funding levels for our Walker Ridge, Green Canyon, Garden Banks and Three Corners surveys. In 2012, we launched our first StagSeis multi-client survey, our new marine acquisition solution that provides full wide-azimuth coverage and unrivalled long offsets, designed to illuminate complex subsalt geologies. We extended this program in 2013 and will complete the acquisition of the third and final StagSeis survey in 2014. Similarly, we will continue to further expand the footprint of our multi-client library with the introduction of our new BroadSeis acquisition technology as we did in 2012 in Brazil and in the North Sea.
Onshore, our land library offers additional potential in North America, particularly in the shale gas plays where we completed a significant onshore program in the Marcellus basin in 2013. We plan to use this existing multi-client onshore footprint to build dedicated commercial offers aimed at improving the productivity of shale market players, including through our cooperation agreement with Baker Hugues International.
Develop reservoir applications
While seismic data was historically used primarily by oil and gas companies for exploration purposes, it has become a recognized tool for field development and reservoir management. We are progressively extending our core business towards compiling and analyzing seismic data of existing reservoirs in response to this trend. Through high-resolution images and our expertise in 4D seismic and permanent monitoring, we aim to assist hydrocarbon producers in better characterizing and predicting the static properties and dynamic behavior of their reservoirs.
Following our acquisition of Fugros Geoscience Division, we are now organized in three segments, including the Geology, Geophysics and Reservoir segment, which is fully dedicated to the development of reservoir software, services and applications. Through GeoSoftware, we intend to further improve our products and services, provide our customers with a better understanding of their reservoirs and deliver unsurpassed expertise to optimize our customers decision-making. Through GeoConsulting, we intend to further enhance our geological and geophysical multi-client products and reports and expand our high-end consulting services across the Exploration & Production value chain.
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On May 1, 2014, we completed a private offering of the outstanding notes outside the United States in reliance on Regulation S under the Securities Act and to certain qualified institutional buyers within the United States in reliance on Rule 144A under the Securities Act. We entered into a registration rights agreement with the initial purchasers in the private offering of the outstanding notes in which we agreed to deliver to you this prospectus and to complete the exchange offer within 210 days after the date we issued the outstanding notes. You are entitled to exchange in the exchange offer your outstanding notes for new notes with substantially identical terms.
You should read the discussion under the headings Summary of the Terms of the New Notes and Description of the Notes for further information regarding the new notes.
We summarize the terms of the exchange offer below. You should read the discussion under the heading The Exchange Offer for further information regarding the exchange offer and resale of the new notes.
The Exchange Offer |
We are offering to exchange up to US$500 million aggregate principal amount of new notes for up to US$500 million aggregate principal amount of the outstanding notes. Outstanding notes may be exchanged only in integral multiples of US$1,000. |
Expiration Date |
The Exchange Offer will expire at 5:00 p.m., New York City time, on [ ], 2014, or such later date and time to which we extend it. |
Withdrawal of Tenders |
You may withdraw your tender of outstanding notes prior to the expiration date, unless previously accepted for exchange. We will return to you, without charge, promptly after the expiration or termination of the exchange offer any outstanding notes that you tendered but that were not accepted for exchange. |
Conditions to the Exchange Offer |
We will not be required to accept outstanding notes for exchange if the exchange offer would be unlawful or would violate any interpretation of the staff of the Commission. The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered. Please read the section The Exchange Offer Conditions to the Exchange Offer for more information regarding the conditions to the exchange offer. |
Procedures for Tendering Outstanding Notes |
If your outstanding notes are held through The Depository Trust Company (DTC) and you wish to participate in the exchange offer, you may do so through the automated tender offer program of DTC. If you tender under this program, you will agree to be bound by the letter of transmittal that we are providing with this prospectus as though you had signed the letter of transmittal. By signing or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things: |
| any new note you receive will be acquired in the ordinary course of your business; |
| you have no arrangement or understanding with any person to participate in the distribution of the outstanding notes or the new notes; |
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| you are not engaged in and do not intend to engage in the distribution of the new notes; |
| if you are a broker-dealer that will receive new notes for your own account in exchange for outstanding notes, that the outstanding notes to be exchanged for new notes were acquired by you as a result of market-making or other trading activities and you will deliver a prospectus, as required by law, in connection with any resale of such new notes; and |
| you are not our affiliate, as defined in Rule 405 of the Securities Act, nor a broker-dealer tendering outstanding notes acquired directly from us for your own account. |
Special Procedures for Beneficial Owners |
If you own a beneficial interest in outstanding notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender the outstanding notes in the exchange offer, you should contact the registered holder promptly and instruct the registered holder to tender on your behalf. |
Guaranteed Delivery Procedures |
If you wish to tender your outstanding notes and cannot comply, prior to the expiration date, with the applicable procedures under the automated tender program of DTC, you must tender your outstanding notes according to the guaranteed delivery procedures described in The Exchange Offer Guaranteed Delivery Procedures. |
Certain U.S. Federal Income Tax Considerations |
The exchange of outstanding notes for new notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes. Please read Certain U.S. Federal Income Tax Consequences of the Exchange Offer. |
Use of Proceeds |
We will not receive any cash proceeds from the issuance of new notes. |
The Exchange Agent
We have appointed The Bank of New York Mellon as exchange agent for the exchange offer. You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for the notice of guaranteed delivery to the exchange agent addressed as follows:
For Delivery by Mail, Overnight Delivery or Delivery By Hand:
The Bank of New York Mellon, as Exchange Agent
111 Sanders Creek Parkway
Asset Servicing Americas & Issuer Services Client Service Delivery
East Syracuse, NY 13057
Attention: Corporate Trust Reorganization Unit
Telephone: 1 (315) 414-3360
The Bank of New York Mellon, in each of its capacities including, but not limited to, Trustee, Paying Agent, Registrar and exchange agent, has not participated in the preparation of this prospectus and assumes no responsibility for its content.
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Right Under Registration Rights Agreement |
If we fail to complete the exchange offer as required by the registration rights agreement, we will be obligated to pay liquidated damages to holders of the outstanding notes. Please read Outstanding Notes Registration Rights Agreement for more information regarding your rights as a holder of outstanding notes. |
Listing |
Application will be made for the new notes to be listed on the Euro MTF market of the Luxembourg Stock Exchange. |
Governing Law |
New York. |
Trustee, Registrar, Transfer Agent and Paying Agent |
The Bank of New York Mellon. |
Luxembourg Listing Agent, Luxembourg Paying Agent and Luxembourg Transfer Agent |
The Bank of New York Mellon (Luxembourg) S.A. |
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SUMMARY OF THE TERMS OF THE NEW NOTES
Securities Offered |
US$500,000,000 aggregate principal amount of 6.875% Exchange Senior Notes due 2022. |
Maturity |
January 15, 2022. |
Interest Payment Dates |
We will pay interest on the notes semi-annually in arrears on January 15 and July 15 of each year, commencing January 15, 2015. |
Guarantees |
Initially, the notes will be guaranteed on a senior unsecured basis by CGG Holding B.V., CGG Marine B.V., CGG Marine Resources Norge AS, CGG Holding (U.S.) Inc., CGG Services (U.S.) Inc., Veritas Investments Inc., CGG Land (U.S.) Inc., Viking Maritime Inc., Veritas Geophysical (Mexico) LLC, Alitheia Resources Inc. and CGG Canada Services Ltd. (the Services Guarantors), and Sercel, Inc., Sercel-GRC Corp., Sercel Canada Ltd. and Sercel Australia Pty Ltd. (the Equipment Guarantors, and together with the Services Guarantors, the Initial Guarantors). Our other subsidiaries will not initially guarantee the notes and, in certain circumstances, we may elect to have certain guarantors released from their guarantees of the notes. |
The Services Guarantors (excluding their subsidiaries that have not guaranteed the notes) generated, before consolidation entries, US$914.3 million of revenues, US$(509.7) million of operating income (loss) and US$(559.8) million of net income (loss) in the year ended December 31, 2013 and held US$7,204.6 million of total assets before consolidation entries as at December 31, 2013. The Services Guarantors (excluding their subsidiaries that have not guaranteed the notes) generated, before consolidation entries, US$185.8 million of revenues, US$9.2 million of operating income and US$(12.6) million of net income (loss) in the three months ended March 31, 2014 and held US$7,296.7 million of total assets before consolidation entries as at March 31, 2014. |
The Equipment Guarantors (excluding their subsidiaries that have not guaranteed the notes) generated, before consolidation entries, US$440.2 million of revenues, US$120.1 million of operating income and US$83.0 million of net income in the year ended December 31, 2013 and held US$476.2 million of total assets before consolidation entries as at December 31, 2013. The Equipment Guarantors (excluding their subsidiaries that have not guaranteed the notes) generated, before consolidation entries, US$80.3 million of revenues, US$14.2 million of operating income and US$9.7 million of net income in the three months ended March 31, 2014 and held US$470.0 million of total assets before consolidation entries as at March 31, 2014. |
Ranking |
The notes will be our senior unsecured obligations, ranking equally in right of payment with all our other existing and future senior |
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unsecured indebtedness, including our other senior notes, and senior in right of payment to all our existing and future subordinated indebtedness. The notes and the subsidiary guarantees will be effectively subordinated to all our secured obligations and all secured obligations of the subsidiaries that guarantee the notes, including any indebtedness under the revolving facility of our U.S. revolving facility and our French revolving facility, to the extent of the value of the collateral. In addition, the notes will be effectively subordinated to all current and future indebtedness and other obligations, including trade payables, of our subsidiaries that do not guarantee the notes. As at March 31, 2014, we had US$588.1 million of outstanding indebtedness, including accrued interest, effectively senior to the notes, of which US$580.1 million was secured. The indenture permits us and our subsidiaries to incur additional indebtedness (including additional secured indebtedness), subject to certain conditions. See Description of Certain Indebtedness. |
Optional Redemption |
We may redeem all or a part of the notes at any time on or after July 15, 2017 at the redemption prices described in this prospectus. We may redeem up to 35% of the aggregate principal amount of the notes prior to July 15, 2017 using the proceeds of certain equity offerings. At any time prior to July 15, 2017, we may redeem all or part of the notes at a redemption price equal to 100% of the principal amount of the notes plus the applicable premium described in this prospectus. |
Change of Control |
If we undergo a change of control, each holder may require us to repurchase all or a portion of the notes held by such holder at 101% of the principal amount thereof, plus accrued and unpaid interest. |
Redemption for Changes in Tax Law |
Under certain conditions, we will be required to pay additional amounts to the holders of the notes to compensate them for any amounts deducted from payments to them in respect of the notes on account of certain taxes and other governmental charges. If we become obliged to pay such additional amounts in respect of the notes as a result of a change in law, the notes will be subject to redemption, in whole but not in part, at our option at a price equal to 100% of the principal amount of the notes. |
Certain Covenants and Events of Default |
The indenture governing the notes contains certain covenants and events of default that, among other things, limit our ability and that of certain of our subsidiaries to: |
| incur or guarantee additional indebtedness or issue preferred shares; |
| pay dividends or make other distributions; |
| purchase equity interests or redeem subordinated indebtedness prior to its maturity; |
| create or incur certain liens; |
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| create or incur restrictions on the ability to pay dividends or make other payments to us; |
| enter into transactions with affiliates; |
| issue or sell capital stock of subsidiaries; |
| engage in sale-and-leaseback transactions; and |
| sell assets or merge or consolidate with another company. |
All of these limitations are subject to a number of important qualifications and exceptions. In addition, the starting dates for the calculation of the availability under the various baskets relating to restricted payments are the same as those under the indentures governing our existing senior notes, namely either January 1, 2005 or April 28, 2005 (depending on the particular basket) and the amounts available for restricted payments under these baskets are significant. |
If at any time the notes receive ratings of BBB- or higher from Standard & Poors Ratings Services (Standard & Poors) and Baa3 or higher from Moodys Investors Service, Inc. (Moodys), and no default or event of default has occurred and is continuing, certain restrictions, covenants and events of default will cease to be applicable to the notes for so long as the notes maintain such ratings. |
For further information regarding the new notes, see Description of the Notes.
Principal Executive Office
Our headquarters are located at Tour Maine-Montparnasse, 33 avenue du Maine, 75015 Paris, France, and our telephone number is +33 1 64 47 45 00.
Risk Factors
See Risk Factors for a discussion of certain factors to be considered in connection with an investment in the new notes.
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The following summary historical consolidated financial information as at and for the three years ended December 31, 2013 is derived from our consolidated audited financial statements, which are included in our 2013 annual report incorporated by reference in this prospectus. Our consolidated financial statements as at and for the year ended December 31, 2013 have been audited by Ernst & Young and as at and for the years ended December 31, 2012 and 2011 have been audited by Ernst & Young and Mazars.
The following summary financial information as at and for the three month periods ended March 31, 2014 and 2013 is unaudited and is derived from our unaudited financial statements included in our current report on Form 6-K submitted to the Commission on May 7, 2014 and incorporated by reference in this prospectus. The unaudited financial statements include all adjustments, consisting of normal recurring accruals, which we consider necessary for a fair presentation of our financial position and results of operations for these periods. The results of operations for the three month periods presented below are not necessarily indicative of the results for the full fiscal year.
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The summary financial data included below should be read in conjunction with, and are qualified in their entirety by reference to, our consolidated financial statements included elsewhere or incorporated by reference in this prospectus and Item 5: Operating and Financial Review and Prospects in our 2013 annual report incorporated by reference in this prospectus and Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations in our current report on Form 6-K submitted to the Commission on May 7, 2014 and incorporated by reference in this prospectus. Our consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.
As at and for the three months ended March 31, |
As at and for the year ended December 31, |
|||||||||||||||||||
2014 (unaudited) |
2013 (unaudited) |
2013 | 2012 (restated) |
2011 (restated) |
||||||||||||||||
(In millions of US$ except per share data and ratios) | ||||||||||||||||||||
Statement of operations data: |
||||||||||||||||||||
Operating revenues |
806.2 | 870.7 | 3,765.8 | 3,410.5 | 3,180.9 | |||||||||||||||
Other income from ordinary activities |
0.4 | 0.6 | 2.1 | 3.6 | 3.3 | |||||||||||||||
Cost of operations |
(672.5 | ) | (675.2 | ) | (2,977.2 | ) | (2,685.4 | ) | (2,649.4 | ) | ||||||||||
Gross profit |
134.1 | 196.1 | 790.7 | 728.7 | 534.8 | |||||||||||||||
Research and development expenses, net |
(26.4 | ) | (26.1 | ) | (105.9 | ) | (92.8 | ) | (77.0 | ) | ||||||||||
Marketing and selling expenses |
(29.5 | ) | (28.4 | ) | (118.6 | ) | (96.0 | ) | (83.1 | ) | ||||||||||
General and administrative expenses |
(41.9 | ) | (51.0 | ) | (215.9 | ) | (182.6 | ) | (201.8 | ) | ||||||||||
Other revenues (expenses) |
(1.8 | ) | 61.2 | (105.2 | ) | (26.7 | ) | 34.3 | ||||||||||||
Impairment of goodwill |
| | (640.0 | ) | | | ||||||||||||||
Operating income |
34.5 | 151.8 | (394.9 | ) | 330.6 | 207.2 | ||||||||||||||
Cost of financial debt, net |
(47.6 | ) | (46.3 | ) | (191.7 | ) | (156.7 | ) | (174.5 | ) | ||||||||||
Other financial income (loss) |
2.5 | (5.0 | ) | (22.3 | ) | (19.7 | ) | 0.8 | ||||||||||||
Income taxes |
(11.9 | ) | (32.0 | ) | (82.9 | ) | (99.2 | ) | (63.1 | ) | ||||||||||
Equity in income of affiliates |
(16.5 | ) | 10.6 | 0.6 | 37.4 | 16.4 | ||||||||||||||
Net income (loss) |
(39.0 | ) | 79.1 | (691.2 | ) | 92.4 | (13.2 | ) | ||||||||||||
Attributable to: |
||||||||||||||||||||
Non-controlling interests |
1.4 | 2.4 | 7.6 | 17.2 | 13.9 | |||||||||||||||
Owners of CGG SA |
(40.4 | ) | 76.7 | (698.8 | ) | 75.2 | (27.1 | ) | ||||||||||||
Net income (loss) per share |
||||||||||||||||||||
Basic(1) |
(0.23 | ) | 0.43 | (3.95 | ) | 0.46 | (0.17 | ) | ||||||||||||
Diluted(2) |
(0.23 | ) | 0.42 | (3.95 | ) | 0.46 | (0.17 | ) | ||||||||||||
Balance sheet data: |
||||||||||||||||||||
Cash and cash equivalents |
458.9 | 516.8 | 530.0 | 1,520.2 | 531.4 | |||||||||||||||
Working capital(3) |
585.7 | 548.6 | 532.0 | 783.5 | 488.7 | |||||||||||||||
Property, plant & equipment, net |
1,528.3 | 1,711.8 | 1,557.8 | 1,159.5 | 1,183.2 | |||||||||||||||
Multi-client surveys |
927.7 | 726.4 | 818.0 | 604.2 | 527.3 | |||||||||||||||
Goodwill |
2,483.6 | 3,112.0 | 2,483.2 | 2,415.5 | 2,688.2 | |||||||||||||||
Total assets |
8,183.8 | 8,855.4 | 8,262.8 | 8,332.8 | 7,191.5 | |||||||||||||||
Gross financial debt(4) |
2,886.5 | 2,609.0 | 2,747.6 | 2,305.2 | 1,942.1 | |||||||||||||||
Equity attributable to owners of CGG SA |
3,759.8 | 4,582.1 | 3,799.9 | 4,483.2 | 3,794.6 | |||||||||||||||
Other financial historical data and other ratios: |
||||||||||||||||||||
EBIT(5) |
18.0 | 162.4 | (394.3 | ) | 368.0 | 223.6 | ||||||||||||||
EBITDAS(6) |
188.3 | 313.2 | 1,139.7 | 1,006.2 | 826.1 | |||||||||||||||
Capital expenditures (property, plant & equipment)(7) |
101.8 | 76.1 | 347.2 | 368.8 | 365.6 | |||||||||||||||
Capital expenditures for multi-client surveys, net cash |
155.9 | 127.2 | 479.4 | 363.8 | 203.2 | |||||||||||||||
Net financial debt(8) |
2,427.6 | 2,092.2 | 2,217.7 | 785.0 | 1,410.6 | |||||||||||||||
Gross financial debt(4)/EBITDAS(6) |
2.4x | 2.3x | 2.4x | |||||||||||||||||
Net financial debt(8)/EBITDAS(6) |
1.9x | 0.8x | 1.7x | |||||||||||||||||
EBITDAS(6)/Cost of financial debt, net |
5.9x | 6.4x | 4.7x | |||||||||||||||||
Ratio of earnings to fixed charges |
0.8x | 3.1x | (2.2x | ) | 2.0x | 1.2x |
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Notes:
(1) | Basic per share amounts have been calculated on the basis of 176,890,866 and 176,423,717 weighted average outstanding shares for the three months ended March 31, 2014 and 2013, respectively, and 176,734,989, 162,077,608 and 158,571,323 weighted average outstanding shares in 2013, 2012 and 2011 respectively. |
(2) | Diluted per share amounts have been calculated on the basis of 176,890,866 and 201,576,529 weighted average outstanding shares for the three months ended March 31, 2014 and 176,734,989, 163,409,442 and 158,571,323 weighted average outstanding shares in 2013, 2012 and 2011 respectively. |
(3) | Working capital is defined as net trade accounts and notes receivable, net inventories and work-in-progress, tax assets, other current assets and assets held for sale less trade accounts and notes payable, accrued payroll costs, income tax payable, advance billings to customers, deferred income, current provisions and other current liabilities. |
(4) | Gross financial debt is defined as financial debt, including current maturities and bank overdrafts. |
(5) | EBIT (earnings before interest and tax) is defined as operating income plus our share of income in companies accounted for under the equity method. EBIT is used by management as a performance indicator because it captures the contribution to our results of the significant businesses that we manage through our joint-ventures. However, other companies may present EBIT and related measures differently than we do. EBIT is not a measure of financial performance under IFRS and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with IFRS. See Item 5: Operating and Financial Review and Prospectus Liquidity and Capital Resources EBIT and EBITDAS of our Annual Report on Form 20-F for the year ended December 31, 2013 dated April 10, 2014 and Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources EBIT and EBITDAS of our Form 6-K dated May 7, 2014, each incorporated by reference in this prospectus, for a reconciliation of EBIT to operating income. |
(6) | EBITDAS is defined as earnings before interest, tax, depreciation, amortization net of amortization costs capitalized to multi-client surveys and share-based compensation cost. Share-based compensation includes both stock options and shares issued under our share allocation plans. EBITDAS is presented as additional information because we understand that it is one measure used by certain investors to determine our operating cash flow and historical ability to meet debt service and capital expenditure requirements. However, other companies may present EBITDAS and similar measures differently than we do. EBITDAS is not a measure of financial performance under IFRS and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with IFRS. See Item 5: Operating and Financial Review and Prospectus Liquidity and Capital Resources EBIT and EBITDAS of our Annual Report on Form 20-F for the year ended December 31, 2013 dated April 10, 2014 and Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources EBIT and EBITDAS of our Form 6-K dated May 7, 2014, each incorporated by reference in this prospectus, for a reconciliation of EBITDAS to net cash provided by operating activities. |
(7) | Capital expenditures is defined as purchases of property, plant and equipment, development costs capitalized plus variation of suppliers of fixed assets and excludes finance leases. |
(8) | Net financial debt is defined as gross financial debt less cash and cash equivalents. Net financial debt is presented as additional information because we understand that certain investors believe that netting cash against debt provides a clearer picture of the financial liability exposure. However, other companies may present net financial debt differently than we do. Net financial debt is not a measure of financial performance under IFRS and should not be considered as an alternative to any other measures of performance derived in accordance with IFRS. See Item 5: Operating and Financial Review and Prospectus Liquidity and Capital Resources Financial Debt of our Annual Report on Form 20-F for the year ended December 31, 2013 dated April 10, 2014 and Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Net Financial Debt of our Form 6-K dated May 7, 2014, each incorporated by reference in this prospectus, for a reconciliation of net financial debt to certain financing items on our balance sheet. |
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An investment in the notes involves risks. Before investing in the notes, you should carefully consider the following risk factors and all information contained in this prospectus. Additional risks and uncertainties of which we are not aware or that we believe are immaterial may also adversely affect our business, financial condition, liquidity, results of operations or prospects. If any of these events occur, our business, financial condition, liquidity, results of operations or prospects could be materially and adversely affected. If that happens, we may not be able to pay interest or principal on the notes when due and you could lose all or part of your investment.
Risks related to our business
Current economic uncertainty and the volatility of oil and natural gas prices could have a significant adverse effect on us.
Global market and economic conditions are uncertain and volatile. In the past, economic contractions and uncertainty have weakened demand and lowered prices for oil and natural gas, resulting in a reduction in the levels of exploration for hydrocarbons and demand for our products and services. It is difficult to predict how long the current economic conditions will persist, whether they will deteriorate further, and which of our products and services will be adversely affected. We may have impairment losses as events or changes in circumstances occur that reduce the fair value of an asset below its book value. These conditions could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Uncertainty about the general economic situation has had and is likely to continue to have a significant adverse impact on the commercial performance and financial condition of many companies, which may affect some of our customers and suppliers. The current economic climate may lead customers to cancel or delay orders or leave suppliers unable to provide goods and services as agreed. Our government clients may face budget deficits that prohibit them from funding proposed and existing projects or that cause them to exercise their right to terminate our contracts with little or no prior notice. If our suppliers, vendors, subcontractors or other counterparties are unable to perform their obligations to us or our customers, we may be required to provide additional services or make alternate arrangements on less favorable terms with other parties to ensure adequate performance and delivery of service to our customers. These circumstances could also lead to disputes and litigation with our partners or customers, which could have a material adverse impact on our reputation, business, financial condition and results of operations.
Turmoil in the credit markets, such as has been experienced in prior periods, could also adversely affect us and our customers. Limited access to external funding has in the past caused some companies to reduce their capital spending to levels supported by their internal cash flow. Some companies have found their access to liquidity constrained or subject to more onerous terms. In this context, our customers may not be able to borrow money on reasonable terms or at all, which could have a negative impact on their demand for our products, and impair their ability to pay us for our products and services on a timely basis, or at all.
In addition, the potential impact on the liquidity of major financial institutions may limit our ability to fund our business strategy through borrowings under either existing or new debt facilities in the public or private markets and on terms we believe to be reasonable. Persistent volatility in the financial markets could have a material adverse effect on our ability to refinance all or a portion of our indebtedness and to otherwise fund our operational requirements. We cannot be certain that additional funds will be available if needed to make future investments in certain projects, take advantage of acquisitions or other opportunities or respond to competitive pressures. If additional funds are not available, or are not available on terms satisfactory to us, there could be a material adverse impact on our business and financial performance.
Furthermore, our cash balances are maintained in accounts held at major banks and financial institutions located primarily in Europe, North America and China. Deposits are in amounts that exceed available insurance.
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Although none of the financial institutions in which we hold our cash and investments has gone into bankruptcy, been forced into receivership, or has been seized by its governments, there is a risk that this may occur in the future. If this were to occur, we would be at risk of not being able to access our cash which may result in a temporary liquidity crisis that could impede our ability to fund operations.
We are subject to risks related to our international operations.
With operations worldwide, including in emerging markets, our business and results of operations are subject to various risks inherent in international operations. These risks include:
| instability of foreign economies and governments, which can cause investment in capital projects by our potential clients to be withdrawn or delayed, reducing or eliminating the viability of some markets for our services; |
| risks of war, terrorism, riots and uprisings, which can make it unsafe to continue operations, adversely affect budgets and schedules and expose us to losses; |
| risk of piracy, which may result in delays carrying out customer contracts in affected areas or their termination; |
| seizure, expropriation, nationalization or detention of assets, or renegotiation or nullification of existing contracts; |
| foreign exchange restrictions, import/export quotas, sanctions and other laws and policies affecting taxation, trade and investment; and |
| availability of suitable personnel and equipment, which can be affected by government policy, or changes in policy, that limit the importation of qualified crew members or specialized equipment in areas where local resources are insufficient. |
We are exposed to these risks in all of our international operations to some degree, particularly in emerging markets where the political and legal environment is less stable. We are subject to the risk of adverse developments with respect to certain international operations and any insurance coverage we have may not be adequate to compensate us for any losses arising from such risks.
Revenue generating activities in certain foreign countries may require prior United States government approval in the form of an export license and may otherwise be subject to tariffs and import/export restrictions. These laws can change over time and may result in limitations on our ability to compete globally. In addition, non-US persons employed by our separately incorporated non-US entities may conduct business in some foreign jurisdictions that are subject to US trade embargoes and sanctions by the US Office of Foreign Assets Control, including countries that have been designated by the US government as state sponsors of terrorism. We have typically generated revenue in some of these countries through the performance of marine surveys, the provision of data processing and reservoir consulting services, the sale of software licenses and software maintenance and the sale of Sercel equipment. We have current and ongoing relationships with customers in these countries. We have procedures in place to conduct these operations in compliance with applicable US laws. However, failure to comply with US laws on equipment and services exports could result in material fines and penalties, damage our reputation, and negatively affect the market price of our securities. We provided information in 2011 and 2012 to the US Department of Commerces Bureau of Industry and Security (BIS) concerning shipments to our vessels operating in or near Cuba that may not have complied fully with our internal policies and possibly violated applicable export controls and sanctions laws. See Item 4: Information on the Company Legal Proceedings Requests for information made by the US Department of Commerces Bureau of Industry and Security of our Annual Report on Form 20-F for the year ended December 31, 2013 dated April 10, 2014 incorporated by reference in this prospectus. In addition, our presence in these countries could reduce demand for our securities among certain investors.
Certain of our clients and certain tax, social security or customs authorities may request that we or certain of our subsidiaries or affiliates post performance bonds or guarantees issued by financial institutions, including in
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the form of stand-by letters of credit, in order to guarantee our legal or contractual obligations. We cannot assure you that we will be able to provide these bonds or guarantees in the amounts or durations required or for the benefit of the necessary parties. Our failure to comply with these requests could reduce our capacity to conduct business or perform our contracts. In addition, if we do provide these bonds or guarantees, our clients or the relevant authorities may call them under circumstances that we believe to be improper, and we may not be able to challenge such actions effectively in local courts.
We and certain of our subsidiaries and affiliated entities also conduct business in countries where there is government corruption. We are committed to doing business in accordance with all applicable laws and our codes of ethics, but there is a risk that we, our subsidiaries or affiliates or their respective officers, directors, employees or agents may act in violation of our codes and applicable laws, including the Foreign Corrupt Practices Act of 1977. Any such violations could result in substantial civil and criminal penalties and might materially adversely affect our business and results of operations or financial condition.
We are subject to certain risks related to acquisitions.
In the past we have grown by acquisitions, some of which, such as the merger with Veritas in 2007, the acquisition of Wavefield in 2008 or the acquisition of Fugro Geoscience Division in 2013, were quite significant. Such transactions, whether completed, pending or likely to be completed in the future, present various financial and management-related risks that can be material, such as integration of the acquired businesses in a cost-effective manner; implementation of a combined business strategy; diversion of managements attention; outstanding or unforeseen legal, regulatory, contractual, labor or other issues arising from the acquisitions; additional capital expenditure requirements; retention of customers; combination of different company and management cultures; operations in new geographic markets; the need for more extensive management coordination; and retention, hiring and training of key personnel. Should any of these risks associated with acquisitions materialize, they could have a material adverse effect on our business, financial condition and results of operations.
We have transferred our Seabed business to a joint venture company that is controlled by a third party.
In connection with the Geoscience Acquisition, we have transferred our shallow water, ocean bottom cable and ocean bottom node activities to a company in which Fugro holds a 60% majority interest and we hold a minority interest. As a result, we no longer have full control over the management and operations of these activities. While we have certain customary rights with respect to certain key decisions relating to the joint ventures activities, this is not the same as the right to determine the strategy and policies of this business. In addition, our shares in the joint venture company are subject to restrictions on transfer, as well as to Fugros right to require us to sell our shares in certain circumstances.
We may need to write down goodwill from our balance sheet.
We have been involved in a number of business combinations in the past, leading to the recognition of large amounts of goodwill on our balance sheet. Goodwill on our balance sheet totaled US$2,483.6 million as of March 31, 2014. Goodwill is allocated to cash generating units (CGUs) as described in note 11 to our consolidated financial statements for the year ended December 31, 2013. The recoverable amount of a CGU is estimated at each balance sheet date and is generally determined on the basis of a group-wide estimate of future cash flows expected from the CGU in question. The estimate takes into account, in particular, the removal from service of certain assets used in our business (such as decommissioning or coldstacking vessels), or change in purpose of a given asset (such as the use of a seismic vessel as a source-vessel), or any significant underperformance in cash generation relative to previously-expected results, which may arise, for example, from the underperformance of certain assets, a deterioration in industry conditions or a decline in the economic environment. At each balance sheet date, if we expect that a CGUs recoverable amount will fall below the amount of capital employed recorded on the balance sheet, we may write down some value on given assets and/
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or the goodwill in part or in whole. Such a write-down would not in itself have an impact on cash flow, but could have a substantial negative impact on our operating income and net income, and as a result, on our shareholders equity and net debt/equity ratio.
We invest significant amounts of money in acquiring and processing seismic data for multi-client surveys and for our data library without knowing precisely how much of the data we will be able to sell or when and at what price we will be able to sell the data.
We invest significant amounts of money in acquiring and processing seismic data that we own. By making such investments, we are exposed to the following risks:
| We may not fully recover the costs of acquiring and processing the data through future sales. The amounts of these data sales are uncertain and depend on a variety of factors, many of which are beyond our control. In addition, the timing of these sales is unpredictable, and sales can vary greatly from period to period. Each of our individual surveys has a limited book life based on its location, so a particular survey may be subject to significant amortization even though sales of licenses associated with that survey are weak or non-existent, thus reducing our net income. |
| Technological or regulatory changes or other developments could also materially adversely affect the value of the data. For example, regulatory changes such as limitations on drilling could affect the ability of our customers to develop exploration programs, either generally or in a specific location where we have acquired seismic data, and technological changes could make existing data obsolete. |
| The value of our multi-client data could be significantly adversely affected if any adverse change occurs in the general prospects for oil and gas exploration, development and production activities in the areas where we acquire multi-client data or more generally. |
| Any reduction in the economic value of such data will require us to write down its recorded value, which could have a material adverse effect on our results of operations. |
Our results of operations may be significantly affected by currency fluctuations.
We derive a substantial portion of our revenues from international sales, subjecting us to risks relating to fluctuations in currency exchange rates. Our revenues and expenses are mainly denominated in US dollars and euros, and to a significantly lesser extent, in Canadian dollars, Brazilian reais, Australian dollars, Norwegian kroner and British pounds. Historically, a significant portion of our revenues that were invoiced in euros related to contracts that were effectively priced in US dollars, as the US dollar often serves as the reference currency when bidding for contracts to provide geophysical services. Our expenses are not linked to the US dollar in the same way, leaving us exposed to currency fluctuations.
Fluctuations in the exchange rate of other currencies, particularly the euro, against the US dollar, have had in the past and will have in the future a significant effect upon our results of operations, which are now reported in US dollars. Since most of the competitive bids for data acquisition contracts that we participate in are denominated in US dollars, the depreciation of the US dollar against the euro harms our competitive position against companies whose costs and expenses are denominated to a greater extent in US dollars. While we attempt to reduce the risks associated with such exchange rate fluctuations through our hedging policy, we cannot assure you that we will maintain our profitability level or that fluctuations in the values of the currencies in which we operate will not materially adversely affect our future results of operations. As of December 31, 2013, we estimate our annual fixed expenses in euros to be approximately 500 million and as a result, an unfavorable variation of US$0.10 in the average yearly exchange rate between the US dollar and the euro would reduce our operating income and our shareholders equity by approximately US$50 million. See Exchange rate risks as of December 31, 2013 below.
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Our working capital needs are difficult to forecast and may vary significantly, which could result in additional financing requirements that we may not be able to meet on satisfactory terms, or at all.
It is difficult for us to predict with certainty our working capital needs. This difficulty is due primarily to working capital requirements related to the marine seismic acquisition business, multi-client projects and the development and introduction of new lines of geophysical equipment products. For example, under specific circumstances, we may have to extend the length of payment terms we grant to customers or may increase our inventories substantially. We may therefore be subject to significant and rapid increases in our working capital needs that we may have difficulty financing on satisfactory terms, or at all, due notably to limitations in our debt agreements or market conditions.
Our results of operations may be affected by fluctuations in fuel costs.
Our marine acquisition business, with a fleet of 21 seismic vessels as of December 31, 2013, incurs significant fuel costs, which were approximately US$255 million in 2013. Fuel costs can vary depending on the supply location, local regulations and the price of crude oil at a given time. Only a portion of this variation can be contractually charged to or negotiated with the client. We therefore estimate that an increase by 20% of the average annual price of crude oil could increase our fuel costs and have a negative effect of approximately US$25 million on our operating income.
Our results of operations may be affected by the weight of intra-group production.
We dedicate a significant part of our production capacity to intra-group sales. For example, the Acquisition division may acquire Sercel equipment, the Marine, Land, and Airborne Acquisition business lines may acquire multi-client data, and the Subsurface Imaging business line may process multi-client surveys. The relative size of our intra-group sales and our external sales has a significant impact both on our revenues and our operating results. With respect to intra-group sales, we capitalize only the direct production costs, and we treat the corresponding general and administrative costs as expenses in our income statement, which decreases operating profit for the period when the sales occur.
Technological changes and new products and services are frequently introduced in the market, and our technology could be rendered obsolete by these introductions, or we may not be able to develop and produce new and enhanced products on a cost-effective and timely basis.
Technology changes rapidly in the seismic industry, and new and enhanced products are frequently introduced in the market in which we operate, particularly in the equipment manufacturing and data processing and geosciences sectors. Our success depends to a significant extent upon our ability to develop and produce new and enhanced products and services on a cost-effective and timely basis in accordance with industry demands. While we commit substantial resources to research and development, we may encounter resource constraints or technical or other difficulties that could delay the introduction of new and enhanced products and services in the future. In addition, the continuing development of new products risks making our older products obsolete. New and enhanced products and services, if introduced, may not gain market acceptance and may be materially adversely affected by technological changes or introductions of other new products or services by one of our competitors.
We depend on proprietary technology and are exposed to risks associated with the misappropriation or infringement of that technology.
Our ability to maintain or increase prices for our products (such as Sercel equipment and GGR Division software) and services depends in part on our ability to differentiate the value delivered by our products and services from those delivered by our competitors. Our proprietary technology plays an important role in this differentiation. We rely on a combination of patents, trademarks and trade secret laws to establish and protect our proprietary technology. Patents last up to 20 years, depending on the date of filing and the protection accorded by
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each country. In addition, we enter into confidentiality and license agreements with our employees, customers and potential customers which limit access to and distribution of our technology. However, actions that we take to protect our proprietary rights may not be adequate to deter the misappropriation or independent third-party development of our technology. In addition, we may have lawsuits filed against us claiming that certain of our products, services, and technologies infringe the intellectual property rights of others. Although we do not have any current litigation involving our intellectual property rights or the intellectual rights of others which may have an impact on us, such litigation may take place in the future. In addition, the laws of certain foreign countries do not protect proprietary rights to the same extent as, in particular, the laws of France or the United States, which may limit our ability to pursue third parties that misappropriate our proprietary technology.
Our failure to attract and retain qualified employees may adversely affect our future business and operations.
Our future results of operations will depend in part upon our ability to retain certain of our highly skilled employees and to attract new ones. A number of our employees are highly skilled scientists and technicians. We compete with other seismic products and services companies and, to a lesser extent, companies in the oil industry for skilled geophysical and seismic personnel, particularly in times when demand for seismic services is relatively high. A limited number of such skilled personnel is available, and demand from other companies may limit our ability to fill our human resources needs. If we are unable to hire and retain a sufficient number of qualified employees, this could impair our ability to compete in the geophysical services industry and to develop and protect our know-how. Our success also depends to a significant extent upon the abilities and efforts of members of our senior management, the loss of whom could materially adversely affect our business and results of operations.
We have had losses in the past and there is no assurance of our profitability for the future.
We have experienced losses in the past. In 2009, 2010, 2011 and 2013, we recorded a net loss attributable to shareholders of US$361.1 million, US$59.4 million, US$13.2 million and US$691.2 million, respectively. However, in 2008 and 2012, our net profit attributable to shareholders amounted to US$502.7 million and US$92.4 million, respectively. There is therefore no assurance as to our profitability for the future.
Risks related to our industry
The volume of our business depends on the level of capital expenditures by the oil and gas industry, and reductions in such expenditures may have a material adverse effect on our business.
Demand for our products and services has historically been dependent upon the level of capital expenditures by oil and gas companies for exploration, production and development activities. These expenditures are significantly influenced by oil and gas prices and by expectations regarding future hydrocarbon prices, which may fluctuate based on relatively minor changes in the supply of and demand for oil and gas, expectations regarding such changes and other factors beyond our control. Lower or volatile hydrocarbon prices tend to limit the demand for seismic services and products.
Factors affecting prices and, consequently, demand for our products and services, include:
| demand for hydrocarbons; |
| worldwide political, military and economic conditions, including political developments in the Middle East and North Africa, economic growth levels, the availability of financing and the ability of OPEC to set and maintain production levels and prices for oil; |
| laws or regulations restricting the use of fossil fuels or taxing such fuels and governmental policies regarding atmospheric emissions and use of alternative energy; |
| levels of oil and gas production; |
| the rate of depletion of existing oil and gas reserves and delays in the development of new reserves; |
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| the pressure imposed by equity markets on oil and gas companies to maintain a dividend distribution policy which could lead them to significantly reduce their capital expenditure plans in the short term; |
| oil and gas inventory levels; |
| the price and availability of alternative fuels; |
| policies of governments regarding the exploration for and production and development of oil and gas reserves in their territories; and |
| general weather conditions, with warmer temperatures decreasing demand for products such as heating oil and extreme weather events potentially disrupting oil and gas exploration or production operations over a wide area. |
Increases in oil and natural gas prices may not increase demand for our products and services or otherwise have a positive effect on our financial condition or results of operations. Forecasted trends in oil and gas exploration and development activities may not materialize and demand for our products and services may not reflect the level of activity in the industry. In particular, with respect to the marine acquisition market, prices remain very dependent upon the balance between supply and demand. They can thus fluctuate only slightly or even decline, even as demand increases if, at the same time, the available production capacity in the market increases to a greater degree (which was the case during 2010 and 2011).
Our backlog includes contracts that can be unilaterally delayed or terminated at the clients option.
In accordance with industry practice, contracts for the provision of seismic services typically can be delayed or terminated at the sole discretion of the client without payment of significant cancellation costs to the service provider. As a result, even if contracts are recorded in backlog, there can be no assurance that such contracts will be wholly executed by us and generate actual revenue, or even that the total costs already borne by us in connection with the contract would be covered in full pursuant to any cancellation clause. Furthermore, there can be no assurance that contracts in backlog will be performed in line with their original timetable and any possible delay could result in operating losses as most of our costs are fixed.
We are subject to intense competition in the markets where we carry out our operations, which could limit our ability to maintain or increase our market share or maintain our prices at profitable levels.
Most of our contracts are obtained through a competitive bidding process, which is standard for our industry. Competitive factors in recent years have included price, crew availability, technological expertise and reputation for quality, safety and dependability. While no single company competes with us in all of our segments, we are subject to intense competition in each of our segments. We compete with large, international companies as well as smaller, local companies. In addition, we compete with major service providers and government-sponsored enterprises and affiliates. Some of our competitors operate more crews than we do and have greater financial and other resources than we do. These and other competitors may be better positioned to withstand and adjust more quickly to volatile market conditions, such as fluctuations in oil and gas prices and production levels, as well as changes in government regulations. In addition, if geophysical service competitors increase their capacity (or do not reduce capacity if demand decreases), the excess supply in the seismic services market could apply downward pressure on prices. The negative effects of the competitive environment in which we operate could have a material adverse effect on our results of operations.
We have taken significant measures to adapt our fleet to changes in the seismic market, and we may take adjustment measures depending on the seismic market in the future, that could impose exceptional charges.
Our fleet of marine seismic acquisition vessels has evolved in the past in reaction to changes in the seismic market and our marine strategy. For example, our 2009 capacity plan reduced the size of the fleet to adjust to reduced seismic market demand, and our 2010 performance plan re-aligned our fleet components to focus on the
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high-end segment of the market. When we acquired Fugros fleet, we retained only the C-class vessels; the Geo Atlantic was decommissioned in 2013, and we intend to use the Geo Barents vessel as a source vessel until its charter ends in 2014. In February 2014, we announced our intention to reduce the fleet from 18 to 13 3D high-end vessels by the end of 2016, and we have already stopped operating the Symphony. Past fleet reductions have generated, and we expect that current and any future reductions will generate, non-recurring charges and could hinder our operational scope in marine acquisition activity.
We have high levels of fixed costs that are incurred regardless of our level of business activity.
We have high fixed costs and seismic data acquisition activities that require substantial capital expenditures. As a result, downtime or decreased productivity due to reduced demand, weather interruptions, equipment failures, permit delays or other circumstances that affect our ability to generate revenue could result in significant operating losses.
The revenues we derive from land and marine seismic data acquisition vary significantly during the year.
Our land and marine seismic data acquisition revenues are partially seasonal in nature. In the marine market notably, certain basins can be very active and absorb higher capacity during a limited period of the year (such as the North Sea between April and September), triggering significant volatility in demand and price in their geographical markets throughout the year. The marine data acquisition business is, by its nature, exposed to unproductive interim periods due to vessel maintenance and repairs or transit time from one operational zone to another during which revenue is not recognized. Other factors that cause variations from quarter to quarter include the effects of weather conditions in a given operating area, the internal budgeting process of some important clients for their exploration expenses, and the time needed to mobilize production means or obtain the administrative authorizations necessary to commence data acquisition contracts.
Our business and that of our customers are subject to governmental regulation, which may adversely affect our operations or demand for our products in the future.
Our operations are subject to a variety of international, federal, regional, national, foreign and local laws and regulations, including flight clearances (for airborne activities), environmental, health and safety and labor laws. We invest financial and managerial resources to comply with these laws and related permit requirements. Our failure to do so could result in fines, enforcement actions, claims for personal injury or property damages, or obligations to investigate and/or remediate contamination. Failure to obtain the required permits on a timely basis may also prevent us from operating in some cases, resulting in increased crew downtime and operating losses. Moreover, if applicable laws and regulations, including environmental, health and safety requirements, or the interpretation or enforcement thereof, become more stringent in the future, we could incur capital or operating costs beyond those currently anticipated. The adoption of laws and regulations that directly or indirectly curtail exploration by oil and gas companies could also adversely affect our operations by reducing the demand for our geophysical products and services.
In the United States, new regulations governing oil and gas exploration were put in place following the Deepwater Horizon platform disaster in the Gulf of Mexico. These new regulations may have a significant financial impact on oil and gas companies that wish to carry out exploration projects in deep-water Gulf of Mexico. Our client mix could be altered with the disappearance of small and medium sized players, which could decrease our sales of multi-client data.
We are exposed to environmental risks
We are subject to various laws and regulations in the countries where we operate, particularly with respect to the environment. These laws and regulations may require Group companies to obtain licenses or permits in connection with a new or existing contract. Frequent changes in environmental laws and regulations make it
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difficult to predict their cost or impact on our future operations. We are not implicated in any legal proceedings relating to environmental matters and are not aware of any claim or any potential liability in this area that could have a significant effect on our business or financial position.
Furthermore, we may be affected by new laws or regulations intended to limit or reduce emissions of gases, such as carbon dioxide and methane, which may be contributing to climate change, and these laws or regulations may affect our operations or, more generally, the production and demand for fossil fuels such as oil and gas. The European Union has already established greenhouse gas regulations, and many other countries, including the United States, may do so in the future. This could impose additional direct or indirect costs on us as our suppliers incur additional costs that get passed on to us or reduce our customers demand for our products or services.
Risks related to our indebtedness
Our substantial debt could adversely affect our financial health and prevent us from fulfilling our obligations.
We have a significant amount of debt. As of December 31, 2013, our net financial debt (which we define as gross financial debt less cash and cash equivalents) amounted to US$2,218 million. As of March 31, 2014, our net financial debt amounted to US$2,427.6 million. Total capital employed was US$6,108 million (4,429 million) as of December 31, 2013 and US$6,279 million (4,554 million) as of March 31, 2014. We cannot assure you that we will be able to generate sufficient cash to service our debt or sufficient earnings to cover fixed charges in future years.
Our substantial debt could have important consequences. In particular, it could:
| increase our vulnerability to general adverse economic and industry conditions; |
| require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund capital expenditures and other general corporate purposes; |
| limit our ability to plan for, or react to, changes in our businesses and the industries in which we operate; |
| place us at a competitive disadvantage compared to competitors that have less debt; and |
| limit our ability to borrow additional funds. |
Our debt agreements contain restrictive covenants that may limit our ability to respond to changes in market conditions or pursue business opportunities.
The agreements governing our borrowings and our US and French senior revolving facilities contain restrictive covenants that limit our ability and the ability of certain of our subsidiaries to, among other things:
| incur or guarantee additional indebtedness or issue preferred shares; |
| pay dividends or make other distributions; |
| purchase equity interests or reimburse subordinated debt prior to its maturity; |
| create or incur certain liens; |
| enter into transactions with affiliates; |
| issue or sell capital stock of subsidiaries; |
| engage in sale-and-leaseback transactions; and |
| sell assets or merge or consolidate with another company. |
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The covenants included in the indentures governing the notes and the agreements governing our U.S. senior facilities and our French revolving facility are subject to significant exceptions. For example, the starting dates for the calculation of the availability under the various baskets relating to restricted payments in the indenture governing the outstanding notes are the same as those under the indentures governing our existing senior notes, namely either January 1, 2005 or April 28, 2005 (depending on the particular basket) and the amounts available for restricted payments under these baskets are significant.
Complying with the restrictions contained in some of these agreements requires us to meet certain ratios and tests, relating notably, to consolidated interest coverage and net indebtedness. The requirement that we comply with these provisions may adversely affect our ability to react to changes in market conditions, take advantage of business opportunities we believe to be desirable, obtain future financing, fund capital expenditures, or withstand a continuing or future downturn in our business.
Detailed information relating to our debt and the restrictions set forth in our borrowing agreements is contained in note 13 to our 2013 consolidated financial statements.
Our French revolving facility entered into on July 31, 2013 and our US revolving facility entered into on July 15, 2013 and amended on July 31, 2013 require that we meet the following ratios, which are tested at the end of each quarter for the rolling 12-month testing period:
| a maximum ratio of consolidated total net debt to consolidated EBITDA of not more than 3.00: to 1:00; |
| a maximum ratio of consolidated EBITDA to total interest costs of at least 4:00 to 1:00. |
Our US$200 million term loan and revolving facilities entered into on July 1, 2013 require that we meet the following ratios and tests:
| a minimum of cash plus cash equivalents of not less than US$75 million at all times; |
| a maximum ratio of total net financial debt to EBITDA of not more than 3.00:1.00; and |
| a minimum ratio of EBITDA to total interest costs of at least 3.00:1.00. |
If we are unable to comply with the restrictions and covenants in the indentures governing our Senior Notes, the agreements governing our US and French senior revolving facilities and other current and future debt agreements, there could be a default under the terms of these indentures and agreements, which could result in an acceleration of repayment.
If we are unable to comply with the restrictions and covenants in the indentures governing our Senior Notes or in other current or future debt agreements, including those governing our US and French senior revolving facilities, there could be a default under the terms of these indentures and agreements. Our ability to comply with these restrictions and covenants, including meeting financial ratios and tests, may be affected by events beyond our control. As a result, we cannot assure you that we will be able to comply with these restrictions and covenants or meet such financial ratios and tests. In certain events of default under these agreements, lenders could terminate their commitments to lend or accelerate the loans or bonds and declare all amounts outstanding due and payable. Borrowings under other debt instruments that contain cross-acceleration or cross-default provisions may also be accelerated and become due and payable. If any of these events occur, our assets might not be sufficient to repay in full all of our outstanding indebtedness and we may be unable to find alternative financing. Even if we could obtain alternative financing, it might not be on terms that are favorable or acceptable to us.
We and our subsidiaries may incur substantially more debt.
We and our subsidiaries may incur substantial additional debt (including secured debt) in the future. The terms of the indentures governing our Senior Notes and the agreements governing our US and French revolving facilities and our other existing senior indebtedness limit, but do not prohibit, us and our subsidiaries from doing so.
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On July 1, 2013, we entered into a 5-year US$200 million term loan and revolving facilities secured by three vessels (Geo Coral, Geo Caribbean, Oceanic Challenger), split into two tranches of US$100 million each, the proceeds of which were used in part to reimburse a portion of the vendor loan granted by Fugro. As of March 31, 2014, US$90 million of the revolving facility tranche was drawn and US$90 million were outstanding under the term loan tranche.
On July 15, 2013, we entered into a US revolving credit facility of up to US$165 million with a 5-year maturity. This facility was undrawn as of March 31, 2014.
On July 31, 2013, we entered into a French revolving credit facility of up to US$325 million with a 3-year maturity with two extension options of one year each. 197 million (US$272 million) was drawn as of March 31, 2014. As of March 31, 2014, we had long-term confirmed and undrawn credit lines (including revolving facilities) amounting to US$220 million.
If new debt is added to our current debt levels, the related risks for us could intensify.
To service our indebtedness and make capital expenditures, we require a significant amount of cash, and our ability to generate cash will depend on many factors beyond our control.
Our ability to make payments on and to refinance our indebtedness, and to fund planned capital expenditures, depends in part on our ability to generate cash in the future. This ability is, to a certain extent, subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
We cannot assure you that we will generate sufficient cash flow from operations to realize operating improvements on schedule or that future cash from operations and borrowings will be available to us in an amount sufficient to enable us to service and repay our indebtedness or to fund our other liquidity needs. If we are unable to satisfy our debt obligations, we may have to undertake alternative financing plans, such as refinancing or restructuring our indebtedness, selling assets, reducing or delaying capital investments or seeking to raise additional capital. We cannot assure you that any refinancing or debt restructuring would be possible, that any assets could be sold or that, if sold, the timing of the sales and the amount of proceeds realized from those sales would be favorable to us or that additional financing could be obtained on acceptable terms. Any disruptions in the capital and credit markets could adversely affect our ability to meet our liquidity needs or to refinance our indebtedness, including our ability to draw on our existing credit facilities or enter into new credit facilities. Banks that are party to our existing credit facilities may not be able to meet their funding commitments to us if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests from us and other borrowers within a short period of time. Furthermore, changes in the monetary policies of the US Federal Reserve and the European Central Bank may increase our financing costs and consequently adversely impact our ability to refinance our indebtedness.
Market and other risks
We are exposed to liquidity risks
Persistent volatility in the financial markets could have a material adverse effect on our ability to refinance all or a portion of our indebtedness and to otherwise fund our operational requirements. We cannot be certain that additional funds will be available if needed to make future investments in certain projects, take advantage of acquisitions or other opportunities or respond to competitive pressures. If additional funds are not available, or are not available on terms satisfactory to us, there could be a material adverse impact on our business and financial performance.
As of December 31, 2013, we had US$2,218 million (1,608 million) of net debt with US$2,748 million (1,992 million) financial debt (of which US$24 million (18 million) was bank overdrafts and accrued interest) and US$530 million (384 million) of cash and cash equivalents.
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As of December 31, 2013, our financial debt consisted primarily of the following (principal amounts differ from financial debt amounts on our balance sheet due to various adjustments including for the equity component of convertible bonds, issuance discounts and capitalized expenses):
| US$225 million outstanding principal amount of our 9 1⁄2% Senior Notes due 2016, US$400 million outstanding principal amount of our 7 3⁄4% Senior Notes due 2017 and US$650 million outstanding principal amount of our 9 1⁄2% Senior Notes due 2021; |
| 360 million outstanding principal amount of our 1.75% OCEANE convertible bonds (bonds convertible into or exchangeable for new or existing shares) due 2016; |
| 360 million outstanding principal amount of our 1.25% OCEANE convertible bonds (bonds convertible into or exchangeable for new or existing shares) due 2019; |
| Our up to US$325 million French revolving facility, of which 110 million was drawn as of December 31, 2013; |
| Our up to US$165 million US revolving facility, which was undrawn as of December 31, 2013; |
| Our US$200 million term loan and revolving facilities secured by three vessels (Geo Coral, Geo Caribbean, Oceanic Challenger), of which US$95 million was drawn under the revolving facility and US$95 million was outstanding under the term loan as of December 31, 2013; |
| 112.5 million under the vendor loan granted by Fugro; and |
| a total of up to US$39 million (out of which US$30 million was drawn) under various credit lines held by several of our subsidiaries. |
The breakdown of our financial liabilities is presented in the table below:
As of December 31, 2013 |
N+1 | N+2 to N+4 | N+5 and > | Total | ||||||||||||||||||||||||||||||||
Nominal | Interests | Nominal | Interests | Nominal | Interests | Nominal | Interests | |||||||||||||||||||||||||||||
(In millions of US dollars) | ||||||||||||||||||||||||||||||||||||
Senior Notes & convertible bonds |
2,122 | | 110 | 1,065 | 268 | 1,057 | 157 | 2,122 | 535 | |||||||||||||||||||||||||||
Bank borrowings |
368 | 204 | 8 | 135 | 13 | 30 | 1 | 368 | 22 | |||||||||||||||||||||||||||
Financial leases |
121 | 9 | 6 | 30 | 16 | 82 | 14 | 121 | 35 | |||||||||||||||||||||||||||
Banks overdrafts |
5 | 5 | | | | | | 5 | | |||||||||||||||||||||||||||
Other financial debts |
174 | 19 | 9 | 116 | 26 | 39 | 2 | 174 | 37 | |||||||||||||||||||||||||||
Derivative instruments |
| | | | | | | | | |||||||||||||||||||||||||||
Cash |
(530 | ) | | | | | | | | | ||||||||||||||||||||||||||
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Total net financial liabilities |
2,260 | 236 | 133 | 1,346 | 323 | 1,208 | 174 | 2,790 | 629 | |||||||||||||||||||||||||||
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The Senior Notes, the term loan and revolving facilities secured by three vessels and the French and US senior revolving facilities contain certain restrictive covenants, including covenants that require compliance with certain financial ratios. For the term loan and revolving facilities secured by vessels and the French and US senior revolving facilities, these financial ratios and tests were as follows as of December 31, 2013:
US senior revolving facility |
French senior revolving facility |
Term loan and revolving facilities secured by vessel assets |
||||||||||
Ratio |
Requirement | Requirement | Requirement | As of December 31, 2013 | ||||||||
Total net debt to EBITDA |
£3.00 | £3.00 | £3.00 | 1.96x | ||||||||
EBITDA to total interest costs |
³4.00 | ³4.00 | ³3.00 | 6.14x | ||||||||
Minimum liquidity |
N/A | N/A | Cash plus Cash Equivalents > US$75 million |
US$530 million |
As of December 31, 2013, our available financial resources amounted to US$781 million (including cash, cash equivalents, marketable securities and undrawn syndicated credit lines).
We are exposed to interest rate risk
We may be required to obtain a portion of our borrowings from financial institutions at variable interest rates indexed to draw periods ranging from one to 12 months. As a result, our interest expenses on this debt vary in line with movements in short-term interest rates. However, a significant portion of our debt consists of fixed-rate bonds, as well as a number of fixed-rate finance leases and fixed-rate medium-term bank credit facilities with variable maturities (see note 14 Financial Instruments to our consolidated financial statements, included elsewhere in this document). This debt is not exposed to interest rate fluctuations.
The following table shows our variable interest rate exposure by maturity as of December 31, 2013.
Financial assets(*) | Financial liabilities(*) | Net position before hedging |
Off-balance sheet position |
Net position after hedging |
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(a) | (b) | (c)=(a)-(b) | (d) | (e)=(c)+(d) | ||||||||||||||||||||||||||||||||||||
As of December 31, 2013 |
Fix rate |
Variable rate |
Fix rate |
Variable rate |
Fix rate |
Variable rate |
Fix rate |
Variable rate |
Fix rate |
Variable rate |
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In millions of US dollars | ||||||||||||||||||||||||||||||||||||||||
Overnight to 1 year |
124 | 336 | 68 | 154 | 56 | 183 | | | 56 | 183 | ||||||||||||||||||||||||||||||
1 to 2 years |
| | 833 | 14 | (833 | ) | (14 | ) | | | (833 | ) | (14 | ) | ||||||||||||||||||||||||||
3 to 5 years |
| | 970 | | (970 | ) | | | | (970 | ) | | ||||||||||||||||||||||||||||
More than 5 years |
| | 683 | | (683 | ) | | | | (683 | ) | | ||||||||||||||||||||||||||||
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Total |
124 | 336 | 2,555 | 168 | (2,431 | ) | 169 | | | (2,431 | ) | 169 | ||||||||||||||||||||||||||||
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(*) | Excluding bank overdrafts and accrued interest |
As of December 31, 2013, our variable-rate assets (net of liabilities) maturing in less than one year totaled US$183 million.
The following table shows our variable interest rate exposure over our financial assets and liabilities as of December 31, 2013:
As of December 31, 2013 | ||||||||
Impact on result before tax |
Impact on shareholders equity before tax |
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In millions of US dollars | ||||||||
Impact of an interest rate variation of +0.8% |
1.3 | 1.3 | ||||||
Impact of an interest rate variation of -0.8% |
(1.3 | ) | (1.3 | ) |
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The sensitivity analysis is based on a net exposure of US$169 million.
Our variable interest rate indebtedness carried an average interest rate of 2.2% in 2013, and our investments and other financial assets earned interest at an average rate of 0.8%.
Exchange rate risks as of December 31, 2013
The following table shows our exchange rate exposure as of December 31, 2013:
As of December 31, 2013 | ||||||||||||||||||||||||||||
Assets | Liabilities | Currency commitments |
Net position before hedging |
Off-balance sheet positions |
Other hedging instruments |
Net position after hedging |
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(a) | (b) | (c) | (d) = (a) (b) ± (c) | (e) | (f) | (g) = (d) + (e)-(f) | ||||||||||||||||||||||
(Converted in millions of US dollars) | ||||||||||||||||||||||||||||
US$(1) |
1,989.0 | 1,055.9 | 0.0 | 933.1 | 3.1 | 920.5 | 15.7 |
(1) | US$-denominated assets and liabilities in the entities whose functional currency is the euro. |
As of December 31, 2013 | ||||||||||||||||||||||||
Assets | Liabilities | Currency commitments |
Net position before hedging |
Off-balance sheet positions |
Net position after hedging |
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(a) | (b) | (c) | (d) = (a) (b) ± (c) | (e) | (f) = (d) + (e) | |||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||
EUR(2) |
110.4 | 113.7 | 0.0 | -3.3 | 0.0 | -3.3 |
(2) | Euro-denominated assets and liabilities in the entities whose functional currency is the US$. |
Our net foreign-exchange exposure is principally linked to the euro. We seek to reduce our foreign-exchange position by selling the future receivables surplus over euro costs of our Equipment division as soon as they enter the backlog and taking out dollar-denominated loans supported by long-term assets. Although we attempt to reduce the risks associated with exchange rate fluctuations, we cannot assure you that fluctuations in the values of the currencies in which we operate will not materially adversely affect our future results of operations. Our annual fixed expenses in euros are equal to approximately 500 million and as a consequence, an unfavorable variation of US$0.10 in the average yearly exchange rate between the US dollar and the euro would reduce our operating income and our shareholders equity by approximately US$50 million.
We have also a substantial net foreign-exchange exposure related to the Norwegian krone. As of December 31, 2013,
| our NOK-denominated assets and liabilities, in the entities whose functional currency is the US dollar, had a passive net position after hedging equivalent to US$10 million, and |
| our US$-denominated assets and liabilities, in the entities whose functional currency is the NOK, had an active net position after hedging equivalent to US$12 million. |
We monitor our balance sheet exposure through either forward sales or capital operations.
As a result of our compliance with IAS 12 (Income Taxes), our results of operation are also exposed to the effect of exchange rate variations on our deferred tax amounts when the functional currency for an entity that owns a non-cash asset is not the same as the currency used for taxation purposes.
With respect to exchange rate risk related to investments in operating subsidiaries, we consider such risk to be low, since the functional currency of the majority of operating entities is the US dollar.
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We are exposed to risk related to equities and financial instruments
We are exposed to risk of fluctuations in the value of equities and other financial instruments we may hold.
Any transactions involving our own shares are decided by management in accordance with applicable regulations.
As of December 31, 2013, we owned 800,000 of our own shares with a balance sheet value of US$20.6 million. As those shares are valued at historical cost, changes in the stocks market price do not have any impact in the consolidated statements of the Group.
Our investment policy does not authorize short term investment in the equities of other companies.
The fair value of the own shares as of December 31, 2013 is as follows:
As of December 31, 2013 |
At fair value | Available for sales |
Held to maturity |
Derivatives | Total | |||||||||||||||
Shares |
US$ | 13.9 million | | | | US$ | 13.9 million | |||||||||||||
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Total |
US$ | 13.9 million | | | | US$ | 13.9 million | |||||||||||||
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Risks relating to the financial market environment
The current situation in the credit and capital markets is likely to have a significant adverse impact on industrial and commercial performance and the solvency of many companies in general, which may affect some of our customers and suppliers. As a result, the current economic climate may have an adverse impact on our business if customers cancel orders or delay or default on payment, or if suppliers fail to provide goods and services as agreed.
Risks related to insurance
The nature of our business subjects us to significant ongoing operating risks for which we may not have adequate insurance or for which we may not be able to procure adequate insurance on reasonable terms, if at all.
The nature of our business involves ongoing and significant operating risks for which we are not always insured, and in respect of which we may not be able to obtain adequate insurance at economically reasonable rates, if at all.
| Our seismic data acquisition activities, particularly in deepwater marine areas, are often conducted under harsh weather and other hazardous operating conditions, including the detonation of dynamite. These operations are subject to the risk of downtime or reduced productivity, as well as to the risks of loss to property and injury to personnel resulting from fires, accidental explosions, mechanical failures, spills, collisions, stranding, ice floes, high seas and natural disasters. In addition to losses caused by human errors and accidents, we may also be subject to losses resulting from, among other things, war, terrorist activities, piracy, political instability, business interruption, strikes and weather events. |
| Our extensive range of seismic products and services expose us to litigation and legal proceedings including those related to product liability, personal injury and contract liability. |
| We produce and sell highly complex products and we cannot assure you that our extensive product development, manufacturing controls and testing will be adequate and sufficient to detect all defects, errors, failures, and quality issues that could affect our customers and result in claims against us, order cancellations or delays in market acceptance. |
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We have put in place insurance coverage against operating hazards, including product liability claims and personal injury claims, damage, destruction or business interruption of data processing centers, manufacturing centers and other facilities, in amounts we consider appropriate in accordance with industry practice. Our risk coverage policy reflects our objective of covering major claims that could affect our facilities and equipment, as well as third-party liability claims that we may be exposed to as a result of our activities. We review the adequacy of insurance coverage for risks we face periodically. Whenever possible, we obtain agreements from customers that limit our liability.
However, we cannot assure you that our insurance coverage will be sufficient to fully indemnify us against liabilities arising from pending and future claims or that our insurance coverage will be adequate in all circumstances or against all hazards, or that we will be able to maintain adequate insurance coverage in the future at commercially reasonable rates or on acceptable terms.
Risks related to outsourcing
Disruptions to our supply chain and other outsourcing risks may adversely affect our ability to deliver our products and services to our customers.
Our supply chain is a complex network of internal and external organizations responsible for the supply, manufacture and logistics supporting our products and services around the world. We are vulnerable to disruptions in this supply chain from changes in government regulations, tax and currency changes, strikes, boycotts and other disruptive events as well as from unavailability of critical resources. These disruptions may have an adverse impact on our ability to deliver products and services to our customers.
Within our Group, Sercel makes particular use of subcontracting. Our French manufacturing sites outsource part of their production to local third-party companies selected according to certain criteria, including quality and financial soundness. Outsourced operations are distributed among several entities, each having a small proportion of aggregate outsourced activity in order to limit risk related to the failure of any one of our subcontractors. For our services business, our policy is not to rely on outsourcing for any of our activities, except in special cases where there is a lack of available capacity.
If our suppliers, vendors, subcontractors or other counterparties are unable to perform their obligations to us or our customers, we may be required to provide additional services or make alternate arrangements on less favorable terms with other parties to ensure adequate performance and delivery of service to our customers. These circumstances could also lead to disputes and litigation with our partners or customers, which could have a material adverse impact on our reputation, business, financial condition and results of operations.
Risks related to the notes
Your right to receive payments on the notes is effectively junior to certain of our existing indebtedness and possibly all of our future borrowings.
The notes effectively rank behind all of our secured indebtedness, to the extent of the value of assets which secure such indebtedness, including borrowings under our U.S. revolving facility and French revolving facility. In the event of any foreclosure, dissolution, winding-up, liquidation, reorganization, administration or other bankruptcy or insolvency proceeding of an entity that has secured obligations, holders of secured indebtedness will have prior claims to our assets or the relevant guarantors assets that constitute their collateral.
Only certain of our subsidiaries will initially guarantee the notes. Our other subsidiaries have no obligation to pay amounts due on the notes and will not initially guarantee the notes. As a result, the notes are structurally subordinated to existing and future third party indebtedness and other liabilities, including trade payables, of those non-guarantor subsidiaries. The Initial Guarantors (excluding their subsidiaries that have not guaranteed the notes) generated, before consolidation entries, US$1,354.5 million of revenue, US$(389.6) million of operating
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income (loss) and US$(476.8) million of net income (loss) in the year ended December 31, 2013 and held US$7,680.8 million of total assets (before consolidation entries) as at December 31, 2013. The Initial Guarantors represented 36% of our consolidated revenues in the year ended December 31, 2013 and 93% of our consolidated assets as at December 31, 2013. The Initial Guarantors (excluding their subsidiaries that have not guaranteed the notes) generated, before consolidation entries, US$266.1 million of revenue, US$23.4 million of operating income and US$(2.9) million of net income (loss) in the three months ended March 31, 2014 and held US$7,766.7 million of total assets (before consolidation entries) as at March 31, 2014. The Initial Guarantors represented 33% of our consolidated revenues in the three months ended March 31, 2014 and 95% of our consolidated assets as at March 31, 2014.
In the event of a bankruptcy, liquidation or reorganization or similar proceeding relating to us, our subsidiaries or our respective properties, holders of the notes will participate with our trade creditors and all other holders of our senior unsecured indebtedness in the assets remaining. In any of these cases, we may not have sufficient funds to pay all of our creditors, and holders of the notes may receive less, ratably, than the holders of secured debt.
As of March 31, 2014, on a pro forma basis after giving effect to the offering of the notes, the offering of 400 million principal amount of our 5.875% Senior Notes due 2020 and the use of proceeds of the notes and of the 5.875% Senior Notes due 2020, we would have had US$588.0 million of outstanding indebtedness, including accrued interest, effectively senior to the notes, of which US$580.1 million would have been secured.
We will rely in part on our subsidiaries for funds necessary to meet our financial obligations, including the notes.
We conduct a significant proportion of our activities through our subsidiaries. We will depend in part on those subsidiaries for dividends and other payments to generate the funds necessary to meet our financial obligations, including the payment of principal and interest on the notes. We cannot assure you that the earnings from, or other available assets of, these operating subsidiaries, together with our own operations, will be sufficient to enable us to pay principal or interest on the notes when due.
Although the occurrence of specific change of control events affecting us will permit you to require us to repurchase your notes, we may not be able to repurchase your notes.
Upon the occurrence of specific change of control events affecting us, you will have the right to require us to repurchase your notes at 101% of their principal amount, plus accrued and unpaid interest. Our ability to repurchase your notes upon such a change of control event would be limited by our access to funds at the time of the repurchase and the terms of our debt agreements, which agreements could restrict or prohibit such a repurchase. Upon a change of control event, we may be required immediately to repay the outstanding principal, any accrued interest on and any other amounts owed by us under our U.S. revolving facility and our French revolving facility. The source of funds for these repayments would be our available cash or cash generated from other sources. However, we cannot assure you that we will have sufficient funds available upon a change of control to make these repayments and any required repurchases of tendered notes.
Courts, under certain circumstances, may void the guarantees of the notes provided by certain of our subsidiaries.
Our creditors or the creditors of one or more guarantors of the notes or a liquidator, administrator or other controller appointed to a guarantor could challenge the guarantees as fraudulent transfers, conveyances, preferences, insolvent transactions or uncommercial transactions or on other grounds (including because of the absence of a corporate benefit to the guarantor or due to financial assistance principles) under applicable U.S. federal or state law, applicable Dutch law, applicable Norwegian law, applicable Australian law, applicable Canadian law or the applicable law governing the country of incorporation of any future guarantors. While the
34
relevant laws vary from one jurisdiction to another, the entering into the guarantees by certain of our subsidiaries could be found to be a fraudulent transfer, conveyance, preference, insolvent transaction or uncommercial transaction or otherwise void or unenforceable if a court were to determine that, for example, one or more of the following apply to the provision of the guarantee:
| a guarantor delivered its guarantee with the intent to defeat, hinder, delay, defraud or otherwise interfere with its existing or future creditors; |
| the guarantor did not receive fair consideration or benefit for the delivery of the guarantee and the guarantor was insolvent at the time it delivered the guarantee; |
| the guarantor delivered its guarantee in contravention of laws relating to the provision of financial assistance; |
| the guarantor was insolvent at the time of execution of the guarantee or was rendered insolvent by reason of its execution of the guarantee or the observance of its obligations under the guarantee; |
| a reasonable person in the guarantors circumstances would not have entered into the transaction having regard to the benefits (if any) to the guarantor, the detriment to the guarantor and the respective benefits to other parties; |
| the guarantor was engaged, or was about to engage, in a business or transaction for which its remaining assets constituted unreasonably small capital to carry on its business; |
| the guarantor intended to incur, or believed it would incur, debts beyond its ability to pay the debts as they matured; |
| the guarantor was a defendant in an action for money damage or had a judgment for money damages docketed against it (if, in either case, after final judgment, the judgment is unsatisfied); or |
| the availability of certain equitable remedies that are in the discretion of the courts. |
To the extent a court voids a guarantee as a fraudulent transfer, preference, insolvent transaction or uncommercial transaction or conveyance or holds it unenforceable for any other reason, holders of notes would cease to have any direct claim against the guarantor that delivered the guarantee. If a court were to take this action, the guarantors assets would, in certain jurisdictions, be applied first to satisfy the guarantors liabilities, including trade payables and preferred stock claims, if any, before any portion of its assets could be distributed to us to be applied to the payment of the notes. We cannot assure you that a guarantors remaining assets would be sufficient to satisfy the claims of the holders of notes relating to any voided portions of the guarantees. In other jurisdictions (such as Australia), if a guarantee is so voided or held unenforceable, you will cease to have any claim against the guarantor.
Because we are organized under the laws of France, you may be unable to recover in civil proceedings for U.S. securities laws violations.
Judgments of U.S. courts, including those predicated on the civil liability provisions of the federal securities laws of the United States, may not be enforceable in French courts. As a result, holders of notes who obtain a judgment against us in the United States may not be able to require us to pay the amount of the judgment. It may not be possible for holders to effect service of process within the United States upon our directors and officers or to enforce against these persons, or us, judgments of United States courts predicated upon civil liability provisions of the federal securities laws of the United States. See Service of Process and Enforcement of Liabilities.
A trading market for the notes may not develop.
The new notes are a new issue of securities with no established trading market. The liquidity of any market for the notes will depend upon the number of holders of the notes, our performance, the market for similar
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securities, the interest of securities dealers in making a market in the notes and other factors, including general declines or disruptions in the markets for debt securities. Although we will apply to admit the new notes to listing on the Official List of the Luxembourg Stock Exchange and to trading on the Euro MTF, a liquid trading market may not develop or continue to exist for the notes.
EU Proposed Financial Transactions Tax
The European Commission has published a proposal for a Directive for a common financial transactions tax (FTT) in Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia (the participating Member States).
The proposed FTT has very broad scope and could, if introduced in its current form, apply to certain transactions relating to the notes (including secondary market transactions) in certain circumstances. The FTT would impose a charge at generally not less than 0.1% of the sale price on such transactions or the market price of the relevant securities, whichever is higher.
Under current proposals the FTT could apply in certain circumstances to persons both within and outside of the participating Member States. Generally, it would apply to certain transactions relating to the notes where at least one party is established in a participating Member State and a financial institution established in (or treated as established in) a participating Member State is a party to the transaction, for its own account, for the account of another person, or if the financial institution is acting in the name of a party to the transaction. A party may be deemed to be established in a participating Member State in a broad range of circumstances, including if its seat is there, if it is acting via a branch in that Member State (as regards branch transactions), or where the financial instrument which is the subject of the transaction is issued in a participating Member State.
In addition to these cases, a financial institution may also be treated as established in a participating Member State if it is authorized there (as regards authorized transactions), or if it is entering into the financial transaction with another person who is established in that Member State.
The FTT proposal remains however subject to negotiation between the participating Member States and is the subject of legal challenge. It may therefore be altered prior to any implementation, the timing of which remains unclear. Additional EU Member States may decide to participate. Prospective holders of the notes are advised to seek their own professional advice in relation to the FTT.
French insolvency laws may not be as favorable to you as the insolvency laws of the United States or other countries.
We conduct a part of our business activity in France and, to the extent that the center of our main interests is deemed to be in France, we could be subject to French insolvency proceedings affecting creditors, including court-assisted pre-insolvency proceedings (mandat ad hoc proceedings or conciliation proceedings (procédure de conciliation)), court-administered insolvency proceedings (safeguard proceedings (procédure de sauvegarde), accelerated financial safeguard proceedings (procédure de sauvegarde financière accélérée) (SFA proceedings) and judicial reorganization or liquidation proceedings (redressement ou liquidation judiciaire)). In general, French insolvency legislation favors the continuation of a business and protection of employment over the payment of creditors and could limit your ability to enforce your rights under the notes.
For an overview of certain insolvency laws and enforceability issues under French law, see Certain Insolvency Law Considerations in France.
French insolvency is about to change as a result of Ordinance No. 2014-326 of March 12, 2014 relating to the reform of the prevention of corporate difficulties and of insolvency proceedings, which is expected to come into force on July 1, 2014. This reform will affect the current regime described in Certain Insolvency Law Considerations in France, and these modifications are presented at the end of that section.
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OFFERING OF THE OUTSTANDING NOTES
On May 1, 2014, we issued US$500,000,000 aggregate principal amount of the outstanding notes to certain initial purchasers of those notes (the Initial Purchasers) at a price of 100.000% of the principal amount of those notes in a private transaction not registered under the Securities Act. The Initial Purchasers then offered and resold the outstanding notes outside the United States in reliance on Regulation S under the Securities Act and to qualified institutional buyers within the United States in reliance on Rule 144A under the Securities Act, at a price to such purchasers of 100.000% of the principal amount of those notes. We used the approximately US$494 million of net proceeds (after deducting commissions, fees and expenses) to redeem all of the US$225 million outstanding principal amount of our 9 1⁄2% Senior Notes due 2016 at a redemption price of 102.375% and used the remaining net proceeds to redeem US$265 million of the US$400 million outstanding principal amount of our 7 3⁄4% Senior Notes due 2017 at a redemption price of 101.292% plus, in each case, accrued and unpaid interest on the notes redeemed.
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We will not receive any cash proceeds from the issuance of the new notes. In consideration for issuing the new notes, we will receive in exchange a like principal amount of outstanding notes. The outstanding notes surrendered in exchange for the new notes will be retired and cancelled and cannot be reissued. Accordingly, issuance of the new notes will not result in any change in our capitalization.
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DESCRIPTION OF CERTAIN INDEBTEDNESS
The following is a description of the terms of our material financing arrangements.
U.S. Revolving Facility
On July 15, 2013, we entered into a US revolving credit facility of up to US$165 million with a 5-year maturity. The borrower is CGG Holding (U.S.) Inc. with Credit Suisse acting as administrative agent and collateral agent. This facility was undrawn as of March 31, 2014.
Proceeds of loans under the US revolving facility may be used for the general corporate purposes of the borrower and other subsidiaries of CGG. Revolving loans may be made at any time prior to the final maturity of the US revolving facility.
The obligations of CGG Holding (U.S.) Inc. as borrower under the US revolving facility are guaranteed by us and certain of our subsidiaries. We have pledged first-priority security in the shares of CGG Holding (U.S.) Inc. and certain of our other first-tier subsidiaries. In addition, certain guarantors have provided first-priority security interests in certain of their respective tangible and intangible assets, including (without limitation) certain marine equipment, deposit accounts and intellectual property.
In addition, the US revolving credit facility agreement contains affirmative and negative covenants that affect our ability, among other things, to borrow money, incur liens, dispose of assets and acquisitions and pay dividends or redeem shares. Events of default under the US revolving credit facility include, among other things, payment and covenant breaches, insolvency of us or our subsidiaries, the occurrence of certain events constituting a change of control and certain defaults in respect of other material financial indebtedness.
The US revolving credit facility agreement was amended on July 31, 2013 in order to insert a clause related to anti-corruption law and the EBITDA to total interest costs financial covenant described below.
Pursuant to this agreement, including above amendment, we are required to adhere to certain financial covenants defined as follows:
| a maximum ratio of total net financial debt to EBITDA of 3.00:1 for each rolling 12-month period tested at the end of each quarter between September 30, 2013 and June 30, 2018; |
| and a minimum ratio of EBITDA to total interest costs of 4.00:1 for each rolling 12-month period tested at the end of each quarter September 30, 2013 and June 30, 2018. |
Borrowings under US revolving facility bear interest, at the option of the borrower, at the rate of adjusted LIBOR plus 2.50% or the Alternate Base Rate plus 1.50%. The Alternate Base Rate is the higher of Credit Suisses Prime Rate, the Federal Funds Effective Rate plus one half of 1.00% and the adjusted LIBOR rate for a one-month interest period plus 1.00%.
French Revolving Facility
On July 31, 2013, we entered into a French revolving credit facility of up to US$325 million with a 3-year maturity with two extension options of one year each. The borrower is CGG SA with Natixis as Agent. The proceeds of the French revolving facility may be drawn in dollars or in euros, and may be used for the general corporate purposes of the borrower. 197 million (US$272 million) was drawn and outstanding as of March 31, 2014.
Pursuant to this agreement, we are required to adhere to certain financial covenants defined as follows:
| a maximum ratio of total net financial debt to EBITDA of 3.00:1 for each rolling 12-month period tested at the end of each quarter between September 30, 2013 and June 30, 2016; |
| and a minimum ratio of EBITDA to total interest costs of 4.00:1 for each rolling 12-month period tested at the end of each quarter between September 30, 2013 and June 30, 2016. |
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Each cash advance under the French revolving facility must be repaid in full at the end of the relevant interest period of one month to twelve months and is available for redrawing during the availability period. All drawings under the French revolving facility must be repaid on the final maturity date.
Our obligations under the French revolving facility are guaranteed by the same guarantors that guarantee the US revolving credit facility (including CGG Holding (U.S.) Inc.), and are secured by the same security interests granted to secure the obligations under the US revolving credit facility.
The rate of interest on each loan for each interest period is the percentage rate per annum which is the aggregate of the applicable margin and the higher of zero and in relation to any loan in US dollars, LIBOR or in relation to any loan made in euros, EURIBOR.
The applicable margin ranges from 0.70% to 2.80% for loans made in euros and 1.10% to 3.20% for loans made in US dollars, depending on the corporate rating of CGG by Standard & Poors and the corporate family rating of CGG by Moodys.
Debt Securities
OCEANE convertible bonds 2016 OCEANEs
On January 27, 2011, we issued 12,949,640 bonds convertible into and/or exchangeable for new or existing shares of our company (the 2016 OCEANEs) maturing on January 1, 2016. The 2016 OCEANEs nominal value was set at 27.80 per bond, representing an issue premium of 25% of the CGG reference share price on the regulated market of NYSE Euronext in Paris. The 2016 OCEANEs bear interest at a rate of 1.75% payable semi-annually in arrears on January 1 and July 1 of each year. The bonds entitle the holders to receive new and/or existing CGGs shares at the ratio of one share per one bond, subject to adjustments. Under certain conditions, the bonds may be redeemed prior to maturity at our option. We used the net proceeds of the issuance to redeem US$460 million principal amount of our US$530 million 7 1⁄2% Senior Notes due 2015.
Concurrently with the issuance of our 5.875% Senior Notes due 2020 on April 23, 2014, we launched an offer to purchase, through a reverse bookbuilding procedure, up to 360 million principal amount of our 2016 OCEANEs. An aggregate principal amount of approximately 293 million 2016 OCEANEs (or 81.4% of the total outstanding 2016 OCEANEs) were tendered at a price of 28.60 (including accrued interest) per 2016 OCEANE. On April 25, 2014, we launched a standing repurchase order on the market in France for the remaining 2016 OCEANEs at a fixed price of 28.60 (including accrued interest) per 2016 OCEANE. The standing repurchase order ended on May 2, 2014 and resulted in the repurchase of approximately 60 million principal amount of 2016 OCEANEs. The repurchased 2016 OCEANEs were cancelled in accordance with their terms. On June 27, 2014, we redeemed the remaining outstanding 2016 OCEANEs at a price of 27.80 per 2016 OCEANE plus accrued interest.
OCEANE convertible bonds 2019 OCEANEs
On November 20, 2012, we issued 11,200,995 OCEANE convertible bonds maturing on January 1, 2019 for a total nominal amount of 360 million. The 2019 OCEANE convertible bonds nominal value was set at 32.14 per bond, representing an issue premium of 40% of the CGG reference share price on the regulated market of NYSE Euronext in Paris. The 2019 OCEANE convertible bonds bear interest at a rate of 1.25% payable semi-annually in arrears on January 1 and July 1 of each year. Under certain conditions, the bonds may be redeemed prior to maturity at our option. We used the net proceeds of the issuance to finance part of the purchase price of the Geoscience Acquisition.
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High yield bonds 7 3⁄4% Senior Notes due 2017
On February 9, 2007, we issued US$400 million in aggregate principal amount of 7 3⁄4% Senior Notes due 2017. These notes are guaranteed on a senior basis by the same guarantors that guarantee our senior facilities (including CGG Holding (U.S.) Inc.). We used the net proceeds from the notes to repay part of the US$700 million outstanding under the bridge loan facility used to finance the Veritas acquisition.
On June 2, 2014, we used a portion of the proceeds of our offering of 6.875% Senior Notes due 2022 to redeem US$265 million aggregate principal amount of our US$400 million 7 3⁄4% Senior Notes due 2017 at a price of 101.292% plus accrued interest.
High yield bonds 9 1⁄2% Senior Notes due 2016
On June 9, 2009, we issued US$350 million principal amount of 9 1⁄2% Senior Notes due 2016. The Senior Notes were issued at a price of 97.0% of their principal amount, resulting in a yield of 10 1⁄8%. The Senior Notes will mature on May 15, 2016.
We used the proceeds from the notes to replace cash used to repay US$100 million of our former Term Loan B facility on May 21, 2009, and to fund the three quarterly US$27.5 million amortization payments due during the remainder of 2009 under our former Term Loan B facility. The remaining amount enabled Norway subsidiaries CGG Marine Resources Norge AS and CGG Services (Norway) AS (ex Exploration Resources) to reimburse financial debts on seismic vessels amounting to US$50 million, and to fund ongoing operations. On January 5, 2010, these notes were exchanged for identical notes registered with the SEC.
On August 21, 2013, we redeemed US$125 million aggregate principal amount of our US$350 million 9 1⁄2% Senior Notes due 2016 at a price of 104.75% plus accrued interest. Accelerated amortization of deferred expenditures and penalties for early repayment were recorded for US$4.3 million and US$5.9 million, respectively.
On June 2, 2014, we used a portion of the proceeds of our offering of 6.875% Senior Notes due 2022 to redeem the remaining US$225 million aggregate principal amount of our US$350 million 9 1⁄2% Senior Notes due 2016 at a price of 102.375% plus accrued interest.
High yield bonds 6 1⁄2% Senior Notes due 2021
On May 31, 2011 we issued US$650 million in aggregate principal amount of 6 1⁄2% Senior Notes due 2021. These notes are guaranteed on a senior basis by the same guarantors that guarantee our senior facilities (including CGG Holding (U.S.) Inc.). We used the proceeds from the notes to repay the US$508 million remaining outstanding under the Term Loan B facility of our US senior facilities and to redeem the US$70 million principal amount remaining outstanding under our 7 1⁄2% Senior Notes due 2015. On December 8, 2011, these notes were exchanged for identical notes registered with the SEC.
High yield bonds 5.875% Senior Notes due 2020
On April 23, 2014, we issued 400 million in aggregate principal amount of 5.875% senior notes due 2020. These notes are guaranteed on a senior basis by the same guarantors that guarantee our senior facilities (including CGG Holding (U.S.) Inc.).
We used a portion of the proceeds from the offering of 5.875% Senior Notes due 2020 to repurchase most of our outstanding 2016 OCEANEs (see OCEANE convertible bonds 2016 OCEANEs above) and used the remainder of the proceeds to repay 28.1 million under the vendor loan granted by Fugro in connection with the Geoscience Acquisition.
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High yield bonds 6.875% Senior Notes due 2022
On May 1, 2014, we issued US$500 million in aggregate principal amount of 6.875% senior notes due 2022. These notes are guaranteed on a senior basis by the same guarantors that guarantee our senior facilities (including CGG Holding (U.S.) Inc.).
We used the approximately US$494 million of net proceeds (after deducting the Initial Purchasers discounts and commissions and fees and expenses) to redeem all of the US$225 million outstanding principal amount of our 9 1⁄2% Senior Notes due 2016 at a redemption price of 102.375% and used the remaining net proceeds to redeem US$265 million of the US$400 million outstanding principal amount of our 7 3⁄4% Senior Notes due 2017 at a redemption price of 101.292% plus, in each case, accrued and unpaid interest on the notes redeemed.
Other Credit Facilities
Geomar secured term loan facility
On April 30, 2007, Geomar entered into a US$25 million credit facility to refinance the purchase price of the seismic vessel CGG Alizé. The facility is secured by a pledge over the vessel. At March 31, 2014, the amount outstanding under this facility was US$0.9 million. This facility was repaid in full on April 1, 2014.
Fugro vendor loan agreement
Fugro granted to us a 125 million vendor loan with a 5-year maturity and bearing an interest rate of 5.50% per annum, which was extended to 225 million on the effective date of the acquisition of the airborne business. As of March 31, 2014, we had repaid 112.5 million of the vendor loan, and 112.5 million remained outstanding. In addition, on June 27, 2014, we used a portion of the proceeds of the offering of our 5.875% Senior Notes due 2020 to repay an additional 28.1 million under the vendor loan.
Interest is payable on outstanding principal under the vendor loan agreement at the rate of 5.50% per annum. Scheduled repayment of the first and second vendor loan installments will occur according to an amortization schedule beginning on December 31, 2013 with the final repayment set to occur on January 31, 2018.
The vendor loan agreement contains customary events of default as well as mandatory prepayment obligations, in certain circumstances, with the proceeds of certain disposals, insurance claims and debt financings. The occurrence of an event of default would allow Fugro to exercise warrants to acquire additional shares of the Seabed Geosolutions BV joint venture, thereby diluting our shareholding in it, with a corresponding decrease in the principal amount due under the vendor loan agreement. We have agreed that our obligations under the vendor loan agreement are to be guaranteed by certain of our subsidiaries that are also guarantors of our Senior Notes.
Voyager AS (renamed Exploration Vessel Resources II AS) secured term loan facility
On January 13, 2011, Exploration Vessel Resources II AS entered into a US$45 million credit facility secured by a pledge over the seismic vessel Geowave Voyager and subject to substantially the same covenants as our US revolving credit facility. This facility matures on August 31, 2016.
On December 18, 2013, we amended this facility, in order to align covenant levels with our US$200 million term loan and revolving facilities described immediately below. The outstanding value at March 31, 2014, was US$20.4 million.
US$200 million term loan and revolving facilities
On July 1, 2013, CGG Geo Vessels AS entered into a 5-year US$200 million financing secured by vessel assets (Geo Coral, Geo Caribbean, Oceanic Challenger) split into two tranches of US$100 million each, the
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proceeds of which were used in part to reimburse a portion of the vendor loan granted by Fugro, and in part to redeem US$125 million aggregate principal amount of our US$350 million 9 1⁄2% Senior Notes due 2016. We entered into an interest rate swap to fix the annual effective rate at 4.4%.
Pursuant to this agreement, we are required to adhere to certain financial covenants defined as follows:
| a minimum of Cash plus Cash Equivalents of not less than US$75 million, at all times; |
| a maximum ratio of total net financial debt to EBITDA of 3.00:1.00; and |
| and a minimum ratio of EBITDA to total interest costs of 3.00:1.00. |
As of March 31, 2014, US$90 million of the revolving facility tranche was drawn and US$90 million was outstanding under the term loan tranche.
US$25 million streamers financing
On December 19, 2013, we signed a loan agreement to be reimbursed over five years after the deadline for drawing for a maximum amount of US$25 million with multiple drawings. This loan may be used to finance the acquisition of marine equipment to be delivered in up to twelve monthly installments over a period of one year. This line was undrawn as of March 31, 2014.
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Purpose and Effect of the Exchange Offer
We entered into a registration rights agreement with the initial purchasers of the outstanding notes in which we agreed to file a registration statement relating to an offer to exchange the outstanding notes for new notes. We also agreed to use our reasonable best efforts to complete that offer within 210 days after May 1, 2014. We are offering the new notes under this prospectus to satisfy those obligations under the registration rights agreement.
If any of the outstanding notes are not freely tradable (meaning that they may be sold to the public pursuant to Rule 144(b) and do not bear any restrictive legends relating to the Securities Act) by the 180th day after May 1, 2014, we will use our reasonable best efforts to cause the Commission to declare effective a shelf registration statement with respect to the resale of the outstanding notes and keep the shelf registration statement effective for up to two years after the date of issuance of the outstanding notes in either of the following circumstances:
| if any changes in law or applicable interpretations by the staff of the Commission do not permit us to effect the exchange offer as contemplated by the registration rights agreement; or |
| in certain limited circumstances, if any holder of the outstanding notes so requests. |
If we fail to comply with deadlines for registering the issuance of the new notes and completion of the exchange offer, we will be required to pay special interest to holders of the outstanding notes. Please read the section captioned Outstanding Notes Registration Rights Agreement for more details regarding the registration rights agreement.
To exchange an outstanding note for transferable new notes in the exchange offer, you will be required to make the following representations:
| any new notes will be acquired in the ordinary course of your business; |
| you have no arrangement or understanding with any person to participate in the distribution of the new notes; |
| you are not engaged in and do not intend to engage in the distribution of the new notes; |
| if you are a broker-dealer that will receive new notes for its own account in exchange for outstanding notes that were acquired as a result of market-making or other trading activities, that you will deliver a prospectus, as required by law, in connection with any resale of such new notes; and |
| you are not our affiliate, as defined in Rule 405 of the Securities Act, or if you are our affiliate, that you will comply with the applicable registration requirements of the Securities Act. |
Resale of New Notes
Based on interpretations of the Commission staff in no action letters issued to third parties, we believe that new notes issued under the exchange offer may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act if:
| you are not our affiliate within the meaning of Rule 405 under the Securities Act; |
| any new notes will be acquired in the ordinary course of your business; |
| you have no arrangement or understanding with any person to participate in the distribution of the new notes; and |
| you have not engaged in and do not intend to engage in the distribution of the new notes. |
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If you tender in the exchange offer with the intention of participating in any manner in a distribution of the new notes, you:
| can not rely on such interpretations by the Commission staff; and |
| must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. |
Unless an exemption from registration is otherwise available, any security holder intending to distribute new notes should be covered by an effective registration statement under the Securities Act containing the selling securityholders information required by Item 507 of Regulation S-K under the Securities Act. This prospectus may be used for an offer to resell, resale or other retransfer of new notes only as specifically described in this prospectus. Only broker-dealers that acquired the outstanding notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives new notes for its own account in exchange for outstanding notes, where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of new notes. Please read the section captioned Plan of Distribution for more details regarding the transfer of new notes.
Terms of the Exchange Offer
Upon the terms and subject to the conditions described in this prospectus and in the letter of transmittal, we will accept for exchange any outstanding notes properly tendered and not withdrawn prior to the expiration date. We will issue US$1,000 principal amount of new notes in exchange for each US$1,000 principal amount of outstanding notes surrendered under the exchange offer. Outstanding notes may be tendered only in integral multiples of US$1,000.
The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered for exchange.
As of the date of this prospectus, US$500 million aggregate principal amount of the outstanding notes are outstanding. This prospectus and the letter of transmittal are being sent to all registered holders of outstanding notes. There will be no fixed record date for determining registered holders of outstanding notes entitled to participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission. Outstanding notes that are not tendered for exchange in the exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits such holders have under the indenture relating to the notes and the registration rights agreement.
We will be deemed to have accepted for exchange properly tendered outstanding notes when we have given oral or written notice of the acceptance to the exchange agent and complied with the applicable provisions of the registration rights agreement. The exchange agent will act as agent for the tendering holders for the purposes of receiving the new notes from us.
If you tender outstanding notes in the exchange offer, you will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes, with respect to the exchange of outstanding notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. It is important for noteholders to read the section entitled Fees and Expenses for more details regarding fees and expenses incurred in the exchange offer.
We will return any outstanding notes that we do not accept for exchange for any reason without expense to the tendering holder as promptly as practicable after the expiration or termination of the exchange offer.
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Expiration Date
The Exchange Offer Will Expire At 5:00 p.m., New York City time on [ ], 2014, unless, in our sole discretion, we extend it.
Extensions, Delay in Acceptance, Termination or Amendment
We expressly reserve the right, at any time or at various times, to extend the period of time during which the exchange offer is open. We may delay acceptance of any outstanding notes by giving oral or written notice of such extension to their holders. During any such extensions, all outstanding notes previously tendered will remain subject to the exchange offer, and we may accept them for exchange.
In order to extend the exchange offer, we will notify the exchange agent orally or in writing of any extension. We will notify the registered holders of outstanding notes of the extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.
If any of the conditions described below under Conditions to the Exchange offer have not been satisfied, we reserve the right, in our sole discretion, to delay accepting for exchange any outstanding notes or to extend the exchange offer or to terminate the exchange offer by giving oral or written notice of such delay, extension or termination to the exchange agent. Subject to the terms of the registration rights agreement, we also reserve the right to amend the terms of the exchange offer in any manner.
Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof to the registered holders of outstanding notes. If we amend the exchange offer in a manner that we determine to constitute a material change, we will promptly disclose such amendment by means of a prospectus supplement. The supplement will be distributed to the registered holders of the outstanding notes. Depending upon the significance of the amendment and the manner of disclosure to the registered holders, we will extend the exchange offer if the exchange offer would otherwise expire during such period.
Conditions to the Exchange Offer
Despite any other term of the exchange offer, we will not be required to accept for exchange, or exchange any new notes for, any outstanding notes, and we may terminate the exchange offer as provided in this prospectus before accepting any outstanding notes for exchange, if in our reasonable judgment the exchange offer, or the making of any exchange by a holder of outstanding notes, would violate applicable law or any applicable interpretation of the staff of the Commission or any action or proceeding has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer that, in our judgment, would reasonably be expected to impair our ability to proceed with the exchange offer.
In addition, we will not be obligated to accept for exchange the outstanding notes of any holder that has not made to us (1) the representations described under Purpose and Effect of the Exchange Offer, Procedures for Tendering and Plan of Distribution and (2) such other representations as may be reasonably necessary under applicable Commission rules, regulations or interpretations to make available to us an appropriate form for registration of the new notes under the Securities Act.
We expressly reserve the right to amend or terminate the exchange offer, and to reject for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions to the exchange offer specified above. We will give oral or written notice of any extension, amendment, non-acceptance or termination to the holders of the outstanding notes as promptly as practicable.
These conditions are for our sole benefit and we may assert them or waive them in whole or in part at any time or at various times in our sole discretion. If we fail at any time to exercise any of these rights, this failure will not mean that we have waived our rights. Each such right will be deemed an ongoing right that we may assert at any time or at various times.
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In addition, we will not accept for exchange any outstanding notes tendered, and will not issue new notes in exchange for any such outstanding notes, if at such time any stop order has been threatened or is in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture relating to the notes under the Trust Indenture Act of 1939.
Procedures for Tendering
How to Tender Generally
Only a holder of outstanding notes may tender such outstanding notes in the exchange offer. To tender in the exchange offer, a holder must:
| complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal; have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires; and mail or deliver such letter of transmittal or facsimile to the exchange agent prior to the expiration date; and |
| comply with the automated tender offer program procedures of DTC described below. |
In addition, either:
| the exchange agent must receive outstanding notes along with the letter of transmittal; |
| the exchange agent must receive, prior to the expiration date, a timely confirmation of book-entry transfer of such outstanding notes into the exchange agents account at DTC according to the procedure for book-entry transfer described below or a properly transmitted agents message; or |
| the holder must comply with the guaranteed delivery procedures described below. |
To be tendered effectively, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at its address provided above under Prospectus Summary The Exchange Agent prior to the expiration date.
The tender by a holder that is not withdrawn prior to the expiration date will constitute an agreement between the holder and us in accordance with the terms and subject to the conditions described in this prospectus and in the letter of transmittal.
The method of delivery of outstanding notes, the letter of transmittal and all other required documents to the exchange agent is at the holders election and risk. Rather than mail these items, we recommend that holders use an overnight or hand delivery service. In all cases, you should allow sufficient time to assure delivery to the exchange agent before the expiration date. You should not send the letter of transmittal or outstanding notes to us. You may request your brokers, dealers, commercial banks, trust companies or other nominees to effect the above transactions for you.
How to Tender if You Are a Beneficial Owner
If you beneficially own outstanding notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender these notes, you should contact the registered holder promptly and instruct it to tender on your behalf. If you are a beneficial owner and wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your outstanding notes, either:
| make appropriate arrangements to register ownership of the outstanding notes in your name; or |
| obtain a properly completed bond power from the registered holder of outstanding notes. |
The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date.
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Signatures and Signature Guarantees
You must have signatures on a letter of transmittal or a notice of withdrawal described below guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an eligible guarantor institution within the meaning of Rule 17Ad-15 under the Exchange Act, that is a member of one of the recognized signature guarantee programs identified in the letter of transmittal, unless the outstanding notes are tendered:
| by a registered holder who has not completed the box entitled Special Issuance Instructions or Special Delivery Instructions on the letter of transmittal; or |
| for the account of a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an eligible guarantor institution. |
When You Need Endorsements or Bond Powers
If the letter of transmittal is signed by a person other than the registered holder of any outstanding notes, the outstanding notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holders name appears on the outstanding notes and a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an eligible guarantor institution must guarantee the signature on the bond power.
If the letter of transmittal or any outstanding notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, those persons should so indicate when signing. Unless waived by us, they should also submit evidence satisfactory to us of their authority to deliver the letter of transmittal.
Tendering Through DTCs Automated Tender Offer Program
The exchange agent and DTC have confirmed that any financial institution that is a participant in DTCs system may use DTCs automated tender offer program to tender. Participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent, transmit their acceptance of the exchange offer electronically. They may do so by causing DTC to transfer the outstanding notes to the exchange agent in accordance with its procedures for transfer. DTC will then send an agents message to the exchange agent.
The term agents message means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, to the effect that:
| DTC has received an express acknowledgement from a participant in its automated tender offer program that is tendering outstanding notes that are the subject of such book-entry confirmation; |
| such participant has received and agrees to be bound by the terms of the letter of transmittal or, in the case of an agents message relating to guaranteed delivery, that such participant has received and agrees to be bound by the applicable notice of guaranteed delivery; and |
| the agreement may be enforced against such participant. |
Determinations Under the Exchange Offer
We will determine in our sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered outstanding notes and withdrawal of tendered outstanding notes. Our determination will be final and binding. We reserve the absolute right to reject any outstanding notices not properly tendered or any
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outstanding notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular outstanding notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of outstanding notes must be cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of outstanding notes, neither we, the exchange agent nor any other person will incur any liability for failure to give such notification. Tenders of outstanding notes will not be deemed made until such defects or irregularities have been cured or waived. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.
When We Will Issue New Notes
In all cases, we will issue new notes for outstanding notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives:
| outstanding notes or a timely book-entry confirmation of such outstanding notes into the exchange agents account at DTC; and |
| a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agents message. |
Return of Outstanding Notes Not Accepted or Exchanged
If we do not accept any tendered outstanding notes for exchange for any reason described in the terms and conditions of the exchange offer or if outstanding notes are submitted for a greater principal amount than the holder desires to exchange, the unaccepted or non-exchanged outstanding notes will be returned without expense to their tendering holder. In the case of outstanding notes tendered by book-entry transfer into the exchange agents account at DTC according to the procedures described below, such non- exchanged outstanding notes will be credited to an account maintained with DTC. These actions will occur as promptly as practicable after the expiration or termination of the exchange offer.
Your Representations to Us
By signing or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:
| any new notes will be acquired in the ordinary course of your business; |
| you have no arrangement or understanding with any person to participate in the distribution of the new notes; |
| you are not engaged in and do not intend to engage in the distribution of the new notes; |
| if you are a broker-dealer that will receive new notes for your own account in exchange for outstanding notes that were acquired as a result of market-making or other trading activities, that you will deliver a prospectus, as required by law, in connection with any resale of such new notes; and |
| you are not our affiliate, as defined in Rule 405 of the Securities Act, or, if you are our affiliate, that you will comply with the applicable registration requirements of the Securities Act. |
Book-Entry Transfer
The exchange agent will make a request to establish an account with respect to the outstanding notes at DTC for purposes of the exchange offer promptly after the date of this prospectus. Any financial institution participating in DTCs system may make book-entry delivery of outstanding notes by causing DTC to transfer
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such outstanding notes into the exchange agents account at DTC in accordance with DTCs procedures for transfer. Holders of outstanding notes who are unable to deliver confirmation of the book-entry tender of their outstanding notes into the exchange agents account at DTC or all other documents required by the letter of transmittal to the exchange agent on or prior to the expiration date must tender their outstanding notes according to the guaranteed delivery procedures described below.
Guaranteed Delivery Procedures
If you wish to tender your outstanding notes but your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal or any other required documents to the exchange agent or comply with the applicable procedures under DTCs automated tender offer program prior to the expiration date, you may tender if:
| the tender is made through a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an eligible guarantor institution; |
| prior to the expiration date, the exchange agent receives from such member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., commercial bank or trust company having an office or correspondent in the United States, or eligible guarantor institution either a properly completed and duly executed notice of guaranteed delivery by facsimile transmission, mail or hand delivery or a properly transmitted agents message and notice of guaranteed delivery: |
| setting forth your name and address, the registered number(s) of your outstanding notes and the principal amount of outstanding notes tendered; |
| stating that the tender is being made thereby; |
| guaranteeing that, within three (3) New York Stock Exchange trading days after the expiration date, the letter of transmittal or facsimile thereof, together with the outstanding notes or a book-entry confirmation, and any other documents required by the letter of transmittal will be deposited by the eligible guarantor institution with the exchange agent; and |
| the exchange agent receives such properly completed and executed letter of transmittal or facsimile thereof, as well as all tendered outstanding notes in proper form for transfer or a book-entry confirmation, and all other documents required by the letter of transmittal, within three (3) New York Stock Exchange trading days after the expiration date. |
Upon request to the exchange agent, a notice of guaranteed delivery will be sent to you if you wish to tender your outstanding notes according to the guaranteed delivery procedures described above.
Withdrawal of Tenders
Except as otherwise provided in this prospectus, you may withdraw your tender at any time prior to 5:00 p.m., New York City time, on the expiration date.
For a withdrawal to be effective:
| the exchange agent must receive a written notice of withdrawal at one of the addresses listed above under Prospectus Summary The Exchange Agent; or |
| you must comply with the appropriate procedures of DTCs automated tender offer program system. |
Any notice of withdrawal must:
| specify the name of the person who tendered the outstanding notes to be withdrawn; and |
| identify the outstanding notes to be withdrawn, including the principal amount of such outstanding notes. |
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If outstanding notes have been tendered under the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn outstanding notes and otherwise comply with the procedures of DTC.
We will determine all questions as to the validity, form, eligibility and time of receipt of notice of withdrawal, and our determination shall be final and binding on all parties. We will deem any outstanding notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer.
Any outstanding notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without cost to the holder or, in the case of outstanding notes tendered by book-entry transfer into the exchange agents account at DTC according to the procedures described above, such outstanding notices will be credited to an account maintained with DTC for the outstanding notes. This return or crediting will take place as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. You may retender properly withdrawn outstanding notes by following one of the procedures described under Procedures for Tendering above at any time on or prior to the expiration date.
Fees and Expenses
We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitation by telegraph, telephone or in person by our officers and regular employees and those of our affiliates.
We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses.
We will pay the cash expenses to be incurred in connection with the exchange offer. They include:
| Commission registration fees; |
| fees and expenses of the exchange agent and trustee; |
| accounting and legal fees and printing costs; and |
| related fees and expenses. |
We will pay all transfer taxes, if any, applicable to the exchange of outstanding notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:
| certificates representing outstanding notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of outstanding notes tendered; |
| tendered outstanding notes are registered in the name of any person other than the person signing the letter of transmittal; or |
| a transfer tax is imposed for any reason other than the exchange of outstanding notes under the exchange offer. |
If satisfactory evidence of payment of any transfer taxes payable by a note holder is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to that tendering holder.
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Transfer Taxes
If you tender your outstanding notes for exchange, you will not be required to pay any transfer taxes. However, if you instruct us to register new notes in the name of, or request that outstanding notes not tendered or not accepted in the exchange offer be returned to, a person other than you, in your capacity as the registered tendering holder, you will be required to pay any applicable transfer tax.
Consequences of Failure to Exchange
If you do not exchange your outstanding notes for new notes under the exchange offer, you will remain subject to the existing restrictions on transfer of the outstanding notes.
In general, you may not offer or sell the outstanding notes unless they are registered under the Securities Act or the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act. Based on interpretations of the Commission staff, you may offer for resale, resell or otherwise transfer new notes issued in the exchange offer without compliance with the registration and prospectus delivery provisions of the Securities Act, if (1) you are not our affiliate within the meaning of Rule 405 under the Securities Act; (2) any new notes will be acquired in the ordinary course of your business; (3) you have no arrangement or understanding with any person to participate in the distribution of the new notes; and (4) you are not engaged in and do not intend to engage in the distribution of the new notes. If you tender in the exchange offer with the intention of participating in any manner in a distribution of the new notes, you:
| cannot rely on the applicable interpretations of the Commission; and |
| must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. |
Accounting Treatment
We will record the new notes in our accounting records at the same carrying value as the outstanding notes, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes in connection with the exchange offer.
Other
Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take.
We may in the future seek to acquire untendered outstanding notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any outstanding notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered outstanding notes.
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General
You can find the definitions of certain terms used in this description of the notes under the caption Certain Definitions. In this description, the word Company refers only to CGG S.A., and not to any of its subsidiaries.
The following description is a summary of the material provisions of the Indenture. It does not restate the Indenture in its entirety. We urge you to read the Indenture because it, and not this description, will define your rights as holders of the Notes.
The outstanding notes were issued on May 1, 2014 in an aggregate principal amount of US$500,000,000 (the Offered Notes), and an equal aggregate principal amount of new notes (the Exchange Notes) may be issued in exchange for the Offered Notes in connection with the exchange offer contemplated by this prospectus (the Exchange Offer).
The Exchange Notes will be issued and the Offered Notes were issued pursuant to the Indenture dated as of the Issue Date among the Company, the Initial Guarantors and The Bank of New York Mellon, as trustee (the Trustee). The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the U.S. Trust Indenture Act of 1939, as amended (the Trust Indenture Act).
The registered holder of a Note will be treated as the owner of it for all purposes, and all references to holders in this Description of the Notes are to registered holders unless otherwise indicated.
If the Exchange Offer is consummated, holders of Offered Notes who do not exchange those notes for Exchange Notes in the Exchange Offer will vote together with holders of Exchange Notes for all relevant purposes under the Indenture. In that regard, the Indenture requires that certain actions by the holders thereunder, including acceleration following an Event of Default, must be taken, and certain rights must be exercised, by specified minimum percentages of the aggregate principal amount of the outstanding securities issued under the Indenture. In determining whether holders of the requisite percentage in principal amount have given any notice, consent or waiver or taken any other action permitted under the Indenture, any Offered Notes that remain outstanding after the Exchange Offer will be aggregated with the Exchange Notes, and the holders of such Offered Notes and the Exchange Notes will vote together as a single series for all such purposes. Accordingly, all references herein to specified percentages in aggregate principal amount of the Notes outstanding shall be deemed to mean, at any time after the Exchange Offer is consummated, such percentages in aggregate principal amount of Offered Notes and Exchange Notes then outstanding.
Copies of the Indenture are available for inspection during normal business hours at the office of the Company referred to under the caption Additional Information, at the corporate trust office of the Trustee at 101 Barclay Street, Floor 7E, Global Corporate Trust, New York, New York, 10286 and at the specified office of each Paying Agent, including, for so long as the Notes are listed on the Luxembourg Stock Exchange, at the specified office of the Paying Agent in Luxembourg. Holders of the Notes are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Indenture.
Brief Description of the Notes
The Notes:
| are general senior, unsecured obligations of the Company; |
| rank equally in right of payment to all existing and future senior, unsecured indebtedness of the Company, except for any liabilities preferred by law; |
| rank senior in right of payment to all existing and future subordinated indebtedness of the Company; |
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| are guaranteed on a senior, unsecured basis by certain Subsidiaries of the Company as described below; and |
| are effectively subordinated to all existing and future indebtedness of Subsidiaries of the Company that are not Guarantors. |
Holders of existing and future secured indebtedness of the Company and its Subsidiaries, including loans under the existing Credit Facilities, will have claims with respect to the assets constituting collateral for such secured indebtedness that are superior to the claims of the holders of the Notes. Accordingly, the Notes and the Subsidiary Guarantees are effectively subordinated to claims of secured creditors of the Company and the Guarantors to the extent of the value of such collateral.
Only certain Subsidiaries of the Company will guarantee the Notes. In the event of a bankruptcy, liquidation or reorganization of any Subsidiary of the Company that is not a Guarantor, that Subsidiary will pay the holders of its debt and its trade creditors before it will be able to distribute any of its assets to the Company.
As at March 31, 2014, on a pro forma basis after giving effect to the offering of the Notes, the offering of 400 million principal amount of our 5.875% Senior Notes due 2020 and the use of proceeds of the Notes and the 5.875% Senior Notes due 2020, we would have had $588.0 million of outstanding indebtedness including accrued interest effectively senior to the Notes, of which $580.1 million would have been secured and the Initial Guarantors (as defined under the caption Subsidiary Guarantees Guarantors) (excluding their Subsidiaries that are not Guarantors) would have had $267.8 million of outstanding indebtedness including accrued interest effectively senior to the guarantees under the Notes, all of which would have been secured. Indebtedness of the Initial Guarantors is included in the total Indebtedness of the Company and its Subsidiaries. In addition, as at March 31, 2014, the Company and its Subsidiaries had availability under their Credit Facilities of $225.0 million, which if drawn would have been secured. Each of the Initial Guarantors (with the exception of CGG Canada Services Ltd., Sercel Canada Ltd. and Sercel Australia Pty Ltd) is an obligor under the U.S. revolving facility and the French revolving facility. The Indenture permits the Company and its Subsidiaries (including the Guarantors) to incur additional Indebtedness, including certain additional secured Indebtedness.
As of the date of the Indenture, all of the Companys Subsidiaries were Restricted Subsidiaries. Under certain circumstances, the Company will be able to designate current or future Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries will not be subject to the restrictive covenants set forth in the Indenture and will not guarantee the Notes.
The Indenture also provides the Company the flexibility of issuing additional Notes in the future in an unlimited amount; however, any issuance of such additional Notes would be subject to the covenant described under the caption Certain Covenants Incurrence of Indebtedness and Issuance of Disqualified Stock. The Offered Notes, the Exchange Notes and any such additional Notes are collectively referred to as the Notes in this Description of the Notes.
Any Offered Notes that remain outstanding after the completion of the Exchange Offer, together with the Exchange Notes issued in connection with the Exchange Offer, will be treated as a single class of securities under the Indenture.
Whenever the covenants or default provisions or definitions in the Indenture refer to an amount in U.S. dollars or euros, that amount will be deemed to refer to the U.S. Dollar Equivalent or the Euro Equivalent, respectively, of the amount of any obligation denominated in any other currency or currencies, including composite currencies.
Any other determination of the U.S. Dollar Equivalent or the Euro Equivalent for any purpose under the Indenture will be determined as of a date of determination as described in the definitions of U.S. Dollar
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Equivalent and Euro Equivalent under Certain Definitions and, in any case, no subsequent change in the U.S. Dollar Equivalent or the Euro Equivalent after the applicable date of determination will cause such determination to be modified.
Principal, Maturity and Interest
The Exchange Notes will be limited in aggregate principal amount to $500,000,000 and will mature on January 15, 2022 at par. Interest on the Notes will accrue at the rate of 6.875% per annum and will be payable semi-annually in arrears on January 15 and July 15 of each year, commencing on July 15, 2014, in the case of the Offered Notes, to holders of record on the immediately preceding January 1 and July 1. Interest on the Exchange Notes will accrue from the most recent date to which interest has been paid on the Offered Notes exchanged therefor or, if no interest has been paid, from the Issue Date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. The Notes will be issued in denominations of $200,000 and integral multiples of $1,000 in excess thereof.
Paying Agents and Registrar for the Notes
Principal of, premium, if any, and interest on the Notes will be payable in U.S. dollars at the office or agency of the Company maintained for such purpose in the continental United States and, subject to any fiscal or other laws and regulations applicable thereto, at the specified offices of any other Paying Agent appointed by the Company for such purpose, or, at the option of the Company, payment of interest may be made by check mailed to holders of the Notes at their respective addresses set forth in the register of holders; provided, however, that all payments with respect to Notes the holders of which have given wire transfer instructions to the Company or a Paying Agent will be required to be made by wire transfer of immediately available funds to the accounts specified by the holders thereof. The principal of the Notes will be payable only upon surrender of any Note at the Corporate Trust Office of the Trustee or at the specified offices of any other Paying Agent.
If the due date for payment of the principal in respect of any Note is not a business day at the place in which it is presented for payment, the holder thereof will not be entitled to payment of the amount due until the next succeeding business day at such place and will not be entitled to any further interest or other payment in respect of any such delay.
The Indenture provides that any money deposited with the Trustee or any Paying Agent in trust for the payment of the principal of, premium, if any, and interest on any Note and remaining unclaimed for two years after such principal, premium, if any, and interest have become due and payable will be paid to the Company, and will be discharged from such trust; and the holder of such Note will thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such money will thereupon cease.
The Corporate Trust Office of the Trustee in New York will initially be designated as the Companys Registrar, Transfer Agent and Paying Agent for payments with respect to the Notes. So long as the Notes are listed on the Luxembourg Stock Exchange and the rules of such stock exchange so require, the Company will maintain a Paying Agent in Luxembourg. The Bank of New York Mellon (Luxembourg) S.A. will initially be designated as the Companys Paying Agent in Luxembourg and as the Companys agent where Notes may be surrendered for registration of transfer and exchange. The Company may at any time designate one or more additional Paying Agents, Registrars or transfer agents or rescind the designation of any Paying Agent, Registrar or transfer agent or approve a change in the office through which any Paying Agent, Registrar or transfer agent acts, except that the Company will be required to maintain a paying agent in the continental United States. The Company will give notice to each holder of Notes, in the manner described under the caption Notices, of any change in Paying Agents, Registrars or transfer agents.
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Subsidiary Guarantees
General
The obligations of each Guarantor under its Subsidiary Guarantee will be general senior, unsecured obligations of such Guarantor, ranking pari passu in right of payment with all other senior indebtedness of such Guarantor and senior in right of payment to any subordinated indebtedness of such Guarantor. The Subsidiary Guarantees will be joint and several obligations of the Guarantors. Holders of existing and future secured indebtedness of the Guarantors, including loans under the existing Credit Facilities (including the senior facilities and the French revolving facility) will have claims with respect to the assets constituting collateral for such secured indebtedness that are superior to the claims of the holders of the Notes.
The Indenture provides that the obligations of each Guarantor under its Subsidiary Guarantee will be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under bankruptcy, fraudulent conveyance and fraudulent transfer and similar laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Subsidiary Guarantee, result in the obligations of such Guarantor under its Subsidiary Guarantee not constituting a fraudulent transfer or conveyance. In addition, the obligations of each Guarantor under its Subsidiary Guarantee shall be limited to the extent required by applicable law.
Guarantors
Only certain Subsidiaries of the Company will guarantee the Notes. On the issue date, the Notes will be fully and unconditionally guaranteed by CGG Holding B.V., CGG Marine B.V., CGG Marine Resources Norge A/S, CGG Holding (U.S.) Inc., CGG Services (U.S.) Inc., Veritas Investments Inc., CGG Land (U.S.) Inc., Viking Maritime Inc., Veritas Geophysical (Mexico) LLC, Alitheia Resources Inc. and CGG Canada Services Ltd. (collectively, the Services Guarantors), and Sercel, Inc., Sercel-GRC Corp., Sercel Canada Ltd. and Sercel Australia Pty Ltd. (collectively, the Equipment Guarantors, and together with the Services Guarantors, the Initial Guarantors). For more information about the Initial Guarantors, see Note 31 and Note 32 to the Companys consolidated annual financial statements incorporated by reference in this prospectus. The Companys other Subsidiaries will not initially guarantee the Notes and, in certain circumstances described below under the caption Release, the Company may elect to have the Equipment Guarantors released from their Subsidiary Guarantees. In the event of a bankruptcy, liquidation or reorganization of any Subsidiary of the Company that is not a Guarantor, that Subsidiary will pay the holders of its debt and its trade creditors before it will be able to distribute any of its assets to the Company.
The Services Guarantors (excluding their subsidiaries that have not guaranteed the notes) generated, before consolidation entries, US$914.3 million of revenues, US$(509.7) million of operating income (loss) and US$(559.8) million of net income (loss) in the year ended December 31, 2013 and held US$7,204.6 million of total assets before consolidation entries as at December 31, 2013. . The Services Guarantors (excluding their subsidiaries that have not guaranteed the notes) generated, before consolidation entries, US$185.8 million of revenues, US$9.2 million of operating income and US$(12.6) million of net income (loss) in the three months ended March 31, 2014 and held US$7,296.7 million of total assets before consolidation entries as at March 31, 2014.
The Equipment Guarantors (excluding their subsidiaries that have not guaranteed the notes) generated, before consolidation entries, US$440.2 million of revenues, US$120.1 million of operating income and US$83.0 million of net income in the year ended December 31, 2013 and held US$476.2 million of total assets before consolidation entries as at December 31, 2013. The Equipment Guarantors (excluding their subsidiaries that have not guaranteed the notes) generated, before consolidation entries, US$80.3 million of revenues, US$14.2 million of operating income and US$9.7 million of net income (loss) in the three months ended March 31, 2014 and held US$470.0 million of total assets before consolidation entries as at March 31, 2014. The revenues, operating income, net income and assets of the Equipment Guarantors are included in those of the Initial Guarantors. In the
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circumstances described under the caption Certain Covenants Guarantees of Certain Indebtedness by Restricted Subsidiaries the Indenture will require certain of the Companys other Subsidiaries to become Guarantors. For more information about the Initial Guarantors, see General Information.
The Initial Guarantors represented 36% of our consolidated revenues in the year ended December 31, 2013 and 93% of our consolidated assets as at December 31, 2013. The Initial Guarantors represented 33% of our consolidated revenues in the three months ended March 31, 2014 and 95% of our consolidated assets as at March 31, 2014.
In addition, a Restricted Subsidiary may become a Guarantor, at its option, by executing a supplemental indenture providing for a Subsidiary Guarantee in accordance with the provisions of the Indenture.
Release
The Indenture provides that, in the event of (a) a transfer, conveyance, sale or other disposition of any Capital Stock of Sercel S.A. or the Equipment Guarantors or (b) the issue by Sercel S.A. or the Equipment Guarantor of any Equity Interests, in either case to any Person other than the Company or a Restricted Subsidiary of the Company, the Company may elect to have the Equipment Guarantor released and relieved of any obligations under their Subsidiary Guarantees, provided that the Net Proceeds of such issuance, transfer, conveyance, sale or other disposition are applied in accordance with the covenant described below under the caption Put Option of Holders Asset Sales and the Equipment Guarantors have no other guarantees of Indebtedness of the Company or any other Guarantors (other than Permitted Guarantees) then outstanding. If a Restricted Subsidiary has become a Guarantor at its option, it may thereafter be released and relieved of its obligations under its Subsidiary Guarantee at its option, provided that such Guarantor has no guarantee of Indebtedness of the Company or any Guarantor (other than Permitted Guarantees) then outstanding. The Indenture further provides that, for purposes of the covenant described under the caption Certain Covenants Incurrence of Indebtedness and Issuance of Disqualified Stock, the release of any Subsidiary Guarantee pursuant to provisions described in this paragraph shall be deemed to be an incurrence by the Restricted Subsidiary whose Subsidiary Guarantee is being released of all Indebtedness then held by such Restricted Subsidiary.
The Indenture provides that, in the event of a transfer, conveyance, sale or other disposition (including by way of merger or consolidation) of all or substantially all of the assets or all of the Capital Stock of any Guarantor, then such Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee and the Indenture, provided that the Net Proceeds of such transfer, conveyance, sale or other disposition are applied in accordance with the covenant described below under the caption Put Option of Holders Asset Sales. A Guarantor will likewise be released and relieved of its obligations under its Subsidiary Guarantee upon the release of any guarantee of Indebtedness of the Company that required such Guarantor to guarantee the Notes pursuant to the covenant described below under the caption Certain Covenants Guarantees of Certain Indebtedness by Restricted Subsidiaries except a discharge or release by or as a result of direct payment under such guarantee, provided that the Guarantor has no other guarantee of Indebtedness of the Company or any Guarantor (other than Permitted Guarantees) then outstanding. The Indenture also provides that, if the Board of Directors designates a Guarantor to be an Unrestricted Subsidiary, then such Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee and the Indenture, provided that such designation is conducted in accordance with the applicable provisions of the Indenture.
Merger or Consolidation
The Indenture provides that, for so long as a Restricted Subsidiary provides a Subsidiary Guarantee pursuant to the terms of the Indenture, such Guarantor may not consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person (other than the Company or another Guarantor), unless:
(a) the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) shall execute a Subsidiary Guarantee and deliver an opinion of counsel in accordance with the terms of the Indenture;
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(b) immediately after giving effect to such transaction, no Default or Event of Default exists;
(c) such Guarantor, or any Person formed by or surviving any such consolidation or merger, would have a Consolidated Net Worth (immediately after giving effect to such transaction) equal to or greater than the Consolidated Net Worth of such Guarantor immediately preceding the transaction; and
(d) the Company would be permitted by virtue of the Companys pro forma Consolidated Interest Coverage Ratio, immediately after giving effect to such transaction, to incur at least 1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the covenant described under the caption Certain Covenants Incurrence of Indebtedness and Issuance of Disqualified Stock.
Optional Redemption
Optional Redemption of Notes prior to July 15, 2017 upon Qualified Equity Offering
At any time prior to July 15, 2017, the Company may redeem on any one or more occasions Notes (including Exchange Notes) representing up to 35% of the sum of the aggregate principal amount of the Offered Notes plus any other Notes originally issued under the Indenture after the Issue Date (but excluding for this purpose any Exchange Notes) at a redemption price of 106.875% of the principal amount thereof plus accrued and unpaid interest thereon to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings, provided that (a) Notes (including Exchange Notes) representing at least 65% of the sum of the aggregate principal amount of the Offered Notes plus any other Notes originally issued under the Indenture after the Issue Date remain outstanding immediately after the occurrence of each such redemption and (b) such redemption occurs within 90 days of the date of the closing of each such Qualified Equity Offering.
Optional Redemption of Notes prior to July 15, 2017
At any time prior to July 15, 2017 the Company may redeem the Notes at its option, in whole or in part, at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium as of, and accrued and unpaid interest to, the date of redemption.
Optional Redemption of Notes on or after July 15, 2017
The Notes will also be redeemable at the Companys option on or after July 15, 2017, in whole or in part, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest thereon to the applicable redemption date, if redeemed during the 12-month period beginning July 15 of the years indicated below:
Year |
Note Redemption Price |
|||
2017 |
105.156 | % | ||
2018 |
103.438 | % | ||
2019 |
101.719 | % | ||
2020 and thereafter |
100.000 | % |
Selection and Notice
If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption as follows:
(a) if the Notes are listed, in compliance with the requirements of the principal securities exchange on which the Notes are listed; or
(b) if the Notes are not so listed, on a pro rata basis, in accordance with the procedures of the applicable depository, if any.
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No Notes of $200,000 or less shall be redeemed in part.
Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of Notes to be redeemed at its registered address. For so long as the Notes are listed on the Luxembourg Stock Exchange and for so long as the rules of such exchange require, notices of redemption will be published once by the Trustee, not less than five business days prior to the redemption date, in a newspaper having general circulation in Luxembourg, which is expected to be Luxemburger Wort or if such newspaper ceases to be published or timely publication in it will not be practicable, in such other newspaper as the Trustee deems necessary to give fair and reasonable notice to the holders of Notes. Notices may also be published on the internet site of the Luxembourg Stock Exchange at www.bourse.lu.
Except as set forth under Redemption for Taxation Reasons, any notice of redemption may, in the Companys discretion, be subject to the satisfaction of one or more conditions precedent.
If any Note is to be redeemed in part only, the notice of redemption that relates to that Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the holder thereof upon surrender of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest will cease to accrue on Notes or portions of them called for redemption.
Redemption for Taxation Reasons
The Indenture provides that the Company may at any time unconditionally redeem, in whole but not in part, the outstanding Notes at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest thereon to the date of redemption if it or any Guarantor has become or would become obligated to pay any Additional Amounts (as defined under the caption Additional Amounts) in respect of the Notes as a result of:
(a) (1) any change in or amendment to the laws or treaties (or regulations or rulings promulgated thereunder) of a Relevant Taxing Jurisdiction (as defined under the caption Additional Amounts) or (2) any change in or amendment to any official position regarding the application or interpretation of such laws, treaties, regulations or rulings, which change or amendment is announced and becomes effective on or after the date of the Indenture (or, if the applicable Relevant Taxing Jurisdiction became a Relevant Taxing Jurisdiction on a date after the date of the Indenture, such later date); and
(b) such obligation cannot be avoided by the Company or any such Guarantor taking reasonable measures available to it.
Notwithstanding the preceding, no notice of redemption will be given earlier than 60 days prior to the earliest date on which the Company could be obligated to pay such Additional Amounts if a payment in respect of the Notes was then due. Prior to giving notice of any such redemption, the Company will deliver to the Trustee (y) an Officers Certificate stating that the obligation to pay Additional Amounts cannot be avoided by the Company or any such Guarantor taking reasonable measures available to it and (z) a written opinion of an independent legal counsel to the Company to the effect that the circumstances referred to above exist.
Additional Amounts
The Indenture provides that payments made by or on behalf of the Company or any Guarantor under or with respect to the Notes or the Subsidiary Guarantees will be made free and clear of and without withholding or deduction for or on account of any present or future tax, duty, levy, impost, assessment or other governmental charge (including without limitation, penalties, interest and any other liability with respect thereto) (Taxes) imposed or levied by or on behalf of any jurisdiction in which the Company or any Guarantor (including any successor entities) is then organized or resident for tax purposes or any political subdivision thereof or therein or
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any jurisdiction by or through which payment is made (each, a Relevant Taxing Jurisdiction), unless the Company or any Guarantor (or any Paying Agent) is required to withhold or deduct Taxes under the laws of the Relevant Taxing Jurisdiction or by the interpretation or administration thereof by the relevant taxing authority. If the Company or any Guarantor (or any Paying Agent) is so required to withhold or deduct any amount for or on account of Taxes from any payment made under or with respect to the Notes or the Subsidiary Guarantees, the Company or any such Guarantor (and each Paying Agent) will pay to each holder of the Notes that are outstanding on the date of the required payment, such additional amounts (Additional Amounts) as may be necessary so that the net amount received by such holder (including the Additional Amounts) after such withholding or deduction will not be less than the amount such holder would have received if such Taxes had not been withheld or deducted, provided that no Additional Amounts will be payable with respect to any Note:
(a) surrendered by the holder thereof for payment of principal more than 30 days after the later of (1) the date on which such payment first became due and (2) if the full amount payable has not been received by or on behalf of the relevant holder on or prior to such due date, the date on which, the full amount having been so received, notice to that effect shall have been given to the holders by the Trustee, except to the extent that the holder would have been entitled to such Additional Amounts on surrendering such Note for payment on any day during the applicable 30-day period;
(b) if any tax, assessment or other governmental charge is imposed or withheld by reason of the failure to comply by the holder or, if different, the beneficial owner (ayant-droit) of the Note with a request addressed to such holder or beneficial owner to provide information, documents or other evidence concerning the nationality, residence, identity or connection with the Relevant Taxing Jurisdiction of such holder or beneficial owner which is required or imposed by a statute, treaty, regulation or administrative practice of the Relevant Taxing Jurisdiction as a precondition to exemption from all or part of such tax, assessment or governmental charge;
(c) held by or on behalf of a holder who is liable for Taxes in respect of such Note by reason of having some connection with the Relevant Taxing Jurisdiction other than the mere purchase, holding or disposition of any Note, or the receipt of payments made by or on behalf of the Company or any Guarantor in respect thereof or any Subsidiary Guarantee, including, without limitation, such holder being or having been a citizen or resident thereof or being or having been present or engaged in a trade or business therein or having had a permanent establishment therein;
(d) on account of any estate, inheritance, gift, sale, transfer, personal property or other similar tax, assessment or other governmental charge;
(e) except in the case of the winding up of the Company or any Guarantor, any Note surrendered for payment in the Republic of France;
(f) any withholding or deduction imposed on a payment to an individual which is required to be made pursuant to any law implementing or complying with, or introduced in order to conform to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income or any agreement between the European Community and any jurisdiction providing for equivalent measures;
(g) as a result of any combination of (a), (b), (c), (d), (e) or (f) or with respect to any payment made by or on behalf of the Company or any Guarantor in respect of any Note or Subsidiary Guarantee to any holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent that a beneficiary or settlor or beneficial owner would not have been entitled to any Additional Amounts had such beneficiary or settlor or beneficial owner been the holder; or
(h) if any withholding or deduction imposed or levied on a payment to a Luxembourg resident individual is required to be made pursuant to the Luxembourg law of 23 December 2005.
The Company or any Guarantor will also make such withholding or deduction and remit the full amount deducted or withheld to the relevant authority in accordance with applicable law. The Company will furnish,
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within 60 days after the date the payment of any Taxes is due pursuant to applicable law, to the Trustee, copies of tax receipts (to the extent received from the relevant tax authorities in the usual course or as generally provided) evidencing that such payment has been made by the Company or any Guarantor. The Trustee will make such evidence available to the holders upon request.
At least 30 days prior to each date on which any payment under or with respect to the Notes or the Subsidiary Guarantees is due and payable, if the Company or any Guarantor becomes obligated to pay Additional Amounts with respect to such payment (unless such obligation to pay Additional Amounts arises after the 30th day prior to the date on which payment under or with respect to the Notes or the Subsidiary Guarantees is due and payable, in which case it will be promptly thereafter and in any case before the relevant payment date), the Company will deliver to each Paying Agent an Officers Certificate stating the fact that such Additional Amounts will be payable, and the amount so payable and will set forth such other information as necessary to enable such Paying Agent to pay such Additional Amounts to the holders of the Notes on the payment date. Whenever in the Indenture or this prospectus there is mentioned, in any context, (a) the payment of principal (and premium, if any), (b) purchase prices in connection with a purchase of the Notes, (c) interest or (d) any other amount payable on or with respect to any of the Notes or the Subsidiary Guarantees, such mention is deemed to include mention of the payment of Additional Amounts provided for in this section to the extent, that, in such context, Additional Amounts are, were or would be payable in respect thereof.
The Company or a Guarantor, as the case may be, will pay any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies that arise in the United States, the Republic of France or in any jurisdiction in which a Paying Agent is located from the initial issue or registration of the Notes or on the enforcement of any payments with respect to the Notes or any Subsidiary Guarantee.
The obligations of the Company or any Guarantor described in this Additional Amounts section will survive any termination, defeasance or satisfaction and discharge of the Indenture, any transfer by a holder or beneficial owner of its notes, and will apply, mutatis mutandis, to any jurisdiction in which any successor Person to the Issuer or any Guarantor is incorporated, engaged in business for tax purposes or resident for tax purposes or any jurisdiction from or through which such Person makes any payment on the Notes and any department or any political subdivision thereof or therein.
Mandatory Redemption
Except as set forth below under the caption Put Option of Holders, the Company will not be required to make mandatory redemption or sinking fund payments with respect to the Notes.
Put Option of Holders
Change of Control
The Indenture provides that, upon the occurrence of a Change of Control, each holder will have the right to require the Company to purchase all or any portion (equal to $200,000 or an integral multiple of $1,000 in excess thereof) of the holders Notes, pursuant to the offer described below (the Change of Control Offer), at a purchase price in cash equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon to the date of purchase (the Change of Control Payment).
Within 30 days following a Change of Control, the Company will give notice to each holder of Notes, in the manner described under the caption Notices, and the Trustee describing the transaction that constitutes the Change of Control and offering to purchase the Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is given (the Change of Control Payment Date), pursuant to the procedures required by the Indenture and described in such notice. The
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Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws and regulations are applicable in connection with the purchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the Indenture by virtue of such conflict.
On or before the Change of Control Payment Date, the Company will, to the extent lawful:
(a) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;
(b) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and
(c) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers Certificate stating the aggregate principal amount of the Notes or portions thereof being purchased by the Company.
The Paying Agent will promptly deliver to each holder of the Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, however, that each such new Note will be in a principal amount of $200,000 or an integral multiple of $1,000 in excess thereof. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the holders of the Notes to require that the Company purchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction. In addition, the Company could enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that could affect the Companys capital structure or the value of the Notes, but that would not constitute a Change of Control. The occurrence of a Change of Control may result in a default under the agreement governing other senior indebtedness of the Company, including the US revolving facility and the French revolving facility, giving the lenders thereunder the right to require the Company to repay all outstanding obligations thereunder, possibly limiting the Companys ability to purchase the Notes upon a Change of Control. The Companys ability to purchase the Notes following a Change of Control may also be limited by the Companys then existing financial resources. Should a Change of Control occur at a time when the Company lacks sufficient funds to make the Change of Control Payments or is prohibited from purchasing the Notes under instruments governing other senior indebtedness (and the Company is unable to obtain the consent of the holders of such senior indebtedness or to prepay such senior indebtedness), an Event of Default would occur under the Indenture. See Events of Default and Remedies. See Risk Factors Risks Related to the Notes Although the occurrence of specific change of control events affecting us will permit you to require us to repurchase your notes, we may not be able to repurchase your notes.
The provisions described above that require the Company to make a Change of Control Offer following a Change of Control will be applicable regardless of whether any other provisions of the Indenture are applicable. The Company will not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
The provisions of the Indenture relating to the Companys obligation to make a Change of Control Offer may be waived or modified, prior to the occurrence of a Change of Control, with the written consent of the holders of a majority in aggregate principal amount of the then outstanding Notes.
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A Change of Control will be deemed to have occurred upon the occurrence of any of the following:
(a) the sale, lease, transfer, conveyance or other disposition (other than by merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Subsidiaries, taken as a whole;
(b) the adoption, by holders of Capital Stock of the Company, of a voluntary plan relating to the liquidation or dissolution of the Company;
(c) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any person (as such term is used in Section 13(d) (3) of the Exchange Act) becomes the beneficial owner (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, of more than 50% of the voting power of the outstanding Voting Stock of the Company; or
(d) the first day on which more than a majority of the members of the Board of Directors are not Continuing Directors;
provided, however, that a transaction in which the Company becomes a Subsidiary of another Person (other than a Person that is an individual) shall not constitute a Change of Control if (1) the shareholders of the Company immediately prior to such transaction beneficially own (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, at least a majority of the voting power of the outstanding Voting Stock of such other Person immediately following the consummation of such transaction and (2) immediately following the consummation of such transaction, no person (as such term is defined above), other than such other Person (but including the holders of the Equity Interests of such other Person), beneficially owns (as such term is defined above), directly or indirectly through one or more intermediaries, more than 50% of the voting power of the outstanding Voting Stock of the Company.
Continuing Directors means, as of any date of determination, any member of the Board of Directors who (a) was a member of the Board of Directors on the Issue Date or (b) was nominated for election to the Board of Directors with the approval of, or whose election to the Board of Directors was ratified by, at least a majority of the members of the Board of Directors who were members of the Board of Directors on the Issue Date or who were so elected to the Board of Directors thereafter.
The definition of Change of Control includes an event by which the Company sells, leases, transfers, conveys or otherwise disposes of all or substantially all of the properties or assets of the Company and its Subsidiaries, taken as a whole. Although there is a limited body of case law interpreting the phrase substantially all, there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of Notes to require the Company to repurchase such Notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the properties or assets of the Company and its Subsidiaries, taken as a whole, may be uncertain. In addition, holders of the Notes should note that case law suggests that, in the event that incumbent directors are replaced as a result of a contested election, issuers may nevertheless avoid triggering a change of control under clauses similar to clause (d) of the definition of Change of Control if the outgoing directors were to approve the new directors for the purposes of that clause.
Asset Sales
The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
(a) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (as determined in accordance with the definition of such term set out below under the caption Certain Definitions, the results of which determination shall be set forth in an Officers Certificate delivered to the Trustee) of the assets or Equity Interests issued or sold or otherwise disposed of; and
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(b) at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents;
provided, however, that the amount of (1) any liabilities (as shown on the Companys or such Restricted Subsidiarys most recent balance sheet) of the Company or such Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or the Subsidiary Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability, (2) any securities, notes or other obligations received by the Company or such Restricted Subsidiary from such transferee that are converted within 180 days by the Company or such Restricted Subsidiary into cash (to the extent of the cash received in that conversion) and (3) any Designated Non-Cash Consideration received by the Company or any Restricted Subsidiary in such Asset Sale having an aggregate fair market value (determined in accordance with the definition of such term set out below under the caption Certain Definitions, the results of which determination shall be set forth in an Officers Certificate delivered to the Trustee) taken together with all other Designated Non-Cash Consideration received pursuant to this covenant that is at that time outstanding, not to exceed the greater of 100,000,000 and 2% of the Companys Consolidated Total Assets (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value) shall be deemed to be cash for purposes of this provision.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company or any such Restricted Subsidiary may apply such Net Proceeds to (a) permanently repay the principal of any Indebtedness of the Company ranking in right of payment at least pari passu with the Notes or any Indebtedness of such Restricted Subsidiary (provided that if such Restricted Subsidiary is a Guarantor, then such Indebtedness shall rank in right of payment at least pari passu with its Subsidiary Guarantee), (b) make capital expenditures in respect of Strategic Assets or (c) acquire (including by way of a purchase of assets or a majority of the Voting Stock of a Person, by merger, by consolidation or otherwise) Strategic Assets, provided that if the Company or such Restricted Subsidiary enters into a binding agreement to acquire such Strategic Assets within such 365-day period, but the consummation of the transactions under such agreement has not occurred within such 365-day period and such agreement has not been terminated, then such 365-day period will be extended by 90 days to permit such consummation. If such consummation does not occur, or such agreement is terminated within such 90-day extension period, then the Company may apply, or cause such Restricted Subsidiary to apply, within 90 days after the end of such initial 90-day extension period or the effective date of such termination, whichever is earlier, such Net Proceeds as provided in clauses (a) through (c) of this paragraph. Pending the final application of any such Net Proceeds, the Company or any such Restricted Subsidiary may temporarily reduce outstanding revolving credit borrowings or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in clauses (a) through (c) of this paragraph will be deemed to constitute Excess Proceeds.
When the aggregate amount of Excess Proceeds exceeds 20,000,000, the Company will be required to make an offer to all holders of the Notes (an Asset Sale Offer) to purchase the maximum principal amount of the Notes that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon to the date of purchase, in accordance with the procedures set forth in the Indenture; provided, however, that, if the Company is required to apply such Excess Proceeds to purchase, or to offer to purchase, any Pari Passu Indebtedness, the Company shall only be required to offer to purchase the maximum principal amount of the Notes that may be purchased out of the amount of such Excess Proceeds multiplied by a fraction, the numerator of which is the aggregate principal amount of the Notes outstanding and the denominator of which is the aggregate principal amount of the Notes outstanding plus the aggregate principal amount of Pari Passu Indebtedness outstanding. To the extent that the aggregate principal amount of the Notes tendered pursuant to an Asset Sale Offer is less than the amount that the Company is required to purchase, the Company may use any remaining Excess Proceeds for general corporate purposes in any manner not prohibited by the Indenture. If the aggregate principal amount of the Notes surrendered by holders thereof exceeds the amount that the Company is required to purchase, the Trustee shall select the Notes to be purchased on a pro rata basis. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.
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The Company will not, and will not permit any Restricted Subsidiary to, enter into or suffer to exist any agreement (other than any agreement governing the Companys or any Restricted Subsidiarys Credit Facilities) that would place any restriction of any kind (other than pursuant to law or regulation) on the ability of the Company to make an Asset Sale Offer. The agreements governing the Companys existing Credit Facilities contain and the agreements governing the Companys future Credit Facilities may contain prohibitions of certain events, including events that would constitute a Change of Control or an Asset Sale. In addition, the exercise by the holders of Notes of their right to require the Company to repurchase the Notes upon a Change of Control or an Asset Sale could cause a default under these other agreements, even if the Change of Control or Asset Sale itself does not, due to the financial effect of such repurchases on the Company. Finally, the Companys ability to pay cash to the holders of Notes upon a repurchase may be limited by the Companys then existing financial resources. See Risk Factors Risks Related to the Notes.
The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws and regulations are applicable in connection with the purchase of the Notes as a result of an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of the Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the Indenture by virtue of such conflict.
Certain Covenants
Restricted Payments
The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(a) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any of its Restricted Subsidiaries (other than any such Equity Interests owned by the Company or any of its Restricted Subsidiaries);
(b) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value, any Indebtedness that is subordinated in right of payment to the Notes or the Subsidiary Guarantees, as the case may be, except a payment of interest or principal at Stated Maturity; or
(c) make any Restricted Investment,
(all such payments and other actions set forth in clauses (a) through (c) above being collectively referred to as Restricted Payments), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least 1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph of the covenant described under the caption Incurrence of Indebtedness and Issuance of Disqualified Stock; and
(3) such Restricted Payment, together with (x) the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Reference Date (excluding Restricted Payments permitted by clauses (b) through (e) and, to the extent deducted in computing Consolidated Net Income, (f) and (g) of the next succeeding paragraph), and (y) the aggregate amount of all dividends and other payments or distributions paid subsequent to the Reference Date on account of the Companys or any of its Restricted Subsidiaries Equity Interests (including, without limitation, any such payment in
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connection with any merger or consolidation involving the Company) or to the direct or indirect holders of the Companys Equity Interests in their capacity as such (other than (i) dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company, (ii) dividends or distributions payable to the Company or any of its Restricted Subsidiaries or (iii) if the Restricted Subsidiary making such dividend is not a Wholly Owned Restricted Subsidiary, dividends to its shareholders on a pro rata basis), is less than the sum (without duplication) of the following:
(A) 50% of the cumulative Consolidated Net Income of the Company for the period (taken as one accounting period) from January 1, 2005 to the end of the Companys most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus
(B) 100% of the aggregate of (1) the net cash proceeds and (2) the fair market value of Strategic Assets transferred or conveyed to the Company (as valued at the time of transfer or conveyance to the Company, and as determined in the manner contemplated by the definition of the term fair market value), in each case received by the Company since the Reference Date as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issuance or sale of Disqualified Stock or debt securities of the Company that have been converted into, or exchanged or redeemed for, such Equity Interests (other than any such Equity Interests, Disqualified Stock or convertible debt securities sold to a Restricted Subsidiary of the Company and other than Disqualified Stock or convertible debt securities that have been converted into, or exchanged or redeemed for, Disqualified Stock); plus
(C) to the extent that any Restricted Investment that was made after the Reference Date is sold for cash or otherwise liquidated or repaid for cash, the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any); plus
(D) if any Unrestricted Subsidiary is redesignated as a Restricted Subsidiary, the lesser of (1) an amount equal to the fair market value of the Investments previously made by the Company and its Restricted Subsidiaries in such Subsidiary as of the date of redesignation and (2) the amount of such Investments.
The preceding provisions will not prohibit any of the following:
(a) the payment of any dividend within 60 days after the date of declaration thereof if at said date of declaration such payment would have complied with the provisions of the Indenture;
(b) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or any Equity Interests of the Company or any of its Restricted Subsidiaries in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of the Company) of, other Equity Interests of the Company (other than any Disqualified Stock), provided that the amount of any such net cash proceeds that are utilized for any such redemption, purchase, retirement, defeasance or other acquisition shall be excluded from clause (3)(B) of the preceding paragraph;
(c) the defeasance, redemption, purchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(d) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the Company or any of its Restricted Subsidiaries;
(e) repurchases of Equity Interests deemed to occur upon exercise of stock options, if such Equity Interests represent a portion of the exercise price of such stock options;
(f) so long as no Default has occurred and is continuing, the repurchase or other acquisition for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company for allocation (as a free allocation or otherwise) to directors, officers and employees of the Company and its Restricted Subsidiaries not in excess of 2,500,000 in any 12-month period;
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(g) so long as no Default has occurred and is continuing, the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any member of the Companys (or any of its Restricted Subsidiaries) management pursuant to any management equity subscription agreement or stock option agreement in effect as of the Issue Date; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed 1,000,000 in any 12-month period;
(h) loans or advances in the ordinary course of business to Affiliates or Persons with which the Company or a Subsidiary may have contractual arrangements in any jurisdiction reasonably necessary to be made in connection with conducting the business of the Company or a Subsidiary in such jurisdiction in a form that is customary to address foreign investment regulation or practice in such jurisdiction, in an aggregate amount not to exceed 2,000,000 outstanding at any one time;
(i) so long as no Default has occurred and is continuing, advances constituting Investments or loans to directors, officers and employees of the Company and its Restricted Subsidiaries in the ordinary course of business for bona fide business purposes not in excess of 1,000,000 at any one time outstanding; and
(j) other Restricted Payments not to exceed 15,000,000 in the aggregate.
The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any non-cash Restricted Payment shall be determined in the manner contemplated by the definition of the term fair market value, and the results of such determination shall be evidenced by an Officers Certificate delivered to the Trustee.
Incurrence of Indebtedness and Issuance of Disqualified Stock
The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, incur or an incurrence) any Indebtedness (including, without limitation, any Acquired Indebtedness) and that the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock or any Disqualified Stock; provided, however, that the Company or any Guarantor may incur Indebtedness or issue Disqualified Stock, and any Restricted Subsidiary may incur Acquired Indebtedness, in each case if the Consolidated Interest Coverage Ratio for the Companys most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 3.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such four-quarter period.
The preceding paragraph will not apply to the incurrence by the Company or any of its Restricted Subsidiaries of any of the following Indebtedness:
(a) Indebtedness under Credit Facilities in an aggregate principal amount at any one time outstanding not to exceed the greater of (x) 500,000,000, plus any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness, and less any amounts derived from Asset Sales and applied to the permanent reduction of Indebtedness under Credit Facilities in accordance with the covenant described under the caption Put Option of Holders Asset Sales and (y) 10% of the Companys Consolidated Total Assets;
(b) Existing Indebtedness;
(c) Hedging Obligations;
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(d) Indebtedness represented by the Offered Notes, the Exchange Notes issued in connection with the Exchange Offer or the Subsidiary Guarantees;
(e) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries, provided that (1) if the Company or any Guarantor is the obligor on such Indebtedness, then the Indebtedness must be unsecured and expressly subordinated in right of payment to the Companys obligations with respect to the Notes or such Guarantors obligations under its Subsidiary Guarantee, as the case may be, and (2) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company, or any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that is not permitted by this clause (e);
(f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any of its Restricted Subsidiaries in the ordinary course of business, including guarantees or obligations of the Company or any of its Restricted Subsidiaries with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(g) Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations (or any guarantee thereof or indemnity with respect thereto), in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (g), not to exceed 50,000,000 at any time outstanding;
(h) the guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary of Indebtedness of the Company or another Restricted Subsidiary, in each case, that was permitted to be incurred by another provision of this covenant; provided that if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or a Subsidiary Guarantee, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(i) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries incurred in the ordinary course of business in connection with cash pooling or other cash management arrangements;
(j) Permitted Refinancing Indebtedness incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund Indebtedness incurred pursuant to the first paragraph and clauses (b), (d) and (j) of the second paragraph of this covenant;
(k) Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) in an aggregate principal amount not to exceed 5% of the Companys Consolidated Total Assets minus the sum of all Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) then outstanding; and
(l) any additional Indebtedness of the Company or any Guarantor in an aggregate principal amount not in excess of 50,000,000 at any one time outstanding and any guarantee thereof.
The Indenture also provides that the Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is subordinated to any other Indebtedness of the Company or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantees of such Guarantor, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall be deemed to be contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured.
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For purposes of determining compliance with this Incurrence of Indebtedness and Issuance of Disqualified Stock covenant, if an item of proposed Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (l) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this covenant, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant.
The reclassification as Indebtedness of operating leases due to a change in accounting principles will not be deemed to be an incurrence of Indebtedness for the purposes of this covenant.
Liens
The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien on any property or asset now owned or hereafter acquired, or any income or profits therefrom, except Permitted Liens, to secure (a) any Indebtedness of the Company or such Restricted Subsidiary (if it is not also a Guarantor), unless prior to, or contemporaneously therewith, the Notes are equally and ratably secured, or (b) any Indebtedness of any Guarantor, unless prior to, or contemporaneously therewith, the Subsidiary Guarantee of such Guarantor is equally and ratably secured; provided, however, that if such Indebtedness is expressly subordinated to the Notes or any Subsidiary Guarantee, the Lien securing such Indebtedness will be subordinated and junior to the Lien securing the Notes or the Subsidiary Guarantee, as the case may be, with the same relative priority as such Indebtedness has with respect to the Notes or the Subsidiary Guarantee. The incurrence of secured Indebtedness by the Company and its Restricted Subsidiaries is subject to further limitations on the incurrence of Indebtedness as described under the caption Incurrence of Indebtedness and Issuance of Disqualified Stock.
Sale-and-Leaseback Transactions
The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale-and-leaseback transaction; provided, however, that the Company or any Restricted Subsidiary, as applicable, may enter into a sale-and-leaseback transaction if:
(a) the Company or such Restricted Subsidiary could have (1) incurred Indebtedness in an amount equal to the Attributable Indebtedness relating to such sale-and-leaseback transaction pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption Incurrence of Indebtedness and Issuance of Disqualified Stock and (2) incurred a Lien to secure such Indebtedness pursuant to the covenant described above under the caption Liens;
(b) the gross cash proceeds of such sale-and-leaseback transaction are at least equal to the fair market value (as determined in accordance with the definition of such term, the results of which determination shall be set forth in an Officers Certificate delivered to the Trustee) of the property that is the subject of such sale-and-leaseback transaction; and
(c) the transfer of assets in such sale-and-leaseback transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with, the covenant described above under the caption Put Option of Holders Asset Sales, if applicable.
Issuances and Sales of Capital Stock of Restricted Subsidiaries
The Indenture provides that the Company (a) will not, and will not permit any Restricted Subsidiary of the Company to, transfer, convey, sell or otherwise dispose of any Capital Stock of any Restricted Subsidiary of the Company to any Person other than the Company or a Restricted Subsidiary of the Company, and (b) will not permit any Restricted Subsidiary of the Company to issue any of its Equity Interests to any Person other than to the Company or a Restricted Subsidiary of the Company (except, in the case of both clauses (a) and (b) above, as
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required in the manner described in clause (b) under the definition of Wholly Owned Restricted Subsidiary, provided that the business and management of the Restricted Subsidiary is, by contract or otherwise, controlled by the Company), unless:
(a) the Net Proceeds from such issuance, transfer, conveyance, sale or other disposition are applied in accordance with the covenant described above under the caption Put Option of Holders Asset Sales and
(b) immediately after giving effect to such transfer, conveyance, sale or other disposition, such Restricted Subsidiary either continues to be a Restricted Subsidiary or, if such Restricted Subsidiary would no longer constitute a Restricted Subsidiary, any remaining Investment in such Restricted Subsidiary would have been permitted to be made under the covenant described above under the caption Restricted Payments if made on the date of such transfer, conveyance, sale or other disposition.
For purposes of this covenant, the creation or perfection of a Lien on any Capital Stock of a Restricted Subsidiary of the Company to secure any Indebtedness of the Company or any of its Restricted Subsidiaries will not be deemed to be a disposition of such Capital Stock, provided that any sale by the secured party of such Capital Stock following foreclosure of its Lien will be subject to this covenant.
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to do any of the following:
(a) (1) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries on its Capital Stock or (2) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries;
(b) make loans or advances to the Company or any of its Restricted Subsidiaries; or
(c) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of:
(1) agreements governing Credit Facilities or Existing Indebtedness, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, provided that such agreements and amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially less favorable to the holders of the Notes, taken as a whole, with respect to such dividend and other payment restrictions, than those contained, in the case of Credit Facilities, in agreements governing Credit Facilities or, in the case of Existing Indebtedness, in agreements governing such Existing Indebtedness, in either case as in effect on the date of the Indenture;
(2) the Indenture, the Notes, the Exchange Notes issued in connection with the Exchange Offer and the Subsidiary Guarantees;
(3) any agreement for the sale or other disposition of Equity Interests in a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending the sale or other disposition;
(4) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred;
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(5) by reason of customary provisions restricting the subletting or assignment of any lease or the transfer of copyrighted or patented materials;
(6) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (c) above on the property so acquired;
(7) customary provisions in agreements for the sale of property or assets;
(8) customary provisions in agreements that restrict the assignment of such agreements or rights thereunder;
(9) provisions with respect to the disposition or distribution of assets or property in any joint venture agreement, assets sale agreement, stock sale agreement or other similar agreement, in each case entered into in the ordinary course of business, but in each case only to the extent such encumbrance or restriction relates to the transfer of the property, or encumbers or restricts the assets, subject to such agreement;
(10) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(11) Permitted Refinancing Indebtedness, provided that the encumbrances and restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially less favorable to the holders of the Notes, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;
(12) any Liens not prohibited by the covenant described above under the caption Liens that limit the right of the debtor to dispose of the assets subject to such Liens; or
(13) applicable law.
Transactions with Affiliates
The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an Affiliate Transaction), unless:
(a) such Affiliate Transaction is in writing and on terms that, when taken as a whole, are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person or, if there is no such comparable transaction, on terms that are fair and reasonable to the Company or such Restricted Subsidiary; and
(b) the Company delivers to the Trustee (1) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of 2,000,000, an Officers Certificate certifying that such Affiliate Transaction complies with clause (a) above and (2) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of 5,000,000, a resolution of the Board of Directors set forth in an Officers Certificate certifying that such Affiliate Transaction complies with clause (a) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors and (3) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of 15,000,000, an opinion as to the fairness to the Company or the relevant Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm that is, in the judgment of the Board of Directors, qualified to render such opinion and is independent with respect to the Company;
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provided, however, that the following shall be deemed not to be Affiliate Transactions:
(A) any employment agreement or other employee compensation plan or arrangement (including stock option plans) entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business of the Company or such Restricted Subsidiary;
(B) transactions between or among the Company and its Restricted Subsidiaries (including any Person that becomes a Restricted Subsidiary as a result of any such transaction);
(C) loans or advances to officers, directors and employees of the Company or any of its Restricted Subsidiaries made in the ordinary course of business and consistent with past practices of the Company and its Restricted Subsidiaries in an aggregate amount not to exceed 10,000,000 outstanding at any one time;
(D) indemnities of officers, directors and employees of the Company or any of its Restricted Subsidiaries permitted by provisions of the organizational documents of the Company or such Restricted Subsidiary or applicable law;
(E) the payment of reasonable and customary regular fees to directors of the Company or any of its Restricted Subsidiaries who are not employees of the Company or any Subsidiary;
(F) any agreement or arrangement in effect as of the Issue Date or any amendment thereto or replacement thereof or any transaction contemplated thereby (including pursuant to any amendment or replacement agreement) so long as any such amendment or replacement agreement, taken as a whole, is no more disadvantageous to the holders of the Notes in any material respect than the original agreement as in effect on the Issue Date;
(G) Restricted Payments and Permitted Investments that are permitted by the provisions of the Indenture described above under the caption Restricted Payments or the declaration or payment of any dividend or the making of any other payment or distribution described in sub-clause (y) of clause (3) of the first paragraph of the covenant described under the caption Restricted Payments which does not constitute an Event of Default pursuant to clause (e) under the caption Events of Default and Remedies; and
(H) transactions with a Person (other than an Unrestricted Subsidiary of the Company) that is an Affiliate of the Company solely because the Company owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person.
Guarantees of Certain Indebtedness by Restricted Subsidiaries
The Indenture provides that the Company will not permit any Restricted Subsidiary, directly or indirectly, to guarantee any Indebtedness of the Company or any Guarantor (the Other Company Indebtedness) other than Permitted Guarantees unless such Restricted Subsidiary (if it is not already a Guarantor) contemporaneously executes and delivers a Subsidiary Guarantee and a supplemental indenture to the Indenture in accordance with its terms, which Subsidiary Guarantee will be senior to such Restricted Subsidiarys guarantee of such Other Company Indebtedness if such Other Company Indebtedness so guaranteed is subordinated Indebtedness.
Conduct of Business
The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in the conduct of any business other than the business being conducted on the Issue Date and such other businesses as are reasonably necessary or desirable to facilitate the conduct and operation of, or ancillary or reasonably related to, such businesses, except to the extent as would not be material to the Company and its Restricted Subsidiaries, taken as a whole.
Anti-Layering
The Indenture provides that the Company will not and will not permit any Guarantor to incur, directly or indirectly, any Indebtedness that is subordinated in right of payment to any Indebtedness of the Company or the Guarantor, as the case may be, unless the Indebtedness so incurred is either pari passu with, or subordinated in right of payment to, the Notes or the relevant Subsidiary Guarantee, as the case may be.
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Unsecured Indebtedness will not be deemed to be subordinated in right of payment to secured Indebtedness solely because it is unsecured, and Indebtedness that is not guaranteed by a particular Person is not deemed to be subordinated in right of payment to Indebtedness that is so guaranteed solely because it is not so guaranteed.
Reports
Whether or not the Company is required to do so by the rules and regulations of the Commission, so long as any Notes are outstanding, the Company will file with the Commission (unless the Commission will not accept such a filing):
(i) within the time periods specified in the Commissions rules and regulations, all annual financial and other information with respect to the Company and its Subsidiaries that would be required to be contained in a filing with the Commission on Form 20-F, including a Managements Discussion and Analysis of Financial Condition and Results of Operations and a report thereon by the Companys certified independent accountants; and
(ii) within 60 days after the end of each of the first and third quarters of each fiscal year (and within 75 days after the end of the second quarter of each fiscal year), reports on Form 6-K, or any successor form, attaching (a) unaudited consolidated financial statements for the Company for the period then ended (and the comparable period in the prior year), in each case prepared in accordance with GAAP (as in effect on the date of such report or financial information) and (b) the information relating to the Company described in Item 5 of Form 20-F (i.e., Operating and Financial Review and Prospects).
Within 15 days of filing, or attempting to file, such information with the Commission, the Company shall furnish such information to the holders of the Notes.
For so long as the Notes are listed on the Luxembourg Stock Exchange and the rules of such stock exchange so require, the above information will also be made available in Luxembourg, free of charge, through the offices of the Paying Agent in Luxembourg.
In addition, the Company will furnish to the holders of the Notes and to prospective investors, upon the requests of such holders, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Notes are not freely transferable under the Securities Act.
Future Designation of Restricted and Unrestricted Subsidiaries
The preceding covenants (including calculation of financial ratios and the determination of limitations on the incurrence of Indebtedness) may be affected by the designation by the Company of any existing or future Subsidiary of the Company as an Unrestricted Subsidiary, or by the redesignation by the Company of an Unrestricted Subsidiary as a Restricted Subsidiary.
The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would not cause a Default. For purposes of making such designation, all outstanding Investments by the Company and its Restricted Subsidiaries in the Subsidiary so designated will be deemed to be Restricted Payments at the time of such designation, in an amount equal to the fair market value of such Investments at the time of such designation. Such designation will only be permitted if such Restricted Payments would be permitted by the terms of the Indenture at such time and if such Restricted Subsidiary otherwise meets the definition of Unrestricted Subsidiary. The Company may not designate any Restricted Subsidiary to be an Unrestricted Subsidiary at any time during which the Company maintains Investment Grade Status.
The Board of Directors may also redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if such redesignation complies with the requirements of the Indenture described in the definition of Unrestricted Subsidiary. If the aggregate amount of all Restricted Payments calculated for purposes of the first paragraph of
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the covenant described under the caption Restricted Payments above includes an Investment in an Unrestricted Subsidiary that subsequently becomes a Restricted Subsidiary pursuant to the terms of this paragraph, then the aggregate amount of such Restricted Payments will be reduced by the lesser of (a) an amount equal to the fair market value of the Investments previously made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary at the time it becomes a Restricted Subsidiary and (b) the amount of such Investments.
Any designation or redesignation pursuant to this covenant by the Board of Directors will be evidenced by the filing with the Trustee of a Board Resolution giving effect to such action and evidencing the valuation of any Investment relating thereto (as determined in good faith by the Board of Directors) and an Officers Certificate certifying that such action and valuation complied with the preceding requirements.
Effectiveness of Covenants and Events of Default
The covenants described under clauses (c) and (d) under Subsidiary Guarantees Merger or Consolidation, Certain Covenants Restricted Payments, Certain Covenants Incurrence of Indebtedness and Issuance of Disqualified Stock, Certain Covenants Dividend and Other Payment Restrictions Affecting Subsidiaries, Certain Covenants Transactions with Affiliates, Certain Covenants Conduct of Business, Put Option of Holders Asset Sales, clauses (a)(1), (b) and (c) under Certain Covenants Sale-and-Leaseback Transactions, and Certain Covenants Issuances and Sales of Capital Stock of Restricted Subsidiaries and the Events of Default described under clauses (e) and (f)(4) under Events of Default and Remedies (collectively, the Suspended Provisions) will no longer be in effect upon the Company attaining Investment Grade Status. If at any time the Companys credit rating is downgraded from Investment Grade Status, then the Suspended Provisions will thereafter be reinstated as if such covenants had never been suspended and be applicable pursuant to the terms of the Indenture (including in connection with performing any calculation or assessment to determine compliance with the terms of the Indenture), unless and until the Company subsequently attains Investment Grade Status (in which event the Suspended Provisions shall again no longer be in effect for such time that the Company maintains Investment Grade Status); provided, however, that no Default, Event of Default or breach of any kind shall be deemed to exist under the Indenture with respect to the Suspended Provisions based on, and none of the Company or any of its Subsidiaries shall bear any liability for, any actions taken or events occurring after the Company attains Investment Grade Status and before any reinstatement of such Suspended Provisions as provided above, or any actions taken at any time pursuant to any contractual obligation arising prior to such reinstatement, regardless of whether such actions or events would have been permitted if the applicable Suspended Provisions remained in effect during such period. There can be no assurance that the Notes will ever achieve Investment Grade Status or that any such rating, if achieved, will be maintained.
Events of Default and Remedies
The Indenture provides that each of the following constitutes an Event of Default:
(a) default for 30 days in the payment when due of interest on the Notes;
(b) default in payment when due of the principal of or premium, if any, on the Notes;
(c) failure by the Company to comply with the provisions described under the caption Put Option of Holders;
(d) failure by the Company for 30 days after it receives written notice from the Trustee or at least 25% in principal amount of the then outstanding Notes to comply with any of its other agreements in the Indenture or the Notes;
(e) the declaration or payment of any dividend or the making of any other payment or distribution described in subclause (y) of clause (3) under the caption Certain Covenants Restricted Payments, which declaration, payment or distribution would not be permitted by the provisions described under the caption Certain Covenants Restricted Payments if it were treated as a Restricted Payment;
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(f) the Company consolidates or merges (fusion) with or into (whether or not the Company is the surviving corporation), or sells, assigns, transfers, leases, conveys, demerges (scission) or otherwise disposes of all or substantially all of its properties or assets in one or more related transactions, to another Person unless:
(1) the Company is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance, demerger or other disposition shall have been made is a corporation organized or existing under the laws of the United States (or any state thereof or the District of Columbia), the Republic of France or any other member state of the European Union (as constituted on the Issue Date);
(2) the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, lease, conveyance, demerger or other disposition shall have been made assumes all the obligations of the Company under the Notes and the Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of Default exists;
(4) except in the case of a merger of the Company with or into a Restricted Subsidiary of the Company, the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance, demerger or other disposition shall have been made:
(A) will have a Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of the Company immediately preceding the transaction; and
(B) will, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least 1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption Certain Covenants Incurrence of Indebtedness and Issuance of Disqualified Stock; and
(5) the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers Certificate and an opinion of counsel stating that such consolidation, merger or disposition and any supplemental indenture in respect thereto comply with this provision and that all conditions precedent in the Indenture relating to such transaction or transactions have been complied with;
(g) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee exists on the date of the Indenture or is created after the date of the Indenture, which default (1) is caused by a failure to pay principal of or premium or interest on such Indebtedness prior to the expiration of any grace period provided in such Indebtedness, including any extension thereof (a Payment Default), or (2) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess of 50,000,000 and provided, further, that if any such default is cured or waived or any such acceleration rescinded, or such Indebtedness is repaid, within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, such Event of Default and any consequential acceleration of the Notes shall be automatically rescinded, so long as such rescission does not conflict with any judgment or decree;
(h) failure by the Company or any of its Restricted Subsidiaries to pay final judgments (not covered by insurance) aggregating in excess of 50,000,000, which judgments are not paid, discharged or stayed for a period of 60 days;
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(i) failure by any Guarantor to perform any covenant set forth in its Subsidiary Guarantee, or the repudiation by any Guarantor of its obligations under its Subsidiary Guarantee or the unenforceability of any Subsidiary Guarantee for any reason other than as provided in the Indenture; and
(j) certain events of bankruptcy or insolvency with respect to the Company or any Significant Subsidiary.
If any Event of Default occurs and is continuing, the Trustee may, by notice to the Company, or the Holders of at least 25% in principal amount of the then outstanding Notes may, by notice to the Company and the Trustee, and the Trustee shall, upon the request of such Holders, declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Company or any Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. The holders of a majority in principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except non-payment of principal, interest or premium that have become due solely because of such acceleration) have been cured or waived. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest.
In the case of any Event of Default occurring by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to the optional redemption provisions of the Indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes.
The holders of a majority in principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of the principal of or interest on the Notes.
The Company will be required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company will be required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator, member, partner or stockholder or other owner of Capital Stock of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Subsidiary Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws, and it is the view of the Commission that such a waiver is against public policy.
Legal Defeasance and Covenant Defeasance
The Company may, at its option and at any time, elect to have all of the obligations of itself and the Guarantors discharged with respect to the outstanding Notes and the Subsidiary Guarantees, respectively (Legal Defeasance), except for:
(a) the rights of holders of outstanding Notes to receive payments in respect of the principal of and premium, if any, and interest on such Notes when such payments are due from the trust referred to below;
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(b) the Companys obligations with respect to the Notes concerning issuing temporary Notes, registration of transfer or exchange of the Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;
(c) the rights, powers, trusts, duties and immunities of the Trustee, and the Companys and any Guarantors obligations in connection with them; and
(d) the Legal Defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time, elect to have the obligations of the Company and any Guarantor released with respect to certain covenants that are described in the Indenture (Covenant Defeasance), and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the Notes. If Covenant Defeasance occurs, certain other events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under the caption Events of Default and Remedies will no longer constitute an Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the holders of the Notes, cash in U.S. dollars or non-callable U.S. Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of an internationally recognized firm of independent public accountants, to pay the principal of and premium and interest on the outstanding Notes on the Stated Maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;
(2) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service and the French tax authority a ruling or (B) since the date of the Indenture, there has been a change in the applicable income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the holders of the outstanding Notes will not recognize income, gain or loss for U.S. federal or French income tax purposes, respectively, as a result of such Legal Defeasance and will be subject to U.S. federal or French income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that the holders of the outstanding Notes will not recognize income, gain or loss for U.S. federal or French income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal or French income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be continuing either (A) on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or (B) insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 550th day after the date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound;
(6) the Company must have delivered to the Trustee an opinion of counsel to the effect that, after the 550th day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally;
(7) the Company must deliver to the Trustee an Officers Certificate stating that the deposit was not made by the Company with the intent of preferring the holders of the Notes over the other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and
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(8) the Company must deliver to the Trustee an Officers Certificate and an opinion of counsel, each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with.
Amendment and Waiver
Except as provided below, the Indenture or the Notes may be amended or supplemented with the consent of the holders of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes), and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the holders of a majority in principal amount of the then outstanding Notes (including, without limitation, consents obtained in connection with a tender offer or exchange offer for the Notes).
Without the consent of each holder affected, an amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting holder):
(a) reduce the principal amount of the Notes whose holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or alter the provisions with respect to the redemption or purchase of the Notes by the Company;
(c) reduce the rate of or change the time for payment of interest on any Note;
(d) waive a Default or Event of Default in the payment of principal of or premium or interest on the Notes (except a rescission of acceleration of the Notes by the holders of at least a majority in principal amount of the Notes and a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of the Indenture relating to waivers of past defaults or the rights of holders of the Notes to receive payments of principal of or premium or interest on the Notes;
(g) waive a redemption or repurchase payment with respect to any Note;
(h) make any change in the ranking of the Notes relative to other Indebtedness of the Company or the Subsidiary Guarantees relative to other Indebtedness of the Guarantors, in either case in a manner adverse to the holders;
(i) release any Guarantor from any of its obligations under its Subsidiary Guarantee or the Indenture, except in accordance with the terms of the Indenture;
(j) make any change in the provisions described under the caption Additional Amounts in a manner adverse to the holders; or
(k) make any change in the preceding amendment, supplement and waiver provisions.
Notwithstanding the foregoing, without the consent of any holder of the Notes, the Company, the Guarantors and the Trustee may amend or supplement the Indenture or the Notes to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Companys obligations to holders of the Notes in the case of a merger or consolidation or sale of all or substantially all of the Companys properties or assets, to make any change that would provide any additional rights or benefits to the holders of the Notes or that does not materially adversely affect the legal rights under the Indenture of any such holder, to secure the Notes pursuant to the requirements of the covenant described above under the caption Certain Covenants Liens or to add any Guarantor or to release any Guarantor from its Subsidiary Guarantee, in each case as provided in the Indenture, or to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.
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Neither the Company nor any of its Subsidiaries shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any holder of any Notes for or as an inducement to any consent, waiver, amendment or supplement of any terms or provisions of the Indenture or the Notes, unless such consideration is offered to be paid or agreed to be paid to all holders of the Notes which so consent, waive or agree to amend or supplement in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.
Satisfaction and Discharge
The Indenture will be discharged and will cease to be of further effect as to all Notes issued thereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company) have been delivered to the Trustee for cancellation; or
(b) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the giving of a notice of redemption or otherwise or will become due and payable within one year and the Company or any Guarantor has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust solely for the benefit of the holders of the Notes, cash in U.S. dollars or non-callable U.S. Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not previously delivered to the Trustee for cancellation, including principal, premium, if any, and accrued interest to the date of maturity or redemption;
(2) no Default or Event of Default shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound;
(3) the Company and each Guarantor has paid or caused to be paid all other sums payable by it under the Indenture; and
(4) the Company has delivered an Officers Certificate and an opinion of counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
The Trustee
The Bank of New York Mellon serves as trustee under the Indenture.
The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Company or any Guarantor, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest and a Default occurs it must eliminate such conflict within 90 days, apply to the Commission for permission to continue as Trustee or resign.
The holders of a majority in principal amount of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur (that is not cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any holder of Notes, unless such holder has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.
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Governing Law
The Indenture, the Notes and the Subsidiary Guarantees are governed by the laws of the State of New York.
Consent to Jurisdiction
The Indenture provides that any suit, action or proceeding with respect to the Indenture, the Notes or the Subsidiary Guarantees may be brought in any New York state or federal court located in the Borough of Manhattan in the City of New York (New York Court) and that the Company and the Guarantors will submit to the non-exclusive jurisdiction of such courts.
Indemnification for Foreign Currency Judgments
The Indenture also provides that obligations of the Company to any holder of the Notes or the Trustee shall, notwithstanding any judgment in a currency (the Judgment Currency) other than United States dollars (the Agreement Currency), be discharged only to the extent that on the day following receipt by such holder of the Notes or the Trustee, as the case may be, of any amount in the Judgment Currency, such holder of the Notes or the Trustee may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the amount originally to be paid to such holder of the Notes or the Trustee, as the case may be, in the Agreement Currency, the Company agrees, as a separate obligation and notwithstanding such judgment, to pay to such holder of Notes or the Trustee, as the case may be, the difference, and if the amount of the Agreement Currency so purchased exceeds the amount originally to be paid to such holder of the Notes or the Trustee, as the case may be, such holder of the Notes or the Trustee, as the case may be, agrees to pay to or for the account of the Company such excess, provided that such holder of the Notes or the Trustee, as the case may be, shall not have any obligation to pay any such excess as long as a default by the Company or any Guarantor in its obligations under the Notes, the Indenture or the Subsidiary Guarantees has occurred and is continuing, in which case such excess may be applied by such holder of the Notes or the Trustee, as the case may be, to such obligations.
Additional Information
Anyone who receives this prospectus may obtain a copy of the Indenture and the Registration Rights Agreement without charge by contacting CGG S.A., Tour Maine Montparnasse, 33 avenue de Maine, 75015 Paris, France, Attention: Investor Relations Officer, Telephone (33) 1 64 47 45 00.
Replacement, Transfer and Exchange
If any Note at any time is mutilated, destroyed, stolen or lost, such Note may be replaced at the cost of the applicant at the office of the Trustee or the office of the Registrar in Luxembourg. The applicant for a new Note must, in the case of any mutilated Note, surrender such Note to the Trustee or the Registrar in Luxembourg, as applicable, and, in the case of any lost, destroyed or stolen Note, furnish evidence satisfactory to the Trustee or the Registrar in Luxembourg, as applicable, of such loss, destruction or theft, together with such indemnity as the Trustee or the Registrar in Luxembourg, as applicable, and the Company may require.
Initially, the Trustee will act as Registrar and Transfer Agent in New York, and Notes may be presented for registration of transfer and exchange at the office of the Trustee in New York. The Bank of New York Mellon (Luxembourg) S.A. will act initially as Transfer Agent in Luxembourg, and Notes may be presented for registration of transfer and exchange at 2-4 rue Eugene Ruppert, L-2453 Luxembourg, Luxembourg.
A holder of the Notes may transfer or exchange Notes in accordance with the Indenture. The Registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a holder to pay any transfer tax or similar governmental charge
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required by law. The Company and the Registrar are not required to transfer or exchange any Note selected for redemption. Also, the Company and the Registrar are not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.
The registered holder of a Note will be treated as the owner of it for all purposes, and all references to holders in this Description of the Notes are to registered holders unless otherwise indicated.
Purchase
The Company, the Trustee and their respective Affiliates may at any time and from time to time purchase any Note or a beneficial interest in any Note in the open market or otherwise at any price.
Notices
Any notice to Noteholders will be mailed by first class mail or delivered by overnight air courier guaranteeing next day delivery, in each case to their respective registered addresses shown on the register kept by the Registrar. In addition, for so long as the Notes are listed on the Luxembourg Stock Exchange and its rules so require, any such notice (including notices of redemption) will be published in a newspaper having general circulation in Luxembourg, which is expected to be the Luxemburger Wort, or if such newspaper ceases to be published or timely publication in it will not be practicable, in such other newspaper as the Trustee deems necessary to give fair and reasonable notice to the Noteholders. Notices may also be published on the internet site of the Luxembourg Stock Exchange at www.bourse.lu. Also for so long as the Notes are listed on the Luxembourg Stock Exchange, the Company will provide to the exchange a copy of all notices to Noteholders.
Prescription
Claims against the Issuer for the payment of principal, or premium, if any, on the Notes will be prescribed ten years after the applicable due date for payment thereof. Claims against the Issuer for the payment of interest on the Notes will be prescribed five years after the applicable due date for payment of interest.
Listing
Application will be made to list the Notes on the Luxembourg Stock Exchange and trade the Notes on the Euro MTF.
Certain Definitions
Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.
Acquired Indebtedness means, with respect to a specified Person, (a) Indebtedness of any other Person existing at the time such other Person is merged with or into or becomes a Subsidiary of such specified Person or (b) Indebtedness relating to properties or assets acquired by such specified Person. Acquired Indebtedness shall be deemed to be incurred on the date the acquired Person becomes a Restricted Subsidiary or the date of the related acquisition of properties or assets from such Person.
Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of the Indenture, control, as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of Voting Stock, by
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agreement or otherwise; provided, however, that beneficial ownership of 10% or more of the Voting Stock of a Person shall be deemed to be control. For purposes of the Indenture, the terms controlling, controlled by and under common control with have correlative meanings.
Applicable Premium means, with respect to any Note on any redemption date, the greater of:
(a) 1.0% of the principal amount of the Note; and
(b) the excess of (1) the present value at such redemption date of (A) the redemption price of the Note at July 15, 2017 (such redemption price being set forth in the table appearing above under the caption Optional Redemption) plus (B) all required interest payments due on the Note during the period from such redemption date through July 15, 2017 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points over (2) the principal amount of the Note, if greater.
Asset Sale means:
(a) the sale, lease, conveyance or other disposition (a disposition) of any properties or assets (including, without limitation, by way of a sale-and-leaseback), excluding dispositions in the ordinary course of business (provided that the disposition of all or substantially all of the properties or assets of the Company and its Subsidiaries taken as a whole will be subject to the provisions of the Indenture described above under the caption Put Option of Holders Change of Control and the provisions described above in clause (f) under the caption Events of Default and Remedies and not to the provisions of the Asset Sales covenant); and
(b) the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Companys Subsidiaries;
whether, in the case of clause (a) or (b), in a single transaction or a series of related transactions, provided that such transaction or series of related transactions (1) involves properties or assets having a fair market value in excess of 10,000,000 or (2) results in the payment of net proceeds in excess of 10,000,000. Notwithstanding the preceding provisions of this definition, the following transactions will be deemed not to be Asset Sales:
(A) a disposition of obsolete or excess equipment or other properties or assets;
(B) a disposition of properties or assets (including Equity Interests) by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to a Restricted Subsidiary;
(C) a disposition of cash or Cash Equivalents;
(D) a disposition of properties or assets (including Equity Interests) that constitutes a Restricted Payment that is permitted by the provisions of the Indenture described above under the caption Certain Covenants Restricted Payments;
(E) any trade or exchange by the Company or any Restricted Subsidiary of equipment or other properties or assets for equipment or other properties or assets owned or held by another Person, provided that the fair market value of the properties or assets traded or exchanged by the Company or such Restricted Subsidiary (together with any cash or Cash Equivalents) is reasonably equivalent to the fair market value of the properties or assets (together with any cash or Cash Equivalents) to be received by the Company or such Restricted Subsidiary;
(F) the creation or perfection of a Lien on any properties or assets (or any income or profits therefrom) of the Company or any of its Restricted Subsidiaries that is not prohibited by the covenant described under the caption Certain Covenants Liens;
(G) a sale-and-leaseback of the Companys office facilities in Massy, France replacing the sale-and-leaseback transaction relating to such facilities that is outstanding on the Issue Date;
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(H) the surrender or waiver of contract rights or the settlement, release or surrender of contractual, non-contractual or other claims of any kind;
(I) the sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business, but only in connection with the compromise of collection thereof;
(J) the factoring of accounts receivable arising in the ordinary course of business pursuant to arrangements customary in the region; and
(K) the grant in the ordinary course of business of any non-exclusive license of patents, trademarks, registrations therefor and other similar intellectual property.
The fair market value of any non-cash proceeds of a disposition of properties or assets and of any properties or assets referred to in the foregoing clause (E) of this definition shall be determined in the manner contemplated in the definition of the term fair market value, the results of which determination shall be set forth in an Officers Certificate delivered to the Trustee.
Attributable Indebtedness in respect of a sale-and-leaseback transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale-and-leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). As used in the preceding sentence, the net rental payments under any lease for any such period shall mean the sum of rental and other payments required to be paid with respect to such period by the lessee thereunder, excluding any amounts required to be paid by such lessee on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges. In the case of any lease that is terminable by the lessee upon payment of penalty, such net rental payment shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.
Board of Directors means the Board of Directors (Conseil dAdministration) of the Company, or any authorized committee of the Board of Directors.
Capital Lease Obligation means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP (as in effect on the Issue Date for purposes of determining whether a lease is a capital lease).
Capital Stock means:
(a) in the case of a corporation, corporate stock;
(b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, including preferred stock;
(c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
Cash Equivalents means:
(a) securities issued or directly and fully guaranteed or insured by the government of the United States of America, the Republic of France or any other country whose sovereign debt has a rating of at least A3 from Moodys Investors Service, Inc. and at least A- from Standard & Poors Ratings Services or any agency or instrumentality of any such government (provided that the full faith and credit of such government is pledged in support thereof), in each case having maturities of not more than 12 months from the date of acquisition;
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(b) certificates of deposit, Eurodollar time deposits and French negotiable debt instruments (titres de créances négociables) with maturities of 12 months or less from the date of acquisition, bankers acceptances with maturities not exceeding six months and overnight bank deposits (collectively, Bank Deposits), in each case with or issued by any commercial bank organized under the laws of any country that is a member of the Organization for Economic Co-operation and Development having capital and surplus in excess of 500,000,000 and whose long-term debt securities are rated at least A3 by Moodys Investors Service, Inc. and at least A- by Standard & Poors Ratings Services;
(c) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (a) and (b) above entered into with any financial institution meeting the qualifications specified in clause (b) above;
(d) commercial paper and French negotiable debt instruments (titres de créances négociables) having a rating of at least P-1 from Moodys Investors Service, Inc. or at least A-1 from Standard & Poors Ratings Services and in each case maturing within 12 months after the date of acquisition;
(e) deposits available for withdrawal on demand with any commercial bank not meeting the qualifications specified in clause (b) above, provided that all such deposits are made in the ordinary course of business, do not remain on deposit for more than 30 consecutive days and do not exceed 25,000,000 in the aggregate at any one time, with no more than 5,000,000 being deposited in commercial banks within a single country;
(f) money market mutual funds substantially all of the assets of which are of the type described in any of the foregoing clauses (a) through (d), including any mutual fund for which the Trustee or an Affiliate of the Trustee serves as investment manager, administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that the Trustee or an Affiliate of the Trustee receives fees from such funds for services it or its Affiliate renders to such fund in respect of such investment; and
(g) in the case of Restricted Subsidiaries organized under the laws of China, Bank Deposits from the date of acquisition issued by a commercial bank organized under the laws of China (i) which has also issued Bank Deposits in which such Restricted Subsidiary is invested as of the Issue Date in the ordinary course of business and consistent with past practice; or (ii) which has capital, surplus and undivided profits aggregating in excess of 500,000,000 (or the foreign currency equivalent thereof as of the date of such investment) and whose long-term debt securities are rated at least A3 by Moodys Investors Service, Inc. and at least A- by Standard & Poors Ratings Services.
Common Stock means the common or ordinary shares of the Company.
Consolidated Cash Flow means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, to the extent deducted or excluded in calculating Consolidated Net Income for such period:
(a) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries;
(b) Consolidated Interest Expense of such Person and its Restricted Subsidiaries;
(c) depreciation and amortization (including amortization or impairment, if any, of goodwill and of other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Person and its Restricted Subsidiaries;
(d) other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries less any non-cash items increasing Consolidated Net Income of such Person and its Restricted Subsidiaries (other than items that will result in cash receipt);
(e) any expenses, fees, charges or other costs related to any equity offering (other than an offering of Disqualified Stock) permitted by the indenture (whether or not successful); and
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(f) without duplication, an amount equal to any extraordinary loss plus any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an Asset Sale, in each case, on a consolidated basis and determined in accordance with GAAP.
Consolidated Interest Coverage Ratio means, with respect to any Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Consolidated Interest Expense of such Person for such period; provided, however, that the Consolidated Interest Coverage Ratio shall be calculated giving pro forma effect to each of the following transactions as if each such transaction had occurred at the beginning of the applicable four quarter reference period:
(a) any incurrence, assumption, guarantee, repayment, purchase or redemption by such Person or any of its Restricted Subsidiaries of any Indebtedness (other than revolving credit borrowings) subsequent to the commencement of the period for which the Consolidated Interest Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Consolidated Interest Coverage Ratio is made (the Calculation Date);
(b) any acquisition that has been made by such Person or any of its Restricted Subsidiaries, or approved and expected to be consummated within 30 days of the Calculation Date, including, in each case, through a merger or consolidation, and including any related financing transactions, during the reference period or subsequent to such reference period and on or prior to the Calculation Date; and
(c) any other transaction that may be given pro forma effect in accordance with Article 11 of Regulation S-X under the Securities Act as in effect from time to time;
provided further, however, that (1) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded and (2) the Consolidated Interest Expense attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Consolidated Interest Expense will not be obligations of the referent Person or any of its Restricted Subsidiaries following the Calculation Date.
Consolidated Interest Expense means, with respect to any Person for any period, the sum, without duplication, of the following:
(a) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers acceptance financings, and net of all payments made or received (if any) pursuant to Hedging Obligations in respect of interest rates but excluding amortization of debt issuance costs and non-cash charges other than non-cash interest expenses related to convertible bonds); and
(b) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period.
Consolidated Net Income means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP, provided that:
(a) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or a Restricted Subsidiary thereof;
(b) the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the
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date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders; and
(c) the cumulative effect of a change in accounting principles shall be excluded.
Consolidated Net Worth means, with respect to any Person as of any date, the consolidated stockholders equity of such Person and its Restricted Subsidiaries as of such date less the amount of consolidated stockholders equity attributable to Disqualified Stock or treasury stock of such Person and its Restricted Subsidiaries as of such date, in each case determined in accordance with GAAP.
Consolidated Tangible Net Worth means, at any date, the Consolidated Net Worth of the Company and its Restricted Subsidiaries as shown on their most recent consolidated balance sheet less, without duplication, all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles, as determined in accordance with GAAP.
Consolidated Total Assets means, with respect to any Person as of any date, the consolidated total assets of such Person and its Restricted Subsidiaries as of such date, as determined in accordance with GAAP.
Credit Facilities means, with respect to any Person, one or more debt facilities or commercial paper facilities with banks or other institutional lenders (including with special purpose vehicles established by such banks or lenders to provide such facilities) providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or trade letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.
Default means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
Designated Non-Cash Consideration means the fair market value of non-cash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to an Officers Certificate, setting forth the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent payment, redemption, retirement, sale or other disposition of such Designated Non-Cash Consideration. A particular item of Designated Non-Cash Consideration will no longer be considered to be outstanding when and to the extent it has been paid, redeemed or otherwise retired or sold or otherwise disposed of in compliance with the Asset Sales covenant.
Disqualified Stock means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures (excluding any maturity as a result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature or are redeemed or retired in full; provided, however, that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof (or of any security into which it is convertible or for which it is exchangeable) have the right to require the issuer to repurchase such Capital Stock (or such security into which it is convertible or for which it is exchangeable) upon the occurrence of any of the events constituting an Asset Sale or a Change of Control shall not constitute Disqualified Stock if such Capital Stock (and all such securities into which it is convertible or for which it is exchangeable) provides that the issuer thereof may not repurchase or redeem any such Capital Stock (or any such security into which it is convertible or for which it is exchangeable) pursuant to such provisions prior to compliance by the Company with the provisions of the Indenture described under the caption Put Option of Holders Change of Control or Put Option of Holders Asset Sales, as the case may be.
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Equity Interests means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
euro or means the lawful single currency of participating member states of the European Economic and Monetary Union as contemplated by the Treaty Establishing the European Union.
Euro Equivalent means, with respect to any monetary amount in a currency other than euros, at or as of any time for the determination thereof, the amount of euros obtained by converting such foreign currency involved in such computation into euros at the spot rate for the purchase of euros with the applicable foreign currency as quoted by Reuters (or, if Reuters ceases to provide such spot quotations, by any other reputable service that is providing such spot quotations, as selected by the Company) at approximately 11:00 a.m. (New York City time) on the date not more than two business days prior to such determination.
Exchange Act means the U.S. Securities Exchange Act of 1934, as amended.
Existing Indebtedness means Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Credit Facilities) in existence on the date of the Indenture, until such amounts are repaid, but shall not include any Indebtedness that is repaid with the proceeds of the Offered Notes.
The term fair market value means, with respect to any asset or Investment, the fair market value of such asset or Investment at the time of the event requiring such determination, as determined in good faith by the Company, or, with respect to any asset or Investment in excess of 50,000,000 (other than cash or Cash Equivalents), as determined by a reputable investment banking, accounting or appraisal firm that is, in the judgment of the Board of Directors, qualified to perform the task for which such firm has been engaged and independent with respect to the Company.
GAAP means International Financial Reporting Standards, accounting principles adopted by the International Accounting Standards Board and its predecessor and, except as otherwise specified, as in effect from time to time.
guarantee means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.
Guarantor means each of:
(1) the Initial Guarantors; and
(2) any other Subsidiary of the Company (including any Restricted Subsidiary that becomes a Guarantor at its option) that executes a supplemental indenture providing for a Subsidiary Guarantee in accordance with the provisions of Indenture,
and their respective successors and assigns, in each case, until the Subsidiary Guarantee of such Person has been released in accordance with the provisions of the Indenture.
Hedging Obligations means, with respect to any Person, the obligations of such Person under:
(a) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements;
(b) other agreements or arrangements designed to protect such Person against fluctuations in interest rates; and
(c) any foreign currency futures contract, option or similar agreement or arrangement designed to protect such Person against fluctuations in currency exchange rates or commodity prices,
in each case to the extent such obligations are incurred in the ordinary course of business of such Person and not for speculative purposes.
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Indebtedness means, with respect to any Person, any indebtedness of such Person, without duplication, whether or not contingent, in respect of borrowed money including, without limitation, any guarantee thereof, or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or bankers acceptances or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade account payable, or representing any Hedging Obligations, if and to the extent any of the foregoing indebtedness (other than letters of credit, guarantees and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP. The amount of any Indebtedness outstanding as of any date shall be (a) the accreted value thereof, in the case of any Indebtedness that does not require current payments of interest, and (b) the principal amount thereof, in the case of any other Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder).
Investment Grade Status shall occur when the Notes receive a rating of BBB- or higher from Standard & Poors (or its equivalent under any successor rating categories of Standard & Poors) and a rating of Baa3 or higher from Moodys (or its equivalent under any successor rating categories of Moodys) or, if either such entity ceases to rate the Notes for reasons outside the normal control of the Company, the equivalent investment grade credit rating from any other nationally recognized statistical rating organization, as that term is used in Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Company as a replacement agency.
Investments means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees by the referent Person of, and Liens on any assets of the referent Person securing, Indebtedness or other obligations of other Persons), advances or capital contributions (excluding commission, travel and similar advances to directors, officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided, however, that the following shall not constitute Investments: (1) extensions of trade credit or other advances to customers on commercially reasonable terms in accordance with normal trade practices or otherwise in the ordinary course of business, (2) Hedging Obligations and (3) endorsements of negotiable instruments and documents in the ordinary course of business. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under the caption Certain Covenants Restricted Payments.
Issue Date means May 1, 2014.
Lien means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes of any jurisdiction), other than a precautionary financing statement respecting a lease not intended as a security agreement) or any assignment of (or agreement to assign) any right to income or profits from any assets by way of security.
Merger includes a fusion, an amalgamation, a compulsory share exchange, a conversion of a corporation into another business entity and any other transaction having effects substantially similar to a merger under the General Corporation Law of the State of Delaware.
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Net Income means, with respect to any Person, the net income (or loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:
(a) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with (1) any Asset Sale (including, without limitation, dispositions pursuant to sale-and-leaseback transactions) or (2) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and
(b) any extraordinary or non-recurring gain (but not loss), together with any related provision for taxes on such extraordinary or non-recurring gain (but not loss).
Net Proceeds means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (without duplication) the following:
(a) the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, sales commissions, recording fees, title transfer fees, title insurance premiums, appraiser fees, other out-of-pocket expenses and costs incurred in connection with preparing such asset for sale) and any relocation expenses incurred as a result thereof;
(b) taxes paid or estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements that will result in a reduction in consolidated tax liability);
(c) amounts required to be applied to the repayment of Indebtedness (other than under a revolving credit facility) secured by a Lien on the asset or assets that were the subject of such Asset Sale; and
(d) any reserve (including any reserve against any liabilities associated with such Asset Sale and retained by the Company or the relevant Restricted Subsidiary) established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such asset or assets, until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of the reserve so reversed or the amount returned to the Company or its Restricted Subsidiaries from such escrow arrangement, as the case may be.
Non-Recourse Debt means Indebtedness:
(a) as to which neither the Company nor any of its Restricted Subsidiaries (1) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or is otherwise directly or indirectly liable (as a guarantor or otherwise) or (2) constitutes the lender;
(b) no default with respect to which (including any rights the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) the holders of Indebtedness of the Company or any of its Restricted Subsidiaries (other than the Notes) to declare a default on such Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and
(c) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.
Pari Passu Indebtedness means, with respect to any Net Proceeds from Asset Sales, Indebtedness of the Company and its Restricted Subsidiaries the terms of which require the Company or such Restricted Subsidiary to apply such Net Proceeds to offer to purchase such Indebtedness.
Permitted Guarantees means any guarantee:
(1) guaranteeing or securing the Notes or any Guarantee;
(2) in favor of the Company or a Guarantor;
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(3) guaranteeing Indebtedness incurred pursuant to clause (a) of the second paragraph of the covenant described under the caption Certain Covenants Incurrence of Indebtedness and Issuance of Preferred Stock; or
(4) in existence on the date of the Indenture to the extent guaranteeing Existing Indebtedness and Permitted Refinancing Indebtedness in respect thereof incurred in compliance with clause (j) of the second paragraph of the covenant described under the caption Certain Covenants Incurrence of Indebtedness and Issuance of Disqualified Stock.
Permitted Investments means:
(a) any Investment in the Company (including, without limitation, any acquisition of the Notes) or in a Restricted Subsidiary of the Company, other than any Investment described in clause (a) of the definition of Restricted Payments;
(b) any Investment in cash or Cash Equivalents;
(c) any Investment by the Company or any Restricted Subsidiary of the Company in a Person if as a result of such Investment (1) such Person becomes a Restricted Subsidiary of the Company or (2) such Person is merged or consolidated with or into, or transfers or conveys all or substantially all of its properties or assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company;
(d) any Investment made as a result of the receipt of non-cash consideration from (1) an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption Put Option of Holders Asset Sales or (2) a disposition of assets that does not constitute an Asset Sale;
(e) Investments in stock, obligations or securities received in settlement of any claim or debts owing to the Company or any Restricted Subsidiary as a result of bankruptcy or insolvency proceedings or received in satisfaction of any judgment or in settlement of any claim in circumstances where the Company does not expect it would receive cash payment in a timely manner, or upon the foreclosure, perfection or enforcement of any Lien in favor of the Company or any Restricted Subsidiary, in each case as to any claim or debts owing to the Company or any Restricted Subsidiary that arose in the ordinary course of business of the Company or any such Restricted Subsidiary, provided that any stocks, obligations or securities received in settlement of any claim or debts that arose in the ordinary course of business (and received other than as a result of bankruptcy or insolvency proceedings or received in satisfaction of any judgment or in settlement of any claim in circumstances where the Company does not expect it would receive cash payment in a timely manner, or upon foreclosure, perfection or enforcement of any Lien) that are, within 180 days of receipt, converted into cash or Cash Equivalents shall be treated as having been cash or Cash Equivalents at the time received;
(f) Investments in Argas Ltd. consisting of guarantees of its obligations incurred in the ordinary course of its business, provided that such Investments, when taken together with all other Investments made pursuant to this clause (f) that are at the time outstanding, do not exceed 50,000,000;
(g) Investments in Argas Ltd. (other than those described in clause (f) above) and any other Affiliate organized in a foreign jurisdiction that is required by the applicable laws and regulations of such foreign jurisdiction or its governmental agencies, authorities or state-owned businesses to be majority owned by the government of such foreign jurisdiction or individual or corporate citizens of such foreign jurisdiction or another foreign jurisdiction in order for such Affiliate to transact business in such foreign jurisdiction, provided that such Investments, when taken together with all other Investments made pursuant to this clause (g) that are at the time outstanding, do not exceed 20% of Consolidated Tangible Net Worth;
(h) Investments in any Person in exchange for, or out of the net cash proceeds of, an issue or sale by the Company of Equity Interests (other than Disqualified Stock); and
(i) other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (i) that are at the time outstanding, do not exceed 25,000,000.
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Permitted Liens means:
(a) Liens securing Indebtedness incurred pursuant to clause (a) of the second paragraph of the covenant described under the caption Certain Covenants Incurrence of Indebtedness and Issuance of Disqualified Stock, and Liens securing any other Indebtedness under Credit Facilities incurred pursuant to the first paragraph of such covenant;
(b) Liens in favor of the Company and its Restricted Subsidiaries;
(c) Liens on any property or asset of a Person existing at the time such Person is merged into or consolidated with the Company or any Restricted Subsidiary of the Company, provided that such Liens were in existence prior to such merger or consolidation, were not created in contemplation of it and do not extend to any property or asset of the Company or any of its Restricted Subsidiaries other than those of the Person merged into or consolidated with the Company or any of its Restricted Subsidiaries;
(d) Liens on any property or asset existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company, provided that such Liens were in existence prior to such acquisition, were not created in contemplation of it and do not extend to any other property or asset of the Company or any of its Restricted Subsidiaries;
(e) Liens securing the performance of statutory obligations, surety or appeal bonds, bid or performance bonds, insurance obligations or other obligations of a like nature incurred in the ordinary course of business;
(f) Liens securing Hedging Obligations;
(g) Liens existing on the date of the Indenture;
(h) Liens securing Indebtedness (including Capital Lease Obligations) permitted by clause (g) of the second paragraph of the covenant described under the caption Certain Covenants Incurrence of Indebtedness and Issuance of Disqualified Stock, provided that such Liens extend only to the property, plant or equipment financed by such Indebtedness;
(i) any interest or title of a lessor under an operating lease;
(j) Liens arising by reason of deposits necessary to obtain standby letters of credit in the ordinary course of business;
(k) Liens on real or personal property or assets of the Company or a Restricted Subsidiary thereof to secure Indebtedness incurred for the purpose of (1) financing all or any part of the purchase price of such property or assets incurred prior to, at the time of, or within 90 days after, the acquisition of such property or assets or (2) financing all or any part of the cost of construction or improvement of any such property or assets, provided that the amount of any such financing shall not exceed the amount expended in the acquisition of, or the construction of, such property or assets and such Liens shall not extend to any other property or assets of the Company or a Restricted Subsidiary (other than any associated accounts, contracts and insurance proceeds);
(l) judgment Liens not giving rise to an Event of Default so long as any appropriate legal proceeding which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceeding may be initiated shall not have expired;
(m) Liens securing Indebtedness of the Company or any Restricted Subsidiary of the Company that does not exceed 10,000,000 at any one time outstanding;
(n) Liens securing Acquired Indebtedness incurred pursuant to the first paragraph of the covenant described under the caption Certain Covenants Incurrence of Indebtedness and Issuance of Disqualified Stock, provided that such Liens (1) secured such Acquired Indebtedness at the time of and prior to the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company and were not granted in connection with, or in anticipation of, such incurrence, and (2) do not extend to any property or asset of the Company or any of its Restricted Subsidiaries other than the property or asset that secured the Acquired Indebtedness prior to the time that it became Acquired Indebtedness of the Company or a Restricted Subsidiary of the Company;
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(o) Liens securing Permitted Refinancing Indebtedness with respect to any Indebtedness secured by Liens referred to in clauses (c), (d), (g), (h), (k) and (n) above and in this clause (o); and
(p) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor.
Permitted Refinancing Indebtedness means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries; provided, however, that:
(a) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus premium, if any, and accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of expenses incurred in connection therewith);
(b) such Permitted Refinancing Indebtedness has a final maturity date no earlier than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;
(c) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable, taken as a whole, to the holders of the Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and
(d) if the Company is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, then such Permitted Refinancing Indebtedness is solely Indebtedness of the Company,
provided, however, that a Restricted Subsidiary that is also a Guarantor may guarantee Permitted Refinancing Indebtedness incurred by the Company, whether or not such Restricted Subsidiary was an obligor or guarantor of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; provided further, however, that if such Permitted Refinancing Indebtedness is subordinated to the Notes, such guarantee shall be subordinated to such Restricted Subsidiarys Subsidiary Guarantee to at least the same extent.
Person means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
Qualified Equity Offering means:
(a) any issuance and sale of Equity Interests (other than Disqualified Stock) of the Company pursuant to an underwritten offering registered under the Securities Act; or
(b) any other issuance and sale of Equity Interests (other than Disqualified Stock) of the Company so long as, at the time of consummation of such sale, the Company has a class of common equity securities (including American depository shares) registered pursuant to Section 12(b) or Section 12(g) under the Exchange Act.
Reference Date means April 28, 2005.
Restricted Investment means an Investment other than a Permitted Investment.
Restricted Subsidiary of a Person means any Subsidiary of such Person that is not an Unrestricted Subsidiary.
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Securities Act means the U.S. Securities Act of 1933, as amended.
Sercel, Inc. means Sercel, Inc., an Oklahoma corporation with its head office in Houston, Texas, and a Restricted Subsidiary of the Company and a Guarantor as of the Issue Date.
Sercel S.A. means:
(a) Sercel S.A., a French limited liability corporation with its head office in Carquefou, France, and a Restricted Subsidiary of the Company as of the Issue Date; and/or
(b) any holding company (including Sercel Holding S.A.) that holds all of the outstanding Capital Stock of either or both of Sercel S.A. and Sercel, Inc. (other than directors qualifying shares and Capital Stock held by other statutorily required minority shareholders) and that does not hold any Capital Stock in any other Subsidiary of the Company.
Significant Subsidiary means any Restricted Subsidiary of the Company that would be a significant subsidiary as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of the Indenture.
Stated Maturity means, with respect to any mandatory sinking fund or other installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
Strategic Assets means assets or rights (other than assets that would be classified as current assets in accordance with GAAP) of the kind used or usable by the Company or its Restricted Subsidiaries in the business of providing services or software products to the oil and gas industry or manufacturing equipment for use by the oil and gas industry (or any business that is reasonably complementary or related thereto as determined in good faith by the Board of Directors).
Subsidiary means, with respect to any Person:
(a) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof);
(b) any partnership (1) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (2) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof); and
(c) any other Person whose results for financial reporting purposes are consolidated with those of such Person in accordance with GAAP.
Subsidiary Guarantee means the guarantee by each Guarantor of the Companys obligations under the Indenture and the Notes (including any Additional Notes), executed pursuant to the provisions of the Indenture.
Treasury Rate means, as of any redemption date in respect of the Notes, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15(519) that has become publicly available at least two business days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to July 15, 2017; provided, however, that if the period from the redemption date to July 15, 2017 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.
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Unrestricted Subsidiary means any Subsidiary of the Company that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution and any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate a Subsidiary as an Unrestricted Subsidiary only to the extent that such Subsidiary at the time of such designation:
(a) has no Indebtedness other than Non-Recourse Debt;
(b) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless such agreement, contract, arrangement or understanding does not violate the terms of the Indenture described under the caption Certain Covenants Transactions with Affiliates; and
(c) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (1) to subscribe for additional Equity Interests or (2) to maintain or preserve such Persons financial condition or to cause such Person to achieve any specified levels of operating results.
Any such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee the Board Resolution giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing conditions and was permitted by the covenant described under the caption Certain Covenants Restricted Payments. If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption Certain Covenants Incurrence of Indebtedness and Issuance of Disqualified Stock, the Company shall be in default of such covenant). The Board of Directors may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary, provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if:
(1) such Indebtedness is permitted under the covenant described under the caption Certain Covenants Incurrence of Indebtedness and Issuance of Disqualified Stock, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and
(2) no Default or Event of Default would be in existence following such designation.
U.S. Dollar Equivalent means, with respect to any monetary amount in a currency other than U.S. dollars, at or as of any time for the determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as quoted by Reuters (or, if Reuters ceases to provide such spot quotations, by any other reputable service as is providing such spot quotations, as selected by the Company) at approximately 11:00 a.m. (New York City time) on the date not more than two business days prior to such determination.
U.S. Government Securities means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged.
Voting Stock of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors, managers or trustees of such Person.
Weighted Average Life to Maturity means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the sum of the products obtained by multiplying (1) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (2) the number of years (calculated to the nearest one twelfth) that will elapse between such date and the making of such payment, by (b) the then outstanding principal amount of such Indebtedness.
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Wholly Owned Restricted Subsidiary of any Person means a Restricted Subsidiary of such Person to the extent that all of the outstanding Capital Stock or other ownership interests of which (other than directors qualifying shares and Capital Stock held by other statutorily required minority shareholders) shall at the time be owned directly or indirectly by such Person.
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OUTSTANDING NOTES REGISTRATION RIGHTS AGREEMENT
In connection with the sale of the outstanding notes, we entered into a registration rights agreement. Under that agreement, we agreed to:
| file a registration statement with the Commission with respect to a registered offer to exchange the outstanding notes for new notes of the Company having terms substantially identical in all material respects to the outstanding notes (except that the new notes will not contain terms with respect to transfer restrictions); |
| use our reasonable best efforts to cause that registration statement to be declared effective under the Securities Act within 180 days of the date of original issuance of the outstanding notes; |
| use our reasonable best efforts to keep that registration statement effective until the first anniversary of the closing of the exchange offer; and |
| use our reasonable best efforts to cause the exchange offer to be consummated within 210 days following the original issuance of the outstanding notes. |
Promptly after the exchange offer registration statement has been declared effective, we will offer the new notes in exchange for surrender of the outstanding notes.
If any of the outstanding notes are not freely tradable (meaning that they may be sold to the public pursuant to Rule 144(b) and do not bear any restrictive legends relating to the Securities Act by the 180th day after May 1, 2014, we will file with the Commission a shelf registration statement to cover resales of the outstanding notes by those holders who provide required information in connection with the shelf registration statement in either of the following circumstances:
| if any changes in law or applicable interpretations by the staff of the Commission do not permit us to effect the exchange offer as contemplated by the registration rights agreement; or |
| in certain limited circumstances, if any holder of the outstanding notes so requests. |
A Registration Default will occur if, among other things:
| the exchange offer registration statement is not declared effective or does not become effective on or prior to the 180th day following the date of original issuance of the outstanding notes; |
| the exchange offer is not consummated on or prior to the 210th day following the date of original issuance of the outstanding notes; or |
| we file the exchange offer registration statement or shelf registration statement and the Commission declares it or it becomes effective, but thereafter it ceases to be effective or fails to be usable for its intended purpose (except as specifically permitted in the registration rights agreement) without being succeeded within 10 business days by a post-effective amendment to such registration statement that cures such failure and that is itself declared effective within 10 business days of the date of filing of such post-effective amendment. |
If any Registration Default occurs, we will be obligated to pay special interest to each holder of outstanding notes in an amount equal of US$.05 per week per US$1,000 principal amount of outstanding notes held by each such holder for each week or portion thereof that the Registration Default continues with respect to the first 90-day period immediately following the occurrence of such Registration Default. The amount of special interest shall increase by an additional US$.05 per week per US$1,000 principal amount of outstanding notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of special interest of US$.30 per week per US$1,000 principal amount of outstanding notes, provided that we will in no event be required to pay special interest for more than one Registration Default at any given time.
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Holders who desire to tender their outstanding notes will be required to make to us the representations described under The Exchange Offer Purpose and Effect of the Exchange Offer and Procedures for Tendering in order to participate in the exchange offer. In addition, we may require holders to deliver information to be used in connection with the shelf registration statement in order to have their notes included in the shelf registration statement and benefit from the provisions regarding special interest described in the preceding paragraph. A holder who sells outstanding notes under the shelf registration statement generally will be required to be named as a selling securityholder in the related prospectus and to deliver a prospectus to purchasers. Such a holder will also be subject to the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the registration rights agreement that are applicable to such holder, including indemnification obligations.
The description of the registration rights agreement contained in this section is a summary only. For more information, you may review the provisions of the registration rights agreement that we filed with the Commission as an exhibit to the registration statement of which this prospectus is a part.
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The new notes will initially be represented by one or more permanent global notes in definitive, fully registered book-entry form (the Global Securities) that will be registered in the name of Cede & Co., as nominee of DTC. The Global Securities will be deposited on behalf of the acquirors of the new notes represented thereby with a custodian for DTC for credit to the respective accounts of the acquirors or to such other accounts as they may direct at DTC. See The Exchange Offer Book-Entry Transfer.
The Global Securities
We expect that under procedures established by DTC:
| upon deposit of the Global Securities with DTC or its custodian, DTC will credit on its internal system portions of the Global Securities that shall be comprised of the corresponding respective amounts of the Global Securities to the respective accounts of persons who have accounts with such depositary; and |
| ownership of the notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC or its nominee, with respect to interests of persons who have accounts with DTC (participants), and the records of participants, with respect to interests of persons other than participants. |
So long as DTC or its nominee is the registered owner or holder of any of the notes, DTC or such nominee will be considered the sole owner or holder or such notes represented by the Global Securities for all purposes under the indenture and under the notes represented thereby. No beneficial owner of an interest in the Global Securities will be able to transfer such interest except in accordance with the applicable procedures of DTC in addition to those provided for under the indenture.
Payments on the notes represented by the Global Securities will be made to DTC or its nominee, as the registered owner thereof. None of the Company, the trustee or any paying agent under the indenture will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Securities or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest.
We expect that DTC or its nominee, upon receipt of any payment on the notes represented by the Global Securities, will credit participants accounts with payments in amounts proportionate to their respective beneficial interests in the Global Securities as shown in the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in the Global Securities held through such participants will be governed by standing instructions and customary practice as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payment will be the responsibility of such participants.
Transfers between participants in DTC will be effected in accordance with DTC rules and will be settled in immediately available funds. If a holder requires physical delivery of a certificated security for any reason, including to sell notes to persons in states that require physical delivery of such security or to pledge such securities, such holder must transfer its interest in the Global Securities in accordance with the normal procedures of DTC and the procedures in the indenture.
DTC has advised us that DTC will take any action permitted to be taken by a holder of notes, including the presentation of notes for exchange as described below, only at the direction of one or more participants to whose account the DTC interests in the Global Securities are credited and only in respect of the aggregate principal amount as to which such participant or participants has or have given such direction. However, if there is an event of default under the indenture, DTC will exchange the Global Securities for certificated securities that it will distribute to its participants.
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DTC has advised us as follows:
| DTC is a limited-purpose company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code and a clearing agency registered under the provisions of Section 17A of the Exchange Act; |
| DTC holds securities that its participants deposit with DTC and facilitates the settlement among participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in participants accounts, thereby eliminating the need for physical movement of securities certificates; |
| Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and other organizations; |
| DTC is owned by a number of its participants and by the New York Stock Exchange, Inc., NYSE Amex LLC and the Financial Industry Regulatory Authority, Inc.; |
| Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly; and |
| The rules applicable to DTC and its participants are on file with the Commission. |
Although DTC is expected to follow these procedures in order to facilitate transfers of interests in the Global Securities among participants of DTC, it is under no obligation to perform such procedures, and such procedures may be discontinued at any time. Neither we nor the trustee will have any responsibility for the performance by DTC or its direct or indirect participants on their respective obligations under the rules and procedures governing their operations.
Certificated Securities
Interests in the Global Securities will be exchanged for certificated securities if:
| DTC or any successor depositary (the Depositary) notifies us that it is unwilling or unable to continue as depositary for the Global Securities, or has ceased to be a clearing agency registered under the Exchange Act, and, in either case, we fail to appoint a successor depositary within 90 days after the date of such notice; or |
| we determine not to have the notes represented by Global Securities. |
Upon the occurrence of either of the events described in the preceding sentence, we will cause the appropriate certified securities to be delivered.
Neither we nor the trustee will be liable for any delay by the Depositary or its nominee in identifying the beneficial owners of the related notes. Each such person may conclusively rely on, and will be protected in relying on, instructions from such Depositary or nominee for all purposes, including the registration and delivery, and the respective principal amounts, of the notes to be issued.
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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER
The following is a summary of certain U.S. federal income tax consequences of the participation by a U.S. Holder (as defined below) in the exchange offer. This discussion does not cover all aspects of U.S. federal income taxation that may be relevant to, or the actual tax effect that any of the matters described herein will have on, the participation in the exchange offer or ownership and disposition of the notes by particular investors, and does not address state, local, non-U.S. or other tax laws. This summary also does not discuss all of the tax considerations that may be relevant to certain types of investors subject to special treatment under the U.S. federal income tax laws (such as financial institutions, insurance companies, investors liable for the alternative minimum tax or the net investment income tax, individual retirement accounts and other tax-deferred accounts, tax-exempt organizations, dealers in securities or currencies, investors that will hold the notes as part of straddles, hedging transactions or conversion transactions for U.S. federal income tax purposes or investors whose functional currency is not the US dollar.
As used herein, the term U.S. Holder means a beneficial owner of notes that is, for U.S. federal income tax purposes, (i) an individual citizen or resident of the United States, (ii) a corporation created or organized under the laws of the United States or any State thereof, (iii) an estate the income of which is subject to U.S. federal income tax without regard to its source or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or the trust has validly elected to be treated as a domestic trust for U.S. federal income tax purposes.
The U.S. federal income tax treatment of a partner in an entity treated as a partnership for U.S. federal income tax purposes, that holds notes will depend on the status of the partner and the activities of the partnership. Prospective purchasers that are entities treated as partnerships for U.S. federal income tax purposes should consult their tax advisers concerning the U.S. federal income tax consequences to their partners of the participation in the exchange offer and ownership and disposition of the notes by the partnership.
This summary is based on the tax laws of the United States, including the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations thereunder, published rulings and court decisions, all as of the date hereof and all subject to change at any time, possibly with retroactive effect.
THE SUMMARY OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FOR GENERAL INFORMATION ONLY. ALL PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX ADVISERS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF PARTICIPATING IN THE EXCHANGE OFFER AND OWNING AND DISPOSING OF THE NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL, NON-U.S. AND OTHER TAX LAWS AND POSSIBLE CHANGES IN TAX LAW.
Exchange Offer
The exchange of notes for registered notes pursuant to the exchange offer will not constitute a significant modification of the terms of the notes and thus will not constitute a taxable event for U.S. Holders. Consequently, U.S. Holders will not recognize gain or loss upon the receipt of registered notes in exchange for notes in the exchange offer, will have the same tax basis in the registered notes received in the exchange offer as the tax basis in the corresponding notes immediately before the exchange, and will have a holding period in the registered notes that includes their holding period in the original notes.
Payments of Interest
Interest on a note will be taxable to a U.S. Holder as ordinary income at the time it is received or accrued, depending on the holders method of accounting for tax purposes. Interest paid by us on the notes constitutes income from sources outside the United States. Prospective purchasers should consult their tax advisers concerning the applicability of the foreign tax credit and source of income rules to income attributable to the notes.
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Sale and Retirement of the Notes
A U.S. Holder will generally recognize gain or loss on the sale or retirement of a note equal to the difference between the amount realized on the sale or retirement and the U.S. Holders tax basis in the note. A U.S. Holders tax basis in a note will generally be its cost reduced by the amount of any principal paid on the note. The amount realized does not include the amount attributable to accrued but unpaid interest, which will be taxable as interest income to the extent not previously included in income. Gain or loss recognized by a U.S. Holder on the sale or retirement of a note will be capital gain or loss and will be long-term capital gain or loss if the note was held by the U.S. Holder for more than one year.
Gain or loss realized by a U.S. Holder on the sale or retirement of a note generally will be U.S. source. Prospective purchasers should consult their tax advisers as to the foreign tax credit implications of the sale or retirement of notes.
Backup Withholding and Information Reporting
Payments of principal and interest on, and the proceeds of sale or other disposition of, notes by a U.S. paying agent or other U.S. intermediary will be reported to the IRS and to the U.S. Holder as may be required under applicable regulations. Backup withholding may apply to these payments if the U.S. Holder fails to provide an accurate taxpayer identification number or certification of exempt status or fails to report all interest and dividends required to be shown on its U.S. federal income tax returns. Certain U.S. Holders are not subject to backup withholding. U.S. Holders should consult their tax advisers as to their qualification for exemption from backup withholding and the procedure for obtaining an exemption.
Foreign Financial Asset Reporting
U.S. taxpayers that own certain foreign financial assets, including debt of foreign entities, with an aggregate value in excess of $50,000 at the end of the taxable year or $75,000 at any time during the taxable year (or, for certain individuals living outside the United States and married individuals filing joint returns, certain higher thresholds) may be required to file an information report with respect to such assets with their tax returns. The notes are expected to constitute foreign financial assets subject to these requirements unless the notes are held in an account at a financial institution (in which case the account may be reportable if maintained by a foreign financial institution). U.S. Holders should consult their tax advisors regarding the application of the rules relating to foreign financial asset reporting.
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Based on interpretations of the Commission staff in no action letters issued to third parties, we believe that each new note issued under the exchange offer may be offered for resale, resold and otherwise transferred by the holder of that new note without compliance with the registration and prospectus delivery provisions of the Securities Act if:
| you are not our affiliate within the meaning of Rule 405 under the Securities Act; |
| any new notes will be acquired in the ordinary course of your business; |
| you have no arrangement or understanding with any person to participate in the distribution of the new notes; and |
| you are not engaged in and do not intend to engage in the distribution of the new notes. |
Broker-dealers receiving notes in the exchange offer will be subject to a prospectus delivery requirement with respect to resales of the new notes.
We believe that you may not transfer new notes issued under the exchange offer in exchange for outstanding notes if you are:
| our affiliate within the meaning of Rule 405 under the Securities Act; |
| a broker-dealer that acquired outstanding notes directly from us; or |
| a broker-dealer that acquired outstanding notes as a result of market-making or other trading activities unless you acknowledge that, in connection with any resale of new notes acquired in exchange for such outstanding notes, you will deliver a prospectus meeting the requirements of the Securities Act. |
To date, the staff of the Commission has taken the position that participating broker-dealers may fulfill their prospectus delivery requirements with respect to transactions involving an exchange of securities such as this exchange offer, other than a resale of an unsold allotment from the original sale of the outstanding notes, with the prospectus contained in the exchange offer registration statement. In the registration rights agreement, we have agreed to permit participating broker-dealers to use this prospectus in connection with the resale of new notes. We have agreed that, for a period of up to one year after the expiration of the exchange offer, we will make this prospectus, and any amendment of supplement to this prospectus, available to any broker-dealer that requests such documents in the letter of transmittal.
If you wish to exchange your outstanding notes for new notes in the exchange offer, you will be required to make representations to us as described in The Exchange Offer Purpose and Effect of the Exchange Offer and Procedures for Tendering Your Representations to Us of this prospectus and in the letter of transmittal. In addition, if you are a broker-dealer who receives new notes for your own account in exchange for outstanding notes that were acquired by it as a result of market-making activities or other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale by you of such new notes.
We will not receive any proceeds from any sale of notes by broker-dealers. Broker-dealers who receive new notes for their own account in the exchange offer may sell them from time to time in one or more transactions in the over-the-counter market:
| in negotiated transactions; |
| through the writing of options on the new notes or a combination of such methods of resale; |
| at market prices prevailing at the time of resale; or |
| at prices related to such prevailing market prices or negotiated prices. |
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Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any broker-dealer or the purchasers of any new notes. Any broker-dealer that resells new notes it received for its own account in the exchange offer and any broker or dealer that participates in a distribution of such new notes may be deemed to be an underwriter within the meaning of the Securities Act. Any profit on any resale of new notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and be delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act.
We have agreed to pay all expenses incidental to the exchange offer other than commissions and concessions of any brokers or dealers. We will indemnify holders of the outstanding notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act, as provided in the registration rights agreement.
Transfer Restrictions on Outstanding Notes
The outstanding notes were not registered under the Securities Act. Those outstanding notes may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons except in accordance with an exemption from the Securities Act registration requirements. Accordingly, the outstanding notes were offered and sold in the United States only to qualified institutional buyers under Rule 144A under the Securities Act in transactions exempt from the registration requirements of the Securities Act.
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CERTAIN INSOLVENCY LAW CONSIDERATIONS IN FRANCE
We conduct a part of our business activity in France and, to the extent that the center of our main interests is deemed to be in France, we would be subject to French insolvency proceedings affecting creditors, including court assisted pre insolvency proceedings (mandat ad hoc or conciliation proceedings) and court administered insolvency proceedings being either safeguard (sauvegarde), accelerated financial safeguard (sauvegarde financière accélérée), reorganization or liquidation proceedings (redressement or liquidation judiciaire). In general, French insolvency legislation favors the continuation of a business and protection of employment over the payment of creditors and could limit your ability to enforce your rights under the notes.
The following is a general discussion of insolvency proceedings governed by French law for informational purposes only and does not address all the French legal considerations that may be relevant to holders of the notes.
Under European Council Regulation (EC) No.1346/2000 of May 29, 2000 on insolvency proceedings, if a debtor is located in the EU (other than Denmark), French courts shall have jurisdiction over the main insolvency proceedings if the center of the debtors main interests is deemed to be in France. In case of a company or legal person, the place of the registered office shall be presumed to be the center of its main interests in the absence of proof to the contrary. In determining whether the center of main interests of a company is in France, French courts will take into account a broad range of factual elements.
Grace periods
In addition to pre-insolvency and insolvency laws discussed below, you could, like any other creditors, be subject to Articles 1244-1 et seq. of the French Civil Code (Code civil).
Pursuant to the provisions of these articles, French courts may, in any civil proceeding involving a debtor, whether initiated by the debtor or a creditor, taking into account the debtors financial position and the creditors financial needs, defer or otherwise reschedule over a maximum period of two years the payment dates of payment obligations and decide that any amounts, the payment date of which is thus deferred or rescheduled, will bear interest at a rate that is lower than the contractual rate (but not lower than the legal rate as published annually by decree) or that payments made shall first be allocated to repayment of principal. A court order made under Articles 1244-1 et seq. of the French Civil Code will suspend any pending enforcement measures, and any contractual interest or penalty for late payment will not accrue or be due during the same grace period ordered by the relevant judge. A creditor cannot contract out of such grace periods.
When the debtor benefits from the opening of conciliation proceedings, these provisions shall be read in combination with Article L. 611-7 of the French Commercial Code.
Insolvency (cessation des paiements) test under French law
Under French law, a company is deemed to be insolvent (en état de cessation des paiements) when it is not able to pay its debts which are due with its available assets taking into account credit lines, existing debt rescheduling agreements and moratoria.
Court-assisted pre-insolvency proceedings
A company that has its center of main interests in France facing difficulties may request the opening of court assisted pre-insolvency proceedings (mandat ad hoc or conciliation), the aim of which is to reach an agreement with the debtors main creditors and stakeholders. Mandat ad hoc and conciliation are proceedings carried out under a court-appointed officer (mandataire ad hoc or conciliateur) itself under the supervision of the president of the relevant court (usually, the Commercial Court). These proceedings are amicable and confidential (subject to the details below as regards approved conciliation proceedings) and do not involve any automatic stay.
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Mandat ad hoc proceedings
French law does not provide for any specific rule in respect of mandat ad hoc proceedings, except that these proceedings (i) are confidential by law and (ii) may only be initiated by a debtor company itself, in its sole direction. In practice, mandat ad hoc proceedings are used by debtors that are facing difficulties of an economic, legal or financial nature but are not insolvent (en état de cessation des paiements) within the meaning of French law. The duties of the mandataire ad hoc (court appointed officer) whose name can be suggested by the debtor, are determined by the Court. This mandataire ad hoc is usually appointed in order to facilitate the negotiations with the debtors main creditors or stakeholders but he cannot coerce the creditors to accept any proposal and the dissenting creditors will not be bound by the arrangement, if any. Creditors are not barred from taking legal action against the company to recover their claims, but, in practice, they generally abstain from doing so. They are confidential and are not limited in time. The agreement reached by the parties (if any) with the help of the court appointed officer (mandataire ad hoc) is reported by the latter to the President of the Court but is not approved by the court. The restructuring agreement between the company and its main creditors will be negotiated on a purely consensual and voluntary basis those creditors not willing to take part cannot be bound by the arrangement. In any event, the debtor retains the right to petition the relevant judge for a grace period as set forth in Article 1244-1 et seq. of the French Civil Code.
Conciliation proceedings
Conciliation proceedings are available to a debtor that faces actual or foreseeable difficulties of a legal, economic or financial nature but which is not insolvent or has not been insolvent for more than 45 days. The debtor petitions the President of the Commercial Court for the appointment of a conciliator in charge of assisting the debtor in negotiating an agreement with all or part of its creditors and/or trade partners. Conciliation proceedings are confidential (subject to the below) and may last up to five months. During the proceedings, creditors may continue to individually claim payment of their claims but the debtor retains the right to petition for debt rescheduling for a maximum of two years pursuant to Articles 1244-1 et seq. of the Civil Code. Upon its execution, the agreement reached by the parties becomes binding upon them and creditors party thereto may not take action against the company in respect of claims governed by the agreement. In addition, without such formalities being an obligation on the parties, the agreement can be either:
| upon all parties request, acknowledged (constaté) by the President of the court, which makes it immediately enforceable without further recourse (titre exécutoire). The acknowledgement of the conciliation agreement keeps the conciliation proceedings confidential; or |
| upon the debtors request, approved (homologué) by the Commercial Court, subject to the satisfaction of certain conditions (i.e., (i) the debtor is not insolvent or the conciliation agreement puts an end to the debtors insolvency; (ii) the terms of the conciliation agreement are of such as to ensure that the company will survive as a going concern; and (iii) the agreement does not infringe upon the rights of the non-signatory creditors), which shall have the following specific consequences: |
| creditors who provide new money, goods or services designed to ensure the continuation of the business of the distressed company (other than shareholders providing new equity) will enjoy a priority of payment over all pre-proceeding and post-proceeding petitioned claims (other than certain post-proceeding employment claims and procedural costs), in the event of subsequent safeguard proceedings, judicial reorganization proceedings or judicial liquidation proceedings (New Money Lien); and |
| in the event of subsequent judicial reorganization proceedings or judicial liquidation proceedings, the date of insolvency and therefore the starting date of the suspect period (as defined below) cannot be fixed by the court as of a date earlier than the date of the approval of the sanction of the conciliation agreement by the Court (see the definition of the date of the cessation des paiements above). |
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The judgment will make the conciliation proceedings public only in respect of the existence of the conciliation proceedings but not in respect of the content of the agreement (except for the guarantees and security interests as well as the amount of New Money Lien detailed above, as provided for in the agreement).
Joint debtors, personal guarantors, or any third party that granted a security interest can benefit from the provisions of the approved or acknowledged agreement. Provided the agreement (whether acknowledged, approved or not) is duly executed, any individual proceedings by creditors with respect to the claims included in the agreement are suspended.
In case of breach of the agreement, any party to the agreement can petition the Court for its termination. The commencement of subsequent insolvency proceedings will automatically put an end to the conciliation agreement, in which case the creditors will recover their claims and security interests, with the exception of those amounts already paid to them. In any event, the debtor retains the right to petition for debt rescheduling pursuant to articles 1244-1 et seq. of the French civil code.
Conciliation proceedings, in the context of which a draft plan has been negotiated and is supported by a large majority of creditors without reaching unanimity, will be a mandatory preliminary step of the accelerated financial safeguard proceedings as described below.
Court-administered proceedings Safeguard, Reorganization and Liquidation Proceedings
Court administered proceedings may be initiated:
| in the event of safeguard proceedings, upon petition by the debtor only; and |
| in the event of judicial reorganization or liquidation, upon petition by the debtor, any creditor or the public prosecutor. |
The debtor may, in its sole discretion, file for safeguard proceedings at any time it is facing difficulties that it cannot overcome, as long as it is not insolvent. It is required to petition for the opening of judicial reorganization proceedings (if recovery is possible) or judicial liquidation proceedings (if recovery is manifestly not possible) within 45 days of its becoming insolvent (unless it filed for conciliation proceedings in the meantime). If it fails to do so, its directors and officers are exposed to incurring civil liability.
The period from the date of the court decision commencing the proceedings (whether a safeguard or a judicial reorganization) to the date on which the court takes a decision on the outcome of the proceedings is called the observation period and may last up to 18 months. During the observation period, a court appointed administrator, whose name can be suggested by the debtor in safeguard proceedings, investigates the business of the company. Creditors do not have effective control of the procedure, which remains in the hands of the company and the administrator and is overseen by the Court. In safeguard proceedings, the administrators mission is limited to either supervising or assisting the debtors management and assisting it in preparing a safeguard plan for the company. In judicial reorganization proceedings, the administrators mission is usually to assist the management (although he can be appointed to replace management, in full or in part) and to make proposals for the reorganization of the company, which proposals may include a business continuation plan (equivalent to a safeguard plan) and/or the sale of all or part of the companys business to a third party.
During the safeguard proceedings, payment by the debtor of any debts incurred prior to the opening of the proceedings is prohibited, subject to very limited exceptions. For example, the insolvency judge can authorize payments for prior debts in order to discharge a lien on property needed for the continued operation of the business or recover goods or rights transferred as collateral in a fiduciary estate (patrimoine fiduciaire). In addition, creditors are required to declare to the mandataire judiciaire (explained below) the debts that arose prior to the opening of the procedure (as well as the post-opening non-privileged debts (as defined below)) and are prohibited from engaging any individual lawsuits against the debtor for any payment default in relation to
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such debts (see Status of Creditors during Safeguard Proceedings, Accelerated Financial Safeguard Proceedings, Judicial Reorganization Proceedings or Judicial Liquidation Proceedings) and the accrual of interest on loans with a term of less than one year, or payments deferred for less than one year, is stopped. Debts arising after the commencement of the safeguard proceedings and which relate to expenses necessary for the businesss ordinary activities or are for the requirements of the proceedings, or are in consideration for a service rendered to the debtor during this period must be paid as and when they fall due and, if such is not the case, they will be given priority over debts incurred prior to the commencement of the safeguard proceedings (with certain limited exception such as the New Money Lien granted in the context of conciliation proceedings).
Contractual provisions providing for the indivisibility or the termination of an ongoing contract as the sole result of the opening of safeguard (as well as reorganization or liquidation proceedings) shall be deemed null and void. A recent decision of the French Supreme Court taking a broad interpretation of this rule held that any contractual provision which would amend an ongoing contract by reducing the debtors rights or increasing its obligations as the sole result of its reorganization proceedings is prohibited.
At the end of the observation period, if it considers that the company can survive as a going concern, the Court will adopt a safeguard or reorganization plan which will entail a restructuring and/or rescheduling of debts and may entail the divestiture of some or all of the debtors assets and businesses. At any time during safeguard proceedings, the Court may convert such proceedings into reorganization proceedings (i) if the debtor becomes insolvent, or (ii) at the debtors request, if the approval of a safeguard plan is manifestly impossible and if the company would become insolvent should safeguard proceedings end.
At any time during safeguard or reorganization proceedings, the Court may also convert such proceedings into liquidation proceedings if the debtor is insolvent and its recovery is manifestly impossible. However, further to recent decision from the French Constitutional Court dated December 7, 2012 and March 7, 2014, the constitutionality of the conversion of safeguard proceedings into judicial reorganization or liquidation proceedings, when it is decided upon the Courts own initiative, may be challenged.
Where the debtor is cash flow insolvent with manifestly no recovery possible, a judicial liquidation proceeding can be opened in the context of which there is no observation period. However, in case a sale of the business is considered, the court can authorize a temporary continuation of the business for a maximum period of three months (renewable once at the Public Prosecutors request), whose effects are similar to those of an observation period.
The court will appoint a liquidator which is generally the former creditors representative (mandataire judiciaire). No maximum time period is provided by law to limit the duration of the judicial liquidation process conducted by the liquidator, vested with the power to represent the company and perform such liquidation operations (mainly liquidate the assets and settle the liabilities to the extent the proceeds from the liquidated assets are sufficient, in accordance with the creditors priority order for payment). Concerning the liquidation of the assets, there are two possible outcomes of such liquidation scenario:
| an asset sale plan, which is governed by the same principles as above. In practice, where an asset sale plan is considered, the court will usually appoint a judicial administrator to manage the company and organize such sale of the business), or |
| a sale of the assets one by one, in which case the liquidator may decide to launch auction sales or sell on an amicable basis each asset for which spontaneous purchase offers have been received, the formal authorization of the bankruptcy judge being necessary to conclude the sale agreement with the bidder, or |
| request, under the surveillance of the bankruptcy judge, from all potential interested purchasers to bid on each asset, as the case may be by way of a private competitive process whereby the bidders submit their offers only at the hearing without disclosing the proposed price before such hearing (procédure des plis cachetés). |
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Creditors Committees and Adoption of the Safeguard or Reorganization Plan
During the observation period, in the case of large companies (with more than 150 employees or turnover greater than 20 million) or where authorized by the supervising judge for smaller companies, two creditors committees must be established one for credit institutions or assimilated institutions and entities (with the exception of major suppliers and bondholders) having granted credit or advances in favor of the debtor) and the other for suppliers having a claim that represents more than 3% of the total amount of the claims of all the debtors suppliers; the smaller suppliers, if invited by the administrator, may elect to be members of such committee.
As a general matter, only the legal owner of the bank debt claim will be invited onto the credit institutions committee. Accordingly, a person holding only an economic interest therein will not itself be a member of the credit institutions committee. If there are any outstanding debt securities in the form of obligations (such as bonds or the notes), a general meeting gathering all holders of such debt securities will be established irrespective of whether or not there are different issuances and of the governing law of those obligations (the bondholders general meeting). The notes would constitute obligations for the purposes of a safeguard, or accelerated financial safeguard or reorganization proceedings and the noteholders would therefore vote within the bondholders general assembly.
These two committees and the bondholders general assembly will be consulted on the safeguard or reorganization plan drafted by the debtors management, together with the judicial administrator during the observation period.
The plan submitted to the committees and the bondholders:
| must take into account subordination agreements entered into by the creditors before the opening of the proceedings; |
| may treat creditors differently if it is justified by their differences in situation; and |
| may include a rescheduling or cancellation of debts, debt-for-equity swaps (debt-for-equity swaps requiring the relevant shareholder consent) and sale of all (in judicial reorganization proceedings only) or part of the business. |
In the first instance, the plan must be approved by each of the two creditors committees. Each committee must announce whether its members approve or reject such plan within 20 to 30 days of its proposal to the debtor (such time can be reduced or extended by the supervising judge, at the request of the debtor or the judicial administrator, but it cannot be less than 15 days). Such approval requires the affirmative vote of creditors holding at least two-thirds of the amounts of the claims held by the members of such committee that express a vote.
Following the approval of the plan by the two creditors committees, the plan will be submitted for approval to the bondholders general meeting. The approval of the plan at such meeting requires the affirmative vote of bondholders representing at least two-thirds of the amount of the claims held by bondholders expressing a vote in the bondholders general assembly.
Holders of the notes could, as members of the general assembly of holders of the notes, veto such plan if they reach a blocking minority (i.e. their claims represent more than one third of the claims of those creditors casting a vote in the meeting). Creditors for whom the plan does not provide any modification of their repayment schedule or provides for a payment of their claims in cash in full as soon as the plan is adopted or as soon as their claims are admitted do not take part in the vote. For those creditors outside such committees or where no such committees have been convened, the mandataire judiciaire may elect not to consult them.
Following approval by the creditors committees and the bondholders general meeting and determination of a rescheduling of the claim of creditors that are not members of the committees or bondholders as discussed above, the plan has to be approved (arrêté) by the Court. In considering such approval, the court has to verify
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that the interests of all creditors are sufficiently protected. Once approved by the relevant court, the safeguard, accelerated financial safeguard or reorganization plan accepted by the committees and the bondholders general meeting will be binding on all the members of the committees and all bondholders (including those who did not vote or voted against the adoption of the plan), as well as those creditors outside such committees/general assembly (it being noted that they can only have imposed upon them debt rescheduling by the Court as detailed below).
In the event that the debtors proposed plan is not approved by both committees and the general meeting of bondholders (or has not rendered its decision) within the first six months of the observation period, the Court can still adopt a safeguard plan in the time remaining until the end of the observation period, in which case a consultation of the creditors on an individual or collective basis will take place (see Ordinary consultation below).
In the event that the debtors proposed plan is not approved by both committees and the general meeting of bondholders, for those individual creditors who have not reached a negotiated agreement, the Court can only impose uniform debt deferrals over a maximum period of 10 years, except for claims with maturity dates of more than 10 years, in which case the maturity date shall remain the same. The Court cannot impose on them debt write-offs or debt-to-equity swaps. The same rule applies with respect to creditors who are not members of the committees, or where no such committees or general meeting of bondholders are convened.
The first payment must be made within a year of the judgment adopting the plan (as from the third year included, the minimum annual installment is 5% of the total admitted liabilities), it being noted, however, that if the contractual provisions relating to a debt claim provide that the principal amount of such debt claim is repayable in fine and its maturity date falls within the implementation period of the plan, the repayment of such principal amount only starts on the first annual installment date (as set out in the plan) following the original contractual maturity date of that debt claim and such payment follows specific rules.
Ordinary consultation
For debtors whose accounts are not certified by a statutory auditor or prepared by a chartered accountant, and who do not have more than 150 employees or a turnover greater than 20 million, or in the event that the debtors proposed plan is not approved, by both committees and the general meeting of bondholders (or has not rendered its decision) within the first six month of the observation period, the court appointed administrator notifies the proposals for the settlement of debts to the court-appointed creditors representative, who, individually or collectively, obtains the agreement of each creditor who stated a claim, regarding the debt remissions and payment times proposed.
The French Commercial Code does not state whether the proposals for settlement can vary according to the creditor and whether the principle of equal treatment of creditors is applicable at the consultation stage. According to legal commentaries and established practice, in the absence of a specific legislative prohibition, varying treatment of creditors is possible, provided that it is justified by the specific position of the creditors and approved by the court-appointed creditors representative. In practice, it is also possible to make alternative proposals at the consultation stage (which generally breaks down into a short-term option, with debt remissions and rapid payment of the balance, and a long-term option with 100% repayment of the debts over ten years. The courts tend to impose a long-term solution).
Creditors whose payment terms are not affected by the plan or who are paid in cash in full as soon as the plan is approved are not consulted.
In the event of a consultation in writing, if a creditor does not respond within 30 days as from receipt of the letter from the creditors representative, such creditor is deemed to have accepted the proposal. The creditors representative keeps a list of the responses from creditors, which is notified to the debtor, the administrator and the monitors.
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Within the framework of an ordinary consultation, if the creditors refuse the proposals that were submitted to them, the court that approves the plan can only obligate them to accept deferral of the payment of their receivables over a maximum period of ten years except for claims with maturity dates of more than 10 years, in which case the maturity date shall remain the same. The Court cannot impose on them debt write-offs or debt-to-equity swaps.
Court administered proceedings Accelerated Financial Safeguard
A debtor in conciliation proceedings may request commencement of accelerated financial safeguard proceedings (Accelerated Financial Safeguard). The Accelerated Financial Safeguard proceedings are very similar to safeguard proceedings (see above) but have been designed to fast-track purely financial difficulties of large companies having (i) either more than 150 employees or a turnover greater than 20 million or (ii) whose total balance sheet exceeds (a) 25 million euros or (b) 10 million euros if they control another company (x) which has more than 150 employees or (y) whose turnover for the previous financial year is greater than 20 million euros or (z) whose total balance sheet exceeds 25 million euros.
The proceedings apply only to debt owed to creditors that are part of the credit institutions committee and bondholders, the payment of which is suspended to be determined by the plan adopted through the Accelerated Financial Safeguard proceedings, other debts continuing to be paid in the ordinary course of business (e.g., trade debt or debt to the tax or social security administrations) in accordance with their contractual or legal terms.
To be eligible to the Accelerated Financial Safeguard, the debtor must fulfill three conditions:
| as is the case for regular safeguard proceedings, the debtor must (i) not be insolvent and (ii) face difficulties which it is not able to overcome; |
| the debtor must be subject to ongoing conciliation proceedings when it applies for the opening of the Accelerated Financial Safeguard; |
| the debtor must have prepared a draft safeguard plan ensuring the continuation of his business as a going concern supported by enough of its financial creditors (i.e., credit institutions and bondholders) to render likely its adoption by a two-thirds majority in each of the credit institutions committee and the bondholders general meeting within a maximum of two months of the opening of the proceedings. |
The list of claims of credit institutions and bondholders party to the conciliation proceedings shall be drawn up by the debtor and certified by its statutory auditor and shall be deemed to constitute the filing of such claims (see below) unless the creditors otherwise elect to make such a filing (see below).
Where accelerated financial safeguard proceedings are commenced, the credit institutions committee and the bondholders general assembly are convened and are required to vote on the proposed safeguard plan within a minimum period of eight days of delivery of the proposed plan (as compared to a minimum period of 15 days for regular safeguard proceedings).
As with traditional safeguard proceedings, the plan adopted in the context of an Accelerated Financial Safeguard may notably provide for rescheduling, debt cancellation and conversion of debt into equity capital in the debtor company (debt-for-equity swaps requiring the relevant shareholder consent).
The total duration of the Accelerated Financial Safeguard (i.e., the period between the judgment opening the Accelerated Financial Safeguard and the judgment adopting the plan) is one month, unless the court decides to extend it by one additional month. If a plan is not adopted by the creditors and approved by the court within such deadlines, the court is obliged to terminate the proceedings.
Status of Creditors during Safeguard, Accelerated Financial Safeguard, Judicial Reorganization or Judicial Liquidation Proceedings
Contractual provisions pursuant to which the opening of the proceedings constitutes an event of default are not enforceable against the debtor (a recent decision of the French Supreme Court taking a broad interpretation of
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this rule held that any contractual provision which would amend an ongoing contract by reducing the debtors rights or increasing its obligations as the sole result of its reorganization proceedings is prohibited), while the court appointed officer (judicial administrator in the event of a judicial reorganization and judicial liquidator in the case of a judicial liquidation) can unilaterally decide to terminate ongoing contracts (contrats en cours) which it believes the debtor will not be able to continue to perform. The court appointed officer can, on the contrary, require that other parties to a contract continue to perform their obligations even though the debtor may have been in default, but on the condition that it fully performs its post-petition contractual obligations.
In addition, during the observation period:
| accrual of interest is suspended (except in respect of loans providing for a term of at least one year, or contracts providing for a payment which is differed by at least one year); |
| the debtor is prohibited from paying debts incurred prior to the date of the court decision commencing the proceedings, subject to specified exceptions which essentially cover the set-off of related (connexes) debts and payments authorized by the supervising judge to recover assets for which recovery is justified by the continued operation of the business; and |
| creditors may not pursue any individual legal action against the debtor (or, in safeguard proceedings against a guarantor of the debtor provided such guarantor is an individual) with respect to any claim arising prior to the court decision commencing the proceedings if the objective of such legal action is: |
| to obtain an order for payment of a sum of money by the debtor to the creditor (however, the creditor may require that a court determine the amount due); |
| to terminate a contract for non-payment of amounts owed by the creditor; or |
| to enforce the creditors rights against any assets of the debtor, except where such asset (whether tangible or intangible, moveable or immoveable) is located in another Member State within the European Union, in which case the rights in rem of creditors thereon would not be affected by the insolvency procedure, in accordance with the terms of article 5 of EC Regulations 1346/2000. |
In Accelerated Financial Safeguard, the above rules only apply to the creditors which are subject to the Accelerated Financial Safeguard (i.e., credit institutions and bondholders).
As a general rule, creditors domiciled in France whose claims arose prior to the commencement of proceedings must file a claim with the mandataire judiciaire within two months of the publication of the court decision in the Bulletin Officiel des annonces civiles et commerciales (by exception, the deadline starts upon receipt of an individual notification for those creditors whose claim arose from a published security interest or who benefit from a published security interest); this period is extended to four months for creditors domiciled outside France. Creditors who have not submitted their claims during the relevant period are, except with respect to very limited exceptions, barred from receiving distributions made in connection with the proceedings. Employees are not subject to limitations and are preferential creditors under French law.
In the Accelerated Financial Safeguard proceedings, the debts held by financial creditors that took part in the conciliation negotiation are listed by the debtor and certified by its statutory auditor (or, in its absence, its accountant). Although such creditors can file proofs of claim pursuant to the regular process, they may also avail themselves of this simplified alternative and merely adjust the amounts of their claims as set forth on the list of prepared by the debtor (within a 2 to 4 months time limit). Those financial creditors who did not take part of the conciliation proceedings (but who would be party to the financial institutions committee or the bondholders general assembly) would have file their proofs of claim within the afore-mentioned legal time limit.
If the court adopts a safeguard plan or reorganization plan, claims of creditors included in the plan will be paid according to the terms of the plan. The court can also set a time period during which the assets that it deems to be essential to the continued business of the debtor may not be sold without its consent.
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If the court adopts a plan for the sale of the business (plan de cession), the proceeds of the sale will be allocated for the repayment of the creditors according to the ranking of the claims under French law. If the court decides to order the judicial liquidation of the debtor, the court will appoint a liquidator in charge of selling the assets of the company and settling the relevant debts in accordance with their ranking. However, in practice, where the sale of the business is considered, it will usually appoint a judicial administrator to advise the company and organize the sale of the business.
French insolvency law assigns priority to the payment of certain preferred creditors, including employees, post-petition legal costs (especially fees of the officials appointed by the insolvency court), creditors who, as part of a approved conciliation agreement, have provided new money or goods or services, certain secured creditors in judicial liquidation proceedings only, post-petition creditors, the French State (taxes and social charges) and other pre-petition secured creditors and pre-petition unsecured creditors.
The Suspect Period in Judicial Reorganization and Liquidation Proceedings
The court determines the date on which insolvency is deemed to have occurred. It can be any date within the 18 months preceding the date of the opening of the proceedings. This marks the beginning of the suspect period (période suspecte). However, the starting date of the suspect period cannot be fixed by the court as of a date earlier than the date of the approval of the conciliation agreement. Certain transactions entered into by the debtor during the suspect period are automatically void or voidable by the court.
Automatically void transactions include transactions or payments entered into during the suspect period that may constitute voluntary preferences for the benefit of some creditors to the detriment of other creditors. These include transfers of assets for no consideration, contracts under which the reciprocal obligations of the debtor significantly exceed those of the other party, payments of debts not due at the time of payment, payments made in a manner which is not commonly used in the ordinary course of business and security granted for debts (including a security granted to secure a guarantee obligation) previously incurred and provisional measures, unless the right of attachment or seizure predates the date of cessation of payments, the transfer of any assets or rights to a trust arrangement (fiducie) (unless such transfer is made as a security for debt incurred at the same time), and any amendment to a trust arrangement that dedicates assets or rights as a guaranty of pre-existing debts.
Transactions voidable by the court include payments made on accrued debts, transactions for consideration and notices of attachments made to third parties (avis à tiers détenteur), seizures (saisie attribution) and oppositions made during the suspect period, if the court determines that the creditor knew of the cessation of payments of the debtor. Transactions relating to the transfer of assets for no consideration are also voidable when entered into during the six-month period prior to the beginning of the suspect period. There is no suspect period prior to the opening of the safeguard or accelerated financial safeguard proceedings, since the condition required to commence such proceedings is that the company is not insolvent (en état de cessation des paiements) within the meaning of French law.
Lender Liability
Pursuant to article L. 650-1 of the French Commercial Code, where safeguard, judicial reorganization or judicial liquidation proceedings have been commenced, creditors may only be held liable for the losses suffered as a result of facilities granted to the debtor on the following grounds (and may only be held liable on those grounds): (i) fraud; (ii) wrongful interference with the management of the debtor; or (iii) if the security or guarantees taken to support the facilities are disproportionate to such facilities. In addition, any security or guarantees taken to support facilities in respect of which a creditor is found liable on any of these grounds can be cancelled or reduced by the court. Case law has recently confirmed that this liability also requires that the granting of the facility be deemed to be wrongful.
If a creditor has repeatedly interfered in the companys management, it can be deemed a manager of such company (dirigeant de fait). In this case, article L 651-2 of the French Commercial Code provides that, if
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liquidation proceedings (liquidation judiciaire) have been commenced against the debtor, the creditor may be liable for the debts of the company, along with the other managers (whether de jure or de facto), as the case may be, if it is established that their mismanagement has contributed to the companys shortfall of assets. If such conditions are met, French courts will decide whether the managers should bear all or part of the shortfall amount.
Main modifications of French bankruptcy regime
French insolvency is about to change as a result of Ordinance No. 2014-326 of March 12, 2014 relating to the reform of the prevention of corporate difficulties and of insolvency proceedings (the Ordinance No. 2014-326), which is expected to come into force on July 1, 2014. This reform will affect the current regime explained above in relation to mandat ad hoc proceedings, conciliation proceedings, safeguard proceedings, accelerated safeguard proceedings, judicial reorganization and liquidation proceedings.
Ordinance No. 2014-326 provides in particular for the following modifications:
Court-assisted pre-insolvency proceedings (mandat ad hoc and conciliation proceedings)
| extension of the benefit of the new money lien to creditors who agree to provide cash to a debtor in the course of conciliation proceedings which ends in an approved conciliation agreement. Under current law, creditors are only entitled to enjoy the New Money Lien over claims advanced in execution of an approved conciliation agreement; |
| in the context of subsequent safeguard, judicial reorganization or judicial liquidation proceedings, the payment date of claims secured by the New Money Lien may not be rescheduled without their holders consent; |
| possibility for the conciliator, upon request of the debtor and after creditors notice to prepare the disposal of all or part of the business of the debtor within the context of conciliation proceedings with a view to implementing such sale, if required, in subsequent insolvency proceedings in the form of a plan for the disposal of the business (plan de cession). To ensure transparency, the public prosecutor must be consulted on any offer formalized in the context of conciliation proceedings; |
| possibility for the conciliator acting as mandataire à lexécution de laccord to monitor the performance of the conciliation agreement, when the said conciliation agreement is approved by the Court; |
| modification of certain details concerning the application of the grace period under article 1244-1 et seq. of the French Civil Code. At the request of the debtor and at any time for so long as the conciliation agreement is in effect, the court may postpone the payments of creditors that have not signed the conciliation agreement up to a maximum of 24 months. However such provisions do not apply to creditors that are mentioned by Article L 611-7 paragraph 3 of the French Commercial Code (i.e., law and social security authorities and institutions managing the unemployment insurance system); |
| contractual provisions modifying the conditions of continuation of a contract, diminishing the rights or increasing the obligations of the debtor solely upon the opening of mandat ad hoc or conciliation proceedings are deemed null and void; |
| contractual provisions that would, as the sole result of the opening of mandat ad hoc or conciliation proceedings, make the debtor bear the cost of the fees of the creditors legal counsel relating to such proceedings (for the portion that would exceed an amount to be set by a decision of the Minister of Justice that has yet to be taken) shall be deemed null and void. |
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Court-controlled insolvency proceedings
| immediate payment of the unpaid amount of the share capital as soon as the insolvency proceedings are opened. The creditors representation may demand that a shareholder pays its portion of the unpaid share capital; |
| following the decisions from the French Constitutional Court dated December 7, 2012 and March 7, 2014 aforementioned, removal of the possibility, for a court, to decide, in its own initiative, the commencement of any insolvency proceedings or the conversion of such proceedings; |
| at the request of the court-appointed administrator, extension of the deadline to vote on the plan by creditors and bondholders for a period of time which cannot exceed the observation period; |
| each creditor member of a creditors committee and each note holder must, if applicable, inform the judicial administrator of the existence of any agreement relating to the exercise of its vote or to the full or total payment of its claim as well as of any subordination agreement. The judicial administrator shall then submit to the creditor/note holder a proposal for the computation of its voting rights in the creditors committee/bondholders general assembly. In the event of a disagreement, the creditor/note holder or the judicial administrator may request that the matter be decided by the president of the commercial court in summary proceedings; |
Modifications pertaining only to safeguard proceedings, accelerated safeguard proceedings and AFS proceedings
| creation of a new type of accelerated safeguard proceedings (procédure de sauvegarde accélérée) to include also non-financial creditors, it being specified that the competent court must approve any restructuring plan within three months of the date on which the accelerated safeguard proceedings have been opened (whereas, in the Accelerated Financial Proceedings, the court must settle a safeguard plan within one month, unless the court decides to extend it by one additional month); |
| loosening of the criteria required for the opening of Accelerated Financial Proceedings and the Accelerated Safeguard Proceedings. Such proceedings may be opened as long as the debtor has not been insolvent for more than 45 days prior to the request for the commencement of conciliation proceedings. The required criteria (number of employees, turnover, total assets) which shall apply (unless the debtor produces consolidated financial statements (comptes consolidés)) will be set by decree: possibility for the Public Prosecutor to request the termination of the Accelerated Financial Proceedings and the Accelerated Safeguard Proceedings if the debtor has been insolvent for more than 45 days prior to the request for the commencement of conciliation proceedings; |
| possibility for creditors who are members of the credit institutions committee or the suppliers committee to submit to the creditors committee an alternative plan under safeguard proceedings, it being specified that these alternative plans are subject to the same two-thirds majority vote in each committee and by a two-thirds majority vote of the bondholders general assembly (although noteholders are not permitted to present their own alternative plan) for their approval; |
| if no plan is adopted by the committees, at the request of the debtor, the judicial administrator, the mandataire judiciaire or the public prosecutor, the court may convert the safeguard proceedings into judicial reorganization proceedings if it appears that the adoption of a safeguard plan is impossible and if the end of the safeguard proceedings would certainly quickly lead to the company being insolvent (en état de cessation des paiements). |
Modifications pertaining only to reorganization or judicial liquidation proceedings
| In reorganization proceedings, in case the shareholders equity has not been restored, the administrator may appoint a trustee (mandataire en justice) to vote in place of the shareholders refusing to approve bylaws modification if the draft restructuring plan provides for an equitys modification to the benefit of a third party undertaking to approve such plan; |
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| simplification of judicial liquidation proceedings (liquidation judiciaire), it being specified that the court may terminate the proceedings when the interest of the continuation of the liquidation process is disproportionate compared to the difficulty to sell the assets. The court may also appoint a mandataire in charge of continuing ongoing lawsuits and allocate the amounts received from these lawsuits between the remaining creditors. |
Void and voidable transactions
| creation of a new type of automatically void transaction including declaration of nonseizability (déclaration dinsaisissabilité) that occurred during the suspect period. |
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The validity of the notes and the guarantees will be passed on for us by Linklaters LLP, Paris, France, who are acting as our special United States counsel and our French legal advisors.
The consolidated financial statements of CGG as of and for the year ended December 31, 2013 and the effectiveness of CGG internal control over financial reporting as of December 31, 2013 appearing in CGGs annual report on Form 20-F for the year ended December 31, 2013 have been audited by Ernst & Young et Autres, independent registered public accounting firm, as set forth in its report thereon, incorporated by reference herein. Such consolidated financial statements and CGG managements assessment of the effectiveness of internal control over financial reporting as of December 31, 2013 are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of CGG as of and for the years ended December 31, 2012 and 2011 appearing in CGGs annual report on Form 20-F for the year ended December 31, 2013 have been audited by Ernst & Young et Autres and Mazars, independent registered public accounting firms, as set forth in their report thereon, incorporated by reference herein. Such consolidated financial statements and CGG managements assessment of the effectiveness of internal control over financial reporting as of December 31, 2013 are incorporated herein by reference in reliance upon such reports given on the authority of such firms as experts in accounting and auditing.
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES
We are a company organized under the laws of France with our registered office and principal place of business in France. A majority of our directors and officers named herein are not residents of the United States, and all or a substantial portion of their assets are located outside the United States. Substantially all of our assets are located outside the United States. We have agreed, in accordance with the terms of the indenture governing the notes, to accept service of process in any suit, action or proceeding with respect to the indenture or the notes brought in any federal or state court located in New York City by an agent designated for such purpose, and to submit to the jurisdiction of such courts in connection with such suits, actions or proceedings. However, it may not be possible for you to effect service of process within the United States upon our officers or to enforce against these persons, or us, judgments of United States courts predicated upon civil liability provisions of the federal securities laws of the United States.
We have been advised by our French counsel, Linklaters LLP, Paris, France, that if an original action is brought in France, predicated solely upon the United States federal securities laws, French courts may not have the requisite jurisdiction to grant the remedies sought. Actions for enforcement in France of a U.S. judgment rendered against any of the French persons referred to in the second sentence of the preceding paragraph would require (i) that the U.S. judgment is enforceable in the jurisdiction which issued it, (ii) that the U.S. judgment was rendered by court having jurisdiction over the matter because the dispute is substantially connected with the United States and that French courts do not have exclusive jurisdiction over the matter, (iii) that the judgment is not contrary to the principles of French international public policy (iv) that neither the choice of applicable law nor the choice of jurisdiction is fraudulent and (v) that the U.S. judgment does not conflict with a French judgment or a foreign judgment enforceable in France relating to the same or similar subject matter as the U.S. judgment. In addition, actions in the United States under United States federal securities laws could be affected under certain circumstances by the French Law of July 16, 1980, which may preclude or restrict the obtaining of evidence in France or from French persons in connection with such actions.
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Share Capital
As at March 31, 2014, we had authorized share capital of 120,698,422 and issued share capital of 70,756,346 divided into 176,890,866 ordinary shares of 0.40 nominal value each.
Corporate Authorizations
The issue of the new notes was authorized pursuant to a resolution of the Board of Directors (Conseil dAdministration) of CGG adopted on April 25, 2014. The guarantee of the new notes was authorized by the Board of Directors of each Initial Guarantor.
Listing of the Notes
Application will be made for the new notes to be listed on the Luxembourg Stock Exchange and to trading on the Euro MTF.
Clearing of the Notes
The new notes will be accepted for clearance and settlement with DTC under the following securities codes: the CUSIP number is 12531T AB5 and the ISIN is US12531TAB52.
No Material Adverse Change
Except as disclosed in this prospectus, there has been no significant change in our financial or trading position since December 31, 2013 and no material adverse change in our financial position or prospects since December 31, 2013.
Litigation
Except as disclosed in this prospectus, neither we nor any of our subsidiaries are involved in any litigation, arbitration or administrative proceedings relating to amounts which, individually or in the aggregate, are material in the context of the issue of the notes and, to the best of our knowledge, there are no such litigation, arbitration or administrative proceedings pending or threatened.
Significant Subsidiaries
For the year ended December 31, 2013, three subsidiaries, CGG Services SA, CGG Services (U.S.) Inc., and Sercel S.A., each represented more than 10% of our consolidated revenues. CGG Services SA, a wholly owned subsidiary CGG SA, had operating revenues of US$1,110.0 million in the year ended December 31, 2013 and had total assets of US$683.6 million at December 31, 2013. CGG Services SA is primarily engaged the provision of geophysical services. Its registered office is at 27 avenue Carnot, 91300 Massy, France. It had issued share capital of 12,274,588 as at December 31, 2013, divided into 306,864,724 shares, all of which were fully paid. CGG Services SA paid no dividends in 2013. Sercel S.A., a wholly owned subsidiary of Sercel Holding S.A., had operating revenues of US$467.5 million in the year ended December 31, 2013 and had total assets of US$586.3 million at December 31, 2013. Sercel S.A. is primarily engaged the production and distribution of marine seismic equipment and other products. Its registered office is at 16 rue du Bel Air, 44470 Carquefou, France. It had issued share capital of 2,000,000 as at December 31, 2013, divided into 5,000,000 shares, all of which were fully paid. In 2013, Sercel S.A. paid dividends in the amount of 70,000,000.
At December 31, 2013, one subsidiary, CGG Holding (U.S.) Inc., represented more than 10% of our consolidated assets.
Information about CGG Services (U.S.) Inc. and CGG Holding (U.S.) Inc. is provided below.
117
Initial Guarantors
Each of the Initial Guarantors is, directly or indirectly, a wholly owned subsidiary of the Issuer.
CGG Holding B.V., a wholly owned subsidiary of CGG SA, is primarily engaged as a holding company of certain subsidiaries. CGG Holding B.V. had no operating revenues in the year ended December 31, 2013 and had total assets of US$811.1 million at December 31, 2013. CGG Holding B.V.s registered office is at Schiphol Boulevard 299, 1118 BH Luchthaven Schiphol, the Netherlands, and its corporate seat (statutaire zetel) at Amsterdam, the Netherlands (trade register number 34314931).
CGG Marine B.V., a wholly owned subsidiary of CGG Holding B.V., is primarily engaged as a holding company of certain subsidiaries in our Services segment. CGG Marine B.V. had no operating revenues in the year ended December 31, 2013 and had total assets of US$534.3 million at December 31, 2013. CGG Marine B.V.s registered office is at Schiphol Boulevard 299, 1118 BH Luchthaven Schiphol, the Netherlands and its corporate seat (statutaire zetel) at Amsterdam, the Netherlands (trade register number 34349332).
CGG Marine Resources Norge AS, a wholly owned subsidiary of CGG SA, is primarily engaged as an asset company. CGG Marine Resources Norge AS had no operating revenues in the year ended December 31, 2013 and had total assets of US$14.6 million at December 31, 2013. CGG Marine Resources Norge ASs registered office is at OH BANGS VEI 70, 1363 Høvik, Norway.
CGG Holding (U.S.) Inc., a wholly owned subsidiary of CGG Holding B.V., is engaged as a holding company. CGG Holding (U.S.) Inc. had no operating revenues in the year ended December 31, 2013 and had total assets of US$1561.9 million at December 31, 2013. CGG Holding (U.S.) Inc.s registered office is at 1209 Orange Street, Wilmington, Delaware, 19801, United States of America. CGG Holding (U.S.) Inc. had issued share capital of US$417,299 as at December 31, 2013, divided into 100 shares, all of which were fully paid. CGG Holding (U.S.) Inc. paid no dividends in 2013.
CGG Services (U.S.) Inc., a wholly owned subsidiary of CGG Holding (U.S.) Inc., is primarily engaged in acquiring marine seismic data in U.S. waters for third parties on a contract basis, acquiring, processing and licensing marine multi-client library data, and processing seismic data for third parties. CGG Services (U.S.) Inc. had operating revenues of US$401.1 million in the year ended December 31, 2013 and had total assets of US$638.6 million at December 31, 2013. CGG Services (U.S.) Inc.s registered office is at 1209 Orange Street, Wilmington, Delaware, 19801, United States of America. CGG Services (U.S.) Inc. had issued share capital of US$417,299 as at December 31, 2013, divided into 100 shares, all of which were fully paid. CGG Services (U.S.) Inc. paid no dividends in 2013.
Veritas Investments Inc., a wholly owned subsidiary of CGG Holding (U.S.) Inc., is primarily engaged as a holding company. Veritas Investments Inc. had no operating revenues in the year ended December 31, 2013 and had total assets of US$0 million at December 31, 2013. Veritas Investments Inc.s registered office is at 1209 Orange Street, Wilmington, Delaware, 19801, United States of America.
CGG Land (U.S.) Inc., a wholly owned subsidiary of CGG Services (U.S.) Inc., is primarily engaged in acquiring seismic data on land in the U.S. for third parties on a contract basis and acquiring and licensing U.S. land multi-client library data. CGG Land (U.S.) Inc. had operating revenues of US$185.8 million in the year ended December 31, 2013 and had total assets of US$178.9 million at December 31, 2013. CGG Land (U.S.) Inc.s registered office is at 3422 Old Capitol Trail, Suite 700,, Wilmington, Delaware, 19808, United States of America.
Viking Maritime Inc., a wholly owned subsidiary of CGG Services (U.S.) Inc., was primarily engaged in chartering, as charterer, and operating seismic and support vessels. Viking Maritime Inc. had no operating revenues in the year ended December 31, 2013 and had total assets of US$0.4 million at December 31, 2013. Viking Maritime Inc.s registered office is at 1209 Orange Street, Wilmington, Delaware, 19801, United States of America.
118
Veritas Geophysical (Mexico) LLC, a wholly owned subsidiary of CGG Services (U.S.) Inc., was primarily engaged as a holding company that owns, together with Veritas Investments Inc., certain of our Mexican subsidiaries. Veritas Geophysical (Mexico) LLC had no operating revenues in the year ended December 31, 2013 and had total assets of US$6.9 million at December 31, 2013. Veritas Geophysical (Mexico) LLCs registered office is at 1209 Orange Street, Wilmington, Delaware, 19801, United States of America.
Alitheia Resources Inc., a wholly owned subsidiary of CGG Services (U.S.) Inc., was primarily engaged in acquiring, exploring and marketing oil and gas properties in the Gulf of Mexico. Alitheia Resources Inc. had no operating revenues in the year ended December 31, 2013 and had total assets of US$0 million at December 31, 2013. Alitheia Resources Inc.s registered office is at 1209 Orange Street, Wilmington, Delaware, 19801, United States of America.
CGG Canada Services Ltd, a wholly owned subsidiary of CGG Holding B.V., is primarily engaged in the processing of seismic data in our Calgary center. CGG Canada Services had operating revenues of US$3.9 in the year ended December 31, 2013 and had total assets of US$15.9 million at December 31, 2013. CGG Canada Services registered office is at 2200, 715 5th Avenue S.W., Calgary, Alberta, T2P 5A2, Canada.
Sercel, Inc., 81% owned by CGG Holding (U.S.) Inc. and 19% owned by Sercel Holding S.A., is primarily engaged in the production and distribution of marine seismic equipment, geophones and other products. Sercel, Inc. had operating revenues of US$228.6 million in the year ended December 31, 2013 and had total assets of US$211.7 million at December 31, 2013. Sercel, Inc.s registered office is at 17200 Park Row, Houston, Texas 77084, United States of America.
Sercel-GRC Corp., a wholly owned subsidiary of Sercel, Inc., is primarily engaged in the production and distribution of downhole equipment and gauges. Sercel-GRC Corp. had operating revenues of US$31.3 million in the year ended December 31, 2013 and had total assets of US$64.3 million at December 31, 2013. Sercel-GRC Corp.s registered office is at 6540 E. Apache St, Tulsa, OK 74115, United States of America.
Sercel Australia Pty Ltd, a wholly owned subsidiary of Sercel Holding S.A., is primarily engaged in the production and distribution of marine seismic products. Sercel Australia had no operating revenues in the year ended December 31, 2013 and had total assets of US$13.9 million at December 31, 2013. Sercel Australias registered office is at Level 5 Deutsche Bank Place, 126 Philip Street Sydney NSW 2000.
Sercel Canada Ltd, a wholly owned subsidiary of Sercel Inc., is primarily engaged in the rental and sale of products for the geophysical land market. Sercel Canada Ltd had operating revenues of US$0.1 million in the year ended December 31, 2013 and had total assets of US$10.9 million at December 31, 2013. Sercel Canada Ltds registered office is at 1108 55th Avenue NE, Calgary, Alberta, T2E 6Y, Canada.
Documents Available
Copies of our annual reports for 2011, 2012 and 2013, the constitutive documents of CGG, the indenture and the registration rights agreement and copies of the most recently published report and financial statements of CGG, including the unaudited interim financial statements for the three months ended March 31, 2014, will, for so long as the notes are listed on the Luxembourg Stock Exchange, be available free of charge during usual business hours on any weekday (except Saturdays, Sundays and public holidays) at the specified offices of the paying agent in Luxembourg. We publish a quarterly consolidated statement of operations, statement of cash flow and balance sheet, each of which will be delivered to, and copies of which may be obtained free of charge from, the specified offices of the paying agent in Luxembourg. We do not publish interim non-consolidated statements. All published interim statements are unaudited.
We have undertaken to the holders of the notes that we will submit certain quarterly financial information to the Commission. Any such quarterly information will also be delivered to, and copies of such information may be obtained free of charge from, the specified offices of the Paying Agent in Luxembourg.
119
Page | ||||
Unaudited Interim Consolidated IFRS Financial Statements |
||||
F-2 | ||||
F-3 | ||||
Unaudited Interim Consolidated Balance Sheets as at March 31, 2014 (unaudited) and December 31, 2013 |
F-4 | |||
F-5 | ||||
F-6 | ||||
Notes to Unaudited Interim Consolidated Financial Statements |
F-7 |
F-1
Item 1: FINANCIAL STATEMENTS
C G G
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF OPERATIONS
Three months ended March 31, | ||||||||
2014 | 2013 | |||||||
Amounts in millions of U.S.$, except per share data or unless indicated |
||||||||
Operating revenues |
806.2 | 870.7 | ||||||
Other income from ordinary activities |
0.4 | 0.6 | ||||||
Total income from ordinary activities |
806.6 | 871.3 | ||||||
Cost of operations |
(672.5 | ) | (675.2 | ) | ||||
Gross profit |
134.1 | 196.1 | ||||||
Research and development expenses, net |
(26.4 | ) | (26.1 | ) | ||||
Marketing and selling expenses |
(29.5 | ) | (28.4 | ) | ||||
General and administrative expenses |
(41.9 | ) | (51.0 | ) | ||||
Other revenues (expenses), net |
(1.8 | ) | 61.2 | |||||
Operating income |
34.5 | 151.8 | ||||||
Expenses related to financial debt |
(48.2 | ) | (46.9 | ) | ||||
Income provided by cash and cash equivalents |
0.6 | 0.6 | ||||||
Cost of financial debt, net |
(47.6 | ) | (46.3 | ) | ||||
Other financial income (loss) |
2.5 | (5.0 | ) | |||||
Income (loss) of consolidated companies before income taxes |
(10.6 | ) | 100.5 | |||||
Deferred taxes on currency translation |
(1.0 | ) | (6.7 | ) | ||||
Other income taxes |
(10.9 | ) | (25.3 | ) | ||||
Total income taxes |
(11.9 | ) | (32.0 | ) | ||||
Net income (loss) from consolidated companies |
(22.5 | ) | 68.5 | |||||
Share of income (loss) in companies accounted for under equity method |
(16.5 | ) | 10.6 | |||||
Net income (loss) |
(39.0 | ) | 79.1 | |||||
Attributable to : |
||||||||
Owners of CGG SA |
$ | (40.4 | ) | 76.7 | ||||
Owners of CGG SA(1) |
| (29.5 | ) | 57.7 | ||||
Non-controlling interests |
$ | 1.4 | 2.4 | |||||
Weighted average number of shares outstanding |
176,890,866 | 176,423,717 | ||||||
Dilutive potential shares from stock-options |
(2) | 734,668 | ||||||
Dilutive potential shares from performance share plan |
(2) | 267,509 | ||||||
Dilutive potential shares from convertible bonds |
(2) | 24,150,635 | ||||||
Dilutive weighted average number of shares outstanding adjusted when dilutive |
176,890,866 | 201,576,529 | ||||||
Net income (loss) per share |
||||||||
Basic |
$ | (0.23 | ) | 0.43 | ||||
Basic(1) |
| (0.17 | ) | 0.33 | ||||
Diluted |
$ | (0.23 | ) | 0.42 | ||||
Diluted(1) |
| (0.17 | ) | 0.32 |
(1) | Converted at the average exchange rate of U.S.$1.371 and U.S.$1.329 per for the periods ended March 31, 2014 and 2013, respectively. |
(2) | As our net result was a loss, stock-options, performance shares plans and convertible bonds had an accretive effect; as a consequence, potential shares linked to those instruments were not taken into account in the dilutive weighted average number of shares, or in the calculation of diluted loss per share. |
See notes to Interim Consolidated Financial Statements
F-2
C G G
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
March 31, | ||||||||
Amounts in millions of U.S.$ | 2014 | 2013 | ||||||
Net income (loss) from statements of operations |
(39.0 | ) | 79.1 | |||||
Other comprehensive income to be reclassified in profit (loss) in subsequent period: |
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Gain (loss) on cash flow hedges |
(0.5 | ) | (1.1 | ) | ||||
Income taxes |
0.2 | 0.4 | ||||||
Net gain (loss) on cash flow hedges |
(0.3 | ) | (0.7 | ) | ||||
Exchange differences on translation of foreign operations |
(1.7 | ) | 10.6 | |||||
Net other comprehensive income to be reclassified in profit (loss) in subsequent period (1) |
(2.0 | ) | 9.9 | |||||
Other comprehensive income not to be classified in profit (loss) in subsequent period: |
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Gain (loss) on actuarial changes on pension plan |
(0.3 | ) | 0.2 | |||||
Income taxes |
0.1 | (0.1 | ) | |||||
Net gain (loss) on actuarial changes on pension plan |
(0.2 | ) | 0.1 | |||||
Net other comprehensive income not to be reclassified in profit (loss) in subsequent period (2) |
(0.2 | ) | 0.1 | |||||
Other comprehensive income (loss) for the period, net of taxes, in companies accounted for under the equity method (3) |
| | ||||||
Total other comprehensive income (loss) for the period, net of taxes (1) + (2) + (3) |
(2.2 | ) | 10.0 | |||||
Total comprehensive income (loss) for the period |
(41.2 | ) | 89.1 | |||||
Attributable to : |
||||||||
Owners of CGG SA |
(42.2 | ) | 86.5 | |||||
Non-controlling interests |
1.0 | 2.6 |
F-3
C G G
March 31, 2014 (unaudited) |
December 31, 2013 | |||||||
Amounts in millions of U.S.$, unless indicated |
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ASSETS |
||||||||
Cash and cash equivalents |
458.9 | 530.0 | ||||||
Trade accounts and notes receivable, net |
874.1 | 987.4 | ||||||
Inventories and work-in-progress, net |
486.0 | 505.2 | ||||||
Income tax assets |
120.8 | 118.1 | ||||||
Other current assets, net |
197.5 | 175.6 | ||||||
Assets held for sale, net |
39.2 | 37.7 | ||||||
Total current assets |
2,176.5 | 2,354.0 | ||||||
Deferred tax assets |
226.0 | 222.6 | ||||||
Investments and other financial assets, net |
67.1 | 47.8 | ||||||
Investments in companies under equity method |
296.2 | 325.8 | ||||||
Property, plant and equipment, net |
1,528.3 | 1,557.8 | ||||||
Intangible assets, net |
1,406.1 | 1,271.6 | ||||||
Goodwill, net |
2,483.6 | 2,483.2 | ||||||
Total non-current assets |
6,007.3 | 5,908.8 | ||||||
TOTAL ASSETS |
8,183.8 | 8,262.8 | ||||||
LIABILITIES AND EQUITY |
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Bank overdrafts |
3.4 | 4.5 | ||||||
Current portion of financial debt |
388.1 | 247.0 | ||||||
Trade accounts and notes payable |
506.3 | 557.6 | ||||||
Accrued payroll costs |
216.2 | 251.1 | ||||||
Income taxes liability payable |
75.0 | 73.9 | ||||||
Advance billings to customers |
50.3 | 52.4 | ||||||
Provisions current portion |
73.5 | 73.1 | ||||||
Other current liabilities |
210.6 | 283.9 | ||||||
Total current liabilities |
1,523.4 | 1,543.5 | ||||||
Deferred tax liabilities |
130.1 | 148.9 | ||||||
Provisions non-current portion |
142.2 | 142.5 | ||||||
Financial debt |
2,495.0 | 2,496.1 | ||||||
Other non-current liabilities |
42.1 | 41.7 | ||||||
Total non-current liabilities |
2,809.4 | 2,829.2 | ||||||
Common stock 301,746,055 shares authorized and 176,890,866 shares with a 0.40 nominal value issued and outstanding at March 31, 2014 and 176,890,866 at December 31, 2013 |
92.7 | 92.7 | ||||||
Additional paid-in capital |
3,180.4 | 3,180.4 | ||||||
Retained earnings |
577.7 | 1,273.9 | ||||||
Other reserves |
(46.7 | ) | (46.1 | ) | ||||
Treasury shares |
(20.6 | ) | (20.6 | ) | ||||
Net income (loss) for the period attributable to the owners of CGG |
(40.4 | ) | (698.8 | ) | ||||
Cumulative income and expense recognized directly in equity |
(8.0 | ) | (7.6 | ) | ||||
Cumulative translation adjustment |
24.7 | 26.0 | ||||||
Equity attributable to owners of CGG SA |
3,759.8 | 3,799.9 | ||||||
Non-controlling interests |
91.2 | 90.2 | ||||||
Total equity |
3,851.0 | 3,890.1 | ||||||
TOTAL LIABILITIES AND EQUITY |
8,183.8 | 8,262.8 |
See notes to Interim Consolidated Financial Statements
F-4
C G G
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
Three months ended March 31, |
||||||||
2014 | 2013 | |||||||
Amounts in millions of U.S.$ |
||||||||
OPERATING |
||||||||
Net income (loss) |
(39.0 | ) | 79.1 | |||||
Depreciation and amortization |
104.0 | 111.8 | ||||||
Multi-client surveys depreciation and amortization |
80.2 | 71.6 | ||||||
Depreciation and amortization capitalized to multi-client surveys |
(34.0 | ) | (27.0 | ) | ||||
Variance on provisions |
(0.7 | ) | 19.1 | |||||
Stock based compensation expenses |
3.6 | 5.0 | ||||||
Net gain (loss) on disposal of fixed assets |
1.2 | (99.7 | ) | |||||
Equity income (loss) of investees |
16.5 | (10.6 | ) | |||||
Dividends received from affiliates |
8.4 | | ||||||
Other non-cash items |
0.2 | 5.5 | ||||||
Net cash including net cost of financial debt and income tax |
140.4 | 154.8 | ||||||
Less net cost of financial debt |
47.6 | 46.3 | ||||||
Less income tax expense |
11.9 | 32.0 | ||||||
Net cash excluding net cost of financial debt and income tax |
199.9 | 233.1 | ||||||
Income tax paid |
(41.0 | ) | (33.2 | ) | ||||
Net cash before changes in working capital |
158.9 | 199.9 | ||||||
change in trade accounts and notes receivable |
77.1 | 16.9 | ||||||
change in inventories and work-in-progress |
18.8 | (15.2 | ) | |||||
change in other current assets |
(19.6 | ) | (1.1 | ) | ||||
change in trade accounts and notes payable |
(45.8 | ) | (89.5 | ) | ||||
change in other current liabilities |
(71.5 | ) | (51.1 | ) | ||||
Impact of changes in exchange rate on financial items |
(0.1 | ) | 2.9 | |||||
Net cash provided by operating activities |
117.8 | 62.8 | ||||||
INVESTING |
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Capital expenditures (including variation of fixed assets suppliers, excluding multi-client surveys) |
(101.8 | ) | (76.1 | ) | ||||
Investment in multi-client surveys, net cash |
(155.9 | ) | (127.2 | ) | ||||
Proceeds from disposals of tangible and intangible assets |
1.3 | | ||||||
Total net proceeds from financial assets |
| 33.7 | ||||||
Acquisition of investments, net of cash and cash equivalents acquired |
(6.5 | ) | (938.0 | ) | ||||
Impact of changes in consolidation scope |
| | ||||||
Variation in loans granted |
(16.0 | ) | (0.5 | ) | ||||
Variation in subsidies for capital expenditures |
| | ||||||
Variation in other non-current financial assets |
(2.0 | ) | 0.2 | |||||
Net cash used in investing activities |
(280.9 | ) | (1,107.9 | ) | ||||
FINANCING |
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Repayment of long-term debts |
(13.2 | ) | (77.9 | ) | ||||
Total issuance of long-term debts |
119.2 | 111.8 | ||||||
Lease repayments |
(2.2 | ) | (5.4 | ) | ||||
Change in short-term loans |
0.2 | (0.7 | ) | |||||
Financial expenses paid |
(12.1 | ) | (7.5 | ) | ||||
Net proceeds from capital increase |
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from shareholders |
| 0.7 | ||||||
from non-controlling interests of integrated companies |
| | ||||||
Dividends paid and share capital reimbursements |
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to shareholders |
| | ||||||
to non-controlling interests of integrated companies |
| | ||||||
Acquisition/disposal from treasury shares |
| | ||||||
Net cash provided by (used in) financing activities |
91.9 | 21.0 | ||||||
Effects of exchange rates on cash |
0.1 | 20.7 | ||||||
Net increase (decrease) in cash and cash equivalents |
(71.1 | ) | (1,003.4 | ) | ||||
Cash and cash equivalents at beginning of year |
530.0 | 1,520.2 | ||||||
Cash and cash equivalents at end of period |
458.9 | 516.8 |
See notes to Interim Consolidated Financial Statements
F-5
C G G
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Amounts in millions of U.S.$, except share data |
Number of Shares |
Share capital |
Additional paid-in |
Retained earnings |
Other reserves |
Treasury shares |
Income Recognized in equity |
Cumulative translation adjustment |
Equity attributable to owners of CGG SA |
Non- controlling |
Total equity |
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Balance at January 1, 2013 |
176,392,225 | 92.4 | 3,179.1 | 1,265.8 | (27.8 | ) | (20.6 | ) | (7.6 | ) | 1.9 | 4,483.2 | 98.7 | 4,581.9 | ||||||||||||||||||||||||||||||
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Capital increase |
61,533 | 0.1 | 0.6 | 0.7 | 0.7 | |||||||||||||||||||||||||||||||||||||||
Net income |
76.7 | 76.7 | 2.4 | 79.1 | ||||||||||||||||||||||||||||||||||||||||
Cost of share-based payment |
5.0 | 5.0 | 5.0 | |||||||||||||||||||||||||||||||||||||||||
Net gain (loss) on actuarial changes on pension plan (1) |
0.1 | 0.1 | 0.1 | |||||||||||||||||||||||||||||||||||||||||
Net gain (loss) on cash flow hedges (2) |
(0.7 | ) | (0.7 | ) | (0.7 | ) | ||||||||||||||||||||||||||||||||||||||
Exchange differences on foreign currency translation (3) |
0.6 | 0.3 | 9.5 | 10.4 | 0.2 | 10.6 | ||||||||||||||||||||||||||||||||||||||
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Other comprehensive income (1)+(2)+(3) |
0.7 | (0.4 | ) | 9.5 | 9.8 | 0.2 | 10.0 | |||||||||||||||||||||||||||||||||||||
Exchange differences on foreign currency translation generated by the mother company |
7.6 | 7.6 | 7.6 | |||||||||||||||||||||||||||||||||||||||||
Changes in consolidation scope and other |
(0.9 | ) | (0.9 | ) | 0.3 | (0.6 | ) | |||||||||||||||||||||||||||||||||||||
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Balance at March 31, 2013 |
176,453,758 | 92.5 | 3,179.7 | 1,347.3 | (20.2 | ) | (20.6 | ) | (8.0 | ) | 11.4 | 4,582.1 | 101.6 | 4,683.7 | ||||||||||||||||||||||||||||||
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Amounts in millions of U.S.$, except share data |
Number of Shares issued |
Share capital |
Additional paid-in |
Retained earnings |
Other reserves |
Treasury shares |
Income Recognized in equity |
Cumulative translation adjustment |
Equity attributable to owners of CGG SA |
Non- controlling |
Total equity |
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Balance at January 1, 2014 |
176,890,866 | 92.7 | 3,180.4 | 575.1 | (46.1 | ) | (20.6 | ) | (7.6 | ) | 26.0 | 3,799.9 | 90.2 | 3,890.1 | ||||||||||||||||||||||||||||||
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Capital increase |
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Net income |
(40.4 | ) | (40.4 | ) | 1.4 | (39.0 | ) | |||||||||||||||||||||||||||||||||||||
Cost of share-based payment |
2.9 | 2.9 | 2.9 | |||||||||||||||||||||||||||||||||||||||||
Net gain (loss) on actuarial changes on pension plan (1) |
(0.2 | ) | (0.2 | ) | (0.2 | ) | ||||||||||||||||||||||||||||||||||||||
Net gain (loss) on cash flow hedges (2) |
(0.3 | ) | (0.3 | ) | (0.3 | ) | ||||||||||||||||||||||||||||||||||||||
Exchange differences on foreign currency translation (3) |
(1.3 | ) | (1.3 | ) | (0.4 | ) | (1.7 | ) | ||||||||||||||||||||||||||||||||||||
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Other comprehensive income (1)+(2)+(3) |
(0.2 | ) | (0.3 | ) | (1.3 | ) | (1.8 | ) | (0.4 | ) | (2.2 | ) | ||||||||||||||||||||||||||||||||
Exchange differences on foreign currency translation generated by the mother company |
(0.6 | ) | (0.6 | ) | (0.6 | ) | ||||||||||||||||||||||||||||||||||||||
Changes in consolidation scope and other |
(0.1 | ) | (0.1 | ) | (0.2 | ) | (0.2 | ) | ||||||||||||||||||||||||||||||||||||
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Balance at March 31, 2014 |
176,890,866 | 92.7 | 3,180.4 | 537.3 | (46.7 | ) | (20.6 | ) | (8.0 | ) | 24.7 | 3,759.8 | 91.2 | 3,851.0 | ||||||||||||||||||||||||||||||
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F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CGG S.A. (the Company) and its subsidiaries (together, the Group) is a global participant in the geophysical and geological services industry, providing a wide range of data acquisition, processing and interpretation services as well as related imaging and interpretation software to clients in the oil and gas exploration and production business. It is also a global manufacturer of geophysical equipment.
Given that the Company is listed on a European Stock Exchange and pursuant to European regulation n°1606/2002 dated July 19, 2002, the accompanying interim condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations as issued by the International Accounting Standards Board (IASB) and adopted by the European Union.
These interim condensed consolidated financial statements have been authorized by the Audit Committee on May 6, 2014 for issue.
The preparation of consolidated financial statements in accordance with IFRS requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates due to the change in economic conditions, changes in laws and regulations, changes in strategy and the inherent imprecision associated with the use of estimates.
The interim condensed consolidated financial statements are presented in U.S.dollars and have been prepared on a historical cost basis, except for certain financial assets and liabilities that have been measured at fair value.
Critical accounting policies
The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Groups annual financial statements as of and for the year ended December 31, 2013 included in its report on Form 20-F for the year 2013 filed with the SEC on April 10, 2014.
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Groups annual financial statements for the year ended December 31, 2013, except for the adoption of the following new Standards and Interpretations:
| Amendment to IFRS7 / IAS32 Offsetting financial assets and financial liabilities |
| Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets |
| Amendments to IAS 39 Financial Instruments novation of derivatives and continuation of hedge accounting |
The adoption of these Standards and Interpretations had no significant impact on the Groups interim financial statements.
At the date of issuance of these consolidated financial statements, the following Standards and Interpretations were issued but not yet adopted by the European Union and were thus not effective:
| IFRS 9 Financial instrument classification and valuation of financial assets |
| IFRIC 21 Levies recognition of a liability for a levy imposed by a government |
F-7
| Amendments to IAS 19 Defined Benefit Plans: Employee Contributions |
| Annual Improvements (2010-2012) |
| Annual Improvements (2011-2013) |
We are currently reviewing these standards and interpretations to measure their potential impact on our consolidated financial statements.
Use of judgment and estimates
Key judgments and estimates used in the financial statements are summarized in the following table:
Judgments and estimates |
Key assumptions | |
Fair value of assets and liabilities acquired through purchase price allocation |
Pattern used to determine the fair value of assets and liabilities | |
Recoverability of client receivables |
Assessment of clients credit default risk | |
Valuation of investments |
Financial assets fair value Equity method companies fair value | |
Amortization and impairment of multi-client surveys |
Expected margin rate for each category of surveys Expected useful life of multi-client surveys | |
Depreciation and amortization of tangible and intangible assets |
Assets useful lives | |
Recoverable value of goodwill and intangible assets |
Expected geophysical market trends Discount rate (WACC) | |
Post-employment benefits |
Discount rate Participation rate to post employment benefit plans Inflation rate | |
Provisions for risks, claims and litigations |
Assessment of risks considering court rulings and attorneys positions | |
Revenue recognition |
Contract completion rates Assessment of fair value of customer loyalty programs Assessment of fair value of contracts identifiable parts | |
Development costs |
Assessment of future benefits of each project | |
Deferred tax assets |
Hypothesis supporting the achievement of future taxable benefits |
Operating revenues
Operating revenues are recognized when they can be measured reliably, and when it is likely that the economic benefits associated with the transaction will flow to the entity, which is at the point that such revenues have been realized or are considered realizable.
| Multi-client surveys |
Revenues related to multi-client surveys result from (i) pre-commitments and (ii) licenses after completion of the surveys (after-sales).
Pre-commitments generally, we obtain commitments from a limited number of customers before a seismic project is completed. These pre-commitments cover part or all of the survey area blocks. In return for the commitment, the customer typically gains the right to direct or influence the project specifications, advance access to data as it is being acquired, and favorable pricing. We record payments that we receive during periods of mobilization as advance billing in the balance sheet in the line item Advance billings to customers.
F-8
We recognize pre-commitments as revenue when production has started based on the physical progress of the project, as services are rendered.
After sales generally, we grant a license entitling non-exclusive access to a complete and ready for use, specifically defined portion of our multi-client data library in exchange for a fixed and determinable payment. We recognize after sales revenue upon the client executing a valid license agreement and being granted access to the data.
In case after sales agreements contain multiple deliverable elements, the revenue is allocated to the various elements based on specific objective evidence of fair value, regardless of any separate allocations stated within the contract for each element. Each element is appropriately accounted for under the applicable accounting standard.
After sales volume agreements we enter into a customer arrangement in which we agree to grant licenses to the customer for access to a specified number of blocks of the multi-client library. These arrangements typically enable the customer to select and access the specific blocks for a limited period of time. We recognize revenue when the blocks are selected and the client has been granted access to the data and if the corresponding revenue can be reliably estimated.
| Exclusive surveys |
In exclusive surveys, we perform seismic services (acquisition and processing) for a specific customer. We recognize proprietary/contract revenues as the services are rendered. We evaluate the progress to date, in a manner generally consistent with the physical progress of the project, and recognize revenues based on the ratio of the project cost incurred during that period to the total estimated project costs as far as they can reliably be assessed.
The billings and the costs related to the transit of seismic vessels at the beginning of the survey are deferred and recognized over the duration of the contract by reference to the technical stage of completion.
In some exclusive survey contracts and a limited number of multi-client survey contracts, we are required to meet certain milestones. We defer recognition of revenue on such contracts until all milestones that provide the customer a right of cancellation or refund of amounts paid have been met.
| Equipment sales |
We recognize revenues on equipment sales upon delivery to the customer when risks and rewards are fully transferred. Any advance billings to customers are recorded in current liabilities.
| Software and hardware sales |
We recognize revenues from the sale of software and hardware products following acceptance of the product by the customer at which time we have no further significant vendor obligations remaining. Any advance billings to customers are recorded in current liabilities.
If an arrangement to deliver software, either alone or together with other products or services, requires significant production, modification, or customization of software, the entire arrangement is accounted for as a production-type contract, i.e. using the percentage of completion method.
If the software arrangement provides for multiple deliverables (e.g. upgrades or enhancements, post-contract customer support such as maintenance, or services), the revenue is allocated to the various elements based on specific objective evidence of fair value, regardless of any separate allocations stated within the contract for each element. Each element is appropriately accounted for under the applicable accounting standard.
F-9
Maintenance revenues consist primarily of post contract customer support agreements and are recorded as advance billings to customers and recognized as revenue on a proportional performance basis over the contract period.
| Other geophysical sales/services |
Revenues from our other geophysical sales/services are recognized as the services are performed and, when related to long-term contracts, using the proportional performance method of recognizing revenues.
| Customer loyalty programs |
We may grant award credits to our main clients. These award credits are contractually based on cumulative services provided during the calendar year and attributable to future services.
These credits are considered as a separate component of the initial sale and measured at their fair value by reference to the contractual rates and the forecasted cumulative revenues for the calendar year. These proceeds are recognized as revenue only when the obligation has been fulfilled.
Multi-client surveys consist of seismic surveys to be licensed to customers on a non-exclusive basis. All costs directly incurred in acquiring, processing and otherwise completing seismic surveys are capitalized into the multi-client surveys (including transit costs when applicable). The value of our multi-client library is stated on our balance sheet at the aggregate of those costs less accumulated amortization or at fair value if lower. We review the library for potential impairment at each balance sheet date at the relevant level (independent surveys or groups of surveys).
Multi-client surveys
Multi-client surveys are classified into a same category when they are located in the same area with the same estimated sales ratio, such estimates generally relying on the historical patterns.
We amortize the multi-client surveys over the period during which the data is expected to be marketed using an amortization rate applied to recognized revenues.
Depending on the category of the survey, we generally use amortization rates from 50% to 80% corresponding to the ratio of total estimated costs over total estimated sales, unless specific indications lead to apply a different rate.
For all categories of surveys, starting from data delivery, a minimum straight-line depreciation scheme is applied over a five-year to seven year period, if total accumulated depreciation from the applicable amortization rate is below this minimum level.
Development costs
Expenditures on research activities undertaken with the prospect of gaining new scientific or technological knowledge and understanding are recognized in the income statement as expenses as incurred and are presented as Research and development expenses net. Expenditures on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, are capitalized if:
| the project is clearly defined, and costs are separately identified and reliably measured, |
| the product or process is technically and commercially feasible, |
| we have sufficient resources to complete development, and |
| the intangible asset is likely to generate future economic benefits, either because it is useful to us or through an existing market for the intangible asset itself or for its products. |
F-10
The expenditures capitalized include the cost of materials, direct labor and an appropriate proportion of overhead. Other development expenditures are recognized in the income statement as expenses as incurred and are presented as Research and development expenses net.
Capitalized development expenditures are stated at cost less accumulated amortization and impairment losses.
We amortize capitalized developments costs over 5 years.
Research and development expenses in our income statement represent the net cost of development costs that are not capitalized, of research costs, offset by government grants acquired for research and development.
NOTE 2 ACQUISITIONS AND DIVESTITURES
None.
NOTE 3 ANALYSIS BY OPERATING SEGMENT AND GEOGRAPHIC AREA
Since February 1, 2013, as a result of the acquisition of the Fugros Geoscience division, we organized our activities into three divisions which we also use as segments for our financial reporting. These segments are:
| Acquisition, which comprises the following operating segments: |
| Marine: offshore seismic data acquisition undertaken by us on behalf of a specific client or for our Multi-client business line (internal activity); |
| Land and Airborne: other seismic data acquisition undertaken by us on behalf of a specific client, or for our Multi-client business line (internal activity); |
| Geology, Geophysics & Reservoir (GGR). This operating segment comprises the Multi-client business line (development and management of seismic surveys that we undertake and license to a number of clients on a non-exclusive basis) and the Subsurface Imaging and Reservoir business line (processing and imaging of geophysical data, reservoir characterization, geophysical consulting and software services, geological data library and data management solutions). Both business lines regularly combine their offerings, generating overall synergies between their respective activities. |
| Equipment, which comprises our manufacturing and sales activities for seismic equipment used for data acquisition, both on land and marine. We carry out the activity in the Equipment segment through our subsidiary Sercel. |
Financial information by segment is reported in accordance with our internal reporting system and provides internal segment information that is used by the chief operating decision maker to manage and measure the performance.
As a complement to the operating income, EBIT is defined as one of our main performance indicator. EBIT is used by Management as a performance indicator because it captures the contribution to our results of the significant businesses that are managed through our joint-ventures. We define EBIT as operating income plus our share of income in companies accounted for under the equity method.
Inter-company transactions between segments are made at arms length prices. They relate primarily to geophysical equipment sales made by the Equipment segment to the Acquisition segment and to services rendered by the Acquisition segment to the GGR segment for the multi-client seismic library.
These inter-segment revenues and the related earnings are eliminated in consolidation in the tables that follow under the column Eliminations and other.
F-11
The inter-segment sales and the related earnings recognized by the Equipment segment are eliminated and presented in the tables that follow as follows: (i) operating income and EBIT for our Acquisition segment are presented after elimination of amortization expenses corresponding to capital expenditures between our Equipment segment and Acquisition segment; and (ii) capital expenditures for our Acquisition segment are presented after elimination of inter-segment margin.
Operating income and EBIT may include non-recurring items, which are disclosed in the reportable segment if material. General corporate expenses, which include Group management, financing, and legal activities, have been included in the column Eliminations and other in the tables that follow. The Group does not disclose financial expenses or financial revenues by segment because they are managed at the Group level.
Identifiable assets are those used in the operations of each segment. Unallocated and corporate assets consist primarily of financial assets, including cash and cash equivalents. Due to the constant changes in work locations, the group does not track its assets based on country of origin or ownership.
Capital employed is defined as total assets excluding cash and cash equivalents less (i) current liabilities excluding bank overdrafts and current portion of financial debt and (ii) non-current liabilities excluding financial debt.
The following tables also present operating revenues, operating income and EBIT by segment, and operating revenues by geographic area (by location of customers).
F-12
Analysis by operating segment
Three months ended March 31, | ||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
In millions of U.S.$, except for assets and capital employed in billions of U.S.$ |
Acquisition | GGR | Equipment | Eliminations and Other |
Consolidated Total |
Acquisition | GGR | Equipment | Eliminations and Other |
Consolidated Total |
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Revenues from unaffiliated customers |
352.9 | 289.9 | 163.4 | | 806.2 | 421.3 | 259.6 | 189.8 | | 870.7 | ||||||||||||||||||||||||||||||
Inter-segment revenues |
206.4 | | 42.8 | (249.2 | ) | | 172.7 | | 60.9 | (233.6 | ) | | ||||||||||||||||||||||||||||
Operating revenues |
559.3 | 289.9 | 206.2 | (249.2 | ) | 806.2 | 594.0 | 259.6 | 250.7 | (233.6 | ) | 870.7 | ||||||||||||||||||||||||||||
Depreciation and amortization (excluding multi-client surveys) |
(77.7 | ) | (16.4 | ) | (9.9 | ) | | (104.0 | ) | (88.4 | ) | (12.0 | ) | (11.4 | ) | | (111.8 | ) | ||||||||||||||||||||||
Depreciation and amortization of multi-client surveys |
| (80.2 | ) | | | (80.2 | ) | | (71.6 | ) | | | (71.6 | ) | ||||||||||||||||||||||||||
Operating income |
0.5 | 63.5 | 41.3 | (70.8 | ) | 34.5 | 38.1 | 79.2 | 69.1 | (34.6 | ) | 151.8 | ||||||||||||||||||||||||||||
Share of income in companies accounted for under equity method(1) |
(16.2 | ) | (0.3 | ) | | | (16.5 | ) | 9.1 | 1.5 | | | 10.6 | |||||||||||||||||||||||||||
Earnings before interest and tax(2) |
(15.7 | ) | 63.2 | 41.3 | (70.8 | ) | 18.0 | 47.2 | 80.7 | 69.1 | (34.6 | ) | 162.4 | |||||||||||||||||||||||||||
Capital expenditures (excluding multi-client surveys)(3) |
58.7 | 17.9 | 18.9 | 6.3 | 101.8 | 57.0 | 11.2 | 6.7 | 1.2 | 76.1 | ||||||||||||||||||||||||||||||
Investments in multi-client surveys, net cash |
| 155.9 | | | 155.9 | | 127.2 | | | 127.2 | ||||||||||||||||||||||||||||||
Capital employed |
2.6 | 2.9 | 0.8 | | 6.3 | 3.3 | 2.7 | 0.8 | | 6.8 | ||||||||||||||||||||||||||||||
Total identifiable assets |
3.1 | 3.1 | 1.0 | 0.5 | 7.7 | 3.9 | 2.9 | 1.1 | 0.4 | 8.3 | ||||||||||||||||||||||||||||||
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(1) | Share of operating results of companies accounted for under equity method were U.S.$(14.3) million and U.S.$11.6 million for the three months ended March 31, 2014 and 2013, respectively. |
(2) | For the three months ended March 31, 2014, eliminations and other included U.S.$(17.2) million of general corporate expenses. |
GGR EBIT for the three months ended March 31, 2013 included a gain of U.S.$19.8 million related to the sale of the Companys shareholding interest in Spectrum ASA.
For the three months ended March 31, 2013, eliminations and other included U.S.$(13.5) million of general corporate expenses, U.S.$(56.0) million of intra-group margin and U.S.$34.9 million of non recurring items related to the acquisition of Fugros Geoscience Division: (i) a gain of U.S.$84.5 million related to the contribution of shallow-water and OBC assets to our Seabed joint-venture with Fugro; (ii) restructuring costs of U.S.$(31.1) million related to the acquired vessels from Fugro; and (iii) acquisition costs of U.S.$(18.5) million.
(3) | Capital expenditures include capitalized development costs of U.S.$(15.9) million and U.S.$(10.8) million for the three months ended March 31, 2014 and 2013, respectively. |
F-13
Analysis by geographic area
The following table sets forth our consolidated operating revenues by location of customers, and the percentage of total consolidated operating revenues represented thereby:
Three months ended March 31, | ||||||||||||||||
In millions of U.S.$, except percentages | 2014 | 2013 | ||||||||||||||
North America |
215.0 | 27 | % | 217.1 | 25 | % | ||||||||||
Central and South Americas |
131.8 | 16 | % | 78.1 | 9 | % | ||||||||||
Europe, Africa and Middle East |
301.1 | 37 | % | 378.8 | 43 | % | ||||||||||
Asia Pacific |
158.3 | 20 | % | 196.7 | 23 | % | ||||||||||
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Total |
806.2 | 100 | % | 870.7 | 100 | % | ||||||||||
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NOTE 4 RECEIVABLES
In 2013 and 2014, we entered into several factoring agreements with various banks. As of March 31, 2014, we had transferred U.S.$107.7 million of notes receivable compared to U.S.$36.9 million as of December 31, 2013 under these agreements.
The risks retained by the Group are mainly the risk of payment delay up to 30 days and the risk of commercial litigation. Both have been historically low with the transferred clients.
As a consequence, the Group retained only non-significant amounts to the extent of its continuing involvement. Related costs recorded in operating income are not significant.
NOTE 5 LITIGATIONS AND CONTENGENCIES
The City of Rio de Janeiro has claimed U.S.$48 million (103 million Brazilian reais) against Veritas do Brazil plus U.S.$30 million (63 million Brazilian reais) to CGG do Brazil concerning tax on services (ISS) with respect to the years 2001 to 2008, which has been duly disputed.
Decisions in favor of Veritas do Brazil were rendered on appeal in August 2011 and May 2012. The municipality appealed to Supreme Court in June 2012 and Veritas do Brazil presented its defense in August 2012. The Superior Court of Justice refused the municipalitys appeal in the case in 2013.
The Municipality did not timely appeal the decision before Supreme Court. As a consequence, from late February 2014, the litigation process is definitively ended with no reassessement.
NOTE 6 SUBSEQUENT EVENTS
Financial debt
On April 23, 2014, CGG issued 400 million in aggregate principal amount of 5.875% Senior Notes due 2020 at par.
The Company will use the net proceeds from this offering to finance the full repurchase of its OCEANE convertible bonds due January 2016 for 360 million in principal amount. The remaining net proceeds will be used to reimburse the 2015 instalment of the Fugro Vendor Loan.
On May 1, 2014, CGG issued U.S.$500 million in aggregate principal amount of 6.875% Senior Notes due 2022 at par.
F-14
The Company intends to use the net proceeds from this offering to redeem all of the U.S.$225 million outstanding principal amount of its 9 1⁄2% Senior Notes due 2016 and will use the remaining net proceeds to redeem a portion of the U.S.$400 million outstanding principal amount of its 7 3⁄4% Senior Notes due 2017.
Purchase option over Geomar with Louis Dreyfus Armateurs Group (LDA)
On November 27, 2013, we agreed with LDA to exercise a purchase option on the shares held by LDA in Geomar, the company owning the CGG Alizé vessel. This purchase took effect on April 1, 2014.
This transaction has no impact on the consolidation method of this subsidiary which remains fully consolidated. The change of ownership interests was accounted for as an equity transaction as of December 31, 2013.
Condensed consolidating information for certain subsidiaries
At March 31, 2014 the obligations to pay our outstanding Senior Notes are guaranteed by certain subsidiaries: CGG Canada Services Ltd, CGG Marine Resources Norge AS, CGG Holding (U.S.) Inc, Alitheia Resources Inc, CGG Land (U.S.) Inc., CGG Services (U.S.) Inc., Veritas Geophysical (Mexico) LLC, Veritas Investments Inc., Viking Maritime Inc., CGG Marine BV, CGG Holding BV as the Services guarantors, and Sercel Inc., Sercel Australia Pty Ltd, Sercel Canada Ltd and Sercel GRC Corp. as the Equipment guarantors.
F-15
The following tables presents condensed consolidated financial information in IFRS as of and for the three months ended March 31, 2014 and 2013 for the Company, the Guarantor subsidiaries, the Non-Guarantor subsidiaries and the eliminations to arrive at CGG on a consolidated basis.
As of March 31, 2014 | CGG | Services Guarantors |
Equipment Guarantors |
Non Guarantors |
Consolidation Adjustments |
Group Consolidated |
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(in millions of U.S.$) | ||||||||||||||||||||||||
Goodwill |
| 2,210.6 | 91.8 | 181.2 | | 2,483.6 | ||||||||||||||||||
Intangible assets (including multi-client surveys) |
35.9 | 703.1 | 30.5 | 845.8 | (209.2 | ) | 1,406.1 | |||||||||||||||||
Property, plant and equipment |
102.3 | 727.6 | 45.1 | 933.0 | (279.7 | ) | 1,528.3 | |||||||||||||||||
Investment in affiliates |
4,598.9 | 1,950.9 | 7.1 | 492.9 | (7,049.8 | ) | | |||||||||||||||||
Other non-current assets |
2,442.8 | 581.2 | 4.9 | 487.8 | (2,927.4 | ) | 589.3 | |||||||||||||||||
Current assets |
328.6 | 1,123.3 | 290.6 | 3,014.8 | (2,580.8 | ) | 2,176.5 | |||||||||||||||||
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Total assets |
7,508.5 | 7,296.7 | 470.0 | 5,955.5 | (13,046.9 | ) | 8,183.8 | |||||||||||||||||
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Financial debt (including bank overdrafts, current and non-current portion) |
2,657.2 | 2,381.3 | 0.1 | 722.6 | (2,874.7 | ) | 2,886.5 | |||||||||||||||||
Other non-current liabilities (excluding financial debt) |
27.0 | 78.8 | 27.0 | 204.4 | (22.8 | ) | 314.4 | |||||||||||||||||
Current liabilities (excluding current portion of debt) |
973.3 | 540.3 | 98.5 | 2,146.7 | (2,626.9 | ) | 1,131.9 | |||||||||||||||||
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Total liabilities (excluding equity) |
3,657.5 | 3,000.4 | 125.6 | 3,073.7 | (5,524.4 | ) | 4,332.8 | |||||||||||||||||
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Equity |
3,851.0 | 4,296.3 | 344.4 | 2,881.8 | (7,522.5 | ) | 3,851.0 | |||||||||||||||||
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Operating revenues |
1.9 | 185.8 | 80.3 | 927.2 | (389.0 | ) | 806.2 | |||||||||||||||||
Depreciation and amortization |
1.9 | 92.8 | 3.0 | 103.9 | (17.4 | ) | 184.2 | |||||||||||||||||
Operating income (loss) |
(15.0 | ) | 9.2 | 14.2 | 39.5 | (13.4 | ) | 34.5 | ||||||||||||||||
Equity in income of affiliates |
34.6 | 23.4 | | (0.1 | ) | (57.9 | ) | | ||||||||||||||||
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Net income (loss) group share |
(39.0 | ) | (12.6 | ) | 9.7 | (26.4 | ) | 29.3 | (39.0 | ) | ||||||||||||||
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Cash flow from operating activities |
7.7 | (5.8 | ) | 5.5 | 156.6 | (46.2 | ) | 117.8 | ||||||||||||||||
Cash flow from investing activities |
(1.5 | ) | (148.9 | ) | (8.5 | ) | (167.7 | ) | 45.7 | (280.9 | ) | |||||||||||||
Cash flow from financing activities |
(20.3 | ) | 136.4 | (0.1 | ) | (24.5 | ) | 0.4 | 91.9 | |||||||||||||||
Effect of exchange rates on cash |
| | | | 0.1 | 0.1 | ||||||||||||||||||
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Cash at opening |
266.5 | 92.9 | 4.0 | 166.6 | | 530.0 | ||||||||||||||||||
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Cash at closing |
252.4 | 74.6 | 0.9 | 131.0 | | 458.9 | ||||||||||||||||||
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F-16
As of March 31, 2013 | CGG | Services Guarantors |
Equipment Guarantors |
Non Guarantors |
Consolidation Adjustments |
Group Consolidated |
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(in millions of U.S.$) | ||||||||||||||||||||||||
Goodwill |
| 2,846.7 | 93.9 | 171.4 | | 3,112.0 | ||||||||||||||||||
Intangible assets (including multi-client surveys) |
26.1 | 587.2 | 31.2 | 671.8 | (132.4 | ) | 1,183.9 | |||||||||||||||||
Property, plant and equipment |
102.4 | 645.2 | 39.5 | 1,180.8 | (256.1 | ) | 1,711.8 | |||||||||||||||||
Investment in affiliates |
5,049.0 | 2,071.0 | 6.1 | 488.2 | (7,614.3 | ) | | |||||||||||||||||
Other non-current assets |
1,257.0 | 114.9 | 6.2 | 250.5 | (1,083.8 | ) | 544.8 | |||||||||||||||||
Current assets |
1,558.8 | 1,692.3 | 244.9 | 3,334.5 | (4,527.6 | ) | 2,302.9 | |||||||||||||||||
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Total assets |
7,993.3 | 7,957.3 | 421.8 | 6,097.2 | (13,614.2 | ) | 8,855.4 | |||||||||||||||||
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Financial debt (including bank overdrafts, current and non-current portion) |
2,516.0 | 1,096.7 | 0.4 | 135.9 | (1,140.0 | ) | 2,609.0 | |||||||||||||||||
Other non-current liabilities (excluding financial debt) |
19.8 | 109.6 | 29.4 | 210.1 | (43.7 | ) | 325.2 | |||||||||||||||||
Current liabilities (excluding current portion of debt) |
773.8 | 1,683.0 | 115.9 | 3,201.0 | (4,536.2 | ) | 1,237.5 | |||||||||||||||||
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Total liabilities (excluding equity) |
3,309.6 | 2,889.3 | 145.7 | 3,547.0 | (5,719.9 | ) | 4,171.7 | |||||||||||||||||
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Equity |
4,683.7 | 5,068.0 | 276.1 | 2,550.2 | (7,894.3 | ) | 4,683.7 | |||||||||||||||||
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Operating revenues |
2.7 | 196.1 | 123.2 | 958.9 | (410.2 | ) | 870.7 | |||||||||||||||||
Depreciation and amortization |
1.8 | 91.3 | 3.2 | 105.2 | (18.1 | ) | 183.4 | |||||||||||||||||
Operating income (loss) |
(30.6 | ) | 60.2 | 32.4 | 43.9 | 45.9 | 151.8 | |||||||||||||||||
Equity in income of affiliates |
(85.6 | ) | 43.2 | | (0.2 | ) | 42.6 | | ||||||||||||||||
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Net income (loss) group share |
79.1 | 37.9 | 21.8 | 10.7 | (70.4 | ) | 79.1 | |||||||||||||||||
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Cash flow from operating activities |
(1,067.0 | ) | 1,099.6 | (3.8 | ) | 141.4 | (107.4 | ) | 62.8 | |||||||||||||||
Cash flow from investing activities |
31.4 | (1,079.5 | ) | (1.0 | ) | (60.9 | ) | 2.1 | (1,107.9 | ) | ||||||||||||||
Cash flow from financing activities |
(23.7 | ) | (17.2 | ) | | (22.7 | ) | 84.6 | 21.0 | |||||||||||||||
Effect of exchange rates on cash |
| | | | 20.7 | 20.7 | ||||||||||||||||||
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Cash at opening |
1,289.8 | 67.6 | 8.8 | 154.0 | | 1,520.2 | ||||||||||||||||||
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Cash at closing |
230.5 | 70.5 | 4.0 | 211.8 | | 516.8 | ||||||||||||||||||
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F-17
You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with different information. We are not offering the new notes in any jurisdiction where the offer is not permitted. We do not claim the accuracy of the information in this prospectus as of any date other than the date stated on the cover.
US$500,000,000
CGG
Offer to Exchange
6.875% Initial Senior Notes due 2022
Guaranteed on a senior basis by certain subsidiaries
for
6.875% Exchange Senior Notes due 2022
Guaranteed on a senior basis by certain subsidiaries
PROSPECTUS
We have not authorized anyone to give you any information or to make any representations about the transactions we discuss in this prospectus other than those contained herein or in the documents we incorporate herein by reference. If you are given any information or representations about these matters that is not discussed or incorporated in this prospectus, you must not rely on that information. This prospectus is not an offer to sell or a solicitation of an offer to buy securities anywhere or to anyone where or to whom we are not permitted to offer or sell securities under applicable law. The delivery of this prospectus does not, under any circumstances, mean that there has not been a change in our affairs since the date hereof. It also does not mean that the information in this prospectus or in the documents we incorporate herein by reference is correct after this date.
Part II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. | Indemnification of Directors and Officers |
As used in this Item 20, we, us and our refer to the entity in the corresponding heading.
CGG
The French Commercial Code prohibits provisions of statuts that limit the liability of directors. The French Commercial Code also prohibits a company from indemnifying its directors against liability. However, if a director is sued by a third party and ultimately prevails in the litigation on all counts, but is nevertheless required to bear attorneys fees and costs, the company may reimburse those fees and costs pursuant to an indemnification arrangement with the director.
Our statuts do not expressly provide for indemnification by us of liabilities of our directors or officers in their capacity as such. However, we maintain officers and directors liability insurance, which insures against certain liabilities that officers and directors in our group companies may incur in such capacities, including liabilities arising under the U.S. securities laws, subject to certain exceptions.
CGG Canada Services Ltd.
Under the Business Corporations Act (Alberta), we may indemnify a present or former director or officer or a person who acts or acted at our request as a director or officer of a body corporate of which we are or were a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of us or that body corporate, if the director or officer acted honestly and in good faith with a view to our best interests, and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his conduct was lawful. Such indemnification may be in connection with a derivative action only with court approval. Except in respect of a derivative action, a director or officer is entitled to indemnification from us as a matter of right if he was substantially successful on the merits of his defense of the action, fulfilled the conditions set forth above, and is fairly and reasonably entitled to indemnity. In addition, we may advance funds to a person in order to defray the costs, charges and expenses of a proceeding referred to above. However, such person will be required to repay the funds advanced if he is not substantially successful on the merits, does not fulfill the conditions set forth above and is not fairly and reasonably entitled to the indemnity.
Subject to the limitations in the Business Corporations Act (Alberta), our by-law no. 1 provides that we will indemnify a director, or a former director or officer, or a person who acts or acted at our request as a director or officer of a body corporate of which we are or were a shareholder or creditor and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being of having been our director or officer of such body corporate, if (a) he acted honestly in good faith with a view to our best interests; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful. These provisions may be sufficiently broad to indemnify such persons for liabilities arising under the U.S. securities laws.
CGG Marine Resources Norge AS
Norwegian law provides that a director or the chief executive officer of a Norwegian company is liable for any loss or damage he has intentionally or negligently caused the company in the performance of his duties. The shareholders may, by a majority resolution at the general meeting, either hold liable or discharge from liability
such director or chief executive officer. Any discharge of liability will only be valid for intentional or negligent acts or omissions which the relevant director or chief executive officer has informed the shareholders of. Notwithstanding a decision at the general meeting to discharge a person from liability or to reject a proposal to hold a person liable, shareholders owning at least 10% of the share capital may within a limited period of time bring a claim predicated on such liability on behalf of the company. Our articles of association do not expressly provide for indemnification by us of liabilities of our directors or officers in their capacity as such.
Sercel, Inc. and Sercel-GRC Corp.
The Oklahoma General Corporation Act allows us to indemnify each of our officers and directors against expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with any action, suit or proceeding brought by reason of the fact that such person is or has been our director, officer, employee or agent, or of any other corporation, partnership, joint venture, trust or other enterprise at our request, other than an action by us or in our right. Such indemnification may only be provided if the individual acted in good faith and in a manner he reasonably believed to be in or not opposed to our best interest, and with respect to any criminal action, the person seeking indemnification had no reasonable cause to believe that the conduct was unlawful. The Oklahoma General Corporation Act also allows us to indemnify our officers and directors for expenses, including attorneys fees, actually and reasonably incurred in connection with the defense or settlement of any action or suit by us or in our right brought by reason of the person seeking indemnification being or having been our director, officer, employee or agent, or of any other corporation, partnership, joint venture, trust or other enterprise at our request, provided the actions were in good faith and were reasonably believed to be in or not opposed to our best interest. No indemnification shall be made in respect of any claim, issue or matter as to which the individual shall have been adjudged liable to us, unless and only to the extent that the court in which such action was decided has determined upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses which the court deems proper.
The bylaws of both Sercel, Inc. and Sercel-GRC Corp. provide that we will indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative by reason of the fact that such person is or was our director, officer, employee or agent, or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys fees, judgment, fines and amounts paid in settlement as provided in the Oklahoma General Corporation Act. These provisions may be sufficiently broad to indemnify such persons for liabilities arising under the U.S. securities laws.
Sercel Australia Pty Ltd.
Section 199A(1) of the Corporations Act 2001 (Commonwealth) (the Corporations Act) provides that a company or a related body corporate must not exempt a person (whether directly or through an interposed entity) from a liability to the company incurred as an officer of the company.
Section 199A(2) of the Corporations Act provides that a company or a related body corporate must not indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against any of the following liabilities incurred as an officer of the company:
| a liability owed to the company or a related body corporate; |
| a liability for a pecuniary penalty order under section 1317G of the Corporations Act or a compensation order under section 961M, 1317H, 1317HA or 1317HB of the Corporations Act; or |
| a liability that is owed to someone other than the company or a related body corporate that did not arise out of conduct in good faith. |
Section 199A(2) does not apply to a liability for legal costs.
Indemnification (as opposed to exemption) which falls outside this provision is permissible.
Section 199A(3) provides that a company or a related body corporate must not indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against legal costs incurred in defending an action for a liability incurred as an officer of the company if the costs are incurred:
| in defending or resisting proceedings in which the person is found to have a liability for which they could not be indemnified under section 199A(2); or |
| in defending or resisting criminal proceedings in which the person is found guilty; or |
| in defending or resisting proceedings brought by the Australian Securities and Investments Commission (ASIC) or a liquidator for a court order if the grounds for making the order are found by the court to have been established (but this does not apply to costs incurred in responding to actions taken by ASIC or a liquidator as part of an investigation before commencing proceedings for the court order); or |
| in connection with proceedings for relief to the person under the Corporations Act in which the court denies the relief. |
Section 199B of the Corporations Act provides that a company or a related body corporate must not pay, or agree to pay, a premium for a contract insuring a person who is or has been an officer of the company against a liability (other than one for legal costs) arising out of:
| conduct involving a willful breach of any duty in relation to the company; or |
| a contravention of the officers duties under the Corporations Act not to improperly use their position or make improper use of information obtained as an officer. |
Section 199C(2) of the Corporations Act provides that anything that purports to indemnify or insure a person against a liability, or exempt them from a liability, is void to the extent that it contravenes section 199A or 199B of the Corporations Act.
For the purpose of sections 199A and 199B, an officer of a company includes:
| a director or secretary; |
| a person who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the company; |
| a person who has the capacity to significantly affect the companys financial standing; and |
| a person in accordance with whose instructions or wishes the directors of the company are accustomed to act. |
Our constitution provides that, to the extent permitted by law and without limiting our powers, we must indemnify each person who is, or has been, our director or secretary against any liability which results from facts or circumstances relating to the person serving or having served as a director, secretary or employee of us or any of our subsidiaries (a) other than a liability owed to us or a related body corporate, a liability for a pecuniary penalty order under section 1317G or a compensation order under section 1317H of the Corporation Act or a liability this is owed to someone (other than us or a related body corporate) and did not arise out of conduct in good faith (but this does not apply to a liability for legal costs) or (b) other than for legal costs incurred in defending an action for liability if the costs are incurred:
(i) | in defending or resisting civil proceedings in which the person is found to have a liability for which they could not be indemnified under paragraph (a); or |
(ii) | is defending or resisting criminal proceedings in which the person is found guilty; |
(iii) | in defending or resisting proceedings brought by ASIC or a liquidator for a court order if the grounds for making the order are found by the court to be established; |
(iv) | in connection with proceedings for relief to the person under the Corporations Act in which the Court denies relief. |
Paragraph (iii) does not apply to costs incurred in responding to actions brought by ASIC or a liquidator as part of an investigation before commencing proceedings for the court order.
These provisions may be sufficiently broad to indemnify such persons for liabilities arising under the U.S. securities laws.
Sercel Canada Ltd.
Under the Business Corporations Act (New Brunswick) we may indemnify a present or former director or officer of our corporation or a person who acts or acted at our request as a director or officer of a body corporate of which we are or were a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of us or that body corporate, if the director or officer acted honestly and in good faith with a view to our best interests, and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable ground for believing that his conduct was lawful. Such indemnification may be in connection with an action by or on behalf of our corporation or body corporate to procure a judgment in its favor only with court approval. A director or officer is entitled to indemnification from us as a matter of right if he was substantially successful on the merits, fulfilled the conditions set forth above, and is fairly and reasonably entitled to indemnity.
Our by-law no. 1 provides that, subject to subsections 81(2) and 81(3) of the Business Corporations Act (New Brunswick), except in respect to an action by or on behalf of our corporation or body corporate to procure a judgment in its favor, we will indemnify a director or officer, or a former director or officer, and each person who acts or acted at our request as a director or officer of a body corporate of which we are or were a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including any amount paid to settle an action or satisfy a judgment reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being of having been our director or officer of such corporation or body corporate, if (a) he acted honestly in good faith with a view to our best interests; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful. These provisions may be sufficiently broad to indemnify such persons for liabilities arising under the U.S. securities laws.
CGG Services (U.S.) Inc., Veritas Land (U.S.) Inc., CGG Holding (U.S.) Inc., Veritas Investments Inc., Viking Maritime Inc. and Alitheia Resources Inc.
Section 145 of the Delaware General Corporation Law permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action.
In a suit brought to obtain a judgment in the corporations favor, whether by the corporation itself or derivatively by a stockholder, the corporation may only indemnify for expenses, including attorneys fees, actually and reasonably incurred in connection with the defense or settlement of the case, and the corporation may not indemnify for amounts paid in satisfaction of a judgment or in settlement of the claim. In any such action, no indemnification may be paid in respect of any claim, issue or matter as to which such persons shall
have been adjudged liable to the corporation except as otherwise provided by the Delaware Court of Chancery or the court in which the claim was brought. In any other type of proceeding, the indemnification may extend to judgments, fines and amounts paid in settlement, actually and reasonably incurred in connection with such other proceeding, as well as to expenses (including attorneys fees).
The statute does not permit indemnification unless the person seeking indemnification has acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interest of the corporation and, in the case of criminal actions or proceedings, the person had no reasonable cause to believe his conduct was unlawful. There are additional limitations applicable to criminal actions and to actions brought by or in the name of the corporation. The determination as to whether a person seeking indemnification has met the required standard of conduct is to be made (i) by a majority vote of a quorum of disinterested members of the board of directors, (ii) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, (iii) by independent counsel in a written opinion, if such a quorum does not exist or if the disinterested directors so direct, or (iv) by the stockholders.
Prior to the merger of CGG and Veritas DGC (which was subsequently renamed CGG Holding (U.S.) Inc.) in January 2007, the restated certificate of incorporation and bylaws of Veritas DGC required it to indemnify its directors and officers to the fullest extent permitted under Delaware law. In addition, prior to the merger, Veritas DGC entered into indemnification agreements with each of its officers and directors providing for indemnification to the fullest extent permitted under Delaware law. CGG Holding (U.S.) Inc.s restated certificate of incorporation limited the personal liability of a director to the company or its stockholders to damages for breach of the directors fiduciary duty.
Prior to the merger, Veritas DGC maintained insurance on behalf of its directors and officers and the directors and officers of its subsidiaries against certain liabilities that may be asserted against, or incurred by, such persons in their capacities as directors or officers, or that may arise out of their status as directors or officers of Veritas DGC or its subsidiaries, including liabilities under the federal and state securities laws.
The merger agreement provides that, for a period of six years following the effective time of the merger, CGG and CGG Holding (U.S.) Inc., as successor in interest to Veritas DGC, shall, jointly and severally, indemnify, defend and hold harmless the present and former officers, directors, employees and agents of Veritas DGC in such capacities to the fullest extent that Veritas DGC would have been required to do so in accordance with the provisions of each indemnification or similar agreement or arrangement with Veritas DGC. CGG and CGG Holding (U.S.) Inc. agreed that all rights to exculpation, advancement of expenses and indemnification for acts or omissions occurring prior to the merger now existing in favor of the current and former officers and directors of Veritas as provided in the certificate of incorporation, bylaws or any material contract of Veritas DGC, will survive the merger and continue in full force and effect in accordance with their terms.
The merger agreement further provided that, for a period of six years following the merger, CGG and CGG Holding (U.S.) Inc. shall take all necessary actions to ensure that CGGs directors and officers liability insurance continues to cover each officer and director of Veritas DGC, in each case so long as they remain employed or retained by CGG as an officer or director. CGG will also maintain a tail directors and officers liability insurance from an insurance carrier with the same or better credit rating as Veritas current insurance carrier, with a claims period of six years from the merger, with respect to the directors and officers of Veritas who are currently covered by Veritas existing directors and officers liability insurance with respect to claims arising from facts or events that occurred before the merger, in an amount and scope and on terms and conditions no less favorable to such directors and officers than those in effect at the signing of the merger agreement.
The current certificates of incorporation and bylaws of CGG Land (U.S.) Inc., CGG Services (U.S.) Inc., Veritas Investments Inc., Viking Maritime Inc., and Alitheia Resources Inc. require each corporation to indemnify its respective directors and officers to the fullest extent permitted under Delaware law.
Veritas Geophysical (Mexico) LLC
Section 18-108 of the Delaware Limited Liability Company Act provides that, subject to such standards and restrictions, if any, as are set forth in its limited liability company agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against all claims and demands whatsoever.
Veritas Geophysical (Mexico) LLC was formed under the laws of the State of Delaware. The operating agreement of Veritas Geophysical (Mexico) LLC provides, in effect, that, subject to certain limitations, it will indemnify its members, officers, directors, employees and agents of Veritas Geophysical (Mexico) LLC (collectively, the Covered Persons), to the fullest extent permitted by applicable law, for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of Veritas Geophysical (Mexico) LLC and in a manner reasonably believed to be within the scope of authority conferred on such Covered Person by the operating agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of gross negligence or willful misconduct with respect to such acts or omissions; provided however, that any indemnity under the operating agreement shall be provided out of and to the extent of assets of Veritas Geophysical (Mexico) LLC only, and no Covered Person shall have any personal liability with respect to such indemnity.
To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by Veritas Geophysical (Mexico) LLC prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by Veritas Geophysical (Mexico) LLC of an undertaking by or on behalf of the Covered Person to repay such amount if it shall be determined that the Covered Person is not entitled to be indemnified as authorized in the operating agreement.
A Covered Person shall be fully protected in relying in good faith upon the records of Veritas Geophysical (Mexico) LLC and upon such information, opinions, reports or statements presented to Veritas Geophysical (Mexico) LLC by any person as to matters the Covered Person reasonably believes are within such other persons professional or expert competence and who has been selected with reasonable care by or on behalf of Veritas Geophysical (Mexico) LLC, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses or net cash flow or any other facts pertinent to the existence and amount of assets from which distributions to members might properly be paid.
To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating to such duties to Veritas Geophysical (Mexico) LLC or to any other Covered Person, a Covered Person acting under the operating agreement shall not be liable to Veritas Geophysical (Mexico) LLC or to any member for its good faith reliance on the provisions of the operating agreement. The provisions of the operating agreement, to the extent that they restrict the duties and liabilities of such Covered Person otherwise existing at law or in equity, are agreed by the parties to replace such other duties and liabilities of such Covered Person.
CGG Holding B.V. and CGG Marine B.V.
Under Dutch law, directors can be held liable by the company itself or by third parties. Although the Dutch Civil Code does not expressly provide for the indemnification of directors against any such liability, the concept of indemnification of directors of a company for liabilities arising from their actions as members of the management or supervisory board is, in principle, accepted in the Netherlands.
The articles of association of CGG Holding B.V. and CGG Marine B.V. do not provide for indemnification of directors by either company against liabilities to it or third parties, including expenses or amounts paid in settlement relating to claims, actions, suits or proceedings to which a director becomes a party as a result of his or her position.
Although not constituting an indemnification, with respect to liability to either company it should be noted that the articles of association provide that in certain cases the general meeting of shareholders may resolve to release the directors from liability to the company for their actions in the course of managing the company, insofar as the exercise of such duties is reflected in the annual accounts or otherwise disclosed to the general meeting prior to the adoption of the annual accounts.
ITEM 21. | Exhibits and Financial Schedules |
The following instruments and documents are included as Exhibits to this Registration Statement. Exhibits incorporated by reference are so indicated.
Exhibit No |
Exhibit | |
3.1 | English translation of the Articles of Association (statuts) of CGG.(1) | |
3.2 | Articles of Amalgamation of CGG Canada Services Ltd.(2) | |
3.3 | CGG Canada Services Ltd. Resolution of the Sole Shareholder.(2) | |
3.4 | By-law No. 1 of CGG Canada Services Ltd.(2) | |
3.5 | Articles of Association of CGG Marine Resources Norge AS.(3) | |
3.6 | Amended Certificate of Incorporation of Opseis, Inc. (Sercel, Inc.), dated February 24, 1993.(2) | |
3.7 | Certificate of Amendment of Certificate of Incorporation of Opseis, Inc. (Sercel, Inc.), dated December 23, 1996.(2) | |
3.8* | Amended and Restated Bylaws of Sercel, Inc. | |
3.9 | Constitution of Sercel Australia Pty Ltd.(2) | |
3.10 | Articles of Incorporation of Sercel Canada Ltd.(2) | |
3.11 | Certificate of Amendment of Sercel Canada Ltd.(4) | |
3.12 | By-Law No. 1 of Sercel Canada Ltd.(4) | |
3.13 | Certificate of Incorporation of Volnay Acquisition Co. II (CGG Holding (U.S.) Inc.), dated September 5, 2006.(5) | |
3.14 | Certificate of Amendment of Certificate of Incorporation of Volnay Acquisition Co. II (CGG Holding (U.S.) Inc.), dated January 12, 2007.(5) | |
3.15* | Certificate of Amendment of Certificate of Incorporation of CGGVeritas Holding (U.S.) Inc. (CGG Holding (U.S.) Inc.), dated May 31, 2012. | |
3.16* | Certificate of Amendment of Certificate of Incorporation of CGG Holding (U.S.) Inc., dated April 30, 2013. | |
3.17 | Bylaws of CGGVeritas Services Holding (U.S.) Inc. (CGG Holding (U.S.) Inc.).(3) | |
3.18 | Restated Certificate of Incorporation (with Amendments) of Veritas DGC Land Inc. (CGG Land (U.S.) Inc.), dated July 18, 2000.(5) | |
3.19 | Certificate of Amendment of Certificate of Incorporation of CGGVeritas Land (U.S.) Inc. (CGG Land (U.S.) Inc.), dated December 19, 2007.(4) | |
3.20* | Certificate of Amendment of Certificate of Incorporation of CGG Land (U.S.) Inc., dated April 30, 2013. | |
3.21 | Bylaws of Veritas DGC Land Inc. (CGG Land (U.S.) Inc.).(5) | |
3.22 | Restated Certificate of Incorporation (with Amendments) of Digicon Geophysical Corp. (CGG Services (U.S.) Inc.), dated February 6, 2001.(5) | |
3.23 | Certificate of Amendment of Certificate of Incorporation of CGGVeritas Services (U.S.) Inc (CGG Services (U.S.) Inc.), dated December 19, 2007.(4) | |
3.24* | Certificate of Amendment of Certificate of Incorporation of CGG Services (U.S.) Inc., dated April 30, 2013. | |
3.25 | Bylaws of CGGVeritas Services (U.S.) Inc. (CGG Services (U.S.) Inc.).(3) |
Exhibit No |
Exhibit | |
3.26 | Restated Certificate of Incorporation (with Amendments) of Veritas Geophysical Inc. (Veritas Investments Inc.), dated February 6, 2001.(5) | |
3.27 | Amended and Restated Bylaws of Veritas Investments Inc.(3) | |
3.28 | Certificate of Incorporation of Viking Maritime Inc., dated March 29, 2001.(5) | |
3.29 | Amended and Restated Bylaws of Viking Maritime Inc.(3) | |
3.30 | Certificate of Formation of Veritas Geophysical (Mexico) LLC, dated February 20, 2001.(5) | |
3.31 | Operating Agreement of Veritas Geophysical (Mexico) LLC.(5) | |
3.32 | Certificate of Incorporation of Alitheia Resources Inc., dated June 29, 2004.(5) | |
3.33 | Amended and Restated Bylaws of Alitheia Resources Inc.(3) | |
3.34* | Deed of Amendment of Articles of Association of CGGVeritas Holding B.V. (CGG Holding B.V.). | |
3.35* | Deed of Amendment of Articles of Association of CGGVeritas Marine B.V. (CGG Marine B.V.). | |
3.36* | Certificate of Incorporation of Sercel GRC, Inc. (Sercel-GRC Corp.) dated September 21, 2011. | |
3.37* | Certificate of Correction of Sercel Acquisition Corp. (Sercel-GRC Corp.) dated September 22, 2011. | |
3.38* | Amended Certificate of Incorporation of Sercel-GRC Corp. dated January 17, 2012. | |
3.39* | Bylaws of Sercel Acquisition Corp. | |
4.1 | Mixed Capital Company Contract dated November 26, 2003 by and among Sercel SA, the Committee of the Hebei JunFeng Prospecting Equipment Company, the Dongfang Geological Prospecting Limited Liability Company, and the Xian General Factory for Oil Prospecting Equipment.(6) | |
4.2 | Agreement between the Shareholders of CGG Ardiseis dated June 23, 2006 between Industrialization & Energy Services Company (TAQA) and us.(7) | |
4.3 | Sale and Purchase Agreement relating to the Geoscience Business between Fugro N.V. (as the Seller) and CGGVeritas S.A. (CGG) (as the Purchaser), dated 23 September 2012.(1) | |
4.4 | Joint Venture Agreement relating to Seabed Geosolutions B.V. between Fugro Consultants International N.V. and CGGVeritas S.A. (CGG) dated 27 January 2013.(1) | |
4.5 | Joint Venture Agreement relating to Seabed Geosolutions B.V. between Fugro Consultants International N.V. and CGGVeritas S.A. (CGG) dated 27 January 2013.(1) | |
4.6 | Amendment dated February 16, 2013 to the Joint-Venture Agreement relating to Seabed Geosolutions B.V. between Fugro Consultants International N.V. and CGGVeritas S.A. (CGG).(1) | |
4.7* | Indenture dated as of May 1, 2014 among the Registrants and The Bank of New York Mellon, as Trustee, which includes the form of the 6.875% Senior Notes due 2022 as an exhibit thereto. | |
4.8* | Registration Rights Agreement dated May 1, 2014 among the Registrants, Credit Suisse Securities (Europe) Limited, BNP Paribas, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and RBS Capital Markets, LLC. | |
5.1* | Opinion of Linklaters LLP, special U.S. counsel to the Registrants, as to the legality of the notes and the guarantees. | |
5.2* | Opinion of Linklaters LLP, special French counsel to CGG, as to the legality of the notes. | |
5.3* | Opinion of Linklaters LLP, special Dutch counsel to CGG Holding B.V. and CGG Marine B.V., as to the legality of their guarantees. |
Exhibit No |
Exhibit | |
5.4* | Opinion of Blake, Cassels & Graydon LLP, special Alberta, Canada counsel to CGG Canada Services Ltd., as to the legality of its guarantee. | |
5.5* | Opinion of Advokatfirmaet Wiersholm, special Norwegian counsel to CGG Marine Resources Norge AS, as to the legality of its guarantee. | |
5.6* | Opinion of GableGotwals, special Oklahoma counsel to Sercel, Inc. and Sercel-GRC Corp., as to the legality of their guarantees. | |
5.7* | Opinion of McInnes Cooper, special New Brunswick, Canada counsel to Sercel Canada Ltd., as to the legality of its guarantee. | |
5.8* | Opinion of Allens, special New South Wales, Australia counsel to Sercel Australia Pty Ltd., as to the legality of its guarantee. | |
12.1* | Statement re Computation of Ratios. | |
23.1* | Consent of Linklaters LLP, special U.S. counsel to the Registrants (included in Exhibit 5.1). | |
23.2* | Consent of Linklaters LLP, special French counsel to CGG (included in Exhibit 5.2). | |
23.3* | Consent of Linklaters LLP, special Dutch counsel to CGG Holding B.V. and CGG Marine B.V. (included in Exhibit 5.3). | |
23.4* | Consent of Blake, Cassels & Graydon LLP, special Alberta, Canada counsel to CGG Canada Services Ltd. (included in Exhibit 5.4). | |
23.5* | Consent of Advokatfirmaet Wiersholm, special Norwegian counsel to CGG Marine Resources Norge AS (included in Exhibit 5.5). | |
23.6* | Consent of GableGotwals, special Oklahoma counsel to Sercel, Inc. and Sercel-GRC Corp. (included in Exhibit 5.6). | |
23.7* | Consent of McInnes Cooper, special New Brunswick, Canada counsel to Sercel Canada Ltd. (included in Exhibit 5.7). | |
23.8* | Consent of Allens, special New South Wales, Australia counsel to Sercel Australia Pty Ltd. (included in Exhibit 5.8). | |
23.9* | Consent of Ernst & Young et Autres. | |
23.10* | Consent of Ernst & Young et Autres and Mazars. | |
25.1* | Statement of Eligibility of Trustee. | |
99.1* | Form of Letter of Transmittal. | |
99.2* | Form of Notice of Guaranteed Delivery. | |
99.3* | Instructions to Registered Holder or DTC Participant. | |
99.4* | Form of Letter to Registered Holders and Depositary Trust Company Participants. | |
99.5* | Form of Letter to Clients. |
* | Filed herewith |
(1) | Incorporated by reference to CGGs Annual Report on Form 20-F for the year ended December 31, 2013 dated April 10, 2014. Pursuant to the rules of the SEC, the schedules and similar attachments to these agreement have not been filed therewith. We agree to furnish a copy of any omitted schedule to the SEC upon request. |
(2) | Incorporated by reference to the Registrants Registration Statement on Forms F-4 and S-4 (SEC File No. 333-126556), dated July 13, 2005, as amended. |
(3) | Incorporated by reference to the Registrants Registration Statement on Form F-4, dated September 27, 2011 (SEC File No. 333- 177040). |
(4) | Incorporated by reference to the Registrants Registration Statement on Form F-4, dated September 21, 2009 (SEC File No. 333-162041), as amended. |
(5) | Incorporated by reference to the Registrants Registration Statement on Forms F-3 and S-3 (SEC File No. 333-140274), dated January 29, 2007. |
(6) | Incorporated by reference to CGGs Report on Form 6-K dated May 13, 2004. |
(7) | Incorporated by reference to CGGs Annual Report on Form 20-F for the year ended December 31, 2006, dated May 7, 2007. |
We and our consolidated subsidiaries are party to several debt instruments under which the total amount of securities authorized does not exceed 10% of our total assets on a consolidated basis. We agree to furnish a copy of such instruments to the SEC upon request.
ITEM 22. | Undertakings |
The undersigned Registrants hereby undertake:
| To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; |
| To include any prospectus required by Section 10(a)(3) of the Securities Act; |
| To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement; |
| To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement: |
| That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| For purposes of determining any liability under the Securities Act, each filing of the Registrants annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plans annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| To (i) respond to requests for information that is incorporated by reference into the Prospectus pursuant to Item 4, 10(b), 11, or 13 of Form F-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means; and (ii) arrange or provide for a facility in the United States for the purpose of responding to such requests. The undertaking in subparagraph (i) above includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request. |
| To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective. |
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrants, the Registrants have been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless, in the opinion of their counsel, the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Paris, France, on July 3, 2014.
CGG
/s/ Jean-Georges Malcor | ||
By: |
Jean-Georges Malcor | |
Title: |
Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Rémi Dorval Rémi Dorval |
Chairman of the Board of Directors | ||
By: |
/s/ Jean-Georges Malcor Jean-Georges Malcor |
Chief Executive Officer and Director (principal executive officer) | ||
By: |
/s/ Stéphane-Paul Frydman Stéphane-Paul Frydman |
Chief Financial Officer (principal financial and accounting officer) | ||
By: |
/s/ Olivier Appert Olivier Appert |
Director | ||
By: |
/s/ Loren Carroll Loren Carroll |
Director | ||
By: |
/s/ Agnès Lemarchand Agnès Lemarchand |
Director | ||
By: |
/s/ Gilberte Lombard Gilberte Lombard |
Director |
Signatures |
Title | |||
By: |
/s/ Hilde Myrberg Hilde Myrberg |
Director | ||
By: |
/s/ Robert Semmens Robert Semmens |
Director | ||
By: |
/s/ Kathleen Sendall Kathleen Sendall |
Director | ||
By: |
/s/ Daniel Valot Daniel Valot |
Director | ||
By: |
/s/ Terence Young Terence Young |
Director | ||
By: |
/s/ Chad Meinte Chad Meintel |
Authorized representative of CGG in the United States |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Paris, France, on July 3, 2014.
CGG HOLDING B.V.
/s/ Christian Klemt | ||
By: |
Christian Klemt | |
Title: |
Managing Director |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Christian Klemt Christian Klemt |
Managing Director (principal executive, financial and accounting officer) | ||
By: |
/s/ Beatrice Place-Faget Beatrice Place-Faget |
Managing Director | ||
By: |
/s/ Chad Meintel Chad Meintel |
Authorized representative of CGG Holding B.V. in the United States |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Paris, France, on July 3, 2014.
CGG MARINE B.V.
/s/ Christian Klemt | ||
By: |
Christian Klemt | |
Title: |
Managing Director |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Christian Klemt Christian Klemt |
Managing Director (principal executive, financial and accounting officer) | ||
By: |
/s/ Benoît Ribadeau-Dumas Benoît Ribadeau-Dumas |
Managing Director | ||
By: |
/s/ Chad Meintel Chad Meintel |
Authorized representative of CGG Marine B.V. in the United States |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, State of Texas, on July 3, 2014.
CGG HOLDING (U.S.) INC.
/s/ Colin Murdoch | ||
By: |
Colin Murdoch | |
Title: |
President |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Colin Murdoch Colin Murdoch |
President (principal executive officer) and Director | ||
By: |
/s/ Vincent Thielen Vincent Thielen |
Treasurer and Senior Vice president Finance and Services (principal financial and accounting officer) and Director | ||
By: |
/s/ Stéphane-Paul Frydman Stéphane-Paul Frydman |
Director |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, State of Texas, on July 3, 2014.
CGG LAND (U.S.) INC.
/s/ Colin Murdoch | ||
By: |
Colin Murdoch | |
Title: |
President |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Colin Murdoch Colin Murdoch |
President (principal executive officer) and Director | ||
By: | /s/ Vincent Thielen Vincent Thielen |
Treasurer and Senior Vice president Finance and Services (principal financial and accounting officer) and Director |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, State of Texas, on July 3, 2014.
CGG SERVICES (U.S.) INC.
/s/ Colin Murdoch | ||
By: |
Colin Murdoch | |
Title: |
President |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Colin Murdoch Colin Murdoch |
President (principal executive officer) and Director | ||
By: |
/s/ Vincent Thielen Vincent Thielen |
Treasurer and Senior Vice president Finance and Services (principal financial and accounting officer) and Director | ||
By: |
/s/ Luc Schlumberger Luc Schlumberger |
Director |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, State of Texas, on July 3, 2014.
VERITAS INVESTMENTS INC.
/s/ Colin Murdoch | ||
By: |
Colin Murdoch | |
Title: |
President |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Colin Murdoch Colin Murdoch |
President (principal executive officer) and Director | ||
By: |
/s/ Vincent Thielen Vincent Thielen |
Treasurer and Senior Vice president Finance and Services (principal financial and accounting officer) and Director | ||
By: |
/s/ Luc Schlumberger Luc Schlumberger |
Director |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, State of Texas, on July 3, 2014.
VIKING MARITIME INC.
/s/ Colin Murdoch | ||
By: |
Colin Murdoch | |
Title: |
President |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Colin Murdoch Colin Murdoch |
President (principal executive officer) and Director | ||
By: |
/s/ Vincent Thielen Vincent Thielen |
Treasurer and Senior Vice president Finance and Services (principal financial and accounting officer) and Director | ||
By: |
/s/ Luc Schlumberger Luc Schlumberger |
Director |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, State of Texas, on July 3, 2014.
VERITAS GEOPHYSICAL (MEXICO) LLC
/s/ Colin Murdoch | ||
By: |
Colin Murdoch | |
Title: |
President |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Colin Murdoch Colin Murdoch |
President (principal executive officer) and Director | ||
By: |
/s/ Vincent Thielen Vincent Thielen |
Treasurer and Senior Vice president Finance and Services (principal financial and accounting officer) and Director |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, State of Texas, on July 3, 2014.
ALITHEIA RESOURCES INC.
/s/ Luc Schlumberger | ||
By: |
Luc Schlumberger | |
Title: |
President |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Luc Schlumberger Luc Schlumberger |
President (principal executive officer) and Director | ||
By: |
/s/ Vincent Thielen Vincent Thielen |
Treasurer and Senior Vice president Finance and Services (principal financial and accounting officer) and Director | ||
By: |
/s/ Colin Murdoch Colin Murdoch |
Director |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Nantes, France, on July 3, 2014.
SERCEL, INC.
/s/ Pascal Rouiller | ||
By: |
Pascal Rouiller | |
Title: |
Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Pascal Rouiller Pascal Rouiller |
Chief Executive Officer (principal executive officer) and Director | ||
By: |
/s/ Ken Fitts Ken Fitts |
Chief Financial Officer (principal financial and accounting officer) and Director | ||
By: |
/s/ George Wood George Wood |
Director | ||
By: |
/s/ Arnaud Surpas Arnaud Surpas |
Director | ||
By: |
/s/ Alain Tisserand Alain Tisserand |
Director | ||
By: |
/s/ Pierre Baliguet Pierre Baliguet |
Director |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Nantes, France, on July 3, 2014.
SERCEL-GRC CORP.
/s/ Arnaud Surpas | ||
By: |
Arnaud Surpas | |
Title: |
President |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Arnaud Surpas Arnaud Surpas |
President (principal executive officer) and Director | ||
By: |
/s/ George Wood George Wood |
Treasurer (principal financial and accounting officer) and Director | ||
By: |
/s/ Gérard Dufoulon Gérard Dufoulon |
Director | ||
By: |
/s/ Ken Fitts Ken Fitts |
Director |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Oslo, Norway, on July 3, 2014.
CGG MARINE RESOURCES NORGE AS
/s/ Marianne Lefdal | ||
By: |
Marianne Lefdal | |
Title: |
General Manager |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Marianne Lefdal Marianne Lefdal |
General Manager (principal executive officer) and Director | ||
By: |
/s/ Christian Klemt Christian Klemt |
Chief Financial Officer (principal financial and accounting officer) | ||
By: |
/s/ Rolf Erik Rolfsen Rolf Erik Rolfsen |
Director and Chairman | ||
By: |
/s/ Yves Goulard Yves Goulard |
Director | ||
By: |
/s/ Eva Rudin Eva Rudin |
Director | ||
By: |
/s/ Chad Meintel Chad Meintel |
Authorized representative of CGG Marine Resources Norge AS in the United States |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Nantes, France, on July 3, 2014.
SERCEL CANADA LTD.
/s/ Pascal Rouiller | ||
By: |
Pascal Rouiller | |
Title: |
President |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Pascal Rouiller Pascal Rouiller |
President (principal executive officer) and Director | ||
By: |
/s/ Ken Fitts Ken Fitts |
Treasurer (principal financial and accounting officer) and Director | ||
By: |
/s/ George Wood George Wood |
Director | ||
By: |
/s/ Arnaud Surpas Arnaud Surpas |
Director | ||
By: |
/s/ Chad Meintel Chad Meintel |
Authorized representative of Sercel Canada Ltd. in the United States |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Nantes, France, on July 3, 2014.
SERCEL AUSTRALIA PTY LTD.
/s/ Pascal Rouiller | ||
By: |
Pascal Rouiller | |
Title: |
Chairman |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Pascal Rouiller Pascal Rouiller |
Chairman (principal executive officer) and Director | ||
By: |
/s/ Gérard Dufoulon Gérard Dufoulon |
Director (principal financial and accounting officer) | ||
By: |
/s/ Chad Meintel Chad Meintel |
Authorized representative of Sercel Australia Pty Ltd. in the United States |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Alberta, Province of Alberta, on July 3, 2014.
CGG CANADA SERVICES LTD.
/s/ Dave Tam | ||
By: |
Dave Tam | |
Title: |
President |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on July 3, 2014.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Yves Goulard and Stéphane-Paul Frydman, and each of them acting individually as his or her true and lawful attorneys-in-fact and agents, with full and several power of substitution and resubstitution, in any and all capacities, to sign on his or her behalf any or all amendments, (including post-effective amendments) and supplements to this registration statement and any registration statements filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933 relating thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures |
Title | |||
By: |
/s/ Dave Tam Dave Tam |
President (principal executive officer) | ||
By: |
/s/ Grant Duncan Grant Duncan |
Treasurer (principal financial and accounting officer) and Director | ||
By: |
/s/ Kent Milani Kent Milani |
Director | ||
By: |
/s/ Chad Meintel Chad Meintel |
Authorized representative of CGG Canada Services Ltd. in the United States |
Exhibit 3.8
AMENDED AND RESTATED BYLAWS
OF
SERCEL, INC.
(An Oklahoma Corporation)
TABLE OF CONTENTS
Page | ||||||
ARTICLE I |
OFFICES |
1 | ||||
ARTICLE II |
MEETINGS OF SHAREHOLDERS |
1 | ||||
ARTICLE III |
BOARD OF DIRECTORS |
4 | ||||
ARTICLE IV |
EXECUTIVE COMMITTEE |
7 | ||||
ARTICLE V |
COMMITTEES OF DIRECTORS |
8 | ||||
ARTICLE VI |
OFFICERS |
8 | ||||
ARTICLE VII |
SHARES OF STOCK |
12 | ||||
ARTICLE VIII |
EXECUTION OF INSTRUMENTS |
14 | ||||
ARTICLE IX |
INDEMNIFICATION |
15 | ||||
ARTICLE X |
GENERAL PROVISIONS |
17 |
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AMENDED AND RESTATED BYLAWS
OF
SERCEL, INC.
(AN OKLAHOMA CORPORATION)
These Amended and Restated Bylaws (the Bylaws or Amended and Restated Bylaws) amend and restate in their entirety, and replace, the previously existing Bylaws of Sercel, Inc.
ARTICLE I
Offices
SECTION 1.1. Principal Office. The present location of the principal office for the transaction of the business of SERCEL, INC. (the Corporation) is 17200 Park Row, Houston, Texas 77084. The Board of Directors may change such principal office from time to time.
SECTION 1.2. Other Offices. The Corporation may have other offices at such places, within or without the State of Oklahoma, as the Board of Directors may designate or as the business of the Corporation may require from time to time.
ARTICLE II
Meetings of Shareholders
SECTION 2.1. Annual Meetings. The annual meetings of shareholders shall be held on the first Monday in December, if not a legal holiday, and if a legal holiday, then on the next day thereafter which is a business day. Any such annual meeting may be held at any other time which may be designated in a resolution adopted by the Board of Directors or by the written consent of shareholders holding a majority of the issued and outstanding voting shares of the Corporation. At the annual meeting, directors shall be elected, reports of the affairs of the Corporation shall be considered, and any other proper business may be transacted.
SECTION 2.2. Special Meetings. Special meetings of the shareholders for any purpose or purposes may be called at any time by: (a) the Chief Executive Officer or the President; (b) resolution adopted by the Board of Directors; or (c) one or more shareholders holding not less than one-fourth (1/4) of the issued and outstanding voting shares of the Corporation. Notice of such special meetings shall be given in the same manner as for annual meetings of shareholders. Notices of any special meeting shall state, in addition to the time, date and place of such meeting, the purpose or purposes of the meeting. Business transacted at any special meeting of shareholders shall be limited to the purposes stated in the notice. Upon request being made by written notice to the Chief Executive Officer or the President, or in their absence or disability to any Vice-President, or in the absence of a Vice-President, to the Secretary, by any person or persons herein empowered to call a special meeting, if such officer is the Secretary, he shall give notice to the shareholders, or if such officer is other than the Secretary, he shall cause the Secretary, to give notice to the shareholders that such meeting has been called for the purpose or
purposes stated in such request and is to be held at a specified time, which time as fixed by such officer shall not be less than ten (10) days nor more than sixty (60) days after the receipt of such request. If notice of such meeting be not given to the shareholders within seven (7) days after the receipt of such request, such person or persons making such request may fix the time of such special meeting and give notice thereof in the same manner as herein provided for notice of special meetings of shareholders.
SECTION 2.3. Place of Meetings. All meetings of shareholders shall be held either at the principal office of the Corporation or at any other place within or without the State of Oklahoma as may be designated either by the Board of Directors or by the written consent of the shareholders entitled to vote at such meeting holding at least a majority of such shares given either before or after the meeting and filed with the Secretary of the Corporation.
SECTION 2.4. Notice of Meetings. Written notice of the time, date and place of each annual meeting of the shareholders shall be given to each shareholder as described in Section 10.4 not less than ten (10) nor more than sixty (60) days before each annual meeting.
SECTION 2.5. Voting List. The Secretary shall prepare, at least forty eight (48) hours prior to each meeting of the shareholders, an alphabetical list of all shareholders entitled to vote at such meeting, with the number of shares entitled to be voted by each shareholder set forth opposite their respective names. The Secretary shall produce the share ledger or a duplicate thereof, together with such list and shall keep it open either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held during the business hours of at least one (1) full day immediately preceding the convening thereof and until the close of such meeting, and it shall be subject to inspection at any time during such period by any shareholder or person representing shares. However, the Secretary shall not be required to prepare and produce a list of shareholders in any case where the share ledger reasonably shows in alphabetical order by classes of shares all persons entitled to represent shares at such meeting with the number of shares entitled to be voted by each shareholder.
SECTION 2.6. Quorum and Required Vote; Adjourned Meetings. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the shareholders for the transaction of business, except as otherwise provided by statute or the Certificate of Incorporation of the Corporation. When a quorum is present at any meeting, a majority of the shares represented thereat and entitled to vote thereat shall decide any question brought before such meeting. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Any shareholders meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the holders of a majority of the shares entitled to vote thereat, present in person or by proxy, but in the absence of a quorum no other business may be transacted at such meeting. It shall not be necessary to give any notice of the time and place of the adjourned meeting or of the business to be transacted thereat, other than by announcement at the meeting at which such adjournment is taken, except that if any shareholders meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting.
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SECTION 2.7. Voting. At each meeting of shareholders each shareholder entitled to vote shall vote in person or by proxy and he shall have one vote for each share standing registered in his name at the closing of the transfer books for such meeting, or the record date fixed for such meeting by the Board of Directors, as the case may be, or standing registered in his name at the time of such meeting if neither a date for the closing of the transfer books nor a record date for such meeting has been fixed by the Board of Directors. The voting at all meetings of shareholders may be viva voce but any qualified voter may demand a share vote by written ballot, whereupon such share vote shall be taken by written ballot each of which shall state the name of the shareholder voting and the number of shares voted by him, and if such ballot be cast by proxy, it shall also state the name of such proxy.
SECTION 2.8. Proxies. Any shareholder entitled to vote or execute consents shall have the right to do so either in person or by one or more agents authorized by proxy. The appointment of a proxy shall be in writing and signed by the shareholder but shall require no other attestation and shall be filed with the Secretary of the Corporation at or prior to the meeting. If any shareholder appoints two or more persons to act as proxies and if the instrument does not otherwise provide, then a majority of such persons present at the meeting, or if only one shall be present, then that one shall have and may exercise all of the powers conferred by such instrument upon all of the persons so appointed; and if such proxies be equally divided as to the right and manner of voting in any particular case, the vote shall be divided among the proxies. Any person holding shares in a representative or fiduciary capacity which he may represent in person may represent the same by proxy and confer general or discretionary power upon such a proxy. The authority of a proxy if not coupled with an interest may be terminated at will, unless otherwise provided in the appointment, the proxys authority shall cease three (3) years after the appointment. The termination of a proxys authority by act of the shareholder shall, subject to the time limitation herein set forth, be ineffective until written notice of the termination has been given to the Secretary of the Corporation. Unless otherwise provided therein, an appointment filed with the Secretary shall have the effect of revoking all proxy appointments of prior date. A proxys authority shall not be revoked by the death or incapacity of the maker unless before the vote is cast or the authority is exercised written notice of such death or incapacity is given to the Corporation.
SECTION 2.9. Order of Business. The order of business at the annual meeting, and so far as practicable at all other meetings of the shareholders, shall be as follows:
(a) Calling meeting to order;
(b) Calling of roll and checking proxies;
(c) Proof of notice of meeting;
(d) Reading of any unapproved minutes;
(e) Reports of officers;
(f) Reports of committees;
(g) Election of directors;
3
(h) Unfinished business;
(i) New business; and
(j) Adjournment.
SECTION 2.10. Action Without Meeting. Any action which, under any provisions of the laws of the State of Oklahoma or under the provisions of the Certificate of Incorporation or under these Bylaws may be taken at a meeting of the shareholders, may be taken without a meeting, without prior notice and without a vote if a consent in writing be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take action at a meeting at which all shares entitled to vote thereon were present and voted. Such consent shall be filed with the Secretary of the Corporation and made a part of the corporate records. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those shareholders who have not consented in writing.
SECTION 2.11. Inspectors of Election. In advance of any meeting of shareholders, the Board of Directors may appoint Inspectors of Election to act at such meeting or any adjournment thereof. If Inspectors of Election be not so appointed, the Chairman of any such meeting may, and on the request of any shareholder, or his proxy shall, make such appointment at the meeting. The number of inspectors shall be either one or three. If appointed at a meeting on the request of one or more shareholders or proxies, the majority of shares present shall determine whether one or three inspectors are to be appointed. In case any person appointed as inspector fails or refuses to act, the vacancy may be filled by appointment by the Board of Directors in advance of the meeting, or at the meeting by the Chairman. An inspector need not be a shareholder of the Corporation, but no person who is a candidate for office of the Corporation shall act as an inspector. The duties of such inspectors shall include: determining the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the authenticity, validity and effect of proxies; receiving votes, ballots or consents; hearing and determining all challenges and questions in any way arising in connection with the right to vote; counting and tabulating all votes or consents; determining the result; and such acts as may be proper to conduct the election or vote with fairness to all shareholders. The inspectors of the election shall perform their duties impartially in good faith, to the best of their ability, and as expeditiously as is practical. If there be three inspectors, the decision, act or certificate of a majority shall be effective in all respects as the decision, act, or certificate of all.
ARTICLE III
Board of Directors
SECTION 3.1. Powers. All corporate powers, except those which are conferred upon or reserved to the shareholders by the Certificate of Incorporation, these Bylaws and the laws of the State of Oklahoma, shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed and conducted by, the Board of Directors. Without prejudice to such general power, but subject to the same limitations, the Board of Directors shall have the following powers:
(a) To select and remove all officers, agents and employees of the Corporation, prescribe such powers and duties for them as may not be inconsistent with applicable law, with the Certificate of Incorporation or these Bylaws and fix their compensation and to confer upon any officer of the Corporation the power to appoint, remove and suspend subordinate officers and agents;
4
(b) To adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of such seal and of such certificates from time to time, as it may determine advisable;
(c) To authorize the issuance of shares of stock of the Corporation from time to time, upon such terms as may be in accordance with applicable law and to declare dividends from time to time in accordance with applicable law;
(d) To borrow money and incur indebtedness for the purposes of the Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor;
(e) To adopt such insurance, retirement and other benefits plans for directors, officers and agents of the Corporation and its subsidiaries as it may determine advisable; and
(f) To adopt regulations, not inconsistent with these Bylaws, for the management of the Corporations business and affairs.
SECTION 3.2. Number, Election and Term of Office. The Board of Directors of the Corporation shall consist of one or more members. The shareholders at any meeting shall determine the number which shall constitute the Board of Directors and the number so determined shall remain fixed until changed at a subsequent meeting of the shareholders. The directors shall be elected at each annual meeting of the shareholders; however, if any such annual meeting is not held or the directors are not elected thereat, the directors may be elected at any meeting of shareholders held for that purpose. Each director shall hold office until his successor is elected or until his earlier resignation or removal. A director need not be a shareholder of the Corporation.
SECTION 3.3. Vacancies. Vacancies in the Board of Directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until his successor is elected at an annual or a special meeting of the shareholders. A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any director, or if the authorized number of directors be increased, or if the shareholders fail, at any annual or special meeting of shareholders at which any director or directors are elected, to elect the full authorized number of directors to be voted for at that meeting. The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors.
SECTION 3.4. Resignations. Upon the resignation of a director, a majority of the remaining directors or the sole remaining director shall have the power to elect a successor to take office when the resignation is to become effective.
5
SECTION 3.5. Removal. The entire Board of Directors or any individual director may be removed from office, with or without cause, by the vote of shareholders holding a majority of the issued and outstanding shares entitled to vote at any annual or special meeting of shareholders. New directors to fill vacancies created by removal may be elected at the same meeting of shareholders.
SECTION 3.6. Annual Meetings. An annual meeting of the Board of Directors for the purpose of election of officers of the Corporation and the transaction of any other business coming before such meeting shall be held each year immediately following the adjournment of the annual meeting of the shareholders and no notice of such meeting to the elected directors shall be necessary in order to legally constitute the meeting, provided a majority of the Board shall be present. If a majority of the Board shall not be present, then such annual meeting may be held at such time as shall be fixed by the consent, in writing, of all of the directors. Other meetings of the Board may be held as shall from time to time be determined by the Board provided notice of the time, date and place of any such meeting is given to each director not less than two (2) days before such meeting.
SECTION 3.7. Regular Meetings. Regular meetings of the Board of Directors shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board of Directors and publicized among all directors. No notice of such regular meeting shall be required.
SECTION 3.8. Special Meetings. Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the Chief Executive Officer, the President or the Secretary or by any two directors by notice of the time, date and place thereof given to each director not less than two (2) days before such meeting. No business shall be considered at any special meeting other than the purposes mentioned in the notice given to each director of the meeting, except with the consent of all directors.
SECTION 3.9. Place of Meetings. Meetings of the Board of Directors shall be held at any place within or without the State of Oklahoma which has been designated from time to time by resolution adopted by the Board or by written consent of all members of the Board. In the absence of such designation, meetings shall be held at the principal office of the Corporation.
SECTION 3.10. Quorum and Required Vote; Adjourned Meetings. A majority of the directors shall constitute a quorum for the transaction of business at any meeting of the directors, and the acts of a majority of the directors present at a meeting at which a quorum is present shall be the acts of the Board of Directors except as may be otherwise specifically provided by statute, by the Certificate of Incorporation or by these Bylaws and except to adjourn as hereinafter provided. A quorum of the directors may adjourn any meeting of the directors to meet again at a stated day and hour; provided that in the absence of a quorum a majority of the directors present at any meeting of the directors, either regular or special, may adjourn to a later date but may not transact any business until a quorum has been secured. At any adjourned meeting at which a required number of directors shall be present, any business may be transacted which might have been transacted at the meeting as originally notified. Notice of the time and place of holding an adjourned meeting need not be given to absent directors if the time and place be fixed at the meeting adjourned.
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SECTION 3.11. Compensation. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement for expenses, as may be fixed by resolution adopted by the Board of Directors.
SECTION 3.12. Action without Meeting. Any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if all members of the Board consent thereto in writing. Such written Action by unanimous consent shall have the same effect as action taken at a meeting of the Board of Directors and shall be filed with the Secretary of the corporation and made a part of the minute of proceeding of the Board of Directors.
SECTION 3.13. Telephonic Meetings. Members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this section shall constitute presence in person at such meeting.
ARTICLE IV
Executive Committee
SECTION 4.1. Election. The Board of Directors may if it deems necessary, acting by resolution adopted by a majority of the number of directors, elect from their own members an Executive Committee composed of two or more voting members.
SECTION 4.2. Duties. The Executive Committee shall have and exercise all of the authority of the Board of Directors in the management of the Corporation in the interval between meetings of the Board of Directors, subject to the control and direction of the Board of Directors, except to the extent, if any, such authority shall be limited by the resolution appointing the Executive Committee and except the power to declare dividends and to adopt, amend or repeal these Bylaws and where action of the Board of Directors is required by law. It shall keep regular minutes of its proceedings which shall be reported to the directors at their next meeting.
SECTION 4.3. Meetings. The Executive Committee shall meet at such times as may be fixed by the Committee or on the call of the Chief Executive Officer or the President. Notice of the time and place of the meeting shall be given to each member of the Committee in the manner provided for the giving of notice to members of the Board of Directors of the time and place of special meetings of the Board of Directors or in such other manner as the Executive Committee by resolution may prescribe.
SECTION 4.4. Quorum and Voting. A majority of the members of the Executive Committee shall constitute a quorum for the transaction of business. The acts of the majority of the members of the Executive Committee present at a meeting at which a quorum is present shall be the acts of the Executive Committee. At all meetings of the Executive Committee, each member present shall have one (1) vote which shall be cast by him in person.
SECTION 4.5. Waiver of Notice. Any actions taken or approved at any meeting of the Executive Committee, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the members not present signs a written waiver of notice or a consent to holding such meeting or an approval of the minutes thereof.
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SECTION 4.6. Removal. The entire Executive Committee or any individual member thereof may be removed from the Committee with or without cause by a vote of a majority of the directors.
SECTION 4.7. Vacancies. The Board of Directors shall fill all vacancies in the Executive Committee which may occur from time to time.
SECTION 4.8. Action Without Meeting; Telephonic Meeting. Action may be taken by the Executive Committee in the manner allowed by the Board of Directors pursuant to Sections 3.12 and 3.13.
ARTICLE V
Committees of Directors
SECTION 5.1. Designation. The Board of Directors may, by resolution passed by a majority of the directors, designate one or more committees, in addition to the Executive Committee authorized in Article IV hereof, each committee to consist of two or more of the directors of the Corporation, which to the extent provided in the resolution, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation, except where action of the Board of Directors is required by law, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.
SECTION 5.2. Procedural Rules. Each committee shall comply with the same procedural rules set forth in Section 4.3 through 4.8, both inclusive, that are applicable to the Executive Committee.
ARTICLE VI
Officers
SECTION 6.1. Election and Term of Office. The officers of the Corporation shall be elected annually by the Board of Directors, and each such officer shall hold their office until their successor shall have been elected and shall qualify, or until their earlier death, resignation or removal. One person may hold more than one office except that the office of President and Secretary may not be held by the same person. Officers may be, but need not be, Directors or Shareholders of the Corporation. Any officer may resign at any time upon written notice to the Corporation or may be removed, with or without cause, by the affirmative vote of a majority of the Board of Directors.
SECTION 6.2. Chairman of the Board and Vice Chairman. The Chairman of the Board of Directors, if any, shall preside at all meetings of the Board of Directors. He may sign, with the Secretary or any other proper officer of the Corporation, thereunto authorized by the Board of
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Directors, and deliver on behalf of the Corporation any deeds, mortgages, bonds, contracts, powers of attorney, and other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by this Agreement to some other officer or agent of the Corporation or shall be required by law to be otherwise signed or executed, and he shall perform such other duties as may be prescribed by the Board of Directors from time to time. The Vice Chairman, if any, shall, at the request of the Chairman or in their absence or disability, perform the duties and exercise the powers of the Chairman, and shall perform such other duties as the Board of Directors shall prescribe.
SECTION 6.3. Chief Executive Officer. Subject to the provisions of the Certificate of Incorporation, these Bylaws and the laws of the State of Oklahoma, the management and control of the Corporation shall be vested in the Chief Executive Officer, if any. The Chief Executive Officer shall have general charge and active management of the business, properties and operations of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall preside at all meetings of the Shareholders and, in the absence of the Chairman of the Board, at all meetings of the Board of Directors. The Chief Executive Officer shall hold the title and powers of the Chairman of the Board and President in the absence of the Board of Directors designating such titles and powers to another person.
The acts of the Chief Executive Officer shall be conclusively deemed to be the acts of the Corporation, and all decisions of the Corporation shall be made by the Chief Executive Officer except as expressly stated in this Agreement, or reserved by the Board of Directors or delegated to another officer. In the absence of a Board of Directors, the Chief Executive Officer shall exercise all powers that would otherwise be delegated to, and exercised by, the Board of Directors. All determinations, decisions, acts and omissions of the Chief Executive Officer required or permitted hereunder shall be in the sole and absolute discretion of the Chief Executive Officer, subject to the limitations contained herein and subject to the exercise of good faith and the care of an ordinarily prudent person in a like position under similar circumstances and in a manner the Chief Executive Officer reasonably believes to be in the best interests of the Corporation. The Chief Executive Officer shall be reimbursed for all reasonable expenses incurred in managing the Corporation and shall be entitled to compensation in an amount to be determined from time to time by the Board of Directors.
The Chief Executive Officer shall possess those powers as set forth in these Bylaws and as may be expressly assigned to him by the Board of Directors. Without limiting the generality of the foregoing, the Chief Executive Officer shall have the following rights and powers:
(a) to purchase for cash or on credit, lease, exchange or otherwise acquire, to manage, operate, maintain and improve, and to sell, lease, exchange or otherwise dispose of any and all Assets necessary or advisable for the conduct of the business and affairs of the Corporation;
(b) to sell, convey, mortgage, pledge, lease, exchange and otherwise dispose of Assets;
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(c) to execute and deliver any and all contracts, agreements, documents guaranties, deeds, mortgages, bonds and other instruments, and any and all extensions, modifications, amendments and replacements thereof;
(d) to incur liabilities, borrow money, issue of notes, bonds and other obligations; and secure any of its obligations by mortgage or pledge any of its Assets or income, provided, however, the indebtedness incurred shall not be more than two (2) times the total equity of the Corporation as of the preceding years end;
(e) to lend money, invest and reinvest the Corporations funds, and receive and hold property as security for repayment, including, without limitation, the loaning of money to and otherwise helping Shareholders, officers, employees and agents;
(f) to open bank accounts in the name of the Corporation;
(g) to conduct the Corporations business, establish Corporation offices, and exercise the powers of the Corporation within or without the State;
(h) to hire and discharge employees of the Corporation, define their duties, and establish their compensation;
(i) to retain or otherwise secure the services of employees and accountants, attorneys and other independent contractors;
(j) to establish pension plans, pension trusts, profit sharing plans, and benefit and incentive plans for all or any of the current or former Shareholders, employees and agents of the Corporation;
(k) to make donations to the public welfare for religious, charitable, scientific, literary or educational purposes, or any other act that furthers the business and affairs of the Corporation;
(l) to purchase insurance for the life of any of its Shareholders or employees for the benefit of the Corporation;
(m) to participate in partnership agreements, joint ventures or other associations of any kind with any Person or Persons;
(n) to cause the Corporation to indemnify its Shareholders or any other Person;
(o) to institute, prosecute and defend any proceeding in the Corporations name;
(p) to pay or otherwise discharge any and all fees, expenses and other obligations of the Corporation in such order of priority as the Chief Executive Officer shall deem advisable; and
(q) to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of security holders, or with respect to any action of security holders, of any other
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company in which the Corporation may hold securities and shall have power to exercise any and all rights and powers which the Corporation may possess by reason of its ownership of securities in such other Corporation;
(r) to take any and all action as may be necessary or advisable to comply with all laws, ordinances, orders, rules, regulations and requirements applicable to Assets or the conduct of the business and affairs of the Corporation; and
(s) to delegate from time to time to the President any and all powers set forth above or elsewhere in this Agreement those powers that have been assigned to the Chief Executive Officer.
SECTION 6.4. President. The President, if any, shall perform, at the request of the Chief Executive Officer, such duties as may be assigned to him by the Chief Executive Officer, including those duties and powers of the Chief Executive Officer that may be delegated to him by the Chief Executive Officer. In the absence of a Chief Executive Officer, the President shall be the chief executive of the Corporation and shall exercise such of those powers of the Chief Executive Officer as are delegated to him by the Board of Directors.
SECTION 6.5. Chief Financial Officer. The Chief Financial Officer, if any, shall perform, at the request of the Chief Executive Officer, such duties as may from time to time be assigned by the Chief Executive Officer. At the discretion of the Board of Directors, one or more Chief Financial Officers may be designated as an Executive Chief Financial Officer or Senior Chief Financial Officer. The Chief Financial Officer shall have or provide for the custody of the funds or other property of the Corporation; whenever so required by the Board of Directors, shall render an account showing their transactions as Chief Financial Officer and the financial condition of the Corporation; and, in general, shall discharge such other duties as may from time to time be assigned to him by the Board of Directors or the Chief Executive Officer. Any Assistant Chief Financial Officer shall, at the request of the Chief Financial Officer or in their absence or disability, perform the duties and exercise the powers of the Chief Financial Officer and shall perform such other duties as the Board of Directors or the Chief Executive Officer shall prescribe.
SECTION 6.6. Vice Presidents. The Vice President, if any, shall perform, at the request of the Chief Executive Officer or in his absence or disability, perform the duties and exercise the powers of the President and such other duties as may from time to time be assigned by the Board of Directors or by the Chief Executive Officer. At the discretion of the Board of Directors, one or more Vice Presidents may be designated as an Executive Vice President or Senior Vice President.
SECTION 6.7. Secretary and Assistant Secretaries. The Secretary, if any, shall attend all meetings of the Shareholders and of the Board of Directors and shall record the proceedings of the Shareholders and of the Directors and of committees of the Board in a book or books to be kept for that purpose; see that notices are given and records and reports properly kept and filed by the Corporation as required by law; be the custodian of the seal of the Corporation and see that it is affixed to all documents to be executed on behalf of the Corporation under its seal; and, in general, perform all duties incident to the office of Secretary, and such other duties as may
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from time to time be assigned to him by the Board of Directors or the Chief Executive Officer. Any Assistant Secretary shall, at the request of the Secretary or in their absence or disability, perform the duties and exercise the powers of the Secretary and shall perform such other duties as the Board of Directors or the Chief Executive Officer shall prescribe.
SECTION 6.8. Officers Bonds. No officer of the Corporation need provide a bond to guarantee the faithful discharge of their duties unless the Board of Directors shall by resolution so require a bond in which event such officer shall give the Corporation a bond (which shall be renewed if and as required) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of their office.
SECTION 6.9. Compensation. The compensation of the officers of the Corporation and employment contracts, if any, for such officers shall be approved by the Board of Directors. Officer employment contracts may fix a term of employment and shall be valid and binding upon the Corporation in accordance with the terms thereof; provided, however, this provision shall not limit or restrict in any way the right of the Chief Executive Officer at any time in his discretion (which right is hereby expressly reserved) to remove from office, discharge or terminate the employment or otherwise dispense with the services of any such officer prior to the expiration of the term of employment under any such contract, provided only that the Corporation shall not thereby be relieved of any continuing liability for salary or other compensation provided for in such contract.
SECTION 6.10. Loans and Guaranties to Officers and Employees. The Corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer, director or employee of the Corporation or any of its subsidiaries or divisions. Any such loan, guarantee or other assistance may be with or without interest, and may be unsecured or secured by Shares in the Corporation and/or other assets. In order for the Corporation to grant any of the above benefits, its Board of Directors must conclude that such transaction may reasonably be expected to benefit the Corporation. The majority vote of the Board of Directors shall then be required before the Corporation can grant any such loan, guarantee or assistance.
SECTION 6.11. Duties of Officers. The officers of the Corporation each shall use their best efforts to conduct, or cause to be conducted, the ordinary and usual business and affairs of the Corporation in accordance with and as limited by this Agreement, and shall be responsible for the performance of their assigned duties. Each officer shall devote such time to the Corporation and its business as shall be reasonably required for its welfare and success.
SECTION 6.12. Checks. Checks shall be signed by the Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, or an employee designated by such officer.
ARTICLE VII
Shares of Stock
SECTION 7.1. Certificates of Stock. A certificate or certificates for shares of the capital stock of the Corporation shall be issued to each shareholder when any such shares are fully paid,
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showing the number of the shares of the Corporation standing on the books in his name. The form of such certificate shall be determined by the Board of Directors. All such certificates shall be signed by the Chief Executive Officer, the President or a Vice President and the Secretary or an Assistant Secretary, or be authenticated by facsimiles of the signatures of the Chief Executive Officer, the President and Secretary or by a facsimile of the signature of the Chief Executive Officer, the President and the written signature of the Secretary or an Assistant Secretary. Every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk. Even though an officer who signed, or whose facsimile signature has been written, printed or stamped on, a certificate for shares shall have ceased by death, resignation or otherwise to be an officer of the Corporation before such certificate is delivered by the Corporation, such certificate shall be as valid as though signed by a duly elected, qualified and authorized officer, if it be countersigned by a transfer agent or transfer clerk. Such certificates shall also be numbered and sealed with the seal of the Corporation.
SECTION 7.2. Record of Shareholders. There shall be kept at the registered office of the Corporation in the State of Oklahoma a record containing the names and addresses of all shareholders of the Corporation, arranged in alphabetical order, the number and class of shares held by each and the dates when they respectively became the owners of record thereof; provided that the foregoing shall not be required if the Corporation shall keep at its registered office a statement containing the name and post office address, including street number, if any, of the custodian of such record. Duplicate lists may be kept in such other state or states as may, from time to time, be determined by the Board of Directors.
SECTION 7.3. Transfer Agents and Registrars. The Board of Directors may, in its discretion, appoint one or more banks or trust companies in such city or cities as the Board of Directors may deem advisable, from time to time, to act as Transfer Agents and Registrars of the shares of stock of the Corporation; and, upon such appointments being made, no certificate representing shares shall be valid until countersigned by one of such Transfer Agents and registered by one of such Registrars.
SECTION 7.4. Transfer of Shares. Transfers of stock of the Corporation shall be made on the books of the Corporation only upon authorization by the registered holder thereof or by his attorney lawfully constituted in writing and on surrender and cancellation of a certificate or certificates for a like number of shares of the same class properly endorsed or accompanied by a duly executed stock transfer power and payment of all taxes thereon, with such proof of authenticity of the signatures as the Corporation or its transfer agents may reasonably require.
SECTION 7.5. Shareholders Record Date and Closing Stock Books. The Board of Directors may fix, in advance, a time as a record date for the determination of the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting not more than sixty (60) days prior to the date of the meeting or action nor less than ten (10) days prior to the date of the meeting or action. The Board of Directors may also fix, in advance, a time as a record date for the determination of shareholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion, or exchange of shares or for the purpose of any other lawful action which shall be not more than sixty (60) days prior to the date of the event for the purpose of which it is fixed.
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When a record date is so fixed, only shareholders of record on that date are entitled to notice of and to vote at the meeting or to receive a dividend, distribution, or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after the record date. In lieu of fixing a record date, the Board of Directors may close the books of the Corporation against any transfer of shares for a stated period but not to exceed in any case the maximum periods set forth above.
SECTION 7.6. Registered Shareholders. The Corporation shall be entitled to recognize the holder of record of any share or shares of stock as the exclusive owner thereof for all purposes, and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.
SECTION 7.7. Lost Certificates. No new certificate for shares shall be issued in lieu of an old one unless the latter is surrendered and cancelled at the same time; provided that if any certificate for shares is lost, stolen, mutilated or destroyed, the Board of Directors may authorize the issuance of a new certificate in lieu thereof, upon such terms and conditions, including indemnification of the Corporation reasonably satisfactory to it, as the Board of Directors shall determine.
SECTION 7.8. Treasury Shares. Treasury shares, or other shares not at the time issued and outstanding, shall not, directly or indirectly, be voted at any meeting of the shareholders, or counted in calculating the actual voting power of shareholders at any given time. Treasury shares shall not have dividend rights.
SECTION 7.9. Fractional Shares. Certificates of fractional shares of stock may be issued at the discretion of the Board of Directors. The registered ownership of any fractional share represented by such certificate or certificates shall entitle the holder thereof to receive dividends, participate in the corporate assets in the event of liquidation of the Corporation and to exercise voting rights in person or by proxy.
ARTICLE VIII
Execution of Instruments
SECTION 8.1. Contracts. The Board of Directors or any committee thereunto authorized may authorize any officer or officers, agent or agents, to enter into any contract or to execute and deliver in the name and on behalf of the Corporation any contract or other instrument, except certificates representing shares of stock of the Corporation, and such authority may be general or may be confined to specific instances.
SECTION 8.2. Deposits; Bank Accounts. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may from time to time designate or as may be designated by an officer or officers of the Corporation to whom such power of designation may from time to time be delegated by the Board of Directors. The Board of Directors may make such special rules and regulations with respect to such bank accounts, not
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inconsistent with the provisions of these Bylaws, as it may deem expedient. Unless otherwise provided by resolution of the Board of Directors, endorsements for deposit to the credit of the Corporation in any of its duly authorized depositories may be made by hand stamped legend in the name of the Corporation or by written endorsement by any officer without countersignature.
SECTION 8.3. Loans. No loans shall be contracted on behalf of the Corporation unless authorized by the Board of Directors, but when so authorized, unless a particular officer or agent is directed to negotiate the same, may be negotiated, up to the amount so authorized, by the Chief Executive Officer, the President or a Vice President or the Treasurer; and such officers are hereby severally authorized to execute and deliver in the name and on behalf of the Corporation notes or other evidences of indebtedness countersigned by the Chief Executive Officer, the President or a Vice President for the amount of such loans and to give security for the payment of any and all loans, advances and indebtedness by hypothecating, pledging or transferring any part or all of the property of the Corporation, real or personal, at any time owned by the Corporation.
SECTION 8.4. Sale or Transfer of Securities Held by the Corporation. Stock certificates, bonds or other securities at any time owned by the Corporation may be held on behalf of the Corporation or sold, transferred or otherwise disposed of pursuant to authorization by the Board of Directors, or of any committee thereunto duly authorized, and when so authorized to be sold, transferred or otherwise disposed of, may be transferred from the name of the Corporation by the signature of the Chief Executive Officer, the President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary.
SECTION 8.5. Execution of Proxies. The Chief Executive Officer, the President, or, in the absence or disability of both, a Vice President, may authorize from time to time the signature and issuance of proxies to vote upon shares of stock of other corporations standing in the name of the Corporation or authorize the execution of consents to action taken or to be taken by such other corporation. All such proxies and consents shall be signed in the name of the Corporation by the Chief Executive Officer, the President or a Vice-President and by the Secretary or an Assistant Secretary.
ARTICLE IX
Indemnification
SECTION 9.1. Indemnification: Actions Other Than by the Corporation. The Corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the Corporation, by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no
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reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner in which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
SECTION 9.2. Indemnification: Actions by the Corporation. The Corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys fees, actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.
SECTION 9.3. Right to Indemnification. To the extent that any present or former director, officer or employee or any person who is or was serving at the request of the Corporation as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise, or any agent of the Corporation or any person who is or was serving at the request of the Corporation as an agent of another corporation, partnership, joint venture, trust or other enterprise, has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 9.1 and 9.2 of this Article IX, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses, including attorneys fees, actually and reasonably incurred by him in connection therewith.
SECTION 9.4. Authorization of Indemnification. Any indemnification under Sections 9.1 and 9.2 of this Article IX, unless ordered by a court, shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 9.1 and 9.2 of this Article IX. Such determination shall be made: (a) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding; or (b) if such quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion; or (c) by the shareholders.
SECTION 9.5. Advance Indemnification. Expenses incurred by a director, officer, employee or agent in defending a civil or criminal action, suit or proceeding as authorized by the Board of Directors in the specific case may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of
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the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this Article IX.
SECTION 9.6. Non Exclusive Indemnification. The indemnification provided by this Article IX shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, contract, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
SECTION 9.7. Insurance. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article IX.
SECTION 9.8. Constituent Corporation. For the purposes of this Article IX, references to the Corporation shall include, in addition to the resulting corporation, any constituent corporation, including any constituent of a constituent, absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article IX with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.
SECTION 9.9. Definitions. For purposes of this Article IX, references to other enterprises shall include employee benefit plans; references to fines shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to serving at the request of the Corporation shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest in the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interests of the Corporation as referred to in this Article IX.
ARTICLE X
General Provisions
SECTION 10.1. Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors.
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SECTION 10.2. Seal. The corporate seal of the Corporation shall be circular in form and shall contain the name of the Corporation, the word OKLAHOMA and such other words or information as shall be determined by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.
SECTION 10.3. Dividends. The Board of Directors may, out of funds legally available therefor, from time to time at any regular or special meeting, declare, and the Corporation may pay, dividends on its outstanding shares of capital stock as and when it deems expedient. Such dividends may be made in cash, property or shares of the capital stock or other securities of the Corporation.
SECTION 10.4. Notice. Whenever any notice is required or permitted to be given under the provisions of any law, the Certificate of Incorporation or these Bylaws, it shall not be construed to require personal notice unless expressly so stated, but such notice may be given by depositing the same in the United States mail, postage prepaid, addressed to the person entitled thereto at his address as it appears on the records of the Corporation, and such notice shall be deemed to have been given on the day of such mailing. Notice shall be deemed to have been duly given on the date of service if served personally or by telex, telecopier, cable, telegram or similar communication. Shareholders not entitled to vote shall not be entitled to receive notice of any meetings except as otherwise provided by statute.
SECTION 10.5. Waiver of Notice. Whenever any notice whatever is required to be given under the provisions of any law or of the Certificate of Incorporation or of these Bylaws, a written waiver thereof, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the shareholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the Certificate of Incorporation.
SECTION 10.6. Conflicts of Interest. Except as may be otherwise provided by the laws of the State of Oklahoma or the Certificate of Incorporation, no contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of the directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or a committee thereof which authorizes the contract or transaction, or solely because his or their votes are accounted for such purpose; if: (a) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or such committee, and the Board of Directors or Executive Committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (b) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the shareholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the shareholders; or (c)
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the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the shareholders. Common or interested directors may be counted in determining the presence of quorum at a meeting of the Board of Directors, or a committee which authorizes the contract or transaction.
SECTION 10.7. Amendment. These Bylaws may be amended, altered, changed or repealed at any annual or special meeting of the shareholders, provided notice of the proposed amendment, alteration, change or repeal is contained in the notice of such meeting, by the affirmative vote of a majority of the shares issued and outstanding, and entitled to vote thereat. These Bylaws also may be amended, altered, changed or repealed at any annual or special meeting of the Board of Directors, provided notice of the proposed amendment, alteration, change or repeal is contained in the notice of such meeting, by the affirmative vote of the members of the Board of Directors. Notwithstanding the preceding sentence, the fact that such power to amend, alter, change or repeal has been conferred upon the Board of Directors, the Board of Directors shall not divest the shareholders of the power, nor limit their power to amend, alter, change or repeal these Bylaws.
APPROVED AND ADOPTED by Unanimous Consent to Action In Lieu of a Special Meeting of the Board of Directors this 01st day of July, 2013.
Directors:
/s/ Pierre Baliguet |
/s/ Kenneth O. Fitts | |||
Pierre Baliguet |
Kenneth O. Fitts | |||
/s/ Pascal Rouiller |
/s/ Arnaud Surpas | |||
Pascal Rouiller |
Arnaud Surpas | |||
/s/ Alain Tisserand |
/s/ George W. Wood | |||
Alain Tisserand |
George W. Wood |
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Exhibit 3.15
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
The corporation organized and existing under und by virtue of the General Corporation Law of the State of Delaware does hereby certify:
FIRST: That at a meeting of the Board of Directors of
CGGVeritas Services Holding (U.S.) Inc.
resolutions were duly adopted setting forth n proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable und calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered First: so that, as amended, said Article shall be and read as follows:
The name of the Corporation shall be CGGVeritas Holding (U.S.) Inc.
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of said corporation was duly called and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said corporation has caused this certificate to be signed this 31 day May, 2012.
By: |
/s/ Vince Thielen | |
Authorized Officer | ||
Title: |
Treasurer | |
Name: |
Vince Thielen |
Exhibit 3.16
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
CGGVeritas Holding (U.S.) Inc. (the Corporation), a corporation organized and existing under and by vit1ue of the General Corporation Law of the State of Delaware, hereby certifies as follows:
FIRST: That at a meeting of the Board of Directors of the Corporation, resolutions were duly adopted setting forth a proposed an1endment of the Certificate of Incorporation of said Corporation, declaring said amendment to be advisable and asking the stockholders of the Corporation for consideration and to be effective April 30, 2013. The resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this Corporation be amended, by changing the Article thereof numbered 1 so that, as amended, and effective upon the date such amendment is accepted and filed by the Delaware Department of State, said Article shall be read as follows:
The name of the Corporation is CGG Holding (U.S.) Inc. (the Corporation).
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the Stockholders of said Corporation was duly called and held in accordance with section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of stock as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed by this 30 day of April, 2013.
By: |
/s/ Vince Thielen | |
Vince Thielen | ||
SVP Finance & Services and Treasurer |
Exhibit 3.20
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
CGGVeritas Land (U.S.) Inc. (the Corporation), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, hereby certifies as follows:
FIRST: That at a meeting of the Board of Directors of the Corporation, resolutions were duly adopted setting forth a proposed amendment of the Restated Certificate of Incorporation (with amendments) of said Corporation to be effective April 30, 2013, declaring said amendment to be advisable and asking the stockholders of the Corporation for consideration. The resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Restated Certificate of Incorporation (with amendments) of this Corporation be amended by changing the Article thereof numbered 1 so that, as amended, and effective upon the date such amendment is accepted and filed by the Delaware Department of State, said Article shall be read as follows:
The name of the corporation is CGG Land (U.S.) Inc. (the Corporation).
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the Stockholders of said Corporation was duly called and held in accordance with section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of stock as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed this 30 day of April 2013.
By: |
/s/ Vince Thielen | |
Vince Thielen | ||
SVP Finance & Services and Treasurer |
Exhibit 3.24
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
CGGVeritas Services (U.S.) Inc. (the Corporation), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, hereby certifies as follows:
FIRST: That at a meeting of the Board of Directors of the Corporation, resolutions were duly adopted setting forth a proposed amendment of the Restated Certificate of Incorporation (with amendments) of said Corporation to be effective April 30, 2013 declaring said amendment to be advisable und asking the stockholders of the Corporation for consideration. The resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Restated Certificate of Incorporation (with amendments) of this Corporation be amended by changing the Article thereof numbered 1 so that, as amended, and effective upon the date such amendment is accepted and filed by the Delaware Department of State, said Article shall be read as-follows:
The name of the corporation is CGG Services (U.S.) Inc.
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the Stockholders of said Corporation was duly called and held in accordance with section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of stock as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed this 30 day of April 2013.
By: |
/s/ Vince Thielen | |
Vince Thielen | ||
SVP Finance & Services and Treasurer |
Exhibit 3.34
NOTE ABOUT TRANSLATION:
This document is an English translation of a document prepared in Dutch. In preparing this document, an attempt has been made to translate as literally as possible without jeopardising the overall continuity of the text. Inevitably, however, differences may occur in translation and if they do, the Dutch text will govern by law. The definitions in article 1.1 of this document are listed in the English alphabetical order which may differ from the Dutch alphabetical order.
In this translation, Dutch legal concepts are expressed in English terms and not in their original Dutch terms. The concepts concerned may not be identical to concepts described by the English terms as such terms may be understood under the laws of other jurisdictions.
DEED OF AMENDMENT OF ARTICLES OF ASSOCIATION
(CGGVeritas Holding B.V.)
(new name: CGG Holding B.V.)
This tenth day of October two thousand and thirteen, there appeared before me, Machiel Wouter Galjaart, deputising for Bartholomeus Johannes Kuck, civil law notary in Amsterdam, the Netherlands:
Esther van der Plaat, with office address at Zuidplein 180, 1077 XV Amsterdam, the Netherlands, born in Baarn, the Netherlands, on the first day of October nineteen hundred and eighty-two.
The person appearing declared the following:
The sole shareholder of CGGVeritas Holding B.V., a private company with limited liability incorporated under the laws of the Netherlands (besloten vennootschap met beperkte aansprakelijkheid), having its official seat (statutaire zetel) in Amsterdam, the Netherlands, and its office at Schiphol Boulevard 299, 1118 BH Schiphol Airport, the Netherlands, registered with the Dutch Trade Register of the Chambers of Commerce under number 34314931 (the Company), resolved on the ninth day of October two thousand and thirteen to amend and completely readopt the articles of association of the Company, as well as to authorise the person appearing to have this deed executed. The adoption of such resolutions is evidenced by a copy of a written shareholders resolution attached to this deed (Annex).
The articles of association of the Company were last partially amended by a deed, executed on the fifteenth day of May two thousand and twelve before a deputy of B.J. Kuck, civil law notary in Amsterdam, the Netherlands.
In implementing the aforementioned resolution, the articles of association of the Company are hereby amended and completely readopted as follows.
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Articles of association:
1 | Definitions and interpretation |
1.1 | In these articles of association, the following terms shall have the following meanings: |
Company means the company the internal organisation of which is governed by these articles of association.
Distributable Equity means the part of the Companys equity which exceeds the aggregate of the reserves which must be maintained pursuant to the laws of the Netherlands.
General Meeting means the body of the Company consisting of the person or persons to whom, as a Shareholder or otherwise, voting rights attached to Shares accrue, or (as the case may be) a meeting of such persons (or their representatives) and other Persons with Meeting Rights.
in writing means transmitted by letter, telecopier or e-mail, or any other electronic means of communication, provided the relevant message is legible and reproducible.
Management Board means the management board of the Company.
Managing Director means a member of the Management Board.
Meeting Rights means the right to attend the General Meeting and to speak therein, as referred to in Section 2:227, subsection 1, of the Dutch Civil Code.
Person with Meeting Rights means a person to whom the Meeting Rights accrue.
Share means a share in the capital of the Company.
Shareholder means a holder of one or more Shares.
Subsidiary means a subsidiary of the Company as referred to in Section 2:24a of the Dutch Civil Code.
1.2 | References to articles refer to articles that are part of these articles of association, except where expressly indicated otherwise. |
2 | Name and official seat |
2.1 | The Companys name is: |
CGG Holding B.V.
2.2 | The Company has its official seat in Amsterdam, the Netherlands. |
3 | Objects |
The objects of the Company are:
(a) | to incorporate, to participate in any way whatsoever in, to manage, to supervise businesses and companies; |
(b) | to finance businesses and companies; |
(c) | to borrow, to lend and to raise funds, including the issue of bonds, debt instruments or other securities or evidence of indebtedness as well as to enter into agreements in connection with aforementioned activities; |
(d) | to render advice and services to businesses and companies with which the Company forms a group and to third parties; |
(e) | to grant guarantees, to bind the Company and to pledge its assets for obligations of businesses and companies with which it forms a group and on behalf of third parties; |
(f) | to acquire, alienate, encumber, manage and exploit registered property and items of property in general; |
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(g) | to trade in currencies, securities and items of property in general; |
(h) | to exploit and trade in patents, trademarks, licenses, knowhow, copyrights, data base rights and other intellectual property rights; |
(i) | to perform any and all activities of an industrial, financial or commercial nature, |
and to do all that is connected therewith or may be conducive thereto, all to be interpreted in the broadest sense.
4 | Share capital |
4.1 | The share capital of the Company is divided into Shares with a nominal value of one hundred euro (EUR 100) each, numbered from 1 onward. |
4.2 | All Shares shall be registered. No share certificates shall be issued. |
4.3 | At least one Share shall be held by a person other than and other than for the account of the Company or one of its Subsidiaries. |
5 | Register |
5.1 | The Management Board shall keep a register in which the names and addresses of all Shareholders are recorded. The names and addresses of pledgees and usufructuaries of Shares shall also be entered in the register. |
5.2 | Section 2:194 of the Dutch Civil Code applies to the register. |
6 | Issuance of Shares |
6.1 | Shares may be issued pursuant to a resolution of the General Meeting. The General Meeting may transfer this authority to another body of the Company and may also revoke such transfer. |
6.2 | A resolution to issue Shares shall stipulate the issue price and the other conditions of issue. |
6.3 | The issuance of a Share shall furthermore require a notarial deed, to be executed for that purpose before a civil law notary registered in the Netherlands, to which deed those involved in the issuance shall be parties. |
6.4 | Upon issuance of Shares, each Shareholder shall have a right of pre-emption in proportion to the aggregate nominal value of his Shares, subject to the relevant limitations prescribed by the laws of the Netherlands and the provisions of article 6.5. |
6.5 | Prior to each single issuance of Shares, the right of pre-emption may be limited or excluded pursuant to a resolution of the body of the Company authorised to issue such Shares. |
6.6 | Rights of pre-emption may not be separately disposed of. |
6.7 | The nominal value of each Share must be paid upon subscription. It can be stipulated that the nominal value or part thereof will only have to be paid on the expiry of a certain period or after the Company has requested that such payment be made. |
6.8 | The Management Board shall be authorised to perform legal acts relating to non-cash contributions on Shares and other legal acts as referred to in Section 2:204 of the Dutch Civil Code, without prior approval of the General Meeting. |
7 | Own Shares; reduction of the issued capital |
7.1 | The Company and its Subsidiaries may acquire fully paid up Shares or depositary receipts thereof, with due observance of the limitations prescribed by the laws of the Netherlands. |
7.2 | The General Meeting may resolve to reduce the Companys issued capital in accordance with the relevant provisions prescribed by the laws of the Netherlands. A resolution to reduce the Companys issued capital with repayment will have no effect for as long as the Management Board has not granted its approval thereto. |
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8 | Transfer of Shares |
8.1 | The transfer of a Share shall require a notarial deed, to be executed for that purpose before a civil law notary registered in the Netherlands, to which deed those involved in the transfer shall be parties. |
8.2 | Unless the Company itself is party to the legal act, the rights attached to the Share can only be exercised after the Company has acknowledged said legal act or said deed has been served upon it, in accordance with the relevant provisions of the laws of the Netherlands. |
9 | Free transferability |
No restrictions shall apply to a transfer of Shares.
10 | Pledging of Shares and usufruct on Shares |
10.1 | The provisions of article 8 shall apply by analogy to the pledging of Shares and to the creation or transfer of a usufruct on Shares. |
10.2 | Upon the creation of a right of pledge on a Share or afterwards by written agreement between the Shareholder and the pledgee, the voting rights attached to such Share may be assigned to the pledgee, with due observance of the relevant provisions of the laws of the Netherlands. The provision of article 8.2 shall apply by analogy to a written agreement as referred to in the preceding full sentence. |
10.3 | Both the Shareholder without voting rights and the pledgee with voting rights shall have the Meeting Rights. The Meeting Rights may also be granted to the pledgee without voting rights, with due observance of the relevant provisions of the laws of the Netherlands. |
10.4 | Upon the creation or transfer of a usufruct on a Share, or afterwards, the voting rights attached to such Share may not be assigned to the usufructuary. |
11 | Depositary receipts for Shares |
The Meeting Rights shall not be attached to depositary receipts for Shares.
12 | Managing Directors |
12.1 | The Management Board shall consist of one or more Managing Directors. Both individuals and legal entities can be Managing Directors. |
12.2 | Managing Directors are appointed by the General Meeting. |
12.3 | A Managing Director may be suspended or removed by the General Meeting at any time. |
12.4 | Any suspension may be extended one or more times, but may not last longer than three months in the aggregate. If, at the end of that period, no decision has been taken on termination of the suspension or on removal, the suspension shall end. |
12.5 | The authority to establish remuneration and other conditions of employment for Managing Directors is vested in the General Meeting. |
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13 | Duties, working methods and decision-making process of the Management Board; conflict of interest |
13.1 | The Management Board shall be entrusted with the management of the Company. In performing their duties, the Managing Directors shall act in accordance with the interests of the Company and the business connected with it. |
13.2 | The Management Board may establish rules regarding its working methods and decision-making process. In this context, the Management Board may also determine the duties which a Managing Director shall be particularly responsible for. Such rules and allocation of duties shall be put in writing. The General Meeting may resolve that such rules and allocation of duties shall be subject to its approval. |
13.3 | Management Board resolutions may at all times be adopted in writing, provided the proposal concerned is submitted to all Managing Directors then in office in respect of whom no conflict of interest within the meaning of article 13.4 exists and none of them objects to this manner of adopting resolutions, evidenced by written statements from all relevant Managing Directors then in office. |
13.4 | A Managing Director shall not take part in the discussions and decision-making by the Management Board if he has a direct or indirect personal interest therein that conflicts with the interests of the Company or the business connected with it. If as a result no resolution can be adopted, the resolution shall be adopted by the General Meeting. |
13.5 | When determining how many votes are cast by Managing Directors or how many Managing Directors are present or represented, no account shall be taken of Managing Directors that are not allowed to take part in the discussions and decision-making by the Management Board pursuant to the laws of the Netherlands, these articles of association or written rules as referred to in article 13.2. |
14 | Representation |
14.1 | The Company shall be represented by the Management Board. Each Managing Director shall also be authorised to represent the Company. |
14.2 | The Management Board may appoint officers with general or limited power to represent the Company. Each officer shall be competent to represent the Company, subject to the restrictions imposed on him. The Management Board shall determine each officers title. |
15 | Approval of Management Board resolutions |
15.1 | The General Meeting may require Management Board resolutions to be subject to its approval. The Management Board shall be notified in writing of such resolutions, which shall be clearly specified. |
15.2 | The absence of approval by the General Meeting of a resolution as referred to in this article 15 shall not affect the authority of the Management Board or the Managing Directors to represent the Company. |
16 | Vacancy or inability to act |
If a seat on the Management Board is vacant or a Managing Director is unable to perform his duties, the remaining Managing Directors or Managing Director shall be temporarily entrusted with the management of the Company. If all seats on the Management Board are vacant or all Managing Directors or the sole Managing Director, as the case may be, are unable to perform their duties, one or more persons to be designated for that purpose by the General Meeting shall be temporarily entrusted with the management of the Company.
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17 | Financial year and annual accounts |
17.1 | The Companys financial year shall be the calendar year. |
17.2 | Annually, not later than five months after the end of the financial year, save where this period is extended by the General Meeting by not more than six months by reason of special circumstances, the Management Board shall prepare annual accounts, and shall deposit the same for inspection by the Shareholders and the other Persons with Meeting Rights at the Companys office. |
17.3 | Within the same period, the Management Board shall also deposit the annual report for inspection by the Shareholders and the other Persons with Meeting Rights, unless Section 2:396, subsection 7, or Section 2:403 of the Dutch Civil Code applies to the Company. |
17.4 | The annual accounts shall consist of a balance sheet, a profit and loss account and explanatory notes. |
17.5 | The annual accounts shall be signed by the Managing Directors. If the signature of one or more of them is missing, this shall be stated and reasons for this omission shall be given. |
17.6 | The Company may, and if the laws of the Netherlands so require shall, appoint an accountant to audit the annual accounts. Such appointment shall be made by the General Meeting. |
18 | Adoption of the annual accounts and release from liability |
18.1 | The General Meeting shall adopt the annual accounts. |
18.2 | At the General Meeting at which it is resolved to adopt the annual accounts, a proposal concerning release of the Managing Directors from liability for the management pursued, insofar as the exercise of their duties is reflected in the annual accounts or otherwise disclosed to the General Meeting prior to the adoption of the annual accounts, shall be brought up for discussion separately. |
18.3 | If all Shareholders are also Managing Directors, signing of the annual accounts by all Managing Directors shall also be considered as adoption of the annual accounts within the meaning of article 18.1, provided all other Persons with Meeting Rights have been given the opportunity to consider the prepared annual accounts and have consented to this way of adoption within the meaning of in article 26.1. In deviation of article 18.2 adoption in the way referred to in this article 18.3 shall result in a release of the Managing Directors from liability for the management pursued, insofar as the exercise of their duties is reflected in the annual accounts or otherwise disclosed to the General Meeting prior to the adoption of the annual accounts. |
19 | Profits and distributions |
19.1 | The General Meeting is authorised to allocate the profits as determined by the adoption of the annual accounts and to declare distributions. |
19.2 | A resolution to make a distribution on Shares will have no effect for as long as the Management Board has not granted its approval thereto. |
19.3 | Distributions on Shares may be made only up to an amount which does not exceed the amount of the Distributable Equity. |
19.4 | A claim of a Shareholder for payment of a distribution on Shares shall be barred after five years have elapsed. |
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19.5 | No distributions shall be made on Shares held by the Company in its own capital, unless these Shares have been pledged or a usufruct has been created in these Shares and the authority to collect distributions or the right to receive distributions respectively accrues to the pledgee or the usufructuary respectively. For the computation of distributions, the Shares on which no distributions shall be made pursuant to this article 19.5, shall not be taken into account. |
20 | General Meetings |
20.1 | During each financial year at least one General Meeting shall be held or at least one resolution shall be adopted in accordance with article 18.3 or article 26.1. |
20.2 | Other General Meetings shall be held as often as the Management Board deems necessary. |
20.3 | Shareholders and/or other Persons with Meeting Rights alone or jointly representing in the aggregate at least one-hundredth of the Companys issued capital may request the Management Board in writing to convene a General Meeting, stating specifically the business to be discussed. If the Management Board has not given proper notice of a General Meeting within two weeks following receipt of such request such that the meeting can be held within four weeks after receipt of the request, the applicants shall be authorised to convene a meeting themselves, provided that no important interests of the Company dictate otherwise. |
21 | Notice, agenda and venue of meetings |
21.1 | Notice of General Meetings shall be given by the Management Board, without prejudice to the provisions of article 20.3. |
21.2 | Notice of the meeting shall be given no later than on the eighth day prior to the day of the meeting. |
21.3 | The notice convening the meeting shall specify the business to be discussed. Other business not specified in such notice may be announced at a later date, with due observance of the term referred to in article 21.2. |
21.4 | Items, for which a written request has been filed to discuss them, by one or more Shareholders and/or other Persons with Meeting Rights, alone or jointly representing at least one-hundredth of the Companys issued capital, shall be included in the notice or announced in the same manner, provided that the Company received the request no later than on the thirtieth day before the date of the meeting and provided that no important interests of the Company dictate otherwise. |
21.5 | The notice convening the meeting shall be sent to the addresses of the Shareholders and the other Persons with Meeting Rights shown in the register referred to in article 5. With the consent of a Shareholder or an other Person with Meeting Rights, notice of the meeting may also be given by a legible and reproducible message sent through electronic means of communication to the address provided for the purposes hereof by the Shareholder or the other Person with Meeting Rights to the Company. |
21.6 | General Meetings are held in the municipality in which, according to these articles of association, the Company has its official seat, as well as at Schiphol |
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airport (municipality of Haarlemmermeer, the Netherlands), The Hague, the Netherlands, Rotterdam, the Netherlands, and Utrecht, the Netherlands. General Meetings may also be held elsewhere, provided that all Persons with Meeting Rights have consented to the place of the meeting and the Managing Directors have been given the opportunity to give advice prior to the decision-making. |
22 | Admittance, Meeting Rights and voting rights |
22.1 | The Meeting Rights accrue to each Shareholder and each other Person with Meeting Rights. Each Shareholder and each pledgee to whom the voting rights accrue shall be entitled to exercise the voting rights in the General Meeting. Shareholders and other Persons with Meeting Rights may be represented in a meeting by a proxy authorised in writing. |
22.2 | The Management Board may determine that the Meeting Rights and the voting rights may be exercised by electronic means of communication, either in person or by a proxy authorised in writing. In order to do so, a Person with Meeting Rights, or his proxy authorised in writing, must, through the electronic means of communication, be identifiable, be able to directly observe the proceedings at the meeting, be able to participate in the discussions and, if the voting rights accrue to him, be able to exercise the voting rights. The Management Board may attach conditions to the use of the electronic means of communication, which conditions shall be announced with the notice of the meeting. |
22.3 | At a meeting, each person present with voting rights, or his proxy authorised in writing, must sign the attendance list. The chairman of the meeting may decide that the attendance list must also be signed by other persons present at the meeting. The names of the persons who participate in the meeting pursuant to article 22.2 or who have cast their votes in the manner referred to in article 25.6 shall be added to the attendance list. |
22.4 | The Managing Directors shall have the right to cast an advisory vote in the General Meetings. |
22.5 | The chairman of the meeting shall decide on the admittance of other persons to the meeting. |
23 | Chairman and secretary of the meeting |
23.1 | The chairman of a General Meeting shall be appointed by the persons with voting rights present or represented at the meeting, by a simple majority of the votes cast. |
23.2 | The chairman of the meeting shall appoint a secretary for the meeting. |
24 | Minutes; recording of Shareholders resolutions |
24.1 | The secretary of a General Meeting shall keep minutes of the proceedings at the meeting. The minutes shall be adopted by the chairman and the secretary of the meeting and as evidence thereof shall be signed by them. |
24.2 | The Management Board shall keep record of all resolutions adopted by the General Meeting. If the Management Board is not represented at a meeting, the chairman of the meeting shall ensure that the Management Board is provided with a transcript of the resolutions adopted, as soon as possible after the meeting. The records shall be deposited at the Companys office for inspection by the Shareholders and the other Persons with Meeting Rights. On application, each of them shall be provided with a copy of or an extract from the records, at not more than cost price. |
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25 | Adoption of resolutions in a meeting |
25.1 | Each Share confers the right to cast one vote. |
25.2 | In the General Meeting, no voting rights may be exercised for Shares held by the Company or a Subsidiary, nor for Shares for which the Company or a Subsidiary holds the depositary receipts. However, pledgees of Shares owned by the Company or a Subsidiary are not excluded from exercising voting rights if the right of pledge was created before the Share was owned by the Company or such Subsidiary. The Company or a Subsidiary may not exercise voting rights for a Share in which it holds a right of pledge or a usufruct. |
25.3 | To the extent that the laws of the Netherlands or these articles of association do not provide otherwise, all resolutions of the General Meeting shall be adopted by a simple majority of the votes cast, without a quorum being required. |
25.4 | If there is a tie in voting, the proposal shall be deemed to have been rejected. |
25.5 | If the formalities for convening and holding of General Meetings, as prescribed by the laws of the Netherlands or these articles of association, have not been complied with, valid resolutions of the General Meeting may only be adopted in a meeting, if all Persons with Meeting Rights have consented to the decision-making taking place and the Managing Directors have been given the opportunity to give advice prior to the decision-making. |
25.6 | The Management Board may determine that votes cast by electronic means of communication prior to the General Meeting shall be treated equally to votes cast during the meeting. The Management Board shall determine the period of time during which votes may be cast in the manner provided in the preceding full sentence; this period of time may not commence any earlier than on the thirtieth day before the date of the meeting. |
26 | Adoption of resolutions without holding a meeting |
26.1 | Shareholders may adopt resolutions of the General Meeting other than in a meeting, provided that all Persons with Meeting Rights have consented to this manner to adopt a resolution. In case of adoption of resolutions other than in a meeting, the votes shall be cast in writing. The requirement that votes must be cast in writing shall have been met if the resolutions have been put in writing specifying the way in which each Shareholder has cast his vote. The Managing Directors shall be given the opportunity to give advice prior to the decision-making. |
26.2 | Each Shareholder must ensure that the Management Board is informed of the resolutions thus adopted as soon as possible in writing. The Management Board shall keep record of the resolutions adopted and it shall add such records to those referred to in article 24.2. |
27 | Amendment of the articles of association |
27.1 | The General Meeting may resolve to amend these articles of association. |
27.2 | A resolution to amend these articles of association as a result of which the voting rights will be amended can only be adopted by unanimous vote in a meeting where the entire issued capital of the Company is represented. |
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27.3 | A resolution to amend these articles of association as a result of which a place outside the Netherlands will be designated as place where General Meetings will be held, can only be adopted by unanimous vote in a meeting where the entire issued capital of the Company is represented and provided that all Persons with Meeting Rights have consented to the amendment of the articles of association. |
27.4 | When a proposal to amend these articles of association is to be made to the General Meeting, the notice convening the General Meeting must state so and a copy of the proposal, including the verbatim text thereof, shall be deposited and kept available at the Companys office for inspection by the Shareholders and the other Persons with Meeting Rights, until the conclusion of the meeting. |
28 | Dissolution and liquidation |
28.1 | The Company may be dissolved pursuant to a resolution to that effect by the General Meeting. When a proposal to dissolve the Company is to be made to the General Meeting, this must be stated in the notice convening the General Meeting. |
28.2 | If the Company is dissolved pursuant to a resolution of the General Meeting, the Managing Directors shall become liquidators of the dissolved Companys assets, unless the General Meeting resolves to appoint one or more other persons as liquidator. |
28.3 | During liquidation, the provisions of these articles of association shall remain in force to the extent possible. |
28.4 | The balance remaining after payment of the debts of the dissolved Company shall be transferred to the Shareholders in proportion to the aggregate nominal value of the Shares held by each. |
28.5 | After the end of the liquidation, the books, records and other data carriers of the dissolved Company shall remain in the custody of the person designated for that purpose by the General Meeting, and in the absence thereof the person designated for that purpose by the liquidators, for a period as prescribed by the laws of the Netherlands. |
28.6 | In addition, the liquidation shall be subject to the relevant provisions of Book 2, Title 1, of the Dutch Civil Code. |
Close
The person appearing is known to me, civil law notary.
This deed was executed in Amsterdam, the Netherlands, on the date first above written. Before reading out, a concise summary and an explanation of the contents of this deed were given to the person appearing. The person appearing then declared that she had taken note of and agreed to the contents of this deed and did not want the complete deed to be read to her. Thereupon, after limited reading, this deed was signed by the person appearing and by me, civil law notary.
10
Exhibit 3.35
NOTE ABOUT TRANSLATION:
This document is an English translation of a document prepared in Dutch. In preparing this document, an attempt has been made to translate as literally as possible without jeopardising the overall continuity of the text. Inevitably, however, differences may occur in translation and if they do, the Dutch text will govern by law. The definitions in article 1.1 of this document are listed in the English alphabetical order which may differ from the Dutch alphabetical order.
In this translation, Dutch legal concepts are expressed in English terms and not in their original Dutch terms. The concepts concerned may not be identical to concepts described by the English terms as such terms may be understood under the laws of other jurisdictions.
DEED OF AMENDMENT OF ARTICLES OF ASSOCIATION
(CGGVeritas Marine B.V.)
(new name: CGG Marine B.V.)
This tenth day of October two thousand and thirteen, there appeared before me, Machiel Wouter Galjaart, deputising for Bartholomeus Johannes Kuck, civil law notary in Amsterdam, the Netherlands:
Esther van der Plaat, with office address at Zuidplein 180, 1077 XV Amsterdam, the Netherlands, born in Baarn, the Netherlands, on the first day of October nineteen hundred and eighty-two.
The person appearing declared the following:
The sole shareholder of CGGVeritas Marine B.V., a private company with limited liability incorporated under the laws of the Netherlands (besloten vennootschap met beperkte aansprakelijkheid), having its official seat (statutaire zetel) in Amsterdam, the Netherlands, and its office at Schiphol Boulevard 299, 1118 BH Schiphol Airport, the Netherlands, registered with the Dutch Trade Register of the Chambers of Commerce under number 34349332 (the Company), resolved on the ninth day of October two thousand and thirteen to amend and completely readopt the articles of association of the Company, as well as to authorise the person appearing to have this deed executed. The adoption of such resolutions is evidenced by a copy of a written shareholders resolution attached to this deed (Annex).
The articles of association of the Company were last partially amended by a deed, executed on the first day of December two thousand and eleven before B.J. Kuck, civil law notary in Amsterdam, the Netherlands.
In implementing the aforementioned resolution, the articles of association of the Company are hereby amended and completely readopted as follows.
1
Articles of association:
1 | Definitions and interpretation |
1.1 | In these articles of association, the following terms shall have the following meanings: |
Company means the company the internal organisation of which is governed by these articles of association.
Distributable Equity means the part of the Companys equity which exceeds the aggregate of the reserves which must be maintained pursuant to the laws of the Netherlands.
General Meeting means the body of the Company consisting of the person or persons to whom, as a Shareholder or otherwise, voting rights attached to Shares accrue, or (as the case may be) a meeting of such persons (or their representatives) and other Persons with Meeting Rights.
in writing means transmitted by letter, telecopier or e-mail, or any other electronic means of communication, provided the relevant message is legible and reproducible.
Management Board means the management board of the Company.
Managing Director means a member of the Management Board.
Meeting Rights means the right to attend the General Meeting and to speak therein, as referred to in Section 2:227, subsection 1, of the Dutch Civil Code.
Person with Meeting Rights means a person to whom the Meeting Rights accrue.
Share means a share in the capital of the Company.
Shareholder means a holder of one or more Shares.
Subsidiary means a subsidiary of the Company as referred to in Section 2:24a of the Dutch Civil Code.
1.2 | References to articles refer to articles that are part of these articles of association, except where expressly indicated otherwise. |
2 | Name and official seat |
2.1 | The Companys name is: |
CGG Marine B.V.
2.2 | The Company has its official seat in Amsterdam, the Netherlands. |
3 | Objects |
The objects of the Company are:
(a) | to incorporate, to participate in any way whatsoever in, to manage, to supervise businesses and companies; |
(b) | to finance businesses and companies; |
(c) | to borrow, to lend and to raise funds, including the issue of bonds, debt instruments or other securities or evidence of indebtedness as well as to enter into agreements in connection with aforementioned activities; |
(d) | to render advice and services to businesses and companies with which the Company forms a group and to third parties; |
(e) | to grant guarantees, to bind the Company and to pledge its assets for obligations of businesses and companies with which it forms a group and on behalf of third parties; |
(f) | to acquire, alienate, encumber, manage and exploit registered property and items of property in general; |
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(g) | to trade in currencies, securities and items of property in general; |
(h) | to exploit and trade in patents, trademarks, licenses, knowhow, copyrights, data base rights and other intellectual property rights; |
(i) | to perform any and all activities of an industrial, financial or commercial nature, |
and to do all that is connected therewith or may be conducive thereto, all to be interpreted in the broadest sense.
4 | Share capital |
4.1 | The share capital of the Company is divided into Shares with a nominal value of one hundred euro (EUR 100) each, numbered from 1 onward. |
4.2 | All Shares shall be registered. No share certificates shall be issued. |
4.3 | At least one Share shall be held by a person other than and other than for the account of the Company or one of its Subsidiaries. |
5 | Register |
5.1 | The Management Board shall keep a register in which the names and addresses of all Shareholders are recorded. The names and addresses of pledgees and usufructuaries of Shares shall also be entered in the register. |
5.2 | Section 2:194 of the Dutch Civil Code applies to the register. |
6 | Issuance of Shares |
6.1 | Shares may be issued pursuant to a resolution of the General Meeting. The General Meeting may transfer this authority to another body of the Company and may also revoke such transfer. |
6.2 | A resolution to issue Shares shall stipulate the issue price and the other conditions of issue. |
6.3 | The issuance of a Share shall furthermore require a notarial deed, to be executed for that purpose before a civil law notary registered in the Netherlands, to which deed those involved in the issuance shall be parties. |
6.4 | Upon issuance of Shares, each Shareholder shall have a right of pre-emption in proportion to the aggregate nominal value of his Shares, subject to the relevant limitations prescribed by the laws of the Netherlands and the provisions of article 6.5. |
6.5 | Prior to each single issuance of Shares, the right of pre-emption may be limited or excluded pursuant to a resolution of the body of the Company authorised to issue such Shares. |
6.6 | Rights of pre-emption may not be separately disposed of. |
6.7 | The nominal value of each Share must be paid upon subscription. It can be stipulated that the nominal value or part thereof will only have to be paid on the expiry of a certain period or after the Company has requested that such payment be made. |
6.8 | The Management Board shall be authorised to perform legal acts relating to non-cash contributions on Shares and other legal acts as referred to in Section 2:204 of the Dutch Civil Code, without prior approval of the General Meeting. |
7 | Own Shares; reduction of the issued capital |
7.1 | The Company and its Subsidiaries may acquire fully paid up Shares or depositary receipts thereof, with due observance of the limitations prescribed by the laws of the Netherlands. |
7.2 | The General Meeting may resolve to reduce the Companys issued capital in accordance with the relevant provisions prescribed by the laws of the Netherlands. A resolution to reduce the Companys issued capital with repayment will have no effect for as long as the Management Board has not granted its approval thereto. |
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8 | Transfer of Shares |
8.1 | The transfer of a Share shall require a notarial deed, to be executed for that purpose before a civil law notary registered in the Netherlands, to which deed those involved in the transfer shall be parties. |
8.2 | Unless the Company itself is party to the legal act, the rights attached to the Share can only be exercised after the Company has acknowledged said legal act or said deed has been served upon it, in accordance with the relevant provisions of the laws of the Netherlands. |
9 | Free transferability |
No restrictions shall apply to a transfer of Shares.
10 | Pledging of Shares and usufruct on Shares |
10.1 | The provisions of article 8 shall apply by analogy to the pledging of Shares and to the creation or transfer of a usufruct on Shares. |
10.2 | Upon the creation of a right of pledge on a Share or afterwards by written agreement between the Shareholder and the pledgee, the voting rights attached to such Share may be assigned to the pledgee, with due observance of the relevant provisions of the laws of the Netherlands. The provision of article 8.2 shall apply by analogy to a written agreement as referred to in the preceding full sentence. |
10.3 | Both the Shareholder without voting rights and the pledgee with voting rights shall have the Meeting Rights. The Meeting Rights may also be granted to the pledgee without voting rights, with due observance of the relevant provisions of the laws of the Netherlands. |
10.4 | Upon the creation or transfer of a usufruct on a Share, or afterwards, the voting rights attached to such Share may not be assigned to the usufructuary. |
11 | Depositary receipts for Shares |
The Meeting Rights shall not be attached to depositary receipts for Shares.
12 | Managing Directors |
12.1 | The Management Board shall consist of one or more Managing Directors. Both individuals and legal entities can be Managing Directors. |
12.2 | Managing Directors are appointed by the General Meeting. |
12.3 | A Managing Director may be suspended or removed by the General Meeting at any time. |
12.4 | Any suspension may be extended one or more times, but may not last longer than three months in the aggregate. If, at the end of that period, no decision has been taken on termination of the suspension or on removal, the suspension shall end. |
12.5 | The authority to establish remuneration and other conditions of employment for Managing Directors is vested in the General Meeting. |
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13 | Duties, working methods and decision-making process of the Management Board; conflict of interest |
13.1 | The Management Board shall be entrusted with the management of the Company. In performing their duties, the Managing Directors shall act in accordance with the interests of the Company and the business connected with it. |
13.2 | The Management Board may establish rules regarding its working methods and decision-making process. In this context, the Management Board may also determine the duties which a Managing Director shall be particularly responsible for. Such rules and allocation of duties shall be put in writing. The General Meeting may resolve that such rules and allocation of duties shall be subject to its approval. |
13.3 | Management Board resolutions may at all times be adopted in writing, provided the proposal concerned is submitted to all Managing Directors then in office in respect of whom no conflict of interest within the meaning of article 13.4 exists and none of them objects to this manner of adopting resolutions, evidenced by written statements from all relevant Managing Directors then in office. |
13.4 | A Managing Director shall not take part in the discussions and decision-making by the Management Board if he has a direct or indirect personal interest therein that conflicts with the interests of the Company or the business connected with it. If as a result no resolution can be adopted, the resolution shall be adopted by the General Meeting. |
13.5 | When determining how many votes are cast by Managing Directors or how many Managing Directors are present or represented, no account shall be taken of Managing Directors that are not allowed to take part in the discussions and decision-making by the Management Board pursuant to the laws of the Netherlands, these articles of association or written rules as referred to in article 13.2. |
14 | Representation |
14.1 | The Company shall be represented by the Management Board. Each Managing Director shall also be authorised to represent the Company. |
14.2 | The Management Board may appoint officers with general or limited power to represent the Company. Each officer shall be competent to represent the Company, subject to the restrictions imposed on him. The Management Board shall determine each officers title. |
15 | Approval of Management Board resolutions |
15.1 | The General Meeting may require Management Board resolutions to be subject to its approval. The Management Board shall be notified in writing of such resolutions, which shall be clearly specified. |
15.2 | The absence of approval by the General Meeting of a resolution as referred to in this article 15 shall not affect the authority of the Management Board or the Managing Directors to represent the Company. |
16 | Vacancy or inability to act |
If a seat on the Management Board is vacant or a Managing Director is unable to perform his duties, the remaining Managing Directors or Managing Director shall be temporarily entrusted with the management of the Company. If all seats on the Management Board are vacant or all Managing Directors or the sole Managing Director, as the case may be, are unable to perform their duties, one or more persons to be designated for that purpose by the General Meeting shall be temporarily entrusted with the management of the Company.
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17 | Financial year and annual accounts |
17.1 | The Companys financial year shall be the calendar year. |
17.2 | Annually, not later than five months after the end of the financial year, save where this period is extended by the General Meeting by not more than six months by reason of special circumstances, the Management Board shall prepare annual accounts, and shall deposit the same for inspection by the Shareholders and the other Persons with Meeting Rights at the Companys office. |
17.3 | Within the same period, the Management Board shall also deposit the annual report for inspection by the Shareholders and the other Persons with Meeting Rights, unless Section 2:396, subsection 7, or Section 2:403 of the Dutch Civil Code applies to the Company. |
17.4 | The annual accounts shall consist of a balance sheet, a profit and loss account and explanatory notes. |
17.5 | The annual accounts shall be signed by the Managing Directors. If the signature of one or more of them is missing, this shall be stated and reasons for this omission shall be given. |
17.6 | The Company may, and if the laws of the Netherlands so require shall, appoint an accountant to audit the annual accounts. Such appointment shall be made by the General Meeting. |
18 | Adoption of the annual accounts and release from liability |
18.1 | The General Meeting shall adopt the annual accounts. |
18.2 | At the General Meeting at which it is resolved to adopt the annual accounts, a proposal concerning release of the Managing Directors from liability for the management pursued, insofar as the exercise of their duties is reflected in the annual accounts or otherwise disclosed to the General Meeting prior to the adoption of the annual accounts, shall be brought up for discussion separately. |
18.3 | If all Shareholders are also Managing Directors, signing of the annual accounts by all Managing Directors shall also be considered as adoption of the annual accounts within the meaning of article 18.1, provided all other Persons with Meeting Rights have been given the opportunity to consider the prepared annual accounts and have consented to this way of adoption within the meaning of in article 26.1. In deviation of article 18.2 adoption in the way referred to in this article 18.3 shall result in a release of the Managing Directors from liability for the management pursued, insofar as the exercise of their duties is reflected in the annual accounts or otherwise disclosed to the General Meeting prior to the adoption of the annual accounts. |
19 | Profits and distributions |
19.1 | The General Meeting is authorised to allocate the profits as determined by the adoption of the annual accounts and to declare distributions. |
19.2 | A resolution to make a distribution on Shares will have no effect for as long as the Management Board has not granted its approval thereto. |
19.3 | Distributions on Shares may be made only up to an amount which does not exceed the amount of the Distributable Equity. |
19.4 | A claim of a Shareholder for payment of a distribution on Shares shall be barred after five years have elapsed. |
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19.5 | No distributions shall be made on Shares held by the Company in its own capital, unless these Shares have been pledged or a usufruct has been created in these Shares and the authority to collect distributions or the right to receive distributions respectively accrues to the pledgee or the usufructuary respectively. For the computation of distributions, the Shares on which no distributions shall be made pursuant to this article 19.5, shall not be taken into account. |
20 | General Meetings |
20.1 | During each financial year at least one General Meeting shall be held or at least one resolution shall be adopted in accordance with article 18.3 or article 26.1. |
20.2 | Other General Meetings shall be held as often as the Management Board deems necessary. |
20.3 | Shareholders and/or other Persons with Meeting Rights alone or jointly representing in the aggregate at least one-hundredth of the Companys issued capital may request the Management Board in writing to convene a General Meeting, stating specifically the business to be discussed. If the Management Board has not given proper notice of a General Meeting within two weeks following receipt of such request such that the meeting can be held within four weeks after receipt of the request, the applicants shall be authorised to convene a meeting themselves, provided that no important interests of the Company dictate otherwise. |
21 | Notice, agenda and venue of meetings |
21.1 | Notice of General Meetings shall be given by the Management Board, without prejudice to the provisions of article 20.3. |
21.2 | Notice of the meeting shall be given no later than on the eighth day prior to the day of the meeting. |
21.3 | The notice convening the meeting shall specify the business to be discussed. Other business not specified in such notice may be announced at a later date, with due observance of the term referred to in article 21.2. |
21.4 | Items, for which a written request has been filed to discuss them, by one or more Shareholders and/or other Persons with Meeting Rights, alone or jointly representing at least one-hundredth of the Companys issued capital, shall be included in the notice or announced in the same manner, provided that the Company received the request no later than on the thirtieth day before the date of the meeting and provided that no important interests of the Company dictate otherwise. |
21.5 | The notice convening the meeting shall be sent to the addresses of the Shareholders and the other Persons with Meeting Rights shown in the register referred to in article 5. With the consent of a Shareholder or an other Person with Meeting Rights, notice of the meeting may also be given by a legible and reproducible message sent through electronic means of communication to the address provided for the purposes hereof by the Shareholder or the other Person with Meeting Rights to the Company. |
21.6 | General Meetings are held in the municipality in which, according to these articles of association, the Company has its official seat, as well as at Schiphol |
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airport (municipality of Haarlemmermeer, the Netherlands), The Hague, the Netherlands, Rotterdam, the Netherlands, and Utrecht, the Netherlands. General Meetings may also be held elsewhere, provided that all Persons with Meeting Rights have consented to the place of the meeting and the Managing Directors have been given the opportunity to give advice prior to the decision-making. |
22 | Admittance, Meeting Rights and voting rights |
22.1 | The Meeting Rights accrue to each Shareholder and each other Person with Meeting Rights. Each Shareholder and each pledgee to whom the voting rights accrue shall be entitled to exercise the voting rights in the General Meeting. Shareholders and other Persons with Meeting Rights may be represented in a meeting by a proxy authorised in writing. |
22.2 | The Management Board may determine that the Meeting Rights and the voting rights may be exercised by electronic means of communication, either in person or by a proxy authorised in writing. In order to do so, a Person with Meeting Rights, or his proxy authorised in writing, must, through the electronic means of communication, be identifiable, be able to directly observe the proceedings at the meeting, be able to participate in the discussions and, if the voting rights accrue to him, be able to exercise the voting rights. The Management Board may attach conditions to the use of the electronic means of communication, which conditions shall be announced with the notice of the meeting. |
22.3 | At a meeting, each person present with voting rights, or his proxy authorised in writing, must sign the attendance list. The chairman of the meeting may decide that the attendance list must also be signed by other persons present at the meeting. The names of the persons who participate in the meeting pursuant to article 22.2 or who have cast their votes in the manner referred to in article 25.6 shall be added to the attendance list. |
22.4 | The Managing Directors shall have the right to cast an advisory vote in the General Meetings. |
22.5 | The chairman of the meeting shall decide on the admittance of other persons to the meeting. |
23 | Chairman and secretary of the meeting |
23.1 | The chairman of a General Meeting shall be appointed by the persons with voting rights present or represented at the meeting, by a simple majority of the votes cast. |
23.2 | The chairman of the meeting shall appoint a secretary for the meeting. |
24 | Minutes; recording of Shareholders resolutions |
24.1 | The secretary of a General Meeting shall keep minutes of the proceedings at the meeting. The minutes shall be adopted by the chairman and the secretary of the meeting and as evidence thereof shall be signed by them. |
24.2 | The Management Board shall keep record of all resolutions adopted by the General Meeting. If the Management Board is not represented at a meeting, the chairman of the meeting shall ensure that the Management Board is provided with a transcript of the resolutions adopted, as soon as possible after the meeting. The records shall be deposited at the Companys office for inspection by the Shareholders and the other Persons with Meeting Rights. On application, each of them shall be provided with a copy of or an extract from the records, at not more than cost price. |
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25 | Adoption of resolutions in a meeting |
25.1 | Each Share confers the right to cast one vote. |
25.2 | In the General Meeting, no voting rights may be exercised for Shares held by the Company or a Subsidiary, nor for Shares for which the Company or a Subsidiary holds the depositary receipts. However, pledgees of Shares owned by the Company or a Subsidiary are not excluded from exercising voting rights if the right of pledge was created before the Share was owned by the Company or such Subsidiary. The Company or a Subsidiary may not exercise voting rights for a Share in which it holds a right of pledge or a usufruct. |
25.3 | To the extent that the laws of the Netherlands or these articles of association do not provide otherwise, all resolutions of the General Meeting shall be adopted by a simple majority of the votes cast, without a quorum being required. |
25.4 | If there is a tie in voting, the proposal shall be deemed to have been rejected. |
25.5 | If the formalities for convening and holding of General Meetings, as prescribed by the laws of the Netherlands or these articles of association, have not been complied with, valid resolutions of the General Meeting may only be adopted in a meeting, if all Persons with Meeting Rights have consented to the decision-making taking place and the Managing Directors have been given the opportunity to give advice prior to the decision-making. |
25.6 | The Management Board may determine that votes cast by electronic means of communication prior to the General Meeting shall be treated equally to votes cast during the meeting. The Management Board shall determine the period of time during which votes may be cast in the manner provided in the preceding full sentence; this period of time may not commence any earlier than on the thirtieth day before the date of the meeting. |
26 | Adoption of resolutions without holding a meeting |
26.1 | Shareholders may adopt resolutions of the General Meeting other than in a meeting, provided that all Persons with Meeting Rights have consented to this manner to adopt a resolution. In case of adoption of resolutions other than in a meeting, the votes shall be cast in writing. The requirement that votes must be cast in writing shall have been met if the resolutions have been put in writing specifying the way in which each Shareholder has cast his vote. The Managing Directors shall be given the opportunity to give advice prior to the decision-making. |
26.2 | Each Shareholder must ensure that the Management Board is informed of the resolutions thus adopted as soon as possible in writing. The Management Board shall keep record of the resolutions adopted and it shall add such records to those referred to in article 24.2. |
27 | Amendment of the articles of association |
27.1 | The General Meeting may resolve to amend these articles of association. |
27.2 | A resolution to amend these articles of association as a result of which the voting rights will be amended can only be adopted by unanimous vote in a meeting where the entire issued capital of the Company is represented. |
9
27.3 | A resolution to amend these articles of association as a result of which a place outside the Netherlands will be designated as place where General Meetings will be held, can only be adopted by unanimous vote in a meeting where the entire issued capital of the Company is represented and provided that all Persons with Meeting Rights have consented to the amendment of the articles of association. |
27.4 | When a proposal to amend these articles of association is to be made to the General Meeting, the notice convening the General Meeting must state so and a copy of the proposal, including the verbatim text thereof, shall be deposited and kept available at the Companys office for inspection by the Shareholders and the other Persons with Meeting Rights, until the conclusion of the meeting. |
28 | Dissolution and liquidation |
28.1 | The Company may be dissolved pursuant to a resolution to that effect by the General Meeting. When a proposal to dissolve the Company is to be made to the General Meeting, this must be stated in the notice convening the General Meeting. |
28.2 | If the Company is dissolved pursuant to a resolution of the General Meeting, the Managing Directors shall become liquidators of the dissolved Companys assets, unless the General Meeting resolves to appoint one or more other persons as liquidator. |
28.3 | During liquidation, the provisions of these articles of association shall remain in force to the extent possible. |
28.4 | The balance remaining after payment of the debts of the dissolved Company shall be transferred to the Shareholders in proportion to the aggregate nominal value of the Shares held by each. |
28.5 | After the end of the liquidation, the books, records and other data carriers of the dissolved Company shall remain in the custody of the person designated for that purpose by the General Meeting, and in the absence thereof the person designated for that purpose by the liquidators, for a period as prescribed by the laws of the Netherlands. |
28.6 | In addition, the liquidation shall be subject to the relevant provisions of Book 2, Title 1, of the Dutch Civil Code. |
Close
The person appearing is known to me, civil law notary.
This deed was executed in Amsterdam, the Netherlands, on the date first above written. Before reading out, a concise summary and an explanation of the contents of this deed were given to the person appearing. The person appearing then declared that she had taken note of and agreed to the contents of this deed and did not want the complete deed to be read to her. Thereupon, after limited reading, this deed was signed by the person appearing and by me, civil law notary.
10
Exhibit 3.36
FILED - Oklahoma Secretary of State #1912329139 09/21/2011 13:10 OKLAHOMA Secretary of State Electronic Filing
CERTIFICATE OF INCORPORATION
DOMESTIC FOR PROFIT BUSINESS CORPORATION
Document Number: 17704090002 Submit Date: 9/21/2011
CORPORATION NAME
The name of the corporation is:
SERCEL GRC, INC.
PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the general corporation law of Oklahoma.
FUTURE EFFECTIVE DATE
Effective Date:
Same as filing date.
DURATION
Perpetual
REGISTERED AGENT AND REGISTERED OFFICE ADDRESS
Agent Name
JEFFREY C. RAMBACH Address
2 W. 2ND STREET, SUITE 700 TULSA, OK 74103 USA
STOCK INFORMATION
Stock Type Shares Par Value Series
Common (Voting) 50000 $1.000000
Total Authorized Capital
$50,000.00
INCORPORATOR INFORMATION
Name Title
JEFFREY C. RAMBACH Incorporator
Address
2 W. 2ND STREET, SUITE 700
TULSA, OK 74103 USA
DIRECTOR INFORMATION
Name Title
GEORGE WOOD Director
Address
17200 PARK ROW
HOUSTON, TX 77084 USA
Name Title
KENNETH O. FITTS Director
Address
17200 PARK ROW HOUSTON, TX
77084 USA
ATTACHMENTS
File Label File Name and Path
SIGNATURE
I hereby certify that the information provided on this form is true and correct to
the best of my knowledge and by attaching the signature I agree and understand that the typed electronic signature shall have the same legal effect as an original signature and is being accepted as my original signature pursuant to the Oklahoma
Uniform Electronic Transactions Act, Title 12A Okla. Statutes Section 15-101, et seq.
Dated - 9/21/2011
Corporation Name Signature Name Title
JEFFREY C. RAMBACH
[End Of Image]
Exhibit 3.37
FILED - Oklahoma Secretary of State #1912329139 09/22/2011 15:08
09/22/2011 02:36 PM OKLAHOMA SECRETARY OF STATE
SOS
17715310002
CERTIFICATE OF CORRECTION OF
SERCEL GRC, INC.
TO: THE OKLAHOMA SECRETARY OF STATE 101 State Capitol Building 2400 N.
Lincoln Boulevard Oklahoma City, OK 73105
The undersigned, for the purpose of filing a certificate of incorporation for an Oklahoma corporation pursuant to 18
Okla. Stat. § 1007(f), does hereby execute the following certificate:
1. The name of the corporation: Sercel GRC, Inc.
2. The name of title of the instrument being corrected: Certificate of Incorporation of Sercel GRC, Inc.
3. The date that the instrument being corrected was filed: September 21, 2011.
4. The
inaccuracy or defect to be corrected is as follows: the name of the Corporation should accurately be Sercel Acquisition Corp.
5. The Certificate of Incorporation
of Sercel GRC, Inc. is hereby corrected to read as follows: Certificate of Incorporation of Sercel Acquisition Corp.
IN WITNESS WHEREOF, this Certificate of
Correction has been executed on the 22nd day of September, 2011, by the undersigned.
INCORPORATOR:
/s/ Jeffrey C. Rambach
Jeffrey C. Rambach
2237833v1
Exhibit 3.38
FILED - Oklahoma Secretary of State #1912329139 01/18/2012
01/18/2012 08:32 AM OKLAHOMA SECRETARY OF STATE
SOS
18394980002
shall be an amount equal to one-tenth of one percent (1/10th of 1%) of such
increase.
PRINT CLEARLY
AMENDED
CERTIFICATE OF INCORPORATION
(AFTER RECEIPT OF PAYMENT OF STOCK)
TO: OKLAHOMA SECRETARY OF STATE
2300 N. Lincoln Blvd., Room 101, State Capitol Building
Oklahoma City, Oklahoma 73105-4897 (405)-521-3912
The undersigned Oklahoma corporation, for the purpose of amending its certificate of incorporation as provided by
Section 1077 of the Oklahoma General Corporation Act, hereby certifies:
1. A. The name of the corporation is:
SERCEL ACQUISITION CORP.
B. As amended: The name of the corporation has been changed to:
SERCEL-GRC CORP.
(Please Note: The new name of the corporation MUST contain
one of the following words: association, company, corporation, club, foundation, fund, incorporated, institute, society, union, syndicate or limited or one of the abbreviations co., corp., Inc. or ltd.)
2. The name of the registered agent and the street address of the registered office in the State of Oklahoma is:
JEFFREY C. RAMBACH 2 W 2ND ST. STE. 700 TULSA TULSA 74103-3117
Name of Agent Street Address
City (P.O. BOXES ARE NOT ACCEPTABLE) County Zip Code
PERPETUAL
3. The
duration of the corporation is:
4. The aggregate number of the authorized shares, itemized by class, par value of shares, shares without par value, and
series, if any, within a class is:
NUMBER OF SHARES SERIES PAR VALUE PER SHARE
(If any) (Or, if without par value, so state)
COMMON 50,000 $1.00
PREFERRED
5. Set forth clearly any and all amendments to the certificate of incorporation
which are desired to be made:
Name Change
That at a meeting of the Board of
Directors, a resolution was duly adopted setting forth the foregoing proposed amendment(s) to the Certificate of Incorporation of said corporation, declaring said amendment(s) to be advisable and calling a meeting of the shareholders of said
corporation for consideration thereof.
That thereafter, pursuant to said resolution of its Board of Directors, a meeting of the shareholders of said corporation
was duly called and held, at which meeting the necessary number of shares as required by statute were voted in favor of the amendment(s).
IN WITNESS WHEREOF, said
corporation has caused this certificate to be signed by its President or Vice President and attested by its Secretary or Assistant Secretary, this 17th day of January, 2012.
/s/ Arnaud Surpas
By: Arnaud Surpas
President
ATTEST:
/s/ Kenneth O. Fitts
By: Kenneth O. Fitts
Secretary
(SOS FORM 004-12/01)
Exhibit 3.39
January 6, 2012
BYLAWS
OF
SERCEL ACQUISITION CORP.
(An Oklahoma Corporation)
ARTICLE I Offices
SECTION 1.1. Principal Office. The present location of the principal office for the transaction of the business of SERCEL ACQUISITION CORP. (the Corporation) is 17200
Park Row, Houston, Texas 77084. The Board of Directors may change such principal office from time to time.
SECTION 1.2. Other Offices. The Corporation may have
other offices at such places, within or without the State of Oklahoma, as the Board of Directors may designate or as the business of the Corporation may require from time to time.
ARTICLE II Meetings of Shareholders
SECTION 2.1. Annual Meetings. The annual meetings of
shareholders shall be held on the third Tuesday of the fourth month following the close of the fiscal year; provided that if such day falls on a legal holiday, then any such annual meeting of shareholders shall be held at the same time and place on
the next day thereafter which is a business day. Any such annual meeting may be held at any other time which may be designated in a resolution adopted by the Board of Directors or by the written consent of shareholders holding a majority of the
issued and outstanding voting shares of the Corporation. At the annual meeting, directors shall be elected, reports of the affairs of the Corporation shall be considered, and any other proper business may be transacted.
SECTION 2.2. Special Meetings. Special meetings of the shareholders for any purpose or purposes may be called at any time by: (a) the President; (b) resolution adopted by the Board
of Directors; or (c) one or more shareholders holding not less than one-fourth (1/4) of the issued and outstanding voting shares of the Corporation. Notice of such special meetings shall be given in the same manner as for annual meetings of
shareholders. Notices of any special meeting shall state, in addition to the time, date and place of such meeting, the purpose or purposes of the meeting. Business transacted at any special meeting of shareholders shall be limited to the purposes
stated in the notice. Upon request being made by written notice to the President, or in his absence or disability to any Vice-President, or in the absence of a Vice-President, to the Secretary, by any person or persons herein empowered to call a
special meeting, if such officer is the Secretary, he shall give notice to the shareholders, or if such officer is other than the Secretary, he shall cause the Secretary, to give notice to the shareholders that such meeting has been called for the
purpose or purposes stated in such request and is to be held at a specified time, which time as fixed by such
officer shall not be less than ten (10) days nor more than sixty (60) days after the receipt of such request.
If notice of such meeting be not given to the shareholders within seven (7) days after the receipt of such request, such person or persons making such request may fix the time of such special meeting and give notice thereof in the same manner
as herein provided for notice of special meetings of shareholders.
SECTION 2.3. Place of Meetings. All meetings of shareholders shall be held either at the
principal office of the Corporation or at any other place within or without the State of Oklahoma as may be designated either by the Board of Directors or by the written consent of the shareholders entitled to vote at such meeting holding at least a
majority of such shares given either before or after the meeting and filed with the Secretary of the Corporation.
SECTION 2.4. Notice of Meetings. Written notice
of the time, date and place of each annual meeting of the shareholders shall be given to each shareholder as described in Section 10.4 not less than ten (10) nor more than sixty (60) days before each annual meeting.
SECTION 2.5. Voting List. The Secretary shall prepare, at least forty-eight (48) hours prior to each meeting of the shareholders, an alphabetical list of all shareholders
entitled to vote at such meeting, with the number of shares entitled to be voted by each shareholder set forth opposite their respective names. The Secretary shall produce the share ledger or a duplicate thereof, together with such list and shall
keep it open either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held during the business hours of at least
one (1) full day immediately preceding the convening thereof and until the close of such meeting, and it shall be subject to inspection at any time during such period by any shareholder or person representing shares. However, the Secretary
shall not be required to prepare and produce a list of shareholders in any case where the share ledger reasonably shows in alphabetical order by classes of shares all persons entitled to represent shares at such meeting with the number of shares
entitled to be voted by each shareholder.
SECTION 2.6. Quorum and Required Vote; Adjourned Meetings. The holders of a majority of the stock issued and outstanding
and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the shareholders for the transaction of business, except as otherwise provided by statute or the Certificate of Incorporation of
the Corporation. When a quorum is present at any meeting, a majority of the shares represented thereat and entitled to vote thereat shall decide any question brought before such meeting. The shareholders present at a duly called or held meeting at
which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Any shareholders meeting, annual or special, whether or not a quorum is present, may be
adjourned from time to time by the holders of a majority of the shares entitled to vote thereat, present in person or by proxy, but in the absence of a quorum no other business may be transacted at such meeting. It shall not be necessary to give any
notice of the time and place of the adjourned meeting or of the business to be transacted thereat, other than by announcement at the meeting at which such adjournment is taken, except that if any shareholders meeting, either annual or special,
is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting.
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SECTION 2.7. Voting. At each meeting of shareholders each shareholder entitled to vote shall vote in person or by proxy
and he shall have one vote for each share standing registered in his name at the closing of the transfer books for such meeting, or the record date fixed for such meeting by the Board of Directors, as the case may be, or standing registered in his
name at the time of such meeting if neither a date for the closing of the transfer books nor a record date for such meeting has been fixed by the Board of Directors. The voting at all meetings of shareholders may be viva voce but any qualified voter
may demand a share vote by written ballot, whereupon such share vote shall be taken by written ballot each of which shall state the name of the shareholder voting and the number of shares voted by him, and if such ballot be cast by proxy, it shall
also state the name of such proxy.
SECTION 2.8. Proxies. Any shareholder entitled to vote or execute consents shall have the right to do so either in person or by
one or more agents authorized by proxy. The appointment of a proxy shall be in writing and signed by the shareholder but shall require no other attestation and shall be filed with the Secretary of the Corporation at or prior to the meeting. If any
shareholder appoints two or more persons to act as proxies and if the instrument does not otherwise provide, then a majority of such persons present at the meeting, or if only one shall be present, then that one shall have and may exercise all of
the powers conferred by such instrument upon all of the persons so appointed; and if such proxies be equally divided as to the right and manner of voting in any particular case, the vote shall be divided among the proxies. Any person holding shares
in a representative or fiduciary capacity which he may represent in person may represent the same by proxy and confer general or discretionary power upon such a proxy. The authority of a proxy if not coupled with an interest may be terminated at
will, unless otherwise provided in the appointment, the proxys authority shall cease three (3) years after the appointment. The termination of a proxys authority by act of the shareholder shall, subject to the time limitation herein
set forth, be ineffective until written notice of the termination has been given to the Secretary of the Corporation. Unless otherwise provided therein, an appointment filed with the Secretary shall have the effect of revoking all proxy appointments
of prior date. A proxys authority shall not be revoked by the death or incapacity of the maker unless before the vote is cast or the authority is exercised written notice of such death or incapacity is given to the Corporation.
SECTION 2.9. Order of Business. The order of business at the annual meeting, and so far as practicable at all other meetings of the shareholders, shall be as follows:
(a) Calling meeting to order;
(b) Calling of roll and checking proxies;
(c) Proof of notice of meeting;
(d) Reading of any unapproved minutes;
(e) Reports of officers;
(f) Reports of committees;
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(g) Election of directors;
(h)
Unfinished business;
(i) New business; and
(j) Adjournment.
SECTION 2.10. Action Without Meeting. Any action which, under any provisions of the laws of the State of Oklahoma or under the provisions of the Certificate of Incorporation or
under these Bylaws may be taken at a meeting of the shareholders, may be taken without a meeting, without prior notice and without a vote if a consent in writing be signed by the holders of outstanding stock having not less than the minimum number
of votes that would be necessary to authorize or take action at a meeting at which all shares entitled to vote thereon were present and voted. Such consent shall be filed with the Secretary of the Corporation and made a part of the corporate
records. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those shareholders who have not consented in writing.
SECTION 2.11. Inspectors of Election. In advance of any meeting of shareholders, the Board of Directors may appoint Inspectors of Election to act at such meeting or any adjournment
thereof. If Inspectors of Election be not so appointed, the Chairman of any such meeting may, and on the request of any shareholder, or his proxy shall, make such appointment at the meeting. The number of inspectors shall be either one or three. If
appointed at a meeting on the request of one or more shareholders or proxies, the majority of shares present shall determine whether one or three inspectors are to be appointed. In case any person appointed as inspector fails or refuses to act, the
vacancy may be filled by appointment by the Board of Directors in advance of the meeting, or at the meeting by the Chairman. An inspector need not be a shareholder of the Corporation, but no person who is a candidate for office of the Corporation
shall act as an inspector. The duties of such inspectors shall include: determining the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the authenticity, validity and
effect of proxies; receiving votes, ballots or consents; hearing and determining all challenges and questions in any way arising in connection with the right to vote; counting and tabulating all votes or consents; determining the result; and such
acts as may be proper to conduct the election or vote with fairness to all shareholders. The inspectors of the election shall perform their duties impartially in good faith, to the best of their ability, and as expeditiously as is practical. If
there be three inspectors, the decision, act or certificate of a majority shall be effective in all respects as the decision, act, or certificate of all.
ARTICLE
III
Board of Directors
SECTION 3.1. Powers. All corporate powers, except
those which are conferred upon or reserved to the shareholders by the Certificate of Incorporation, these Bylaws and the laws of the State of Oklahoma, shall be exercised by or under the authority of, and the business and affairs of the Corporation
shall be managed and conducted by, the Board of Directors. Without prejudice to
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such general power, but subject to the same limitations, the Board of Directors shall have the following powers:
(a) To select and remove all officers, agents and employees of the Corporation, prescribe such powers and duties for them as may not be inconsistent with
applicable law, with the Certificate of Incorporation or these Bylaws and fix their compensation and to confer upon any officer of the Corporation the power to appoint, remove and suspend subordinate officers and agents;
(b) To adopt, make and use a corporate seal, and to prescribe the forms of certificates of stock, and to alter the form of such seal and of such certificates from time to time, as
it may determine advisable;
(c) To authorize the issuance of shares of stock of the Corporation from time to time, upon such terms as may be in accordance with
applicable law and to declare dividends from time to time in accordance with applicable law;
(d) To borrow money and incur indebtedness for the purposes of the
Corporation, and to cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of debt and securities therefor;
(e) To adopt such insurance, retirement and other benefits plans for directors, officers and agents of the Corporation and its subsidiaries as it may determine advisable; and
(f) To adopt regulations, not inconsistent with these Bylaws, for the management of the Corporations business and affairs.
SECTION 3.2. Number, Election and Term of Office. The Board of Directors of the Corporation shall consist of one or more members. The shareholders at any meeting shall determine
the number which shall constitute the Board of Directors and the number so determined shall remain fixed until changed at a subsequent meeting of the shareholders. The directors shall be elected at each annual meeting of the shareholders; however,
if any such annual meeting is not held or the directors are not elected thereat, the directors may be elected at any meeting of shareholders held for that purpose. Each director shall hold office until his successor is elected or until his earlier
resignation or removal. A director need not be a shareholder of the Corporation.
SECTION 3.3. Vacancies. Vacancies in the Board of Directors may be filled by a
majority of the directors then in office, though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until his successor is elected at an annual or a special meeting of the shareholders. A vacancy or
vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any director, or if the authorized number of directors be increased, or if the shareholders fail, at any annual or special meeting of
shareholders at which any director or directors are elected, to elect the full authorized number of directors to be voted for at that meeting. The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled
by the directors.
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SECTION 3.4. Resignations. Upon the resignation of a director, a majority of the remaining directors or the sole
remaining director shall have the power to elect a successor to take office when the resignation is to become effective.
SECTION 3.5. Removal. The entire Board of
Directors or any individual director may be removed from office, with or without cause, by the vote of shareholders holding a majority of the issued and outstanding shares entitled to vote at any annual or special meeting of shareholders. New
directors to fill vacancies created by removal may be elected at the same meeting of shareholders.
SECTION 3.6. Annual Meetings. An annual meeting of the Board of
Directors for. the purpose of election of officers of the Corporation and the transaction of any other business coming before such meeting shall be held each year immediately following the adjournment of the annual meeting of the shareholders and no
notice of such meeting to the elected directors shall be necessary in order to legally constitute the meeting, provided a majority of the Board shall be present. If a majority of the Board shall not be present, then such annual meeting may be held
at such time as shall be fixed by the consent, in writing, of all of the directors. Other meetings of the Board may be held as shall from time to time be determined by the Board provided notice of the time, date and place of any such meeting is
given to each director not less than two (2) days before such meeting.
SECTION 3.7. Regular Meetings. Regular meetings of the Board of Directors shall be held
at such place or places, on such date or dates, and at such time or times as shall have been established by the Board of Directors and publicized among all directors. No notice of such regular meeting shall be required.
SECTION 3.8. Special Meetings. Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the President or the Secretary or by any two
directors by notice of the time, date and place thereof given to each director not less than two (2) days before such meeting. No business shall be considered at any special meeting other than the purposes mentioned in the notice given to each
director of the meeting, except with the consent of all directors.
SECTION 3.9. Place of Meetings. Meetings of the Board of Directors shall be held at any place
within or without the State of Oklahoma which has been designated from time to time by resolution adopted by the Board or by written consent of all members of the Board. In the absence of such designation, meetings shall be held at the principal
office of the Corporation.
SECTION 3.10. Quorum and Required Vote; Adjourned Meetings. A majority of the directors shall constitute a quorum for the transaction of
business at any meeting of the directors, and the acts of a majority of the directors present at a meeting at which a quorum is present shall be the acts of the Board of Directors except as may be otherwise specifically provided by statute, by the
Certificate of Incorporation or by these Bylaws and except to adjourn as hereinafter provided. A quorum of the directors may adjourn any meeting of the directors to meet again at a stated day and hour; provided that in the absence of a quorum a
majority of the directors present at any meeting of the directors, either regular or special, may adjourn to a later date but may not transact any business until a quorum has been secured. At any adjourned meeting at which a required number of
directors
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shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.
Notice of the time and place of holding an adjourned meeting need not be given to absent directors if the time and place be fixed at the meeting adjourned.
SECTION
3.11. Compensation. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement for expenses, as may be fixed by resolution adopted by the Board of Directors.
SECTION 3.12. Action without Meeting. Any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if all members of the Board
consent thereto in writing. Such written Action by unanimous consent shall have the same effect as action taken at a meeting of the Board of Directors and shall be filed with the Secretary of the corporation and made a part of the minute of
proceeding of the Board of Directors.
SECTION 3.13. Telephonic Meetings. Members of the Board of Directors may participate in a meeting of the Board of Directors
by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this section shall constitute presence in person at such
meeting.
ARTICLE IV Executive Committee
SECTION 4.1. Election. The Board of
Directors may if it deems necessary, acting by resolution adopted by a majority of the number of directors, elect from their own members an Executive Committee composed of two or more voting members.
SECTION 4.2. Duties. The Executive Committee shall have and exercise all of the authority of the Board of Directors in the management of the Corporation in the interval between
meetings of the Board of Directors, subject to the control and direction of the Board of Directors, except to the extent, if any, such authority shall be limited by the resolution appointing the Executive Committee and except the power to declare
dividends and to adopt, amend or repeal these Bylaws and where action of the Board of Directors is required by law. It shall keep regular minutes of its proceedings which shall be reported to the directors at their next meeting.
SECTION 4.3. Meetings. The Executive Committee shall meet at such times as may be fixed by the Committee or on the call of the President. Notice of the time and place of the
meeting shall be given to each member of the Committee in the manner provided for the giving of notice to members of the Board of Directors of the time and place of special meetings of the Board of Directors or in such other manner as the Executive
Committee by resolution may prescribe.
SECTION 4.4. Quorum and Voting. A majority of the members of the Executive Committee shall constitute a quorum for the
transaction of business. The acts of the majority of the members of the Executive Committee present at a meeting at which a quorum is present shall be the acts of the Executive Committee. At all meetings of the Executive Committee, each member
present shall have
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one (1) vote which shall be cast by him in person.
SECTION 4.5. Waiver of Notice. Any actions taken or approved at any meeting of the Executive Committee, however called and noticed or wherever held, shall be as valid as though had
at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the members not present signs a written waiver of notice or a consent to holding such meeting or an approval of the
minutes thereof.
SECTION 4.6. Removal. The entire Executive Committee or any individual member thereof may be removed from the Committee with or without cause by a
vote of a majority of the directors.
SECTION 4.7. Vacancies. The Board of Directors shall fill all vacancies in the Executive Committee which may occur from time
to time.
SECTION 4.8. Action Without Meeting; Telephonic Meeting. Action may be taken by the Executive Committee in the manner allowed by the Board of Directors
pursuant to Sections 3.12 and 3.13 of Article
ARTICLE V Committees of Directors
SECTION 5.1. Designation. The Board of Directors may, by resolution passed by a majority of the directors, designate one or more committees, in addition to the
Executive Committee authorized in Article IV hereof, each committee to consist of two or more of the directors of the Corporation, which to the extent provided in the resolution, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Corporation, except where action of the Board of Directors is required by law, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.
SECTION 5.2. Procedural Rules.
Each committee shall comply with the same procedural rules set forth in Section 4.3 through 4.8, both inclusive, of Article IV that are applicable to the Executive Committee.
ARTICLE VI Officers
SECTION 6.1. Officers. The officers of the Corporation shall be a
President, a Secretary and a Treasurer. The Corporation may also have, at the discretion of the Board of Directors, a Chairman of the Board, an Executive Vice-President, one or more Vice-Presidents, one or more Assistant Secretaries, one or more
Assistant Treasurers, and such other officers as may be appointed in accordance with Section 6.3. One person may hold two or more offices; provided that no person shall at the same time hold the offices of President and Secretary.
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SECTION 6.2. Election. The officers of the Corporation, except such officers as may be appointed in accordance with
Section 6.3 or Section 6.5, shall be elected annually by the Board of Directors, and each shall hold his office until he shall resign or shall be removed or otherwise disqualified to serve, or his successor shall be elected and qualified.
SECTION 6.3. Subordinate Officers. The Board of Directors may appoint, and may empower the President to appoint, such other officers as the business of the
Corporation may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in these Bylaws or as the Board of Directors may from time to time determine.
SECTION 6.4. Removal. Any officer may be removed, either with or without cause, by the Board of Directors, at any regular or special meeting thereof, or, except in case of an
officer chosen by the Board of Directors, by any officer upon whom such power of removal may be conferred by the Board of Directors.
SECTION 6.5. Resignation. Any
officer may resign at any time by giving written notice to the Board of Directors, or to the President, or to the Secretary of the Corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time
specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
SECTION 6.6. Vacancies.
A vacancy in any office because of death, removal, resignation, disqualification or any other cause shall be filled in the manner prescribed in these Bylaws for regular appointments to such office.
SECTION 6.7. Chairman of the Board. The Chairman of the Board, if any, shall, if present, preside at all meetings of the Board of Directors and exercise and perform such other
powers and duties as may be from time to time assigned to him by the Board of Directors or prescribed by these Bylaws.
SECTION 6.8. Vice Chairman of the Board. The
Vice Chairman of the Board, if any, shall perform such duties as the Board of Directors shall prescribe. In the absence or disability of the Chairman of the Board, the Vice Chairman shall perform the duties and exercise the powers of the Chairman of
the Board.
SECTION 6.9. President. The President shall be the Chief Executive Officer of the Corporation and shall, subject to the control of the Board of
Directors, have general supervision, direction and control of the business, finances and affairs of the Corporation and all other powers normally held and exercised by the person serving as President of a corporation. The President shall:
(a) Preside at all meetings of the shareholders and, in the absence of the Chairman of the Board, at all meetings of the Board of Directors;
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(b) Sign or countersign, as may be necessary, all such bills, notes, checks, contracts and other instruments as may
pertain to the ordinary course of the business of the Corporation;
(c) Execute deeds, bonds, mortgages, and contracts required to be executed under the seal of the
Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation;
(d) Have the power to appoint all employees and agents of the Corporation whose appointment is not otherwise provided for and to fix the compensation thereof
subject to the provisions of these Bylaws and subject to the approval of the Board of Directors and to remove or suspend any employee or agent who shall not have been appointed by the Board of Directors and to suspend for cause, pending final action
by the body which shall have appointed him, any officer other than an elected officer, or any employee or agent who shall have been appointed by the Board of Directors;
(e) Present a complete report of the business of the Corporation for the preceding fiscal year at the annual meeting of the shareholders and report to the Board of Directors from
time to time all matters coming to his attention which materially affect the business of the Corporation;
(f) Serve as a member of the Board of Directors and an
ex-officio member of all standing committees, including the Executive Committee, if any; and possess such usual powers and duties of supervision and management as may pertain to the office of the President and such other powers and duties as may be
prescribed by the Board of Directors or these Bylaws.
SECTION 6.10. Executive Vice-President. The Executive Vice-President, if any, shall be the executive officer
of the Corporation next in authority to the Chairman of the Board and the President, both of whom he shall assist in the management of the business of the Corporation and the implementation of orders and resolutions of the Board of Directors. In the
absence of the Chairman of the Board and the President, he shall preside at all meetings of the shareholders and of the directors, and shall exercise all other powers and perform all other duties of the Chairman of the Board and the President; and
he shall perform such other duties as the Board of Directors may from time to time prescribe. He shall have all authority conferred upon a Vice-President by these Bylaws.
SECTION 6.11. Vice-President. In the absence or disability of the President, the Vice-Presidents, if any, in order of their rank as fixed by the Board of Directors or, if not
ranked, the Vice-President designated by the Board of Directors, shall perform all the duties of the President and, when so acting, shall have all the powers of, and be subject to all the restrictions upon, the President. The Vice-Presidents shall
have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board of Directors or these Bylaws.
SECTION 6.12. Secretary. The Secretary shall:
(a) Attend all meetings of the
Board of Directors and the, shareholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall, when
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requested, perform like duties for all committees of the Board of Directors;
(b) Duly give or cause to be given all notices in accordance with these Bylaws or as required by law;
(c) Be custodian of the corporate records and of the seal of the Corporation and see that the seal of the Corporation is affixed to all documents the execution of which on behalf
of the Corporation under its seal is duly authorized;
(d) Sign, with the President or Vice-President, all deeds, bonds, mortgages, contracts and other instruments
when so ordered;
(e) Keep a register of the post office address of each shareholder which shall be furnished to the Secretary by such shareholder;
(f) Have general charge of the stock transfer books of the Corporation; and
(g) In general,
perform all duties as from time to time may be assigned to him by the President or by the Board of Directors.
SECTION 6.13. Assistant Secretaries. In the absence
of the Secretary or in the event of his death, inability or refusal to act, the Assistant Secretaries in the order of their length of service as Assistant Secretary, unless otherwise determined by the Board of Directors, shall perform the duties of
the Secretary, and when so acting shall have all the powers of, and be subject to, all the restrictions upon the Secretary. They shall perform such duties as may be assigned to them by the Secretary, by the President, or by the Board of Directors.
SECTION 6.14. Treasurer. The Treasurer shall:
(a) Keep and maintain adequate
and correct accounts of the properties and business transactions of the Corporation;
(b) Have charge and custody of and be responsible for all funds and securities
of the Corporation; receive and give receipts for moneys due and payable to the Corporation from any source whatsoever, and deposit all such moneys in the name of the Corporation in such depositories as shall be designated by the Board of Directors;
(c) Sign or countersign, as may be necessary, all such bills, notes, checks and other instruments relating to the fiscal affairs of the Corporation in the ordinary
course of the business of the Corporation;
(d) Prepare, or cause to be prepared, a true statement of the Corporations assets and liabilities as of the close
of each fiscal year and a true statement of the results of the operations of the Corporation for the fiscal year then ended, all in reasonable detail; and
(e) In
general, perform all duties as from time to time may be assigned to him by the
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President or by the Board of Directors.
SECTION 6.15. Assistant Treasurers. In the absence of the Treasurer or in the event of his death, inability or refusal to act, the Assistant Treasurers, in the order of their
length of service as Assistant Treasurer, unless otherwise determined by the Board of Directors, shall perform the duties of the Treasurer, and when so acting shall have all the powers of, and be subject to, all the restrictions upon the Treasurer.
They shall perform such other duties as may be assigned to them by the Treasurer, by the President, or by the Board of Directors.
SECTION 6.16. Delegation of
Duties. In case of the absence or disability of any officer of the corporation or for any other reason that the Board of Directors may deem sufficient, the Board of Directors may, by a vote of a majority of the whole Board, delegate, for the time
being, the powers or duties, or any of them, of such officer to any other officer or to any director.
ARTICLE VII
Shares of Stock
SECTION 7.1. Certificates of Stock. A certificate or certificates for shares
of the capital stock of the Corporation shall be issued to each shareholder when any such shares are fully paid, showing the number of the shares of the Corporation standing on the books in his name. The form of such certificate shall be determined
by the Board of Directors. All such certificates shall be signed by the President or a Vice-President and the Secretary or an Assistant Secretary, or be authenticated by facsimiles of the signatures of the President and Secretary or by a facsimile
of the signature of the President and the written signature of the Secretary or an Assistant Secretary. Every certificate authenticated by a facsimile of a signature must be countersigned by a transfer agent or transfer clerk. Even though an officer
who signed, or whose facsimile signature has been written, printed or stamped on, a certificate for shares shall have ceased by death, resignation or otherwise to be an officer of the Corporation before such certificate is delivered by the
Corporation, such certificate shall be as valid as though signed by a duly elected, qualified and authorized officer, if it be countersigned by a transfer agent or transfer clerk. Such certificates shall also be numbered and sealed with the seal of
the Corporation.
SECTION 7.2. Record of Shareholders. There shall be kept at the registered office of the Corporation in the State of Oklahoma a record containing
the names and addresses of all shareholders of the Corporation, arranged in alphabetical order, the number and class of shares held by each and the dates when they respectively became the owners of record thereof; provided that the foregoing shall
not be required if the Corporation shall keep at its registered office a statement containing the name and post office address, including street number, if any, of the custodian of such record. Duplicate lists may be kept in such other state or
states as may, from time to time, be determined by the Board of Directors.
SECTION 7.3. Transfer Agents and Registrars. The Board of Directors may, in its
discretion, appoint one or more banks or trust companies in such city or cities as the Board of Directors may deem advisable, from time to time, to act as Transfer Agents and Registrars of the shares of stock of the Corporation; and, upon such
appointments being made, no certificate
12
representing shares shall be valid until countersigned by one of such Transfer Agents and registered by one of such
Registrars.
SECTION 7.4. Transfer of Shares. Transfers of stock of the Corporation shall be made on the books of the Corporation only upon authorization by the
registered holder thereof or by his attorney lawfully constituted in writing and on surrender and cancellation of a certificate or certificates for a like number of shares of the same class properly endorsed or accompanied by a duly executed stock
transfer power and payment of all taxes thereon, with such proof of authenticity of the signatures as the Corporation or its transfer agents may reasonably require.
SECTION 7.5. Shareholders Record Date and Closing Stock Books. The Board of Directors may fix, in advance, a time as a record date for the determination of the
shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting not more than sixty (60) days prior to the date of the meeting or
action nor less than ten (10) days prior to the date of the meeting or action. The Board of Directors may also fix, in advance, a time as a record date for the determination of shareholders entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion, or exchange of shares or for the purpose of any other lawful action which shall be not more than sixty (60) days prior to the date
of the event for the purpose of which it is fixed. When a record date is so fixed, only shareholders of record on that date are entitled to notice of and to vote at the meeting or to receive a dividend, distribution, or allotment of rights, or to
exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after the record date. In lieu of fixing a record date, the Board of Directors may close the books of the Corporation against any
transfer of shares for a stated period but not to exceed in any case the maximum periods set forth above.
SECTION 7.6. Registered Shareholders. The Corporation
shall be entitled to recognize the holder of record of any share or shares of stock as the exclusive owner thereof for all purposes, and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such shares on the
part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.
SECTION 7.7. Lost Certificates. No new
certificate for shares shall be issued in lieu of an old one unless the latter is surrendered and cancelled at the same time; provided that if any certificate for shares is lost, stolen, mutilated or destroyed, the Board of Directors may authorize
the issuance of a new certificate in lieu thereof, upon such terms and conditions, including indemnification of the Corporation reasonably satisfactory to it, as the Board of Directors shall determine.
SECTION 7.8. Treasury Shares. Treasury shares, or other shares not at the time issued and outstanding, shall not, directly or indirectly, be voted at any meeting of the
shareholders, or counted in calculating the actual voting power of shareholders at any given time. Treasury shares shall not have dividend rights.
SECTION 7.9.
Fractional Shares. Certificates of fractional shares of stock may be issued at
13
the discretion of the Board of Directors. The registered ownership of any fractional share represented by such
certificate or certificates shall entitle the holder thereof to receive dividends, participate in the corporate assets in the event of liquidation of the Corporation and to exercise voting rights in person or by proxy.
ARTICLE VIII Execution of Instruments
SECTION 8.1. Contracts. The Board of Directors or any
committee thereunto authorized may authorize any officer or officers, agent or agents, to enter into any contract or to execute and deliver in the name and on behalf of the Corporation any contract or other instrument, except certificates
representing shares of stock of the Corporation, and such authority may be general or may be confined to specific instances.
SECTION 8.2. Checks and Drafts. All
checks, drafts or other orders for the payment of money, notes, acceptances or other evidences of indebtedness issued by or in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation and in such
manner as shall be determined from time to time by resolution of the Board of Directors.
SECTION 8.3. Deposits; Bank Accounts. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may from time to time designate or as may be designated by an officer or officers
of the Corporation to whom such power of designation may from time to time be delegated by the Board of Directors. The Board of Directors may make such special rules and regulations with respect to such bank accounts, not inconsistent with the
provisions of these Bylaws, as it may deem expedient. Unless otherwise provided by resolution of the Board of Directors, endorsements for deposit to the credit of the Corporation in any of its duly authorized depositories may be made by hand-stamped
legend in the name of the Corporation or by written endorsement by any officer without countersignature.
SECTION 8.4. Loans. No loans shall be contracted on behalf
of the Corporation unless authorized by the Board of Directors, but when so authorized, unless a particular officer or agent is directed to negotiate the same, may be negotiated, up to the amount so authorized, by the President or a Vice-President
or the Treasurer; and such officers are hereby severally authorized to execute and deliver in the name and on behalf of the Corporation notes or other evidences of indebtedness countersigned by the President or a Vice-President for the amount of
such loans and to give security for the payment of any and all loans, advances and indebtedness by hypothecating, pledging or transferring any part or all of the property of the Corporation, real or personal, at any time owned by the Corporation.
SECTION 8.5. Sale or Transfer of Securities Held by the Corporation. Stock certificates, bonds or other securities at any time owned by the Corporation may be held
on behalf of the Corporation or sold, transferred or otherwise disposed of pursuant to authorization by the Board of Directors, or of any committee thereunto duly authorized, and when so authorized to be sold, transferred or otherwise disposed of,
may be transferred from the name of the Corporation by the
14
signature of the President or a Vice-President and the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary.
SECTION 8.6. Execution of Proxies. The President, or, in the absence or disability of the President a Vice-President, may authorize from time
to time the signature and issuance of proxies to vote upon shares of stock of other corporations standing in the name of the Corporation or authorize the execution of consents to action taken or to be taken by such other corporation. All such
proxies and consents shall be signed in the name of the Corporation by the President or a Vice- President and by the Secretary or an Assistant Secretary.
ARTICLE
IX Indemnification
SECTION 9.1. Indemnification: Actions Other Than by the Corporation. The Corporation shall have the power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the Corporation, by reason of the
fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner in which he reasonably believed to be in
or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
SECTION 9.2. Indemnification: Actions by the Corporation. The Corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including attorneys fees, actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Corporation unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem
proper.
15
SECTION 9.3. Right to Indemnification. To the extent that any present or former director, officer or employee or any
person who is or was serving at the request of the Corporation as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise, or any agent of the Corporation or any person who is or was serving at
the request of the Corporation as an agent of another corporation, partnership, joint venture, trust or other enterprise, has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 9.1 and 9.2
of this Article IX, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses, including attorneys fees, actually and reasonably incurred by him in connection therewith.
SECTION 9.4. Authorization of Indemnification. Any indemnification under Sections 9.1 and 9.2 of this Article IX, unless ordered by a court, shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 9.1 and 9.2 of this
Article IX. Such determination shall be made: (a) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding; or (b) if such quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion; or (c) by the shareholders.
SECTION 9.5.
Advance Indemnification. Expenses incurred by a director, officer, employee or agent in defending a civil or criminal action, suit or proceeding as authorized by the Board of Directors in the specific case may be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article IX.
SECTION 9.6. Non-Exclusive Indemnification. The indemnification provided by this Article IX shall
not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, contract, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
SECTION 9.7. Insurance. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article IX.
SECTION 9.8. Constituent Corporation. For the purposes of this Article IX, references to the Corporation shall include, in addition to the resulting corporation, any
constituent corporation, including any constituent of a constituent, absorbed in a consolidation or merger which, if its
16
separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or
agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article IX with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if
its separate existence had continued.
SECTION 9.9. Definitions. For purposes of this Article IX, references to other enterprises shall include employee
benefit plans; references to fines shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to serving at the request of the Corporation shall include any service as a
director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted
in good faith and in a manner he reasonably believed to be in the interest in the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interests of the Corporation
as referred to in this Article IX.
ARTICLE X General Provisions
SECTION 10.1.
Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors.
SECTION 10.2. Seal. The corporate seal of the Corporation shall be
circular in form and shall contain the name of the Corporation, the word OKLAHOMA and such other words or information as shall be determined by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be
impressed, affixed or otherwise reproduced.
SECTION 10.3. Dividends. The Board of Directors may, out of funds legally available therefor, from time to time at any
regular or special meeting, declare, and the Corporation may pay, dividends on its outstanding shares of capital stock as and when it deems expedient. Such dividends may be made in cash, property or shares of the capital stock or other securities of
the Corporation.
SECTION 10.4. Notice. Whenever any notice is required or permitted to be given under the provisions of any law, the Certificate of Incorporation
or these Bylaws, it shall not be construed to require personal notice unless expressly so stated, but such notice may be given by depositing the same in the United States mail, postage prepaid, addressed to the person entitled thereto at his address
as it appears on the records of the Corporation, and such notice shall be deemed to have been given on the day of such mailing. Notice shall be deemed to have been duly given on the date of service if served personally or by telex, telecopier,
cable, telegram or similar communication. Shareholders not entitled to vote shall not be entitled to receive notice of any meetings except as otherwise provided by statute.
SECTION 10.5. Waiver of Notice. Whenever any notice whatever is required to be given
17
under the provisions of any law or of the Certificate of Incorporation or of these Bylaws, a written waiver thereof,
signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall-constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of,
any annual or special meeting of the shareholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the Certificate of Incorporation.
SECTION 10.6. Conflicts of Interest. Except as may be otherwise provided by the laws of the State of Oklahoma or the Certificate of Incorporation, no contract or transaction
between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of the directors or officers are directors or officers,
or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or a committee thereof which authorizes the contract or
transaction, or solely because his or their votes are accounted for such purpose; if: (a) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or such
committee, and the Board of Directors or Executive Committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum;
or (b) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the shareholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith
by vote of the shareholders; or (c) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the shareholders. Common or interested
directors may be counted in determining the presence of quorum at a meeting of the Board of Directors, or a committee which authorizes the contract or transaction.
SECTION 10.7. Loans to Officers or Employees. The Corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee
of the Corporation or of its subsidiary, including any officer or employee who is a director of the Corporation or its subsidiary whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the
Corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the
Corporation. Nothing contained in this section shall be construed to deny, limit or restrict the powers of guaranty or warranty of any Corporation at common law or under any statute.
SECTION 10.8. Amendment. These Bylaws may be amended, altered, changed or repealed at any annual or special meeting of the shareholders, provided notice of the proposed amendment,
alteration, change or repeal is contained in the notice of such meeting, by the affirmative vote of a majority of the shares issued and outstanding, and entitled to vote thereat. These Bylaws also may be amended, altered, changed or repealed at any
annual or special meeting of the Board of Directors, provided notice of the proposed amendment, alteration, change or repeal is contained in
18
the notice of such meeting, by the affirmative vote of the members of the Board of Directors. Notwithstanding the
preceding sentence, the fact that such power to amend, alter, change or repeal has been conferred upon the Board of Directors shall not divest the shareholders of the power, nor limit their power to amend, alter, change or repeal these Bylaws.
ADOPTED by Unanimous Consent to Organizational Action of the Board of Directors without a Meeting this 6th day of January, 2012.
WITNESS our signatures the day and year first above written.
/s/ George W. Wood
George W. Wood, Director
/s/ Kenneth O. Fitts
Kenneth O. Fitts, Director
19
Exhibit 4.7
CGG S.A.
AND
GUARANTORS PARTY HERETO
6.875% Senior Notes due 2022
INDENTURE
Dated as of May 1, 2014
THE BANK OF NEW YORK MELLON
Trustee
CROSS REFERENCE TABLE
Trust Indenture Act Section |
Indenture Section | |||
310(a)(1) |
7.10 | |||
(a)(2) |
7.10 | |||
(a)(3) |
N/A | |||
(a)(4) |
N/A | |||
(a)(5) |
7.10 | |||
(b) |
7.10 | |||
(c) |
N/A | |||
311(a) |
7.11 | |||
(b) |
7.11 | |||
(c) |
N/A | |||
312(a) |
2.05 | |||
(b) |
11.03 | |||
(c) |
11.03 | |||
313(a) |
7.06 | |||
(b)(1) |
7.06 | |||
(b)(2) |
7.06, 7.07 | |||
(c) |
7.06, 11.02 | |||
(d) |
7.06 | |||
314(a) |
4.03, 4.04, 11.02 | |||
(b) |
N/A | |||
(c)(1) |
11.04 | |||
(c)(2) |
11.04 | |||
(c)(3) |
N/A | |||
(d) |
N/A | |||
(e) |
11.05 | |||
(f) |
N/A | |||
315(a) |
7.01 | |||
(b) |
7.05, 11.02 | |||
(c) |
7.01 | |||
(d) |
7.01 | |||
(e) |
6.11 | |||
316(a)(last sentence) |
2.09 | |||
(a)(1)(A) |
6.05 | |||
(a)(1)(B) |
6.04 | |||
(a)(2) |
N/A | |||
(b) |
6.07 | |||
(c) |
2.12 | |||
317(a)(1) |
6.08 | |||
(a)(2) |
6.09 | |||
(b) |
2.04 | |||
318(a) |
11.01 | |||
(b) |
N/A | |||
(c) |
11.01 |
i
N/A means not applicable.
* | This Cross-Reference Table is not part of the Indenture. |
ii
TABLE OF CONTENTS
Page | ||||||
ARTICLE 1 |
||||||
DEFINITIONS AND INCORPORATION BY REFERENCE |
1 | |||||
SECTION 1.01. |
DEFINITIONS |
1 | ||||
SECTION 1.02. |
OTHER DEFINITIONS |
22 | ||||
SECTION 1.03. |
INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT |
23 | ||||
SECTION 1.04. |
RULES OF CONSTRUCTION |
23 | ||||
ARTICLE 2 |
||||||
THE NOTES |
24 | |||||
SECTION 2.01. |
FORM AND DATING |
24 | ||||
SECTION 2.02. |
EXECUTION AND AUTHENTICATION |
26 | ||||
SECTION 2.03. |
REGISTRAR AND PAYING AGENT |
26 | ||||
SECTION 2.04. |
PAYING AGENT TO HOLD MONEY IN TRUST |
27 | ||||
SECTION 2.05. |
HOLDER LISTS |
27 | ||||
SECTION 2.06. |
TRANSFER AND EXCHANGE |
27 | ||||
SECTION 2.07. |
REPLACEMENT NOTES |
35 | ||||
SECTION 2.08. |
OUTSTANDING NOTES |
36 | ||||
SECTION 2.09. |
TREASURY NOTES |
36 | ||||
SECTION 2.10. |
TEMPORARY NOTES |
36 | ||||
SECTION 2.11. |
CANCELLATION |
37 | ||||
SECTION 2.12. |
DEFAULTED INTEREST; SPECIAL INTEREST |
37 | ||||
ARTICLE 3 |
||||||
REDEMPTION AND REPURCHASE |
37 | |||||
SECTION 3.01. |
NOTICES TO TRUSTEE |
37 | ||||
SECTION 3.02. |
SELECTION OF NOTES TO BE REDEEMED |
38 | ||||
SECTION 3.03. |
NOTICE OF REDEMPTION |
38 | ||||
SECTION 3.04. |
EFFECT OF NOTICE OF REDEMPTION |
39 | ||||
SECTION 3.05. |
DEPOSIT OF REDEMPTION PRICE |
39 | ||||
SECTION 3.06. |
NOTES REDEEMED IN PART |
40 | ||||
SECTION 3.07. |
OPTIONAL REDEMPTION |
40 | ||||
SECTION 3.08. |
MANDATORY REDEMPTION |
41 | ||||
SECTION 3.09. |
OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS |
41 |
iii
ARTICLE 4 |
||||
COVENANTS |
44 | |||
SECTION 4.01. |
PAYMENT OF NOTES |
44 | ||
SECTION 4.02. |
MAINTENANCE OF OFFICE OR AGENCY |
44 | ||
SECTION 4.03. |
REPORTS |
45 | ||
SECTION 4.04. |
COMPLIANCE CERTIFICATE |
46 | ||
SECTION 4.05. |
TAXES |
46 | ||
SECTION 4.06. |
STAY, EXTENSION AND USURY LAWS |
46 | ||
SECTION 4.07. |
RESTRICTED PAYMENTS |
47 | ||
SECTION 4.08. |
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES |
50 | ||
SECTION 4.09. |
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK |
51 | ||
SECTION 4.10. |
ASSET SALES |
54 | ||
SECTION 4.11. |
TRANSACTIONS WITH AFFILIATES |
56 | ||
SECTION 4.12. |
LIENS |
57 | ||
SECTION 4.13. |
GUARANTEES OF CERTAIN INDEBTEDNESS BY RESTRICTED SUBSIDIARIES |
57 | ||
SECTION 4.14. |
CORPORATE EXISTENCE |
57 | ||
SECTION 4.15. |
OFFER TO PURCHASE UPON CHANGE OF CONTROL |
58 | ||
SECTION 4.16. |
ISSUANCES AND SALES OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES |
59 | ||
SECTION 4.17. |
SALE-AND-LEASEBACK TRANSACTIONS |
60 | ||
SECTION 4.18. |
NO INDUCEMENTS |
60 | ||
SECTION 4.19. |
ADDITIONAL AMOUNTS |
60 | ||
SECTION 4.20. |
INDEMNIFICATION FOR FOREIGN CURRENCY JUDGMENTS |
63 | ||
SECTION 4.21. |
CONDUCT OF BUSINESS |
63 | ||
SECTION 4.22. |
ANTI-LAYERING |
64 | ||
SECTION 4.23. |
EFFECTIVENESS OF COVENANTS AND EVENTS OF DEFAULT |
64 | ||
SECTION 4.24. |
WITHHOLDING |
64 | ||
ARTICLE 5 |
||||
SUCCESSORS |
65 | |||
SECTION 5.01. |
SUCCESSOR CORPORATION SUBSTITUTED |
65 | ||
ARTICLE 6 |
||||
DEFAULTS AND REMEDIES |
65 | |||
SECTION 6.01. |
EVENTS OF DEFAULT |
65 |
iv
SECTION 6.02. |
ACCELERATION |
68 | ||||
SECTION 6.03. |
OTHER REMEDIES |
68 | ||||
SECTION 6.04. |
WAIVER OF PAST DEFAULTS |
69 | ||||
SECTION 6.05. |
CONTROL BY MAJORITY |
69 | ||||
SECTION 6.06. |
LIMITATION ON SUITS |
69 | ||||
SECTION 6.07. |
RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT |
70 | ||||
SECTION 6.08. |
COLLECTION SUIT BY TRUSTEE |
70 | ||||
SECTION 6.09. |
TRUSTEE MAY FILE PROOFS OF CLAIM |
70 | ||||
SECTION 6.10. |
PRIORITIES |
71 | ||||
SECTION 6.11. |
UNDERTAKING FOR COSTS |
71 | ||||
ARTICLE 7 |
||||||
TRUSTEE |
71 | |||||
SECTION 7.01. |
DUTIES OF TRUSTEE |
71 | ||||
SECTION 7.02. |
RIGHTS OF TRUSTEE |
73 | ||||
SECTION 7.03. |
INDIVIDUAL RIGHTS OF TRUSTEE |
74 | ||||
SECTION 7.04. |
TRUSTEES DISCLAIMER |
74 | ||||
SECTION 7.05. |
NOTICE OF DEFAULTS |
74 | ||||
SECTION 7.06. |
REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES |
74 | ||||
SECTION 7.07. |
COMPENSATION AND INDEMNITY |
75 | ||||
SECTION 7.08. |
REPLACEMENT OF TRUSTEE |
76 | ||||
SECTION 7.09. |
SUCCESSOR TRUSTEE BY MERGER, ETC. |
77 | ||||
SECTION 7.10. |
ELIGIBILITY; DISQUALIFICATION |
77 | ||||
SECTION 7.11. |
PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY |
77 | ||||
SECTION 7.12. |
FORCE MAJEURE; CONSEQUENTIAL DAMAGES |
77 | ||||
ARTICLE 8 |
||||||
LEGAL DEFEASANCE AND COVENANT DEFEASANCE; SATISFACTION AND DISCHARGE |
78 | |||||
SECTION 8.01. |
OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE |
78 | ||||
SECTION 8.02. |
LEGAL DEFEASANCE AND DISCHARGE |
78 | ||||
SECTION 8.03. |
COVENANT DEFEASANCE |
79 | ||||
SECTION 8.04. |
CONDITIONS TO LEGAL OR COVENANT DEFEASANCE |
79 | ||||
SECTION 8.05. |
SATISFACTION AND DISCHARGE |
81 | ||||
SECTION 8.06. |
DEPOSITED MONEY AND U.S. GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS |
82 | ||||
SECTION 8.07. |
REPAYMENT TO COMPANY |
83 | ||||
SECTION 8.08. |
REINSTATEMENT |
83 |
v
ARTICLE 9 |
||||||
AMENDMENT, SUPPLEMENT AND WAIVER |
83 | |||||
SECTION 9.01. |
WITHOUT CONSENT OF HOLDERS OF NOTES |
83 | ||||
SECTION 9.02. |
WITH CONSENT OF HOLDERS OF NOTES |
84 | ||||
SECTION 9.03. |
COMPLIANCE WITH TRUST INDENTURE ACT |
86 | ||||
SECTION 9.04. |
REVOCATION AND EFFECT OF CONSENTS |
86 | ||||
SECTION 9.05. |
NOTATION ON OR EXCHANGE OF NOTES |
86 | ||||
SECTION 9.06. |
TRUSTEE TO SIGN AMENDMENTS, ETC. |
86 | ||||
ARTICLE 10 |
||||||
GUARANTEES OF NOTES |
87 | |||||
SECTION 10.01. |
SUBSIDIARY GUARANTEES |
87 | ||||
SECTION 10.02. |
EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE |
88 | ||||
SECTION 10.03. |
GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS |
89 | ||||
SECTION 10.04. |
RELEASES OF GUARANTEES |
89 | ||||
SECTION 10.05. |
RELEASES FOLLOWING SALE OF ASSETS |
90 | ||||
SECTION 10.06. |
RELEASES FOLLOWING DESIGNATION AS AN UNRESTRICTED SUBSIDIARY, ETC. |
90 | ||||
SECTION 10.07. |
LIMITATION ON GUARANTOR LIABILITY |
91 | ||||
SECTION 10.08. |
TRUSTEE TO INCLUDE PAYING AGENT |
91 | ||||
ARTICLE 11 |
||||||
MISCELLANEOUS |
91 | |||||
SECTION 11.01. |
TRUST INDENTURE ACT CONTROLS |
91 | ||||
SECTION 11.02. |
NOTICES |
92 | ||||
SECTION 11.03. |
COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES |
93 | ||||
SECTION 11.04. |
CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT |
93 | ||||
SECTION 11.05. |
STATEMENTS REQUIRED IN CERTIFICATE OR OPINION |
93 | ||||
SECTION 11.06. |
RULES BY TRUSTEE AND AGENTS |
94 | ||||
SECTION 11.07. |
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS |
94 | ||||
SECTION 11.08. |
GOVERNING LAW |
94 | ||||
SECTION 11.09. |
NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS |
94 | ||||
SECTION 11.10. |
SUCCESSORS |
94 | ||||
SECTION 11.11. |
SEVERABILITY |
95 | ||||
SECTION 11.12. |
COUNTERPART ORIGINALS |
95 | ||||
SECTION 11.13. |
TABLE OF CONTENTS, HEADINGS, ETC. |
95 |
vi
SECTION 11.14. |
CONSENT TO JURISDICTION; SUBMISSION TO PROCESS; WAIVER OF JURY TRIAL |
95 | ||||
SECTION 11.15. |
PRESCRIPTION |
96 |
vii
EXHIBITS AND ANNEXES
EXHIBIT A |
Form of Note |
A-1 | ||||
EXHIBIT B-1 |
Form of Certificate for Transfer of Beneficial Interest from Rule 144A Global Note to Regulation S Global Note |
B-1-1 | ||||
EXHIBIT B-2 |
Form of Certificate for Transfer of Beneficial Interest from Regulation S Global Note to Rule 144A Global Note |
B-2-1 | ||||
EXHIBIT B-3 |
Form of Certificate for Exchange or Registration of Transfer of Definitive Notes |
B-3-1 | ||||
EXHIBIT C |
Form of Certificate to be delivered by Institutional Accredited Investors |
C-1 | ||||
EXHIBIT D |
Form of Notation of Subsidiary Guarantee |
D-1 | ||||
EXHIBIT E |
Form of Supplemental Indenture |
E-1 |
viii
This Indenture, dated as of May 1, 2014 is among CGG, a société anonyme incorporated in France and registered at the Paris Commercial Registry under Number 969 202 241 (the Company), any Guarantors (as hereinafter defined) party hereto and The Bank of New York Mellon, as trustee (the Trustee).
RECITAL:
The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the $500,000,000 principal amount of 6.875% Senior Notes due 2022 issued on the Issue Date (the Original Notes), 6.875% Exchange Senior Notes due 2022 in exchange for the Original Notes pursuant to a registered exchange offer (the Exchange Notes) and additional Notes for original issue from time to time after the Issue Date pursuant to Section 2.02 (together with the Original Notes and Exchange Notes, the Notes), without preference of one tranche of Notes over another tranche of Notes of the same series.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
Acquired Indebtedness means with respect to a specified Person (a) Indebtedness of any other Person existing at the time such other Person is merged with or into or becomes a Subsidiary of such specified Person or (b) Indebtedness relating to properties or assets acquired by such specified Person. Acquired Indebtedness shall be deemed to be incurred on the date the acquired Person becomes a Restricted Subsidiary or the date of the related acquisition of properties or assets from such Person.
Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this Indenture, control, as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of Voting Stock, by agreement or otherwise; provided, however, that beneficial ownership of 10% or more of the Voting Stock of a Person shall be deemed to be control. For purposes of this Indenture, the terms controlling, controlled by and under common control with have correlative meanings.
Agent means any Registrar or Paying Agent.
Applicable Premium means, with respect to any Note on any redemption date, the greater of:
(a) 1.0% of the principal amount of the Note; and
(b) the excess of (1) the present value at such redemption date of (A) the redemption price of the Note at July 15, 2017 (such redemption price being set forth in the table appearing in Section 3.07(b) of this Indenture) plus (B) all required interest payments due on the Note during the period from such redemption date through July 15, 2017 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points over (2) the principal amount of the Note, if greater.
Applicable Procedures means, with respect to any transfer or exchange of beneficial interests in the Global Note, the rules and procedures of the Depository, Euroclear or Clearstream that apply to such transfer or exchange.
Asset Sale means:
(a) the sale, lease, conveyance or other disposition (a disposition) of any properties or assets (including, without limitation, by way of a sale-and-leaseback), excluding dispositions in the ordinary course of business (provided that the disposition of all or substantially all of the properties or assets of the Company and its Subsidiaries taken as a whole will be subject to Sections 4.15 and 6.01(f) of this Indenture and not to provisions of Section 4.10 hereof); and
(b) the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Companys Subsidiaries,
whether, in the case of clause (a) or (b), in a single transaction or a series of related transactions, provided that such transaction or series of related transactions (i) involves properties or assets having a fair market value in excess of 10,000,000, or (ii) results in the payment of net proceeds in excess of 10,000,000.
Notwithstanding the preceding provisions of this definition, the following transactions will be deemed not to be Asset Sales:
(A) a disposition of obsolete or excess equipment or other properties or assets;
(B) a disposition of properties or assets (including Equity Interests) by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;
(C) a disposition of cash or Cash Equivalents;
(D) a disposition of properties or assets (including Equity Interests) that constitutes a Restricted Payment that is permitted by Section 4.07 of this Indenture;
(E) any trade or exchange by the Company or any Restricted Subsidiary of equipment or other properties or assets for equipment or other properties or assets owned or held by another Person, provided that the fair market value of the properties or assets traded or exchanged by the Company or such Restricted Subsidiary (together with any cash or Cash
2
Equivalents) is reasonably equivalent to the fair market value of the properties or assets (together with any cash or Cash Equivalents) to be received by the Company or such Restricted Subsidiary;
(F) the creation or perfection of a Lien on any properties or assets (or any income or profits therefrom) of the Company or any of its Restricted Subsidiaries that is not prohibited by Section 4.12 hereof;
(G) a sale-and-leaseback of the Companys office facilities in Massy, France replacing the sale-and-leaseback transaction relating to such facilities that is outstanding on the Issue Date;
(H) the surrender or waiver of contract rights or the settlement, release or surrender of contractual, non-contractual or other claims of any kind;
(I) the sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business, but only in connection with the compromise of collection thereof;
(J) the factoring of accounts receivable arising in the ordinary course of business pursuant to arrangements customary in the region; and
(K) the grant in the ordinary course of business of any non-exclusive license of patents, trademarks, registrations therefor and other similar intellectual property.
The fair market value of any non-cash proceeds of a disposition of properties or assets and of any properties or assets referred to in the foregoing clause (E) of this definition shall be determined in the manner contemplated in the definition of the term fair market value, the results of which determination shall be set forth in an Officers Certificate delivered to the Trustee.
Attributable Indebtedness in respect of a sale-and-leaseback transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale-and-leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). As used in the preceding sentence, the net rental payments under any lease for any such period shall mean the sum of rental and other payments required to be paid with respect to such period by the lessee thereunder, excluding any amounts required to be paid by such lessee on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges. In the case of any lease that is terminable by the lessee upon payment of penalty, such net rental payment shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.
Board of Directors means the Board of Directors (Conseil dAdministration) of the Company, or any authorized committee of the Board of Directors.
3
Board Resolution means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors of the Company and to be in full force and effect on the date of such certification.
Business Day means any day other than a Legal Holiday.
Capital Lease Obligation means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP (as in effect on the Issue Date for purposes of determining whether a lease is a capital lease).
Capital Stock means (a) in the case of a corporation, corporate stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, including preferred stock, (c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
Cash Equivalents means:
(a) securities issued or directly and fully guaranteed or insured by the government of the United States of America, the Republic of France or any other country whose sovereign debt has a rating of at least A3 from Moodys and at least A- from S&P or any agency or instrumentality of any such government (provided that the full faith and credit of such government is pledged in support thereof), in each case having maturities of not more than 12 months from the date of acquisition;
(b) certificates of deposit, Eurodollar time deposits and French negotiable debt instruments (titres de créances négociables) with maturities of 12 months or less from the date of acquisition, bankers acceptances with maturities not exceeding six months and overnight bank deposits (collectively, Bank Deposits), in each case with or issued by any commercial bank organized under the laws of any country that is a member of the Organization for Economic Co-operation and Development having capital and surplus in excess of 500,000,000 and whose long-term debt securities are rated at least A3 by Moodys and at least A- by S&P;
(c) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (a) and (b) above entered into with any financial institution meeting the qualifications specified in clause (b) above;
(d) commercial paper and French negotiable debt instruments (titres de créances négociables) having a rating of at least P-1 from Moodys or at least A-1 from S&P and in each case maturing within 12 months after the date of acquisition;
(e) deposits available for withdrawal on demand with any commercial bank not meeting the qualifications specified in clause (b) above, provided that all such deposits are
4
made in the ordinary course of business, do not remain on deposit for more than 30 consecutive days and do not exceed 25,000,000 in the aggregate at any one time, with no more than 5,000,000 being deposited in commercial banks within a single country;
(f) money market mutual funds substantially all of the assets of which are of the type described in any of the foregoing clauses (a) through (d), including, without limitation, any mutual fund for which the Trustee or an Affiliate of the Trustee serves as investment manager, administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that the Trustee or an Affiliate of the Trustee receives fees from such funds for services it or its Affiliate renders to such fund in respect of such investment; and
(g) in the case of Restricted Subsidiaries organized under the laws of China, Bank Deposits from the date of acquisition issued by a commercial bank organized under the laws of China (i) which has also issued Bank Deposits in which such Restricted Subsidiary is invested as of the Issue Date in the ordinary course of business and consistent with past practice; or (ii) which has capital, surplus and undivided profits aggregating in excess of 500,000,000 (or the foreign currency equivalent thereof as of the date of such investment) and whose long-term debt securities are rated at least A3 by Moodys Investors Service, Inc. and at least A- by Standard & Poors Ratings Services.
Change of Control means the occurrence of any of the following: (a) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Subsidiaries, taken as a whole, (b) the adoption, by holders of Capital Stock of the Company, of a voluntary plan relating to the liquidation or dissolution of the Company, (c) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any person (as such term is used in Section 13(d) (3) of the Exchange Act) becomes the beneficial owner (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, of more than 50% of the voting power of the outstanding Voting Stock of the Company or (d) the first day on which more than a majority of the members of the Board of Directors are not Continuing Directors; provided, however, that a transaction in which the Company becomes a Subsidiary of another Person (other than a Person that is an individual) shall not constitute a Change of Control if (i) the shareholders of the Company immediately prior to such transaction beneficially own (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, at least a majority of the voting power of the outstanding Voting Stock of such other Person immediately following the consummation of such transaction and (ii) immediately following the consummation of such transaction, no person (as such term is defined above), other than such other Person (but including the holders of the Equity Interests of such other Person), beneficially owns (as such term is defined above), directly or indirectly through one or more intermediaries, more than 50% of the voting power of the outstanding Voting Stock of the Company.
Clearstream means Clearstream Banking, société anonyme.
5
Company means the party named as such in the first paragraph of this Indenture until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means such successor.
Consolidated Cash Flow means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, to the extent deducted or excluded in calculating Consolidated Net Income for such period,
(a) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries,
(b) Consolidated Interest Expense of such Person and its Restricted Subsidiaries,
(c) depreciation and amortization (including amortization or impairment, if any, of goodwill and other intangibles, but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Person and its Restricted Subsidiaries,
(d) other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries less any non-cash items increasing Consolidated Net Income of such Person and its Restricted Subsidiaries (other than items that will result in cash receipt),
(e) any expenses, fees, charges or other costs related to any equity offering (other than an offering of Disqualified Stock) permitted by this Indenture (whether or not successful), and
(f) without duplication, an amount equal to any extraordinary loss plus any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an Asset Sale,
in each case, on a consolidated basis and determined in accordance with GAAP.
Consolidated Interest Coverage Ratio means with respect to any Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Consolidated Interest Expense of such Person for such period; provided, however, that the Consolidated Interest Coverage Ratio shall be calculated giving pro forma effect to each of the following transactions as if each such transaction had occurred at the beginning of the applicable four-quarter reference period:
(a) any incurrence, assumption, guarantee, repayment, purchase or redemption by such Person or any of its Restricted Subsidiaries of any Indebtedness (other than revolving credit borrowings) subsequent to the commencement of the period for which the Consolidated Interest Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Consolidated Interest Coverage Ratio is made (the Calculation Date);
6
(b) any acquisition that has been made by such Person or any of its Restricted Subsidiaries, or approved and expected to be consummated within 30 days of the Calculation Date, including, in each case, through a merger or consolidation, and including any related financing transactions, during the reference period or subsequent to such reference period and on or prior to the Calculation Date; and
(c) any other transaction that may be given pro forma effect in accordance with Article 11 of Regulation S-X under the Securities Act as in effect from time to time;
provided further, however, that (i) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded and (ii) the Consolidated Interest Expense attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Consolidated Interest Expense will not be obligations of the referent Person or any of its Restricted Subsidiaries following the Calculation Date.
Consolidated Interest Expense means, with respect to any Person for any period, the sum, without duplication, of
(a) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers acceptance financings, and net of all payments made or received (if any) pursuant to Hedging Obligations in respect of interest rates but excluding amortization of debt issuance costs and non-cash charges other than non-cash interest expenses related to convertible bonds), and
(b) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period.
Consolidated Net Income means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP, provided that (a) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or a Restricted Subsidiary thereof, (b) the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders and (c) the cumulative effect of a change in accounting principles shall be excluded.
7
Consolidated Net Worth means, with respect to any Person as of any date, the consolidated stockholders equity of such Person and its Restricted Subsidiaries as of such date less the amount of consolidated stockholders equity attributable to Disqualified Stock or treasury stock of such Person and its Restricted Subsidiaries as of such date, in each case determined in accordance with GAAP.
Consolidated Tangible Net Worth means, at any date, the Consolidated Net Worth of the Company and its Restricted Subsidiaries as shown on their most recent consolidated balance sheet less, without duplication, all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles, as determined in accordance with GAAP.
Consolidated Total Assets means, with respect to any Person as of any date, the consolidated total assets of such Person and its Restricted Subsidiaries as of such date, as determined in accordance with GAAP.
Continuing Directors means, as of any date of determination, any member of the Board of Directors who (a) was a member of the Board of Directors on the Issue Date or (b) was nominated for election to the Board of Directors with the approval of, or whose election to the Board of Directors was ratified by, at least a majority of the members of the Board of Directors who were members of the Board of Directors on the Issue Date or who were so elected to the Board of Directors thereafter.
Corporate Trust Office of the Trustee shall be at the address of the Trustee specified in Section 11.02 hereof or such other address as to which the Trustee may give notice to the Company.
Credit Facilities means, with respect to any Person, one or more debt facilities or commercial paper facilities with banks or other institutional lenders (including with special purpose vehicles established by such banks or lenders to provide such facilities) providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or trade letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.
Default means any event that is, or with the passage of time or the giving of notice or both, would be, an Event of Default.
Definitive Notes means Notes that are in registered certificated form.
Depository means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section SECTION 2.03 hereof as the Depository with respect to the Notes, until a successor shall have been appointed and becomes such pursuant to the applicable provision of this Indenture, and, thereafter, Depository shall mean or include such successor.
8
Designated Non-Cash Consideration means the fair market value of non-cash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to an Officers Certificate, setting forth the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent payment, redemption, retirement, sale or other disposition of such Designated Non-Cash Consideration. A particular item of Designated Non-Cash Consideration shall no longer be considered to be outstanding when and to the extent it has been paid, redeemed or otherwise retired or sold or otherwise disposed of in compliance with Section 4.10 of this Indenture.
Disqualified Stock means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures (excluding any maturity as a result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature or are redeemed or retired in full; provided, however, that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof (or of any security into which it is convertible or for which it is exchangeable) have the right to require the issuer to repurchase such Capital Stock (or such security into which it is convertible or for which it is exchangeable) upon the occurrence of any of the events constituting an Asset Sale or a Change of Control shall not constitute Disqualified Stock if such Capital Stock (and all such securities into which it is convertible or for which it is exchangeable) provides that the issuer thereof may not repurchase or redeem any such Capital Stock (or any such security into which it is convertible or for which it is exchangeable) pursuant to such provisions prior to compliance by the Company with Section 4.10 or 4.15 of this Indenture, as the case may be.
$, dollars and U.S. dollars denote the lawful currency of the United States of America.
Equity Interests means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
euro and denote the lawful single currency of participating member states of the European Economic and Monetary Union as contemplated by the Treaty Establishing the European Union.
Euro Equivalent means, with respect to any monetary amount in a currency other than euros, at or as of any time for the determination thereof, the amount of euros obtained by converting such foreign currency involved in such computation into euros at the spot rate for the purchase of euros with the applicable foreign currency as quoted by Reuters (or, if Reuters ceases to provide such spot quotations, by any other reputable service that is
9
providing such spot quotations, as selected by the Company) at approximately 11:00 a.m. (New York City time) on the date not more than two Business Days prior to such determination.
Euroclear means Euroclear SA/NV, as operator of the Euroclear system.
Exchange Act means the U.S. Securities Exchange Act of 1934, as amended.
Exchange Notes has the meaning set forth in the Recital of this Indenture.
Existing Indebtedness means Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Credit Facilities) in existence on the date of this Indenture, until such amounts are repaid, but shall not include any Indebtedness that is repaid with the proceeds of the Notes.
The term fair market value means, with respect to any asset or Investment, the fair market value of such asset or Investment at the time of the event requiring such determination, as determined in good faith by the Company, or, with respect to any asset or Investment in excess of 50,000,000 (other than cash or Cash Equivalents), as determined by a reputable investment banking, accounting or appraisal firm that is, in the judgment of the Board of Directors, qualified to perform the task for which such firm has been engaged and independent with respect to the Company.
GAAP means International Financial Reporting Standards, accounting principles adopted by the International Accounting Standards Board and its predecessor and, except as otherwise specified, as in effect from time to time.
guarantee means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.
Guarantor means each of:
(a) the Initial Guarantors; and
(b) any other Subsidiary of the Company (including any Restricted Subsidiary that becomes a Guarantor at its option) that executes a supplemental indenture providing for a Subsidiary Guarantee in accordance with the provisions of this Indenture,
and their respective successors and assigns, in each case, until the Subsidiary Guarantee of such Person has been released in accordance with Sections 10.04, 10.05 or 10.06 hereof.
Hedging Obligations means, with respect to any Person, the obligations of such Person under (a) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, (b) other agreements or arrangements designed to protect such Person
10
against fluctuations in interest rates and (c) any foreign currency futures contract, option or similar agreement or arrangement designed to protect such Person against fluctuations in currency exchange rates or commodity prices, in each case to the extent such obligations are incurred in the ordinary course of business of such Person and not for speculative purposes.
Holder means a Person in whose name a Note is registered.
Indebtedness means, with respect to any Person, any indebtedness of such Person, without duplication, whether or not contingent, in respect of borrowed money including, without limitation, any guarantee thereof, or evidenced by bonds, debentures, notes or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or bankers acceptances or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade account payable, or representing any Hedging Obligations, if and to the extent any of the foregoing indebtedness (other than letters of credit, guarantees and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP. The amount of any Indebtedness outstanding as of any date shall be (a) the accreted value thereof, in the case of any Indebtedness that does not require current payments of interest, and (b) the principal amount thereof, in the case of any other Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder).
Indenture means this Indenture, as amended or supplemented from time to time.
Indirect Participant means a Person who holds an interest through a Participant.
Initial Guarantors means CGG Holding B.V., CGG Marine B.V., CGG Marine Resources Norge A/ S, CGG Holding (U.S.) Inc., CGG Services (U.S.) Inc., Veritas Investments Inc., CGG Land (U.S.) Inc., Viking Maritime Inc., Veritas Geophysical (Mexico) LLC, Alitheia Resources Inc., Sercel, Inc., Sercel-GRC Corp., each a Restricted Subsidiary of the Company and a Guarantor as of the Issue Date.
Institutional Accredited Investor means an accredited investor as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.
Investment Grade Status shall occur when the Notes receive a rating of BBB- or higher from S&P (or its equivalent under any successor rating categories of S&P) and a rating of Baa3 or higher from Moodys (or its equivalent under any successor rating categories of Moodys) or, if either such entity ceases to rate the Notes for reasons outside the normal control of the Company, the equivalent investment grade credit rating from any other nationally recognized statistical rating organization, as that term is used in Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Company as a replacement agency.
Investments means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including
11
guarantees by the referent Person of, and Liens on any assets of the referent Person securing, Indebtedness or other obligations of other Persons), advances or capital contributions (excluding commission, travel and similar advances to directors, officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided, however, that the following shall not constitute Investments: (i) extensions of trade credit or other advances to customers on commercially reasonable terms in accordance with normal trade practices or otherwise in the ordinary course of business, (ii) Hedging Obligations and (iii) endorsements of negotiable instruments and documents in the ordinary course of business. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in Section 4.07 of this Indenture.
Issue Date means May 1, 2014.
Legal Holiday means a Saturday, a Sunday or a day on which banking institutions in Paris, France, New York, New York or at a place of payment with respect to the Notes are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.
Lien means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction other than a precautionary financing statement respecting a lease not intended as a security agreement) or any assignment of (or agreement to assign) any right to income or profits from any assets by way of security.
Moodys means Moodys Investors Service, Inc. or any successor to the rating agency business thereof.
Net Income means, with respect to any Person, the net income (or loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however, (a) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with (i) any Asset Sale (including, without limitation, dispositions pursuant to sale-and-leaseback transactions) or (ii) the disposition of any securities by such Person or any of its Restricted
12
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries and (b) any extraordinary or nonrecurring gain (but not loss), together with any related provision for taxes on such extraordinary or nonrecurring gain (but not loss).
Net Proceeds means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (without duplication) the following: (a) the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, sales commissions, recording fees, title transfer fees, title insurance premiums, appraiser fees, other out-of-pocket expenses and costs incurred in connection with preparing such asset for sale) and any relocation expenses incurred as a result thereof, (b) taxes paid or estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements that will result in a reduction in consolidated tax liability), (c) amounts required to be applied to the repayment of Indebtedness (other than under a revolving credit facility) secured by a Lien on the asset or assets that were the subject of such Asset Sale and (d) any reserve (including any reserve against any liabilities associated with such Asset Sale and retained by the Company or the relevant Restricted Subsidiary) established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such asset or assets, until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of the reserve so reversed or the amount returned to the Company or its Restricted Subsidiaries from such escrow arrangement, as the case may be.
Non-Recourse Debt means Indebtedness (a) as to which neither the Company nor any of its Restricted Subsidiaries (i) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or is otherwise directly or indirectly liable (as a guarantor or otherwise) or (ii) constitutes the lender, (b) no default with respect to which (including any rights the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) the holders of Indebtedness of the Company or any of its Restricted Subsidiaries (other than the Notes) to declare a default on such Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity and (c) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.
Notes has the meaning set forth in the Recital of this Indenture.
Note Custodian means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.
Obligations means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
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Officer means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Chief Administrative Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.
Officers Certificate means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 11.05 hereof.
Opinion of Counsel means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 11.05 hereof. Unless otherwise provided in this Indenture, the counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee.
Pari Passu Indebtedness means, with respect to any Net Proceeds from Asset Sales, Indebtedness of the Company and its Restricted Subsidiaries the terms of which require the Company or such Restricted Subsidiary to apply such Net Proceeds to offer to purchase such Indebtedness.
Participant means with respect to DTC, Euroclear or Clearstream, a Person who has an account with DTC, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).
Permitted Guarantees means any guarantee:
(a) guaranteeing or securing the Notes or the guarantee of any Guarantor,
(b) in favor of the Company or a Guarantor,
(c) guaranteeing Indebtedness incurred pursuant to clause (a) of the second paragraph of Section 4.09 of this Indenture, or
(d) in existence on the date of this Indenture to the extent guaranteeing Existing Indebtedness and Permitted Refinancing Indebtedness in respect thereof incurred in compliance with clause (j) of the second paragraph of Section 4.09 of this Indenture.
Permitted Investments means:
(a) any Investment in the Company (including, without limitation, any acquisition of the Notes) or in a Restricted Subsidiary of the Company, other than any Investment described in clause (a) of the definition of Restricted Payments,
(b) any Investment in cash or Cash Equivalents,
(c) any Investment by the Company or any Restricted Subsidiary of the Company in a Person if as a result of such Investment (i) such Person becomes a Restricted Subsidiary
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of the Company or (ii) such Person is merged or consolidated with or into, or transfers or conveys all or substantially all of its properties or assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company,
(d) any Investment made as a result of the receipt of non-cash consideration from (i) an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof or (ii) a disposition of assets that does not constitute an Asset Sale,
(e) Investments in stock, obligations or securities received in settlement of any claim or debts owing to the Company or any Restricted Subsidiary as a result of bankruptcy or insolvency proceedings or received in satisfaction of any judgment or in settlement of any claim in circumstances where the Company does not expect it would receive cash payment in a timely manner, or upon the foreclosure, perfection or enforcement of any Lien in favor of the Company or any Restricted Subsidiary, in each case as to any claim or debts owing to the Company or any Restricted Subsidiary that arose in the ordinary course of business of the Company or any such Restricted Subsidiary, provided that any stocks, obligations or securities received in settlement of any claim or debts that arose in the ordinary course of business (and received other than as a result of bankruptcy or insolvency proceedings or received in satisfaction of any judgment or in settlement of any claim in circumstances where the Company does not expect it would receive cash payment in a timely manner, or upon foreclosure, perfection or enforcement of any Lien) that are, within 180 days of receipt, converted into cash or Cash Equivalents shall be treated as having been cash or Cash Equivalents at the time received,
(f) Investments in Argas Ltd. consisting of guarantees of its obligations incurred in the ordinary course of its business, provided that such Investments, when taken together with all other Investments made pursuant to this clause (f) that are at the time outstanding, do not exceed 50,000,000,
(g) Investments in Argas Ltd. (other than those described in clause (f) above) and any other Affiliate organized in a foreign jurisdiction that is required by the applicable laws and regulations of such foreign jurisdiction or its governmental agencies, authorities or state-owned businesses to be majority owned by the government of such foreign jurisdiction or individual or corporate citizens of such foreign jurisdiction or another foreign jurisdiction in order for such Affiliate to transact business in such foreign jurisdiction, provided that such Investments, when taken together with all other Investments made pursuant to this clause (g) that are at the time outstanding, do not exceed 20% of Consolidated Tangible Net Worth,
(h) Investments in any Person in exchange for, or out of the net cash proceeds of, an issue or sale by the Company of Equity Interests (other than Disqualified Stock), and
(i) other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (i) that are at the time outstanding, do not exceed 25,000,000.
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Permitted Liens means:
(a) Liens securing Indebtedness incurred pursuant to clause (a) of the second paragraph of Section 4.09 hereof, and Liens securing any other Indebtedness under Credit Facilities incurred pursuant to the first paragraph of such Section 4.09,
(b) Liens in favor of the Company and its Restricted Subsidiaries,
(c) Liens on any property or asset of a Person existing at the time such Person is merged into or consolidated with the Company or any Restricted Subsidiary of the Company, provided that such Liens were in existence prior to such merger or consolidation, were not created in contemplation of it and do not extend to any property or asset of the Company or any of its Restricted Subsidiaries other than those of the Person merged into or consolidated with the Company or any of its Restricted Subsidiaries,
(d) Liens on any property or asset existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company, provided that such Liens were in existence prior to such acquisition, were not created in contemplation of it and do not extend to any other property or asset of the Company or any of its Restricted Subsidiaries,
(e) Liens securing the performance of statutory obligations, surety or appeal bonds, bid or performance bonds, insurance obligations or other obligations of a like nature incurred in the ordinary course of business,
(f) Liens securing Hedging Obligations,
(g) Liens existing on the date hereof,
(h) Liens securing Indebtedness (including Capital Lease Obligations) permitted by clause (g) of the second paragraph of Section 4.09 hereof, provided that such Liens extend only to the property, plant or equipment financed by such Indebtedness,
(i) any interest or title of a lessor under an operating lease,
(j) Liens arising by reason of deposits necessary to obtain standby letters of credit in the ordinary course of business,
(k) Liens on real or personal property or assets of the Company or a Restricted Subsidiary thereof to secure Indebtedness incurred for the purpose of (i) financing all or any part of the purchase price of such property or assets incurred prior to, at the time of, or within 90 days after, the acquisition of such property or assets or (ii) financing all or any part of the cost of construction or improvement of any such property or assets, provided that the amount of any such financing shall not exceed the amount expended in the acquisition of, or the construction of, such property or assets and such Liens shall not extend to any other property or assets of the Company or a Restricted Subsidiary (other than any associated accounts, contracts and insurance proceeds),
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(l) judgment Liens not giving rise to an Event of Default so long as any appropriate legal proceeding which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceeding may be initiated shall not have expired,
(m) Liens securing Indebtedness of the Company or any Restricted Subsidiary of the Company that does not exceed 10,000,000 at any one time outstanding,
(n) Liens securing Acquired Indebtedness incurred pursuant to the first paragraph of Section 4.09 hereof, provided that such Liens (1) secured such Acquired Indebtedness at the time of and prior to the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company and were not granted in connection with, or in anticipation of, such incurrence, and (2) do not extend to any property or asset of the Company or any of its Restricted Subsidiaries other than the property or asset that secured the Acquired Indebtedness prior to the time that it became Acquired Indebtedness of the Company or a Restricted Subsidiary of the Company,
(o) Liens securing Permitted Refinancing Indebtedness with respect to any Indebtedness secured by Liens referred to in clauses (c), (d), (g), (h), (k) and (n) above and in this clause (o), and
(p) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor.
Permitted Refinancing Indebtedness means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries; provided, however, that
(a) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus premium, if any, and accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of expenses incurred in connection therewith),
(b) such Permitted Refinancing Indebtedness has a final maturity date no earlier than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded,
(c) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable, taken as a whole, to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, and
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(d) if the Company is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, then such Permitted Refinancing Indebtedness is solely Indebtedness of the Company;
provided, however, that a Restricted Subsidiary that is also a Guarantor may guarantee Permitted Refinancing Indebtedness incurred by the Company, whether or not such Restricted Subsidiary was an obligor or guarantor of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; provided further, however, that if such Permitted Refinancing Indebtedness is subordinated to the Notes, such guarantee shall be subordinated to such Restricted Subsidiarys Subsidiary Guarantee to at least the same extent.
Person means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or other entity.
Qualified Equity Offering means (a) any issuance and sale of Equity Interests (other than Disqualified Stock) of the Company pursuant to an underwritten offering registered under the Securities Act or (b) any other issuance and sale of Equity Interests (other than Disqualified Stock) of the Company so long as, at the time of consummation of such sale, the Company has a class of common equity securities (including American depository shares) registered pursuant to Section 12(b) or Section 12(g) under the Exchange Act.
Reference Date means April 28, 2005.
Registered Exchange Offer means the offer that may be made by the Company pursuant to a Registration Rights Agreement to issue Exchange Notes in exchange for Original Notes.
Registration Rights Agreement means the Registration Rights Agreement, dated as of May 1, 2014, by and among the Company, the Initial Guarantors and the initial purchasers party thereto relating to the Original Notes.
Regulation S means Regulation S under the Securities Act.
Regulation S Global Note means a permanent global note that contains the applicable restricted legends referred to in the form of the Note attached hereto as Exhibit A, and that is deposited with the Note Custodian and registered in the name of the Depository, representing Notes originally issued or transferred in reliance on Regulation S.
Responsible Officer, when used with respect to the Trustee, means any officer within the Corporate Trust Office of the Trustee (or any successor corporate trust office of the Trustee) or any other officer of the Trustee customarily performing functions similar to
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those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject and, in each case, having direct responsibility for the administration of this Indenture.
Restricted Global Notes means the IAI Global Note, the Rule 144A Global Note, and the Regulation S Global Note, and each of which is required to bear the legend set forth in Section 2.06(f) hereof.
Restricted Investment means an Investment other than a Permitted Investment.
Restricted Subsidiary of a Person means any Subsidiary of such Person that is not an Unrestricted Subsidiary.
Rule 144A means Rule 144A promulgated under the Securities Act.
S&P means Standard & Poors Financial Services LLC, a subsidiary of The McGraw Hill Companies, Inc. or any successor to the rating agency business thereof.
SEC means the Securities and Exchange Commission.
Securities Act means the U.S. Securities Act of 1933, as amended.
Sercel-GRC Corp. means Sercel-GRC Corp., an Oklahoma corporation with its head office in Tulsa, Oklahoma, and a Restricted Subsidiary of the Company and a Guarantor as of the Issue Date.
Sercel Guarantors means Sercel, Inc. and Sercel-GRC. Corp.
Sercel, Inc. means Sercel, Inc., an Oklahoma corporation with its head office in Houston, Texas, and a Restricted Subsidiary of the Company and a Guarantor as of the Issue Date.
Sercel S.A. means:
(a) Sercel S.A., a French limited liability corporation with its head office in Carquefou, France, and a Restricted Subsidiary of the Company as of the Issue Date; and/or
(b) any holding company (including Sercel Holding S.A.) that holds all of the outstanding Capital Stock of either or both of Sercel S.A. and Sercel, Inc. (other than directors qualifying shares and Capital Stock held by other statutorily required minority shareholders) and that does not hold any Capital Stock in any other Subsidiary of the Company.
Significant Subsidiary means any Restricted Subsidiary of the Company that would be a significant subsidiary as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture.
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Stated Maturity means, with respect to any mandatory sinking fund or other installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
Strategic Assets means assets or rights (other than assets that would be classified as current assets in accordance with GAAP) of the kind used or usable by the Company or its Restricted Subsidiaries in the business of providing services or software products to the oil and gas industry or manufacturing equipment for use by the oil and gas industry (or any business that is reasonably complementary or related thereto as determined in good faith by the Board of Directors).
Subsidiary means, with respect to any Person, (a) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof), (b) any partnership (i) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (ii) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof) and (c) any other Person whose results for financial reporting purposes are consolidated with those of such Person in accordance with GAAP.
Subsidiary Guarantee means the guarantee by each Guarantor of the Companys obligations under this Indenture and the Notes, executed pursuant to Article 10 hereof.
TIA means the Trust Indenture Act of 1939 as in effect on the date on which this Indenture is qualified under the TIA.
Transfer Restricted Securities means securities that bear or are required to bear the legend set forth in Section 2.06(f) hereof.
Treasury Rate means, as of any redemption date in respect of the Notes, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15(519) that has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to July 15, 2017; provided, however, that if the period from the redemption date to July 15, 2017 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.
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Trustee means the party named as such in the first paragraph of this Indenture until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.
Unrestricted Subsidiary means any Subsidiary of the Company that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution and any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate a Subsidiary as an Unrestricted Subsidiary only to the extent that such Subsidiary at the time of such designation (a) has no Indebtedness other than Non-Recourse Debt, (b) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless such agreement, contract, arrangement or understanding does not violate Section 4.11 hereof, and (c) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (i) to subscribe for additional Equity Interests or (ii) to maintain or preserve such Persons financial condition or to cause such Person to achieve any specified levels of operating results. Any such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee the Board Resolution giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing conditions and was permitted by Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date pursuant to Section 4.09 hereof, the Company shall be in default of such covenant). The Board of Directors may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary, provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if: (1) such Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period, and (2) no Default or Event of Default would be in existence following such designation.
U.S. Dollar Equivalent means, with respect to any monetary amount in a currency other than U.S. dollars, at or as of any time for the determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as quoted by Reuters (or, if Reuters ceases to provide such spot quotations, by any other reputable service as is providing such spot quotations, as selected by the Company) at approximately 11:00 a.m. (New York City time) on the date not more than two Business Days prior to such determination.
U.S. Government Securities means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged.
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Voting Stock of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors, managers or trustees of such Person.
Weighted Average Life to Maturity means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (b) the then outstanding principal amount of such Indebtedness.
Wholly Owned Restricted Subsidiary of any Person means a Restricted Subsidiary of such Person to the extent that all of the outstanding Capital Stock or other ownership interests of which (other than directors qualifying shares and Capital Stock held by other statutorily required minority shareholders) shall at the time be owned directly or indirectly by such Person.
SECTION 1.02. OTHER DEFINITIONS.
Term |
Defined in Section |
|||
Additional Amounts |
4.19 | |||
Affiliate Transaction |
4.11 | |||
Agreement Currency |
4.20 | |||
Asset Sale Offer |
3.09 | |||
Change of Control Offer |
4.15 | |||
Change of Control Payment |
4.15 | |||
Change of Control Payment Date |
4.15 | |||
Covenant Defeasance |
8.03 | |||
Definitive Notes Legend |
2.06 | |||
Distribution Compliance Period |
2.01 | |||
DTC |
2.03 | |||
Event of Default |
6.01 | |||
Excess Proceeds |
4.10 | |||
Global Notes |
2.01 | |||
incur or incurrence |
4.09 | |||
IAI Global Notes |
2.01 | |||
Judgment Currency |
4.20 | |||
Legal Defeasance |
8.02 | |||
merger |
1.04 | |||
Offer Amount |
3.09 | |||
Offer Period |
3.09 | |||
Other Company Indebtedness |
4.13 | |||
Paying Agent |
2.03 | |||
Payment Default |
6.01 |
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Purchase Date |
3.09 | |||
QIB |
2.06 | |||
Registrar |
2.03 | |||
Regulation S Global Notes |
2.01 | |||
Restricted Payments |
4.07 | |||
Rule 144A Global Notes |
2.01 | |||
Taxes |
4.19 | |||
Relevant Taxing Jurisdiction |
4.19 | |||
Suspended Provisions |
4.23 |
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. Any terms incorporated in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(3) or is not exclusive;
(4) words in the singular include the plural, and in the plural include the singular;
(5) provisions apply to successive events and transactions;
(6) the term merger includes a fusion, an amalgamation, a compulsory share exchange, a conversion of a corporation into another business entity and any other transaction having effects substantially similar to a merger under the General Corporation Law of the State of Delaware;
(7) references to France are to the French Republic; and
(8) references to sections of or rules under the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time.
Whenever the covenants or default provisions or definitions in this Indenture refer to an amount in U.S. dollars or euros, that amount will be deemed to refer to the U.S. Dollar Equivalent or Euro Equivalent, as applicable, of the amount of any obligation denominated in any other currency or currencies, including composite currencies.
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The U.S. Dollar Equivalent or the Euro Equivalent for any purpose under this Indenture will be determined as of a date of determination as described in the definition of U.S. Dollar Equivalent or Euro Equivalent, as applicable, in Section 1.01 and, in any case, no subsequent change in the U.S. Dollar Equivalent or the Euro Equivalent after the applicable date of determination will cause such determination to be modified.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes shall be issued only in registered form. The Notes and the Trustees certificates of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication. Notes shall be issued in registered, global form in minimum denominations of $200,000 and integral multiples of $1,000 in excess thereof.
Any Original Notes that remain outstanding after the completion of the Registered Exchange Offer, together with the Exchange Notes issued in connection with the Registered Exchange Offer, shall be treated as a single class of securities under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.
The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture, and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. Notwithstanding the foregoing, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.
(a) Global Notes. The Original Notes will be offered and sold by the Company pursuant to a purchase agreement. The Original Notes will be resold initially only to (i) QIBs in reliance on Rule 144A and (ii) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S. The Original Notes may thereafter be transferred to, among others, QIBs, Institutional Accredited Investors and purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth herein. Original Notes initially resold pursuant to Rule 144A shall be issued initially in the form of one or more permanent global notes in definitive, fully registered form (collectively, the Rule 144A Global Note); Original Notes resold to Institutional Accredited Investors shall be issued initially in the form of one or more permanent global notes in definitive, fully registered form (collectively, the IAI Global
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Note); and Original Notes initially resold pursuant to Regulation S shall be issued initially in the form of one or more permanent global notes in definitive, fully registered form (collectively, the Regulation S Global Note), in each case without interest coupons and with the global securities legend and the applicable restricted securities legend set forth in Exhibit A hereto. The Rule 144A Global Notes, the IAI Global Notes and the Regulation S Global Notes are collectively referred to herein as the Global Notes.
The Global Notes shall be deposited upon issuance with the Trustee as custodian for the Depository and registered in the name of Depository or its nominee, in each case for credit to an account of a direct or indirect participant in the Depository (including Euroclear or Clearstream).
Beneficial interests in the Rule 144A Global Notes may not be exchanged for beneficial interests in the Regulation S Global Notes or the IAI Global Notes at any time except in the limited circumstances as provided in Section 2.06. Beneficial interests in a Regulation S Global Note will be exchangeable for beneficial interests in a Rule 144A Global Note, an IAI Global Note or a Definitive Note only after the expiration of the period through and including the 40th day after the later of the commencement and the closing of this offering (the Distribution Compliance Period) and then only in compliance with the requirements provided for in Section 2.06. Beneficial interests in the Global Notes may not be exchanged for Definitive Notes except in the limited circumstances provided in Section 2.06.
Each Global Note shall represent such of the outstanding Notes as shall be specified therein, and each shall provide that it shall represent the aggregate amount of outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, redemptions, repurchases and transfers of interests. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Note Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.
(b) Book-Entry Provisions. Participants shall have no rights either under this Indenture with respect to any Global Note held on their behalf by the Depository or by the Note Custodian as custodian for the Depository or under such Global Note, and the Depository (or its nominee, if the Depository is not the Holder) may be treated by the Company, the Trustee and any Agent of the Company or the Trustee as the absolute owner of such Global Note for all purposes whatsoever (except for the determination of Additional Amounts payable pursuant to Section 4.19 hereof). Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any Agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Participants, the operation of customary practices of such Depository governing the exercise of the rights of an owner of a beneficial interest in any Global Note.
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SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer shall sign the Notes for the Company by manual or facsimile signature. If the Company has a corporate seal, it may be reproduced on the Notes and, if so, it may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of an authorized signatory of the Trustee. Such signature shall be conclusive evidence that the Note has been authenticated under this Indenture. The form of Trustees certificate of authentication to be borne by the Notes shall be substantially as set forth in Exhibit A hereto.
The Trustee shall authenticate (i) the Original Notes for original issue on the Issue Date in the aggregate principal amount of $500,000,000, (ii) additional Notes (other than Exchange Notes) for original issue from time to time after the Issue Date subject to compliance with the terms of this Indenture in such principal amounts as may be set forth in a written order of the Company described in this sentence and (iii) the Exchange Notes for original issue from time to time for issue only in exchange for a like principal amount of Original Notes, in each case upon a written order of the Company signed by one Officer, which written order shall specify (a) the amount of Notes to be authenticated and the date of original issue thereof, (b) whether the Notes are Original Notes or Exchange Notes and (c) the amount of Notes to be issued in global form or definitive form. The aggregate principal amount of the Notes outstanding at any time may not exceed $500,000,000 plus such additional principal amounts as may be issued and authenticated pursuant to clause (ii) of this paragraph, except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company, any Guarantor or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the continental United States where Notes may be presented for registration of transfer or for exchange (Registrar) and where Notes may be presented for payment (Paying Agent). The Registrar shall keep a register of the Notes and of their transfer and exchange. So long as the Notes are listed on the Luxembourg Stock Exchange and the rules of such stock exchange shall so require, the Company shall maintain a paying agent and a co-registrar in the Grand Duchy of Luxembourg. The Company may at any time appoint one or more co-registrars and one or more additional paying agents. The term Registrar includes any co-registrar and the term Paying Agent includes any additional paying agent. The Company may at any time change any Paying Agent or Registrar without notice to any Holder. The Company shall
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notify the Trustee in writing of the name and address of any Agent not named in this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, and such agreement shall incorporate the TIAs provisions of this Indenture that relate to such Agent. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company (DTC) to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as Registrar and Paying Agent at its Corporate Trust Office in New York, New York and to act as Note Custodian with respect to the Global Notes, and the Company initially appoints The Bank of New York Mellon (Luxembourg), S.A. to act as Transfer Agent and Paying Agent in Luxembourg.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of or premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon the occurrence and during the continuance of any Event of Default described in clause (j), (k) or (l) of Section 6.01 hereof, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with Section 312(a) of the TIA. If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise comply with Section 312(a) of the TIA.
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. The transfer and exchange of the Global Notes or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture and the Applicable Procedures. Beneficial interests in a
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Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Global Note in accordance with the Applicable Procedures and, in the case of a Transfer Restricted Security, the transfer restrictions set forth in the legend in subsection (f) of this Section 2.06. Transfers of beneficial interests in the Restricted Global Notes to Persons required to take delivery thereof in the form of an interest in another Restricted Global Note shall be permitted as follows:
(i) Rule 144A Global Note or Regulation S Global Note to IAI Global Note. If an owner of a beneficial interest in a Rule 144A Global Note or Regulation S Global Note, as applicable, wishes to transfer its beneficial interest in such Rule 144A Global Note or Regulation S Global Note, as applicable, to a Person who is required or permitted to take delivery thereof in the form of an interest in a separate IAI Global Note, such owner shall, subject to the Applicable Procedures and in the case of a Regulation S Global Note, only after the expiration of the Distribution Compliance Period, exchange or cause the exchange of such interest for an equivalent beneficial interest in such separate IAI Global Note as provided for in this Section 2.06(a)(i). Upon receipt by the Trustee of (A) instructions given in accordance with the Applicable Procedures directing the Trustee, as Registrar and Note Custodian, to credit a beneficial interest in the separate IAI Global Note equal to the beneficial interest in the Rule 144A Global Note or Regulation S Global Note, as applicable, to be transferred, and (B) in the case of Global Notes that are Transfer Restricted Securities, a certificate substantially in the form of Exhibit B-2 hereto from the transferor and a certificate substantially in the form of Exhibit C hereto from the transferee and, if such transfer is in respect of an aggregate principal amount of Notes of less than $250,000, an Opinion of Counsel reasonably acceptable to the Company and the Registrar that such transfer is in compliance with the Securities Act and any applicable blue sky laws of any state of the United States, then the Trustee, as Registrar and Note Custodian, shall reduce the aggregate principal amount of the appropriate Rule 144A Global Note or Regulations S Global Note, as applicable, and increase the aggregate principal amount of the other IAI Global Note by the principal amount of the beneficial interest in the Rule 144A Global Note or Regulation S Global Note to be transferred.
(ii) Rule 144A Global Note or IAI Global Note to Regulation S Global Note. If an owner of a beneficial interest in a Rule 144A Global Note or IAI Global Note, as applicable, wishes to transfer its beneficial interest in such Rule 144A Global Note or IAI Global Note, as applicable, to a Person who is required or permitted to take delivery thereof in the form of an interest in a Regulation S Global Note, whether or not before or after the Distribution Compliance Period, such owner shall, subject to the Applicable Procedures, exchange or cause the exchange of such interest for an equivalent beneficial interest in a Regulation S Global Note as provided in this Section 2.06(a)(ii). Upon receipt by the Trustee of (A) instructions given in accordance with the Applicable Procedures directing the Trustee, as Registrar and Note Custodian, to credit a beneficial interest in the Regulation S Global Note in an amount equal to the beneficial interest in the Rule 144A Global Note or IAI Global Note, as applicable, to be transferred and (B) in the case of Global
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Notes that are Transfer Restricted Securities, a certificate substantially in the form of Exhibit B-1 hereto given by the owner of such beneficial interest stating that the transfer of such interest has been made in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with Rule 903 or Rule 904 of Regulation S, then the Trustee, as Registrar and Note Custodian, shall reduce the aggregate principal amount of the applicable Rule 144A Global Note or IAI Global Note and increase the aggregate principal amount of the Regulation S Global Note by the principal amount of the beneficial interest in the Rule 144A Global Note or IAI Global Note to be transferred.
(iii) Regulation S Global Note or IAI Global Note to Rule 144A Global Note. If an owner of a beneficial interest in a Regulation S Global Note or IAI Global Note, as applicable, wishes to transfer its beneficial interest in such Regulation S Global Note or IAI Global Note, as applicable, to a Person who is required or permitted to take delivery thereof in the form of an interest in a separate Rule 144A Global Note, such owner shall, subject to the Applicable Procedures, exchange or cause the exchange of such interest for an equivalent beneficial interest in such separate Regulation S Global Note or IAI Global Note as provided in this Section 2.06(a)(iii). Upon receipt by the Trustee of (A) instructions given in accordance with the Applicable Procedures directing the Trustee, as Registrar and Note Custodian, to credit a beneficial interest in the separate Rule 144A Global Note equal to the beneficial interest in the Regulation S Global Note or IAI Global Note, as applicable, to be transferred, and (B) in the case of Global Notes that are Transfer Restricted Securities, a certificate substantially in the form of Exhibit B-2 attached hereto given by the owner of such beneficial interest stating that the Person transferring such interest reasonably believes that the Person acquiring such interest is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) (a QIB) and is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A, then the Trustee, as Registrar and Note Custodian, shall reduce the aggregate principal amount of the appropriate Regulation S Global Note or IAI Global Note, as applicable, and increase the aggregate principal amount of the other Rule 144A Global Note by the principal amount of the beneficial interest in the Regulation S Global Note or IAI Global Note to be transferred.
Any beneficial interest in one of the Global Notes that is transferred to a Person who takes delivery in the form of an interest in the other Global Note will, upon transfer, cease to be an interest in such Global Note and will become an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interest in such other Global Note for so long as it remains such an interest.
(b) Transfer and Exchange of Definitive Notes. If issued, Definitive Notes may not be exchanged or transferred for beneficial interests in a Global Note, except upon consummation of a Registered Exchange Offer as contemplated by Section 2.06(f)(iv) hereof. When Definitive Notes are presented by a Holder to the Registrar with a request to register the transfer of the Definitive Notes or to exchange such Definitive Notes for an equal
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principal amount of Definitive Notes of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested only if the Definitive Notes are presented or surrendered for registration of transfer or exchange, are endorsed or accompanied by a written instrument of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing, and the Registrar receives the following (all of which may be submitted by facsimile):
(i) in the case of Definitive Notes that are Transfer Restricted Securities, such request shall be accompanied by the following additional information and documents, as applicable:
(A) if such Transfer Restricted Security is being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, or such Transfer Restricted Security is being transferred (1) to the Company or any of its Subsidiaries or (2) pursuant to an effective registration statement under the Securities Act, a certification to that effect from such Holder (substantially in the form of Exhibit B-3 hereto);
(B) if such Transfer Restricted Security is being transferred to a Person the transferor reasonably believes is a QIB in accordance with Rule 144A under the Securities Act or pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act, a certification to that effect from such Holder (in substantially the form of Exhibit B-3 hereto);
(C) if such Transfer Restricted Security is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or 904 under Regulation S of the Securities Act, a certification to that effect from such Holder (substantially in the form of Exhibit B-3 hereto but containing the certification called for by clauses (1) through (4) of Exhibit B-1 hereto); or
(D) if such Transfer Restricted Security is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraph (B) or (C) above, a certification to that effect from such Holder (substantially in the form of Exhibit B-3 hereto), and a certification substantially in the form of Exhibit C hereto from the transferee, and, if such transfer is in respect of an aggregate principal amount of Notes of less than $250,000, an Opinion of Counsel reasonably acceptable to the Company and the Registrar that such transfer is in compliance with the Securities Act and any applicable blue sky laws of any state of the United States.
(c) [Intentionally omitted.]
(d) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding any other provision of this Indenture, a Global Note may not be transferred as a whole except by
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the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.
(e) Authentication of Definitive Notes in Absence of Depository or at Companys Election. If at any time (i) the Depository for the Notes notifies the Company that the Depository is unwilling or unable to continue as Depository for the Global Notes or has ceased to be a clearing agency registered under the Exchange Act and in either case a successor Depository for the Global Notes is not appointed by the Company within 90 days after delivery of such notice, (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes or (iii) there has occurred and is continuing an Event of Default with respect to the Notes and the Depository so requests, then the Company shall execute, and the Trustee shall, upon receipt of an authentication order in accordance with Section 2.02 hereof, authenticate and deliver Definitive Notes in an aggregate principal amount equal to the principal amount of the Global Notes in exchange for such Global Notes. Definitive Notes issued in exchange for beneficial interests in the Global Notes pursuant to this Section 2.06(e) shall be registered in such names and in such authorized denominations as the Depository, pursuant to instructions from its direct or Indirect Participants or otherwise (in accordance with its customary procedures), shall instruct the Trustee. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered.
(f) Legends.
(i) Except as permitted by the following paragraphs (ii), (iii) and (iv), each Note certificate evidencing a Global Note or a Definitive Note (and all Notes issued in exchange therefor or substitution thereof) offered otherwise than in reliance on Regulation S will, until the expiration of the applicable holding period with respect to the notes set forth in Rule 144(k) of the Securities Act, unless otherwise agreed by the Company and the holder thereof, bear a legend substantially to the following effect (the Restricted Notes Legend):
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE SECURITIES ACT), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
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THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT, PRIOR TO THE DATE WHICH IS SIX MONTHS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT TO A PERSON WHO IS NOT A U.S. PERSON, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) (V) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
The Notes offered in reliance on Regulation S will, unless otherwise agreed by the Company and the holder thereof, bear a legend substantially to the following effect (the Regulation S Legend):
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.
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Each Definitive Note shall bear the following additional legend (the Definitive Notes Legend):
IN CONNECTION WITH ANY TRANSFER, THE HOLDER SHALL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Global Note) pursuant to Rule 144 under the Securities Act or pursuant to an effective registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a Definitive Note, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Security for a Definitive Note that does not bear the legend set forth in (i) above and rescind any restriction on the transfer of such Transfer Restricted Security upon certification from the transferring holder substantially in the form of Exhibit B-3 hereto and receipt of an Opinion of Counsel reasonably acceptable to the Registrar that such transfer is in compliance with the Securities Act; and
(B) in the case of any Transfer Restricted Security represented by a Global Note, such Transfer Restricted Security shall not be required to bear the legend set forth in (i) above, but shall continue to be subject to the provisions of Section 2.06(a) hereof.
(iii) Upon any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Global Note) in reliance on any exemption from the registration requirements of the Securities Act (other than an exemption pursuant to Rule 144 under the Securities Act) in which the Holder or the transferee provides an Opinion of Counsel to the Company and the Registrar in form and substance reasonably acceptable to the Company and the Registrar (which Opinion of Counsel shall also state that the transfer restrictions contained in the legend are no longer applicable):
(A) in the case of any Transfer Restricted Security that is a Definitive Note, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Security for a Definitive Note that does not bear the legend set forth in (i) above and rescind any restriction on the transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security represented by a Global Note, such Transfer Restricted Security shall not be required to bear the legend set forth in (i) above, but shall continue to be subject to the provisions of Section 2.06(a) hereof.
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(iv) Notwithstanding the foregoing, upon consummation of a Registered Exchange Offer, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more unrestricted Global Notes in aggregate principal amount equal to the sum of (A) the principal amount of the beneficial interests in the Global Notes accepted for exchange in the Registered Exchange Offer and (B) the principal amount of any Definitive Notes accepted for exchange in the Registered Exchange Offer. Concurrently with the issuance of such unrestricted Global Notes, the Trustee, as Registrar and Note Custodian, shall reduce accordingly the aggregate principal amount of each applicable Global Note and cancel any Definitive Notes accepted for exchange.
(g) Cancellation or Adjustment of Global Notes. At such time as all beneficial interests in Global Notes have been exchanged for Definitive Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for Definitive Notes or a beneficial interest in another Global Note, redeemed, repurchased or cancelled, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee, as Registrar and Note Custodian, to reflect such reduction; and if the beneficial interest is being exchanged or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee, as Registrar and Note Custodian, to reflect such increase.
(h) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, subject to this Section 2.06, the Company shall execute and, upon the written order of the Company signed by an Officer of the Company, the Trustee shall authenticate Definitive Notes and Global Notes at the Registrars request.
(ii) No service charge shall be made to a Holder for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 3.07, 4.10, 4.15 and 9.05 hereof).
(iii) Notwithstanding any other provision of this Section 2.06, prior to the expiration of the Distribution Compliance Period, beneficial interests in Regulation S Global Notes may be held only through Euroclear or Clearstream (as Indirect Participants in DTC), unless transferred to a Person that takes delivery through a Rule 144A Global Note or IAI Global Note in accordance with Section 2.06(a)(ii) hereof.
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(iv) All Definitive Notes and Global Notes issued upon any registration of transfer or exchange of Definitive Notes or Global Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Definitive Notes or Global Notes surrendered upon such registration of transfer or exchange.
(v) The Company and the Registrar shall not be required:
(A) to issue, to register the transfer of or to exchange Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection;
(B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of a Note other than in amounts of $200,000 or multiple integrals of $1,000 in excess thereof.
(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of, premium, if any, and interest, on such Notes, and neither the Trustee, any Agent nor the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes and Global Notes in accordance with the provisions of Section 2.02 hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Registrar in Luxembourg, or the Trustee or the Registrar in Luxembourg receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon the written order of the Company signed by one Officer of the Company, shall authenticate a replacement Note if the Trustees requirements are met. If required by the Trustee or the Registrar in Luxembourg, as applicable, and the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee or the Registrar in Luxembourg, as applicable, and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note. If, after the delivery of such replacement Note, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment or registration such original Note,
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the Trustee shall be entitled to recover such replacement Note from the Person to whom it was delivered or any Person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Company, the Trustee, any Agent and any authenticating agent in connection therewith.
Subject to the provisions of the final sentence of the preceding paragraph of this Section 2.07, every replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company, any Subsidiary of the Company or an Affiliate of the Company or any Subsidiary of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.
If the entire principal of and premium, if any, and interest on any Note are considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue as of the date of such payment.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, a Subsidiary of the Company or an Affiliate, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Trustee knows are so owned shall be so disregarded. Notwithstanding the foregoing, Notes that the Company, a Subsidiary of the Company or an Affiliate offers to purchase or acquires pursuant to an offer, exchange offer, tender offer or otherwise shall not be deemed to be owned by the Company, a Subsidiary of the Company or an Affiliate until legal title to such Notes passes to the Company, such Subsidiary or such Affiliate, as the case may be.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes upon a written order of the Company signed by one Officer of the Company. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Company considers appropriate for
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temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes. Until such exchange, Holders of temporary Notes shall be entitled to all of the benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and, at the written request of the Company, shall destroy cancelled Notes (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all cancelled Notes shall be delivered to the Company upon its written request. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation, other than as contemplated by the Registered Exchange Offer.
SECTION 2.12. DEFAULTED INTEREST; SPECIAL INTEREST
(a) If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date, provided, however, that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.
(b) All references herein, in any context, to any interest or other amount payable on or with respect to the Notes shall be deemed to include any special interest pursuant to the Registration Rights Agreement.
ARTICLE 3
REDEMPTION AND REPURCHASE
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, subject to Section 3.03, an Officers Certificate
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setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed among the Holders of the Notes as follows: (i) if the Notes are listed, in compliance with the requirements of the principal securities exchange on which the Notes are listed; or (ii) if the Notes are not so listed, on a pro rata basis, in accordance with the procedures of the applicable depository, if any. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 days nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes selected shall be in amounts of $200,000 or whole multiples of $1,000 in excess thereof. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.
The provisions of the two preceding paragraphs of this Section 3.02 shall not apply with respect to any redemption affecting only a Global Note, whether a Global Note is to be redeemed in whole or in part. In case of any such redemption in part, the unredeemed portion of the principal amount of the Global Note shall be in an authorized denomination.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first class mail a notice of redemption to each Holder whose Notes are to be redeemed at its registered address. For so long as the Notes are listed on the Luxembourg Stock Exchange and for so long as the rules of such exchange require, notices of redemption shall be published once by the Trustee, not less than five Business Days prior to the redemption date, in a newspaper having general circulation in Luxembourg, which newspaper may be the Luxemburger Wort, or if such newspaper ceases to be published or timely publication in it will not be practicable, in such other newspaper as the Trustee deems necessary to give fair and reasonable notice to the Holders of the Notes. Notices may also be published on the internet site of the Luxembourg Stock Exchange at http://www.bourse.lu.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price and any Applicable Premium;
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(c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in a principal amount equal to the unredeemed portion shall be issued in the name of the Holder thereof upon surrender and cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;
(g) the clause of this Indenture pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.
If any of the Notes to be redeemed is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depository applicable to redemption, and such notice will be given electronically.
At the Companys request, the Trustee shall give the notice of redemption in the Companys name and at its expense; provided, however, that the Company shall have delivered to the Trustee, at least 45 days (unless the Company and the Trustee agree to a shorter period) prior to the redemption date, an Officers Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the second preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03 hereof, or all conditions to a conditional redemption have been satisfied, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. Other than with respect to a redemption pursuant to Section 3.07(d), any notice of redemption may, in the Companys discretion, be subject to the satisfaction of one of more conditions precedent.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
No later than 10:00 a.m., New York City time, on the Business Day immediately preceding the redemption date, the Company shall deposit with the Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.04 hereof) money sufficient to pay the redemption price of and accrued interest on
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all Notes to be redeemed on the redemption date. The Paying Agent shall promptly return to the Company any money deposited with the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of and accrued interest on all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) At any time prior to July 15, 2017, the Company may redeem the Notes at its option, in whole or in part, at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium as of, and accrued and unpaid interest to, the date of redemption.
(b) At any time on or after July 15, 2017, the Company shall have the option to redeem the Notes, in whole or in part, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon, to the applicable redemption date, if redeemed during the twelve-month period beginning on July 15 of the years indicated below:
Year |
Note Redemption Price |
|||
2017 |
105.156 | % | ||
2018 |
103.438 | % | ||
2019 |
101.719 | % | ||
2020 and thereafter |
100.000 | % |
(c) At any time prior to July 15, 2017, the Company may redeem on any one or more occasions Notes (including Exchange Notes) representing up to 35% of the aggregate principal amount of Notes originally issued from time to time under this Indenture (including
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any Notes originally issued after the Issue Date but excluding for this purpose any Exchange Notes) at a redemption price of 106.875% of the principal amount thereof, plus accrued and unpaid interest thereon to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings, provided that (i) Notes (including Exchange Notes) representing at least 65% of the aggregate principal amount of Notes originally issued from time to time under this Indenture (including any Notes originally issued after the Issue Date but excluding for this purpose any Exchange Notes) remain outstanding immediately after the occurrence of each such redemption and (ii) such redemption shall occur within 90 days of the date of the closing of each such Qualified Equity Offering.
(d) The Company may at any time unconditionally redeem, in whole but not in part, the Notes at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest thereon to the date of redemption if it or any Guarantor has become or would become obligated to pay any Additional Amounts in respect of the Notes as a result of (i)(1) any change in or amendment to the laws or treaties (or regulations or rulings promulgated thereunder) of a Relevant Taxing Jurisdiction to tax or (2) any change in or amendment to any official position regarding the application or interpretation of such laws, treaties, regulations or rulings, which change or amendment is announced and becomes effective on or after the date of this Indenture (or, if the applicable Relevant Taxing Jurisdiction became a Relevant Taxing Jurisdiction on a date after the date of the Indenture, such later date); and (ii) such obligation cannot be avoided by the Company or any such Guarantor taking reasonable measures available to it. Notwithstanding the preceding sentence of this Section 3.07(d), no notice of redemption of the Notes pursuant to this Section 3.07(d) may be given earlier than 60 days prior to the earliest date on which the Company could be obligated to pay such Additional Amounts if a payment in respect of the Notes was then due. Prior to giving notice of any such redemption, the Company shall deliver to the Trustee (y) an Officers Certificate stating that the obligation to pay Additional Amounts cannot be avoided by the Company or any such Guarantor taking reasonable measures available to it and (z) an Opinion of Counsel of an independent legal counsel to the Company to the effect that the circumstances referred to in clause (i) above exist.
(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Section 3.01 through Section 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Holders shall have the right to require the Company to purchase Notes pursuant to an offer (an Asset Sale Offer), the Company shall follow the procedures specified below.
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The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the Offer Period). No later than five Business Days after the termination of the Offer Period (the Purchase Date), the Company shall purchase the principal amount of Notes required to be purchased pursuant to Section 4.10 hereof (the Offer Amount) or, if less than the Offer Amount has been tendered, all Notes validly tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as principal payments are made at Stated Maturity. The Company shall not permit any Restricted Subsidiary to enter into or suffer to exist any agreement (other than any agreement governing the Companys or any of its Restricted Subsidiaries Credit Facilities) that would place any restriction of any kind (other than pursuant to law or regulation) on the ability of the Company to make an Asset Sale Offer. Further, the Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the purchase of Notes as a result of an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions relating to an Asset Sale Offer, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described above by virtue thereof.
If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase Date;
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(e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may only elect to have all of such Note purchased and may not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled Option of Holder to Elect Purchase on the reverse of the Note completed, to the Company or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the Company or the Paying Agent, as the case may be, receives, no later than the expiration of the Offer Period, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Trustee shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $200,000, or integral multiples of $1,000 in excess thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).
If any of the Notes subject to an Asset Sale Offer is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depository applicable to repurchases.
On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and shall deliver to the Trustee an Officers Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Company or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Purchase Date.
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Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Section 3.01 through Section 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of and premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if a Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m., New York City time, on the Business Day immediately preceding the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in any proceeding under any applicable bankruptcy law) on overdue principal and premium, if any, at the rate equal to the interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any applicable bankruptcy law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain an office or agency in the continental United States and, subject to the provisions of Section 2.03 hereof, in the Grand Duchy of Luxembourg where Notes may be presented or surrendered for payment, where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. If at any time the Company shall fail to maintain any such required office or agency in the continental United States or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. Further, if at any time there shall be no such office or agency in the continental United States where the Notes may be presented or surrendered for payment, the Company shall forthwith designate and maintain such an office or agency in the continental United States, in order that the Notes shall at all times be payable in the continental United States. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
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The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03.
SECTION 4.03. REPORTS.
(a) Whether or not the Company is required to do so by the rules and regulations of the SEC, so long as any Notes are outstanding, the Company will file with the SEC (unless the SEC will not accept such a filing):
(i) within the time periods specified in the SECs rules and regulations, all annual financial and other information with respect to the Company and its Subsidiaries that would be required to be contained in a filing with the SEC on Form 20-F, including a Managements Discussion and Analysis of Financial Condition and Results of Operations and a report thereon by the Companys certified independent accountants, and
(ii) within 60 days after the end of each of the first and third quarters of each fiscal year (and within 75 days after the end of the second quarter of each fiscal year), reports on Form 6-K, or any successor form, attaching (a) unaudited consolidated financial statements for the Company for the period then ended (and the comparable period in the prior year), in each case prepared in accordance with GAAP (as in effect on the date of such report or financial information) and (b) the information relating to the Company described in Item 5 of Form 20-F (i.e., Operating and Financial Review and Prospects).
Within 15 days of filing, or attempting to file, such information with the SEC, the Company shall furnish such information to the Holders of the Notes.
The Company shall at all times comply with Section 314(a) of the TIA.
(b) For so long as any Notes remain outstanding and during any period during which the Company is not subject to Section 13 or 15(d) of the Exchange Act nor exempt therefrom pursuant to Rule 12g3-2(b) under the Exchange Act, the Company and the Guarantors shall furnish to the holders of the Notes and prospective purchasers of the Notes, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(c) For so long as the Notes are listed on the Luxembourg Stock Exchange and the rules of such stock exchange so require, the information referred to in Section 4.03(a) hereof shall also be made available, free of charge in Luxembourg through the offices of the Paying Agent in Luxembourg.
(d) Delivery of reports to the SEC or receipt by the Trustee of the documents specified in this Section 4.03 shall not constitute actual or constructive notice to the Trustee, or actual or constructive knowledge by the Trustee, of the contents of such documents.
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SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers Certificate stating that a review of the activities of the Company and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants or its equivalent body in France, as the case may be, the year-end financial statements delivered pursuant to Section 4.03(a) above shall be accompanied by a written statement of the Companys independent public accountants (who shall be a firm of established international reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Article 4 or Article 5 hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter
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in force, that may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, (i) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any of its Restricted Subsidiaries (other than any such Equity Interests owned by the Company or any of its Restricted Subsidiaries); (ii) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value, any Indebtedness that is subordinated in right of payment to the Notes or the Subsidiary Guarantees, as the case may be, except a payment of interest or principal at Stated Maturity; or (iii) make any Restricted Investment (all such payments and other actions set forth in clauses (i) through (iii) above being collectively referred to as Restricted Payments), unless, at the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least 1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in Section 4.09 hereof; and
(c) such Restricted Payment, together with (x) the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Reference Date (excluding Restricted Payments permitted by clauses (b) through (e) and, to the extent deducted in computing Consolidated Net Income, (f) and (g) of the next succeeding paragraph), and (y) the aggregate amount of all dividends and other payments or distributions paid subsequent to the Reference Date on account of the Companys or any of its Restricted Subsidiaries Equity Interests (including, without limitation, any such payment in connection with any merger or consolidation involving the Company) or to the direct or indirect holders of the Companys Equity Interests in their capacity as such (other than (i) dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company, (ii) dividends or distributions payable to the Company or any of its Restricted Subsidiaries or (iii) if the Restricted Subsidiary making such dividend is not a Wholly Owned Restricted Subsidiary, dividends to its shareholders on a pro rata basis), is less than the sum (without duplication) of the following: (A) 50% of the cumulative Consolidated Net Income of the Company for the period (taken as one accounting period) from January 1, 2005 to the end of the Companys most recently ended fiscal quarter for
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which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus (B) 100% of the aggregate of (1) the net cash proceeds and (2) the fair market value of Strategic Assets transferred or conveyed to the Company (as valued at the time of transfer or conveyance to the Company, and as determined in the manner contemplated by the definition of the term fair market value), in each case received by the Company since the Reference Date as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issuance or sale of Disqualified Stock or debt securities of the Company that have been converted into, or exchanged or redeemed for, such Equity Interests (other than any such Equity Interests, Disqualified Stock or convertible debt securities sold to a Restricted Subsidiary of the Company and other than Disqualified Stock or convertible debt securities that have been converted into, or exchanged or redeemed for, Disqualified Stock), plus (C) to the extent that any Restricted Investment that was made after the Reference Date is sold for cash or otherwise liquidated or repaid for cash, the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) plus (D) if any Unrestricted Subsidiary is redesignated as a Restricted Subsidiary, the lesser of (1) an amount equal to the fair market value of the Investments previously made by the Company and its Restricted Subsidiaries in such Subsidiary as of the date of redesignation and (2) the amount of such Investments.
The foregoing provisions will not prohibit any of the following:
(a) the payment of any dividend within 60 days after the date of declaration thereof if at said date of declaration such payment would have complied with the provisions of this Indenture;
(b) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or any Equity Interests of the Company or any of its Restricted Subsidiaries in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of the Company) of, other Equity Interests of the Company (other than any Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such redemption, purchase, retirement, defeasance or other acquisition shall be excluded from clause (c)(B) of the preceding paragraph;
(c) the defeasance, redemption, purchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(d) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the Company or any of its Restricted Subsidiaries;
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(e) repurchases of Equity Interests deemed to occur upon exercise of stock options, if such Equity Interests represent a portion of the exercise price of such stock options;
(f) so long as no Default has occurred and is continuing, the repurchase or other acquisition for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company for allocation (as a free allocation or otherwise) to directors, officers and employees of the Company and its Restricted Subsidiaries not in excess of 2,500,000 in any twelve-month period;
(g) so long as no Default has occurred and is continuing, the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any member of the Companys (or any of its Restricted Subsidiaries) management pursuant to any management equity subscription agreement or stock option agreement in effect as of the Issue Date; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed 1,000,000 in any twelve-month period;
(h) loans or advances in the ordinary course of business to Affiliates or Persons with which the Company or a Subsidiary may have contractual arrangements in any jurisdiction reasonably necessary to be made in connection with conducting the business of the Company or a Subsidiary in such jurisdiction in a form that is customary to address foreign investment regulation or practice in such jurisdiction, in an aggregate amount not to exceed 2,000,000 outstanding at any one time;
(i) so long as no Default has occurred and is continuing, advances constituting Investments or loans to directors, officers and employees of the Company and its Restricted Subsidiaries in the ordinary course of business for bona fide business purposes not in excess of 1,000,000 at any one time outstanding; and
(j) other Restricted Payments not to exceed 15,000,000 in the aggregate.
The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would not cause a Default (except at any time during which the Company maintains Investment Grade Status). For purposes of making such designation, all outstanding Investments by the Company and its Restricted Subsidiaries in the Subsidiary so designated shall be deemed to be Restricted Payments at the time of such designation, in an amount equal to the fair market value of such Investments at the time of such designation. Such designation shall only be permitted if such Restricted Payments would be permitted at such time and if such Restricted Subsidiary otherwise meets the definition of Unrestricted Subsidiary.
The Board of Directors may also redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if such redesignation complies with the requirements described in the definition of Unrestricted Subsidiary. If the aggregate amount of all Restricted Payments
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calculated for purposes of the first paragraph of this Section 4.07 includes an Investment in an Unrestricted Subsidiary that subsequently becomes a Restricted Subsidiary pursuant to the terms of this paragraph, then the aggregate amount of such Restricted Payments shall be reduced by the lesser of (a) an amount equal to the fair market value of the Investments previously made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary at the time it becomes a Restricted Subsidiary and (b) the amount of such Investments.
Any designation or redesignation of a Subsidiary shall be evidenced to the Trustee by filing with the Trustee a Board Resolution giving effect to such action and evidencing the valuation of any Investment relating thereto (as determined in good faith by the Board of Directors) and an Officers Certificate certifying that such action complied with the terms of the definition of Unrestricted Subsidiary set forth in this Indenture and with this Section 4.07.
The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any non-cash Restricted Payment shall be determined in the manner contemplated by the definition of the term fair market value, and the results of such determination shall be evidenced by an Officers Certificate delivered to the Trustee.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to do any of the following: (a)(i) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries on its Capital Stock or (ii) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries; (b) make loans or advances to the Company or any of its Restricted Subsidiaries or (c) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (1) agreements governing Credit Facilities or Existing Indebtedness, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, provided that such agreements and amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially less favorable to the holders of the Notes, taken as a whole, with respect to such dividend and other payment restrictions than those contained, in the case of Credit Facilities, in agreements governing Credit Facilities or, in the case of Existing Indebtedness, in agreements governing such Existing Indebtedness, in either case as in effect on the date of this Indenture, (2) this Indenture, the Notes, the Exchange Notes issued in connection with the Registered Exchange Offer and the Subsidiary Guarantees, (3) any agreement for the sale or other disposition of Equity Interests in a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending the
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sale or other disposition, (4) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred, (5) by reason of customary provisions restricting the subletting or assignment of any lease or the transfer of copyrighted or patented materials, (6) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (c) above on the property so acquired, (7) customary provisions in agreements for the sale of property or assets, (8) customary provisions in agreements that restrict the assignment of such agreements or rights thereunder, (9) provisions with respect to the disposition or distribution of assets or property in any joint venture agreement, assets sale agreement, stock sale agreement or other similar agreement in each case entered into in the ordinary course of business, but in each case only to the extent such encumbrance or restriction relates to the transfer of the property, or encumbers or restricts the assets, subject to such agreement, (10) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business, (11) Permitted Refinancing Indebtedness, provided that the encumbrances and restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially less favorable to the Holders, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced, (12) any Liens not prohibited by Section 4.12 that limit the right of the debtor to dispose of the assets subject to such Liens, or (13) applicable law.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK.
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, incur or an incurrence) any Indebtedness (including, without limitation, any Acquired Indebtedness) and that the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock or Disqualified Stock; provided, however, that the Company or any Guarantor may incur Indebtedness or issue Disqualified Stock, and any Restricted Subsidiary may incur Acquired Indebtedness, in each case if the Consolidated Interest Coverage Ratio for the Companys most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 3.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such four-quarter period.
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The foregoing provisions shall not apply to the incurrence by the Company or any of its Restricted Subsidiaries of any of the following Indebtedness:
(a) Indebtedness under Credit Facilities in an aggregate principal amount at any one time outstanding not to exceed the greater of (x) 500,000,000, plus any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness, and less any amounts derived from Asset Sales and applied to the permanent reduction of Indebtedness under Credit Facilities in accordance with Section 4.10 hereof and (y) 10% of the Companys Consolidated Total Assets;
(b) Existing Indebtedness;
(c) Hedging Obligations;
(d) Indebtedness represented by the Original Notes, any Exchange Notes issued in exchange for Original Notes pursuant to a Registered Exchange Offer or the Subsidiary Guarantees with respect to the Original Notes and such Exchange Notes;
(e) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries, provided that (1) if the Company or any Guarantor is the obligor on such Indebtedness, then the Indebtedness must be unsecured and expressly subordinated in right of payment to all of the Companys obligations with respect to the Notes or such Guarantors obligations under its Subsidiary Guarantee, as the case may be, and (2) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company, or any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that is not permitted by this clause (e);
(f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary thereof in the ordinary course of business, including guarantees or obligations of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(g) Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations (or any guarantee thereof or indemnity with respect thereto), in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (g), not to exceed 50,000,000 at any time outstanding;
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(h) the guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary of Indebtedness of the Company or another Restricted Subsidiary, in each case, that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or a Subsidiary Guarantee then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(i) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries incurred in the ordinary course of business in connection with cash pooling or other cash management arrangements;
(j) Permitted Refinancing Indebtedness incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund Indebtedness incurred pursuant to the first paragraph and clauses (b), (d) and (j) of the second paragraph of this Section 4.09;
(k) Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) in an aggregate principal amount not to exceed 5% of the Companys Consolidated Total Assets minus the sum of all Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) then outstanding; and
(l) any additional Indebtedness of the Company or any Guarantor in an aggregate principal amount not in excess of 50,000,000 at any one time outstanding and any guarantee thereof.
The Company shall not, and shall not permit any Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is subordinated to any other Indebtedness of the Company or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantees of such Guarantor, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall be deemed to be contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured.
For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (l) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.09, the Company shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09.
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The reclassification as Indebtedness of operating leases due to a change in accounting principles will not be deemed to be an incurrence of Indebtedness for the purposes of this Section 4.09.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless (a) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (as determined in accordance with the definition of such term, the results of which determination shall be set forth in an Officers Certificate delivered to the Trustee) of the assets or Equity Interests issued or sold or otherwise disposed of and (b) at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents,
provided, however, that the amount of (i) any liabilities (as shown on the Companys or such Restricted Subsidiarys most recent balance sheet) of the Company or such Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any guarantee thereof) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability, (ii) any securities, notes or other obligations received by the Company or such Restricted Subsidiary from such transferee that are converted within 180 days by the Company or such Restricted Subsidiary into cash (to the extent of the cash received in that conversion) and (iii) any Designated Non-Cash Consideration received by the Company or any Restricted Subsidiary in such Asset Sale having an aggregate fair market value (determined in accordance with the definition of such term under Section 1.01, the results of which determination shall be set forth in an Officers Certificate delivered to the Trustee) taken together with all other Designated Non-Cash Consideration received pursuant to this covenant that is at that time outstanding, not to exceed the greater of 100,000,000 and 2% of the Companys Consolidated Total Assets (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value) shall be deemed to be cash for purposes of this Section 4.10.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company or any such Restricted Subsidiary may apply such Net Proceeds to (a) permanently repay the principal of any Indebtedness of the Company ranking in right of payment at least pari passu with the Notes or any Indebtedness of such Restricted Subsidiary (provided that if such Restricted Subsidiary is a Guarantor then such Indebtedness shall rank in right of payment at least pari passu with its Subsidiary Guarantee), (b) make capital expenditures in respect of Strategic Assets, or (c) acquire (including by way of a purchase of assets or a majority of the Voting Stock of a Person, by merger, by consolidation or otherwise) Strategic Assets, provided that if the Company or such Restricted Subsidiary enters into a binding
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agreement to acquire such Strategic Assets within such 365-day period, but the consummation of the transactions under such agreement has not occurred within such 365-day period and such agreement has not been terminated, then such 365-day period shall be extended by 90 days to permit such consummation. If such consummation shall not occur, or such agreement shall be terminated within such 90-day extension period, then the Company may apply, or cause such Restricted Subsidiary to apply, within 90 days after the end of such initial 90-day extension period or the effective date of such termination, whichever is earlier, such Net Proceeds as provided in clauses (a) through (c) of this paragraph. Pending the final application of any such Net Proceeds, the Company or any such Restricted Subsidiary may temporarily reduce outstanding revolving credit borrowings, including borrowings under the Credit Facilities, or otherwise invest such Net Proceeds in any manner that is not prohibited by this Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in clauses (a) through (c) of this paragraph shall be deemed to constitute Excess Proceeds.
Within 30 days of each date on which the aggregate amount of Excess Proceeds exceeds 20,000,000, the Company shall commence an Asset Sale Offer pursuant to Section 3.09 hereof to purchase the maximum principal amount of Notes that may be purchased out of Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon, to the date of purchase, in accordance with the procedures set forth in Section 3.09 hereof; provided, however, that, if the Company is required to apply such Excess Proceeds to purchase, or to offer to purchase, any Pari Passu Indebtedness, the Company shall only be required to offer to purchase the maximum principal amount of Notes that may be purchased out of the amount of such Excess Proceeds multiplied by a fraction, the numerator of which is the aggregate principal amount of Notes outstanding and the denominator of which is the aggregate principal amount of Notes outstanding plus the aggregate principal amount of Pari Passu Indebtedness outstanding. To the extent that the aggregate principal amount of Notes tendered pursuant to an Asset Sale Offer is less than the amount that the Company is required to purchase, the Company may use any remaining Excess Proceeds for general corporate purposes in any manner not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by holders thereof exceeds the amount that the Company is required to purchase, the Trustee shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $200,000, or integral multiples of $1,000 in excess thereof, shall be purchased). Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.
The Company shall not, and shall not permit any Restricted Subsidiary to, enter into or suffer to exist any agreement (other than any agreement governing the Companys or any Restricted Subsidiarys Credit Facilities) that would place any restriction of any kind (other than pursuant to law or regulation) on the ability of the Company to make an Asset Sale Offer.
The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the purchase of Notes as a result of an Asset
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Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions relating to the Asset Sale Offer, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described above by virtue thereof.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an Affiliate Transaction), unless (a) such Affiliate Transaction is in writing and on terms that, when taken as a whole, are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person or, if there is no such comparable transaction, on terms that are fair and reasonable to the Company or such Restricted Subsidiary, and (b) the Company delivers to the Trustee (i) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of 2,000,000, an Officers Certificate certifying that such Affiliate Transaction complies with clause (a) above and (ii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of 5,000,000, a resolution of the Board of Directors set forth in an Officers Certificate certifying that such Affiliate Transaction complies with clause (a) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors and (iii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of 15,000,000, an opinion as to the fairness to the Company or the relevant Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm that is, in the judgment of the Board of Directors, qualified to render such opinion and is independent with respect to the Company; provided, however, that the following shall be deemed not to be Affiliate Transactions: (A) any employment agreement or other employee compensation plan or arrangement (including stock option plans) entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business of the Company or such Restricted Subsidiary; (B) transactions between or among the Company and its Restricted Subsidiaries (including any Person that becomes a Restricted Subsidiary as a result of any such transaction); (C) loans or advances to officers, directors and employees of the Company or any of its Restricted Subsidiaries made in the ordinary course of business and consistent with past practices of the Company and its Restricted Subsidiaries in an aggregate amount not to exceed 10,000,000 outstanding at any one time; (D) indemnities of officers, directors and employees of the Company or any of its Restricted Subsidiaries permitted by provisions of the organizational documents of the Company or such Restricted Subsidiary or applicable law; (E) the payment of reasonable and customary regular fees to directors of the Company or any of its Restricted Subsidiaries who are not employees of the Company or any Subsidiary; (F) any agreement or arrangement in effect as of the Issue Date or any amendment thereto or replacement thereof or any transaction contemplated thereby
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(including pursuant to any amendment or replacement agreement) so long as any such amendment or replacement agreement, taken as a whole, is no more disadvantageous to the Holders in any material respect than the original agreement as in effect on the Issue Date; (G) Restricted Payments and Permitted Investments that are permitted by the provisions of Section 4.07 hereof or the declaration or payment of any dividend or the making of any other payment or distribution described in Section 4.07(c)(y) which does not constitute an Event of Default pursuant to Section 6.01(e); and (H) transactions with a Person (other than an Unrestricted Subsidiary of the Company) that is an Affiliate of the Company solely because the Company owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien on any property or asset now owned or hereafter acquired, or any income or profits therefrom, except Permitted Liens, to secure (a) any Indebtedness of the Company or such Restricted Subsidiary (if it is not also a Guarantor), unless prior to, or contemporaneously therewith, the Notes are equally and ratably secured, or (b) any Indebtedness of any Guarantor, unless prior to, or contemporaneously therewith, the Subsidiary Guarantee of such Guarantor is equally and ratably secured; provided, however, that if such Indebtedness is expressly subordinated to the Notes or any Subsidiary Guarantee, the Lien securing such Indebtedness will be subordinated and junior to the Lien securing the Notes or the Subsidiary Guarantee, as the case may be, with the same relative priority as such Indebtedness has with respect to the Notes or the Subsidiary Guarantee.
SECTION 4.13. GUARANTEES OF CERTAIN INDEBTEDNESS BY RESTRICTED SUBSIDIARIES.
The Company shall not permit any Restricted Subsidiary, directly or indirectly, to guarantee any Indebtedness of the Company or any Guarantor (the Other Company Indebtedness) other than Permitted Guarantees, unless such Restricted Subsidiary (if it is not already a Guarantor) contemporaneously executes and delivers a Subsidiary Guarantee and a supplemental indenture to this Indenture in accordance with the terms of Section 10.02 hereof, which Subsidiary Guarantee will be senior to such Restricted Subsidiarys guarantee of such Other Company Indebtedness if such Other Company Indebtedness so guaranteed is subordinated Indebtedness.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, and, subject to Article 10 hereof, the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Restricted Subsidiary; provided, however, that the Company shall not be required to preserve the existence of any of its Restricted Subsidiaries, if the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole.
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SECTION 4.15. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder shall have the right to require the Company to purchase all or any portion (equal to $200,000 or an integral multiple of $1,000 in excess thereof) of such Holders Notes, pursuant to an offer described in this Section 4.15 (a Change of Control Offer), at a purchase price in cash equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon to the date of purchase (the Change of Control Payment). Within 30 days following a Change of Control, the Company shall give notice to each Holder and the Trustee stating: (1) that the Change of Control Offer is being made pursuant to this Section 4.15 and that all Notes validly tendered and not withdrawn will be accepted for payment; (2) the purchase price and the purchase date, which shall be no earlier than 30 days but no later than 60 days from the date such notice is given (the Change of Control Payment Date); (3) that any Note not tendered will continue to accrue interest; (4) that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, properly endorsed for transfer, together with the form entitled Option of Holder to Elect Purchase on the reverse of the Notes completed and such customary documents as the Company may reasonably request, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date; (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, no later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and (7) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $200,000 in principal amount or an integral multiple of $1,000 in excess thereof. If any of the Notes subject to a Change of Control Offer is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depository applicable to repurchases. Further, the Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the purchase of Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions relating to the Change of Control Offer, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described above by virtue thereof.
(b) On or before 10:00 a.m. New York time on the Business Day immediately preceding the Change of Control Payment Date, the Company shall, to the extent lawful, (a) accept for payment all Notes or portions thereof properly tendered pursuant to the Change
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of Control Offer, (b) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered and (c) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent shall promptly deliver to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, however, that each such new Note will be in a principal amount of $200,000 or an integral multiple of $1,000 in excess thereof. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
(c) The Change of Control provisions described above shall be applicable whether or not any other provisions of this Indenture are applicable.
(d) The foregoing provisions of this Section 4.15 that require the Company to make a Change of Control Offer following a Change of Control shall be applicable regardless of whether any other provisions of this Indenture are applicable. The Company shall not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the time and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
(e) The provisions of this Section 4.15 relating to the Companys obligation to make a Change of Control Offer may be waived or modified, prior to the occurrence of a Change of Control, with the written consent of the holders of a majority in aggregate principal amount of the then outstanding Notes.
SECTION 4.16. ISSUANCES AND SALES OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES.
The Company (i) shall not, and shall not permit any Restricted Subsidiary of the Company to, transfer, convey, sell or otherwise dispose of any Capital Stock of any Restricted Subsidiary of the Company to any Person (other than the Company or a Restricted Subsidiary of the Company) and (ii) shall not permit any Restricted Subsidiary of the Company to issue any of its Equity Interests to any Person other than to the Company or a Restricted Subsidiary of the Company (except, in the case of both clauses (i) and (ii) above, as required in the manner described in clause (b) under the definition of Wholly Owned Restricted Subsidiary, provided that the business and management of the Restricted Subsidiary is, by contract or otherwise, controlled by the Company), unless:
(1) the Net Proceeds from such issuance, transfer, conveyance, sale or other disposition are applied in accordance with Section 4.10 hereof and
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(2) immediately after giving effect to such transfer, conveyance, sale or other disposition, such Restricted Subsidiary either continues to be a Restricted Subsidiary or, if such Restricted Subsidiary would no longer constitute a Restricted Subsidiary, any remaining Investment in such Restricted Subsidiary would have been permitted to be made under Section 4.07 hereof if made on the date of such transfer, conveyance, sale or other disposition.
For purposes of this Section 4.16, the creation or perfection of a Lien on any Capital Stock of a Restricted Subsidiary of the Company to secure any Indebtedness of the Company or any of its Restricted Subsidiaries shall not be deemed to be a disposition of such Capital Stock; provided, however, any sale by the secured party of such Capital Stock following foreclosure of its Lien shall be subject to this Section 4.16.
SECTION 4.17. SALE-AND-LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, enter into any sale-and-leaseback transaction; provided, however, that the Company or any Restricted Subsidiary, as applicable, may enter into a sale-and-leaseback transaction if (i) the Company or such Restricted Subsidiary could have (a) incurred Indebtedness in an amount equal to the Attributable Indebtedness relating to such sale-and-leaseback transaction pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof and (b) incurred a Lien to secure such Indebtedness pursuant to Section 4.12 hereof, (ii) the gross cash proceeds of such sale-and-leaseback transaction are at least equal to the fair market value (as determined in accordance with the definition of such term, the results of which determination shall be set forth in an Officers Certificate delivered to the Trustee) of the property that is the subject of such sale-and-leaseback transaction and (iii) the transfer of assets in such sale-and-leaseback transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with, Section 4.10 hereof, if applicable.
SECTION 4.18. NO INDUCEMENTS.
The Company shall not, and the Company shall not permit any of its Subsidiaries, either directly or indirectly, to pay (or cause to be paid) any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver, amendment or supplement of any terms or provisions of this Indenture or the Notes, unless such consideration is offered to be paid (or agreed to be paid) to all Holders which so consent, waive or agree to amend or supplement in the time frame set forth on solicitation documents relating to such consent, waiver or agreement.
SECTION 4.19. ADDITIONAL AMOUNTS
All payments made by or on behalf of the Company or any Guarantor under or with respect to the Notes or the Subsidiary Guarantees will be made free and clear of and without withholding or deduction for or on account of any present or future tax, duty, levy, impost, assessment or other governmental charge (including without limitation, penalities, interest
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and any other liability with respect thereto) (Taxes) imposed or levied by or on behalf of any jurisdiction in which the Company or any Guarantor (including any successor entities) is then organized or resident for tax purposes or any political subdivision thereof or therein or any jurisdiction by or through which payment is made (each, a Relevant Taxing Jurisdiction), unless the Company or any Guarantor (or any Paying Agent) is required to withhold or deduct Taxes under the laws of the Relevant Taxing Jurisdiction or by the interpretation or administration thereof by the relevant taxing authority. If the Company or any Guarantor (or any Paying Agent) is so required to withhold or deduct any amount for or on account of Taxes from any payment made under or with respect to the Notes or the Subsidiary Guarantees, the Company or any such Guarantor (and each Paying Agent) will pay to each Holder of the Notes that are outstanding on the date of the required payment, such additional amounts (Additional Amounts) as may be necessary so that the net amount received by such Holder (including the Additional Amounts) after such withholding or deduction will not be less than the amount such Holder would have received if such Taxes had not been withheld or deducted, provided that no Additional Amounts will be payable with respect to any Note:
(a) surrendered by the Holder thereof for payment of principal more than 30 days after the later of (1) the date on which such payment first became due and (2) if the full amount payable has not been received by or on behalf of the relevant Holder on or prior to such due date, the date on which, the full amount having been so received, notice to that effect shall have been given to the Holders by the Trustee, except to the extent that the Holder would have been entitled to such Additional Amounts on surrendering such Note for payment on any day during the applicable 30-day period;
(b) if any tax, assessment or other governmental charge is imposed or withheld by reason of the failure to comply by the Holder or, if different, the beneficial owner (ayant-droit) of the Note with a request addressed to such Holder or beneficial owner to provide information, documents or other evidence concerning the nationality, residence, identity or connection with the Relevant Taxing Jurisdiction of such Holder or beneficial owner which is required or imposed by a statute, treaty, regulation or administrative practice of the Relevant Taxing Jurisdiction as a precondition to exemption from all or part of such tax, assessment or governmental charge;
(c) held by or on behalf of a Holder who is liable for Taxes in respect of such Note by reason of having some connection with the Relevant Taxing Jurisdiction other than the mere purchase, holding or disposition of any Note, or the receipt of payments made by or on behalf of the Company or any Guarantor in respect thereof or any Subsidiary Guarantee, including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in a trade or business therein or having had a permanent establishment therein;
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(d) on account of any estate, inheritance, gift, sale, transfer, personal property or other similar tax, assessment or other governmental charge;
(e) except in the case of the winding up of the Company or any Guarantor, any Note surrendered for payment in the Republic of France;
(f) any withholding or deduction imposed on a payment to an individual which is required to be made pursuant to any law implementing or complying with, or introduced in order to conform to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 2627 November 2000 on the taxation of savings income or any agreement between the European Community and any jurisdiction providing for equivalent measures;
(g) as a result of any combination of (a), (b), (c), (d), (e) or (f) or with respect to any payment made by or on behalf of the Company or any Guarantor in respect of any Note or Subsidiary Guarantee to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent that a beneficiary or settlor or beneficial owner would not have been entitled to any Additional Amounts had such beneficiary or settlor or beneficial owner been the Holder; or
(h) such withholding or deduction is imposed or levied on a payment to a Luxembourg resident individual and is required to be made pursuant to the Luxembourg law of 23 December 2005.
The Company or any Guarantor will also make such withholding or deduction and remit the full amount deducted or withheld to the relevant authority in accordance with applicable law. The Company will furnish, within 60 days after the date the payment of any Taxes is due pursuant to applicable law, to the Trustee, copies of tax receipts (to the extent received from the relevant tax authorities in the usual course or as generally provided) evidencing that such payment has been made by the Company or any Guarantor. The Trustee will make such evidence available to the Holders upon request.
At least 30 days prior to each date on which any payment under or with respect to the Notes or the Subsidiary Guarantees is due and payable, if the Company or any Guarantor becomes obligated to pay Additional Amounts with respect to such payment (unless such obligation to pay Additional Amounts arises after the 30th day prior to the date on which payment under or with respect to the Notes or the Subsidiary Guarantees is due and payable, in which case it will be paid promptly thereafter and in any case before the relevant payment date), the Company will deliver to each Paying Agent an Officers Certificate stating the fact that such Additional Amounts will be payable, and the amount so payable and will set forth such other information as necessary to enable such Paying Agent to pay such Additional Amounts to the Holders of the Notes on the payment date. Whenever in this Indenture there is mentioned, in any context, (a) the payment of principal (and premium, if any), (b) purchase prices in connection with a purchase of the Notes, (c) interest or (d) any other amount payable on or with respect to any of the Notes or the Subsidiary Guarantees, such mention is
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deemed to include mention of the payment of Additional Amounts provided for in this section to the extent, that, in such context, Additional Amounts are, were or would be payable in respect thereof.
The Company or a Guarantor, as the case may be, will pay any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies that arise in the United States, the Republic of France or in any jurisdiction in which a Paying Agent is located from the initial issue or registration of the Notes or on the enforcement of any payments with respect to the Notes or any Subsidiary Guarantee.
The obligations of the Company or any Guarantor described in this Section 4.19 will survive any termination, defeasance or satisfaction and discharge of this Indenture or any transfer by a holder or beneficial owner of its notes, and will apply, mutatis mutandis, to any jurisdiction in which any successor Person to the Issuer or any Guarantor is incorporated, engaged in business for tax purposes or resident for tax purposes or any jurisdiction from or through which such Person makes any payment on the Notes and any department or any political subdivision thereof or therein.
SECTION 4.20. INDEMNIFICATION FOR FOREIGN CURRENCY JUDGMENTS.
The obligations of the Company to any Holder or the Trustee shall, notwithstanding any judgment in a currency (the Judgment Currency) other than United States dollars (the Agreement Currency), be discharged only to the extent that on the day following receipt by such Holder or the Trustee, as the case may be, of any amount in the Judgment Currency, such Holder or the Trustee may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the amount originally to be paid to such Holder or the Trustee, as the case may be, in the Agreement Currency, the Company agrees, as a separate obligation and notwithstanding such judgment, to pay to such Holder or the Trustee, as the case may be, the difference, and if the amount of the Agreement Currency so purchased exceeds the amount originally to be paid to such Holder or the Trustee, as the case may be, such Holder or the Trustee, as the case may be, shall pay to or for the account of the Company such excess; provided that such Holder or the Trustee, as the case may be, shall not have any obligation to pay any such excess as long as a Default has occurred and is continuing, in which case such excess may be applied by such Holder or the Trustee, as the case may be, to such obligations.
SECTION 4.21. CONDUCT OF BUSINESS.
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, engage in the conduct of any business other than the business being conducted on the Issue Date and such other businesses as are reasonably necessary or desirable to facilitate the conduct and operation of, or ancillary or reasonably related to, such businesses, except to the extent as would not be material to the Company and its Restricted Subsidiaries, taken as a whole.
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SECTION 4.22. ANTI-LAYERING.
The Company shall not and shall not permit any Guarantor to incur, directly or indirectly, any Indebtedness that is subordinated in right of payment to any Indebtedness of the Company or the Guarantor, as the case may be, unless the Indebtedness so incurred is either pari passu with, or subordinated in right of payment to, the Notes or the relevant Subsidiary Guarantee, as the case may be.
Unsecured Indebtedness will not be deemed to be subordinated in right of payment to secured Indebtedness solely because it is unsecured, and Indebtedness that is not guaranteed by a particular Person is not deemed to be subordinated in right of payment to Indebtedness that is so guaranteed solely because it is not so guaranteed.
SECTION 4.23. EFFECTIVENESS OF COVENANTS AND EVENTS OF DEFAULT.
The covenants described under clauses (b)(iii) and (b)(iv) in Section 10.03 (Guarantors may Consolidate, etc., on Certain Terms), Section 4.07 (Restricted Payments), Section 4.09 (Incurrence of Indebtedness and Issuance of Disqualified Stock), Section 4.08 (Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries), Section 4.11 (Transactions with Affiliates), Section 4.21 (Conduct of Business), Section 4.10 (Asset Sales), clauses (i)(a), (ii) and (iii) in Section 4.17 (Sale-and-Leaseback Transactions) and Section 4.16 (Issuances and Sales of Capital Stock of Restricted Subsidiaries) and the Events of Default described in clauses (e) and (f) in Section 6.01 (Events of Default) (collectively, the Suspended Provisions) will no longer be in effect upon the Company attaining Investment Grade Status. If at any time the Companys credit rating is downgraded from Investment Grade Status, then the Suspended Provisions will thereafter be reinstated as if such covenants had never been suspended and be applicable pursuant to the terms of this Indenture (including in connection with performing any calculation or assessment to determine compliance with the terms of this Indenture), unless and until the Company subsequently attains Investment Grade Status (in which event the Suspended Provisions shall again no longer be in effect for such time that the Company maintains Investment Grade Status); provided, however, that no Default, Event of Default or breach of any kind shall be deemed to exist under the Indenture with respect to the Suspended Provisions based on, and none of the Company or any of its Subsidiaries shall bear any liability for, any actions taken or events occurring after the Company attains Investment Grade Status and before any reinstatement of such Suspended Provisions as provided above, or any actions taken at any time pursuant to any contractual obligation arising prior to such reinstatement, regardless of whether such actions or events would have been permitted if the applicable Suspended Provisions remained in effect during such period.
SECTION 4.24. WITHHOLDING.
In order to comply with applicable tax laws (inclusive of rules, regulations and interpretations promulgated by competent authorities) related to the Indenture in effect from time to time (Applicable Law) that a foreign financial institution, issuer, trustee, paying
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agent or other party is or has agreed to be subject to, the Company agrees (i) to provide to the Trustee and the paying agents sufficient information about the parties and/or transactions (including any modification to the terms of such transactions) so that the Trustee and the paying agents can determine if they have tax-related obligations under Applicable Law, (ii) that the Trustee and the paying agents shall be entitled to make any withholding or deduction from payments to the extent necessary to comply with Applicable Law for which the Trustee and the paying agents should not have any liability and (iii) to hold the Trustee and the paying agents harmless for any losses that they may suffer due to the actions required to comply with Applicable Law. The terms of this Section 4.24 shall survive the termination and discharge of this Indenture.
ARTICLE 5
SUCCESSORS
SECTION 5.01. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of the Company not constituting an Event of Default pursuant to with Section 6.01(f) hereof, the successor corporation formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the Company shall refer instead to the successor corporation and not to the Company), and may exercise every right and power of the Company under this Indenture with the same effect as if such successor corporation had been named as the Company herein; provided, however, that the predecessor Company shall not be relieved from its obligations under this Indenture or the Notes in the case of any such lease.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An Event of Default occurs if:
(a) the Company defaults in the payment when due of interest on the Notes, and such default continues for a period of 30 days;
(b) the Company defaults in the payment when due of principal of or premium, if any, on the Notes;
(c) the Company fails to comply with any of the provisions of Sections 4.10 or 4.15 hereof;
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(d) the Company fails to observe or perform any other covenant or other agreement in this Indenture or the Notes for 30 days after it receives written notice from the Trustee or the Holders of at least 25% in principal amount of the Notes then outstanding of such failure;
(e) the declaration or payment of any dividend or the making of any other payment or distribution described in subclause (y) of Section 4.07(c) hereof, which declaration, payment or distribution would not be permitted by Section 4.07 hereof if it were treated as a Restricted Payment;
(f) the Company consolidates or merges (fusion) with or into (whether or not the Company is the surviving corporation), or sells, assigns, transfers, leases, conveys, demerges (scission) or otherwise disposes of all or substantially all of its properties or assets in one or more related transactions, to, another Person unless: (1) the Company is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance, demerger or other disposition shall have been made is a corporation organized or existing under the laws of the United States (or any state thereof or the District of Columbia), France or any other member state of the European Union (as constituted on the Issue Date); (2) the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, lease, conveyance, demerger or other disposition shall have been made assumes all the obligations of the Company under the Notes and this Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee; (3) immediately after such transaction no Default or Event of Default exists; (4) except in the case of a merger of the Company with or into a Wholly Owned Restricted Subsidiary of the Company, the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance, demerger or other disposition shall have been made, (i) shall have Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of the Company immediately preceding the transaction and (ii) shall, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least 1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof; and (5) the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, (i) an Officers Certificate stating that such consolidation, merger or disposition and any supplemental indenture in respect thereto comply with this provision and that all conditions precedent in this Indenture relating to such transaction or transactions have been complied with and (ii) an Opinion of Counsel stating that the requirements of clauses (1) and (2) of this Section 6.01(f) have been satisfied;
(g) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any
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Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or is created after the date of this Indenture, which default (i) is caused by a failure to pay principal of or premium or interest on such Indebtedness prior to the expiration of any grace period provided in such Indebtedness, including any extension thereof (a Payment Default) or (ii) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess of 50,000,000; and provided, further, that if such default is cured or waived or any such acceleration rescinded, or such Indebtedness is repaid, within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, an Event of Default and any consequential acceleration of the Notes shall be automatically rescinded, so long as such rescission does not conflict with any judgment or decree;
(h) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any of its Restricted Subsidiaries and such judgment or judgments are not paid or discharged for a period (during which execution shall not be effectively stayed) of 60 days; provided that the aggregate of all such undischarged judgments (not covered by insurance) exceeds 50,000,000;
(i) the failure of any Guarantor to perform any covenant set forth in its Subsidiary Guarantee or the repudiation by any Guarantor of its obligations under its Subsidiary Guarantee or the unenforceability of any Subsidiary Guarantee for any reason other than as provided in this Indenture;
(j) the Company or any Significant Subsidiary is unable to pay its debts as they fall due and commences negotiations with any one or more of its creditors with a view to the general readjustment or rescheduling of its indebtedness or makes a general assignment for the benefit of or a composition with its creditors;
(k) the Company or any Significant Subsidiary takes any corporate action or other steps are taken or legal proceedings are started under applicable bankruptcy laws for its sauvegarde judiciaire, redressement judiciaire, liquidation judiciaire or other winding-up, dissolution, administration or reorganization (whether by way of voluntary arrangement, scheme of arrangement or otherwise) or for the appointment of a mandataire ad hoc, conciliateur or administrateur provisoire, or other liquidator, receiver, administrator, administrative receiver, conservator, custodian, trustee or similar officer of it or of any or all of its revenues and assets, other than an action, legal proceeding or other step on vexatious or frivolous grounds or which is withdrawn or discharged within 40 days; or
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(l) any execution or distress is levied against, or an encumbrancer takes possession of, the whole or any part of, the property, undertaking or assets of the Company or any Significant Subsidiary or any event occurs which under the laws of any jurisdiction has a similar or analogous effect in relation to property, undertaking or assets the value of which is superior to 50,000,000, other than an action, legal proceeding or other step on vexatious or frivolous grounds or which is withdrawn or discharged within 40 days.
SECTION 6.02. ACCELERATION.
If any Event of Default occurs and is continuing, the Trustee may, by notice to the Company, or the Holders of at least 25% in principal amount of the then outstanding Notes may, by notice to the Company and the Trustee, and the Trustee shall, upon the request of such Holders, declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately. Notwithstanding the foregoing, if an Event of Default specified in clause (j), (k) or (l) of Section 6.01 hereof occurs with respect to the Company or any Significant Subsidiary, all outstanding Notes shall be due and payable immediately without further action or notice. The Holders of a majority in principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium, if any, that have become due solely because of such acceleration) have been cured or waived.
If an Event of Default occurs by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium shall also become and be immediately due and payable, to the extent permitted by law, anything in this Indenture or in the Notes to the contrary notwithstanding.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of and premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
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SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of a majority in principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of or premium, if any, or interest on the Notes (including in connection with an offer to purchase). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.
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SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal of and premium, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
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SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the Trustees reasonable costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and interest ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest respectively; and
Third: to the Company or to such party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
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(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability; provided, however, if the Trustee elects to take any such action (including, but not limited to, the institution of defense of legal proceedings) it shall be entitled to security or indemnity for the payment of costs, expenses (including, but not limited to, attorneys fees and expenses) and liabilities which may be incurred thereby, satisfactory to the Trustee. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
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SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an Officers Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers Certificate or Opinion of Counsel. The Trustee may consult with counsel, and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.
(g) The Trustee shall have no duty to inquire as to the performance of the Companys covenants in Article 4 hereof or under any other agreement to which the Company is a party. In addition, the Trustee shall not be deemed to have knowledge of any Default or Event of Default except: (1) any Event of Default occurring pursuant to Section 6.01(a) or 6.01(b) hereof; or (2) any Default or Event of Default of which its Responsible Officer shall have received written notification at its Corporate Trust Office or obtained actual knowledge.
(h) The Trustee is not required to give any bond or surety with respect to the performance of its duties or the exercise of its powers under this Indenture.
(i) In the event the Trustee receives inconsistent or conflicting requests and indemnity from two or more groups of Holders of Notes, each representing less than a majority in aggregate principal amount of the Notes then outstanding, pursuant to the provisions of this Indenture, the Trustee, in its sole discretion, may determine what action, if any, shall be taken.
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(j) The permissive right of the Trustee to take the actions permitted by this Indenture shall not be construed as an obligation or duty to do so.
(k) Except for information provided by the Trustee concerning the Trustee, the Trustee shall have no responsibility for any information in any offering memorandum or other disclosure material distributed with respect to the Notes, and the Trustee shall have no responsibility for compliance with any state or Federal securities laws in connection with the Notes.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company, any Guarantor or any Affiliate of the Company with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEES DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to the validity, enforceability or adequacy of this Indenture or the Notes; it shall not be accountable for the Companys use of the proceeds from the Notes or any money paid to the Company or upon the Companys direction under any provision of this Indenture; it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee; it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication; and it shall not be responsible for any loss suffered in connection with any investment of funds made by it in accordance with this Indenture.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of or premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES
Within 60 days after each September 15 beginning with the September 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with Section 313(a) of the TIA (but if no event described in Section 313(a) of the TIA has occurred within the twelve months preceding the reporting date, no report need be
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transmitted). The Trustee also shall comply with Sections 313(b)(2) and 313(b)(1) of the TIA. The Trustee shall also transmit by mail all reports as required by Section 313(c) of the TIA.
Commencing at the time this Indenture is qualified under the TIA, a copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with Section 313(d) of the TIA. The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange, including, but not limited to, the Luxembourg Stock Exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustees compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustees agents and counsel.
The Company and the Guarantors, on a joint and several basis, shall indemnify the Trustee, its directors, employees, agents and affiliates against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of the Trustees duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07) and defending itself against any claim (whether asserted by the Company, any Guarantor or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence, bad faith or willful misconduct. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company or the Guarantors of their obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under this Section 7.07 shall survive the satisfaction and discharge of this Indenture.
To secure the Companys payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.
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When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(j), (k) or (l) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any applicable bankruptcy law.
The Trustee shall comply with the provisions of Section 313(b)(2) of the TIA to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustees acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any applicable bankruptcy law;
(c) a custodian or public officer takes charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of Notes of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 7.10 hereof, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring
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Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided that all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Companys obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, by sale or otherwise, the successor corporation without any further act shall be the successor Trustee. As soon as practicable, the successor Trustee shall mail a notice of its succession to the Company and the Holders of the Notes. Any such successor must nevertheless be eligible and qualified under the provisions of Section 7.10 hereof.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by Federal or state authorities and that has a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements of Section 310(a)(1), (2) and (5) of the TIA. The Trustee is subject to Section 310(b) of the TIA; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of the TIA any indenture or indentures under which other securities, or certificates of interest or participation in other securities, of the Company are outstanding, if the requirements for such exclusion set forth in Section 310(b)(1) of the TIA are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
The Trustee is subject to the TIA Section 311(a), excluding any creditor relationship listed in the TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to the TIA Section 311(a) to the extent indicated therein.
SECTION 7.12. FORCE MAJEURE; CONSEQUENTIAL DAMAGES.
(a) Without prejudice to the generality of the foregoing, the Trustee shall be without liability to the Company, the Guarantors, the Holders or any other Person for any damage or loss resulting from or caused by events or circumstances beyond the Trustees reasonable control including nationalization, expropriation, currency restrictions, the interruption, disruption or suspension of the normal procedures and practices of any securities market, power, mechanical, communications or other technological failures or interruptions, computer viruses or the like, fires, floods, earthquakes or other natural
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disasters, civil and military disturbance, acts of war or terrorism, riots, revolution, acts of God, work stoppages, strikes, national disasters of any kind, or other similar events or acts; errors by the Company in its instructions to the Custodian; or changes in applicable law, regulation or orders.
(b) In no event shall the Trustee or its directors, officers, agents and employees be liable for special, punitive, exemplary, incidental or consequential damages, including, without limitation, and damages from loss of data, revenue or profit, even if the Trustee had been advised of the possibility of such damages.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE;
SATISFACTION AND DISCHARGE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers Certificate, at any time, exercise its rights under either Section 8.02 or 8.03 hereof with respect to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Companys exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have discharged its obligations with respect to all outstanding Notes, and each Guarantor shall be deemed to have discharged its obligations with respect to its Subsidiary Guarantee, on the date the conditions set forth in Section 8.04 below are satisfied (hereinafter, Legal Defeasance). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, and each Guarantor shall be deemed to have paid and discharged its Subsidiary Guarantee (which in each case shall thereafter be deemed to be outstanding only for the purposes of Section 8.06 hereof and the other Sections of this Indenture referred to in (a) and (b) below) and to have satisfied all its other obligations under such Notes or Subsidiary Guarantee and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of and premium, if any, and interest on such Notes when such payments are due, (b) the Companys obligations with respect to such Notes under Sections 2.03, 2.04, 2.07, 2.10 and 4.02 hereof and the second paragraph of Section 4.19 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Companys and any Guarantors obligations in connection therewith and (d) this Article 8. Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.
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SECTION 8.03. COVENANT DEFEASANCE.
Upon the Companys exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and each Guarantor shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their respective obligations under the covenants contained in Article 4 (other than those in Sections 4.01, 4.02, 4.06, 4.14 and 4.19) on and after the date the conditions set forth below are satisfied (hereinafter, Covenant Defeasance), and the Notes shall thereafter be deemed not outstanding for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed outstanding for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company and any Guarantor may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Companys exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(d) through 6.01(i) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S dollars, non-callable U.S. Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of an internationally recognized firm of independent public accountants, to pay the principal of and premium, if any, and interest on the outstanding Notes on the Stated Maturity thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service and the French Tax Authority a ruling or (B) since the date of this Indenture, there has been a change in the applicable income tax law, in either case to the effect that, and based thereon such Opinion of Counsel
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shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for U.S. Federal or French income tax purposes, respectively, as a result of such Legal Defeasance and will be subject to U.S. Federal or French income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for U.S. Federal or French income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. Federal or French income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing either (A) on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness or the grant of Liens securing such Indebtedness, all or a portion of the proceeds of which will be used to defease the Notes pursuant to this Article 8 concurrently with such incurrence or within 30 days thereof) or (B) insofar as Events of Default described in Sections 6.01(j) through 6.01(l) are concerned, at any time in the period ending on the 550th day after the date of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of Counsel (which may be based on such solvency certificates or solvency opinions as counsel deems necessary or appropriate) to the effect that, after the 550th day following such deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally;
(g) the Company shall have delivered to the Trustee an Officers Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with.
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SECTION 8.05. SATISFACTION AND DISCHARGE.
This Indenture shall upon the written request of the Company cease to be of further effect with respect to all outstanding Notes (except as to surviving rights of registration of transfer or exchange of Notes herein expressly provided for, the Companys and any Guarantors obligations under Section 7.07, and the Trustees and each Paying Agents obligations under Sections 8.06 and 8.07), and the Trustee, on demand and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to such series, when:
(a) either
(ii) all outstanding Notes therefor authenticated and delivered (other than (A) Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.07 and (B) Notes for whose payment money has theretofore been deposited in trust with the Trustee or any Paying Agent and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for cancellation; or
(iii) all outstanding Notes not theretofore delivered to the Trustee for cancellation
(A) have become due and payable by reason of the giving of a notice of redemption or otherwise; or
(B) shall become due and payable at their Stated Maturity within one year, or
(C) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,
and the Company or any Guarantor, in the case of clause (A), (B) or (C) above, has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable U.S. Government Securities, or a combination thereof, in an amount sufficient (without consideration of any reinvestment of interest and as certified by an independent public accountant designated by the Company expressed in a written certification thereof delivered to the Trustee) to pay and discharge the entire indebtedness of the Notes not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and accrued and unpaid interest to the date of such deposit (in the case of Notes which have become due and payable) or the Stated Maturity or redemption date, as the case may be;
(a) the Company and each Guarantor has paid or caused to be paid all other sums then due and payable hereunder by it under this Indenture;
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(b) no Default or Event of Default shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit shall not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound; and
(c) the Company has delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
In order to have money available on a payment date to pay principal, premium, if any, or interest on the Notes, the U.S. Government Securities shall be payable as to principal, premium, if any, or interest at least one Business Day before such payment date in such amounts as shall provide the necessary money. The U.S. Government Securities shall not be callable at the issuers option.
SECTION 8.06. DEPOSITED MONEY AND U.S. GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.07 hereof, all money and non-callable U.S. Government Securities (including the proceeds thereof) deposited with the Trustee pursuant to Section 8.04 or 8.05 hereof in respect of the outstanding Notes shall be (i) held in trust, (ii) and, at the written direction of the Company, such money may be invested, prior to maturity of the Notes, in non-callable U.S. Government Securities, and (iii) applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest but such money need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable U.S. Government Securities deposited pursuant to Section 8.04 or 8.05 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the written request of the Company any money or non-callable U.S. Government Securities held by it as provided in Section 8.04 or 8.05 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which in the former case may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
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SECTION 8.07. REPAYMENT TO COMPANY.
Subject to applicable escheat and abandoned property laws, any money deposited with the Trustee or any Paying Agent (which money shall be held uninvested and without liability for interest), or then held by the Company, in trust for the payment of the principal of, premium, if any, and interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in The New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.
Nothing contained in this Section 8.07 shall be deemed to affect any obligation of the Trustee or any Paying Agent to search for lost Holders pursuant to Rule 17Ad-17 under the Exchange Act.
SECTION 8.08. REINSTATEMENT.
If the Trustee or a Paying Agent is unable to apply any dollars or U.S. Government Securities in accordance with Section 8.05 or 8.06 hereof, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Companys and the Guarantors obligations under this Indenture, the Notes and the Subsidiary Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02, 8.03 or 8.05 hereof until such time as the Trustee or such Paying Agent is permitted to apply all such money in accordance with Section 8.05 or 8.06 hereof, as the case may be; provided, however, that, if the Company or any Guarantor makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, then it shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Securities held by the Trustee or such Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee may amend or supplement this Indenture or the Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
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(b) to provide for uncertificated Notes in addition to or in place of certificated Notes;
(c) to provide for the assumption of the Companys obligations to the Holders of the Notes pursuant to Section 6.01(f) hereof;
(d) to secure the Notes pursuant to the requirements of Section 4.12 or otherwise;
(e) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not materially adversely affect the legal rights hereunder of any Holder of a Note;
(f) to add or to release any Guarantor, in each case as provided in Article 10 hereof; or
(g) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA.
Upon the written request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Company and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company, the Guarantors and the Trustee may amend or supplement this Indenture and the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default or compliance with any provision of this Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including, without limitation, consents obtained in connection with a tender offer or exchange offer for the Notes).
Upon the written request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Company and the Guarantors in the
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execution of such amended or supplemental indenture unless such amended or supplemental indenture affects the Trustees own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in principal amount of the Notes then outstanding may waive compliance in a particular instance by the Company with any provision of this Indenture or the Notes. However, without the consent of each Holder affected, an amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or alter any of the provisions with respect to the redemption or purchase of the Notes by the Company;
(c) reduce the rate of or change the time for payment of interest on any Note;
(d) waive a Default or Event of Default in the payment of principal of or premium or interest on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in principal amount of the Notes and a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to waivers of past Defaults or Events of Default or the rights of Holders of Notes to receive payments of principal of or premium, if any, or interest on the Notes;
(g) waive a redemption or repurchase payment with respect to any Note;
(h) make any change in the ranking of the Notes relative to other Indebtedness of the Company or in any Subsidiary Guarantees relative to other Indebtedness of the Guarantors, in either case in a manner adverse to the Holders of Notes;
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(i) release any Guarantor from any of its obligations under its Subsidiary Guarantee or the Indenture, except in accordance with Sections 10.04, 10.05 and 10.06 hereof;
(j) make any change in the provisions of Section 4.19 hereof in a manner adverse to the Holders; or
(k) make any change in the foregoing amendment, supplement and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holders Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
After receipt by the Trustee of the Officers Certificate and Opinion of Counsel in accordance with this Section 9.06, the Trustee shall sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental indenture until the Board of Directors approves it. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 7.01) shall be fully protected in relying upon, an Officers Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and all conditions precedent have been complied with.
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ARTICLE 10
GUARANTEES OF NOTES
SECTION 10.01. SUBSIDIARY GUARANTEES.
Subject to Section 10.07 hereof, the Initial Guarantors, and any additional Guarantors that become Guarantors after the date of this Indenture; provided that, at any time a Restricted Subsidiary may become a Guarantor at its option, by executing a supplemental indenture as set forth in Section 10.02 hereof, jointly and severally, unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes held thereby and the Obligations of the Company hereunder and thereunder, that: (a) the principal of and premium, if any, and interest on the Notes will be promptly paid in full when due, subject to any applicable grace period, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and premium, if any, and interest (to the extent permitted by law) on the Notes, and all other payment Obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full and performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other Obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at stated maturity, by acceleration, redemption or otherwise. Failing payment when so due of any amount so guaranteed or any performance so guaranteed for whatever reason the Guarantors will be jointly and severally obligated to pay the same immediately. An Event of Default under this Indenture or the Notes shall constitute an event of default under the Subsidiary Guarantees, and shall entitle the Holders to accelerate the obligations of the Guarantors hereunder in the same manner and to the same extent as the Obligations of the Company. The Guarantors agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance (other than complete performance) which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. Each Guarantor further, to the extent permitted by law, waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that its Subsidiary Guarantee will not be discharged except by complete performance of the Obligations contained in the Notes and this Indenture. If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, the Trustee or any custodian or other similar official acting under any applicable bankruptcy law in relation to either the Company or the Guarantors, any amount paid by the Company or any Guarantor to the Trustee or such Holder, the Subsidiary
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Guarantees, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not be entitled to, and waives, any right of subrogation in relation to the Holders in respect of any Obligations guaranteed hereby until payment in full of the Obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (a) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of its Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed thereby, and (b) in the event of any declaration of acceleration of such Obligations as provided in Article 6 hereof, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantor for the purpose of its Subsidiary Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Subsidiary Guarantees.
SECTION 10.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section 10.01 hereof, each Guarantor (including any Restricted Subsidiary that becomes a Guarantor at its option) agrees that a notation of such Subsidiary Guarantee in substantially the form of Exhibit D hereto may be endorsed by manual or facsimile signature by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that the supplemental indenture to this Indenture referred to in the next succeeding paragraph shall be executed on behalf of such Guarantor by an Officer of such Guarantor.
To the extent required by the provisions of Section 4.13 hereof, the Company shall cause each of its Restricted Subsidiaries to execute a notation of Subsidiary Guarantee in substantially the form of Exhibit D hereto, and, whether or not required by Section 4.13 hereof, the Company may also cause, at its option, any of its Restricted Subsidiaries to execute such a notation. Such notation of Subsidiary Guarantee shall be accompanied by a supplemental indenture in substantially the form of Exhibit E hereto, along with the Opinion of Counsel and Officers Certificate required under Section 9.06 of this Indenture; provided, however, that any Subsidiary that has been properly designated as an Unrestricted Subsidiary in accordance with this Indenture need not execute a notation of Subsidiary Guarantee for so long as it continues to constitute an Unrestricted Subsidiary.
The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantees on behalf of the Guarantors. Each Guarantor agrees that its Subsidiary Guarantee shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on the notation of Subsidiary Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a notation of Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be valid nevertheless.
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SECTION 10.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained in this Indenture shall prohibit a merger between a Guarantor and another Guarantor or a merger between a Guarantor and the Company.
(b) No Guarantor, for so long as it provides a Subsidiary Guarantee pursuant to the terms of this Indenture, shall consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person (other than the Company or another Guarantor), unless: (i) subject to the provisions of Section 10.05 hereof, the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) assumes all the obligations of such Guarantor under the Notes and this Indenture, pursuant to a supplemental indenture in substantially the form of Exhibit E hereto, accompanied by a notation of its Subsidiary Guarantee as provided in such supplemental indenture; (ii) immediately after giving effect to such transaction, no Default or Event of Default exists; (iii) such Guarantor, or any Person formed by or surviving any such consolidation or merger, would have a Consolidated Net Worth (immediately after giving effect to such transaction) equal to or greater than the Consolidated Net Worth of such Guarantor immediately preceding the transaction; and (iv) the Company would be permitted by virtue of the Companys pro forma Consolidated Interest Coverage Ratio, immediately after giving effect to such transaction, to incur at least 1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof.
(c) In the case of any such consolidation or merger and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and substantially in the form of Exhibit E hereto, of the Subsidiary Guarantee and the due and punctual performance of all of the covenants of this Indenture to be performed by the Guarantor, such successor Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor; provided, however, that, solely for purposes of computing Consolidated Net Income for purposes of clause (c) of the first paragraph of Section 4.07 hereof, the Consolidated Net Income of any Person other than the Company and its Restricted Subsidiaries shall only be included for periods subsequent to the effective time of such merger or consolidation.
SECTION 10.04. RELEASES OF GUARANTEES.
In the event of (a) a transfer, conveyance, sale or other disposition of any Capital Stock of Sercel SA or any Sercel Guarantor or (b) the issue by Sercel SA or any Sercel Guarantor of any Equity Interests, in either case to any Person other than the Company or a Restricted Subsidiary of the Company, the Company may elect to have the Sercel Guarantors released and relieved of any obligations under their Subsidiary Guarantees; provided that the Net Proceeds of such issuance, transfer, conveyance, sale or other disposition are applied in accordance with the covenant described in Section 4.10 and the Sercel Guarantors have no other guarantees of Indebtedness of the Company or any other Guarantors (other than Permitted Guarantees) then outstanding. If a Restricted Subsidiary has become a Guarantor
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at its option, it may thereafter be released and relieved of its obligations under its Subsidiary Guarantee at its option; provided that such Guarantor has no other guarantee of Indebtedness of the Company or any Guarantor (other than Permitted Guarantees) then outstanding. For purposes of Section 4.09 hereof the release of any Subsidiary Guarantee pursuant to provisions described in this paragraph shall be deemed to be an incurrence by the Restricted Subsidiary whose Subsidiary Guarantee is being released of all Indebtedness then held by such Restricted Subsidiary. Each Subsidiary Guarantee created by a Restricted Subsidiary pursuant to the provisions of Section 4.13 hereof, shall be automatically and unconditionally released and discharged upon the release or discharge of the guarantee of the Indebtedness that resulted in the creation of such Subsidiary Guarantee, except a discharge or release by or as a result of direct payment under such guarantee of such Indebtedness; provided that the Guarantor has no other guarantee of Indebtedness of the Company or any Guarantor (other than Permitted Guarantees) then outstanding.
SECTION 10.05. RELEASES FOLLOWING SALE OF ASSETS.
In the event of a transfer, conveyance, sale or other disposition (including by way of merger or consolidation) of all or substantially all of the assets or all of the Capital Stock of any Guarantor, then such Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee and the Indenture; provided that the Net Proceeds of such transfer, conveyance, sale or other disposition are applied in accordance with the provisions of Section 4.10 hereof. Upon delivery by the Company to the Trustee of an Officers Certificate to the effect of the foregoing, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Subsidiary Guarantee and this Indenture. Any Guarantor not released from its obligations under its Subsidiary Guarantee shall remain liable for the full amount of principal of and premium, if any, and interest on the Notes and for the other Obligations of such Guarantor under this Indenture as provided in this Article 10.
SECTION 10.06. RELEASES FOLLOWING DESIGNATION AS AN UNRESTRICTED SUBSIDIARY, ETC.
In the event that the Board of Directors designates a Guarantor to be an Unrestricted Subsidiary, then such Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee and the Indenture; provided, however, that such designation is conducted in accordance with this Indenture. A Guarantor shall likewise be released and relieved of such obligations upon the release of any guarantee of the Other Company Indebtedness that required such Guarantor to guarantee the Notes pursuant to Section 4.13 hereof. Upon delivery by the Company to the Trustee of an Officers Certificate to the effect of the foregoing, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Subsidiary Guarantee and this Indenture.
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SECTION 10.07. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor and, by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Subsidiary Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of any applicable bankruptcy law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal, state or foreign law to the extent applicable to any Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor under its Subsidiary Guarantee and this Article 10 shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 10, result in the obligations of such Guarantor under its Subsidiary Guarantee not constituting a fraudulent transfer or conveyance. In addition, the obligation of a Guarantor to grant a Subsidiary Guarantee and the obligations of each Guarantor under its Subsidiary Guarantee shall be limited to the extent required by applicable law.
SECTION 10.08. TRUSTEE TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term Trustee as used in this Article 10 shall in each case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully and for all intents and purposes as if such Paying Agent were named in this Article 10 in place of the Trustee.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS
If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Section 318(c) of the TIA, the imposed duties shall control.
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SECTION 11.02. NOTICES.
Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing (in the English language) and delivered in person or mailed by first class-mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, to the others address:
If to the Company or the Guarantors:
CGG S.A.
Tour Maine-Montparnasse
33 avenue de Maine
75755 Paris cedex 15
France
Attention: General Counsel
Telecopy No.: (33-1) 64-47-34-29
If to the Trustee:
The Bank of New York Mellon
Global Corporate Trust
101 Barclay Street, Floor 7E
New York, New York 10286
Telephone: (212) 815-2719
Telecopy No.: (724) 540-6328
The Company, any of the Guarantors or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by first-class mail, certified or registered, return receipt requested, or delivered by overnight air courier guaranteeing next day delivery, in each case to its address shown on the register kept by the Registrar. In addition, for so long as the Notes are listed on the Luxembourg Stock Exchange and its rules so require, any such notice or communication (including, without limitation, any notice of redemption) to Holders shall be published in a newspaper having general circulation in Luxembourg, which newspaper may be the Luxemburger Wort, or if such newspaper ceases to be published or timely publication in it will not be practicable, in such other newspaper as the Trustee deems necessary to give fair and reasonable notice to the Holders. Notices may also be published on the Internet site of the Luxembourg Stock Exchange at http://www.bourse.lu. Any notice or communication shall also be so mailed to any Person described in Section 313(c) of the TIA, to the extent required by the TIA. Failure to provide a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.
All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Notwithstanding the foregoing, notices to the Trustee shall be effective only upon receipt. Any notice or communication given by newspaper or internet publication shall be deemed to have been given on the date of publication or, if published more than once or on different dates, on the first date on which publication is made in the manner required in the newspaper, in one of the newspapers referred to above or on the internet site referred to above.
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If a notice or communication is given in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company gives a notice or communication to Holders, it shall give a copy at the same time to the Trustee and each Agent and, for so long as the Notes are listed on the Luxembourg Stock Exchange, the Luxembourg Stock Exchange.
In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES
Holders may communicate pursuant to Section 312(b) of the TIA with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of Section 312(c) of the TIA.
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to Section 314(a)(4) of the TIA) shall comply with the provisions of Section 314(e) of the TIA and shall include:
(a) a statement that the Person making such certificate or opinion has read such covenant or condition;
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(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS.
No past, present or future director, officer, employee, incorporator, member, partner or shareholder or other owner of Capital Stock of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Subsidiary Guarantees, this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
SECTION 11.08. GOVERNING LAW.
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE AND ENFORCE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Restricted Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture and the Notes shall bind their successors. All agreements of the Trustee in this Indenture shall bind its successors.
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SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.
SECTION 11.14. CONSENT TO JURISDICTION; SUBMISSION TO PROCESS; WAIVER OF JURY TRIAL.
Each of the Company and the Guarantors irrevocably submits to the non-exclusive jurisdiction of any New York state or U.S. Federal court located in the Borough of Manhattan in the City and State of New York over any suit, action or proceeding arising out of or relating to this Indenture, the Registration Rights Agreement or any Guarantee or Note. Each of the Company and the Guarantors irrevocably waives, to the fullest extent permitted by law, any objection which it may have, pursuant to articles 14 and 15 of the French Civil Code or otherwise, to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in any inconvenient forum. The Trustee, the Company and the Guarantors acknowledge that nothing in this Section shall prevent the Trustee, the Holders, the Company or the Guarantors from bringing any legal action, suit or proceeding arising out of or related to this Indenture or with respect to their respective obligations or liabilities hereunder in any court of competent jurisdiction for such legal action, suit or proceeding.
In furtherance of the foregoing, each of the Company and the Guarantors hereby irrevocably designates and appoints CT Corporation, 111 Eighth Avenue, New York, New York 10011, as the agent of the Company and each of the Guarantors to receive service of all process brought against the Company or any such Guarantor with respect to any such suit, action or proceeding in any such court in the City and State of New York, such service being hereby acknowledged by the Company and each of the Guarantors to be effective and binding service in every respect. Copies of any such process so served shall also be given to the Company in accordance with Section 11.02 hereof, but the failure of the Company or any Guarantor to receive such copies shall not affect in any way the service of such process as aforesaid. On the Issue Date, the Company and the Guarantors shall furnish to the Trustee a consent of CT Corporation agreeing to act hereunder. If for any reason CT Corporation shall
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resign or otherwise cease to act as such agent, the Company and each of the Guarantors hereby irrevocably agrees to (A) immediately designate and appoint a new agent reasonably acceptable to the Trustee to serve in such capacity and, in such event, such new agent shall be deemed to be substituted for CT Corporation for all purposes hereof and (B) promptly deliver to the Trustee the written consent (in form and substance reasonably satisfactory to the Trustee) of such new agent agreeing to serve in such capacity.
Nothing in this Section shall limit the right of the Trustee or any Holder to serve process in any other manner permitted by law.
To the extent permitted by applicable law, each of the parties hereto hereby waives, and the Holders, by acceptance of their Notes, shall be deemed to have waived, any right to have a jury participate in resolving any dispute, whether sounding in contract, tort, or otherwise, between or among the parties or any other Persons in connection with or arising out of, connected with, or incidental to this Indenture, the Notes or any related agreement. Instead any such dispute shall be resolved in a bench trial without a jury.
SECTION 11.15. PRESCRIPTION.
Claims against the Company for the payment of principal, or premium, if any, on the Notes will be prescribed ten years after the applicable due date for payment thereof. Claims against the Company for the payment of interest on the Notes will be prescribed five years after the applicable due date for payment of interest.
[Signature pages follow.]
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The foregoing indenture is hereby accepted and agreed as of the date first written above: | ||
CGG S.A. | ||
By: | /s/ Stephane-Paul Frydman | |
Name: | Stephane-Paul Frydman | |
Title: | Corporate Officer & Chief Financial Officer | |
CGG HOLDING B.V. | ||
By: | /s/ Yves Goulard | |
Name: | Yves Goulard | |
Title: | Authorized Signatory | |
CGG MARINE B.V. | ||
By: | /s/ Yves Goulard | |
Name: | Yves Goulard | |
Title: | Authorized Signatory | |
CGG MARINE RESOURCES NORGE A/S | ||
By: | /s/ Yves Goulard | |
Name: | Yves Goulard | |
Title: | Authorized Signatory | |
CGG HOLDING (U.S.) INC. | ||
By: | /s/ Yves Goulard | |
Name: | Yves Goulard | |
Title: | Authorized Signatory | |
CGG SERVICES (U.S.) INC. | ||
By: | /s/ Yves Goulard | |
Name: | Yves Goulard | |
Title: | Authorized Signatory | |
VERITAS INVESTMENTS INC. | ||
By: | /s/ Yves Goulard | |
Name: | Yves Goulard | |
Title: | Authorized Signatory |
The foregoing indenture is hereby accepted and agreed as of the date first written above: | ||
VIKING MARITIME INC. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
VERITAS GEOPHYSICAL (MEXICO) LLC | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
ALITHEIA RESOURCES INC. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
CGG LAND (U.S.) INC. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
SERCEL, INC. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
SERCEL-GRC CORP. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory |
The foregoing indenture is hereby accepted and agreed as of the date first written above: | ||||
THE BANK OF NEW YORK MELLON, as Trustee, Paying Agent, Registrar and Transfer Agent | ||||
By: | /s/ Catherine F Donohue | |||
Name: | Catherine F. Donohue | |||
Title: | Vice President | |||
THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A., as Luxembourg Paying Agent and Luxembourg Transfer Agent | ||||
By: | /s/ Catherine F Donohue | |||
Name: | Catherine F. Donohue | |||
Title: | Vice President |
EXHIBIT A
(Face of Note)
CGG S.A.
Form of [Original][Exchange] 6.875% Senior Note due 2022
No: [ ]
Up to [ ]
Common Code: [ ]
CUSIP: [ ]
ISIN : [ ]
CGG S.A. hereby promises to pay to Cede & Co., or its registered assigns, the principal sum set forth in the Schedule of Exchange of Notes attached hereto on January 15, 2022.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Additional provisions of this Note are set forth on the other side of this Note.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.
CGG S.A. | ||
By: |
| |
Name: |
| |
Title: |
|
TRUSTEES CERTIFICATE OF AUTHENTICATION:
This is one of the Global Notes referred
to in the within-mentioned Indenture.
The Bank of New York Mellon,
as Trustee
By: |
| |
Authorized Signatory |
Date of Authentication: |
|
A-2
(Back of Note)
6.875 Senior Notes due 2022
[Unless and until it is exchanged in whole or in part for Notes in definitive form, this Global Note may not be transferred except as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) (DTC), to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as may be requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as may be requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.]1
[Restricted Notes Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE SECURITIES ACT), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT, PRIOR TO THE DATE WHICH IS SIX MONTHS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT TO A PERSON WHO IS NOT A U.S. PERSON, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
1 | This paragraph should be included only if the Note is issued in global form. |
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144 THEREUNDER (IF AVAILABLE) (V) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
[Regulation S Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.
[Definitive Notes Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER SHALL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
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1. INTEREST. CGG S.A., a société anonyme incorporated in France and registered at the Paris commercial register under number 969 202 241 (the Company), promises to pay interest on the principal amount of this Note at 6.875% per annum from May 1, 2014 until maturity and shall pay the special interest payable pursuant to Section 5 of the Registration Rights Agreement referred to below. All references herein, in any context, to any interest or other amount payable on or with respect to the Notes shall be deemed to include any special interest pursuant to the Registration Rights Agreement. The Company will pay interest semi-annually in arrears on January 15 and July 15 of each year, commencing on July 15, 2014, or if any such day is not a Business Day, on the next succeeding Business Day (each an Interest Payment Date). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default or Event of Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date, except in the case of the original issuance of Notes, in which case interest shall accrue from the date of authentication. The Company shall pay interest (including post-petition interest in any proceeding under applicable bankruptcy law) on overdue principal and premium, if any, from time to time on demand at a rate that is the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under applicable bankruptcy law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the January 1 and July 1 next preceding the Interest Payment Date, even if such Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium, if any, and interest at the office or agency of the Company maintained for such purpose within the continental United States and, subject to any fiscal or other laws and regulations applicable thereto, at the specified offices of any other Paying Agent appointed by the Company for such purpose, or, at the option of the Company, payment of interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds will be required with respect to principal of, interest and premium, if any, on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or a Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. The principal of the Notes shall be payable only upon surrender of any Note at the Corporate Trust Office of the Trustee or at the specified offices of any other Paying Agent.
If the due date for payment of the principal in respect of any Note is not a Business Day at the place in which it is presented for payment, the Holder thereof shall not be entitled to payment of the amount due until the next succeeding Business Day at such place and shall not be entitled to any further interest or other payment in respect of any such delay.
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3. PAYING AGENTS AND REGISTRARS. Initially, The Bank of New York Mellon, the Trustee under the Indenture (the Trustee), will act as Paying Agent and Registrar at its Corporate Trust Office in New York, New York, and The Bank of New York Mellon (Luxembourg), S.A. will act as Transfer Agent and Paying Agent in Luxembourg. The Company may at any time designate one or more additional Paying Agents or rescind the designation of any Paying Agent or approve a change in the office through which any Paying Agent acts, except that the Company will be required to maintain a Paying Agent in the continental United States. The Company will give notice to the Holders of any such change by publication in a newspaper having general circulation in Luxembourg, which newspaper is expected to be Luxemburger Wort, or if such newspaper ceases to be published or timely publication in it will not be practicable, in such other newspaper as the Trustee deems necessary to give fair and reasonable notice to the Holders. Such notices may also be published on the internet site of the Luxembourg Stock Exchange at http://www.bourse.lu.
4. INDENTURE. The Company issued the Notes under an Indenture dated as of May 1, 2014 (the Indenture), among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa through 77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. The Notes are general unsecured obligations of the Company limited to up to $500,000,000 aggregate principal amount in the case of Notes issued on May 1, 2014.
5. OPTIONAL REDEMPTION.
(a) At any time prior to July 15, 2017, the Company may redeem the Notes at its option, in whole or in part, at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium as of, and accrued and unpaid interest to, the date of redemption.
(b) At any time on or after July 15, 2017, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on July 15 of the years indicated below:
Year |
Note Redemption Price |
|||
2017 |
105.156 | % | ||
2018 |
103.438 | % | ||
2019 |
101.719 | % | ||
2020 and thereafter |
100.000 | % |
(c) Further, prior to July 15, 2017, the Company may redeem on any one or more occasions Notes (including Exchange Notes) representing up to 35% of the aggregate principal amount of Notes originally issued from time to time under the Indenture (including any Notes
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originally issued after the Issue Date but excluding for this purpose any Exchange Notes) at a redemption price of 106.875% of the principal amount thereof, plus accrued and unpaid interest thereon to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings, provided that (i) Notes (including Exchange Notes) representing at least 65% of the aggregate principal amount of Notes originally issued from time to time under the Indenture (including any Notes originally issued after the Issue Date but excluding for this purpose any Exchange Notes) remain outstanding immediately after the occurrence of each such redemption, and (ii) such redemption shall occur within 90 days of the date of the closing of each such Qualified Equity Offering.
(d) The Company may at any time unconditionally redeem, in whole but not in part, the Notes at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest thereon to the date of redemption if it or any Guarantor has become or would become obligated to pay any Additional Amounts in respect of the Notes as a result of (a)(i) any change in or amendment to the laws or treaties (or regulations or rulings promulgated thereunder) of a Relevant Taxing Jurisdiction or (ii) any change in or amendment to any official position regarding the application or interpretation of such laws, treaties, regulations or rulings, which change or amendment is announced and becomes effective on or after the date of the Indenture (or, if the applicable Relevant Taxing Jurisdiction became a Relevant Taxing Jurisdiction on a date after the date of the Indenture, such later date); and (b) such obligation cannot be avoided by the Company or any such Guarantor taking reasonable measures available to it.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.
7. PUT OPTION OF HOLDER.
(a) If there is a Change of Control, each Holder shall have the right to require the Company to purchase all or any portion (equal to $200,000 or an integral multiple of $1,000 in excess thereof) of such Holders Notes, pursuant to an offer described in Section 4.15 of the Indenture (a Change of Control Offer), at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest thereon to the date of purchase (the Change of Control Payment). Within 30 days following any Change of Control, the Company shall give notice to each Holder and the Trustee describing the transaction that constitutes the Change of Control and setting forth the procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset Sales, within 30 days of each date on which the aggregate amount of Excess Proceeds exceeds 20,000,000, the Company shall commence an offer to all Holders of Notes (an Asset Sale Offer) pursuant to Section 3.09 of the Indenture to purchase the maximum principal amount of Notes that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the
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principal amount thereof, plus accrued and unpaid interest thereon to the date of purchase, in accordance with the procedures set forth in the Indenture; provided, however, that, if the Company is required to apply such Excess Proceeds to purchase, or to offer to purchase, any Pari Passu Indebtedness, the Company shall only be required to offer to purchase the maximum principal amount of Notes that may be purchased out of the amount of such Excess Proceeds multiplied by a fraction, the numerator of which is the aggregate principal amount of Notes outstanding and the denominator of which is the aggregate principal amount of Notes outstanding plus the aggregate principal amount of Pari Passu Indebtedness outstanding. To the extent that the aggregate principal amount of Notes tendered pursuant to an Asset Sale Offer is less than the amount that the Company is required to purchase, the Company may use any remaining Excess Proceeds for general corporate purposes in any manner not prohibited by the Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof exceeds the amount that the Company is required to purchase, the Trustee shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $200,000, or integral multiples of $1,000 in excess thereof, shall be purchased). Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled Option of Holder to Elect Purchase on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. For so long as the Notes are listed on the Luxembourg Stock Exchange and for so long as the rules of such exchange require, notices of redemption shall be published once by the Trustee, not less than five Business Days prior to the redemption date, in a newspaper having general circulation in Luxembourg, which newspaper is expected to be Luxemburger Wort, or if such newspaper ceases to be published or timely publication in it will not be practicable, in such other newspaper as the Trustee deems necessary to give fair and reasonable notice to the Holders. Notices may also be published on the internet site of the Luxembourg Stock Exchange at http://www.bourse.lu. Notes in denominations larger than $200,000 may be redeemed in part but only in whole multiples of $1,000 in excess thereof, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $200,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed.
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10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes, and any existing Default or Event of Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes. Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Companys obligations to Holders of the Notes in case of a merger or consolidation or sale of all or substantially all of the Companys properties or assets, to secure the Notes, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not materially adversely affect the legal rights under the Indenture of any such Holder, to add any additional Guarantor or to release any Guarantor from its Subsidiary Guarantee, in each case as provided in the Indenture, or to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest on the Notes; (ii) default in payment when due of the principal of or premium, if any, on the Notes; (iii) failure by the Company to comply with Section 4.10 or 4.15 of the Indenture; (iv) failure by the Company for 30 days after it receives written notice from the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes to observe or perform any other covenant or other agreement in the Indenture or the Notes; (v) the declaration or payment of any dividend or the making of any other payment or distribution described in subclause (y) of Section 4.07(c) of the Indenture, which declaration, payment or distribution would not be permitted by Section 4.07 of the Indenture if it were treated as a Restricted Payment; (vi) the Company consolidates or merges with or into (whether or not the Company is the surviving corporation), or sells, assigns, transfers, leases, conveys, demerges or otherwise disposes of all or substantially all of its properties and assets in one or more related transactions, to, another Person, unless the conditions precedent specified in clauses (1) through (5) of Section 6.01(f) of the Indenture have been complied with; (vii) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or is created after the date of the Indenture, which default (a) is caused by a failure to pay principal of or premium or interest on such Indebtedness prior to the expiration of any grace period provided in such Indebtedness, including any extension thereof (a Payment Default) or (b) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess of 50,000,000, and provided further, that if such default is cured
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or waived or any such acceleration rescinded, or such Indebtedness is repaid within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, an Event of Default and any consequential acceleration of the Notes shall be automatically rescinded, so long as said rescission does not conflict with any judgment or decree; (vii) failure by the Company or any of its Restricted Subsidiaries to pay final judgments (not covered by insurance) aggregating in excess of 50,000,000, which judgments are not paid, discharged or stayed for a period of 60 days; (viii) failure by any Guarantor to perform any covenant set forth in its Subsidiary Guarantee, or the repudiation by any Guarantor of its obligations under its Subsidiary Guarantee or the unenforceability of any Subsidiary Guarantee for any reason other than as provided in the Indenture; and (ix) certain events of bankruptcy or insolvency with respect to the Company or any Significant Subsidiary. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may, by notice, declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Company or any Significant Subsidiary, all outstanding Notes will become due and payable without further action or notice. The Holders of a majority in principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium, if any, that have become due solely because of such acceleration) have been cured or waived. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of the principal of or premium, if any, or interest on the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.
13. DEFEASANCE. The Notes are subject to legal and covenant defeasance upon the terms and conditions specified in Article 8 of the Indenture.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator, member, partner or shareholder or other owner of capital stock of the Company or any Guarantor, as such, shall not have any liability for any obligations of the Company or any Guarantor under the Notes, the Subsidiary Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.
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16. AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature of an authorized signatory of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF ORIGINAL NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Original Notes shall have all the rights set forth in the Registration Rights Agreement dated as of the same date as the Indenture, between the Company and the initial purchasers named on the signature page thereof (the Registration Rights Agreement).
19. SUBSIDIARY GUARANTEES. The Companys obligations under the Notes are fully, irrevocably and unconditionally guaranteed on an unsecured senior basis, to the extent set forth in the Indenture, by each of the Guarantors. In addition, this Note is entitled to the benefits of the guarantee of each party that subsequent to the date of the Indenture becomes a Guarantor pursuant to the terms of the Indenture. Upon the terms and subject to the conditions set forth in the Indenture, any such party will unconditionally agree that the principal, interest and premium, if any, on the Notes will be duly and punctually paid in full when due, all as more fully set forth in Article 10 of the Indenture.
20. COMMON CODES; ISINS; CUSIP NUMBERS. The Company has caused Common Codes, ISINs and CUSIP numbers to be printed on the Notes and the Trustee may use the Common Codes, ISINs and CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without charge a copy of the Indenture or the Registration Rights Agreement. Requests may be made to:
CGG S.A.
Tour Maine - Montparnasse
33, avenue de Maine
75755 Paris cedex 15
France
Attention: General Counsel
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to
(Insert Assignees Soc. Sec. or Tax I.D. no.)
(Print or Type Assignees Name, Address and Zip Code)
and irrevocably appoint to transfer this Note on the books of the Company. The agent may substitute another to act for him.
Date: |
|
Your Signature: |
| |
(Sign exactly as your name appears on the face of this Note) |
Signature Guarantee: |
|
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SCHEDULE OF EXCHANGE OF NOTES2
The initial principal amount of this Global Note is [ ]. The following exchanges of a part of this Global Note for other Notes have been made:
Date of Exchange |
Amount of Decrease in Principal Amount of This Global Note |
Amount of Increase in Principal Amount of This Global Note |
Principal Amount of This Global Note Following Such Decrease (or Increase) |
Signature of Authorized Officer of Trustee | ||||
2 | This should be included only if the Note is issued in global form. |
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
¨ Section 4.10 ¨ Section 4.15
If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased: $
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EXHIBIT B-1
FORM OF CERTIFICATE FOR TRANSFER OF BENEFICIAL INTEREST
FROM RULE 144A GLOBAL NOTE OR IAI GLOBAL NOTE
TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.06(a)(i) of the Indenture)
The Bank of New York Mellon,
as Trustee and Registrar
Global Corporate Trust
101 Barclay Street, Floor 7E
New York, New York 10286
Re: 6.875% Senior Notes due 2022 of CGG S.A.
Reference is hereby made to the Indenture, dated as of May 1, 2014 (the Indenture), among CGG S.A. (the Company), any guarantors party thereto (the Guarantors) and The Bank of New York Mellon, as trustee (the Trustee). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
This letter relates to $ principal amount of Notes which are evidenced by one or more (i) Rule 144A Global Notes and held with the Depository or (ii) IAI Global Notes and held with the Depository, in either case in the name of (the Transferor). The Transferor has requested a transfer of such beneficial interest in the Notes to a Person who will take delivery thereof in the form of an equal principal amount of Notes evidenced by one or more Regulation S Global Notes, which amount, immediately after such transfer, is to be held with the Depository.
In connection with such request and in respect of such Notes, the Transferor hereby certifies that such transfer has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with Rule 903 or Rule 904 under the United States Securities Act of 1933, as amended (the Securities Act), and accordingly the Transferor hereby further certifies that:
(1) | The offer of the Notes was not made to a person in the United States; |
(2) | either: |
(a) at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed and believes that the transferee was outside the United States; or
(b) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that the transaction was prearranged with a buyer in the United States;
B-1-1
(3) | no directed selling efforts have been made in contravention of the requirements of Rule 904(b) of Regulation S; |
(4) | the transaction is not part of a plan or scheme to evade the registration provisions of the Securities Act; and |
(5) | upon completion of the transaction, the beneficial interest being transferred as described above is to be held with the Depository through Euroclear or Clearstream or both. |
Upon giving effect to this request to exchange a beneficial interest in a Rule 144A Global Note or IAI Global Notes, as applicable, for a beneficial interest in a Regulation S Global Note, the resulting beneficial interest shall be subject to the restrictions on transfer applicable to Regulation S Global Notes pursuant to the Indenture and the Securities Act and, if such transfer occurs prior to the end of the 40-day compliance distribution period associated with the initial offering of Notes, the beneficial interests in the Regulation S Global Notes shall be held through Euroclear or Clearstream.
This certificate and the statements contained herein are made for your benefit and the benefit of the Company and the Guarantors. Terms used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act.
[INSERT NAME OF TRANSFEROR] | ||
By: |
| |
Name: | ||
Title: |
Dated:
cc: CGG S.A.
B-1-2
EXHIBIT B-2
FORM OF CERTIFICATE FOR TRANSFER OF BENEFICIAL INTEREST
FROM REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE
OR IAI GLOBAL NOTE
(Pursuant to Section 2.06(a)(ii) or (iii) of the Indenture)
The Bank of New York Mellon,
as Trustee and Registrar
Global Corporate Trust
101 Barclay Street, Floor 7E
New York, New York 10286
Re: 6.875% Senior Notes due 2022 of CGG S.A.
Reference is hereby made to the Indenture, dated as of May 1, 2014 (the Indenture), among CGG S.A. (the Company), any guarantors party thereto (the Guarantors) and The Bank of New York Mellon, as trustee (the Trustee). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
This letter relates to $ principal amount of Notes which are evidenced by one or more of the following Notes that are being held by the Depository: (i) Regulation S Global Notes, (ii) Rule 144 Global Notes, or (iii) IAI Global Notes, in each case in the name of (the Transferor). The Transferor has requested a transfer of such beneficial interest in the Notes to a Person who will take delivery thereof in the form of an equal principal amount of Notes evidenced by one or more (i) Rule 144A Global Notes to be held with the Depository or (ii) IAI Global Notes to be held with the Depository,
In connection with such request and in respect of such Notes, the Transferor hereby certifies that:
[CHECK ONE]
¨ | such transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the Securities Act), and, accordingly, the Transferor hereby further certifies that the Notes are being transferred to a Person that the Transferor reasonably believes is purchasing the Notes for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a qualified institutional buyer within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A; |
or
¨ | such transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; |
or
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¨ | such transfer is being effected pursuant to an exemption from the registration requirements of the Securities Act other than one described above, and the Transferor hereby further certifies that the Notes are being transferred in compliance with the transfer restrictions applicable to the Global Notes and in accordance with the requirements of the exemption claimed, which certification is, if requested by the Company or the Registrar, supported by an Opinion of Counsel, provided by the transferor or the transferee (a copy of which the Transferor has attached to this certification) in form reasonably acceptable to the Company and to the Registrar, to the effect that such transfer is in compliance with the Securities Act and any applicable blue sky laws of any state of the United States; |
and such Notes are being transferred in compliance with any applicable blue sky securities laws of any state of the United States or any other applicable jurisdiction.
Upon giving effect to this request to exchange a beneficial interest in Regulation S Global Notes or Rule 144A Global Notes for a beneficial interest in Rule 144A Global Notes or IAI Global Notes, as applicable, the resulting beneficial interest shall be subject to the restrictions on transfer applicable to Rule 144A Global Notes or IAI Global Notes, as applicable, pursuant to the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your benefit and the benefit of the Company and the Guarantors.
[INSERT NAME OF TRANSFEROR] | ||
By: |
| |
Name: | ||
Title: |
Dated:
cc: CGG S.A.
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EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE NOTES
(Pursuant to Section 2.06(b) of the Indenture)
The Bank of New York Mellon,
as Trustee and Registrar
Global Corporate Trust
101 Barclay Street, Floor 7E
New York, New York 10286
Re: 6.875% Senior Notes due 2022 of CGG S.A.
Reference is hereby made to the Indenture, dated as of May 31, 2011 (the Indenture), among CGG S.A. (the Company), any guarantors party thereto (the Guarantors) and The Bank of New York Mellon, as trustee (the Trustee). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
This relates to $ principal amount of Notes which are evidenced by one or more Definitive Notes in the name of (the Transferor). The Transferor has requested an exchange or transfer of such Definitive Note(s) in the form of an equal principal amount of Notes evidenced by one or more Definitive Notes, to be delivered to the Transferor or, in the case of a transfer of such Notes, to such Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the Notes surrendered to the Trustee herewith (the Surrendered Notes), the Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
¨ | the Surrendered Notes are being acquired for the Transferors own account, without transfer; |
or
¨ | the Surrendered Notes are being transferred to the Company or one of its Subsidiaries; |
or
¨ | the Surrendered Notes are being transferred pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the Securities Act), and, accordingly, the Transferor hereby further certifies that the Surrendered Notes are being transferred to a Person that the Transferor reasonably believes is purchasing the Surrendered Notes for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a qualified institutional buyer within the meaning of Rule 144A, in each case in a transaction meeting the requirements of Rule 144A; |
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or
¨ | the Surrendered Notes are being transferred in a transaction permitted by Rule 144 under the Securities Act; |
or
¨ | the Surrendered Notes are being transferred pursuant to an exemption under the Securities Act other than Rule 144A, Rule 144 or Rule 903 or 904 of Regulation S to a Person who is an Institutional Accredited Investor and the Transferor further certifies that the transfer complies with the transfer restrictions applicable to Definitive Notes bearing the legend set forth in Section 2.06(f) of the Indenture and the requirements of the exemption claimed, which certification is supported by (a) if such transfer is in respect of a principal amount of Notes at the time of transfer of $250,000 or more, a certificate executed by the transferee in the form of Exhibit C to the Indenture, or (b) if such transfer is in respect of a principal amount of Notes at the time of transfer of less than $250,000, (i) a certificate executed in the form of Exhibit C to the Indenture and (ii) an Opinion of Counsel provided by the Transferor or the transferee (a copy of which the Transferor has attached to this certification), to the effect that (1) such transfer is in compliance with the Securities Act and (2) such transfer complies with any applicable blue sky securities laws of any state of the United States; |
or
¨ | the Surrendered Notes are being transferred pursuant to an effective registration statement under the Securities Act; |
and the Surrendered Notes are being transferred in compliance with any applicable blue sky securities laws of any state of the United States or any other applicable jurisdiction.
This certificate and the statements contained herein are made for your benefit and the benefit of the Company and the Guarantors.
[INSERT NAME OF TRANSFEROR] | ||
By: |
| |
Name: | ||
Title: |
Dated:
cc: CGG S.A.
B-3-2
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED BY
INSTITUTIONAL ACCREDITED INVESTORS
(Pursuant to Section 2.06(a)(ii) or (iii) or 2.06(b) of the Indenture)
,
The Bank of New York Mellon,
as Trustee and Registrar
Global Corporate Trust
101 Barclay Street, Floor 7E
New York, New York 10286
Ladies and Gentlemen:
We are delivering this letter in connection with our purchase of 6.875% Senior Notes due 2022 (the Notes) of CGG S.A., a société anonyme incorporated in France (the Company). We hereby confirm that:
(i) we are an accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act, as amended (the Securities Act) that is an institutional investor acquiring the Notes for its own account, or an entity in which all of the equity owners are accredited investors within the meaning of Rule 501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act (an Institutional Accredited Investor);
(ii) any purchase of Notes by us will be for our own account or, if we are buying for one or more institutional accounts for which we are acting as fiduciary or agent and we are not a bank (as defined in Section 3(a)(2) of the Securities Act) or a savings and loan association or other institution (as defined in Section 3(a)(5)(A) of the Securities Act), each such account is an Institutional Accredited Investor;
(iii) we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of purchasing Notes and we, and any accounts for which we are acting, are able to bear the economic risks of its or their investment;
(iv) we are not acquiring Notes with a view to any distribution thereof in a transaction that would violate the Securities Act or the securities laws of any State of the United States or any other applicable jurisdiction; provided, however, that the disposition of our property and the property of any accounts for which we are acting as fiduciary shall remain at all times within our control; and
(v) we acknowledge that we have had access to such financial and other information, and have been afforded the opportunity to ask such questions of representatives of the Company and receive answers thereto, as we deem necessary in connection with our decision to purchase Notes.
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We understand that the Notes were offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Notes have not been registered under the Securities Act, and we agree, on our own behalf and on behalf of each account for which we acquire any Notes, that such Notes may be offered, resold, pledged or otherwise transferred only (i) to a person whom we reasonably believe to be a qualified institutional buyer (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A under the Securities Act, in a transaction meeting the requirements of Rule 144 under the Securities Act, outside the United States in a transaction meeting the requirements of Rule 903 or 904 under the Securities Act, or in accordance with another exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel if the Company so requests), (ii) to the Company or (iii) pursuant to an effective registration statement, and, in each case, in accordance with any applicable securities laws of any State of the United States or any other applicable jurisdiction, and we will, and each subsequent holder of the Notes is required to, notify any subsequent purchaser from us or it of the resale restrictions set forth in clause (i) above. We acknowledge that the Notes will bear legends substantially to the foregoing effect. We understand that the registrar will not be required to accept for registration of transfer any Notes, except upon presentation of evidence satisfactory to the Company that the foregoing restrictions on transfer have been complied with.
We acknowledge that you and the Company will rely upon our confirmations, acknowledgments and agreements set forth herein, and we agree to notify you promptly in writing if any of our representations or warranties herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[INSERT NAME OF PURCHASER] | ||
By: |
| |
Name: | ||
Title: | ||
Address: |
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EXHIBIT D
SUBSIDIARY GUARANTEE
Subject to Section 10.07 of the Indenture, each Guarantor, has jointly and severally, unconditionally guaranteed to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes and the Obligations of the Company under the Notes or under the Indenture, that: (a) the principal of and premium, if any, and interest on the Notes will be promptly paid in full when due, subject to any applicable grace period, whether at maturity, by acceleration, redemption or otherwise, and interest on overdue principal of and premium, if any, (to the extent permitted by law) interest on the Notes and all other payment Obligations of the Company to the Holders or the Trustee under the Indenture or under the Notes will be promptly paid in full and performed, all in accordance with the terms thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other payment Obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at stated maturity, by acceleration, redemption or otherwise. Failing payment when so due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. An Event of Default under the Indenture or the Notes shall constitute an event of default under the Subsidiary Guarantees, and shall entitle the Holders to accelerate the obligations of the Guarantors under the Indenture in the same manner and to the same extent as the Obligations of the Company. The Guarantors have agreed that their Obligations under the Indenture shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. Each Guarantor further, to the extent permitted by law, has waived diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that its Subsidiary Guarantee will not be discharged except by complete performance of the Obligations contained in the Notes and the Indenture. If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any Note Custodian, Trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by the Company or any Guarantor to the Trustee or such Holder, the Subsidiary Guarantees, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor has agreed that it shall not be entitled to, and hereby has waived, any right of subrogation in relation to the Holders in respect of any Obligations guaranteed under the Indenture. Each Guarantor further has agreed that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (a) the maturity of the Obligations guaranteed under the Indenture may be accelerated as provided in Article 6 of the Indenture for the purposes of its Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed thereby, and (b) in the event of any declaration of acceleration of such Obligations as provided in Article 6 of the Indenture, such Obligations (whether or not due and payable) shall forthwith become due and
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payable by the Guarantor for the purpose of its Subsidiary Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Subsidiary Guarantees.
The obligations of the Guarantors to the Holders and to the Trustee pursuant to the Subsidiary Guarantees and the Indenture are expressly set forth in Article 10 of the Indenture, and reference is hereby made to such Indenture for the precise terms of the Subsidiary Guarantees. The terms of Article 10 of the Indenture are incorporated herein by reference. The Subsidiary Guarantees are subject to release as and to the extent provided in Sections 10.04, 10.05 and 10.06 of the Indenture.
Each Subsidiary Guarantee is a continuing guarantee and shall remain in full force and effect and shall be binding upon each Guarantor and its respective successors and assigns to the extent set forth in the Indenture until full and final payment of all of the Companys Obligations under the Notes and the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred in the Indenture upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. Each Subsidiary Guarantee is a guarantee of payment and not a guarantee of collection.
For purposes hereof, each Guarantors liability under its Subsidiary Guarantee shall be limited in amount as provided in Section 10.07 of the Indenture.
Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated.
[GUARANTORS] | ||
By: |
| |
Name: | ||
Title: |
D-2
EXHIBIT E
CGG S.A.
and
the Guarantors named herein
6.875% SENIOR NOTES DUE 2022
FORM OF SUPPLEMENTAL INDENTURE
DATED AS OF ,
THE BANK OF NEW YORK MELLON
Trustee
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This SUPPLEMENTAL INDENTURE, dated as of , , is among CGG S.A., a société anonyme incorporated in France and registered at the Paris commercial register under number 969 202 241 (the Company), each of the parties identified under the caption Guarantors on the signature page hereto (the Guarantors) and The Bank of New York Mellon, as Trustee.
RECITALS
WHEREAS, the Company and the Trustee entered into an Indenture, dated as of May 1, 2014 (the Indenture), pursuant to which the Company has originally issued $500,000,000 in principal amount of 6.875% Senior Notes due 2022 (the Notes);
WHEREAS, Section 9.01(f) of the Indenture provides that the Company and the Trustee may amend or supplement the Indenture in order to execute and deliver a guarantee (a Subsidiary Guarantee) to comply with Section 10.02 thereof without the consent of the Holders of the Notes; and
WHEREAS, all acts and things prescribed by the Indenture, by law and by the charter and the bylaws (or comparable constituent documents) of the Company, of the Guarantors and of the Trustee necessary to make this Supplemental Indenture a valid instrument legally binding on the Company, the Guarantors and the Trustee, in accordance with its terms, have been duly done and performed.
NOW, THEREFORE, to comply with the provisions of the Indenture and in consideration of the above premises, the Company, the Guarantors and the Trustee covenant and agree for the equal and proportionate benefit of the respective Holders of the Notes as follows:
ARTICLE 1
SECTION 1.01. This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes.
SECTION 1.02. This Supplemental Indenture shall become effective immediately upon its execution and delivery by each of the Company, the Guarantors and the Trustee.
ARTICLE 2
From this date, in accordance with Section 10.02 and by executing this Supplemental Indenture and the accompanying notation of Subsidiary Guarantee (a copy of which is attached hereto), the Guarantors whose signatures appear below are subject to the provisions of the Indenture to the extent provided for in Article 10 thereunder.
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ARTICLE 3
SECTION 3.01. Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall remain in full force and effect in accordance with their terms with all capitalized terms used herein without definition having the same respective meanings ascribed to them as in the Indenture.
SECTION 3.02. Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee subject to all the terms and conditions set forth in the Indenture with the same force and effect as if those terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto.
SECTION 3.03. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE AND ENFORCE THIS SUPPLEMENTAL INDENTURE.
SECTION 3.04. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of such executed copies together shall represent the same agreement.
[NEXT PAGE IS SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first written above.
CGG S.A. | ||
By: |
| |
Name: | ||
Title: | ||
[GUARANTORS] | ||
By: |
| |
Name: | ||
Title: | ||
THE BANK OF NEW YORK MELLON, as Trustee | ||
By: |
| |
Name: | ||
Title: |
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Exhibit 4.8
CGG S.A.
AND
THE GUARANTORS PARTY HERETO
$500,000,000
6.875% Senior Notes due 2022
REGISTRATION RIGHTS AGREEMENT
Dated as of May 1, 2014
CREDIT SUISSE SECURITIES (EUROPE) LIMITED
BNP PARIBAS
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
RBC CAPITAL MARKETS, LLC
This Registration Rights Agreement (this Agreement) is made and entered into as of May 1, 2014 by and among CGG S.A., a société anonyme organized under the laws of the Republic of France and registered at the Paris Commercial Registry under Number B 969 202 241 (69B00224), (the Company), CGG Holding B.V., CGG Marine B.V., CGG Marine Resources Norge AS, CGG Holding (U.S.) Inc., CGG Services (U.S.) Inc., Veritas Investments Inc., CGG Land (U.S.) Inc., Viking Maritime Inc., Veritas Geophysical (Mexico) LLC, Alitheia Resources Inc., Sercel, Inc. and Sercel-GRC Corp. and any subsidiary of the Company that becomes a guarantor of the Notes (as defined below) subsequent to the date hereof pursuant to the terms of the Indenture (as defined below) (each a Guarantor and, collectively, the Guarantors), and Credit Suisse Securities (Europe) Limited, BNP Paribas, Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBC Capital Markets, LLC (each an Initial Purchaser and, collectively, the Initial Purchasers), who have agreed to purchase $500,000,000 aggregate principal amount of the Companys 6.785% Senior Notes due 2022 (the Initial Notes) pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated April 28, 2014 (the Purchase Agreement), by and among the Company, the Guarantors and the Initial Purchasers. In order to induce the Initial Purchasers to purchase the Initial Notes, the Company and the Guarantors have agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchasers set forth in Section 7(j) of the Purchase Agreement. Capitalized terms used herein and not otherwise defined shall have the meaning assigned to them in the Indenture (as defined).
The parties hereby agree as follows:
SECTION 1.
DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the following meanings:
Act: The U.S. Securities Act of 1933, as amended.
Advice: As defined in Section 6(d) hereof.
Affiliate: As defined in Rule 144 under the Act.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Closing Date: The date hereof.
Commission: The U.S. Securities and Exchange Commission.
Company: As defined in the preamble hereto.
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Consummate: The Registered Exchange Offer shall be deemed Consummated for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Act of the Exchange Offer Registration Statement relating to the Registered Exchange Offer, (ii) the maintenance of such Registration Statement continuously effective and the keeping of the Registered Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company to the Registrar under the Indenture of Exchange Notes in the same aggregate principal amount as the aggregate principal amount of Initial Notes that were validly tendered and not withdrawn by Holders thereof pursuant to the Registered Exchange Offer.
Effectiveness Target Date: As defined in Section 5 hereof.
Exchange Act: The U.S. Securities Exchange Act of 1934, as amended.
Exchange Offer Registration Statement: The Registration Statement relating to the Registered Exchange Offer, including the related Prospectus.
Exchange Notes: The Companys 6.875% Senior Notes due 2022 to be issued pursuant to the Indenture (a) in the Registered Exchange Offer and (b) as contemplated by Section 6(c)(xii) hereof.
Exempt Resales: The transactions in which the Initial Purchasers propose to sell the Initial Notes (i) to certain qualified institutional buyers, as such term is defined in Rule 144A under the Act and (ii) outside the United States to certain non-U.S. Persons pursuant to the requirements of Rule 903 under the Act.
FINRA: The Financial Industry Regulatory Authority, Inc.
Freely Tradeable: An Initial Note at any time of determination if at such time of determination (i) it may be sold to the public pursuant to Rule 144(b)(1)(ii) under the Securities Act by a person that is not an affiliate (as defined in Rule 144 under the Securities Act) of the Company and (ii) it does not bear any restrictive legends relating to the Securities Act.
Guarantor: As defined in the preamble hereto.
Holder and Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of May 1, 2014, between the Company and The Bank of New York Mellon Trust Company, National Association, as the Trustee, pursuant to which the Notes are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.
Initial Notes: As defined in the preamble hereto.
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Initial Purchaser and Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: Each January 15 and July 15, beginning with July 15, 2014.
Notes: The Initial Notes and the Exchange Notes.
Prospectus: The prospectus included in a Registration Statement at the time such Registration Statement is declared or becomes effective, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.
Record Holder: With respect to any Special Interest Payment Date relating to Notes, each Person who is a Holder of Notes on the record date with respect to the Interest Payment Date on which such Special Interest Payment Date shall occur.
Registered Exchange Offer: The offer, registered by the Company under the Act pursuant to a Registration Statement, of the Exchange Notes to the Holders of all outstanding Initial Notes validly tendered and not withdrawn in such exchange offer by such Holders.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company relating to (a) an offering of Exchange Notes and the Subsidiary Guarantees pursuant to a Registered Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, in each case, which is filed pursuant to the provisions of this Agreement and including the related Prospectus.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
Special Interest Payment Date: With respect to the Initial Notes, each Interest Payment Date.
Subsidiary Guarantees: The joint and several guarantees of the Companys payment obligations under the Notes by the Guarantors to the extent required by the terms of the Indenture.
TIA: The U.S. Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each (a) Initial Note until (i) the date on which such Initial Note has been exchanged by a Person other than a Broker-Dealer for an Exchange Note in the Registered Exchange Offer, (ii) the date on which such Initial Note has been disposed of in accordance with the Shelf Registration Statement in a transaction
4
registered thereunder and the purchasers thereof have been issued Exchange Notes or (iii) the date on which such Initial Note is Freely Tradeable and (b) Exchange Note until, following the exchange by a Broker-Dealer in the Registered Exchange Offer of an Initial Note for an Exchange Note, the date on which such Exchange Note is sold pursuant to the Plan of Distribution contemplated in the Exchange Offer Registration Statement to a purchaser who receives from such Broker-Dealer on or prior to the date of such sale a copy of the Prospectus contained in the Exchange Offer Registration Statement.
Underwritten Registration or Underwritten Offering: A registration or an offering in which securities of the Company are sold to an underwriter for reoffering to the public.
SECTION 2.
SECURITIES SUBJECT TO THIS AGREEMENT
(a) Initial Notes. The securities entitled to the benefits of this Agreement are the Initial Notes.
(b) Holders of Initial Notes. A Person is deemed to be a holder of Initial Notes (each, a Holder and, collectively, the Holders) whenever such Person owns Initial Notes of record.
SECTION 3.
REGISTERED EXCHANGE OFFER
(a) Unless the Registered Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with), the Company and the Guarantors shall (i) cause to be filed with the Commission on or before the 120th day after the Closing Date, a Registration Statement under the Act relating to the Exchange Notes, the Subsidiary Guarantees and the Registered Exchange Offer, (ii) use their reasonable best efforts to cause such Registration Statement to become effective on or before the 180th day after the Closing Date, (iii) in connection with the foregoing, file (A) all pre-effective amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) if applicable, a post-effective amendment to such Registration Statement pursuant to Rule 430A under the Act and (C) subject to the proviso in Section 6(c)(xi) hereof, cause all necessary filings in connection with the registration and qualification of the Exchange Notes and the Subsidiary Guarantees to be made under the Blue Sky laws of such jurisdictions as are necessary to permit the Registered Exchange Offer to be Consummated, and (iv) upon the effectiveness of such Registration Statement, commence, and within the time periods contemplated by Section 3(b) hereof Consummate, the Registered Exchange Offer. The Exchange Offer Registration Statement shall be on the appropriate form under the Act permitting registration of the Exchange Notes to be offered in exchange for the Initial Notes and permitting resales of the Exchange Notes held by Broker-Dealers that tendered into the Registered Exchange Offer Initial Notes that such Broker-Dealers acquired for their own account as a result of
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market-making activities or other trading activities (other than Initial Notes acquired directly from the Company or any of its Affiliates) as contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall cause the Exchange Offer Registration Statement to be effective continuously and shall keep the Registered Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Registered Exchange Offer; provided, however, that in no event shall such period be less than 20 Business Days. The Company and the Guarantors shall cause the Registered Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Exchange Notes and the Subsidiary Guarantees shall be included in the Exchange Offer Registration Statement. The Company and the Guarantors shall use their reasonable best efforts to cause the Registered Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in any event on or prior to the 210th day after the Closing Date.
(c) The Company and the Guarantors shall indicate in a Plan of Distribution section contained in the Exchange Offer Registration Statement that any Broker-Dealer who holds Initial Notes that were acquired for its own account as a result of market-making activities or other trading activities (other than Initial Notes acquired directly from the Company or any of its Affiliates) may exchange such Initial Notes pursuant to the Registered Exchange Offer; however, such Broker-Dealer may be deemed to be an underwriter within the meaning of the Act and must, therefore, deliver a prospectus meeting the requirements of the Act in connection with its initial sale of the Exchange Notes received by such Broker-Dealer in the Registered Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such Plan of Distribution section shall also contain all other information with respect to such resales by such Broker-Dealers that the Commission may require in order to permit such resales pursuant thereto, but such Plan of Distribution shall not name any such Broker-Dealer or disclose the amount of Initial Notes held by any such Broker-Dealer except to the extent required by the Commission as a result of a change in policy after the date of this Agreement.
The Company and the Guarantors shall use their reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by and subject to the provisions of Sections 6(a) and 6(c) below to the extent necessary to ensure that the related Prospectus is available for resales of Notes acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities (other than Initial Notes acquired directly from the Company or any of its Affiliates), and to ensure that it conforms with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of one year from the Consummation Date or such shorter period as will terminate when no Initial Notes covered by such Registration Statement are outstanding.
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The Company and the Guarantors shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon request at any time during such period in order to facilitate such resales.
SECTION 4.
SHELF REGISTRATION
(a) Shelf Registration. If any of the Initial Notes are not Freely Tradeable by the 180th day after the Closing Date and either (i) the Company and the Guarantors are not required to file an Exchange Offer Registration Statement or not permitted to Consummate the Registered Exchange Offer because the Registered Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with) or (ii) any Holder of Transfer Restricted Securities notifies the Company in writing prior to the 20th Business Day following the Consummation of the Registered Exchange Offer that (A) such Holder is prohibited by applicable law or Commission policy from participating in the Registered Exchange Offer, or (B) such Holder may not resell the Exchange Notes acquired by it in the Registered Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not available for such resales by such Holder, then the Company and the Guarantors shall use their reasonable best efforts to:
(x) cause to be filed a shelf registration statement pursuant to Rule 415 under the Act, which may be an amendment to the Exchange Offer Registration Statement (in either event, the Shelf Registration Statement) relating to all Transfer Restricted Securities in the case of Section 4(a)(i) or the Transfer Restricted Securities specified in any notice in the case of Section 4(a)(ii) on or prior to the earliest to occur of (1) the 90th day after the date on which the Company determines that it is not required to file the Exchange Offer Registration Statement as a result of Section 4(a)(i) hereof and (2) the 90th day after the date on which the Company receives notice from a Holder of Transfer Restricted Securities as contemplated by Section 4(a)(ii) above (such earliest date being the Shelf Filing Deadline), which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and
(y) cause such Shelf Registration Statement to become effective on or before the 180th day after the Shelf Filing Deadline.
The Company and the Guarantors shall use their reasonable best efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Act and the policies, rules and regulations of the
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Commission as announced from time to time, until the earlier of (a) two years following the Closing Date and (b) such earlier date when no Transfer Restricted Securities covered by such Shelf Registration Statement remain outstanding.
Holders of Transfer Restricted Securities that do not give the written notice within the 20 Business Day period set forth above in this Section 4(a), if required to be given, will no longer have any registration rights pursuant to this Section 4 and will not be entitled to any special interest pursuant to Section 5 hereof in respect of the Companys obligations with respect to the Shelf Registration Statement.
(b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 10 Business Days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. No Holder of Transfer Restricted Securities shall be entitled to special interest pursuant to Section 5 hereof if such Holder shall have failed to provide all such reasonably requested information within such period. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.
SECTION 5.
SPECIAL INTEREST
If (i) any of the Registration Statements required by this Agreement to be filed is not filed with the Commission on or prior to the date specified for such filing in this Agreement, (ii) any of such Registration Statements has not been declared effective by the Commission or has not become effective on or prior to the date specified for such effectiveness in this Agreement (the Effectiveness Target Date), whether or not the Company and the Guarantors have breached any obligations to use their reasonable best efforts to cause any such Registration Statement to be declared, or become, effective, (iii) the Registered Exchange Offer has not been Consummated within 210 days of the Closing Date with respect to the Exchange Offer Registration Statement or (iv) subject to Section 6(c)(i) hereof, any Registration Statement required by this Agreement is filed and has been declared, or has become, effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded within 10 Business Days by a post-effective amendment to such Registration Statement that cures such failure and that is itself declared or becomes effective within 10 Business Days of the date of filing of such post-effective amendment (each such event referred to in clauses (i) through (iv), a Registration Default), the Company and the Guarantors hereby jointly and severally agree to pay special interest to each Holder of Initial Notes in an amount equal to $.05 per week per $1,000 principal amount of Initial Notes held by such Holder for each week or portion thereof that the Registration Default continues with respect to
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the first 90-day period immediately following the occurrence of such Registration Default. The amount of the special interest shall increase by an additional $.05 per week per $1,000 in principal amount of Initial Notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of special interest of $.30 per week per $1,000 principal amount of Initial Notes provided that the Company shall in no event be required to pay special interest for more than one Registration Default at any given time. All accrued special interest shall be paid to Record Holders by the Company on each Special Interest Payment Date following the accrual thereof, in the same manner as provided in the Indenture and the Notes for the payment of interest on the Notes. The accrual of special interest will cease on the earlier of a) the cure of all Registration Defaults relating to any particular Initial Notes and b) the later of (1) two years from the Closing Date and (2) two years from the latest date on which the Company or any of its Affiliates has resold during the two year period commencing on the Closing Date any of the Initial Notes they had acquired since the Closing Date.
SECTION 6.
REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the Registered Exchange Offer, the Company and the Guarantors shall comply with all of the applicable provisions of Section 6(c) below, shall use their reasonable best efforts to effect such exchange and to permit the sale of Initial Notes being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Company there is a question as to whether the Registered Exchange Offer is permitted by applicable law, the Company and the Guarantors hereby agree to seek a no-action letter or other favorable decision from the Commission allowing the Company and the Guarantors to Consummate the Registered Exchange Offer for such Initial Notes and to permit the resale of Exchange Notes by Broker-Dealers that tendered in the Registered Exchange Offer Initial Notes that such Broker-Dealers acquired for their own account as a result of market-making activities or other trading activities (other than Initial Notes acquired directly from the Company or any of its Affiliates) being sold in accordance with the intended method or methods of distribution thereof. The Company and the Guarantors hereby agree to use their reasonable best efforts to pursue the issuance of such a decision to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy.
(ii) As a condition to its participation in the Registered Exchange Offer, each Holder of Initial Notes (including, without limitation, any Holder who is a Broker-Dealer) shall furnish, upon the request of the Company, prior to the Consummation of the Registered Exchange Offer, a written representation to the
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Company (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that, at the time of Consummation of the Registered Exchange Offer, (A) any Exchange Notes received by such Holder will be acquired in the ordinary course of its business, (B) such Holder will have no arrangement or understanding with any person to participate in distribution of the Initial Notes or the Exchange Notes within the meaning of the Act, (C) if the Holder is not a Broker-Dealer or is a Broker-Dealer but will not receive Exchange Notes for its own account in exchange for Initial Notes, neither the Holder nor any such other Person is engaged in or intends to participate in a distribution of the Exchange Notes, and (D) such Holder is not an Affiliate of the Company. If the Holder is a Broker-Dealer that will receive Exchange Notes for its own account in exchange for Initial Notes, it will represent that the Initial Notes to be exchanged for the Exchange Notes were acquired by it as a result of market-making activities or other trading activities, and will acknowledge that it will deliver a prospectus meeting the requirements of the Act in connection with any resale of such Exchange Notes. It is understood that, by acknowledging that it will deliver, and by delivering, a prospectus meeting the requirements of the Act in connection with any resale of such Exchange Notes, the Holder is not admitting that it is an underwriter within the meaning of the Act.
(iii) Prior to effectiveness of the Exchange Offer Registration Statement, the Company and the Guarantors shall provide a supplemental letter to the Commission (A) stating that the Company and the Guarantors are registering the Registered Exchange Offer in reliance on the position of the Commission enunciated in Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if applicable, any no-action letter obtained pursuant to clause (i) above and (B) including a representation that neither the Company nor any Guarantor has entered into any arrangement or understanding with any Person to distribute the Exchange Notes to be received in the Registered Exchange Offer and that, to the best of the Companys information and belief, each Holder participating in the Registered Exchange Offer is acquiring the Exchange Notes in its ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the Exchange Notes received in the Registered Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf Registration Statement, if required, the Company and the Guarantors shall comply with all the provisions of Section 6(c) below and shall use their reasonable best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (as indicated in the information furnished to the Company pursuant to Section 4(b) hereof) and, pursuant thereto, the Company and the Guarantors will prepare and file with the Commission in accordance with Section 4(a) hereof a Shelf Registration Statement to effect such registration on any appropriate form under the Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof within the time periods and otherwise in accordance with the provisions hereof.
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(c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Initial Notes (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Notes by Broker-Dealers as contemplated herein), the Company and the Guarantors shall during the periods specified in Sections 3 and 4 hereof, as applicable:
(i) use their reasonable best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements (including, if required by the Act or any regulation thereunder, financial statements of the Guarantors, if any) for the period specified in Section 3 or 4 hereof, as applicable; upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain an untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or (B) not to be effective and usable for the resale of Initial Notes during the period required by this Agreement, the Company and the Guarantors shall file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B), use their reasonable best efforts to cause such amendment to be declared or become effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter; provided, however, if (A) the full Board of Directors of the Company determines in good faith that it is in the best interests of the Company not to disclose the existence of or facts surrounding any proposed or pending material corporate transaction involving the Company or any of its subsidiaries and (B) the Company notifies the Holders, pursuant to Section 6(c)(iii)(D) hereof, within two Business Days after such Board of Directors makes such determination, the Company may allow the Shelf Registration Statement to fail to be effective and usable as a result of such nondisclosure for up to 120 days during the period of effectiveness required by Section 4 hereof, but in no event for a period in excess of 45 consecutive days;
(ii) prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Act in a timely manner; and comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;
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(iii) except in the case of the Exchange Offer Registration Statement, advise the underwriter(s), if any, and selling Holders promptly and, if requested by any such Person, to confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Act or of the suspension by any state securities commission of the qualification of the Initial Notes for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Initial Notes under state securities or Blue Sky laws, the Company and the Guarantors shall use their reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time;
(iv) in the case of a Shelf Registration Statement, furnish to each of the selling Holders and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (but excluding any documents incorporated by reference as a result of the Companys periodic reporting requirements under the Exchange Act), and neither the Company nor any Guarantors shall file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (excluding all such documents incorporated by reference as a result of the Companys periodic reporting requirements under the Exchange Act) to which a selling Holder of Transfer Restricted Securities covered by such Registration Statement or the underwriter(s), if any, shall reasonably object within five Business Days after the receipt thereof. A selling Holder or underwriter, if any, shall be deemed to have reasonably objected to such filing if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains an untrue statement of material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
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(v) in the case of a Shelf Registration Statement, promptly following the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the selling Holders and to the underwriter(s), if any, make the Companys representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;
(vi) in the case of a Shelf Registration Statement, make available at reasonable times for inspection by the selling Holders, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney or accountant retained by such selling Holders or any of the underwriter(s), all relevant financial and other records and pertinent corporate documents and properties of the Company and the Guarantors and cause the Companys and the Guarantors officers, directors and employees to supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement subsequent to the filing thereof and prior to its effectiveness; provided, however, that the foregoing inspection and information gathering (i) shall be coordinated on behalf of the selling Holders, underwriters, or any representative thereof, by one counsel, who shall be Cravath, Swaine & Moore LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of Transfer Restricted Securities, and (ii) shall not be available for any such Holder who does not agree in writing to hold such information in confidence.
(vii) in the case of a Shelf Registration Statement, if requested by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the Plan of Distribution of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;
(viii) in the case of a Shelf Registration Statement, furnish to each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);
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(ix) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Company and the Guarantors hereby consent, subject to Section 6(d) hereof, to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Initial Notes covered by the Prospectus or any amendment or supplement thereto; provided that such use of the Prospectus and any amendment or supplement thereto and such offering and sale conforms to the Plan of Distribution set forth in the Prospectus and complies with the terms of this Agreement and all applicable laws and regulations thereunder;
(x) in the event of an Underwritten Registration, enter into such customary agreements (including an underwriting agreement), make such customary representations and warranties, deliver such customary documents and certificates, and take all such other customary actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Shelf Registration Statement contemplated by this Agreement, all to such extent as may be reasonably requested by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Shelf Registration Statement contemplated by this Agreement; and, without limiting the generality of the foregoing, the Company and the Guarantors shall:
(A) furnish to each underwriter upon the effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date of effectiveness of the Shelf Registration Statement, signed on behalf of the Company by two senior officers, one of whom must be its Senior Executive Vice President, Finance and Human Resources, confirming, as of such date, the matters addressed in the officers certificate delivered pursuant to Section 6(e) of the Purchase Agreement with respect to the transactions contemplated by the Shelf Registration Statement;
(2) an opinion or opinions, dated the date of effectiveness of the Shelf Registration Statement, of counsel for the Company and the Guarantors covering the matters referred to in Section 6(c) and (d) of the Purchase Agreement with respect to the transactions contemplated by the Shelf Registration Statement; and
(3) a customary comfort letter, dated as of the date of effectiveness of the Shelf Registration Statement, from the Companys independent accountants if such comfort letter shall be issuable to the underwriters in accordance with the relevant
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accounting industry pronouncements, in the customary form and covering matters of the type customarily covered in comfort letters to underwriters in connection with primary underwritten offerings, and substantially in the form of the comfort letters delivered pursuant to Section 6(a) of the Purchase Agreement; and
(B) deliver such other documents and certificates as may be reasonably requested by such parties and which are customarily delivered in Underwritten Offerings.
(xi) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s) may reasonably request and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however, that neither the Company nor the Guarantors shall be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject;
(xii) issue, upon the request of any Holder of Initial Notes covered by the Shelf Registration Statement, Exchange Notes, having an aggregate principal amount equal to the aggregate principal amount of Initial Notes being sold by such Holder, such Exchange Notes to be registered in the name of the purchaser(s) of such Notes, as the case may be; in return, the Initial Notes held by such Holder shall be surrendered to the Company for cancellation;
(xiii) in connection with any sale of Initial Notes that will result in such securities no longer being Transfer Restricted Securities, cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Initial Notes to be sold and not bearing any restrictive legends; and enable such Initial Notes to be in such authorized denominations and registered in such names as the Holders or the underwriter(s), if any, may reasonably request at least two Business Days prior to any sale of Initial Notes made by such underwriter(s);
(xiv) if any fact or event contemplated by clause (c)(iii)(D) above shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Initial Notes, the Prospectus will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;
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(xv) provide CUSIP, ISIN and Common Code numbers for all Exchange Notes not later than the effective date of the Registration Statement and provide the Trustee under the Indenture with one or more global certificates for the Exchange Notes that are in a form eligible for deposit with The Depository Trust Company;
(xvi) in the case of a Shelf Registration Statement, cooperate and assist in any filings required to be made with the FINRA and in the performance of any due diligence investigation by any underwriter (including any qualified independent underwriter) that is required to be retained in accordance with the rules and regulations of the FINRA;
(xvii) otherwise use their reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders with regard to any applicable Registration Statement, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) for a twelve-month period commencing after the effective date of the Registration Statement;
(xviii) cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Notes to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the TIA; and execute and use their reasonable best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and
(xix) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 or Section 15 of the Exchange Act.
(d) Each Holder agrees by acquisition of an Initial Note that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will keep such notice confidential and forthwith discontinue disposition of Initial Notes pursuant to the applicable Registration Statement until such Holders receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xiv) hereof, or until it is advised in writing (the Advice) by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, each Holder will deliver to the Company (at the Companys expense) all copies, other than permanent file copies then in such Holders possession, of the Prospectus covering such Initial Notes that was current at the time of receipt of such notice. If the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4
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hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xiv) hereof or shall have received the Advice.
SECTION 7.
REGISTRATION EXPENSES
(a) All expenses incident to the Companys or the Guarantors performance of or compliance with this Agreement will be borne by the Company and the Guarantors regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses (including filings made by the Initial Purchasers or Holders with the FINRA (and, if applicable, the fees and expenses of any qualified independent underwriter and its counsel that may be required by the rules and regulations of the FINRA)); (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company and the Guarantors and, subject to Section 7(b) below, counsel for the Holders of Initial Notes; (v) all application and filing fees in connection with listing Notes on a national securities exchange or automated quotation system, if any; and (vi) all fees and disbursements of independent public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance).
The Company and the Guarantors will, in any event, bear their internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or any Guarantor. The Company shall not be responsible for any other expenses or costs, including but not limited to commissions, fees and discounts of underwriters, brokers, dealers and agents.
(b) In connection with any Registration Statement required by this Agreement (excluding the Exchange Offer Registration Statement), the Company and the Guarantors will reimburse the Holders of Initial Notes being tendered in the Registered Exchange Offer and/or resold pursuant to the Plan of Distribution contained in the Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Cravath Swaine & Moore LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of the Initial Notes for whose benefit such Registration Statement is being prepared; provided that, except in the case of an Underwritten Offering, the fees and expenses of such counsel to be reimbursed by the Company shall not exceed $25,000.
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SECTION 8.
INDEMNIFICATION
(a) The Company and the Guarantors jointly and severally, agree to indemnify and hold harmless (i) each Holder, (ii) each Initial Purchaser, (iii) each person, if any, who controls any Holder or an Initial Purchaser within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or Initial Purchaser or any controlling person (any person referred to in clauses (i), (ii) or (iii) may hereinafter be referred to as an Indemnified Holder), to the fullest extent lawful, from and against any and all losses, liabilities, claims, damages and expenses whatsoever (including but not limited to reasonable attorneys fees and any and all reasonable expenses whatsoever incurred in investigating, preparing or defending against any investigation or litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus, or in any supplement thereto or amendment thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company and the Guarantors will not be liable in any such case to the extent, but only to the extent, that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the any of the Holders expressly for use therein. This indemnity agreement will be in addition to any liability that the Company and the Guarantors may otherwise have, including under this Agreement.
(b) Each Holder of Initial Notes agrees, severally and not jointly, to indemnify and hold harmless the Company, each of the Guarantors and each person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and each of their respective officers, directors, employers, partners, representatives and agents to the same extent as the foregoing indemnity from the Company and the Guarantors to each of the Indemnified Holders, but only with respect to information relating to such Holder furnished in writing by such Holder for use in any Registration Statement, or in any amendment thereof or supplement thereto; provided, however, that in no case shall any selling Holder be liable or responsible for any amount in excess of proceeds received by such Holder upon the sale of the Notes giving rise to such indemnification obligation. This indemnity will be in addition to any liability that the Holders may otherwise have, including under this Agreement.
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(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement thereof (but the failure so to notify an indemnifying party shall not relieve it from any liability that it may have under this Section 8 or otherwise except to the extent that it has been prejudiced in any material respect by such failure). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume and control the defense thereof with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to take charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it that are different from or additional to those available to one or all of the indemnifying parties (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses of counsel shall be borne by the indemnifying parties; provided, however, that the indemnifying party under subsection (a) or (b) above shall only be liable for the legal expenses of one counsel (in addition to any local counsel) for all indemnified parties. Anything in this subsection to the contrary notwithstanding, an indemnifying party shall not be liable for any settlement of any claim or action effected without its prior written consent; provided that such consent was not unreasonably withheld.
SECTION 9.
CONTRIBUTION
In order to provide for contribution in circumstances in which the indemnification provided for in Section 8 is for any reason held to be unavailable or is insufficient to hold harmless a party indemnified thereunder, the Company and the Guarantors on the one hand, and the Holders on the other hand, shall contribute to the aggregate losses, claims, damages, liabilities and expenses of the nature contemplated by such indemnification provision (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting in the case of losses, claims, damages, liabilities and expenses suffered by the Company and the Guarantors any contribution received by the Company and the Guarantors from Persons, other than a Holder, who may also be liable for contribution, including persons who control the Company and the Guarantors within
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the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act) to which the Company, the Guarantors or any Holder may be subject, (i) in such proportion as is appropriate to reflect the relative fault of the Company and the Guarantors on one hand, and each Holder, on the other hand, in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative fault referred to in clause (i) above but also other relevant equitable considerations. The relative fault of the Company and the Guarantors on one hand, and of each Holder, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the Guarantors or such Holder and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Guarantors and each Holder of Initial Notes agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to above. Notwithstanding the provisions of this Section 9, (i) in no case shall any Holder be required to contribute any amount in excess of the amount by which the proceeds received by such Holder upon the sale of the Initial Notes giving rise to such obligation exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of any untrue or alleged untrue statement or omission or alleged omission and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9, (A) each Person, if any, who controls any of the Holders within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B) the respective officers, directors, partners, employees, representatives and agents of such Holder or any controlling Person shall have the same rights to contribution as the Holders, and each Person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the same rights to contribution as the Company and the Guarantors subject in each case to clauses (i) and (ii) of this Section 9. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties under this Section 9, notify such party or parties from whom contribution may be sought, but the failure to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this Section 9 or otherwise, except to the extent it or they have been prejudiced in any material respect by such failure. No party shall be liable for contribution with respect to any action or claim settled without its prior written consent; provided that such written consent was not unreasonably withheld.
20
SECTION 10.
RULE 144A
The Company and the Guarantors hereby agree with each Holder, for so long as any Transfer Restricted Securities remain outstanding, to make available, upon request, to any Holder of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder, the information required by Rule 144A(d)(4) under the Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 11.
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holders Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.
SECTION 12.
SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Company; provided, however, that such investment bankers and managers must be reasonably satisfactory to the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering.
SECTION 13.
MISCELLANEOUS
(a) No Inconsistent Agreements. The Company and the Guarantors shall not, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Companys or any Guarantors securities under any agreement in effect on the date hereof.
(b) [Intentionally omitted.]
21
(c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of a majority of the outstanding principal amount of Initial Notes; provided, however, that the Company may amend this Agreement to include or exclude a Guarantor as a party hereto if, pursuant to the terms of the Indenture, such Guarantor is required to provide a Subsidiary Guarantee for the Notes or is released from such obligation. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Registered Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Registered Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Initial Notes being tendered.
(d) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and
(ii) if to the Company or any Guarantor:
CGG S.A. Tour Maine-Montparnasse 33, avenue de Maine BP 191 75755 Paris Cedex 15 France Telecopier No.: 33-1-64-47-34-31 Attention: Chief Financial Officer |
with a copy to:
Linklaters LLP 25, rue de Marignan 75008 Paris France Telecopier No.: 33-1-43-59-41-96 Attention: Luis Roth |
All such notices and communications shall be deemed to have been duly given at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.
22
Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, the successors and assigns of subsequent Holders of Initial Notes; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Initial Notes from such Holder.
(f) Counterparts. This Agreement may be executed in any number of 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 agreement.
(g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(i) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.
(j) Consent to Jurisdiction; Submission to Process. Each of the Company and the Guarantors irrevocably submits to the non-exclusive jurisdiction of any New York state or U.S. Federal court located in the Borough of Manhattan in the City and State of New York over any suit, action or proceeding arising out of or relating to this Agreement. Each of the Company and the Guarantors irrevocably waives, to the fullest extent permitted by law, any objection which it may have, pursuant to articles 14 and 15 of the French Civil Code or otherwise, to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in any inconvenient forum. In furtherance of the foregoing, each of the Company and the Guarantors hereby irrevocably designates and appoints CT Corporation, 111 Eighth Avenue, New York, New York 10011, as the agent of the Company and each of the Guarantors to receive service of all process brought against the Company or any such Guarantor with respect to any such suit, action or proceeding in any such court in the City and State of New York, such service being
23
hereby acknowledged by the Company and each of the Guarantors to be effective and binding service in every respect. Copies of any such process so served shall also be given to the Company in accordance with Section 13(d), but the failure of the Company or any Guarantor to receive such copies shall not affect in any way the service of such process as aforesaid. On the Closing Date, the Company and the Guarantors shall furnish to the Initial Purchasers a consent of CT Corporation agreeing to act hereunder. If for any reason CT Corporation shall resign or otherwise cease to act as such agent, the Company and each of the Guarantors hereby irrevocably agrees to (A) immediately designate and appoint a new agent reasonably acceptable to the Initial Purchasers to serve in such capacity and, in such event, such new agent shall be deemed to be substituted for CT Corporation for all purposes hereof and (B) promptly deliver to the Initial Purchasers the written consent (in form and substance reasonably satisfactory to the Initial Purchasers) of such new agent agreeing to serve in such capacity.
Nothing in this Section shall limit the right of the Company, any of the Guarantors, the Initial Purchasers or any Holder to bring proceedings in the courts of any other jurisdiction or to serve process in any other manner permitted by law.
[Signature pages to follow]
24
The foregoing registration rights agreement is hereby accepted and agreed as of the date first written above: | ||
CGG S.A. | ||
By: |
/s/ Stephane-Paul Frydman | |
Name: |
Stephane-Paul Frydman | |
Title: |
Corporate Officer & Chief Financial Officer | |
CGG HOLDING B.V. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
CGG MARINE B.V. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: Authorized Signatory | ||
CGG MARINE RESOURCES NORGE AS | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
CGG HOLDING (U.S.) INC. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
CGG SERVICES (U.S.) INC. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
VERITAS INVESTMENTS INC. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory |
The foregoing registration rights agreement is hereby accepted and agreed as of the date first written above: | ||
CGG LAND (U.S.) INC. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
VIKING MARITIME INC. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
VERITAS GEOPHYSICAL (MEXICO) LLC | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
ALITHEIA RESOURCES INC. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
SERCEL, INC. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory | |
SERCEL-GRC CORP. | ||
By: |
/s/ Yves Goulard | |
Name: |
Yves Goulard | |
Title: |
Authorized Signatory |
The foregoing registration rights agreement is hereby accepted and agreed as of the date first written above: | ||||
CREDIT SUISSE SECURITIES (EUROPE) LIMITED | ||||
By: |
/s/ Itay Singer | |||
Name: |
Itay Singer | |||
Title: |
Director | |||
By: |
/s/ Simon Francis | |||
Name: |
Simon Francis | |||
Title: |
Managing Director | |||
BNP PARIBAS | ||||
By: |
/s/ Benedict Foster | |||
Name: |
Benedict Foster | |||
Title: |
Authorised Signatory | |||
By: |
/s/ Maya Mehta | |||
Name: |
Maya Mehta | |||
Title: |
Authorised Signatory | |||
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | ||||
By: |
/s/ John Pantalena | |||
Name: |
John Pantalena | |||
Title: |
Director | |||
RBC CAPITAL MARKETS, LLC | ||||
By: |
/s/ Robert Kordas | |||
Name: |
Robert Kordas | |||
Title: |
Director |
Exhibit 5.1
Avocats à la Cour de Paris |
Linklaters LLP | |
Solicitors of the Senior Courts of England and Wales |
25 rue de Marignan | |
75008 Paris | ||
Telephone (+33) 1 56 43 56 43 | ||
Facsimile (+33) 1 43 59 41 96 | ||
Palais J 030 |
The Issuers
c/o CGG
Tour Maine-Montparnasse
33, avenue du Maine
B.P. 191
75755 Paris Cedex 15
France
July 3, 2014 |
Our Ref L-223941
Ladies and Gentlemen,
CGG (the Company)
U.S.$500,000,000 6.875% Senior Notes due 2022 (the New Notes)
Guaranteed (the New Guarantees) by Sercel Inc., Sercel-GRC Corp., Sercel Canada Ltd., Sercel Australia Pty Ltd, CGG Canada Services Ltd., CGG Marine Resources Norge A/S, CGG Holding B.V., CGG Marine B.V., CGG Holding (U.S.) Inc., CGG Land (U.S.) Inc., CGG Services (U.S.) Inc., Veritas Investments Inc., Viking Maritime Inc., Veritas Geophysical (Mexico) LLC, and Alitheia Resources Inc. (the Guarantors and together with the Company, the Issuers)
We have acted as special United States counsel to the Company in connection with the registration of the New Notes and the New Guarantees under the U.S. Securities Act of 1933 (the Securities Act) and the proposed offer by the Issuers to exchange the New Notes and the New Guarantees for U.S.$500,000,000 aggregate principal amount of the Companys 6.875% Senior Notes due 2022 (the Original Notes) and the Guarantors guarantees thereof (the Original Guarantees), each of which was originally issued on May 1, 2014.
This opinion is limited to the federal law of the United States and the laws of the State of New York, and we express no opinion as to the effect of the laws of any State of the United States or any other jurisdiction.
We also are delivering to you opinions dated the date hereof with respect to certain matters of French and Dutch law. We have relied on such opinions, filed as Exhibits 5.2 and 5.3, respectively, to the registration statement relating to the New Notes and the New Guarantees (the Registration Statement), with respect to the opinions set forth herein insofar as they may be affected by matters of French or Dutch law and, insofar as the opinions set forth herein may be affected by matters of French or Dutch law, they are subject to the same assumptions, qualifications and limitations with respect to such matters as are contained in such opinions.
This communication is confidential and may be privileged or otherwise protected by work product immunity. Linklaters LLP is a limited liability partnership registered in England and Wales with registered number OC326345. It is a law firm regulated by the Solicitors Regulation Authority. The term partner in relation to Linklaters LLP is used to refer to a member of the LLP or an employee or consultant of Linklaters LLP or any of its affiliated firms or entities with equivalent standing and qualifications. A list of the names of the members of Linklaters LLP and of the non-members who are designated as partners and their professional qualifications is open to inspection at its registered office, One Silk Street, London EC2Y 8HQ, England or on www.linklaters.com and such persons are either solicitors, registered foreign lawyers or European lawyers.
Please refer to www.linklaters.com/regulation for important information on our regulatory position.
With respect to all matters of the law of the Province of Alberta, Canada, we have relied without independent investigation upon the opinion dated July 3, 2014, of Blake, Cassels & Graydon LLP, special Alberta, Canada counsel to CGG Canada Services Ltd., filed as Exhibit 5.4 to the Registration Statement, and our opinions set forth herein, insofar as they may be affected by matters of the law of the Province of Alberta, are subject to the same assumptions, qualifications and limitations with respect to such matters as are contained in such opinion of Blake, Cassels & Graydon LLP.
With respect to all matters of the law of Norway, we have relied without independent investigation upon the opinion dated July 3, 2014, of Advokatfirmaet Wiersholm, special Norwegian counsel to CGG Marine Resources Norge AS, filed as Exhibit 5.5 to the Registration Statement, and our opinions set forth herein, insofar as they may be affected by matters of the law of Norway, are subject to the same assumptions, qualifications and limitations with respect to such matters as are contained in such opinion of Advokatfirmaet Wiersholm.
With respect to all matters of the law of the State of Oklahoma, we have relied without independent investigation upon the opinion dated July 3, 2014, of GableGotwals, special Oklahoma counsel to Sercel Inc. and Sercel-GRC Corp., filed as Exhibit 5.6 to the Registration Statement, and our opinions set forth herein, insofar as they may be affected by matters of the law of the State of Oklahoma, are subject to the same assumptions, qualifications and limitations with respect to such matters as are contained in such opinion of GableGotwals.
With respect to all matters of the law of the Province of New Brunswick, Canada, we have relied without independent investigation upon the opinion dated July 3, 2014, of McInnes Cooper, special New Brunswick, Canada counsel to Sercel Canada Ltd., filed as Exhibit 5.7 to the Registration Statement, and our opinions set forth herein, insofar as they may be affected by matters of the law of the Province of New Brunswick, are subject to the same assumptions, qualifications and limitations with respect to such matters as are contained in such opinion of McInnes Cooper.
With respect to all matters of the law of New South Wales, Australia, we have relied without independent investigation upon the opinion dated July 3, 2014, of Allens, special New South Wales, Australia counsel to Sercel Australia Pty Ltd., filed as Exhibit 5.8 to the Registration Statement, and our opinions set forth herein, insofar as they may be affected by matters of the law of New South Wales, are subject to the same assumptions, qualifications and limitations with respect to such matters as are contained in such opinion of Allens.
For the purpose of this opinion, we have examined the Indenture dated as of May 1, 2014 (the Indenture) between the Issuers and The Bank of New York Mellon (the Trustee) as Trustee, the forms of the New Notes and the notation of New Guarantees, the Registration Rights Agreement dated as of May 1, 2014 (the Registration Rights Agreement) between the Issuers and the initial purchasers of the Original Notes, such certificates and other documents, and such questions of law, as we have considered necessary or appropriate. We have assumed that the Indenture has been duly authorized, executed and delivered by the Trustee, an assumption we have not independently verified.
In our opinion, when the terms of the New Notes and the New Guarantees and of their issuance have been duly established in conformity with the Indenture, and the New Notes and the New Guarantees have been duly executed and authenticated in accordance with the terms of the Indenture and duly issued and delivered in exchange for the Original Notes and Original Guarantees in accordance with the terms of the Indenture and the Registration Rights Agreement, the New Notes and the New Guarantees will constitute valid and legally binding obligations of the Issuers, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar laws of general applicability relating to or affecting creditors rights and to general equity principles.
Page 2 of 3
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us under the heading Legal Matters in the prospectus contained therein. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
Yours faithfully,
/s/ Linklaters LLP
Page 3 of 3
Exhibit 5.2
Linklaters LLP | ||
25 rue de Marignan | ||
Avocats à la Cour de Paris |
75008 Paris | |
Solicitors of the Senior Courts of England and Wales |
Telephone (+33) 1 56 43 56 43 | |
Facsimile (+33) 1 43 59 41 96 | ||
Palais J 030 |
To: | The Issuers |
c/o CGG
Tour Maine-Montparnasse
33, avenue du Maine
B.P. 191
75755 Paris Cedex 15
France
3 July 2014 |
Our Ref L-223941
Ladies and Gentlemen
CGG (the Company) U.S.$500,000,000 6.875% Senior Notes due 2022 (the New Notes) Guaranteed (the New Guarantees) by Sercel Inc., Sercel-GRC Corp., Sercel Canada Ltd., Sercel Australia Pty Ltd, CGG Canada Services Ltd., CGG Marine Resources Norge A/S, CGG Holding B.V., CGG Marine B.V., CGG Holding (U.S.) Inc., CGG Land (U.S.) Inc., CGG Services (U.S.) Inc., Veritas Investments Inc., Viking Maritime Inc., Veritas Geophysical (Mexico) LLC, and Alitheia Resources Inc. (the Guarantors and together with the Company, the Issuers)
1 | Introduction |
1.1 | We have acted as French legal advisers to the Company in connection with the proposed offer by the Issuers to exchange the New Notes and the New Guarantees for U.S.$500,000,000 aggregate principal amount of the Companys 6.875% Senior Notes due 2022 (the Original Notes) and the Guarantors guarantees thereof (the Original Guarantees), each of which was originally issued on 1 May 2014. |
1.2 | We have taken instructions solely from the Company. |
2 | French Law |
This opinion is limited to French law as applied by the French courts and in effect on the date of this opinion. It is given on the basis that it and all matters relating to it will be governed by, and that it (including all terms used in it) will be construed in accordance with, French law.
This communication is confidential and may be privileged or otherwise protected by work product immunity. Linklaters LLP is a limited liability partnership registered in England and Wales with registered number OC326345. It is a law firm authorised and regulated by the Solicitors Regulation Authority. The term partner in relation to Linklaters LLP is used to refer to a member of the LLP or an employee or consultant of Linklaters LLP or any of its affiliated firms or entities with equivalent standing and qualifications. A list of the names of the members of Linklaters LLP and of the non-members who are designated as partners and their professional qualifications is open to inspection at its registered office, One Silk Street, London EC2Y 8HQ, England or on www.linklaters.com and such persons are either solicitors, registered foreign lawyers or European lawyers.
Please refer to www.linklaters.com/regulation for important information on our regulatory position.
3 | Scope of Inquiry |
For the purpose of this opinion, we have examined the following documents:
3.1 | A certified copy of the by-laws (statuts) of the Company dated 8 January 2014 (the By-Laws). |
3.2 | A certified copy of an extract of the minutes of the meeting of the Board of Directors of the Company held on 25 April 2014 containing the resolution approving the issue of the Notes and delegating to the Directeur Général of the Company the power to determine the final conditions of the Notes. |
3.3 | A copy of a decision of Jean-Georges Malcor, Directeur Général of the Company, dated 28 April 2014 deciding the issue of and determining the final conditions of the Notes and delegating to Mr. Stéphane-Paul Frydman (Directeur Général Délégué et Directeur Financier) or Mr. Yves Goulard (Trésorier Groupe), with the right to subdelegate, the power to sign the Agreements and take all actions required in connection with the issue of the Notes (the Decision). |
3.4 | An extrait Kbis of the Company as at 30 June 2014 issued by the Greffe du Tribunal de commerce of Paris on 1 July 2014 (the Extrait Kbis). |
3.5 | A certificat négatif de recherche dune procédure collective relating to the Company as at 30 June 2014 issued by the Greffe du Tribunal de commerce of Paris on 1 July 2014 (the Certificat Négatif). |
3.6 | A copy of the offering circular dated 28 April 2014 relating to the issue of the Original Notes. |
3.7 | An executed copy of the indenture dated 1 May 2014 among the Company and The Bank of New York Mellon as trustee (the Indenture), together with an authentication order signed by the Company, as provided in the Indenture. |
3.8 | A copy of the registration statement dated 3 July 2014 relating to the exchange of the New Notes and the New Guarantees for the Original Notes and the Original Guarantees (the Registration Statement). |
3.9 | A copy of the Officers Certificate dated 1 May 2014. |
3.10 | A copy of the Secretarys Certificate dated 1 May 2014. |
3.11 | A copy of the Secretarys Certificate dated 3 July 2014. |
4 | Assumptions |
For the purpose of this opinion, we have made the following assumptions:
4.1 | All copy documents conform to the originals and all originals are genuine, complete and up-to-date. |
4.2 | Each signature is the genuine signature of the individual concerned. |
4.3 | The Extrait Kbis, Certificat Négatif and By-Laws referred to in section 3 are each up-to-date. |
4.4 | The Indenture and the New Notes are within the capacity and powers of, and have been validly authorised and signed by, each party thereto other than the Company. |
4.5 | No dealings between the parties affect the Indenture and the New Notes. |
Page 2 of 4
4.6 | The Indenture and the New Notes are valid, binding and enforceable on each party thereto under the laws of the State of New York by which they are expressed to be governed. |
4.7 | The Indenture and the New Notes have the same meaning and effect under the laws of the State of New York as they would have if they were interpreted under French law by a French court and there are no provisions of any law other than French law which would affect this opinion. |
4.8 | The parties to the Indenture and the New Notes have complied with the requirement of good faith and fair dealing, their conduct has not contravened public order or moral standards and they have not entered into the Indenture or the New Notes on the basis of any material error. |
4.9 | The obligations undertaken by the Company under the Indenture and the New Notes meet its corporate interest and statutory purpose and fall within its corporate purpose. |
4.10 | The extract of the minutes of the meeting of the Board of Directors of the Company referred to in paragraph 3.2 is a true record of the proceedings described in it in a duly convened, constituted and quorate meeting and the resolutions set out in this extract of the minutes of the meeting of the Board of Directors of the Company were validly passed and remain in full force and effect without modification and have been, or will be, duly recorded in the minute book of the Company. |
5 | Opinions |
Based on the documents referred to and the assumptions in sections 3 and 4 above and subject to the qualifications in section 6 and to any matters not disclosed to us, we are of the following opinion:
5.1 | The Company is existing as a limited liability company (société anonyme) under the laws of the French Republic and is duly registered with the Registre du Commerce et des Sociétés of Paris with number 969 202 241. |
5.2 | The Company has the corporate power and authority to enter into and perform its obligations under the Indenture and to issue and perform its obligations under the New Notes. |
5.3 | The Company has taken all necessary corporate action to authorise its entry into and performance of the Indenture, the issue of the New Notes and the performance of its obligations under the New Notes in exchange for the Original Notes. |
5.4 | The Company has validly signed the Indenture and the representatives of the Company named in the Decision have the authority to execute, issue and deliver the New Notes in exchange for the Original Notes. |
6 | Qualifications |
This opinion is subject to the following qualifications:
6.1 | Without limiting the generality of the foregoing, we have made no investigation as to the accuracy and exhaustiveness of the facts (including statements of foreign law) contained in any of the documents referred to in section 3. |
6.2 | This opinion is subject to any limitations arising from (a) conciliation proceedings, safeguard proceedings (including the accelerated financial safeguard proceedings), judicial reorganisation proceedings, judicial liquidation proceedings or any other insolvency proceedings, moratorium laws, (b) laws relating to reorganisation and (c) laws of general application affecting the rights of creditors. |
Page 3 of 4
6.3 | A certificate, determination, notification, opinion or the like might be held by the French courts not to be conclusive, final or binding if it could be shown to have an unreasonable or arbitrary basis or in the event of manifest error despite any provision in the Agreement to the contrary. |
6.4 | We do not express any opinion as to any taxation matters. |
6.5 | Claims may become time-barred under the relevant provisions of French law or may be or become subject of the defences of set-off or counterclaim (demande reconventionnelle). |
7 | Consent |
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us under the heading Legal Matters in the prospectus contained therein. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
Yours faithfully, |
/s/ Bertrand Sénéchal
|
Bertrand Sénéchal |
Partner, Avocat à la Cour
For and on behalf of Linklaters LLP
Linklaters LLP
Page 4 of 4
Exhibit 5.3
Linklaters LLP World Trade Centre Amsterdam Zuidplein 180 1077 XV Amsterdam Telephone (31 20) 799 6200 Facsimile (31 20) 799 6300 |
To: CGG Holding B.V. Schiphol Boulevard 299 1118 BH Schiphol The Netherlands
CGG Marine B.V. Schiphol Boulevard 299 1118 BH Schiphol The Netherlands |
3 July 2014 |
Dear Sirs
CGG Holding B.V. (Holding) and CGG Marine B.V. (Marine and together with Holding, the Companies) Registration under the United States Securities Act of 1933, as amended, (the Act) of $500,000,000 6.875% Exchange Senior Notes due 15 January 2022 (the Exchange Notes) issued by CGG (the Issuer)
1 | We have acted as Dutch legal advisers to the Companies in connection with the registration under the Act by the Issuer of the proposed offer (the Offer) to exchange the Issuers $500,000,000 6.875% Senior Notes due 2021 (the Original Notes and together with the Exchange Notes, the Notes) for an equal principal amount of the Exchange Notes. The Original Notes are, and the Exchange Notes will be, issued pursuant to an indenture dated as of 1 May 2014 between the Issuer, the Companies, certain subsidiaries of the Issuer (all such guarantors including the Companies collectively, the Guarantors) and The Bank of New York Mellon (the Indenture). We have taken instructions solely from the Issuer. |
2 | This opinion is limited to Dutch law as applied by the Dutch courts and published in print and in effect on the date of this opinion, excluding tax law, the laws of the European Union (insofar as not implemented or incorporated in Dutch law) and market abuse, competition and procurement laws. This opinion is given on the basis that we undertake no responsibility to notify any addressee of this opinion of any change in Dutch law after the date of this opinion. It is given in accordance with customary Dutch legal practice and on the basis that it and all matters relating to it will be governed by and construed in accordance with Dutch law. In this opinion, Dutch legal concepts are expressed in English terms and not in their original Dutch terms. The Dutch concepts concerned may not be identical to the concepts described by the English terms as they may exist or be interpreted under the laws of jurisdictions other than the Netherlands. |
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3 | For the purpose of this opinion we have examined the documents listed and, where appropriate, defined in the Schedule to this letter. Our examination has been limited to the text of the documents. In addition we have obtained the following confirmations given by telephone or otherwise on the date of this opinion: |
3.1 | Confirmation from the Chamber of Commerce that the Trade Register Extracts are up to date in all respects material for this opinion. |
3.2 | Confirmation from the insolvency office (afdeling insolventie) of the competent court in Amsterdam and the central insolvency register (centraal insolventieregister) that the Companies are not registered as having been declared bankrupt (failliet verklaard) or granted suspension of payments (surseance verleend). |
4 | We have assumed the following: |
4.1 | All copy documents conform to the originals and all originals are genuine and complete. |
4.2 | Each signature is the genuine signature of the individual concerned. |
4.3 | All documents were at their date, and have through the date hereof remained, accurate, complete and in full force and effect without modification and have been or will have been executed in the same form as examined by us for the purposes of this opinion, the Original Notes have been validly issued, offered, authenticated and fully paid up and the Exchange Notes will have been authenticated, issued, offered and exchanged for the Original Notes as contemplated by, and in accordance with, the Indenture, the Registration Statement and the Prospectus. All confirmations referred to in paragraph 3 are true. |
4.4 | The deeds of incorporation are valid notarial deeds (notariële akte) and there were no defects in the incorporation of the Companies not appearing on the face of the deeds of incorporation. |
4.5 | None of the Companies has (i) had its assets placed under administration (onder bewind gesteld), (ii) been dissolved (ontbonden), merged (gefuseerd) or split up (gesplitst), (iii) been subjected to emergency measures (noodregeling) or any prevention, intervention and resolution measure or been the subject of any event (gebeurtenis) (including preparation of a transfer plan) under the Financial Supervision Act (Wet op het financieel toezicht) (collectively, Measures) or (iv) been subjected to any one of the insolvency and winding-up proceedings listed in Annex A or Annex B to the Council Regulation EC No. 1346/2000 of 29 May 2000 on Insolvency Proceedings (together Insolvency Proceedings, including, inter alia, bankruptcy (faillissement)). |
4.6 | The entry into and performance of the Indenture and the transactions contemplated thereby are conducive to the corporate objects and in the interest of the Companies, and the execution by the Companies of the Indenture will be a proper use of the powers of the directors and in the Companies best interest, and the entry into the Indenture by the Companies and the exercise of their rights and performance of their obligations under the Indenture and the Notes will be of material commercial benefit (in het vennootschappelijk belang) to the Companies. By entering into the Indenture the Companies act in good faith and for the purposes of carrying on their business and there are reasonable grounds for believing that the transaction will benefit the Companies. |
4.7 | The written resolutions referred to in the Schedule have been validly passed, and any conditions and limitations contained therein have been or will have been complied with. |
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4.8 | No advice is required from any works council under the Works Councils Act (Wet op de ondernemingsraden) in connection with the Companies entry into and performance of the Indenture. |
4.9 | The Indenture has been, and any powers of attorney (including the Powers of Attorney) have been or will have been, signed on behalf of each of the Companies by a member of its management board in office at the time of signing or by a person or persons duly authorised to do so under a valid power of attorney (including the relevant of the Powers of Attorney), if in facsimile with the approval of the signatory. |
4.10 | No member of the Companies management boards has a conflict of interest (tegenstrijdig belang) within the meaning of Section 2:239, subsection 6 of the Dutch Civil Code with respect to the Notes or the Indenture (or the transactions contemplated thereby). |
4.11 | The Companies management boards have not adopted regulations ((bestuurs)reglementen). |
4.12 | All documents and their entry into and performance are within the capacity and powers (corporate and otherwise) of, and have been or will have been validly authorised, entered into and duly performed by, each party other than the Companies. |
4.13 | All documents (including the Notes), including any governing law and submission to jurisdiction provisions contained therein, are valid, binding and enforceable on each party (including the Companies) under the law to which they are expressed to be subject where that is not Dutch law, and under any other applicable law than Dutch law. Words and phrases used in those documents have the same meaning and effect as they would if those documents were governed by Dutch law. |
4.14 | Insofar as any obligation of any of the Companies under the Indenture or the Notes falls to be performed in, or is otherwise affected by the laws of, any jurisdiction other than the Netherlands, its performance would not be illegal or ineffective under the laws of that jurisdiction. |
4.15 | There are no dealings between the parties that affect the Indenture. |
4.16 | There are no provisions of any law, other than Dutch law, which may apply to the Notes or the Indenture (or the transactions contemplated thereby) or to any power of attorney issued by the Companies (including the Powers of Attorney), which would affect this opinion. |
5 | In our opinion: |
5.1 | Each of the Companies has been incorporated and is existing as a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) under Dutch law. |
5.2 | Each of the Companies has the corporate power to enter into and perform the Indenture. |
5.3 | Each of the Companies has taken all necessary corporate action to authorise its entry into and performance of the Indenture. |
5.4 | Each of the Companies has validly signed the Indenture. |
6 | This opinion is subject to any matters not disclosed to us and to the following qualifications: |
6.1 | This opinion is limited by, and therefore we do not express any opinion or statement as to the consequences of, any Insolvency Proceeding, Measure, insolvency, liquidation (ontbinding en vereffening), reorganisation, fraudulent conveyance (Actio Pauliana) and other laws relating to or affecting the rights of creditors. |
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6.2 | Under Dutch law, a power of attorney does not preclude the principal from performing the legal acts covered by the power of attorney and can be made irrevocable only insofar as it is granted for the purpose of performing a legal act in the interest of the attorney or a third party and subject to any amendments made or limitations imposed by the court on serious grounds (gewichtige redenen). Each power of attorney (volmacht) or mandate (lastgeving), whether or not irrevocable, granted by a company, will terminate by force of law and without notice, upon bankruptcy of the company or the death of or termination by the attorney or the attorney being placed under guardianship, and will cease to have effect upon the company having been granted a suspension of payments or subjected to Measures. This qualification would also apply to the extent that the appointment of a process agent or other agent were to be deemed to constitute a power of attorney or a mandate. |
6.3 | Under Dutch law, a legal act (rechtshandeling) performed by a legal entity (including (without limitation) a guarantee pursuant to which it guarantees the performance of, or accepts joint and several liability for, obligations of a third party, whether or not affiliated with such third party, or an agreement pursuant to which it agrees to provide or provides security for any of such obligations and any other legal act having similar effect and including (without limitation) an agreement pursuant to which it agrees to provide or provides security for its or a third partys obligations under such agreement or guarantee or other act), may be nullified by any of its creditors if (a) such transactions are entered into by such debtor without a legal obligation to do so, (b) the rights of such creditors are thereby prejudiced, and (c) there is knowledge on the part of the relevant legal entity and the party with whom the transaction is made that the rights of the other creditors (existing or future) would be prejudiced. |
6.4 | If a legal act (rechtshandeling) performed by a legal entity (including (without limitation) a guarantee pursuant to which it guarantees the performance of, or accepts joint and several liability for, obligations of a third party, whether or not affiliated with such third party, or an agreement pursuant to which it agrees to provide or provides security for any of such obligations and any other legal act having similar effect and including (without limitation) an agreement pursuant to which it agrees to provide or provides security for its or a third partys obligations under such agreement or guarantee or other act) which exceeds the entitys objects or is not in the entitys corporate interest (i.e. is not in furtherance of the entitys objects), the act may (i) exceed the entitys corporate power, (ii) violate its articles of association and (iii) be nullified by it on the basis of section 2:7 of the Dutch Civil Code if the other party or parties to the act knew or should have known that the entitys objects were exceeded or that the act was not in the entitys corporate interest. In determining whether the act is conducive to the objects of a company, it is important to take into account (a) the text of the objects clause in its articles of association and (b) whether the company, irrespective of the wording of the objects clause, derives certain commercial benefit from the transaction in respect of which the act was performed. With regard to (a) we note that the objects clause contained in the articles of association of each of the Companies that is a Guarantor includes a reference to the guaranteeing by and the binding of the relevant company for the benefit of group companies and third parties. With regard to (b) we note that, if and to the extent that it is determined that there is an imbalance, to the disadvantage of the company, between the value of the commercial benefit and the amount for which the company is held liable, then irrespective of the wording of the objects clause in its articles of association the company may contest the validity or enforceability of the act and it is possible that such contestation will be honoured by the Dutch courts. |
6.5 | We do not express any opinion as to any deemed action or absence thereof. |
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6.6 | Under Dutch law, any security or guarantee given or liability accepted by a Dutch limited liability company or any of its subsidiaries (including, possibly, any foreign subsidiaries) with a view to (met het oog op) the acquisition (or the refinancing thereof) by any party of shares in the Dutch limited liability companys share capital or of any company of which any it is a direct or indirect subsidiary violates Dutch law and will most likely be void. |
6.7 | It should be understood that we have not been responsible for investigating or verifying the accuracy of the facts or the reasonableness of any statements of belief or opinion contained in the Prospectus, or that no material facts have been omitted from it. We express no opinion as to whether the Prospectus contains all the information that would have been required by Directive 2003/71/EC and Commission Regulation (EC) No. 809/2004 and implementing legislation if they were applicable. |
6.8 | The Trade Register Extracts and the confirmations referred to in paragraph 3 do not provide conclusive evidence that the information set out in the Trade Register Extracts is correct or that none of the Companies has become the subject of an Insolvency Proceeding. |
6.9 | We do not express any opinion as to facts. |
7 | We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the U.S. Securities and Exchange Commission. |
Yours faithfully
/s/ Linklaters LLP
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Schedule
1 | A copy of an extract from the trade register (the Holding Extract) obtained from the chamber of commerce (the Chamber of Commerce) regarding Holding dated 2 July 2014. |
2 | A faxed copy of a notarial copy of Holdings deed of incorporation dated 10 July 2009 and of its articles of association as most recently amended on 10 October 2013, both as obtained from and according to the Chamber of Commerce. |
3 | A print-out of an electronic copy of a written resolution of the management board of Holding dated 22 April 2014 including a power of attorney granted by the management board of Holding to each of Mrs Béatrice Place-Faget, Mr Stéphane-Paul Frydman and Mr Yves Goulard (the Holding Power); of a written resolution of the Issuer in its stated capacity as Holdings sole shareholder dated 22 April 2014. |
4 | A copy of an extract from the trade register (the Marine Extract) obtained from the Chamber of Commerce regarding Marine dated 2 July 2014. |
5 | A faxed copy of a notarial copy of Marines deed of incorporation dated 10 July 2009 and of its articles of association as most recently amended on 10 October 2013, both as obtained from and according to the Chamber of Commerce. |
6 | A print-out of an electronic copy of a written resolution of the management board of Marine dated 22 April 2014 including a power of attorney granted by the management board of Marine to each of Mrs Béatrice Place-Faget, Mr Stéphane-Paul Frydman and Mr Yves Goulard (the Marine Power); of a written resolution of Holding in its stated capacity as Marines sole shareholder dated 22 April 2014. |
7 | A print-out of an electronic copy of an executed indenture dated as of 1 May 2014 relating to the Notes (the Indenture), between the Issuer as issuer, the Guarantors as guarantors and The Bank of New York Mellon as trustee (the Trustee). |
8 | A print-out of an electronic copy of an executed registration rights agreement dated 1 May 2014 between the Issuer, the subsidiary guarantors including the Companies and the Initial Purchasers party thereto. |
9 | A print-out of an electronic copy of a registration statement on Form F-4 as filed with the Securities and Exchange Commission on 3 July 2014 (the Registration Statement), including a prospectus, (the Prospectus) relating to the Exchange Notes. |
The Holding Extract and the Marine Extract are together referred to as the Trade Register Extracts; the Holding Power and the Marine Power are together referred to as the Powers of Attorney; references to the Notes include the Notes in global form, unless the context requires otherwise; references to documents are to any and all documents mentioned in this Schedule including the Notes, unless the context requires otherwise.
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Exhibit 5.4
|
Blake, Cassels & Graydon LLP Barristers & Solicitors | |
Patent & Trade-mark Agents | ||
855 - 2nd Street S.W. | ||
Suite 3500, Bankers Hall East Tower | ||
Calgary AB T2P 4J8 Canada | ||
Tel: 403-260-9600 Fax: 403-260-9700 |
July 3, 2014
2200, 715 5th Avenue S.W. | Reference: 78658/06 |
Calgary, AB
Canada T2P 5A2
Re: | CGG Canada Services Ltd. (the Guarantor) Guarantee (the 2022 Subsidiary Guarantee) of U.S.$500,000,000 6.875% Senior Notes due 2022 (the 2022 Notes) of CGG (the Issuer) |
Dear Sirs:
We have acted as special Alberta counsel to the Guarantor in connection with the registration of the 2022 Notes and the 2022 Subsidiary Guarantee under the U.S. Securities Act of 1933 (the Securities Act) and the proposed offer to exchange the 2022 Notes and the 2022 Subsidiary Guarantee for U.S. $500,000,000 aggregate principal amount of 6.875% Senior Notes due 2022 and the Guarantors guarantee thereof.
All capitalized terms used in this opinion letter, unless otherwise defined in this opinion letter, shall have the meanings specified in the 2022 Indenture (defined below).
A. | Documentation |
As such counsel, we have examined an executed copy (if applicable) of each of the following:
(a) | Indenture dated as of May 1, 2014 (the Original 2022 Indenture) between the Issuer, the guarantors party thereto and The Bank of New York Mellon, as Trustee; |
(b) | Supplemental Indenture dated June 24, 2014 (the Supplemental 2022 Indenture and together with the Original 2022 Indenture, the 2022 Indenture) between the Issuer, the Guarantor, the other guarantors party thereto and The Bank of New York Mellon, as Trustee; |
(c) | the 2022 Subsidiary Guarantee in respect of the 2022 Notes; and |
(d) | the form of the 2022 Notes. |
All of the above documents are collectively referred to in this opinion letter as the Documents.
B. | Jurisdiction |
We are solicitors qualified to practise law in the Province of Alberta and we express no opinion as to any laws or any matters governed by any laws other than the laws of the Province of Alberta and the federal laws of Canada applicable in the Province of Alberta (collectively, Alberta Law).
MONTRÉAL OTTAWA TORONTO CALGARY VANCOUVER
12718208.5 | NEW YORK | CHICAGO | LONDON | BAHRAIN | AL-KHOBAR* | BEIJING | SHANGHAI* | blakes.com | ||||||||
* Associated Office |
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C. | Scope of Examinations |
In connection with the opinions expressed in this letter, we have considered such questions of law and examined such public and corporate records, certificates and other documents and conducted such other examinations as we have considered necessary for the purposes of the opinions expressed in this letter.
We have not maintained or reviewed the minute books of the Guarantor.
D. | Assumptions and Reliances |
In expressing the opinion in paragraph E.1, we have relied solely upon a certificate of status issued by the Registrar of Corporations for Alberta, dated June 30, 2014, a copy of which has been delivered to you, and we have assumed that the matters set out in such certificate have not changed from the date of such certificate until the date hereof.
To the extent that the opinions expressed in this opinion letter are based on factual matters, we have relied solely on the certificate of an officer of the Guarantor, and the schedules attached thereto (the Officers Certificate).
For purposes of the opinions expressed in this letter, we have assumed:
(a) | the legal capacity of all individuals, the genuineness of all signatures and the authenticity of all documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as copies; |
(b) | the accuracy, currency and completeness of the indices and filing systems maintained at the public offices where we have searched or enquired or have caused searches or enquiries to be conducted; |
(c) | that all facts set forth in all certificates supplied, or otherwise conveyed to us, by public officials and in the Officers Certificate are true; |
(d) | that the written resolution authorizing the issue, execution and delivery by the Guarantor of the Documents and the performance of its obligations thereunder has been signed by all the directors of the Guarantor entitled to vote on that resolution at a meeting of the directors; and |
(e) | that the 2022 Indenture has been executed and delivered in accordance with all requirements of the laws of the jurisdiction in which it was executed and delivered. |
MONTRÉAL OTTAWA TORONTO CALGARY VANCOUVER
12718208.5 | NEW YORK | CHICAGO | LONDON | BAHRAIN | AL-KHOBAR* | BEIJING | SHANGHAI* | blakes.com | ||||||||
* Associated Office |
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E. | Opinions |
On the basis of the foregoing, we are of the opinion that:
1. | The Guarantor is a valid and subsisting corporation under the laws of the Province of Alberta. |
2. | The Guarantor has all necessary corporate power and capacity to enter into and perform its obligations under the 2022 Indenture and the 2022 Subsidiary Guarantee. |
3. | The issue, execution and delivery by the Guarantor of the 2022 Indenture and the 2022 Subsidiary Guarantee have been duly authorized by all necessary corporate action on the part of the Guarantor. |
4. | To the extent governed by Alberta Law, the Supplemental 2022 Indenture has been duly executed and, to the extent governed by Alberta Law, delivered by the Guarantor. |
We hereby consent to the filing of this opinion as an exhibit to the registration statement relating to the 2022 Notes and the 2022 Subsidiary Guarantee. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
Yours very truly,
/s/ Blake, Cassels & Graydon LLP
MONTRÉAL OTTAWA TORONTO CALGARY VANCOUVER
12718208.5 | NEW YORK | CHICAGO | LONDON | BAHRAIN | AL-KHOBAR* | BEIJING | SHANGHAI* | blakes.com | ||||||||
* Associated Office |
Exhibit 5.5
CGG Marine Resources Norge AS O.H. Bangs vei 70 1363 Høvik Norway |
Oslo, 3 July, 2014 Ref: 5089686_4 Partner in charge: Erik Ramm | |
LEGAL OPINION |
Dear Ladies and Gentlemen,
RE: CGG MARINE RESOURCES NORGE ASS (THE NORWEGIAN GUARANTOR) GUARANTEE (THE GUARANTEE) OF USD 500,000,000 6.875% SENIOR NOTES DUE 2022 (THE NOTES) OF CGG SA (THE ISSUER)
1. | INTRODUCTION |
We have acted as your special Norwegian counsel in connection with the registration of the Notes and the Guarantee (each as defined below) under the U.S. Securities Act of 1933 (the Securities Act) and the proposed offer to exchange the Notes and the Guarantee for USD 500,000,000 aggregate principal amount of 6.875% Senior Notes due 2022 and CGG Marine Resources Norge AS (the Norwegian Guarantor) guarantee thereto, dated 28 April, 2014.
2. | DOCUMENTS |
In rendering the opinions set out below, we have examined and relied on originals or copies, certified or otherwise identified to our satisfaction, of the following:
(a) | an indenture dated 1 May, 2014 among (a) the Issuer, (b) the Norwegian Guarantor and the other guarantors named therein and (c) The Bank of New York Mellon as trustee (the Trustee), (the Indenture); |
(b) | the form of the Notes (including the form of endorsement thereon of the Guarantee thereof by the Norwegian Guarantor); |
(c) | the articles of association of the Norwegian Guarantor dated 21 September, 2011; |
(d) | the certificate of registration of the Norwegian Guarantor dated 2 July, 2014; |
(e) | a directors certificate dated 1 May, 2014, signed by Mr. Rolf Erik Rolfsen, chairman of the board of directors of the Norwegian Guarantor; |
(f) | a copy of the resolutions (the Resolutions) by the board of directors of the Norwegian Guarantor dated 24 April, 2014, authorising the Norwegian Guarantors execution and delivery of, inter alia, the Indenture and the Guarantee, and authorising a person or persons to sign, inter alia, the Indenture and the Guarantee; and |
(g) | an e-mail dated 3 July, 2014, from the Norwegian Register of Bankruptcies confirming that it as of 09:43 hours (Oslo time) had not registered any notices of bankruptcy against the Norwegian Guarantor. |
3. | ASSUMPTIONS |
In giving this opinion we have assumed:
(a) | that we shall express no opinion as to any laws other than the laws of Norway in force at the date hereof; |
(b) | the authenticity and completeness of all documents submitted to us as originals; |
(c) | that all photocopies reviewed by us are in conformity with the originals thereof and that all translations of documents reviewed by us in translated form are true and accurate; |
(d) | that any signatures on the documents reviewed by us are genuine; |
(e) | that the Norwegian Guarantor has not passed a voluntary resolution and that no petition has been presented to a court for the winding-up, composition proceedings, bankruptcy or commencement of debt negotiations of the Norwegian Guarantor. According to the e-mail from the register described in 2. (g) above, no bankruptcy proceedings have been registered against the Norwegian Guarantor as at 09:43 hours (Oslo time) on 3 July, 2014 and according to a verbal confirmation from Asker og Bærum District Court (in Norwegian: Asker og Bærum tingrett), no petitions for the bankruptcy of the Norwegian Guarantor have been scheduled for hearing with the Asker og Bærum District Court (in Norwegian: Asker og Bærum tingrett) as at 09:58 hours (Oslo time) on 3 July, 2014; |
(f) | that there have been no amendments to the certificate of registration and articles of association of the Norwegian Guarantor as compared to the form provided to us in connection with the giving of this opinion; |
(g) | that the Resolutions presented to us in connection with the giving of this opinion were duly passed at a properly convened board meeting of the Norwegian Guarantor and that a duly qualified quorum of board members voted in favour of approving the Resolutions and that the Resolutions have not been amended or rescinded and are in full force and effect at the date hereof; and |
(h) | that the Norwegian Guarantor is a wholly owned, directly or indirectly, subsidiary the Issuer and that it is economically beneficial for the Group to enter into the Indenture and the Guarantee. |
4. | OPINIONS |
4.1 | Based upon and subject to the foregoing we are of the opinion that: |
4.1.1 | Status |
The Norwegian Guarantor is a limited liability company (in Norwegian: aksjeselskap), duly registered and validly existing under the laws of Norway, with full power and authority (corporate and other) to enter into the Guarantee and the Indenture.
2
4.1.2 | Due Authorisation |
(a) | The execution and delivery of the Indenture and the performance of its obligations thereunder have been duly authorized by the Norwegian Guarantor. |
(b) | The Guarantee to be endorsed or affirmed, as applicable, on the Notes or the Exchange Notes by the Norwegian Guarantor has been duly authorized by the Norwegian Guarantor. |
We hereby consent to the filing of this opinion as an exhibit to the registration statement relating to the Notes and the Guarantee. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
Yours faithfully
Advokatfirmaet Wiersholm AS
/s/ Eric Ramm
3
Exhibit 5.6
1100 ONEOK Plaza 100 West Fifth Street Tulsa, Oklahoma 74103-4217 Telephone (918) 595-4800 Fax (918) 595-4990 www.gablelaw.com |
Fifteenth Floor One Leadership Square 211 North Robinson Oklahoma City, Oklahoma 73102-7101 Telephone (405) 235-5500 Fax (405) 235-2875 |
July 3, 2014
Sercel, Inc. and
Sercel-GRC Corp.
17200 Park Row
Houston, Texas 77084
Re: | U.S.$500,000,000 of 6.875% Senior Notes due 2022 of CGG SA |
Ladies and Gentlemen:
We have acted as special counsel in the State of Oklahoma for Sercel, Inc., an Oklahoma corporation (Sercel), and Sercel-GRC Corp., an Oklahoma corporation (Sercel-GRC and, together with Sercel, the Oklahoma Guarantors and each an Oklahoma Guarantor) in connection with the guarantee by each of the Oklahoma Guarantors of certain obligations of their ultimate parent company, CGG SA, a société anonyme incorporated under the laws of France and registered at the Paris Commercial Registry under Number B 969 202 241 (69B00224) (the Issuer), relating to the issuance by the Issuer of U.S.$500,000,000 principal amount of its 6.875% Senior Notes due 2022 (the Exchange Notes). The Exchange Notes are to be issued pursuant to an exchange offer (the Exchange Offer) in exchange for a like principal amount of the Issuers issued and outstanding 6.875% Senior Notes due 2022 (the Old Notes). The Old Notes are, and the Exchange Notes will be, governed by an indenture dated as of May 1, 2014 (the Indenture) among the Issuer, the Oklahoma Guarantors, the other guarantors named therein (such other guarantors, collectively with the Oklahoma Guarantors, being referred to herein as the Guarantors) and The Bank of New York Mellon, as trustee.
In rendering the opinions set forth herein, we have examined and relied on originals or copies, certified or otherwise identified to our satisfaction, of the following:
(a) | the executed Indenture; |
(b) | the form of the Exchange Notes (including the form of endorsement thereon of the guarantee thereof by each of the Oklahoma Guarantors); |
(c) | the registration statement on Form F-4, filed by the Issuer and the Guarantors with the United States Securities and Exchange Commission (the Commission) on July 3, 2014 (such registration statement, as so filed, being hereinafter referred to herein as the Registration Statement), relating to the Exchange Offer, including the prospectus constituting a portion thereof; |
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Sercel, Inc. & Sercel-GRC Corp. July 3, 2014 Page 2 |
(d) | the certificate of incorporation of Sercel, as amended, certified by the Secretary of State of the State of Oklahoma as of April 22, 2014, and certified in the Sercel Secretarys Certificate (as defined below) as being in effect at the time of the adoption of the Sercel Resolutions (as defined below) and at all subsequent times through and including the date hereof (the Sercel Certificate of Incorporation); |
(h) | the certificate of incorporation of Sercel-GRC, as amended, certified by the Secretary of State of the State of Oklahoma as of April 22, 2014, and certified in the Sercel-GRC Secretarys Certificate (as defined below) as being in effect at the time of the adoption of the Sercel-GRC Resolutions (as defined below) and at all subsequent times through and including the date hereof (the Sercel-GRC Certificate of Incorporation); |
(i) | the amended and restated bylaws of Sercel, certified in the Sercel Secretarys Certificate as being in effect at the time of the adoption of the Sercel Resolutions and at all subsequent times through and including the date hereof (the Sercel Bylaws); |
(j) | the bylaws of Sercel-GRC, certified in the Sercel-GRC Secretarys Certificate as being in effect at the time of the adoption of the Sercel-GRC Resolutions and at all subsequent times through and including the date hereof (the Sercel-GRC Bylaws); |
(k) | a copy of those certain resolutions of the board of directors of Sercel adopted on April 23, 2014, certified in the Sercel Secretarys Certificate as being in effect since the date of their adoption and at all subsequent times through and including the date hereof (the Sercel Resolutions); |
(l) | a copy of those certain resolutions of the board of directors of Sercel-GRC adopted on April 23, 2014, certified in the Sercel-GRC Secretarys Certificate as being in effect since the date of their adoption and at all subsequent times through and including the date hereof (the Sercel-GRC Resolutions); |
(m) | a certificate dated July 3, 2014 of the Secretary of Sercel as to the Sercel Certificate of Incorporation, the Sercel Bylaws, the Sercel Resolutions, the incumbency of certain officers and directors of Sercel and certain other matters (the Sercel Secretarys Certificate); |
(n) | a certificate dated July 3, 2014 of the Secretary of Sercel-GRC as to the Sercel-GRC Certificate of Incorporation, the Sercel-GRC Bylaws, the Sercel-GRC Resolutions, the incumbency of certain officers and directors of Sercel-GRC and certain other matters (the Sercel-GRC Secretarys Certificate); and |
(o) | certificates of the Secretary of State of the State of Oklahoma, each dated as of a recent date, as to the corporate existence and good standing of each of the Oklahoma Guarantors (collectively, the Good Standing Certificates). |
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Sercel, Inc. & Sercel-GRC Corp. July 3, 2014 Page 3 |
The documents listed as items (a) (c) above are collectively referred to herein as the Transaction Documents. The documents listed as items (d) (o) above are collectively referred to herein as the Authority Documents.
We have assumed without independent investigation or inquiry the legal capacity of all natural persons executing documents, the genuineness of all signatures on original or certified copies, the authenticity of all original or certified copies and the conformity to original or certified documents of all copies submitted to us as conformed or reproduction copies. We have relied as to factual matters upon, and have assumed the accuracy of, the statements and representations made in the Sercel Secretarys Certificate and in the Sercel-GRC Secretarys Certificate and certificates and other statements or information of or from public officials and officers and representatives of the Oklahoma Guarantors.
We have also assumed: (i) the due execution and delivery of the Indenture and the Exchange Notes by the parties thereto, including by the Oklahoma Guarantors, to the extent such execution and delivery are questions of laws of jurisdictions other than the State of Oklahoma; (ii) to the extent the Transaction Documents purport to be governed by the laws of a jurisdiction other than the State of Oklahoma, the Transaction Documents constitute valid, legal and binding obligations of the parties thereto, enforceable in accordance with their terms under the laws of such other jurisdiction; (iii) neither of the Oklahoma Guarantors is specifically subject to any governmental programs or any judicial or governmental actions, proceedings, liens, judgments, orders, injunctions, decrees or arbitration awards (as opposed to laws of general application of the State of Oklahoma); and (iv) the truthfulness and accuracy of the factual representations contained in the Transaction Documents and the Authority Documents.
Based solely upon our examination of the Transaction Documents and the Authority Documents, and subject to the assumptions and qualifications herein expressed, we are of the opinion that:
1. Each Oklahoma Guarantor is a corporation existing and in good standing under the Oklahoma General Corporation Act, as amended.
2. Each Oklahoma Guarantor has the requisite corporate power and authority to enter into the Indenture (which includes a guarantee by each of the Oklahoma Guarantors of the Exchange Notes) under the applicable laws of the State of Oklahoma.
3. The Indenture has been duly authorized, executed and delivered by each of the Oklahoma Guarantors under the applicable laws of the State of Oklahoma.
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Sercel, Inc. & Sercel-GRC Corp. July 3, 2014 Page 4 |
Our opinions expressed herein are subject to the following qualifications:
(a) Our attorneys are members of the bar of the State of Oklahoma, and we express no opinion with regard to any matter that may be governed by the law of any jurisdiction other than the State of Oklahoma. In rendering the foregoing opinions, our examination of matters of law has been limited to the applicable laws of the State of Oklahoma as in effect on the date hereof. Without limiting the generality of and subject to the foregoing, in rendering the opinions herein we have considered only those laws, statutes, rules and regulations that, in our experience, are customarily applicable to transactions of the character contemplated by the Transaction Documents. Further, as used herein, applicable laws does not include and we express no opinion with respect to any: (a) municipal or other local law, rule or regulation, and any other law, rule or regulation relating to (i) pollution or protection of the environment, (ii) zoning, land use, building or construction codes or guidelines, (iii) labor, employee rights and benefits, or occupational safety and health, or (iv) utility regulation; (b) antitrust laws and other laws regulating competition; (c) antifraud laws; (d) tax laws, rules or regulations; (e) securities or blue sky laws, rules or regulations; (f) intellectual property laws; (g) usury laws; and (h) any law, rule or regulation that may be applicable to any party by virtue of the particular nature of the business conducted by it or any goods or services produced by it or property owned or leased by it.
(b) Except as specifically noted in this opinion letter, we have not (i) made any independent review or special investigation concerning any agreements, instruments, encumbrances, orders, judgments, or decrees by which either of the Oklahoma Guarantors may be specifically bound, or (except with respect to the general application of the applicable laws of the State of Oklahoma) any laws, rules or other regulations by which either of the Oklahoma Guarantors may be bound; (ii) made any independent investigation as to the existence of any litigation, tax claims, actions, suits, investigations or disputes, if any, pending or threatened against either of the Oklahoma Guarantors; or (iii) made any other independent investigation of factual matters.
(c) The opinion set forth in paragraph 1 above is based solely upon our review of the Good Standing Certificates.
(d) No member of this firm was involved in any aspect of the closing of the Exchange Offer, other than the presentation and delivery of this opinion letter. Accordingly, our opinion in paragraph 3 regarding execution and delivery of the Indenture by the Oklahoma Guarantors is based solely upon (i) the applicable laws of the State of Oklahoma, (ii) our review of copies of the executed Indenture and (iii) communications from Linklaters LLP, primary counsel to the Oklahoma Guarantors, providing assurances that the aforementioned documents have been delivered in conjunction with the closing.
This opinion letter is rendered as of the date first set forth above, and we express no opinion as to circumstances or events which may occur subsequent to such date. We disclaim any obligation to update this opinion letter after such date or to advise you of changes of facts stated or assumed herein or any subsequent changes in any law.
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Sercel, Inc. & Sercel-GRC Corp. July 3, 2014 Page 5 |
We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Commission.
Yours very truly, |
/s/ Gable Gotwals |
Exhibit 5.7
Blue Cross Centre | ||
South Tower, Suite 400 | ||
644 Main Street | ||
PO Box 1368 Moncton NB Canada E1C 1E2 Tel 506.857.8970 | Fax 506.857.4095 |
Our File: O-656
July 3, 2014
Sercel Canada Ltd.
1108 55 Avenue NE
Calgary, AB T2E 6Y4
Dear Sirs:
Sercel Canada Ltd. (the Guarantor) Guarantee (the Guarantee) of U.S. $500,000,000 6.875% Senior Notes due 2022 (the Notes) of CGG (the Issuer)
We have acted as special New Brunswick counsel to the Guarantor for the purposes of giving the opinions set forth herein in connection with the registration of the Notes and the Guarantee under the U.S. Securities Act of 1933 (the Securities Act) and the proposed offer to exchange the Notes and the Guarantee for U.S. $500,000,000 aggregate principal amount of 6.875% Senior Notes due 2022 (the Original Notes), which were originally issued on May 1, 2014, and the Guarantors guarantee thereof (the Original Guarantee).
All capitalized terms used in this opinion letter, unless otherwise defined in this opinion letter, shall have the meanings specified in an indenture dated as of May 1, 2014 (the Indenture) between the Issuer, the guarantors party thereto and The Bank of New York Mellon, as Trustee. The Guarantor acceded to the Indenture pursuant to a supplemental indenture dated as of June 24, 2014 (the Supplemental Indenture) between the Issuer, the Guarantor and The Bank of New York Mellon, as Trustee.
A. | DOCUMENTATION |
As such counsel, we have examined each of the following:
(a) | the executed Supplemental Indenture; |
(b) | the Guarantee; and |
(c) | the Indenture. |
All of the above documents are collectively referred to in this opinion letter as the Documents.
MCINNES COOPER |
Page 2 O-656 July 3, 2014 |
B. | JURISDICTION |
We are solicitors qualified to practise law in the Province of New Brunswick and we express no opinion as to any laws or any matters governed by any laws other than the laws of the Province of New Brunswick and the federal laws of Canada applicable in the Province of New Brunswick (Applicable Law).
C. | SCOPE OF EXAMINATIONS |
In connection with the opinions expressed in this letter, we have considered such questions of law and examined such public and corporate records, certificates and other documents and conducted such other examinations as we have considered necessary for the purposes of the opinions expressed in this letter.
D. | ASSUMPTIONS AND RELIANCES |
In expressing the opinion in paragraph E.1, we have relied solely upon a certificate in respect of the Guarantor issued by the Director under the Business Corporations Act (New Brunswick), dated July 2, 2014, a copy of which has been delivered to you, and we have assumed that the matters set out in such certificate have not changed from the date of such certificate until the date hereof.
To the extent that the opinions expressed in this opinion letter are based on factual matters, we have relied solely on the certificate of Kenneth O. Fitts, the Secretary of the Guarantor (the Officers Certificate), a copy of which has been provided to us.
For purposes of the opinions expressed in this letter, we have assumed:
(a) | the legal capacity of all individuals, the genuineness of all signatures and the authenticity of all documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as copies; |
(b) | the accuracy, currency and completeness of the indices and filing systems maintained at the public offices where we have searched or enquired or have caused searches or enquiries to be conducted; and |
(c) | that all facts set forth in all certificates supplied, or otherwise conveyed to us, by public officials and in the Officers Certificate are true. |
E. | OPINIONS |
On the basis of the foregoing, we are of the opinion that:
1. | The Guarantor is a corporation duly organized and validly existing under the laws of the Province of New Brunswick. |
2. | The Guarantor has all necessary corporate power and capacity to enter into and perform its obligations under the Supplemental Indenture, the Indenture and the Guarantee. |
MCINNES COOPER |
Page 3 O-656 July 3, 2014 |
3. | The issue, execution and delivery by the Guarantor of the Guarantee in exchange for the Original Guarantee have been duly authorized by all necessary corporate action on the part of the Guarantor. |
4. | The Supplemental Indenture has been duly authorized, executed and delivered by the Guarantor under the laws of the Province of New Brunswick. |
We hereby consent to the filing of this opinion as an exhibit to the registration statement relating to the Notes and the Guarantee. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
Yours very truly,
/s/ McInnes Cooper
Exhibit 5.8
Allens 101 Collins Street Melbourne VIC 3000 Australia
T +61 3 9614 1011 F +61 3 9614 4661 www.allens.com.au |
GPO Box 1776 Melbourne VIC 3001 Australia DX 30999 Melbourne |
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ABN 47 702 595 758 |
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3 July 2014
Sercel Australia Pty Ltd
Level 5
Deutsche Bank Place
Sydney NSW 2000
(the Australian Guarantor)
Dear Sir / Madam
CGG Guarantee of US$500 million 6.875% Senior Notes due in 2022 by the Australian Guarantor
We have been retained to act as Australian lawyers for CGG, a company incorporated in France and registered at the Paris commercial register under company number 969 202 241 (the Issuer) and the Australian Guarantor in connection with the Issuers US$500 million 6.875% Senior Notes due in 2022. At the request of the Issuer, we have been requested to issue this opinion.
1 | Definitions |
In this opinion:
(a) | ASIC means the Australian Securities and Investments Commission; |
(b) | Corporations Act means the Corporations Act 2001 (Cth); |
(c) | Document means: |
(i) | the Supplemental Indenture dated 24 June 2014 between, among others, the Issuer, the Australian Guarantor and The Bank of New York Mellon as trustee (the Trustee) (the Supplemental Indenture) in respect of the Indenture dated 1 May 2014 pursuant to which the Issuer issued US$500 million in principal amount of 6.875% Senior Notes due in 2022 (the 2022 Notes Indenture), and which contains a guarantee in respect of the 2022 Notes Indenture (the Subsidiary Guarantee); and |
(ii) | the Registration Statement dated 3 July 2014. |
(d) | law means the common law, principles of equity and laws constituted by legislation that is available to the public generally; |
(e) | Power of Attorney means the power of attorney of the Australian Guarantor granted in connection with the Documents and dated 5 June 2014; and |
(f) | Relevant Jurisdictions means New South Wales and the federal jurisdiction of the Commonwealth of Australia. |
Our Ref JDDM;SAAM:120452418
Allens is an independent partnership operating in alliance with Linklaters LLP.
CGG |
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2 | Documents |
We have examined and rely on:
(a) | an executed counterpart of each Document; |
(b) | an executed copy of the Power of Attorney; |
(c) | a certificate from the Australian Guarantor dated 3 July 2014; |
(d) | a copy of the board resolutions of the board of directors of the Australian Guarantor dated 5 June 2014 authorising, among other things, the execution, delivery and observance of obligations under the Documents; and |
(e) | a copy of the constitution of the Australian Guarantor. |
3 | Scope |
This opinion relates only to the laws of the Relevant Jurisdictions, as interpreted by courts of the Relevant Jurisdictions, at 9am Sydney time) on the date of this opinion.We express no opinion on the impact of any revenue laws.This opinion is given on the basis that it will be construed in accordance with the laws of New South Wales. Anyone relying on this opinion agrees that this opinion and all matters (including any liability) arising in any way from it are to be governed by the laws of New South Wales and will be subject to the non-exclusive jurisdiction of the courts with jurisdiction there.
4 | Searches |
We have relied on an extract of the public records of the Australian Guarantor produced by ASIC on 3 July 2014. We have assumed that the extracts are correct, complete and up-to-date, and are the same as information provided by the Australian Guarantor to ASIC. We have not examined any documents that the Australian Guarantor may have filed with ASIC.
We have not conducted any other searches or investigations.
5 | Opinion |
Our opinion is as follows, subject to the assumptions in Schedule 1 and the qualifications in Schedule 2.
(a) | The Australian Guarantor is incorporated and exists under the laws in force in Australia and is capable of suing and being sued in its corporate name. |
(b) | The Australian Guarantor has the corporate power to enter into and perform its obligations under each Document to which it is a party. |
(c) | The Australian Grantor may be regarded as having taken all necessary corporate action to authorise the execution, delivery and performance of the Documents. |
(d) | The Supplemental Indenture has been duly authorised and executed by the Australian Guarantor in accordance with the laws of the Relevant Jurisdictions. |
page 2 |
CGG |
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6 | Benefit |
We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of person whose consent is required under section 7 of the Securities Act of 1933 (US).
Yours faithfully
/s/ Allens
Allens
page 3 |
CGG |
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Schedule 1
Assumptions
(a) | All dates, signatures, seals and duty markings are authentic. |
(b) | If we have reviewed a copy of a document, it is a correct and complete copy of the original. |
(c) | The Documents have not been amended, released or terminated. |
(d) | No person has engaged or will engage in unconscionable, misleading or deceptive conduct (by act or omission) that might make any part of this opinion incorrect. No person has engaged or will engage in any other conduct, and there are no facts or circumstances not evident from the face of the documents listed in Part 2 of this opinion, that might make any part of this opinion incorrect including, without limiting this, whether a Document or a transaction in connection with it will: |
(i) | financially assist a person to acquire shares in the Australian Guarantor (or a holding company of the Australian Guarantor) in contravention of section 260A (Financial assistance by a company for acquiring shares in the company or a holding company) of the Corporations Act; or |
(ii) | constitute a financial benefit to a related party of the Australian Guarantor in contravention of Chapter 2E (Related party transactions) of the Corporations Act. |
(e) | The Australian Guarantor enters into each Document to which it is a party in its personal capacity, and not as trustee or agent or in any other capacity. |
(f) | Each of the assumptions set out in section 129 of the Corporations Act is correct in relation to each Document, the Power of Attorney and the Australian Guarantor. |
(g) | Each person who executed any Document on behalf of the Australian Guarantor held the position they purported to hold. The Power of Attorney has not been amended or revoked. |
(h) | The Documents: |
(i) | have been or will be validly authorised and entered into by each party to them other than the Australian Guarantor, and are binding on each such party under all applicable laws; and |
(ii) | are binding on the Australian Guarantor under all applicable laws other than the laws of the Relevant Jurisdictions. |
(i) | If any Document is to be performed in any jurisdiction other than a Relevant Jurisdiction, its performance will not be illegal under the laws of that jurisdiction. |
(j) | The Australian Guarantor is solvent immediately after it enters each Document to which it is a party. |
(k) | Formalities for execution required by the law of the place of execution (other than a Relevant Jurisdiction) of each Document have been or will be complied with. |
We have not taken any step to investigate whether the assumptions in this opinion are correct, except as expressly stated in this opinion.
page 4 |
CGG |
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Schedule 2
Qualifications
(a) | The powers and authorisations of the Australian Guarantor may be affected by laws such as those relating to bankruptcy, insolvency, liquidation, receivership, administration, reorganisation, reconstruction, fraudulent transfer or moratoria. |
(b) | We have not been responsible for verifying the accuracy of the facts, or the reasonableness of any statements of opinion, contained in the Registration Statement, or that no material facts have been omitted from it. We express no opinion as to whether the Registration Statement contains all the information required by the applicable securities laws of the United States or whether the persons responsible for the Registration Statement under these laws have discharged their obligations under those laws. |
(c) | We have relied, as to certain matters of fact, on certificates of officers of the Australian Guarantor. |
page 5 |
Exhibit 12.1
Statement re Computation of Ratios
IFRS (in millions of USD) | Three months ended | Year ended | ||||||||||||||||||||||||||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec 31, 2009 | ||||||||||||||||||||||
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Fixed Charges(1) |
48.2 | 46.9 | 193.3 | 159.0 | 177.2 | 143.3 | 149.9 | |||||||||||||||||||||
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Pre-tax income from continuing operations before income (loss) from equity investees |
10.6 | 100.5 | 608.9 | 154.2 | 33.5 | 41.5 | 385.6 | |||||||||||||||||||||
Excluding variance on derivative |
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Fixed Charges |
48.2 | 46.9 | 193.3 | 159.0 | 177.2 | 143.3 | 149.9 | |||||||||||||||||||||
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Earnings |
37.6 | 147.4 | 415.6 | 313.2 | 210.7 | 101.8 | 235.7 | |||||||||||||||||||||
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Ratio of Earnings to Fixed Charges |
0.8 | 3.1 | 2.2 | 2.0 | 1.2 | 0.7 | 1.6 | |||||||||||||||||||||
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Note:
(1) | Fixed Charges corresponds to the line item Expenses related to financial debt in our consolidated statement of operations. |
Exhibit 23.9
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firms under the caption Experts in the Registration Statement on Form F-4 of CGG pertaining to the offer to exchange US$500,000,000 6.875% Senior Notes due 2022 and to the incorporation by reference therein of our reports dated April 10, 2014, with respect to the consolidated financial statements of CGG for the year ended December 31, 2013 and the effectiveness of internal control over financial reporting as of December 31, 2013 of CGG included in its Annual Report (Form 20-F) for the year ended December 31, 2013 filed with the Securities and Exchange Commission on April 10, 2014.
Paris-La Défense, France
July 3, 2014
ERNST & YOUNG & AUTRES |
/s/ PIERRE JOUANNE |
Pierre Jouanne |
/s/ LAURENT VITSE |
Laurent Vitse |
Exhibit 23.10
Consent of Independent Registered Public Accounting Firms
We consent to the reference to our firms under the caption Experts in the Registration Statement on Form F-4 of CGG pertaining to the offer to exchange US$500,000,000 6.875% Senior Notes due 2022 and to the incorporation by reference therein of our reports dated April 25, 2013, with respect to the consolidated financial statements of CGG (formerly known as Compagnie Générale de GéophysiqueVeritas) for the years ended December 31, 2012 and 2011 and the effectiveness of internal control over financial reporting as of December 31, 2012 of CGG included in its Annual Report (Form 20-F) for the year ended December 31, 2012 filed with the Securities and Exchange Commission on April 25, 2013.
Paris-La Défense, France | ||||
July 3, 2014 | ||||
ERNST & YOUNG & AUTRES | MAZARS | |||
/s/ PIERRE JOUANNE |
/s/ JEAN-LUC BARLET | |||
Pierre Jouanne | Jean-Luc Barlet | |||
/s/ LAURENT VITSE |
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Laurent Vitse |
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
¨ | CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |
THE BANK OF NEW YORK MELLON
(Exact name of trustee as specified in its charter)
New York | 13 5160382 | |
(State of incorporation if not a U.S. national bank) |
(I.R.S. employer identification no.) | |
One Wall Street, New York, N.Y. | 10286 | |
(Address of principal executive offices) | (Zip code) |
CGG
(Exact name of obligor as specified in their charters)
France | 74 1734402 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
Tour Maine Montparnasse
33 avenue de Maine
75015 Paris, France
(Address of registrants principal executive offices)
CGG HOLDING B.V.
(Exact name of obligor as specified in its charters)
The Netherlands | N/A | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
CGG MARINE B.V.
(Exact name of obligor as specified in its charters)
The Netherlands | N/A | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
CGG MARINE RESOURCES NORGE AS
(Exact name of obligor as specified in its charters)
Norway | N/A | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
CGG HOLDING (U.S.) INC.
(Exact name of obligor as specified in its charters)
Delaware | 74 1813790 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
CGG SERVICES (U.S.) INC.
(Exact name of obligor as specified in its charters)
Delaware | 20 8026762 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
VERITAS INVESTMENT INC.
(Exact name of obligor as specified in its charters)
Delaware | 76 0569069 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
2
VIKING MARITIME INC.
(Exact name of obligor as specified in its charters)
Delaware | 76 0677405 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
VERITAS GEOPHYSICAL (MEXICO) LLC
(Exact name of obligor as specified in its charters)
Delaware | 76 0670383 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
ALITHEIA RESOURCES INC.
(Exact name of obligor as specified in its charters)
Delaware | 56 2475147 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
CGG LAND (U.S.) INC.
(Exact name of obligor as specified in its charters)
Delaware | 76 0542437 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
SERCEL, INC.
(Exact name of obligor as specified in its charters)
Oklahoma | 73 1396603 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
3
SERCEL-GRC CORP.
(Exact name of obligor as specified in its charters)
Oklahoma | 45 4121837 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
CGG CANADA SERVICES LTD.
(Exact name of obligor as specified in its charters)
Alberta, Canada | N/A | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
SERCEL CANADA LTD.
(Exact name of obligor as specified in its charters)
New Brunswick, Canada | N/A | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
SERCEL AUSTRALIA PTY LTD.
(Exact name of obligor as specified in its charters)
New South Wales, Australia | N/A | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
6.875% Senior Notes due 2022
(Title of the indenture securities)
1. | General information. Furnish the following information as to the Trustee: |
(a) | Name and address of each examining or supervising authority to which it is subject. |
4
Name |
Address | |
New York State Department of Financial Services |
One State Street, New York, N.Y. 10004, and One Commerce Plaza, Albany, N.Y. 12257 | |
Federal Reserve Bank of New York |
33 Liberty Street, New York, N.Y. 10045 | |
Federal Deposit Insurance Corporation |
550 17th Street, N.W. Washington, D.C. 20429 | |
New York Clearing House Association |
New York, New York 10005 |
(b) | Whether it is authorized to exercise corporate trust powers. |
Yes.
2. | Affiliations with Obligor and Guarantor. |
If the obligor or guarantor is an affiliate of the trustee, describe each such affiliation.
None.
3-15. | Pursuant to General Instruction B of the Form T-1, no responses are included for Items 3-15 of this Form T-1 because, to the best of the Trustees knowledge, the obligor or the guarantor is not in default under any Indenture for which the Trustee acts as Trustee and the Trustee is not a foreign trustee as provided under Item 15 . |
16. | List of Exhibits. |
Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the Act) and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York Mellon (formerly known as The Bank of New York, itself formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T 1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637, Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-152735).
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T 1 filed with Registration Statement No. 333-154173).
6. The consent of the Trustee required by Section 321(b) of the Act (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-152735).
7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.
5
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York Mellon, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 3rd day of July, 2014.
THE BANK OF NEW YORK MELLON | ||||
By: |
/s/ Lesley Daley | |||
Name: |
Lesley Daley | |||
Title: |
Vice President |
6
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK MELLON
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2014, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar amounts in thousands | ||||
ASSETS |
||||
Cash and balances due from depository institutions: |
||||
Noninterest-bearing balances and currency and coin |
4,798,000 | |||
Interest-bearing balances |
117,806,000 | |||
Securities: |
||||
Held-to-maturity securities |
18,480,000 | |||
Available-for-sale securities |
77,008,000 | |||
Federal funds sold and securities purchased under agreements to resell: |
||||
Federal funds sold in domestic offices |
67,000 | |||
Securities purchased under agreements to resell |
4,438,000 | |||
Loans and lease financing receivables: |
||||
Loans and leases held for sale |
0 | |||
Loans and leases, net of unearned income |
33,479,000 | |||
LESS: Allowance for loan and lease losses |
182,000 | |||
Loans and leases, net of unearned income and allowance |
33,297,000 | |||
Trading assets |
6,825,000 | |||
Premises and fixed assets (including capitalized leases) |
1,162,000 | |||
Other real estate owned |
3,000 | |||
Investments in unconsolidated subsidiaries and associated companies |
1,111,000 | |||
Direct and indirect investments in real estate ventures |
0 | |||
Intangible assets: |
||||
Goodwill |
6,487,000 | |||
Other intangible assets |
1,255,000 | |||
Other assets |
15,439,000 | |||
|
|
|||
Total assets |
288,176,000 | |||
|
|
LIABILITIES |
||||
Deposits: |
||||
In domestic offices |
122,415,000 | |||
Noninterest-bearing |
79,457,000 | |||
Interest-bearing |
42,958,000 | |||
In foreign offices, Edge and Agreement subsidiaries, and IBFs |
121,648,000 | |||
Noninterest-bearing |
8,862,000 | |||
Interest-bearing |
112,786,000 | |||
Federal funds purchased and securities sold under agreements to repurchase: |
||||
Federal funds purchased in domestic offices |
2,270,000 | |||
Securities sold under agreements to repurchase |
3,511,000 | |||
Trading liabilities |
4,618,000 | |||
Other borrowed money: |
||||
(includes mortgage indebtedness and obligations under capitalized leases) |
5,928,000 | |||
Not applicable |
||||
Not applicable |
||||
Subordinated notes and debentures |
1,065,000 | |||
Other liabilities |
6,134,000 | |||
|
|
|||
Total liabilities |
267,589,000 | |||
|
|
|||
EQUITY CAPITAL |
||||
Perpetual preferred stock and related surplus |
0 | |||
Common stock |
1,135,000 | |||
Surplus (exclude all surplus related to preferred stock) |
9,954,000 | |||
Retained earnings |
9,711,000 | |||
Accumulated other comprehensive income |
-563,000 | |||
Other equity capital components |
0 | |||
Total bank equity capital |
20,237,000 | |||
Noncontrolling (minority) interests in consolidated subsidiaries |
350,000 | |||
Total equity capital |
20,587,000 | |||
|
|
|||
Total liabilities and equity capital |
288,176,000 | |||
|
|
I, Thomas P. Gibbons, Chief Financial Officer of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.
Thomas P. Gibbons,
Chief Financial Officer
We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.
Gerald L. Hassell Catherine A. Rein Michael J. Kowalski |
Directors |
Exhibit 99.1
CGG
LETTER OF TRANSMITTAL
relating to
TENDER OF
UNREGISTERED 6.875% SENIOR NOTES DUE 2022
IN EXCHANGE FOR
REGISTERED 6.875% SENIOR NOTES DUE 2022
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [ ], 2014, UNLESS EXTENDED (THE EXPIRATION DATE). OUTSTANDING NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
Deliver to the Exchange Agent:
The Bank of New York Mellon
By Registered or Certified Mail: | By Hand or Overnight Delivery: | |
The Bank of New York Mellon | The Bank of New York Mellon | |
111 Sanders Creek Parkway | 111 Sanders Creek Parkway | |
Corporate Trust Reorganization Unit | Corporate Trust Reorganization Unit | |
East Syracuse, NY 13057 | East Syracuse, NY 13057 | |
Attn: Adam DeCapio | Attn: Adam DeCapio |
By Facsimile (Eligible Institutions Only):
+1 (732) 667-9408
Attn: Adam DeCapio
For Information by Telephone:
+1 (315) 414-3360
Originals of all documents sent by facsimile should be sent promptly by registered or
certified mail, by hand or by overnight delivery service.
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL.
The undersigned hereby acknowledges receipt and review of the Prospectus dated [ ], 2014 (the Prospectus) of CGG, a company organized under the laws of the Republic of France (the Company), and the accompanying Letter of Transmittal (the Letter of Transmittal), that together constitute the offer (the Exchange Offer) by the Company to exchange its 6.875% Senior Notes due 2022, with CUSIP number 12531T AB5 (the Exchange Notes), which have been registered under the Securities Act of 1933, as amended (the Securities Act), for a like principal amount of its issued and outstanding 6.875% Senior Notes due 2022, with CUSIP numbers F1704U AC8, 12531T AA7 and 12531T AC3 (the Outstanding Notes), upon the terms and subject to the conditions set forth in the Exchange Offer. Capitalized terms used but not defined herein have the meanings assigned to them in the Prospectus.
The Company reserves the right, at any time or from time to time, to extend the Exchange Offer at its discretion, in which event the term Expiration Date shall mean the latest time and date in which the Exchange Offer is extended. The Company shall notify the Exchange Agent of any extension by oral or written notice and will make a public announcement thereof, each prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.
This Letter of Transmittal is to be completed by a Holder (as defined below) of Outstanding Notes either if original Outstanding Notes are to be forwarded herewith or if delivery of Outstanding Notes, if
available, is to be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company (DTC) pursuant to the procedures set forth in The Exchange OfferProcedures for Tendering in the Prospectus.
Holders of Outstanding Notes whose certificates for such Outstanding Notes are not immediately available or who cannot deliver their certificates and all other required documents to The Bank of New York Mellon on or prior to the Expiration Date or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Outstanding Notes according to the guaranteed delivery procedures set forth in the Prospectus under the caption The Exchange OfferBook-Entry Transfer. Holders of Outstanding Notes whose Outstanding Notes are not immediately available, or who are unable to deliver their Outstanding Notes and all other documents required by this Letter of Transmittal to the Exchange Agent on or prior to the Expiration Date, or who are unable to complete the procedure for book-entry transfer on a timely basis, must tender their Outstanding Notes according to the guaranteed delivery procedures set forth in the Prospectus under the caption The Exchange OfferGuaranteed Delivery Procedures. See Instruction 2. Delivery of documents to DTC does not constitute delivery to the Exchange Agent.
The term Holder with respect to the Exchange Offer means any person in whose name Outstanding Notes are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered holder. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. Holders who wish to tender their Outstanding Notes must complete this Letter of Transmittal in its entirety.
The undersigned has checked the appropriate boxes below and signed this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY BEFORE CHECKING ANY BOX BELOW.
THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
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List below the Outstanding Notes to which this Letter of Transmittal relates. If the space below is inadequate, list the registered numbers and principal amounts on a separate signed schedule and affix the list to this Letter of Transmittal.
DESCRIPTION OF OUTSTANDING NOTES TENDERED | ||||||
Name(s) and Address(es) of Registered Owner(s) Exactly |
Registered Numbers* | Aggregate Principal Amount Represented by Note(s) |
Aggregate Principal Amount Tendered | |||
|
| |||||
Total: | ||||||
|
| |||||
Need not be completed by book-entry Holders. Unless otherwise indicated, any tendering Holder of Outstanding Notes will be deemed to have tendered the entire aggregate principal amount represented by such Outstanding Notes. All tenders must be in integral multiples of $1,000. |
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
¨ | CHECK HERE IF TENDERED OUTSTANDING NOTES ARE ENCLOSED HEREWITH. |
¨ | CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY): |
Name of Tendering
Institution:
Account Number: Transaction Code Number:
¨ | CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY ENCLOSED HEREWITH AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY): |
Name(s) of Registered Holder(s) of
Outstanding Notes:
Date of Execution of Notice of Guaranteed
Delivery:
Window Ticket Number (if
available):
Name of Eligible Institution that Guaranteed
Delivery:
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering
Institution:
Account Number: Transaction Code Number:
¨ | CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE ADDITIONAL COPIES OF THE PROSPECTUS AND COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. |
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Name:
Address:
If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of the Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes, it acknowledges that the Outstanding Notes were acquired as a result of market-making and other trading activities and that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an underwriter within the meaning of the Securities Act.
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SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby acknowledges receipt of the Prospectus dated [ ], 2014 (the Prospectus) of CGG, a company organized under the laws of the Republic of France (the Company), and the accompanying Letter of Transmittal (the Letter of Transmittal), that together constitute the offer (the Exchange Offer) by the Company to exchange $1,000 principal amount of its 6.875% Senior Notes due 2022 (the Exchange Notes), which have been registered under the Securities Act of 1933, as amended (the Securities Act), for a like principal amount of its issued and outstanding 6.875% Senior Notes due 2022 (the Outstanding Notes), upon the terms and subject to the conditions set forth in the Exchange Offer.
Subject to the terms and conditions of the Exchange Offer, the undersigned hereby tenders to the Company the principal amount of Outstanding Notes indicated above. Subject to and effective upon the acceptance for exchange of the principal amount of Outstanding Notes tendered in accordance with this Letter of Transmittal, the undersigned hereby exchanges, assigns and transfers to the Company all right, title and interest in and to the Outstanding Notes tendered for exchange hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the agent and attorney-in-fact of the undersigned (with full knowledge that the Exchange Agent is also acting as agent of the Company in connection with the Exchange Offer) with respect to the tendered Outstanding Notes with full power of substitution to (i) deliver such Outstanding Notes, or transfer ownership of such Outstanding Notes on the account books maintained by DTC, to the Company and deliver all accompanying evidences of transfer and authenticity, and (ii) present such Outstanding Notes for transfer on the books of the Company and receive all benefits and otherwise exercise all rights of beneficial ownership of such Outstanding Notes, all in accordance with the terms and conditions of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed to be irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, assign and transfer the Outstanding Notes tendered hereby and to acquire the Exchange Notes issuable upon the exchange of such tendered Outstanding Notes, and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim, when the same are accepted for exchange by the Company.
The undersigned acknowledge(s) that this Exchange Offer is being made in reliance upon interpretations contained in no-action letters issued to third parties by the staff of the Securities and Exchange Commission (the Commission), that the Exchange Notes issued in exchange for the Outstanding Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by Holders thereof (other than any such Holder that is an affiliate of the Company within the meaning of Rule 405 under the Securities Act or a broker-dealer tendering Outstanding Notes acquired directly from the Company or an affiliate thereof for its own account) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Notes are acquired in the ordinary course of such Holders business and such Holders are not engaging in and do not intend to engage in a distribution of the Exchange Notes and have no arrangement or understanding with any person to participate in a distribution of such Exchange Notes. The undersigned hereby further represent(s) to the Company that (i) any Exchange Notes acquired in exchange for Outstanding Notes tendered hereby are being acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not the undersigned, (ii) neither the undersigned nor any such other person is engaged in or intends to engage in the distribution of such Exchange Notes, (iii) neither the undersigned nor any such other person has any arrangement or understanding with any person to participate in the distribution of such Exchange Notes, (iv) if the undersigned or any such other person is a resident of the State of California, it falls under the self-executing institutional investor exemption set forth under Section 25102(i) of the Corporate Securities Law of 1968 and Rules 260.102.10 and 260.105.14 of the California Blue Sky Regulations, (v) if the undersigned or any such other person is a resident of the Commonwealth of Pennsylvania, it falls under the self-executing institutional investor exemption set forth under Sections 203(c), 102(d) and (k) of the Pennsylvania Securities Act of 1972, Section 102.111 of the Pennsylvania Blue Sky Regulations and an interpretative opinion dated November 16, 1985, (vi) the undersigned is not our affiliate within the meaning of Rule 405 under the Securities Act or, if the undersigned is an affiliate, the undersigned will comply with the registration and prospectus delivery requirements of the Securities Act, to the extent applicable, and (vii) if the undersigned is a broker-dealer, such person has acquired the Outstanding Notes as a result of market-making activities or other trading activities.
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If the undersigned or the person receiving the Exchange Notes is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes that were acquired as a result of market-making activities or other trading activities, the undersigned acknowledges that it or such other person will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an underwriter within the meaning of the Securities Act. The undersigned acknowledges that if the undersigned is participating in the Exchange Offer for the purpose of participating in any manner in a distribution of the Exchange Notes (i) the undersigned cannot rely on the position of the staff of the Commission in certain no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the Exchange Notes, in which case the registration statement must contain the selling security holder information required by Item 507 or Item 508, as applicable, of Regulation S-K of the Commission, and (ii) failure to comply with such requirements in such instance could result in the undersigned incurring liability under the Securities Act for which the undersigned is not indemnified by the Company.
If the undersigned or the person receiving the Exchange Notes is an affiliate of the Company within the meaning of Rule 405 under the Securities Act, the undersigned represent(s) to the Company that the undersigned understand(s) and acknowledge(s) that the Exchange Notes may not be offered for resale, resold or otherwise transferred by the undersigned or such other person without registration under the Securities Act or an exemption therefrom.
The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the exchange, assignment and transfer of the Outstanding Notes tendered hereby, including the transfer of such Outstanding Notes on the account books maintained by DTC.
For purposes of the Exchange Offer, the Company shall be deemed to have accepted for exchange validly tendered Outstanding Notes when, as and if the Company gives oral or written notice thereof to the Exchange Agent. Any tendered Outstanding Notes that are not accepted for exchange pursuant to the Exchange Offer for any reason will be returned, without expense, to the undersigned at the address shown below or at a different address as may be indicated herein under Special Delivery Instructions as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of Transmittal shall survive the death, incapacity or dissolution of the undersigned, and every obligation of the undersigned under this Letter of Transmittal shall be binding upon the undersigneds heirs, personal representatives, successors and assigns.
The undersigned acknowledges that the Companys acceptance of properly tendered Outstanding Notes pursuant to the procedures described under the caption The Exchange OfferProcedures for Tendering in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer.
Unless otherwise indicated under Special Issuance Instructions, please issue the Exchange Notes issued in exchange for the Outstanding Notes accepted for exchange and return any Outstanding Notes not tendered or not exchanged, in the name(s) of the undersigned. Similarly, unless otherwise indicated under Special Issuance Instructions, please mail or deliver the Exchange Notes issued in exchange for the Outstanding Notes accepted for exchange and any Outstanding Notes not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigneds signature(s). In the event that both Special Issuance Instructions and Special Delivery Instructions are completed, please issue the Exchange Notes issued in exchange for the Outstanding Notes accepted for exchange in the name(s) of, and return any Outstanding Notes not tendered or not exchanged to, the person(s) so indicated. The undersigned recognizes that the Company has no obligation pursuant to the Special Issuance Instructions and Special Delivery Instructions to transfer any Outstanding Notes from the name of the registered holder(s) thereof if the Company does not accept for exchange any of the Outstanding Notes so tendered for exchange.
6
SPECIAL ISSUANCE INSTRUCTIONS
(See Items 5 and 6)
To be completed ONLY (i) if Outstanding Notes in a principal amount not tendered, or Exchange Notes issued in exchange for Outstanding Notes accepted for exchange, are to be issued in the name of someone other than the undersigned, or (ii) if Outstanding Notes tendered by book-entry transfer which are not exchanged are to be returned by credit to an account maintained at DTC. Issue Exchange Notes and/or Outstanding Notes to:
Name(s):
(Please Type or Print)
Address:
(Include Zip Code)
(Tax Identification or Social Security No.)
(Complete Form W-9)
Credit unexchanged Outstanding Notes delivered by book-entry transfer to DTC as set forth below:
(DTC Account Number, if applicable)
PLEASE SIGN HERE WHETHER OR NOT OUTSTANDING
NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(Complete Accompanying Form W-9 on Reverse Side)
To be completed by all exchanging noteholders. Must be signed by registered holder exactly as name appears on Outstanding Notes. If signature is by trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 3.
Date: | ||
Date: |
Area Code and Telephone Number:
The above lines must be signed by the registered Holder(s) of Outstanding Notes as name(s) appear(s) on the Outstanding Notes or on a security position listing, or by person(s) authorized to become registered Holder(s) by a properly completed bond power from the registered Holder(s), a copy of which must be transmitted with this Letter of Transmittal. If Outstanding Notes to which this Letter of Transmittal relate are hold of record by two or more joint Holders, then all such Holders must sign this Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation of other person acting in a fiduciary or representative capacity, then such person must (i) set forth his or her full title below and (ii) unless waived by the Company, submit evidence satisfactory to the Company of such persons authority to so act. See Instruction 5 regarding the completion of this Letter of Transmittal printed below.
Name(s):
(Please Type or Print)
Capacity:
Address:
(Include Zip Code)
MEDALLION SIGNATURE GUARANTEE
(If Required by Instruction 5)
Certain Signatures must be guaranteed by an Eligible Institution.
Signature(s) guaranteed by an Eligible Institution:
(Authorized Signature)
(Title)
(Name of Firm)
(Address, including Zip Code)
(Area Code and Telephone Number)
Dated: , 2014
Dated:
SPECIAL DELIVERY INSTRUCTIONS
(SEE Items 5 and 6)
To be completed ONLY if Outstanding Notes in a principal amount not tendered, or Exchange Notes issued in exchange for Outstanding Notes accepted for exchange, are to be mailed or delivered to someone other than the undersigned, or to the undersigned at an address other than that shown below the undersigneds signature.
7
Mail or deliver Exchange Notes and/or Outstanding Notes to:
Name:
(Please Type or Print)
Address:
(Include Zip Code)
(Tax Identification or Social Security No.)
8
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
1 | Delivery of this Letter of Transmittal and Outstanding Notes or Book-Entry Confirmations |
All physically delivered Outstanding Notes or any confirmation of a book-entry transfer to the Exchange Agents account at the DTC of Outstanding Notes tendered by book-entry transfer (a Book-Entry Confirmation), as well as a properly completed and duly executed copy of this Letter of Transmittal or facsimile hereof, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. The method of delivery of the tendered Outstanding Notes, this Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the Holder and, except as otherwise provided below, the delivery will be deemed made only when actually received or confirmed by the Exchange Agent. Instead of delivery by mail, it is recommended that the Holder use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure delivery to the Exchange Agent before the Expiration Date.
NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT TO THE COMPANY.
2 | Guaranteed Delivery Procedures |
Holders who wish to tender their Outstanding Notes and (a) whose Outstanding Notes are not immediately available, or (b) who cannot deliver their Outstanding Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date or (c) who are unable to comply with the applicable procedures under DTCs Automated Tender Offer Program on a timely basis, must tender their Outstanding Notes according to the guaranteed delivery procedures set forth in the Prospectus. Pursuant to such procedures: (i) such tender must be made by or through a firm which is a member of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc., a commercial bank or a trust company having an office or correspondent in the United States or an eligible guarantor institution within the meaning of Rule 17Ad-15 under the Exchange Act (an Eligible Institution); (ii) prior to the Expiration Date, the Exchange Agent must have received from the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) or a properly transmitted agents message and Notice of Guaranteed Delivery setting forth the name and address of the Holder of the Outstanding Notes, the registration number(s) of such Outstanding Notes and the principal amount of Outstanding Notes tendered, stating that the tender is being made thereby and guaranteeing that, within three (3) New York Stock Exchange, Inc. (NYSE) trading days after the Expiration Date, this Letter of Transmittal (or facsimile hereof) together with the Outstanding Notes (or a Book-Entry Confirmation), and any other documents required by the Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent; and (iii) such properly completed and executed Letter of Transmittal (or facsimile thereof), as well as all tendered Outstanding Notes, in proper form for transfer, or Book-Entry Confirmation, as the case may be, and all other documents required by this Letter are received by the Exchange Agent within three (3) NYSE trading days after the Expiration Date.
Any Holder of Outstanding Notes who wishes to tender Outstanding Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m., New York City time, on the Expiration Date.
Upon request of the Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who wish to tender their Outstanding Notes according to the guaranteed delivery procedures set forth above.
See The Exchange OfferGuaranteed Delivery Procedures section of the Prospectus.
3 | Tender by Holder |
Only a Holder of Outstanding Notes may tender such Outstanding Notes in the Exchange Offer. Any beneficial Holder of Outstanding Notes who is not the registered Holder and who wishes to tender should arrange with the registered Holder to execute and deliver this Letter of Transmittal on his behalf or must, prior to completing and executing this Letter of Transmittal and delivering his Outstanding Notes, either make appropriate arrangements to register ownership of the Outstanding Notes in such Holders name or obtain a properly completed bond power from the registered Holder.
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4 | Partial Tenders |
Tenders of Outstanding Notes will be accepted only in integral multiples of $1,000. If less than the entire principal amount of any Outstanding Notes is tendered, the tendering Holder should fill in the principal amount tendered in the fourth column of the box entitled Description of Outstanding Notes Tendered above. The entire principal amount of Outstanding Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Outstanding Notes is not tendered, then Outstanding Notes for the principal amount of Outstanding Notes not tendered and Exchange Notes issued in exchange for any Outstanding Notes accepted will be sent to the Holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal, promptly after the Outstanding Notes are accepted for exchange.
5 | Signatures on this Letter of Transmittal; Bond Powers and Endorsements; Medallion Guarantee of Signatures |
If this Letter of Transmittal (or facsimile hereof) is signed by the record Holder(s) of the Outstanding Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the Outstanding Notes without alteration, enlargement or any change whatsoever.
If this Letter of Transmittal is signed by a participant in the DTC, the signature must correspond with the name as it appears on the security position listing as the Holder of the Outstanding Notes.
If this Letter of Transmittal (or facsimile hereof) is signed by the registered Holder or Holders of Outstanding Notes listed and tendered hereby and the Exchange Notes issued in exchange therefor are to be issued (or any untendered principal amount of Outstanding Notes are to be reissued) to the registered Holder, the said Holder need not and should not endorse any tendered Outstanding Notes, nor provide a separate bond power. In any other case, such Holder must either properly endorse the Outstanding Notes tendered or transmit a properly completed separate bond power with this Letter of Transmittal, with the signatures on the endorsement or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person other than the registered Holder or Holders of any Outstanding Notes listed, such Outstanding Notes must be endorsed or accompanied by appropriate bond powers, in each case signed as the name of the registered Holder or Holders appears on the Outstanding Notes.
If this Letter of Transmittal (or facsimile hereof) or any Outstanding Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, or officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, evidence satisfactory to the Company of their authority to so act must be submitted with this Letter of Transmittal.
Endorsements on Outstanding Notes or signatures on bond powers required by this Instruction 5 must be guaranteed by an Eligible Institution.
No signature guarantee is required if (i) the Outstanding Notes tendered pursuant to this Letter of Transmittal are tendered by a registered holder who has not completed the box entitled Special Delivery Instructions nor the box entitled Special Issuance Instructions on the Letter of Transmittal, or (ii) such Outstanding Notes are tendered for the account of an Eligible Institution. In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution.
6 | Special Registration and Delivery Instructions |
Tendering holders should indicate, in the applicable box or boxes, the name and address (or account at the DTC) to which Exchange Notes or substitute Outstanding Notes for principal amounts not tendered or not accepted for exchange are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated.
7 | Transfer Taxes |
The Company will pay all transfer taxes, if any, applicable to the exchange of Outstanding Notes pursuant to the Exchange Offer. If, however, Exchange Notes or Outstanding Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered or issued in the name of, any person other than the registered Holder of the Outstanding Notes tendered hereby, or if tendered Outstanding Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Outstanding Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether
10
imposed on the registered Holder or any other persons) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 7, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE OUTSTANDING NOTES LISTED IN THIS LETTER OF TRANSMITTAL.
8 | Tax Identification Number |
A holder of any Outstanding Notes or Exchange Notes must provide the Company or a paying agent (as payer) with its correct taxpayer identification number (TIN), which, in the case of a holder who is an individual, is his or her social security number. If the Company or a paying agent is not provided with the correct TIN, the holder may be subject to a $50 penalty imposed by the Internal Revenue Service and to backup withholding of 28% on payments on the Exchange Notes. (If withholding results in an over-payment of taxes, a refund may be obtained.) Certain holders (including, among others, all corporations) are not subject to these backup withholding and reporting requirements.
To prevent backup withholding, each tendering holder must provide such holders correct TIN by completing the Form W-9 set forth herein, certifying that the TIN provided is correct.
Certain foreign individuals and entities will not be subject to backup withholding or information reporting if they submit a Form W-8BEN, signed under penalties of perjury, attesting to their foreign status. A Form W-8BEN can be obtained from the Exchange Agent.
The Company reserves the right in its sole discretion to take whatever steps are necessary to comply with the Companys obligation regarding backup withholding.
9 | Validity of Tenders |
All questions as to the validity, form, eligibility (including time of receipt), acceptance of tendered Outstanding Notes and withdrawal of tendered Outstanding Notes will be determined by the Company, in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Outstanding Notes not validly tendered or any Outstanding Notes, the Companys acceptance of which would, in the opinion of the Company or its counsel, be unlawful. The Company also reserves the right to waive any conditions or defects or irregularities of tender as to particular Outstanding Notes. The interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) by the Company shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Outstanding Notes must be cured within such time as the Company shall determine. The Company will use reasonable efforts to give notification of defects or irregularities with respect to tenders of Outstanding Notes, but shall not incur any liability for failure to give such notification.
10 | Waiver of Conditions |
The Company reserves the absolute right to waive, in whole or part, any of the conditions to the Exchange Offer set forth in the Prospectus.
11 | No Conditional Tender |
No alternative, conditional, irregular or contingent tender of Outstanding Notes on transmittal of this Letter of Transmittal will be accepted.
12 | Mutilated, Lost, Stolen or Destroyed Outstanding Notes |
Any Holder whose Outstanding Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for farther instructions.
13 | Requests for Assistance or Additional Copies |
Requests for assistance or for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent at the address or telephone number set forth on the cover page of this Letter of Transmittal. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer.
11
14 | Acceptance of Tendered Outstanding Notes and Issuance of Exchange Notes; Return of Outstanding Notes |
Subject to the terms and conditions of the Exchange Offer, the Company will accept for exchange all validly tendered Outstanding Notes as soon as practicable after the Expiration Date and will issue Exchange Notes therefor as soon as practicable thereafter. For purposes of the Exchange Offer, the Company shall be deemed to have accepted tendered Outstanding Notes when the Company has given written or oral notice thereof to the Exchange Agent and complied with the applicable provisions of the Registration Rights Agreement. If any tendered Outstanding Notes are not exchanged pursuant to the Exchange Offer for any reason, such unexchanged Outstanding Notes will be returned, without expense, to the undersigned at the address shown above (or credited to the undersigneds account at the DTC designated above) or at a different address as may be indicated under the box entitled Special Delivery Instructions.
15 | Withdrawal |
Tenders may be withdrawn only pursuant to the limited withdrawal rights set forth in the Prospectus under the caption The Exchange OfferWithdrawal of Tenders.
IMPORTANT: This Letter of Transmittal or a manually signed facsimile hereof (together with the Outstanding Notes which must be delivered by book-entry transfer or in original hard copy form) or the Notice of Guaranteed Delivery must be received by the Exchange Agent prior to the expiration time.
12
Form W-9 (Rev. August 2013) Department of the Treasury Internal Revenue Service |
Request for Taxpayer Identification Number and Certification
|
Give Form to the requester. Do not send to the IRS.
|
Print or type See Specific Instructions on page 2. |
Name (as shown on your income tax return)
|
|||||
Business name/disregarded entity name, if different from above
|
||||||
Check appropriate box for federal tax classification: | Exemptions (see instructions): | |||||
¨ Individual/sole proprietor ¨ C Corporation ¨ S Corporation ¨ Partnership ¨ Trust/estate |
Exempt payee code (if any) | |||||
¨ Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=partnership) u |
Exemption from FATCA reporting code (if any) | |||||
¨ Other (see instructions) u |
||||||
Address (number, street, and apt. or suite no.)
|
Requesters name and address (optional) | |||||
City, state, and ZIP code
|
||||||
List account number(s) here (optional)
|
Part I | Taxpayer Identification Number (TIN) |
Enter your TIN in the appropriate box. The TIN provided must match the name given on the Name line to avoid backup withholding. For individuals, this is your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3.
Note. If the account is in more than one name, see the chart on page 4 for guidelines on whose number to enter. |
Social security number | |||||||||||||||||||||||
| | |||||||||||||||||||||||
Employer identification number |
||||||||||||||||||||||||
|
Part II | Certification |
Under penalties of perjury, I certify that:
1. | The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and |
2. | I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and |
3. | I am a U.S. citizen or other U.S. person (defined below), and |
4. | The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. |
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions on page 3.
Sign Here | Signature of U.S. person u |
Date u |
Cat. No. 10231X | Form W-9 (Rev. 8-2013) |
Form W-9 (Rev. 8-2013) |
Page 2 |
Form W-9 (Rev. 8-2013) |
Page 3 |
Form W-9 (Rev. 8-2013) |
Page 4 |
Privacy Act Notice
Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting the above information. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties may also apply for providing false or fraudulent information.
Exhibit 99.2
CGG
NOTICE OF GUARANTEED DELIVERY
relating to
TENDER OF
UNREGISTERED 6.875% SENIOR NOTES DUE 2022
IN EXCHANGE FOR
REGISTERED 6.875% SENIOR NOTES DUE 2022
This form or one substantially equivalent hereto must be used to accept the Exchange Offer of CGG, a company organized under the laws of the Republic of France (the Company), and to tender issued and outstanding 6.875% Senior Notes due 2022 (the Outstanding Notes) to the Exchange Agent pursuant to the guaranteed delivery procedures described in The Exchange OfferGuaranteed Delivery Procedures of the Companys Prospectus, dated [ ], 2014 (the Prospectus) and in Instruction 2 of the related Letter of Transmittal. Any holder who wishes to tender Outstanding Notes pursuant to such guaranteed delivery procedures must ensure that the Exchange Agent receives this Notice of Guaranteed Delivery prior to the Expiration Date. Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus or the Letter of Transmittal.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [ ], 2014, UNLESS EXTENDED (THE EXPIRATION DATE). OUTSTANDING NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
Deliver to the Exchange Agent:
The Bank of New York Mellon
By Registered or Certified Mail: | By Hand or Overnight Delivery: | |
The Bank of New York Mellon | The Bank of New York Mellon | |
111 Sanders Creek Parkway | 111 Sanders Creek Parkway | |
Corporate Trust Reorganization Unit | Corporate Trust Reorganization Unit | |
East Syracuse, NY 13057 | East Syracuse, NY 13057 | |
Attn: Adam DeCapio | Attn: Adam DeCapio |
By Facsimile (Eligible Institutions Only):
+1 (732) 667-9408
Attn: Adam DeCapio
For Information by Telephone:
+1 (315) 414-3360
Originals of all documents sent by facsimile should be sent promptly by registered or
certified mail, by hand or by overnight delivery service.
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the box on the Letter of Transmittal for guarantee of signatures.
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and subject to the conditions set forth in the Prospectus and the related Letter of Transmittal, receipt of which is hereby acknowledged, the aggregate principal amount of Outstanding Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus and in Instruction 2 of the Letter of Transmittal.
The undersigned hereby tenders the Outstanding Notes listed below:
Certificate Number(s) (if Known) of Outstanding Notes or Account Number |
Aggregate Principal Amount Represented |
Aggregate Principal Amount Tendered | ||
PLEASE SIGN AND COMPLETE
Signatures of Registered Holder(s) or Authorized
Signatory:
Date:
Address:
Name(s) of Registered
Holder(s):
Area Code and
Telephone No.:
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly as their name(s) appear(s) on certificates for Outstanding Notes or on a security position listing as the owner of Outstanding Notes, or by person(s) authorized to become Holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must provide the following information.
Please print name(s) and address(es)
Name(s):
Capacity:
Address(es):
THE GUARANTEE ON THE NEXT PAGE MUST BE COMPLETED.
2
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc., or is a commercial bank or trust company having an office or correspondent in the United States, or is otherwise an eligible guarantor institution within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby guarantees deposit with the Exchange Agent of the Letter of Transmittal (or facsimile thereof), together with the Outstanding Notes tendered hereby in proper form for transfer (or confirmation of the book-entry transfer of such Outstanding Notes into the Exchange Agents account at DTC described in the Prospectus under the caption The Exchange OfferGuaranteed Delivery Procedures and in the Letter of Transmittal) and any other required documents, all by 5:00 p.m., New York City time, within three New York Stock Exchange trading days following the Expiration Date.
(Authorized Signature) | ||||||||
Name: |
||||||||
(Include Zip Code) | ||||||||
Title: |
||||||||
(Please Print or Type) | ||||||||
Date: |
DO NOT SEND CERTIFICATES FOR OUTSTANDING NOTES WITH THIS FORM. ACTUAL SURRENDER OF OUTSTANDING NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
3
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. Delivery of this Notice of Guaranteed Delivery. A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at its address set forth herein prior to the Expiration Date. The method of delivery of this Notice of Guaranteed Delivery and any other required documents to the Exchange Agent is at the election and sole risk of the holder, and the delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. As an alternative to delivery by mail, the holders may wish to consider using an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. For a description of the guaranteed delivery procedures, see Instruction 2 of the Letter of Transmittal.
2. Signatures on this Notice of Guaranteed Delivery. If this Notice of Guaranteed Delivery is signed by the registered holder(s) of the Outstanding Notes referred to herein, the signature must correspond with the name(s) written on the face of the Outstanding Notes without alteration, enlargement or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a participant of DTC whose name appears on a security position listing as owner of the Outstanding Notes, the signature must correspond with the name shown on the security position listing as the owner of the Outstanding Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the registered holder(s) of any Outstanding Notes listed or a participant of DTC, this Notice of Guaranteed Delivery must be accompanied by appropriate bond powers, signed as the name of the registered holder(s) appears on the Outstanding Notes or signed as the name of the participant shown on DTCs security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other person acting in a fiduciary or representative capacity, such person should so indicate when signing and submit with the Letter of Transmittal evidence satisfactory to the Company of such persons authority to so act.
3. Requests for Assistance or Additional Copies. Questions and requests for assistance and requests for additional copies of the Prospectus may be directed to the Exchange Agent at the address specified in the Prospectus. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer.
4
Exhibit 99.3
CGG
INSTRUCTION TO REGISTERED HOLDER OR DTC
PARTICIPANT FROM BENEFICIAL OWNER
relating to
TENDER OF
UNREGISTERED 6.875% SENIOR NOTES DUE 2022
IN EXCHANGE FOR
REGISTERED 6.875% SENIOR NOTES DUE 2022
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [ ], 2014, UNLESS EXTENDED (THE EXPIRATION DATE). OUTSTANDING NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
To Registered Holder and/or Depository Trust Company Participant:
The undersigned hereby acknowledges receipt of the Prospectus dated [ ], 2014 (the Prospectus) of CGG, a company organized under the laws of the Republic of France (the Company), and the accompanying Letter of Transmittal (the Letter of Transmittal), that together constitute the offer (the Exchange Offer) by the Company to exchange its 6.875% Senior Notes due 2022 (the Exchange Notes), which have been registered under the Securities Act of 1933, as amended (the Securities Act), for a like principal amount of its issued and outstanding 6.875% Senior Notes due 2022 (the Outstanding Notes), upon the terms and subject to the conditions set forth in the Exchange Offer. Capitalized terms used but not defined herein have the meanings assigned to them in the Prospectus and the Letter of Transmittal.
This will instruct you, the registered holder and/or book-entry transfer facility participant, as to the action to be taken by you relating to the Exchange Offer with respect to the Outstanding Notes held by you for the account of the undersigned.
The aggregate principal amount of the Outstanding Notes held by you for the account of the undersigned is (FILL IN AMOUNT): $ principal amount of 6.875% Senior Notes due 2022.
With respect to the Exchange Offer, the undersigned hereby instructs you (CHECK APPROPRIATE BOX):
¨ | To TENDER the following amount of Outstanding Notes held by you for the account of the undersigned (INSERT AMOUNT OF OUTSTANDING NOTES TO BE TENDERED, IF ANY): $ . |
¨ | NOT to TENDER any Outstanding Notes held by you for the account of the undersigned. |
If the undersigned instructs you to tender the Outstanding Notes held by you for the account of the undersigned, it is understood that you are authorized to
(a) make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations that (i) the Exchange Notes acquired pursuant to the Exchange Offer are being acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not the undersigned, (ii) neither the undersigned nor any such other person is engaged in or intends to engage in the distribution of such Exchange Notes, (iii) neither the undersigned nor any such other person has any arrangement or understanding with any person to participate in the distribution (within the meaning of
the Securities Act) of such Exchange Notes, (iv) if the undersigned or any such other person is a resident of the State of California, it falls under the self-executing institutional investor exemption set forth under Section 25102(i) of the Corporate Securities Law of 1968 and Rules 260.102.10 and 260.105.14 of the California Blue Sky Regulations, (v) if the undersigned or any such other person is a resident of the Commonwealth of Pennsylvania, it falls under the self-executing institutional investor exemption set forth under Sections 203(c), 102(d) and (k) of the Pennsylvania Securities Act of 1972, Section 102.111 of the Pennsylvania Blue Sky Regulations and an interpretive opinion dated November 16, 1985, (vi) the undersigned is not an affiliate of the Company within the meaning of Rule 405 under the Securities Act or, if the undersigned is an affiliate, the undersigned will comply with the registration and prospectus delivery requirements of the Securities Act, to the extent applicable, (vii) the undersigned or any such other person acknowledge and agree that any person who is a broker-dealer registered under the Securities Exchange Act of 1934 (the Exchange Act) or is participating in the Exchange Offer for the purpose of distributing the Exchange Notes must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the Exchange Notes or interests therein acquired by such person and cannot rely on the position of the staff of the Commission set forth in certain no-action letters, and (viii) the holder and each Beneficial Owner understand that a secondary resale transaction described in clause (vii) above and any resales of Exchange Notes or interests therein obtained by such holder in exchange for Outstanding Notes or interests therein originally acquired by such holder directly from the Company should be covered by an effective registration statement containing the selling security holder information required by Item 507 or Item 508, as applicable, of Regulation S-K of the Commission. Upon a request by the Company, it will deliver to the Company a legal opinion confirming its representation made in clause (viii) above. If the undersigned or such other person is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes, it represents that such Outstanding Notes were acquired as a result of market- making activities or other trading activities, and it acknowledges that it or such other person will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes. By acknowledging that it will deliver and by delivering a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes, the undersigned is not deemed to admit that it is an underwriter within the meaning of the Securities Act;
(b) agree, on behalf of the undersigned, as set forth in the Letter of Transmittal; and
(c) take such other action as necessary under the Prospectus or the Letter of Transmittal to effect the valid tender of such Outstanding Notes.
SIGN HERE
Name of beneficial
owner(s):
Signature(s):
Name(s) (please
print):
Address:
Telephone
Number:
Taxpayer Identification or Social Security
Number:
Date:
2
Exhibit 99.4
CGG
LETTER TO REGISTERED HOLDERS AND DTC
PARTICIPANTS
relating to
TENDER OF
UNREGISTERED 6.875% SENIOR NOTES DUE 2022
IN EXCHANGE FOR
REGISTERED 6.875% SENIOR NOTES DUE 2022
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [ ], 2014 UNLESS EXTENDED (THE EXPIRATION DATE). OUTSTANDING NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
To Registered Holders and Depository Trust Company Participants:
We are enclosing herewith the materials listed below relating to the offer by CGG, a company organized under the laws of the Republic of France (the Company), to exchange its 6.875% Senior Notes due 2022 (the Exchange Notes), which have been registered under the Securities Act of 1933, as amended (the Securities Act), for a like principal amount of its issued and outstanding 6.875% Senior Notes due 2022 (the Outstanding Notes) upon the terms and subject to the conditions set forth in the Companys Prospectus, dated [ ], 2014, and the related Letter of Transmittal (which together constitute the Exchange Offer).
Enclosed herewith are copies of the following documents:
1. Prospectus dated [ ], 2014;
2. Letter of Transmittal (together with accompanying Form W-9 Guidelines);
3. Notice of Guaranteed Delivery;
4. Instruction to Registered Holder or DTC Participant from Beneficial Owner; and
5. Letter which may be sent to your clients for whose account you hold Outstanding Notes in your name or in the name of your nominee (to accompany the instruction form referred to above) for obtaining such clients instructions with regard to the Exchange Offer.
We urge you to contact your clients promptly. Please note that the exchange offer will expire on the expiration date, unless extended.
The Exchange Offer is not conditioned upon any minimum number of Outstanding Notes being tendered.
To participate in the Exchange Offer, a beneficial holder must either (i) cause to be delivered to The Bank of New York Mellon (the Exchange Agent) at the address set forth in the Letter of Transmittal, Definitive Registered Notes in proper form for transfer together with a properly executed Letter of Transmittal or (ii) cause a DTC Participant to tender such holders Outstanding Notes to the Exchange Agents account maintained at the Depository Trust Company (DTC) for the benefit of the Exchange Agent through DTCs Automated Tender Offer Program (ATOP), including transmission of a computer-generated message that acknowledges and agrees to be bound by the terms of the Letter of Transmittal. By complying with DTCs ATOP procedures with respect to the Exchange Offer, the DTC Participant confirms on behalf of itself and the beneficial owners of tendered Outstanding Notes all provisions of the Letter of Transmittal applicable to it and such beneficial owners as fully as if it completed, executed and returned the Letter of Transmittal to the Exchange Agent.
Pursuant to the Letter of Transmittal, each holder of Outstanding Notes will represent to the Company that: (i) the Exchange Notes acquired pursuant to the Exchange Offer are being acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not the undersigned, (ii) neither the undersigned nor any such other person is engaged in or intends to engage in the distribution of such Exchange Notes, (iii) neither the undersigned nor any such other person has any arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of such Exchange Notes, (iv) if the undersigned or any such other person is a resident of the State of California, it falls under the self-executing institutional investor exemption set forth under Section 25102(i) of the Corporate Securities Law of 1968 and Rules 260.102.10 and 260.105.14 of the California Blue Sky Regulations, (v) if the undersigned or any such other person is a resident of the Commonwealth of Pennsylvania, it falls under the self- executing institutional investor exemption set forth under Sections 203(c), 102(d) and (k) of the Pennsylvania Securities Act of 1972, Section 102.111 of the Pennsylvania Blue Sky Regulations and an interpretive opinion dated November 16, 1985, (vi) the undersigned is not an affiliate of the Company within the meaning of Rule 405 under the Securities Act or, if the undersigned is an affiliate, the undersigned will comply with the registration and prospectus delivery requirements of the Securities Act, to the extent applicable, (vii) the undersigned or any such other person acknowledge and agree that any person who is a broker-dealer registered under the Securities Exchange Act of 1934 (the Exchange Act) or is participating in the Exchange Offer for the purpose of distributing the Exchange Notes must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the Exchange Notes or interests therein acquired by such person and cannot rely on the position of the staff of the Commission set forth in certain no-action letters, and (viii) the holder and each Beneficial Owner understand that a secondary resale transaction described in clause (vii) above and any resales of Exchange Notes or interests therein obtained by such holder in exchange for Outstanding Notes or interests therein originally acquired by such holder directly from the Company should be covered by an effective registration statement containing the selling security holder information required by Item 507 or Item 508, as applicable, of Regulation S-K of the Commission. Upon a request by the Company, it will deliver to the Company a legal opinion confirming its representation made in clause (viii) above. If the undersigned or such other person is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes, it represents that such Outstanding Notes were acquired as a result of market-making activities or other trading activities, and it acknowledges that it or such other person will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes. By acknowledging that it will deliver and by delivering a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes, the undersigned is not deemed to admit that it is an underwriter within the meaning of the Securities Act.
The enclosed Instruction to Registered Holder or DTC Participant from Beneficial Owner form contains an authorization by the beneficial owners of Outstanding Notes for you to make the foregoing representations.
The Company will not pay any fee or commission to any broker or dealer or to any other persons (other than the Exchange Agent) in connection with the solicitation of tenders of Outstanding Notes pursuant to the Exchange Offer. The Company will pay or cause to be paid any transfer taxes payable on the transfer of Outstanding Notes to it, except as otherwise provided in Instruction 7 of the enclosed Letter of Transmittal.
Additional copies of the enclosed material may be obtained from The Bank of New York Mellon.
Very truly yours,
CGG
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE AGENT OF CGG OR THE BANK OF NEW YORK MELLON OR AUTHORIZE YOU TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON THEIR BEHALF IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
Exhibit 99.5
CGG
LETTER TO CLIENTS
relating to
TENDER OF
UNREGISTERED 6.875% SENIOR NOTES DUE 2022
IN EXCHANGE FOR
REGISTERED 6.875% SENIOR NOTES DUE 2022
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [ ], 2014, UNLESS EXTENDED (THE EXPIRATION DATE). OUTSTANDING NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
To Our Clients:
We are enclosing herewith a Prospectus, dated [ ], 2014, of CGG, a company organized under the laws of the Republic of France (the Company), and a related Letter of Transmittal (which together constitute the Exchange Offer) relating to the offer by the Company to exchange its 6.875% Senior Notes due 2022 (the Exchange Notes), which have been registered under the Securities Act of 1933, as amended (the Securities Act), for a like principal amount of its issued and outstanding 6.875% Senior Notes due 2022 (the Outstanding Notes), upon the terms and subject to the conditions set forth in the Exchange Offer.
The Exchange Offer is not conditioned upon any minimum number of Outstanding Notes being tendered.
We are the holder of record of Outstanding Notes held by us for your account. A tender of such Outstanding Notes can be made only by us as the record holder and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Outstanding Notes held by us for your account.
We request instructions as to whether you wish to tender any or all of the Outstanding Notes held by us for your account pursuant to the terms and subject to the conditions of the Exchange Offer. We also request that you confirm that we may on your behalf make the representations contained in the Letter of Transmittal.
Pursuant to the Letter of Transmittal, each holder of Outstanding Notes must make certain representations and warranties that are set forth in the Letter of Transmittal and in the attached form that we have provided to you for your instructions regarding what action we should take in the Exchange Offer with respect to your interest in the Outstanding Notes.
Very truly yours,
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M3+O#N0L>]?JSFZD=C:GB+)=U;)=@,F8*4QID+KK>>P](R75*KCB#?9T2>BA1
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