<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 18, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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EAGLE GEOPHYSICAL, INC.
(SEE TABLE OF OTHER REGISTRANTS BELOW)
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 1382 76-0522659
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
50 BRIAR HOLLOW LANE, 6TH FLOOR, WEST BUILDING
HOUSTON, TEXAS 77027
(713) 881-2800
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------------
JAY N. SILVERMAN
EAGLE GEOPHYSICAL, INC.
50 BRIAR HOLLOW LANE, 6TH FLOOR, WEST BUILDING
HOUSTON, TEXAS 77027
(713) 881-2800
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies to:
W. MARK YOUNG
GARDERE WYNNE SEWELL & RIGGS, L.L.P.
THREE ALLEN CENTER
333 CLAY AVENUE, SUITE 800
HOUSTON, TEXAS 77002-4086
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this registration
statement and upon consummation of the exchange offer described herein.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
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 earlier effective registration statement
for the offering. [ ] ---------------------
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
10 3/4% Senior Notes due 2008....... $100,000,000 100% $100,000,000 $29,500
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Guarantees of 10 3/4% Senior Notes
due 2008(2)....................... -- -- -- --
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f) under the Securities Act of 1933, as amended.
(2) Pursuant to Rule 457(n), no separate filing fee is required to be paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
TABLE OF OTHER REGISTRANTS
<TABLE>
<CAPTION>
PRIMARY
STATE OR OTHER STANDARD
JURISDICTION OF INDUSTRIAL
EXACT NAME OF REGISTRANT INCORPORATION OR CLASSIFICATION I.R.S. EMPLOYER
AS SPECIFIED IN ITS CHARTER ORGANIZATION CODE NUMBER IDENTIFICATION NO.
--------------------------- ---------------- -------------- ------------------
<S> <C> <C> <C>
Eagle Geophysical Onshore, Inc. ................... Delaware 1382 76-0522657
Eagle Geophysical Offshore, Inc. .................. Delaware 1382 76-0555183
Eagle Geophysical Royalty, Inc. (f/k/a Eagle
Geophysical Leasing, Inc.)....................... Delaware 1382 76-0555184
Eagle Geophysical de Mexico, Inc. ................. Delaware 1382 76-0547307
Eagle Front End Services, Inc. .................... Delaware 1382 76-0566426
Eagle Geophysical Management, Inc. ................ Delaware 1382 76-0566429
Eagle Geophysical de Colombia, Inc. ............... Delaware 1382 76-0581587
Austral Horizon, Inc. ............................. Delaware 1382 Applied For
Atlantic Horizon, Inc. ............................ Delaware 1382 Applied For
Eagle Geophysical GOM, Inc. ....................... Texas 1382 76-0405274
Eagle Front End Services, Ltd. .................... Texas 1382 76-0566434
Eagle Geophysical de Ecuador, Inc. ................ Delaware 1382 76-0581590
Eagle Geophysical de Bolivia, Inc. ................ Delaware 1382 76-0581589
</TABLE>
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED SEPTEMBER 18, 1998
PROSPECTUS
EAGLE GEOPHYSICAL, INC.
OFFER TO EXCHANGE
10 3/4% SENIOR NOTES DUE 2008, SERIES B,
FOR ALL OUTSTANDING 10 3/4% SENIOR NOTES DUE 2008, SERIES A
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1998, UNLESS EXTENDED
---------------------
Eagle Geophysical, Inc., a Delaware corporation (the "Company"), hereby
offers (the "Exchange Offer"), upon the terms and subject to the conditions set
forth in this Prospectus and the accompanying Letter of Transmittal, to
exchange, in a transaction registered under the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to a Registration Statement (as defined
herein) of which this Prospectus constitutes a part, up to $100 million in
aggregate principal amount of its 10 3/4% Senior Notes due 2008, Series B (the
"Exchange Notes") for up to an equal aggregate principal amount of its
outstanding 10 3/4% Senior Notes due 2008, Series A (the "Private Notes"). The
Private Notes are, and the Exchange Notes will be, jointly and severally,
guaranteed on a senior unsecured basis by the Subsidiary Guarantors (as defined
herein). The Exchange Notes and the Private Notes are referred to herein
collectively as the "Notes."
The Company will accept for exchange any and all Private Notes that are
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the date the Exchange Offer expires, which will be , 1998
unless the Exchange Offer is extended (the "Expiration Date"). Tenders of
Private Notes may be withdrawn at any time prior to 5:00 p.m., New York City
time, on the Expiration Date. The Exchange Offer is not conditioned upon any
minimum principal amount of Private Notes being tendered for exchange. However,
the Exchange Offer is subject to certain conditions that may be waived by the
Company and to the terms and provisions of the Registration Rights Agreement (as
defined herein). See "The Exchange Offer." Private Notes may be tendered only in
denominations of $1,000 and integral multiples thereof. The Company has agreed
to pay the expenses of the Exchange Offer.
The Exchange Notes will be obligations of the Company entitled to the
benefits of the Indenture dated July 20, 1998 between the Company, as issuer,
the Subsidiary Guarantors and Chase Bank of Texas, National Association, as
trustee (the "Trustee"), relating to the Notes (the "Indenture"). The form and
terms of the Exchange Notes are identical in all material respects to the form
and terms of the Private Notes, except that (i) the offering of the Exchange
Notes has been registered under the Securities Act, (ii) the Exchange Notes will
not be subject to transfer restrictions and (iii) the Exchange Notes will not be
entitled to registration or other rights under the Registration Rights
Agreement, including the provision in the Registration Rights Agreement for
payment of additional interest upon failure by the Company to consummate the
Exchange Offer or the occurrence of certain other events. Following the Exchange
Offer, any holders of Private Notes will continue to be subject to the existing
restrictions on transfer thereof and, as a general matter, the Company will not
have any further obligation to such holders to provide for registration under
the Securities Act of transfers of the Private Notes held by them. To the extent
that Private Notes are tendered and accepted in the Exchange Offer, a holder's
ability to sell untendered and tendered but unaccepted Private Notes could be
adversely affected. See "The Exchange Offer -- Purpose and Effect of the
Exchange Offer." The Exchange Notes are being offered hereby in order to satisfy
the obligations of the Company and the Subsidiary Guarantors under a
Registration Rights Agreement dated July 20, 1998 among the Company, the
Subsidiary Guarantors and the Initial Purchasers (as defined herein) relating to
the Private Notes (the "Registration Rights Agreement").
(continued on next page)
---------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR A DISCUSSION OF CERTAIN FACTORS
INVESTORS SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFER AND AN
INVESTMENT IN THE EXCHANGE NOTES OFFERED HEREBY.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is , 1998
<PAGE> 4
The Exchange Notes will bear interest at a rate of 10 3/4% per annum.
Interest on the Exchange Notes is payable semi-annually on January 15 and July
15 of each year, commencing January 15, 1999. Holders of Exchange Notes of
record on January 1, 1999 will receive, on January 15, 1999, an interest payment
in an amount equal to (x) the accrued interest on such Exchange Notes from the
date of issuance thereof to January 15, 1999, plus (y) the accrued interest on
the previously held Private Notes from the date of issuance of such Private
Notes (July 20, 1998) to the date of exchange thereof. Interest will not be paid
on Private Notes that are accepted for exchange. The Exchange Notes mature on
July 15, 2008.
Based on existing interpretations of the Securities Act by the staff of the
Securities and Exchange Commission (the "Commission"), Exchange Notes issued
pursuant to the Exchange Offer in exchange for Private Notes may be offered for
resale, resold and otherwise transferred by a holder thereof (other than (i) a
broker-dealer who purchased such Private Notes directly from the Company for
resale pursuant to Rule 144A or any other available exemption under the
Securities Act or (ii) a person that is an "affiliate" (within the meaning of
Rule 405 of the Securities Act) of the Company), without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that the holder is acquiring the Exchange Notes in its ordinary course of
business and is not participating, and has no arrangement or understanding with
any person to participate, in the distribution of the Exchange Notes. Holders of
Private Notes wishing to accept the Exchange Offer must represent to the Company
that such conditions have been met.
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Private Notes where such
Private Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that, for a
period of up to 180 days after the Expiration Date, it will make this Prospectus
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution."
Prior to the Exchange Offer, there has been no public market for the
Private Notes. The Exchange Notes will not be listed on any securities exchange,
but the Private Notes are, and the Exchange Notes will be, eligible for trading
in the National Association of Securities Dealers, Inc.'s Private Offerings,
Resales and Trading through Automatic Linkages ("PORTAL") Market. There can be
no assurance that an active market for the Notes will develop. To the extent
that a market for the Notes does develop, the market value of the Notes will
depend on market conditions (such as yields on alternative investments), general
economic conditions, the Company's financial condition and certain other
factors. Such conditions might cause the Notes, to the extent that they are
traded, to trade at a significant discount from face value. See "Risk
Factors -- Absence of Market for the Notes."
The Company will not receive any proceeds from, and has agreed to bear the
expenses of, the Exchange Offer. No underwriter is being used in connection with
this Exchange Offer. See "The Exchange Offer -- Solicitation of Tenders; Fees
and Expenses."
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE EXCHANGE OFFER COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, THE EXCHANGE NOTES IN ANY JURISDICTION
WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATIONS THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.
ii
<PAGE> 5
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A
SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW
HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY DOCUMENT
FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH
FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR
A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE
MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON,
SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY
PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH
THE PROVISIONS OF THIS PARAGRAPH.
The Exchange Notes will be available initially only in book-entry form. The
Company expects that the Exchange Notes issued pursuant to the Exchange Offer
will be issued in the form of one or more fully registered global notes that
will be deposited with, or on behalf of, the Depository Trust Company ("DTC" or
the "Depositary") and registered in its name or in the name of Cede & Co., as
its nominee. Beneficial interests in the global notes representing the Exchange
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by the Depositary and its participants. After the initial
issuance of such global notes, Exchange Notes in certificated form will be
issued in exchange for the global notes only in accordance with the terms and
conditions set forth in the Indenture. See "Description of the Notes -- Book
Entry; Delivery and Form."
---------------------
FORWARD-LOOKING STATEMENTS
Certain statements contained herein and in the documents incorporated
herein by reference, including statements of the Company's and management's
expectations, intentions, plans and beliefs, are forward-looking statements, as
defined in Section 27A of the Securities Act, that are dependent on certain
events, risks and uncertainties that may be outside of the Company's control.
When used or incorporated in this Prospectus, the words "anticipate," "believe,"
"could," "estimate," "expect," "intend," "may," "plan," "project" and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks, uncertainties and assumptions. Should one or more
of these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those anticipated,
estimated or projected. Among the key factors that have a direct bearing on the
Company's results of operations are the Company's leverage and liquidity, the
Company's dependence on energy industry spending, the Company's investment in
multi-client data, risks in international operations, competition, operating
risks, the Company's limited operating history, concentration of credit risks,
the capital intensive nature of the Company's business and the potential
obsolescence of technology, the Company's reliance on its key suppliers,
environmental and other regulations, risks in connection with the Company's
vessel upgrade projects, the influence of Seitel on the Company, conflicts of
interest between Seitel and the Company and reliance on the Company's key
personnel. These and other factors are discussed in "Risk Factors" and elsewhere
in this Prospectus.
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-4 (the "Registration Statement"), which term shall include all amendments,
exhibits, annexes and schedules thereto) under the Securities Act with respect
to the Exchange Notes offered hereby. As permitted by the rules and regulations
of the Commission, this Prospectus omits certain information, exhibits and
undertakings contained in the Registration Statement. For further information
with respect to the Company and the Exchange Notes offered hereby, reference is
made to the Registration Statement, including the exhibits thereto and the
financial statements, notes and schedules filed as a part thereof. Statements
contained in this Prospectus as to the
iii
<PAGE> 6
contents of any contract or other document are not necessarily complete, and in
each instance reference is made to the copy of such contract or document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder and, in accordance therewith, files reports,
proxy statements and other information with the Commission. All such information
may be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington
D.C. 20549 and at the following Regional Offices of the Commission: Chicago
Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and New York Regional Office, 7 World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material may also be obtained at prescribed rates
from the Public Reference Section of the Commission at its principal office at
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. The Commission
also maintains a web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission (http://www.sec.gov). In addition, the Company's common
stock, par value $.01 per share, is listed for trading on The Nasdaq Stock
Market, Inc.'s National Market System and reports, proxy statements and other
information concerning the Company may be inspected at the offices of The Nasdaq
Stock Market, Inc., 1735 K Street, Washington, D.C. 20006.
The Company has agreed that, whether it is required to do so by the rules
and regulations of the Commission or not, for so long as any of the Notes remain
outstanding, it will furnish to the holders of the Notes all quarterly and
annual financial information that would be required to be contained in a filing
with the Commission on Forms 10-Q and 10-K if the Company were required to file
such forms pursuant to the Exchange Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Prospectus incorporates by reference certain documents relating to the
Company that are not presented herein or delivered herewith. These documents
(other than the exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents) are available
without charge, on request by any person to whom this Prospectus is delivered,
from the Company, 50 Briar Hollow Lane, 6th Floor, West Building, Houston,
Texas, 77027, attention: Richard W. McNairy, telephone number (713) 881-2800.
The Company incorporates herein by reference the following documents:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1997;
(b) Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 1998 and June 30, 1998;
(c) Current Reports on Form 8-K dated June 29, 1998 and August 25,
1998; and
(d) All other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof
and prior to termination of the Exchange Offer made hereby.
Any statement contained herein or in a document all or a portion of which
is incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any subsequently filed document that also is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus except as so modified or superceded.
iv
<PAGE> 7
SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information in this Prospectus, including
the consolidated financial statements of the Company and notes thereto
incorporated herein by reference in this Prospectus. Unless the context
otherwise requires, references to the "Company" and "Eagle Geophysical" shall
mean Eagle Geophysical, Inc. and its subsidiaries.
THE COMPANY
Eagle Geophysical, Inc. is an international oilfield service company
specializing in the acquisition of high definition three-dimensional ("3D")
seismic data. Oil and gas companies regularly use seismic data to image
underground geological structures to aid in the exploration for hydrocarbon
reservoirs. The use of 3D seismic data can significantly increase the
probability of drilling success. The Company conducts its seismic data
acquisition operations both offshore and onshore, targeting particular niches in
both markets. The Company's offshore seismic acquisition operations have been
focused primarily on small and medium sized surveys in heavily congested areas,
while its onshore seismic operations have been concentrated in logistically
difficult wetland environments. Approximately 44% of the Company's 1997 pro
forma combined revenues was derived from its offshore operations, and the
remaining 56% of revenues was derived from onshore operations.
The Company's offshore operations currently utilize four seismic data
acquisition vessels. Three of these vessels are configured to tow either two or
three streamers, which allows the Company to conduct small and medium sized high
definition seismic surveys in congested offshore areas with dense marine
traffic, production platforms and other obstructions. Utilizing the greater
resources available to it after its initial public offering in August 1997 (the
"IPO"), the Company is expanding its offshore capabilities, primarily by
increasing the number of streamers towed by the Company's vessels, allowing the
Company to offer a wider breadth of services to its customers. As part of this
expansion, the Company took its vessel Labrador Horizon out of service from
December 1997 to April 1998 to complete an upgrade, increasing its streamer
towing capacity from three to six. The Company has also purchased two additional
vessels that are currently being converted to conduct seismic acquisition
operations, the Austral Horizon (scheduled for completion in the third quarter
of 1998 and the Atlantic Horizon (scheduled for completion in the fourth quarter
of 1998). Upon completion, these vessels will be equipped to tow four and six
streamers, respectively, and will have the potential to deploy up to six and ten
streamers, respectively. This increased capacity gives the Company the ability
to efficiently conduct larger offshore seismic surveys, which, in turn, will
enable the Company to expand its product offerings and to conduct more
multi-client surveys. In a multi-client survey, the Company retains ownership of
the seismic data and can license the data to numerous customers.
The Company's onshore seismic operations are currently concentrated in
wetland environments, and the Company's crews and equipment have been configured
for the technically and logistically demanding operations they conduct in these
areas. The Company currently operates four 2,450 channel Opseis(R) radio
telemetry seismic data acquisition crews. These crews and equipment are
specifically designed to work efficiently in environmentally sensitive and
operationally challenging swamp and marsh environments. Because these Opseis
systems use radio signals to transmit data, they can be operated more
efficiently than traditional cable-based systems, particularly in wetland areas
and areas where there are numerous topographic obstructions, such as rivers,
bays, highways and towns. These systems also excel in environmentally sensitive
areas where physical intrusion must be minimized. The Company's onshore
operations are currently located primarily in the U.S. Gulf Coast region.
1
<PAGE> 8
SUMMARY OF TERMS OF EXCHANGE OFFER
The Exchange Offer relates to the exchange of up to $100,000,000 aggregate
principal amount of Exchange Notes for up to an equal aggregate principal amount
of outstanding Private Notes. The Exchange Notes will be obligations of the
Company entitled to the benefits of the Indenture. The form and terms of the
Exchange Notes are identical in all material respects to the form and terms of
the Private Notes, except that (i) the offering of the Exchange Notes has been
registered under the Securities Act, (ii) the Exchange Notes will not be subject
to transfer restrictions and (iii) the Exchange Notes will not be entitled to
any rights under the Registration Rights Agreement. See "Description of the
Notes."
THE PRIVATE NOTES.......... The Company issued and sold $100 million aggregate
principal amount of its Private Notes to Prudential
Securities Incorporated and Banc One Capital
Markets, Inc. (the "Initial Purchasers") on July
20, 1998 (the "Closing Date") pursuant to a
Purchase Agreement dated July 15, 1998 (the
"Purchase Agreement") in a transaction not
registered under the Securities Act in reliance
upon the exemption provided in Section 4(2) of the
Securities Act (the "Private Offering"). The
Initial Purchasers placed the Private Notes with
qualified institutional buyers (as defined in Rule
144A under the Securities Act) ("Qualified
Institutional Buyers" or "QIBs"), each of whom
agreed to comply with certain transfer restrictions
and other restrictions. Accordingly, the Private
Notes may not be reoffered, resold or otherwise
transferred in the United States unless such
transaction is registered under the Securities Act
or an applicable exemption from the registration
requirements of the Securities Act is available.
THE EXCHANGE OFFER......... $1,000 principal amount of Exchange Notes will be
issued in exchange for each $1,000 principal amount
of Private Notes validly tendered and accepted
pursuant to the Exchange Offer. As of the date
hereof, $100,000,000 in aggregate principal amount
of Private Notes are outstanding. The Company will
issue the Exchange Notes to tendering holders of
Private Notes promptly following the Expiration
Date. The terms of the Exchange Notes are identical
in all material respects to the Private Notes
except for certain transfer restrictions and
registration rights relating to the Private Notes.
No federal or state regulatory requirements must be
complied with or approval obtained in connection
with the Exchange Offer, other than the
registration requirements under the Securities Act.
REGISTRATION RIGHTS
AGREEMENT.................. Pursuant to the Purchase Agreement, the Company,
the Subsidiary Guarantors and the Initial
Purchasers entered into the Registration Rights
Agreement which, among other things, grants the
holders of the Private Notes certain exchange and
registration rights. The Exchange Offer is intended
to satisfy certain obligations of the Company and
the Subsidiary Guarantors under the Registration
Rights Agreement.
RESALE..................... Based on existing interpretations of the Securities
Act by the staff of the Commission (the "Staff")
set forth in several no-action letters to third
parties, and subject to the immediately following
sentence, the Company believes that Exchange Notes
issued pursuant to the Exchange Offer in exchange
for Private Notes may be offered for resale, resold
and otherwise transferred by a holder thereof
(other than (i) a broker-dealer who purchased such
Private Notes directly from the Company for resale
pursuant to Rule 144A or any other available
exemption under the Securities Act or (ii) a person
that is an "affiliate" (within the meaning
2
<PAGE> 9
of Rule 405 of the Securities Act) of the Company),
without compliance with the registration and
prospectus delivery provisions of the Securities
Act, provided that the holder is acquiring the
Exchange Notes in its ordinary course of business
and is not participating, and has no arrangement or
understanding with any person to participate, in
the distribution of the Exchange Notes. Each
broker-dealer that receives Exchange Notes for its
own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes.
The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the
Securities Act. See "Plan of Distribution."
EXPIRATION DATE............ The Exchange Offer will expire at 5:00 p.m., New
York City time, on , 1998, unless the
Exchange Offer is extended, in which case the term
"Expiration Date" means the latest date and time to
which the Exchange Offer is extended. See "The
Exchange Offer -- Expiration Date; Extensions;
Amendments."
ACCRUED INTEREST ON THE
EXCHANGE NOTES AND THE
PRIVATE NOTES............ The Exchange Notes will bear interest at a rate of
10 3/4% per annum. Interest on the Exchange Notes
is payable semi-annually on January 15 and July 15
of each year, commencing January 15, 1999. Holders
of record of Exchange Notes on January 1, 1999 will
receive on January 15, 1999 an interest payment in
an amount equal to (x) the accrued interest on such
Exchange Notes from the date of issuance thereof to
January 15, 1999, plus (y) the accrued interest on
the previously held Private Notes from the date of
issuance of such Private Notes (July 20, 1998) to
the date of exchange thereof. Interest will not be
paid on Private Notes that are accepted for
exchange. The Exchange Notes mature on July 15,
2008.
CONDITIONS TO THE EXCHANGE
OFFER.................... The Company may terminate the Exchange Offer if it
determines that its ability to proceed with the
Exchange Offer could be materially impaired due to
the occurrence of certain conditions. The Company
does not expect any of such conditions to occur,
although there can be no assurance that such
conditions will not occur. Holders of Private Notes
will have certain rights under the Registration
Rights Agreement should the Company fail to
consummate the Exchange Offer. See "The Exchange
Offer -- Conditions to the Exchange Offer."
PROCEDURES FOR TENDERING
PRIVATE NOTES.............. Each holder of Private Notes wishing to accept the
Exchange Offer must either (i) complete, sign and
date the Letter of Transmittal, or a facsimile
thereof, in accordance with the instructions
contained herein and therein, and mail or otherwise
deliver such Letter of Transmittal, or such
facsimile, together with the Private Notes to be
exchanged and any other required documentation, to
Chase Bank of Texas, National Association, as
Exchange Agent, at the address set forth herein and
therein or effect a tender of Private Notes
pursuant to the procedures for book-entry transfer
as provided for herein and therein or (ii) effect
tenders by book-entry transfer by complying with
DTC's Automated Tender Offer Program ("ATOP"),
including the delivery of an Agent's message to the
3
<PAGE> 10
Exchange Agent. By executing the Letter of
Transmittal, each holder will represent to the
Company that, among other things, 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 such person is the holder, that
neither the holder nor any such other person has
any arrangement or understanding with any person to
participate in the distribution of such Exchange
Notes and that neither the holder nor any such
other person is an "affiliate," as defined in Rule
405 under the Securities Act, of the Company. See
"The Exchange Offer -- Procedures for Tendering."
Following consummation of the Exchange Offer,
holders of Private Notes not tendered will not as a
general matter have any further registration
rights, and the Private Notes will continue to be
subject to certain restrictions on transfer.
Accordingly, the liquidity of the market for the
Private Notes could be adversely affected. See
"Risk Factors -- Absence of Market for the Notes"
and "-- Failure to Exchange Private Notes" and "The
Exchange Offer -- Consequences of Failure to
Exchange."
SPECIAL PROCEDURES FOR
BENEFICIAL OWNERS.......... Any beneficial owner whose Private Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and
who wishes to tender in the Exchange Offer should
contact such registered holder promptly and
instruct such registered holder to tender on his
behalf. If such beneficial owner wishes to tender
on his own behalf, such beneficial owner must,
prior to completing and executing the Letter of
Transmittal and delivering his Private Notes,
either (a) make appropriate arrangements to
register ownership of the Private Notes in such
holder's name or (b) obtain a properly completed
bond power from the registered holder or endorsed
certificates representing the Private Notes to be
tendered. The transfer of record ownership may take
considerable time, and completion of such transfer
prior to the Expiration Date may not be possible.
See "The Exchange Offer -- Procedures for
Tendering."
GUARANTEED DELIVERY
PROCEDURES................. Holders of Private Notes who wish to tender their
Private Notes and whose Private Notes are not
immediately available, or who cannot deliver their
Private Notes (or complete the procedure for
book-entry transfer) and deliver a properly
completed Letter of Transmittal and any other
documents required by the Letter of Transmittal to
the Exchange Agent prior to the Expiration Date may
tender their Private Notes according to the
guaranteed delivery procedures set forth in "The
Exchange Offer -- Guaranteed Delivery Procedures."
WITHDRAWAL RIGHTS.......... Tenders of Private Notes may be withdrawn at any
time prior to the Expiration Date by furnishing a
written or facsimile transmission notice of
withdrawal to the Exchange Agent containing the
information set forth in "The Exchange
Offer -- Withdrawal of Tenders."
ACCEPTANCE OF PRIVATE NOTES
AND DELIVERY OF EXCHANGE
NOTES.................... Subject to certain conditions (as summarized above
in "Conditions to the Exchange Offer" and described
more fully in "The Exchange Offer -- Conditions to
the Exchange Offer"), the Company will accept
4
<PAGE> 11
for exchange any and all Private Notes that are
properly tendered in the Exchange Offer prior to
the Expiration Date. See "The Exchange
Offer -- Procedures for Tendering." The Exchange
Notes issued pursuant to the Exchange Offer will be
delivered promptly following the Expiration Date.
EXCHANGE AGENT............. Chase Bank of Texas, National Association, the
trustee under the Indenture, is serving as the
Exchange Agent (the "Exchange Agent") in connection
with the Exchange Offer. The mailing address of the
Exchange Agent is Chase Bank of Texas, National
Association, 1201 Main Street, 18th Floor, Dallas,
Texas 75202, Attn: Frank Ivins. For assistance and
requests for additional copies of the Prospectus,
the Letter of Transmittal or the Notice of
Guaranteed Delivery, the telephone number for the
Exchange Agent is (214) 672-5678, and the facsimile
number for the Exchange Agent is (214) 672-5746
(Eligible Institutions only).
EFFECT ON HOLDERS OF
PRIVATE NOTES.............. Holders of Private Notes who do not tender their
Private Notes in the Exchange Offer will continue
to hold their Private Notes and will be entitled to
all the rights and limitations applicable thereto
under the Indenture. All untendered, and tendered
but unaccepted, Private Notes will continue to be
subject to the restrictions on transfer provided
for in the Private Notes and the Indenture. To the
extent that Private Notes are tendered and accepted
in the Exchange Offer, the trading market, if any,
for any untendered and tendered but unaccepted
Private Notes could be adversely affected. See
"Risk Factors -- Consequences of Failure to
Exchange Private Notes."
See "The Exchange Offer" for more detailed information concerning the terms of
the Exchange Offer.
5
<PAGE> 12
SUMMARY OF TERMS OF EXCHANGE NOTES
SECURITIES OFFERED......... $100,000,000 aggregate principal amount of 10 3/4%
Senior Notes due 2008, Series B, of the Company
under an Indenture dated as of July 20, 1998. See
"Description of the Notes."
MATURITY DATE.............. July 15, 2008.
INTEREST PAYMENT DATES..... January 15 and July 15 of each year, commencing
January 15, 1999.
OPTIONAL REDEMPTION........ The Exchange Notes will be redeemable at the
election of the Company, in whole or in part, at
any time on or after July 15, 2003 at the
redemption prices set forth herein, plus accrued
interest to the date of redemption. In addition,
the Company may, at its option, redeem Notes prior
to July 15, 2001 at 110.75% of the principal amount
thereof, plus accrued interest to the date of
redemption, from the net proceeds of one or more
Equity Offerings (as defined); provided that,
immediately after giving effect to any such
redemption, an aggregate principal amount of Notes
equal to at least 65% of the aggregate principal
amount of the Notes issued remains outstanding
after each such redemption. See "Description of the
Notes."
GUARANTEES................. The Exchange Notes will be jointly and severally
guaranteed on a senior unsecured basis by the
Company's current and future Restricted
Subsidiaries (as defined) that are organized under
the laws of any state of the United States or the
District of Columbia (the "Subsidiary Guarantors").
The Exchange Notes will not be guaranteed by the
Company's Restricted Subsidiaries that are
organized under the laws of jurisdictions outside
the United States. The Indenture requires that the
subsidiaries of the Company that own the Austral
Horizon and the Atlantic Horizon, the two seismic
data acquisition vessels being upgraded with the
proceeds of the sale of the Private Notes, be
Subsidiary Guarantors. See "Description of the
Notes -- Subsidiary Guarantees."
RANKING.................... The Exchange Notes will be senior unsecured
obligations of the Company ranking pari passu with
all existing and future unsubordinated debt of the
Company. The Exchange Notes will also be guaranteed
by the Subsidiary Guarantors pursuant to the
Subsidiary Guarantees. The Exchange Notes and the
Subsidiary Guarantees are effectively subordinated
to all of the Company's and subsidiaries' secured
debt, including loans under the Revolving Credit
Facility (as defined), to the extent of the value
of the assets securing such debt and are
structurally subordinated to all liabilities,
including trade payables, of the Company's
subsidiaries that are not Subsidiary Guarantors. As
of June 30, 1998, on a pro forma basis after giving
effect to the sale of the Private Notes and the
application of the net proceeds therefrom, the
Company and its subsidiaries had $37.1 million of
consolidated secured debt and capital lease
obligations outstanding ($31.3 million of which is
a capital lease obligation of one of the Company's
subsidiaries that is not a Subsidiary Guarantor).
In addition, the Company's subsidiaries that are
not Subsidiary Guarantors had approximately $21.2
million of trade payables as of June 30, 1998.
COVENANTS.................. The Indenture contains certain covenants,
including, but not limited to, covenants that limit
the Company's and its subsidiaries' ability to
incur additional indebtedness, pay dividends and
make other restricted pay-
6
<PAGE> 13
ments, make asset sales, enter into transactions
with affiliates, incur dividend and other payment
restrictions affecting subsidiaries, incur certain
liens and merge or consolidate. These limitations
are subject to certain qualifications and
exceptions. See "Description of the Notes --
Certain Covenants."
CHANGE OF CONTROL.......... Upon a Change of Control, the Company will be
required, subject to certain conditions, to offer
to repurchase all of the outstanding Exchange Notes
at 101% of the principal amount thereof, plus
accrued and unpaid interest to the date of
purchase. See "Risk Factors -- Potential Inability
to Purchase Notes Upon a Change in Control" and
"Description of the Notes."
FORM AND REGISTRATION OF
NOTES...................... Except as set forth under "Description of the
Notes -- Book-Entry, Delivery and Form," the
Exchange Notes offered hereby will be represented
by a global note in definitive, fully registered
form without interest coupons (the "Global Note").
The Global Note will be deposited with the trustee
for the Notes as custodian for, and registered in
the name of a nominee of, DTC. See "Description of
the Notes -- Book-Entry, Delivery and Form."
USE OF PROCEEDS............ The Company will not receive any proceeds from the
Exchange Offer.
RISK FACTORS............... Prospective purchasers of the Exchange Notes should
carefully consider the specific matters set forth
under "Risk Factors" as well as the other
information and data included in or incorporated by
reference into this Exchange Offer prior to making
an investment in the Exchange Notes.
7
<PAGE> 14
SUMMARY SELECTED PRO FORMA AND HISTORICAL FINANCIAL DATA
The following table sets forth historical summary selected financial data
and selected unaudited pro forma financial data for the Company. The unaudited
pro forma results of operations for the year ended December 31, 1997 and the six
month period ended June 30, 1997 give effect to the IPO, the application of the
net proceeds thereof to retire certain debt and capital leases, and the
acquisition of Energy Research International ("ERI"), which occurred
contemporaneously with the IPO (the "ERI Acquisition"), as if such transactions
had occurred on January 1, 1997. The unaudited pro forma results of operations
for the year ended December 31, 1997 and the six month periods ended June 30,
1997 and 1998 also give effect to the issuance of $22.5 million of the Notes to
retire borrowings under the Revolving Credit Facility and the Short-Term Loan as
if such transactions had occurred on January 1, 1997 or the later actual date of
such borrowings. Interest expense has not been accrued on the remaining net
proceeds of $73.9 million as this amount had not yet been utilized to fund
capital expenditures during the periods presented. Results of operations for pro
forma periods may not be indicative of the actual results that would have been
achieved or of the results that may be achieved through future operations. The
following historical and pro forma summary selected financial data should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the historical consolidated financial
statements and the unaudited pro forma consolidated financial statements
included herein.
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED ENDED JUNE 30,
DECEMBER 31, ------------------------
1997(2) 1997(2) 1998 SIX MONTHS
YEARS ENDED DECEMBER 31, ------------ ----------- ---------- ENDED
------------------------------------ JUNE 30,
1995 1996 1997(1) PRO FORMA PRO FORMA 1998(3)
---------- ---------- ---------- COMBINED COMBINED -----------
HISTORICAL HISTORICAL HISTORICAL AS ADJUSTED AS ADJUSTED HISTORICAL AS ADJUSTED
---------- ---------- ---------- ------------ ----------- ---------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues.................... $29,275 $48,136 $79,061 $108,128 $50,060 $58,216 $58,216
------- ------- ------- -------- ------- ------- -------
Expenses:
Operating expenses........ 20,986 34,817 56,470 76,723 36,079 39,966 39,966
Depreciation and
amortization............ 2,471 3,409 8,584 12,889 6,238 7,687 7,687
Selling, general and
administrative
expenses................ 2,874 2,680 6,408 8,793 3,384 5,373 5,373
Interest and other
expense, net............ 408 531 205 251 297 351 459
------- ------- ------- -------- ------- ------- -------
Total expenses...... 26,739 41,537 71,667 98,656 45,998 53,377 53,485
------- ------- ------- -------- ------- ------- -------
Income before provision for
income taxes.............. 2,536 6,599 7,394 9,472 4,062 4,839 4,731
Provision for income
taxes..................... 933 2,420 2,994 3,836 1,645 1,960 1,916
------- ------- ------- -------- ------- ------- -------
Net income(4)............... $ 1,603 $ 4,179 $ 4,400 $ 5,636 $ 2,417 $ 2,879 $ 2,815
======= ======= ======= ======== ======= ======= =======
OTHER DATA:
EBITDA(5)................... $ 5,415 $10,539 $16,183 $ 22,612 $10,597 $12,877 $12,877
Ratio of EBITDA to interest
expense(6)................ 12.03x 15.08x 10.20x 90.09x 35.68x 19.63x 14.32x
Ratio of earnings to fixed
charges................... 3.61x 4.70x 3.08x 3.35x 2.71x 2.61x 2.52x
Capital expenditures and
acquisitions.............. $ 289 $ 7,928 $40,790 $ 46,290 $ 9,107 $17,269 $17,269
</TABLE>
8
<PAGE> 15
<TABLE>
<CAPTION>
JUNE 30, 1998
-------------------------
AS
ACTUAL ADJUSTED(3)
-------- --------------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents................................... $ 15,912 $ 24,912
Working capital............................................. (8,960) (360)
Total assets................................................ 200,862 278,362
Total debt (including current portion)...................... 59,552 137,052
Stockholders' equity........................................ 87,820 87,820
</TABLE>
- ---------------
(1) Includes the results of ERI from and after August 11, 1997.
(2) The unaudited pro forma results of operations for the year ended December
31, 1997 and the six month period ended June 30, 1997 give effect to (i) the
IPO, the application of the net proceeds thereof to retire certain debt and
capital leases, and the ERI Acquisition, as if such transactions had
occurred on January 1, 1997, and (ii) the Private Offering and the
application of the net proceeds thereof.
(3) The unaudited adjusted statement of operations data for the six months ended
June 30, 1998 and the balance sheet data for the period then ended give
effect to the Private Offering and the application of the net proceeds
thereof.
(4) Excludes the effect of a $600,000 extraordinary gain for early
extinguishment of debt on ERI's historical 1996 financial statements.
(5) "EBITDA" means earnings before interest expense, taxes, depreciation, and
amortization, and should not be considered as an alternative to net income
or any generally accepted accounting principles measure of performance as an
indicator of the Company's operating performance or as a measure of
liquidity. The Company believes EBITDA is a widely accepted financial
indicator of a company's ability to service debt.
(6) Ratio of EBITDA to interest expense represents an industry ratio that
provides an investor with information as to the Company's current ability to
meet its interest costs.
9
<PAGE> 16
RISK FACTORS
Prior to making an investment in the Exchange Notes, prospective purchasers
should carefully consider all of the information contained and incorporated by
reference in this Prospectus and, in particular, should evaluate the following
risk factors.
LEVERAGE AND LIQUIDITY
The Company has significant leverage and will require substantial cash flow
to meet its debt service requirements. The degree of the Company's leverage will
have several important effects on its future operations, including (i) a
substantial amount of the Company's cash flow from operations must be dedicated
to the payment of interest on its indebtedness and will not be available for
other purposes, (ii) covenants contained in the Company's debt obligations will
require the Company to meet certain financial tests, and other restrictions will
limit its ability to borrow additional funds or to dispose of assets and may
affect the Company's flexibility in planning for, and reacting to, changes in
its business, including possible acquisition opportunities, and (iii) the
Company's ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions or general corporate purposes may be
impaired.
The Company's ability to meet its debt obligations will depend on the
Company's future performance, which is subject to general economic and business
factors beyond the Company's control. To the extent that the Company is unable
to repay the principal amount of the Notes at maturity out of cash on hand or
from other sources, it will need to refinance its existing debt (including the
Notes), sell assets or repay the Notes with the proceeds of an equity offering.
There can be no assurance that future borrowings or equity financing will be
available for the refinancing or repayment of the Notes, nor can there be any
assurance as to the timing of any asset sales or the proceeds that could be
realized by the Company therefrom. In addition, the Indenture and the Revolving
Credit Facility will restrict the Company's ability to sell assets and use the
proceeds therefrom.
HOLDING COMPANY STRUCTURE
All of the Company's operating income and cash flow is generated by its
subsidiaries (the "Subsidiaries"). As a result, funds necessary to meet the
Company's debt service obligations are provided in part by distributions or
advances from the Subsidiaries. Under certain circumstances, contractual and
legal restrictions, as well as the financial condition and operating
requirements of the Subsidiaries, could limit the Company's ability to obtain
cash from the Subsidiaries for the purpose of meeting its debt service
obligations, including the payment of principal and interest on the Notes.
Although the Subsidiary Guarantors will guarantee the Exchange Notes pursuant to
the Subsidiary Guarantees, not all of the Subsidiaries will be Subsidiary
Guarantors. See "Description of the Notes -- Subsidiary Guarantees." As a
result, the claims of creditors of the Subsidiaries that are not Subsidiary
Guarantors effectively have priority with respect to the assets and earnings of
those Subsidiaries over the claims of the holders of the Notes. In the event of
an insolvency, liquidation or reorganization of a Subsidiary that is not a
Subsidiary Guarantor, any creditors of such Subsidiary, including trade
creditors, would be entitled to payment in full from the assets of such
Subsidiary before the Company, as a stockholder, would be entitled to receive
any distribution from the Subsidiary.
Horizon Exploration Ltd., a Subsidiary that is not a Subsidiary Guarantor
("Horizon Exploration"), operates one of the Company's seismic acquisition
vessels under a capital lease with an outstanding balance of approximately $31.3
million as of June 30, 1998. Eagle Geophysical Onshore, Inc., a Subsidiary
Guarantor ("Eagle Onshore"), entered into a $5.9 million term loan in April 1998
to finance the acquisition of its fourth Opseis system. In addition, the Company
and its Subsidiaries are co-borrowers under the Revolving Credit Facility
secured by accounts receivable. The Exchange Notes will be effectively
subordinated to this capital lease, equipment loan and Revolving Credit
Facility, to the extent of the assets securing such obligations, and will be
structurally subordinated to all obligations of the Subsidiaries that are not
Subsidiary Guarantors, including obligations under this capital lease, certain
of the obligations under the Revolving Credit Facility and all trade payables,
currently outstanding or incurred in the future. The Indenture contains
covenants
10
<PAGE> 17
limiting the ability of the Company and its Subsidiaries to grant liens and the
ability of the Company and its Subsidiaries to incur additional indebtedness.
See "Description of the Notes -- Certain Covenants."
DEPENDENCE UPON ENERGY INDUSTRY SPENDING
Demand for the Company's services depends upon the level of capital
expenditures by oil and gas companies for exploration, production and
development activities. These activities depend in part on oil and gas prices,
expectations about future prices, the cost of exploring for, producing and
delivering oil and gas, the sale and expiration dates of leases in the United
States and abroad, the discovery rate of new oil and gas reserves, local and
international political, regulatory and economic conditions and the ability of
oil and gas companies to obtain capital. In addition, a decrease in oil and gas
expenditures could result from such factors as unfavorable tax and other
legislation or uncertainty concerning national energy policies. No assurance can
be given that current levels of oil and gas activities will be maintained or
that demand for the Company's services will reflect the level of such
activities. Decreases in oil and gas activities could have a significant adverse
effect upon the demand for the Company's services and the Company's cash flows
and results of operations.
INVESTMENT IN MULTI-CLIENT DATA
Historically, the Company has performed its offshore seismic data
acquisition services for its customers primarily on a contract basis without
retaining any interest in the data it acquired. However, increasing demand for
larger and higher-cost 3D surveys has resulted in significantly increased
industry acceptance of and customer demand for multi-client surveys. As a result
of this industry trend and customer demand, the Company anticipates that an
increasing part of its future offshore data acquisition projects will be
multi-client surveys. The Company therefore anticipates that in the near term it
will begin investing increasing amounts in acquiring and processing multi-client
data. By making such investments, the Company will assume the risk that future
sales of such data may not fully recoup the costs of the data. The amounts of
these data sales will be uncertain and will be impacted by a number of factors,
many of which are beyond the control of the Company. In addition, revenues
generated by licensing multi-client data are typically less predictable from
period to period than are revenues from surveys performed on an exclusive
contract basis for customers. The Company intends to seek to reduce these risks
by acquiring multi-client data in partnership with third parties or by obtaining
pre-acquisition licensing commitments to cover part of its costs of acquiring
the data and by evaluating various factors affecting the sales potential of each
survey. In addition, the recovery of costs of multi-client data is dependent
upon the absence of technological or regulatory changes or other developments
that would render such data obsolete or less valuable.
The majority of the Company's investment in multi-client data is likely to
be in the Gulf of Mexico. If there were to occur any material adverse change in
the general prospects for oil and gas exploration, development and production
activities in the Gulf of Mexico, the value of the Company's multi-client data
in the Gulf of Mexico could be significantly adversely impacted.
RISKS IN INTERNATIONAL OPERATIONS
Approximately 22% of the Company's pro forma combined 1997 revenues were
derived from operations outside the U.S., and the Company is subject to the
risks inherent in doing business internationally. In addition, the Company
intends to expand its international operations. For example, the Company has
conducted significant operations offshore Argentina during the first and second
quarters of 1998. Since the Company has an established presence in the North
Sea, the Company does not view its offshore operations in the North Sea as being
subject to undue risks of this type. However, as the Company expands the scope
and extent of its onshore and offshore operations outside of their current
primary areas of operations in the U.S. Gulf Coast, the North Sea and the Gulf
of Mexico, these risks may become more significant. Such risks include the
possibility of unfavorable changes in tax or other laws, partial or total
expropriation, currency exchange rate fluctuations and restrictions on currency
repatriation, the disruption of operations from labor and political
disturbances, insurrection or war, and the effect of requirements of partial
local ownership of operations in certain countries.
11
<PAGE> 18
SUBSTANTIAL COMPETITION
The offshore and onshore seismic data acquisition business is highly
competitive. The Company believes that it has five major competitors for its
offshore seismic data acquisition business worldwide and six major competitors
for its wetland seismic data acquisition business in the U.S. Gulf Coast region.
Competitive factors include price, experience, availability, technological
expertise, performance and reputation for dependability. Certain of the
Company's major competitors operate more data acquisition crews than the
Company, provide integrated data acquisition, processing and interpretation
services, have substantially greater revenues than the Company or are
subsidiaries or divisions of major industrial enterprises having far greater
financial and other resources than the Company and more extensive relationships
with major integrated and multinational oil and gas companies. Such resources
may enable these competitors to maintain technological and certain other
advantages relating to costs that may provide them with an advantage over the
Company in bidding for contracts.
OPERATING RISKS
Seismic operations are subject to risks of injury to personnel and loss of
equipment. In addition, the Company's crews often conduct operations in extreme
weather, in difficult terrain that is not easily accessible and under other
hazardous conditions. Each of the Company's vessels is taken out of service for
approximately two to four weeks each year, generally at different off-season
times of the year, for routine maintenance and service. Fixed costs, including
costs associated with operating leases, labor costs and depreciation, account
for a significant amount of the Company's costs and expenses. As a result, low
productivity resulting from weather interruptions, equipment failures or other
causes can result in significant operating losses, particularly when the Company
is performing its services under a turnkey contract.
Although the Company provides the seismic personnel on its offshore seismic
data acquisition vessels, the Company contracts with third parties to provide
vessel crews, so the Company does not control some aspects of its operations and
is subject to the safety risks inherent in relying on third parties for critical
operations. In addition, while the Company has insurance policies that protect
it against liabilities that may be incurred in the ordinary course of its
business, the Company is unable to insure fully against all possible loss or
liability. For example, no insurance is available at a cost deemed reasonable by
the Company for war, nationalization, expropriation or other extreme events. The
Company does not carry business interruption insurance with respect to its
operations.
LIMITED COMBINED OPERATING HISTORY
The Company was formed to combine the onshore seismic data acquisition
business conducted by Seitel Geophysical, Inc. ("SGI") with the offshore seismic
data acquisition business conducted by ERI and its operating subsidiaries (the
"Horizon Companies," and collectively with SGI, the "Combined Businesses"). The
Company acquired ERI in August 1997 at the time of the Company's IPO. Prior to
the Company's IPO, the Combined Businesses were operated separately, and neither
the historical results of their separate operations nor their pro forma
financial information is necessarily indicative of the results that would have
been achieved had the Combined Businesses been operated on an integrated basis
or the results that may be realized in the future. In addition, prior to the
IPO, the Company was a subsidiary of Seitel, Inc. ("Seitel") and relied on
Seitel for certain financial, management, administrative and other resources. A
number of significant changes occurred in the funding and operations of the
Company in connection with the consummation of the IPO. These changes included
the establishment of the Company's Revolving Credit Facility and its own
incentive compensation and stock option plans. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations." These changes may
have a substantial impact on the financial position and future results of
operations of the Company. As a result, the historical financial information
included in this Prospectus does not necessarily reflect the financial position
and results of operations of the Company in the future or what the financial
position and results of operations of the Company would have been had the
Combined Businesses been operated as a combined stand-alone entity during all of
the periods presented.
12
<PAGE> 19
CONCENTRATION OF CREDIT RISK
The Company generally provides services to a relatively small group of key
customers that account for a significant percentage of the accounts receivable
of the Company at any given time. The Company's key customers vary over time,
but have historically included Seitel and its subsidiaries. The Company extends
credit to various companies in the oil and gas industry, including its key
customers, for the acquisition of seismic data, which results in a concentration
of credit risk. This concentration of credit risk may be affected by changes in
the economic or other conditions of the Company's key customers and may
accordingly impact the Company's overall credit risk. The Company currently has
one receivable from a customer of approximately $2.4 million that is over one
year old. There can be no assurance that the Company will collect this
receivable. Historical credit losses incurred on receivables by the Company have
been immaterial.
CAPITAL INTENSIVE BUSINESS; OBSOLESCENCE OF TECHNOLOGY
The Company competes in a capital intensive industry. The development of
seismic data acquisition equipment has been characterized by rapid technological
advancements in recent years, and this trend may continue. There can be no
assurance that manufacturers of seismic equipment will not develop new systems
that have competitive advantages over systems now in use that either render the
Company's current equipment obsolete or require the Company to make significant
capital expenditures to maintain its competitive position. The Company's
strategy is to upgrade its vessels and data acquisition systems as often as
necessary to maintain its competitive position. However, any such upgrades may
require large expenditures of capital. There can be no assurance that the
Company will have the capital necessary to upgrade its equipment to maintain its
competitive position or that any required financing therefor will be available
on favorable terms. If the Company is unable to raise the capital necessary to
update its data acquisition systems to the extent necessary, it may be
materially and adversely affected.
The Company's ability to compete is highly dependent upon, among other
things, its ability to provide seismic data of a competitive quality. Because of
the significant technological changes that have already taken place with respect
to 3D seismic data acquisition and those that may occur in the future, the
Company is, like other seismic companies, generally dependent on its ability to
keep pace with changes and improvements in data acquisition technologies and to
acquire advanced equipment and vessels. Any significant technological
developments affecting seismic surveying could adversely affect the Company.
Over time, the value of and demand for seismic vessels and onshore seismic data
acquisition equipment can be expected to fluctuate, depending upon a variety of
factors including alternative types, sizes and technical abilities of competing
vessels and equipment.
RELIANCE ON KEY SUPPLIERS
The Company is dependent on Georex, Inc., a subsidiary of Compagnie
Generale de Geophysique, S.A. ("CGG"), which is a competitor of the Company, for
additions to and replacements for its Opseis seismic data acquisition systems,
and Opseis is a registered trademark of CGG. The Company is also dependent on
Input/Output, Inc. and Syntron, Inc., a subsidiary of GeoScience Corporation,
for additions to and replacements for its offshore seismic data acquisition
systems and on Concept Systems Ltd. for positioning software. Although these
companies are not the only suppliers of seismic data acquisition systems, they
are the Company's primary suppliers. In addition, the Company considers the
Opseis system to be the state-of-the-art seismic data equipment for performing
3D seismic surveys in marshes and swamps. In the event of any disruption in the
supply of repair services or replacement parts from the Company's primary
suppliers, the Company may be unable to obtain such services or parts from other
sources and would have to acquire other equipment that may be less advanced
technologically. Although the Company believes it will be able to obtain systems
from its primary suppliers in the future, should it be unable to do so, the
Company's anticipated revenues or operating margins could be reduced
significantly and the amount of cash needed for capital expenditures could be
increased significantly.
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ENVIRONMENTAL AND OTHER REGULATIONS
The Company's operations are materially affected by government regulation
in the form of international conventions, national, state and local laws and
regulations in force in the jurisdictions in which the Company operates, as well
as in the country or countries of registration of the Company's vessels. The
Company is required by various governmental and quasi-governmental agencies to
obtain certain permits, licenses and certificates with respect to its
operations. In particular, the United States Oil Pollution Act of 1990 sets
forth technical and operational requirements for vessels operating in the U.S.
Gulf of Mexico. The Company believes that it possesses all permits, licenses and
certificates material to the operation of its business. The modification of
existing laws or regulations or the adoption of new laws or regulations
curtailing drilling for oil and gas or imposing more stringent restrictions on
seismic operations could adversely affect the Company.
RISKS OF UPGRADE PROJECTS
The Company's seismic acquisition vessel upgrade projects are subject to
the risks of delay and cost overruns inherent in any large construction project,
including shortages of equipment, unforeseen engineering problems, work
stoppages, weather interference, unanticipated cost increases and shortages of
materials or skilled labor. Significant cost overruns or delays could adversely
affect the Company's financial condition and results of operations.
INFLUENCE OF SEITEL ON THE COMPANY
Prior to the Company's IPO, the Company was a subsidiary of Seitel. Seitel
currently owns approximately 17.7% of the outstanding shares of common stock of
the Company. Approximately 56% of the revenues of the Company for the six months
ended June 30, 1998 were derived from seismic data acquisition services provided
to Seitel and its subsidiaries. Prior to the IPO, the onshore revenues from
Seitel were based on prices charged to unaffiliated parties for similar work.
Such revenues are not necessarily indicative of the revenues the Company would
have earned had it provided these services to unrelated third parties. Prior to
the IPO, the offshore revenues from Seitel were determined by negotiations
between Seitel and the Horizon Companies, which management of the Horizon
Companies believe were equal to amounts it would have charged unrelated third
parties for such services. Revenues from Seitel for both onshore and offshore
data acquisition after the IPO have been determined by negotiations between
Seitel and the Company, which management believes are equal to amounts it would
have charged unrelated third parties for such services. The loss of Seitel as a
customer would have a material adverse effect on the Company's financial
condition and results of operations. There can be no assurance that Seitel will
enter into any material contracts with the Company for seismic data acquisition
services in the future.
Prior to the IPO, Seitel guaranteed certain indebtedness of the Company and
made loans to the Company. The Company's borrowing costs may be greater than
historical borrowing costs as a result of having to obtain financing based on
its own creditworthiness. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
Paul A. Frame, the President and Chief Executive Officer and a director of
Seitel, is a director of the Company, serves as Chairman of the Executive
Committee of the Board of Directors of the Company, has duties with respect to
marketing and expansion of the Company's business pursuant to a Bonus Agreement
with the Company, and has received from the Company options to acquire shares of
its common stock. Consequently, in addition to its current position as a
significant customer of the Company, Seitel will be able to exercise significant
influence over the management of the Company. Such influence may extend to
matters such as the election of directors of the Company, the approval of
matters submitted for stockholder approval and responding to any potential
takeover of the Company.
In addition, Mr. William Lurie, Chairman of the Board of Directors of the
Company, was a director of Seitel prior to the Company's IPO. Mr. Jay N.
Silverman, President and Chief Executive Officer and a director of the Company,
was an executive officer of Seitel prior to the IPO. A substantial part of Mr.
Silverman's present personal assets is comprised of common stock and other
equity interests in Seitel.
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POTENTIAL CONFLICTS OF INTEREST
Conflicts of interest may arise in the future between Seitel and the
Company in a number of areas relating to their past and ongoing relationships,
including potential acquisitions of businesses or properties, other business
opportunities, the election of new or additional directors, the payment of
dividends, incurrence of indebtedness, tax matters, financial commitments,
registration rights and issuances and sales of capital stock of the Company.
Although the Company and Seitel do not currently compete against each other in
any material respect, there can be no assurance that Seitel and the Company will
not in the future compete against each other. Any officer or director of Seitel
who serves as a director of the Company, such as Mr. Frame, may have conflicts
of interest in addressing business opportunities and strategies as to which
Seitel's and the Company's interests differ. The Company has not adopted any
formal procedures to ensure that conflicts of interest will not occur or to
resolve any such conflicts of interest that do occur. There can be no assurance
that any such conflicts of interest will be resolved in favor of the Company.
RELIANCE ON KEY PERSONNEL
The Company's operations are dependent on the efforts of Messrs. Jay N.
Silverman, President, and Gerald M. Harrison, Executive Vice President. If
either of these key persons becomes unable to continue in his present role, or
if the Company is unable to attract and retain other skilled employees, the
Company's business could be adversely affected. The Company has employment
agreements with automatic renewal features with Messrs. Silverman and Harrison.
FRAUDULENT CONVEYANCE
Various fraudulent conveyance laws enacted for the protection of creditors
may apply to the Subsidiary Guarantors' issuance of the Subsidiary Guarantees.
To the extent that a court were to find that (x) a Subsidiary Guarantee was
incurred by a Subsidiary Guarantor with intent to hinder, delay or defraud any
present or future creditor or the Subsidiary Guarantor contemplated insolvency
with a design to prefer one or more creditors to the exclusion in whole or in
part of others or (y) a Subsidiary Guarantor did not receive fair consideration
or reasonably equivalent value for issuing its Subsidiary Guarantee and such
Subsidiary Guarantor (i) was insolvent, (ii) was rendered insolvent by reason of
the issuance of such Subsidiary Guarantee, (iii) was engaged or about to engage
in a business or transaction for which the remaining assets of such Subsidiary
Guarantor constituted unreasonably small capital to carry on its business or
(iv) intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they matured, the court could avoid or subordinate
such Subsidiary Guarantee in favor of the Subsidiary Guarantor's creditors.
Among other things, a legal challenge of a Subsidiary Guarantee on fraudulent
conveyance grounds may focus on the benefits, if any, realized by the Subsidiary
Guarantor as a result of the Company's issuance of the Notes. The Subsidiary
Guarantees will contain a savings clause that generally will limit the
obligations of each Subsidiary Guarantor under its Subsidiary Guarantee to the
maximum amount as will, after giving effect to all of the liabilities of such
Subsidiary Guarantor, result in such obligations not constituting a fraudulent
conveyance. To the extent a Subsidiary Guarantee of any Subsidiary Guarantor was
avoided or limited as a fraudulent conveyance or held unenforceable for any
other reason, holders of the Notes would cease to have any claim against such
Subsidiary Guarantor and would be creditors solely of the Company and any
Subsidiary Guarantor whose Subsidiary Guarantee was not avoided or held
unenforceable. In such event, the claims of the holders of the Notes against the
issuer of an invalid Subsidiary Guarantee would be subject to the prior payment
of all liabilities (including trade payables) of such Subsidiary Guarantor.
There can be no assurance that, after providing for all prior claims, there
would be sufficient assets to satisfy the claims of the holders of the Notes
relating to any avoided portions of any of the Subsidiary Guarantees.
The measure of insolvency for purposes of the foregoing considerations will
vary depending upon the law applied in any such proceeding. Generally, however,
a Subsidiary Guarantor may be considered insolvent if the sum of its debts,
including contingent liabilities, was greater than the fair marketable value of
all of its assets at a fair valuation or if the present fair marketable value of
its assets was less than the amount that would be required to pay its probable
liability on its existing debts, including contingent liabilities, as they
become absolute and mature. The terms of the Subsidiary Guarantees will provide
that, for purposes of such
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<PAGE> 22
limitations and the applicable fraudulent conveyance laws, any indebtedness of a
Subsidiary Guarantor incurred from time to time pursuant to the Revolving Credit
Facility and secured by a perfected Lien (as defined) on the assets of such
Subsidiary Guarantor (assuming, for purposes of such determination, that the
incurrence of any such indebtedness and the granting of any such security
interest did not violate any such fraudulent conveyance laws) shall be deemed,
to the extent of the value of the assets subject to such Lien, to have been
incurred prior to the incurrence by such Subsidiary Guarantor of liability under
its Subsidiary Guarantee.
Based upon financial and other information, the Company and the Subsidiary
Guarantors believe that the Subsidiary Guarantees were incurred for proper
purposes and in good faith and that the Company and each Subsidiary Guarantor
was solvent after issuing its Subsidiary Guarantee and continues to be solvent,
has sufficient capital for carrying on its business after such issuance and will
be able to pay its debts as they mature. There can be no assurance, however,
that a court passing on such standards would agree with the Company. See
"Description of the Notes -- Subsidiary Guarantees."
POTENTIAL INABILITY TO PURCHASE NOTES UPON A CHANGE OF CONTROL
Upon a Change of Control, the Company will be required to offer to
repurchase all outstanding Notes at 101% of the principal amount thereof plus
accrued and unpaid interest to the date of repurchase. However, there can be no
assurance that sufficient funds will be available at the time of any Change of
Control to make any required repurchases of Notes tendered, or that restrictions
in the Revolving Credit Facility will allow the Company to make such required
repurchases. Notwithstanding these provisions, the Company could enter into
certain transactions, including certain recapitalizations, that would not
constitute a Change of Control but that would increase the amount of debt
outstanding at such time. See "Description of the Notes -- Certain
Covenants -- Purchase of Notes upon a Change of Control."
ABSENCE OF MARKET FOR THE NOTES
Although the Exchange Notes may be resold or otherwise transferred by the
holders (who are not affiliates of the Company) without compliance with the
registration requirements under the Securities Act, they will be new securities
for which there is currently no established trading market. The Company does not
intend to apply for listing of the Exchange Notes on a national securities
exchange or for quotation of the Exchange Notes on an automated dealer quotation
system. Although one of the Initial Purchasers in the Private Offering has
informed the Company that they intend to make a market in the Exchange Notes,
they are not obligated to do so, and any such market-making, if initiated, may
be discontinued at any time without notice. The liquidity of any market for the
Exchange Notes will depend upon the number of holders of the Exchange Notes, the
interest of securities dealers in making a market in the Exchange Notes and
other factors. Accordingly, there can be no assurance as to the development or
liquidity of any market for the Exchange Notes. If an active trading market for
the Exchange Notes does not develop, the market price and liquidity of the
Exchange Notes may be adversely affected. If the Exchange Notes are traded, they
may trade at a discount from their face value, depending upon prevailing
interest rates, the market for similar securities, the performance of the
Company and certain other factors. The Exchange Notes will be eligible for
trading in the PORTAL Market.
Notwithstanding the registration of the Exchange Notes in the Exchange
Offer, holders who are "affiliates" (as defined under Rule 405 of the Securities
Act) of the Company may publicly offer for sale or resell the Exchange Notes
only in compliance with provisions of Rule 144 under the Securities Act.
CONSEQUENCES OF FAILURE TO EXCHANGE PRIVATE NOTES
The Private Notes have not been registered under the Securities Act or any
state securities law and, unless so registered, may not be offered or sold
except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and any applicable state
securities laws. Private Notes that are not tendered or are tendered but not
accepted will, following consummation of the Exchange Offer, continue to be
subject to the existing restrictions upon transfer thereof. In addition, upon
consummation
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<PAGE> 23
of the Exchange Offer, holders of Private Notes which remain outstanding will
not be entitled to any rights under the Registration Rights Agreement (subject
to certain exceptions). To the extent that Private Notes are tendered and
accepted in the Exchange Offer, the trading market for untendered and tendered
but unaccepted Private Notes could be adversely affected due to the limited
amount of the Private Notes that are expected to remain outstanding following
the Exchange Offer. See "The Exchange Offer -- Consequences of Failure to
Exchange."
EXCHANGE OFFER PROCEDURES
Exchange Notes will be issued in exchange for Private Notes only after
timely receipt by the Exchange Agent of such Private Notes (including tenders by
book-entry transfer), a properly completed and duly executed Letter of
Transmittal and all other required documentation, or after tender of the Private
Notes by book-entry transfer and compliance with DTC's ATOP procedures.
Therefore, holders of Private Notes desiring to tender such Private Notes in
exchange for Exchange Notes should allow sufficient time to ensure timely
compliance with the Exchange Offer procedures. Neither the Exchange Agent nor
the Company is under any duty to give notification of defects or irregularities
with respect to tenders of Private Notes for exchange.
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<PAGE> 24
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Private Notes were sold by the Company on July 20, 1998 to the Initial
Purchasers pursuant to the Purchase Agreement. The Initial Purchasers
subsequently resold all of the Private Notes to Qualified Institutional Buyers,
each of whom agreed to comply with certain transfer restrictions and other
conditions. As a condition to the purchase of the Private Notes by the Initial
Purchasers, the Company and the Subsidiary Guarantors entered into the
Registration Rights Agreement with the Initial Purchasers, which requires, among
other things, that promptly following the issuance and sale of the Private
Notes, the Company and the Subsidiary Guarantors file with the Commission the
Registration Statement with respect to the Exchange Notes, use their best
efforts to cause the Registration Statement to become effective under the
Securities Act and, upon the effectiveness of the Registration Statement, offer
to the holders of the Private Notes the opportunity to exchange their Private
Notes for a like principal amount of Exchange Notes, which will be issued
without a restrictive legend and may be reoffered and resold by the holder
without restrictions or limitations under the Securities Act subject to certain
exceptions described below. A copy of the Registration Rights Agreement has been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. The term "holder" with respect to the Exchange Offer means any person in
whose name Private Notes are registered on the Company's books or any other
person who has obtained a properly completed bond power from the registered
holder or any person whose Private Notes are held of record by the Depositary
who desires to deliver such Private Notes by book-entry transfer of the
Depositary.
Based on existing interpretations of the Securities Act by the staff of the
Commission set forth in several no-action letters issued to third parties, the
Company believes that Exchange Notes issued pursuant to the Exchange Offer in
exchange for Private Notes may be offered for resale, resold and otherwise
transferred by a holder thereof (other than (i) a broker-dealer who purchased
such Private Notes directly from the Company for resale pursuant to Rule 144A or
any other available exemption under the Securities Act or (ii) a person that is
an "affiliate" (within the meaning of Rule 405 of the Securities Act) of the
Company), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that the holder is acquiring the
Exchange Notes in its ordinary course of business and is not participating, does
not intend to participate, and has no arrangement or understanding with any
person to participate, in the distribution of the Exchange Notes. However, if
any holder acquires the Exchange Notes in the Exchange Offer for the purpose of
distributing or participating in the distribution of the Exchange Notes or is a
broker-dealer, such holder cannot rely on the position of the staff of the
Commission enumerated in certain no-action letters issued to third parties and
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction, unless an exemption
from registration is available. Each broker-dealer that receives Exchange Notes
for its own account in exchange for Private Notes, where such Private 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 such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
Exchange Notes received in exchange for Private Notes where such Private Notes
were acquired by such broker-dealer as a result of market-making or other
trading activities. Pursuant to the Registration Rights Agreement, the Company
has agreed to make this Prospectus, as it may be amended or supplemented from
time to time, available to broker-dealers for use in connection with any resale
for a period of 180 days after the Expiration Date. See "Plan of Distribution."
As a result of the filing and effectiveness of the Registration Statement
of which this Prospectus is a part, the Company will not be required to pay an
increased interest rate on the Private Notes. Following the consummation of the
Exchange Offer, holders of Private Notes not tendered will not have any further
registration rights, except in certain limited circumstances requiring the
filing of a Shelf Registration Statement (as defined herein), and the Private
Notes will continue to be subject to certain restrictions on
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<PAGE> 25
transfer. See "-- Consequences of Failure to Exchange." Accordingly, the
liquidity of the market for the Private Notes could be adversely affected.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept all Private Notes
properly tendered and not withdrawn prior to 5:00 p.m. New York City time, on
the Expiration Date. After authentication of the Exchange Notes by the Trustee
or an authenticating agent, the Company will issue and deliver $1,000 principal
amount of Exchange Notes in exchange for each $1,000 principal amount of
outstanding Private Notes accepted in the Exchange Offer. Holders may tender
some or all of their Private Notes pursuant to the Exchange Offer in
denominations of $1,000 and integral multiples thereof.
Each holder of Private Notes who wishes to exchange Private Notes for
Exchange Notes in the Exchange Offer will be required to represent that (i) any
Exchange Notes to be received by such holder are being acquired in the ordinary
course of business, (ii) such holder has no arrangements or understandings with
any person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Notes, (iii) such holder is not an affiliate of
the Company, as defined in Rule 405 of the Securities Act, (iv) if such holder
is not a broker-dealer, that it is not engaged in, and does not intend to engage
in, the distribution of the Exchange Notes, and (v) if such holder is a
broker-dealer, that it will receive the Exchange Notes for its own account in
exchange for the Private Notes that were acquired as a result of market-making
activities.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Private Notes, where such Private 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 such Exchange Notes. See "Plan of Distribution."
The form and terms of the Exchange Notes are identical in all material
respects to the form and terms of the Private Notes, except that (i) the
offering of the Exchange Notes has been registered under the Securities Act,
(ii) the Exchange Notes will not be subject to transfer restrictions and (iii)
certain provisions relating to registration rights and an increase in the stated
interest rate on the Private Notes provided for under certain circumstances will
be eliminated. The Exchange Notes will evidence the same debt as the Private
Notes. The Exchange Notes will be issued under and entitled to the benefits of
the Indenture.
As of the date of this Prospectus, $100,000,000 aggregate principal amount
of the Private Notes is outstanding. In connection with the issuance of the
Private Notes, the Company arranged for the Private Notes to be issued and
transferable in book-entry form through the facilities of the Depositary, acting
as depositary. The Exchange Notes will also be issuable and transferable in
book-entry form through the Depositary.
This Prospectus, together with the accompanying Letter of Transmittal, is
initially being sent to all registered holders of the Private Notes as of the
close of business on , 1998. The Company intends to conduct the
Exchange Offer in accordance with the applicable requirements of the Exchange
Act, and the rules and regulations of the Commission thereunder, including Rule
14e-1, to the extent applicable. The Exchange Offer is not conditioned upon any
minimum aggregate principal amount of Private Notes being tendered, and holders
of the Private Notes do not have any appraisal or dissenters' rights under the
General Corporation Law of the State of Delaware or under the Indenture in
connection with the Exchange Offer. The Company shall be deemed to have accepted
validly tendered Private Notes when, as and if the Company has given oral or
written notice thereof to the Exchange Agent. See "-- Exchange Agent." The
Exchange Agent will act as agent for the tendering holders for the purpose of
receiving Exchange Notes from the Company and delivering Exchange Notes to such
holders.
If any tendered Private Notes are not accepted for exchange because of an
invalid tender or the occurrence of certain other events set forth herein,
certificates for any such unaccepted Private Notes will be returned, at the
Company's cost, to the tendering holder thereof as promptly as practicable after
the Expiration Date.
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Holders who tender Private Notes in the Exchange Offer 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 Private
Notes pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than certain applicable taxes, in connection with the Exchange
Offer. See "-- Solicitation of Tenders; Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR THE COMPANY MAKES ANY
RECOMMENDATION TO HOLDERS OF PRIVATE NOTES AS TO WHETHER TO TENDER OR REFRAIN
FROM TENDERING ALL OR ANY PORTION OF THEIR PRIVATE NOTES PURSUANT TO THE
EXCHANGE OFFER. MOREOVER, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH
RECOMMENDATION. HOLDERS OF PRIVATE NOTES MUST MAKE THEIR OWN DECISION WHETHER TO
TENDER PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF
PRIVATE NOTES TO TENDER.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998 unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date to which the Exchange Offer is extended. The Company may extend the
Exchange Offer at any time and from time to time by giving oral or written
notice to the Exchange Agent and by timely public announcement.
The Company expressly reserves the right, in its sole discretion (i) to
delay acceptance of any Private Notes, to extend the Exchange Offer or to
terminate the Exchange Offer and to refuse to accept Private Notes not
previously accepted, if any of the conditions set forth herein under
"-- Conditions of the Exchange Offer" shall have occurred and shall not have
been waived by the Company (if permitted to be waived by the Company), by giving
oral or written notice of such delay, extension or termination to the Exchange
Agent and (ii) 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 by the Company to the
registered holders of the Private Notes. If the Exchange Offer is amended in a
manner determined by the Company to constitute a material change, the Company
will promptly disclose such amendment in a manner reasonably calculated to
inform the holders of such amendment and the Company will extend the Exchange
Offer to the extent required by law.
Without limiting the manner in which the Company may choose to make public
announcements of any delay in acceptance, extension, termination or amendment of
the Exchange Offer, the Company shall have no obligation to publish, advise, or
otherwise communicate any such public announcement, other than by making a
timely release thereof to the Dow Jones News Service.
INTEREST ON THE EXCHANGE NOTES
The Exchange Notes will bear interest at a rate of 10 3/4% per annum.
Interest on the Exchange Notes is payable semi-annually on January 15 and July
15 of each year, commencing January 15, 1999. Holders of Exchange Notes of
record on January 1, 1999 will receive on January 15, 1999 an interest payment
in an amount equal to (x) the accrued interest on such Exchange Notes from the
date of issuance thereof to January 15, 1999, plus (y) the accrued interest on
the previously held Private Notes from the date of issuance of such Private
Notes (July 20, 1998) to the date of exchange thereof. Interest will not be paid
on Private Notes that are accepted for exchange. The Exchange Notes mature on
July 15, 2008.
PROCEDURES FOR TENDERING
Each holder of Private Notes wishing to accept the Exchange Offer must
complete, sign and date the Letter of Transmittal, or a facsimile thereof, in
accordance with the instructions contained herein and therein, and mail or
otherwise deliver such Letter of Transmittal, or such facsimile, together with
the Private Notes to be exchanged and any other required documentation, to Chase
Bank of Texas, National Association, as Exchange Agent, at the address set forth
herein and therein or effect a tender of Private Notes pursuant to the
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procedures for book-entry transfer as provided for herein and therein. By
executing the Letter of Transmittal, each holder will represent to the Company,
that, among other things, 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 such person is the holder, that
neither the holder nor any such other person has any arrangement or
understanding with any person to participate in the distribution of such
Exchange Notes and that neither the holder nor any such other person is an
"affiliate," as defined in Rule 405 under the Securities Act, of the Company.
Any financial institution that is a participant in the Depositary's
Book-Entry Transfer Facility system may make book-entry delivery of the Private
Notes by causing the Depositary to transfer such Private Notes into the Exchange
Agent's account in accordance with the Depositary's procedure for such transfer.
Although delivery of Private Notes may be effected through book-entry transfer
into the Exchange Agent's account at the Depositary, the Letter of Transmittal
(or facsimile thereof), with any required signature guarantees and any other
required documents, must, in any case, be transmitted to and received by the
Exchange Agent at its address set forth herein under "-- Exchange Agent" prior
to 5:00 p.m., New York City time, on the Expiration Date. Alternatively, holders
may tender by book-entry by complying, prior to 5:00 p.m., New York City time,
on the Expiration Date, with DTC's ATOP procedures, including transmitting an
Agent's Message to the Exchange Agent in which the holder of the Private Notes
acknowledges and agrees to be bound by the terms of the Letter of Transmittal,
which will confirm on behalf of the participant in ATOP and the beneficial
owners of such Private Notes all provisions of the Letter of Transmittal
applicable to it and such beneficial owners as fully as if it had completed the
information required in the Letter of Transmittal and executed and transmitted
the Letter of Transmittal to the Exchange Agent. See "-- Book-entry Transfer."
DELIVERY OF DOCUMENTS TO THE DEPOSITARY IN ACCORDANCE WITH ITS PROCEDURES DOES
NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Only a holder may tender its Private 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 thereof, have the signatures thereof guaranteed if
required by the Letter of Transmittal, and mail or otherwise deliver such Letter
of Transmittal or such facsimile, together with the Private Notes (unless such
tender is being effected pursuant to the procedure for book-entry transfer) and
any other required documents, to the Exchange Agent, prior to 5:00 p.m., New
York City time, on the Expiration Date.
The tender by a holder will constitute an agreement between such holder,
the Company and the Exchange Agent in accordance with the terms and subject to
the conditions set forth herein and in the Letter of Transmittal. If less than
all of the Private Notes held by a holder are tendered, the tendering holder
should fill in the amount of Private Notes being tendered in the appropriate box
on the Letter of Transmittal. The entire amount of Private Notes delivered to
the Exchange Agent will be deemed to have been tendered unless otherwise
indicated.
THE LETTER OF TRANSMITTAL WILL INCLUDE REPRESENTATIONS TO THE COMPANY THAT,
AMONG OTHER THINGS, (1) 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 SUCH PERSON IS THE HOLDER), (2)
NEITHER THE HOLDER NOR ANY SUCH OTHER PERSON IS ENGAGED IN, INTENDS TO ENGAGE IN
OR HAS ANY ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN THE
DISTRIBUTION OF SUCH EXCHANGE NOTES, (3) NEITHER THE HOLDER NOR ANY SUCH OTHER
PERSON IS AN "AFFILIATE," AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT, OF
THE COMPANY AND (4) IF THE TENDERING HOLDER IS A BROKER OR DEALER (AS DEFINED IN
THE EXCHANGE ACT) (A) IT ACQUIRED THE PRIVATE NOTES FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND (B) IT HAS
NOT ENTERED INTO ANY ARRANGEMENT OR UNDERSTANDING WITH THE COMPANY OR ANY
"AFFILIATE" THEREOF (WITHIN THE MEANING OF RULE 405 UNDER THE SECURITIES ACT) TO
DISTRIBUTE THE EXCHANGE NOTES TO BE RECEIVED IN THE EXCHANGE OFFER. IN THE CASE
OF A BROKER-DEALER THAT RECEIVES EXCHANGE NOTES FOR ITS OWN ACCOUNT
21
<PAGE> 28
IN EXCHANGE FOR PRIVATE NOTES WHICH WERE ACQUIRED BY IT AS A RESULT OF
MARKET-MAKING OR OTHER TRADING ACTIVITIES, THE LETTER OF TRANSMITTAL WILL ALSO
INCLUDE AN ACKNOWLEDGMENT THAT THE BROKER-DEALER WILL DELIVER A COPY OF THIS
PROSPECTUS IN CONNECTION WITH THE RESALE BY IT OF EXCHANGE NOTES RECEIVED
PURSUANT TO THE EXCHANGE OFFER. HOWEVER, BY SO ACKNOWLEDGING AND BY DELIVERING A
PROSPECTUS, SUCH HOLDER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER"
WITHIN THE MEANING OF THE SECURITIES ACT. SEE "PLAN OF DISTRIBUTION."
THE METHOD OF DELIVERY OF PRIVATE NOTES AND THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK
OF THE HOLDERS. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE
AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE DELIVERY TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
NO LETTER OF TRANSMITTAL OR PRIVATE NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS
MAY ALSO REQUEST THAT THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES OR NOMINEES EFFECT SUCH TENDER FOR HOLDERS, IN EACH CASE AS SET FORTH
HEREIN AND IN THE LETTER OF TRANSMITTAL.
Any beneficial owner whose Private Notes are registered in the name of his
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial owner wishes to
tender on his own behalf, such beneficial owner must, prior to completing and
executing the Letter of Transmittal and delivering his Private Notes, either
make appropriate arrangements to register ownership of the Private Notes in such
owner's name or obtain a properly completed bond power from the registered
holder. The transfer of record ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be 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 (each an "Eligible Institution"), unless the
Private Notes tendered pursuant thereto are tendered (i) by a registered holder
who has not completed the box entitled "Special Registration Instructions" or
"Special Delivery Instructions" of the Letter of Transmittal or (ii) for the
account of an Eligible Institution. If the Letter of Transmittal is signed by a
person other than the registered holder listed therein, such Private Notes must
be endorsed or accompanied by appropriate bond powers which authorize such
person to tender the Private Notes on behalf of the registered holder, in either
case signed as the name of the registered holder or holders appears on the
Private Notes. If the Letter of Transmittal or any Private Notes or bond powers
are signed or endorsed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such person 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 such Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of the tendered Private 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
Private Notes not properly tendered or any Private Notes the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the absolute right to waive any
irregularities or conditions of tender as to particular Private Notes. The
Company's 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 Private Notes must be cured within such time as the
Company shall determine. Although the Company intends to notify holders of
defects or irregularities with respect to tenders of Private Notes, neither the
Company, the Exchange Agent nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of
22
<PAGE> 29
Private Notes, nor shall any of them incur any liability for failure to give
such notification. Tenders of Private Notes will not be deemed to have been made
until such irregularities have been cured or waived. Any Private Notes received
by the Exchange Agent that the Company determines are not properly tendered or
the tender of which is otherwise rejected by the Company and as to which the
defects or irregularities have not been cured or waived by the Company will be
returned by the Exchange Agent to the tendering holder unless otherwise provided
in the Letter of Transmittal, as soon as practicable following the Expiration
Date.
In addition, the Company reserves the right in its sole discretion (a) to
purchase or make offers for any Private Notes that remain outstanding subsequent
to the Expiration Date, and (b) to the extent permitted by applicable law, to
purchase Private Notes in the open market, in privately negotiated transactions
or otherwise. The terms of any such purchases or offers may differ from the
terms of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Company understands that the Exchange Agent will make a request
promptly after the date of this Prospectus to establish accounts with respect to
the Private Notes at the DTC (the "Book-Entry Transfer Facility") for the
purpose of facilitating the Exchange Offer, and subject to the establishment
thereof, any financial institution that is a participant in the Book-Entry
Transfer Facility's system may make book-entry delivery of Private Notes by
causing such Book Entry Transfer Facility to transfer such Private Notes into
the Exchange Agent's account with respect to the Private Notes in accordance
with the Book-Entry Transfer Facility's procedures for such transfer. ALTHOUGH
DELIVERY OF PRIVATE NOTES MAY BE EFFECTED THROUGH BOOK-ENTRY TRANSFER INTO THE
EXCHANGE AGENT'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY, AN APPROPRIATE
LETTER OF TRANSMITTAL PROPERLY COMPLETED AND DULY EXECUTED WITH ANY REQUIRED
SIGNATURE GUARANTEE AND ALL OTHER REQUIRED DOCUMENTS MUST IN EACH CASE BE
TRANSMITTED TO AND RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT AT ITS ADDRESS
SET FORTH BELOW ON OR PRIOR TO THE EXPIRATION DATE, OR, IF THE GUARANTEED
DELIVERY PROCEDURES DESCRIBED BELOW ARE COMPLIED WITH, WITH THE TIME PERIOD
PROVIDED UNDER SUCH PROCEDURES. ALTERNATIVELY, HOLDERS MAY TENDER BY BOOK-ENTRY
BY COMPLYING, PRIOR TO THE EXPIRATION DATE, WITH DTC'S ATOP PROCEDURES,
INCLUDING TRANSMITTING AN AGENT'S MESSAGE TO THE EXCHANGE AGENT. DELIVERY OF
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE EXCHANGE AGENT.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Private Notes and (i) whose Private Notes
are not immediately available, or (ii) who cannot deliver their Private Notes,
the Letter of Transmittal or any other required documents to the Exchange Agent
prior to the Expiration Date, or (iii) who cannot complete the procedure for
book-entry transfer on a timely basis, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmittal, mail or hand delivery)
setting forth the name and address of the holder, the certificate number or
numbers of such holder's Private Notes and the principal amount of such
Private Notes tendered, stating that the tender is being made thereby, and
guaranteeing that, within three New York Stock Exchange ("NYSE") trading
days after the Expiration Date, the Letter of Transmittal (or facsimile
thereof), together with the certificate(s) representing the Private Notes
to be tendered in proper form for transfer (or confirmation of a book-entry
transfer into the Exchange Agent's account at the Depositary of Private
Notes delivered electronically) and any other documents required by the
Letter of Transmittal, will be deposited by the Eligible Institution with
the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), together with the certificate(s) representing all
tendered Private Notes in proper form for transfer (or confirma-
23
<PAGE> 30
tion of a book-entry transfer into the Exchange Agent's account at the
Depositary of Private Notes delivered electronically) and all other
documents required by the Letter of Transmittal are received by the
Exchange Agent within three NYSE trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Private Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Private Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal 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. Any
such notice of withdrawal must (i) specify the name of the person having
deposited the Private Notes to be withdrawn (the "Depositor"), (ii) identify the
Private Notes to be withdrawn (including the certificate number or numbers and
principal amount of such Private Notes or, in the case of Private Notes
transferred by book-entry transfer, the name and number of the account at the
Depositary to be credited, the principal amount of Private Notes to be
credited), (iii) be signed by the Depositor in the same manner as the original
signature on the Letter of Transmittal by which such Private Notes were tendered
(including any required signature guarantee) or be accompanied by documents of
transfer sufficient to permit the Trustee with respect to the Private Notes to
register the transfer of such Private Notes into the name of the Depositor
withdrawing the tender and (iv) specify the name in which any such Private Notes
are to be registered, if different from that of the Depositor. All questions as
to the validity, form and eligibility (including time of receipt) of such
withdrawal notices will be determined by the Company, whose determination shall
be final and binding on all parties. Any Private Notes so withdrawn will be
deemed not to have been validly tendered for purposes of the Exchange Offer, and
no Exchange Notes will be issued with respect thereto unless the Private Notes
so withdrawn are validly retendered. Any Private Notes that have been tendered
but are not accepted for exchange will be returned to the holder thereof without
cost to such holder as soon as practicable after withdrawal, rejection of tender
or termination of the Exchange Offer. Properly withdrawn Private Notes may be
retendered by following one of the procedures described above under
"-- Procedures for Tendering" at any time prior to the Expiration Date.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or exchange the Exchange Notes for, any
Private Notes, and may terminate the Exchange Offer as provided herein before
the acceptance of such Private Notes, if the Exchange Offer violates applicable
law, rules or regulations or an applicable interpretation of the staff of the
Commission.
If the Company reasonably determines that such condition (that the Exchange
Offer not violate applicable law, rules, regulations or interpretation of the
Staff) is not satisfied, the Company may (i) refuse to accept any Private Notes
and return all tendered Private Notes to the tendering holders or (ii) extend
the Exchange Offer and retain all Private Notes tendered prior to the expiration
of the Exchange Offer, subject, however, to the rights of holders to withdraw
such Private Notes (see "-- Withdrawal of Tenders").
SHELF REGISTRATION
In the event that applicable interpretations of the staff of the Commission
do not permit the Company to effect the Exchange Offer, or if for any reason the
Exchange Offer is not consummated within 210 calendar days of the Closing Date,
the Company and the Subsidiary Guarantors will, at their expense, (i) as
promptly as practicable, and in any event on or prior to 60 calendar days after
such filing obligation arises, file with the Commission a shelf registration
statement (the "Shelf Registration Statement") covering resales of the Private
Notes, (ii) use their best efforts to cause the Shelf Registration Statement to
be declared effective under the Securities Act on or prior to 45 calendar days
after such filing occurs and (iii) keep effective the
24
<PAGE> 31
Shelf Registration Statement until two years after the Closing Date (or such
shorter period that will terminate when all the Private Notes covered thereby
have been sold pursuant thereto or in certain other circumstances). The Company
will, in the event of the filing of a Shelf Registration Statement, provide to
each holder of the Private Notes covered by the Shelf Registration Statement
copies of the prospectus that is a part of the Shelf Registration Statement,
notify each such holder when the Shelf Registration Statement has become
effective and take certain other actions as are required to permit unrestricted
resales of the Private Notes. A holder of Private Notes that sells such Private
Notes pursuant to 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 the purchaser, will be subject to certain of 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 certain indemnification obligations). In addition,
each holder of the Private Notes will be required to deliver certain information
to be used in connection with the Shelf Registration Statement in order to have
its Private Notes included in the Shelf Registration Statement.
ADDITIONAL INTEREST
If (i) the Registration Statement is not filed with the Commission on or
prior to the 60th calendar day following the Closing Date; (ii) the Registration
Statement is not declared effective on or prior to the 180th calendar day
following the Closing Date; (iii) the Exchange Offer is not consummated or a
Shelf Registration Statement is not declared effective on or prior to the 210th
calendar day after the Closing Date; (iv) either (A) the Registration Statement
ceases to be effective at any time prior to the time that the Exchange Offer is
consummated or (B) if applicable, subject to certain exceptions, the Shelf
Registration Statement has been declared effective and such Shelf Registration
Statement ceases to be effective at any time prior to the second anniversary of
the Closing Date, (each such event referred to in clause (i) through (iv) above,
a "Registration Default"), then the per annum interest rate on the Notes will
increase by 25 basis points following the 60-day period referred to in clause
(i) above, following the 180-day period referred to in clause (ii) above,
following the 210-day period referred to in clause (iii) above or in the case of
clause (iv) above, immediately following such Registration Default; and the per
annum interest rate will increase by an additional 25 basis points at the
beginning of such subsequent 30-day period in the case of clause (i), (ii) or
(iii) above, or 90-day period in the case of clause (iv) above; provided,
however, that in no event will the per annum interest rate borne by the Notes be
increased by more than 150 basis points. Upon the filing of the Registration
Statement, the consummation of the Exchange Offer or the effectiveness of the
Shelf Registration Statement, as the case may be, the interest borne by the
Notes will be reduced to the original interest rate; provided, however, that, if
after any such reduction in interest rate, a different Registration Default
occurs, the interest rate may again be increased pursuant to the foregoing
provisions.
If the Company effects the Exchange Offer, it will be entitled to close the
Exchange Offer 30 days after the commencement thereof provided that it has
accepted all Private Notes theretofore validly tendered in accordance with the
terms of the Exchange Offer.
TERMINATION OF CERTAIN RIGHTS
All rights under the Registration Rights Agreement (including registration
rights) of holders of the Private Notes eligible to participate in the Exchange
Offer will terminate upon consummation of the Exchange Offer except with respect
to the Company's continuing obligations (i) to indemnify such holders (including
any broker-dealers) and certain parties related to such holders against certain
liabilities (including liabilities under the Securities Act), (ii) to provide,
upon the request of any holder of a transfer-restricted Private Note, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Private Notes pursuant to Rule 144A, (iii) use its best
efforts to keep the Registration Statement effective and to amend and supplement
the prospectus in order to permit the prospectus to be lawfully delivered by all
persons subject to the prospectus delivery requirements of the Securities Act
for such period of time as such persons must comply with such requirement in
order to resell the Exchange Notes and (iv) to provide copies of the latest
version of the Prospectus to broker-dealers upon their request for a period of
not less than 180 days after the Expiration Date.
25
<PAGE> 32
EXCHANGE AGENT
Chase Bank of Texas, National Association, the Trustee under the Indenture,
has been appointed as Exchange Agent for the Exchange Offer. In such capacity,
the Exchange Agent has no fiduciary duties and will be acting solely on the
basis of directions of the Company. Requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent addressed as follows:
<TABLE>
<S> <C>
By Registered or Certified Mail or by Facsimile:
Overnight Delivery (214) 672-5746
Chase Bank of Texas, National Association Confirm by Telephone
1201 Main Street (214) 672-5678
18th Floor
Dallas, TX 75202
ATTN: Frank Ivins
</TABLE>
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
SOLICITATION OF TENDERS; FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Company. The principal solicitation pursuant to the Exchange Offer
is being made by mail. Additional solicitations may be made by officers and
regular employees of the Company and its affiliates in person, by telegraph,
telephone or telecopier.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or other
persons soliciting acceptances of the Exchange Offer. The Company will, however,
pay the Exchange Agent reasonable and customary fees for its services and will
reimburse the Exchange Agent for its reasonable out-of-pocket costs and expenses
in connection therewith and will indemnify the Exchange Agent for all losses and
claims incurred by it as a result of the Exchange Offer. The Company may also
pay brokerage houses and other custodians, nominees and fiduciaries the
reasonable out-of-pocket expenses incurred by them in forwarding copies of this
Prospectus, Letters of Transmittal and related documents to the beneficial
owners of the Private Notes and in handling or forwarding tenders for exchange.
The expenses to be incurred in connection with the Exchange Offer,
including fees and expenses of the Exchange Agent and Trustee and accounting and
legal fees and printing costs, will be paid by the Company.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Private Notes pursuant to the Exchange Offer. If, however, certificates
representing Exchange Notes or Private 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
Private Notes tendered, or if tendered Private Notes are registered in the name
of any person other than the person signing the Letter of Transmittal, or if a
transfer tax is imposed for any reason other than the exchange of Private Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether 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 the Letter of Transmittal, the amount
of such transfer taxes will be billed by the Company directly to such tendering
holder.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the
Private Notes, as reflected in the Company's accounting records on the date of
the exchange. Accordingly, no gain or loss for accounting
26
<PAGE> 33
purposes will be recognized by the Company as a result of the consummation of
the Exchange Offer. The expenses of the Exchange Offer will be amortized by the
Company over the term of the Exchange Notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
Participation in the Exchange Offer is voluntary. Holders of the Private
Notes are urged to consult their financial and tax advisors in making their own
decisions as to what action to take.
Holders of the Private Notes who do not tender their Private Notes in the
Exchange Offer will continue to hold such Private Notes and will be entitled to
all the rights, and subject to the limitations applicable thereto, under the
Indenture and the Registration Rights Agreement, except for any such rights
under the Registration Rights Agreement that by their terms terminate or cease
to have further effect as a result of the making of this Exchange Offer. All
untendered Private Notes will continue to be subject to the restrictions on
transfer set forth in the Indenture. Accordingly, the Private Notes may be
offered, resold, pledged or otherwise transferred only (i) to a person whom the
seller reasonably believes is a QIB in a transaction meeting the requirements of
Rule 144A; (ii) in a transaction meeting the requirements of Rule 144 under the
Securities Act; (iii) outside the United States to a foreign person in a
transaction meeting the requirements of Rule 904 promulgated under the
Securities Act; (vi) in accordance with any other available exemption from the
registration requirements under the Securities Act; (v) to the Company; or (vi)
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. To the extent that Private Notes are
tendered and accepted in the Exchange Offer, the liquidity of the trading market
for untendered Private Notes could be adversely affected.
The Company may in the future seek to acquire untendered Private Notes in
the open market or through privately negotiated transactions, through subsequent
exchange offers or otherwise. The Company intends to make any such acquisitions
of Private Notes in accordance with the applicable requirements of the Exchange
Act and the rules and regulations of the Commission thereunder, including Rule
14e-1, to the extent applicable. The Company has no present plan to acquire any
Private Notes that are not tendered in the Exchange Offer or to file a
registration statement to permit resales of any Private Notes that are not
tendered in the Exchange Offer.
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the
Exchange Notes offered hereby. In consideration for issuing the Exchange Notes
as contemplated in this Prospectus, the Company will receive in exchange Private
Notes in like principal amount. The form and terms of the Exchange Notes are
identical in all material respects to the form and terms of the Private Notes,
except that (i) the offering of the Exchange Notes has been registered under the
Securities Act, (ii) the Exchange Notes will not be subject to transfer
restrictions and (iii) the holders of the Exchange Notes will not be entitled to
registration or other rights under the Registration Rights Agreement, including
the payment of additional interest upon failure by the Company to consummate the
Exchange Offer or the occurrence of certain other events. The Private Notes
surrendered in exchange for Exchange Notes will be retired and canceled and
cannot be reissued. Accordingly, issuance of the Exchange Notes will not result
in a change in the indebtedness of the Company.
27
<PAGE> 34
CAPITALIZATION
The following table sets forth the capitalization of the Company at June
30, 1998 and as adjusted to reflect the issuance of the Notes offered hereby and
the use of the net proceeds from the Private Offering to repay certain
indebtedness.
<TABLE>
<CAPTION>
AS OF JUNE 30, 1998
-------------------------------------
ACTUAL PRO FORMA(1) AS ADJUSTED
-------- ------------ -----------
(IN THOUSANDS, UNAUDITED)
<S> <C> <C> <C>
Short-term debt:
Current portion of long-term debt and capital
lease obligations........................... 6,861 6,861 6,861
-------- -------- --------
Total short-term debt.................. 6,861 6,861 6,861
-------- -------- --------
Long-term debt and capital lease obligations, net
of current portion:
Short-Term Loan................................ $ 2,500 $ 7,500 $ --
Revolving Credit Facility...................... 20,000 20,000 --
Equipment loan................................. 4,770 4,770 4,700
Capital lease of vessel........................ 25,421 25,421 25,421
10 3/4% Senior Notes due 2008.................. -- -- 100,000
-------- -------- --------
Total long-term debt and capital lease
obligations, net of current
portion.............................. $ 52,691 $ 57,691 $130,191
-------- -------- --------
Total stockholders' equity............. 87,820 87,820 87,820
-------- -------- --------
Total capitalization................... $140,511 $145,511 $218,011
======== ======== ========
</TABLE>
- ---------------
(1) Includes borrowings through the date of consummation of the Private
Offering.
28
<PAGE> 35
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Company's
audited and unaudited historical consolidated financial statements included
herein.
GENERAL
The Company's revenues are generated from the sale of onshore and offshore
seismic data acquisition services and, commencing in March 1998, the sale of
seismic shot-hole drilling and front end services. The Company focuses its
onshore operations in logistically difficult wetland environments along the U.S.
Gulf Coast, and focuses its offshore operations in congested areas in the North
Sea and the U.S. Gulf of Mexico.
With respect to its onshore operations, the Company's prices, and therefore
its revenues, vary depending on demand for the Company's services, the number of
acquisition crews of the Company, the acquisition capacity of each crew, the
utilization rates of the Company's crews and the complexity and difficulty of
the projects undertaken by each crew. The Company increased the channel
capabilities of its two existing Opseis crews during 1996 and added a third
Opseis crew in January 1997. At the end of the third quarter of 1997, the
Company upgraded the channel capacity of each of its three crews to 2,350
channels from 1,850 channels. Thus, the Company has increased the number of
crews operated and the acquisition capacities of its crews for the periods
presented in the financial statements, which has contributed substantially to
the increased revenues from period to period. In addition, the Company recently
added a fourth onshore crew and upgraded all of its crews to 2,450 channels,
which should further increase revenues in future periods.
Revenues for less complex, easier to perform seismic acquisition projects
tend to be lower than revenues for more complex, difficult to perform projects,
even when the projects take the same amount of time for a crew to perform. The
mix of more or less complex projects results in variations from period to period
for revenues attributable to each crew. The projects performed by the Company's
three onshore crews operating in 1997 were weighted more heavily towards complex
projects than in 1996, further contributing to the increases in revenues in 1997
as compared to 1996.
Similar to the Company's onshore operations, prices and revenues with
respect to the offshore operations performed by ERI vary depending on demand for
the number of vessels operated by the Company, the acquisition capacity of each
vessel, utilization rates and the complexity and difficulty of the projects
undertaken by each vessel. The Company operated four vessels in 1997 and during
the third and fourth quarters of 1996, with only three vessels being operated
during the first and second quarters of 1996. The Company also increased the
streamer capacity of its vessels in mid-1996, so that the vessels operated in
1997 had greater data acquisition capabilities than in the first half of 1996.
Thus, the Company has increased the number of vessels operated and the
acquisition capacities of its vessels for the periods presented in the financial
statements, which has contributed substantially to the increased revenues from
period to period.
The Company anticipates that an increasing percentage of its future
offshore data acquisition projects will be multi-client surveys. Conducting
multi-client surveys normally has little effect on operating margins in the
short term because the Company will capitalize most of the costs relating to the
acquisition of the multi-client data that are not offset by pre-funding.
However, since revenues from multi-client projects only include pre-funding
amounts during the acquisition of the data, and these pre-funding amounts are
normally less than revenues for proprietary data acquisition projects, total
revenues and net income tend to be less during multi-client acquisition projects
than during proprietary acquisition projects. If the Company is able to make
sales of the multi-client data after full amortization of the acquisition cost
of the data (up to four years), the additional sales will result in revenues
with little or no cost, increasing net income. Conversely, if the sales of the
multi-client data are less than originally projected by management, the asset
value of the data will be adjusted to equal the estimated net realizable value
of the data (total estimated future sales less selling expenses), resulting in
decreased net income. See Note B to the audited historical consolidated
financial statements included herein for a description of the Company's
multi-client data library accounting policies.
29
<PAGE> 36
Because the Company derives part of its offshore revenues from sales
internationally, the Company is subject to risks relating to fluctuations in
currency exchange rates. The Company's costs and revenues from offshore
operations have historically been evenly divided between the U.S. dollar and the
British pound. The Company's financial statements are prepared using the U.S.
dollar as the functional currency, and, therefore, fluctuations in the exchange
rate between the U.S. dollar and the British pound affect the Company's costs
and revenues. Historically, fluctuations in exchange rates have not had a
material impact on the Company's results of operations, and the Company does not
currently engage in any currency hedging activities. As the Company expands its
operations into new geographic markets, such as Latin America, Africa and
Southeast Asia, which may involve more extensive currency risks, the Company
intends to protect itself against foreign currency fluctuations. The Company
generally intends to match foreign currency revenues and expenses in order to
balance its net position of receivables and payables denominated in foreign
currencies and by endeavoring to require its customers to pay for services in
U.S. dollars and, to a lesser extent, by purchasing foreign exchange contracts
and other foreign exchange instruments and implementing other procedures to
counteract currency fluctuations.
The Company generally provides services to a relatively small group of key
customers that account for a significant percentage of the accounts receivable
of the Company at any given time. The Company's key customers vary over time,
but have historically included Seitel and its subsidiaries. The Company extends
credit to various companies in the oil and gas industry, including its key
customers, for the acquisition of seismic data, which results in a concentration
of credit risk. This concentration of credit risk may be affected by changes in
the economic or other conditions of the Company's key clients and may
accordingly impact the Company's overall credit risk. As of June 30, 1998, the
Company had one receivable from a customer of approximately $2.4 million that
was over one year old. In light of the age of this receivable, the Company has
increased its reserve for doubtful accounts to $450,000 as of June 30, 1998.
Historical credit losses incurred on receivables by the Company have been
immaterial.
PRO FORMA RESULTS OF OPERATIONS
The following discussion of the results of operations is divided into a
discussion of the Company's onshore operations, which were conducted by the
Company, and the Company's offshore operations, which were conducted by ERI
prior to the consummation of the IPO and the ERI Acquisition on August 11, 1997.
These discussions are presented for the periods ended on and prior to December
31, 1997 based on the unaudited pro forma revenues and expenses of the separate
companies including periods prior to the ERI Acquisition. The revenues of the
Company include intercompany profits from work performed for Seitel and its
subsidiaries prior to the IPO.
ONSHORE OPERATIONS
Historical Six Months Ended June 30, 1998 Compared to Pro Forma Six Months
Ended June 30, 1997
Revenue increased 44% from $27.9 million in the first six months of 1997 to
$40.3 million in the first six months of 1998, primarily due to the Company's
third onshore crew, acquired during the first quarter of 1997, operating for the
entire period in 1998, the Company's fourth onshore crew, acquired at the end of
the first quarter of 1998, operating for the entire second quarter of 1998, as
well as higher revenues derived from the increased channel capacity of the
Company's crews from 1,850 channels per crew in the 1997 period to 2,450
channels per crew in the 1998 period and revenue from the front end services
business acquired late in the first quarter of 1998.
Operating costs (excluding depreciation) increased 39% from $20.8 million
in the first six months of 1997 to $28.9 million in the first six months of
1998, primarily due to the operations of the third onshore crew for the entire
1998 period and the operations of the fourth onshore crew and the front end
services business, both of which were acquired at the end of the first quarter
of 1998. Operating margin percentage improved to 28.3% for the 1998 period
compared to an operating margin of 25.4% for the 1997 period.
Depreciation and amortization increased 57% from $2.8 million in the first
six months of 1997 to $4.4 million in the first six months of 1998, resulting
from operating three crews for the entire period in 1998,
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depreciation and amortization from the Company's fourth onshore crew and the
front end services business, both of which were acquired at the end of the first
quarter of 1998, and the increased depreciation associated with the upgrade to
2,450 channels in the 1998 period versus three crews at 1,850 channels in the
1997 period. Selling, general and administrative expenses increased 71% from
$2.1 million in the first six months of 1997 to $3.6 million in the first six
months of 1998, primarily due to the addition of administrative staff to support
the expanded operations and additional corporate staff and corporate office
expenses.
Pro Forma Year Ended December 31, 1997 Compared to 1996
Revenue increased 28% from $47.3 million in 1996 to $60.7 million in 1997,
primarily due to the addition of a third Opseis crew in January 1997.
Additionally, the surveys performed by the Company's crews in the 1997 period
were in more difficult logistical and environmental areas, providing higher
contract prices per crew, than the surveys performed in the 1996 period.
Operating costs (excluding depreciation) increased 25% from $34.9 million
in 1996 to $43.6 million in 1997, primarily due to the addition of the third
crew in the 1997 period. Operating margin (revenues less operating costs as a
percentage of revenues) increased from 26.2% in 1996 to 28.2% in 1997 as a
result of these changes in revenues and operating costs.
Depreciation and amortization increased 76% from $3.4 million in 1996 to
$6.0 million in 1997, resulting from operating three crews in the 1997 period
versus two in the 1996 period and from depreciation of marine seismic equipment
purchased by Eagle in July 1996 and leased to a subsidiary of ERI.
Selling, general and administrative expenses increased 58% from $3.8
million in 1996 to $6.0 million in 1997, primarily due to the addition of
administrative staff to support expanded operations and additional corporate
staff and related expenses incurred subsequent to the IPO.
Net interest expense decreased from $500,000 in the 1996 period to $0 in
the 1997 period due to the retirement of all debt and capital leases and
interest income with proceeds from the IPO.
OFFSHORE OPERATIONS
Historical Six Months Ended June 30, 1998 Compared to Pro Forma Six Months
Ended June 30, 1997
Revenue decreased 19% from $22.2 million in the 1997 period to $18.0
million in the 1998 period, primarily due to the decrease in vessel availability
during the first quarter of 1998. The Company's vessel the Labrador Horizon was
in drydock for the entire first quarter of 1998 completing a $22 million
upgrade, the vessel Discoverer underwent a bi-annual maintenance inspection, and
the vessel Abshire Tide was decommissioned and replaced by the Celtic Horizon,
which required shipyard work prior to commencing service. Additionally, the
Discoverer, the Abshire Tide, and later the Celtic Horizon, were working during
the 1998 period acquiring multi-client data, which instead of generating current
revenue, will generate revenue in the future as data is licensed to customers.
During the 1997 period, the Discoverer and the Abshire Tide acquired data on a
contract basis resulting in higher revenues during the period.
Operating expenses (excluding depreciation) decreased 27% from $15.3
million in the 1997 period to $11.1 million in the 1998 period due to the
decrease in vessel utilization during the first quarter of 1998. Operating
margins improved to 38.3% for the 1998 period as compared to 31.1% for the 1997
period.
Depreciation and amortization decreased 6% from $3.5 million in the 1997
period to $3.3 million in the 1998 period, resulting from the decrease in vessel
utilization during the first quarter of 1998 partially offset by additional
depreciation during the second quarter of 1998 from the upgrade to six streamers
on the Labrador Horizon and additional equipment purchased for the Celtic
Horizon.
Selling, general and administrative expenses increased from $1.3 million in
the 1997 period to $1.8 million in the 1998 period due to increases in personnel
required for the expansion of the Company's vessel fleet. Net interest expense
decreased from $297,000 in the 1997 period to $86,000 in the 1998 period due to
the retirement of certain debt and capital leases from the proceeds of the IPO
in 1997.
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HISTORICAL RESULTS OF OPERATIONS
The following is a discussion of the historical results of operations of
the Company, including the results of ERI following the ERI Acquisition. The
revenues of the Company include intercompany profits from work performed for
Seitel prior to the IPO.
Historical Six Months Ended June 30, 1998 Compared to Historical Six Months
Ended June 30, 1997
Revenues increased 102% from $28.8 million in the first six months of 1997
to $58.2 million in the first six months of 1998 due to the addition of a third
onshore seismic crew in January 1997, the acquisition of ERI in August 1997, the
addition of a fourth onshore seismic crew at the end of the first quarter of
1998 and the acquisition of the front end services business at the end of the
first quarter of 1998.
Operating expenses increased 92% from $20.8 million in the 1997 period to
$40.0 million in the 1998 period also due to the addition of the third onshore
seismic crew in January 1997, the ERI Acquisition in August 1997, the addition
of a fourth onshore seismic crew at the end of the first quarter of 1998 and the
acquisition of the front end services business at the end of the first quarter
of 1998. Operating margins increased from 27.8% in the 1997 period to 31.3% in
the 1998 period.
Depreciation and amortization increased 175% from $2.8 million in the 1997
period to $7.7 million in the 1998 period due primarily to the addition of the
third onshore seismic crew in January 1997, depreciation and goodwill
amortization associated with the ERI Acquisition, depreciation associated with
the fourth onshore seismic crew, and depreciation and goodwill amortization
associated with the acquisition of the front end services business, both of
which occurred at the end of the first quarter of 1998.
Selling, general and administrative expenses increased 238% from $1.6
million in the 1997 period to $5.4 million in the 1998 period due to the
addition of staff to support the Company's expanded operations, expenses for
corporate staff and related expenses added subsequent to the IPO, and general
and administrative expenses of ERI incurred subsequent to the ERI Acquisition.
Net interest and other expense increased from $34,000 in the 1997 period to
$351,000 in the 1998 period due to interest expense from the Revolving Credit
Facility on borrowings used to fund the expansion of the Company's offshore
seismic vessel fleet through the purchase and upgrade of the vessels Austral
Horizon and Atlantic Horizon.
Historical Year Ended December 31, 1997 Compared to December 31, 1996
Revenues increased 64% from $48.1 million in 1996 to $79.1 million in 1997
due to the addition of a third onshore seismic crew in January 1997, and the ERI
Acquisition in August 1997.
Operating expenses increased 62% from $34.9 million in 1996 to $56.5
million in 1997 also due to the addition of the third onshore seismic crew in
January 1997 and the ERI Acquisition in August 1997. Operating margins improved
from 27.4% in 1996 to 28.6% in 1997.
Depreciation and amortization increased 153% from $3.4 million in 1996 to
$8.6 million in 1997 due primarily to the addition of the third onshore seismic
crew in January 1997, and depreciation and goodwill amortization associated with
the ERI Acquisition.
Selling, general and administrative expenses increased 137% from $2.7
million in 1996 to $6.4 million in 1997 due to the addition of staff to support
the Company's expanded operations, expenses related to corporate staff and
related expenses added subsequent to the IPO, and general and administrative
expenses of ERI incurred subsequent to the ERI Acquisition.
Interest and other expense decreased from $531,000 in 1996 to $205,000 in
1997 due to interest savings related to the retirement of the Company's debt and
capital leases and interest income earned on the net proceeds from the IPO.
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Historical Year Ended December 31, 1996 Compared to December 31, 1995
Revenues increased 64% from $29.3 million for 1995 to $48.1 million for
1996. This increase in revenue was primarily due to increased production from
the two crews operating in 1996 and higher prices due to these crews performing
a greater proportion of higher definition seismic data acquisition services than
in 1995 and performing seismic data acquisition services in logistically and
environmentally more difficult areas than in 1995. The Company increased the
channel capacity of both crews during 1996 by approximately 20% over their 1995
channel capacity. This enabled each crew to acquire more seismic data, resulting
in higher revenues.
Operating costs (excluding depreciation and amortization) increased 66%
from $21.0 million for 1995 to $34.9 million for 1996, reflecting the higher
costs associated with performing services in logistically and environmentally
difficult areas. These higher costs were primarily attributable to additional
subcontract service and labor costs. Operating margin percentages changed only
slightly from 28.3% for 1995 to 27.4% for 1996.
Depreciation and amortization increased 36% from $2.5 million in 1995 to
$3.4 million in 1996, primarily as a result of depreciation related to
additional equipment costs from the increased channel capacity of both crews and
additional capital purchases for both crews during 1996. Selling, general and
administrative expenses decreased slightly, from $2.9 million in 1995 to $2.7
million in 1996, primarily due to cost saving measures implemented in 1996. Net
interest expense increased from $408,000 in 1995 to $531,000 in 1996, reflecting
additional financing costs for equipment purchases made during 1996.
LIQUIDITY AND CAPITAL RESOURCES
Prior to the IPO, the Company was a wholly-owned subsidiary of Seitel. In
the past, Seitel guaranteed certain indebtedness of the Company and made loans
to the Company. All of such debt owed to Seitel was repaid with part of the net
proceeds of the IPO. The Company's borrowing costs may be greater than
historical borrowing costs as a result of having to obtain financing based on
its own creditworthiness. Therefore, the historical liquidity and capital
resources of the Company may not be indicative of the Company's future liquidity
and capital resources.
Prior to the IPO, revenues for services provided by the Company to Seitel
were based on prices charged to unaffiliated third parties for similar work.
These revenues included a profit component. Prior to the consummation of the
IPO, the Company declared and paid a dividend to Seitel to eliminate these
intercompany profits. The amount of such dividend was $6.7 million.
The Company had a working capital deficit of $9.0 million as of June 30,
1998. The indebtedness of the Company as of such date consisted of borrowings
under its Revolving Credit Facility, the Short-Term Loan, The Fleet Capital
Loan, and the British Linen Capital Lease, totaling approximately $59.6 million.
The Company has an agreement with Bank One, Texas, N.A. with respect to a
$20.0 million revolving credit facility (the "Revolving Credit Facility")
secured by the Company's accounts receivable. The amount the Company may borrow
under the revolving credit facility is limited to a borrowing base that is equal
to 90% of eligible U.S. and U.K. investment grade accounts receivable, 100% of
receivables secured by acceptable letters of credit and 80% of non-graded U.S.
or foreign receivables and other eligible receivables approved by the bank.
Interest only is payable monthly or at the end of LIBOR interest periods, and
the credit facility is payable in full on June 1, 1999. Mandatory prepayments
are required if borrowings exceed the borrowing base. Interest accrues under the
credit facility at the bank's base rate or at LIBOR plus a spread of 1.375% if
the Company's debt to net worth ratio is less than 1 to 1 and 1.625% if such
ratio is equal to or greater than 1 to 1. As of June 30, 1998, $20.0 million was
available for borrowing under the facility and $20.0 million of borrowings were
outstanding. On July 20, 1998, the $20 million of borrowings outstanding was
repaid with proceeds from the Offering.
In June 1998, the Company entered into a $29.0 million short-term loan (the
"Short-Term Loan") with Bank One, Texas, N.A. to fund part of the cost of the
upgrades to two of its seismic vessels, the Austral Horizon and the Atlantic
Horizon, pending completion of the Private Offering. The maximum amount borrowed
under this loan was $7.5 million, which was repaid in full on July 20, 1998 with
a portion of the
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proceeds of the Private Offering. Interest accrued under this loan at the bank's
base rate or LIBOR plus 2% and was payable monthly or at the end of applicable
LIBOR interest periods.
The Company has expanded its existing data acquisition capabilities by
increasing the streamer towing capacity of its seismic vessel the Labrador
Horizon. The upgrades to this vessel were initiated late in the fourth quarter
of 1997 and were completed at the end of the first quarter of 1998. The capital
cost of these upgrades was approximately $22.0 million.
In April 1998, the Company entered into an agreement with British Linen
Bank for the financing of the Labrador Horizon upgrade and the refinancing of
the existing capital lease of this vessel. As part of this financing, British
Linen Bank purchased the vessel from the previous owner, funded approximately
$20.0 million of the upgrades to the vessel, and entered into a capital lease of
the vessel (the "British Linen Capital Lease") to the Company for a five-year
term commencing upon completion of the upgrades, for a total commitment of
approximately $31.3 million. The facility bears interest at a rate of LIBOR plus
1.375% and required the Company to post a security deposit of approximately $5
million with scheduled amounts to be refunded based upon a predetermined
formula. Additionally, the Company has the option to acquire the vessel at the
end of the term of the capital lease for a price of 0.1% of the total facility
commitment.
The Company is currently upgrading and equipping two additional offshore
seismic vessels at an aggregate capital cost of approximately $98.8 million. The
Company acquired the two vessels, the Austral Horizon and the Atlantic Horizon,
during the fourth quarter of 1997 for purchase prices of approximately $1.6
million and $3.6 million, respectively. These acquisitions were funded with cash
flows from operations. The Company expects to complete the upgrade and
outfitting of the vessels during the third and fourth quarters of 1998. The
costs to outfit and equip the two vessels will be approximately $34.3 million
for the Austral Horizon and approximately $59.3 million for the Atlantic
Horizon. As of August 1, 1998 the Company had expended $50.6 million (including
acquisition costs) and had $39.4 million of capital commitments outstanding
related to these projects. The Company funded these capital costs on an interim
basis with borrowings from the Revolving Credit Facility and the Short-Term
Loan. These borrowings were repaid on July 20, 1998 with proceeds from the
Private Offering and the remaining upgrade costs will be paid from the remaining
proceeds of the Private Offering.
In March 1998, the Company acquired the common stock of a privately-held
company providing seismic shot-hole drilling and front-end services, for a price
of approximately $6.3 million, consisting of approximately $4.3 million in cash
and 98,360 shares of the Company's common stock and deferred compensation
payable to the former owner of $500,000. The Company financed the cash portion
of the acquisition with a combination of cash flows from operations and
borrowings from the Company's Revolving Credit Facility.
In April 1998, the Company obtained a term loan (the "Fleet Capital Loan")
with Fleet Capital Corporation for the financing of an Opseis system for
approximately $5.9 million. The loan is for a period of five years and bears
interest at a fixed rate of 7.36%. Monthly payments of approximately $117,000
are payable under the loan with the Opseis system pledged as security for the
loan.
On July 20, 1998, the Company completed an offering of $100 million of
10 3/4% Senior Notes due 2008 in a private placement transaction which resulted
in net proceeds to the Company of approximately $96.4 million after deducting
offering-related expenses. The proceeds of the Private Offering were used to
repay $27.5 million of borrowings outstanding on the Revolving Credit Facility
and the Short-Term Loan, with the remaining proceeds to be used to complete the
upgrades for the vessels Austral Horizon and Atlantic Horizon and for general
corporate purposes.
The Company will be required to fund the portion of the acquisition costs
for multi-client data that is not covered by pre-acquisition licensing
commitments. These funding requirements will vary depending on the cost of the
data acquisition project, the amount of pre-acquisition licensing commitments,
and the amount of any costs funded by any third parties who participate in the
projects. The Company will evaluate each multi-client project in light of the
capital requirements of the project and the Company's other capital commitments
as compared to the Company's liquidity and capital resources.
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The Company believes that its planned capital expenditures and operating
requirements through the end of 1998 will be funded from the Revolving Credit
Facility, additional equipment financing, the Company's cash flow from
operations and the net proceeds of the Private Offering. The Company anticipates
that its cash flow from operations will be sufficient to fund its operating
requirements for the foreseeable future, and that any additional capital
expenditures will be funded from the Company's cash flow from operations and
additional debt financing. If the Company is not able to obtain additional
financing, it will be unable to make such capital expenditures and the Company's
financial position and results of operations may be materially and adversely
affected as a result.
IMPACT OF INFLATION AND CHANGING PRICES
The general availability of seismic equipment and crews and the level of
exploration activity in the oil and gas industry directly affect the cost of
creating seismic data. The level of exploration activity is dependent on the
commodity price levels of oil and natural gas. The pricing of the Company's
products and services is primarily a function of these factors. For these
reasons, the Company does not believe inflationary trends have had any
significant impact on its financial operating results during the three years
ended December 31, 1997.
YEAR 2000
The Company is currently in the process of evaluating its computer hardware
and software systems to ensure such programs and systems will be able to process
transactions in the year 2000 ("Y2K"). The Company is also currently identifying
other equipment which contains embedded electronics that may render the
equipment inoperable in the year 2000 and is evaluating the plans of its
material suppliers and vendors to become Y2K compliant. The Company anticipates
it will have hardware and software critical to its operation Y2K compliant
before the end of 1999. The Company is currently evaluating the time table upon
which all other hardware, software, and equipment can be made Y2K compliant and
will target a date when the evaluation is complete.
Although it is not possible to accurately estimate the costs of this
information systems analysis, at this time the Company expects that such costs
will not be material to the Company's financial position or the results of
operations. There can be no assurance, however, that the Company, its suppliers
and vendors or their respective software vendors will complete all modifications
to all material information technology systems in a timely manner, or as to the
costs associated with the Company becoming Y2K compliant, or the costs of the
failure of any of the Company's vendors failing to become Y2K compliant.
The Company's risks due to failure of computer hardware and software not
being Y2K compliant include the risk that the Company's seismic recording
systems will not operate properly or as efficiently, thus causing an unexpected
decline in revenue. The Company also risks not being able to record and process
transactions properly in its accounting system. Such risks could lead to a
material business interruption and could have a material adverse impact on the
Company's results of operations, although the amount can not be estimated. The
Company will continue to consider the likelihood of a material business
interruption due to the Year 2000 Problem, and if necessary, implement an
appropriate contingency plan.
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DESCRIPTION OF THE NOTES
The Exchange Notes will be issued, and the Private Notes were issued,
pursuant to an Indenture dated July 20, 1998 among the Company, the Subsidiary
Guarantors referred to below and Chase Bank of Texas, National Association,
trustee (the "Trustee"), a copy of which is available from the Company upon
request. The Private Notes were issued on July 20, 1998 in a private transaction
that was not subject to the registration requirements of the Securities Act. 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 (the
"Trust Indenture Act"). The Notes are subject to all such terms, and prospective
Holders of Notes are referred to the Indenture and the Trust Indenture Act for a
statement of such terms. The following summary of certain provisions of the
Notes and the Indenture do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, the Notes and the Indenture.
For definitions of certain capitalized terms used in the following summary, see
"-- Certain Definitions" below.
GENERAL
The Notes will mature on July 15, 2008, will be initially limited to
$100,000,000 aggregate principal amount and will be senior unsecured obligations
of the Company. Each Note will bear interest at 10 3/4% per annum from July 20,
1998 or from the most recent interest payment date to which interest has been
paid or duly provided for, payable semiannually on January 15 and July 15 in
each year, commencing January 15, 1999, until the principal thereof is paid or
duly provided for, to the person in whose name the Note (or any predecessor
Note) is registered at the close of business on the January 1 or July 1 next
preceding such interest payment date. Interest will be computed on the basis of
a 360-day year comprised of twelve 30-day months.
The principal of and premium, if any, and interest on the Notes will be
payable, and the Notes will be exchangeable and transferable, at the office or
agency of the Company in The City of New York maintained for such purposes
(which initially will be the office of the Trustee located in The City of New
York); provided, however, that, at the option of the Company, interest may be
paid by check mailed to the address of the person entitled thereto as such
address appears in the security register. The Notes will be issued only in
registered form without coupons and only in denominations of $1,000 and any
integral multiple thereof. No service charge will be made for any registration
of transfer or exchange or redemption of Notes, but the Company may require
payment in certain circumstances of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
Subject to the covenants described below under "Certain Covenants" and
applicable laws, the Company may, from time to time, issue additional Notes (the
"Additional Notes") under the Indenture. The Notes offered hereby and any
Additional Notes subsequently issued would be treated as a single class for all
purposes under the Indenture.
As of the date hereof, all of the Company's Subsidiaries are Restricted
Subsidiaries. However, under certain circumstances, the Company will be able to
designate current or future Subsidiaries as Unrestricted Subsidiaries.
Unrestricted Subsidiaries will not be subject to many of the restrictive
covenants set forth in the Indenture.
Any Notes that remain outstanding after the consummation of the Exchange
Offer and Exchange Notes issued in connection with the Exchange Offer will be
treated as a single class of securities under the Indenture.
The Notes will not be entitled to the benefit of any sinking fund.
SUBSIDIARY GUARANTEES
Payment of the principal of (and premium, if any, on) and interest on the
Notes, when and as the same become due and payable, is guaranteed, jointly and
severally, on a senior unsecured basis by the Subsidiary Guarantors referred to
below. The obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee is limited so as not to constitute a fraudulent conveyance under
applicable law. See "Risk Factors -- Fraudulent Conveyance."
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The Indenture requires that all of the Company's current and future
Restricted Subsidiaries that are organized under the laws of any state of the
United States or the District of Columbia be Subsidiary Guarantors. The
Subsidiary Guarantors as of the date hereof are Eagle Geophysical Onshore, Inc,
Eagle Geophysical Offshore, Inc., Eagle Geophysical Royalty, Inc. (f/k/a Eagle
Geophysical Leasing, Inc.), Eagle Geophysical de Mexico, Inc., Eagle Front End
Services, Inc., Eagle Geophysical Management, Inc., Eagle Geophysical GOM, Inc.,
Eagle Front End Services, Ltd., Eagle Geophysical de Colombia, Inc., Austral
Horizon, Inc., Atlantic Horizon, Inc. Eagle Geophysical de Bolivia, Inc. and
Eagle Geophysical de Ecuador, Inc. Restricted Subsidiaries that are organized
under the laws of jurisdictions outside the United States will not be required
to be Subsidiary Guarantors.
The Indenture requires that the Austral Horizon and the Atlantic Horizon,
and any assets or properties acquired with the Net Cash Proceeds from the sale
of either such vessel pursuant to the "Limitation on Certain Asset Sales"
covenant, be owned by the Company or a Subsidiary Guarantor.
The Indenture provides that no Subsidiary Guarantor may consolidate with or
merge with or into any other person or convey, sell, assign, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any other person (other than the Company or another Subsidiary Guarantor)
unless: (a) subject to the provisions of the following paragraph, the person
formed by or surviving such consolidation or merger (if other than such
Subsidiary Guarantor) or to which such properties and assets are transferred
assumes all of the obligations of such Subsidiary Guarantor under the Indenture
and its Subsidiary Guarantee, pursuant to a supplemental indenture in form and
substance satisfactory to the Trustee and (b) immediately after giving effect to
such transaction, no Default or Event of Default has occurred and is continuing.
The Indenture provides that, in the event of (a) a sale, transfer or other
disposition of all of the Capital Stock of a Subsidiary Guarantor to a person
that is not an Affiliate of the Company, (b) a sale, transfer or other
disposition of all or substantially all of the assets of a Subsidiary Guarantor
to a person that is not an Affiliate of the Company or (c) the designation of
such Subsidiary Guarantor as an Unrestricted Subsidiary, in any such case in
compliance with the terms of the Indenture, then such Subsidiary Guarantor will
be deemed automatically and unconditionally released and discharged from all of
its obligations under its Subsidiary Guarantee without any further action on the
part of the Trustee or any holder of the Notes; provided that the Net Proceeds
of any such sale, transfer or other disposition are applied in accordance with
the "Limitation on Certain Asset Sales" covenant.
RANKING
The Notes and the Subsidiary Guarantees are senior unsecured obligations of
the respective obligors and rank pari passu in right of payment with all other
existing and future senior obligations of the Company and the Subsidiary
Guarantors, respectively. The Notes and the Subsidiary Guarantees are
effectively subordinated to all of the Company's secured debt, including amounts
outstanding under the Revolving Credit Facility, to the extent of the value of
the assets securing such loans. The Notes are also structurally subordinated to
all liabilities, including trade payables, of the Company's Subsidiaries that
are not Subsidiary Guarantors. As of June 30, 1998, on a pro forma basis after
giving effect to the Private Offering and the use of proceeds therefrom, the
Company would have had approximately $37.1 million of consolidated debt and
capital lease obligations outstanding other than the Notes (excluding accounts
payable), of which $5.8 million would have been senior secured debt of a
Subsidiary Guarantor and $31.3 million would have been a capital lease
obligation of one of the Company's Subsidiaries that is not a Subsidiary
Guarantor. In addition, the Company's Subsidiaries that are not Subsidiary
Guarantors had approximately $21.2 million of trade payables as of June 30,
1998. Subject to certain limitations, the Company and its Restricted
Subsidiaries may incur additional Debt in the future.
REDEMPTION
The Notes are redeemable, at the election of the Company, as a whole or
from time to time in part, at any time on or after July 15, 2003, on not less
than 30 nor more than 60 days' prior notice at the redemption prices (expressed
as percentages of principal amount) set forth below, together with accrued
interest, if any, to the
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redemption date, if redeemed during the 12-month period beginning on July 15 of
the years indicated below (subject to the right of holders of record on the
relevant record date to receive interest due on an interest payment date):
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2003............................................. 105.375%
2004............................................. 103.583
2005............................................. 101.792
</TABLE>
and thereafter at 100% of the principal amount, together with accrued interest,
if any, to the redemption date.
In addition, at any time or from time to time prior to July 15, 2001, the
Company may at its option redeem Notes with the net proceeds of one or more
Equity Offerings at a redemption price equal to 110.75% of the principal amount
thereof, together with accrued interest, if any, to the date of redemption
(subject to the rights of holders of record on the relevant record date to
receive interest due on an interest payment date); provided that, immediately
after giving effect to any such redemption, at least 65% of the aggregate
principal amount of the Notes issued under the Indenture remains outstanding.
Any such redemption must be made within 90 days of the related Equity Offering.
If less than all the Notes are to be redeemed, the particular Notes to be
redeemed will be selected not more than 60 days prior to the redemption date by
the Trustee by lot or such other method as the Trustee deems fair and
appropriate.
CERTAIN DEFINITIONS
"Acquired Debt" means Debt of a person (a) existing at the time such person
is merged with or into the Company or becomes a Subsidiary or (b) assumed in
connection with the acquisition of assets from such person.
"Affiliate" means, with respect to any specified person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control," when used with respect to any specified person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition (including, without limitation, by way of merger or consolidation)
(collectively, a "transfer") by the Company or a Restricted Subsidiary, directly
or indirectly, in one or a series of related transactions, to any person other
than the Company or a Restricted Subsidiary of (a) any Capital Stock of any
Restricted Subsidiary, (b) all or substantially all of the properties and assets
of the Company and its Restricted Subsidiaries representing a division or line
of business or (c) any other properties or assets of the Company or any
Restricted Subsidiary, other than in the ordinary course of business. For the
purposes of this definition, the term "Asset Sale" does not include any transfer
of properties or assets (i) that is governed by the provisions of the Indenture
described under "Consolidation, Merger and Sale of Assets," (ii) between or
among the Company and its Restricted Subsidiaries pursuant to transactions that
do not violate any other provision of the Indenture, (iii) to an Unrestricted
Subsidiary, if permitted under the "Limitation on Restricted Payments" covenant,
(iv) representing obsolete or permanently retired equipment and facilities, (v)
the gross proceeds of which (exclusive of indemnities) do not exceed $500,000
for any particular item or $1,000,000 in the aggregate for any fiscal year, or
(vi) that is a lease of a towed-streamer seismic data acquisition vessel owned
by the Company or any Restricted Subsidiary, provided that (A) such lease shall
not provide for the acquisition of such vessel by the lessee during or at the
end of the term thereof for an amount that is less than the fair market value
thereof at the time the right to acquire such property is granted, (B) the term
of such lease shall not exceed twelve months, (C) such lease shall provide that
upon an Event of Default under the Indenture such lease would automatically
terminate, (D) not more than the greater of (I) one such vessel or (II)
one-third of
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<PAGE> 45
all of such vessels may be subject to such a lease at any one time and (E) the
Company or a Restricted Subsidiary shall retain legal title to such vessel at
all times during the term of such lease.
"Bank" means Bank One, Texas, N.A., and other institutions that from time
to time are lenders under the Revolving Credit Facility.
"Capital Stock" of any person means any and all shares, interests,
partnership interests, participations, rights in or other equivalents (however
designated) of such person's equity interest (however designated).
"Capitalized Lease Obligation" means, with respect to any person, an
obligation incurred or assumed under or in connection with any capital lease of
real or personal property that, in accordance with GAAP, has been recorded as a
capitalized lease.
"Change of Control" means the occurrence of any of the following events:
(a) Any person or "group" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person will
be deemed to have "beneficial ownership" of all securities that such person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than a
majority of the voting power of all classes of Voting Stock of the Company.
(b) During any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election to such Board of Directors,
or whose nomination for election by the stockholders of the Company, was
approved by a vote of 66 2/3% of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Company then in
office.
(c) The Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution, other than a transaction that complies with the
provisions described under "Consolidation, Merger and Sales of Assets."
"Closing Date" means the date on which the Private Notes were originally
issued under the Indenture.
"Consolidated Adjusted Net Income" means, for any period, the net income
(or net loss) of the Company and its Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP, adjusted to the
extent included in calculating such net income or loss by excluding (a) any net
after-tax extraordinary gains or losses (less all fees and expenses relating
thereto), (b) any net after-tax gains or losses (less all fees and expenses
relating thereto) attributable to Asset Sales, (c) the portion of net income (or
loss) of any person (other than the Company or a Restricted Subsidiary),
including Unrestricted Subsidiaries, in which the Company or any Restricted
Subsidiary has an ownership interest, except to the extent of the amount of
dividends or other distributions actually paid to the Company or any Restricted
Subsidiary in cash during such period, (d) the net income (or loss) of any
person combined with the Company or any Restricted Subsidiary on a "pooling of
interests" basis attributable to any period prior to the date of combination and
(e) the net income (but not the net loss) of any Restricted Subsidiary to the
extent that the declaration or payment of dividends or similar distributions by
such Restricted Subsidiary is at the date of determination restricted, directly
or indirectly, except to the extent that such net income could be paid to the
Company or a Restricted Subsidiary thereof by loans, advances, intercompany
transfers, principal repayments or otherwise; provided that, if any Restricted
Subsidiary is not a Wholly Owned Restricted Subsidiary, Consolidated Adjusted
Net Income will be reduced (to the extent not otherwise reduced in accordance
with GAAP) by an amount equal to (A) the amount of the Consolidated Adjusted Net
Income otherwise attributable to such Restricted Subsidiary multiplied by (B)
the quotient of (1) the number of shares of outstanding common stock of such
Restricted Subsidiary not owned on the last day of such period by the Company or
any of its Restricted Subsidiaries divided by (2) the total number of shares of
outstanding common stock of such Restricted Subsidiary on the last day of such
period.
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<PAGE> 46
"Consolidated EBITDA" means, for any period, the sum of, without
duplication, Consolidated Adjusted Net Income for such period plus (or, in the
case of clause (d) below, plus or minus) the following items to the extent
included in computing Consolidated Adjusted Net Income for such period (a)
Consolidated Fixed Charges for such period, plus (b) the provision for federal,
state, local and foreign income taxes of the Company and its Restricted
Subsidiaries for such period, plus (c) the aggregate depreciation and
amortization expense of the Company and its Restricted Subsidiaries for such
period, plus (d) any other non-cash charges for such period, and minus non-cash
credits for such period, other than non-cash charges or credits resulting from
changes in prepaid assets or accrued liabilities in the ordinary course of
business; provided that fixed charges, income tax expense, depreciation and
amortization expense and non-cash charges and credits of a Restricted Subsidiary
will be included in Consolidated EBITDA only to the extent (and in the same
proportion) that the net income of such Subsidiary was included in calculating
Consolidated Adjusted Net Income for such period.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the ratio
of (a) Consolidated EBITDA for such period to (b) Consolidated Fixed Charges for
such period.
"Consolidated Fixed Charges" means, for any period, without duplication,
the sum of (a) the amount that, in conformity with GAAP, would be set forth
opposite the caption "interest expense" (or any like caption) on a consolidated
statement of operations of the Company and its Restricted Subsidiaries for such
period, including, without limitation, (i) amortization of debt discount, (ii)
the net cost of interest rate contracts (including amortization of discounts),
(iii) the interest portion of any deferred payment obligation, (iv) amortization
of debt issuance costs and (v) the interest component of Capitalized Lease
Obligations, plus (b) cash dividends paid on Preferred Stock and Disqualified
Stock by the Company and any Restricted Subsidiary (to any person other than the
Company and its Restricted Subsidiaries), plus (c) all interest on any Debt of
any person guaranteed by the Company or any of its Restricted Subsidiaries;
provided, however, that Consolidated Fixed Charges will not include (i) any gain
or loss from extinguishment of debt, including the write-off of debt issuance
costs and (ii) the fixed charges of a Restricted Subsidiary to the extent (and
in the same proportion) that the net income of such Subsidiary was excluded in
calculating Consolidated Adjusted Net Income pursuant to clause (e) of the
definition thereof for such period.
"Consolidated Net Worth" means, at any date of determination, stockholders'
equity of the Company and its Restricted Subsidiaries as set forth on the most
recently available quarterly or annual consolidated balance sheet of the Company
and its Restricted Subsidiaries, less any amounts attributable to Disqualified
Stock or any equity security convertible into or exchangeable for Debt, the cost
of treasury stock and the principal amount of any promissory notes receivable
from the sale of the Capital Stock of the Company or any of its Restricted
Subsidiaries and less, to the extent included in calculating such stockholders'
equity of the Company and its Restricted Subsidiaries, the stockholders' equity
attributable to Unrestricted Subsidiaries, each item to be determined in
conformity with GAAP (excluding the effects of foreign currency adjustments
under Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 52).
"Debt" means (without duplication), with respect to any person, whether
recourse is to all or a portion of the assets of such person and whether or not
contingent, (a) every obligation of such person for money borrowed, (b) every
obligation of such person evidenced by bonds, debentures, notes or other similar
instruments, (c) every reimbursement obligation of such person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such person, (d) every obligation of such person issued or assumed as
the deferred purchase price of property or services, (e) the amount of every
Capitalized Lease Obligation of such person, (f) all Disqualified Stock of such
person valued at its maximum fixed repurchase price, plus accrued and unpaid
dividends, (g) all obligations of such person under or in respect of Hedging
Obligations and (h) every obligation of the type referred to in clauses (a)
through (g) of another person and all dividends of another person the payment of
which, in either case, such person has guaranteed. For purposes of this
definition, the "maximum fixed repurchase price" of any Disqualified Stock that
does not have a fixed repurchase price will be calculated in accordance with the
terms of such Disqualified Stock as if such Disqualified Stock were repurchased
on any date on which Debt is required to be determined pursuant to the
Indenture, and if such price is based upon, or measured by, the fair market
value of such Disqualified Stock, such fair market value will be determined in
good faith by the board of directors of the issuer of such
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<PAGE> 47
Disqualified Stock. Notwithstanding the foregoing, trade accounts payable and
accrued liabilities arising in the ordinary course of business and any liability
for federal, state or local taxes or other taxes owed by such person will not be
considered Debt for purposes of this definition.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Disinterested Director" means, with respect to any transaction or series
of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors, to make a finding or otherwise
take action under the Indenture, a member of the Board of Directors who does not
have any material direct or indirect financial interest in or with respect to
such transaction or series of transactions (other than as the holder of Voting
Stock of the Company).
"Disqualified Stock" means any class or series of Capital Stock that,
either by its terms, or by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise (i) is, or upon the
happening of an event or passage of time would be, required to be redeemed prior
to one year after the final Stated Maturity of the Notes, (ii) is redeemable at
the option of the holder thereof at any time prior to one year after such final
Stated Maturity or (iii) at the option of the holder thereof, is convertible
into or exchangeable for debt securities at any time prior to one year after
such final Stated Maturity; provided that any Capital Stock that would not
constitute Disqualified Stock but for provisions therein giving holders thereof
the right to cause the issuer thereof to repurchase or redeem such Capital Stock
upon the occurrence of an "asset sale" or "change of control" occurring prior to
the Stated Maturity of the Notes will not constitute Disqualified Stock if the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are no more favorable to the holders of such Capital Stock than the provisions
contained in the "Limitation on Certain Asset Sales" and "Purchase of Notes upon
a Change of Control" covenants described below and such Capital Stock
specifically provides that the issuer will not repurchase or redeem any such
stock pursuant to such provision prior to the Company's repurchase of such Notes
as are required to be repurchased pursuant to the "Limitation on Certain Asset
Sales" and "Purchase of Notes upon a Change of Control" covenants described
below.
"Equity Offering" means an offer and sale by the Company of its common
stock (which is Qualified Stock) for cash to a person or persons other than a
Subsidiary.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, that
are in effect on the Closing Date.
"guarantee" means, as applied to any obligation, (a) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limitation, the payment of
amounts drawn down under letters of credit.
"Hedging Obligations" means the obligations of any person under (i)
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and (ii) other agreements or arrangements designed to protect
such person against fluctuations in interest rates or the value of foreign
currencies.
"Investment" in any person means, (i) directly or indirectly, any advance,
loan or other extension of credit (including, without limitation, by way of
guarantee or similar arrangement) or capital contribution to any person, the
purchase or other acquisition of any stock, bonds, notes, debentures or other
securities issued by such person, the acquisition (by purchase or otherwise) of
all or substantially all of the business or assets of such person, or the making
of any investment in such person, (ii) the designation of any Restricted
Subsidiary as an Unrestricted Subsidiary and (iii) the fair market value of the
Capital Stock (or any other Investment), held by the Company or any of its
Restricted Subsidiaries, of (or in) any person that has ceased to be a
Restricted Subsidiary, including, without limitation, by reason of any
transaction permitted by clause (iv) of
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<PAGE> 48
the "Limitation on Issuances and Sales of Capital Stock of Restricted
Subsidiaries" covenant described below. Investments exclude extensions of trade
credit on commercially reasonable terms in accordance with normal trade
practices.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
privilege, security interest, hypothecation, assignment for security, claim, or
preference or priority or other encumbrance upon or with respect to any property
of any kind, real or personal, movable or immovable, now owned or hereafter
acquired. A person will be deemed to own subject to a Lien any property that
such person has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement.
"Multi-Client Survey" means a seismic survey whereby the Company or a
Restricted Subsidiary acquires certain seismic data in which it directly or
indirectly retains ownership rights, revenue interests or similar interests in
the future economic benefits thereof and which data is to be licensed to
customers on a non-transferable, non-exclusive basis.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or cash equivalents, including payments in respect
of deferred payment obligations when received in the form of, or stock or other
assets when disposed for, cash or cash equivalents (except to the extent that
such obligations are financed or sold with recourse to the Company or any
Restricted Subsidiary), net of (a) brokerage commissions and other fees and
expenses (including fees and expenses of legal counsel and investment banks)
related to such Asset Sale, (b) provisions for all taxes payable as a result of
such Asset Sale, (c) payments made to retire Debt where payment of such Debt is
secured by the assets that are the subject of such Asset Sale, (d) amounts
required to be paid to any person (other than the Company or any Restricted
Subsidiary) owning a beneficial interest in the assets that are subject to the
Asset Sale and (e) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve required in accordance
with GAAP against any liabilities associated with such Asset Sale and retained
by the seller after such Asset Sale, including pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale.
"Permitted Investments" means any of the following:
(a) Investments in (i) securities with a maturity of 180 days or less
issued or directly and fully guaranteed or insured by the United States or
any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof); (ii)
certificates of deposit or acceptances with a maturity of 180 days or less
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus of not less than $500,000,000; and
(iii) commercial paper with a maturity of 180 days or less issued by a
corporation that is not an Affiliate of the Company and is organized under
the laws of any state of the United States or the District of Columbia and
having the highest rating obtainable from Moody's Investors Service Inc. or
Standard & Poor's Ratings Services, a division of McGraw Hill, Inc.
(b) Investments by the Company or any Restricted Subsidiary in another
person, if as a result of such Investment such other person (i) becomes a
Restricted Subsidiary or (ii) is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets to, the Company
or a Restricted Subsidiary.
(c) Investments by the Company or any of the Restricted Subsidiaries
in any one or the other of them.
(d) Investments in existence on the Closing Date.
(e) Promissory notes received as a result of Asset Sales permitted
under the "Limitation on Certain Asset Sales" covenant.
(f) Direct or indirect loans to employees, or to a trustee for the
benefit of such employees, of the Company or any Restricted Subsidiary in
an aggregate amount outstanding at any time not exceeding
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<PAGE> 49
$750,000, plus the amount of direct or indirect loans to employees for
relocation expenses, plus advances to employees in the ordinary course of
business for travel and other business expenses.
(g) Investments in assets owned or used in the ordinary course of
business.
(h) Other Investments in a business substantially similar, or related,
to the business conducted by the Company and its Restricted Subsidiaries
provided that such Investments do not exceed $5,000,000 in the aggregate at
any time outstanding.
(i) Investments by the Company or any Restricted Subsidiary in any
person in connection with Multi-Client Surveys in an aggregate amount
outstanding at any time not exceeding $5,000,000.
(j) Investments in any person in the form of a capital contribution of
the Company's Qualified Stock.
"person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Stock" means, with respect to any person, any and all shares,
interests, participations or other equivalents (however designated) of such
person's preferred or preference stock, whether now outstanding or issued after
the Closing Date, and including, without limitation, all classes and series of
preferred or preference stock of such person.
"Qualified Equity Interest" means any Qualified Stock and all warrants,
options or other rights to acquire Qualified Stock (but excluding any debt
security that is convertible into or exchangeable for Capital Stock).
"Qualified Stock" of any person means any and all Capital Stock of such
person, other than Disqualified Stock.
"Restricted Subsidiary" means any Subsidiary other than an Unrestricted
Subsidiary.
"Revolving Credit Facility" means the revolving credit facility dated
October 21, 1997, as amended June 10, 1998, between the Company and the Bank, as
such agreement may be amended, restated, supplemented, refinanced or otherwise
modified from time to time.
"Significant Subsidiary" means any Restricted Subsidiary of the Company
that, together with its Subsidiaries, (a) for the most recent fiscal year of the
Company, accounted for more than 10% of the consolidated net sales of the
Company and its Restricted Subsidiaries or (b) as of the end of such fiscal
year, was the owner of more than 10% of the consolidated assets of the Company
and its Restricted Subsidiaries, in the case of either (a) or (b), as set forth
on the most recently available consolidated financial statements of the Company
for such fiscal year or (c) was organized or acquired after the beginning of
such fiscal year and would have been a Significant Subsidiary if it had been
owned during the entire fiscal year.
"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable and, when used with respect to any other Debt, means the date
specified in the instrument governing such Debt as the fixed date on which the
principal of such Debt or any installment of interest thereon is due and
payable.
"Subordinated Debt" means Debt of the Company or a Subsidiary Guarantor
that is subordinated in right of payment to the Notes or the Subsidiary
Guarantee issued by such Subsidiary Guarantor, as the case may be.
"Subsidiary" means any person a majority of the equity ownership or Voting
Stock of which is at the time owned, directly or indirectly, by the Company
and/or one or more other Subsidiaries of the Company.
"Subsidiary Guarantee" means a guarantee of the Notes by a Restricted
Subsidiary in accordance with the provisions of the Indenture.
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<PAGE> 50
"Unrestricted Subsidiary" means (a) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary in accordance with the
"Unrestricted Subsidiaries" covenant and (b) any Subsidiary of an Unrestricted
Subsidiary.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any person (irrespective of whether or not, at the time, stock of
any other class or classes has, or might have, voting power by reason of the
happening of any contingency).
"Weighted Average Life" means, as of the date of determination with respect
to any Debt or Disqualified Stock, the quotient obtained by dividing (a) the sum
of the products of (i) the number of years from the date of determination to the
date or dates of each successive scheduled principal or liquidation value
payment of such Debt or Disqualified Stock, respectively, multiplied by (ii) the
amount of each such principal or liquidation value payment by (b) the sum of all
such principal or liquidation value payments.
"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary, all
of the outstanding voting securities (other than directors' qualifying shares or
shares of foreign Restricted Subsidiaries required to be owned by foreign
nationals pursuant to applicable law) of which are owned, directly or
indirectly, by the Company.
CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
Limitation on Debt. The Company will not, and will not permit any
Restricted Subsidiary to, create, issue, assume, guarantee or in any manner
become directly or indirectly liable for the payment of, or otherwise incur
(collectively, "incur"), any Debt (including Acquired Debt and the issuance of
Disqualified Stock), except that the Company or a Subsidiary Guarantor may incur
Debt or issue Disqualified Stock if, at the time of such event, the Consolidated
Fixed Charge Coverage Ratio for the immediately preceding four full fiscal
quarters for which internal financial statements are available, taken as one
accounting period, would have been greater than 2.5 to 1.0.
In making the foregoing calculation, pro forma effect will be given to: (i)
the incurrence of such Debt and (if applicable) the application of the net
proceeds therefrom, including to refinance other Debt, as if such Debt was
incurred and the application of such proceeds occurred at the beginning of such
four-quarter period, (ii) the incurrence, repayment or retirement of any other
Debt by the Company or its Restricted Subsidiaries since the first day of such
four-quarter period as if such Debt was incurred, repaid or retired at the
beginning of such four-quarter period and (iii) the acquisition (whether by
purchase, merger or otherwise) or disposition (whether by sale, merger or
otherwise) of any company, entity or business acquired or disposed of by the
Company or its Restricted Subsidiaries, as the case may be, since the first day
of such four-quarter period, as if such acquisition or disposition occurred at
the beginning of such four-quarter period. In making a computation under the
foregoing clause (i) or (ii), (A) interest on Debt bearing a floating interest
rate will be computed as if the rate in effect on the date of computation had
been the applicable rate for the entire period, (B) if such Debt bears, at the
option of the Company, a fixed or floating rate of interest, interest thereon
will be computed by applying, at the option of the Company, either the fixed or
floating rate and (C) the amount of Debt under a revolving credit facility will
be computed based upon the average daily balance of such Debt during such
four-quarter period.
On a pro-forma basis after giving effect to this offering and the use of
the net proceeds therefrom, the Company's Consolidated Fixed Charge Coverage
Ratio for the four quarters ended June 30, 1998 would have been 2.15:1.
Notwithstanding the foregoing, the Company may, and may, to the extent
expressly permitted below, permit its Restricted Subsidiaries to, incur any of
the following Debt ("Permitted Debt"):
(i) Debt of the Company or any Restricted Subsidiary under the
Revolving Credit Facility or one or more other credit facilities in an
aggregate principal amount at any one time outstanding not to exceed
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<PAGE> 51
$25,000,000, less any amounts applied to the permanent reduction of such
credit facilities pursuant to the "Limitation on Certain Asset Sales"
covenant, together with guarantees (if any) of such Debt by a Restricted
Subsidiary, plus an amount equal to (A) the excess of 85% of the aggregate
book value of the accounts receivable (net of bad debt reserves) and 50% of
the aggregate net book value of the inventory of the Company and its
Restricted Subsidiaries on a consolidated basis in accordance with GAAP as
of the last day of the immediately preceding four full fiscal quarters for
which internal financial statements are available over (B) $25,000,000.
(ii) Debt of the Company or any Restricted Subsidiary outstanding on
the Closing Date, other than Debt described under clause (i) above.
(iii) Debt of the Company or any Restricted Subsidiary incurred in
respect of letters of credit, bankers' acceptances or similar facilities
entered into in the ordinary course of business.
(iv) Debt owed by the Company to any Wholly-Owned Restricted
Subsidiary or owed by a Subsidiary Guarantor to the Company or any
Wholly-Owned Restricted Subsidiary (provided that such Debt is held by the
Company or such Restricted Subsidiary and constitutes Subordinated Debt) or
owed by a Restricted Subsidiary that is not a Subsidiary Guarantor to the
Company or another Restricted Subsidiary; provided the incurrence of such
Debt did not violate the "Limitations on Restricted Payments" covenant.
(v) Acquired Debt of a person, other than Debt incurred in connection
with, or in contemplation of, such person becoming a Restricted Subsidiary
or the acquisition of assets from such person, as the case may be, provided
that the Company on a pro forma basis could incur $1.00 of additional Debt
(other than Permitted Debt) pursuant to the first paragraph of the
"Limitation on Debt" covenant.
(vi) Debt represented by the Notes (other than the Additional Notes)
and the Subsidiary Guarantees.
(vii) Debt of the Company or any Restricted Subsidiary in respect of
Hedging Obligations incurred in the ordinary course of business.
(viii) (A) Capitalized Lease Obligations of the Company or a
Restricted Subsidiary, and (B) Debt of the Company or a Restricted
Subsidiary under purchase money mortgages or secured by purchase money
security interests so long as (x) such Debt is not secured by any property
or assets of the Company or any Restricted Subsidiary other than the
property and assets so acquired and (y) such Debt is created within 60 days
of the acquisition of the related property; provided that the aggregate
amount of Debt under this clause (viii) does not exceed $10,000,000 at any
one time outstanding.
(ix) Guarantees by any Restricted Subsidiary made in accordance with
the provisions of the "Limitation on Guarantees of Debt by Restricted
Subsidiaries" covenant.
(x) Debt of the Company or a Restricted Subsidiary, not permitted by
any other clause of this definition, in an aggregate principal amount not
to exceed $10,000,000 at any one time outstanding.
(xi) Any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") of any
outstanding Debt, other than Debt incurred pursuant to clause (i), (vii),
(viii) or (x) of this definition, including any successive refinancings
thereof, so long as (A) any such new Debt is in a principal amount that
does not exceed the principal amount so refinanced, plus the amount of any
premium required to be paid in connection with such refinancing pursuant to
the terms of the Debt refinanced or the amount of any premium reasonably
determined by the Company as necessary to accomplish such refinancing, plus
the amount of the expenses of the Company incurred in connection with such
refinancing, (B) in the case of any refinancing of Subordinated Debt, such
new Debt is made subordinate to the Notes at least to the same extent as
the Debt being refinanced and (C) such refinancing Debt does not have a
Weighted Average Life less than the Weighted Average Life of the Debt being
refinanced and does not have a final scheduled maturity earlier than the
final scheduled maturity, or permit redemption at the option of the holder
earlier than the earliest date of redemption at the option of the holder,
of the Debt being refinanced.
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For the purpose of determining compliance with this covenant, if an item of
Debt meets the criteria of more than one of the types of Permitted Debt
described in the above clauses, the Company or the Restricted Subsidiary in
question shall have the right to determine the category to which such Debt
applies and shall not be required to include the amount and type of such Debt in
more than one of such categories and may elect to apportion such item of Debt
between or among any two or more of such categories otherwise applicable.
Limitation on Restricted Payments. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, take any of the
following actions:
(a) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Capital Stock of the Company or any
Restricted Subsidiary, other than (i) dividends or distributions payable
solely in Qualified Equity Interests, (ii) dividends or distributions by a
Restricted Subsidiary payable to the Company or another Restricted
Subsidiary or (iii) pro rata dividends or distributions on common stock of
a Restricted Subsidiary held by minority stockholders, provided that such
dividends do not in the aggregate exceed the minority stockholders' pro
rata share of such Restricted Subsidiary's net income from the first day of
the Company's fiscal quarter during which the Closing Date occurs;
(b) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of Capital Stock (or any options,
warrants or other rights to acquire shares of Capital Stock) of (i) the
Company or any Unrestricted Subsidiary or (ii) any Restricted Subsidiary
held by any Affiliate of the Company (other than, in either case, any such
Capital Stock owned by the Company or any of its Restricted Subsidiaries);
(c) make any principal payment on, or repurchase, redeem, defease or
otherwise acquire or retire for value, prior to any scheduled principal
payment, sinking fund payment or maturity, any Subordinated Debt; and
(d) make any Investment (other than a Permitted Investment) in any
person
(such payments or other actions described in (but not excluded from)
clauses (a) through (d) being referred to as "Restricted Payments"), unless
at the time of, and immediately after giving effect to, the proposed
Restricted Payment:
(i) no Default or Event of Default has occurred and is continuing,
(ii) the Company could incur at least $1.00 of additional Debt
(other than Permitted Debt) pursuant to the first paragraph of the
"Limitation on Debt" covenant and
(iii) the aggregate amount of all Restricted Payments declared or
made after the Closing Date does not exceed the sum of:
(A) 50% of the aggregate Consolidated Adjusted Net Income of the
Company during the period (taken as one accounting period) from the
first day of the Company's fiscal quarter during which the Closing
Date occurs to the last day of the Company's most recently ended
fiscal quarter for which internal financial statements are available
at the time of such proposed Restricted Payment (or, if such
aggregate cumulative Consolidated Adjusted Net Income is a loss,
minus 100% of such amount), plus
(B) the aggregate net cash proceeds received by the Company
after the Closing Date from the issuance or sale (other than to a
Subsidiary) of Qualified Equity Interests of the Company (excluding
from this computation proceeds of an Equity Offering received by the
Company that are used by it to redeem Notes as discussed above); plus
(C) the aggregate net cash proceeds received by the Company
after the Closing Date from the issuance or sale (other than to a
Subsidiary) of debt securities or Disqualified Stock that have been
converted into or exchanged for Qualified Stock of the Company,
together with the aggregate net cash proceeds received by the Company
at the time of such conversion or exchange, plus
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(D) $5,000,000.
Notwithstanding the foregoing, the Company and its Restricted Subsidiaries
may take any of the following actions, so long as (with respect to clause (e)
and (f) below) no Default or Event of Default has occurred and is continuing or
would occur:
(a) The payment of any dividend within 60 days after the date of
declaration thereof if at the declaration date such payment would not have
been prohibited by the foregoing provision.
(b) The repurchase, redemption or other acquisition or retirement for
value of any shares of Capital Stock of the Company in exchange for, or out
of the net cash proceeds of a substantially concurrent issuance and sale
(other than to a Subsidiary) of, Qualified Equity Interests of the Company.
(c) The purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Debt in exchange for, or out of
the net cash proceeds of a substantially concurrent issuance and sale
(other than to a Subsidiary) of, Qualified Equity Interests of the Company;
(d) The purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Debt in exchange for, or out of the
net cash proceeds of a substantially concurrent issuance or sale (other
than to a Subsidiary) of, Subordinated Debt, so long as the Company or a
Restricted Subsidiary would be permitted to refinance such original
Subordinated Debt with such new Subordinated Debt pursuant to clause (xi)
of the definition of Permitted Debt.
(e) The repurchase of any Subordinated Debt at a purchase price not
greater than 101% of the principal amount of such Subordinated Debt in the
event of a "change of control" in accordance with provisions similar to the
"Purchase of Notes upon a Change of Control" covenant; provided that, prior
to or simultaneously with such repurchase, the Company has made the Change
of Control Offer as provided in such covenant with respect to the Notes and
has repurchased all Notes validly tendered for payment in connection with
such Change of Control Offer.
(f) The purchase, redemption, acquisition, cancellation or other
retirement for value of shares of Capital Stock of the Company, options on
any such shares or related stock appreciation rights or similar securities
held by officers or employees or former officers or employees (or their
estates or beneficiaries under their estates) or by any employee benefit
plan, upon death, disability, retirement or termination of employment or
pursuant to the terms of any employee benefit plan or any other agreement
under which such shares of stock or related rights were issued; provided
that the aggregate cash consideration paid for such purchase, redemption,
acquisition, cancellation or other retirement of such shares of Capital
Stock after the date of the initial issuance of the Notes does not exceed
$500,000 in any fiscal year.
(g) Repurchases of Capital Stock of the Company from employees of the
Company or any of its Restricted Subsidiaries deemed to occur upon exercise
of stock options or stock appreciation rights if such Capital Stock
represents a portion of the exercise price of such options or rights;
provided that any payments made pursuant to this clause (g) may not exceed
in the aggregate $100,000 in any fiscal year.
The payments described in clauses (b), (c), (e), (f) and (g) of this
paragraph will be Restricted Payments that will be permitted to be taken in
accordance with this paragraph but will reduce the amount that would
otherwise be available for Restricted Payments under the foregoing clause
(iii) of the first paragraph of this covenant and the payments described in
clauses (a) and (d) of this paragraph will be Restricted Payments that will
be permitted to be taken in accordance with this paragraph and will not
reduce the amount that would otherwise be available for Restricted Payments
under the foregoing clause (iii) of the first paragraph of this covenant.
For the purpose of making any calculations under the Indenture (i) if a
Restricted Subsidiary is designated an Unrestricted Subsidiary, the Company will
be deemed to have made an Investment in amount equal to the fair market value of
the net assets of such Restricted Subsidiary at the time of such designation as
determined by the Board of Directors of the Company, whose good faith
determination will be conclusive, (ii) any property transferred to or from an
Unrestricted Subsidiary will be valued at fair market value at the
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time of such transfer, as determined by the Board of Directors of the Company,
whose good faith determination will be conclusive and (iii) subject to the
foregoing, the amount of any Restricted Payment, if other than cash, will be
determined by the Board of Directors of the Company, whose good faith
determination will be conclusive.
If the aggregate amount of all Restricted Payments calculated under the
foregoing provision includes an Investment in an Unrestricted Subsidiary or
other person that thereafter becomes a Restricted Subsidiary, the aggregate
amount of all Restricted Payments calculated under the foregoing provision will
be reduced by the lesser of (x) the net asset value of such Subsidiary at the
time it becomes a Restricted Subsidiary and (y) the initial amount of such
Investment.
If an Investment resulted in the making of a Restricted Payment, the
aggregate amount of all Restricted Payments calculated under the foregoing
provision will be reduced by the amount of any net reduction in such Investment
(resulting from the payment of interest or dividends, loan repayment, transfer
of assets or otherwise), to the extent such net reduction is not included in the
Company's Consolidated Adjusted Net Income; provided that the total amount by
which the aggregate amount of all Restricted Payments may be reduced may not
exceed the lesser of (x) the cash proceeds received by the Company and its
Restricted Subsidiaries in connection with such net reduction and (y) the
initial amount of such Investment.
In computing Consolidated Adjusted Net Income of the Company for purposes
of the foregoing clause (iii)(A), (i) the Company may use audited financial
statements for the portions of the relevant period for which audited financial
statements are available on the date of determination and unaudited financial
statements and other current financial data based on the books and records of
the Company for the remaining portion of such period and (ii) the Company will
be permitted to rely in good faith on the financial statements and other
financial data derived from the books and records of the Company that are
available on the date of determination. If the Company makes a Restricted
Payment that, at the time of the making of such Restricted Payment, would in the
good faith determination of the Company be permitted under the requirements of
the Indenture, such Restricted Payment will be deemed to have been made in
compliance with the Indenture notwithstanding any subsequent adjustments made in
good faith to the Company's financial statements affecting Consolidated Adjusted
Net Income of the Company for any period.
Purchase of Notes upon a Change of Control. If a Change of Control occurs
at any time, then each holder of Notes will have the right to require that the
Company purchase such holder's Notes, in whole or in part in integral multiples
of $1,000, at a purchase price in cash equal to 101% of the principal amount of
such Notes, plus accrued and unpaid interest, if any, to the date of purchase,
pursuant to the offer described below (the "Change of Control Offer") and the
other procedures set forth in the Indenture.
Within 30 days following any Change of Control, the Company will notify the
Trustee thereof and give written notice of such Change of Control to each holder
of Notes by first-class mail, postage prepaid, at its address appearing in the
security register, stating, among other things, (i) the purchase price and the
purchase date, which will be a Business Day no earlier than 30 days nor later
than 60 days from the date such notice is mailed or such later date as is
necessary to comply with requirements under the Exchange Act; (ii) that any Note
not tendered will continue to accrue interest; (iii) that, unless the Company
defaults in the payment of the purchase price, any Notes accepted for payment
pursuant to the Change of Control Offer will cease to accrue interest after the
Change of Control purchase date; and (iv) certain other procedures that a holder
of Notes must follow to accept a Change of Control Offer or to withdraw such
acceptance.
If a Change of Control Offer is made, there can be no assurance that the
Company will have available funds sufficient to pay the purchase price for all
of the Notes that might be tendered by holders of the Notes seeking to accept
the Change of Control Offer. The failure of the Company to make or consummate
the Change of Control Offer or pay the applicable Change of Control purchase
price when due would result in an Event of Default and would give the Trustee
and the holders of the Notes the rights described under "Events of Default."
One of the events that constitutes a Change of Control under the Indenture
is the disposition of "all or substantially all" of the Company's assets. This
term has not been interpreted under New York law (which is
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the governing law of the Indenture) to represent a specific quantitative test.
As a consequence, in the event holders of the Notes elect to require the Company
to purchase the Notes and the Company elects to contest such election, there can
be no assurance as to how a court interpreting New York law would interpret the
phrase.
The existence of a holder's right to require the Company to purchase such
holder's Notes upon a Change of Control may deter a third party from acquiring
the Company in a transaction that constitutes a Change of Control.
The definition of "Change of Control" in the Indenture is limited in scope.
The provisions of the Indenture may not afford holders of Notes the right to
require the Company to repurchase such Notes in the event of a highly leveraged
transaction or certain transactions with the Company's management or its
affiliates, including a reorganization, restructuring, merger or similar
transaction involving the Company (including, in certain circumstances, an
acquisition of the Company by management or its affiliates) that may adversely
affect holders of the Notes, if such transaction is not a transaction defined as
a Change of Control. See "-- Certain Definitions" above for the definition of
"Change of Control." A transaction involving the Company's management or its
affiliates, or a transaction involving a recapitalization of the Company, would
result in a Change of Control if it is the type of transaction specified in such
definition.
The Company will comply with the applicable tender offer rules including
Rule l4e-l under the Exchange Act, and any other applicable securities laws and
regulations in connection with a Change of Control Offer.
The Company will not, and will not permit any Restricted Subsidiary to,
create any restriction (other than restrictions existing under Debt as in effect
on the Closing Date or in refinancings of such Debt) that would materially
impair the ability of the Company to make a Change of Control Offer to purchase
the Notes or, if such Change of Control Offer is made, to pay for the Notes
tendered for purchase.
Limitation on Certain Asset Sales. (a) The Company will not, and will not
permit any Restricted Subsidiary to, engage in any Asset Sale unless (i) the
consideration received by the Company or such Restricted Subsidiary for such
Asset Sale is not less than the fair market value of the assets sold (as
determined by the Board of Directors of the Company, whose good faith
determination will be conclusive) and (ii) the consideration received by the
Company or the relevant Restricted Subsidiary in respect of such Asset Sale
consists of at least 75% (A) cash or cash equivalents or (B) the assumption by
the transferee of Debt of the Company or a Restricted Subsidiary ranked pari
passu with the Notes and release of the Company or such Restricted Subsidiary
from all liability on such Debt, or a combination of the foregoing.
(b) If the Company or any Restricted Subsidiary engages in an Asset Sale,
the Company may, at its option, within 12 months after such Asset Sale, (i)
apply all or a portion of the Net Cash Proceeds to the permanent reduction of
amounts outstanding under the Revolving Credit Facility or other credit facility
referred to in clause (i) of the definition of Permitted Debt or to the
repayment of other senior Debt of the Company or a Restricted Subsidiary or (ii)
invest (or enter into a legally binding agreement to invest) all or a portion of
such Net Cash Proceeds in properties and assets to replace the properties and
assets that were the subject of the Asset Sale or in properties and assets that
will be used in businesses of the Company or its Restricted Subsidiaries, as the
case may be, existing on the Closing Date. If any such legally binding agreement
to invest such Net Cash Proceeds is terminated, the Company may, within 90 days
of such termination or within 12 months of such Asset Sale, whichever is later,
invest such Net Cash Proceeds as provided in clause (b)(i) or (b)(ii) (without
regard to the parenthetical contained in such clause (b)(ii)) above. The amount
of such Net Cash Proceeds not so used as set forth above in this paragraph (b)
constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $5,000,000, the
Company will, within 30 days thereafter, make an offer to purchase from all
holders of Notes, on a pro rata basis, in accordance with the procedures set
forth in the Indenture, the maximum principal amount (expressed as a multiple of
$1,000) of Notes that may be purchased with the Excess Proceeds, at a purchase
price in cash equal to 100% of the principal amount thereof, plus accrued
interest, if any, to the date such offer to purchase is consummated. To the
extent that the aggregate principal amount of Notes tendered pursuant to such
offer to purchase is less
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than the Excess Proceeds, the Company may use such deficiency for general
corporate purposes. If the aggregate principal amount of Notes validly tendered
and not withdrawn by holders thereof exceeds the Excess Proceeds, the Notes to
be purchased will be selected on a pro rata basis. Upon completion of such offer
to purchase, the amount of Excess Proceeds will be reset to zero.
Limitation on Transactions with Affiliates. The Company will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, enter into or
suffer to exist any transaction with, or for the benefit of, any Affiliate of
the Company unless (a) such transaction is on terms that are no less favorable
to the Company or such Restricted Subsidiary, as the case may be, than those
that could have been obtained in an arm's length transaction with third parties
who are not Affiliates and (b) either (i) with respect to any transaction or
series of related transactions involving aggregate payments in excess of
$1,000,000, but less than $2,500,000, or between the Company (or its
Subsidiaries) and Seitel (or its subsidiaries) in the ordinary course of
business involving aggregate payments in excess of $1,000,000, the Company
delivers an officers' certificate to the Trustee certifying that such
transaction or transactions comply with clause (a) above ("Officers'
Certificate") or (ii) with respect to any transaction or series of related
transactions involving aggregate payments equal to or in excess of $2,500,000,
but less than $7,500,000 (not including transactions with Seitel or its
subsidiaries, falling under clause (i) above), the Company delivers (A) an
Officers' Certificate and (B) such transaction or transactions have been
approved by the Board of Directors (including a majority of the Disinterested
Directors) of the Company or (iii) with respect to a transaction or series of
related transactions involving aggregate payments equal to or in excess of
$7,500,000 (not including transactions with Seitel or its subsidiaries, falling
under clause (i) above) the Company has obtained a written opinion from a
nationally recognized investment banking firm to the effect that such
transaction or transactions are fair to the Company or such Restricted
Subsidiary from a financial point of view.
The foregoing covenant will not restrict any of the following:
(A) Transactions among the Company and/or its Wholly-Owned Restricted
Subsidiaries.
(B) The Company from paying (i) reasonable compensation and fees to
directors of the Company or any Restricted Subsidiary who are not employees
of the Company or any Restricted Subsidiary and (ii) reasonable
compensation to officers of the Company or any Restricted Subsidiary.
(C) Transactions permitted by the provisions of the "Limitations on
Restricted Payments" covenant.
Limitation on Dividends and Other Payment Restrictions Affecting Restricted
Subsidiaries. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Restricted Subsidiary to (a) pay dividends, in cash or
otherwise, or make any other distributions on or in respect of its Capital
Stock, (b) pay any Debt owed to the Company or any other Restricted Subsidiary,
(c) make loans or advances to the Company or any other Restricted Subsidiary,
(d) transfer any of its properties or assets to the Company or any other
Restricted Subsidiary or (e) guarantee Debt of the Company or any other
Restricted Subsidiary, except for such encumbrances or restrictions existing
under or by reason of any of the following:
(i) Any agreement in effect on the Closing Date.
(ii) Customary non-assignment provisions of any lease governing a
leasehold interest of the Company or any Restricted Subsidiary.
(iii) The refinancing or successive refinancings of Debt incurred
under the agreements in effect on the Closing Date, so long as such
encumbrances or restrictions are no less favorable to the Company or any
Restricted Subsidiary than those contained in such original agreement.
(iv) Any agreement or other instrument of a person acquired by the
Company or any Restricted Subsidiary in existence at the time of such
acquisition (but not created in contemplation thereof), which
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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.
Limitation on Issuances and Sales of Capital Stock of Restricted
Subsidiaries. The Company will not sell, and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell, any shares of Capital
Stock of a Restricted Subsidiary (including options, warrants or other rights to
purchase shares of such Capital Stock) except (i) to the Company or a
Wholly-Owned Restricted Subsidiary, (ii) issuances or sales to foreign nationals
of shares of Capital Stock of foreign Restricted Subsidiaries, to the extent
required by applicable law, or issuances or sales to directors of directors'
qualifying shares, (iii) if, immediately after giving effect to such issuance or
sale, neither the Company nor any of its Subsidiaries owns any shares of Capital
Stock of such Restricted Subsidiary (including options, warrants or other rights
to purchase shares of such Capital Stock) or (iv) if, immediately after giving
effect to such issuance or sale, such Restricted Subsidiary would no longer
constitute a Restricted Subsidiary and any remaining Investment in such person
would have been permitted to be made under the "Limitation on Restricted
Payments" covenant if made on the date of such issuance or sale.
Limitation on Guarantees of Debt by Restricted Subsidiaries. The Company
will not permit any Restricted Subsidiary, directly or indirectly, to guarantee,
assume or in any other manner become liable for the payment of any Debt of the
Company or any other Restricted Subsidiary, provided, however, that any
Restricted Subsidiary may guarantee, assume or become liable for the payment of
Debt of the Company if (a) such Restricted Subsidiary simultaneously executes
and delivers a supplemental indenture providing for a guarantee of payment of
the Notes by such Restricted Subsidiary and (b) with respect to any guarantee of
Debt by a Restricted Subsidiary, any such guarantee is subordinated to such
Restricted Subsidiary's guarantee with respect to the Notes at least to the same
extent as such Debt is subordinated to the Notes, provided that the foregoing
provision will not be applicable to any guarantee by any Restricted Subsidiary
that existed at the time such person became a Restricted Subsidiary and was not
incurred in connection with, or in contemplation of, such person becoming a
Restricted Subsidiary.
Any guarantee by a Restricted Subsidiary of the Notes pursuant to the
preceding paragraph may provide by its terms that it will automatically and
unconditionally be released and discharged upon (i) any sale, exchange or
transfer to any person not an Affiliate of the Company of all of the Company's
and the Restricted Subsidiaries' Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by the Indenture), (ii) the release or discharge of the guarantee
that resulted in the creation of such guarantee of the Notes, except a discharge
or release by or as a result of payment under such guarantee or (iii) the
designation of such Restricted Subsidiary as an Unrestricted Subsidiary in
accordance with the terms of the Indenture.
The foregoing restriction shall not apply to any guarantee, assumption or
liability in existence as of the Closing Date.
Unrestricted Subsidiaries. (a) The Board of Directors of the Company may
designate any Subsidiary (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary so long as (i) neither the Company
nor any Restricted Subsidiary provides credit support for or guarantee of, any
Debt or is directly or indirectly liable for any Debt of such Subsidiary, (ii)
no default with respect to any Debt of such Subsidiary would permit (upon
notice, lapse of time or otherwise) any holder of any other Debt of the Company
or any Restricted Subsidiary to declare a default on such other Debt or cause
the payment thereof to be accelerated or payable prior to its stated maturity,
(iii) any Investment in such Subsidiary made as a result of designating such
Subsidiary an Unrestricted Subsidiary will not violate the provisions of the
"Limitation on Restricted Payments" covenant, (iv) neither the Company nor any
Restricted Subsidiary has a contract, agreement, arrangement, understanding or
obligation of any kind, whether written or oral, with such Subsidiary other than
those that might be obtained at the time from persons who are not Affiliates of
the Company and (v) neither the Company nor any Restricted Subsidiary has any
obligation to subscribe for additional shares of Capital Stock or other equity
interest in such Subsidiary, or to maintain or preserve such Subsidiary's
financial condition or to cause such Subsidiary to achieve certain levels of
operating results.
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(b) The Board of Directors of the Company may designate any Unrestricted
Subsidiary as a Restricted Subsidiary; provided that (i) no Default or Event of
Default has occurred and is continuing following such designation and (ii) the
Company could incur at least $1.00 of additional Debt (other than Permitted
Debt) pursuant to the first paragraph of the "Limitation on Debt" covenant
(treating any Debt of such Unrestricted Subsidiary as the incurrence of Debt by
a Restricted Subsidiary).
Limitation on Liens. The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume or
suffer to exist any Lien of any kind on or with respect to any of its property
or assets, including any shares of stock or indebtedness of any Restricted
Subsidiary, whether owned at the Closing Date or thereafter acquired, or any
income, profits or proceeds therefrom, or assign or otherwise convey any right
to receive income thereon, unless (a) in the case of any Lien securing Debt
which is pari passu or Subordinated Debt, the Notes are secured by a Lien on
such property, assets or proceeds that is senior in priority to such Lien and
(b) in the case of any other Lien, the Notes are equally and ratably secured
with the obligation or liability secured by such Lien.
Notwithstanding the foregoing, the Company may, and may permit any
Restricted Subsidiary to, incur any of the following Liens ("Permitted Liens"):
(i) Liens (other than Liens securing Debt under the Revolving Credit
Facility) existing as of the Closing Date.
(ii) Liens on property or assets of the Company or any Restricted
Subsidiary securing Debt under the Revolving Credit Facility and/or other
credit facilities in a principal amount not to exceed the principal amount
of the outstanding Debt permitted by clause (i) of the definition of
"Permitted Debt."
(iii) Liens on any property or assets of a Restricted Subsidiary
granted in favor of the Company or any Restricted Subsidiary.
(iv) Liens securing the Notes or any Subsidiary Guarantee.
(v) Liens representing the interest or title of lessors under
Capitalized Lease Obligations or Liens securing purchase money mortgages or
purchase money security interests.
(vi) Liens securing Acquired Debt created prior to (and not in
connection with or in contemplation of) the incurrence of such Debt by the
Company or any Restricted Subsidiary; provided that such Lien does not
extend to any property or assets of the Company or any Restricted
Subsidiary other than the property and assets acquired in connection with
the incurrence of such Acquired Debt.
(vii) Liens securing Hedging Obligations permitted to be incurred
pursuant to clause (vii) of the definition of "Permitted Debt."
(viii) Statutory Liens or landlords', carriers', warehouseman's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business and with respect to amounts not
yet delinquent or being contested in good faith by appropriate proceedings.
(ix) Liens for taxes, assessments, government charges or claims that
are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted.
(x) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance bonds and other obligations of a like
nature incurred in the ordinary course of business (other than contracts
for the payment of money).
(xi) Easements, rights-of-way, restrictions and other similar charges
or encumbrances not interfering in any material respect with the business
of the Company or any Restricted Subsidiary incurred in the ordinary course
of business.
(xii) Liens arising by reason of any judgment, decree or order of any
court, so long as such Lien is adequately bonded and any appropriate legal
proceedings that may have been duly initiated for the review of such
judgment, decree or order have not been finally terminated or the period
within which such proceedings may be initiated has not expired.
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(xiii) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating to
such letters of credit and the products and proceeds thereof.
(xiv) Liens incidental to the conduct by the Company or its Restricted
Subsidiaries of Multi-Client Surveys (including without limitation,
licenses, participation rights, rebate or revenue sharing obligations,
joint ownership, or similar encumbrances), provided that such Liens have
not arisen in connection with the incurrence of Debt.
(xv) Liens encumbering towed-streamer seismic data acquisition vessels
owned by the Company or a Restricted Subsidiary pursuant to leases thereof
in accordance with clause (vi) of the last sentence of the definition of
Asset Sale.
(xvi) Any extension, renewal or replacement, in whole or in part, of
any Lien described in the foregoing clauses (i) through (xv); provided that
any such extension, renewal or replacement is no more restrictive in any
material respect than the Lien so extended, renewed or replaced and does
not extend to any additional property or assets.
Reports. At all times from and after the earlier of (i) the date of the
commencement of an Exchange Offer or the effectiveness of the Shelf Registration
Statement (the "Registration") and (ii) the date six months after the Closing
Date, in either case, whether or not the Company is then required to file
reports with the Commission, the Company will file with the Commission all such
annual reports, quarterly reports and other documents that the Company would be
required to file if it were subject to Sections 13(a) or 15(d) under the
Exchange Act. The Company will also be required (a) to supply to the Trustee and
each holder of Notes, or supply to the Trustee for forwarding to each such
holder, without cost to such holder, copies of such reports and other documents
within 15 days after the date on which the Company files such reports and
documents with the Commission or the date on which the Company would be required
to file such reports and documents if the Company were so required and (b) if
filing such reports and documents with the Commission is not accepted by the
Commission or is prohibited under the Exchange Act, to supply at the Company's
cost copies of such reports and documents to any prospective holder of Notes
promptly upon written request. In addition, at all times prior to the earlier of
the date of the Registration and the date six months after the Closing Date, the
Company will, at its cost, deliver to each holder of the Notes quarterly and
annual reports substantially equivalent to those that would be required by the
Exchange Act. Furthermore, at all times prior to the Registration, the Company
will supply at the Company's cost copies of such reports and documents to any
prospective holder of Notes promptly upon written request.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge with or into any other person
or, directly or indirectly, convey, sell, assign, transfer, lease or otherwise
dispose of its properties and assets substantially as an entirety to any other
person (in one transaction or a series of related transactions), unless each of
the following conditions is satisfied:
(a) Either (i) the Company is the surviving corporation or (ii) the
person (if other than the Company) formed by such consolidation or into
which the Company is merged or the person that acquires by sale,
assignment, transfer, lease or other disposition the properties and assets
of the Company substantially as an entirety (the "Surviving Entity") (A) is
a corporation, partnership or trust organized and validly existing under
the laws of the United States, any state thereof or the District of
Columbia and (B) expressly assumes, by a supplemental indenture in form
satisfactory to the Trustee, all of the Company's obligations under the
Indenture and the Notes.
(b) Immediately after giving effect to such transaction and treating
any obligation of the Company or a Restricted Subsidiary in connection with
or as a result of such transaction as having been incurred at the time of
such transaction, no Default or Event of Default has occurred and is
continuing.
(c) Immediately after giving effect to such transaction on a pro forma
basis, the Consolidated Net Worth of the Company (or of the Surviving
Entity if the Company is not the continuing obligor under the
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Indenture) is equal to or greater than the Consolidated Net Worth of the
Company immediately prior to such transaction.
(d) Immediately after giving effect to such transaction on a pro forma
basis (on the assumption that the transaction occurred at the beginning of
the most recently ended four full fiscal quarter period for which internal
financial statements are available), the Company (or the Surviving Entity
if the Company is not the continuing obligor under the Indenture) could
incur at least $1.00 of additional Debt (other than Permitted Debt)
pursuant to the first paragraph of the "Limitation on Debt" covenant.
(e) If any of the property or assets of the Company or any of its
Restricted Subsidiaries would thereupon become subject to any Lien, the
provisions of the "Limitation on Liens" covenant are complied with.
(f) The Company delivers, or causes to be delivered, to the Trustee,
in form and substance reasonably satisfactory to the Trustee, an officers'
certificate and an opinion of counsel, each stating that such transaction
complies with the requirements of the Indenture.
(g) If the Company is not the continuing obligor under the Indenture,
each Subsidiary Guarantor, unless it is the other party to the transaction
described above, has by supplemental indenture confirmed that its
Subsidiary Guarantee applies to the Surviving Entity's obligations under
the Indenture and the Notes.
In the event of any transaction described in and complying with the
conditions listed in the first paragraph of this covenant in which the Company
is not the continuing obligor under the Indenture, the Surviving Entity will
succeed to, and be substituted for, and may exercise every right and power of,
the Company under the Indenture, and thereafter the Company will, except in the
case of a lease, be discharged from all its obligations and covenants under the
Indenture and Notes.
EVENTS OF DEFAULT
Each of the following are "Events of Default" under the Indenture:
(a) Default in the payment of any interest on any Note when it becomes
due and payable, and continuance of such default for a period of 60 days.
(b) Default in the payment of the principal of (or premium, if any,
on) any Note when due either at maturity, upon any redemption or pursuant
to a purchase by the Company pursuant to the "Change in Control" covenant
or the "Limitation on Certain Asset Sales" covenant.
(c) Failure to perform or comply with the Indenture provisions
described under "Consolidation, Merger and Sale of Assets."
(d) Default in the performance, or breach, of any covenant or
agreement of the Company or any Subsidiary Guarantor contained in the
Indenture or any Subsidiary Guarantee (other than a default in the
performance, or breach, of a covenant or agreement that is specifically
dealt with elsewhere herein), and continuance of such default or breach for
a period of 60 days after written notice has been given to the Company by
the Trustee or to the Company and the Trustee by the holders of at least
25% in aggregate principal amount of the Notes then outstanding.
(e) (i) An event of default has occurred under any mortgage, bond,
indenture, loan agreement or other document evidencing an issue of Debt of
the Company or any Restricted Subsidiary, which issue has an aggregate
outstanding principal amount of not less than $5,000,000, and such default
has resulted in such Debt becoming, whether by declaration or otherwise,
due and payable prior to the date on which it would otherwise become due
and payable or (ii) a default in any payment when due at final maturity of
any such Debt.
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(f) Failure by the Company or any of its Restricted Subsidiaries to
pay one or more final judgments the uninsured portion of which exceeds in
the aggregate $5,000,000, which judgment or judgments are not paid,
discharged or stayed for a period of 30 days.
(g) The occurrence of certain events of bankruptcy, insolvency or
reorganization with respect to the Company or any Significant Subsidiary.
(h) Any Subsidiary Guarantee ceases to be in full force and effect or
is declared null and void or any Subsidiary Guarantor denies that it has
any further liability under any Subsidiary Guarantee, or gives notice to
such effect (other than by reason of the termination of the Indenture or
the release of any such Subsidiary Guarantee in accordance with the
Indenture), and such condition has continued for a period of 30 days after
written notice of such failure requiring the Subsidiary Guarantor and the
Company to remedy the same has been given (x) to the Company by the Trustee
or (y) to the Company and the Trustee by the holders of 25% in aggregate
principal amount of the Notes then outstanding.
If an Event of Default (other than as specified in clause (g) above) occurs
and is continuing, the Trustee or the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding may, and the Trustee at the
request of such holders will, declare the principal of all of the outstanding
Notes immediately due and payable and, upon any such declaration, such principal
will become due and payable immediately. If an Event of Default specified in
clause (g) above occurs and is continuing, then the principal of all of the
outstanding Notes will ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any holder of
Notes.
At any time after a declaration of acceleration under the Indenture, but
before a judgment or decree for payment of the money due has been obtained by
the Trustee, the holders of a majority in aggregate principal amount of the
outstanding Notes, by written notice to the Company and the Trustee, may rescind
such declaration and its consequences if (i) the Company has paid or deposited
with the Trustee a sum sufficient to pay (A) all overdue interest on all Notes,
(B) all unpaid principal of (and premium, if any, on) any outstanding Notes that
has become due otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Notes, (C) to the extent that payment of such
interest is lawful, interest upon overdue interest and overdue principal at the
rate borne by the Notes and, (D) all sums paid or advanced by the Trustee under
the Indenture and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel; and (ii) all Events of Default,
other than the non-payment of amounts of principal of (or premium, if any, on)
or interest on the Notes that have become due solely by such declaration of
acceleration, have been cured or waived. No such rescission will affect any
subsequent default or impair any right consequent thereon.
The holders of not less than a majority in aggregate principal amount of
the outstanding Notes may, on behalf of the holders of all of the Notes, waive
any past defaults under the Indenture, except a default in the payment of the
principal of (and premium, if any) or interest on any Note, or in respect of a
covenant or provision that under the Indenture cannot be modified or amended
without the consent of the holder of each Note outstanding.
If a Default or an Event of Default occurs and is continuing and is known
to the Trustee, the Trustee will mail to each holder of the Notes notice of the
Default or Event of Default within 90 days after the occurrence thereof. Except
in the case of a Default or an Event of Default in payment of principal of (and
premium, if any, on) or interest on any Notes, the Trustee may withhold the
notice to the holders of the Notes if a committee of its trust officers in good
faith determines that withholding such notice is in the interests of the holders
of the Notes.
The Company is required to furnish to the Trustee annual statements as to
the performance by the Company of its obligations under the Indenture and as to
any default in such performance. The Company is also required to notify the
Trustee within five business days of any Default.
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DEFEASANCE OR COVENANT DEFEASANCE OF INDENTURE
The Company may, at its option and at any time, terminate the obligations
of the Company and any Subsidiary Guarantors with respect to the outstanding
Notes ("defeasance"). Such defeasance means that the Company will be deemed to
have paid and discharged the entire Debt represented by the outstanding Notes,
except for (i) the rights of holders of outstanding Notes to receive payments in
respect of the principal of (and premium, if any, on) and interest on such Notes
when such payments are due, (ii) the Company's obligations to issue temporary
Notes, register the transfer or exchange of any Notes, replace mutilated,
destroyed, lost or stolen Notes, maintain an office or agency for payments in
respect of the Notes and segregate and hold such payments in trust, (iii) the
rights, powers, trusts, duties and immunities of the Trustee and (iv) the
defeasance provisions of the Indenture. In addition, the Company may, at its
option and at any time, elect to terminate the obligations of the Company and
any Subsidiary Guarantors with respect to certain covenants set forth in the
Indenture and described under "Certain Covenants" above, and any omission to
comply with such obligations would not constitute a Default or an Event of
Default with respect to the Notes ("covenant defeasance").
In order to exercise either defeasance or covenant defeasance, (a) the
Company must irrevocably deposit or cause to be deposited with the Trustee, as
trust funds in trust, specifically pledged as security for, and dedicated solely
to, the benefit of the holders of the Notes, money in an amount, or U.S.
Government Obligations (as defined in the Indenture) that through the scheduled
payment of principal and interest thereon will provide money in an amount, or a
combination thereof, sufficient, in the opinion of a nationally recognized firm
of independent public accountants, to pay and discharge the principal of (and
premium, if any, on) and interest on the outstanding Notes at maturity (or upon
redemption, if applicable) of such principal or installment of interest; (b) no
Default or Event of Default has occurred and is continuing on the date of such
deposit or, insofar as an event of bankruptcy under clause (g) of "Events of
Default" above is concerned, at any time during the period ending on the 91st
day after the date of such deposit; (c) such defeasance or covenant defeasance
may not result in a breach or violation of, or constitute a default under, the
Indenture or any material agreement or instrument to which the Company or any
Subsidiary Guarantor is a party or by which it is bound; (d) in the case of
defeasance, the Company must deliver to the Trustee an opinion of counsel
stating that the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or since the date hereof there has been a
change in applicable federal income tax law, to the effect, and based thereon
such opinion must confirm that, the holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred; (e) in the case of covenant defeasance, the Company
must have delivered to the Trustee an opinion of counsel to the effect that the
Holders of the Notes outstanding will not recognize income, gain or loss for
federal income tax purposes as a result of such covenant defeasance and will be
subject to federal 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; and (f) the Company must have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that all conditions
precedent provided for relating to either the defeasance or the covenant
defeasance, as the case may be, have been complied with.
SATISFACTION AND DISCHARGE
Upon the request of the Company, the Indenture will cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
the Notes, as expressly provided for in the Indenture) and the Trustee, at the
expense of the Company, will execute proper instruments acknowledging
satisfaction and discharge of the Indenture when (a) either (i) all the Notes
theretofore authenticated and delivered (other than destroyed, lost or stolen
Notes that have been replaced or paid and Notes that have been subject to
defeasance under "Defeasance or Covenant Defeasance of Indenture") have been
delivered to the Trustee for cancellation or (ii) all Notes not theretofore
delivered to the Trustee for cancellation (A) have become due and payable, (B)
will become due and payable at maturity within one year or (C) the Company has
irrevocably notified the Trustee to call such Notes for redemption within one
year under arrangements for the
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giving of notice of redemption by the Trustee in the name, and at the expense,
of the Company, and the Company has irrevocably deposited or caused to be
deposited with the Trustee funds in trust for the purpose in an amount
sufficient to pay and discharge the entire Debt on such Notes not theretofore
delivered to the Trustee for cancellation, for principal (and premium, if any,
on) and interest on the Notes to the date of such deposit (in the case of Notes
that have become due and payable) or to the Stated Maturity or redemption date,
as the case may be; (b) the Company has paid or caused to be paid all sums
payable under the Indenture by the Company; and (c) the Company has delivered to
the Trustee an officers' certificate and an opinion of counsel, each stating
that all conditions precedent provided in the Indenture relating to the
satisfaction and discharge of the Indenture have been complied with.
AMENDMENTS AND WAIVERS
Modifications and amendments of the Indenture and any Subsidiary Guarantee
may be made by the Company, any affected Subsidiary Guarantor and the Trustee
with the consent of the holders of a majority in aggregate outstanding principal
amount of the Notes; provided, however, that no such modification or amendment
may, without the consent of the holder of each outstanding Note affected
thereby,
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Note, or reduce the principal amount thereof or the
rate of interest thereon or any premium payable upon the redemption
thereof, or change the place of payment where, or the coin or currency in
which any Note or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);
(b) reduce the percentage in principal amount of outstanding Notes,
the consent of whose holders is required for any such amendment or for any
waiver of compliance with certain provisions of, or certain defaults and
their consequences provided for under, the Indenture; or
(c) waive a default in the payment of principal of, or premium, if
any, or interest on the Notes or reduce the percentage or aggregate
principal amount of outstanding Notes the consent of whose holders is
necessary for waiver of compliance with certain provisions of the Indenture
or for waiver of certain defaults.
Without the consent of the holders of at least 75% in principal amount of
the Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for such Notes), no waiver or amendment to the
Indenture may make any change in the provisions described above under the
caption "Change of Control" above after the mailing of an offer with respect to
a Change of Control Offer that adversely affects the rights of any holder of
Notes.
The holders of a majority in aggregate principal amount of the Notes
outstanding may waive compliance with certain restrictive covenants and
provisions of the Indenture and any Subsidiary Guarantee.
Without the consent of any holders, the Company and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
to the Indenture for any of the following purposes: (1) to evidence the
succession of another person to the Company and the assumption by any such
successor of the covenants of the Company in the Indenture and in the Notes; or
(2) to add to the covenants of the Company for the benefit of the holders, or to
surrender any right or power herein conferred upon the Company; or (3) to add
additional Events of Defaults; or (4) to provide for uncertificated Notes in
addition to or in place of the certificated Notes; or (5) to evidence and
provide for the acceptance of appointment under the Indenture by a successor
Trustee; or (6) to secure the Notes; or (7) to add new Subsidiary Guarantors or
release Subsidiary Guarantors in accordance with the terms of the Indenture; or
(8) to cure any ambiguity, to correct or supplement any provision in the
Indenture that may be defective or inconsistent with any other provision in the
Indenture, or to make any other provisions with respect to matters or questions
arising under the Indenture, provided that such actions pursuant to this clause
do not adversely affect the interests of the holders in any material respect; or
(9) to comply with any requirements of the Commission in order to effect and
maintain
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the qualification of the Indenture under the Trust Indenture Act; or (10) to
make any other change that does not adversely affect the rights of any holder.
THE TRUSTEE
Chase Bank of Texas, National Association, the Trustee under the Indenture,
is the initial paying agent and registrar for the Notes.
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set forth
in the Indenture. Under the Indenture, the holders of a majority in outstanding
principal amount of the 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. If an Event of Default has occurred and
is continuing, the Trustee will exercise such rights and powers vested in it
under the Indenture and use the same degree of care and skill in its exercise as
a prudent person would exercise under the circumstances in the conduct of such
person's own affairs.
The Indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the Trustee thereunder,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize on certain property received by it in respect of any
such claims, as security or otherwise. The Trustee is permitted to engage in
other transactions; provided, however, that, if it acquires any conflicting
interest (as defined), it must eliminate such conflict upon the occurrence of an
Event of Default or else resign.
GOVERNING LAW
The Indenture and the Notes are governed by, and will be construed in
accordance with, the laws of the State of New York.
BOOK-ENTRY, DELIVERY AND FORM
The Private Notes were initially issued in fully registered form without
interest coupons, represented by one global Note in definitive, fully registered
form without interest coupons (the "Private Global Note") and were deposited
with the Trustee as custodian for DTC and registered in the name of a nominee of
DTC.
The Private Notes, to the extent validly tendered and accepted and directed
by their holders in their Letters of Transmittal, will be exchanged through
book-entry electronic transfer for a beneficial interest in one global Note (the
"Exchange Global Note") in definitive, fully registered form deposited with the
Trustee as custodian for DTC and registered in the name of a nominee of DTC. The
Private Global Note and the Exchange Global Note are referred to collectively as
the "Global Note."
Upon the issuance of the Global Note, DTC will credit, on its internal
system, the respective principal amount of the individual beneficial interests
represented by such Global Note to the accounts of persons who have accounts
with such depositary. Such accounts were initially designated by or on behalf of
the Initial Purchasers. Ownership of beneficial interests in a Global Note will
be limited to persons who have accounts with DTC ("participants") or persons who
hold interests through participants. Ownership of beneficial interests in the
Global Note will be shown on, and the transfer of that ownership will be
effected only through, records maintained by DTC or its nominee (with respect to
interests of participants) and the records of participants (with respect to
interests of persons other than participants). Qualified Institutional Buyers
may hold their interests in the Global Note directly through DTC if they are
participants in such system, or indirectly through organizations which are
participants in such system.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Note, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the Notes represented by such Global Note for all
purposes under the Indenture and the Notes. In addition, no beneficial owner of
an interest in a Global Note will be able to transfer that interest except in
accordance with the applicable procedures of DTC.
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Payments of the principal of, and interest on, the Global Note will be made
to DTC or its nominee, as the case may be, as the registered owner thereof.
Neither the Company, the Trustee nor any Paying Agent 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 Note or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Company expects that DTC or its nominee, upon receipt of any payment of
principal or interest in respect of a Global Note, will credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Note as shown on the records of
DTC or its nominee. The Company also expects that payments by participants to
owners of beneficial interests in such Global Note held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers registered
in the names of nominees for such customers. Such payments will be the
responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds.
DTC has advised the Company that it 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 Note is credited and only in respect of
such portion of the aggregate principal amount of Notes as to which such
participant or participants has or have given such direction. However, if there
is an Event of Default under the Notes, DTC will exchange the Global Note for
Certificated Notes which it will distribute to its participants.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a "banking
organization" within the meanings of New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participants and facilitate the clearance and settlement of
securities transactions between participants through electronic book-entry
changes in accounts of its participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and certain other
organizations. Indirect access to the DTC system is available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly
("indirect participants").
Although DTC is expected to follow the foregoing procedures in order to
facilitate transfers of interests in the Global Note among participants of DTC,
it is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. None of the Company or the
Trustee will have any responsibility for the performance by DTC or the
participants or indirect participants of their respective obligations under the
rules and procedures governing their respective operations.
CERTIFICATED SECURITIES
Subject to certain conditions, any Person having a beneficial interest in a
Global Note may, upon request to the Company or the Trustee, exchange such
beneficial interest for Notes in the form of Certificated Notes. Upon any such
issuance, the Trustee is required to register such Notes in the name of, and
cause the same to be delivered to, such Person or Persons (or the nominee of any
thereof). In addition, if (i) DTC or any successor depositary notifies the
Company in writing that it is no longer willing or able to act as a depositary
and the Company is unable to locate a qualified successor within 90 days or (ii)
the Company, at its option, notifies the Trustee in writing that it elects to
cause the issuance of Notes in the form of Certificated Notes under the
Indenture, then, upon surrender by the registered owner or holder of a Global
Note (a "Global Note Holder") of its Global Note, Notes in such form will be
issued to each Person that such Global Note Holder and the Depositary identify
as the beneficial owner of the related Notes.
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Neither the Company nor the Trustee will be liable for any delay by the
related Global Note Holder or the Depositary in identifying the beneficial
owners of the related Notes, and each such Person may conclusively rely on, and
will be protected from relying on, instructions from such Global Note Holder or
of the Depositary for all purposes (including with respect to the registration
and delivery, and the respective principal amounts, of the Notes to be issued).
SAME-DAY SETTLEMENT AND PAYMENT
The Indenture requires that payments in respect of the Notes represented by
the Global Note (including principal, premium, if any, and interest) be made by
wire transfer of immediately available funds to the accounts specified by the
Global Note Holder. With respect to Certificated Notes, the Company will make
all payments of principal, premium, if any, and interest by wire transfer of
immediately available funds to the accounts specified by the Holders thereof or,
if no such account is specified, by mailing a check to each such Holder's
registered address. Secondary trading in long-term notes and debentures of
corporate issuers is generally settled in clearinghouse or next-day funds. In
contrast, the Notes represented by the Global Note will be eligible to trade in
the PORTAL Market and to trade in DTC's Same-Day Funds Settlement System, and
any permitted secondary market trading activity in such Notes will, therefore,
be required by DTC to be settled in immediately available funds. The Company
expects that secondary trading in the Certificated Notes will also be settled in
immediately available funds.
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CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
FOR NON-UNITED STATES HOLDERS
The following is a general discussion of certain United States federal
income and estate tax consequences of the acquisition, ownership and disposition
of Notes by an initial beneficial owner of Notes that, for United States federal
tax purposes, is not a "United States person" (a "Non-United States Holder").
This discussion is based upon the Internal Revenue Code of 1986, as amended, its
legislative history, existing and proposed regulations thereunder, published
rulings and court decisions, all as in effect on the date hereof, which are
subject to change, possibly retroactively. For purposes of this discussion, a
"United States person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in the United
States or under the law of the United States or of any state thereof or the
District of Columbia (unless, in the case of a partnership, Treasury regulations
provide otherwise), an estate whose income is includible in gross income for
United States federal income tax purposes regardless of its source, or a trust
if a U.S. court is able to exercise primary supervision over the administration
of the trust and one or more United States persons have the authority to control
all substantial decisions of the trust. Notwithstanding the preceding sentence,
to the extent provided in Treasury regulations, certain trusts in existence on
August 20, 1996, and treated as United States persons prior to such date, that
elect to continue to be treated as United States persons will also be United
States persons. This discussion applies only to those Non-United States Holders
who purchased Private Notes from the Initial Purchasers and hold the Notes as a
capital asset. The tax treatment of the holders of the Notes may vary depending
upon their particular situations. United States persons acquiring the Notes are
subject to different rules than those discussed below. In addition, certain
other holders (including insurance companies, tax exempt organizations,
financial institutions and broker-dealers) may be subject to special rules not
discussed below. Prospective investors are urged to consult their tax advisors
regarding the United States federal tax consequences of acquiring, holding and
disposing of Notes, as well as any tax consequences that may arise under the
laws of any relevant foreign, state, local or other taxing jurisdiction.
INTEREST
Interest paid by the Company to a Non-United States Holder will not be
subject to United States federal income or withholding tax if such interest is
not effectively connected with the conduct of a trade or business within the
United States by such Non-United States Holder and such Non-United States Holder
(i) does not actually or constructively own 10% or more of the total combined
voting power of all classes of stock of the Company; (ii) is not a controlled
foreign corporation with respect to which the Company is a related person and
(iii) certifies, under penalties of perjury, on Form W-8 or substantially
similar form that such holder is not a United States person and provides such
holder's name and address (the "Certification Requirement"). In the case of
interest on a Note that is not "effectively connected with the conduct of a
trade or business within the United States" and does not satisfy the three
requirements of the preceding sentence, the Non-United States Holder's interest
on a Note would generally be subject to United States withholding tax at a flat
rate of 30% (or a lower applicable treaty rate). If a Non-United States Holder's
interest on a Note is "effectively connected with the conduct of a trade or
business within the United States," then the Non-United States Holder will be
subject to United States federal income tax on such interest income in
essentially the same manner as a United States person and, in the case of a
Non-United States Holder that is a foreign corporation, may also be subject to
the branch profits tax.
GAIN ON DISPOSITION
A Non-United States Holder generally will not be subject to United States
federal income tax with respect to gain recognized on a sale, redemption or
other disposition of a Note unless (i) the gain is effectively connected with
the conduct of a trade or business within the United States by the Non-United
States Holder or (ii) in the case of a Non-United States Holder who is a
nonresident alien individual and holds the Note as a capital asset, such holder
is present in the United States for 183 or more days in the taxable year and
certain other requirements are met.
61
<PAGE> 68
FEDERAL ESTATE TAXES
If interest on a Note is exempt from withholding of United States federal
income tax under the rules described above, the Note held by an individual who
at the time of death is a Non-United States Holder generally will not be subject
to United States federal estate tax as a result of such individual's death.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Company will, when required, report to the holders of the Notes and The
Internal Revenue Service ("IRS") the amount of any interest paid on the Notes in
each calendar year and the amounts of tax withheld, if any, with respect to such
payments.
In the case of payments of interest to Non-United States Holders, the
general 31% backup withholding tax and certain information reporting will not
apply to such payments with respect to which either the Certification
Requirement, as described above under "Certain United States Federal Tax
Consequences For Non-United States Holders Interest," has been satisfied or an
exemption has otherwise been established; provided that neither the Company nor
its payment agent has actual knowledge that the holder is a United States person
or that the conditions of any other exemption are not in fact satisfied.
Information reporting and backup withholding requirements will apply to the
gross proceeds paid to a Non-United States Holder on the disposition of the
Notes by or through a United States office of a United States or foreign broker,
unless the holder certifies to the broker under penalties of perjury as to its
name, address and status as a foreign person or the holder otherwise establishes
an exemption. Information reporting requirements, but not backup withholding,
will also apply to a payment of the proceeds of a disposition of the Notes by or
through a foreign office of a United States broker or foreign brokers with
certain types of relationships to the United States unless such broker has
documentary evidence in its file that the holder of the Notes is not a United
States person and such broker has no actual knowledge to the contrary, or the
holder establishes an exception. Neither information reporting nor backup
withholding generally will apply to a payment of the proceeds of a disposition
of the Notes by or through a foreign office of a foreign broker not subject to
the preceding sentence.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules may be refunded or credited against the Non-United
States Holder's United States federal income tax liability, provided that the
required information is furnished to the IRS.
The United States Treasury Department recently promulgated new regulations
regarding the withholding and information reporting rules discussed above. In
general, the new regulations do not significantly alter the substantive
withholding and information reporting requirements but rather unify current
certification procedures and forms and clarify reliance standards. The new
regulations require, however, that a foreign person furnish its taxpayer
identification number in certain circumstances to claim a reduction in United
States federal withholding tax and new rules are provided for foreign persons
that hold debt instruments thorough a foreign intermediary. The new regulations
are generally effective for payments made after December 31, 1999, subject to
certain transition rules. Non-United States Holders should consult their own tax
advisors with respect to the impact, if any, of the new regulations.
62
<PAGE> 69
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Private Notes where such Private Notes were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that it will make this Prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale.
The Company will not receive any proceeds from any sale of Exchange Notes.
Exchange Notes received by broker-dealers for their own account pursuant to the
Exchange Offer may be sold 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 Exchange Notes or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or at negotiated prices. Any such 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 such
broker-dealer or the purchasers of any such Exchange Notes. Any broker-dealer
that resells Exchange Notes that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Notes may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit on any such resale of Exchange
Notes and any commission or concessions received by any such person may be
deemed to be underwriting compensation under the Securities Act. The Letter of
Transmittal states that, by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offer, other than commissions or concessions
of any broker-dealer, and will indemnify the holders of the Notes (including any
broker-dealers) against certain liabilities including liabilities under the
Securities Act.
LEGAL MATTERS
Certain legal matters with respect to the Exchange Notes offered hereby
will be passed upon for the Company by Gardere Wynne Sewell & Riggs, L.L.P.,
Houston, Texas.
EXPERTS
The consolidated financial statements of the Company as of December 31,
1997 and 1996, and for each of the three years in the period ended December 31,
1997 included in this prospectus and elsewhere in the registration statement,
have been audited by Arthur Andersen LLP, independent public accountants, as set
forth in their report. Arthur Andersen's report, included herein, indicates that
ERI's 1997 financial statements were audited by other auditors, whose opinion
was furnished to Arthur Andersen. Arthur Andersen's 1997 opinion, insofar as it
relates to ERI, is based solely on the report of the other auditors. The
consolidated financial statements referred to above have been included herein in
reliance upon the authority of said firm as experts in giving said report.
63
<PAGE> 70
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS OF
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
Unaudited Pro forma Consolidated Balance Sheet as of June
30, 1998............................................... F-3
Unaudited Pro forma Consolidated Statement of Operations
for the six month period ended June 30, 1998........... F-4
Unaudited Pro forma Consolidated Statement of Operations
for the year ended December 31, 1997................... F-5
Notes to Unaudited Pro forma Financial Statements......... F-6
CONSOLIDATED FINANCIAL STATEMENTS OF EAGLE GEOPHYSICAL, INC.
AND SUBSIDIARIES
Report of Independent Public Accountants.................. F-7
Consolidated Balance Sheets -- December 31, 1996 and 1997
and unaudited June 30, 1998............................ F-8
Consolidated Statements of Operations for the years ended
December 31, 1995, 1996 and 1997 and unaudited for the
three and six month periods ended June 30, 1997 and
1998................................................... F-9
Consolidated Statements of Stockholders' Equity for the
years ended December 31, 1995, 1996 and 1997 and
unaudited for the six month period ended June 30,
1998................................................... F-10
Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1996 and 1997 and unaudited for the
six month periods ended June 30, 1997 and 1998......... F-11
Notes to Consolidated Financial Statements................ F-12
</TABLE>
F-1
<PAGE> 71
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The following financial statements include the unaudited pro forma
consolidated balance sheet of Eagle Geophysical, Inc. (the "Company") as of June
30, 1998, and the unaudited pro forma consolidated statements of operations for
the year ended December 31, 1997 and the six months ended June 30, 1998.
The unaudited pro forma consolidated statements of operations for the year
ended December 31, 1997 and the six months ended June 30, 1998 assume the
issuance of $22.5 million of the $100.0 million 10 3/4% Senior Notes due 2008
(the "Notes"), the proceeds of which were used to repay borrowings under the
Revolving Credit Facility and the Short-term Loan as of January 1, 1997 or the
later actual date of such borrowings (the "Offering"). Interest expense has not
been accrued on the excess net proceeds of $73.9 million as this amount had not
yet been utilized to fund capital expenditures during the periods presented.
The unaudited pro forma consolidated statement of operations for the year
ended December 31, 1997 assumes the Company had completed the acquisition of the
remaining 81% of Energy Research International ("ERI") for 600,000 shares of the
Company's common stock as of January 1, 1997 (the "ERI Acquisition"), and
assumes the Company completed the offering and sale of a total of 6,524,000
shares of common stock to the public at a price of $17.00 per share (including
1,880,000 shares sold by the Company's former parent, Seitel, Inc., and 180,000
shares by the former owners of ERI) resulting in net proceeds to the Company of
$69.1 million after deducting offering related expenses (the "IPO"), the
proceeds of which were used to retire debt and capital leases of ERI and the
Company.
The accompanying unaudited pro forma consolidated balance sheet as of June
30, 1998 gives effect to the issuance of the Notes resulting in net proceeds of
$96.4 million after deducting offering-related expenses of approximately $3.6
million and the use of proceeds thereof to retire certain debt and obligations
incurred for the acquisition and upgrade of the vessels Austral Horizon and
Atlantic Horizon. The Company estimates the upgrades will cost approximately
$98.8 million of which approximately $33.5 million was expended as of June 30,
1998. These expenditures are being financed on an interim basis under the
Company's $20.0 million bank revolving credit facility and under a $29.0 million
short-term bank loan.
The unaudited pro forma consolidated financial statements and the notes
thereto are based upon available information and certain estimates and
assumptions related to the accounting for the Offering that are subject to final
determination. The unaudited pro forma financial information is not necessarily
indicative of the results that would have occurred had such transactions
actually taken place at the beginning of the periods specified nor does such
information purport to project the Company's financial position or results of
operations for any future date or period.
F-2
<PAGE> 72
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THE COMPANY PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS AS ADJUSTED
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................... $ 10,912 $ 96,400(A) $ 19,512
(87,800)(B)
Restricted Cash............................................. 5,000 -- 5,000
Receivables:
Trade..................................................... 12,941 -- 12,941
Costs and estimated earnings in excess of billings on
uncompleted contracts................................... 2,313 -- 2,313
Other..................................................... 3,840 -- 3,840
Due from affiliate.......................................... 9,988 -- 9,988
Inventory................................................... 3,032 -- 3,032
Prepaid expenses and other assets........................... 2,151 -- 2,151
-------- -------- --------
Total current assets............................... 50,177 8,600 58,777
PROPERTY AND EQUIPMENT, AT COST:
Vessels and geophysical Equipment........................... 145,310 65,300(B) 210,610
Furniture, fixtures and other............................... 1,071 -- 1,071
-------- -------- --------
146,381 65,300 211,681
Less: Accumulated depreciation and amortization............. (22,363) -- (22,363)
-------- -------- --------
Net property and equipment......................... 124,018 65,300 189,318
MULTI-CLIENT DATA LIBRARY................................... 6,615 -- 6,615
GOODWILL, NET............................................... 19,877 -- 19,877
OTHER LONG-TERM ASSETS...................................... 175 3,600(A) 3,775
-------- -------- --------
TOTAL ASSETS....................................... $200,862 $ 77,500 $278,362
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt........................... $ 1,014 $ -- $ 1,014
Current portion of capital lease obligations................ 5,847 -- 5,847
Accounts payable............................................ 28,943 -- 28,943
Accrued liabilities......................................... 13,879 -- 13,879
Billings in excess of costs and estimated earnings on
uncompleted contracts..................................... 9,454 -- 9,454
-------- -------- --------
Total current liabilities.......................... 59,137 -- 59,137
LONG-TERM DEBT.............................................. 27,270 100,000(A) 104,770
(22,500)(B)
CAPITAL LEASE OBLIGATIONS................................... 25,421 25,421
DEFERRED INCOME TAXES AND OTHER OBLIGATIONS................. 1,214 -- 1,214
-------- -------- --------
Total liabilities.................................. 113,042 77,500 190,542
-------- -------- --------
STOCKHOLDERS' EQUITY
Preferred stock, 5,000,000 shares authorized, none issued
and outstanding......................................... -- -- --
Common Stock, par value $0.01 per share; authorized
25,000,000 shares; 8,587,360 (unaudited) shares issued
and outstanding......................................... 86 -- 86
Additional paid-in capital................................ 83,566 -- 83,566
Retained earnings (deficit)............................... 4,593 -- 4,593
Note receivable from stockholder.......................... (425) -- (425)
-------- -------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)............... 87,820 -- 87,820
-------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY......... $200,862 $ 77,500 $278,362
======== ======== ========
</TABLE>
See footnote explanations beginning at page F-6.
F-3
<PAGE> 73
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THE COMPANY PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS AS ADJUSTED
----------- ----------- -----------
<S> <C> <C> <C>
REVENUE.................................................. $58,216 $ -- $58,216
OPERATING EXPENSES
Operating expenses (exclusive of depreciation and
amortization shown below)........................... 39,966 -- 39,966
Depreciation and amortization.......................... 7,687 -- 7,687
Selling, general and administrative expenses........... 5,373 -- 5,373
Interest expense....................................... 656 93(C) 764
15(D)
Interest Income........................................ (395) -- (395)
Other, net............................................. 90 -- 90
------- ----- -------
Total expenses................................. 53,377 108 53,485
------- ----- -------
Income before provision (benefit) for income taxes..... 4,839 (108) 4,731
Provision (benefit) for income taxes................... 1,960 (44)(E) 1,916
------- ----- -------
NET INCOME............................................. $ 2,879 $ (64) $ 2,815
======= ===== =======
Basic earnings per share............................... $ 0.34 -- $ 0.33
======= =======
Weighted average number of common shares (basic)....... 8,543 -- 8,543
======= =======
Diluted earnings per share............................. $ 0.34 -- $ 0.33
======= =======
Weighted average number of common shares............... 8,553 -- 8,553
======= =======
</TABLE>
See footnote explanations beginning at page F-6.
F-4
<PAGE> 74
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ENERGY
RESEARCH
INTERNATIONAL
(HISTORICAL)
JANUARY 1, 1997
THE COMPANY TO PRO FORMA PRO FORMA
HISTORICAL AUGUST 11, 1997 ADJUSTMENTS AS ADJUSTED
----------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE.................................. $79,061 $30,401 $(1,334)(F) $108,128
OPERATING EXPENSES
Operating expenses (exclusive of
depreciation and amortization shown
below)................................. 56,470 21,587 (1,334)(F) 76,723
Depreciation and amortization............ 8,584 3,282 1,023 (G) 12,889
Selling, general and administrative
expenses............................... 6,408 1,656 729 (H) 8,793
Interest expense, net.................... 205 1,046 (1,000)(I) 251
------- ------- ------- --------
Total expenses................. 71,667 27,571 (582) 98,656
------- ------- ------- --------
Income (loss) before provision for income
taxes.................................. 7,394 2,830 (752) 9,472
Provision (benefit) for income taxes..... 2,994 -- 842 (J) 3,836
------- ------- ------- --------
NET INCOME (LOSS)(1)..................... $ 4,400 $ 2,830 $(1,594) $ 5,636
======= ======= ======= ========
Basic earnings per share................. $ 0.81 -- $ 0.66
======= ========
Weighted average number of common shares
(basic)................................ 5,418 3,071 (K) 8,489
======= ======= ========
Diluted earnings per share............... $ 0.81 -- $ 0.66
======= ======= ========
Weighted average number of common shares
(diluted).............................. 5,436 3,071 (K) 8,507
======= ======= ========
</TABLE>
See footnote explanations beginning at Page F-6.
F-5
<PAGE> 75
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AT JUNE 30, 1998
A) Adjustment to record proceeds from the issuance of the Notes, net of
offering costs of approximately $3.6 million.
B) Adjustment to record the remaining capital expenditures for the acquisition
and upgrade of the vessels Austral Horizon and Atlantic Horizon for
approximately $98.8 million of which approximately $33.5 million had been
expended as of June 30, 1998. These expenditures are being financed on an
interim basis under the Company's $20.0 million bank revolving credit
facility and under a $29.0 million short-term bank loan.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 30, 1998
C) To adjust interest expense on the $22.5 million of Notes proceeds used to
repay borrowings under the Revolving Credit Facility and the Short-Term
Loan.
D) To adjust interest expense to reflect deferred financing costs incurred on
the $22.5 million of Notes proceeds used to repay borrowings under the
Revolving Credit Facility and the Short-Term Loan. Interest expense has not
been accrued on the remaining net proceeds of $73.9 million as this amount
had not yet been utilized to fund capital expenditures during the periods
presented.
E) To record the tax effects of the above adjustments at the Company's
effective tax rate.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED
DECEMBER 31, 1997
F) Adjustment to eliminate $1.3 million in lease income between the Company
and ERI for the period from January 1, 1997 to August 8, 1997.
G) Reflects the amortization of goodwill associated with the acquisition of
ERI over a 15-year estimated useful life.
H) Represents additions supported by contractual agreements to selling,
general and administrative (SG&A) expenses the Company estimates it would
have incurred operating as a public registrant. Such incremental expenses
primarily include increases in personnel, contractual employment
arrangements, and directors' and officers' compensation and insurance.
I) Reflects a reduction in interest expense as a result of the application of
approximately $35.7 million of the net proceeds of the IPO to reduce debt,
capital lease obligations and due to affiliate obligations.
J) To record the tax effects of the above adjustments at the Company's
effective tax rate.
K) To adjust the weighted average common shares outstanding to reflect the
IPO, the ERI Acquisition, and the issuance of 25,000 shares of common stock
to the president of the Company for a note as if such transactions had
occurred on January 1, 1997.
F-6
<PAGE> 76
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Eagle Geophysical, Inc. and subsidiaries:
We have audited the accompanying consolidated balance sheets of Eagle
Geophysical, Inc. (a Delaware corporation) and subsidiaries as of December 31,
1996 and 1997, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1997. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits. We did
not audit the financial statements of Energy Research International, which
statements reflect total assets and total revenues of 41 percent and 22 percent
in 1997, respectively, of the consolidated totals. Those statements were audited
by other auditors whose report has been furnished to us and our opinion, insofar
as it relates to the amounts included for that entity, is based solely on the
report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of the other auditors provide a
reasonable basis for our opinion.
In our opinion based on our audits and the report of the other auditors,
the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Eagle Geophysical, Inc. and
subsidiaries as of December 31, 1996 and 1997, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Houston, Texas
March 6, 1998 (except with respect to the
matter discussed in Note O,
as to which the date is July 10, 1998)
F-7
<PAGE> 77
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JUNE 30,
1996 1997 1998
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents, including restricted cash of
$-0-, $4,502 and $5,000 (unaudited) at December 31, 1996,
1997, and June 30, 1998, respectively..................... $ -- $ 19,482 $ 15,912
Receivables:
Trade, billed, net of allowance for doubtful accounts of
$-0-, $132, and $450 (unaudited) at December 31, 1996,
1997 and June 30, 1998, respectively.................... 12,913 11,291 12,941
Costs and estimated earnings in excess of billings on
uncompleted contracts................................... 441 2,576 2,313
Other..................................................... 233 546 3,840
Due from affiliate.......................................... -- 12,500 9,988
Inventory................................................... -- 1,705 3,032
Prepaid expenses and other assets........................... 860 2,273 2,151
Deferred income taxes....................................... -- 515 --
------- -------- --------
Total current assets............................... 14,447 50,888 50,177
PROPERTY AND EQUIPMENT, AT COST:
Geophysical equipment....................................... 20,200 69,418 145,310
Furniture, fixtures and other............................... 108 652 1,071
------- -------- --------
20,308 70,070 146,381
Less: Accumulated depreciation.............................. (8,103) (14,873) (22,363)
------- -------- --------
Net property and equipment......................... 12,205 55,197 124,018
GOODWILL, net of accumulated amortization of $-0-, $477, and
$1,150 (unaudited) at December 31, 1996, 1997, and June
30, 1998, respectively.................................... -- 17,990 19,877
MULTI-CLIENT DATA LIBRARY................................... -- -- 6,615
OTHER LONG-TERM ASSETS...................................... 69 230 175
------- -------- --------
TOTAL ASSETS....................................... $26,721 $124,305 $200,862
======= ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt........................... $ 2,556 $ -- $ 1,014
Current portion of capital lease obligations................ 1,033 2,816 5,847
Accounts payable............................................ 4,623 15,671 28,943
Accrued liabilities......................................... 652 7,849 13,879
Billings in excess of costs and estimated earnings on
uncompleted contracts..................................... 78 6,029 9,454
------- -------- --------
Total current liabilities.......................... 8,942 32,365 59,137
LONG-TERM DEBT.............................................. 6,039 -- 27,270
CAPITAL LEASE OBLIGATIONS................................... 1,274 7,944 25,421
DUE TO AFFILIATE............................................ 1,965 -- --
DEFERRED INCOME TAXES AND OTHER OBLIGATIONS................. 712 -- 1,214
------- -------- --------
TOTAL LIABILITIES.................................. 18,932 40,309 113,042
------- -------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, 5,000,000 shares authorized, none issued
and outstanding........................................... -- -- --
Common stock, par value $0.01 per share; 25,000,000 shares
authorized; 3,400,000 shares issued and outstanding at
December 31, 1996, 8,489,000 at December 31, 1997 and
8,587,360 (unaudited) at June 30, 1998.................... 34 85 86
Additional paid-in capital.................................. 7,755 82,622 83,566
Retained earnings........................................... -- 1,714 4,593
Note receivable from Stockholder............................ -- (425) (425)
------- -------- --------
TOTAL STOCKHOLDERS' EQUITY......................... 7,789 83,996 87,820
------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY......... $26,721 $124,305 $200,862
======= ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-8
<PAGE> 78
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTH PERIODS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
--------------------------- -----------------
1995 1996 1997 1997 1998
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES(1).................................. $29,275 $48,136 $79,061 $28,766 $58,216
EXPENSES.....................................
Operating expenses (exclusive of
depreciation and amortization shown
below................................... 20,986 34,917 56,470 20,779 39,966
Depreciation and amortization.............. 2,471 3,409 8,584 2,772 7,687
Selling, general and administrative
expenses................................ 2,874 2,680 6,408 1,565 5,373
Interest Expense........................... 450 699 1,586 612 656
Interest Income............................ (42) (168) (1,263) (578) (395)
Other, net................................. -- -- (118) -- 90
------- ------- ------- ------- -------
26,739 41,537 71,667 25,150 53,377
------- ------- ------- ------- -------
Income before provision of income taxes.... 2,536 6,599 7,394 3,616 4,839
Provision for income taxes................. 933 2,420 2,994 1,326 1,960
------- ------- ------- ------- -------
NET INCOME................................... $ 1,603 $ 4,179 $ 4,400 $ 2,290 $ 2,879
======= ======= ======= ======= =======
Basic earnings per share................... $ 0.47 $ 1.23 $ 0.81 $ 0.67 $ 0.34
======= ======= ======= ======= =======
Weighted average number of common shares
(basic)................................. 3,400 3,400 5,418 3,400 8,543
======= ======= ======= ======= =======
Diluted earnings per share................. $ 0.47 $ 1.23 $ 0.81 $ 0.67 $ 0.34
======= ======= ======= ======= =======
Weighted average number of common shares
(diluted)............................... 3,400 3,400 5,436 3,400 8,553
======= ======= ======= ======= =======
</TABLE>
- ---------------
(1) Includes revenue from affiliates of $15,391, $27,217, $42,265, $15,212
(unaudited), and $32,546 (unaudited) for the years ended December 31, 1995,
1996 and 1997 and the unaudited six month periods ended June 30, 1997 and
1998, respectively, and operating expenses related to such affiliate revenue
of $10,845, $20,078, $34,514, $11,210 (unaudited) and $24,961 (unaudited)
for the years ended December 31, 1995, 1996, and 1997 and the unaudited
six-month periods ended June 30, 1997 and 1998, respectively.
The accompanying notes are an integral part of these consolidated financial
statements.
F-9
<PAGE> 79
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
NOTE
COMMON STOCK ADDITIONAL RECEIVABLE TOTAL
--------------- PAID-IN RETAINED FROM STOCKHOLDER
SHARES AMOUNT CAPITAL EARNINGS STOCKHOLDER EQUITY
------ ------ ---------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994........ 3,400 $34 $ 1,973 $ -- $ -- $ 2,007
Net income...................... -- -- 1,603 -- -- 1,603
------ --- ------- ------- ----- -------
Balance, December 31, 1995........ 3,400 34 3,576 -- -- 3,610
Net income...................... -- -- 4,179 -- -- 4,179
------ --- ------- ------- ----- -------
Balance, December 31, 1996........ 3,400 34 7,755 -- -- 7,789
Contribution of 19% interest in
Energy Research International
by Seitel, Inc. ............. -- -- 914 -- -- 914
Net income from January 1, 1997
to August 11, 1997........... -- -- -- 2,686 -- 2,686
Dividend declared to Seitel,
Inc.......................... -- -- (3,965) (2,686) -- (6,651)
Issuance of common stock, net... 4,464 45 69,084 -- -- 69,129
Acquisition of remaining 81% of
Energy Research International
Energy Research
International................ 600 6 8,409 -- -- 8,415
Issuance of common stock to an
officer for a note........... 25 -- 425 -- (425) --
Net income from August 12, 1997
to December 31, 1997......... -- -- -- 1,714 -- 1,714
------ --- ------- ------- ----- -------
Balance, December 31, 1997........ 8,489 $85 $82,622 $ 1,714 $(425) $83,996
Unaudited:
Acquisition of shot hole
drilling company............. 98 1 1,124 -- -- 1,125
Net income...................... -- -- -- 2,879 -- 2,879
Other, net...................... -- -- (180) -- -- (180)
------ --- ------- ------- ----- -------
Balance, June 30, 1998............ 8,587 $86 $83,566 $ 4,593 $(425) $87,820
====== === ======= ======= ===== =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-10
<PAGE> 80
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTH
PERIODS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------- ------------------
1995 1996 1997 1997 1998
------- ------- -------- ------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................. $ 1,603 $ 4,179 $ 4,400 $ 2,290 $ 2,879
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 2,471 3,409 8,584 2,772 7,687
Income contributed to former parent, Seitel, Inc.......... -- -- (6,651) -- --
Bad debt expense.......................................... -- -- 582 -- 450
Gain on sale of property and equipment.................... -- -- (19) (18) (10)
Deferred income tax provision............................. 152 58 219 128 386
(Increase) decrease in receivables........................ (5,241) (3,726) (2,280) 3,005 1,930
(Increase) decrease in other assets....................... (49) (833) (1,257) 240 (10,402)
Increase in accounts payable and other liabilities........ 1,697 1,553 9,311 1,479 20,993
------- ------- -------- ------- --------
Total adjustments....................................... (970) 461 8,489 7,606 21,034
------- ------- -------- ------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES................... 633 4,640 12,889 9,896 23,913
------- ------- -------- ------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment........................ (289) (7,928) (32,375) (8,098) (45,159)
Cash paid for Seismic Drilling & Services, Inc., net of
cash acquired........................................... -- -- -- -- (3,516)
Cash acquired from the purchase of Energy Research
International........................................... -- -- 145 -- --
Cash received on sale of property and equipment........... -- -- 24 27 152
------- ------- -------- ------- --------
NET CASH USED IN INVESTING ACTIVITIES....................... (289) (7,928) (32,206) (8,071) (48,523)
------- ------- -------- ------- --------
Cash flows from financing activities:
Borrowings under credit facility.......................... -- -- -- -- 30,500
Repayments under credit facility.......................... (8,000)
Borrowings under term loans............................... -- 7,694 7,564 7,925 --
Principal payments on term loans.......................... (812) (1,518) (27,886) (1,943) (81)
Principal payments on capital leases...................... (1,299) (1,247) (7,005) (681) (1,199)
Receipts (payments) to affiliate.......................... 1,796 (1,699) (3,003) (7,115) --
Issuance of common stock, net............................. -- -- 69,129 -- --
Other net................................................. (180)
------- ------- -------- ------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES......... (315) 3,230 38,799 (1,814) 21,040
------- ------- -------- ------- --------
Net increase (decrease) in cash and cash equivalents........ 29 (58) 19,482 11 (3,570)
Cash and cash equivalents at beginning of period............ 29 58 -- -- 19,482
------- ------- -------- ------- --------
Cash and cash equivalents at end of period.................. $ 58 $ -- $ 19,482 $ 11 $ 15,912
======= ======= ======== ======= ========
Supplemental disclosures of cash flow information:
CASH PAID DURING THE PERIOD FOR:
Interest.................................................. $ 408 $ 637 $ 1,472 $ 339 $ 678
======= ======= ======== ======= ========
Income taxes.............................................. -- -- $ 1,950 -- $ 1,741
======= ======= ======== ======= ========
NON-CASH INVESTING ACTIVITIES:
Capital lease obligations................................. $ 10 $ 41 $ 374 $ 374 --
======= ======= ======== ======= ========
Vessel upgrade through a capital lease.................... -- -- -- -- $ 21,707
======= ======= ======== ======= ========
Contribution of 19% interest in Energy Research
International by Seitel, Inc. .......................... -- -- $ 914 $ 914 --
======= ======= ======== ======= ========
Issuance of common stock to an officer for a note......... -- -- $ 425 -- --
======= ======= ======== ======= ========
Purchase of remaining 81% interest in Energy Research
International for common stock.......................... -- -- $ 8,415 -- --
======= ======= ======== ======= ========
Dividend declared to Seitel, Inc.......................... -- -- $ 6,651 -- --
======= ======= ======== ======= ========
Purchase of Seismic Drilling & Services, Inc. for 98,360
shares of common stock.................................. -- -- -- -- $ 1,175
======= ======= ======== ======= ========
Equipment Purchase through term loan...................... -- -- -- -- $ 5,864
======= ======= ======== ======= ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-11
<PAGE> 81
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- BUSINESS, FORMATION OF THE COMPANY AND ACQUISITIONS
BUSINESS
Eagle Geophysical, Inc. (the "Company") is an international oilfield
service company engaged in seismic data acquisition services, with a
specialization in the acquisition of high-resolution, three dimensional seismic
data in logistically difficult wetland environments and in congested offshore
areas primarily in the U.S. Gulf Coast region. Since its inception and through
August 11, 1997, the Company was a wholly-owned subsidiary of Seitel, Inc.
("Seitel"), which has subsidiaries that have been significant purchasers of the
Company's services -- See Note J.
FORMATION OF THE COMPANY AND ACQUISITIONS
The Company was formed from the onshore seismic data acquisition business
of Seitel Geophysical, Inc., a wholly-owned subsidiary of Seitel that began
operations in December, 1992. Eagle Geophysical, Inc., indirectly a wholly-owned
subsidiary of Seitel and Eagle Geophysical Onshore, Inc. were both formed on
December 18, 1996. Effective December 31, 1996, substantially all of the net
assets of Seitel Geophysical, Inc. were contributed to Eagle Geophysical
Onshore, Inc.
In May 1997, Seitel contributed to the Company all of the shares that it
owned of Energy Research International ("ERI"), representing a 19% ownership
interest. ERI is a holding company that wholly owns two marine seismic
companies. This contribution was recorded at Seitel's basis in such investment
and resulted in a $914,000 increase in the Company's additional paid-in capital
account.
On August 11, 1997 and September 5, 1997, the Company completed the
offering and sale of a total of 6,524,000 shares of common stock to the public
at a price of $17 per share (including 1,880,000 shares sold by the Company's
former parent, Seitel and 180,000 shares sold by the former owners of ERI)
resulting in net proceeds to the Company of $69.1 million after deducting
offering-related expenses (the "IPO"). After the IPO, Seitel owns 1,520,000
shares or 17.9% of the Company's common stock.
On August 11, 1997, the Company acquired the remaining 81% of ERI in
exchange for 600,000 shares of common stock valued at the initial offering price
of $17 per share (the "ERI Acquisition"). The ERI Acquisition was accounted for
by the Company as a purchase transaction in which the Company recorded its cost
in the assets acquired less liabilities assumed, with the difference between the
cost and the sum of the fair values of tangible assets less liabilities assumed
recorded as goodwill. The Company is currently evaluating the value of the
assets acquired and liabilities assumed in order to determine the final purchase
price allocation related to the ERI Acquisition.
The following table presents the unaudited pro forma effects of the IPO,
the application of the net proceeds thereof, and the ERI Acquisition, as if such
transactions had occurred on January 1, 1996.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------
1997 1996
-------- -------
(UNAUDITED)
(IN THOUSANDS EXCEPT
PER SHARE
INFORMATION)
<S> <C> <C>
Pro Forma Revenues.......................................... $108,128 $90,915
Pro Forma Income Before Taxes............................... 9,472 2,715
Pro Forma Weighted Average Number of Common Shares
Outstanding............................................... 8,489 8,489
Pro Forma Basic and Diluted Earnings Per Common Share....... $ 0.66 $ 0.09
======== =======
</TABLE>
The pro forma results of operations reflect the application of United
Kingdom statutory tax rates to earnings from ERI resulting from non-deductible
goodwill. Had such rates not been applied, pro forma earnings would have been
$.80 and $.09 for the years ended December 31, 1997 and 1996 respectively.
F-12
<PAGE> 82
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates: The preparation of these consolidated financial
statements in accordance with generally accepted accounting principles requires
the use of certain estimates by management in determining the Company's assets,
liabilities, contingencies, revenues and expenses. One important estimate
relates to the percentage of revenue recognized based on the stage of completion
of seismic acquisition projects. Actual results could differ from estimates.
Basis of Presentation: The accompanying consolidated financial statements
include the accounts of Eagle Geophysical, Inc., indirectly a wholly-owned
subsidiary of Seitel until August 11, 1997, and the accounts of its wholly-owned
subsidiaries, Eagle Geophysical Onshore, Inc. and ERI. The Company's reported
assets, liabilities, revenues and expenses include the predecessor operations of
Seitel Geophysical, Inc. for all periods presented. The financial reporting
basis of the contributed net assets was carried forward to the Company's
accounts, and the net equity of Seitel Geophysical, Inc. for periods prior to
December 31, 1996, is reflected in the Company's additional paid-in capital
account. The accompanying consolidated financial statements include the results
of operations of ERI for the period after the ERI Acquisition (August 11, 1997).
Cash and Cash Equivalents: Cash and cash equivalents include short-term
investments with original maturities of three months or less.
Inventory: Inventory which consists primarily of spare parts for equipment
is stated at the lower of cost or market value on a first-in, first-out basis.
Property and Equipment: Property and equipment are carried at cost and
include assets under capital leases. Maintenance and repairs are charged to
expense as incurred and expenditures for major improvements are capitalized.
Gains and losses from retirement or replacement of property and equipment are
included in operations.
Depreciation of property and equipment and assets under capital leases is
provided over the estimated useful lives of the assets, which range from three
to five years or the term of the lease, using the straight-line method.
Multi-client Data Library: The Company acquires certain seismic data for
its own account to which it retains ownership rights and which it resells to
clients on a non-transferable, non-exclusive basis. The Company may obtain
precommitted sales contracts to help fund the cash requirements of these surveys
which generally last from 5 to 7 months. The Company capitalizes the unfunded
portion using an estimated sales method. Under that method the amount
capitalized equals actual costs incurred less costs attributed to the
precommitted sales contracts based on the percentage of total estimated costs to
total estimated sales multiplied by actual sales. The capitalized cost of
multi-client data library is likewise charged to operations in the period
subsequent sales occur based on the percentage of total estimated costs to total
estimated sales multiplied by actual sales. The Company periodically reviews the
carrying value of the multi-client data library to assess whether there has been
a permanent impairment of value and records losses when the total estimated
costs exceed total estimated sales or when it is determined that estimated sales
would not be sufficient to cover the carrying value of the asset. In general,
costs are expected to be recovered from sales over a period of less than 4
years.
Intangible Assets: Goodwill which resulted from the ERI Acquisition is
amortized on a straight-line basis over a period of 15 years. Organization
costs, which are classified as other long-term assets, are amortized on a
straight-line basis over a period of three years. The Company evaluates
intangible assets periodically in accordance with Statement of Financial
Accounting Standards No. 121 "Accounting for Impairment of Long-Lived Assets and
Long-Lived Assets to be Disposed Of" to determine whether they are
F-13
<PAGE> 83
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
properly reflected in the financial statements based upon future undiscounted
operating cash flows. If an impairment is determined to exist, then the asset is
written down to fair market value.
Income Taxes: The Company and all of its subsidiaries file a consolidated
federal income tax return. ERI and its subsidiaries file a consolidated income
tax return in the United Kingdom. The Company does not provide deferred taxes
(benefit) on the undistributed earnings (loss) of its foreign subsidiaries which
amounted to $192,000 for the year ended December 31, 1997, as such earnings are
intended to be permanently invested in those operations.
Revenue and Cost Recognition: Revenue from the acquisition of seismic data
is recognized on the percentage-of-completion method based on the work effort
completed compared with the total work effort estimated for the contract.
Revenue received in advance of being earned is deferred until earned. For
contracts accounted for under the percentage-of-completion method, the Company's
contracts provide that the customer accepts work completed throughout the
duration of the project and owes the Company, based on the pricing provisions
and job completion to date, measured in terms of time incurred or other
performance milestones.
Operating expenses include all direct material and labor costs and indirect
costs related to the acquisition of seismic data such as supplies, tools and
repairs. Selling, general and administrative costs are charged to expense as
incurred. Provisions for estimated losses on uncompleted contracts are made in
the period in which such losses are determined. Changes in job performance, job
conditions and estimated profitability, including those arising from contract
penalty provisions, and final contract settlements may result in revisions to
costs and income and are recognized in the period in which the revisions are
determined.
The asset, "costs and estimated earnings in excess of billings on
uncompleted contracts," represents revenue recognized in excess of amounts
billed. The liability, "billings in excess of costs and estimated earnings on
uncompleted contracts," represents billings in excess of revenue recognized.
Foreign Currency Translation: The Company's functional currency is the U.S.
Dollar. Accordingly, foreign entities translate monetary assets and liabilities
at period end exchange rates, while nonmonetary items are translated at
historical rates. Income and expense accounts are translated at the average
rates in effect during the year except for depreciation and amortization which
are translated at historical rates. Gains and losses resulting from the
translation of foreign financial statements and from foreign currency
transactions are included in other income and expense. The Company recorded no
foreign currency translation gains or losses in 1995 and 1996 and approximately
$117,000 in net gains for the year ending December 31, 1997.
Earnings Per Share: Earnings per share is based on the weighted average
number of outstanding shares of common stock during the respective years, and
where dilutive, the effect of common stock contingently issuable, which arises
from the exercise of stock options. In February 1997, the Financial Accounting
Standards board issued Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings per Share," effective for interim and annual periods after
December 15, 1997. This statement replaces primary earnings per share with a
newly defined basic earnings per share and modifies the computation of dilutive
earnings per share. The Company adopted this statement effective for the fiscal
year ended December 31, 1997. The adoption of this statement had no effect on
the Company's earnings per share for the three years ended December 31, 1997.
The weighted average number of common shares outstanding for calculation of
basic earnings per share was 3,400,000, 3,400,000 and 5,418,000 for the years
ended December 31, 1995, 1996 and 1997 respectively. The weighted average number
of common shares outstanding for calculation of diluted earnings per share was
3,400,000, 3,400,000 and 5,436,000 for the years ended December 31, 1995, 1996
and 1997 respectively.
Stock-based Compensation: The Company accounts for employee stock-based
compensation using the intrinsic value method prescribed in Accounting
Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to
Employees." Reference is made to Note G, "Stockholders' Equity," for a summary
of the pro
F-14
<PAGE> 84
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
forma effect of SFAS No. 123, "Accounting for Stock Based Compensation" on the
Company's results of operations for 1997.
Fair Value of Financial Instruments: The estimated fair value amounts have
been determined by the Company using available market data and valuation
methodologies. The book values of cash and cash equivalents, receivables and
accounts payable approximate their fair value as of December 31, 1996 and 1997,
because of the short-term maturity of these instruments. Based upon the rates
available to the Company, the fair value of the Company's debt and capital
leases approximated the carrying value as of December 31, 1996 and was $10.2
million compared to a carrying value of $10.8 million as of December 31, 1997.
New Accounting Pronouncements: In June 1997, the Financial Accounting
Standards Board issued SFAS No. 130, "Reporting Comprehensive Income." This
statements requires the reporting of comprehensive income which includes net
income plus all other non owner changes in equity during the period. This
statement is required to be adopted for fiscal years beginning after December
15, 1997. The Company intends to adopt this statement during its fiscal year
ending December 31, 1998. The adoption of this statement will not have a
material effect on the Company's financial position or results of operations.
Management is evaluating what, if any, additional disclosures may be required
when this statement is implemented.
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosure about Segments of an Enterprise and Related Information." This
statement requires the reporting of expanded information of a company's
operating segments. It also expands the definition of what constitutes an
entity's operating segments. This statement is required to be adopted for fiscal
years beginning after December 15, 1997. The Company intends to adopt this
statement during its fiscal year ending December 31, 1998. The adoption of this
statement will not have a material effect on the Company's financial position or
results of operations. Management is evaluating what, if any, additional
disclosures may be required when this statement is implemented.
In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position No. 98-5, "Reporting on the Costs of Start-Up
Activities," which requires costs of start-up activities and organization costs
to be expensed as incurred. The provisions of the statement are effective for
fiscal years beginning after December 15, 1998 and encourages early adoption.
Management adopted this statement in January 1998 and does not believe the
adoption had a material effect on the Company's financial position and results
of operations.
F-15
<PAGE> 85
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE C -- INCOME TAXES
The provision for income taxes for each of the three years ended December
31, 1997, consists of the following (in thousands):
<TABLE>
<CAPTION>
1995 1996 1997
---- ------ ------
<S> <C> <C> <C>
Current
-- Federal................................................ $695 $2,105 $2,603
-- State.................................................. 86 257 443
-- Foreign................................................ -- -- (271)
---- ------ ------
781 2,362 2,775
---- ------ ------
Deferred
-- Federal................................................ 137 51 (227)
-- State.................................................. 15 7 (33)
-- Foreign................................................ -- -- 479
---- ------ ------
152 58 219
---- ------ ------
Tax Provision
-- Federal................................................ 832 2,156 2,376
-- State.................................................. 101 264 410
-- Foreign................................................ -- -- 208
---- ------ ------
$933 $2,420 $2,994
==== ====== ======
</TABLE>
The difference between U.S. Federal income taxes computed at the statutory
rate (34%) and the Company's income tax provision are as follows (in thousands):
<TABLE>
<CAPTION>
1995 1996 1997
---- ------ ------
<S> <C> <C> <C>
Statutory Federal income tax................................ $862 $2,244 $2,514
State income tax, less Federal benefit...................... 67 174 272
Foreign income tax.......................................... -- -- 208
Other, net.................................................. 4 2 --
---- ------ ------
Income tax expense.......................................... $933 $2,420 $2,994
==== ====== ======
</TABLE>
The components of the net deferred income tax asset and liability reflected
in the Company's consolidated balance sheets at December 31, 1996 and 1997 were
as follows (in thousands):
<TABLE>
<CAPTION>
DEFERRED TAX ASSETS
(LIABILITIES)
AT DECEMBER 31,
-------------------
1996 1997
-------- --------
<S> <C> <C>
Net operating loss carry forward............................ $ -- $ 2,263
Deferred items related to state tax provisions.............. 26 --
Accrued expense and other assets............................ 371 1,008
------- -------
Total deferred tax assets......................... 397 3,271
Less: valuation allowance................................... -- (291)
------- -------
Deferred tax assets, net of valuation allowance........... 397 2,980
------- -------
Depreciation and amortization............................... (1,109) (2,361)
Total deferred tax liabilities.................... (1,109) (2,361)
------- -------
Net deferred tax asset (liability).......................... $ (712) $ 619
======= =======
</TABLE>
F-16
<PAGE> 86
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Included in the deferred federal tax provisions are the following: excess
of tax depreciation expense over book depreciation expense and expenses accrued
for financial statement purposes which are not yet deductible for tax purposes.
In connection with the ERI Acquisition, the Company acquired approximately $6.0
million of net operating loss carry forwards (currently with no expiration date)
and $1.3 million of other items not currently deductible for tax purposes in the
United Kingdom related to ERI's United Kingdom subsidiary, Horizon Exploration
Ltd. resulting in a deferred tax asset of approximately $2.6 million. Such
deferred tax asset was recorded by the Company in accordance with the provisions
of SFAS No. 109, "Accounting for Income Taxes," with only the portion of such
tax assets that are in management's opinion, more likely than not, expected to
be realized considering ERI's results subsequent to the ERI Acquisition.
Accordingly, a $291,000 valuation allowance was provided on such deferred
assets.
NOTE D -- COSTS AND BILLINGS ON UNCOMPLETED CONTRACTS
The following is a summary of the Company's estimated costs and earnings on
uncompleted contacts at December 31, 1996 and 1997 (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1997
------- --------
<S> <C> <C>
Costs incurred and estimated earnings on uncompleted
contracts................................................. $ 2,354 $ 19,748
Billings on uncompleted contracts........................... (1,991) (23,201)
------- --------
$ 363 $ (3,453)
======= ========
Included in accompanying balance sheets under the following
captions:
Costs and estimated earnings in excess of billings on
uncompleted contracts.................................. $ 441 $ 2,576
Billings in excess of costs and estimated earnings on
uncompleted contracts.................................. (78) (6,029)
------- --------
$ 363 $ (3,453)
======= ========
</TABLE>
NOTE E -- LONG TERM DEBT
The following is a summary of the Company's long-term debt at December 31,
1996 and 1997 (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1996 1997
------- ----
<S> <C> <C>
Term loans.................................................. $ 8,595 $ --
Less: Current maturities.................................... $(2,556) --
------- ----
Long-term debt.............................................. $ 6,039 $ --
======= ====
</TABLE>
Term Loans: On July 15, 1993, the Company obtained a $4,300,000, five-year
term loan bearing interest at the rate of 7.61% for the purchase of a telemetry
seismic data acquisition system and auxiliary equipment. The debt was secured by
such equipment. Monthly principal and interest payments total approximately
$86,000. This term loan was guaranteed by Seitel. On August 12, 1997, the
Company repaid the remaining balance of the loan of approximately $917,000,
including accrued interest to date, with proceeds from the IPO.
On March 14, 1996, the Company obtained a $433,000, three-year term loan
bearing interest at the rate of 7.52% for the purchase of geophysical equipment.
The debt was secured by such equipment. Monthly principal and interest payments
totaled approximately $13,000. This term loan was guaranteed by Seitel. On
August 14, 1997, the Company repaid the remaining balance of the loan of
approximately $257,000, including accrued interest to date, with proceeds from
the IPO.
F-17
<PAGE> 87
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
On July 9, 1996, the Company obtained two term loans aggregating $7,264,000
for the purchase of land and marine seismic equipment which secured the debt.
The first loan was a $5,902,000, five year term loan bearing interest at the
rate of 8%. The second loan was a $1,362,000 three year term loan bearing
interest at a rate of 8.06%. Monthly principal and interest payments on both
term loans totaled approximately $163,000. In March 1997, the Company obtained
two additional loans from the same lender of $558,000 and $7,006,000,
respectively, for the purchase of additional seismic equipment. The notes bear
interest at 7.73% and 7.98%, respectively, and mature in three and five years
respectively. These term loans were guaranteed by Seitel. On August 12, 1997,
the Company repaid the remaining balance of these loans of $13.3 million,
including interest and prepayment penalties, with proceeds from the IPO.
On August 14, 1997, the Company repaid approximately $7.5 million of
borrowings and accrued interest to date with respect to the ERI Acquisition with
proceeds from the IPO.
On October 21, 1997, the Company entered into an agreement with Bank One,
Texas N.A. with respect to a $20,000,000 revolving credit facility secured by
the Company's accounts receivable. The amount the Company may borrow under the
facility is limited to a borrowing base that is equal to 90% of the eligible
U.S. and U.K. investment grade accounts receivable, as defined, 100% of
receivables secured by acceptable letters of credit, and 80% of eligible
noninvestment grade domestic and other foreign receivables. Interest only will
be payable monthly or at the end of LIBOR interest periods, and the credit
facility is payable in full in three years. Mandatory prepayments are required
if borrowings exceed the borrowing base. Interest accrues under the credit
facility at the bank's base rate or LIBOR plus a spread of 1.375% if the
Company's debt to net worth ratio is less than 1 to 1, and 1.625% if such ratio
is equal to or greater than 1 to 1. As of December 31, 1997, the Company has
approximately $18.5 million available under this facility and no borrowings were
currently outstanding.
NOTE F -- LEASE OBLIGATIONS
Property and equipment in the accompanying consolidated balance sheets
includes the following assets held under capital leases (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1997
------- -------
<S> <C> <C>
Geophysical equipment....................................... $ 5,339 $15,311
Accumulated amortization.................................... (2,649) (6,704)
------- -------
Assets under capital lease, net............................. $ 2,690 $ 8,607
======= =======
</TABLE>
The Company is allocated a portion of the office lease expense incurred by
Seitel under its operating lease for the corporate office based on the actual
cost of such office space pro-rated to the square footage utilized by the
Company. Additionally, the Company directly leases office space and charters
vessels and geophysical equipment under certain non-cancelable operating leases.
Rental expense for 1995, 1996 and 1997 was approximately $98,000, $142,000 and
$4,293,000, respectively, related to these leases.
F-18
<PAGE> 88
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Future minimum lease payments for the five years subsequent to December 31,
1997 and in the aggregate are as follows (in thousands):
<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
------- ---------
<S> <C> <C>
1998........................................................ $ 3,278 $ 4,655
1999........................................................ 3,474 2,409
2000........................................................ 3,681 2,301
2001........................................................ 1,261 433
2002........................................................ -- 426
Thereafter.................................................. -- 4,220
------- -------
Total minimum lease payments...................... 11,694 $14,444
=======
Less amount representing interest........................... (934)
-------
Present value of net minimum lease payments................. $10,760
=======
</TABLE>
The capital lease obligation outstanding as of December 31, 1997 has an
annual interest rate of approximately 4.95%.
NOTE G -- STOCKHOLDERS' EQUITY
Common Stock: In May 1997, the Company amended its Certificate of
Incorporation to authorize the issuance of 25,000,000 shares of common stock and
changed the par value to $.01 per share. At the same time, the Company approved
a 3,400-for-one stock split. All share and per share information included in the
accompanying consolidated financial statements has been adjusted to give
retroactive effect to the split.
On July 23, 1997, the Company issued 25,000 shares of common stock to the
president of the Company for a note valued at $425,000 which represented the
fair value of the Company's common stock at that date. The note bears interest
at 6% and is for a term of eight years. Interest is payable quarterly until
September 2000 when equal payments of principal plus interest will be payable
monthly until July 2005. The note is secured by a pledge of the 25,000 shares of
common stock in favor of the Company.
Preferred Stock: In May 1997, the Company amended its Certificate of
Incorporation to authorize the issuance of 5,000,000 shares of preferred stock,
the terms and conditions to be determined by the Board of Directors in creating
any particular series.
Seitel Contribution: In May 1997, Seitel contributed to the Company all of
the shares that it owned of Energy Research International, which represented a
19% ownership interest. Energy Research International is a holding company that
wholly-owns two marine seismic companies. This contribution was recorded at
Seitel's basis in such investment and resulted in a $914,000 increase in the
Company's additional paid-in capital.
Securities Offering, ERI Acquisition: On August 11, 1997 and September 5,
1997, the Company completed the offering and sale of a total of 6,524,000 shares
of common stock to the public at a price of $17 per share (including 1,880,000
shares sold by the Company's former parent, Seitel, Inc. and 180,000 shares sold
by the former owners of ERI) resulting in net proceeds of $69.1 million to the
Company after deducting offering-related expenses. Also on August 11, 1997, the
Company acquired the remaining 81% of Energy Research International in exchange
for 600,000 shares of common stock.
Stock Option Plans: In May 1997, the Company adopted a stock option plan
whereby 1,100,000 shares of common stock were reserved for issuance pursuant to
such plan. Under the stock option plan, the Company may grant both incentive
stock options intended to qualify under Section 422 of the Internal Revenue Code
and options that are not qualified as incentive stock options. Options are
granted at or above the market price
F-19
<PAGE> 89
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
of the Company's stock on the date of grant. As of December 31, 1997, 763,250
options have been issued under the plan.
In May 1997, the Company adopted an independent directors stock option plan
and 100,000 shares were reserved for issuance pursuant to such plan. Under this
plan, options are automatically granted to independent directors upon their
election and reelection as directors of the Company. Such options are granted at
the fair market value of the Company's stock on the date of grant. As of
December 31, 1997, 30,000 options have been issued under the plan.
The following summarizes information with regard to the stock option plans
for the year ended December 31, 1997 (shares in thousands):
<TABLE>
<CAPTION>
1997
-----------------
WEIGHTED
AVERAGE
EXERCISE
SHARES PRICE
------ --------
<S> <C> <C>
Outstanding at beginning of year............................ -- --
Granted................................................... 793 $16.81
Exercise.................................................. -- --
Forfeited................................................. -- --
Outstanding at end of year.................................. 793 $16.81
=== ======
Options exercisable at end of year.......................... -- --
=== ======
</TABLE>
The following table summarizes information for the options outstanding at
December 31, 1997 (shares in thousands):
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------ ----------------------
WEIGHTED NUMBER OF
NUMBER OF AVERAGE WEIGHTED OPTIONS WEIGHTED
OPTIONS CONTRACTUAL AVERAGE EXERCISABLE AVERAGE
OUTSTANDING LIFE IN EXERCISE AT EXERCISE
RANGE OF EXERCISE PRICES AT 12/31/97 YEARS PRICE 12/31/97 PRICE
- ------------------------ ----------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$13.25 - 15.50...................... 53 10.0 $13.28 -- --
$17.00 - $18.50..................... 740 9.6 17.07 -- --
--- ------ --- ---
$13.25 - $18.50..................... 793 $16.81 -- --
=== ====== === ===
</TABLE>
The Company applies APB Opinion 25 and related interpretations in
accounting for its stock-based compensation plans. APB Opinion 25 does not
require compensation costs to be recorded on options which have exercise prices
at least equal to the market price of the stock on the date of grant.
Accordingly, no compensation cost has been recognized for the Company's
stock-based plans. Had compensation costs for the Company's stock-based
compensation plans been determined based on the fair value at the grant dates
for awards under those plans consistent with the optional accounting method
prescribed by SFAS No. 123,
F-20
<PAGE> 90
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
"Accounting for Stock-Based Compensation," the Company's net income and earnings
per share would have been reduced to the pro forma amounts indicated below (in
thousands, except per share data):
<TABLE>
<CAPTION>
1997
------
<S> <C> <C>
Net income.................................................. As reported $4,400
Pro forma.. 3,635
Basic earnings per share.................................... As reported $ 0.81
Pro forma 0.67
Diluted earnings per share.................................. As reported $ 0.81
Pro forma 0.67
</TABLE>
The fair value of each option grant was estimated on the date of grant
using the Black-Scholes option-pricing model with the following assumptions for
1997: risk-free interest rates ranging from 5.7% to 6.5%; dividend yield of 0%;
stock price volatility ranging from 40.7% to 41.2%; and an expected option life
of ten years. The weighted-average fair value of options granted during 1997 was
$10.68 per option, for options granted at fair market value.
NOTE H -- COMMITMENTS AND CONTINGENCIES
Acquisition and Financing Commitments: In September, 1997, the Company
entered into an agreement for the purchase of a telemetry seismic data
acquisition system at a cost of approximately $5.9 million. A deposit of
approximately $586,000 has been made with the remaining amount to be paid upon
delivery of the system which is expected in March, 1998.
In December 1997, the Company commenced upgrades on one of its vessels, the
Labrador Horizon, for an estimated upgrade cost of approximately $20.0 million.
In March 1998, the Company completed the upgrade.
In December 1997, the Company entered into a letter of intent for the
purchase of a privately-held seismic shot-hole drilling and front-end services
company. This acquisition is expected to be accounted for under the purchase
method of accounting. In March 1998, the Company completed the acquisition for a
purchase price of approximately $4.3 million in cash, 98,360 shares of the
Company's common stock, and $500,000 in deferred compensation payable to the
former owner (unaudited).
In January 1998, the Company obtained a commitment, subject to
documentation, with British Linen Shipping Ltd. for the financing of the
Labrador Horizon upgrades and the purchase of the vessel for a total commitment
of approximately $31.3 million. The facility will bear interest at a rate of
LIBOR plus 1.375% and will require the Company to enter into a lease purchase
agreement with British Linen Shipping Ltd. for a period of five years commencing
upon completion of the upgrades. The facility will require a security deposit of
approximately $5.0 million with scheduled amounts to be refunded based upon a
predetermined formula. Additionally, the Company will have the option to acquire
the vessel at the end of the lease purchase agreement for a price of .1% of the
total facility commitment. In April 1998, the Company completed the transaction
for a total of approximately $31.3 million (unaudited).
In March 1998, the Company obtained a term loan commitment, subject to
documentation, with Fleet Capital Corporation for the financing of an Opseis
system for approximately $5.9 million. The loan will be for a period of five
years and will bear interest at a fixed rate equal to the average three year
treasury rate at the time of closing plus 1.75%. Monthly payments of
approximately $117,000 will be made under the loan with the Opseis system
pledged as security for the loan. In April 1998, the Company acquired the Opseis
system and completed the financing with the Fleet Capital term loan as described
above (unaudited).
F-21
<PAGE> 91
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Employment Agreements: In connection with the completion of the IPO in
August 1997, the Company entered into employment agreements with five of its
executive officers.
Litigation: The Company is involved in or threatened with various legal
proceedings from time to time arising in the ordinary course of business.
Management of the Company does not believe that any liabilities resulting from
such proceedings will have a material adverse effect on its consolidated results
of operations or financial position.
NOTE I -- EMPLOYEE BENEFIT PLANS
In July 1997, the Company adopted the Eagle Geophysical, Inc. 401k
Retirement Plan (the "Plan") which is a defined contribution plan for all
eligible employees in the United States. The Company matches employee
contributions up to specified limits and may contribute a portion of the net
profits of the Company in accordance with the Plan. For the year ended December
31, 1997, the Company incurred expense of approximately $32,000 for its matching
contributions to the Plan.
The Company provides for the retirement of its United Kingdom employees
through The Horizon Pension Plan (the "Pension Plan"). The Pension Plan provides
defined retirement benefits as defined in the Trust Deed and is managed by the
Trustees. The following table sets forth the Pension Plan and the funded status
as of December 31, 1996 and 1997 (in thousands):
<TABLE>
<CAPTION>
1996 1997
------ ------
<S> <C> <C>
Actuarial present value of benefit obligation:
Vested benefit obligation................................. $4,098 $5,168
Accumulated benefit obligation............................ 4,098 5,168
Projected benefit obligation.............................. 4,939 6,230
Plan assets at fair value................................... 5,969 7,271
------ ------
Plan assets in excess of projected benefit obligation....... 1,030 1,041
Unrecognized net transition asset........................... (700) (597)
Unrecognized net loss....................................... 79 159
------ ------
Prepaid pension cost........................................ $ 409 $ 603
====== ======
</TABLE>
Plan assets are invested in a unitized mixed managed fund. At December 31,
1997 approximately 82% of the fund was invested in UK and international equities
and the balance was invested in fixed interest securities or held as cash
deposits.
Net pension cost for 1995, 1996 and 1997 included the following components
(in thousands):
<TABLE>
<CAPTION>
1995 1996 1997
----- ----- -------
<S> <C> <C> <C>
Service cost............................................. $ 338 $ 379 $ 406
Interest cost............................................ 249 330 403
Actual return on plan assets............................. (489) (627) (1,102)
Net amortization and deferral............................ 83 118 512
----- ----- -------
Net pension cost......................................... $ 181 $ 200 $ 219
===== ===== =======
</TABLE>
The major assumptions used in computing the net pension cost were:
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Discount.................................................... 9.0% 9.0% 8.5%
Expected long term rate of return on plan assets............ 9.5% 9.5% 9.0%
Rate of increase in compensation levels..................... 6.5% 6.5% 6.5%
</TABLE>
F-22
<PAGE> 92
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE J -- RELATED PARTY TRANSACTIONS
The Company enters into various transactions with Seitel and its
subsidiaries. The Company performs seismic data acquisition services for
Seitel's seismic data library subsidiary and its exploration and production
subsidiary. For the years ended December 31, 1995, 1996 and 1997, the Company
recognized revenue of $15.4 million, $27.2 million and $42.3 million,
respectively, for seismic data acquisition services performed for Seitel's
subsidiaries. Prior to August 11, 1997 such revenues from affiliates were based
on prices charged to unaffiliated third parties for similar work. Gross margin
recognized on work for affiliates was limited in each reporting period to the
total margin percentage earned on work for unaffiliated parties. Subsequent to
August 11, 1997, revenues from affiliates were based on agreed upon contractual
amounts and terms similar to contracts with other third party customers.
Prior to the IPO, the Company reimbursed Seitel for direct and indirect
costs of certain Seitel employees who provided services to the Company and for
other costs, primarily general and administrative expenses, related to the
Company's operations. Seitel allocated indirect costs to the Company using a
formula based on the ratio of the Company's levels of revenue, number of
personnel or other factors, as applicable, to the total consolidated Seitel
levels for such factors. Management of the Company believes that the use of such
formula resulted in a reasonable allocation of indirect costs. During the period
from January 1, 1997 to August 11, 1997, the Company recorded general and
administrative costs allocated from Seitel of $818,000. Prior to August 11,
1997, Seitel funded the Company's direct operating costs through intercompany
advances and was reimbursed for such advances with available cash. Amounts
payable to or receivable from Seitel and its subsidiaries bore interest at the
same rates which Seitel was charged or received. During the period from January
1, 1997 to August 11, 1997, the Company recorded net interest income of $404,000
related to the amounts payable to or receivable from Seitel and its
subsidiaries.
On July 22, 1997 the Company declared a dividend to Seitel for its
receivable for work performed by the Company for Seitel and its subsidiaries
prior to the IPO. On August 11, 1997, the Company settled this receivable
through a non-cash dividend which amounted to approximately $6,651,000.
Prior to the IPO, the Company leased certain marine seismic equipment to
Horizon Exploration Limited, a marine seismic company wholly-owned by ERI, under
a five-year operating rental agreement expiring June 30, 2001. For the years
ended December 31, 1995, 1996, and 1997, the Company recognized revenues of
$-0-, $828,000 and $1,783,000, respectively, related to this lease. Subsequent
to the IPO and the ERI acquisition, $694,000 of such rental income and expense
has been eliminated in the Company's consolidated results of operations.
The Company and Seitel have entered into a number of agreements for the
purpose of defining their continuing relationship. Conflicts of interest may
arise in the future between Seitel and the Company in connection with these
agreements and other areas of their ongoing relationship. The following is a
summary of certain prospective arrangements between the Company and Seitel.
Master Separation Agreement: The Master Separation Agreement provided for
the Company and Seitel to enter into a Sublease, a Registration Rights
Agreement, a Tax Indemnity Agreement and an Administrative Services Agreement.
In addition, the Master Separation Agreement required the Company to repay
indebtedness owed by the Company and its subsidiaries to Seitel and indebtedness
owed by the Company and its subsidiaries to third parties guaranteed by Seitel
contemporaneously with the consummation of the IPO. Under the Master Separation
Agreement, Seitel and its subsidiaries and the Company and its subsidiaries have
indemnified each other with respect to liabilities arising in connection with
the operations of their respective businesses prior to and after the date of
consummation of the IPO including liabilities under the Securities Act with
respect to the IPO. The Master Separation Agreement also provides for continued
access by the Company to historical financial and operational information
relating to the Company and its subsidiaries maintained by Seitel.
F-23
<PAGE> 93
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Sublease: The Sublease between the Company and Seitel provides for the
Company to lease its principal corporate offices, comprising approximately 7,600
square feet, from Seitel for a term of three years at an annual rent of
approximately $85,000. The Sublease also provides for the Company to utilize
certain shared office equipment, such as phone systems and central computer
systems, for an additional charge.
Registration Rights Agreement: Pursuant to the Registration Rights
Agreement, the Company has agreed to register the offer and sale by Seitel on a
delayed and continuous basis from time to time of the shares of common stock
owned by Seitel after the IPO at the expense of the Company.
Tax Indemnity Agreement: Prior to the IPO, the Company was a member of the
Seitel affiliated group and filed its tax returns on a consolidated basis with
such group. After the IPO, the Company is no longer a member of the Seitel
affiliated group. The Company and Seitel have entered into a Tax Indemnity
Agreement to define their respective rights and obligations relating to federal,
state and other taxes for periods before and after the IPO. Pursuant to the Tax
Indemnity Agreement, the Company is required to pay Seitel (to the extent not
already paid) its share of federal income taxes prior to the date of
consummation of the IPO, and is responsible for federal income taxes from its
operations on and after the date of the IPO. Any subsequent refunds, additional
taxes or penalties or other adjustments relating to the Company's federal income
taxes for periods prior to the date of consummation of the IPO shall be for the
benefit of or be borne by Seitel. Similar provisions apply under the Tax
Indemnity Agreement to other taxes, such as state and local income taxes.
Administrative Services Agreement: Seitel and the Company entered into an
Administrative Services Agreement pursuant to which Seitel provides the Company
with administrative services, primarily accounting services, at or up to the
same levels as provided prior to the IPO. Seitel provided these services for a
90-day transition period after the IPO to allow the Company adequate time to
build an internal administrative staff. The Company paid Seitel approximately
$5,500 for these services at Seitel's actual cost of providing these services
for the year ended December 31, 1997.
NOTE K -- MAJOR CUSTOMERS
During each of the years ended December 31, 1995, 1996 and 1997, certain
customers accounted for 10% or more of the Company's consolidated revenue as
follows:
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Affiliated companies, wholly-owned subsidiaries of Seitel:
Seitel Data, Ltd. ........................................ 14% 28% 46%
DDD Energy Inc. .......................................... 39% 29% 8%
Unaffiliated companies, one each year....................... 22% 20% --
</TABLE>
The Company extends credit to various companies in the oil and gas industry
for the acquisition of seismic data, which results in a concentration of credit
risk. This concentration of credit risk may be affected by changes in economic
or other conditions and may accordingly impact the Company's overall credit
risk. However, management believes that the risk is mitigated by the number,
size, reputation and diversified nature of the companies to which they extend
credit. Historical credit losses as a percentage of total revenues have been
immaterial.
F-24
<PAGE> 94
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE L -- FOREIGN OPERATIONS
Prior to the IPO, the Company's principal operations were in the United
States. With the completion of the ERI Acquisition, the Company's principal
operations are in both Europe and the United States. Financial information by
geographic area is as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1995 1996 1997
------- ------- --------
<S> <C> <C> <C>
Operating revenues:
United States...................................... $29,275 $48,136 $ 70,185
Europe and other areas............................. -- -- 8,876
------- ------- --------
Total operating revenues................... $29,275 $48,136 $ 79,061
======= ======= ========
Operating Income:
United States...................................... $ 5,415 $10,539 $ 15,998
Europe and other areas............................. -- -- 2,255
------- ------- --------
Total operating income..................... 5,415 10,539 18,253
Depreciation and amortization................... 2,471 3,409 8,584
General corporate expense....................... -- -- 2,070
Net interest and other expense.................. 408 531 205
------- ------- --------
Income before provision for income taxes........ $ 2,536 $ 6,599 $ 7,394
======= ======= ========
Identifiable Assets:
United States...................................... 17,960 26,721 47,568
Europe and other areas............................. -- -- 66,668
------- ------- --------
Total Identifiable assets.................. 17,960 26,721 114,236
Corporate assets........................... -- -- 10,069
------- ------- --------
Total assets............................... $17,960 $26,721 $124,305
======= ======= ========
</TABLE>
F-25
<PAGE> 95
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE M -- QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of the unaudited quarterly results of operations
for the years ended December 31, 1996 and 1997:
<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
1996
Revenues....................................... $ 5,974 $11,777 $12,138 $18,247
Operating costs and expenses (excluding
depreciation and amortization).............. 4,697 9,412 9,660 13,828
Depreciation and amortization.................. 657 640 1,018 1,094
Interest and other............................. 136 158 167 70
Income before income taxes..................... 484 1,567 1,293 3,255
Net income applicable to common shares......... 306 993 819 2,061
Net income per common share -- basic(1)........ $ 0.09 $ 0.29 $ 0.24 $ 0.61
Net income per common share -- diluted(1)...... $ 0.09 $ 0.29 $ 0.24 $ 0.61
1997
Revenues....................................... $12,981 $15,785 $25,216 $25,079
Operating costs and expenses (excluding
depreciation and amortization).............. 9,736 12,608 20,451 20,083
Depreciation and amortization.................. 1,302 1,470 2,613 3,199
Interest and other............................. 158 (124) 646 (475)
Income before income taxes..................... 1,785 1,831 1,506 2,272
Net income applicable to common shares......... 1,130 1,160 913 1,197
Net income per common share -- basic(1)........ $ 0.33 $ 0.34 $ 0.14 $ 0.14
Net income per common share -- diluted(1)...... $ 0.33 $ 0.34 $ 0.14 $ 0.14
</TABLE>
- ---------------
(1) The sum of individual quarterly earnings per share may not agree with the
year to date earnings per share as each period's computation is based on the
weighted average number of common shares outstanding during the period.
NOTE N -- SUBSEQUENT EVENTS (UNAUDITED)
The Company intends to upgrade and equip two additional offshore seismic
vessels, at an aggregate capital cost (including acquisition costs) of
approximately $98.8 million. The Company acquired the two vessels, the Austral
Horizon and the Atlantic Horizon, during the fourth quarter of 1997 for purchase
prices of approximately $1.6 million and $3.6 million, respectively. The Company
intends to upgrade and equip the vessels during 1998. The costs to upgrade and
equip the two vessels will be approximately $34.3 million for the Austral
Horizon and approximately $59.3 million for the Atlantic Horizon. The Company is
financing these capital costs out of the proceeds of the issuance of $100.0
million aggregate principal amount of 10 3/4% Senior Notes due 2008 (the "Senior
Notes"). In anticipation of the offering and sale of the Senior Notes (the
"Offering"), the Company financed these costs on an interim basis with the $20.0
million Bank Credit Facility and a $29.0 million short-term loan more fully
described below.
In June 1998, the Company entered into the $29.0 million Short-Term Loan
with Bank One, Texas, N.A. to fund part of the cost of the upgrades to the
Austral Horizon and the Atlantic Horizon pending completion of the Offering. The
maximum amount borrowed under this loan was $7.5 million, which was repaid in
full upon consummation of the Offering on July 20, 1998. Interest accrued under
this loan at the bank's base rate on LIBOR plus 2% and was payable monthly or at
the end of applicable LIBOR interest periods.
F-26
<PAGE> 96
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE O -- SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
On July 20, 1998, the Company issued the Senior Notes to repay
approximately $27.5 million borrowed under the Short-Term Loan and the Revolving
Credit Facility to pay for upgrades to the Austral Horizon and Atlantic Horizon
and to fund the remaining upgrades of these two vessels. In connection with the
Offering, certain of the Company's subsidiaries (the "Guarantor Subsidiaries")
agreed to guarantee the Company's obligations under the Senior Notes. Certain
other subsidiaries (the "Non-Guarantor Subsidiaries") are not required to
guarantee the Senior Notes.
The following tables present the condensed consolidating balance sheets of
Eagle Geophysical, Inc. as a parent company, its Guarantor Subsidiaries and its
Non-Guarantor Subsidiaries as of June 30, 1998 (unaudited), and December 31,
1997 and 1996 and the related condensed consolidating statements of operations
and cash flows for the six months ended June 30, 1998 and 1997 (unaudited), and
for each of the three years in the period ended December 31, 1997.
F-27
<PAGE> 97
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY BALANCE SHEET
JUNE 30, 1998
(UNAUDITED)
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
RECLASSIFICATIONS
EAGLE GEOPHYSICAL, INC. GUARANTOR NON-GUARANTOR AND EAGLE GEOPHYSICAL, INC.
PARENT COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS AND SUBSIDIARIES
----------------------- ------------ ------------- ----------------- -----------------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash
equivalents............ $ 4,619 $ -- $ 14,506 $ (3,213) $ 15,912
Receivables, net.......... -- 18,151 10,931 -- 29,082
Inventory................. -- 1,441 1,591 -- 3,032
Prepaid expenses and other
assets................. 2,607 416 1,735 (2,607) 2,151
-------- ------- -------- -------- --------
Total current
assets.......... 7,226 20,008 28,763 (5,820) 50,177
Property and equipment,
net.................... -- 29,470 94,548 -- 124,018
Goodwill, net............. -- 2,443 17,434 -- 19,877
Other assets, net......... 172 4,647 1,971 -- 6,790
Intercompany investments
and advances........... 16,790 -- -- (16,790) --
-------- ------- -------- -------- --------
Total Assets...... $ 24,188 $56,568 $142,716 $(22,610) $200,862
======== ======= ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term
debt and capital lease
obligations............... $ -- $ 1,014 $ 5,847 $ -- $ 6,861
Accounts payable............ 16 10,956 21,184 (3,213) 28,943
Intercompany payables,
net....................... (79,196) 15,866 77,659 (14,329) --
Accrued liabilities......... 1,153 4,014 11,319 (2,607) 13,879
Billings in excess of costs
and estimated earnings on
uncompleted contracts..... -- 9,267 187 -- 9,454
-------- ------- -------- -------- --------
Total current
liabilities..... (78,027) 41,117 116,196 (20,149) 59,137
Long-term debt.............. 22,500 4,770 -- -- 27,270
Capital leases
obligations............... -- -- 25,421 -- 25,421
Deferred income taxes and
other obligations......... -- 1,214 -- -- 1,214
-------- ------- -------- -------- --------
Total
Liabilities..... (55,527) 47,101 141,617 (20,149) 113,042
-------- ------- -------- -------- --------
Stockholders' Equity........ 79,715 9,467 1,099 (2,461) 87,820
-------- ------- -------- -------- --------
Total Liabilities
and
Stockholders'
Equity.......... $ 24,188 $56,568 $142,716 $(22,610) $200,862
======== ======= ======== ======== ========
</TABLE>
F-28
<PAGE> 98
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY BALANCE SHEET
DECEMBER 31, 1997
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
RECLASSIFICATIONS
EAGLE GEOPHYSICAL, INC. GUARANTOR NON-GUARANTOR AND EAGLE GEOPHYSICAL, INC.
PARENT COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS AND SUBSIDIARIES
----------------------- ------------ ------------- ----------------- -----------------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash
equivalents............ $ 8,450 $ 1,871 $ 9,161 $ -- $ 19,482
Receivables, net.......... 89 25,339 1,485 -- 26,913
Inventory................. -- 378 1,327 -- 1,705
Prepaid expenses and other
assets................. 2,357 515 1,866 (1,950) 2,788
-------- ------- ------- -------- --------
Total current
assets.......... 10,896 28,103 13,839 (1,950) 50,888
Property and equipment,
net.................... 54 22,338 32,805 -- 55,197
Goodwill, net............. -- -- 17,990 -- 17,990
Other assets, net......... 104 22 1,972 (1,868) 230
Intercompany
investments............ 11,789 -- -- (11,789) --
-------- ------- ------- -------- --------
Total Assets...... $ 22,843 $50,463 $66,606 $(15,607) $124,305
======== ======= ======= ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of capital
lease obligations......... $ -- $ -- $ 2,816 $ -- $ 2,816
Accounts payable............ 934 8,198 6,539 -- 15,671
Intercompany payables,
net....................... (58,340) 25,681 41,987 (9,328) --
Accrued liabilities......... 278 3,095 6,426 (1,950) 7,849
Billings in excess of costs
and estimated earnings on
uncompleted contracts..... -- 5,842 187 -- 6,029
-------- ------- ------- -------- --------
Total current
liabilities..... (57,128) 42,816 57,955 (11,278) 32,365
Capital leases
obligations............... -- -- 7,944 -- 7,944
Deferred income taxes and
other obligations......... -- 1,868 -- (1,868) --
-------- ------- ------- -------- --------
Total
Liabilities..... (57,128) 44,684 65,899 (13,146) 40,309
-------- ------- ------- -------- --------
Stockholders' Equity........ 79,971 5,779 707 (2,461) 83,996
-------- ------- ------- -------- --------
Total Liabilities
and
Stockholders'
Equity.......... $ 22,843 $50,463 $66,606 $(15,607) $124,305
======== ======= ======= ======== ========
</TABLE>
F-29
<PAGE> 99
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY BALANCE SHEET
DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
RECLASSIFICATIONS
EAGLE GEOPHYSICAL, INC. GUARANTOR NON-GUARANTOR AND EAGLE GEOPHYSICAL, INC.
PARENT COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS AND SUBSIDIARIES
----------------------- ------------ ------------- ----------------- -----------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents........... $ -- $ -- $ -- $ -- $ --
Receivables, net......... -- 13,587 -- -- 13,587
Inventory................ -- -- -- -- --
Prepaid expenses and
other assets.......... -- 860 -- -- 860
---- ------- ---- ---- -------
Total current
assets......... -- 14,447 -- -- 14,447
Property and equipment,
net................... -- 12,205 -- -- 12,205
Goodwill, net............ -- -- -- -- --
Other assets, net........ -- 69 -- -- 69
Intercompany investments
and advances, net..... -- -- -- -- --
---- ------- ---- ---- -------
Total Assets..... $ -- $26,721 $ -- $ -- $26,721
==== ======= ==== ==== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of
capital lease
obligations........... $ -- $ 1,033 $ -- $ -- $ 1,033
Current portion of
long-term debt........ -- 2,556 -- -- 2,556
Accounts payable......... -- 4,623 -- -- 4,623
Intercompany payables,
net................... -- -- -- -- --
Accrued liabilities...... -- 652 -- -- 652
Billings in excess of
costs and estimated
earnings on
uncompleted
contracts............. -- 78 -- -- 78
---- ------- ---- ---- -------
Total current
liabilities.... -- 8,942 -- -- 8,942
---- ------- ---- ---- -------
Long-term debt............. -- 6,039 -- -- 6,039
Capital leases
obligations.............. -- 1,274 -- -- 1,274
Due to affiliate........... -- 1,965 -- -- 1,965
Deferred income taxes and
other obligations........ -- 712 -- -- 712
---- ------- ---- ---- -------
Total
Liabilities.... -- 18,932 -- -- 18,932
---- ------- ---- ---- -------
Stockholders' Equity....... -- 7,789 -- -- 7,789
---- ------- ---- ---- -------
Total Liabilities
and
Stockholders'
Equity......... $ -- $26,721 $ -- $ -- $26,721
==== ======= ==== ==== =======
</TABLE>
F-30
<PAGE> 100
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
RECLASSIFICATIONS
EAGLE GEOPHYSICAL, INC. GUARANTOR NON-GUARANTOR AND EAGLE GEOPHYSICAL, INC.
PARENT COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS AND SUBSIDIARIES
----------------------- ------------ ------------- ----------------- -----------------------
<S> <C> <C> <C> <C> <C>
1998
REVENUES................... $ -- $43,995 $15,118 $ (897) $58,216
EXPENSES
Operating Expenses
(exclusive of
depreciation and
amortization
shown below).......... -- 31,741 9,122 (897) 39,966
Depreciation and
amortization.......... 13 4,407 3,267 -- 7,687
Selling, general and
administrative
expenses.............. 1,753 1,923 1,697 -- 5,373
Interest expense, net.... 156 8 187 -- 351
------- ------- ------- ------- -------
1,922 38,079 14,273 (897) 53,377
------- ------- ------- ------- -------
Income (loss) before
provision for income
taxes.................... (1,922) 5,916 845 -- 4,839
Provision (benefit) for
income taxes............. (721) 2,228 453 -- 1,960
------- ------- ------- ------- -------
NET INCOME (LOSS).......... $(1,201) $ 3,688 $ 392 $ -- $ 2,879
======= ======= ======= ======= =======
1997
REVENUES................... $ -- $28,766 $ -- $ -- $28,766
EXPENSES
Operating expenses
(exclusive of
depreciation and
amortization shown
below)................ -- 20,779 -- -- 20,779
Depreciation and
amortization.......... -- 2,772 -- -- 2,772
Selling, general and
administrative
expenses.............. -- 1,565 -- -- 1,565
Interest expense, net.... -- 34 -- -- 34
------- ------- ------- ------- -------
-- 25,150 -- -- 25,150
------- ------- ------- ------- -------
Income (loss) before
provision for income
taxes.................... -- 3,616 -- -- 3,616
Provision for income
taxes.................... -- 1,326 -- -- 1,326
------- ------- ------- ------- -------
NET INCOME (LOSS).......... $ -- $ 2,290 $ -- $ -- $ 2,290
======= ======= ======= ======= =======
</TABLE>
F-31
<PAGE> 101
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
RECLASSIFICATIONS
EAGLE GEOPHYSICAL, INC. GUARANTOR NON-GUARANTOR AND EAGLE GEOPHYSICAL, INC.
PARENT COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS AND SUBSIDIARIES
----------------------- ------------ ------------- ----------------- -----------------------
<S> <C> <C> <C> <C> <C>
1997
REVENUES................... $ -- $70,024 $ 9,731 $(694) $79,061
EXPENSES
Operating expenses
(exclusive of
depreciation and
amortization
shown below).......... -- 51,548 5,616 (694) 56,470
Depreciation and
amortization.......... 4 6,070 2,510 -- 8,584
Selling, general and
administrative
expenses.............. 2,070 4,086 252 -- 6,408
Interest expense, net.... (355) 450 110 -- 205
------- ------- ------- ----- -------
1,719 62,154 8,488 (694) 71,667
------- ------- ------- ----- -------
Income (loss) before
provision for income
taxes.................... (1,719) 7,870 1,243 -- 7,394
Provision (benefit) for
income taxes............. (645) 3,106 533 -- 2,994
------- ------- ------- ----- -------
NET INCOME (LOSS).......... $(1,074) $ 4,764 $ 710 $ -- $ 4,400
======= ======= ======= ===== =======
1996
REVENUES................... $ -- $48,136 $ -- $ -- $48,136
EXPENSES
Operating expenses
(exclusive of
depreciation and
amortization
shown below).......... -- 34,917 -- -- 34,917
Depreciation and
amortization.......... -- 3,409 -- -- 3,409
Selling, general and
administrative
expenses.............. -- 2,680 -- -- 2,680
Interest expense, net.... -- 531 -- -- 531
------- ------- ------- ----- -------
-- 41,537 -- -- 41,537
------- ------- ------- ----- -------
Income (loss) before
provision for income
taxes.................... -- 6,599 -- -- 6,599
Provision for income
taxes.................... -- 2,420 -- -- 2,420
------- ------- ------- ----- -------
NET INCOME (LOSS).......... $ -- $ 4,179 $ -- $ -- $ 4,179
======= ======= ======= ===== =======
</TABLE>
F-32
<PAGE> 102
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
RECLASSIFICATIONS
EAGLE GEOPHYSICAL, INC. GUARANTOR NON-GUARANTOR AND EAGLE GEOPHYSICAL, INC.
PARENT COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS AND SUBSIDIARIES
----------------------- ------------ ------------- ----------------- -----------------------
<S> <C> <C> <C> <C> <C>
1995
REVENUES................... $ -- $29,275 $ -- $ -- $29,275
EXPENSES
Operating expenses
(exclusive of
depreciation and
amortization
shown below).......... -- $20,986 -- -- 20,986
Depreciation and
amortization.......... -- 2,471 -- -- 2,471
Selling, general and
administrative
expenses.............. -- 2,874 -- -- 2,874
Interest expense, net.... -- 408 -- -- 408
------- ------- ------- ------- -------
-- 26,739 -- -- 26,739
------- ------- ------- ------- -------
Income (loss) before
provision for income
taxes.................... -- 2,536 -- -- 2,536
Provision for income
taxes.................... -- 933 -- -- 933
------- ------- ------- ------- -------
NET INCOME (LOSS).......... $ -- $ 1,603 $ -- $ -- $ 1,603
======= ======= ======= ======= =======
</TABLE>
F-33
<PAGE> 103
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING GUARANTOR, NONGUARANTOR AND
PARENT COMPANY STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
RECLASSIFICATIONS
EAGLE GEOPHYSICAL, INC. GUARANTOR NON-GUARANTOR AND EAGLE GEOPHYSICAL, INC.
PARENT COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS AND SUBSIDIARIES
----------------------- ------------ ------------- ----------------- -----------------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss).......... $ (1,201) $ 3,688 $ 392 $ -- $ 2,879
Adjustments to reconcile
net income (loss) to net
cash provided by (used
in) operating
activities............... (2,248) 15,763 10,732 (3,213) 21,034
-------- -------- -------- ------- --------
NET CASH PROVIDED BY (USED
IN) OPERATING
ACTIVITIES............... (3,449) 19,451 11,124 (3,213) 23,913
-------- -------- -------- ------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase and upgrades of
property and equipment... -- (4,633) (40,526) -- (45,159)
Cash received on disposal
of property and
equipment................ -- 152 -- -- 152
Cash paid for shot-hole
drilling company, net of
cash acquired............ -- (3,516) -- -- (3,516)
-------- -------- -------- ------- --------
NET CASH USED IN INVESTING
ACTIVITIES............... -- (7,997) (40,526) -- (48,523)
-------- -------- -------- ------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowings under credit
facility................. 30,500 -- -- -- 30,500
Repayments under credit
facility................. (8,000) -- -- -- (8,000)
Principal payments on term
loans.................... -- (81) -- -- (81)
Principal payments on
capital
leases................... -- -- (1,199) -- (1,199)
Proceeds (payments) on
intercompany advances.... (22,702) (13,244) 35,946 -- --
Other, net................. (180) -- -- -- (180)
-------- -------- -------- ------- --------
NET CASH PROVIDED BY (USED
IN) FINANCING
ACTIVITIES............... (382) (13,325) 34,747 -- 21,040
-------- -------- -------- ------- --------
Net decrease in cash and
cash equivalents......... (3,831) (1,871) 5,345 (3,213) (3,570)
Cash and cash equivalents,
beginning of period...... 8,450 1,871 9,161 -- 19,482
-------- -------- -------- ------- --------
CASH AND CASH EQUIVALENTS,
END OF PERIOD............ $ 4,619 $ -- $ 14,506 $(3,213) $ 15,912
======== ======== ======== ======= ========
</TABLE>
F-34
<PAGE> 104
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING GUARANTOR, NONGUARANTOR AND
PARENT COMPANY STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
RECLASSIFICATIONS
EAGLE GEOPHYSICAL, INC. GUARANTOR NON-GUARANTOR AND EAGLE GEOPHYSICAL, INC.
PARENT COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS AND SUBSIDIARIES
----------------------- ------------ ------------- ----------------- -----------------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income(loss)........... $ -- $ 2,290 $ -- $ -- $ 2,290
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities..... -- 7,606 -- -- 7,606
---- ------- ---- ---- -------
NET CASH PROVIDED BY
OPERATING ACTIVITIES..... -- 9,896 -- -- 9,896
---- ------- ---- ---- -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase and upgrades of
property and equipment... -- (8,098) -- -- (8,098)
Cash received on disposal
of property and
equipment................ -- 27 -- -- 27
---- ------- ---- ---- -------
NET CASH USED IN INVESTING
ACTIVITIES............... -- (8,071) -- -- (8,071)
---- ------- ---- ---- -------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowings under term
loans.................... -- 7,925 -- -- 7,925
Principal payments on term
loans.................... -- (1,943) -- -- (1,943)
Principal payments on
capital
leases................... -- (681) -- -- (681)
Payment to affiliate....... -- (7,115) -- -- (7,115)
---- ------- ---- ---- -------
NET CASH USED IN FINANCING
ACTIVITIES............... -- (1,814) -- -- (1,814)
---- ------- ---- ---- -------
Net change in cash and cash
equivalents.............. -- 11 -- -- 11
Cash and cash equivalents,
beginning of period...... -- -- -- -- --
---- ------- ---- ---- -------
CASH AND CASH EQUIVALENTS,
END OF PERIOD............ $ -- $ 11 $ -- $ -- $ 11
==== ======= ==== ==== =======
</TABLE>
F-35
<PAGE> 105
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING GUARANTOR, NONGUARANTOR AND
PARENT COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
RECLASSIFICATIONS
EAGLE GEOPHYSICAL, INC. GUARANTOR NON-GUARANTOR AND EAGLE GEOPHYSICAL, INC.
PARENT COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS AND SUBSIDIARIES
----------------------- ------------ ------------- ----------------- -----------------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss)........... $ (1,074) $ 4,764 $ 710 $ -- $ 4,400
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:..... (1,335) 4,056 5,768 -- 8,489
-------- -------- -------- ---- --------
NET CASH PROVIDED BY (USED
IN) OPERATING
ACTIVITIES................ (2,409) 8,820 6,478 -- 12,889
-------- -------- -------- ---- --------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase and upgrades of
property and equipment.... (58) (16,821) (15,496) -- (32,375)
Cash received on disposal of
property and equipment.... -- 24 -- -- 24
Cash acquired from the
purchase of Energy
Research International.... -- -- 145 -- 145
-------- -------- -------- ---- --------
NET CASH USED IN INVESTING
ACTIVITIES................ (58) (16,797) (15,351) -- (32,206)
-------- -------- -------- ---- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowings under credit
facility.................. -- -- -- -- --
Borrowings under term
loans..................... -- 7,564 -- -- 7,564
Principal payments on term
loans..................... -- (16,275) (11,611) -- (27,886)
Principal payments on
capital leases............ -- (3,002) (4,003) -- (7,005)
Payment to affiliate........ -- (3,003) -- -- (3,003)
Issuance of common stock,
net....................... 69,129 -- -- -- 69,129
Proceeds (payments) on
intercompany investments
and advances.............. (58,212) 24,564 33,648 -- --
-------- -------- -------- ---- --------
NET CASH PROVIDED BY
FINANCING ACTIVITIES...... 10,917 9,848 18,034 -- 38,799
-------- -------- -------- ---- --------
Net increase in cash and
cash equivalents.......... 8,450 1,871 9,161 -- 19,482
Cash and cash equivalents,
beginning of year......... -- -- -- -- --
-------- -------- -------- ---- --------
CASH AND CASH EQUIVALENTS,
END
OF YEAR................... $ 8,450 $ 1,871 $ 9,161 $ -- $ 19,482
======== ======== ======== ==== ========
</TABLE>
F-36
<PAGE> 106
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
RECLASSIFICATIONS
EAGLE GEOPHYSICAL, INC. GUARANTOR NON-GUARANTOR AND EAGLE GEOPHYSICAL, INC.
PARENT COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS AND SUBSIDIARIES
----------------------- ------------ ------------- ----------------- -----------------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss).......... $ -- $ 4,179 $ -- $ -- $ 4,179
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:.... -- 461 -- -- 461
------ ------- ------ ------ -------
NET CASH PROVIDED BY
OPERATING ACTIVITIES..... -- 4,640 -- -- 4,640
------ ------- ------ ------ -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase and upgrading of
property and
equipment............. -- (7,928) -- -- (7,928)
Cash received on disposal
of property and
equipment............. -- -- -- -- --
Cash paid for shot-hole
drilling
company, net of cash
acquired............ -- -- -- -- --
------ ------- ------ ------ -------
NET CASH USED IN INVESTING
ACTIVITIES............... -- (7,928) -- -- (7,928)
------ ------- ------ ------ -------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowings under credit
facility.............. -- -- -- -- --
Borrowings under term
loans................. -- 7,694 -- -- 7,694
Principal payments on
term loans............ -- (1,518) -- -- (1,518)
Principal payments on
capital leases........ -- (1,247) -- -- (1,247)
Payments to affiliate.... -- (1,699) -- -- (1,699)
------ ------- ------ ------ -------
NET CASH PROVIDED BY
FINANCING ACTIVITIES..... -- 3,230 -- -- 3,230
------ ------- ------ ------ -------
Net decrease in cash and
cash equivalents......... -- (58) -- -- (58)
Cash and cash equivalents,
beginning of year........ -- 58 -- -- 58
------ ------- ------ ------ -------
CASH AND CASH EQUIVALENTS,
END OF YEAR.............. $ -- $ -- $ -- $ -- $ --
====== ======= ====== ====== =======
</TABLE>
F-37
<PAGE> 107
EAGLE GEOPHYSICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING GUARANTOR, NONGUARANTOR AND
PARENT COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
RECLASSIFICATIONS
EAGLE GEOPHYSICAL, INC. GUARANTOR NON-GUARANTOR AND EAGLE GEOPHYSICAL, INC.
PARENT COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS AND SUBSIDIARIES
----------------------- ------------ ------------- ----------------- -----------------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income................. $ -- $ 1,603 $ -- $ -- $ 1,603
Adjustments to reconcile
net income to net cash
provided by operating
activities:.............. -- (970) -- -- (970)
------ ------- ------ ------ -------
NET CASH PROVIDED BY
OPERATING ACTIVITIES..... -- 633 -- -- 633
------ ------- ------ ------ -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase and upgrading of
property and equipment... -- (289) -- -- (289)
Cash received on disposal
of property and
equipment................ -- -- -- -- --
Cash paid for shot-hole
drilling company,
net of cash acquired..... -- -- -- -- --
------ ------- ------ ------ -------
NET CASH USED IN INVESTING
ACTIVITIES............... -- (289) -- -- (289)
------ ------- ------ ------ -------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowings under credit
facility................. -- -- -- -- --
Borrowings under term
loans.................... -- -- -- -- --
Principal payments on term
loans.................... -- (812) -- -- (812)
Principal payments on
capital leases........... -- (1,299) -- -- (1,299)
Receipts from affiliate.... -- 1,796 -- -- 1,796
------ ------- ------ ------ -------
NET CASH USED IN FINANCING
ACTIVITIES............... -- (315) -- -- (315)
------ ------- ------ ------ -------
Net increase in cash and
cash equivalents......... -- 29 -- -- 29
Cash and cash equivalents,
beginning
of year.................. -- 29 -- -- 29
------ ------- ------ ------ -------
CASH AND CASH EQUIVALENTS,
END OF YEAR.............. $ -- $ 58 $ -- $ -- $ 58
====== ======= ====== ====== =======
</TABLE>
F-38
<PAGE> 108
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE EXCHANGE OFFER, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR
TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Forward-looking Statements............. iii
Available Information.................. iii
Incorporation of Certain Documents by
Reference............................ iv
Summary................................ 1
Risk Factors........................... 10
The Exchange Offer..................... 18
Use of Proceeds........................ 27
Capitalization......................... 28
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 29
Description of the Notes............... 36
Certain United States Federal Tax
Consequences for Non-United States
Holders.............................. 61
Plan of Distribution................... 63
Legal Matters.......................... 63
Experts................................ 63
Financial Statements................... F-1
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
[EAGLE GEOPHYSICAL LOGO
EAGLE GEOPHYSICAL, INC.
OFFER TO EXCHANGE
10 3/4% SENIOR NOTES DUE 2008, SERIES B,
FOR ALL OUTSTANDING
10 3/4% SENIOR NOTES DUE 2008, SERIES A
---------------------
PROSPECTUS
---------------------
, 1998
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 109
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is incorporated under the laws of Delaware. Section 145 of
the Delaware General Corporation Law provides that a Delaware corporation may
indemnify any person against expenses, fines and settlements actually and
reasonably incurred by any such person in connection with a threatened, pending
or completed action, suit or proceeding in which he is involved by reason of the
fact that he is or was a director, officer, employee or agent of such
corporation, provided that (i) 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 (ii) with respect to any criminal action or proceeding, he had
no reasonable cause to believe his conduct was unlawful. If the action or suit
is by or in the name of the corporation, the corporation may indemnify any such
person against expenses 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
interest of the corporation, except that no indemnification may be made in
respect to 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 Delaware Court
of Chancery or the court in which the action or suit is brought determines upon
application that, despite the adjudication of liability but in light of the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
As permitted by the Delaware General Corporation Law, the Registrants'
Certificate of Incorporation provides that the directors and officers of the
Registrant shall be indemnified by the Registrant against certain liabilities
that those persons may incur in their capacities as directors or officers. The
Certificate of Incorporation eliminates the liability of directors of the
Registrant, under certain circumstances, to the maximum extent permitted by the
Delaware General Corporation Law. Section 102(b)(7) of the General Corporation
Law of the State of Delaware provides that a certificate of incorporation may
contain a provision eliminating or limiting the personal liability of a director
to the corporation or its stockholders for monetary damages for a breach of
fiduciary duty as a director, provided that such provisions may not eliminate or
limit the liability of a director (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 (relating to liability for unauthorized
acquisitions or redemptions of, or dividends on, capital stock) of the General
Corporation Law of the State of Delaware or (iv) for any transaction from which
the director derived an improper personal benefit. The Registrant's Certificate
of Incorporation contains such a provision.
Additionally, pursuant to an employment agreement between Mr. Silverman and
the Registrant and an employment agreement between Mr. McNairy and the
Registrant, the Registrant shall, to the maximum extent not prohibited by law,
indemnify Mr. Silverman and Mr. McNairy if Mr. Silverman or Mr. McNairy is made,
or threatened to be made, a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, including an action by or in the right of the Registrant to
procure a judgment in its favor (collectively, a "Proceeding"), by reason of the
fact that Mr. Silverman or Mr. McNairy is or was a director or officer of the
Registrant, or is or was serving in any capacity at the request of the
Registrant for any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against judgments, fines, penalties,
excise taxes, amounts paid in settlement and costs, charges and expenses
(including attorneys' fees and disbursements) paid or incurred in connection
with any such Proceeding. The Registrant anticipates that it may enter into
similar contractual indemnification arrangements with its other executive
officers and directors.
The above discussion of the Registrant's Certificate of Incorporation,
Bylaws, and employment agreements and of Sections 102(b)(7) and 145 of the
General Corporation Law of the State of Delaware is not intended to be
exhaustive and is qualified in its entirety by such Certificate of
Incorporation, Bylaws, employment agreements and statutes.
II-1
<PAGE> 110
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<C> <C> <S>
3.1 -- Certificate of Incorporation of Eagle Geophysical, Inc., as
amended (incorporated by reference to Exhibit 3.1 of Eagle
Geophysical, Inc.'s Registration Statement, as amended, on
Form S-1, No. 333-28303, as filed with the Securities and
Exchange Commission on June 2, 1997).
3.2 -- Amended and Restated Bylaws of Eagle Geophysical, Inc., as
amended (incorporated by reference to Exhibit 3.2 of Eagle
Geophysical, Inc.'s Registration Statement, as amended, on
Form S-1, No. 333-28303, as filed with the Securities and
Exchange Commission on June 2, 1997, as amended by Exhibit
3.1 of Eagle Geophysical, Inc.'s Quarterly Report on Form
10-Q for the quarterly period ended March 31, 1998).
3.3* -- Certificate of Incorporation of Eagle Geophysical Onshore,
Inc., as amended
3.4* -- Amended and Restated Bylaws of Eagle Geophysical Onshore,
Inc.
3.5* -- Certificate of Incorporation of Eagle Geophysical Offshore,
Inc.
3.6* -- Bylaws of Eagle Geophysical Offshore, Inc.
3.7* -- Certificate of Incorporation of Eagle Geophysical Royalty,
Inc., as amended.
3.8* -- Bylaws of Eagle Geophysical Royalty, Inc.
3.9* -- Certificate of Incorporation of Eagle Geophysical de Mexico,
Inc.
3.10* -- Bylaws of Eagle Geophysical de Mexico, Inc.
3.11* -- Certificate of Incorporation of Eagle Front End Services,
Inc.
3.12* -- Bylaws of Eagle Front End Services, Inc.
3.13* -- Certificate of Incorporation of Eagle Geophysical
Management, Inc.
3.14* -- Bylaws of Eagle Geophysical Management, Inc.
3.15* -- Certificate of Incorporation of Eagle Geophysical de
Colombia, Inc.
3.16* -- Bylaws of Eagle Geophysical de Colombia, Inc.
3.17* -- Certificate of Incorporation of Austral Horizon, Inc.
3.18* -- Bylaws of Austral Horizon, Inc.
3.19* -- Certificate of Incorporation of Atlantic Horizon, Inc.
3.20* -- Bylaws of Atlantic Horizon, Inc.
3.21* -- Articles of Incorporation of Eagle Geophysical GOM, Inc., as
amended
3.22* -- Bylaws of Eagle Geophysical GOM, Inc.
3.23* -- Certificate of Incorporation of Eagle Geophysical de
Ecuador, Inc.
3.24* -- Bylaws of Eagle Geophysical de Ecuador, Inc.
3.25* -- Certificate of Incorporation of Eagle Geophysical de
Bolivia, Inc.
3.26* -- Bylaws of Eagle Geophysical de Bolivia, Inc.
3.27* -- Certificate of Limited Partnership of Eagle Front End
Services, Ltd.
4.1* -- Indenture dated as of July 20, 1998 between Eagle
Geophysical, Inc., as Issuer, certain subsidiaries of Eagle
Geophysical, Inc. (the "Guarantors") and Chase Bank of
Texas, National Association, as Trustee, with respect to
each of Series A and Series B of $100,000,000 10 3/4% Senior
Notes due 2008.
4.2* -- First Supplemental Indenture dated September 18, 1998 among
Eagle Geophysical, Inc., Eagle Geophysical de Bolivia, Inc.,
Eagle Geophysical de Ecuador, Inc. and Chase Bank of Texas,
National Association.
4.3* -- Registration Rights Agreement dated as of July 20, 1998
among Eagle Geophysical, Inc., the Guarantors and Prudential
Securities Inc. and Banc One Capital Markets, Inc.
5.1* -- Opinion of Gardere Wynne Sewell & Riggs, L.L.P., counsel for
Eagle Geophysical, Inc.
10.1* -- Purchase Agreement dated July 15, 1998 among Eagle
Geophysical, Inc., Prudential Securities Incorporated and
Banc One Capital Markets, Inc.
12.1* -- Statement regarding computation of ratio of earnings to
fixed charges.
23.1* -- Consent of Arthur Andersen LLP.
23.2* -- Consent of KPMG.
23.3 -- Consent of Gardere Wynne Sewell & Riggs, L.L.P. (included in
Exhibit 5.1).
</TABLE>
II-2
<PAGE> 111
<TABLE>
<C> <C> <S>
24.1 -- Power of Attorney (set forth on the signature pages
contained in Part II of this Registration Statement).
25.1* -- Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 on Form T-1 of Chase Bank of Texas,
National Association.
99.1* -- Form of Letter of Transmittal.
99.2* -- Form of Notices of Guaranteed Delivery.
</TABLE>
- ---------------
* Filed herewith.
ITEM 22. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) of 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) 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.
(b) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
(c) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet
the requirements of section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, 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.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the 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 Registrant
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 Registrant will, unless in the opinion of its 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 Act and will be governed by the final adjudication of
such issue.
(e) The undersigned Registrant hereby undertakes to respond to requests for
information that are incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(f) The undersigned Registrant hereby undertakes 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.
II-3
<PAGE> 112
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 September 18, 1998.
EAGLE GEOPHYSICAL, INC.
By: /s/ JAY N. SILVERMAN
----------------------------------
Jay N. Silverman
Chief Executive Officer and
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jay N. Silverman and Gerald M. Harrison, and each
of them, each of whom may act without joinder of the other, his or her true and
lawful attorneys and agents, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all pre- and post-effective amendments to this
Registration Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
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 as to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, and each of them, or
the substitute or substitutes of any or all of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JAY N. SILVERMAN Chief Executive Officer, September 18, 1998
- ----------------------------------------------------- President and Director
Jay N. Silverman (Principal Executive
Officer)
/s/ WILLIAM L. LURIE Chairman of the Board of September 18, 1998
- ----------------------------------------------------- Directors
William L. Lurie
/s/ GERALD M. HARRISON Executive Vice President and September 18, 1998
- ----------------------------------------------------- Director
Gerald M. Harrison
/s/ GEORGE PURDIE Senior Vice President -- September 18, 1998
- ----------------------------------------------------- Offshore Operations and
George Purdie Director
/s/ PAUL FRAME Director September 18, 1998
- -----------------------------------------------------
Paul Frame
/s/ PAUL G. SOMERVILLE Director September 18, 1998
- -----------------------------------------------------
Paul G. Somerville
</TABLE>
<PAGE> 113
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RICHARD W. MCNAIRY Vice President, Chief September 18, 1998
- ----------------------------------------------------- Financial Officer and
Richard W. McNairy Secretary (Principal
Financial Officer)
/s/ DAVID H. SAINDON Controller (Principal September 18, 1998
- ----------------------------------------------------- Accounting Officer)
David H. Saindon
</TABLE>
<PAGE> 114
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 September 18, 1998.
EAGLE FRONT END SERVICES, INC.
EAGLE GEOPHYSICAL MANAGEMENT, INC.
EAGLE GEOPHYSICAL ONSHORE, INC.
EAGLE GEOPHYSICAL ROYALTY, INC.
EAGLE GEOPHYSICAL DE COLOMBIA, INC.
ATLANTIC HORIZON, INC.
AUSTRAL HORIZON, INC.
EAGLE GEOPHYSICAL DE ECUADOR, INC.
EAGLE GEOPHYSICAL DE BOLIVIA, INC.
EAGLE FRONT END SERVICES, LTD.
By: EAGLE GEOPHYSICAL MANAGEMENT,
INC., its General Partner
By: /s/ JAY N. SILVERMAN
------------------------------------
Jay N. Silverman
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jay N. Silverman and Gerald M. Harrison, and each
of them, each of whom may act without joinder of the other, his or her true and
lawful attorneys and agents, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all pre- and post-effective amendments to this
Registration Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
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 as to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, and each of them, or
the substitute or substitutes of any or all of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JAY N. SILVERMAN September 18, 1998
- ----------------------------------------------------- President and Sole Director
Jay N. Silverman (Principal Executive Officer)
/s/ RICHARD W. MCNAIRY Vice President, September 18, 1998
- ----------------------------------------------------- Treasury and Secretary
Richard W. McNairy (Principal Financial Officer
and Principal Accounting Officer)
</TABLE>
<PAGE> 115
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 September 18, 1998.
EAGLE GEOPHYSICAL GOM, INC.
By: /s/ GERALD M. HARRISON
------------------------------------
Gerald M. Harrison
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jay N. Silverman and Gerald M. Harrison, and each
of them, each of whom may act without joinder of the other, his or her true and
lawful attorneys and agents, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all pre- and post-effective amendments to this
Registration Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
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 as to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, and each of them, or
the substitute or substitutes of any or all of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ GERALD M. HARRISON September 18, 1998
- ----------------------------------------------------- President and Director
Gerald M. Harrison (Principal Executive Officer)
/s/ GEORGE PURDIE September 18, 1998
- -----------------------------------------------------
George Purdie Vice President and Director
/s/ NEIL A.M. CAMPBELL Secretary, Treasurer and Director September 18, 1998
- ----------------------------------------------------- (Principal Financial Officer and
Neil A.M. Campbell Principal Accounting Officer)
</TABLE>
<PAGE> 116
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 September 18, 1998.
EAGLE GEOPHYSICAL DE MEXICO, INC.
By: /s/ JAY N. SILVERMAN
------------------------------------
Jay N. Silverman
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jay N. Silverman and Gerald M. Harrison, and each
of them, each of whom may act without joinder of the other, his or her true and
lawful attorneys and agents, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all pre- and post-effective amendments to this
Registration Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
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 as to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, and each of them, or
the substitute or substitutes of any or all of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JAY N. SILVERMAN President and Director September 18, 1998
- ----------------------------------------------------- (Principal Executive Officer)
Jay N. Silverman
/s/ RICHARD W. MCNAIRY Vice President, September 18, 1998
- ----------------------------------------------------- Treasurer and Secretary
Richard W. McNairy (Principal Financial Officer and
Principal Accounting Officer)
/s/ PAUL A. FRAME Director September 18, 1998
- -----------------------------------------------------
Paul A. Frame
</TABLE>
<PAGE> 117
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 September 18, 1998.
EAGLE GEOPHYSICAL OFFSHORE, INC.
By: /s/ GERALD M. HARRISON
------------------------------------
Gerald M. Harrison
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jay N. Silverman and Gerald M. Harrison, and each
of them, each of whom may act without joinder of the other, his or her true and
lawful attorneys and agents, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all pre- and post-effective amendments to this
Registration Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
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 as to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, and each of them, or
the substitute or substitutes of any or all of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ GERALD M. HARRISON President September 18, 1998
- ----------------------------------------------------- (Principal Executive Officer)
Gerald M. Harrison
/s/ RICHARD W. MCNAIRY Vice President, September 18, 1998
- ----------------------------------------------------- Treasury and Secretary
Richard W. McNairy (Principal Financial Officer
and Principal Accounting Officer)
/s/ JAY N. SILVERMAN Sole Director September 18, 1998
- -----------------------------------------------------
Jay N. Silverman
</TABLE>
<PAGE> 118
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.1 -- Certificate of Incorporation of Eagle Geophysical, Inc.,
as amended (incorporated by reference to Exhibit 3.1 of
Eagle Geophysical, Inc.'s Registration Statement, as
amended, on Form S-1, No. 333-28303, as filed with the
Securities and Exchange Commission on June 2, 1997).
3.2 -- Amended and Restated Bylaws of Eagle Geophysical, Inc.,
as amended (incorporated by reference to Exhibit 3.2 of
Eagle Geophysical, Inc.'s Registration Statement, as
amended, on Form S-1, No. 333-28303, as filed with the
Securities and Exchange Commission on June 2, 1997, as
amended by Exhibit 3.1 of Eagle Geophysical, Inc.'s
Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1998).
3.3* -- Certificate of Incorporation of Eagle Geophysical
Onshore, Inc., as amended
3.4* -- Amended and Restated Bylaws of Eagle Geophysical Onshore,
Inc.
3.5* -- Certificate of Incorporation of Eagle Geophysical
Offshore, Inc.
3.6* -- Bylaws of Eagle Geophysical Offshore, Inc.
3.7* -- Certificate of Incorporation of Eagle Geophysical
Royalty, Inc., as amended.
3.8* -- Bylaws of Eagle Geophysical Royalty, Inc.
3.9* -- Certificate of Incorporation of Eagle Geophysical de
Mexico, Inc.
3.10* -- Bylaws of Eagle Geophysical de Mexico, Inc.
3.11* -- Certificate of Incorporation of Eagle Front End Services,
Inc.
3.12* -- Bylaws of Eagle Front End Services, Inc.
3.13* -- Certificate of Incorporation of Eagle Geophysical
Management, Inc.
3.14* -- Bylaws of Eagle Geophysical Management, Inc.
3.15* -- Certificate of Incorporation of Eagle Geophysical de
Colombia, Inc.
3.16* -- Bylaws of Eagle Geophysical de Colombia, Inc.
3.17* -- Certificate of Incorporation of Austral Horizon, Inc.
3.18* -- Bylaws of Austral Horizon, Inc.
3.19* -- Certificate of Incorporation of Atlantic Horizon, Inc.
3.20* -- Bylaws of Atlantic Horizon, Inc.
3.21* -- Articles of Incorporation of Eagle Geophysical GOM, Inc.,
as amended
3.22* -- Bylaws of Eagle Geophysical GOM, Inc.
3.23* -- Certificate of Incorporation of Eagle Geophysical de
Ecuador, Inc.
3.24* -- Bylaws of Eagle Geophysical de Ecuador, Inc.
3.25* -- Certificate of Incorporation of Eagle Geophysical de
Bolivia, Inc.
3.26* -- Bylaws of Eagle Geophysical de Bolivia, Inc.
3.27* -- Certificate of Limited Partnership of Eagle Front End
Services, Ltd.
4.1* -- Indenture dated as of July 20, 1998 between Eagle
Geophysical, Inc., as Issuer, certain subsidiaries of
Eagle Geophysical, Inc. (the "Guarantors") and Chase Bank
of Texas, National Association, as Trustee, with respect
to each of Series A and Series B of $100,000,000 10 3/4%
Senior Notes due 2008.
4.2* -- First Supplemental Indenture dated September 18, 1998
among Eagle Geophysical, Inc., Eagle Geophysical de
Bolivia, Inc., Eagle Geophysical de Ecuador, Inc. and
Chase Bank of Texas, National Association.
</TABLE>
<PAGE> 119
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.3* -- Registration Rights Agreement dated as of July 20, 1998
among Eagle Geophysical, Inc., the Guarantors and
Prudential Securities Inc. and Banc One Capital Markets,
Inc.
5.1* -- Opinion of Gardere Wynne Sewell & Riggs, L.L.P., counsel
for Eagle Geophysical, Inc.
10.1* -- Purchase Agreement dated July 15, 1998 among Eagle
Geophysical, Inc., Prudential Securities Incorporated and
Banc One Capital Markets, Inc.
12.1* -- Statement regarding computation of ratio of earnings to
fixed charges.
23.1* -- Consent of Arthur Andersen LLP.
23.2* -- Consent of KPMG.
23.3 -- Consent of Gardere Wynne Sewell & Riggs, L.L.P. (included
in Exhibit 5.1).
24.1 -- Power of Attorney (set forth on the signature pages
contained in Part II of this Registration Statement).
25.1* -- Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 on Form T-1 of Chase Bank of
Texas, National Association.
99.1* -- Form of Letter of Transmittal.
99.2* -- Form of Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* Filed herewith
<PAGE> 1
EXHIBIT 3.3
CERTIFICATE OF INCORPORATION
OF
EAGLE GEOPHYSICAL, INC.
1. The name of the corporation is Eagle Geophysical, Inc.
2. The address of its registered office in the State of Delaware
is 1209 Orange Street, the City of Wilmington, County of New Castle, 19801. The
name of its registered agent at such address is The Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of common stock which the
corporation shall have authority to issue is 10,000 and the par value of each
such share is $1.00.
5. The name and mailing address of each incorporator is as
follows:
NAME ADDRESS
---- -------
William Mark Young 333 Clay Avenue
Suite 800
Houston, Texas 77002
6. The corporation is to have perpetual existence.
7. The name and mailing address of the initial director of the
corporation is as follows:
NAME ADDRESS
---- -------
Paul A. Frame 50 Briar Hollow Lane West
7th Floor
Houston, Texas 77027
<PAGE> 2
8. In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized to adopt, amend or
repeal the by-laws of the corporation.
9. Meetings of stockholders may be held within or without the
State of Delaware, as the by-laws may provide. The books of the corporation may
be kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the board of directors or in the by-laws of the corporation. Elections of
directors need not be by written ballot unless the by-laws of the corporation
shall so provide.
10. No director of the corporation shall be personally liable to
the corporation or any of its stockholders for monetary damages resulting from
a breach of fiduciary duty involving any act or omission of any director;
provided, however, that the foregoing provision shall not limit the liability
of any director (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Title 8, Section 174 of the Delaware Code or (iv) for any transaction
from which such director derived an improper personal benefit.
11. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on application in a summary way
of this corporation of any creditor or stockholder thereof or on the applicati
on of any receiver or its receivers appointed for this corporation under
Section 291 of Title 8 of the Delaware Code or on the application of trustees
in dissolution or of any receiver or receivers appointed for this corporation
under Section 279 of Title 8 of the Delaware Code order a meeting of the
creditors or a class of creditors, and/or of the stockholders or a class of
stockholders for this corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 17th day of December, 1996.
/S/ WILLIAM MARK YOUNG
-------------------------------
William Mark Young
2
<PAGE> 3
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
EAGLE GEOPHYSICAL, INC.
Pursuant to the provisions of Section 242 of the General Corporation
Law of the State of Delaware, Eagle Geophysical, Inc. (the "Company"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware, does hereby certify:
FIRST: That the Board of Directors of the Company, by
written consent pursuant to Section 141(f) of the General Corporation Law of
the State of Delaware, adopted a resolution setting forth and declaring
advisable the following proposed amendment to the Certificate of Incorporation
of the Company.
Paragraph One of the Certificate of Incorporation of the
Company shall be amended to read in its entirety as follows:
"The name of the corporation is Eagle Geophysical
Onshore, Inc."
SECOND: That thereafter, pursuant to resolution of the
Board of Directors, the proposed amendment was submitted to the stockholders of
the Company, and the necessary number of shares as required by statute was
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.
FOURTH: That this Certificate of Amendment shall be
effective upon the filing hereof.
IN WITNESS WHEREOF, the Company has caused this Certificate of
Amendment to be executed this 21st day of May, 1997.
EAGLE GEOPHYSICAL, INC.
By: /S/ JAY N. SILVERMAN
--------------------------------
Jay N. Silverman, President
<PAGE> 1
EXHIBIT 3.4
AMENDED AND RESTATED BYLAWS
OF
EAGLE GEOPHYSICAL, INC., A DELAWARE CORPORATION
Article I
Offices
Section 1. Registered Office. The registered office of the
Corporation required by the General Corporation Law of the State of Delaware to
be maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
Article II
Stockholders
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at the principal office of the Corporation, or at such other place
within or without the State of Delaware as shall be specified or fixed in the
notices or waivers of notice thereof.
Section 2. Quorum; Adjournment of Meetings. Unless otherwise
required by law or provided in the Certificate of Incorporation or these
bylaws, 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 any meeting of stockholders for the transaction of
business and the act of a majority of such stock so represented at any meeting
of stockholders at which a quorum is present shall constitute the act of the
meeting of stockholders. The stockholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Notwithstanding the other provisions of the Certificate of
Incorporation or these bylaws, the chairman of the meeting or the holders of a
majority of the issued and outstanding stock, present in person or represented
by proxy, at any meeting of stockholders, whether or not a quorum is present,
shall have the power to adjourn such meeting from time to time, without any
notice other than
<PAGE> 2
announcement at the meeting of the time and place of the holding of the
adjourned meeting. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at such meeting. At such adjourned meeting at which a quorum
shall be present or represented any business may be transacted which might have
been transacted at the meeting as originally called.
Section 3. Annual Meetings. An annual meeting of the stockholders,
for the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, within or without the State of Delaware, on such
date, and at such time as the Board of Directors shall fix and set forth in the
notice of the meeting, which date shall be within thirteen (13) months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.
Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the
Chairman of the Board (if any), by the President or the Secretary upon the
written request therefor, stating the purpose or purposes of the meeting,
delivered to such officer, signed by the holder(s) of at least ten percent
(10%) of the issued and outstanding stock entitled to vote at such meeting.
Section 5. Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or 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 stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.
If the Board of Directors does not fix a record date for any meeting
of the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If,
in accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
2
<PAGE> 3
Section 6. Notice of Meetings. Written notice of the place, date and
hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
Section 7. Stock List. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, 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. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
Section 8. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to a corporate action in
writing without a meeting may authorize another person or persons to act for
him by proxy. Proxies for use at any meeting of stockholders shall be filed
with the Secretary, or such other officer as the Board of Directors may from
time to time determine by resolution, before or at the time of the meeting.
All proxies shall be received and taken charge of and all ballots shall be
received and canvassed by the secretary of the meeting who shall decide all
questions touching upon the qualification of voters, the validity of the
proxies, and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed by the chairman of the meeting, in which
event such inspector or inspectors shall decide all such questions.
No proxy shall be valid after three (3) years from its date, unless
the proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers thereunder are to be exercised shall have
and may exercise all the powers of voting or giving consents thereby conferred,
or if only one be present, then such powers may be exercised by that one; or,
if an even number attend and a majority do not agree on any particular issue,
each proxy so attending shall be entitled to exercise such powers in respect of
the same portion of the shares as he is of the proxies representing such
shares.
Section 9. Voting; Elections; Inspectors. Unless otherwise required
by law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as
3
<PAGE> 4
the bylaw (or comparable instrument) of such corporation may prescribe, or in
the absence of such provision, as the Board of Directors (or comparable body)
of such corporation may determine. Shares registered in the name of a deceased
person may be voted by his executor or administrator, either in person or by
proxy.
All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.
At any meeting at which a vote is taken by ballots, the chairman of
the meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector.
Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.
Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the Chairman of the Board (if any),
nor President is present, by a chairman elected at the meeting. The Secretary
of the Corporation, if present, shall act as secretary of such meetings, or if
he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor an Assistant Secretary is present, then a secretary shall be
appointed by the chairman of the meeting. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order. Unless the chairman of the meeting of
stockholders shall otherwise determine, the order of business shall be as
follows:
(a) Calling of meeting to order.
(b) Election of a chairman and the appointment of a secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting.
(d) Presentation and examination of proxies and determination of a
quorum.
(e) Reading and settlement of the minutes of the previous meeting.
(f) Reports of officers and committees.
(g) The election of directors if an annual meeting, or a meeting
called for that purpose.
(h) Unfinished business.
(i) New business.
(j) Adjournment.
4
<PAGE> 5
Section 11. Treasury Stock. The Corporation shall not vote, directly
or indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.
Section 12. Action Without Meeting. Unless otherwise provided in the
Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall 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 such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than a unanimous written consent shall be given by the Secretary to those
stockholders who have not consented in writing.
Article III
Board of Directors
Section 1. Power; Number; Term of Office. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.
The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the Board of
Directors (provided that no decrease in the number of directors which would
have the effect of shortening the term of an incumbent director may be made by
the Board of Directors). If the Board of Directors makes no such
determination, the number of directors shall be the number set forth in the
Certificate of Incorporation. Each director shall hold office for the term for
which he is elected, and until his successor shall have been elected and
qualified or until his earlier death, resignation or removal.
Unless otherwise provided in the Certificate of Incorporation,
directors need not be stockholders nor residents of the State of Delaware.
Section 2. Quorum. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 3. Place of Meetings; Order of Business. The directors may
hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of
Directors business shall be transacted in such order as shall from time to time
be determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.
5
<PAGE> 6
Section 4. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.
Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.
Section 7. Removal. Any director or the entire Board of Directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided that, if the
Certificate of Incorporation expressly grants to stockholders the right to
cumulate votes for the election of directors and if less than the entire board
is to be removed, no director may be removed without cause if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which such director is a
part.
Section 8. Vacancies; Increases in the Number of Directors. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.
If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for which such directors shall have
been chosen, and until their successors shall be duly elected and shall
qualify.
Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.
Section 10. Action Without a Meeting; Telephone Conference Meeting.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be
6
<PAGE> 7
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation,
subject to the requirement for notice of meetings, members of the Board of
Directors, or members of any committee designated by the Board of Directors,
may participate in a meeting of such Board of Directors or committee, as the
case may be, by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in such a meeting shall constitute presence in
person at such meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
purpose of considering any such act or contract, and any act or contract that
shall be approved or be ratified by the vote of the stockholders holding a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote and present in person or by proxy at such meeting (provided
that a quorum is present), shall be as valid and as binding upon the
Corporation and upon all the stockholders as if it has been approved or
ratified by every stockholder of the Corporation. In addition, any such act or
contract may be approved or ratified by the written consent of stockholders
holding a majority of the issued and outstanding shares of capital stock of the
Corporation entitled to vote and such consent shall be as valid and as binding
upon the Corporation and upon all the stockholders as if it had been approved
or ratified by every stockholder of the Corporation.
Article IV
Committees
Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power of authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which
7
<PAGE> 8
may require it. In addition to the above such committee or committees shall
have such other powers and limitations of authority as may be determined from
time to time by resolution adopted by the Board of Directors.
Section 2. Procedure; Meetings; Quorum. Any committee designated
pursuant to Section 1 of this Article shall choose its own chairman, shall keep
regular minutes of its proceedings and report the same to the Board of
Directors when requested, shall fix its own rules or procedures, and shall meet
at such times and at such place or places as may be provided by such rules, or
buy resolution of such committee or resolution of the Board of Directors. At
every meeting of any such committee, the presence of a majority of all the
members thereof shall constitute a quorum and the affirmative vote of a
majority of the members present shall be necessary for the adoption by it of
any resolution.
Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In
the absence or disqualification of a member of a committee, the member or
members present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified
member.
Article V
Officers
Section 1. Number, Titles and Term of Office. The officers of the
Corporation shall be a President, one or more Vice Presidents (any one or more
of whom may be designated Executive Vice President or Senior Vice President), a
Treasurer, a Secretary and, if the Board of Directors so elects, a Chairman of
the Board and such other officers as the Board of Directors may from time to
time elect or appoint. Each officer shall hold office until his successor
shall be duly elected and shall qualify or until his death or until he shall
resign or shall have been removed in the manner hereinafter provided. Any
number of offices may be held by the same person, unless the Certificate of
Incorporation provides otherwise. Except for the Chairman of the Board, if
any, no officer need be a director.
Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.
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<PAGE> 9
Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.
Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 6. Powers and Duties of the Chairman of the Board. If
elected, the Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors; and he shall have such other powers
and duties as designated in these bylaws and as from time to time may be
assigned to him by the Board of Directors.
Section 7. Powers and Duties of the President. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board or
if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 8. Vice Presidents. In the absence of the President, or in
the event of his inability or refusal to act, a Vice President designated by
the Board of Directors shall perform 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. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the Corporation shall so
act. The Vice Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 9. Treasurer. The Treasurer shall have responsibility for
the custody and control of all the funds and securities of the Corporation, and
he shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.
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<PAGE> 10
Section 10. Assistant Treasurers. Each Assistant Treasurer shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Treasurers shall exercise the powers of the Treasurer
during that officer's absence or inability or refusal to act.
Section 11. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation and attest the
affixation of the seal of the Corporation thereto; he may sign with the other
appointed officers all certificates for shares of capital stock of the
Corporation; he shall have charge of the certificate books, transfer books and
stock ledgers, and such other books and papers as the Board of Directors may
direct, all of which shall at all reasonable times be open to inspection of any
director upon application at the office of the Corporation during business
hours; he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of Directors; and
he shall in general perform all acts incident to the office of Secretary,
subject to the control of the chief executive officer and the Board of
Directors.
Section 12. Assistant Secretaries. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Secretaries shall exercise the powers of the
Secretary during that officer's absence or inability or refusal to act.
Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
Article VI
Indemnification of Directors,
Officers, Employees and Agents
Section 1. Right to Indemnification. Each person who was or is made
a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other
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<PAGE> 11
capacity while serving or having agreed to serve as a director or officer,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended, (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment) against all expense, liability and loss (including, without
limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered
by such person in connection therewith and such indemnification shall continue
as to a person who has ceased to serve in the capacity which initially entitled
such person to indemnity hereunder and shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that the Corporation
shall indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the board of directors of the Corporation.
The right to indemnification conferred in this Article VI shall be a contract
right and shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition;
provided, however, that, if the Delaware General Corporation Law requires, the
payment of such expenses incurred by a current, former or proposed director or
officer in his or her capacity as a director or officer or proposed director or
officer (and not in any other capacity in which service was or is or has been
agreed to be rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in advance of the
final disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.
Section 2. Indemnification of Employees and Agents. The Corporation
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the same scope
and effect as the indemnification of directors and officers provided for in
this Article.
Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors,
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<PAGE> 12
independent legal counsel, or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the claimant has not met the applicable standard of conduct.
Section 4. Nonexclusivity of Rights. The right to indemnification
and the advancement and payment of expenses conferred in this Article VI shall
not be exclusive of any other right which any person may have or hereafter
acquire under any law (common or statutory), provision of the Certificate of
Incorporation of the Corporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as 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
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Savings Clause. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VI that shall not have been invalidated and to the fullest extent
permitted by applicable law.
Article VII
Capital Stock
Section 1. Certificates of Stock. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation; provided, however, that any of or all the
signatures on the certificate may be facsimile. The stock record books and the
blank stock certificate books shall be kept by the Secretary, or at the office
of such transfer agent or transfer agents as the Board of Directors may from
time to time by resolution determine. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature or signatures
shall have been placed upon any such certificate or certificates shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued by the Corporation, such certificate may
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<PAGE> 13
nevertheless be issued by the Corporation with the same effect as if such
person were such officer, transfer agent or registrar at the date of issue.
The stock certificates shall be consecutively numbered and shall be entered in
the books of the Corporation as they are issued and shall exhibit the holder's
name and number of shares.
Section 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferable only on the books of the Corporation by the
holders thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Ownership of Shares. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
Section 4. Regulations Regarding Certificates. The Board of
Directors shall have the power and authority to make all such rules and
regulations as they may deem expedient concerning the issue, transfer and
registration or the replacement of certificates for shares of capital stock of
the Corporation.
Section 5. Lost or Destroyed Certificates. The Board of Directors
may determine the conditions upon which a new certificate of stock may be
issued in place of a certificate which is alleged to have been lost, stolen or
destroyed; and may, in their discretion, require the owner of such certificate
or his legal representative to give bond, with sufficient surety, to indemnify
the Corporation and each transfer agent and registrar against any and all
losses or claims which may arise by reason of the issue of a new certificate in
the place of the one so lost, stolen or destroyed.
Article VIII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as established from time to time by the Board of Directors.
Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall
have charge of the seal (if any). If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Treasurer or by the Assistant Secretary or Assistant Treasurer.
Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be
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<PAGE> 14
deemed to be sufficient if given (i) by telegraphic, cable or wireless
transmission or (ii) by deposit of the same in a post office box in a sealed
prepaid wrapper addressed to the person entitled thereto at his post office
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 transmission or mailing, as the
case may be.
Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to 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 regular or special meeting of the
stockholders, 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 or the bylaws.
Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 5. Facsimile Signatures. In addition to the provisions for
the use of facsimile signatures elsewhere specifically authorized in these
bylaws, facsimile signatures of any officer or officers of the Corporation may
be used whenever and as authorized by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records. Each director
and each member of any committee designated by the Board of Directors shall, in
the performance of his duties, be fully protected in relying in good faith upon
the books of account or reports made to the Corporation by any of its officers,
or by an independent certified public accountant, or by an appraiser selected
with reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
Article IX
Amendments
If provided in the Certificate of Incorporation of the Corporation,
the Board of Directors shall have the power to adopt, amend and repeal from
time to time bylaws of the Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to amend or repeal such
bylaws as adopted or amended by the Board of Directors.
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<PAGE> 1
EXHIBIT 3.5
CERTIFICATE OF INCORPORATION
OF
EAGLE GEOPHYSICAL OFFSHORE, INC.
1. The name of the corporation is Eagle Geophysical Offshore, Inc.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, the City of Wilmington, County of
New Castle, 19801. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of common stock which the corporation
shall have authority to issue is 1,000 and the par value of each such share is
$0.01.
5. The name and mailing address of each incorporator is as follows:
NAME ADDRESS
---- -------
William Mark Young 333 Clay Avenue
Suite 800
Houston, Texas 77002
6. The corporation is to have perpetual existence.
7. The name and mailing address of each of the initial directors of
the corporation is as follows:
NAME ADDRESS
---- -------
Jay N. Silverman 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
8. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
<PAGE> 2
To adopt, amend or repeal the bylaws of the corporation.
9. Meetings of stockholders may be held within or without the State
of Delaware, as the bylaws may provide. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the bylaws of the corporation. Elections of directors
need not be by written ballot unless the bylaws of the corporation shall so
provide.
10. No director of the corporation shall be personally liable to the
corporation or any of its stockholders for monetary damages resulting from a
breach of fiduciary duty involving any act or omission of any director;
provided, however, that the foregoing provision shall not limit the liability
of any director (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Title 8, Section 174 of the Delaware Code or (iv) for any transaction
from which such director derived an improper personal benefit.
11. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on application in a summary way
of this corporation of any creditor or stockholder thereof or on the
application of any receiver or its receivers appointed for this corporation
under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
corporation under Section 279 of Title 8 of the Delaware Code order a meeting
of the creditors or a class of creditors, and/or of the stockholders or a class
of stockholders for this corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 25th day of September, 1997.
/s/ WILLIAM MARK YOUNG
------------------------------------
William Mark Young
<PAGE> 1
EXHIBIT 3.6
BYLAWS
OF
EAGLE GEOPHYSICAL OFFSHORE, INC.
Article I
Offices
Section 1. Registered Office. The registered office of the
Corporation required by the General Corporation Law of the State of Delaware to
be maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
Article II
Stockholders
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at the principal office of the Corporation, or at such other place
within or without the State of Delaware as shall be specified or fixed in the
notices or waivers of notice thereof.
Section 2. Quorum; Adjournment of Meetings. Unless otherwise
required by law or provided in the Certificate of Incorporation or these
bylaws, 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 any meeting of stockholders for the transaction of
business and the act of a majority of such stock so represented at any meeting
of stockholders at which a quorum is present shall constitute the act of the
meeting of stockholders. The stockholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Notwithstanding the other provisions of the Certificate of
Incorporation or these bylaws, the chairman of the meeting or the holders of a
majority of the issued and outstanding stock, present in person or represented
by proxy, at any meeting of stockholders, whether or not a quorum is present,
shall have the power to adjourn such meeting from time to time, without any
<PAGE> 2
notice other than announcement at the meeting of the time and place of the
holding of the adjourned meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at such meeting. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
called.
Section 3. Annual Meetings. An annual meeting of the stockholders,
for the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, within or without the State of Delaware, on such
date, and at such time as the Board of Directors shall fix and set forth in the
notice of the meeting, which date shall be within thirteen (13) months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.
Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the
Chairman of the Board (if any), by the President or the Secretary upon the
written request therefor, stating the purpose or purposes of the meeting,
delivered to such officer, signed by the holder(s) of at least ten percent
(10%) of the issued and outstanding stock entitled to vote at such meeting.
Section 5. Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or 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 stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.
If the Board of Directors does not fix a record date for any meeting
of the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If,
in accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
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<PAGE> 3
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Notice of Meetings. Written notice of the place, date and
hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
Section 7. Stock List. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, 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. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
Section 8. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to a corporate action in
writing without a meeting may authorize another person or persons to act for
him by proxy. Proxies for use at any meeting of stockholders shall be filed
with the Secretary, or such other officer as the Board of Directors may from
time to time determine by resolution, before or at the time of the meeting.
All proxies shall be received and taken charge of and all ballots shall be
received and canvassed by the secretary of the meeting who shall decide all
questions touching upon the qualification of voters, the validity of the
proxies, and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed by the chairman of the meeting, in which
event such inspector or inspectors shall decide all such questions.
No proxy shall be valid after three (3) years from its date, unless
the proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers thereunder are to be exercised shall have
and may exercise all the powers of voting or giving consents thereby conferred,
or if only one be present, then such powers may be exercised by that one; or,
if an even number attend and a majority do not agree on any particular issue,
each proxy
-3-
<PAGE> 4
so attending shall be entitled to exercise such powers in respect of the same
portion of the shares as he is of the proxies representing such shares.
Section 9. Voting; Elections; Inspectors. Unless otherwise required
by law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as the bylaw (or comparable instrument) of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors (or
comparable body) of such corporation may determine. Shares registered in the
name of a deceased person may be voted by his executor or administrator, either
in person or by proxy.
All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.
At any meeting at which a vote is taken by ballots, the chairman of
the meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector.
Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.
Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the Chairman of the Board (if any),
nor President is present, by a chairman elected at the meeting. The Secretary
of the Corporation, if present, shall act as secretary of such meetings, or if
he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor an Assistant Secretary is present, then a secretary shall be
appointed by the chairman of the meeting. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order. Unless the chairman of the meeting of
stockholders shall otherwise determine, the order of business shall be as
follows:
(a) Calling of meeting to order.
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(b) Election of a chairman and the appointment of a secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting.
(d) Presentation and examination of proxies and determination of a
quorum.
(e) Reading and settlement of the minutes of the previous meeting.
(f) Reports of officers and committees.
(g) The election of directors if an annual meeting, or a meeting
called for that purpose.
(h) Unfinished business.
(i) New business.
(j) Adjournment.
Section 11. Treasury Stock. The Corporation shall not vote, directly
or indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.
Section 12. Action Without Meeting. Unless otherwise provided in the
Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall 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 such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than a unanimous written consent shall be given by the Secretary to those
stockholders who have not consented in writing.
Article III
Board of Directors
Section 1. Power; Number; Term of Office. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.
The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the
stockholders (provided that no decrease in the
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number of directors which would have the effect of shortening the term of an
incumbent director may be made by the stockholders). If the stockholders make
no such determination, the number of directors shall be two (2). The initial
Director of the Corporation shall fill the vacancy on the Board of Directors at
the organizational meeting of the Corporation. Each director shall hold office
for the term for which he is elected, and until his successor shall have been
elected and qualified or until his earlier death, resignation or removal.
Unless otherwise provided in the Certificate of Incorporation,
directors need not be stockholders nor residents of the State of Delaware.
Section 2. Quorum. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 3. Place of Meetings; Order of Business. The directors may
hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of
Directors business shall be transacted in such order as shall from time to time
be determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.
Section 4. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.
Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.
Section 7. Removal. Any director or the entire Board of Directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of
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directors; provided that, if the Certificate of Incorporation expressly grants
to stockholders the right to cumulate votes for the election of directors and
if less than the entire board is to be removed, no director may be removed
without cause if the votes cast against his removal would be sufficient to
elect him if then cumulatively voted at an election of the entire Board of
Directors, or, if there be classes of directors, at an election of the class of
directors of which such director is a part.
Section 8. Vacancies; Increases in the Number of Directors. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.
If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for which such directors shall have
been chosen, and until their successors shall be duly elected and shall
qualify.
Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.
Section 10. Action Without a Meeting; Telephone Conference Meeting.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation,
subject to the requirement for notice of meetings, members of the Board of
Directors, or members of any committee designated by the Board of Directors,
may participate in a meeting of such Board of Directors or committee, as the
case may be, by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in such a meeting shall constitute presence in
person at such meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
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purpose of considering any such act or contract, and any act or contract that
shall be approved or be ratified by the vote of the stockholders holding a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote and present in person or by proxy at such meeting (provided
that a quorum is present), shall be as valid and as binding upon the
Corporation and upon all the stockholders as if it has been approved or
ratified by every stockholder of the Corporation. In addition, any such act or
contract may be approved or ratified by the written consent of stockholders
holding a majority of the issued and outstanding shares of capital stock of the
Corporation entitled to vote and such consent shall be as valid and as binding
upon the Corporation and upon all the stockholders as if it had been approved
or ratified by every stockholder of the Corporation.
Article IV
Committees
Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power of authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which may
require it. In addition to the above such committee or committees shall have
such other powers and limitations of authority as may be determined from time
to time by resolution adopted by the Board of Directors.
Section 2. Procedure; Meetings; Quorum. Any committee designated
pursuant to Section 1 of this Article shall choose its own chairman, shall keep
regular minutes of its proceedings and report the same to the Board of
Directors when requested, shall fix its own rules or procedures, and shall meet
at such times and at such place or places as may be provided by such rules, or
buy resolution of such committee or resolution of the Board of Directors. At
every meeting of any such committee, the presence of a majority of all the
members thereof shall constitute a quorum and the affirmative vote of a
majority of the members present shall be necessary for the adoption by it of
any resolution.
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Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In
the absence or disqualification of a member of a committee, the member or
members present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified
member.
Article V
Officers
Section 1. Number, Titles and Term of Office. The officers of the
Corporation shall be a President, a Secretary and, if the Board of Directors so
elects, a Chairman of the Board and such other officers as the Board of
Directors may from time to time elect or appoint. Each officer shall hold
office until his successor shall be duly elected and shall qualify or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Any number of offices may be held by the same person,
unless the Certificate of Incorporation provides otherwise. Except for the
Chairman of the Board, if any, no officer need be a director.
Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.
Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.
Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.
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Section 6. Powers and Duties of the Chairman of the Board. If
elected, the Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors; and he shall have such other powers
and duties as designated in these bylaws and as from time to time may be
assigned to him by the Board of Directors.
Section 7. Powers and Duties of the President. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board or
if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 8. Vice Presidents. In the absence of the President, or in
the event of his inability or refusal to act, a Vice President designated by
the Board of Directors shall perform 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. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the Corporation shall so
act. The Vice Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 9. Treasurer. The Treasurer shall have responsibility for
the custody and control of all the funds and securities of the Corporation, and
he shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.
Section 10. Assistant Treasurers. Each Assistant Treasurer shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Treasurers shall exercise the powers of the Treasurer
during that officer's absence or inability or refusal to act.
Section 11. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation and attest the
affixation of the seal of the Corporation thereto; he may sign with the other
appointed officers all certificates for shares of capital stock of the
Corporation; he shall have charge of the certificate books, transfer books
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and stock ledgers, and such other books and papers as the Board of Directors
may direct, all of which shall at all reasonable times be open to inspection of
any director upon application at the office of the Corporation during business
hours; he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of Directors; and
he shall in general perform all acts incident to the office of Secretary,
subject to the control of the chief executive officer and the Board of
Directors.
Section 12. Assistant Secretaries. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Secretaries shall exercise the powers of the
Secretary during that officer's absence or inability or refusal to act.
Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
Article VI
Indemnification of Directors,
Officers, Employees and Agents
Section 1. Right to Indemnification. Each person who was or is made
a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other capacity while serving or having agreed to
serve as a director or officer, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment) against all expense,
liability and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to serve in the capacity which initially entitled such person to indemnity
hereunder and shall inure to the benefit of his or her heirs, executors and
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administrators; provided, however, that the Corporation shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the board of directors of the Corporation. The right to
indemnification conferred in this Article VI shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a current, former or proposed director or officer in
his or her capacity as a director or officer or proposed director or officer
(and not in any other capacity in which service was or is or has been agreed to
be rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.
Section 2. Indemnification of Employees and Agents. The Corporation
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the same scope
and effect as the indemnification of directors and officers provided for in
this Article.
Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 4. Nonexclusivity of Rights. The right to indemnification
and the advancement and payment of expenses conferred. in this Article VI shall
not be exclusive of any other right which any person may have or hereafter
acquire under any law (common or statutory), provision
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of the Certificate of Incorporation of the Corporation, bylaw, agreement, vote
of stockholders or disinterested directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as 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
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Savings Clause. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VI that shall not have been invalidated and to the fullest extent
permitted by applicable law.
Article VII
Capital Stock
Section 1. Certificates of Stock. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation; provided, however, that any of or all the
signatures on the certificate may be facsimile. The stock record books and the
blank stock certificate books shall be kept by the Secretary, or at the office
of such transfer agent or transfer agents as the Board of Directors may from
time to time by resolution determine. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature or signatures
shall have been placed upon any such certificate or certificates shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued by the Corporation, such certificate may nevertheless be issued by
the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue. The stock certificates shall
be consecutively numbered and shall be entered in the books of the Corporation
as they are issued and shall exhibit the holder's name and number of shares.
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Section 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferable only on the books of the Corporation by the
holders thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Ownership of Shares. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
Section 4. Regulations Regarding Certificates. The Board of
Directors shall have the power and authority to make all such rules and
regulations as they may deem expedient concerning the issue, transfer and
registration or the replacement of certificates for shares of capital stock of
the Corporation.
Section 5. Lost or Destroyed Certificates. The Board of Directors
may determine the conditions upon which a new certificate of stock may be
issued in place of a certificate which is alleged to have been lost, stolen or
destroyed; and may, in their discretion, require the owner of such certificate
or his legal representative to give bond, with sufficient surety, to indemnify
the Corporation and each transfer agent and registrar against any and all
losses or claims which may arise by reason of the issue of a new certificate in
the place of the one so lost, stolen or destroyed.
Article VIII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as established from time to time by the Board of Directors.
Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall
have charge of the seal (if any). If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Treasurer or by the Assistant Secretary or Assistant Treasurer.
Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be deemed to be sufficient if
given (i) by telegraphic, cable or wireless transmission or (ii) by deposit of
the same in a post office box in a sealed prepaid wrapper addressed to the
person entitled thereto at his post office address, as it appears on the
records of the Corporation, and such notice
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shall be deemed to have been given on the day of such transmission or mailing,
as the case may be.
Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to 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 regular or special meeting of the
stockholders, 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 or the bylaws.
Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 5. Facsimile Signatures. In addition to the provisions for
the use of facsimile signatures elsewhere specifically authorized in these
bylaws, facsimile signatures of any officer or officers of the Corporation may
be used whenever and as authorized by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records. Each director
and each member of any committee designated by the Board of Directors shall, in
the performance of his duties, be fully protected in relying in good faith upon
the books of account or reports made to the Corporation by any of its officers,
or by an independent certified public accountant, or by an appraiser selected
with reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
Article IX
Amendments
If provided in the Certificate of Incorporation of the Corporation,
the Board of Directors shall have the power to adopt, amend and repeal from
time to time bylaws of the Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to amend or repeal such
bylaws as adopted or amended by the Board of Directors.
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EXHIBIT 3.7
CERTIFICATE OF INCORPORATION
OF
EAGLE GEOPHYSICAL LEASING, INC.
1. The name of the corporation is Eagle Geophysical Leasing, Inc.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, the City of Wilmington, County of
New Castle, 19801. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of common stock which the corporation
shall have authority to issue is 1,000 and the par value of each such share is
$0.01.
5. The name and mailing address of each incorporator is as follows:
NAME ADDRESS
---- -------
William Mark Young 333 Clay Avenue
Suite 800
Houston, Texas 77002
6. The corporation is to have perpetual existence.
7. The name and mailing address of each of the initial directors of
the corporation is as follows:
NAME ADDRESS
---- -------
Jay N. Silverman 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
8. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
<PAGE> 2
To adopt, amend or repeal the bylaws of the corporation.
9. Meetings of stockholders may be held within or without the State
of Delaware, as the bylaws may provide. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the bylaws of the corporation. Elections of directors
need not be by written ballot unless the bylaws of the corporation shall so
provide.
10. No director of the corporation shall be personally liable to the
corporation or any of its stockholders for monetary damages resulting from a
breach of fiduciary duty involving any act or omission of any director;
provided, however, that the foregoing provision shall not limit the liability
of any director (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Title 8, Section 174 of the Delaware Code or (iv) for any transaction
from which such director derived an improper personal benefit.
11. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on application in a summary way
of this corporation of any creditor or stockholder thereof or on the
application of any receiver or its receivers appointed for this corporation
under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
corporation under Section 279 of Title 8 of the Delaware Code order a meeting
of the creditors or a class of creditors, and/or of the stockholders or a class
of stockholders for this corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 28th day of October, 1997.
/s/ WILLIAM MARK YOUNG
------------------------------------
William Mark Young
<PAGE> 3
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
EAGLE GEOPHYSICAL LEASING, INC.
Pursuant to the provisions of Section 242 of the General Corporation Law
of the State of Delaware, Eagle Geophysical Leasing, Inc. (the "Company"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware, does hereby certify:
FIRST: That the Board of Directors of the Company, by written
consent pursuant to Section 141(f) of the General Corporation Law of the State
of Delaware, adopted a resolution setting forth and declaring advisable the
following proposed amendment to the Certificate of Incorporation of the
Company.
Paragraph One of the Certificate of Incorporation of the Company
shall be amended to read in its entirety as follows:
"The name of the corporation is Eagle Geophysical Royalty,
Inc."
SECOND: That thereafter, pursuant to resolution of the Board of
Directors, the proposed amendment was submitted to the stockholders of the
Company, and the necessary number of shares as required by statute was 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.
FOURTH: That this Certificate of Amendment shall be effective upon
the filing hereof.
IN WITNESS WHEREOF, the Company has caused this Certificate of Amendment
to be executed this 1st day of August, 1998.
EAGLE GEOPHYSICAL LEASING, INC.
By: /S/ JAY N. SILVERMAN
---------------------------------
Jay N. Silverman, President
<PAGE> 1
EXHIBIT 3.8
BYLAWS
OF
EAGLE GEOPHYSICAL LEASING, INC.
Article I
Offices
Section 1. Registered Office. The registered office of the Corporation
required by the General Corporation Law of the State of Delaware to be
maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
Article II
Stockholders
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at the principal office of the Corporation, or at such other place
within or without the State of Delaware as shall be specified or fixed in the
notices or waivers of notice thereof.
Section 2. Quorum; Adjournment of Meetings. Unless otherwise required
by law or provided in the Certificate of Incorporation or these bylaws, 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 any meeting of stockholders for the transaction of business and the act of a
majority of such stock so represented at any meeting of stockholders at which a
quorum is present shall constitute the act of the meeting of stockholders. The
stockholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
Notwithstanding the other provisions of the Certificate of Incorporation
or these bylaws, the chairman of the meeting or the holders of a majority of
the issued and outstanding stock, present in person or represented by proxy, at
any meeting of stockholders, whether or not a quorum is present, shall have the
power to adjourn such meeting from time to time, without any
<PAGE> 2
notice other than announcement at the meeting of the time and place of the
holding of the adjourned meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at such meeting. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
called.
Section 3. Annual Meetings. An annual meeting of the stockholders, for
the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, within or without the State of Delaware, on such
date, and at such time as the Board of Directors shall fix and set forth in the
notice of the meeting, which date shall be within thirteen (13) months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.
Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the
Chairman of the Board (if any), by the President or the Secretary upon the
written request therefor, stating the purpose or purposes of the meeting,
delivered to such officer, signed by the holder(s) of at least ten percent
(10%) of the issued and outstanding stock entitled to vote at such meeting.
Section 5. Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or 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 stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.
If the Board of Directors does not fix a record date for any meeting of
the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If,
in accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
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<PAGE> 3
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Notice of Meetings. Written notice of the place, date and
hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
Section 7. Stock List. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, 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. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
Section 8. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to a corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy. Proxies for use at any meeting of stockholders shall be filed with the
Secretary, or such other officer as the Board of Directors may from time to
time determine by resolution, before or at the time of the meeting. All
proxies shall be received and taken charge of and all ballots shall be received
and canvassed by the secretary of the meeting who shall decide all questions
touching upon the qualification of voters, the validity of the proxies, and the
acceptance or rejection of votes, unless an inspector or inspectors shall have
been appointed by the chairman of the meeting, in which event such inspector or
inspectors shall decide all such questions.
No proxy shall be valid after three (3) years from its date, unless the
proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers thereunder are to be exercised shall have
and may exercise all the powers of voting or giving consents thereby conferred,
or if only one be present, then such powers may be exercised by that one; or,
if an even number attend and a majority do not agree on any particular issue,
each proxy
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<PAGE> 4
so attending shall be entitled to exercise such powers in respect of the same
portion of the shares as he is of the proxies representing such shares.
Section 9. Voting; Elections; Inspectors. Unless otherwise required by
law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as the bylaw (or comparable instrument) of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors (or
comparable body) of such corporation may determine. Shares registered in the
name of a deceased person may be voted by his executor or administrator, either
in person or by proxy.
All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.
At any meeting at which a vote is taken by ballots, the chairman of the
meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector.
Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.
Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the Chairman of the Board (if any),
nor President is present, by a chairman elected at the meeting. The Secretary
of the Corporation, if present, shall act as secretary of such meetings, or if
he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor an Assistant Secretary is present, then a secretary shall be
appointed by the chairman of the meeting. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order. Unless the chairman of the meeting of
stockholders shall otherwise determine, the order of business shall be as
follows:
(a) Calling of meeting to order.
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<PAGE> 5
(b) Election of a chairman and the appointment of a secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting.
(d) Presentation and examination of proxies and determination of a
quorum.
(e) Reading and settlement of the minutes of the previous meeting.
(f) Reports of officers and committees.
(g) The election of directors if an annual meeting, or a meeting
called for that purpose.
(h) Unfinished business.
(i) New business.
(j) Adjournment.
Section 11. Treasury Stock. The Corporation shall not vote, directly
or indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.
Section 12. Action Without Meeting. Unless otherwise provided in the
Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall 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 such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than a unanimous written consent shall be given by the Secretary to those
stockholders who have not consented in writing.
Article III
Board of Directors
Section 1. Power; Number; Term of Office. The business and affairs of
the Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.
The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the
stockholders (provided that no decrease in the
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<PAGE> 6
number of directors which would have the effect of shortening the term of an
incumbent director may be made by the stockholders). If the stockholders make
no such determination, the number of directors shall be two (2). The initial
Director of the Corporation shall fill the vacancy on the Board of Directors at
the organizational meeting of the Corporation. Each director shall hold office
for the term for which he is elected, and until his successor shall have been
elected and qualified or until his earlier death, resignation or removal.
Unless otherwise provided in the Certificate of Incorporation, directors
need not be stockholders nor residents of the State of Delaware.
Section 2. Quorum. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 3. Place of Meetings; Order of Business. The directors may
hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of
Directors business shall be transacted in such order as shall from time to time
be determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.
Section 4. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.
Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.
Section 7. Removal. Any director or the entire Board of Directors may
be removed, with or without cause, by the holders of a majority of the shares
then entitled to vote at an election of
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<PAGE> 7
directors; provided that, if the Certificate of Incorporation expressly grants
to stockholders the right to cumulate votes for the election of directors and
if less than the entire board is to be removed, no director may be removed
without cause if the votes cast against his removal would be sufficient to
elect him if then cumulatively voted at an election of the entire Board of
Directors, or, if there be classes of directors, at an election of the class of
directors of which such director is a part.
Section 8. Vacancies; Increases in the Number of Directors. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.
If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for which such directors shall have
been chosen, and until their successors shall be duly elected and shall
qualify.
Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.
Section 10. Action Without a Meeting; Telephone Conference Meeting.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation, subject
to the requirement for notice of meetings, members of the Board of Directors,
or members of any committee designated by the Board of Directors, may
participate in a meeting of such Board of Directors or committee, as the case
may be, by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in such a meeting shall constitute presence in person at such
meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
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<PAGE> 8
purpose of considering any such act or contract, and any act or contract that
shall be approved or be ratified by the vote of the stockholders holding a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote and present in person or by proxy at such meeting (provided
that a quorum is present), shall be as valid and as binding upon the
Corporation and upon all the stockholders as if it has been approved or
ratified by every stockholder of the Corporation. In addition, any such act or
contract may be approved or ratified by the written consent of stockholders
holding a majority of the issued and outstanding shares of capital stock of the
Corporation entitled to vote and such consent shall be as valid and as binding
upon the Corporation and upon all the stockholders as if it had been approved
or ratified by every stockholder of the Corporation.
Article IV
Committees
Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power of authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which may
require it. In addition to the above such committee or committees shall have
such other powers and limitations of authority as may be determined from time
to time by resolution adopted by the Board of Directors.
Section 2. Procedure; Meetings; Quorum. Any committee
designated pursuant to Section 1 of this Article shall choose its own chairman,
shall keep regular minutes of its proceedings and report the same to the Board
of Directors when requested, shall fix its own rules or procedures, and shall
meet at such times and at such place or places as may be provided by such
rules, or buy resolution of such committee or resolution of the Board of
Directors. At every meeting of any such committee, the presence of a majority
of all the members thereof shall constitute a quorum and the affirmative vote
of a majority of the members present shall be necessary for the adoption by it
of any resolution.
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<PAGE> 9
Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In
the absence or disqualification of a member of a committee, the member or
members present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified
member.
Article V
Officers
Section 1. Number, Titles and Term of Office. The officers of the
Corporation shall be a President, a Secretary and, if the Board of Directors so
elects, a Chairman of the Board and such other officers as the Board of
Directors may from time to time elect or appoint. Each officer shall hold
office until his successor shall be duly elected and shall qualify or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Any number of offices may be held by the same person,
unless the Certificate of Incorporation provides otherwise. Except for the
Chairman of the Board, if any, no officer need be a director.
Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.
Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.
Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.
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Section 6. Powers and Duties of the Chairman of the Board. If elected,
the Chairman of the Board shall preside at all meetings of the stockholders and
of the Board of Directors; and he shall have such other powers and duties as
designated in these bylaws and as from time to time may be assigned to him by
the Board of Directors.
Section 7. Powers and Duties of the President. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board or
if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 8. Vice Presidents. In the absence of the President, or in the
event of his inability or refusal to act, a Vice President designated by the
Board of Directors shall perform 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. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the Corporation shall so
act. The Vice Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 9. Treasurer. The Treasurer shall have responsibility for the
custody and control of all the funds and securities of the Corporation, and he
shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.
Section 10. Assistant Treasurers. Each Assistant Treasurer shall have
the usual powers and duties pertaining to his office, together with such other
powers and duties as designated in these bylaws and as from time to time may be
assigned to him by the chief executive officer or the Board of Directors. The
Assistant Treasurers shall exercise the powers of the Treasurer during that
officer's absence or inability or refusal to act.
Section 11. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation and attest the
affixation of the seal of the Corporation thereto; he may sign with the other
appointed officers all certificates for shares of capital stock of the
Corporation; he shall have charge of the certificate books, transfer books
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<PAGE> 11
and stock ledgers, and such other books and papers as the Board of Directors
may direct, all of which shall at all reasonable times be open to inspection of
any director upon application at the office of the Corporation during business
hours; he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of Directors; and
he shall in general perform all acts incident to the office of Secretary,
subject to the control of the chief executive officer and the Board of
Directors.
Section 12. Assistant Secretaries. Each Assistant Secretary shall have
the usual powers and duties pertaining to his office, together with such other
powers and duties as designated in these bylaws and as from time to time may be
assigned to him by the chief executive officer or the Board of Directors. The
Assistant Secretaries shall exercise the powers of the Secretary during that
officer's absence or inability or refusal to act.
Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
Article VI
Indemnification of Directors,
Officers, Employees and Agents
Section 1. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other capacity while serving or having agreed to
serve as a director or officer, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment) against all expense,
liability and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to serve in the capacity which initially entitled such person to indemnity
hereunder and shall inure to the benefit of his or her heirs, executors and
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<PAGE> 12
administrators; provided, however, that the Corporation shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the board of directors of the Corporation. The right to
indemnification conferred in this Article VI shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a current, former or proposed director or officer in
his or her capacity as a director or officer or proposed director or officer
(and not in any other capacity in which service was or is or has been agreed to
be rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.
Section 2. Indemnification of Employees and Agents. The Corporation
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the same scope
and effect as the indemnification of directors and officers provided for in
this Article.
Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 4. Nonexclusivity of Rights. The right to indemnification and
the advancement and payment of expenses conferred. in this Article VI shall not
be exclusive of any other right which any person may have or hereafter acquire
under any law (common or statutory), provision
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<PAGE> 13
of the Certificate of Incorporation of the Corporation, bylaw, agreement, vote
of stockholders or disinterested directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as 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
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Savings Clause. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VI that shall not have been invalidated and to the fullest extent
permitted by applicable law.
Article VII
Capital Stock
Section 1. Certificates of Stock. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation; provided, however, that any of or all the
signatures on the certificate may be facsimile. The stock record books and the
blank stock certificate books shall be kept by the Secretary, or at the office
of such transfer agent or transfer agents as the Board of Directors may from
time to time by resolution determine. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature or signatures
shall have been placed upon any such certificate or certificates shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued by the Corporation, such certificate may nevertheless be issued by
the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue. The stock certificates shall
be consecutively numbered and shall be entered in the books of the Corporation
as they are issued and shall exhibit the holder's name and number of shares.
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<PAGE> 14
Section 2. Transfer of Shares. The shares of stock of the Corporation
shall be transferable only on the books of the Corporation by the holders
thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Ownership of Shares. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
Section 4. Regulations Regarding Certificates. The Board of Directors
shall have the power and authority to make all such rules and regulations as
they may deem expedient concerning the issue, transfer and registration or the
replacement of certificates for shares of capital stock of the Corporation.
Section 5. Lost or Destroyed Certificates. The Board of Directors may
determine the conditions upon which a new certificate of stock may be issued in
place of a certificate which is alleged to have been lost, stolen or destroyed;
and may, in their discretion, require the owner of such certificate or his
legal representative to give bond, with sufficient surety, to indemnify the
Corporation and each transfer agent and registrar against any and all losses or
claims which may arise by reason of the issue of a new certificate in the place
of the one so lost, stolen or destroyed.
Article VIII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as established from time to time by the Board of Directors.
Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall
have charge of the seal (if any). If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Treasurer or by the Assistant Secretary or Assistant Treasurer.
Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be deemed to be sufficient if
given (i) by telegraphic, cable or wireless transmission or (ii) by deposit of
the same in a post office box in a sealed prepaid wrapper addressed to the
person entitled thereto at his post office address, as it appears on the
records of the Corporation, and such notice
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<PAGE> 15
shall be deemed to have been given on the day of such transmission or mailing,
as the case may be.
Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to 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 regular or special meeting of the
stockholders, 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 or the bylaws.
Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 5. Facsimile Signatures. In addition to the provisions for the
use of facsimile signatures elsewhere specifically authorized in these bylaws,
facsimile signatures of any officer or officers of the Corporation may be used
whenever and as authorized by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records. Each director and
each member of any committee designated by the Board of Directors shall, in the
performance of his duties, be fully protected in relying in good faith upon the
books of account or reports made to the Corporation by any of its officers, or
by an independent certified public accountant, or by an appraiser selected with
reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
Article IX
Amendments
If provided in the Certificate of Incorporation of the Corporation, the
Board of Directors shall have the power to adopt, amend and repeal from time to
time bylaws of the Corporation, subject to the right of the stockholders
entitled to vote with respect thereto to amend or repeal such bylaws as adopted
or amended by the Board of Directors.
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<PAGE> 1
EXHIBIT 3.9
CERTIFICATE OF INCORPORATION
OF
EAGLE GEOPHYSICAL DE MEXICO, INC.
1. The name of the corporation is Eagle Geophysical de Mexico, Inc.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, the City of Wilmington, County of
New Castle, 19801. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of common stock which the corporation
shall have authority to issue is 1,000 and the par value of each such share is
$0.01.
5. The name and mailing address of each incorporator is as follows:
NAME ADDRESS
---- -------
Steven J. McNamara 333 Clay Avenue
Suite 800
Houston, Texas 77002
6. The corporation is to have perpetual existence.
7. The name and mailing address of each of the initial directors of
the corporation is as follows:
NAME ADDRESS
---- -------
Jay N. Silverman 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
8. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
<PAGE> 2
To adopt, amend or repeal the bylaws of the corporation.
9. Meetings of stockholders may be held within or without the State
of Delaware, as the bylaws may provide. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the bylaws of the corporation. Elections of directors
need not be by written ballot unless the bylaws of the corporation shall so
provide.
10. No director of the corporation shall be personally liable to the
corporation or any of its stockholders for monetary damages resulting from a
breach of fiduciary duty involving any act or omission of any director;
provided, however, that the foregoing provision shall not limit the liability
of any director (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Title 8, Section 174 of the Delaware Code or (iv) for any transaction
from which such director derived an improper personal benefit.
11. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on application in a summary way
of this corporation of any creditor or stockholder thereof or on the
application of any receiver or its receivers appointed for this corporation
under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
corporation under Section 279 of Title 8 of the Delaware Code order a meeting
of the creditors or a class of creditors, and/or of the stockholders or a class
of stockholders for this corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 18th day of June, 1997.
/s/ STEVEN J. MCNAMARA
------------------------------------
Steven J. McNamara
<PAGE> 1
EXHIBIT 3.10
BYLAWS
OF
EAGLE GEOPHYSICAL DE MEXICO, INC.
Article I
Offices
Section 1. Registered Office. The registered office of the
Corporation required by the General Corporation Law of the State of Delaware to
be maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
Article II
Stockholders
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at the principal office of the Corporation, or at such other place
within or without the State of Delaware as shall be specified or fixed in the
notices or waivers of notice thereof.
Section 2. Quorum; Adjournment of Meetings. Unless otherwise
required by law or provided in the Certificate of Incorporation or these
bylaws, 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 any meeting of stockholders for the transaction of
business and the act of a majority of such stock so represented at any meeting
of stockholders at which a quorum is present shall constitute the act of the
meeting of stockholders. The stockholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Notwithstanding the other provisions of the Certificate of
Incorporation or these bylaws, the chairman of the meeting or the holders of a
majority of the issued and outstanding stock, present in person or represented
by proxy, at any meeting of stockholders, whether or not a quorum is present,
shall have the power to adjourn such meeting from time to time, without any
<PAGE> 2
notice other than announcement at the meeting of the time and place of the
holding of the adjourned meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at such meeting. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
called.
Section 3. Annual Meetings. An annual meeting of the stockholders,
for the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, within or without the State of Delaware, on such
date, and at such time as the Board of Directors shall fix and set forth in the
notice of the meeting, which date shall be within thirteen (13) months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.
Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the
Chairman of the Board (if any), by the President or the Secretary upon the
written request therefor, stating the purpose or purposes of the meeting,
delivered to such officer, signed by the holder(s) of at least ten percent
(10%) of the issued and outstanding stock entitled to vote at such meeting.
Section 5. Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or 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 stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.
If the Board of Directors does not fix a record date for any meeting
of the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If,
in accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
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<PAGE> 3
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Notice of Meetings. Written notice of the place, date and
hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
Section 7. Stock List. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, 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. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
Section 8. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to a corporate action in
writing without a meeting may authorize another person or persons to act for
him by proxy. Proxies for use at any meeting of stockholders shall be filed
with the Secretary, or such other officer as the Board of Directors may from
time to time determine by resolution, before or at the time of the meeting.
All proxies shall be received and taken charge of and all ballots shall be
received and canvassed by the secretary of the meeting who shall decide all
questions touching upon the qualification of voters, the validity of the
proxies, and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed by the chairman of the meeting, in which
event such inspector or inspectors shall decide all such questions.
No proxy shall be valid after three (3) years from its date, unless
the proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers thereunder are to be exercised shall have
and may exercise all the powers of voting or giving consents thereby conferred,
or if only one be present, then such powers may be exercised by that one; or,
if an even number attend and a majority do not agree on any particular issue,
each proxy
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<PAGE> 4
so attending shall be entitled to exercise such powers in respect of the same
portion of the shares as he is of the proxies representing such shares.
Section 9. Voting; Elections; Inspectors. Unless otherwise required
by law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as the bylaw (or comparable instrument) of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors (or
comparable body) of such corporation may determine. Shares registered in the
name of a deceased person may be voted by his executor or administrator, either
in person or by proxy.
All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.
At any meeting at which a vote is taken by ballots, the chairman of
the meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector.
Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.
Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the Chairman of the Board (if any),
nor President is present, by a chairman elected at the meeting. The Secretary
of the Corporation, if present, shall act as secretary of such meetings, or if
he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor an Assistant Secretary is present, then a secretary shall be
appointed by the chairman of the meeting. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order. Unless the chairman of the meeting of
stockholders shall otherwise determine, the order of business shall be as
follows:
(a) Calling of meeting to order.
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<PAGE> 5
(b) Election of a chairman and the appointment of a secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting.
(d) Presentation and examination of proxies and determination of a
quorum.
(e) Reading and settlement of the minutes of the previous meeting.
(f) Reports of officers and committees.
(g) The election of directors if an annual meeting, or a meeting
called for that purpose.
(h) Unfinished business.
(i) New business.
(j) Adjournment.
Section 11. Treasury Stock. The Corporation shall not vote, directly
or indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.
Section 12. Action Without Meeting. Unless otherwise provided in the
Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall 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 such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than a unanimous written consent shall be given by the Secretary to those
stockholders who have not consented in writing.
Article III
Board of Directors
Section 1. Power; Number; Term of Office. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.
The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the
stockholders (provided that no decrease in the
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number of directors which would have the effect of shortening the term of an
incumbent director may be made by the stockholders). If the stockholders make
no such determination, the number of directors shall be two (2). The initial
Director of the Corporation shall fill the vacancy on the Board of Directors at
the organizational meeting of the Corporation. Each director shall hold office
for the term for which he is elected, and until his successor shall have been
elected and qualified or until his earlier death, resignation or removal.
Unless otherwise provided in the Certificate of Incorporation,
directors need not be stockholders nor residents of the State of Delaware.
Section 2. Quorum. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 3. Place of Meetings; Order of Business. The directors may
hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of
Directors business shall be transacted in such order as shall from time to time
be determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.
Section 4. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.
Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.
Section 7. Removal. Any director or the entire Board of Directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of
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directors; provided that, if the Certificate of Incorporation expressly grants
to stockholders the right to cumulate votes for the election of directors and
if less than the entire board is to be removed, no director may be removed
without cause if the votes cast against his removal would be sufficient to
elect him if then cumulatively voted at an election of the entire Board of
Directors, or, if there be classes of directors, at an election of the class of
directors of which such director is a part.
Section 8. Vacancies; Increases in the Number of Directors. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.
If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for which such directors shall have
been chosen, and until their successors shall be duly elected and shall
qualify.
Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.
Section 10. Action Without a Meeting; Telephone Conference Meeting.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation,
subject to the requirement for notice of meetings, members of the Board of
Directors, or members of any committee designated by the Board of Directors,
may participate in a meeting of such Board of Directors or committee, as the
case may be, by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in such a meeting shall constitute presence in
person at such meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
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purpose of considering any such act or contract, and any act or contract that
shall be approved or be ratified by the vote of the stockholders holding a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote and present in person or by proxy at such meeting (provided
that a quorum is present), shall be as valid and as binding upon the
Corporation and upon all the stockholders as if it has been approved or
ratified by every stockholder of the Corporation. In addition, any such act or
contract may be approved or ratified by the written consent of stockholders
holding a majority of the issued and outstanding shares of capital stock of the
Corporation entitled to vote and such consent shall be as valid and as binding
upon the Corporation and upon all the stockholders as if it had been approved
or ratified by every stockholder of the Corporation.
Article IV
Committees
Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power of authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which may
require it. In addition to the above such committee or committees shall have
such other powers and limitations of authority as may be determined from time
to time by resolution adopted by the Board of Directors.
Section 2. Procedure; Meetings; Quorum. Any committee
designated pursuant to Section 1 of this Article shall choose its own chairman,
shall keep regular minutes of its proceedings and report the same to the Board
of Directors when requested, shall fix its own rules or procedures, and shall
meet at such times and at such place or places as may be provided by such
rules, or buy resolution of such committee or resolution of the Board of
Directors. At every meeting of any such committee, the presence of a majority
of all the members thereof shall constitute a quorum and the affirmative vote
of a majority of the members present shall be necessary for the adoption by it
of any resolution.
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Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In
the absence or disqualification of a member of a committee, the member or
members present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified
member.
Article V
Officers
Section 1. Number, Titles and Term of Office. The officers of the
Corporation shall be a President, a Secretary and, if the Board of Directors so
elects, a Chairman of the Board and such other officers as the Board of
Directors may from time to time elect or appoint. Each officer shall hold
office until his successor shall be duly elected and shall qualify or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Any number of offices may be held by the same person,
unless the Certificate of Incorporation provides otherwise. Except for the
Chairman of the Board, if any, no officer need be a director.
Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.
Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.
Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.
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Section 6. Powers and Duties of the Chairman of the Board. If
elected, the Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors; and he shall have such other powers
and duties as designated in these bylaws and as from time to time may be
assigned to him by the Board of Directors.
Section 7. Powers and Duties of the President. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board or
if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 8. Vice Presidents. In the absence of the President, or in
the event of his inability or refusal to act, a Vice President designated by
the Board of Directors shall perform 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. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the Corporation shall so
act. The Vice Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 9. Treasurer. The Treasurer shall have responsibility for
the custody and control of all the funds and securities of the Corporation, and
he shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.
Section 10. Assistant Treasurers. Each Assistant Treasurer shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Treasurers shall exercise the powers of the Treasurer
during that officer's absence or inability or refusal to act.
Section 11. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation and attest the
affixation of the seal of the Corporation thereto; he may sign with the other
appointed officers all certificates for shares of capital stock of the
Corporation; he shall have charge of the certificate books, transfer books
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and stock ledgers, and such other books and papers as the Board of Directors
may direct, all of which shall at all reasonable times be open to inspection of
any director upon application at the office of the Corporation during business
hours; he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of Directors; and
he shall in general perform all acts incident to the office of Secretary,
subject to the control of the chief executive officer and the Board of
Directors.
Section 12. Assistant Secretaries. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Secretaries shall exercise the powers of the
Secretary during that officer's absence or inability or refusal to act.
Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
Article VI
Indemnification of Directors,
Officers, Employees and Agents
Section 1. Right to Indemnification. Each person who was or is made
a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other capacity while serving or having agreed to
serve as a director or officer, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment) against all expense,
liability and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to serve in the capacity which initially entitled such person to indemnity
hereunder and shall inure to the benefit of his or her heirs, executors and
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administrators; provided, however, that the Corporation shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the board of directors of the Corporation. The right to
indemnification conferred in this Article VI shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a current, former or proposed director or officer in
his or her capacity as a director or officer or proposed director or officer
(and not in any other capacity in which service was or is or has been agreed to
be rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.
Section 2. Indemnification of Employees and Agents. The Corporation
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the same scope
and effect as the indemnification of directors and officers provided for in
this Article.
Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 4. Nonexclusivity of Rights. The right to indemnification
and the advancement and payment of expenses conferred. in this Article VI shall
not be exclusive of any other right which any person may have or hereafter
acquire under any law (common or statutory), provision
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of the Certificate of Incorporation of the Corporation, bylaw, agreement, vote
of stockholders or disinterested directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as 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
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Savings Clause. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VI that shall not have been invalidated and to the fullest extent
permitted by applicable law.
Article VII
Capital Stock
Section 1. Certificates of Stock. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation; provided, however, that any of or all the
signatures on the certificate may be facsimile. The stock record books and the
blank stock certificate books shall be kept by the Secretary, or at the office
of such transfer agent or transfer agents as the Board of Directors may from
time to time by resolution determine. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature or signatures
shall have been placed upon any such certificate or certificates shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued by the Corporation, such certificate may nevertheless be issued by
the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue. The stock certificates shall
be consecutively numbered and shall be entered in the books of the Corporation
as they are issued and shall exhibit the holder's name and number of shares.
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Section 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferable only on the books of the Corporation by the
holders thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Ownership of Shares. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
Section 4. Regulations Regarding Certificates. The Board of
Directors shall have the power and authority to make all such rules and
regulations as they may deem expedient concerning the issue, transfer and
registration or the replacement of certificates for shares of capital stock of
the Corporation.
Section 5. Lost or Destroyed Certificates. The Board of Directors
may determine the conditions upon which a new certificate of stock may be
issued in place of a certificate which is alleged to have been lost, stolen or
destroyed; and may, in their discretion, require the owner of such certificate
or his legal representative to give bond, with sufficient surety, to indemnify
the Corporation and each transfer agent and registrar against any and all
losses or claims which may arise by reason of the issue of a new certificate in
the place of the one so lost, stolen or destroyed.
Article VIII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as established from time to time by the Board of Directors.
Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall
have charge of the seal (if any). If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Treasurer or by the Assistant Secretary or Assistant Treasurer.
Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be deemed to be sufficient if
given (i) by telegraphic, cable or wireless transmission or (ii) by deposit of
the same in a post office box in a sealed prepaid wrapper addressed to the
person entitled thereto at his post office address, as it appears on the
records of the Corporation, and such notice
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shall be deemed to have been given on the day of such transmission or mailing,
as the case may be.
Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to 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 regular or special meeting of the
stockholders, 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 or the bylaws.
Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 5. Facsimile Signatures. In addition to the provisions for
the use of facsimile signatures elsewhere specifically authorized in these
bylaws, facsimile signatures of any officer or officers of the Corporation may
be used whenever and as authorized by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records. Each director
and each member of any committee designated by the Board of Directors shall, in
the performance of his duties, be fully protected in relying in good faith upon
the books of account or reports made to the Corporation by any of its officers,
or by an independent certified public accountant, or by an appraiser selected
with reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
Article IX
Amendments
If provided in the Certificate of Incorporation of the Corporation,
the Board of Directors shall have the power to adopt, amend and repeal from
time to time bylaws of the Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to amend or repeal such
bylaws as adopted or amended by the Board of Directors.
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EXHIBIT 3.11
CERTIFICATE OF INCORPORATION
OF
EAGLE FRONT END SERVICES, INC.
1. The name of the corporation is Eagle Front End Services, Inc.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, the City of Wilmington, County of
New Castle, 19801. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of common stock which the corporation
shall have authority to issue is 10,000 and the par value of each such share is
$0.01.
5. The name and mailing address of each incorporator is as follows:
NAME ADDRESS
---- -------
Chad E. Mills 333 Clay Avenue
Suite 800
Houston, Texas 77002
6. The corporation is to have perpetual existence.
7. The name and mailing address of each of the initial directors of
the corporation is as follows:
NAME ADDRESS
---- -------
Jay N. Silverman 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
8. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
<PAGE> 2
To adopt, amend or repeal the bylaws of the corporation.
9. Meetings of stockholders may be held within or without the State
of Delaware, as the bylaws may provide. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the bylaws of the corporation. Elections of directors
need not be by written ballot unless the bylaws of the corporation shall so
provide.
10. No director of the corporation shall be personally liable to the
corporation or any of its stockholders for monetary damages resulting from a
breach of fiduciary duty involving any act or omission of any director;
provided, however, that the foregoing provision shall not limit the liability
of any director (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Title 8, Section 174 of the Delaware Code or (iv) for any transaction
from which such director derived an improper personal benefit.
11. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on application in a summary way
of this corporation of any creditor or stockholder thereof or on the
application of any receiver or its receivers appointed for this corporation
under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
corporation under Section 279 of Title 8 of the Delaware Code order a meeting
of the creditors or a class of creditors, and/or of the stockholders or a class
of stockholders for this corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 29th day of January, 1998.
/S/ CHAD E. MILLS
-----------------------------------
Chad E. Mills
<PAGE> 3
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
BABE & BILL ENTERPRISES, INC.
(A TEXAS CORPORATION)
INTO
EAGLE FRONT END SERVICES, INC.
(A DELAWARE CORPORATION)
Pursuant to Section 253 of The General Corporation Law of Delaware,
Eagle Front End Services, Inc. (the "Company"), a Delaware corporation, for the
purpose of merging into itself Babe & Bill Enterprises, Inc. (the
"Subsidiary"), a Texas corporation d/b/a Seismic Drilling & Service Co.,
DOES HEREBY CERTIFY:
FIRST: That this Company was organized pursuant to the General
Corporate Law of Delaware on the 29th day of January, 1998.
SECOND: That this Company is the owner and holder of 1,000 issued and
outstanding shares of the Subsidiary, which shares in the aggregate constitute
one hundred percent (100%) of the issued and outstanding capital stock of the
Subsidiary.
THIRD: By the following resolutions of the Board of Directors of this
Company, duly adopted by the unanimous written consent of the members thereof,
and adopted by the Board of Directors on April ___, 1998, determined to and,
effective upon the filing of this Certificate of Ownership and Merger with the
Secretary of State of Delaware and the filing of the Article of Merger with the
Secretary of State of Texas, does merge into itself the Subsidiary:
WHEREAS, the Company is the owner and holder of 1,000 issued and
outstanding shares of Babe & Bill Enterprises, Inc., a Texas corporation
d/b/a Seismic Drilling & Service Co. (the "Subsidiary"), which shares in
the aggregate constitute one hundred percent (100%) of the issued and
outstanding capital stock of the Subsidiary;
<PAGE> 4
WHEREAS, the Board of Directors deems it in the best interest of
the Company to merge the Subsidiary into the Company pursuant to Section
253 of the Delaware General Corporation Law and Article 5.16 of the
Texas Business Corporation Act;
NOW, THEREFORE, BE IT RESOLVED, that the Subsidiary be merged
into the Company;
RESOLVED FURTHER, that the execution by the President or any
Vice President of the Company of any document authorized by the
foregoing resolutions or any action or actions so authorized, is, and
shall become, upon delivery, the enforceable and binding acts of the
Company without the necessity of the signature or attestation of any
other officer and that the Secretary of the Company is hereby
authorized, empowered and directed to attest to any document authorized
by the foregoing resolutions if he deems such attestation necessary or
advisable; and
RESOLVED FURTHER, that the officers of the Company be, and each
of them acting alone hereby is, authorized, empowered and directed to do
all other things and acts, to execute, deliver and file all other
instruments, documents and certificates and to pay all costs, fees and
taxes as may be, in their sole judgment, necessary, proper or advisable
in connection with the merger and in order to otherwise carry out and
comply with the purposes and intent of the foregoing resolutions; and
that all of the acts and deeds of the officers of the Company which are
consistent with the purposes and intent of such resolutions be and the
same hereby are, in all respects, approved, confirmed and adopted as the
acts and deeds of the Company.
IN WITNESS WHEREOF, the Company has caused this Certificate to be signed
by its authorized officer, this 3rd day of April, 1998.
EAGLE FRONT END SERVICES, INC.
By: /s/ JAY N. SILVERMAN
------------------------------------
Jay N. Silverman, President
<PAGE> 1
EXHIBIT 3.12
BYLAWS
OF
EAGLE FRONT END SERVICES, INC.
Article I
Offices
Section 1. Registered Office. The registered office of the
Corporation required by the General Corporation Law of the State of Delaware to
be maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
Article II
Stockholders
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at the principal office of the Corporation, or at such other place
within or without the State of Delaware as shall be specified or fixed in the
notices or waivers of notice thereof.
Section 2. Quorum; Adjournment of Meetings. Unless otherwise
required by law or provided in the Certificate of Incorporation or these
bylaws, 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 any meeting of stockholders for the transaction of
business and the act of a majority of such stock so represented at any meeting
of stockholders at which a quorum is present shall constitute the act of the
meeting of stockholders. The stockholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Notwithstanding the other provisions of the Certificate of
Incorporation or these bylaws, the chairman of the meeting or the holders of a
majority of the issued and outstanding stock, present in person or represented
by proxy, at any meeting of stockholders, whether or not a quorum is present,
shall have the power to adjourn such meeting from time to time, without any
<PAGE> 2
notice other than announcement at the meeting of the time and place of the
holding of the adjourned meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at such meeting. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
called.
Section 3. Annual Meetings. An annual meeting of the stockholders,
for the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, within or without the State of Delaware, on such
date, and at such time as the Board of Directors shall fix and set forth in the
notice of the meeting, which date shall be within thirteen (13) months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.
Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the
Chairman of the Board (if any), by the President or the Secretary upon the
written request therefor, stating the purpose or purposes of the meeting,
delivered to such officer, signed by the holder(s) of at least ten percent
(10%) of the issued and outstanding stock entitled to vote at such meeting.
Section 5. Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or 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 stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.
If the Board of Directors does not fix a record date for any meeting
of the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If,
in accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
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<PAGE> 3
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Notice of Meetings. Written notice of the place, date and
hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
Section 7. Stock List. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, 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. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
Section 8. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to a corporate action in
writing without a meeting may authorize another person or persons to act for
him by proxy. Proxies for use at any meeting of stockholders shall be filed
with the Secretary, or such other officer as the Board of Directors may from
time to time determine by resolution, before or at the time of the meeting.
All proxies shall be received and taken charge of and all ballots shall be
received and canvassed by the secretary of the meeting who shall decide all
questions touching upon the qualification of voters, the validity of the
proxies, and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed by the chairman of the meeting, in which
event such inspector or inspectors shall decide all such questions.
No proxy shall be valid after three (3) years from its date, unless
the proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers thereunder are to be exercised shall have
and may exercise all the powers of voting or giving consents thereby conferred,
or if only one be present, then such powers may be exercised by that one; or,
if an even number attend and a majority do not agree on any particular issue,
each proxy
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<PAGE> 4
so attending shall be entitled to exercise such powers in respect of the same
portion of the shares as he is of the proxies representing such shares.
Section 9. Voting; Elections; Inspectors. Unless otherwise required
by law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as the bylaw (or comparable instrument) of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors (or
comparable body) of such corporation may determine. Shares registered in the
name of a deceased person may be voted by his executor or administrator, either
in person or by proxy.
All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.
At any meeting at which a vote is taken by ballots, the chairman of
the meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector.
Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.
Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the Chairman of the Board (if any),
nor President is present, by a chairman elected at the meeting. The Secretary
of the Corporation, if present, shall act as secretary of such meetings, or if
he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor an Assistant Secretary is present, then a secretary shall be
appointed by the chairman of the meeting. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order. Unless the chairman of the meeting of
stockholders shall otherwise determine, the order of business shall be as
follows:
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<PAGE> 5
(a) Calling of meeting to order.
(b) Election of a chairman and the appointment of a secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting.
(d) Presentation and examination of proxies and determination of a
quorum.
(e) Reading and settlement of the minutes of the previous meeting.
(f) Reports of officers and committees.
(g) The election of directors if an annual meeting, or a meeting
called for that purpose.
(h) Unfinished business.
(i) New business.
(j) Adjournment.
Section 11. Treasury Stock. The Corporation shall not vote, directly
or indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.
Section 12. Action Without Meeting. Unless otherwise provided in the
Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall 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 such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than a unanimous written consent shall be given by the Secretary to those
stockholders who have not consented in writing.
Article III
Board of Directors
Section 1. Power; Number; Term of Office. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.
The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the
stockholders (provided that no decrease in the number of directors which would
have the effect of shortening the term of an incumbent director
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<PAGE> 6
may be made by the stockholders). If the stockholders make no such
determination, the number of directors shall be one (1). Each director shall
hold office for the term for which he is elected, and until his successor shall
have been elected and qualified or until his earlier death, resignation or
removal.
Unless otherwise provided in the Certificate of Incorporation,
directors need not be stockholders nor residents of the State of Delaware.
Section 2. Quorum. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 3. Place of Meetings; Order of Business. The directors may
hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of
Directors business shall be transacted in such order as shall from time to time
be determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.
Section 4. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.
Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.
Section 7. Removal. Any director or the entire Board of Directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided that, if the
Certificate of Incorporation expressly grants to stockholders the
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<PAGE> 7
right to cumulate votes for the election of directors and if less than the
entire board is to be removed, no director may be removed without cause if the
votes cast against his removal would be sufficient to elect him if then
cumulatively voted at an election of the entire Board of Directors, or, if
there be classes of directors, at an election of the class of directors of
which such director is a part.
Section 8. Vacancies; Increases in the Number of Directors. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.
If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for which such directors shall have
been chosen, and until their successors shall be duly elected and shall
qualify.
Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.
Section 10. Action Without a Meeting; Telephone Conference Meeting.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation,
subject to the requirement for notice of meetings, members of the Board of
Directors, or members of any committee designated by the Board of Directors,
may participate in a meeting of such Board of Directors or committee, as the
case may be, by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in such a meeting shall constitute presence in
person at such meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
purpose of considering any such act or contract, and any act or contract that
shall be approved or
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<PAGE> 8
be ratified by the vote of the stockholders holding a majority of the issued
and outstanding shares of stock of the Corporation entitled to vote and present
in person or by proxy at such meeting (provided that a quorum is present),
shall be as valid and as binding upon the Corporation and upon all the
stockholders as if it has been approved or ratified by every stockholder of the
Corporation. In addition, any such act or contract may be approved or ratified
by the written consent of stockholders holding a majority of the issued and
outstanding shares of capital stock of the Corporation entitled to vote and
such consent shall be as valid and as binding upon the Corporation and upon all
the stockholders as if it had been approved or ratified by every stockholder of
the Corporation.
Article IV
Committees
Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power of authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which may
require it. In addition to the above such committee or committees shall have
such other powers and limitations of authority as may be determined from time
to time by resolution adopted by the Board of Directors.
Section 2. Procedure; Meetings; Quorum. Any committee designated
pursuant to Section 1 of this Article shall choose its own chairman, shall keep
regular minutes of its proceedings and report the same to the Board of Directors
when requested, shall fix its own rules or procedures, and shall meet at such
times and at such place or places as may be provided by such rules, or buy
resolution of such committee or resolution of the Board of Directors. At every
meeting of any such committee, the presence of a majority of all the members
thereof shall constitute a quorum and the affirmative vote of a majority of the
members present shall be necessary for the adoption by it of any resolution.
Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified
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<PAGE> 9
member at any meeting of such committee. In the absence or disqualification of
a member of a committee, the member or members present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the
place of the absent or disqualified member.
Article V
Officers
Section 1. Number, Titles and Term of Office. The officers of the
Corporation shall be a President, a Secretary and, if the Board of Directors so
elects, a Chairman of the Board and such other officers as the Board of
Directors may from time to time elect or appoint. Each officer shall hold
office until his successor shall be duly elected and shall qualify or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Any number of offices may be held by the same person,
unless the Certificate of Incorporation provides otherwise. Except for the
Chairman of the Board, if any, no officer need be a director.
Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.
Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.
Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.
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<PAGE> 10
Section 6. Powers and Duties of the Chairman of the Board. If
elected, the Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors; and he shall have such other powers
and duties as designated in these bylaws and as from time to time may be
assigned to him by the Board of Directors.
Section 7. Powers and Duties of the President. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board or
if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 8. Vice Presidents. In the absence of the President, or in
the event of his inability or refusal to act, a Vice President designated by
the Board of Directors shall perform 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. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the Corporation shall so
act. The Vice Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 9. Treasurer. The Treasurer shall have responsibility for
the custody and control of all the funds and securities of the Corporation, and
he shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.
Section 10. Assistant Treasurers. Each Assistant Treasurer shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Treasurers shall exercise the powers of the Treasurer
during that officer's absence or inability or refusal to act.
Section 11. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation and attest the
affixation of the seal of the Corporation thereto; he may sign with the other
appointed officers all certificates for shares of capital stock of the
Corporation; he shall have charge of the certificate books, transfer books
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<PAGE> 11
and stock ledgers, and such other books and papers as the Board of Directors
may direct, all of which shall at all reasonable times be open to inspection of
any director upon application at the office of the Corporation during business
hours; he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of Directors; and
he shall in general perform all acts incident to the office of Secretary,
subject to the control of the chief executive officer and the Board of
Directors.
Section 12. Assistant Secretaries. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Secretaries shall exercise the powers of the
Secretary during that officer's absence or inability or refusal to act.
Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
Article VI
Indemnification of Directors,
Officers, Employees and Agents
Section 1. Right to Indemnification. Each person who was or is made
a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other capacity while serving or having agreed to
serve as a director or officer, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment) against all expense,
liability and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to serve in the capacity which initially entitled such person to indemnity
hereunder and shall inure to the benefit of his or her heirs, executors and
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<PAGE> 12
administrators; provided, however, that the Corporation shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the board of directors of the Corporation. The right to
indemnification conferred in this Article VI shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a current, former or proposed director or officer in
his or her capacity as a director or officer or proposed director or officer
(and not in any other capacity in which service was or is or has been agreed to
be rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.
Section 2. Indemnification of Employees and Agents. The Corporation
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the same scope
and effect as the indemnification of directors and officers provided for in
this Article.
Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 4. Nonexclusivity of Rights. The right to indemnification
and the advancement and payment of expenses conferred. in this Article VI shall
not be exclusive of any other right which any person may have or hereafter
acquire under any law (common or statutory), provision
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<PAGE> 13
of the Certificate of Incorporation of the Corporation, bylaw, agreement, vote
of stockholders or disinterested directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as 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
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Savings Clause. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VI that shall not have been invalidated and to the fullest extent
permitted by applicable law.
Article VII
Capital Stock
Section 1. Certificates of Stock. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation; provided, however, that any of or all the
signatures on the certificate may be facsimile. The stock record books and the
blank stock certificate books shall be kept by the Secretary, or at the office
of such transfer agent or transfer agents as the Board of Directors may from
time to time by resolution determine. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature or signatures
shall have been placed upon any such certificate or certificates shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued by the Corporation, such certificate may nevertheless be issued by
the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue. The stock certificates shall
be consecutively numbered and shall be entered in the books of the Corporation
as they are issued and shall exhibit the holder's name and number of shares.
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<PAGE> 14
Section 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferable only on the books of the Corporation by the
holders thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Ownership of Shares. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
Section 4. Regulations Regarding Certificates. The Board of
Directors shall have the power and authority to make all such rules and
regulations as they may deem expedient concerning the issue, transfer and
registration or the replacement of certificates for shares of capital stock of
the Corporation.
Section 5. Lost or Destroyed Certificates. The Board of Directors
may determine the conditions upon which a new certificate of stock may be
issued in place of a certificate which is alleged to have been lost, stolen or
destroyed; and may, in their discretion, require the owner of such certificate
or his legal representative to give bond, with sufficient surety, to indemnify
the Corporation and each transfer agent and registrar against any and all
losses or claims which may arise by reason of the issue of a new certificate in
the place of the one so lost, stolen or destroyed.
Article VIII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as established from time to time by the Board of Directors.
Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall
have charge of the seal (if any). If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Treasurer or by the Assistant Secretary or Assistant Treasurer.
Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be deemed to be sufficient if
given (i) by telegraphic, cable or wireless transmission or (ii) by deposit of
the same in a post office box in a sealed prepaid wrapper addressed to the
person entitled thereto at his post office 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 transmission or mailing, as the case may be.
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<PAGE> 15
Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to 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 regular or special meeting of the
stockholders, 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 or the bylaws.
Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 5. Facsimile Signatures. In addition to the provisions for
the use of facsimile signatures elsewhere specifically authorized in these
bylaws, facsimile signatures of any officer or officers of the Corporation may
be used whenever and as authorized by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records. Each director
and each member of any committee designated by the Board of Directors shall, in
the performance of his duties, be fully protected in relying in good faith upon
the books of account or reports made to the Corporation by any of its officers,
or by an independent certified public accountant, or by an appraiser selected
with reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
Article IX
Amendments
If provided in the Certificate of Incorporation of the Corporation,
the Board of Directors shall have the power to adopt, amend and repeal from
time to time bylaws of the Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to amend or repeal such
bylaws as adopted or amended by the Board of Directors.
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<PAGE> 1
Exhibit 3.13
CERTIFICATE OF INCORPORATION
OF
EAGLE GEOPHYSICAL MANAGEMENT, INC.
1. The name of the corporation is Eagle Geophysical Management,
Inc.
2. The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, the City of Wilmington, County
of New Castle, 19801. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of common stock which the
corporation shall have authority to issue is 10,000 and the par value of each
such share is $0.01.
5. The name and mailing address of each incorporator is as
follows:
NAME ADDRESS
---- -------
Chad Mills 333 Clay Avenue
Suite 800
Houston, Texas 77002
6. The corporation is to have perpetual existence.
7. The name and mailing address of each of the initial directors
of the corporation is as follows:
NAME ADDRESS
---- -------
Jay N. Silverman 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
8. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
<PAGE> 2
To adopt, amend or repeal the bylaws of the corporation.
9. Meetings of stockholders may be held within or without the
State of Delaware, as the bylaws may provide. The books of the corporation may
be kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the board of directors or in the bylaws of the corporation. Elections of
directors need not be by written ballot unless the bylaws of the corporation
shall so provide.
10. No director of the corporation shall be personally liable to
the corporation or any of its stockholders for monetary damages resulting from
a breach of fiduciary duty involving any act or omission of any director;
provided, however, that the foregoing provision shall not limit the liability
of any director (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Title 8, Section 174 of the Delaware Code or (iv) for any transaction
from which such director derived an improper personal benefit.
11. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on application in a summary way
of this corporation or any creditor or stockholder thereof or on the
application of any receiver or its receivers appointed for this corporation
under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
corporation under Section 279 of Title 8 of the Delaware Code order a meeting
of the creditors or a class of creditors, and/or of the stockholders or a class
of stockholders for this corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 18th day of March, 1998.
/s/ CHAD MILLS
------------------------------
Chad Mills
<PAGE> 1
EXHIBIT 3.14
BYLAWS
OF
EAGLE GEOPHYSICAL MANAGEMENT, INC.
Article I
Offices
Section 1. Registered Office. The registered office of the Corporation
required by the General Corporation Law of the State of Delaware to be
maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
Article II
Stockholders
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at the principal office of the Corporation, or at such other place
within or without the State of Delaware as shall be specified or fixed in the
notices or waivers of notice thereof.
Section 2. Quorum; Adjournment of Meetings. Unless otherwise required
by law or provided in the Certificate of Incorporation or these bylaws, 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 any meeting of stockholders for the transaction of business and the act of a
majority of such stock so represented at any meeting of stockholders at which a
quorum is present shall constitute the act of the meeting of stockholders. The
stockholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
Notwithstanding the other provisions of the Certificate of Incorporation
or these bylaws, the chairman of the meeting or the holders of a majority of
the issued and outstanding stock, present in person or represented by proxy, at
any meeting of stockholders, whether or not a quorum is present, shall have the
power to adjourn such meeting from time to time, without any
<PAGE> 2
notice other than announcement at the meeting of the time and place of the
holding of the adjourned meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at such meeting. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
called.
Section 3. Annual Meetings. An annual meeting of the stockholders, for
the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, within or without the State of Delaware, on such
date, and at such time as the Board of Directors shall fix and set forth in the
notice of the meeting, which date shall be within thirteen (13) months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.
Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the
Chairman of the Board (if any), by the President or the Secretary upon the
written request therefor, stating the purpose or purposes of the meeting,
delivered to such officer, signed by the holder(s) of at least ten percent
(10%) of the issued and outstanding stock entitled to vote at such meeting.
Section 5. Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or 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 stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.
If the Board of Directors does not fix a record date for any meeting of
the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If,
in accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
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<PAGE> 3
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Notice of Meetings. Written notice of the place, date and
hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
Section 7. Stock List. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, 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. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
Section 8. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to a corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy. Proxies for use at any meeting of stockholders shall be filed with the
Secretary, or such other officer as the Board of Directors may from time to
time determine by resolution, before or at the time of the meeting. All
proxies shall be received and taken charge of and all ballots shall be received
and canvassed by the secretary of the meeting who shall decide all questions
touching upon the qualification of voters, the validity of the proxies, and the
acceptance or rejection of votes, unless an inspector or inspectors shall have
been appointed by the chairman of the meeting, in which event such inspector or
inspectors shall decide all such questions.
No proxy shall be valid after three (3) years from its date, unless the
proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers thereunder are to be exercised shall have
and may exercise all the powers of voting or giving consents thereby conferred,
or if only one be present, then such powers may be exercised by that one; or,
if an even number attend and a majority do not agree on any particular issue,
each proxy
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<PAGE> 4
so attending shall be entitled to exercise such powers in respect of the same
portion of the shares as he is of the proxies representing such shares.
Section 9. Voting; Elections; Inspectors. Unless otherwise required by
law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as the bylaw (or comparable instrument) of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors (or
comparable body) of such corporation may determine. Shares registered in the
name of a deceased person may be voted by his executor or administrator, either
in person or by proxy.
All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.
At any meeting at which a vote is taken by ballots, the chairman of the
meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector.
Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.
Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the Chairman of the Board (if any),
nor President is present, by a chairman elected at the meeting. The Secretary
of the Corporation, if present, shall act as secretary of such meetings, or if
he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor an Assistant Secretary is present, then a secretary shall be
appointed by the chairman of the meeting. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order. Unless the chairman of the meeting of
stockholders shall otherwise determine, the order of business shall be as
follows:
(a) Calling of meeting to order.
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<PAGE> 5
(b) Election of a chairman and the appointment of a secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting.
(d) Presentation and examination of proxies and determination of a
quorum.
(e) Reading and settlement of the minutes of the previous meeting.
(f) Reports of officers and committees.
(g) The election of directors if an annual meeting, or a meeting
called for that purpose.
(h) Unfinished business.
(i) New business.
(j) Adjournment.
Section 11. Treasury Stock. The Corporation shall not vote, directly
or indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.
Section 12. Action Without Meeting. Unless otherwise provided in the
Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall 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 such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than a unanimous written consent shall be given by the Secretary to those
stockholders who have not consented in writing.
Article III
Board of Directors
Section 1. Power; Number; Term of Office. The business and affairs of
the Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.
The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the
stockholders (provided that no decrease in the number of directors which would
have the effect of shortening the term of an incumbent director
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may be made by the stockholders). If the stockholders make no such
determination, the number of directors shall be one (1). Each director shall
hold office for the term for which he is elected, and until his successor shall
have been elected and qualified or until his earlier death, resignation or
removal.
Unless otherwise provided in the Certificate of Incorporation, directors
need not be stockholders nor residents of the State of Delaware.
Section 2. Quorum. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 3. Place of Meetings; Order of Business. The directors may
hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of
Directors business shall be transacted in such order as shall from time to time
be determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.
Section 4. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.
Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.
Section 7. Removal. Any director or the entire Board of Directors may
be removed, with or without cause, by the holders of a majority of the shares
then entitled to vote at an election of directors; provided that, if the
Certificate of Incorporation expressly grants to stockholders the
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right to cumulate votes for the election of directors and if less than the
entire board is to be removed, no director may be removed without cause if the
votes cast against his removal would be sufficient to elect him if then
cumulatively voted at an election of the entire Board of Directors, or, if
there be classes of directors, at an election of the class of directors of
which such director is a part.
Section 8. Vacancies; Increases in the Number of Directors. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.
If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for which such directors shall have
been chosen, and until their successors shall be duly elected and shall
qualify.
Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.
Section 10. Action Without a Meeting; Telephone Conference Meeting.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation, subject
to the requirement for notice of meetings, members of the Board of Directors,
or members of any committee designated by the Board of Directors, may
participate in a meeting of such Board of Directors or committee, as the case
may be, by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in such a meeting shall constitute presence in person at such
meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
purpose of considering any such act or contract, and any act or contract that
shall be approved or
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be ratified by the vote of the stockholders holding a majority of the issued
and outstanding shares of stock of the Corporation entitled to vote and present
in person or by proxy at such meeting (provided that a quorum is present),
shall be as valid and as binding upon the Corporation and upon all the
stockholders as if it has been approved or ratified by every stockholder of the
Corporation. In addition, any such act or contract may be approved or ratified
by the written consent of stockholders holding a majority of the issued and
outstanding shares of capital stock of the Corporation entitled to vote and
such consent shall be as valid and as binding upon the Corporation and upon all
the stockholders as if it had been approved or ratified by every stockholder of
the Corporation.
Article IV
Committees
Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power of authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which may
require it. In addition to the above such committee or committees shall have
such other powers and limitations of authority as may be determined from time
to time by resolution adopted by the Board of Directors.
Section 2. Procedure; Meetings; Quorum. Any committee
designated pursuant to Section 1 of this Article shall choose its own chairman,
shall keep regular minutes of its proceedings and report the same to the Board
of Directors when requested, shall fix its own rules or procedures, and shall
meet at such times and at such place or places as may be provided by such
rules, or buy resolution of such committee or resolution of the Board of
Directors. At every meeting of any such committee, the presence of a majority
of all the members thereof shall constitute a quorum and the affirmative vote
of a majority of the members present shall be necessary for the adoption by it
of any resolution.
Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified
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<PAGE> 9
member at any meeting of such committee. In the absence or disqualification of
a member of a committee, the member or members present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the
place of the absent or disqualified member.
Article V
Officers
Section 1. Number, Titles and Term of Office. The officers of the
Corporation shall be a President, a Secretary and, if the Board of Directors so
elects, a Chairman of the Board and such other officers as the Board of
Directors may from time to time elect or appoint. Each officer shall hold
office until his successor shall be duly elected and shall qualify or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Any number of offices may be held by the same person,
unless the Certificate of Incorporation provides otherwise. Except for the
Chairman of the Board, if any, no officer need be a director.
Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.
Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.
Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.
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Section 6. Powers and Duties of the Chairman of the Board. If elected,
the Chairman of the Board shall preside at all meetings of the stockholders and
of the Board of Directors; and he shall have such other powers and duties as
designated in these bylaws and as from time to time may be assigned to him by
the Board of Directors.
Section 7. Powers and Duties of the President. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board or
if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 8. Vice Presidents. In the absence of the President, or in the
event of his inability or refusal to act, a Vice President designated by the
Board of Directors shall perform 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. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the Corporation shall so
act. The Vice Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 9. Treasurer. The Treasurer shall have responsibility for the
custody and control of all the funds and securities of the Corporation, and he
shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.
Section 10. Assistant Treasurers. Each Assistant Treasurer shall have
the usual powers and duties pertaining to his office, together with such other
powers and duties as designated in these bylaws and as from time to time may be
assigned to him by the chief executive officer or the Board of Directors. The
Assistant Treasurers shall exercise the powers of the Treasurer during that
officer's absence or inability or refusal to act.
Section 11. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation and attest the
affixation of the seal of the Corporation thereto; he may sign with the other
appointed officers all certificates for shares of capital stock of the
Corporation; he shall have charge of the certificate books, transfer books
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and stock ledgers, and such other books and papers as the Board of Directors
may direct, all of which shall at all reasonable times be open to inspection of
any director upon application at the office of the Corporation during business
hours; he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of Directors; and
he shall in general perform all acts incident to the office of Secretary,
subject to the control of the chief executive officer and the Board of
Directors.
Section 12. Assistant Secretaries. Each Assistant Secretary shall have
the usual powers and duties pertaining to his office, together with such other
powers and duties as designated in these bylaws and as from time to time may be
assigned to him by the chief executive officer or the Board of Directors. The
Assistant Secretaries shall exercise the powers of the Secretary during that
officer's absence or inability or refusal to act.
Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
Article VI
Indemnification of Directors,
Officers, Employees and Agents
Section 1. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other capacity while serving or having agreed to
serve as a director or officer, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment) against all expense,
liability and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to serve in the capacity which initially entitled such person to indemnity
hereunder and shall inure to the benefit of his or her heirs, executors and
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administrators; provided, however, that the Corporation shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the board of directors of the Corporation. The right to
indemnification conferred in this Article VI shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a current, former or proposed director or officer in
his or her capacity as a director or officer or proposed director or officer
(and not in any other capacity in which service was or is or has been agreed to
be rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.
Section 2. Indemnification of Employees and Agents. The Corporation
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the same scope
and effect as the indemnification of directors and officers provided for in
this Article.
Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 4. Nonexclusivity of Rights. The right to indemnification and
the advancement and payment of expenses conferred. in this Article VI shall not
be exclusive of any other right which any person may have or hereafter acquire
under any law (common or statutory), provision
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of the Certificate of Incorporation of the Corporation, bylaw, agreement, vote
of stockholders or disinterested directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as 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
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Savings Clause. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VI that shall not have been invalidated and to the fullest extent
permitted by applicable law.
Article VII
Capital Stock
Section 1. Certificates of Stock. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation; provided, however, that any of or all the
signatures on the certificate may be facsimile. The stock record books and the
blank stock certificate books shall be kept by the Secretary, or at the office
of such transfer agent or transfer agents as the Board of Directors may from
time to time by resolution determine. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature or signatures
shall have been placed upon any such certificate or certificates shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued by the Corporation, such certificate may nevertheless be issued by
the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue. The stock certificates shall
be consecutively numbered and shall be entered in the books of the Corporation
as they are issued and shall exhibit the holder's name and number of shares.
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Section 2. Transfer of Shares. The shares of stock of the Corporation
shall be transferable only on the books of the Corporation by the holders
thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Ownership of Shares. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
Section 4. Regulations Regarding Certificates. The Board of Directors
shall have the power and authority to make all such rules and regulations as
they may deem expedient concerning the issue, transfer and registration or the
replacement of certificates for shares of capital stock of the Corporation.
Section 5. Lost or Destroyed Certificates. The Board of Directors may
determine the conditions upon which a new certificate of stock may be issued in
place of a certificate which is alleged to have been lost, stolen or destroyed;
and may, in their discretion, require the owner of such certificate or his
legal representative to give bond, with sufficient surety, to indemnify the
Corporation and each transfer agent and registrar against any and all losses or
claims which may arise by reason of the issue of a new certificate in the place
of the one so lost, stolen or destroyed.
Article VIII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as established from time to time by the Board of Directors.
Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall
have charge of the seal (if any). If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Treasurer or by the Assistant Secretary or Assistant Treasurer.
Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be deemed to be sufficient if
given (i) by telegraphic, cable or wireless transmission or (ii) by deposit of
the same in a post office box in a sealed prepaid wrapper addressed to the
person entitled thereto at his post office address, as it appears on the
records of the Corporation, and such notice
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shall be deemed to have been given on the day of such transmission or mailing,
as the case may be.
Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to 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 regular or special meeting of the
stockholders, 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 or the bylaws.
Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 5. Facsimile Signatures. In addition to the provisions for the
use of facsimile signatures elsewhere specifically authorized in these bylaws,
facsimile signatures of any officer or officers of the Corporation may be used
whenever and as authorized by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records. Each director and
each member of any committee designated by the Board of Directors shall, in the
performance of his duties, be fully protected in relying in good faith upon the
books of account or reports made to the Corporation by any of its officers, or
by an independent certified public accountant, or by an appraiser selected with
reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
Article IX
Amendments
If provided in the Certificate of Incorporation of the Corporation, the
Board of Directors shall have the power to adopt, amend and repeal from time to
time bylaws of the Corporation, subject to the right of the stockholders
entitled to vote with respect thereto to amend or repeal such bylaws as adopted
or amended by the Board of Directors.
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EXHIBIT 3.15
CERTIFICATE OF INCORPORATION
OF
EAGLE GEOPHYSICAL DE COLOMBIA, INC.
1. The name of the corporation is Eagle Geophysical de Colombia,
Inc.
2. The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, the City of Wilmington, County
of New Castle, 19801. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of common stock which the
corporation shall have authority to issue is 1,000 and the par value of each
such share is $0.01.
5. The name and mailing address of each incorporator is as
follows:
NAME ADDRESS
Stephen D. Elison 333 Clay Avenue
Suite 800
Houston, Texas 77002
6. The corporation is to have perpetual existence.
7. The name and mailing address of each of the initial directors
of the corporation is as follows:
NAME ADDRESS
Jay N. Silverman 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
<PAGE> 2
8. In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized to adopt, amend or
repeal the bylaws of the corporation.
9. Meetings of stockholders may be held within or without the
State of Delaware, as the bylaws may provide. The books of the corporation may
be kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the board of directors or in the bylaws of the corporation. Elections of
directors need not be by written ballot unless the bylaws of the corporation
shall so provide.
10. No director of the corporation shall be personally liable to
the corporation or any of its stockholders for monetary damages resulting from
a breach of fiduciary duty involving any act or omission of any director;
provided, however, that the foregoing provision shall not limit the liability
of any director (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Title 8, Section 174 of the Delaware Code or (iv) for any transaction
from which such director derived an improper personal benefit.
11. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on application in a summary way
of this corporation of any creditor or stockholder thereof or on the
application of any receiver or its receivers appointed for this corporation
under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
corporation under Section 279 of Title 8 of the Delaware Code order a meeting
of the creditors or a class of creditors, and/or of the stockholders or a class
of stockholders for this corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 9th day of July, 1998.
/s/ STEPHEN D. ELISON
-------------------------------------
Stephen D. Elison
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EXHIBIT 3.16
BYLAWS
OF
EAGLE GEOPHYSICAL DE COLOMBIA, INC.
Article I
Offices/Purpose
Section 1. Registered Office. The registered office of the
Corporation required by the General Corporation Law of the State of Delaware to
be maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
Section 3. Colombian Branch. The Corporation shall conduct business
in such jurisdictions within and without the United States of America as the
Board of Directors may from time to time determine or the business of the
Corporation may require. Specifically, the Corporation may establish a branch
in the Republic of Colombia, which shall have as its business purpose to engage
in any lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware, including without limitation, the
acquisition and interpretation of 2D and 3D seismic onshore, offshore and on
wetlands data and providing directly oil related field services for use by
group companies and third party operators in Colombia, as authorized by Decree
2058, 1991 issued by the Ministry of Mines and Energy of the Republic of
Colombia. The Company shall solely in furtherance of the foregoing purposes
have full power and authority to carry out any act necessary for the attainment
of its purposes and whatever else may be considered by it as incidental or
conductive thereto or consequential thereon, including, but without in any way
restricting the generality of the foregoing, the power to make any alterations
or amendments to the Certificate of Incorporation or Bylaws of the Company
considered necessary or convenient, and the power to do any of the following
acts or things directed to the accomplishment of the purposes set forth above,
namely, to pay all expenses of and incidental to the promotion, formation, and
incorporation of the Company; to register the Company to do business in any
other jurisdiction; to sell, lease, or dispose of any property of the Company;
to draw, make, accept endorse, discount, execute, and issue promissory notes,
debentures, bills of exchange, bills of lading, warrants and other negotiable
and transferable instruments; to lend money or other assets and to act as
<PAGE> 2
guarantors; to borrow or raise money on the security of the undertaking or on
all or any of the assets of the Company including uncalled capital or without
security; to invest monies of the Company in such manner as the Directors
determine; to promote other companies; to sell the assets of the Company for
cash or any other consideration; to distribute assets in kind to Shareholders
of the Company; to pay pensions or gratuities or provide other benefits in cash
or in kind to Directors, officers, employee, past or present and their
families; to purchase Director and officer liability insurance and to carry on
any trade or business and generally to do all acts and things which in the
opinion of this Company or the Directors, may be conveniently or profitably or
usefully acquired and dealt with, carried on, executed or done by the Company
in connection with the aforesaid business, provided that the Company shall only
carry on the business for which a license is required under the laws of
Colombia when so licensed under the terms of such laws.
Article II
Stockholders
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at the principal office of the Corporation, or at such other place
within or without the State of Delaware as shall be specified or fixed in the
notices or waivers of notice thereof.
Section 2. Quorum; Adjournment of Meetings. Unless otherwise
required by law or provided in the Certificate of Incorporation or these
bylaws, 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 any meeting of stockholders for the transaction of
business and the act of a majority of such stock so represented at any meeting
of stockholders at which a quorum is present shall constitute the act of the
meeting of stockholders. The stockholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Notwithstanding the other provisions of the Certificate of
Incorporation or these bylaws, the chairman of the meeting or the holders of a
majority of the issued and outstanding stock, present in person or represented
by proxy, at any meeting of stockholders, whether or not a quorum is present,
shall have the power to adjourn such meeting from time to time, without any
notice other than announcement at the meeting of the time and place of the
holding of the adjourned meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at such meeting. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
called.
Section 3. Annual Meetings. An annual meeting of the stockholders,
for the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, within or without the State of
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Delaware, on such date, and at such time as the Board of Directors shall fix
and set forth in the notice of the meeting, which date shall be within thirteen
(13) months subsequent to the later of the date of incorporation or the last
annual meeting of stockholders.
Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the
Chairman of the Board (if any), by the President or the Secretary upon the
written request therefor, stating the purpose or purposes of the meeting,
delivered to such officer, signed by the holder(s) of at least ten percent
(10%) of the issued and outstanding stock entitled to vote at such meeting.
Section 5. Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or 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 stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.
If the Board of Directors does not fix a record date for any meeting
of the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If,
in accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Notice of Meetings. Written notice of the place, date and
hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be
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delivered either personally or by mail. If mailed, notice is given when
deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the records of the Corporation.
Section 7. Stock List. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, 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. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
Section 8. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to a corporate action in
writing without a meeting may authorize another person or persons to act for
him by proxy. Proxies for use at any meeting of stockholders shall be filed
with the Secretary, or such other officer as the Board of Directors may from
time to time determine by resolution, before or at the time of the meeting.
All proxies shall be received and taken charge of and all ballots shall be
received and canvassed by the secretary of the meeting who shall decide all
questions touching upon the qualification of voters, the validity of the
proxies, and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed by the chairman of the meeting, in which
event such inspector or inspectors shall decide all such questions.
No proxy shall be valid after three (3) years from its date, unless
the proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers thereunder are to be exercised shall have
and may exercise all the powers of voting or giving consents thereby conferred,
or if only one be present, then such powers may be exercised by that one; or,
if an even number attend and a majority do not agree on any particular issue,
each proxy so attending shall be entitled to exercise such powers in respect of
the same portion of the shares as he is of the proxies representing such
shares.
Section 9. Voting; Elections; Inspectors. Unless otherwise required
by law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as the bylaw (or comparable instrument) of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors (or
comparable body) of such corporation
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may determine. Shares registered in the name of a deceased person may be voted
by his executor or administrator, either in person or by proxy.
All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.
At any meeting at which a vote is taken by ballots, the chairman of
the meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector.
Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.
Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the Chairman of the Board (if any),
nor President is present, by a chairman elected at the meeting. The Secretary
of the Corporation, if present, shall act as secretary of such meetings, or if
he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor an Assistant Secretary is present, then a secretary shall be
appointed by the chairman of the meeting. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order. Unless the chairman of the meeting of
stockholders shall otherwise determine, the order of business shall be as
follows:
(a) Calling of meeting to order.
(b) Election of a chairman and the appointment of a secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting.
(d) Presentation and examination of proxies and determination of a
quorum.
(e) Reading and settlement of the minutes of the previous meeting.
(f) Reports of officers and committees.
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(g) The election of directors if an annual meeting, or a meeting
called for that purpose.
(h) Unfinished business.
(i) New business.
(j) Adjournment.
Section 11. Treasury Stock. The Corporation shall not vote, directly
or indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.
Section 12. Action Without Meeting. Unless otherwise provided in the
Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall 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 such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than a unanimous written consent shall be given by the Secretary to those
stockholders who have not consented in writing.
Article III
Board of Directors
Section 1. Power; Number; Term of Office. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.
The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the
stockholders (provided that no decrease in the number of directors which would
have the effect of shortening the term of an incumbent director may be made by
the stockholders). If the stockholders make no such determination, the number
of directors shall be the number set forth in the Certificate of Incorporation.
Each director shall hold office for the term for which he is elected, and until
his successor shall have been elected and qualified or until his earlier death,
resignation or removal.
Unless otherwise provided in the Certificate of Incorporation,
directors need not be stockholders nor residents of the State of Delaware.
Section 2. Quorum. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business
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of the Board of Directors and the vote of a majority of the directors present
at a meeting at which a quorum is present shall be the act of the Board of
Directors.
Section 3. Place of Meetings; Order of Business. The directors may
hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of
Directors business shall be transacted in such order as shall from time to time
be determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.
Section 4. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.
Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.
Section 7. Removal. Any director or the entire Board of Directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided that, if the
Certificate of Incorporation expressly grants to stockholders the right to
cumulate votes for the election of directors and if less than the entire board
is to be removed, no director may be removed without cause if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which such director is a
part.
Section 8. Vacancies; Increases in the Number of Directors. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall
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hold office until the next annual election and until his successor shall be
duly elected and shall qualify, unless sooner displaced.
If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for which such directors shall have
been chosen, and until their successors shall be duly elected and shall
qualify.
Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.
Section 10. Action Without a Meeting; Telephone Conference Meeting.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation,
subject to the requirement for notice of meetings, members of the Board of
Directors, or members of any committee designated by the Board of Directors,
may participate in a meeting of such Board of Directors or committee, as the
case may be, by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in such a meeting shall constitute presence in
person at such meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
purpose of considering any such act or contract, and any act or contract that
shall be approved or be ratified by the vote of the stockholders holding a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote and present in person or by proxy at such meeting (provided
that a quorum is present), shall be as valid and as binding upon the
Corporation and upon all the stockholders as if it has been approved or
ratified by every stockholder of the Corporation. In addition, any such act or
contract may be approved or ratified by the written consent of stockholders
holding a majority of the issued and outstanding shares of capital stock of the
Corporation entitled to vote and such consent shall be as valid and as binding
upon the Corporation and upon all the stockholders as if it had been approved
or ratified by every stockholder of the Corporation.
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Article IV
Committees
Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power of authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which may
require it. In addition to the above such committee or committees shall have
such other powers and limitations of authority as may be determined from time
to time by resolution adopted by the Board of Directors.
Section 2. Procedure; Meetings; Quorum. Any committee designated
pursuant to Section 1 of this Article shall choose its own chairman, shall keep
regular minutes of its proceedings and report the same to the Board of
Directors when requested, shall fix its own rules or procedures, and shall meet
at such times and at such place or places as may be provided by such rules, or
buy resolution of such committee or resolution of the Board of Directors. At
every meeting of any such committee, the presence of a majority of all the
members thereof shall constitute a quorum and the affirmative vote of a
majority of the members present shall be necessary for the adoption by it of
any resolution.
Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In
the absence or disqualification of a member of a committee, the member or
members present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified
member.
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Article V
Officers
Section 1. Number, Titles and Term of Office. The officers of the
Corporation shall be a President, a Secretary and, if the Board of Directors so
elects, a Chairman of the Board and such other officers as the Board of
Directors may from time to time elect or appoint. Each officer shall hold
office until his successor shall be duly elected and shall qualify or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Any number of offices may be held by the same person,
unless the Certificate of Incorporation provides otherwise. Except for the
Chairman of the Board, if any, no officer need be a director.
Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.
Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.
Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 6. Powers and Duties of the Chairman of the Board. If
elected, the Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors; and he shall have such other powers
and duties as designated in these bylaws and as from time to time may be
assigned to him by the Board of Directors.
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Section 7. Powers and Duties of the President. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board or
if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 8. Vice Presidents. In the absence of the President, or in
the event of his inability or refusal to act, a Vice President designated by
the Board of Directors shall perform 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. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the Corporation shall so
act. The Vice Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 9. Treasurer. The Treasurer shall have responsibility for
the custody and control of all the funds and securities of the Corporation, and
he shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.
Section 10. Assistant Treasurers. Each Assistant Treasurer shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Treasurers shall exercise the powers of the Treasurer
during that officer's absence or inability or refusal to act.
Section 11. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation and attest the
affixation of the seal of the Corporation thereto; he may sign with the other
appointed officers all certificates for shares of capital stock of the
Corporation; he shall have charge of the certificate books, transfer books and
stock ledgers, and such other books and papers as the Board of Directors may
direct, all of which shall at all reasonable times be open to inspection of any
director upon application at the office of the Corporation during business
hours; he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of
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<PAGE> 12
Directors; and he shall in general perform all acts incident to the office of
Secretary, subject to the control of the chief executive officer and the Board
of Directors.
Section 12. Assistant Secretaries. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Secretaries shall exercise the powers of the
Secretary during that officer's absence or inability or refusal to act.
Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
Article VI
Indemnification of Directors,
Officers, Employees and Agents
Section 1. Right to Indemnification. Each person who was or is made
a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other capacity while serving or having agreed to
serve as a director or officer, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment) against all expense,
liability and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to serve in the capacity which initially entitled such person to indemnity
hereunder and shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that the Corporation shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the board of directors of the Corporation. The right to
indemnification conferred in this Article VI shall be a contract right and
shall include the
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<PAGE> 13
right to be paid by the Corporation the expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however, that, if the
Delaware General Corporation Law requires, the payment of such expenses
incurred by a current, former or proposed director or officer in his or her
capacity as a director or officer or proposed director or officer (and not in
any other capacity in which service was or is or has been agreed to be rendered
by such person while a director or officer, including, without limitation,
service to an employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such indemnified person, to repay all amounts
so advanced if it shall ultimately be determined that such indemnified person
is not entitled to be indemnified under this Section or otherwise.
Section 2. Indemnification of Employees and Agents. The Corporation
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the same scope
and effect as the indemnification of directors and officers provided for in
this Article.
Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 4. Nonexclusivity of Rights. The right to indemnification
and the advancement and payment of expenses conferred. in this Article VI shall
not be exclusive of any other right which any person may have or hereafter
acquire under any law (common or statutory), provision of the Certificate of
Incorporation of the Corporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as a director,
officer, employee or agent of the
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<PAGE> 14
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 expense, liability or loss,
whether or not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the Delaware General Corporation
Law.
Section 6. Savings Clause. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VI that shall not have been invalidated and to the fullest extent
permitted by applicable law.
Article VII
Capital Stock
Section 1. Certificates of Stock. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation; provided, however, that any of or all the
signatures on the certificate may be facsimile. The stock record books and the
blank stock certificate books shall be kept by the Secretary, or at the office
of such transfer agent or transfer agents as the Board of Directors may from
time to time by resolution determine. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature or signatures
shall have been placed upon any such certificate or certificates shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued by the Corporation, such certificate may nevertheless be issued by
the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue. The stock certificates shall
be consecutively numbered and shall be entered in the books of the Corporation
as they are issued and shall exhibit the holder's name and number of shares.
Section 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferable only on the books of the Corporation by the
holders thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or
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<PAGE> 15
authority to transfer, it shall be the duty of the Corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 3. Ownership of Shares. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
Section 4. Regulations Regarding Certificates. The Board of
Directors shall have the power and authority to make all such rules and
regulations as they may deem expedient concerning the issue, transfer and
registration or the replacement of certificates for shares of capital stock of
the Corporation.
Section 5. Lost or Destroyed Certificates. The Board of Directors
may determine the conditions upon which a new certificate of stock may be
issued in place of a certificate which is alleged to have been lost, stolen or
destroyed; and may, in their discretion, require the owner of such certificate
or his legal representative to give bond, with sufficient surety, to indemnify
the Corporation and each transfer agent and registrar against any and all
losses or claims which may arise by reason of the issue of a new certificate in
the place of the one so lost, stolen or destroyed.
Article VIII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as established from time to time by the Board of Directors.
Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall
have charge of the seal (if any). If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Treasurer or by the Assistant Secretary or Assistant Treasurer.
Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be deemed to be sufficient if
given (i) by telegraphic, cable or wireless transmission or (ii) by deposit of
the same in a post office box in a sealed prepaid wrapper addressed to the
person entitled thereto at his post office 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 transmission or mailing, as the case may be.
Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to
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<PAGE> 16
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
regular or special meeting of the stockholders, 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 or the bylaws.
Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 5. Facsimile Signatures. In addition to the provisions for
the use of facsimile signatures elsewhere specifically authorized in these
bylaws, facsimile signatures of any officer or officers of the Corporation may
be used whenever and as authorized by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records. Each director
and each member of any committee designated by the Board of Directors shall, in
the performance of his duties, be fully protected in relying in good faith upon
the books of account or reports made to the Corporation by any of its officers,
or by an independent certified public accountant, or by an appraiser selected
with reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
Article IX
Amendments
If provided in the Certificate of Incorporation of the Corporation,
the Board of Directors shall have the power to adopt, amend and repeal from
time to time bylaws of the Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to amend or repeal such
bylaws as adopted or amended by the Board of Directors.
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<PAGE> 1
EXHIBIT 3.17
CERTIFICATE OF INCORPORATION
OF
AUSTRAL HORIZON, INC.
1. The name of the corporation is Austral Horizon, Inc.
2. The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, the City of Wilmington, County
of New Castle, 19801. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of common stock which the
corporation shall have authority to issue is 1,000 and the par value of each
such share is $0.01.
5. The name and mailing address of each incorporator is as
follows:
NAME ADDRESS
---- -------
William Mark Young 333 Clay Avenue
Suite 800
Houston, Texas 77002
6. The corporation is to have perpetual existence.
7. The name and mailing address of each of the initial directors
of the corporation is as follows:
NAME ADDRESS
---- -------
Jay N. Silverman 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
8. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
<PAGE> 2
To adopt, amend or repeal the bylaws of the corporation.
9. Meetings of stockholders may be held within or without the
State of Delaware, as the bylaws may provide. The books of the corporation may
be kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the board of directors or in the bylaws of the corporation. Elections of
directors need not be by written ballot unless the bylaws of the corporation
shall so provide.
10. No director of the corporation shall be personally liable to
the corporation or any of its stockholders for monetary damages resulting from
a breach of fiduciary duty involving any act or omission of any director;
provided, however, that the foregoing provision shall not limit the liability
of any director (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Title 8, Section 174 of the Delaware Code or (iv) for any transaction
from which such director derived an improper personal benefit.
11. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on application in a summary way
of this corporation of any creditor or stockholder thereof or on the
application of any receiver or its receivers appointed for this corporation
under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
corporation under Section 279 of Title 8 of the Delaware Code order a meeting
of the creditors or a class of creditors, and/or of the stockholders or a class
of stockholders for this corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 1st day of July, 1998.
/s/ WILLIAM MARK YOUNG
-------------------------------
William Mark Young
<PAGE> 1
EXHIBIT 3.18
BYLAWS
OF
AUSTRAL HORIZON, INC.
Article I
Offices
Section 1. Registered Office. The registered office of the
Corporation required by the General Corporation Law of the State of Delaware to
be maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
Article II
Stockholders
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at the principal office of the Corporation, or at such other place
within or without the State of Delaware as shall be specified or fixed in the
notices or waivers of notice thereof.
Section 2. Quorum; Adjournment of Meetings. Unless otherwise
required by law or provided in the Certificate of Incorporation or these
bylaws, 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 any meeting of stockholders for the transaction of
business and the act of a majority of such stock so represented at any meeting
of stockholders at which a quorum is present shall constitute the act of the
meeting of stockholders. The stockholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Notwithstanding the other provisions of the Certificate of
Incorporation or these bylaws, the chairman of the meeting or the holders of a
majority of the issued and outstanding stock,
<PAGE> 2
present in person or represented by proxy, at any meeting of stockholders,
whether or not a quorum is present, shall have the power to adjourn such
meeting from time to time, without any notice other than announcement at the
meeting of the time and place of the holding of the adjourned meeting. If the
adjournment is for more than thirty (30) days, or if after the adjournment a
new record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at such
meeting. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally called.
Section 3. Annual Meetings. An annual meeting of the stockholders,
for the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, within or without the State of Delaware, on such
date, and at such time as the Board of Directors shall fix and set forth in the
notice of the meeting, which date shall be within thirteen (13) months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.
Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the
Chairman of the Board (if any), by the President or the Secretary upon the
written request therefor, stating the purpose or purposes of the meeting,
delivered to such officer, signed by the holder(s) of at least ten percent
(10%) of the issued and outstanding stock entitled to vote at such meeting.
Section 5. Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or 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 stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.
If the Board of Directors does not fix a record date for any meeting
of the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If,
in accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose
2
<PAGE> 3
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Notice of Meetings. Written notice of the place, date and
hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
Section 7. Stock List. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, 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. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
Section 8. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to a corporate action in
writing without a meeting may authorize another person or persons to act for
him by proxy. Proxies for use at any meeting of stockholders shall be filed
with the Secretary, or such other officer as the Board of Directors may from
time to time determine by resolution, before or at the time of the meeting.
All proxies shall be received and taken charge of and all ballots shall be
received and canvassed by the secretary of the meeting who shall decide all
questions touching upon the qualification of voters, the validity of the
proxies, and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed by the chairman of the meeting, in which
event such inspector or inspectors shall decide all such questions.
No proxy shall be valid after three (3) years from its date, unless
the proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers
3
<PAGE> 4
thereunder are to be exercised shall have and may exercise all the powers of
voting or giving consents thereby conferred, or if only one be present, then
such powers may be exercised by that one; or, if an even number attend and a
majority do not agree on any particular issue, each proxy so attending shall be
entitled to exercise such powers in respect of the same portion of the shares
as he is of the proxies representing such shares.
Section 9. Voting; Elections; Inspectors. Unless otherwise required
by law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as the bylaw (or comparable instrument) of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors (or
comparable body) of such corporation may determine. Shares registered in the
name of a deceased person may be voted by his executor or administrator, either
in person or by proxy.
All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.
At any meeting at which a vote is taken by ballots, the chairman of
the meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector.
Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.
Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the Chairman of the Board (if any),
nor President is present, by a chairman elected at the meeting. The Secretary
of the Corporation, if present, shall act as secretary of such meetings, or if
he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor an Assistant Secretary is present, then a secretary shall be
appointed by the chairman of the meeting. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order. Unless the chairman of the meeting of
stockholders shall otherwise determine, the order of business shall be as
follows:
4
<PAGE> 5
(a) Calling of meeting to order.
(b) Election of a chairman and the appointment of a secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting.
(d) Presentation and examination of proxies and determination of a
quorum.
(e) Reading and settlement of the minutes of the previous meeting.
(f) Reports of officers and committees.
(g) The election of directors if an annual meeting, or a meeting
called for that purpose.
(h) Unfinished business.
(i) New business.
(j) Adjournment.
Section 11. Treasury Stock. The Corporation shall not vote, directly
or indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.
Section 12. Action Without Meeting. Unless otherwise provided in the
Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall 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 such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than a unanimous written consent shall be given by the Secretary to those
stockholders who have not consented in writing.
Article III
Board of Directors
Section 1. Power; Number; Term of Office. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.
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The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the
stockholders (provided that no decrease in the number of directors which would
have the effect of shortening the term of an incumbent director may be made by
the stockholders). If the stockholders make no such determination, the number
of directors shall be the number set forth in the Certificate of Incorporation.
Each director shall hold office for the term for which he is elected, and until
his successor shall have been elected and qualified or until his earlier death,
resignation or removal.
Unless otherwise provided in the Certificate of Incorporation,
directors need not be stockholders nor residents of the State of Delaware.
Section 2. Quorum. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 3. Place of Meetings; Order of Business. The directors may
hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of
Directors business shall be transacted in such order as shall from time to time
be determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.
Section 4. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.
Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.
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Section 7. Removal. Any director or the entire Board of Directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided that, if the
Certificate of Incorporation expressly grants to stockholders the right to
cumulate votes for the election of directors and if less than the entire board
is to be removed, no director may be removed without cause if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which such director is a
part.
Section 8. Vacancies; Increases in the Number of Directors. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.
If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for which such directors shall have
been chosen, and until their successors shall be duly elected and shall
qualify.
Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.
Section 10. Action Without a Meeting; Telephone Conference Meeting.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation,
subject to the requirement for notice of meetings, members of the Board of
Directors, or members of any committee designated by the Board of Directors,
may participate in a meeting of such Board of Directors or committee, as the
case may be, by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in such a meeting shall constitute presence in
person at such meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
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Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
purpose of considering any such act or contract, and any act or contract that
shall be approved or be ratified by the vote of the stockholders holding a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote and present in person or by proxy at such meeting (provided
that a quorum is present), shall be as valid and as binding upon the
Corporation and upon all the stockholders as if it has been approved or
ratified by every stockholder of the Corporation. In addition, any such act or
contract may be approved or ratified by the written consent of stockholders
holding a majority of the issued and outstanding shares of capital stock of the
Corporation entitled to vote and such consent shall be as valid and as binding
upon the Corporation and upon all the stockholders as if it had been approved
or ratified by every stockholder of the Corporation.
Article IV
Committees
Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power of authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which may
require it. In addition to the above such committee or committees shall have
such other powers and limitations of authority as may be determined from time
to time by resolution adopted by the Board of Directors.
Section 2. Procedure; Meetings; Quorum. Any committee designated
pursuant to Section 1 of this Article shall choose its own chairman, shall keep
regular minutes of its proceedings and report the same to the Board of
Directors when requested, shall fix its own rules or procedures, and shall meet
at such times and at such place or places as may be provided by such rules, or
buy resolution of such committee or resolution of the Board of Directors. At
every meeting of any such committee, the presence of a majority of all the
members thereof shall constitute a quorum
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and the affirmative vote of a majority of the members present shall be
necessary for the adoption by it of any resolution.
Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In
the absence or disqualification of a member of a committee, the member or
members present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified
member.
Article V
Officers
Section 1. Number, Titles and Term of Office. The officers of the
Corporation shall be a President, a Secretary and, if the Board of Directors so
elects, a Chairman of the Board and such other officers as the Board of
Directors may from time to time elect or appoint. Each officer shall hold
office until his successor shall be duly elected and shall qualify or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Any number of offices may be held by the same person,
unless the Certificate of Incorporation provides otherwise. Except for the
Chairman of the Board, if any, no officer need be a director.
Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.
Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.
Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
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and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 6. Powers and Duties of the Chairman of the Board. If
elected, the Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors; and he shall have such other powers
and duties as designated in these bylaws and as from time to time may be
assigned to him by the Board of Directors.
Section 7. Powers and Duties of the President. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board or
if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 8. Vice Presidents. In the absence of the President, or in
the event of his inability or refusal to act, a Vice President designated by
the Board of Directors shall perform 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. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the Corporation shall so
act. The Vice Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 9. Treasurer. The Treasurer shall have responsibility for
the custody and control of all the funds and securities of the Corporation, and
he shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.
Section 10. Assistant Treasurers. Each Assistant Treasurer shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Treasurers shall exercise the powers of the Treasurer
during that officer's absence or inability or refusal to act.
Section 11. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose;
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he shall attend to the giving and serving of all notices; he may in the name of
the Corporation affix the seal of the Corporation to all contracts of the
Corporation and attest the affixation of the seal of the Corporation thereto;
he may sign with the other appointed officers all certificates for shares of
capital stock of the Corporation; he shall have charge of the certificate
books, transfer books and stock ledgers, and such other books and papers as the
Board of Directors may direct, all of which shall at all reasonable times be
open to inspection of any director upon application at the office of the
Corporation during business hours; he shall have such other powers and duties
as designated in these bylaws and as from time to time may be assigned to him
by the Board of Directors; and he shall in general perform all acts incident to
the office of Secretary, subject to the control of the chief executive officer
and the Board of Directors.
Section 12. Assistant Secretaries. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Secretaries shall exercise the powers of the
Secretary during that officer's absence or inability or refusal to act.
Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
Article VI
Indemnification of Directors,
Officers, Employees and Agents
Section 1. Right to Indemnification. Each person who was or is made
a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other capacity while serving or having agreed to
serve as a director or officer, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment) against all expense,
liability and loss (including, without limitation, attorneys' fees,
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judgments, fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement) reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a person who
has ceased to serve in the capacity which initially entitled such person to
indemnity hereunder and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that the Corporation shall
indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the board of directors of the Corporation.
The right to indemnification conferred in this Article VI shall be a contract
right and shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition;
provided, however, that, if the Delaware General Corporation Law requires, the
payment of such expenses incurred by a current, former or proposed director or
officer in his or her capacity as a director or officer or proposed director or
officer (and not in any other capacity in which service was or is or has been
agreed to be rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in advance of the
final disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.
Section 2. Indemnification of Employees and Agents. The Corporation
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the same scope
and effect as the indemnification of directors and officers provided for in
this Article.
Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
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Section 4. Nonexclusivity of Rights. The right to indemnification
and the advancement and payment of expenses conferred. in this Article VI shall
not be exclusive of any other right which any person may have or hereafter
acquire under any law (common or statutory), provision of the Certificate of
Incorporation of the Corporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as 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
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Savings Clause. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VI that shall not have been invalidated and to the fullest extent
permitted by applicable law.
Article VII
Capital Stock
Section 1. Certificates of Stock. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation; provided, however, that any of or all the
signatures on the certificate may be facsimile. The stock record books and the
blank stock certificate books shall be kept by the Secretary, or at the office
of such transfer agent or transfer agents as the Board of Directors may from
time to time by resolution determine. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature or signatures
shall have been placed upon any such certificate or certificates shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued by the Corporation, such certificate may nevertheless be issued by
the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue.
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The stock certificates shall be consecutively numbered and shall be entered in
the books of the Corporation as they are issued and shall exhibit the holder's
name and number of shares.
Section 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferable only on the books of the Corporation by the
holders thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Ownership of Shares. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
Section 4. Regulations Regarding Certificates. The Board of
Directors shall have the power and authority to make all such rules and
regulations as they may deem expedient concerning the issue, transfer and
registration or the replacement of certificates for shares of capital stock of
the Corporation.
Section 5. Lost or Destroyed Certificates. The Board of Directors
may determine the conditions upon which a new certificate of stock may be
issued in place of a certificate which is alleged to have been lost, stolen or
destroyed; and may, in their discretion, require the owner of such certificate
or his legal representative to give bond, with sufficient surety, to indemnify
the Corporation and each transfer agent and registrar against any and all
losses or claims which may arise by reason of the issue of a new certificate in
the place of the one so lost, stolen or destroyed.
Article VIII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as established from time to time by the Board of Directors.
Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall
have charge of the seal (if any). If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Treasurer or by the Assistant Secretary or Assistant Treasurer.
Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be
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deemed to be sufficient if given (i) by telegraphic, cable or wireless
transmission or (ii) by deposit of the same in a post office box in a sealed
prepaid wrapper addressed to the person entitled thereto at his post office
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 transmission or mailing, as the
case may be.
Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to 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 regular or special meeting of the
stockholders, 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 or the bylaws.
Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 5. Facsimile Signatures. In addition to the provisions for
the use of facsimile signatures elsewhere specifically authorized in these
bylaws, facsimile signatures of any officer or officers of the Corporation may
be used whenever and as authorized by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records. Each director
and each member of any committee designated by the Board of Directors shall, in
the performance of his duties, be fully protected in relying in good faith upon
the books of account or reports made to the Corporation by any of its officers,
or by an independent certified public accountant, or by an appraiser selected
with reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
Article IX
Amendments
If provided in the Certificate of Incorporation of the Corporation,
the Board of Directors shall have the power to adopt, amend and repeal from
time to time bylaws of the Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to amend or repeal such
bylaws as adopted or amended by the Board of Directors.
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EXHIBIT 3.19
CERTIFICATE OF INCORPORATION
OF
ATLANTIC HORIZON, INC.
1. The name of the corporation is Atlantic Horizon, Inc.
2. The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, the City of Wilmington, County
of New Castle, 19801. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of common stock which the
corporation shall have authority to issue is 1,000 and the par value of each
such share is $0.01.
5. The name and mailing address of each incorporator is as
follows:
NAME ADDRESS
---- -------
William Mark Young 333 Clay Avenue
Suite 800
Houston, Texas 77002
6. The corporation is to have perpetual existence.
7. The name and mailing address of each of the initial directors
of the corporation is as follows:
NAME ADDRESS
---- -------
Jay N. Silverman 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
8. In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized:
<PAGE> 2
To adopt, amend or repeal the bylaws of the corporation.
9. Meetings of stockholders may be held within or without the
State of Delaware, as the bylaws may provide. The books of the corporation may
be kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the board of directors or in the bylaws of the corporation. Elections of
directors need not be by written ballot unless the bylaws of the corporation
shall so provide.
10. No director of the corporation shall be personally liable to
the corporation or any of its stockholders for monetary damages resulting from
a breach of fiduciary duty involving any act or omission of any director;
provided, however, that the foregoing provision shall not limit the liability
of any director (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Title 8, Section 174 of the Delaware Code or (iv) for any transaction
from which such director derived an improper personal benefit.
11. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on application in a summary way
of this corporation of any creditor or stockholder thereof or on the
application of any receiver or its receivers appointed for this corporation
under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
corporation under Section 279 of Title 8 of the Delaware Code order a meeting
of the creditors or a class of creditors, and/or of the stockholders or a class
of stockholders for this corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 1st day of July, 1998.
/s/ WILLIAM MARK YOUNG
------------------------------
William Mark Young
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EXHIBIT 3.20
BYLAWS
OF
ATLANTIC HORIZON, INC.
Article I
Offices
Section 1. Registered Office. The registered office of the
Corporation required by the General Corporation Law of the State of Delaware to
be maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
Article II
Stockholders
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at the principal office of the Corporation, or at such other place
within or without the State of Delaware as shall be specified or fixed in the
notices or waivers of notice thereof.
Section 2. Quorum; Adjournment of Meetings. Unless otherwise
required by law or provided in the Certificate of Incorporation or these
bylaws, 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 any meeting of stockholders for the transaction of
business and the act of a majority of such stock so represented at any meeting
of stockholders at which a quorum is present shall constitute the act of the
meeting of stockholders. The stockholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Notwithstanding the other provisions of the Certificate of
Incorporation or these bylaws, the chairman of the meeting or the holders of a
majority of the issued and outstanding stock,
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present in person or represented by proxy, at any meeting of stockholders,
whether or not a quorum is present, shall have the power to adjourn such
meeting from time to time, without any notice other than announcement at the
meeting of the time and place of the holding of the adjourned meeting. If the
adjournment is for more than thirty (30) days, or if after the adjournment a
new record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at such
meeting. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally called.
Section 3. Annual Meetings. An annual meeting of the stockholders,
for the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, within or without the State of Delaware, on such
date, and at such time as the Board of Directors shall fix and set forth in the
notice of the meeting, which date shall be within thirteen (13) months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.
Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the
Chairman of the Board (if any), by the President or the Secretary upon the
written request therefor, stating the purpose or purposes of the meeting,
delivered to such officer, signed by the holder(s) of at least ten percent
(10%) of the issued and outstanding stock entitled to vote at such meeting.
Section 5. Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or 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 stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.
If the Board of Directors does not fix a record date for any meeting
of the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If,
in accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
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A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Notice of Meetings. Written notice of the place, date and
hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
Section 7. Stock List. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, 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. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
Section 8. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to a corporate action in
writing without a meeting may authorize another person or persons to act for
him by proxy. Proxies for use at any meeting of stockholders shall be filed
with the Secretary, or such other officer as the Board of Directors may from
time to time determine by resolution, before or at the time of the meeting.
All proxies shall be received and taken charge of and all ballots shall be
received and canvassed by the secretary of the meeting who shall decide all
questions touching upon the qualification of voters, the validity of the
proxies, and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed by the chairman of the meeting, in which
event such inspector or inspectors shall decide all such questions.
No proxy shall be valid after three (3) years from its date, unless
the proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers
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thereunder are to be exercised shall have and may exercise all the powers of
voting or giving consents thereby conferred, or if only one be present, then
such powers may be exercised by that one; or, if an even number attend and a
majority do not agree on any particular issue, each proxy so attending shall be
entitled to exercise such powers in respect of the same portion of the shares
as he is of the proxies representing such shares.
Section 9. Voting; Elections; Inspectors. Unless otherwise required
by law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as the bylaw (or comparable instrument) of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors (or
comparable body) of such corporation may determine. Shares registered in the
name of a deceased person may be voted by his executor or administrator, either
in person or by proxy.
All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.
At any meeting at which a vote is taken by ballots, the chairman of
the meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector.
Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.
Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the Chairman of the Board (if any),
nor President is present, by a chairman elected at the meeting. The Secretary
of the Corporation, if present, shall act as secretary of such meetings, or if
he is not present, an Assistant Secretary shall so act; if neither the
Secretary nor an Assistant Secretary is present, then a secretary shall be
appointed by the chairman of the meeting. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order. Unless the chairman of the meeting of
stockholders shall otherwise determine, the order of business shall be as
follows:
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(a) Calling of meeting to order.
(b) Election of a chairman and the appointment of a secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting.
(d) Presentation and examination of proxies and determination of a
quorum.
(e) Reading and settlement of the minutes of the previous meeting.
(f) Reports of officers and committees.
(g) The election of directors if an annual meeting, or a meeting
called for that purpose.
(h) Unfinished business.
(i) New business.
(j) Adjournment.
Section 11. Treasury Stock. The Corporation shall not vote, directly
or indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.
Section 12. Action Without Meeting. Unless otherwise provided in the
Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall 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 such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than a unanimous written consent shall be given by the Secretary to those
stockholders who have not consented in writing.
Article III
Board of Directors
Section 1. Power; Number; Term of Office. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.
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The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the
stockholders (provided that no decrease in the number of directors which would
have the effect of shortening the term of an incumbent director may be made by
the stockholders). If the stockholders make no such determination, the number
of directors shall be the number set forth in the Certificate of Incorporation.
Each director shall hold office for the term for which he is elected, and until
his successor shall have been elected and qualified or until his earlier death,
resignation or removal.
Unless otherwise provided in the Certificate of Incorporation,
directors need not be stockholders nor residents of the State of Delaware.
Section 2. Quorum. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 3. Place of Meetings; Order of Business. The directors may
hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of
Directors business shall be transacted in such order as shall from time to time
be determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.
Section 4. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.
Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in
the Certificate of Incorporation or these bylaws.
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Section 7. Removal. Any director or the entire Board of Directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided that, if the
Certificate of Incorporation expressly grants to stockholders the right to
cumulate votes for the election of directors and if less than the entire board
is to be removed, no director may be removed without cause if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which such director is a
part.
Section 8. Vacancies; Increases in the Number of Directors. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.
If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for which such directors shall have
been chosen, and until their successors shall be duly elected and shall
qualify.
Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.
Section 10. Action Without a Meeting; Telephone Conference Meeting.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation,
subject to the requirement for notice of meetings, members of the Board of
Directors, or members of any committee designated by the Board of Directors,
may participate in a meeting of such Board of Directors or committee, as the
case may be, by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in such a meeting shall constitute presence in
person at such meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
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Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
purpose of considering any such act or contract, and any act or contract that
shall be approved or be ratified by the vote of the stockholders holding a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote and present in person or by proxy at such meeting (provided
that a quorum is present), shall be as valid and as binding upon the
Corporation and upon all the stockholders as if it has been approved or
ratified by every stockholder of the Corporation. In addition, any such act or
contract may be approved or ratified by the written consent of stockholders
holding a majority of the issued and outstanding shares of capital stock of the
Corporation entitled to vote and such consent shall be as valid and as binding
upon the Corporation and upon all the stockholders as if it had been approved
or ratified by every stockholder of the Corporation.
Article IV
Committees
Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power of authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which may
require it. In addition to the above such committee or committees shall have
such other powers and limitations of authority as may be determined from time
to time by resolution adopted by the Board of Directors.
Section 2. Procedure; Meetings; Quorum. Any committee designated
pursuant to Section 1 of this Article shall choose its own chairman, shall keep
regular minutes of its proceedings and report the same to the Board of
Directors when requested, shall fix its own rules or procedures, and shall meet
at such times and at such place or places as may be provided by such rules, or
buy resolution of such committee or resolution of the Board of Directors. At
every meeting of any such committee, the presence of a majority of all the
members thereof shall constitute a quorum and the affirmative vote of a
majority of the members present shall be necessary for the adoption by it of
any resolution.
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Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In
the absence or disqualification of a member of a committee, the member or
members present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified
member.
Article V
Officers
Section 1. Number, Titles and Term of Office. The officers of the
Corporation shall be a President, a Secretary and, if the Board of Directors so
elects, a Chairman of the Board and such other officers as the Board of
Directors may from time to time elect or appoint. Each officer shall hold
office until his successor shall be duly elected and shall qualify or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Any number of offices may be held by the same person,
unless the Certificate of Incorporation provides otherwise. Except for the
Chairman of the Board, if any, no officer need be a director.
Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.
Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.
Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
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and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 6. Powers and Duties of the Chairman of the Board. If
elected, the Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors; and he shall have such other powers
and duties as designated in these bylaws and as from time to time may be
assigned to him by the Board of Directors.
Section 7. Powers and Duties of the President. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board or
if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 8. Vice Presidents. In the absence of the President, or in
the event of his inability or refusal to act, a Vice President designated by
the Board of Directors shall perform 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. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the Corporation shall so
act. The Vice Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 9. Treasurer. The Treasurer shall have responsibility for
the custody and control of all the funds and securities of the Corporation, and
he shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.
Section 10. Assistant Treasurers. Each Assistant Treasurer shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Treasurers shall exercise the powers of the Treasurer
during that officer's absence or inability or refusal to act.
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Section 11. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation and attest the
affixation of the seal of the Corporation thereto; he may sign with the other
appointed officers all certificates for shares of capital stock of the
Corporation; he shall have charge of the certificate books, transfer books and
stock ledgers, and such other books and papers as the Board of Directors may
direct, all of which shall at all reasonable times be open to inspection of any
director upon application at the office of the Corporation during business
hours; he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of Directors; and
he shall in general perform all acts incident to the office of Secretary,
subject to the control of the chief executive officer and the Board of
Directors.
Section 12. Assistant Secretaries. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Secretaries shall exercise the powers of the
Secretary during that officer's absence or inability or refusal to act.
Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
Article VI
Indemnification of Directors,
Officers, Employees and Agents
Section 1. Right to Indemnification. Each person who was or is made
a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other capacity while serving or having agreed to
serve as a director or officer, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment) against all expense,
liability and loss (including, without limitation, attorneys' fees,
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judgments, fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement) reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a person who
has ceased to serve in the capacity which initially entitled such person to
indemnity hereunder and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that the Corporation shall
indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the board of directors of the Corporation.
The right to indemnification conferred in this Article VI shall be a contract
right and shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition;
provided, however, that, if the Delaware General Corporation Law requires, the
payment of such expenses incurred by a current, former or proposed director or
officer in his or her capacity as a director or officer or proposed director or
officer (and not in any other capacity in which service was or is or has been
agreed to be rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in advance of the
final disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.
Section 2. Indemnification of Employees and Agents. The Corporation
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the same scope
and effect as the indemnification of directors and officers provided for in
this Article.
Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
12
<PAGE> 13
Section 4. Nonexclusivity of Rights. The right to indemnification
and the advancement and payment of expenses conferred. in this Article VI shall
not be exclusive of any other right which any person may have or hereafter
acquire under any law (common or statutory), provision of the Certificate of
Incorporation of the Corporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as 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
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Savings Clause. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VI that shall not have been invalidated and to the fullest extent
permitted by applicable law.
Article VII
Capital Stock
Section 1. Certificates of Stock. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation; provided, however, that any of or all the
signatures on the certificate may be facsimile. The stock record books and the
blank stock certificate books shall be kept by the Secretary, or at the office
of such transfer agent or transfer agents as the Board of Directors may from
time to time by resolution determine. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature or signatures
shall have been placed upon any such certificate or certificates shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued by the Corporation, such certificate may nevertheless be issued by
the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue.
13
<PAGE> 14
The stock certificates shall be consecutively numbered and shall be entered in
the books of the Corporation as they are issued and shall exhibit the holder's
name and number of shares.
Section 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferable only on the books of the Corporation by the
holders thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Ownership of Shares. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
Section 4. Regulations Regarding Certificates. The Board of
Directors shall have the power and authority to make all such rules and
regulations as they may deem expedient concerning the issue, transfer and
registration or the replacement of certificates for shares of capital stock of
the Corporation.
Section 5. Lost or Destroyed Certificates. The Board of Directors
may determine the conditions upon which a new certificate of stock may be
issued in place of a certificate which is alleged to have been lost, stolen or
destroyed; and may, in their discretion, require the owner of such certificate
or his legal representative to give bond, with sufficient surety, to indemnify
the Corporation and each transfer agent and registrar against any and all
losses or claims which may arise by reason of the issue of a new certificate in
the place of the one so lost, stolen or destroyed.
Article VIII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as established from time to time by the Board of Directors.
Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall
have charge of the seal (if any). If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Treasurer or by the Assistant Secretary or Assistant Treasurer.
Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be
14
<PAGE> 15
deemed to be sufficient if given (i) by telegraphic, cable or wireless
transmission or (ii) by deposit of the same in a post office box in a sealed
prepaid wrapper addressed to the person entitled thereto at his post office
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 transmission or mailing, as the
case may be.
Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to 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 regular or special meeting of the
stockholders, 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 or the bylaws.
Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 5. Facsimile Signatures. In addition to the provisions for
the use of facsimile signatures elsewhere specifically authorized in these
bylaws, facsimile signatures of any officer or officers of the Corporation may
be used whenever and as authorized by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records. Each director
and each member of any committee designated by the Board of Directors shall, in
the performance of his duties, be fully protected in relying in good faith upon
the books of account or reports made to the Corporation by any of its officers,
or by an independent certified public accountant, or by an appraiser selected
with reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
Article IX
Amendments
If provided in the Certificate of Incorporation of the Corporation,
the Board of Directors shall have the power to adopt, amend and repeal from
time to time bylaws of the Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to amend or repeal such
bylaws as adopted or amended by the Board of Directors.
15
<PAGE> 1
EXHIBIT 3.21
ARTICLES OF INCORPORATION
OF
HORIZON SEISMIC, INC.
The undersigned natural person of the age of eighteen (18) years or
more, acting as Incorporator of a corporation (hereinafter referred to as the
"Corporation") under the Texas Business Corporation Act (hereinafter referred
to as the "Act"), does hereby adopt the following Articles of Incorporation for
the Corporation:
ARTICLE I
Name
The name of the Corporation is Horizon Seismic, Inc.
ARTICLE II
Duration
The period of duration of the Corporation is perpetual.
ARTICLE III
Purpose
The purpose for which. the Corporation is organized is the transaction
of any or all lawful business for which corporations may be incorporated under
the Act.
ARTICLE IV
Capital Stock
Section 1. Authorized Shares. The aggregate number of shares which
the Corporation shall have authority to issue is 100,000, with a par value per
share of $.10. The shares are designated as Common Stock and have identical
rights and privileges in every respect.
Section 2. Preemptive Rights. No shareholder of the Corporation shall
by reason of his holding shares in the Corporation possess a preemptive and
preferential right to purchase or subscribe to additional, unissued or treasury
shares of any class of the Corporation, now or hereafter to be authorized, and
any notes, debentures, bonds or other securities convertible into or carrying
options or warrants to purchase shares of any class, now or hereafter to be
authorized.
<PAGE> 2
Section 3. Cumulative Voting Prohibited. Directors shall be elected
by majority vote. Cumulative voting is expressly denied.
ARTICLE V
Initial Consideration for Issuance of Shares
The Corporation will not commence business until it has received for
the issuance of its shares consideration of the value of One Thousand Dollars
($1,000.00), consisting of money, labor done or property actually received.
ARTICLE VI
Initial Registered Office and Agent
The address of the initial registered office of the Corporation is
7000 Texas Commerce Tower, Houston, Texas 77002, and the name of the initial
registered agent of the Corporation at such address is Ralph K. Miller, Jr.
ARTICLE VII
Board of Directors
The number of directors of the Corporation shall be fixed from time to
time in the manner provided in the Bylaws; but no decrease shall have the
effect of shortening the term of any incumbent director. The number
constituting the initial Board of Directors is three, and the name and address
of each person who is to serve as director until the first annual meeting of
shareholders, or until their successor is elected and qualified, is as follows:
<TABLE>
Name Address
---- -------
<S> <C>
Neil Campbell 11200 Westheimer, Suite 200
Houston, Texas 77042
Gerry Harrison 10200 Westheimer, Suite 200
Houston, Texas 77042
George Purdie 10200 Westheimer, Suite 200
Houston, Texas 77042
</TABLE>
2
<PAGE> 3
ARTICLE VIII
Purchase of Shares
The Corporation may purchase directly or indirectly its own shares to
the extent the money or other property paid or the indebtedness issued
therefore does not (i) render the Corporation unable to pay its debts as they
become due in the usual course of business or (ii) exceed the surplus of the
Corporation, as defined in the Act. Notwithstanding the limitations contained
in the preceding sentence, the Corporation may purchase any of its own shares
for the following purposes, provided that the net assets of the Corporation, as
defined in the Act, are not less than the amount of money or other property
paid or the indebtedness issued therefor: (i) to eliminate fractional shares;
(ii) to collect or compromise indebtedness owed by or to the Corporation; (iii)
to pay dissenting shareholders entitled to payment for their shares under the
Act; and (iv) to effect the purchase or redemption of redeemable shares in
accordance with the Act.
ARTICLE IX
Bylaws
The initial Bylaws of the Corporation shall be adopted by the Board of
Directors. The power to alter, amend or repeal the Bylaws of the Corporation
or adopt new Bylaws is vested in the Board of Directors, subject to repeal or
change by action of the shareholders of the Corporation.
ARTICLE X
Indemnification
No director of the Corporation shall be liable to the Corporation or
its shareholders for monetary damages for an act or omission in the director's
capacity as a director, except that this article does not eliminate or limit
the liability of a director for: (i) a breach of a director's duty of loyalty
to the Corporation or its shareholders; (ii) an act or omission not in good
faith or that involves intentional misconduct or a knowing violation of law;
(iii) a transaction from which a director received an improper benefit, whether
or not the benefit resulted from an action taken within the scope of, the
director's office; (iv) an act or omission for which the liability of a
director is expressly provided for by statute; or (v) an act related to an
unlawful stock repurchase or payment of a dividend.
3
<PAGE> 4
ARTICLE XI
Incorporator
The name and address of the Incorporator is: Ralph K. Miller, Jr.,
7000 Texas Commerce Tower, Houston, Texas 77002.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
12th day of July, 1993.
INCORPORATOR:
/s/ RALPH K. MILLER, JR.
------------------------------------
Ralph K. Miller, Jr.
4
<PAGE> 5
ARTICLES OF CORRECTION
TO THE
ARTICLES OF INCORPORATION OF
HORIZON SEISMIC, INC.
The undersigned submits these articles pursuant to Texas Civil
Statutes article 1302-7.01 to correct a document which is an inaccurate record
of the entity action, contains an inaccurate or erroneous statement, or was
defectively or erroneously executed, sealed, acknowledged, or verified.
ARTICLE ONE
The name of the entity is Horizon Seismic, Inc.
ARTICLE TWO
The document to be corrected is the Articles of Incorporation which
was filed in the office of the Secretary of State on the 13th day of July,
1993.
ARTICLE THREE
The inaccuracy, error, or defect to be corrected is: The address
listed in Article VII for the initial corporate directors Gerry Harrison and
George Purdie.
ARTICLE FOUR
As corrected, the inaccurate, erroneous, or defective portion of the
document reads as follows:
<TABLE>
<S> <C>
Gerry Harrison 11200 Westheimer, Suite 200
Houston, Texas 77042
George Purdie 11200 Westheimer, Suite 200
Houston, Texas 77042
</TABLE>
By: /s/ NEIL A.M. CAMPBELL
-------------------------------
Name: Neil A.M. Campbell
-------------------------------
An Authorized Corporate
Officer or Director
<PAGE> 6
ARTICLE OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act (the "Act"), the undersigned corporation adopts the following
Articles of Amendment to its Articles of Incorporation:
ARTICLE 1
The name of the corporation is Horizon Seismic, Inc.
ARTICLE 2
The following amendment to the Articles of Incorporation was adopted
by the sole shareholder of the corporation on May 23, 1997. The sole
shareholder of the corporation deemed it to be in the best interest of the
corporation to change the name of the corporation from Horizon Seismic, Inc. to
Eagle Geophysical Offshore, Inc.
The amendment alters or changes Article I of the Articles of
Incorporation, as amended, and the full text of such provision as amended is as
follows:
"ARTICLE I
Tne name of the corporation is Eagle Geophysical Offshore, Inc."
ARTICLE 3
The number of shares of the corporation outstanding at the time of
such adoption was 10,000 and the number of shares entitled to vote thereon was
10,000.
ARTICLE 4
The holders of all the shares outstanding and entitled to vote on said
amendment have signed a consent in writing pursuant to Article 9.10 of the Act
adopting said amendment and any written notice required by Article 9.10 of the
Act has been given.
Dated effective as of May 23, 1997.
HORIZON SEISMIC, INC.
By: /S/ GERALD M. HARRISON
-------------------------------
Gerald M. Harrison, President
<PAGE> 7
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act (the "Act"), the undersigned corporation adopts the following
Articles of Amendment to the Articles of Incorporation.
ARTICLE 1
The name of the corporation is Eagle Geophysical Offshore, Inc.
ARTICLE 2
The following amendment to the Articles of Incorporation was adopted
by the sole shareholder of the corporation on September 29, 1997. The sole
shareholder of the corporation deemed it to be in the best interest of the
corporation to change the name of the corporation from Eagle Geophysical
Offshore, Inc. to Eagle Geophysical GOM, Inc.
The amendment alters or changes Article I of the Articles of
Incorporation, as amended, and the full text of such provision as amended is as
follows:
"ARTICLE I
The name of the corporation is Eagle Geophysical GOM, Inc."
ARTICLE 3
The number of shares of the corporation outstanding at the time of
such adoption was 10,000 and the number of shares entitled to vote thereon was
10,000.
ARTICLE 4
The holders of all the shares outstanding and entitled to vote on said
amendment have signed a consent in writing pursuant to Article 9.10 of the Act
adopting said amendment and any written notice required by Article 9.10 of the
Act has been given.
Dated effective as of September 29, 1997.
EAGLE GEOPHYSICAL OFFSHORE, INC.
By: /s/ JAY N. SILVERMAN
--------------------------------
Jay N. Silverman, Vice President
<PAGE> 1
EXHIBIT 3.22
BYLAWS
OF
HORIZON SEISMIC, INC.
I.
CAPITAL STOCK
Section 1. Certificates Representing Shares. Certificates in
the form determined by the Board of Directors and as shall conform to the
requirements of the statutes, the Articles of Incorporation and these Bylaws
shall be delivered representing all shares to which shareholders are entitled.
Such certificates shall be consecutively numbered and shall be entered in the
share transfer records of the Company as they are issued. Each certificate
shall state on its face the holder's name, the number and class of shares, the
par value of shares or a statement that such shares are without par value, and
such other matters as may be required by law. Each certificate shall be signed
by the President or a Vice President and either the Secretary or any Assistant
Secretary, and may bear the seal of the Company or a facsimile thereof . The
signatures of such officers upon a certificate may be facsimiles, if the
certificate is countersigned by a transfer agent or registered by a registrar,
either of which is other than the Company itself or an employee of the Company.
In case any officer who has signed or whose facsimile signature has been placed
upon such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Company with the same effect as
if such person were that officer at the date of its issuance.
Section 2. Issuance. Shares having a par value (both treasury
and authorized but unissued) may be issued for such consideration, expressed in
dollars, not less than par value, and to such persons as the Board of Directors
may determine from time to time. Shares without par value may be issued for
such consideration, expressed in dollars, as may be fixed from time to time by
the Board of Directors. Shares may not be issued until the full amount of the
consideration, fixed as provided by law, has been paid.
Section 3. Payment for Shares.
(a) The consideration for the issuance of shares shall consist of
money paid, labor done (including services actually performed for the Company),
or property (tangible or intangible) actually received. Neither promissory
notes nor the promise of future services shall constitute payment for shares.
(b) In the absence of fraud in the transaction, the judgment of
the Board of Directors as to the value of consideration received shall be
conclusive.
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<PAGE> 2
(c) When consideration, fixed as provided by law, has been paid,
the shares shall be deemed to have been issued and shall be considered fully
paid and nonassessable.
(d) The consideration received for shares shall be allocated by
the Board of Directors, in accordance with law, between stated capital and
capital surplus accounts.
Section 4. Lost, Stolen, or Destroyed Certificates. The Company
shall issue a new certificate in place of any certificate for shares previously
issued if the registered owner of the certificate:
(a) Makes proof in affidavit form that it has been lost,
destroyed, or wrongfully taken; and
(b) Requests the issuance of a new certificate before the Company
has notice that the certificate has been acquired by a purchaser for value in
good faith and without notice of an adverse claim; and
(c) Gives a bond in such form, and with such surety or sureties,
with fixed or open penalty, as the Company may direct, to indemnify the Company
(and its transfer agent and registrar, if any) against any claim that may be
made on account of the alleged loss, destruction or theft of the certificate;
and
(d) Satisfies any other reasonable requirements imposed by the
Company.
When a certificate has been lost, apparently destroyed, or wrongfully taken,
and the holder of record fails to notify the Company within a reasonable time
after the holder has notice of it, and the Company registers a transfer of the
shares represented by the certificate before receiving such notification, the
holder of record is precluded from making any claim against the Company for the
transfer or for a new certificate.
Section 5. Registered Owner. Prior to due presentment for
registration or transfer of a certificate for shares, the Company is entitled
to treat the registered owner as the person exclusively entitled to vote, to
receive notices and otherwise to exercise all the rights and powers of a
shareholder. The Company shall not be bound to recognize any equitable or
other claim to or interest in such share or 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 6. Shareholders of Record. The Board of Directors of
the Company may appoint one or more transfer agents or registrars of any class
of stock of the Company. Unless and until such appointment is made, the
Secretary of the Company shall maintain among other records a stock certificate
book, the stubs in which shall set forth the names and addresses of the holders
of all issued shares of the Company, the number of shares held by each, the
certificate numbers representing such shares, and whether or not such shares
originate from original issues or from transfer. The names
-2-
<PAGE> 3
and addresses of the shareholders, as they appear on the stock certificate
book, shall be the official list of shareholders of record of the Company for
all purposes. The Company shall be entitled to treat the holder of record of
any shares of the Company as the owner thereof for all purposes, and shall not
be bound to recognize any equitable or other claim to, or interest in, such
shares or rights deriving from such shares, on the part of any other person,
including (but without limitation) a purchaser, assignee, or transferee, unless
and until such other person becomes the holder of record of such shares,
whether or not the Company shall have either actual or constructive notice of
the interest of such other person.
Section 7. Transfer of Shares. The shares of the Company shall
be transferable only on the share transfer records of the Company by the holder
of record thereof, or by a duly authorized attorney or legal representative,
upon endorsement and surrender for cancellation of the certificates) for such
shares. The Company shall register the transfer of a certificate for shares
presented to it for transfer provided the Company has no notice of an adverse
claim or has discharged any duty to inquire into such a claim, and any
applicable law relating to the collection of taxes has been complied with. All
certificates surrendered for transfer shall be cancelled, and no new
certificate shall be issued until a former certificate or certificates for a
like number of shares shall have been surrendered and cancelled, except that in
the case of a lost, destroyed, or mutilated certificate, a new certificate may
be issued therefor upon such conditions for the protection of the Company and
any transfer agent or registrar (including the requirement of a bond or of
indemnification) as the Board of Directors or the Secretary may prescribe.
Section 8. Agreements Among Shareholders. The shareholders of
the Company shall have the power to make, amend and terminate any Voting
Agreement, Voting Trust or Buy-Sell Agreement as they may deem proper.
II.
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. All meetings of shareholders
shall be held at the principal office of the Company, or at such other place
within or without the State of Texas as may be designated by the Board of
Directors or officer calling the meeting or as shall be specified or fixed in
the respective notices or waivers of notice thereof.
Section 2. Annual Meeting. Annual meetings of the shareholders,
commencing with the year 1994, shall be held on the second Tuesday of April of
each year at such hour as may be designated in the notice of the meeting, if
such day is not a legal holiday and, if a holiday, then on the first following
day that is not a legal holiday. The Board of Directors may postpone the time
of holding the annual meeting of shareholders for such period not exceeding
ninety (90) days, as they may deem advisable. Failure to hold the annual
meeting at the designated time shall not work a dissolution of the Company nor
impair the powers, rights and duties of the Company's officers and Directors.
At annual meetings, the shareholders shall elect Directors and transact such
other
-3-
<PAGE> 4
business as may properly be brought before the meeting. If the election of
Directors shall not be held on the day designated herein for any annual meeting
of the shareholders or at any adjournment thereof, the Board of Directors shall
cause the election to be held at a special meeting of the shareholders as soon
thereafter as is convenient.
Section 3. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise prescribed by
statute, may be called by the President or the Board of Directors. Special
meetings of shareholders shall be called by the President or the Secretary upon
the written request of the holders of shares equal to not less than ten percent
(10%) of all the outstanding shares of the Company entitled to vote at such
meeting. Such request shall state the purpose or purposes of such meeting and
the matters proposed to be acted on thereat. Business transacted at a special
meeting shall be confined to the purposes stated in the notice of the meeting.
Section 4. Notice of Meeting. Written notice of all meetings
stating the place, day, and hour of each meeting, and in the case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered by or at the direction of the President, or the Secretary, or the
officer or persons calling the meeting, not less than ten (10) nor more than
fifty (50) days before the date of the meeting, either personally or by mail,
to each shareholder entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his address as it appears on the share transfer
records of the Company, with postage thereon prepaid. Waiver by a shareholder
in writing of notice of a shareholders, meeting, signed by the shareholder,
whether before or after the time of such meeting, shall be equivalent to the
giving of such notice. Attendance by a shareholder, whether in person or by
proxy, at a shareholders' meeting shall constitute a waiver of notice of such
meeting of which such shareholder has had no notice.
Section 5. Closing of Share Transfer Records and Fixing of
Record Date for Meetings. The Board of Directors may, by resolution, fix in
advance a date as the record date for the purpose of determining shareholders
entitled to notice of, or to vote at, any meeting of shareholders or any
adjournment thereof, or shareholders entitled to receive payment of any
dividend or the allotment of any rights, or in order to make a determination of
shareholders for any other purposes (other than determining shareholders
entitled to consent to action by shareholders proposed to be taken without a
meeting of shareholders). Such date, in any case, shall not be more than sixty
(60) days and less than ten (10) days prior to the date on which the particular
action requiring such determination of shareholders is to be taken. In lieu of
fixing a record date, the Board of Directors may provide that the share
transfer records shall be closed for a stated period but not to exceed, in any
case, twenty (20) days. If the share transfer records are closed for the
purpose of determining shareholders entitled to notice of, or to vote at, a
meeting of shareholders, such records shall be closed for at least ten (10)
days immediately preceding such meeting. If the share transfer records are not
closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record
date for such
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determination of shareholders. When a determination of shareholders entitled
to vote at any meeting of shareholders has been made as provided in this
section, such determination shall apply to any adjournment thereof except where
the determination has been made through the closing of the share transfer
records and the stated period of closing has expired.
Section 6. Voting List. The officer or agent having charge of
the share transfer records for shares of the Company shall make, at least ten
(10) days before each meeting of shareholders, a complete list of the
shareholders entitled to vote at such meeting or any adjournment thereof,
arranged in alphabetical order, with the address of and the number of shares
held by each, which list, for a period of ten (10) days prior to such meeting,
shall be kept on file at the registered office of the Company and shall be
subject to inspection by any shareholder at any time during usual business
hours. Such list shall also be produced and kept open at the time and place of
the meeting and shall be subject to inspection by any shareholder during the
whole time of the meeting. The original share transfer records shall be prima
facie evidence as to which shareholders are entitled to examine such list or
transfer records or to vote at any meeting of shareholders. Failure to comply
with any requirements of this Section shall not affect the validity of any
action taken at such meeting.
Section 7. Voting at Meetings. Each holder of shares of the
Company entitled to vote shall be entitled to one vote upon each matter
submitted to a vote at a meeting of shareholders for each such share, either in
person or by proxy, except to the extent that the voting rights of the shares
of any class or classes are limited or denied by the Articles of Incorporation.
Section 8. Proxies. At any meeting of shareholders, a
shareholder having the right to vote may vote by proxy executed in writing by
the shareholder or by a duly authorized attorney-in-fact. A telegram, telex,
cablegram, or similar transmission by the shareholder, or a photographic,
photostatic, facsimile, or similar reproduction of a writing executed by the
shareholder, shall be treated as an execution in writing for purposes of this
Section. Such proxy shall be filed with the Secretary of the Company before or
at the time of the meeting. No proxy shall be valid after eleven (11) months
from the date of its execution, unless otherwise provided in the proxy. Each
proxy shall be revocable unless expressly provided therein to be irrevocable,
and unless otherwise made irrevocable by law.
Section 9. Quorum. Unless otherwise provided in the Articles of
Incorporation of the Company, the holders of a majority of the shares issued
and outstanding and entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders, but if a quorum is not
represented, a majority in interest of those represented may adjourn the
meeting from time to time, without further notice other than announcement at
the meeting, until a quorum shall be present or represented. If the
adjournment is for more than fifty (50) days, or if after adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each shareholder of record entitled to vote at such
meeting. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. The vote of the holders of a majority of
the shares entitled to vote and thus represented at a meeting at which a quorum
is present shall be the
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act of the shareholders' meeting unless the vote of a greater number is
required by law, the Articles of Incorporation or these Bylaws, in which case
the vote of such greater number shall be requisite to constitute the act of the
meeting. The shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
Section 10. Presiding Officer and Conduct of Meetings. The
Chairman of the Board of Directors shall preside at all meetings of the
shareholders and shall automatically serve as Chairman of such meetings. In
the absence of the Chairman of the Board of Directors, or if the Directors
neglect or fail to elect a Chairman, then the President of the corporation
shall preside at the meetings of the shareholders and shall automatically be
the Chairman of such meeting, unless and until a different person is elected by
a majority of the shares entitled to vote at such meeting.
Section 11. Action by Shareholders without Meeting. Any action
required to be taken at a meeting of the shareholders, or any other action
which 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,
setting forth the action so taken, shall be signed by all of the holders of
outstanding stock having not less than the minimum number of votes which would
be necessary to authorize or take such action at a meeting at which all shares
entitled to vote with respect to the subject matter thereof were present and
voted. Every written consent shall bear the date of signature of each
shareholder. Prompt notice of the taking of any action by the shareholders
without a meeting by less than unanimous written consent shall be given to
those shareholders who did not consent in writing to the action.
Section 12. Fixing Record Dates for Consents to Action. Unless a
record date shall have previously been fixed or determined pursuant to Section
5 of this Article, whenever action is proposed to be taken by consent in
writing without a meeting of shareholders, the Board of Directors may fix a
record date for the purpose of determining shareholders entitled to consent to
that action, which record date shall not precede, and shall not be more than
ten (10) days after, the date upon which the resolution fixing the record date
is adopted by the Board of Directors. If no record date has been fixed by the
Board of Directors and the prior action of the Board of Directors is not
required by applicable law, the record date for determining shareholders
entitled to consent to action in writing without a meeting shall be the first
date on which a signed written consent setting forth the action or proposed
action to be taken is delivered to the Company by delivery to its registered
office, its principal place of business or an officer or agent of the Company
having custody of the books in which proceedings of meetings of shareholders
are recorded. Delivery shall be by hand or by certified or registered mail,
return receipt requested. Delivery to the Company's principal place of
business shall be addressed to the President or the principal executive officer
of the Company. If no record date shall have been fixed by the Board of
Directors and prior action of the Board of Directors is required by statute,
the record date for determining shareholders entitled to consent to action in
writing without a meeting shall be at the close of business on the date on
which the Board of Directors adopts a resolution taking such prior action.
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Section 13. Telephone Meetings. Subject to the provisions of
applicable law and these Bylaws regarding notice of meetings, the shareholders
may, unless otherwise restricted by the Articles of Incorporation or these
Bylaws, participate in and hold a meeting using 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, except when a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting was not lawfully
called or convened.
III.
DIRECTORS
Section 1. Management. The powers of the Company shall be
exercised by or under the authority of, and the business, affairs and property
of the Company shall be managed and controlled under the direction of the Board
of Directors which may exercise all such powers of the Company and do all such
lawful acts and things as are not by statute, the Articles of Incorporation or
by these Bylaws directed or required to be exercised or done by the
shareholders.
Section 2. Number and Tenure. The Board of Directors shall
consist of at least three (3) members, which number shall be fixed by the Board
of Directors and may be increased or decreased from time to time by resolution
of the Board of Directors, but shall never be less than one (1) and, provided
that no decrease shall effect the shortening of the term of any incumbent
Director. The Directors shall be elected at each annual meeting of
shareholders, except as provided in Section 4 below. At each election, the
persons receiving the greatest number of votes shall be elected Directors.
Unless sooner removed in accordance with these Bylaws or until the Company has
received a written resignation, members of the Board of Directors shall hold
office until the next succeeding annual meeting of shareholders and until their
successors shall have been elected and qualified.
Section 3. Qualifications. Directors need not be shareholders
of the Company or residents of any particular state.
Section 4. Vacancies. Any vacancies occurring in the Board of
Directors, including vacancies resulting from any increase in the number of
Directors, may be filled by the affirmative vote of a majority of the Directors
then in office, though less than a quorum of the entire Board, and the
Directors so elected shall hold office for the unexpired term of their
predecessors in office until the next annual meeting and until their successors
are elected and have qualified. A vacancy shall be deemed to exist by reason
of the death, resignation, or upon the failure of shareholders to elect
Directors to fill the unexpired terms of Directors removed in accordance with
the provisions of these Bylaws.
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Section 5. Place of Meeting. Meetings of the Board of Directors
may be held either within or without the State of Texas, at whatever place is
specified by the officer or Director calling a meeting or at the same place as
the annual meeting of shareholders. In the absence of specific designation,
the meeting shall be held at the principal office of the Company.
Section 6. Regular Meetings. The Board of Directors shall meet
each year immediately following the annual meeting of the shareholders, at the
place of such meeting, for the transaction of such business as may properly be
brought before it. No notice of annual meetings need be given to either old or
new members of the Board of Directors. Regular meetings may be held at such
other times as shall be designated by the Board of Directors.
Section 7. Special Meetings. Special meetings of the Board of
Directors may be held at any time upon the call or at the request of the
President, the Secretary, or any Director of the Company. The person or
persons authorized to call special meetings of the Board of Directors may fix
any place for holding any special meeting of the Board of Directors called by
them. Notice shall be delivered personally or sent by mail or telegram to the
last known address of each Director at least three (3) days before the meeting.
Oral notice may be substituted for such written notice if given not later than
one (1) day before the meeting. Notice of the time, place, and purpose of such
meeting may be waived in writing before or after such meeting, and shall be
equivalent to the giving of notice. Any Director may waive notice of any
meeting. Attendance of a Director at such meeting shall also constitute waiver
of notice thereof, except where the Director attends for the express purpose of
objecting to the transaction of any business on the ground that the meeting is
not lawfully called or convened. Except as otherwise herein provided, neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the Board of Directors need be specified in the notice or waiver of
such meeting.
Section 8. Quorum. At all meetings of the Board of Directors,
the presence of a majority of the number of Directors shall be necessary and
sufficient to constitute a quorum for the transaction of business. If a quorum
is not present at a meeting of the Board of Directors, the Directors present
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present. The act of a majority
of the Directors present at such meeting at which a quorum is present shall be
the act of the Board of Directors. Any regular or special Directors, meeting
may be adjourned from time to time by those present, whether a quorum is
present or not.
Section 9. Chairman. A majority of the Directors shall elect
from its members a Chairman who shall preside at all meetings of the Board of
Directors. The Chairman shall hold this office until the next regular meeting
of the Directors or until his successor shall have been elected and qualified.
In the absence of the Chairman, or if the Directors neglect or fail to elect a
Chairman, then the President of the Company, if he is a member of the Board of
Directors, shall automatically serve as Chairman of the Board of Directors.
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Section 10. Secretary. The Board of Directors shall designate a
person to serve as Secretary at the meetings of the Board. The Secretary of
the Board of Directors may be the Secretary of the Company or may be any
officer or agent the Company or a member of the Board of Directors. The
Secretary of the Board shall be present at all Directors' meetings and record
the minutes of such meetings. If the Secretary of the Company is not
available, then the Chairman, or the President, as the case may be, may appoint
a person to serve as Secretary of the meeting, and such person shall not be
required to be a member of the Board of Directors nor an officer of the
Company.
Section 11. Compensation. The Board of Directors shall have
authority to determine, from time to time, by resolution of the Board of
Directors, the amount of compensation, if any, which shall be paid to its
members for their services as Directors and as members of standing or special
committees. No such payment shall preclude any Director from serving the
Company in any other capacity and receiving compensation therefor.
Section 12. Interest of Directors in Contracts. Any contract or
other transaction between the Company and one (1) or more of its Directors, or
between the Company and any firm of which one or more of its Directors are
members or employees, or in which they are interested, or between the Company
and any corporation or association of which one or more of its Directors are
shareholders, members, directors, officers, or employees, or in which they are
interested, shall be valid for all purposes, notwithstanding the presence of
such Director or Directors at the meeting of the Board of Directors of the
Company, which acts upon, or in reference to, such contract or transaction, and
notwithstanding their participation in such action, if the fact of such
interest shall be disclosed or known to the Board of Directors and the Board of
Directors shall, nevertheless, authorize, approve, and ratify such contract or
transaction by a vote of a majority of the Directors present, such interested
Director or Directors to be counted in determining whether a quorum is present,
but not to be counted in calculating the majority of such quorum necessary to
carry such vote. This Section shall not be construed to invalidate any
contract or other transaction which would otherwise be valid under the common
and statutory law applicable thereto.
Section 13. Removal. The entire Board of Directors or any
individual Director may be removed from office, either for or without cause, at
any special meeting of shareholders by the affirmative vote of the holders of a
majority of the outstanding shares entitled to vote at elections of Directors.
The notice calling such meeting shall give notice of the intention to act upon
such matter, and if the notice so provides, the vacancy caused by such removal
may be filled at such meeting by vote of the holders of a majority of the
shares represented at such meeting and entitled to vote for the election of
Directors. For cause, a Director may be removed at any meeting of Directors by
a majority vote of the Directors in office.
Section 14. Action by Directors Without Meeting. Any action
required or permitted to be taken at a meeting of the Board of Directors or any
executive committee may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by all the members of the
Board of Directors or executive committee, as the case may be. As permitted by
Article 9.10C
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of the Texas Business Corporation Act, members of the Board of Directors, or
members of any committee designated by such Board, may participate and hold a
meeting of the Board of Directors or any committee 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 such
meeting pursuant to a conference call or similar communications equipment shall
constitute presence in person at such meeting.
IV.
OFFICERS
Section 1. Officers. The officers of the Company shall be
elected by the Board of Directors at such time and in such manner as may be
prescribed by the Bylaws. The officers shall consist of a President and a
Secretary and such other officers and assistant officers as may be deemed
necessary and as may be elected or appointed by the Board of Directors, from
time to time, or chosen in such other manner as may be prescribed by the
Bylaws. Two or more offices may be held by the same person, but, when
applicable, no officer shall execute, acknowledge, or verify any instrument in
more than one capacity if such instrument is required by law, the Articles of
Incorporation, or these Bylaws to be executed, acknowledged, or verified by two
or more officers. None of the elected officers, with the exception of the
Chairman of the Board, must be a member of the Board of Directors.
Section 2. Election and Term of Office. The officers of the
Company to be elected by the Board of Directors shall be elected annually by
the Board of Directors at the first meeting of the Board of Directors held
after each annual meeting of the shareholders. If the election of officers
shall not be held at such meeting, such election shall be held as soon
thereafter as conveniently may be held. The officers shall hold office until
their earlier death, resignation, retirement, disqualification or removal from
office and until their successors shall have been duly elected and qualified.
Section 3. Compensation. The compensation of the officers shall
be determined by the Board of Directors and may be altered by the Board, from
time to time, except as otherwise provided by contract, and no officer shall be
prevented from receiving such compensation by reason of the fact that such
officer is also a Director of the Company. All officers shall be entitled to
be paid or reimbursed for all costs and expenditures incurred in the Company's
business.
Section 4. Vacancies. Whenever any vacancies shall occur in any
office by death, resignation, increase in the number of officers of the
Company, or otherwise, the same shall be filled by the Board of Directors, and
the officer so elected shall hold office for the unexpired portion of such term
or until a successor is chosen and qualified.
Section 5. Removal. Any officer or agent elected or appointed
by the Board of Directors may be removed by the Board of Directors, with or
without cause, whenever in its judgment the best
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interests of the Company will be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights.
Section 6. President. The President may serve as the Chief
Executive Officer of the Company unless the Board of Directors designates a
chief executive officer. Subject to the control of the Board of Directors, the
President shall have general executive charge, management and control of the
affairs, properties and operations of the Company in the ordinary course of its
business, with all such duties, powers and authority with respect to such
affairs, properties and operations as may be reasonably incident to such
responsibilities; the President may appoint or employ and discharge employees
and agents of the Company and fix their compensation; the President may make,
execute, acknowledge and deliver any and all contracts, leases, deeds,
conveyances, assignments, bills of sale, transfers, releases and receipts, any
and all mortgages, deeds of trust, indentures, pledges, chattel mortgages,
liens and hypothecations, and any and all bonds, debentures, notes, other
evidences of indebtedness and any and all other obligations and encumbrances
and any and all other instruments, documents and papers of any kind or
character for and on behalf of and in the name of the Company, and, with the
Secretary or an Assistant Secretary, the President may sign all certificates
for shares of the capital stock of the Company; he shall do and perform such
other duties and have such additional authority and powers as from time to time
may be assigned to or conferred upon the President by the Board of Directors.
Section 7. The Vice Presidents. Each Vice President shall
generally assist the President and shall have such powers and perform such
duties and services as shall from time to time be prescribed or delegated by
the President or the Board of Directors. In the absence of the President or in
the event of the death, inability, or refusal of the President to act, the Vice
President (or in the event there be more than one Vice President, the vice
Presidents in the order designated at the time of their election, or in the
absence of any designation, then in the order of their election) shall perform
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. Any Vice President
may sign, with the Secretary or an Assistant Secretary, certificates for shares
of the Company; and shall perform such other duties as from time to time may be
assigned to such Vice President by the President, or by the Board of Directors.
Section 8. Secretary. It shall be the duty of the Secretary to
give notice to and attend all meetings of the shareholders and Board of
Directors and record correctly all votes, actions and the minutes of all
proceedings had at such meetings in a book suitable for that purpose. It shall
also be the duty of the Secretary to attest, by personal signature and the seal
of the Company, all stock certificates issued by the Company and to keep a
stock ledger in which shall be correctly recorded all transactions pertaining
to the capital stock of the Company. The Secretary shall also attest, by
personal signature and the seal of the Company, all deeds, conveyances, or
other instruments requiring the seal of the Company. The person holding the
office of Secretary shall also perform, under the direction and subject to the
control of the President and the Board of Directors, such other duties as may
be assigned to such officer. The duties of the Secretary may also be performed
by any
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Assistant Secretary. In the absence of the appointment of a Treasurer for the
Company, the Secretary shall perform the duties of the Treasurer.
Section 9. Treasurer. The Treasurer shall have active control
of and shall be responsible for all matters pertaining to the accounts and
finances of the Company. The Treasurer shall keep such monies and securities
of the Company as may be entrusted to safe keeping and account for the same.
The Treasurer shall be prepared at all times to give information as to the
condition of the Company and shall make a detailed annual report of the entire
business and financial condition of the Company. The person holding the office
of Treasurer shall also perform, under the direction and subject to the control
of the President and the Board of Directors, such other duties as may be
assigned to such officer. The duties of the Treasurer may also be performed by
any Assistant Treasurer. If required by the Board of Directors, the Treasurer
shall give a bond for the faithful discharge of his duties in such sum and with
such surety or sureties as the Board of Directors may determine.
Section 10. Delegation of Authority. In the case of any absence
of any officer of the Company, or for any other reason that the Board may deem
sufficient, the President or the Board of Directors may delegate some or all
the powers or duties of such officer to any other officer or to any Director,
employee, shareholder, or agent for whatever period of time seems desirable.
V.
INDEMNIFICATION
Section 1. Indemnification of Directors, Officers, Employees,
and Agents. The Company shall indemnify to the full extent from time to time
permitted by law any Director, officer, employee, or agent of the Company made,
or threatened to be made a party to, or a witness or other participant in, any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative, legislative, investigative, or any other
kind, by reason of the fact that such person is or was a Director, officer,
employee or other corporate agent of the Company or any subsidiary of the
Company or serves or served any other enterprise at the request of the Company
(including service as a fiduciary with respect to any employee benefit plan of
the Company or any subsidiary of the Company against expenses (including
attorney's fees), judgments, fines, penalties, excise taxes and amounts paid in
settlement, actually and reasonably incurred by such person in connection with
such action, suit or proceeding, or any appeal therein. No indemnification
pursuant to this Article shall be required with respect to any settlement or
other non-adjudicated disposition of any threatened or pending action or
proceeding unless the Company has given its prior consent to such settlement or
other disposition.
Section 2. Additional Indemnification. The indemnification
provided by this Article shall not be deemed exclusive of any right to which
those seeking indemnification may be entitled from the Company or any other
entity under any statute, other bylaw, agreement, provision of the Company's
Articles of Incorporation, vote of shareholders or disinterested Directors or
otherwise,
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both as to action in 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, advisory Director, officer, employee or agent and shall inure to
the benefit Of the heirs, executors and administrators of such a person.
However, any amount actually received as the proceeds of any such other
indemnification shall be deducted from the amount, if any, which he may be
entitled to receive pursuant to this Article.
Section 3. Insurance. By action of its Board of Directors,
notwithstanding any interest of the Directors in the action, to the full extent
permitted by the Texas Business Corporation Act, the Company may purchase and
maintain insurance, in such amounts and against such risks as the Board of
Directors deems appropriate, on behalf of any person who is or was a Director,
advisory Director, officer, employee or agent of the Company, or of any entity
a majority of the voting stock of which is owned by the Company, or who is or
was serving at the request of the Company as a director, advisory director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against any liability asserted against the Director
and incurred by such person in any such capacity, or arising out of the status
as such, whether or not the Company would have the power or would be required
to indemnify the Director against such liability under the provisions of this
Article, or of the Company's Articles of Incorporation or of the Texas Business
Corporation Act.
Section 4. Reliance Upon Books, Reports and Records. Neither a
Director nor a member of any committee shall be liable if, in the exercise of
ordinary care, they relied and acted in good faith upon written financial
statements of the Company represented to them to be correct by the President or
by the officer of the Company having charge of its books of account, or
certified by an independent public or certified public accountant or firm of
such accountants fairly to reflect the financial condition of the Company, nor
shall they be so liable if, in the exercise of ordinary care and in good faith,
in determining the amount available for payment of a dividend or other
distribution, they considered the assets of the Company to be of their book
value.
VI.
MISCELLANEOUS PROVISIONS
Section 1. Amendments. These Bylaws may be altered, amended, or
repealed, or new Bylaws may be adopted, by the affirmative vote of a majority
of the Directors present at any meeting of the Board of Directors at which a
quorum is present or by unanimous written consent of all the Directors, subject
to repeal or change by action of the Shareholders.
Section 2. Waiver. Whenever, under the provisions of any law,
the Articles of Incorporation or amendments thereto, or these Bylaws, any
notice is required to be given under the provisions of these Bylaws to any
shareholder, Director, or committee member, a waiver thereof in writing signed
by the person or persons entitled to such notice, whether before or after the
time stated therein, shall be equivalent to the giving of such notice.
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Section 3. Offices. The principal office of the Company shall
be designated by resolution of the Board of Directors. The Company may also
have, in addition to its registered office in the State of Texas, offices at
such other places as the Board of Directors may, from time to time, designate
or as its business may require.
Section 4. Resignations.. Any Director or officer may resign at
any time. Such resignation shall be made in writing and shall take effect at
the time specified therein, or, if no time is specified, at the time of its
receipt by the Company. The acceptance of a resignation shall not be necessary
to make it effective, unless expressly so provided in the resignation.
Section 5. Seal. The Company may adopt a seal which may be in
such form as shall be adopted and approved from time to time by the Board of
Directors. The seal may be used by causing it, or a facsimile thereof, to be
impressed, affixed, imprinted or in any manner reproduced.
The Board of Directors may determine not to adopt a seal for the
Company in which case, any documents or instruments providing for the use of a
seal shall be valid despite the lack of a corporate seal.
Section 6. Telephone Meetings. Shareholders and Directors may
participate in and hold a meeting by means of conference telephone or similar
communications equipment by means of which all participants in the meeting can
hear each other. Participation in such a meeting shall constitute presence in
person at the meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
Section 7. Securities of other Corporation. The President or
any Vice President of the Company shall have power and authority to transfer,
endorse for transfer, vote, consent, or take any other action with respect to
any securities of another issuer which may be held or owned by the Company and
to make, execute, and deliver any waiver, proxy, or consent with respect to any
such securities.
Section 8. Fiscal Year. The fiscal year of the Company shall be
fixed by resolution of the Board of Directors.
Section 9. Dividends. Dividends upon the outstanding shares of
the Company, subject to the provisions of the statutes and of the Articles of
Incorporation, may be declared by the Board of Directors at any regular or
special meeting. Dividends may be declared and paid in cash, in property, or
in shares of the Company, or in any combination thereof.
Section 10. Reserves. There may be created from time to time by
resolution of the Board of Directors, out of the earned surplus of the Company,
such reserve or reserves as the Directors from time to time in their discretion
think proper to provide for contingencies, or to equalize dividends, or to
repair or maintain any property of the Company, or for such other purpose as
the
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Directors shall think beneficial to the Company, and the Directors may modify
or abolish any such reserve in the manner in which it was created.
Section 11. Signature of Negotiable Instruments. All bills,
notes, checks or other instruments for the payment of money shall be signed or
countersigned by such officer, officers, agent or agents, and in such manner,
as are permitted by these Bylaws and as from time to time may be prescribed by
resolution (whether general or special) of the Board of Directors or the
Executive Committee.
Section 12. Surety Bonds. Such officers and agents of the
Company (if any) as the Board of Directors may direct from time to time shall
be bonded for the faithful performance of their duties and for the restoration
to the Company, in case of their death, resignation, retirement,
disqualification or removal from office, of all books, papers, vouchers, money
and other property of whatever kind in their possession or under their control
belonging to the Company, in such amounts and by such surety companies as the
Board of Directors may determine. The premiums on such bonds shall be paid by
the Company, and the bonds so furnished shall be in the custody of the
Secretary.
Section 13. Loans and Guaranties. The Company may lend money to,
guaranty obligations of, and otherwise assist its Directors, officers and
employees if the Board of Directors determines that such loans, guaranties, or
assistance reasonably may be expected to benefit, directly or indirectly, the
Company.
Section 14. Relation to Articles of Incorporation. These Bylaws
are subject to, and governed by, the Articles of Incorporation.
Section 15. Gender. Pronouns of any gender or singular number
used in this Agreement shall be deemed to include any other gender or the
plural, when the same are required in these Bylaws.
-15-
<PAGE> 1
EXHIBIT 3.23
CERTIFICATE OF INCORPORATION
OF
EAGLE GEOPHYSICAL DE ECUADOR, INC.
1. The name of the corporation is Eagle Geophysical de Ecuador,
Inc.
2. The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, the City of Wilmington, County
of New Castle, 19801. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of common stock which the
corporation shall have authority to issue is 1,000 and the par value of each
such share is $0.01.
5. The name and mailing address of each incorporator is as
follows:
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Stephen D. Elison 333 Clay Avenue
Suite 800
Houston, Texas 77002
</TABLE>
6. The corporation is to have perpetual existence.
7. The name and mailing address of each of the initial directors
of the corporation is as follows:
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Jay N. Silverman 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
</TABLE>
<PAGE> 2
8. In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized to adopt, amend or
repeal the bylaws of the corporation.
9. Meetings of stockholders may be held within or without the
State of Delaware, as the bylaws may provide. The books of the corporation may
be kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the board of directors or in the bylaws of the corporation. Elections of
directors need not be by written ballot unless the bylaws of the corporation
shall so provide.
10. No director of the corporation shall be personally liable to
the corporation or any of its stockholders for monetary damages resulting from
a breach of fiduciary duty involving any act or omission of any director;
provided, however, that the foregoing provision shall not limit the liability
of any director (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Title 8, Section 174 of the Delaware Code or (iv) for any transaction
from which such director derived an improper personal benefit.
11. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on application in a summary way
of this corporation of any creditor or stockholder thereof or on the
application of any receiver or its receivers appointed for this corporation
under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
corporation under Section 279 of Title 8 of the Delaware Code order a meeting
of the creditors or a class of creditors, and/or of the stockholders or a class
of stockholders for this corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 30th day of July, 1998.
/S/ STEPHEN D. ELISON
----------------------------
Stephen D. Elison
2
<PAGE> 1
EXHIBIT 3.24
BYLAWS
OF
EAGLE GEOPHYSICAL DE ECUADOR, INC.
Article I
Offices/Purpose
Section 1. Registered Office. The registered office of the
Corporation required by the General Corporation Law of the State of Delaware to
be maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
Section 3. Ecuadorian Branch. The Corporation shall conduct business
in such jurisdictions within and without the United States of America as the
Board of Directors may from time to time determine or the business of the
Corporation may require. Specifically, the Corporation may establish a branch
in the Republic of Ecuador, which shall have as its business purpose to engage
in any lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware, including without limitation, the
acquisition and interpretation of 2D and 3D seismic onshore, offshore and on
wetlands data and providing directly oil related field services for use by
group companies and third party operators in Ecuador.
Article II
Stockholders
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at the principal office of the Corporation, or at such other place
within or without the State of Delaware as shall be specified or fixed in the
notices or waivers of notice thereof.
Section 2. Quorum; Adjournment of Meetings. Unless otherwise
required by law or provided in the Certificate of Incorporation or these
bylaws, the holders of a majority of the stock
<PAGE> 2
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at any meeting of stockholders
for the transaction of business and the act of a majority of such stock so
represented at any meeting of stockholders at which a quorum is present shall
constitute the act of the meeting of stockholders. The stockholders present at
a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.
Notwithstanding the other provisions of the Certificate of
Incorporation or these bylaws, the chairman of the meeting or the holders of a
majority of the issued and outstanding stock, present in person or represented
by proxy, at any meeting of stockholders, whether or not a quorum is present,
shall have the power to adjourn such meeting from time to time, without any
notice other than announcement at the meeting of the time and place of the
holding of the adjourned meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at such meeting. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
called.
Section 3. Annual Meetings. An annual meeting of the stockholders,
for the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, within or without the State of Delaware, on such
date, and at such time as the Board of Directors shall fix and set forth in the
notice of the meeting, which date shall be within thirteen (13) months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.
Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the
Chairman of the Board (if any), by the President or the Secretary upon the
written request therefor, stating the purpose or purposes of the meeting,
delivered to such officer, signed by the holder(s) of at least ten percent
(10%) of the issued and outstanding stock entitled to vote at such meeting.
Section 5. Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or 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 stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.
2
<PAGE> 3
If the Board of Directors does not fix a record date for any meeting
of the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If,
in accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Notice of Meetings. Written notice of the place, date and
hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
Section 7. Stock List. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, 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. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
Section 8. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to a corporate action in
writing without a meeting may authorize another person or persons to act for
him by proxy. Proxies for use at any meeting of stockholders shall be filed
with the Secretary, or such other officer as the Board of Directors may from
time to time determine by resolution, before or at the time of the meeting.
All proxies shall be received and taken charge of and all ballots shall be
received and canvassed by the secretary of the meeting who shall decide all
questions touching upon the qualification of voters, the validity of the
proxies, and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed by the chairman of the meeting, in which
event such inspector or inspectors shall decide all such questions.
3
<PAGE> 4
No proxy shall be valid after three (3) years from its date, unless
the proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers thereunder are to be exercised shall have
and may exercise all the powers of voting or giving consents thereby conferred,
or if only one be present, then such powers may be exercised by that one; or,
if an even number attend and a majority do not agree on any particular issue,
each proxy so attending shall be entitled to exercise such powers in respect of
the same portion of the shares as he is of the proxies representing such
shares.
Section 9. Voting; Elections; Inspectors. Unless otherwise required
by law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as the bylaw (or comparable instrument) of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors (or
comparable body) of such corporation may determine. Shares registered in the
name of a deceased person may be voted by his executor or administrator, either
in person or by proxy.
All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.
At any meeting at which a vote is taken by ballots, the chairman of
the meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector.
Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.
Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the
4
<PAGE> 5
Chairman of the Board (if any), nor President is present, by a chairman elected
at the meeting. The Secretary of the Corporation, if present, shall act as
secretary of such meetings, or if he is not present, an Assistant Secretary
shall so act; if neither the Secretary nor an Assistant Secretary is present,
then a secretary shall be appointed by the chairman of the meeting. The
chairman of any meeting of stockholders shall determine the order of business
and the procedure at the meeting, including such regulation of the manner of
voting and the conduct of discussion as seem to him in order. Unless the
chairman of the meeting of stockholders shall otherwise determine, the order of
business shall be as follows:
(a) Calling of meeting to order.
(b) Election of a chairman and the appointment of a secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting.
(d) Presentation and examination of proxies and determination of a
quorum.
(e) Reading and settlement of the minutes of the previous meeting.
(f) Reports of officers and committees.
(g) The election of directors if an annual meeting, or a meeting
called for that purpose.
(h) Unfinished business.
(i) New business.
(j) Adjournment.
Section 11. Treasury Stock. The Corporation shall not vote, directly
or indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.
Section 12. Action Without Meeting. Unless otherwise provided in the
Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall 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 such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than a unanimous written consent shall be given by the Secretary to those
stockholders who have not consented in writing.
5
<PAGE> 6
Article III
Board of Directors
Section 1. Power; Number; Term of Office. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.
The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the
stockholders (provided that no decrease in the number of directors which would
have the effect of shortening the term of an incumbent director may be made by
the stockholders). If the stockholders make no such determination, the number
of directors shall be the number set forth in the Certificate of Incorporation.
Each director shall hold office for the term for which he is elected, and until
his successor shall have been elected and qualified or until his earlier death,
resignation or removal.
Unless otherwise provided in the Certificate of Incorporation,
directors need not be stockholders nor residents of the State of Delaware.
Section 2. Quorum. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 3. Place of Meetings; Order of Business. The directors may
hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of
Directors business shall be transacted in such order as shall from time to time
be determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.
Section 4. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.
Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
6
<PAGE> 7
Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.
Section 7. Removal. Any director or the entire Board of Directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided that, if the
Certificate of Incorporation expressly grants to stockholders the right to
cumulate votes for the election of directors and if less than the entire board
is to be removed, no director may be removed without cause if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which such director is a
part.
Section 8. Vacancies; Increases in the Number of Directors. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.
If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for which such directors shall have
been chosen, and until their successors shall be duly elected and shall
qualify.
Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.
Section 10. Action Without a Meeting; Telephone Conference Meeting.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation,
subject to the requirement for notice of meetings, members of the Board of
Directors, or members of any committee
7
<PAGE> 8
designated by the Board of Directors, may participate in a meeting of such
Board of Directors or committee, as the case may be, by means of a conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in such a
meeting shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
purpose of considering any such act or contract, and any act or contract that
shall be approved or be ratified by the vote of the stockholders holding a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote and present in person or by proxy at such meeting (provided
that a quorum is present), shall be as valid and as binding upon the
Corporation and upon all the stockholders as if it has been approved or
ratified by every stockholder of the Corporation. In addition, any such act or
contract may be approved or ratified by the written consent of stockholders
holding a majority of the issued and outstanding shares of capital stock of the
Corporation entitled to vote and such consent shall be as valid and as binding
upon the Corporation and upon all the stockholders as if it had been approved
or ratified by every stockholder of the Corporation.
Article IV
Committees
Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power of authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which may
require it. In addition to the above such committee or committees shall have
such other powers and limitations of authority as may be determined from time
to time by resolution adopted by the Board of Directors.
8
<PAGE> 9
Section 2. Procedure; Meetings; Quorum. Any committee designated
pursuant to Section 1 of this Article shall choose its own chairman, shall keep
regular minutes of its proceedings and report the same to the Board of
Directors when requested, shall fix its own rules or procedures, and shall meet
at such times and at such place or places as may be provided by such rules, or
buy resolution of such committee or resolution of the Board of Directors. At
every meeting of any such committee, the presence of a majority of all the
members thereof shall constitute a quorum and the affirmative vote of a
majority of the members present shall be necessary for the adoption by it of
any resolution.
Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In
the absence or disqualification of a member of a committee, the member or
members present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified
member.
Article V
Officers
Section 1. Number, Titles and Term of Office. The officers of the
Corporation shall be a President, a Secretary and, if the Board of Directors so
elects, a Chairman of the Board and such other officers as the Board of
Directors may from time to time elect or appoint. Each officer shall hold
office until his successor shall be duly elected and shall qualify or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Any number of offices may be held by the same person,
unless the Certificate of Incorporation provides otherwise. Except for the
Chairman of the Board, if any, no officer need be a director.
Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.
Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.
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<PAGE> 10
Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 6. Powers and Duties of the Chairman of the Board. If
elected, the Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors; and he shall have such other powers
and duties as designated in these bylaws and as from time to time may be
assigned to him by the Board of Directors.
Section 7. Powers and Duties of the President. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board or
if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 8. Vice Presidents. In the absence of the President, or in
the event of his inability or refusal to act, a Vice President designated by
the Board of Directors shall perform 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. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the Corporation shall so
act. The Vice Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 9. Treasurer. The Treasurer shall have responsibility for
the custody and control of all the funds and securities of the Corporation, and
he shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.
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<PAGE> 11
Section 10. Assistant Treasurers. Each Assistant Treasurer shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Treasurers shall exercise the powers of the Treasurer
during that officer's absence or inability or refusal to act.
Section 11. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation and attest the
affixation of the seal of the Corporation thereto; he may sign with the other
appointed officers all certificates for shares of capital stock of the
Corporation; he shall have charge of the certificate books, transfer books and
stock ledgers, and such other books and papers as the Board of Directors may
direct, all of which shall at all reasonable times be open to inspection of any
director upon application at the office of the Corporation during business
hours; he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of Directors; and
he shall in general perform all acts incident to the office of Secretary,
subject to the control of the chief executive officer and the Board of
Directors.
Section 12. Assistant Secretaries. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Secretaries shall exercise the powers of the
Secretary during that officer's absence or inability or refusal to act.
Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
Article VI
Indemnification of Directors,
Officers, Employees and Agents
Section 1. Right to Indemnification. Each person who was or is made
a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint
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<PAGE> 12
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director or officer or in any other capacity while
serving or having agreed to serve as a director or officer, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended, (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment) against all expense, liability and loss (including, without
limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered
by such person in connection therewith and such indemnification shall continue
as to a person who has ceased to serve in the capacity which initially entitled
such person to indemnity hereunder and shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that the Corporation
shall indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the board of directors of the Corporation.
The right to indemnification conferred in this Article VI shall be a contract
right and shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition;
provided, however, that, if the Delaware General Corporation Law requires, the
payment of such expenses incurred by a current, former or proposed director or
officer in his or her capacity as a director or officer or proposed director or
officer (and not in any other capacity in which service was or is or has been
agreed to be rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in advance of the
final disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.
Section 2. Indemnification of Employees and Agents. The Corporation
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the same scope
and effect as the indemnification of directors and officers provided for in
this Article.
Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its
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<PAGE> 13
Board of Directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or
she has met the applicable standard of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
Section 4. Nonexclusivity of Rights. The right to indemnification
and the advancement and payment of expenses conferred. in this Article VI shall
not be exclusive of any other right which any person may have or hereafter
acquire under any law (common or statutory), provision of the Certificate of
Incorporation of the Corporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as 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
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Savings Clause. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VI that shall not have been invalidated and to the fullest extent
permitted by applicable law.
Article VII
Capital Stock
Section 1. Certificates of Stock. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation;
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<PAGE> 14
provided, however, that any of or all the signatures on the certificate may be
facsimile. The stock record books and the blank stock certificate books shall
be kept by the Secretary, or at the office of such transfer agent or transfer
agents as the Board of Directors may from time to time by resolution determine.
In case any officer, transfer agent or registrar who shall have signed or whose
facsimile signature or signatures shall have been placed upon any such
certificate or certificates shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued by the Corporation, such
certificate may nevertheless be issued by the Corporation with the same effect
as if such person were such officer, transfer agent or registrar at the date of
issue. The stock certificates shall be consecutively numbered and shall be
entered in the books of the Corporation as they are issued and shall exhibit
the holder's name and number of shares.
Section 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferable only on the books of the Corporation by the
holders thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Ownership of Shares. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
Section 4. Regulations Regarding Certificates. The Board of
Directors shall have the power and authority to make all such rules and
regulations as they may deem expedient concerning the issue, transfer and
registration or the replacement of certificates for shares of capital stock of
the Corporation.
Section 5. Lost or Destroyed Certificates. The Board of Directors
may determine the conditions upon which a new certificate of stock may be
issued in place of a certificate which is alleged to have been lost, stolen or
destroyed; and may, in their discretion, require the owner of such certificate
or his legal representative to give bond, with sufficient surety, to indemnify
the Corporation and each transfer agent and registrar against any and all
losses or claims which may arise by reason of the issue of a new certificate in
the place of the one so lost, stolen or destroyed.
Article VIII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as established from time to time by the Board of Directors.
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<PAGE> 15
Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall
have charge of the seal (if any). If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Treasurer or by the Assistant Secretary or Assistant Treasurer.
Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be deemed to be sufficient if
given (i) by telegraphic, cable or wireless transmission or (ii) by deposit of
the same in a post office box in a sealed prepaid wrapper addressed to the
person entitled thereto at his post office 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 transmission or mailing, as the case may be.
Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to 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 regular or special meeting of the
stockholders, 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 or the bylaws.
Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 5. Facsimile Signatures. In addition to the provisions for
the use of facsimile signatures elsewhere specifically authorized in these
bylaws, facsimile signatures of any officer or officers of the Corporation may
be used whenever and as authorized by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records. Each director
and each member of any committee designated by the Board of Directors shall, in
the performance of his duties, be fully protected in relying in good faith upon
the books of account or reports made to the Corporation by any of its officers,
or by an independent certified public accountant, or by an appraiser selected
with reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
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Article IX
Amendments
If provided in the Certificate of Incorporation of the Corporation,
the Board of Directors shall have the power to adopt, amend and repeal from
time to time bylaws of the Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to amend or repeal such
bylaws as adopted or amended by the Board of Directors.
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<PAGE> 1
EXHIBIT 3.25
CERTIFICATE OF INCORPORATION
OF
EAGLE GEOPHYSICAL DE BOLIVIA, INC.
1. The name of the corporation is Eagle Geophysical de Bolivia,
Inc.
2. The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, the City of Wilmington, County
of New Castle, 19801. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of common stock which the
corporation shall have authority to issue is 1,000 and the par value of each
such share is $0.01.
5. The name and mailing address of each incorporator is as
follows:
NAME ADDRESS
---- -------
Stephen D. Elison 333 Clay Avenue
Suite 800
Houston, Texas 77002
6. The corporation is to have perpetual existence.
7. The name and mailing address of each of the initial directors
of the corporation is as follows:
NAME ADDRESS
---- -------
Jay N. Silverman 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
<PAGE> 2
8. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized to adopt, amend or
repeal the bylaws of the corporation.
9. Meetings of stockholders may be held within or without the
State of Delaware, as the bylaws may provide. The books of the corporation may
be kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the board of directors or in the bylaws of the corporation. Elections of
directors need not be by written ballot unless the bylaws of the corporation
shall so provide.
10. No director of the corporation shall be personally liable to
the corporation or any of its stockholders for monetary damages resulting from
a breach of fiduciary duty involving any act or omission of any director;
provided, however, that the foregoing provision shall not limit the liability
of any director (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Title 8, Section 174 of the Delaware Code or (iv) for any transaction
from which such director derived an improper personal benefit.
11. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on application in a summary way
of this corporation of any creditor or stockholder thereof or on the
application of any receiver or its receivers appointed for this corporation
under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
corporation under Section 279 of Title 8 of the Delaware Code order a meeting
of the creditors or a class of creditors, and/or of the stockholders or a class
of stockholders for this corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 30th day of July, 1998.
/s/ STEPHEN D. ELISON
-----------------------------------------
Stephen D. Elison
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<PAGE> 1
EXHIBIT 3.26
BYLAWS
OF
EAGLE GEOPHYSICAL DE BOLIVIA, INC.
Article I
Offices/Purpose
Section 1. Registered Office. The registered office of the
Corporation required by the General Corporation Law of the State of Delaware to
be maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated from time to time by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware such registered office need not be identical to
such principal office of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
Section 3. Bolivian Branch. The Corporation shall conduct business
in such jurisdictions within and without the United States of America as the
Board of Directors may from time to time determine or the business of the
Corporation may require. Specifically, the Corporation may establish a branch
in the Republic of Bolivia, which shall have as its business purpose to engage
in any lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware, including without limitation, the
acquisition and interpretation of 2D and 3D seismic onshore, offshore and on
wetlands data and providing directly oil related field services for use by
group companies and third party operators in Bolivia.
Article II
Stockholders
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at the principal office of the Corporation, or at such other place
within or without the State of Delaware as shall be specified or fixed in the
notices or waivers of notice thereof.
Section 2. Quorum; Adjournment of Meetings. Unless otherwise
required by law or provided in the Certificate of Incorporation or these
bylaws, the holders of a majority of the stock
<PAGE> 2
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at any meeting of stockholders
for the transaction of business and the act of a majority of such stock so
represented at any meeting of stockholders at which a quorum is present shall
constitute the act of the meeting of stockholders. The stockholders present at
a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.
Notwithstanding the other provisions of the Certificate of
Incorporation or these bylaws, the chairman of the meeting or the holders of a
majority of the issued and outstanding stock, present in person or represented
by proxy, at any meeting of stockholders, whether or not a quorum is present,
shall have the power to adjourn such meeting from time to time, without any
notice other than announcement at the meeting of the time and place of the
holding of the adjourned meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at such meeting. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
called.
Section 3. Annual Meetings. An annual meeting of the stockholders,
for the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, within or without the State of Delaware, on such
date, and at such time as the Board of Directors shall fix and set forth in the
notice of the meeting, which date shall be within thirteen (13) months
subsequent to the later of the date of incorporation or the last annual meeting
of stockholders.
Section 4. Special Meetings. Unless otherwise provided in the
Certificate of Incorporation, special meetings of the stockholders for any
purpose or purposes may be called at any time by the Chairman of the Board (if
any), by the President or by a majority of the Board of Directors, or by a
majority of the executive committee (if any), and shall be called by the
Chairman of the Board (if any), by the President or the Secretary upon the
written request therefor, stating the purpose or purposes of the meeting,
delivered to such officer, signed by the holder(s) of at least ten percent
(10%) of the issued and outstanding stock entitled to vote at such meeting.
Section 5. Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders, or any
adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or 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 stock or for the
purpose of any other lawful action, the Board of Directors of the Corporation
may fix, in advance, a date as the record date for any such determination of
stockholders, which date shall not be more than sixty (60) days nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action.
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<PAGE> 3
If the Board of Directors does not fix a record date for any meeting
of the stockholders, the record date for determining stockholders entitled to
notice of or to vote at such meeting shall be at the close of business on the
day next preceding the day on which notice is given, or, if in accordance with
Article VIII, Section 3 of these bylaws notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. If,
in accordance with Section 12 of this Article II, corporate action without a
meeting of stockholders is to be taken, the record date for determining
stockholders entitled to express consent to such corporate action in writing,
when no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed. The record date for
determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Notice of Meetings. Written notice of the place, date and
hour of all meetings, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given by or at the direction
of the Chairman of the Board (if any) or the President, the Secretary or the
other person(s) calling the meeting to each stockholder entitled to vote
thereat not less than ten (10) nor more than sixty (60) days before the date of
the meeting. Such notice may be delivered either personally or by mail. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
Section 7. Stock List. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in the name of such stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, 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. The stock list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.
Section 8. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to a corporate action in
writing without a meeting may authorize another person or persons to act for
him by proxy. Proxies for use at any meeting of stockholders shall be filed
with the Secretary, or such other officer as the Board of Directors may from
time to time determine by resolution, before or at the time of the meeting.
All proxies shall be received and taken charge of and all ballots shall be
received and canvassed by the secretary of the meeting who shall decide all
questions touching upon the qualification of voters, the validity of the
proxies, and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed
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<PAGE> 4
by the chairman of the meeting, in which event such inspector or inspectors
shall decide all such questions.
No proxy shall be valid after three (3) years from its date, unless
the proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers thereunder are to be exercised shall have
and may exercise all the powers of voting or giving consents thereby conferred,
or if only one be present, then such powers may be exercised by that one; or,
if an even number attend and a majority do not agree on any particular issue,
each proxy so attending shall be entitled to exercise such powers in respect of
the same portion of the shares as he is of the proxies representing such
shares.
Section 9. Voting; Elections; Inspectors. Unless otherwise required
by law or provided in the Certificate of Incorporation, each stockholder shall
have one vote for each share of stock entitled to vote which is registered in
his name on the record date for the meeting. Shares registered in the name of
another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as the bylaw (or comparable instrument) of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors (or
comparable body) of such corporation may determine. Shares registered in the
name of a deceased person may be voted by his executor or administrator, either
in person or by proxy.
All voting, except as required by the Certificate of Incorporation or
where otherwise required by law, may be by a voice vote; provided, however,
that upon demand therefor by stockholders holding a majority of the issued and
outstanding stock present in person or by proxy at any meeting a stock vote
shall be taken. Every stock vote shall be taken by written ballots, each of
which shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
All elections of directors shall be by ballot, unless otherwise provided in the
Certificate of Incorporation.
At any meeting at which a vote is taken by ballots, the chairman of
the meeting may appoint one or more inspectors, each of whom shall subscribe an
oath or affirmation to execute faithfully the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
Such inspector shall receive the ballots, count the votes and make and sign a
certificate of the result thereof. The chairman of the meeting may appoint any
person to serve as inspector, except no candidate for the office of director
shall be appointed as an inspector.
Unless otherwise provided in the Certificate of Incorporation,
cumulative voting for the election of directors shall be prohibited.
Section 10. Conduct of Meetings. The meetings of the stockholders
shall be presided over by the Chairman of the Board (if any), or if he is not
present, by the President, or if neither the
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<PAGE> 5
Chairman of the Board (if any), nor President is present, by a chairman elected
at the meeting. The Secretary of the Corporation, if present, shall act as
secretary of such meetings, or if he is not present, an Assistant Secretary
shall so act; if neither the Secretary nor an Assistant Secretary is present,
then a secretary shall be appointed by the chairman of the meeting. The
chairman of any meeting of stockholders shall determine the order of business
and the procedure at the meeting, including such regulation of the manner of
voting and the conduct of discussion as seem to him in order. Unless the
chairman of the meeting of stockholders shall otherwise determine, the order of
business shall be as follows:
(a) Calling of meeting to order.
(b) Election of a chairman and the appointment of a secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting.
(d) Presentation and examination of proxies and determination of a
quorum.
(e) Reading and settlement of the minutes of the previous meeting.
(f) Reports of officers and committees.
(g) The election of directors if an annual meeting, or a meeting
called for that purpose.
(h) Unfinished business.
(i) New business.
(j) Adjournment.
Section 11. Treasury Stock. The Corporation shall not vote, directly
or indirectly, shares of its own stock owned by it and such shares shall not be
counted for quorum purposes.
Section 12. Action Without Meeting. Unless otherwise provided in the
Certificate of Incorporation, any action permitted or required by law, the
Certificate of Incorporation or these bylaws to be taken at a meeting of
stockholders, may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall 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 such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than a unanimous written consent shall be given by the Secretary to those
stockholders who have not consented in writing.
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Article III
Board of Directors
Section 1. Power; Number; Term of Office. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors, and subject to the restrictions imposed by law or the Certificate of
Incorporation, they may exercise all the powers of the Corporation.
The number of directors which shall constitute the whole Board of
Directors, shall be determined from time to time by resolution of the
stockholders (provided that no decrease in the number of directors which would
have the effect of shortening the term of an incumbent director may be made by
the stockholders). If the stockholders make no such determination, the number
of directors shall be the number set forth in the Certificate of Incorporation.
Each director shall hold office for the term for which he is elected, and until
his successor shall have been elected and qualified or until his earlier death,
resignation or removal.
Unless otherwise provided in the Certificate of Incorporation,
directors need not be stockholders nor residents of the State of Delaware.
Section 2. Quorum. Unless otherwise provided in the Certificate of
Incorporation, a majority of the total number of directors shall constitute a
quorum for the transaction of business of the Board of Directors and the vote
of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 3. Place of Meetings; Order of Business. The directors may
hold their meetings and may have an office and keep the books of the
Corporation, except as otherwise provided by law, in such place or places,
within or without the State of Delaware, as the Board of Directors may from
time to time determine by resolution. At all meetings of the Board of
Directors business shall be transacted in such order as shall from time to time
be determined by the Chairman of the Board (if any), or in his absence by the
President, or by resolution of the Board of Directors.
Section 4. First Meeting. Each newly elected Board of Directors may
hold its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as
the annual meeting of the stockholders. Notice of such meeting shall not be
required. At the first meeting of the Board of Directors in each year at which
a quorum shall be present, held next after the annual meeting of stockholders,
the Board of Directors shall proceed to the election of the officers of the
Corporation.
Section 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
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Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any), the President
or, on the written request of any two directors, by the Secretary, in each case
on at least twenty-four (24) hours personal, written, telegraphic, cable or
wireless notice to each director. Such notice, or any waiver thereof pursuant
to Article VIII, Section 3 hereof, need not state the purpose or purposes of
such meeting, except as may otherwise be required by law or provided for in the
Certificate of Incorporation or these bylaws.
Section 7. Removal. Any director or the entire Board of Directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided that, if the
Certificate of Incorporation expressly grants to stockholders the right to
cumulate votes for the election of directors and if less than the entire board
is to be removed, no director may be removed without cause if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which such director is a
part.
Section 8. Vacancies; Increases in the Number of Directors. Unless
otherwise provided in the Certificate of Incorporation, vacancies and newly
created directorships resulting from any increase in the authorized number of
directors may be filled by a majority of the directors then in office, although
less than a quorum, or a sole remaining director; and any director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.
If the directors of the Corporation are divided into classes, any
directors elected to fill vacancies or newly created directorships shall hold
office until the next election of the class for which such directors shall have
been chosen, and until their successors shall be duly elected and shall
qualify.
Section 9. Compensation. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority
to fix the compensation of directors.
Section 10. Action Without a Meeting; Telephone Conference Meeting.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee designated by the Board of Directors, may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee. Such consent
shall have the same force and effect as a unanimous vote at a meeting, and may
be stated as such in any document or instrument filed with the Secretary of
State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation,
subject to the requirement for notice of meetings, members of the Board of
Directors, or members of any committee
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<PAGE> 8
designated by the Board of Directors, may participate in a meeting of such
Board of Directors or committee, as the case may be, by means of a conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in such a
meeting shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
Section 11. Approval or Ratification of Acts or Contracts by
Stockholders. The Board of Directors in its discretion may submit any act or
contract for approval or ratification at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the
purpose of considering any such act or contract, and any act or contract that
shall be approved or be ratified by the vote of the stockholders holding a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote and present in person or by proxy at such meeting (provided
that a quorum is present), shall be as valid and as binding upon the
Corporation and upon all the stockholders as if it has been approved or
ratified by every stockholder of the Corporation. In addition, any such act or
contract may be approved or ratified by the written consent of stockholders
holding a majority of the issued and outstanding shares of capital stock of the
Corporation entitled to vote and such consent shall be as valid and as binding
upon the Corporation and upon all the stockholders as if it had been approved
or ratified by every stockholder of the Corporation.
Article IV
Committees
Section 1. Designation; Powers. The Board of Directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, including, if they shall so determine, an executive committee, each
such committee to consist of one or more of the directors of the Corporation.
Any such designated committee shall have and may exercise such of the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation as may be provided in such resolution, except that
no such committee shall have the power or authority of the Board of Directors
in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution of the Corporation, or amending,
altering or repealing the bylaws or adopting new bylaws for the Corporation
and, unless such resolution or the Certificate of Incorporation expressly so
provides, no such committee shall have the power of authority to declare a
dividend or to authorize the issuance of stock. Any such designated committee
may authorize the seal of the Corporation to be affixed to all papers which may
require it. In addition to the above such committee or committees shall have
such other powers and limitations of authority as may be determined from time
to time by resolution adopted by the Board of Directors.
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Section 2. Procedure; Meetings; Quorum. Any committee designated
pursuant to Section 1 of this Article shall choose its own chairman, shall keep
regular minutes of its proceedings and report the same to the Board of
Directors when requested, shall fix its own rules or procedures, and shall meet
at such times and at such place or places as may be provided by such rules, or
buy resolution of such committee or resolution of the Board of Directors. At
every meeting of any such committee, the presence of a majority of all the
members thereof shall constitute a quorum and the affirmative vote of a
majority of the members present shall be necessary for the adoption by it of
any resolution.
Section 3. Substitution of Members. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In
the absence or disqualification of a member of a committee, the member or
members present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified
member.
Article V
Officers
Section 1. Number, Titles and Term of Office. The officers of the
Corporation shall be a President, a Secretary and, if the Board of Directors so
elects, a Chairman of the Board and such other officers as the Board of
Directors may from time to time elect or appoint. Each officer shall hold
office until his successor shall be duly elected and shall qualify or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Any number of offices may be held by the same person,
unless the Certificate of Incorporation provides otherwise. Except for the
Chairman of the Board, if any, no officer need be a director.
Section 2. Salaries. The salaries or other compensation of the
officers and agents of the Corporation shall be fixed from time to time by the
Board of Directors.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed, either with or without cause, by the vote of
a majority of the whole Board of Directors at a special meeting called for the
purpose, or at any regular meeting of the Board of Directors, provided the
notice for such meeting shall specify that the matter of any such proposed
removal will be considered at the meeting but such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Election
or appointment of an officer or agent shall not of itself create contract
rights.
Section 4. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors.
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Section 5. Powers and Duties of the Chief Executive Officer. The
President shall be the chief executive officer of the Corporation unless the
Board of Directors designates the Chairman of the Board as chief executive
officer. Subject to the control of the Board of Directors and the executive
committee (if any), the chief executive officer shall have general executive
charge, management and control of the properties, business and operations of
the Corporation with all such powers as may be reasonably incident to such
responsibilities; he may agree upon and execute all leases, contracts,
evidences of indebtedness and other obligations in the name of the Corporation
and may sign all certificates for shares of capital stock of the Corporation;
and shall have such other powers and duties as designated in accordance with
these bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 6. Powers and Duties of the Chairman of the Board. If
elected, the Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors; and he shall have such other powers
and duties as designated in these bylaws and as from time to time may be
assigned to him by the Board of Directors.
Section 7. Powers and Duties of the President. Unless the Board of
Directors otherwise determines, the President shall have the authority to agree
upon and execute all leases, contracts, evidences of indebtedness and other
obligations in the name of the Corporation; and, unless the Board of Directors
otherwise determines, he shall, in the absence of the Chairman of the Board or
if there be no Chairman of the Board, preside at all meetings of the
stockholders and (should he be a director) of the Board of Directors; and he
shall have such other powers and duties as designated in accordance with these
bylaws and as from time to time may be assigned to him by the Board of
Directors.
Section 8. Vice Presidents. In the absence of the President, or in
the event of his inability or refusal to act, a Vice President designated by
the Board of Directors shall perform 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. In the absence of a designation by the Board of Directors of a
Vice President to perform the duties of the President, or in the event of his
absence or inability or refusal to act, the Vice President who is present and
who is senior in terms of time as a Vice President of the Corporation shall so
act. The Vice Presidents shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 9. Treasurer. The Treasurer shall have responsibility for
the custody and control of all the funds and securities of the Corporation, and
he shall have such other powers and duties as designated in these bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the chief executive officer and the Board of Directors; and he shall, if
required by the Board of Directors, give such bond for the faithful discharge
of his duties in such form as the Board of Directors may require.
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Section 10. Assistant Treasurers. Each Assistant Treasurer shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Treasurers shall exercise the powers of the Treasurer
during that officer's absence or inability or refusal to act.
Section 11. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors, committees of directors and the
stockholders, in books provided for that purpose; he shall attend to the giving
and serving of all notices; he may in the name of the Corporation affix the
seal of the Corporation to all contracts of the Corporation and attest the
affixation of the seal of the Corporation thereto; he may sign with the other
appointed officers all certificates for shares of capital stock of the
Corporation; he shall have charge of the certificate books, transfer books and
stock ledgers, and such other books and papers as the Board of Directors may
direct, all of which shall at all reasonable times be open to inspection of any
director upon application at the office of the Corporation during business
hours; he shall have such other powers and duties as designated in these bylaws
and as from time to time may be assigned to him by the Board of Directors; and
he shall in general perform all acts incident to the office of Secretary,
subject to the control of the chief executive officer and the Board of
Directors.
Section 12. Assistant Secretaries. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as designated in these bylaws and as from time to time
may be assigned to him by the chief executive officer or the Board of
Directors. The Assistant Secretaries shall exercise the powers of the
Secretary during that officer's absence or inability or refusal to act.
Section 13. Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the chief executive
officer shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of security holders of or
with respect to any action of security holders of any other corporation in
which this Corporation may hold securities and otherwise to exercise any and
all rights and powers which this Corporation may possess by reason of its
ownership of securities in such other corporation.
Article VI
Indemnification of Directors,
Officers, Employees and Agents
Section 1. Right to Indemnification. Each person who was or is made
a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to
become a director or officer of the Corporation or is or was serving or has
agreed to serve at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint
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venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director or officer or in any other capacity while
serving or having agreed to serve as a director or officer, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended, (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment) against all expense, liability and loss (including, without
limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered
by such person in connection therewith and such indemnification shall continue
as to a person who has ceased to serve in the capacity which initially entitled
such person to indemnity hereunder and shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that the Corporation
shall indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the board of directors of the Corporation.
The right to indemnification conferred in this Article VI shall be a contract
right and shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition;
provided, however, that, if the Delaware General Corporation Law requires, the
payment of such expenses incurred by a current, former or proposed director or
officer in his or her capacity as a director or officer or proposed director or
officer (and not in any other capacity in which service was or is or has been
agreed to be rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in advance of the
final disposition of a proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such indemnified person, to
repay all amounts so advanced if it shall ultimately be determined that such
indemnified person is not entitled to be indemnified under this Section or
otherwise.
Section 2. Indemnification of Employees and Agents. The Corporation
may, by action of its Board of Directors, provide indemnification to employees
and agents of the Corporation, individually or as a group, with the same scope
and effect as the indemnification of directors and officers provided for in
this Article.
Section 3. Right of Claimant to Bring Suit. If a written claim
received by the Corporation from or on behalf of an indemnified party under
this Article VI is not paid in full by the Corporation within ninety days after
such receipt, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its
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Board of Directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or
she has met the applicable standard of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
Section 4. Nonexclusivity of Rights. The right to indemnification
and the advancement and payment of expenses conferred. in this Article VI shall
not be exclusive of any other right which any person may have or hereafter
acquire under any law (common or statutory), provision of the Certificate of
Incorporation of the Corporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 5. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any person who is or was serving as 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
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
Section 6. Savings Clause. If this Article VI or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VI that shall not have been invalidated and to the fullest extent
permitted by applicable law.
Article VII
Capital Stock
Section 1. Certificates of Stock. The certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
that required by law and the Certificate of Incorporation, as shall be approved
by the Board of Directors. The Chairman of the Board (if any), President or a
Vice President shall cause to be issued to each stockholder one or more
certificates, under the seal of the Corporation or a facsimile thereof if the
Board of Directors shall have provided for such seal, and signed by the
Chairman of the Board (if any), President or a Vice President and the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer certifying
the number of shares (and, if the stock of the Corporation shall be divided
into classes or series, the class and series of such shares) owned by such
stockholder in the Corporation;
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provided, however, that any of or all the signatures on the certificate may be
facsimile. The stock record books and the blank stock certificate books shall
be kept by the Secretary, or at the office of such transfer agent or transfer
agents as the Board of Directors may from time to time by resolution determine.
In case any officer, transfer agent or registrar who shall have signed or whose
facsimile signature or signatures shall have been placed upon any such
certificate or certificates shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued by the Corporation, such
certificate may nevertheless be issued by the Corporation with the same effect
as if such person were such officer, transfer agent or registrar at the date of
issue. The stock certificates shall be consecutively numbered and shall be
entered in the books of the Corporation as they are issued and shall exhibit
the holder's name and number of shares.
Section 2. Transfer of Shares. The shares of stock of the
Corporation shall be transferable only on the books of the Corporation by the
holders thereof in person or by their duly authorized attorneys or legal
representatives upon surrender and cancellation of certificates for a like
number of shares. Upon surrender to the Corporation or a transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Ownership of Shares. The Corporation shall be entitled to
treat the holder of record of any share or shares of capital stock of the
Corporation as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Delaware.
Section 4. Regulations Regarding Certificates. The Board of
Directors shall have the power and authority to make all such rules and
regulations as they may deem expedient concerning the issue, transfer and
registration or the replacement of certificates for shares of capital stock of
the Corporation.
Section 5. Lost or Destroyed Certificates. The Board of Directors
may determine the conditions upon which a new certificate of stock may be
issued in place of a certificate which is alleged to have been lost, stolen or
destroyed; and may, in their discretion, require the owner of such certificate
or his legal representative to give bond, with sufficient surety, to indemnify
the Corporation and each transfer agent and registrar against any and all
losses or claims which may arise by reason of the issue of a new certificate in
the place of the one so lost, stolen or destroyed.
Article VIII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as established from time to time by the Board of Directors.
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Section 2. Corporate Seal. The Board of Directors may provide a
suitable seal, containing the name of the Corporation. The Secretary shall
have charge of the seal (if any). If and when so directed by the Board of
Directors or a committee thereof, duplicates of the seal may be kept and used
by the Treasurer or by the Assistant Secretary or Assistant Treasurer.
Section 3. Notice and Waiver of Notice. Whenever any notice is
required to be given by law, the Certificate of Incorporation or under the
provisions of these bylaws, said notice shall be deemed to be sufficient if
given (i) by telegraphic, cable or wireless transmission or (ii) by deposit of
the same in a post office box in a sealed prepaid wrapper addressed to the
person entitled thereto at his post office 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 transmission or mailing, as the case may be.
Whenever notice is required to be given by law, the Certificate of
Incorporation or under any of the provisions of these bylaws, a written waiver
thereof, signed by the person entitled to 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 regular or special meeting of the
stockholders, 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 or the bylaws.
Section 4. Resignations. Any director, member of a committee or
officer may resign at any time. Such resignation shall be made in writing and
shall take effect at the time specified therein, or if no time be specified, at
the time of its receipt by the chief executive officer or Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 5. Facsimile Signatures. In addition to the provisions for
the use of facsimile signatures elsewhere specifically authorized in these
bylaws, facsimile signatures of any officer or officers of the Corporation may
be used whenever and as authorized by the Board of Directors.
Section 6. Reliance upon Books, Reports and Records. Each director
and each member of any committee designated by the Board of Directors shall, in
the performance of his duties, be fully protected in relying in good faith upon
the books of account or reports made to the Corporation by any of its officers,
or by an independent certified public accountant, or by an appraiser selected
with reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
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Article IX
Amendments
If provided in the Certificate of Incorporation of the Corporation,
the Board of Directors shall have the power to adopt, amend and repeal from
time to time bylaws of the Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to amend or repeal such
bylaws as adopted or amended by the Board of Directors.
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EXHIBIT 3.27
CERTIFICATE OF
LIMITED PARTNERSHIP
FOR
EAGLE FRONT END SERVICES, LTD.
1. Name of Partnership: Eagle Front End Services, Ltd.
2. Address of Registered Office: 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
3. Name and Address Jay N. Silverman
of Registered Agent: 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
4. Address of Principal Office: 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
4. General Partner:
Name: Eagle Geophysical Management, Inc.
Mailing and Street Address: 50 Briar Hollow Lane
West Building, 6th Floor
Houston, Texas 77027
EXECUTED this 19th day of March, 1998.
GENERAL PARTNER:
Eagle Geophysical Management, Inc.
By: /s/ RICHARD W. MCNAIRY
--------------------------------
Richard W. McNairy, Secretary
<PAGE> 1
===============================================================================
EXHIBIT 4.1
EAGLE GEOPHYSICAL, INC.,
Issuer,
THE SUBSIDIARIES SET FORTH ON SCHEDULE I HERETO
and
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
Trustee
---------------------------
INDENTURE
Dated as of July 20, 1998
---------------------------
$100,000,000
10 3/4% Senior Notes due 2008
===============================================================================
<PAGE> 2
EAGLE GEOPHYSICAL, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT
OF 1939 AND INDENTURE, DATED AS OF JULY 20, 1998
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
Section 310(a)(1) .................................. 607
(a)(2) .................................. 607
(b) .................................. 608
Section 312(c) .................................. 701
Section 314(a) .................................. 703
(a)(4) .................................. 1008(a)
(c)(1) .................................. 102
(c)(2) .................................. 102
(e) .................................. 102
Section 315(b) .................................. 601
Section 316(a)(last
sentence) .................................. 101 ("Outstanding")
(a)(1)(A) .................................. 502, 512
(a)(1)(B) .................................. 513
(b) .................................. 508
(c) .................................. 105(d)
Section 317(a)(1) .................................. 503
(a)(2) .................................. 504
(b) .................................. 1003
Section 318(a) .................................. 111
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TABLE OF CONTENTS
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PARTIES..........................................................................1
RECITALS OF THE COMPANY..........................................................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions..........................................................2
Acquired Debt.......................................................................2
Act.................................................................................2
Additional Securities...............................................................2
Affiliate...........................................................................2
Asset Sale..........................................................................3
Asset Sale Offer....................................................................3
Asset Sale Purchase Date............................................................3
Authenticating Agent................................................................3
Bank................................................................................3
Board of Directors..................................................................3
Board Resolution....................................................................3
Business Day........................................................................4
Capital Stock.......................................................................4
Capitalized Lease Obligation........................................................4
Cash Equivalents....................................................................4
Change of Control...................................................................4
Change of Control Offer.............................................................5
Change of Control Payment"..........................................................5
Change of Control Purchase Date.....................................................5
Closing Date........................................................................5
Commission..........................................................................5
Company.............................................................................5
Company Request or Company Order....................................................5
Consolidated Adjusted Net Income....................................................5
Consolidated EBITDA.................................................................6
Consolidated Fixed Charge Coverage Ratio............................................6
Consolidated Fixed Charges..........................................................6
Consolidated Net Worth..............................................................6
Corporate Trust Office..............................................................7
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Note: This table of contents shall not, for any purpose, be deemed to be part
of the Indenture.
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Debt................................................................................7
Default.............................................................................7
Defaulted Interest..................................................................7
Depositary..........................................................................7
Disinterested Director..............................................................8
Disqualified Stock..................................................................8
Equity Offering.....................................................................8
Event of Default....................................................................8
Exchange Act........................................................................8
Exchange Offer......................................................................8
Exchange Offer Registration Statement...............................................8
Exchange Securities.................................................................8
Fair market value...................................................................9
Federal Bankruptcy Code.............................................................9
Generally Accepted Accounting Principles or GAAP....................................9
Global Security.....................................................................9
Guarantee...........................................................................9
Hedging Obligations.................................................................9
Holder..............................................................................9
Indenture...........................................................................9
Indenture Obligations...............................................................9
Initial Securities..................................................................9
Interest Payment Date...............................................................9
Investment.........................................................................10
Lien...............................................................................10
Maturity...........................................................................10
Moody's............................................................................10
Multi-Client Survey................................................................10
Net Cash Proceeds..................................................................10
Non-U.S. Person....................................................................11
Offering...........................................................................11
Officers' Certificate..............................................................11
Offshore Global Security...........................................................11
Offshore Physical Security.........................................................11
Opinion of Counsel.................................................................11
Outstanding........................................................................11
Paying Agent.......................................................................12
Permitted Investments..............................................................12
Person.............................................................................13
Predecessor Security...............................................................13
Preferred Stock....................................................................13
Private Placement Legend...........................................................13
QIB................................................................................13
Qualified Equity Interest..........................................................13
Qualified Stock....................................................................13
Redemption Date....................................................................14
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Redemption Price...................................................................14
Registrar..........................................................................14
Registration Rights Agreement......................................................14
Registration Statement.............................................................14
Regular Record Date................................................................14
Regulation S.......................................................................14
Restricted Payments................................................................14
Restricted Subsidiary..............................................................14
Revolving Credit Facility..........................................................14
Rule 144A..........................................................................14
S&P................................................................................14
Securities.........................................................................14
Securities Act.....................................................................15
Security Register..................................................................15
Shelf Registration Statement.......................................................15
Significant Subsidiary.............................................................15
Special Record Date................................................................15
Stated Maturity....................................................................15
Subordinated Debt..................................................................15
Subsidiary.........................................................................15
Subsidiary Guarantee...............................................................15
Subsidiary Guarantor...............................................................15
Trust Indenture Act or TIA.........................................................16
Trustee............................................................................16
Unrestricted Subsidiary............................................................16
U.S. Global Security...............................................................16
U.S. Government Obligations........................................................16
U.S. Physical Security.............................................................16
Voting Stock.......................................................................16
Weighted Average Life..............................................................16
Wholly-Owned Restricted Subsidiary.................................................16
SECTION 102. Compliance Certificates and Opinions................................17
SECTION 103. Form of Documents Delivered to Trustee..............................17
SECTION 104. Acts of Holders.....................................................18
SECTION 105. Notices, Etc., to Trustee, Company..................................19
SECTION 106. Notice to Holders; Waiver...........................................19
SECTION 107. Conflict of Any Provision of Indenture with Trust Indenture Act.....20
SECTION 108. Effect of Headings and Table of Contents............................20
SECTION 109. Successors and Assigns..............................................20
SECTION 110. Separability Clause.................................................20
SECTION 111. Benefits of Indenture...............................................20
SECTION 112. Governing Law.......................................................21
SECTION 113. Legal Holidays......................................................21
SECTION 114. Consent to Jurisdiction and Service of Process......................21
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ARTICLE TWO
SECURITY FORMS
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SECTION 201. Forms Generally.....................................................23
SECTION 202. Restrictive Legends.................................................24
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.....................................................26
SECTION 302. Denominations.......................................................26
SECTION 303. Execution, Authentication, Delivery and Dating......................26
SECTION 304. Temporary Securities................................................28
SECTION 305. Registration, Registration of Transfer and Exchange.................29
SECTION 306. Book-Entry Provisions for Global Securities.........................30
SECTION 307. Special Transfer Provisions.........................................31
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities....................34
SECTION 309. Payment of Interest; Interest Rights Preserved......................35
SECTION 310. Persons Deemed Owners...............................................36
SECTION 311. Cancellation........................................................36
SECTION 312. Issuance of Additional Securities...................................37
SECTION 313. CUSIP and CINS Numbers..............................................37
SECTION 314. Computation of Interest.............................................37
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.............................38
SECTION 402. Application of Trust Money..........................................39
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default...................................................40
SECTION 502. Acceleration of Maturity; Rescission and Annulment..................41
SECTION 503. Collection of Debt and Suits for Enforcement by Trustee.............42
SECTION 504. Trustee May File Proofs of Claim....................................43
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.........44
SECTION 506. Application of Money Collected......................................44
SECTION 507. Limitation on Suits.................................................44
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SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest........................................................45
SECTION 509. Restoration of Rights and Remedies..................................45
SECTION 510. Rights and Remedies Cumulative......................................45
SECTION 511. Delay or Omission Not Waiver........................................46
SECTION 512. Control by Holders..................................................46
SECTION 513. Waiver of Past Defaults.............................................46
SECTION 514. Waiver of Stay or Extension Laws....................................46
SECTION 515. Undertaking for Costs...............................................47
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults..................................................48
SECTION 602. Certain Rights of Trustee...........................................48
SECTION 603. Trustee Not Responsible for Recitals or Issuance of Securities......51
SECTION 604. May Hold Securities.................................................51
SECTION 605. Money Held in Trust.................................................52
SECTION 606. Compensation and Reimbursement......................................52
SECTION 607. Corporate Trustee Required; Eligibility.............................53
SECTION 608. Resignation and Removal; Appointment of Successor...................53
SECTION 609. Acceptance of Appointment by Successor..............................54
SECTION 610. Merger, Conversion, Consolidation or Succession to Business.........55
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE
SECTION 701. Disclosure of Names and Addresses of Holders........................56
SECTION 702. Reports by Trustee..................................................56
SECTION 703. Reports by Company..................................................56
ARTICLE EIGHT
CONSOLIDATION, MERGER, AND SALE OF ASSETS
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms................58
SECTION 802. Successor Substituted...............................................59
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ARTICLE NINE
SUPPLEMENTS AND AMENDMENTS TO INDENTURE AND SUBSIDIARY GUARANTEES
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SECTION 901. Without Consent of Holders..........................................60
SECTION 902. With Consent of Holders.............................................61
SECTION 903. Execution of Supplemental Indentures................................62
SECTION 904. Effect of Supplemental Indentures...................................62
SECTION 905. Conformity with Trust Indenture Act.................................62
SECTION 906. Reference in Securities to Supplemental Indentures..................62
SECTION 907. Notice of Supplemental Indentures...................................62
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if Any, and Interest.............63
SECTION 1002. Maintenance of Office or Agency.................................63
SECTION 1003. Money for Security Payments to Be Held in Trust.................63
SECTION 1004. Corporate Existence.............................................64
SECTION 1005. Payment of Taxes and Other Claims...............................65
SECTION 1006. Maintenance of Properties.......................................65
SECTION 1007. Ownership of Austral Horizon and Atlantic Horizon by Company
or Subsidiary Guarantors........................................65
SECTION 1008. Statement by Officers as to Default.............................65
SECTION 1009. Provision of Reports and Financial Statements...................66
SECTION 1010. Limitation on Debt..............................................66
SECTION 1011. Limitation on Restricted Payments...............................69
SECTION 1012. Purchase of Securities upon a Change of Control.................72
SECTION 1013. Limitation on Certain Asset Sales...............................74
SECTION 1014. Limitation on Transactions with Affiliates......................75
SECTION 1015. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries...............................76
SECTION 1016. Limitation on Issuances and Sales of Capital Stock of
Restricted Subsidiaries.........................................77
SECTION 1017. Limitation on Liens.............................................77
SECTION 1018. Unrestricted Subsidiaries.......................................79
SECTION 1019. Limitation on Guarantees of Debt by Restricted Subsidiaries.....79
SECTION 1020. Waiver of Certain Covenants.....................................80
SECTION 1021. Payment for Consent.............................................80
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
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SECTION 1101. Right of Redemption.............................................81
SECTION 1102. Applicability of Article........................................81
SECTION 1103. Election to Redeem; Notice to Trustee...........................81
SECTION 1104. Selection by Trustee of Securities to Be Redeemed...............81
SECTION 1105. Notice of Redemption............................................82
SECTION 1106. Deposit of Redemption Price.....................................82
SECTION 1107. Securities Payable on Redemption Date...........................83
SECTION 1108. Securities Redeemed in Part.....................................83
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company Option to Effect Defeasance or Covenant Defeasance......84
SECTION 1202. Defeasance and Discharge........................................84
SECTION 1203. Covenant Defeasance.............................................84
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.................85
SECTION 1205. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions...................86
SECTION 1206. Reinstatement...................................................87
ARTICLE THIRTEEN
SUBSIDIARY GUARANTEES
SECTION 1301. Subsidiary Guarantees...........................................88
SECTION 1302. Guaranty Absolute...............................................89
SECTION 1303. Waivers.........................................................90
SECTION 1304. Subrogation.....................................................91
SECTION 1305. No Waiver; Remedies.............................................91
SECTION 1306. Continuing Guaranty; No Right of Set-Off; Independent
Obligation......................................................91
SECTION 1307. Subsidiary Guarantors May Consolidate, Etc., on Certain Terms...92
SECTION 1308. Additional Subsidiary Guarantors................................92
SECTION 1309. Releases........................................................93
SECTION 1310. Benefits Acknowledged...........................................93
SECTION 1311. Severability....................................................93
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EXHIBITS
Exhibit A - Form of Security
Exhibit B - Form of Certificate to Be Delivered upon Termination of Restricted
Period
Exhibit C - Form of Certificate to Be Delivered in Connection with Transfers to
Non-QUIB Institutional Accredited Investors
Exhibit D - Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S
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INDENTURE, dated as of July 20, 1998 among Eagle Geophysical, Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), the Subsidiaries set forth on Schedule I hereto
and Chase Bank of Texas, National Association, a national banking association
having its principal corporate trust office in Houston, Texas, as trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation and issue of its 10 3/4%
Senior Notes due 2008 (herein called the "Initial Securities"), and 10 3/4%
Senior Notes due 2008, Series B (the "Exchange Securities" and, together with
the Initial Securities, the "Securities") of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.
Upon the issuance of the Exchange Securities, if any, or the
effectiveness of the Exchange Offer Registration Statement (as defined herein)
or, under certain circumstances, the effectiveness of the Shelf Registration
Statement (as defined herein), this Indenture shall be subject to the provisions
of the Trust Indenture Act of 1939, as amended, that are required to be part of
this Indenture and shall, to the extent applicable, be governed by such
provisions.
All things necessary have been done to make the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company and to make this
Indenture a valid agreement of the Company, each in accordance with their
respective terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders (as defined herein) thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper", as used in TIA Section 311, shall have the
meanings assigned to them in the rules of the Commission adopted under the
Trust Indenture Act;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Articles Two, Eight, Ten and Twelve
are defined in those Articles.
"Acquired Debt" means Debt of a Person (a) existing at the time such
Person is merged with or into the Company or becomes a Subsidiary or (b) assumed
in connection with the acquisition of assets from such Person.
"Act," when used with respect to any Holder, has the meaning specified
in Section 104 hereof.
"Additional Securities" has the meaning set forth in Section 312
hereof.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger or
consolidation) (collectively, a "transfer") by the Company or a Restricted
Subsidiary, directly or indirectly, in one or a series of
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related transactions, to any person other than the Company or a Restricted
Subsidiary of (a) any Capital Stock of any Restricted Subsidiary, (b) all or
substantially all of the properties and assets of the Company and its Restricted
Subsidiaries representing a division or line of business or (c) any other
properties or assets of the Company or any Restricted Subsidiary, other than in
the ordinary course of business. For the purposes of this definition, the term
"Asset Sale" does not include any transfer of properties or assets (i) that is
governed by the provisions of Section 801 hereof, (ii) between or among the
Company and its Restricted Subsidiaries pursuant to transactions that do not
violate any other provision of this Indenture, (iii) to an Unrestricted
Subsidiary, if permitted under Section 1011 hereof, (iv) representing obsolete
or permanently retired equipment and facilities (v) the gross proceeds of which
(exclusive of indemnities) do not exceed $500,000 for any particular item or
$1,000,000 in the aggregate for any fiscal year or (vi) that is a lease of a
towed-streamer seismic data acquisition vessel owned by the Company or any
Restricted Subsidiary, provided that (A) such lease shall not provide for the
acquisition of such vessel by the lessee during or at the end of the term
thereof for an amount that is less than the fair market value thereof at the
time the right to acquire such property is granted, (B) the term of such lease
shall not exceed twelve months, (C) such lease shall provide that upon an Event
of Default under this Indenture such lease would automatically terminate, (D)
not more than the greater of (I) one such vessel or (II) one-third of all of
such vessels may be subject to such a lease at any one time and (E) the Company
or a Restricted Subsidiary shall retain legal title to such vessel at all times
during the term of such lease.
"Asset Sale Offer" has the meaning set forth in Section 1013 hereof.
"Asset Sale Purchase Date" has the meaning set forth in Section 1013
hereof.
"Authenticating Agent" has the meaning set forth in Section 303 hereof.
"Bank" means Bank One, Texas, N.A., and other financial institutions
that from time to time are lenders under the Revolving Credit Facility.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"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 and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York or Texas are
authorized or obligated by law or executive order to close.
"Capital Stock" of any Person means any and all shares, interests,
partnership interests, participations, rights in or other equivalents (however
designated) of such person's equity interest (however designated).
"Capitalized Lease Obligation" means, with respect to any person, an
obligation incurred or assumed under or in connection with any capital lease of
real or personal property that, in accordance with GAAP, has been recorded as a
capitalized lease.
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"Cash Equivalents" means (i) any evidence of Debt with a maturity of
180 days or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof); (ii) certificates of deposit or acceptances with a maturity of 180
days or less of any financial institution that is a member of the Federal
Reserve System having combined capital and surplus and undivided profits of not
less than $500,000,000; and (iii) commercial paper with a maturity of 180 days
or less issued by a corporation that is not an Affiliate of the Company and is
organized under the laws of any state of the United States or the District of
Columbia and rated at least A-1 by S&P or at least P-1 by Moody's.
"Change of Control" means the occurrence of any of the following
events:
(a) Any Person or "group" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person will
be deemed to have "beneficial ownership" of all securities that such Person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than a
majority of the voting power of all classes of Voting Stock of the Company.
(b) During any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election to such Board of Directors,
or whose nomination for election by the stockholders of the Company, was
approved by a vote of 66-2/3% of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Company then in
office.
(c) The Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution, other than a transaction that complies with the
provisions described under Section 801 hereof.
"Change of Control Offer" has the meaning set forth in Section 1012
hereof.
"Change of Control Payment" has the meaning set forth in Section 1012
hereof.
"Change of Control Purchase Date" has the meaning set forth in Section
1012 hereof.
"Closing Date" means the date on which the Initial Securities are
originally issued under this Indenture.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
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"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, Chief Executive Officer,
President, any Vice President, Chief Financial Officer, Treasurer or an
Assistant Treasurer, and delivered to the Trustee.
"Consolidated Adjusted Net Income" means, for any period, the net
income (or net loss) of the Company and its Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP, adjusted
to the extent included in calculating such net income or loss by excluding (a)
any net after-tax extraordinary gains or losses (less all fees and expenses
relating thereto), (b) any net after-tax gains or losses (less all fees and
expenses relating thereto) attributable to Asset Sales, (c) the portion of net
income (or loss) of any Person (other than the Company or a Restricted
Subsidiary), including Unrestricted Subsidiaries, in which the Company or any
Restricted Subsidiary has an ownership interest, except to the extent of the
amount of dividends or other distributions actually paid to the Company or any
Restricted Subsidiary in cash during such period, (d) the net income (or loss)
of any Person combined with the Company or any Restricted Subsidiary on a
"pooling of interests" basis attributable to any period prior to the date of
combination and (e) the net income (but not the net loss) of any Restricted
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is at the date of determination
restricted, directly or indirectly, except to the extent that such net income
could be paid to the Company or a Restricted Subsidiary thereof by loans,
advances, intercompany transfers, principal repayments or otherwise; provided
that, if any Restricted Subsidiary is not a Wholly-Owned Restricted Subsidiary,
Consolidated Adjusted Net Income shall be reduced (to the extent not otherwise
reduced in accordance with GAAP) by an amount equal to (A) the amount of the
Consolidated Adjusted Net Income otherwise attributable to such Restricted
Subsidiary multiplied by (B) the quotient of (1) the number of shares of
outstanding common stock of such Restricted Subsidiary not owned on the last day
of such period by the Company or any of its Restricted Subsidiaries divided by
(2) the total number of shares of outstanding common stock of such Restricted
Subsidiary on the last day of such period.
"Consolidated EBITDA" means, for any period, the sum of, without
duplication, Consolidated Adjusted Net Income for such period, plus (or, in the
case of clause (d) below, plus or minus) the following items to the extent
included in computing Consolidated Adjusted Net Income for such period (a)
Consolidated Fixed Charges for such period, plus (b) the provision for federal,
state, local and foreign income taxes of the Company and its Restricted
Subsidiaries for such period, plus (c) the aggregate depreciation and
amortization expense of the Company and its Restricted Subsidiaries for such
period, plus (d) any other non-cash charges for such period, and minus non-cash
credits for such period, other than non-cash charges or credits resulting from
changes in prepaid assets or accrued liabilities in the ordinary course of
business; provided that fixed charges, income tax expense, depreciation and
amortization expense and non-cash charges and credits of a Restricted Subsidiary
shall be included in Consolidated EBITDA only to the extent (and in the same
proportion) that the net income of such Subsidiary was included in calculating
Consolidated Adjusted Net Income for such period.
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"Consolidated Fixed Charge Coverage Ratio" means, for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Fixed
Charges for such period.
"Consolidated Fixed Charges" means, for any period, without
duplication, the sum of (a) the amount that, in conformity with GAAP, would be
set forth opposite the caption "interest expense" (or any like caption) on a
consolidated statement of operations of the Company and its Restricted
Subsidiaries for such period, including, without limitation, (i) amortization of
debt discount, (ii) the net cost of interest rate contracts (including
amortization of discounts), (iii) the interest portion of any deferred payment
obligation, (iv) amortization of debt issuance costs and (v) the interest
component of Capitalized Lease Obligations, plus (b) cash dividends paid on
Preferred Stock and Disqualified Stock by the Company and any Restricted
Subsidiary (to any Person other than the Company and its Restricted
Subsidiaries), plus (c) all interest on any Debt of any Person guaranteed by the
Company or any of its Restricted Subsidiaries; provided, however, that
Consolidated Fixed Charges shall not include (i) any gain or loss from
extinguishment of debt, including the write-off of debt issuance costs and (ii)
the fixed charges of a Restricted Subsidiary to the extent (and in the same
proportion) that the net income of such Subsidiary was excluded in calculating
Consolidated Adjusted Net Income pursuant to clause (e) of the definition
thereof for such period.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity of the Company and its Restricted Subsidiaries as set forth
on the most recently available quarterly or annual consolidated balance sheet of
the Company and its Restricted Subsidiaries, less any amounts attributable to
Disqualified Stock or any equity security convertible into or exchangeable for
Debt, the cost of treasury stock and the principal amount of any promissory
notes receivable from the sale of the Capital Stock of the Company or any of its
Restricted Subsidiaries and less, to the extent included in calculating such
stockholders' equity of the Company and its Restricted Subsidiaries, the
stockholders' equity attributable to Unrestricted Subsidiaries, each item to be
determined in conformity with GAAP (excluding the effects of foreign currency
adjustments under Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 52).
"Corporate Trust Office" means the principal corporate trust office of
the Trustee, at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Indenture is
located at 600 Travis Street, Suite 1150, Houston, TX 77002, except that with
respect to presentation of Securities for payment or for registration of
transfer or exchange, such term shall mean the office or agency of the Trustee
at which, at any particular time, its corporate trust and agency business shall
be conducted in The City of New York.
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (a) every obligation of such Person for money borrowed, (b) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, (c) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person, (d) every obligation of such Person issued or assumed as
the deferred purchase price of property or services, (e) the amount of every
Capitalized Lease Obligation of
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<PAGE> 17
such Person, (f) all Disqualified Stock of such Person valued at its maximum
fixed repurchase price, plus accrued and unpaid dividends, (g) all obligations
of such Person under or in respect of Hedging Obligations and (h) every
obligation of the type referred to in clauses (a) through (g) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed. For purposes of this definition, the "maximum fixed
repurchase price" of any Disqualified Stock that does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Stock as if such Disqualified Stock were repurchased on any date on
which Debt is required to be determined pursuant to this Indenture, and if such
price is based upon, or measured by, the fair market value of such Disqualified
Stock, such fair market value shall be determined in good faith by the board of
directors of the issuer of such Disqualified Stock. Notwithstanding the
foregoing, trade accounts payable and accrued liabilities arising in the
ordinary course of business and any liability for federal, state or local taxes
or other taxes owed by such Person shall not be considered Debt for purposes of
this definition.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 309 hereof.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors, to make a finding or otherwise
take action under this Indenture, a member of the Board of Directors who does
not have any material direct or indirect financial interest in or with respect
to such transaction or series of transactions (other than as the holder of
Voting Stock of the Company).
"Disqualified Stock" means any class or series of Capital Stock that,
either by its terms, or by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise (i) is, or upon the
happening of an event or passage of time would be, required to be redeemed prior
to one year after the final Stated Maturity of the Securities, (ii) is
redeemable at the option of the holder thereof at any time prior to one year
after such final Stated Maturity or (iii) at the option of the holder thereof,
is convertible into or exchangeable for debt securities at any time prior to one
year after such final Stated Maturity; provided that any Capital Stock that
would not constitute Disqualified Stock but for provisions therein giving
holders thereof the right to cause the issuer thereof to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Securities shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are no more favorable to the holders of such
Capital Stock than the provisions contained in Sections 1012 and 1013 hereof and
such Capital Stock specifically provides that the issuer shall not repurchase or
redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Securities as are required to be repurchased pursuant to
Sections 1012 and 1013 hereof.
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<PAGE> 18
"Equity Offering" means an offer and sale by the Company of its common
stock (which is Qualified Stock) for cash to a Person or Persons other than a
Subsidiary.
"Event of Default" has the meaning specified in Section 501 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the exchange offer that may be effected pursuant
to the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Exchange Securities" has the meaning stated in the first recital of
this Indenture and refers to any Exchange Securities containing terms
substantially identical to the Initial Securities (except that such Exchange
Securities shall not contain terms with respect to the interest rate step-up
provisions in Section 309 hereof and the transfer restrictions in Section 307
hereof) that are issued and exchanged for the Initial Securities or any
Additional Securities pursuant to the Registration Rights Agreement and this
Indenture.
"Fair market value" means, with respect to any asset, the price which
could be negotiated in an arm's-length free market transaction, for cash,
between an informed and willing seller and an informed and willing buyer,
neither of which is under pressure or compulsion to complete the transaction.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the
United States Code, as amended from time to time.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, that
are in effect on the Closing Date.
"Global Security" has the meaning set forth in Section 201 hereof.
"Guarantee" means, as applied to any obligation, (a) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limitation, the payment of
amounts drawn down under letters of credit.
"Hedging Obligations" means the obligations of any Person under (i)
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and (ii) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates or the value of foreign
currencies.
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<PAGE> 19
"Holder" means the Person in whose name a Security is, at the time of
determination, registered on the Security Register.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company and any
other obligor hereunder or under the Securities to pay principal of (and
premium, if any) and interest on the Securities when due and payable at
Maturity, and all other amounts due or to become due under or in connection with
this Indenture, the Securities and the performance of all other obligations to
the Trustee (including all amounts due to the Trustee under Section 606 hereof)
and the Holders under this Indenture and the Securities, according to the terms
hereof and thereof.
"Initial Securities" has the meaning stated in the first recital of
this Indenture.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Investment" in any Person means, (i) directly or indirectly, any
advance, loan or other extension of credit (including, without limitation, by
way of guarantee or similar arrangement) or capital contribution to any Person,
the purchase or other acquisition of any stock, bonds, notes, debentures or
other securities issued by such Person, the acquisition (by purchase or
otherwise) of all or substantially all of the business or assets of such Person,
or the making of any investment in such Person, (ii) the designation of any
Restricted Subsidiary as an Unrestricted Subsidiary and (iii) the fair market
value of the Capital Stock (or any other Investment), held by the Company or any
of its Restricted Subsidiaries, of (or in) any Person that has ceased to be a
Restricted Subsidiary, including, without limitation, by reason of any
transaction permitted by clause (iv) of Section 1016 hereof. Investments exclude
extensions of trade credit on commercially reasonable terms in accordance with
normal trade practices.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation, assignment for
security, claim, or preference or priority or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired. A Person will be deemed to own subject to a Lien
any property that such Person has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. and its successors.
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<PAGE> 20
"Multi-Client Survey" means a seismic survey whereby the Company or a
Restricted Subsidiary acquires certain seismic data in which it directly or
indirectly retains ownership rights, revenue interests or similar interests in
the future economic benefits thereof and which data is to be licensed to
customers on a non-transferable, non-exclusive basis.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or cash equivalents, including payments in respect
of deferred payment obligations when received in the form of, or stock or other
assets when disposed for, cash or cash equivalents (except to the extent that
such obligations are financed or sold with recourse to the Company or any
Restricted Subsidiary), net of (a) brokerage commissions and other fees and
expenses (including fees and expenses of legal counsel and investment banks)
related to such Asset Sale, (b) provisions for all taxes payable as a result of
such Asset Sale, (c) payments made to retire Debt where payment of such Debt is
secured by the assets that are the subject of such Asset Sale, (d) amounts
required to be paid to any Person (other than the Company or any Restricted
Subsidiary) owning a beneficial interest in the assets that are subject to the
Asset Sale and (e) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve required in accordance
with GAAP against any liabilities associated with such Asset Sale and retained
by the seller after such Asset Sale, including pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale.
"Non-U.S. Person" means a Person that is not a "U.S. Person" as defined
in Regulation S.
"Offering" means the offering of 10 3/4% Senior Notes due 2008 by the
Company.
"Officers' Certificate" means a certificate signed by the Chairman,
Chief Executive Officer, the President, the Chief Financial Officer or any Vice
President, and by an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.
"Offshore Global Security" has the meaning set forth in Section 201
hereof.
"Offshore Physical Security" has the meaning set forth in Section 201
hereof.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, including an employee of the Company.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment, redemption or
purchase money in the necessary amount has been theretofore deposited with
the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such
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<PAGE> 21
Securities; provided that, if such Securities are to be redeemed,
irrevocable notice of such redemption has been duly given pursuant to this
Indenture to Holders or provision therefor satisfactory to the Trustee has
been made;
(c) Securities, except to the extent provided in Sections 1202 and 1203
hereof, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Twelve hereof; and
(d) Securities which have been paid pursuant to Section 308 hereof or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Company proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands the Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned, as evidenced by registration on the Securities
Register or reflected as a beneficial owner on the records of the Depositary,
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
"Paying Agent" means Chase Bank of Texas, National Association and any
successor (including the Company acting as Paying Agent) authorized by the
Company to pay the principal of (and premium, if any) or interest on any
Securities on behalf of the Company.
"Permitted Investments" means any of the following:
(a) Investments in (i) securities with a maturity of 180 days or less
issued or directly and fully guaranteed or insured by the United States or
any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof); (ii)
certificates of deposit or acceptances with a maturity of 180 days or less
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus of not less than $500,000,000; and
(iii) commercial paper with a maturity of 180 days or less issued by a
corporation that is not an Affiliate of the Company and is organized under
the laws of any state of the United States or the District of Columbia and
having the highest rating obtainable from Moody's or S&P.
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<PAGE> 22
(b) Investments by the Company or any Restricted Subsidiary in another
Person, if as a result of such Investment such other Person (i) becomes a
Restricted Subsidiary or (ii) is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets to, the Company
or a Restricted Subsidiary.
(c) Investments by the Company or any of the Restricted Subsidiaries in
any one or the other of them.
(d) Investments in existence on the Closing Date.
(e) Promissory notes received as a result of Asset Sales permitted
under Section 1013 hereof.
(f) Direct or indirect loans to employees, or to a trustee for the
benefit of such employees, of the Company or any Restricted Subsidiary in
an aggregate amount outstanding at any time not exceeding $750,000, plus
the amount of direct or indirect loans to employees for relocation
expenses, plus advances to employees in the ordinary course of business for
travel and other business expenses.
(g) Investments in assets owned or used in the ordinary course of
business.
(h) Other Investments in a business substantially similar, or related,
to the business conducted by the Company and its Restricted Subsidiaries
provided that such Investments do not exceed $5,000,000 in the aggregate at
any time outstanding.
(i) Investments by the Company or any Restricted Subsidiary in any
person in connection with Multi-Client Surveys in an aggregate amount
outstanding at any time not exceeding $5,000,000.
(j) Investments in any Person in the form of a capital contribution of
the Company's Qualified Stock.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 308 hereof in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's preferred or preference stock, whether now outstanding or issued
after the Closing Date, and including, without limitation, all classes and
series of preferred or preference stock of such Person.
"Private Placement Legend" has the meaning set forth in Section 202
hereof.
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"QIB" means a "Qualified Institutional Buyer" under Rule 144A.
"Qualified Equity Interest" means any Qualified Stock and all
warrants, options or other rights to acquire Qualified Stock (but excluding any
debt security that is convertible into or exchangeable for Capital Stock).
"Qualified Stock" of any Person means any and all Capital Stock of
such Person, other than Disqualified Stock.
"Redemption Date", when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registrar" means Chase Bank of Texas, National Association and any
successor authorized by the Company to act as Registrar.
"Registration Rights Agreement" means the Registration Rights
Agreement between the Company and the Initial Purchasers named therein, dated as
of July 20, 1998, relating to the Securities.
"Registration Statement" means the Registration Statement as defined
in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the January 1 or July 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. "Regulation S" means
Regulation S under the Securities Act.
"Restricted Payments" has the meaning set forth in Section 1011
hereof.
"Restricted Subsidiary" means any Subsidiary other than an
Unrestricted Subsidiary.
"Revolving Credit Facility" means the revolving credit facility dated
October 27, 1997, as amended June 10, 1998, between the Company and the Bank, as
such agreement may be amended, restated, supplemented, refinanced or otherwise
modified from time to time.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Services, a division of McGraw
Hill, Inc. and its successors.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture. For all purposes of this Indenture, the term "Securities"
shall include the Initial Securities and any
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<PAGE> 24
Exchange Securities to be issued and exchanged for any Initial Securities in
accordance with the Exchange Offer as provided for in the Registration Rights
Agreement and this Indenture. From and after the issuance of any Additional
Securities pursuant to Section 312 hereof (but not for purposes of determining
whether such issuance is permitted hereunder), "Securities" shall include such
Additional Securities for purposes of this Indenture, and all Initial
Securities, Exchange Securities and Additional Securities shall vote together as
one series of Securities under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations thereunder.
"Security Register" has the meaning set forth in Section 305 hereof.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary of the
Company that, together with its Subsidiaries, (a) for the most recent fiscal
year of the Company, accounted for more than 10% of the consolidated net sales
of the Company and its Restricted Subsidiaries or (b) as of the end of such
fiscal year, was the owner of more than 10% of the consolidated assets of the
Company and its Restricted Subsidiaries, in the case of either (a) or (b), as
set forth on the most recently available consolidated financial statements of
the Company for such fiscal year or (c) was organized or acquired after the
beginning of such fiscal year and would have been a Significant Subsidiary if it
had been owned during the entire fiscal year.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 309 hereof.
"Stated Maturity" means, when used with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable and, when used with respect to any other Debt, means
the date specified in the instrument governing such Debt as the fixed date on
which the principal of such Debt or any installment of interest thereon is due
and payable.
"Subordinated Debt" means Debt of the Company or a Subsidiary
Guarantor that is subordinated in right of payment to the Securities or the
Subsidiary Guarantee issued by such Subsidiary Guarantor, as the case may be.
"Subsidiary" means any Person a majority of the equity ownership or
Voting Stock of which is at the time owned, directly or indirectly, by the
Company and/or one or more other Subsidiaries of the Company.
"Subsidiary Guarantee" means a guarantee of the Securities by a
Restricted Subsidiary in accordance with the provisions of this Indenture.
"Subsidiary Guarantor" means those Restricted Subsidiaries set forth
on Schedule I to this Indenture and any other Restricted Subsidiary that from
time to time issues a Subsidiary
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<PAGE> 25
Guarantee pursuant to the terms hereof (subject to the release of any such
Restricted Subsidiary from its obligations as a Subsidiary Guarantor pursuant to
the provisions hereof).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this Indenture was executed,
except as provided in Section 905 hereof.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Subsidiary" means (a) any Subsidiary that is designated
by the Board of Directors as an Unrestricted Subsidiary in accordance with
Section 1018 hereof and (b) any Subsidiary of an Unrestricted Subsidiary.
"U.S. Global Security" has the meaning set forth in Section 201
hereof.
"U.S. Government Obligations" has the meaning set forth in Section
1204 hereof.
"U.S. Physical Security" has the meaning set forth in Section 201
hereof.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes has, or might have, voting power by reason of the
happening of any contingency).
"Weighted Average Life" means, as of the date of determination with
respect to any Debt or Disqualified Stock, the quotient obtained by dividing (a)
the sum of the products of (i) the number of years from the date of
determination to the date or dates of each successive scheduled principal or
liquidation value payment of such Debt or Disqualified Stock, respectively,
multiplied by (ii) the amount of each such principal or liquidation value
payment by (b) the sum of all such principal or liquidation value payments.
"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary,
all of the outstanding voting securities (other than directors' qualifying
shares or shares of foreign Restricted Subsidiaries required to be owned by
foreign nationals pursuant to applicable law) of which are owned, directly or
indirectly, by the Company.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture (including any covenant compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically
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<PAGE> 26
required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1008(a) hereof) shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(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 each such individual, he or
she has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company that the information
with respect to such factual matters is in the possession of the Company, unless
such counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing (including but not limited to an electronic transmission of
an agent's message or other consent pursuant to the Depositary's Automated
Tender Offer Program or any similar procedure); and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that the Trustee deems sufficient.
(c) The principal amount and serial numbers of Securities held by any
Person, and the date of holding the same shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders of Securities any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than the date such solicitation is completed. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than eleven
months after the record date.
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(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(f) For all purposes of this Indenture, all Initial Securities,
Additional Securities and Exchange Securities shall vote together as one series
of Securities under this Indenture.
SECTION 105. Notices, Etc., to Trustee, Company.
Any request, application, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
and hand delivered or mailed, first-class postage prepaid, to or with the
Trustee at its Corporate Trust Office, Attention: Jan Mysinger, or sent by
facsimile to the Trustee at (713) 216-5476 (with receipt confirmed by
telephone at (713) 216-4650); or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at 50 Briar Hollow Lane 6th Floor West Houston, Texas
77027, Attention: President, or sent by facsimile to the Company at (713)
881-2801 (with receipt confirmed by telephone at (713) 881-2800), or at any
other address or facsimile number previously furnished in writing to the
Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders by
the Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
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In case by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice shall
be deemed to be a sufficient giving of such notice for every purpose hereunder.
SECTION 107. Conflict of Any Provision of Indenture with Trust
Indenture Act.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 318,
inclusive, of the Trust Indenture Act, or conflicts with any provision (an
"incorporated provision") required by or deemed to be included in this Indenture
by operation of such Trust Indenture Act sections, such imposed duties or
incorporated provision shall control.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof. Articles and
Sections referred to herein shall refer to such Articles and Sections as set
forth herein, unless otherwise specified.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its respective successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities 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 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto, any Paying Agent, any
Securities Registrar and their successors hereunder, and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF LAWS PROVISIONS. Upon the issuance of the Exchange Securities, if any, or the
effectiveness of the Exchange Offer Registration Statement (as defined herein)
or, under certain circumstances, the effectiveness of the Shelf Registration
Statement (as defined herein), this Indenture shall be subject to the
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provisions of the Trust Indenture Act, that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, date
established for payment of Defaulted Interest pursuant to Section 309 hereof,
Stated Maturity or Maturity, Change of Control Purchase Date or Asset Sale
Purchase Date with respect to any Security or other date on which principal,
premium or interest in respect or the Securities is due, shall not be a Business
Day, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of principal (or premium, if any) or interest need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date, Redemption Date,
date established for payment of Defaulted Interest pursuant to Section 309
hereof, Stated Maturity or Maturity, Change of Control Purchase Date, Asset Sale
Purchase Date or such other date; provided that no interest shall accrue for the
period from and after such Interest Payment Date or other such day, Redemption
Date, date established for payment of Defaulted Interest pursuant to Section 309
hereof, Stated Maturity or Maturity, Change of Control Purchase Date, Asset Sale
Purchase Date or such other date, as the case may be, to the next succeeding
Business Day.
SECTION 114. Consent to Jurisdiction and Service of Process.
The Company agrees that any legal suit, action or proceeding brought
by any party to enforce any rights under or with respect to this Indenture or
the Securities may be instituted in any state or federal court in New York City
and waives to the fullest extent permitted by law any objection which it may now
or hereafter have to the laying of venue of any such suit, action or proceeding
and irrevocably submits to the non-exclusive jurisdiction of any such court in
any such suit, action or proceeding. The Company hereby irrevocably designates
and appoints CT Corporation System as the Company's authorized agent to receive
and forward on its behalf service of any and all process which may be served in
any such suit, action or proceeding in any such court and agrees that service of
process upon CT Corporation System at its office at 1633 Broadway, New York, New
York 10019, (or such other address in the State of New York as the Company may
designate by written notice to the Trustee) and written notice of such service
to the Company marked or delivered to CT Corporation System at its address set
forth herein shall be deemed in every respect effective service of process upon
the Company in any such suit, action or proceeding and shall be taken and held
to be valid personal service upon the Company. Nothing in this Section 114 shall
affect the right of any party hereto to serve process in any manner permitted by
law or limit the right of any party hereto to bring proceedings against the
Company in the courts of any jurisdiction or jurisdictions. The Company further
agrees to take any and all action, including the execution and filing of any and
all such documents and instruments as may be necessary to continue such
designation and appointment of CT Corporation System in full force and effect so
long as this Indenture or any of the Securities shall be outstanding. To the
extent that the Company has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, executor
or otherwise) with respect to itself or its property, the Company hereby
irrevocably waives such immunity in respect of its obligations under this
Indenture and the Securities, to the extent permitted by law.
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ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities and the Trustee's certificate of authentication shall
be in substantially the form annexed hereto as Exhibit A, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. Any portion of the text of
any Security may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved
on steel-engraved borders or may be produced in any other manner, all as
determined by the officers of the Company executing such Securities, as
evidenced by their execution of such Securities.
The terms and provisions contained in the form of the Securities
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Indenture. To the extent applicable, the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Securities in registered
form substantially in the form set forth in Exhibit A (the "U.S. Global
Security"), registered in the name of the nominee of the Depositary, deposited
with the Trustee, as custodian for the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the U.S. Global Security may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more permanent
global Securities in registered form substantially in the form set forth in
Exhibit A (the "Offshore Global Security"), registered in the name of the
nominee of the Depositary, deposited with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Offshore Global
Security may from time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
Securities offered and sold in reliance on Regulation D under the
Securities Act shall be issued in the form of permanent certificated Securities
in registered form in substantially the form set forth in Exhibit A (the "U.S.
Physical Securities"). Securities offered and sold pursuant to Section 306
hereof in exchange for interests in the Offshore Global Security shall be
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in the form of permanent certificated Securities in registered form
substantially in the form set forth in Exhibit A (the "Offshore Physical
Securities").
The Offshore Physical Securities and the U.S. Physical Securities are
sometimes collectively herein referred to as the "Physical Securities." The U.S.
Global Security and the Offshore Global Security are sometimes referred to
herein as the "Global Securities."
SECTION 202. Restrictive Legends.
Unless and until an Initial Security is sold under an effective Shelf
Registration Statement or an Initial Security is exchanged for an Exchange
Security in connection with an effective Exchange Offer Registration Statement,
in each case pursuant to the Registration Rights Agreement, (i) the U.S. Global
Security and the U.S. Physical Securities shall bear the legend, set forth below
on the face thereof (the "Private Placement Legend") and (ii) the Offshore
Global Security and the Offshore Physical Security shall bear the Private
Placement Legend until at least the 41st day after the Closing Date and receipt
by the Company and the Trustee of a certificate substantially in the form of
Exhibit B hereto:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL, PLEDGE OR
OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS
AFTER THE LATER OF THE DATE OF ORIGINAL ISSUE HEREOF AND THE LAST DATE ON
WHICH EAGLE GEOPHYSICAL, INC. (THE "COMPANY") OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, (E) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES MEETING THE
REQUIREMENTS OF RULE 903 OR RULE 904
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OF REGULATION S UNDER THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT; PROVIDED THAT THE COMPANY SHALL HAVE THE RIGHT PRIOR TO ANY SUCH
OFFER, SALE, PLEDGE OR TRANSFER (i) PURSUANT TO CLAUSE (E) OR (F) ABOVE TO
REQUIRE THE DELIVERY OF AN OPINION (IN FORM AND SUBSTANCE SATISFACTORY TO
THE COMPANY) OF COUNSEL SATISFACTORY TO THE COMPANY, AND CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY, AND (ii) IN THE CASE
OF CLAUSE (D) ABOVE, THE TRANSFEROR SHALL DELIVER A LETTER FROM THE
TRANSFEREE WHICH SHALL PROVIDE, AMONG OTHER THINGS, THAT SUCH TRANSFEREE IS
AN INSTITUTIONAL "ACCREDITED INVESTOR" AND THAT IT IS ACQUIRING SUCH
SECURITIES FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR
SALE IN CONNECTION WITH, ANY DISTRIBUTION UNDER THE SECURITIES ACT AND IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE COMPANY.
Each U.S. Global Security, whether or not an Initial Security, shall
also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTIONS 306 AND 307 OF THE INDENTURE.
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ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The Initial Securities shall be known and designated as the "10 3/4%
Senior Notes due 2008" and the Exchange Securities shall be known and designated
as the "10 3/4% Senior Notes due 2008, Series B." Their Stated Maturity shall be
July 15, 2008, and they shall bear interest at the rate of 10 3/4% per annum
from July 20, 1998, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, payable semiannually on January 15
and July 15 in each year, commencing January 15, 1999, until the principal
thereof is paid or duly provided for, to the Person in whose name the Security
(or any predecessor Security) is registered at the close of business on the
January 1 or July 1 next preceding such Interest Payment Date.
The principal of (and premium, if any), and interest on the Securities
shall be payable, and the Securities shall be exchangeable and transferable, at
the office or agency of the Company in The City of New York maintained for such
purposes, (which initially shall be the office of the Trustee located at 55
Water Street, North Building, Room 234, Windows 20 and 21, New York, New York,
10041) or, at the option of the Company, interest may be paid by check mailed to
the address of the Person entitled thereto as such address shall appear on the
Security Register; provided that all payments with respect to the U.S. Global
Securities, as well as Physical Securities the Holders of which have given wire
transfer instructions to the Trustee (or other Paying Agent) by the Regular
Record Date for such payment, shall be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders thereof.
Initial Securities that remain outstanding after the consummation of
the Exchange Offer, Exchange Securities issued in connection with the Exchange
Offer and any Additional Securities will be treated as a single class of
securities under this Indenture.
The Securities shall be redeemable as provided in Article Eleven.
SECTION 302. Denominations.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
Subject to Article Ten hereof, the aggregate principal amount of
Securities which may be authenticated and delivered under this Indenture is
unlimited. The Securities shall be executed on behalf of the Company by its
Chairman, Chief Executive Officer, President, Chief Financial Officer or any
Vice President. The signature of any of these officers on the Securities may be
manual or facsimile signatures of the present or any future such authorized
officer and may be imprinted or otherwise reproduced on the Securities.
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Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
On the date hereof, after the execution and delivery of this
Indenture, the Company shall deliver Initial Securities in the aggregate
principal amount of $100,000,000 executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Initial Securities directing the Trustee to authenticate the
Initial Securities and certifying that all conditions precedent to the issuance
of Securities contained herein have been fully complied with, and the Trustee in
accordance with such Company Order shall authenticate and deliver such Initial
Securities. At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Additional Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Additional Securities directing the Trustee
to authenticate the Additional Securities and certifying that the issuance of
such Additional Securities is in compliance with Article Ten hereof and that all
other conditions precedent to the issuance of Securities contained herein have
been fully complied with, and the Trustee in accordance with such Company Order
shall authenticate and deliver such Additional Securities. On Company Order, the
Trustee shall authenticate for original issue Exchange Securities in an
aggregate principal amount not to exceed $100,000,000 plus the aggregate
principal amount of any Additional Securities issued; provided that such
Exchange Securities shall be issuable only upon the valid surrender for
cancellation of Initial Securities and Additional Securities of a like aggregate
principal amount in accordance with an Exchange Offer pursuant to the
Registration Rights Agreement and a Company Order delivered to the Trustee for
the authentication and delivery of such Exchange Securities and certifying that
all conditions precedent to the issuance of such Securities have been complied
with (including the effectiveness of the Registration Statement related
thereto). In each case, the Trustee shall be entitled to receive an Officers'
Certificate and an Opinion of Counsel of the Company to the effect that the form
of the certificates being delivered to the Trustee for authentication comply
with the terms and provisions of this Indenture, that all terms and provisions
of this Indenture have been complied with for the issuance of Exchange
Securities or such other matters as the Trustee may reasonably request in
connection with such authentication of Securities. Each Company Order shall
specify the amount of Securities to be authenticated and the date on which the
original issue of Securities is to be authenticated.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for in Exhibit
A duly executed by the Trustee by manual signature of an authorized officer, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture.
In case the Company, pursuant to Article Eight, shall be consolidated
or merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its
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properties and assets substantially as an entirety to any Person, and the
successor Person resulting from such consolidation, or surviving such merger, or
into which the Company shall have been merged, or the Person which shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article Eight, any of the Securities authenticated or delivered prior to such
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Securities executed in the name of the successor Person with such changes
in phraseology and form as may be appropriate as determined by the Company or
the successor Person, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Company Request of the successor Person, shall authenticate and deliver
Securities as specified in such request for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in any new name of a
successor Person pursuant to this Section in exchange or substitution for or
upon registration of transfer of any Securities, such successor Person, at the
option of the Holders but without expense to them or the Trustee, shall provide
for the exchange of all Securities at the time Outstanding for Securities
authenticated and delivered in such new name.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities (an "Authenticating Agent").
Unless limited by the terms of such appointment, an Authenticating Agent may
authenticate Securities 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 any Registrar, Paying
Agent or agent for service of notices and demands.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the Company's officers executing such Securities may determine, as conclusively
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company shall cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 1002
hereof, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
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SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 hereof being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Security Register
shall be in written form or any other form capable of being converted into
written form within a reasonable time. At all reasonable times, the Security
Register shall be open to inspection by the Trustee. The Trustee is hereby
initially appointed as "Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 1002 hereof, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
any authorized denomination or denominations of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange (including an
exchange of Initial Securities for Exchange Securities), the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive; provided that no exchange
of Initial Securities for Exchange Securities shall occur until an Exchange
Offer Registration Statement shall have been declared effective by the
Commission, the Trustee shall have received an Officer's Certificate confirming
that the Exchange Offer Registration Statement has been declared effective by
the Commission and the Initial Securities to be exchanged for the Exchange
Securities shall be canceled by the Trustee.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Sections 304, 906, 1012, 1013 or 1108 hereof not
involving any transfer.
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The Company shall not be required (i) to issue, register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the selection of Securities to be redeemed under Section 1104
hereof and ending at the close of business on the day of such mailing of the
relevant notice of redemption, or (ii) to register the transfer of or exchange
any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
Notwithstanding anything to the contrary contained herein, the Trustee
shall have no duty whatsoever and no liability whatsoever with respect to
compliance with Federal or State securities laws, rules or regulations.
SECTION 306. Book-Entry Provisions for Global Securities.
(a) The U.S. Global Security and the Offshore Global Security
initially shall (i) be registered in the name of the Depositary or the nominee
of the Depositary, (ii) be deposited with, or on behalf of, the Depositary or
with the Trustee, as custodian for such Depositary, and (iii) bear legends as
set forth in Section 202 hereof.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. 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 Depositary or shall impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers of
such Global Security in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary and the provisions of Section 307 hereof. In addition, U.S.
Physical Securities and Offshore Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in the U.S. Global
Security or the Offshore Global Security, respectively, if (i) the Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for the U.S. Global Securities or the Offshore Global Securities, as the case
may be and a successor depositary is not appointed by the Company within 90 days
of such notice, (ii) an Event of Default has occurred and is continuing and is
known to the Trustee and the Registrar has received a request from the
Depositary or (iii) in accordance with the rules and procedures of the
Depositary and the provisions of Section 307 hereof.
(c) Any beneficial interest in one of the Global Securities that is
transferred to a Person who takes delivery in the form of an interest in the
other Global Security shall, upon transfer, cease to be an interest in such
Global Security and become an interest in the other Global Security and,
accordingly, shall thereafter be subject to all transfer restrictions, if any,
and
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other procedures applicable to beneficial interest in such other Global Security
for as long as it remains such an interest.
(d) In connection with any transfer of a portion of the beneficial
interests in a U.S. Global Security or Offshore Global Security to beneficial
owners pursuant to subsection (b) of this Section, the Registrar shall reflect
on its books and records the date and a decrease in the principal amount of the
U.S. Global Security or Offshore Global Security in an amount equal to the
principal amount of the beneficial interest in such Global Security to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more U.S. Physical Securities or Offshore Physical
Securities of like tenor and amount.
(e) In connection with the transfer of the entire U.S. Global Security
or Offshore Global Security to beneficial owners pursuant to subsection (b) of
this Section, the U.S. Global Security or the Offshore Global Security, as the
case may be, shall be deemed to be surrendered to the Trustee for cancellation,
and the Company shall execute, and the Trustee shall authenticate and deliver,
to each beneficial owner identified by the Depositary in exchange for its
beneficial interest in the U.S. Global Security or Offshore Global Security, as
the case may be, an equal aggregate principal amount of U.S. Physical Securities
or Offshore Physical Securities, as the case may be, of authorized
denominations.
(f) Any U.S. Physical Security delivered in exchange for an interest
in the U.S. Global Security pursuant to subsection (b), (d) or (e) of this
Section shall, except as otherwise provided by paragraph (e) of Section 307
hereof, bear the applicable legend regarding transfer restrictions applicable to
the U.S. Physical Security set forth in Section 202 hereof.
(g) Any Offshore Physical Security delivered in exchange for an
interest in the Offshore Global Security pursuant to subsection (b), (d) or (e)
of this Section shall, except as otherwise provided by paragraph (e) of Section
307 hereof, bear the applicable legend regarding transfer restrictions
applicable to the Offshore Physical Security set forth in Section 202 hereof.
(h) The registered Holder of a Global Security may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 307. Special Transfer Provisions.
The Trustee is entitled to rely upon the certificates delivered
pursuant to this Section 307 and is irrevocably authorized to produce such
certificates or copies thereof to any interested party in any administrative or
legal proceeding or official inquiry with respect to the matters covered
thereby.
Unless and until the Trustee has received a certification from the
Company that (i) an Initial Security is sold under an effective Shelf
Registration Statement or (ii) an Initial Security is exchanged for an Exchange
Security in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement, the following provisions shall
apply:
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(a) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Security to any institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) which is not a QIB (excluding transfers to Non-U.S. Persons in compliance
with Regulation S):
(i) The Registrar shall register the transfer of any Security, whether
or not such Security bears the Private Placement Legend, if (x) the Company
has certified to the registrar that such requested transfer is after the
time period referred to in Rule 144(k) under the Securities Act as in
effect with respect to such transfer or (y) the proposed transferee has
delivered to the Registrar (A) a certificate substantially in the form of
Exhibit C hereto and (B) if the aggregate principal amount of the
Securities being transferred is less than $100,000 at the time of such
transfer, an opinion of counsel acceptable to the Company that such
transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (i), and (y)
instructions given in accordance with the Depositary's and the Registrar's
procedures therefor, the Registrar shall reflect on its books and records
the date and a decrease in the principal amount of the U.S. Global Security
in an amount equal to the principal amount of the beneficial interest in
the U.S. Global Security to be transferred, and the Company shall execute,
and the Trustee shall authenticate and deliver, one or more U.S. Physical
Securities of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a U.S. Physical
Security, an interest in a U.S. Global Security or an interest in an Offshore
Global Security to a QIB (excluding transfers to Non-U.S. Persons in compliance
with Regulation S):
(i) If the Security to be transferred consists of (x) either (A) an
interest in an Offshore Global Security prior to the removal of the Private
Placement Legend or (B) U.S. Physical Securities, the Registrar shall
register the transfer if such transfer is being made by a proposed
transferor who has checked the box provided for on the form of Initial
Security stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with the provisions of
Rule 144A to a transferee who has signed the certification provided for on
the form of Initial Security stating, or has otherwise advised the Company
and the Registrar in writing, that it is purchasing the Initial Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it, or the Person on whose behalf it is
acting with respect to any such account, is a QIB within the meaning of
Rule 144A, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding
the Company as it has requested pursuant to Rule 144A or has determined not
to request such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the exemption
from registration provided by Rule 144A or (y) an interest in a U.S. Global
Security, the transfer of such interest may be effected only through the
book-entry system maintained by the Depositary.
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(ii) If the proposed transferee is an Agent Member, and the Initial
Security to be transferred consists of U.S. Physical Securities, upon
receipt by the Registrar of the documents referred to in clause (i) and
instructions given in accordance with the Depositary's and the Registrar's
procedures therefor, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the U.S. Global
Security in an amount equal to the principal amount of the U.S. Physical
Securities to be transferred, and the Trustee shall cancel the U.S.
Physical Security so transferred.
(c) Transfers of Interests in the Offshore Global Security or Offshore
Physical Securities. The following provisions shall apply with respect to any
transfer of interests in the Offshore Global Security or Offshore Physical
Securities:
(i) prior to the removal of the Private Placement Legend from an
Offshore Global Security or an Offshore Physical Security pursuant to
Section 202 hereof, the Registrar shall refuse to register such transfer
unless such transfer complies with Section 306(b) or Section 306(d) hereof,
as the case may be; and
(ii) after such removal, the Registrar shall register the transfer of
any such Security without requiring any additional certification.
(d) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of an Initial Security to a
Non-U.S. Person pursuant to Regulation S:
(i) The Registrar shall register any proposed transfer of an Initial
Security to a Non-U.S. Person pursuant to Regulation S if the Security to
be transferred is a U.S. Physical Security or an interest in the U.S.
Global Security only upon receipt of a certificate substantially in the
form of Exhibit D hereto from the proposed transferor.
(ii) (A) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (i), and (y)
instructions given in accordance with the Depositary's and the Registrar's
procedures therefor, the Registrar shall reflect on its books and records
the date and a decrease in the principal amount of the U.S. Global Security
in an amount equal to the principal amount of the beneficial interest in
the U.S. Global Security to be transferred and the Company shall execute,
and the Trustee shall authenticate and deliver, one or more Offshore
Physical Securities in a like principal amount or (B) if the proposed
transferee is an Agent Member, upon receipt by the Registrar of
instructions given in accordance with the Depositary's and the Registrar's
Procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Offshore Global Security in
an amount equal to the principal amount of the U.S. Physical Securities or
the U.S. Global Security, as the case may be, to be transferred and the
Trustee shall cancel the U.S. Physical Security, if any, so transferred or
decrease the amount of the U.S. Global Security.
(e) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do
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not bear the Private Placement Legend. Upon the transfer, exchange or
replacement of Securities bearing the Private Placement Legend, the Registrar
shall deliver only Securities that bear the Private Placement Legend unless
either (i) the circumstances contemplated by paragraph (a)(i)(x) or (c)(ii) of
this Section 307 exist and the Company directs the Trustee pursuant to an
Officers' Certificate to remove such legend or (ii) there is delivered to the
Registrar an Opinion of Counsel reasonably satisfactory to the Company to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(f) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain as required by law copies of all letters,
notices and other written communications received pursuant to Section 306 hereof
or this Section 307. The Company shall have the right to inspect and make copies
of all such letters, notices or other written communications at any reasonable
time upon the giving of reasonable written notice to the Registrar.
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities.
If (i) any mutilated Security is surrendered to the Trustee or the
Registrar, or (ii) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and upon Company Order the Trustee
shall authenticate and deliver, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
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The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 309. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name such Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest at the
office or agency of the Company in The City of New York maintained for such
purposes (which initially shall be the office of the Trustee located at 55 Water
Street, North Building, Room 234, Windows 20 and 21, New York, New York, 10041)
pursuant to Section 1002 hereof or, at the option of the Company, interest may
be paid by check mailed to the address of the Person entitled thereto pursuant
to 310 hereof as such address appears in the Security Register; provided that
all payments with respect to Global Securities and Physical Securities the
Holders of which have given wire transfer instructions to the Trustee (or other
Paying Agent) by the Regular Record Date shall be required to be made by wire
transfer of immediately available funds to the accounts specified by the holders
thereof.
Any interest on the Securities shall be considered punctually paid or
duly provided for if the Paying Agent holds immediately available funds no later
than 11:00 A.M. New York City time on the applicable Interest Payment Date. Any
interest on any Security which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date shall forthwith cease to be payable
to the Holder on the Regular Record Date by virtue of having been such Holder,
and such defaulted interest and (to the extent lawful) interest on such
defaulted interest at the rate borne by the Securities (such defaulted interest
and interest thereon herein collectively called "Defaulted Interest") may be
paid by the Company, at its election in each case, as provided in clause (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security and
the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record
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Date, and in the name and at the expense of the Company, shall cause notice
of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be given in the manner provided for in Section 106 hereof,
not less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so given, such Defaulted Interest shall be paid to the
Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
If the Company shall be required to pay any additional interest
pursuant to the terms of the Registration Rights Agreement, it shall deliver an
Officers' Certificate to the Trustee setting forth the new interest rate and the
period for which such rate is applicable.
SECTION 310. Persons Deemed Owners.
Prior to the due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and premium,
if any) and (subject to Sections 305 and 309 hereof) interest on such Security
and for all other purposes whatsoever, whether or not such Security be overdue,
and none of the Company, any Subsidiary Guarantor or the Trustee or any agent of
the Company, any Subsidiary Guarantor or the Trustee shall be affected by notice
to the contrary.
SECTION 311. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly canceled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly canceled by the Trustee. If
the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All
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canceled Securities held by the Trustee shall be disposed of by the Trustee in
accordance with its customary procedures and certification of their disposal
delivered to the Company unless by Company Order the Company shall direct that
canceled Securities be returned to it.
SECTION 312. Issuance of Additional Securities.
The Company may, subject to Article Ten of this Indenture, issue
additional Securities having identical terms and conditions to the Securities
offered hereby (the "Additional Securities"). The Initial Securities issued on
the closing date and any Additional Securities subsequently issued (and any
Exchange Securities issued in exchange therefore) shall be treated as a single
class for all purposes under this Indenture.
SECTION 313. CUSIP and CINS Numbers.
The Company in issuing the Securities may use "CUSIP" and "CINS"
numbers (if then generally in use) and, if so, the Trustee shall use such
"CUSIP" and "CINS" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.
SECTION 314. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
the Securities, as expressly provided for herein or pursuant hereto) and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture when
(a) either
(i) all the Securities theretofore authenticated and delivered
(other than mutilated, destroyed, lost or stolen Securities that have
been replaced or paid as provided in Section 308 and Securities that
have been subject to defeasance under Article Twelve) have been
delivered to the Trustee for cancellation; or
(ii) all Securities not theretofore delivered to the Trustee for
cancellation
(A) have become due and payable,
(B) shall become due and payable at Stated Maturity within
one year, or
(C) the Company has irrevocably notified the Trustee to call
such Securities for redemption within one year under arrangements
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 Subsidiary Guarantor, as the case may be, in
the case of (A), (B) or (C) above, has irrevocably deposited or caused
to be deposited with the Trustee funds in trust for the purpose in an
amount sufficient to pay and discharge the entire Debt on such
Securities not theretofore delivered to the Trustee for cancellation,
for principal (and premium, if any, on) and interest on the Securities
to the date of such deposit (in the case of Securities that have
become due and payable) or to the Stated Maturity or Redemption Date,
as the case may be;
(b) the Company or any Subsidiary Guarantor, as the case may be, has
paid or caused to be paid all sums payable hereunder by the Company; and
(c) the Company or any Subsidiary Guarantor, as the case may be, 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.
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Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) Default in the payment of any interest on any Security when it
becomes due and payable, and continuance of such default for a period of 60
days.
(2) Default in the payment of the principal of (or premium, if any,
on) any Security when due either at maturity, upon any redemption or
pursuant to a purchase by the Company pursuant to Sections 1012 or 1013
hereof.
(3) Failure to perform or comply with the provisions of Section 801
hereof.
(4) Default in the performance, or breach, of any covenant or
agreement of the Company or any Subsidiary Guarantor contained in this
Indenture or any Subsidiary Guarantee (other than a default in the
performance, or breach, of a covenant or agreement that is specifically
dealt with elsewhere herein), and continuance of such default or breach for
a period of 60 days after written notice has been given to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the Securities then outstanding.
(5) (i) An event of default has occurred under any mortgage, bond,
indenture, loan agreement or other document evidencing an issue of Debt of
the Company or any Restricted Subsidiary, which issue has an aggregate
outstanding principal amount of not less than $5,000,000, and such default
has resulted in such Debt becoming, whether by declaration or otherwise,
due and payable prior to the date on which it would otherwise become due
and payable or (ii) a default in any payment when due at final maturity of
any such Debt.
(6) Failure by the Company or any of its Restricted Subsidiaries to
pay one or more final judgments the uninsured portion of which exceeds in
the aggregate $5,000,000, which judgment or judgments are not paid,
discharged or stayed for a period of 30 days.
(7) Entry of a decree or order by a court having jurisdiction in the
premises adjudging the Company or any Significant Subsidiary a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustments or composition of or in respect of
the Company or any Significant Subsidiary under the Federal Bankruptcy Code
or any other applicable federal or state law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the Company or any Significant Subsidiary or of any substantial part of its
property, or
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ordering the winding up or liquidation of its affairs, and the continuance
of any such decree or order unstayed and in effect for a period of 90
consecutive days.
(8) The institution by the Company or any Significant Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by it
to the institution of bankruptcy or insolvency proceedings against it, or
the filing by it of a petition or answer or consent seeking reorganization
or relief under the Federal Bankruptcy Code or any other applicable federal
or state law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or any Significant Subsidiary or
of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing
of its inability to pay its debts generally as they become due.
(9) Any Subsidiary Guarantee ceases to be in full force and effect or
is declared null and void or any Subsidiary Guarantor denies that it has
any further liability under any Subsidiary Guarantee, or gives notice to
such effect (other than by reason of the termination of this Indenture or
the release of any such Subsidiary Guarantee in accordance with this
Indenture), and such condition has continued for a period of 30 days after
written notice of such failure requiring the Subsidiary Guarantor and the
Company to remedy the same has been given (x) to the Company by the Trustee
or (y) to the Company and the Trustee by the holders of 25% in aggregate
principal amount of the Securities then outstanding.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than as specified in clauses (7) or (8)
of Section 501 hereof) occurs and is continuing, the Trustee or the Holders of
not less than 25% in aggregate principal amount of the Securities then
outstanding may, and the Trustee at the request of such Holders shall, declare
the principal of all of the outstanding Securities immediately due and payable
and, upon any such declaration, such principal shall become due and payable
immediately. If an Event of Default specified in clauses (7) or (8) of Section
501 hereof occurs and is continuing, then the principal of all of the
outstanding Securities shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
At any time after a declaration of acceleration under this Indenture,
but before a judgment or decree for payment of the money due has been obtained
by the Trustee, the Holders of a majority in aggregate principal amount of the
outstanding Securities, by written notice to the Company and the Trustee, may
rescind such declaration and its consequences if
(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
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(B) all unpaid principal of (and premium, if any, on) any
outstanding Securities that has become due otherwise than by such
declaration of acceleration and interest thereon at the rate borne by
the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest and overdue principal at the rate borne
by the Securities, and
(D) all sums paid or advanced by the Trustee under this Indenture
and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and
(ii) all Events of Default, other than the non-payment of amounts of
principal of (or premium, if any, on) or interest on the Securities that
have become due solely by such declaration of acceleration, have been cured
or waived.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Notwithstanding the preceding paragraph, in the event of a declaration
of acceleration in respect of the Securities because of an Event of Default
specified in Section 501(5) shall have occurred and be continuing, such
declaration of acceleration shall be automatically annulled if the Debt that is
the subject of such Event of Default has been discharged or the holders thereof
have rescinded their declaration of acceleration in respect of such Debt, and
written notice of such discharge or rescission, as the case may be, shall have
been given to the Trustee by the Company and countersigned by the holders of the
requisite percentage of such Debt or a trustee, fiduciary or agent for such
holders, within 30 days after such declaration of acceleration in respect of the
Securities, and no other Event of Default has occurred during such 30-day period
which has not been cured or waived during such period.
SECTION 503. Collection of Debt and Suits for Enforcement by Trustee.
The Company and each Subsidiary Guarantor covenant that if
(a) default is made in the payment of any installment of interest on
any Security when such interest becomes due and payable and such default
continues for a period of 60 days, or
(b) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Company and each Subsidiary Guarantor shall, upon demand of the Trustee, pay
to the Trustee for the benefit of the Holders of such Securities, the whole
amount then due and payable on such Securities for principal (and premium, if
any) and interest, and interest on any overdue principal (and premium, if any)
and, to the extent that payment of such interest shall be legally enforceable,
upon any overdue installment of interest, at the rate borne by the Securities,
and, in addition thereto, 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.
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If the Company or any Subsidiary Guarantor, as the case may be, fails
to pay such amounts forthwith upon such demand, the Trustee, in its own name as
trustee of an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree and may enforce the same against the Company, any such
Subsidiary Guarantor or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company, any such Subsidiary Guarantor or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities (including any Subsidiary Guarantor) or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of overdue principal,
premium, if any, or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities
and to file such 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 of the Holders allowed in such
judicial proceeding, and
(b) to collect and receive any moneys or other securities or property
payable or deliverable upon the conversion or exchange of such securities
or upon any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official 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 the
Trustee any amount due 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 606 hereof.
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,
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adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
and as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 606
hereof;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium, if
any) and interest, respectively; and
THIRD: The balance, if any, to the Company or as a court of competent
jurisdiction may direct.
SECTION 507. Limitation on Suits.
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
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(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities (including fees and
expenses of its agents and counsel) to be incurred in compliance with such
request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority or
more in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment, as provided herein (including, if applicable, Article Twelve)
and in such Security of the principal of (and premium, if any) and (subject to
Section 309 hereof) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 308 hereof, no right or remedy herein conferred upon or reserved to
the Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
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SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
The Holders of not less than a majority in principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, provided -------- that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(c) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not
consenting.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may, on behalf of the Holders of all of the Securities,
waive any past defaults hereunder, except a default
(a) in the payment of the principal of (or premium, if any) or
interest on any Security, or
(b) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Security Outstanding.
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 Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Stay or Extension Laws.
The Company and each Subsidiary Guarantor covenant (to the extent that
it may lawfully do so) that it shall not at any time insist upon, or plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at
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any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company and each Subsidiary Guarantor (to the extent
that they may lawfully do so) hereby expressly waive all benefit or advantage of
any such law and covenants that it shall not 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 had been enacted.
SECTION 515. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, 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,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal (or premium, if any ) or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and is
known to the Trustee, the Trustee shall mail to each Holder of the Securities in
the manner and to the extent provided in TIA Section 313(c) notice of the
Default or Event of Default within 90 days after the occurrence thereof;
provided, however, that, except in the case of a Default or an Event of Default
in the payment of principal of (and premium, if any, on) or interest on any
Securities, the Trustee may withhold the notice to the Holders of the Securities
if a committee of its trust officers in good faith determines that withholding
such notice is in the interests of the Holders of the Securities.
SECTION 602. Certain Rights of Trustee.
Prior to the occurrence of a Default of an Event of Default of which
the Trustee has been notified as provided in (j) of this Section below, or of
which by that paragraph the Trustee is deemed to have notice, and after the cure
or waiver of all Defaults or Events of Default which may have occurred and, as
applicable, subject to the provisions of TIA Sections 315(a) through 315(d):
(a) the Trustee undertakes to perform only those duties and
obligations which are set forth specifically in this Indenture and no other
duties or obligations shall be implied to the Trustee;
(b) in the absence of bad faith on its part, the Trustee may rely
conclusively 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; but in the
case of any such certificates or opinions which by any provision hereof are
required specifically to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether they conform to the
requirements of this Indenture.
In case a Default or an Event of Default has occurred and is
continuing hereunder of which the Trustee has been notified, or is deemed to
have notice as provided in (j) of this Section below, the Trustee shall exercise
those rights and powers vested in it by this Indenture and shall use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his own affairs.
No provisions of this Indenture shall be construed to release the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(a) this paragraph shall not be construed to affect the limitation of
the Trustee's duties and obligations provided in the first paragraph of
this Section 602 or the
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Trustee's right to rely on the truth of statements and the correctness of
opinions as provided in (b) in the first paragraph of this Section 602;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by any one of its officers, unless it shall be established that
the Trustee was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of not less than a majority in principal amount of the
Securities at the time Outstanding relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture.
Except as otherwise provided in this Section above:
(a) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting, pursuant to the terms of this Indenture or
otherwise, upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper Person or Persons;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order with
sufficient detail as may be requested by the Trustee and any resolution of
the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate or an Opinion of
Counsel;
(d) 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 in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) 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 pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities (including fees and expenses of its agents
and counsel) which might be incurred by it in compliance with such request
or direction;
(f) the Trustee shall not be bound to make any investigation into, and
may conclusively rely upon, the facts or matters stated in any resolution,
certificate, statement,
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instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture; and
(i) Except for its certificate of authentication of the Securities,
the Trustee shall not be responsible for:
(A) any recital in this Indenture or in the Securities,
(B) the validity, priority, recording, filing or refiling of
this Indenture or of any supplemental indenture or financing
statement,
(C) any instrument or document of further assurance or
collateral assignment,
(D) the validity of the execution by the Company of this
Indenture, any supplemental indenture or instruments or
documents of further assurance,
(E) the sufficiency of the security for the Securities issued
hereunder or intended to be secured hereby,
(F) losses as the result of any investments in any fund made at
the direction of the Company, or
(G) any disclosure in any offering memorandum or similar
document related to the Securities, or compliance with any
Federal or state securities laws, rules or regulations.
(j) Except for those Events of Default specified in Sections 501 (1)
and (2) hereof, the Trustee shall not be required to take notice, and shall
not be deemed to have notice, of any Default or Event of Default hereunder,
unless the Trustee shall be notified specifically of the Default or Event
of Default in a written instrument or document delivered to it by the
Company, or by the Holders of at least 25% of the aggregate principal
amount of Securities then Outstanding. In the absence of delivery of a
notice satisfying those requirements, the Trustee may assume conclusively
that there is no
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Default or Event of Default, except for those Events of Default specified
in Sections 501 (1) and (2) hereof.
(k) The Trustee shall not be required to give any bond or surety with
respect to the execution of these trusts and powers or otherwise in respect
of the Securities.
(l) The Registrar, Paying Agent and Authenticating Agent shall be
entitled to all of the protections to which the Trustee is entitled
hereunder.
(m) Notwithstanding anything to the contrary herein, the Trustee shall
not be responsible or liable for the appropriateness or compliance of the
form of securities issued representing any of the Securities with the terms
and provisions of this Indenture or applicable Federal or state securities
law, rule or regulation and the Trustee shall solely rely on the Company to
deliver to the Trustee certificates for authentication which comply with
the terms and provisions of this Indenture and applicable Federal or state
securities law, rule or regulation, such delivery which shall conclusively
evidence such compliance.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. Trustee Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture, any Subsidiary Guarantee or the Securities except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Securities and perform its obligations hereunder and, upon the
effectiveness of the Registration Statement, that the statements made by it in a
Statement of Eligibility on Form T-1 supplied to the Company are true and
accurate, subject to the qualifications set forth therein. The Trustee shall not
be accountable for the use or application by the Company of Securities or the
proceeds thereof or any money paid to the Company or upon the Company's
direction under any provision of this Indenture. The Trustee shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee.
SECTION 604. May Hold Securities.
The Trustee, any Paying Agent, any Registrar or any other agent of the
Company or of the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Securities and, subject to TIA Sections 310(b) and 311,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Paying Agent, Registrar or such other agent.
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SECTION 605. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee (in its capacity as Trustee, Paying Agent
and Registrar) from time to time reasonable compensation for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust), including in connection with the investment by the Trustee (and/or
its affiliate) of trust assets in certain Permitted Investments as provided
in this Indenture;
(b) except as otherwise expressly provided herein, to reimburse the
Trustee (in its capacity as Trustee, Paying Agent and Registrar) promptly
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including securities transaction charges and the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to
its negligence or bad faith but, with respect to securities transaction
charges, only to the extent any such securities transaction charges have
not been waived by the Trustee (and/or its affiliate); and
(c) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust, including the costs and expenses (including the reasonable
expenses and disbursements of counsel) of enforcing this Indenture against
the Company or any Subsidiary Guarantor (including this Section 606) and of
defending itself against any claim (whether asserted by any Holder or the
Company or any other Person) or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture and any termination under any bankruptcy law.
As security for the performance of such obligations of the Company, the
Trustee shall have a lien prior to the Securities upon all property and
funds held or collected by the Trustee as such, except funds held in trust
for the payment of principal of (and premium, if any) or interest on
particular Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(7) or (8) hereof, the expenses
(including the reasonable charges and expenses of its counsel) of and the
compensation for such services are intended to
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constitute expenses of administration under any applicable bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility.
There shall be at all times a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of Federal, State, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609 hereof.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 609 hereof shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
not less than a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, except when the Trustee's duty to resign is stayed in accordance
with the provisions of TIA Section 310(b), or
(2) the Trustee shall cease to be eligible under Section 607 hereof
and shall fail to resign after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Security for at least
six months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or
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any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided subject to
TIA Section 315(e), any Holder who has been a bona fide Holder of a Security for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to the Holders of
Securities in the manner provided for in Section 106 hereof. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 609. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder subject to the retiring Trustee's rights as
provided under the last sentence of Section 606 hereof. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
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SECTION 610. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities. In
case at that time any of the Securities shall not have been authenticated, any
successor Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee. In all such cases
such certificates shall have the full force and effect which this Indenture
provides that the certificate of authentication of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Securities in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that none of the Company or the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee.
Within 60 days after January 1 of each year commencing with the first
January 1 after the first issuance of Securities, the Trustee shall transmit to
the Holders, in the manner and to the extent provided in TIA Section 313(c), a
brief report dated as of such January 1 if required by TIA Section 313(a).
SECTION 703. Reports by Company.
The Company shall:
(a) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act of 1934; or, if the Company is not required to file information,
documents or reports pursuant to either of said Sections, then it shall
file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act of 1934 in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations;
(c) transmit by mail to all Holders, in the manner and to the extent
provided in TIA Section 313(c), within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (a) and (b) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission.
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Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
The Trustee shall not be obligated to take or have knowledge of and
shall not be liable for knowledge of any information contained in any reports,
information or documents delivered to the Trustee hereunder and shall solely be
responsible to forward such reports, information or documents to Holders or
other persons as may be and to the extent expressly required under this
Indenture.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, AND SALE OF ASSETS
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge with or into any other
Person or, directly or indirectly, convey, sell, assign, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any other Person (in one transaction or a series of related transactions),
unless each of the following conditions is satisfied:
(a) Either (i) the Company is the surviving corporation or (ii) the
Person (if other than the Company) formed by such consolidation or into
which the Company is merged or the Person that acquires by sale,
assignment, transfer, lease or other disposition the properties and assets
of the Company substantially as an entirety (the "Surviving Entity") (A) is
a corporation, partnership or trust organized and validly existing under
the laws of the United States, any state thereof or the District of
Columbia and (B) expressly assumes, by a supplemental indenture in form
satisfactory to the Trustee, all of the Company's obligations under this
Indenture and the Securities.
(b) Immediately after giving effect to such transaction and treating
any obligation of the Company or a Restricted Subsidiary in connection with
or as a result of such transaction as having been incurred as of the time
of such transaction, no Default or Event of Default has occurred and is
continuing.
(c) Immediately after giving effect to such transaction on a pro forma
basis, the Consolidated Net Worth of the Company (or of the Surviving
Entity if the Company is not the continuing obligor under this Indenture)
is equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction.
(d) Immediately after giving effect to such transaction on a pro forma
basis (on the assumption that the transaction occurred at the beginning of
the most recently ended four full fiscal quarter period for which internal
financial statements are available), the Company (or the Surviving Entity
if the Company is not the continuing obligor under this Indenture) could
incur at least $1.00 of additional Debt (other than Permitted Debt)
pursuant to the first paragraph of Section 1010 hereof.
(e) If any of the property or assets of the Company or any of its
Restricted Subsidiaries would thereupon become subject to any Lien, the
provisions of Section 1017 hereof are complied with.
(f) The Company delivers, or causes to be delivered, to the Trustee,
in form and substance reasonably satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each stating that such transaction
complies with the requirements of this Indenture.
(g) If the Company is not the continuing obligor under this Indenture,
each Subsidiary Guarantor, unless it is the other party to the transaction
described above, has
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by supplemental indenture confirmed that its Subsidiary Guarantee applies
to the Surviving Entity's obligations under this Indenture and the
Securities.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries that constitutes all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
SECTION 802. Successor Substituted.
In the event of any transaction described in and complying with the
conditions listed in Section 801 hereof in which the Company is not the
continuing obligor under this Indenture, the Surviving Entity shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such Surviving Entity had been
named as the Company herein, and thereafter the Company shall, except in the
case of a lease, be discharged of all its obligations and covenants under this
Indenture and the Securities.
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ARTICLE NINE
SUPPLEMENTS AND AMENDMENTS TO INDENTURE
AND SUBSIDIARY GUARANTEES
SECTION 901. Without Consent of Holders.
Without the consent of any Holders, the Company and any affected
Subsidiary Guarantor, when authorized by a Board Resolution, and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental hereto, for any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company or
contained in this Indenture, and the Securities; or
(b) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein or in the Securities
conferred upon the Company; or
(c) to add any additional Events of Default; or
(d) to provide for uncertificated Securities in addition to or in
place of the certificated Securities;
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of Section
609 hereof; or
(f) to secure the Securities;
(g) to add new Subsidiary Guarantors or release Subsidiary Guarantor
in accordance with the terms of Article Thirteen hereof;
(h) to cure any ambiguity or mistake, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision in this Indenture, or to make any other provisions with respect
to matters or questions arising under this Indenture; provided that such
action pursuant to this clause (h) shall not adversely affect the interests
of the Holders in any material respect; or
(i) to qualify, or maintain the qualification of, this Indenture under
the Trust Indenture Act; and
(j) to make any other change that does not adversely affect the rights
of any Holder.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon receipt by the Trustee of the documents described in Section 602 hereof,
the Trustee shall join with the Company in the execution of any amended or
supplemental Indenture, authorized or permitted
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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 902. With Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company, and upon the filing with the Trustee of evidence of
consent of the Holders as aforesaid, the Company, when authorized by a Board
Resolution, each Subsidiary Guarantor and the Trustee may amend or supplement in
any manner this Indenture or modify in any manner the rights of the Holders
under this Indenture; provided, however, that no such supplement, amendment or
modification may, without the consent of the Holder of each Outstanding Security
affected thereby:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Security, or reduce the principal amount thereof or the
rate of interest thereon or any premium payable upon the redemption
thereof, or change the place of payment where, or the coin or currency in
which any Security or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment
after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date), or
(b) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any waiver of
compliance with certain provisions of, or certain defaults and their
consequences provided for under, this Indenture, or
(c) waive a default in the payment of principal of, or premium, if
any, or interest on the Securities or reduce the percentage or aggregate
principal amount of Outstanding Securities the Consent of whose Holders is
necessary for waiver of compliance with certain provisions of this
Indenture or for waiver of certain defaults, or
(d) modify any of the provisions of this Indenture relating to the
subordination of the Securities or the Subsidiary Guarantees in a manner
materially adverse to the Holders.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Without the consent of the holders of at least 75% in principal amount
of the Securities then Outstanding (including consents obtained in connection
with a tender offer or exchange offer for such Securities), no waiver or
amendment to this Indenture may make any change in the provisions of Section
1012 hereof after the mailing of an offer with respect to a Change of Control
Offer that adversely affects the rights of any Holder.
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SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Officer's Certificate and
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and that such supplemental indenture
constitutes the legal, valid and binding obligation of the Company and each
Subsidiary Guarantor subject to the customary exceptions and such other matters
as the Trustee may reasonably request. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustees own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 907. Notice of Supplemental Indentures.
Promptly after the execution by the Company, each Subsidiary Guarantor
and the Trustee of any supplemental indenture pursuant to the provisions of
Section 902 hereof, the Company shall give notice thereof to the Holders of each
Outstanding Security affected, in the manner provided for in Section 106 hereof,
setting forth in general terms the substance of such supplemental indenture.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if Any, and Interest.
The Company covenants and agrees for the benefit of the Holders that
it will duly and punctually pay the principal of (and premium, if any) and
interest on the Securities in accordance with the terms of the Securities and
this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company shall maintain in The City of New York, an office or
agency where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Trustee's office located at 55 Water Street, North
Building, Room 234, Windows 20 and 21, New York, New York 10041 shall be such
office or agency of the Company, unless the Company shall designate and maintain
some other office or agency for one or more of such purposes. The Company shall
give prompt written notice to the Trustee of any change in the location of any
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency 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, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such other
office or agency.
SECTION 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (or premium, if any) or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal of (or premium,
if any) or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and shall promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it shall, on or before each due date of the principal of (or
premium, if any) or interest on any Securities, deposit with a Paying Agent a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company shall promptly notify the Trustee of such action or
any failure so to act.
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The Company shall cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent shall:
(a) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal (and premium, if any) or interest; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (or premium, if
any) or interest on any Security 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 Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
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 a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, 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 publication, any unclaimed
balance of such money then remaining shall be repaid to the Company.
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its existence and
the existence of each of its Restricted Subsidiaries in accordance with the
respective organizational documents of the Company and each such Restricted
Subsidiary and the rights (whether pursuant to charter, partnership certificate,
agreement, statute or otherwise), material licenses and franchises of the
Company and each such Subsidiary; provided, however, that the Company shall not
be required to preserve any such right, license or franchise or the existence of
any Restricted Subsidiary, if
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the Board of Directors shall determine that the maintenance or preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Restricted Subsidiaries taken as a whole and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 1005. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (b)
all material lawful claims for labor, materials and supplies, which, if unpaid,
might by law become a lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 1006. Maintenance of Properties.
The Company shall cause all properties owned by the Company or any
Subsidiary or used or held for use in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, except, in every case, as and to the
extent that the Company may be prevented by fire, strikes, lockouts, acts of
God, inability to obtain labor or materials, governmental restrictions, enemy
action, civil commotion or unavoidable casualty or similar causes beyond the
control of the Company; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the maintenance of any of such properties
if such discontinuance is, in the judgment of the Company, desirable in the
conduct of its business or the business of any Subsidiary.
SECTION 1007. Ownership of Austral Horizon and Atlantic Horizon by
Company or Subsidiary Guarantors.
Either the Company or one or more Subsidiary Guarantors shall at all
times own the seismic data acquisition vessels currently named Austral Horizon
and Atlantic Horizon, which vessels are owned as of the Closing Date by Austral
Horizon, Inc. and Atlantic Horizon, Inc., respectively, and any assets or
properties acquired with the Net Cash Proceeds from any Asset Sale of either
such vessel pursuant to Section 1013 hereof.
SECTION 1008. Statement by Officers as to Default.
(a) The Company shall deliver to the Trustee, within 60 days after the
end of each fiscal year, an Officer's Certificate signed by either the principal
executive officer, principal financial officer or principal accounting officer
as to his or her knowledge of compliance by the Company and the Restricted
Subsidiaries with all conditions and covenants under this Indenture. For
purposes of this Section 1008(a), such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
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(b) When any Default has occurred and is continuing under this
Indenture, the Company shall deliver to the Trustee by registered or certified
mail or by telegram, telex or facsimile transmission an Officers Certificate
specifying such event, notice or other action within five Business Days of its
occurrence.
(c) When any Registration Default (as defined in the Registration
Rights Agreement) occurs, the Company shall deliver to the Trustee by registered
or certified mail or by facsimile transmission an Officers' Certificate
specifying the nature of such Registration Default within 10 days of its
occurrence. In addition, the Company shall deliver to the Trustee on each
Interest Payment Date during the continuance of a Registration Default and on
the Interest Payment Date following the cure of a Registration Default, an
Officers' Certificate specifying the amount of additional interest which has
accrued and which is then owing under the Registration Rights Agreement.
SECTION 1009. Provision of Reports and Financial Statements.
At all times from and after the earlier of (i) the date of the
commencement of an Exchange Offer or the effectiveness of the Shelf Registration
Statement (the "Registration") and (ii) the date that is six months after the
Closing Date, in either case, whether or not the Company is required to file
reports with the Commission, the Company shall file on a timely basis with the
Commission, all such annual reports, quarterly reports and other documents that
the Company would be required to file if it were subject to Section 13(a) or
15(d) of the Exchange Act. The Company shall also be required (a) to supply to
the Trustee and each Holder, or supply to the Trustee for forwarding to each
such Holder, without cost to such Holder, copies of such reports and documents
within 15 days after the date on which the Company files such reports and
documents with the Commission or the date on which the Company would be required
to file such reports and documents if the Company were so required and (b) if
filing such reports and documents with the Commission is not accepted by the
Commission or is prohibited under the Exchange Act, to supply at the Company's
cost copies of such reports and documents to any prospective Holder of
Securities promptly upon written request. In addition, at all times prior to the
earlier of the date of the Registration and the date six months after the
Closing Date, the Company shall, at its cost, deliver to each Holder quarterly
and annual reports substantially equivalent to those that would be required by
the Exchange Act. Furthermore, at all times prior to the Registration, the
Company shall supply at the Company's cost copies of such reports and documents
to any prospective Holder promptly upon written request.
SECTION 1010. Limitation on Debt.
The Company shall not, and shall not permit any Restricted Subsidiary
to, create, issue, assume, guarantee or in any manner become directly or
indirectly liable for the payment of, or otherwise incur (collectively,
"incur"), any Debt (including Acquired Debt and the issuance of Disqualified
Stock), except that the Company or a Subsidiary Guarantor may incur Debt or
issue Disqualified Stock if, at the time of such event, the Consolidated Fixed
Charge Coverage Ratio for the immediately preceding four full fiscal quarters
for which internal financial statements are available, taken as one accounting
period, would have been greater than 2.5 to 1.0.
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In making the foregoing calculation, pro forma effect shall be given
to: (i) the incurrence of such Debt and (if applicable) the application of the
net proceeds therefrom, including to refinance other Debt, as if such Debt was
incurred and the application of such proceeds occurred at the beginning of such
four-quarter period, (ii) the incurrence, repayment or retirement of any other
Debt by the Company or its Restricted Subsidiaries since the first day of such
four-quarter period as if such Debt was incurred, repaid or retired at the
beginning of such four-quarter period and (iii) the acquisition (whether by
purchase, merger or otherwise) or disposition (whether by sale, merger or
otherwise) of any company, entity or business acquired or disposed of by the
Company or its Restricted Subsidiaries, as the case may be, since the first day
of such four-quarter period. In making a computation under the foregoing clause
(i) or (ii), (A) interest on Debt bearing a floating interest rate will be
computed as if the rate in effect on the date of computation had been the
applicable rate for the entire period, (B) if such Debt bears, at the option of
the Company, a fixed or floating rate of interest, interest thereon will be
computed by applying, at the option of the Company, either the fixed or floating
rate and (C) the amount of Debt under a revolving credit facility will be
computed based upon the average daily balance of such Debt during such
four-quarter period. In making a computation under the foregoing clause (i) or
(ii), (A) Interest on Debt bearing a floating interest rate will be computed as
if the rate in effect on the date of computation had been the applicable rate
for the entire period, (B) if such Debt bears, at the option of the Company, a
fixed or floating rate of interest, interest thereon will be computed by
applying, at the option of the Company, either the fixed or floating rate and
(C) the amount of Debt under a revolving credit facility will be computed based
upon the average daily balance of such Debt during such four-quarter period.
Notwithstanding the foregoing, the Company may, and may, to the extent
expressly permitted below, permit its Restricted Subsidiaries to, incur any of
the following Debt ("Permitted Debt"):
(i) Debt of the Company or any Restricted Subsidiary under the
Revolving Credit Facility or one or more other credit facilities in an
aggregate principal amount at any one time outstanding not to exceed
$25,000,000, less any amounts applied to the permanent reduction of such
credit facilities pursuant to Section 1013 hereof, together with guarantees
(if any) of such Debt by a Restricted Subsidiary, plus an amount equal to
(A) the excess of 85% of the aggregate book value of the accounts
receivable (net of bad debt reserves) and 50% of the aggregate net book
value of the inventory of the Company and its Restricted Subsidiaries on a
consolidated basis in accordance with GAAP as of the last day of the
immediately preceding four full fiscal quarters for which internal
financial statements are available over (B) $25,000,000.
(ii) Debt of the Company or any Restricted Subsidiary outstanding on
the Closing Date, other than Debt described under clause (i) above.
(iii) Debt of the Company or any Restricted Subsidiary incurred in
respect of letters of credit, bankers' acceptances or similar facilities
entered into in the ordinary course of business.
(iv) Debt owed by the Company to any Wholly-Owned Restricted
Subsidiary or owed by a Subsidiary Guarantor to the Company or any
Wholly-Owned Restricted
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Subsidiary (provided that such Debt is held by the Company or such
Restricted Subsidiary and constitutes Subordinated Debt) or owed by a
Restricted Subsidiary that is not a Subsidiary Guarantor to the Company or
another Restricted Subsidiary; provided the incurrence of such Debt did not
violate Section 1011 hereof.
(v) Acquired Debt of a person, other than Debt incurred in connection
with, or in contemplation of, such person becoming a Restricted Subsidiary
or the acquisition of assets from such person, as the case may be, provided
that the Company on a pro forma basis could incur $1.00 of additional Debt
(other than Permitted Debt) pursuant to the first paragraph of this
Section.
(vi) Debt represented by the Securities (other than the Additional
Securities) and the Subsidiary Guarantees.
(vii) Debt of the Company or any Restricted Subsidiary in respect of
Hedging Obligations incurred in the ordinary course of business.
(viii) (A) Capitalized Lease Obligations of the Company or a
Restricted Subsidiary, and (B) Debt of the Company or a Restricted
Subsidiary under purchase money mortgages or secured by purchase money
security interests so long as (x) such Debt is not secured by any property
or assets of the Company or any Restricted Subsidiary other than the
property and assets so acquired and (y) such Debt is created within 60 days
of the acquisition of the related property; provided that the aggregate
amount of Debt under this clause (viii) does not exceed $10,000,000 at any
one time outstanding.
(ix) Guarantees by any Restricted Subsidiary made in accordance with
the provisions of Section 1019 hereof.
(x) Debt of the Company or a Restricted Subsidiary, not permitted by
any other clause of this definition, in an aggregate principal amount not
to exceed $10,000,000 at any one time outstanding.
(xi) Any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") of any
outstanding Debt, other than Debt incurred pursuant to clause (i), (vii),
(viii) or (x) of this definition, including any successive refinancings
thereof, so long as (A) any such new Debt is in a principal amount that
does not exceed the principal amount so refinanced, plus the amount of any
premium required to be paid in connection with such refinancing pursuant to
the terms of the Debt refinanced or the amount of any premium reasonably
determined by the Company as necessary to accomplish such refinancing, plus
the amount of the expenses of the Company incurred in connection with such
refinancing, (B) in the case of any refinancing of Subordinated Debt, such
new Debt is made subordinate to the Securities at least to the same extent
as the Debt being refinanced and (C) such refinancing Debt does not have a
Weighted Average Life less than the Weighted Average Life of the Debt being
refinanced and does not have a final scheduled maturity earlier than the
final scheduled
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maturity, or permit redemption at the option of the holder earlier than the
earliest date of redemption at the option of the holder, of the Debt being
refinanced.
For the purpose of determining compliance with this Section 1010, if
an item of Debt meets the criteria of more than one of the types of Permitted
Debt described in the above clauses, the Company or the Restricted Subsidiary in
question shall have the right to determine the category to which such Debt
applies and shall not be required to include the amount and type of such Debt in
more than one of such categories and may elect to apportion such item of Debt
between or among any two or more of such categories otherwise applicable.
SECTION 1011. Limitation on Restricted Payments.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, take any of the following actions:
(a) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Capital Stock of the Company or any
Restricted Subsidiary, other than (i) dividends or distributions
payable solely in Qualified Equity Interests, (ii) dividends or
distributions by a Restricted Subsidiary payable to the Company or
another Restricted Subsidiary or (iii) pro rata dividends or
distributions on common stock of a Restricted Subsidiary held by
minority stockholders, provided that such dividends do not in the
aggregate exceed the minority stockholders' pro rata share of such
Restricted Subsidiary's net income from the first day of the Company's
fiscal quarter during which the Closing Date occurs;
(b) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of Capital Stock (or any options,
warrants or other rights to acquire shares of Capital Stock) of (i)
the Company or any Unrestricted Subsidiary or (ii) any Restricted
Subsidiary held by any Affiliate of the Company (other than, in either
case, any such Capital Stock owned by the Company or any of its
Restricted Subsidiaries);
(c) make any principal payment on, or repurchase, redeem, defease
or otherwise acquire or retire for value, prior to any scheduled
principal payment, sinking fund payment or maturity, any Subordinated
Debt; and
(d) make any Investment (other than a Permitted Investment) in
any Person
(such payments or other actions described in (but not excluded from) clauses (a)
through (d) above being referred to as "Restricted Payments"), unless at the
time of, and immediately after giving effect to, the proposed Restricted
Payment:
(i) no Default or Event of Default has occurred and is continuing,
(ii) the Company could incur at least $1.00 of additional Debt (other
than Permitted Debt) pursuant to the first paragraph of Section 1010
hereof, and
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(iii) the aggregate amount of all Restricted Payments declared or made
after the Closing Date does not exceed the sum of:
(A) 50% of the aggregate Consolidated Adjusted Net Income
of the Company during the period (taken as one accounting period)
from the first day of the Company's fiscal quarter during which
the Closing Date occurs to the last day of the Company's most
recently ended fiscal quarter for which internal financial
statements are available at the time of such proposed Restricted
Payment (or, if such aggregate cumulative Consolidated Adjusted
Net Income is a loss, minus 100% of such amount), plus
(B) the aggregate net cash proceeds received by the Company
after the Closing Date from the issuance or sale (other than to a
Subsidiary) of Qualified Equity Interests of the Company
(excluding from this computation proceeds of an Equity Offering
received by the Company that are used by it to redeem Securities
pursuant to Section 1101(b) hereof); plus
(C) the aggregate net cash proceeds received by the Company
after the Closing Date from the issuance or sale (other than to a
Subsidiary) of debt securities or Disqualified Stock that have
been converted into or exchanged for Qualified Stock of the
Company, together with the aggregate net cash proceeds received
by the Company at the time of such conversion or exchange, plus
(D) $5,000,000.
Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may take any of the following actions, so long as (with respect to
clauses (e) and (f) below) no Default or Event of Default has occurred and is
continuing or would occur:
(a) The payment of any dividend within 60 days after the date of
declaration thereof if at the declaration date such payment would not
have been prohibited by the foregoing provision.
(b) The repurchase, redemption or other acquisition or retirement
for value of any shares of Capital Stock of the Company in exchange
for, or out of the net cash proceeds of a substantially concurrent
issuance and sale (other than to a Subsidiary) of, Qualified Equity
Interests of the Company.
(c) The purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Debt in exchange for, or out
of the net cash proceeds of a substantially concurrent issuance and
sale (other than to a Subsidiary) of, Qualified Equity Interests of
the Company;
(d) The purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Debt in exchange for, or out of
the net cash
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proceeds of a substantially concurrent issuance or sale (other than to
a Subsidiary) of, Subordinated Debt, so long as the Company or a
Restricted Subsidiary would be permitted to refinance such original
Subordinated Debt with such new Subordinated Debt pursuant to clause
(xi) of the definition of Permitted Debt.
(e) The repurchase of any Subordinated Debt at a purchase price
not greater than 101% of the principal amount of such Subordinated
Debt in the event of a "change of control" in accordance with
provisions similar to Section 1012 hereof, provided that, prior to or
simultaneously with such repurchase, the Company has made the Change
of Control Offer as provided in such covenant with respect to the
Securities and has repurchased all Securities validly tendered for
payment in connection with such Change of Control Offer.
(f) The purchase, redemption, acquisition, cancellation or other
retirement for value of shares of Capital Stock of the Company,
options on any such shares or related stock appreciation rights or
similar securities held by officers or employees or former officers or
employees (or their estates or beneficiaries under their estates) or
by any employee benefit plan, upon death, disability, retirement or
termination of employment or pursuant to the terms of any employee
benefit plan or any other agreement under which such shares of stock
or related rights were issued; provided that the aggregate cash
consideration paid for such purchase, redemption, acquisition,
cancellation or other retirement of such shares of Capital Stock after
the Closing Date does not exceed $500,000 in any fiscal year.
(g) Repurchases of Capital Stock of the Company from employees of
the Company or any of its Restricted Subsidiaries deemed to occur upon
exercise of stock options or stock appreciation rights if such Capital
Stock represents a portion of the exercise price of such options or
rights; provided that any payments made pursuant to this clause (g)
may not exceed in the aggregate $100,000 in any fiscal year.
The payments described in clauses (b), (c), (e), (f) and (g) of this paragraph
shall be Restricted Payments that shall be permitted to be taken in accordance
with this paragraph but shall reduce the amount that would otherwise be
available for Restricted Payments under the foregoing clause (iii) of the first
paragraph of this Section 1011 and the payments described in clauses (a) and (d)
of this paragraph shall be Restricted Payments that shall be permitted to be
taken in accordance with this paragraph and shall not reduce the amount that
would otherwise be available for Restricted Payments under the foregoing clause
(iii) of the first paragraph of this Section 1011.
For the purpose of making any calculations under this Indenture (i) if
a Restricted Subsidiary is designated an Unrestricted Subsidiary, the Company
shall be deemed to have made an Investment in amount equal to the fair market
value of the net assets of such Restricted Subsidiary at the time of such
designation as determined by the Board of Directors of the Company, whose good
faith determination shall be conclusive, (ii) any property transferred to or
from an Unrestricted Subsidiary shall be valued at fair market value at the time
of such transfer, as determined by the Board of Directors of the Company, whose
good faith determination shall
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be conclusive and (iii) subject to the foregoing, the amount of any Restricted
Payment, if other than cash, shall be determined by the Board of Directors of
the Company, whose good faith determination shall be conclusive.
If the aggregate amount of all Restricted Payments calculated under
the foregoing provision includes an Investment in an Unrestricted Subsidiary or
other Person that thereafter becomes a Restricted Subsidiary, the aggregate
amount of all Restricted Payments calculated under the foregoing provision shall
be reduced by the lesser of (x) the net asset value of such Subsidiary at the
time it becomes a Restricted Subsidiary and (y) the initial amount of such
Investment.
If an Investment resulted in the making of a Restricted Payment, the
aggregate amount of all Restricted Payments calculated under the foregoing
provision shall be reduced by the amount of any net reduction in such Investment
(resulting from the payment of interest or dividends, loan repayment, transfer
of assets or otherwise), to the extent such net reduction is not included in the
Company's Consolidated Adjusted Net Income; provided that the total amount by
which the aggregate amount of all Restricted Payments may be reduced may not
exceed the lesser of (x) the cash proceeds received by the Company and its
Restricted Subsidiaries in connection with such net reduction and (y) the
initial amount of such Investment.
In computing Consolidated Adjusted Net Income of the Company for
purposes of the foregoing clause (iii)(A), (i) the Company may use audited
financial statements for the portions of the relevant period for which audited
financial statements are available on the date of determination and unaudited
financial statements and other current financial data based on the books and
records of the Company for the remaining portion of such period and (ii) the
Company shall be permitted to rely in good faith on the financial statements and
other financial data derived from the books and records of the Company that are
available on the date of determination. If the Company makes a Restricted
Payment that, at the time of the making of such Restricted Payment, would in the
good faith determination of the Company be permitted under the requirements of
this Indenture, such Restricted Payment shall be deemed to have been made in
compliance with this Indenture notwithstanding any subsequent adjustments made
in good faith to the Company's financial statements affecting Consolidated
Adjusted Net Income of the Company for any period.
SECTION 1012. Purchase of Securities upon a Change of Control.
If a Change of Control occurs at any time, then each Holder shall have
the right to require that the Company purchase such Holder's Securities, in
whole or in part in integral multiples of $1,000, at a purchase price in cash
equal to 101% of the principal amount of such Securities, plus accrued and
unpaid interest, if any, to the date of purchase (the "Change of Control
Payment"), pursuant to the offer described below (the "Change of Control Offer")
and the other procedures set forth in this Indenture.
Within 30 days following any Change of Control, the Company shall
notify the Trustee thereof and give written notice of such Change of Control to
each Holder by first-class mail, postage prepaid, at its address appearing in
the security register, stating, among other things, (i) the purchase price and
the purchase date, which shall be a Business Day no earlier
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than 30 days nor later than 60 days from the date such notice is mailed or such
later date as is necessary to comply with requirements under the Exchange Act;
(ii) that any Security not tendered shall continue to accrue interest; (iii)
that, unless the Company defaults in the payment of the purchase price, any
Securities accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control purchase date (the "Change
of Control Purchase Date"); (iv) that, in order to tender Securities pursuant to
the Change of Control Offer, a Holder shall be required to surrender the
Securities, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Securities completed, 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 Purchase Date; (v) that Holders shall be
entitled to withdraw their election if the Paying Agent receives, not later than
the close of business on the second Business Day preceding the Change of Control
Purchase Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of Securities delivered for
purchase, and a statement that such Holder is withdrawing his election to have
such Securities purchased; (vi) that Holders whose Securities are being
purchased only in part shall be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered, which unpurchased
portion must be equal to $1,000 in principal amount or an integral multiple
thereof; (vii) the instructions that the Holders of Securities must follow in
order to tender their Securities; and (viii) the circumstances and relevant
facts regarding such Change of Control.
If the Change of Control Purchase Date is on or after a Regular Record
Date and on or before the related Interest Payment Date, any accrued interest
will be paid to the Person in whose name a Security is registered at the close
of business on such Regular Record Date, and no additional interest will be
payable to Holders who tender Securities pursuant to the Change in Control
Offer.
On the Change of Control Purchase Date, the Company shall, to the
extent lawful, (i) accept for payment Securities or portions thereof that are
timely tendered pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Securities or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Securities so accepted together with an Officers'
Certificate that states the aggregate principal amount of Securities or portions
thereof tendered to the Company.
The Paying Agent shall promptly mail to each Holder of Securities so
accepted payment in an amount equal to the Change of Control Payment for such
Securities, and the Trustee shall promptly authenticate and mail to each Holder
a new Security equal in principal amount to any unpurchased portion of the
Securities surrendered, if any; provided that each such new Security shall be in
a principal amount of U.S.$1,000 or an integral multiple thereof.
The Company will comply with the applicable tender offer rules
including Rule l4e-l under the Exchange Act, and any other applicable securities
laws and regulations in connection with a Change of Control Offer.
The Company shall not, and shall not permit any Restricted Subsidiary
to, create any restriction (other than restrictions existing under Debt as in
effect on the Closing Date or in
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refinancings of such Debt) that would materially impair the ability of the
Company to make a Change of Control Offer to purchase the Securities or, if such
Change of Control Offer is made, to pay for the Securities tendered for
purchase.
SECTION 1013. Limitation on Certain Asset Sales.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any Asset Sale unless (i) the consideration received by
the Company or such Restricted Subsidiary for such Asset Sale is not less than
the fair market value of the assets sold (as determined by the Board of
Directors of the Company, whose good faith determination will be conclusive) and
(ii) the consideration received by the Company or the relevant Restricted
Subsidiary in respect of such Asset Sale consists of at least 75% (A) cash or
cash equivalents or (B) the assumption by the transferee of Debt of the Company
or a Restricted Subsidiary ranked pari passu with the Securities and release of
the Company or such Restricted Subsidiary from all liability on such Debt, or a
combination of the foregoing.
(b) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company may, at its option, within 12 months after such Asset Sale,
(i) apply all or a portion of the Net Cash Proceeds to the permanent reduction
of amounts outstanding under the Revolving Credit Facility or other credit
facility referred to in clause (i) of the definition of Permitted Debt or to the
repayment of other senior Debt of the Company or a Restricted Subsidiary or (ii)
invest (or enter into a legally binding agreement to invest) all or a portion of
such Net Cash Proceeds in properties and assets to replace the properties and
assets that were the subject of the Asset Sale or in properties and assets that
shall be used in businesses of the Company or its Restricted Subsidiaries, as
the case may be, existing on the Closing Date. If any such legally binding
agreement to invest such Net Cash Proceeds is terminated, the Company may,
within 90 days of such termination or within 12 months of such Asset Sale,
whichever is later, invest such Net Cash Proceeds as provided in clause (b)(i)
or (b)(ii) (without regard to the parenthetical contained in such clause
(b)(ii)) above. The amount of such Net Cash Proceeds not so used as set forth
above in this paragraph (b) constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $5,000,000,
the Company shall, within 30 days thereafter, make an offer to purchase (an
"Asset Sale Offer") from all Holders of Securities, on a pro rata basis, in
accordance with the procedures set forth in this Indenture, the maximum
principal amount (expressed as a multiple of $1,000) of Securities that may be
purchased with the Excess Proceeds, at a purchase price in cash equal to 100% of
the principal amount thereof, plus accrued interest, if any, to the date such
offer to purchase is consummated. To the extent that the aggregate principal
amount of Securities tendered pursuant to such offer to purchase is less than
the Excess Proceeds, the Company may use such deficiency for general corporate
purposes. If the aggregate principal amount of Securities validly tendered and
not withdrawn by Holders thereof exceeds the Excess Proceeds, the Securities to
be purchased shall be selected on a pro rata basis. Upon completion of such
offer to purchase, the amount of Excess Proceeds will be reset to zero
(d) Within the time period described in (c) above for making an Asset
Sale Offer, the Company shall mail a notice to each Holder in the manner
provided in Section 106 hereof stating: (1) that the Asset Sale Offer is being
made pursuant to the provisions of
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Section 1013 of this Indenture and that all Securities duly and timely tendered
shall be accepted for payment (except, as provided above, if the aggregate
principal amount as the case may be, of the Securities and any Pari Passu Debt
surrendered exceeds the amount of Excess Proceeds); (2) the purchase price and
the purchase date (the "Asset Sale Purchase Date"), which date shall be no
earlier than 30 days nor later than 60 days from the date such notice is mailed;
(3) that any Securities not tendered shall continue to accrue interest; (4)
that, unless the Company defaults in the payment of the purchase price, all
Securities accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest after the Asset Sale Purchase Date; (5) that Holders electing to
have any Securities purchased pursuant to an Asset Sale Offer shall be required
to surrender the Securities, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Securities completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the third
Business Day preceding the Asset Sale Purchase Date; (6) that Holders shall be
entitled to withdraw their election if the Paying Agent receives, not later than
the close of business on the second Business Day preceding the Asset Sale
Purchase Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of Securities delivered for
purchase, and a statement that such Holder is withdrawing his election to have
such Securities purchased; (7) that Holders whose Securities are being purchased
only in part shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple thereof; (8)
any other procedures that the Holders of Securities must follow in order to
tender their Securities; and (9) the circumstances and relevant facts regarding
such Asset Sale.
If the Asset Sale Purchase Date is on or after a Regular Record Date
and on or before the related Interest Payment Date, any accrued interest will be
paid to the Person in whose name a Security is registered at the close of
business on such Regular Record Date, and no additional interest will be payable
to Holders who tender Securities pursuant to the Asset Sale Offer.
SECTION 1014. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into or suffer to exist any transaction with,
or for the benefit of, any Affiliate of the Company unless (a) such transaction
is on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could have been obtained in an
arm's length transaction with third parties who are not Affiliates and (b)
either (i) with respect to any transaction or series of related transactions
involving aggregate payments in excess of $1,000,000, but less than $2,500,000,
or between the Company (or its Subsidiaries) and Seitel, Inc. (or its
subsidiaries) in the ordinary course of business involving aggregate payments in
excess of $1,000,000, the Company delivers an Officers' Certificate to the
Trustee certifying that such transaction or transactions comply with clause (a)
above or (ii) with respect to any transaction or series of related transactions
involving aggregate payments equal to or in excess of $2,500,000, but less than
$7,500,000 (not including transactions with Seitel, Inc. or its subsidiaries,
falling under clause (i) above), the Company delivers (A) an Officers'
Certificate and (B) such transaction or transactions have been approved by the
Board of Directors (including a majority of the Disinterested Directors) of the
Company or (iii) with respect to a transaction or series of related transactions
involving aggregate payments equal to or in excess of $7,500,000
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(not including transactions with Seitel, Inc. or its subsidiaries, falling under
clause (i) above) the Company has obtained a written opinion from a nationally
recognized investment banking firm to the effect that such transaction or
transactions are fair to the Company or such Restricted Subsidiary from a
financial point of view.
The foregoing covenant shall not restrict any of the following:
(A) Transactions among the Company and/or its Wholly-Owned Restricted
Subsidiaries.
(B) The Company from paying (i) reasonable compensation and fees to
directors of the Company or any Restricted Subsidiary who are not employees
of the Company any Restricted Subsidiary who are not employees of the
Company or any Restricted Subsidiary and (ii) reasonable compensation to
officers of the Company or any Restricted Subsidiary.
(C) Transactions permitted by the provisions of Section 1011 hereof.
SECTION 1015. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (a) pay dividends, in cash or otherwise,
or make any other distributions on or in respect of its Capital Stock, (b) pay
any Debt owed to the Company or any other Restricted Subsidiary, (c) make loans
or advances to the Company or any other Restricted Subsidiary, (d) transfer any
of its properties or assets to the Company or any other Restricted Subsidiary or
(e) guarantee Debt of the Company or any other Restricted Subsidiary, except for
such encumbrances or restrictions existing under or by reason of any of the
following:
(i) Any agreement in effect on the Closing Date.
(ii) Customary non-assignment provisions of any lease governing a
leasehold interest of the Company or any Restricted Subsidiary.
(iii) The refinancing or successive refinancings of Debt incurred
under the agreements in effect on the Closing Date, so long as such
encumbrances or restrictions are no less favorable to the Company or any
Restricted Subsidiary than those contained in such original agreement.
(iv) Any agreement or other instrument of a Person acquired by the
Company or any Restricted Subsidiary in existence at the time of such
acquisition (but not created in contemplation thereof), 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.
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SECTION 1016. Limitation on Issuances and Sales of Capital Stock of
Restricted Subsidiaries.
The Company shall not sell, and shall not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell, any shares of Capital
Stock of a Restricted Subsidiary (including options, warrants or other rights to
purchase shares of such Capital Stock) except (i) to the Company or a
Wholly-Owned Restricted Subsidiary, (ii) issuances or sales to foreign nationals
of shares of Capital Stock of foreign Restricted Subsidiaries, to the extent
required by applicable law, or issuances or sales to directors of directors'
qualifying shares, (iii) if, immediately after giving effect to such issuance or
sale, neither the Company nor any of its Subsidiaries owns any shares of Capital
Stock of such Restricted Subsidiary (including options, warrants or other rights
to purchase shares of such Capital Stock) or (iv) if, immediately after giving
effect to such issuance or sale, such Restricted Subsidiary would no longer
constitute a Restricted Subsidiary and any remaining Investment in such Person
would have been permitted to be made under Section 1011 hereof if made on the
date of such issuance or sale.
SECTION 1017. Limitation on Liens.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind on or with respect to any of its property or assets, including any
shares of stock or indebtedness of any Restricted Subsidiary, whether owned at
the Closing Date or thereafter acquired, or any income, profits or proceeds
therefrom, or assign or otherwise convey any right to receive income thereon,
unless (a) in the case of any Lien securing Debt which is pari passu or
Subordinated Debt, the Securities are secured by a Lien on such property, assets
or proceeds that is senior in priority to such Lien and (b) in the case of any
other Lien, the Securities are equally and ratably secured with the obligation
or liability secured by such Lien.
Notwithstanding the foregoing, the Company may, and may permit any
Restricted Subsidiary to, incur any of the following Liens ("Permitted Liens"):
(i) Liens (other than Leins securing Debt under the Revolving Credit
Facility) existing as of the Closing Date.
(ii) Liens on property or assets of the Company or any Restricted
Subsidiary securing Debt under the Revolving Credit Facility and/or other
credit facilities in a principal amount not to exceed the principal amount
of the outstanding Debt permitted by clause (i) of Section 1010 hereof.
(iii) Liens on any property or assets of a Restricted Subsidiary
granted in favor of the Company or any Restricted Subsidiary.
(iv) Liens securing the Securities or any Subsidiary Guarantee.
(v) Liens representing the interest or title of lessors under
Capitalized Lease Obligations or Liens securing purchase money mortgages or
purchase money security interests.
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(vi) Liens securing Acquired Debt created prior to (and not in
connection with or in contemplation of) the incurrence of such Debt by the
Company or any Restricted Subsidiary; provided that such Lien does not
extend to any property or assets of the Company or any Restricted
Subsidiary other the property and assets acquired in connection with the
incurrence of such Acquired Debt.
(vii) Liens securing Hedging Obligations permitted to be incurred
pursuant to clause (vii) of Section 1010 hereof.
(viii) Statutory Liens or landlords', carriers', warehouseman's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business and with respect to amounts not
yet delinquent or being contested in good faith by appropriate proceedings.
(ix) Liens for taxes, assessments, government charges or claims that
are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted.
(x) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance bonds and other obligations of a like
nature incurred in the ordinary course of business (other than contracts
for the payment of money).
(xi) Easements, rights-of-way, restrictions and other similar charges
or encumbrances not interfering in any material respect with the business
of the Company or any Restricted Subsidiary incurred in the ordinary course
of business.
(xii) Liens arising by reason of any judgment, decree or order of any
court, so long as such Lien is adequately bonded and any appropriate legal
proceedings that may have been duly initiated for the review of such
judgment, decree or order have not been finally terminated or the period
within which such proceedings may be initiated has not expired.
(xiii) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating to
such letters of credit and the products and proceeds thereof.
(xiv) Liens incidental to the conduct by the Company or its Restricted
Subsidiaries of Multi-Client Surveys (including without limitation,
licenses, participation rights, rebate or revenue sharing obligations,
joint ownership, or similar encumbrances), provided that such Liens have
not arisen in connection with the incurrence of Debt.
(xv) Liens encumbering towed-streamer seismic data acquisition vessels
owned by the Company or a Restricted Subsidiary pursuant to leases thereof
in accordance with clause (vi) of the last sentence of the definition of
Asset Sale.
(xvi) Any extension, renewal or replacement, in whole or in part, of
any Lien described in the foregoing clauses (i) through (xv); provided that
any such extension,
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renewal or replacement is no more restrictive in any material respect than
the Lien so extended, renewed or replaced and does not extend to any
additional property or assets.
SECTION 1018. Unrestricted Subsidiaries.
(a) The Board of Directors of the Company may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary so long as (i) neither the Company nor any Restricted Subsidiary
provides credit support for or guarantee of, any Debt or is directly or
indirectly liable for any Debt of such Subsidiary, (ii) no default with respect
to any Debt of such Subsidiary would permit (upon notice, lapse of time or
otherwise) any holder of any other Debt of the Company or any Restricted
Subsidiary to declare a default on such other Debt or cause the payment thereof
to be accelerated or payable prior to its stated maturity, (iii) any Investment
in such Subsidiary made as a result of designating such Subsidiary an
Unrestricted Subsidiary shall not violate the provisions of Section 1011 hereof,
(iv) neither the Company nor any Restricted Subsidiary has a contract,
agreement, arrangement, understanding or obligation of any kind, whether written
or oral, with such Subsidiary other than those that might be obtained at the
time from Persons who are not Affiliates of the Company and (v) neither the
Company nor any Restricted Subsidiary has any obligation to subscribe for
additional shares of Capital Stock or other equity interest in such Subsidiary,
or to maintain or preserve such Subsidiary's financial condition or to cause
such Subsidiary to achieve certain levels of operating results.
(b) The Board of Directors of the Company may designate any
Unrestricted Subsidiary as a Restricted Subsidiary; provided that (i) no Default
or Event of Default has occurred and is continuing following such designation
and (ii) the Company could incur at least $1.00 of additional Debt (other than
Permitted Debt) pursuant to the first paragraph of Section 1010 hereof (treating
any Debt of such Unrestricted Subsidiary as the incurrence of Debt by a
Restricted Subsidiary).
(c) All of the Company's Subsidiaries as of the Closing Date are
Restricted Subsidiaries.
SECTION 1019. Limitation on Guarantees of Debt by Restricted
Subsidiaries.
The Company shall not permit any Restricted Subsidiary, directly or
indirectly, to guarantee, assume or in any other manner become liable for the
payment of any Debt of the Company or any Debt of any other Restricted
Subsidiary, provided, however, that any Restricted Subsidiary may guarantee,
assume or become liable for the payment of Debt of the Company if (a) such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture providing for a guarantee of payment of the Securities by such
Restricted Subsidiary and (b) with respect to any guarantee of Debt by a
Restricted Subsidiary, any such guarantee is subordinated to such Restricted
Subsidiary's guarantee with respect to the Securities at least to the same
extent as such Debt is subordinated to the Securities, provided that the
foregoing provision will not be applicable to any guarantee by any Restricted
Subsidiary that existed at the time such Person became a Restricted Subsidiary
and was not incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary.
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Any guarantee by a Restricted Subsidiary of the Securities pursuant to
the preceding paragraph may provide by its terms that it shall be automatically
and unconditionally be released and discharged upon (i) any sale, exchange or
transfer to any Person not an Affiliate of the Company of all of the Company's
and the Restricted Subsidiaries' Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by this Indenture), (ii) the release or discharge of the
guarantee that resulted in the creation of such guarantee of the Securities,
except a discharge or release by or as a result of payment under such guarantee
or (iii) the designation of such Restricted Subsidiary as an Unrestricted
Subsidiary in accordance with the terms of this Indenture.
The foregoing restriction shall not apply to any guarantee, assumption
or liability in existence as of the Closing Date.
SECTION 1020. Waiver of Certain Covenants.
The Company or any Restricted Subsidiary may omit in any particular
instance to comply with any term, provision or condition set forth in Sections
1005 through 1019, inclusive, if before or after the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities, by Act of such Holders, waive such compliance in such instance with
such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
SECTION 1021. Payment for Consent.
Neither the Company nor any of its Restricted Subsidiaries shall,
directly or indirectly, 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 or amendment of any of the terms or provisions of this Indenture
or the Securities unless such consideration is offered to be paid or is paid to
all Holders that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
(a) The Securities may be redeemed at the option of the Company, as a
whole or from time to time in part, at any time on or after July 15, 2003,
subject to the conditions and at the Redemption Prices specified in the form of
Security attached hereto as Exhibit A, together with accrued interest to the
Redemption Date.
(b) In addition, at any time or from time to time prior to July 15,
2001, the Company may at its option redeem Securities with the net proceeds of
one or more Equity Offerings at a redemption price equal to 110.75% of the
principal amount thereof, together with accrued interest, if any, to the date of
redemption; provided that, immediately after giving effect to any such
redemption, at least 65% of the aggregate principal amount of the Securities
issued under this Indenture remains outstanding. Any such redemption must be
made within 90 days of the related Equity Offering.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company or otherwise,
as permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1101 hereof shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 1104 hereof.
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by lot or such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the principal of Securities; provided, however, that no such partial
redemption shall reduce the portion of the principal amount of a Security not
redeemed to less than $1,000.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
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For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given in the manner provided for in
Section 106 hereof not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest to the
Redemption Date payable as provided in Section 1107 hereof, if any,
(3) if less than all Outstanding Securities are to be redeemed, the
identification (and, in the case of a partial redemption, the principal
amounts) of the particular Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder shall receive, without
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price (and accrued
interest, if any, to the Redemption Date payable as provided in Section
1107 hereof) shall become due and payable upon each such Security, or the
portion thereof, to be redeemed, and that interest thereon shall cease to
accrue on and after said date,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest, if any,
(7) the CUSIP or CINS number, as the case may be, and
(8) the Section of the Securities or this Indenture pursuant to which
the Securities are being redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
On or prior to 10:00 a.m. (New York City time) on any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as
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its own Paying Agent, segregate and hold in trust as provided in Section 1003
hereof) an amount of money in U.S. dollars sufficient to pay the Redemption
Price of, and accrued interest on, all the Securities which are to be redeemed
on that date.
SECTION 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest, if any, to
the Redemption Date), and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest, if any, to the
Redemption Date. If the Redemption Date is on or after a Regular Record Date and
on or before the related Interest Payment Date, any accrued interest will be
paid to the Person in whose name a Security is registered at the close of
business on such Regular Record Date, and no additional interest will be payable
to Holders whose Securities are redeemed.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at the office or agency of the Company maintained for such purpose pursuant to
Section 1002 hereof (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
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ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company Option to Effect Defeasance or Covenant
Defeasance.
The Company may, at its option by Board Resolution at any time, with
respect to the Securities, elect to have either Section 1202 or 1203 hereof be
applied to all Outstanding Securities upon compliance with the conditions set
forth below in this Article Twelve.
SECTION 1202. Defeasance and Discharge.
Upon the Company's exercise under Section 1201 hereof of the option
applicable to this Section 1202, the Company and the Subsidiary Guarantors shall
be deemed to have been discharged from their obligations with respect to all
Outstanding Securities on the date the conditions set forth in Section 1204
hereof are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire Debt represented by the Outstanding Securities, which shall
thereafter be deemed to be "Outstanding" only for the purposes of Section 1205
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 Securities and
this Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (A) the rights of Holders of Outstanding Securities to
receive payments in respect of the principal of (and premium, if any, on) and
interest on such Securities when such payments are due, (B) the Company's
obligations with respect to such Securities under Sections 304, 305, 308, 1002
and 1003, (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (D) this Article Twelve. Subject to compliance with this Article
Twelve, the Company may exercise its option under this Section 1202
notwithstanding the prior exercise of its option under Section 1203 hereof with
respect to the Securities.
SECTION 1203. Covenant Defeasance.
Upon the Company's exercise under Section 1201 hereof of the option
applicable to this Section 1203, each of the Company and the Subsidiary
Guarantors shall be released from its obligations under any covenant contained
in clauses (b), (c), (d) and (e) of Section 801 and in Sections 1005 through
1021 with respect to the Outstanding Securities on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance"),
and the Securities shall thereafter be deemed not to be "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. For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Securities, the Company and any Subsidiary 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
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any other document and such omission to comply shall not constitute a Default or
an Event of Default under Sections 501(3), 501(4), 501(5) and 501(6), but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby.
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
1202 or 1203 hereof to the Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 hereof who shall agree to comply with the provisions of this
Article Twelve applicable to it) as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities, (A) money in an amount, or (B) U.S. Government
Obligations (as defined herein) that through the scheduled payment of
principal and interest thereon shall provide money in an amount, or (C) a
combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay and discharge the principal
of (and premium, if any, on) and interest on the Outstanding Securities on
the Stated Maturity (or upon Redemption Date, if applicable) of such
principal (and premium, if any) or installment of interest; provided that
the Trustee shall have been irrevocably instructed to apply such money or
the proceeds of such U.S. Government Obligations to said payments with
respect to the Securities. Before such a deposit, the Company may give to
the Trustee, in accordance with Section 1103 hereof, a notice of its
election to redeem all of the Outstanding Securities at a future date in
accordance with Article Eleven hereof, which notice shall be irrevocable.
Such irrevocable redemption notice, if given, shall be given effect in
applying the foregoing. For this purpose, "U.S. Government Obligations"
means securities that are (x) direct obligations of the United States of
America for the timely payment of which its full faith and credit is
pledged or (y) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act), as custodian with respect to any
such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for
the account of the holder of such depository receipt, provided that (except
as required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depository receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depository receipt.
(2) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit or,
insofar as paragraphs (7) and (8) of Section 501 hereof are concerned, at
any time during the period ending on the 91st
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day after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company or any
Subsidiary Guarantor is a party or by which it is bound.
(4) In the case of an election under Section 1202 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (x)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the Closing Date, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such opinion shall confirm that, the Holders
of the Outstanding Securities shall not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance and shall be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred.
(5) In the case of an election under Section 1203 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Securities Outstanding shall not recognize income,
gain or loss for federal income tax purposes as a result of such covenant
defeasance and shall be subject to federal 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.
(6) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1202
hereof or the covenant defeasance under Section 1203 hereof, as the case
may be, have been complied with.
SECTION 1205. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003
hereof, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1205, the "Trustee") pursuant to Section 1204
hereof in respect of the Outstanding Securities shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become due
thereon in respect of principal (and 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 U.S. Governmental Obligations
deposited pursuant to Section 1204 hereof or the principal and interest received
in respect thereof other than any such
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tax, fee or other charge which by law is for the account of the Holders of the
Outstanding Securities.
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1204 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance, as applicable, in accordance with this Article.
SECTION 1206. Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1205 hereof by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 1202 or 1203 hereof, as the case may be, until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 1205 hereof; provided, however, that if the Company makes any
payment of principal of (or premium, if any) or interest on any Security
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money held by the Trustee or Paying Agent.
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ARTICLE THIRTEEN
SUBSIDIARY GUARANTEES
SECTION 1301. Subsidiary Guarantees.
The Company will cause each Person that currently is a Restricted
Subsidiary that is organized under the laws of any state of the United States or
the District of Columbia or that becomes a Restricted Subsidiary that is
organized under the laws of any state of the United States or the District of
Columbia to become a Subsidiary Guarantor as provided in Section 1308 hereof.
(a) Subject to clause (b) of this Section 1301, each Subsidiary
Guarantor hereby, jointly and severally, fully, absolutely, unconditionally
and irrevocably guarantees to each Holder of a Security authenticated and
delivered by the Trustee, and to the Trustee on behalf of each Holder, the
punctual payment when due of all Indenture Obligations which, for purposes
of its Subsidiary Guarantee, shall also be deemed to include all
commissions, fees, charges, costs and other expenses (including reasonable
legal fees and disbursements of counsel) arising out of or incurred by the
Trustee or the Holders in connection with the enforcement of any Subsidiary
Guarantee. Without limiting the generality of the foregoing, each
Subsidiary Guarantor's liability shall extend to all amounts that
constitute part of the Indenture Obligations and would be owed by the
Company to such Holder or the Trustee under the Securities or this
Indenture but for the fact that they are unenforceable, reduced, limited,
suspended or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company.
(b) Each Subsidiary Guarantor and by its acceptance hereof each Holder
hereby confirms that it is the intention of all such parties that the
Guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee
not constitute a fraudulent transfer or conveyance for purposes of the
Federal Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law or the
provisions of its local law relating to fraudulent transfer or conveyance.
To effectuate the foregoing intention, the Holders and each Subsidiary
Guarantor hereby irrevocably agree that the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee shall be limited to the maximum
amount as shall, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor
under its Subsidiary Guarantee or pursuant to paragraph (c) of this Section
1301, result in the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law.
(c) In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in
the event any payment or distribution is made by any Subsidiary Guarantor
(a "Funding Guarantor") under its Subsidiary Guarantee, such Funding
Guarantor shall be entitled to a contribution from each other Subsidiary
Guarantor in a pro rata amount based on the Adjusted Net Assets of each
Subsidiary Guarantor (including the Funding Guarantor) for
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all payments, damages and expenses incurred by the Funding Guarantor in
discharging the Indenture Obligations of the Company or any other
Subsidiary Guarantor's obligations with respect to its Subsidiary
Guarantee. "Adjusted Net Assets" of such Subsidiary Guarantor at any date
shall mean the lesser of (x) the amount by which the fair value of the
property of such Subsidiary Guarantor exceeds the total amount of
liabilities, including, without limitation, contingent liabilities (after
giving effect to all other fixed and contingent liabilities incurred or
assumed on such date), but excluding liabilities under the Subsidiary
Guarantee of such Subsidiary Guarantor at such date and (y) the amount by
which the present fair salable value of the assets of such Subsidiary
Guarantor at such date exceeds the amount that shall be required to pay the
probable liability of such Subsidiary Guarantor on its debts (after giving
effect to all other fixed and contingent liabilities incurred or assumed on
such date), excluding debt in respect of the Subsidiary Guarantee, as they
become absolute and matured.
SECTION 1302. Guaranty Absolute.
Subject to the limitations in Section 1301 hereof, each Subsidiary
Guarantor guarantees that the Securities shall be paid or performed strictly in
accordance with the terms of the Securities and this Indenture, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of any Holder with respect thereto.
The obligations of each Subsidiary Guarantor under its Subsidiary Guarantee are
independent of the obligations of the Company under the Securities and this
Indenture, and a separate action or actions may be brought and prosecuted
against such Subsidiary Guarantor to enforce its Subsidiary Guarantee,
irrespective of whether any action is brought against the Company or any other
Subsidiary Guarantor or whether the Company or any other Subsidiary Guarantor is
joined in any such action or actions. The liability of each Subsidiary Guarantor
under its Subsidiary Guarantee shall be absolute and unconditional and the
liability and obligations of such Subsidiary Guarantor hereunder shall not be
released, discharged, mitigated, waived, impaired or affected in whole or in
part by:
(a) any lack of validity or enforceability of this Indenture or the
Securities with respect to the Company or any Subsidiary Guarantor or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Indenture Obligations, or any other
amendment or waiver of or any consent to departure from this Indenture,
including any increase in the Indenture Obligations resulting from the
extension of additional credit to the Company or otherwise;
(c) the failure to give notice to the Subsidiary Guarantor of the
occurrence of a Default under the provisions of this Indenture or the
Securities;
(d) any taking, release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the Indenture
Obligations;
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(e) any failure, omission, delay by or inability on the part of the
Trustee or the Holders to assert or exercise any right, power or remedy
conferred on the Trustee or the Holders in this Indenture or the
Securities;
(f) any change in the corporate structure, or termination,
dissolution, consolidation or merger of the Company or any Subsidiary
Guarantor with or into any other Person, the voluntary or involuntary
liquidation, dissolution, sale or other disposition of all or substantially
all the assets of the Company or any Subsidiary Guarantor, the marshalling
of the assets and liabilities of the Company or any Subsidiary Guarantor,
the receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition with the creditors, or
readjustment of, or other similar proceedings affecting the Company or any
Subsidiary Guarantor, or any of the assets of any of them;
(g) the assignment of any right, title or interest of the Trustee or
any Holder in this Indenture or the Securities to any other Person; or
(h) any other event or circumstance (including any statute of
limitations), whether foreseen or unforeseen and whether similar or
dissimilar to any of the foregoing, that might otherwise constitute a
defense available to, or a discharge of, the Company or a Subsidiary
Guarantor, other than payment in full of the Indenture Obligations; it
being the intent of each Subsidiary Guarantor that its obligations
hereunder shall not be discharged except by payment of all amounts owing
pursuant to this Indenture or the Securities.
The Subsidiary Guarantee of each Subsidiary Guarantor shall continue
to be effective or be reinstated, as the case may be, if at any time any payment
of any of the Indenture Obligations is rescinded or must otherwise be returned
by any Holder or the Trustee upon the insolvency, bankruptcy or reorganization
of the Company or otherwise, all as though such payment had not been made. Each
Subsidiary Guarantor further agrees, to the fullest extent that it may lawfully
do so, that, as between such Subsidiary Guarantor, on the one hand, and the
Holders and the Trustee, on the other hand, (i) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article Five of this
Indenture for the purposes of this Subsidiary Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (ii) in the event of any acceleration of
such obligations as provided in Article Five of this Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Subsidiary Guarantor for the purpose of this Subsidiary Guarantee.
SECTION 1303. Waivers.
(a) Each Subsidiary Guarantor hereby expressly waives (to the extent
permitted by law) notice of the acceptance of its Subsidiary Guarantee and
notice of the existence, renewal, extension or the non-performance, non-payment,
or non-observance on the part of the Company of any of the terms, covenants,
conditions and provisions of this Indenture or the Securities or any other
notice whatsoever to or upon the Company or such Subsidiary Guarantor with
respect to the Indenture Obligations. Each Subsidiary Guarantor hereby
88
<PAGE> 99
acknowledges communication to it of the terms of this Indenture and the
Securities and all of the provisions herein contained and consents to and
approves the same. Each Subsidiary Guarantor hereby expressly waives (to the
extent permitted by law) diligence, presentment and protest.
(b) Without prejudice to any of the rights or recourse which the
Trustee or the Holders may have against the Company, each Subsidiary Guarantor
hereby expressly waives (to the extent permitted by law) any right to require
the Trustee or the Holders to:
(1) initiate or exhaust any rights, remedies or recourse against the
Company, any Subsidiary Guarantor or any other Person;
(2) value, realize upon, or dispose of any security of the Company or
any other Person held by the Trustee or the Holders; or
(3) initiate or exhaust any other remedy which the Trustee or the
Holders may have in law or equity;
before requiring, becoming entitled to or demanding payment from such Subsidiary
Guarantor under this Subsidiary Guarantee.
SECTION 1304. Subrogation.
Each Subsidiary Guarantor shall not exercise any rights that it may
acquire by way of subrogation under this Subsidiary Guarantee, by any payment
made hereunder or otherwise, until all the Indenture Obligations shall have been
paid in full. If any amount shall be paid to any Subsidiary Guarantor on account
of any such subrogation rights at any time when all the Indenture Obligations
shall not have been paid in full, such amount shall be held in trust for the
benefit of the Holders and the Trustees and shall forthwith be paid to the
Trustee, on behalf of the Holders, to be credited and applied to the Indenture
Obligations, whether matured or unmatured.
SECTION 1305. No Waiver; Remedies.
No failure on the part of any Holder or the Trustee to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 1306. Continuing Guaranty; No Right of Set-Off; Independent
Obligation.
(a) This Subsidiary Guarantee is a continuing guarantee of the payment
of all Indenture Obligations and shall remain in full force and effect until the
payment in full (subject to Section 1301 hereof) of all of the Indenture
Obligations and all other amounts payable under this Subsidiary Guarantee and
shall apply to and secure any ultimate balance due or remaining unpaid to the
Trustee or the Holders under this Indenture or the Securities; and this
Subsidiary Guarantee shall not be considered as wholly or partially satisfied by
the payment or liquidation at
89
<PAGE> 100
any time or from time to time of any sum of money for the time being due or
remaining unpaid to the Trustee or the Holders.
(b) Subject to Section 1301 hereof, each Subsidiary Guarantor hereby
guarantees that the Indenture Obligations shall be paid to the Trustee without
set-off or counterclaim or other reduction whatsoever (whether for taxes,
withholding or otherwise) in lawful currency of the United States of America.
(c) Subject to Section 1301 hereof, each Subsidiary Guarantor
guarantees that the Indenture Obligations shall be paid strictly in accordance
with their terms regardless of any lack of validity or enforceability of any of
such terms or the rights of the Holders with respect thereto.
(d) Each Subsidiary Guarantor's liability to pay or perform or cause
the performance of the Indenture Obligations under this Subsidiary Guarantee
shall arise forthwith after demand for payment by the Trustee has been given to
such Subsidiary Guarantor in the manner prescribed in this Indenture.
SECTION 1307. Subsidiary Guarantors May Consolidate, Etc., on Certain
Terms.
(a) Nothing contained in this Indenture or in any of the Securities
shall prevent any consolidation or merger of a Subsidiary Guarantor with or into
the Company or another Subsidiary Guarantor or shall prevent any sale or
conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety to the Company or another Subsidiary Guarantor,
which consolidation, merger, sale or conveyance is otherwise in accordance with
the terms of this Indenture.
(b) Other than as set forth in paragraph (a) of this Section, no
Subsidiary Guarantor may consolidate with or merge with or into (whether or not
such Subsidiary Guarantor is the surviving Person) another Person whether or not
affiliated with such Subsidiary Guarantor unless: (i) subject to the provisions
of Section 1309 hereof, the Person formed by or surviving such consolidation or
merger (if other than such Subsidiary Guarantor) assumes all of the obligations
of such Subsidiary Guarantor under this Indenture and its Subsidiary Guarantee,
pursuant to a supplemental indenture in form and substance satisfactory to the
Trustee, and (b) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing.
SECTION 1308. Additional Subsidiary Guarantors.
The Company will cause each Person that becomes a Restricted
Subsidiary that is organized under the laws of any state of the United States or
the District of Columbia after the date of this Indenture to become a Subsidiary
Guarantor with respect to the Indenture Obligations by executing and delivering
a supplemental indenture to this Indenture providing for a Subsidiary Guarantee
by such Subsidiary under this Article Thirteen (or under a separate guarantee
agreement consistent in all material respects with this Article Thirteen). The
Company shall deliver to the Trustee, together with the supplemental indenture
referred to above, an Opinion of Counsel that such Subsidiary Guarantee is a
legal, valid, binding and enforceable
90
<PAGE> 101
obligation of such Subsidiary Guarantor, subject to customary local law
exceptions and customary exceptions for bankruptcy and equitable principles.
SECTION 1309. Releases.
(a) In the event of (i) the conveyance, sale, assignment, transfer or
other disposition (by way of merger, consolidation or otherwise) of all of the
Capital Stock of a Subsidiary Guarantor to a Person that is not an Affiliate of
the Company in compliance with this Section 1309 and the terms of this Indenture
or (ii) a conveyance, sale, assignment, transfer or other disposition of all or
substantially all of the assets of a Subsidiary Guarantor (by way of merger,
consolidation or otherwise) to a Person that is not an Affiliate of the Company
in compliance with this Section 1309 and the terms of this Indenture, then such
Subsidiary Guarantor (or Person acquiring such assets in the event of a sale or
other disposition of all of the assets of such Subsidiary Guarantor) shall be
deemed automatically and unconditionally released from and discharged from all
of its obligations under this Article Thirteen and its Subsidiary Guarantee
without any further action required on the part of the Trustee or any Holder;
provided that, in the event such transaction constitutes an Asset Sale, the Net
Proceeds of such sale, transfer or other disposition are applied in accordance
with Section 1013 hereof.
(b) Any Subsidiary Guarantor that is designated by the Board of
Directors of the Company as an Unrestricted Subsidiary, or such Subsidiary
Guarantor ceases to be a Subsidiary of the Company, in accordance with the terms
of this Indenture may, at such time, at the option of the Board of Directors, be
released and relieved of its obligations under its Subsidiary Guarantee.
(c) Concurrently with the defeasance of the Securities under Section
1202 hereof, or the covenant defeasance of the Securities under Section 1203
hereof, the Subsidiary Guarantors shall be released from all their obligations
under their Subsidiary Guarantees under this Article Thirteen.
(d) The Trustee shall deliver an appropriate instrument evidencing
such release upon receipt of a Company Request accompanied by an Officers'
Certificate certifying as to the compliance with this Section 1309. Any
Subsidiary Guarantor not so released shall remain liable for the full amount of
principal of and interest on the Securities as provided in its Subsidiary
Guarantee.
SECTION 1310. Benefits Acknowledged.
Each Subsidiary Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Indenture
and that its guarantee and waivers pursuant to its Subsidiary Guarantee are
knowingly made in contemplation of such benefits. SECTION 1311. Severability.
In case any provision of this Subsidiary Guarantee 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.
91
<PAGE> 102
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
EAGLE GEOPHYSICAL, INC.
By /S/ RICHARD W. MCNAIRY
-----------------------------------------------
Name: Richard W. McNairy
Title: Vice President, Chief Financial Officer
and Secretary
CHASE BANK OF TEXAS NATIONAL ASSOCIATION
By /S/ JANET MYSINGER
-----------------------------------------------
Name: Janet Mysinger
Title: Vice President and Trust Officer
<PAGE> 103
AGREED TO AND ACCEPTED AS TO
ARTICLE THIRTEEN
EAGLE GEOPHYSICAL ONSHORE, INC.
By /S/ RICHARD W. MCNAIRY
-----------------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE GEOPHYSICAL GOM, INC.
By /S/ RICHARD W. MCNAIRY
-----------------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE GEOPHYSICAL OFFSHORE, INC.
By /S/ RICHARD W. MCNAIRY
-----------------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE GEOPHYSICAL LEASING, INC.
By /S/ RICHARD W. MCNAIRY
-----------------------------------------------
Name: Richard W. McNairy
Title: Vice President
<PAGE> 104
EAGLE GEOPHYSICAL DE MEXICO, INC
By /S/ RICHARD W. MCNAIRY
-----------------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE FRONT END SERVICES, INC
By /S/ RICHARD W. MCNAIRY
-----------------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE GEOPHYSICAL MANAGEMENT, INC.
By /S/ RICHARD W. MCNAIRY
-----------------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE FRONT END SERVICES, LTD.
By: Eagle Geophysical Management, Inc.,
its General Partner
By /S/ RICHARD W. MCNAIRY
-----------------------------------------------
Name: Richard W. McNairy
Title: Vice President
AUSTRAL HORIZON, INC.
By /S/ RICHARD W. MCNAIRY
-----------------------------------------------
Name: Richard W. McNairy
Title: Vice President
<PAGE> 105
EAGLE GEOPHYSICAL DE COLOMBIA, INC.
By /S/ RICHARD W. MCNAIRY
-----------------------------------------------
Name: Richard W. McNairy
Title: Vice President
ATLANTIC HORIZON, INC.
By /S/ RICHARD W. MCNAIRY
-----------------------------------------------
Name: Richard W. McNairy
Title: Vice President
<PAGE> 106
SCHEDULE I
SUBSIDIARY GUARANTORS OF THE COMPANY
SUBSIDIARY: FORMED IN:
- ---------- ---------
Eagle Geophysical Onshore, Inc. Delaware
Eagle Geophysical Offshore, Inc Delaware
Eagle Geophysical GOM, Inc. Texas
Eagle Geophysical Leasing, Inc. Delaware
Eagle Geophysical de Mexico, Inc Delaware
Eagle Front End Services, Inc Delaware
Eagle Geophysical Management, Inc. Delaware
Eagle Front End Services, Ltd. Texas
Austral Horizon, Inc. Delaware
Atlantic Horizon, Inc. Delaware
Eagle Geophysical de Colombia, Inc. Delaware
<PAGE> 107
Exhibit A
[FACE OF SECURITY]
EAGLE GEOPHYSICAL, INC.
10 3/4% Senior Note due 2008
[CUSIP]
--------------
No. $
------- --------------------
EAGLE GEOPHYSICAL, INC., a Delaware corporation (the "Company", which
term includes any successor under the Indenture hereinafter referred to), for
value received, promises to pay to ___________, or its registered assigns, the
principal sum of ____________________________________ ($___________), on July
15, 2008.
Interest Payment Dates: January 15 and July 15 of each year
commencing January 15, 1999.
Regular Record Dates: January 1 and July 1 of each year.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
Date: EAGLE GEOPHYSICAL, INC
--------------
By:
-------------------------------
Name:
Title:
<PAGE> 108
(Form of Trustee's Certificate of Authentication)
This is one of the 10 3/4% Senior Notes due 2008 referred to in the
within-mentioned Indenture.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION,
as Trustee
By:
-------------------------------
Authorized Signatory
<PAGE> 109
[REVERSE SIDE OF SECURITY]
EAGLE GEOPHYSICAL, INC.
10 3/4% Senior Note due 2008
1. Principal and Interest.
The Company will pay the principal of this Security on July 15, 2008.
The Company promises to pay interest on the principal amount of this
Security on each Interest Payment Date, as set forth below, at the rate per
annum shown above.
Interest will be payable semiannually (to the holders of record of the
Securities at the close of business on the January 1 or July 1 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
January 15, 1999.
[The Holder of this Security is entitled to the benefits of the
Registration Rights Agreement, dated as of July 20, 1998, among the Company, the
Subsidiary Guarantors signatory thereto and the Initial Purchasers named therein
(the "Registration Rights Agreement"). In the event that either (a) the Exchange
Offer Registration Statement (as defined in the Registration Rights Agreement)
is not filed with the Securities and Exchange Commission on or prior to the 60th
calendar day following the date of original issue of the Securities (the
"Closing Date"), or (b) the Exchange Offer Registration Statement is not
declared effective on or prior to the 180th calendar day following the Closing
Date, or (c) the Exchange Offer (as defined in the Registration Rights
Agreement) is not consummated or a Shelf Registration Statement (as defined in
the Registration Rights Agreement) is not declared effective on or prior to the
210th calendar day following the Closing Date, or (d) either (A) the Exchange
Offer Registration Statement ceases to be effective at any time prior to the
time that the Exchange Offer is consummated or (B) if applicable, subject to
certain exceptions, the Shelf Registration Statement has been declared effective
and such Shelf Registration Statement ceases to be effective at any time prior
to the second anniversary of the Closing Date (each such event referred to in
clause (a) through (d), a "Registration Default"), then the per annum interest
rate borne by this Security shall be increased by 25 basis points following the
60-day period referred to in clause (a) above, following the 180-day period
referred to in clause (b) above, following the 210-day period referred to in
clause (c) above, or in the case of clause (d) above, immediately following such
Registration Default. Such per annum interest rate will increase by an
additional 25 basis points at the beginning of each subsequent 30-day period in
the case of clause (a), (b) or (c) above, or 90-day period in the case of clause
(d) above; provided, however, that in no event will the per annum interest rate
borne by the Notes be increased by more than 150 basis points. Upon the filing
of the Exchange Offer Registration Statement, the effectiveness of the Exchange
Offer
A-3
<PAGE> 110
Registration Statement, the consummation of the Exchange Offer or the
effectiveness of a Shelf Registration Statement, as the case may be, the
interest rate borne by this Security from the date of such filing, consummation
or effectiveness, as the case may be, will be reduced to the original interest
rate set forth above; provided, however, that, if after such reduction in
interest rate, a different event specified in clause (a), (b), (c) or (d) above
occurs, the interest rate may again be increased pursuant to the foregoing
provisions. If the Company issues a notice that the Shelf Registration Statement
is unusable pending the announcement of a material corporate transaction or
otherwise pursuant to Section 3(k) of the Registration Rights Agreement, or such
a notice is required under applicable securities laws to be issued by the
Company, and the aggregate number of days in any consecutive twelve-month period
for which all such notices are issued or required to be issued exceeds 30 days
in the aggregate, then the interest rate borne by this Security will be
increased by 25 basis points per annum following the date that such Shelf
Registration Statement ceases to be usable beyond the 30-day period permitted
above, which rate shall be increased by an additional 25 basis points per annum
for each 90-day period that such additional interest continues to accrue;
provided that the aggregate increase in such annual interest rate may in no
event exceed 150 basis points. Upon the Company declaring that the Shelf
Registration Statement is usable after the interest rate has been increased
pursuant to the preceding sentence, the interest rate borne by this Security
will be reduced to the original interest rate if the Company is otherwise in
compliance with paragraph 2(e) of the Registration Rights Agreement, provided,
however, that if after any such reduction in interest rate the Shelf
Registration Statement again ceases to be usable beyond the period permitted
above, the interest rate will again be increased and thereafter reduced pursuant
to the foregoing provisions.]*
Interest on this Security will accrue from the most recent date to
which interest has been paid on this Security [or the Security surrendered in
exchange hereof]** or, if no interest has been paid, from July 20, 1998;
provided that, if there is no existing default in the payment of interest and if
this Security is authenticated between a Regular Record Date referred to on the
face hereof and the next succeeding Interest Payment Date, interest shall accrue
from such Interest Payment Date. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
the rate borne by the Securities.
2. Method of Payment.
The Company will pay interest (except defaulted interest) on the
principal amount of the Securities on each January 15 and July 15 to the Persons
who are Holders (as reflected in the Security Register at the close of business
on the January 1 and July 1 (each a "Regular Record Date") immediately preceding
the Interest Payment Date), in each case, even if the
- ----------------
* Include only for Initial Securities.
** Include only for Exchange Securities.
A-4
<PAGE> 111
Security is canceled on registration of transfer or registration of exchange,
redemption or repurchase after such record date; provided that, with respect to
the payment of principal, the Company will make payment to the Holder that
surrenders this Security to any Paying Agent on or after July 15, 2008.
The Company will pay principal, premium, if any, and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. At the option of the Company, interest may be paid by
check mailed to the address of the Holder entitled thereto as such address
appears in the Security Register; provided that all payments to the Holders who
have given wire transfer instructions to the Trustee (or other Paying Agent) by
the Regular Record Date immediately preceding such Interest Payment Date shall
be required to be made by wire transfer of immediately available funds to the
accounts specified by such Holders. If a payment date is a date other than a
Business Day at a place of payment, payment may be made on the next succeeding
day that is a Business Day and no interest shall accrue for the intervening
period.
3. Paying Agent and Registrar.
Initially, the Trustee will act as Authenticating Agent, Paying Agent
and Registrar. The Company may change any Authenticating Agent, Paying Agent or
Registrar upon written notice. The Company, any Subsidiary or any Affiliate of
any of them may act as Paying Agent, Registrar or co-registrar.
4. Indenture; Limitations.
The Company issued the Securities under an Indenture dated as of July
20, 1998 (the "Indenture"), among the Company, the Subsidiary Guarantors
signatory thereto and Chase Bank of Texas, National Association, trustee (the
"Trustee"). Capitalized terms herein are used as defined in the Indenture unless
otherwise indicated. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Securities are subject to all such terms, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of all
such terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Security and the terms of the Indenture,
the terms of the Indenture shall control.
The Securities are general obligations of the Company.
5. Redemption.
The Securities may be redeemed at the option of the Company, in whole
or in part, at any time and from time to time, on or after July 15, 2003, at the
following Redemption Prices (expressed in percentages of principal amount), plus
accrued and unpaid interest, if any, to the Redemption Date (subject to the
right of Holders of record on the relevant Regular Record
A-5
<PAGE> 112
Date to receive interest due on an Interest Payment Date that is on or prior to
the Redemption Date), if redeemed during the 12-month period beginning on July
15 of each of the years set forth below:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2003............................. 105.375%
2004............................. 103.583%
2005 ............................ 101.792%
2006 and thereafter ............. 100.000%
</TABLE>
In addition, at any time or from time to time prior to July 15, 2001,
the Company may at its option redeem Securities with the net proceeds of one or
more Equity Offerings at a redemption price equal to 110.75% of the principal
amount thereof, together with accrued interest, if any, to the Redemption Date
(subject to the right of Holders of record on the relevant Record Date to
receive interest due on the relevant Interest Payment Date); provided that,
immediately after giving effect to such redemption, at least 65% of the
aggregate principal amount of the Securities (including any Additional
Securities) remains outstanding; provided further that any such redemption
occurs within 90 days of the date of closing of the related Equity Offering.
Notice of a redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's last address as it appears in the Security Register.
Securities in original denominations larger than $1,000 may be redeemed in part
in integral multiples of $1,000. On and after the Redemption Date, interest
ceases to accrue on Securities or portions of Securities called for redemption,
unless the Company defaults in the payment of the Redemption Price.
6. Repurchase upon a Change in Control and Asset Sales.
(a) Upon the occurrence of a Change of Control, the Company is
obligated to make an offer to purchase all outstanding Securities at a
redemption price of 101% of the principal amount thereof, plus accrued interest,
if any, to the date of purchase and (b) upon Asset Sales, the Company may be
obligated to make offers to purchase Securities with the Net Cash Proceeds of
such Asset Sales at a redemption price of 100% of the principal amount thereof
plus accrued interest, if any, to the date of purchase.
7. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons, in
denominations of $1,000 and multiples of $1,000 in excess thereof. A Holder may
register the transfer or exchange of Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Securities selected for redemption (except the
unredeemed portion of
A-6
<PAGE> 113
any Security being redeemed in part). Also, it need not register the transfer or
exchange of any Securities for a period of 15 days before a selection of
Securities to be redeemed is made.
8. Persons Deemed Owners.
A Holder may be treated as the owner of a Security for all purposes.
9. Unclaimed Money.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its request. After that, Holders entitled to the
money must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company irrevocably deposits, or causes to be deposited, with
the Trustee money or U.S. Government Obligations sufficient to pay the then
outstanding principal of, premium, if any, and accrued interest on the
Securities to redemption or maturity, the Company will be discharged from the
Indenture and the Securities, except in certain circumstances for certain
sections thereof.
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount of the Securities then Outstanding, and any
existing default or compliance with any provision may be waived with the consent
of the Holders of a majority in aggregate principal amount of the Securities
then Outstanding. Without notice to or the consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Securities to, among other
things, cure any ambiguity, defect or inconsistency and make any change that
does not materially adversely affect the rights of any Holder.
12. Restrictive Covenants.
The Indenture contains certain covenants, including, without
limitation, covenants with respect to the following matters: (i) additional
Debt; (ii) Restricted Payments; (iii) the purchase of Notes upon a Change of
Control; (iv) certain Asset Sales; (v) transactions with Affiliates; (vi)
restrictions on dividends and other payments affecting Restricted Subsidiaries;
(vii) issuances and sale of Capital Stock of Restricted Subsidiaries; (viii)
Guarantees of Debt by Restricted Subsidiaries; (ix) designation of Unrestricted
Subsidiaries; (x) limitations on Liens; and (xi) merger, consolidation and
certain transfers of assets. Within 60 days after the end of each fiscal year,
the Company must report to the Trustee on compliance with such limitations.
A-7
<PAGE> 114
13. Successor Persons.
When a successor Person or other entity assumes all the obligations of
its predecessor under the Securities and the Indenture, the predecessor Person
will be released from those obligations.
14. Remedies for Events of Default.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of not less than 25% in principal amount
of the Securities then Outstanding may declare all the Securities to be
immediately due and payable. If a bankruptcy or insolvency default with respect
to the Company or any of its Significant Subsidiaries occurs and is continuing,
the Securities automatically become immediately due and payable. Holders may not
enforce the Indenture or the Securities except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of at least
a majority in principal amount of the Securities then Outstanding may direct the
Trustee in its exercise of any trust or power.
15. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may make loans to,
accept deposits from, perform services for, and otherwise deal with, the Company
and its Affiliates as if it were not the Trustee.
16. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
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. Governing Law.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PROVISIONS.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Eagle
Geophysical, Inc., 50 Briar Hollow Road, 6th Floor West, Houston, Texas 77027,
Attention: President.
A-8
<PAGE> 115
[FORM OF TRANSFER NOTICE]
Eagle Geophysical, Inc.
10 3/4% Senior Notes due 2008
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
(Please print or typewrite name and address including zip code of assignee)
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
attorney to transfer such Security on the books of the Company with full power
of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL SECURITIES OTHER THAN EXCHANGE SECURITIES,
UNLEGENDED OFFSHORE GLOBAL SECURITIES AND
UNLEGENDED OFFSHORE PHYSICAL SECURITIES]
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date the Shelf Registration Statement
is declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
or
[ ] (b) this Security is being transferred other than in accordance with
(a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
A-9
<PAGE> 116
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 307 of the Indenture shall have
been satisfied.
Date:
-------------------- -------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
Signature Guarantee:
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Date:
-------------------- -------------------------
NOTICE: To be executed by an executive
officer, general partner, trustee or similar
representative.
A-10
<PAGE> 117
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 1012 or 1013 of the Indenture, check the Box: [ ].
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 1012 or 1013 of the Indenture, state the amount (in
original principal amount) below:
$ .
-------------------------
Date:
Your Signature:
--------------------------------
(Sign exactly as your name appears on the other side of this
Security)
Signature Guarantee:
---------------------------
(Signature must be guaranteed by a member of the New York
Stock Exchange or a commercial bank or trust company)
A-11
<PAGE> 118
Exhibit B
Form of Certificate
to Be Delivered upon
Termination of Restricted Period
On or after August 31, 1998
Eagle Geophysical, Inc.
50 Briar Hollow Lane
6th Floor West
Houston, Texas 77027
c/o
Chase Bank of Texas, National Association
600 Travis Street, Suite 1150
Houston, Texas 77002
Attention: Corporate Trust Department
Re: Eagle Geophysical, Inc. (the "Company") 10 3/4%
Senior Notes due 2008 (the "Notes")
Ladies and Gentlemen:
This letter relates to $________ principal amount of Notes represented
by the temporary global note certificate (the "Temporary Certificate"). Pursuant
to Section 202 of the Indenture dated as of July 20, 1998 relating to the Notes
(the "Indenture"), we hereby certify that (1) we are the beneficial owner of
such principal amount of Notes represented by the Temporary Certificate and (2)
we are a person outside the United States to whom the Notes could be transferred
in accordance with Rule 904 of Regulation S promulgated under the U.S.
Securities Act of 1933, as amended. Accordingly, the Company and the Trustee are
hereby requested to issue a Certificated Note representing the undersigned's
interest in the principal amount of Notes represented by the Temporary
Certificate, all in the manner provided by the Indenture.
The Trustee and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Holder]
By:
--------------------------------
Authorized Signature
<PAGE> 119
Exhibit C
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Institutional Accredited Investors
-------------------, ----
Eagle Geophysical, Inc.
50 Briar Hollow Lane
6th Floor West
Houston, Texas 77027
c/o
Chase Bank of Texas, National Association
600 Travis Street, Suite 1150
Houston, Texas 77002
Attention: Jan Mysinger
Re: Eagle Geophysical, Inc. (the "Company") 10 3/4%
Senior Notes due 2008 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed purchase of $____________ aggregate
principal amount of the Notes and pursuant to Section 307(a)(i) of the Indenture
dated July 20, 1998 relating to the Notes:
1. We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended (the "Securities Act"), or an entity in which all of the
equity owners are accredited investors within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act (an "Institutional
Accredited Investor");
(ii) any purchase of the Notes by us will be for our own account
or for the account of one or more other Institutional Accredited
Investors;
(iii) in the event that we purchase any of the Notes, we will
acquire Notes having a minimum purchase price of not less than
$100,000 for our own account or for any separate account for which we
are acting;
<PAGE> 120
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and
risks of purchasing the Notes;
(v) we are not acquiring the 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 jurisdictions, provided 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
(vi) 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 the Notes.
2. We understand that the Notes are being 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, in a transaction meeting the requirements of Rule 144
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 under the Securities Act, and, in each case, in
accordance with any applicable securities laws of any State of the United States
or any other applicable jurisdiction. We understand that the registrar and
transfer agent will not be required to accept for registration of transfer any
Notes, except upon presentation of evidence satisfactory to the Company as
applicable, that the foregoing restrictions on transfer have been complied with.
We further understand that the Notes will be in the form of definitive physical
certificates and that any such certificates will bear a legend reflecting the
substance of this paragraph.
C-2
<PAGE> 121
3. The Trustee and the Company are entitled to rely upon this letter
and the Trustee and the Company are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
By:
-----------------------------------
(NAME OF PURCHASER)
Date:
Upon transfer, the Notes should be registered in the name of the new
beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
C-3
<PAGE> 122
Exhibit D
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
-------------------, ----
Eagle Geophysical, Inc.
50 Briar Hollow Lane
6th Floor West
Houston, Texas 77027
c/o
Chase Bank of Texas, National Association
600 Travis Street, Suite 1150
Houston, Texas 77002
Attention: Jan Mysinger
Re: Eagle Geophysical, Inc. (the "Company") 10 3/4%
Senior Notes due 2008 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Notes and pursuant to Section 307(d) of the Indenture dated
___________, 1998 relating to the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the Securities
Act of 1933, as amended, and, accordingly, we represent 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 we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
<PAGE> 123
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(a) or Rule 904(a) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933, as amended.
In addition, if the sale is made during a "distribution compliance
period" and the provisions of Rule 903 or Rule 904 of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903 or Rule 904, as the case may be.
The Trustee and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
---------------------------------
Authorized Signature
D-2
<PAGE> 1
EXHIBIT 4.2
FIRST SUPPLEMENTAL INDENTURE, dated as of September 18, 1998, to the
Indenture, dated as of July 20, 1998 ("Indenture"), among Eagle Geophysical,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), the Subsidiaries set forth on Schedule I
thereto and Chase Bank of Texas, National Association, a national banking
association, having its principal corporate trust office in Houston, Texas, as
trustee.
RECITALS
WHEREAS, pursuant to Section 1308 of the Indenture, the Company agreed
to cause each Person (as defined in the Indenture) that becomes a Restricted
Subsidiary (as defined in the Indenture) that is organized under the laws of any
state of the United States or the District of Columbia after the date of the
Indenture to become a Subsidiary Guarantor (as defined in the Indenture) with
respect to the Indenture Obligations (as defined in the Indenture).
WHEREAS, Eagle Geophysical de Bolivia, Inc., a Delaware corporation
("Eagle Bolivia"), and Eagle Geophysical de Ecuador, Inc., a Delaware
corporation ("Eagle Ecuador"), each became Restricted Subsidiaries after the
date of the Indenture.
NOW, THEREFORE, in consideration of good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Eagle Bolivia and Eagle Ecuador each agree to become Subsidiary
Guarantors and to be bound by Article 13 of the Indenture.
2. Schedule I to the Indenture is hereby amended and replaced in its
entirety by Schedule I attached hereto.
3. Except as herein specifically amended and modified, the Indenture
shall remain unchanged and continua in full force and effect, and
the parties hereby restate, confirm, ratify and reaffirm the
existence of each and every term, condition and covenant
contained therein, to the same extent and as though the same were
set out herein in full.
4. This First Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York
without regard to conflict of laws provisions.
5. This First Supplemental Indenture may be executed in one or more
counterparts all of which shall constitute one and the same
instrument.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
EAGLE GEOPHYSICAL, INC.
By: /s/ RICHARD W. MCNAIRY
----------------------------------------
Name: Richard W. McNairy
Title: Vice President Chief Financial
Officer and Secretary
CHASE BANK OF TEXAS NATIONAL
ASSOCIATION
By: /s/ JANET MYSINGER
----------------------------------------
Name: Janet Mysinger
Title: Vice President and Trust Officer
EAGLE GEOPHYSICAL DE BOLIVIA, INC.
By: /s/ RICHARD W. MCNAIRY
----------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE GEOPHYSICAL DE ECUADOR, INC.
By: /s/ RICHARD W. MCNAIRY
----------------------------------------
Name: Richard W. McNairy
Title: Vice President
2
<PAGE> 3
SCHEDULE I
Subsidiary Guarantors of the Company
Subsidiary: Formed In:
----------- ----------
Eagle Geophysical Onshore, Inc. Delaware
Eagle Geophysical Offshore, Inc Delaware
Eagle Geophysical GOM, Inc. Texas
Eagle Geophysical Royalty, Inc. (formerly known as Delaware
Eagle Geophysical Leasing, Inc.)
Eagle Geophysical de Mexico, Inc. Delaware
Eagle Front End Services, Inc Delaware
Eagle Geophysical Management, Inc. Delaware
Eagle Front End Services, Ltd. Texas
Austral Horizon, Inc. Delaware
Atlantic Horizon, Inc. Delaware
Eagle Geophysical de Colombia, Inc, Delaware
Eagle Geophysical de Bolivia, Inc. Delaware
Eagle Geophysical de Ecuador, Inc. Delaware
<PAGE> 1
EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of July 20, 1998, among Eagle Geophysical, Inc., a Delaware
corporation (the "Company"), and the subsidiaries of the Company (the
"Subsidiaries") set forth in Schedule I hereto on the one hand, and Prudential
Securities Incorporated and Banc One Capital Markets, Inc. (collectively, the
"Initial Purchasers"), on the other hand.
This Agreement is made pursuant to the Purchase Agreement
dated July 15, 1998 among the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of $100,000,000 aggregate principal amount of the Company's 10 3/4%
Senior Notes due 2008 (the "Notes"). In order to induce the Initial Purchasers
to enter into the Purchase Agreement, the Company has agreed to provide to the
Initial Purchasers and their direct and indirect transferees and assigns the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the
following capitalized defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time
to time, and the rules and regulations of the SEC promulgated
thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations of the SEC
promulgated thereunder.
"Closing Time" shall mean the Closing Time as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble of this
Agreement and also includes the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company, provided, however, that any such
depositary must have an address in the Borough of Manhattan, in the
City of New York.
"Exchange Notes" shall mean 10 3/4% Series B Senior Notes due 2008
issued by the Company under the Indenture containing terms identical
to the Notes (except that (i) interest thereon shall accrue from the
last date on which interest was paid on the Notes or, if no such
interest has been paid, from July 20, 1998, (ii) the transfer
restrictions thereon shall be eliminated and (iii) certain provisions
relating to an increase in the stated rate of interest thereon shall
be eliminated) to be offered to Holders of Notes in exchange for Notes
pursuant to the Exchange Offer.
<PAGE> 2
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Notes for Registrable Notes pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such
registration statement, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Holders" shall mean the Initial Purchasers, for so long as they own
any Registrable Notes, and each of their successors, assigns and
direct and indirect transferees who become registered owners of
Registrable Notes under the Indenture.
"Indenture" shall mean the Indenture relating to the Notes dated as of
July 20, 1998 among the Company, the subsidiaries of the Company
signatory thereto and Chase Bank of Texas, National Association, a
national banking association, as trustee, as the same may be amended
from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble
of this Agreement.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Notes; provided
that whenever the consent or approval of Holders of a specified
percentage of Registrable Notes is required hereunder, Registrable
Notes held by the Company or any of its affiliates (as such term is
defined in Rule 405 under the 1933 Act) (other than the Initial
Purchasers or subsequent holders of Registrable Notes if such
subsequent holders are deemed to be such affiliates solely by reason
of their holding of such Registrable Notes) shall be disregarded in
determining whether such consent or approval was given by the Holders
of such required percentage or amount.
"Person" shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement,
including a prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Notes covered by a Shelf
Registration Statement, and by all other amendments and supplements to
a prospectus, including post-effective amendments, and in each case
including all material incorporated by reference therein.
2
<PAGE> 3
"Purchase Agreement" shall have the meaning set forth in the preamble
of this Agreement.
"Registrable Notes" shall mean the Notes; provided, however, that the
Notes shall cease to be Registrable Notes when (i) a Registration
Statement with respect to such Notes shall have been declared
effective under the 1933 Act and such Notes shall have been disposed
of pursuant to such Registration Statement, (ii) such Notes shall
have been sold to the public pursuant to Rule 144 (or any similar
provision then in force, but not Rule 144A) under the 1933 Act, (iii)
such Notes shall have ceased to be outstanding or (iv) such Notes have
been exchanged for Exchange Notes upon consummation of the Exchange
Offer.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement,
including without limitation: (i) all SEC, stock exchange or National
Association of Securities Dealers, Inc. ("NASD") registration and
filing fees, (ii) all fees and expenses incurred in connection with
compliance with state or other securities or blue sky laws and
compliance with the rules of the NASD (including reasonable fees and
disbursements of counsel for any underwriters or Holders in connection
with state or other securities or blue sky qualification of any of the
Exchange Notes or Registrable Notes), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus,
any amendments or supplements thereto, certificates representing the
Exchange Notes and other documents relating to the performance of and
compliance with this Agreement, (iv) all rating agency fees, (v) all
fees and expenses incurred in connection with the listing, if any, of
any of the Registrable Notes on any securities exchange or exchanges,
(vi) all fees and disbursements relating to the qualification of the
Indenture under applicable securities laws, (vii) the reasonable fees
and disbursements of counsel for the Company and the reasonable fees
and disbursements (including the expenses of preparing and
distributing any underwriting or securities sales agreement) of one
counsel (in addition to appropriate local counsel) for the Holders
(which counsel shall be selected in writing by the Majority Holders),
(viii) the fees and expenses of the independent public accountants of
the Company, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and
compliance, (ix) the fees and expenses of a "qualified independent
underwriter" as defined by Conduct Rule 2720 of the NASD (if required
by the NASD rules) in connection with the offering of the Registrable
Securities, (x) the fees and expenses of the trustee, including its
counsel, and any escrow agent or custodian, and (xi) any fees and
disbursements of the underwriters customarily required to be paid by
issuers or sellers of securities and the reasonable fees and expenses
of any special experts retained by the Company in connection with any
Registration Statement, but excluding underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or
disposition of Registrable Notes by a Holder.
3
<PAGE> 4
"Registration Statement" shall mean any registration statement of the
Company which covers any of the Exchange Notes or Registrable Notes
pursuant to the provisions of this Agreement, and all amendments and
supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated
by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) of
this Agreement which covers all of the then Registrable Notes on an
appropriate form under Rule 415 under the 1933 Act, or any similar
rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference
therein.
"Trustee" shall mean the trustee with respect to the Notes and the
Exchange Notes under the Indenture.
2. Registration Under the 1933 Act. (a) Exchange Offer
Registration. To the extent not prohibited by any applicable law or applicable
interpretation of the Staff of the SEC, the Company shall (A) file on or prior
to the 60th calendar day following the Closing Time an Exchange Offer
Registration Statement covering the offer by the Company to the Holders of
Exchange Notes in exchange for all of the Registrable Notes, (B) use its best
efforts to cause such Exchange Offer Registration Statement to be declared
effective by the SEC on or prior to the 180th calendar day following the
Closing Time, (C) use its best efforts to cause such Exchange Offer
Registration Statement to remain effective until the closing of the Exchange
Offer and (D) use its best efforts to consummate the Exchange Offer on or prior
to the 210th calendar day following the Closing Date. Upon the effectiveness
of the Exchange Offer Registration Statement, the Company shall promptly
commence the Exchange Offer, it being the objective of such Exchange Offer to
enable each Holder (other than Participating Broker-Dealers (as defined in
Section 3(f)) eligible and electing to exchange Registrable Notes for Exchange
Notes (assuming that such Holder is not an affiliate of the Company within the
meaning of Rule 405 under the 1933 Act, acquires the Exchange Notes in the
ordinary course of such Holder's business and has no arrangements or
understandings with any person to participate in the Exchange Offer for the
purpose of distributing the Exchange Notes) to trade such Exchange Notes from
and after their receipt without any limitations or restrictions under the 1933
Act and without material restrictions under the securities laws of a
substantial proportion of the several states of the United States. The
Exchange Notes will be issued under the Indenture.
In connection with the Exchange Offer, the Company shall:
4
<PAGE> 5
(i) mail to each Holder a copy of the Prospectus forming
part of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 30
days after the date notice thereof is mailed to the Holders (or longer
if required by applicable law);
(iii) use the services of the Depositary for the Exchange
Offer with respect to Notes evidenced by global certificates;
(iv) permit Holders to withdraw tendered Registrable Notes
at any time prior to the close of business, New York City time, on the
last business day on which the Exchange Offer shall remain open, by
sending to the institution specified in the notice, a telegram, telex,
facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Registrable Notes delivered for
exchange, and a statement that such Holder is withdrawing his election
to have such Notes exchanged; and
(v) otherwise comply in all respects with all applicable
laws relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer,
the Company shall:
(i) accept for exchange Registrable Notes duly tendered
and not validly withdrawn pursuant to the Exchange Offer in accordance
with the terms of the Exchange Offer Registration Statement and the
letter of transmittal which is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Notes so accepted for exchange by the
Company; and
(iii) cause the Trustee promptly to authenticate and
deliver Exchange Notes to each Holder of Registrable Notes equal in
amount to the Registrable Notes of such Holder so accepted for
exchange.
Interest on each Exchange Note will accrue from the last date
on which interest was paid on the Registrable Notes surrendered in exchange
therefor or, if no interest has been paid on the Registrable Notes, from July
20, 1998. The Exchange Offer shall not be subject to any conditions, other
than that the Exchange Offer, or the making of any exchange by a Holder, does
not violate applicable law or any applicable interpretation of the Staff of the
SEC. Each Holder of Registrable Notes (other than Participating
Broker-Dealers) who wishes to exchange such Registrable Notes for Exchange
Notes in the Exchange Offer shall have represented that (i) any Exchange Notes
to be received by it were acquired in the ordinary course of business, (ii) at
the time of the commencement of the Exchange Offer it has no arrangement with
any person to participate in the distribution (within the meaning of the 1933
Act) of the Exchange Notes, (iii) it is not an affiliate (as defined in Rule
405 under the 1933 Act) of the Company, or if it is an affiliate it will comply
with the registration and prospectus delivery requirements of the 1933 Act to
the extent applicable and (iv) it is not acting on behalf of any person who
could not make the representations in clauses (i) through (iii). The Company
shall inform the Initial Purchasers of
5
<PAGE> 6
the names and addresses of the Holders to whom the Exchange Offer is made, and
the Initial Purchasers shall have the right to contact such Holders and
otherwise facilitate the tender of Registrable Notes in the Exchange Offer.
(b) Shelf Registration. (i) If, because of any change in
law or applicable interpretations thereof by the Staff of the SEC, the Company
is not permitted to effect the Exchange Offer as contemplated by Section 2(a)
hereof, or (ii) if for any other reason the Exchange Offer cannot be
consummated within 210 calendar days following the Closing Time, or (iii) if
any Holder (other than an Initial Purchaser) is not eligible to participate in
the Exchange Offer or (iv) upon the request of any Initial Purchaser (with
respect to any Registrable Notes which it acquired directly from the Company)
following the consummation of the Exchange Offer if any such Initial Purchaser
shall hold Registrable Notes which it acquired directly from the Company and if
such Initial Purchaser is not permitted, in the opinion of counsel to such
Initial Purchaser, pursuant to applicable law or applicable interpretation of
the Staff of the SEC to participate in the Exchange Offer, the Company shall,
at its cost:
(A) as promptly as practicable, and in any event within
60 days after the date on which such filing obligation arises, file
with the SEC a Shelf Registration Statement relating to the offer and
sale of the then outstanding Registrable Notes by the Holders from
time to time in accordance with the methods of distribution elected by
the Majority Holders of such Registrable Notes and set forth in such
Shelf Registration Statement, and use its best efforts to cause such
Shelf Registration Statement to be declared effective by the SEC on or
prior to 45 days after the date on which such filing occurs.
(B) use its best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of two years
after the Closing Time or such shorter period which will terminate
when all of the Registrable Notes covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement
or all of the Registrable Notes become eligible for resale pursuant to
Rule 144 under the 1933 Act without volume restrictions; and
(C) notwithstanding any other provisions hereof, use its
best efforts to ensure that (i) any Shelf Registration Statement and
any amendment thereto and any Prospectus forming a part thereof and
any supplement thereto complies in all material respects with the 1933
Act and the rules and regulations thereunder, (ii) any Shelf
Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any
Prospectus forming part of any Shelf Registration Statement, and any
supplement to such Prospectus (as amended or supplemented from time to
time), does not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements, in
light of the circumstances under which they were made, not misleading.
The Company further agrees, if necessary, to supplement or
amend the Shelf Registration Statement if reasonably requested by the Majority
Holders with respect to information relating to the Holders and otherwise as
required by Section 3(b) below, to use all
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<PAGE> 7
reasonable efforts to cause any such amendment to become effective and such
Shelf Registration to become usable as soon as practicable thereafter and to
furnish to the Holders of Registrable Notes copies of any such supplement or
amendment promptly after its being used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration
Expenses in connection with the registration pursuant to Section 2(a) and 2(b).
Each Holder shall pay all expenses of its counsel other than as set forth in
the preceding sentence, underwriting discounts and commissions (prior to the
reduction thereof with respect to selling concessions, if any) and transfer
taxes, if any, relating to the sale or disposition of such Holder's Registrable
Notes pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. (i) The Company
will be deemed not to have used its best efforts to cause a Registration
Statement to become, or to remain, effective during the requisite period if the
Company voluntarily takes any action that would result in any such Registration
Statement not being declared effective or in the Holders of Registrable Notes
covered thereby not being able to exchange or offer and sell such Registrable
Notes during that period unless (A) such action is required by applicable law
or (B) such action is taken by the Company in good faith and for valid business
reasons (but not including avoidance of the Company's obligations hereunder),
including a material corporate transaction, so long as the Company promptly
complies with the requirements of Section 3(k) hereof, if applicable.
(ii) An Exchange Offer Registration Statement pursuant to
Section 2(a) hereof or a Shelf Registration Statement pursuant to
Section 2(b) hereof will not be deemed to have become effective unless
it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable
Notes pursuant to a Registration Statement is interfered with by any
stop order, injunction or other order or requirement of the SEC or any
other governmental agency or court, such Registration Statement will
be deemed not to have been effective during the period of such
interference, until the offering of Registrable Notes pursuant to such
Registration Statement may legally resume.
(e) Increase in Interest Rate. In the event that either
(i) the Exchange Offer Registration Statement is not filed with the Commission
on or prior to the 60th calendar day following the Closing Time, or (ii) the
Exchange Offer Registration Statement is not declared effective on or prior to
the 180th calendar day following the Closing Time, or (iii) the Exchange Offer
is not consummated on or prior to the 210th calendar day following the Closing
Time or a Shelf Registration Statement with respect to the Registrable Notes is
not declared effective on or prior to the 210th calendar day following the
Closing Time, or (iv) either (A) the Exchange Offer Registration Statement
ceases to be effective at any time prior to the time that the Exchange Offer is
consummated or (B) if applicable, the Shelf Registration Statement has been
declared effective and such Shelf Registration Statement ceases to be effective
at any time prior to the second anniversary of the Closing Time, the interest
rate borne by the Notes shall be increased by 25 basis points per annum
following such 60-day period in the case of clause (i) above, following such
180-day period in the case of clause (ii) above, following such 30-day period
in the case of clause (iii) above, or immediately in the case of clause (iv)
above, which rate will be
7
<PAGE> 8
increased by an additional 25 basis points per annum for each 30-day period
that any such additional interest continues to accrue in the case of clauses
(i), (ii) and (iii) above or for each 90-day period that any such additional
interest continues to accrue in the case of clause (iv) above, provided that
the aggregate per annum increase in such interest rate will in no event exceed
150 basis points. Upon (x) the filing of the Exchange Offer Registration
Statement after the 60-day period described in clause (i) above, (y) the
consummation of the Exchange Offer or the effectiveness of a Shelf Registration
Statement, as the case may be, after the 210-day period described in clause
(iii) above, as the case may be, or (z) the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement following an event
described in clause (iv) above, the interest rate borne by the Notes from the
date of such filing, effectiveness or consummation, as the case may be, will be
reduced to the original interest rate if the Company is otherwise in compliance
with this paragraph; provided, however, that, if after any such reduction in
interest rate, a different event specified in clauses (i), (ii), (iii) or (iv)
above occurs, the interest rate will again be increased and thereafter reduced
pursuant to the foregoing conditions. If the Company issues a notice that the
Shelf Registration Statement is unusable pending the announcement of a material
corporate transaction or otherwise pursuant to Section 3(k) hereof, or such a
notice is required under applicable securities laws to be issued by the
Company, and the aggregate number of days in any consecutive twelve-month
period for which all such notices are issued or required to be issued exceeds
30 days in the aggregate, then the interest rate borne by the Notes will be
increased by 25 basis points per annum following the date that such Shelf
Registration Statement ceases to be usable beyond the 30-day period permitted
above, which rate shall be increased by an additional 25 basis points per annum
for each 90-day period that such additional interest continues to accrue;
provided that the aggregate increase in such annual interest rate may in no
event exceed 150 basis points. Upon the Company declaring that the Shelf
Registration Statement is usable after the interest rate has been increased
pursuant to the preceding sentence, the interest rate borne by the Notes will
be reduced to the original interest rate if the Company is otherwise in
compliance with this paragraph; provided, however, that if after any such
reduction in interest rate the Shelf Registration Statement again ceases to be
usable beyond the period permitted above, the interest rate will again be
increased and thereafter reduced pursuant to the foregoing provisions.
(f) Specific Enforcement. Without limiting the remedies
available to the Initial Purchasers and the Holders, the Company acknowledges
that any failure by the Company to comply with its respective obligations
under Sections 2(a) and 2(b) hereof may result in material irreparable injury
to the Initial Purchasers or the Holders for which there is no adequate remedy
at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial Purchasers or
any Holder may obtain such relief as may be required to specifically enforce
the Company's obligations under Sections 2(a) and 2(b) hereof.
3. Registration Procedures. In connection with the
obligations of the Company with respect to the Registration Statements pursuant
to Sections 2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement, with
in the time period specified in Section 2, on the
appropriate form under the 1933 Act,
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<PAGE> 9
which form (i) shall be selected by the Company, (ii)
shall, in the case of a Shelf Registration, be
available for the sale of the Registrable Notes by
the selling Holders thereof and (iii) shall comply as
to form in all material respects with the
requirements of the applicable form and include or
incorporate by reference all financial statements
required by the SEC to be filed therewith, and use
its best efforts to cause such Registration Statement
to become effective and remain effective in
accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to (i) the Exchange Offer
Registration Statement as may be necessary under
applicable law to keep such Exchange Offer
Registration Statement effective for the period
required to comply with Section 2(a) (except to the
extent the Company is unable to consummate the
Exchange Offer and the Company complies with Section
2(b), subject in all respects to Section 3(f)
hereof), and (ii) the Shelf Registration Statement as
may be necessary under applicable law to keep such
Shelf Registration Statement effective for the period
required pursuant to Section 2(b) hereof; cause each
Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the 1933 Act; and
comply with the provisions of the 1933 Act with
respect to the disposition of all securities covered
by each Registration Statement during the applicable
period in accordance with the intended method or
methods of distribution by the selling Holders
thereof;
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Notes, at least ten days prior
to filing, that a Shelf Registration Statement with
respect to the Registrable Notes is being filed and
advising such Holders that the distribution of
Registrable Notes will be made in accordance with the
method elected by the Majority Holders; and (ii)
furnish to each Holder of Registrable Notes, to
counsel for the Initial Purchasers, to counsel for
the Holders and to each underwriter of an
underwritten offering of Registrable Notes, if any,
without charge, as many copies of each Prospectus,
including each preliminary Prospectus, and any
amendment or supplement thereto and such other
documents as such Holder or underwriter may
reasonably request, including financial statements
and schedules and, if the Holder so requests, all
exhibits (including those incorporated by reference)
in order to facilitate the public sale or other
disposition of the Registrable Notes; and (iii)
subject to the last paragraph of Section 3, hereby
consent to the use of the Prospectus, including each
preliminary Prospectus, or any amendment or
supplement thereto by each of the selling Holders of
Registrable Notes in connection with the offering and
sale of the Registrable Notes covered by the
Prospectus or any amendment or supplement thereto;
9
<PAGE> 10
(d) use its best efforts to register or qualify the
Registrable Notes under all applicable state
securities or "blue sky" laws of such jurisdictions
as any Holder of Registrable Notes covered by a
Registration Statement and each underwriter of an
underwritten offering of Registrable Notes shall
reasonably request by the time the applicable
Registration Statement is declared effective by the
SEC, to cooperate with the Holders in connection with
any filings required to be made with the NASD, keep
each such registration or qualification effective
during the period such Registration Statement is
required to be effective and do any and all other
acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such
Registrable Notes owned by such Holder; provided,
however, that the Company shall not be required to
(i) qualify as a foreign corporation or as a dealer
in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Section
3(d) or (ii) take any action which would subject it
to general service of process or taxation in any such
jurisdiction if it is not then so subject;
(e) in the case of a Shelf Registration, notify each
Holder of Registrable Notes and counsel for such
Holders promptly and, if requested by such Holder or
counsel, confirm such advice in writing promptly (i)
when a Registration Statement has become effective
and when any post-effective amendments and
supplements thereto become effective, (ii) of any
request by the SEC or any state securities authority
for post-effective amendments and supplements to a
Registration Statement and Prospectus or for
additional information after the Registration
Statement has become effective, (iii) of the issuance
by the SEC or any state securities authority of any
stop order suspending the effectiveness of a
Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the
effective date of a Registration Statement and the
closing of any sale of Registrable Notes covered
thereby, the representations and warranties of the
Company contained in any underwriting agreement,
securities sales agreement or other similar
agreement, if any, relating to such offering cease to
be true and correct in all material respects, (v) of
the receipt by the Company of any notification with
respect to the suspension of the qualification of the
Registrable Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such
purpose, (vi) of the happening of any event or the
discovery of any facts during the period a Shelf
Registration Statement is effective which makes any
statement made in such Shelf Registration Statement
or the related Prospectus untrue in any material
respect or which requires the making of any changes
in such Shelf Registration Statement or Prospectus in
order to make the statements therein not misleading
and (vii) of any determination by the Company that a
post-effective amendment to a Registration Statement
would be appropriate;
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<PAGE> 11
(f) (A) in the case of the Exchange Offer, (i) include in
the Exchange Offer Registration Statement a "Plan of
Distribution" section covering the use of the
Prospectus included in the Exchange Offer
Registration Statement by broker-dealers who have
exchanged their Registrable Notes for Exchange Notes
for the resale of such Exchange Notes, (ii) furnish
to each broker-dealer who desires to participate in
the Exchange Offer, without charge, as many copies of
each Prospectus included in the Exchange Offer
Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto,
as such broker-dealer may reasonably request, (iii)
include in the Exchange Offer Registration Statement
a statement that any broker-dealer who holds
Registrable Notes acquired for its own account as a
result of market-making activities or other trading
activities (a "Participating Broker-Dealer"), and who
receives Exchange Notes for Registrable Notes
pursuant to the Exchange Offer, may be a statutory
underwriter and must deliver a prospectus meeting the
requirements of the 1933 Act in connection with any
resale of such Exchange Notes, (iv) subject to the
last paragraph of Section 3, hereby consent to the
use of the Prospectus forming part of the Exchange
Offer Registration Statement or any amendment or
supplement thereto, by any broker-dealer in
connection with the sale or transfer of the Exchange
Notes covered by the Prospectus or any amendment or
supplement thereto, and (v) include in the
transmittal letter or similar documentation to be
executed by an exchange offeree in order to
participate in the Exchange Offer (x) the following
provision:
"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 Exchange Notes. If the
undersigned is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Registrable Notes,
it represents that the Registrable Notes to be exchanged for
Exchange Notes were acquired by it as a result of
market-making activities or other trading activities and
acknowledges that it will deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of
such Exchange Notes pursuant to the Exchange Offer; 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 1933 Act"; and
(y) a statement to the effect that by a broker-dealer making the acknowledgment
described in subclause (x) and by delivering a Prospectus in connection with
the exchange of Registrable Securities, the broker-dealer will not be deemed to
admit that it is an underwriter within the meaning of the 1933 Act; and
(B) to the extent any Participating Broker-Dealer participates in
the Exchange Offer, the Company shall use its best efforts to cause to
be delivered at the request of an entity representing the
Participating Broker-Dealers (which entity shall be one of the Initial
Purchasers, unless it elects not to act as such representative) only
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<PAGE> 12
one, if any, "cold comfort" letter with respect to the Prospectus in
the form existing on the last date for which exchanges are accepted
pursuant to the Exchange Offer and with respect to each subsequent
amendment or supplement, if any, effected during the period specified
in clause (C) below; and
(C) to the extent any Participating Broker-Dealer participates in
the Exchange Offer, the Company shall use its best efforts to
maintain the effectiveness of the Exchange Offer Registration
Statement for a period of 180 days following the closing of the
Exchange Offer and make available the Prospectus to any Participating
Broker-Dealer; and
(D) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement as
would otherwise be contemplated by Section 3(b), or take any other
action as a result of this Section 3(f), for a period exceeding 180
days after the last date for which exchanges are accepted pursuant to
the Exchange Offer (as such period may be extended by the Company) and
Participating Broker-Dealers shall not be authorized by the Company
to, and shall not, deliver such Prospectus after such period in
connection with resales contemplated by this Section 3.
(g) (A) in the case of an Exchange Offer, furnish
counsel for the Initial Purchasers and (B) in the
case of a Shelf Registration, furnish counsel for the
Holders of Registrable Notes copies of any request by
the SEC or any state securities authority for
amendments or supplements to a Registration Statement
and Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of a
Registration Statement as soon as practicable and
provide immediate notice to each Holder of the
withdrawal of any such order;
(i) in the case of a Shelf Registration, furnish to each
Holder of Registrable Notes, without charge, at least
one conformed copy of each Registration Statement and
any post-effective amendment thereto (without
documents incorporated therein by reference or
exhibits thereto, unless requested);
(j) in the case of a Shelf Registration, cooperate with
the selling Holders of Registrable Notes to
facilitate the timely preparation and delivery of
certificates representing Registrable Notes to be
sold and not bearing any restrictive legends; and
cause such Registrable Notes to be in such
denominations (consistent with the provisions of the
Indenture) and registered in such names as the
selling Holders or the underwriters, if any, may
reasonably request at least one business day prior to
the closing of any sale of Registrable Notes;
(k) in the case of a Shelf Registration, upon the
occurrence of any event or the discovery of any
facts, each as contemplated by Section 3(e)(vi)
hereof,
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<PAGE> 13
use its best efforts to prepare a supplement or
post-effective amendment to a Registration Statement
or the related Prospectus or any document
incorporated therein by reference or file any other
required document so that, as thereafter delivered to
the purchasers of the Registrable Notes, such
Prospectus will not contain at the time of such
delivery any untrue statement of a material fact or
omit to state a material fact necessary to make the
statements therein, in light of the circumstances
under which they were made, not misleading. The
Company agrees to notify each Holder to suspend use
of the Prospectus as promptly as practicable after
the occurrence of such an event, and each Holder
hereby agrees to suspend use of the Prospectus until
the Company has amended or supplemented the
Prospectus to correct such misstatement or omission.
At such time as such public disclosure is otherwise
made or the Company determines that such disclosure
is not necessary, in each case to correct any
misstatement of a material fact or to include any
omitted material fact, the Company agrees promptly to
notify each Holder of such determination and to
furnish each Holder such numbers of copies of the
Prospectus, as amended or supplemented, as such
Holder may reasonably request;
(l) obtain a CUSIP number for all Exchange Notes, or
Registrable Notes, as the case may be, not later than
the effective date of a Registration Statement, and
provide the Trustee with printed certificates for the
Exchange Notes or the Registrable Notes, as the case
may be, in a form eligible for deposit with the
Depositary;
(m) (i) cause the Indenture to be qualified under the
Trust Indenture Act of 1939, as amended (the "TIA"),
in connection with the registration of the Exchange
Notes, or Registrable Notes, as the case may be, (ii)
cooperate with the Trustee and the Holders to effect
such changes to the Indenture as may be required for
the Indenture to be so qualified in accordance with
the terms of the TIA and (iii) execute, and use its
best efforts to cause the Trustee to execute, all
documents as may be required to effect such changes,
and all other forms and documents required to be
filed with the SEC to enable the Indenture to be so
qualified in a timely manner;
(n) in the case of a Shelf Registration, enter into
agreements (including underwriting agreements) and
take all other customary and appropriate actions
(including those reasonably requested by the Majority
Holders) in order to expedite or facilitate the
disposition of such Registrable Notes and in such
connection whether or not an underwriting agreement
is entered into and whether or not the registration
is an underwritten registration:
(i) make such representations and warranties to
the Holders of such Registrable Notes and the
underwriters, if any, in form, substance and
scope as are customarily made by issuers to
underwriters in similar underwritten
offerings as may be reasonably requested by
them;
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<PAGE> 14
(ii) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions
(in form, scope and substance) shall be
reasonably satisfactory to the managing
underwriters, if any, and the holders of a
majority in principal amount of the
Registrable Notes being sold) addressed to
each selling Holder and the underwriters, if
any, covering the matters customarily covered
in opinions requested in sales of securities
or underwritten offerings;
(iii) obtain "cold comfort" letters and updates
thereof from the Company's independent
certified public accountants addressed to the
underwriters, if any, and use best efforts to
have such letters addressed to the selling
Holders of Registrable Notes, such letters to
be in customary form and covering matters of
the type customarily covered in "cold
comfort" letters to underwriters in
connection with similar underwritten
offerings;
(iv) enter into a securities sales agreement with
the Holders and an agent of the Holders
providing for, among other things, the
appointment of such agent for the selling
Holders for the purpose of soliciting
purchases of Registrable Notes, which
agreement shall be in form, substance and
scope customary for similar offerings; and
(v) deliver such documents and certificates as
may be reasonably requested and as are
customarily delivered in similar offerings.
The above shall be done at (i) the effectiveness of such Shelf
Registration Statement (and, if appropriate, each post-effective
amendment thereto) and (ii) each closing under any underwriting or
similar agreement as and to the extent required thereunder. In the
case of any underwritten offering, the Company shall provide written
notice to the Holders of all Registrable Notes of such underwritten
offering at least 30 days (or such shorter, reasonable time period as
is practicable) prior to the filing of a prospectus supplement for
such underwritten offering. Such notice shall (x) if satisfactory to
the investment banker or manager of such underwritten offering, offer
each such Holder the right to participate in such underwritten
offering, (y) specify a date, which shall be no earlier than 10 days
following the date of such notice, by which such Holder must inform
the Company of its intent to participate in such underwritten offering
and (z) include the instructions such Holder must follow in order to
participate in such underwritten offering;
(o) in the case of a Shelf Registration, make available
for inspection by representatives of the Holders of
the Registrable Notes and any underwriters
participating in any disposition pursuant to a Shelf
Registration Statement and any counsel or accountant
retained by such Holders or underwriters, at
reasonable times and in a reasonable manner,
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<PAGE> 15
all financial and other records, pertinent corporate
documents and properties of the Company reasonably
requested by any such persons, and cause the
respective officers, directors, employees, and any
other agents of the Company to supply all information
reasonably requested by any such representative,
underwriter, special counsel or accountant in
connection with such Shelf Registration Statement,
provided, however, that such Persons shall first
agree in writing with the Company that any
information that is reasonably and in good faith
designated by the Company in writing as confidential
at the time of delivery of such information shall be
kept confidential by such Persons, unless (i)
disclosure of such information is required by court
or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure
of such information is required by law (including any
disclosure requirements pursuant to Federal
securities laws in connection with the filing of such
Shelf Registration Statement or the use of any
Prospectus), (iii) such information becomes generally
available to the public other than as a result of a
disclosure or failure to safeguard such information
by such Person or (iv) such information becomes
available to such Person from a source other than the
Company and its subsidiaries and such source is not
bound by a confidentiality agreement; provided,
further, that the foregoing investigation shall be
coordinated on behalf of the Holders by one
representative designated by and on behalf of such
Holders and any such confidential information shall
be available from such representative to such Holders
so long as any Holder agrees to be bound by such
confidentiality agreement;
(p) (i) a reasonable time prior to the filing of any
Exchange Offer Registration Statement, any Prospectus
forming a part thereof, any amendment to an Exchange
Offer Registration Statement or amendment or
supplement to a Prospectus, provide copies of such
document to the Initial Purchasers, and make such
changes in any such document prior to the filing
thereof as any of the Initial Purchasers or their
counsel may reasonably request; (ii) in the case of a
Shelf Registration, a reasonable time prior to filing
any Shelf Registration Statement, any Prospectus
forming a part thereof, any amendment to such Shelf
Registration Statement or amendment or supplement to
such Prospectus, provide copies of such document to
the Holders of Registrable Notes, to the Initial
Purchasers, to counsel on behalf of the Holders and
to the underwriter or underwriters of an underwritten
offering of Registrable Notes, if any, and make such
changes in any such document prior to the filing
thereof as the Holders of Registrable Notes, the
Initial Purchasers on behalf of such Holders, their
counsel and any underwriter may reasonably request;
and (iii) cause the representatives of the Company to
be available for discussion of such document as shall
be reasonably requested by the Holders of Registrable
Notes, the Initial Purchasers on behalf of such
Holders or any underwriter and shall not at any time
make any filing of
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<PAGE> 16
any such document of which such Holders, the Initial
Purchasers on behalf of such Holders, their counsel
or any underwriter shall not have previously been
advised and furnished a copy or to which such
Holders, the Initial Purchasers on behalf of such
Holders, their counsel or any underwriter shall
reasonably object, each of which actions in this
clause (iii) by the Holders shall be coordinated by
one representative for all the Holders at reasonable
times and in a reasonable manner;
(q) in the case of a Shelf Registration, use its best
efforts to cause all Registrable Securities to be
listed on any securities exchange on which similar
debt securities issued by the Company are then listed
if requested by the Majority Holders or by the
underwriter or underwriters of an underwritten
offering of Registrable Securities, if any;
(r) in the case of a Shelf Registration, unless the
rating in effect for the Notes applies to the
Exchange Notes and the Notes to be sold pursuant to a
Shelf Registration, use its best efforts to cause the
Registrable Notes to be rated with the appropriate
rating agencies, if so requested by the Majority
Holders or by the underwriter or underwriters of an
underwritten offering of Registrable Notes, if any,
unless the Registrable Notes are already so rated;
(s) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and make
available to its security holders, as soon as
reasonably practicable, an earnings statement
covering at least 12 months which shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule
158 thereunder; and
(t) cooperate and assist in any filings required to be
made with the NASD.
In the case of a Shelf Registration Statement, the Company may
(as a condition to such Holder's participation in the Shelf Registration)
require each Holder of Registrable Notes to furnish to the Company such
information regarding such Holder and the proposed distribution by such Holder
of such Registrable Notes and make such representations, in each case, as the
Company may from time to time reasonably request in writing.
In the case of a Shelf Registration Statement, each Holder
agrees that, upon receipt of any notice from the Company of the happening of
any event or the discovery of any facts, each of the kind described in Section
3(e)(ii)-(vi) hereof, such Holder will forthwith discontinue disposition of
Registrable Notes pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(k) hereof, and, if so directed by the Company, such Holder will
deliver to the Company (at the Company's expense) all copies in its possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Notes current at the time of receipt of
such notice. If the Company shall give any such notice to suspend the
disposition of Registrable Notes pursuant to a Shelf Registration Statement as
a result of the happening of any event or the discovery of any facts, each of
the kind described in
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<PAGE> 17
Section 3(e)(vi) hereof, the Company shall be deemed to have used its best
efforts to keep the Shelf Registration Statement effective during such period
of suspension provided that the Company shall use its best efforts to file and
have declared effective (if an amendment) as soon as practicable an amendment
or supplement to the Shelf Registration Statement and shall extend the period
during which the Registration Statement shall be maintained effective pursuant
to this Agreement by the number of days during the period from and including
the date of the giving of such notice to and including the date when the
Holders shall have received copies of the supplemented or amended Prospectus
necessary to resume such dispositions.
4. Underwritten Registrations. If any of the
Registrable Notes covered by any Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will manage the offering will be selected by the Majority
Holders of such Registrable Notes included in such offering and shall be
reasonably acceptable to the Company.
No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Notes on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
5. Indemnification and Contribution. (a) The Company
and each Subsidiary, jointly and severally, agree to indemnify and hold
harmless each Holder and each person, if any, who controls any Holder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any losses, claims, damages or liabilities, joint or several, to which such
Holder or such controlling person may become subject under the 1933 Act, the
1934 Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made
by the Company in Section 1 of the Purchase Agreement,
(ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) any Registration Statement or
Prospectus or any amendment or supplement thereto or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by
or on behalf of the Company filed in any jurisdiction in order to
qualify the Registrable Notes or Exchange Notes under the securities
or blue sky laws thereof or filed with the SEC or any securities
association or securities exchange (each an "Application"),
(iii) the omission or alleged omission to state in any
Registration Statement or Prospectus or any amendment or supplement
thereto, or any Application a material fact required to be stated
therein or necessary to make the statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials used by
the Company in connection with the
17
<PAGE> 18
marketing of the Registrable Notes or Exchange Notes, including
without limitation, slides, videos, films and tape recordings,
and will reimburse, as incurred, each Holder and each such controlling person
for any legal or other expenses reasonably incurred by such Holder or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and each
Subsidiary, jointly and severally, will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in any Registration Statement or Prospectus or any amendment or
supplement thereto or any Application in reliance upon and in conformity with
written information relating to any Holder furnished to the Company by such
Holder specifically for use therein. This indemnity agreement will be in
addition to any liability which the Company and each Subsidiary, jointly and
severally, may otherwise have. The Company will not, without the prior written
consent of each Holder, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
Holder or any person who controls any such Holder within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or consent
includes an unconditional release of all of such Holders and such controlling
persons from all liability arising out of such claim, action, suit or
proceeding.
(b) Each Holder, severally and not jointly, agrees, by
acquiring any Notes, to indemnify and hold harmless the Company, each of its
directors, each of its executive officers and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any losses, claims, damages or liabilities to which the
Company, any such director, officer or controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement or Prospectus or any amendment or supplement
thereto or any Application or (ii) the omission or alleged omission to state
therein a material fact required to be stated in any Registration Statement or
Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information relating to any Holder furnished to the
Company by such Holder specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 5 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 5, notify the
18
<PAGE> 19
indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any liability which it may have
to any indemnified party otherwise than under this Section 5. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be one or more legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not
have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof and approval by
such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 5 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by such Holder in the
case of paragraph (a) of this Section 5, representing the indemnified parties
under such paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 5 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
(i) the relative benefits received by the indemnifying party or parties on the
one hand and the indemnified party on the other from the offering of the
Securities or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions
or alleged statements or omissions that resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company and each Subsidiary on the one hand and the Initial Purchasers on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering
19
<PAGE> 20
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by such Holder. The relative
fault of the parties 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 or such Holder, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in
the circumstances. The Company, each Subsidiary and each Holder agree that it
would not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation or by any other method of allocation that
does not take into account the equitable considerations referred to above in
this paragraph (d). Notwithstanding any other provision of this paragraph (d),
no Holder shall be obligated to make contributions hereunder that in the
aggregate exceed the total public offering price of the Securities purchased by
such Holder under this Agreement, less the aggregate amount of any damages
that such Holder has otherwise been required to pay in respect of the same or
any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each person,
if any, who controls a Holder within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as
such Holder, and each director of the Company, each officer of the Company who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, shall have the same rights to contribution as the Company.
(e) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of this Section 5, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section
5 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Offering Memorandum as required by the 1933 Act. The
parties are advised that federal or state policy, as interpreted by the courts
in certain jurisdictions, may be contrary to certain provisions of this Section
5, and the parties hereto hereby expressly waive and relinquish any right or
ability to assert such public policy as a defense to a claim under this Section
5 and further agree not to attempt to assert any such defense.
6. Miscellaneous. (a) Rule 144 and Rule 144A. For so long
as the Company is subject to the reporting requirements of Section 13 or 15 of
the 1934 Act, the Company covenants that it will file the reports required to
be filed by it under Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder. The Company further covenants that
if it ceases to be so required to file such reports, it will upon the request
of any Holder of Registrable Notes (i) make publicly available such information
as is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (ii)
deliver such information to a prospective purchaser as is necessary to permit
sales pursuant to Rule 144A under the 1933 Act and it will take such further
action as any Holder of Registrable Notes may reasonably request, and (iii)
take such further action that is reasonable in the circumstances, in each case,
to the extent required from time to time to enable such Holder to sell its
Registrable Notes without
20
<PAGE> 21
registration under the 1933 Act within the limitation of the exemptions
provided by (x) Rule 144 under the 1933 Act, as such Rule may be amended from
time to time, (y) Rule 144A under the 1933 Act, as such Rule may be amended
from time to time, or (z) any similar rules or regulations hereafter adopted by
the SEC. Upon the request of any Holder of Registrable Notes, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
(a) No Inconsistent Agreements. The Company has not
entered into nor will the Company on or after the date of this Agreement enter
into any agreement which is inconsistent with the rights granted to the Holders
of Registrable Notes 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 Company's other issued and outstanding securities under any such
agreements.
(b) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company has obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Notes affected by such amendment, modification,
supplement, waiver or departure; provided, however, that no amendment,
modification, supplement or waiver or consent to any departure from the
provisions of Section 5 hereof shall be effective as against any Holder of
Registrable Notes unless consented to in writing by such Holder.
(c) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder (other than an Initial Purchaser), at the most
current address set forth on the records of the Registrar under the Indenture,
(ii) if to an Initial Purchaser, at the most current address given by such
Initial Purchaser to the Company by means of a notice given in accordance with
the provisions of this Section 6(d), which address initially is the address set
forth in the Purchase Agreement; and (iii) if to the Company, initially at the
Company's address set forth in the Purchase Agreement and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Section 6(d).
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 is acknowledged, if telecopied; and on the next business day if
timely delivered to an air courier guaranteeing overnight delivery.
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.
(d) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors, assigns and transferees
of each of the parties, including, without limitation and without the need for
an express assignment, subsequent Holders; provided that nothing herein shall
be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms hereof or of the Purchase
Agreement or the
21
<PAGE> 22
Indenture. If any transferee of any Holder shall acquire Registrable Notes, in
any manner, whether by operation of law or otherwise, such Registrable Notes
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Notes, such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this
Agreement and, if applicable, the Purchase Agreement, and such Person shall be
entitled to receive the benefits hereof.
(e) Third Party Beneficiary. Each of the Holders shall
be third party beneficiaries to the agreements made hereunder between the
Company on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(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 WITHOUT
REGARD TO CONFLICT OF LAWS PROVISIONS.
(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.
22
<PAGE> 23
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
EAGLE GEOPHYSICAL, INC.
By: /S/ RICHARD W. MCNAIRY
---------------------------------------
Name: Richard W. McNairy
Title: Vice President, Chief Financial
Officer and Secretary
EAGLE GEOPHYSICAL ONSHORE, INC.
By: /S/ RICHARD W. MCNAIRY
---------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE GEOPHYSICAL GOM, INC.
By: /S/ RICHARD W. MCNAIRY
---------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE GEOPHYSICAL OFFSHORE, INC.
By: /S/ RICHARD W. MCNAIRY
---------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE GEOPHYSICAL LEASING, INC.
By: /S/ RICHARD W. MCNAIRY
---------------------------------------
Name: Richard W.McNairy
Title: Vice President
EAGLE GEOPHYSICAL DE MEXICO, INC.
By: /S/ RICHARD W. MCNAIRY
---------------------------------------
Name: Richard W. McNairy
Title: Vice President
23
<PAGE> 24
EAGLE FRONT END SERVICES, INC.
By: /S/ RICHARD W. MCNAIRY
------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE GEOPHYSICAL MANAGEMENT, INC.
By: /S/ RICHARD W. MCNAIRY
------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE FRONT END SERVICES, LTD.
By: Eagle Geophysical Management, Inc.,
its General Partner
By: /S/ RICHARD W. MCNAIRY
------------------------------------
Name: Richard W. McNairy
Title: Vice President
AUSTRAL HORIZON, INC.
By: /S/ RICHARD W. MCNAIRY
------------------------------------
Name: Richard W. McNairy
Title: Vice President
ATLANTIC HORIZON, INC.
By: /S/ RICHARD W. MCNAIRY
------------------------------------
Name: Richard W. McNairy
Title: Vice President
EAGLE GEOPHYSICAL DE COLOMBIA, INC.
By: /S/ RICHARD W. MCNAIRY
------------------------------------
Name: Richard W. McNairy
Title: Vice President
24
<PAGE> 25
Confirmed and accepted as of
the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By: /S/ STEVEN C. BENFIELD
-----------------------------
Authorized Signatory
BANC ONE CAPITAL MARKETS, INC.
By: /S/ EARL BENZING
-----------------------------
Authorized Signatory
25
<PAGE> 26
SCHEDULE I
Certain Subsidiaries of the Company
<TABLE>
<CAPTION>
Subsidiary: Formed In:
- ---------- ---------
<S> <C>
Eagle Geophysical Onshore, Inc. Delaware
Eagle Geophysical GOM, Inc. Texas
Eagle Geophysical Offshore, Inc Delaware
Eagle Geophysical Leasing, Inc. Delaware
Eagle Geophysical de Mexico, Inc Delaware
Eagle Front End Services, Inc Delaware
Eagle Geophysical Management, Inc. Delaware
Eagle Front End Services, Ltd. Texas
Austral Horizon, Inc. Delaware
Atlantic Horizon, Inc. Delaware
Eagle Geophysical de Colombia, Inc. Delaware
</TABLE>
Sch-1
<PAGE> 1
EXHIBIT 5.1
713-308-5864
September 18, 1998
Eagle Geophysical, Inc.
50 Briar Hollow Lane, 6th Floor
Houston, Texas 77027
Gentlemen:
We have acted as counsel to Eagle Geophysical, Inc., a Delaware corporation
(the "Company"), in connection with the Company's Registration Statement on
Form S-4 (the "Registration Statement") being filed with the Securities and
Exchange Commission on this date relating to the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of the offer by the
Company (the "Exchange Offer") of an aggregate principal amount of $100 million
of its 10 3/4% Senior Notes due 2008, Series B (the "Exchange Notes"), to be
exchanged for up to an equal aggregate principal amount of its outstanding
10 3/4% Senior Notes due 2008, Series A (the "Private Notes"). The Exchange
Notes are to have terms substantially identical in all material respects to the
Private Notes, except that such Exchange Notes will not contain terms with
respect to transfer restrictions. The Exchange Notes are proposed to be issued
in accordance with the provisions of the Indenture, dated as of July 20, 1998,
between the Company and Chase Bank of Texas, National Association, as Trustee
(the "Indenture").
As the basis for the opinions expressed below, we have examined the
Registration Statement, the Prospectus contained therein, the Indenture, which
is filed as an exhibit to the Prospectus, and such statutes, regulations,
corporate records and documents, certificates of corporate and public officials
and other instruments as we have deemed necessary or advisable for the purposes
of this opinion. In such examination, we have assumed (i) that the signatures
on all documents that we have examined are genuine, (ii) the authenticity of
all documents submitted to us as originals, and (iii) the conformity with the
original documents of all documents submitted to us as copies.
In connection with this opinion, we have assumed that (i) the Registration
Statement, and any amendments thereto (including post-effective amendments),
will have become effective, (ii) the Indenture will have been qualified under
the Trust Indenture Act of 1939, as amended, and (iii) the Exchange Notes will
be issued and exchanged in compliance with applicable federal and state
securities laws and in the manner stated in the Registration Statement.
<PAGE> 2
Eagle Geophysical, Inc.
Page Two
Based upon the foregoing, subject to the qualifications hereinafter set
forth, and having regard for such legal considerations as we have deemed
relevant, we are of the opinion that the Exchange Notes proposed to be issued
pursuant to the Exchange Offer have been duly authorized for issuance and,
subject to the Registration Statement becoming effective under the Securities
Act and in compliance with any applicable state securities laws, when executed,
authenticated, issued, delivered and exchanged in accordance with the Exchange
Offer and the Indenture, will be legally issued and will constitute valid and
legally binding obligations of the Company, enforceable against the Company in
accordance with their terms.
The opinion expressed above with respect to the Exchange Notes is subject
to the qualifications (x) that the enforcement of the Exchange Notes may be
limited by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity) and (y) that a waiver of rights under any usury
laws may be unenforceable. Furthermore, we express no opinion as to the
enforceability of any provisions of the Exchange Notes that would require the
performance thereof in the presence of fraud or illegality on the part of the
holders of the Exchange Notes or the Trustee.
The opinions expressed herein are limited exclusively to the federal laws
of the United States of America, the laws of the State of Texas and the General
Corporation Law of the State of Delaware, and we are expressing no opinion as
to the effect of the laws of any other jurisdiction.
This opinion is rendered solely for the benefit of the Company and is not
to be used, circulated, copied, quoted or referred to without our prior written
consent. We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the statements made with respect to us under the
caption "Legal Matters" in the Prospectus included as part of the Registration
Statement.
Very truly yours,
GARDERE WYNNE SEWELL & RIGGS, L.L.P.
By: /s/ WILLIAM MARK YOUNG, PARTNER
----------------------------------------
William Mark Young, Partner
<PAGE> 1
EXHIBIT 10.1
EAGLE GEOPHYSICAL, INC.
(a Delaware corporation)
$100,000,000
10 3/4% Senior Notes due 2008
PURCHASE AGREEMENT
July 15, 1998
PRUDENTIAL SECURITIES INCORPORATED
BANC ONE CAPITAL MARKETS, INC.
c/o Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Ladies and Gentlemen:
Eagle Geophysical, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions set forth herein, to
issue and sell to Prudential Securities Incorporated and Banc One Capital
Markets, Inc. (each an "Initial Purchaser" and together the "Initial
Purchasers") $100,000,000 aggregate principal amount of its 10 3/4% Senior Notes
due 2008 (the "Securities"). The Securities are to be issued pursuant to an
indenture to be dated as of July 20, 1998 (the "Indenture") between the Company
and Chase Bank of Texas, National Association, as trustee (the "Trustee"). The
Securities and the Indenture are more fully described in the Offering Memorandum
(as hereinafter defined). Capitalized terms used herein and not otherwise
defined herein have the respective meanings specified in the Offering
Memorandum.
The Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933, as amended
(the "1933 Act"), in reliance on an exemption from the registration requirements
of the 1933 Act. The Company has prepared a preliminary offering memorandum,
dated June 26, 1998 (such preliminary offering memorandum being hereinafter
referred to as the "Preliminary Offering Memorandum"), and has prepared a final
offering memorandum, dated July 15, 1998 (such final offering memorandum, in the
form first furnished to the Initial Purchasers for use in connection with the
offering of the Securities, being hereinafter referred to as the "Offering
Memorandum"), each setting forth information regarding the Company and the
Securities. The Company hereby confirms that it has authorized the use of the
Preliminary Offering Memorandum and the Offering Memorandum in connection with
the offering and resale of the Securities by the Initial Purchasers in
accordance with the terms hereof.
<PAGE> 2
The Company understands that the Initial Purchasers propose to
make an offering of the Securities on the terms set forth in the Offering
Memorandum, as soon as they deem advisable after this Agreement has been
executed and delivered, (i) to persons in the United States whom the Initial
Purchasers reasonably believe to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the 1933 Act, as such rule
may be amended from time to time ("Rule 144A"), in transactions under Rule 144A,
(ii) to a limited number of other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under Regulation D ("Regulation D")
of the 1933 Act ("Accredited Investors")) in private sales exempt from
registration under the 1933 Act and (iii) pursuant to offers and sales that
occur outside the United States within the meaning of Regulation S ("Regulation
S") under the 1933 Act.
The Initial Purchasers and other holders of Securities
(including subsequent transferees) will be entitled to the benefits of a
Registration Rights Agreement, which will be entered into as of the Closing Time
(as hereinafter defined), in substantially the form attached hereto as Exhibit A
with such changes as shall be agreed to by the parties hereto (the "Registration
Rights Agreement"). Pursuant to the Registration Rights Agreement, the Company
will agree that it shall file with the Securities and Exchange Commission (the
"Commission") under the circumstances set forth therein, either (i) a
registration statement under the 1933 Act registering the Exchange Securities
(as defined in the Registration Rights Agreement) to be offered in exchange for
the Securities (the "Registration Statement) and to use its best efforts to
cause such Registration Statement to be declared effective or (ii) under certain
circumstances set forth therein, file with the Commission a shelf registration
statement pursuant to Rule 415 under the 1933 Act relating to the resale of the
Securities (the "Shelf Registration Statement"), and use its best efforts to
cause such Shelf Registration Statement to be declared effective.
Section 1. Representations and Warranties of the Company. (a)
The Company represents and warrants to, and agrees with, each of the Initial
Purchasers that:
(i) As of their respective dates and, except with respect to the
Preliminary Offering Memorandum, as of the Closing Time, (x) none of the
Preliminary Offering Memorandum, the Offering Memorandum or any amendment or
supplement thereto includes or will include an untrue statement of a material
fact or omits or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, (y) all reasonable inquiries have been made to ascertain
such facts and to verify the accuracy of all such information and statements and
(z) any opinions and intentions expressed in the Preliminary Offering
Memorandum, the Offering Memorandum or any amendment or supplement thereto with
respect to the Company are honestly held and are based on reasonable
assumptions; provided, however, that the Company makes no representation or
warranty as to statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by the Initial Purchasers
expressly for use in the Preliminary Offering Memorandum, the Offering
Memorandum or any amendment or supplement thereto.
(ii) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with corporate power
and authority under such laws to own, lease and operate its properties and
conduct its business as described in the Offering
2
<PAGE> 3
Memorandum; and the Company is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it owns
or leases property of a nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on the
condition, financial or otherwise, or on the assets, earnings, results of
operations, business affairs or business prospects of the Company and its
Subsidiaries (as defined below) taken as a whole (a "Material Adverse Effect").
(iii) The Company's only subsidiaries (either direct or indirect) as of
the date hereof are those entities listed as such on Schedule I hereto (the
"Subsidiaries"). Each of the Subsidiaries is duly incorporated and validly
existing in the manner and jurisdiction set forth on Schedule I, in each case,
with all requisite corporate or other power and authority under such laws, and
all necessary authorizations, approvals, orders, licenses, certificates and
permits of and from regulatory or governmental officials, bodies and tribunals,
to own, lease and operate their respective properties and to conduct their
respective businesses as now conducted and as described in the Offering
Memorandum; and are, to the extent applicable, duly qualified to do business as
foreign corporations in good standing in all other jurisdictions where the
ownership or leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except where the failure to
be so qualified could not reasonably be expected to have a Material Adverse
Effect.
(iv) The Company had, at the date indicated in the Offering Memorandum,
a duly authorized, issued and outstanding capitalization as set forth in the
Offering Memorandum under "As of March 31, 1998" under the caption
"Capitalization." All of the outstanding capital stock of the Company has been
duly authorized and validly issued, is fully paid and nonassessable and was not
issued in violation of any preemptive or similar rights (whether provided
contractually or pursuant to its charter, by-laws or other organizational
documents). All of the outstanding capital stock or other equity interest of
each of the Subsidiaries has been duly authorized and validly issued, is fully
paid and nonassessable and was not issued in violation of any preemptive or
similar rights (whether provided contractually or pursuant to any of their
respective charters, by-laws or other organizational documents) and the
outstanding shares of the capital stock or other equity interests of the
Subsidiaries owned by the Company are owned beneficially and of record by the
Company in the percentages of each such Subsidiary's total capital stock or
other equity interests set forth on Schedule I and, in each case, are free and
clear of all liens, encumbrances, equities and claims or restrictions on
transferability or voting of, or the payment to the Company of dividends or
distributions on, such capital stock, except as set forth in the Offering
Memorandum.
(v) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and constitutes the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.
(vi) The execution and delivery of the Registration Rights Agreement
have been duly authorized by the Company and the Subsidiary Guarantors thereto
and, on and as of the Closing Time, the Registration Rights Agreement will have
been duly executed and delivered by
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the Company and the Subsidiary Guarantors thereto and when duly executed and
delivered by the Company, the Subsidiary Guarantors thereto and the Initial
Purchasers, will constitute a valid and binding obligation of each of the
Company and the Subsidiary Guarantors thereto, enforceable against the Company
and the Subsidiary Guarantors thereto in accordance with its terms.
(vii) The execution and delivery of the Indenture have been duly
authorized by the Company and the Subsidiary Guarantors thereto and, on and as
of the Closing Time, the Indenture will have been duly executed and delivered by
the Company and the Subsidiary Guarantors thereto and when duly executed and
delivered by the Company, the Subsidiary Guarantors thereto and the Trustee,
will constitute a valid and binding obligation of each of the Company and the
Subsidiary Guarantors thereto, enforceable against the Company and the
Subsidiary Guarantors thereto in accordance with its terms.
(viii) The issuance, execution and delivery of the Securities and the
Exchange Securities have been duly authorized by the Company. When executed,
authenticated, issued and delivered in the manner provided for in the Indenture
and sold and paid for as provided in this Agreement, the Securities will
constitute valid and binding obligations of the Company entitled to the benefits
of the Indenture and enforceable against the Company in accordance with their
terms. The Exchange Securities, when executed, authenticated, issued and
delivered in exchange for the Securities, will constitute valid and binding
obligations of the Company, entitled to the benefits of the Indenture,
enforceable against the Company in accordance with the terms thereof. The
Securities conform to the description thereof in the Offering Memorandum.
(ix) The financial statements included in the Offering Memorandum,
together with the related schedules and notes, present fairly (1) the financial
position of the Company and its Subsidiaries on a consolidated basis as of the
dates indicated and (2) the results of operations and cash flows of the Company
and its Subsidiaries on a consolidated basis for the periods specified, subject,
in the case of unaudited financial statements of the Company, to normal year-end
adjustments which shall not be materially adverse to the condition (financial or
otherwise), earnings, business affairs or business prospects of the Company and
its Subsidiaries, considered as one enterprise. Such financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved. The financial
statement schedules, if any, included in the Offering Memorandum present fairly
the information required to be stated therein. The selected financial data
included in the Offering Memorandum present fairly the information shown therein
and have been compiled on a basis consistent with that of the audited
consolidated financial statements included in the Offering Memorandum.
(x) Arthur Andersen LLP, which is reporting upon the audited financial
statements and related schedules and notes included in the Offering Memorandum,
is an independent public accountant with respect to the Company and its
Subsidiaries within the meaning of the 1933 Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder.
(xi) The documents incorporated by reference in the Offering
Memorandum, when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of the 1933
Act or the Exchange Act, as applicable, and the
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rules and regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and any further documents so filed and incorporated by reference
in the Offering Memorandum, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material respects
to the requirements of the 1933 Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
(xii) Except as disclosed in the Offering Memorandum, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the knowledge
of the Company, threatened against or affecting the Company or any Subsidiary or
any of their respective officers or directors, in their capacity as such, that
could reasonably be expected to result in a Material Adverse Effect, or that
could adversely affect the consummation of the transactions contemplated in this
Agreement or the Offering Memorandum; the aggregate of all pending legal or
governmental proceedings that are not described in the Offering Memorandum to
which the Company, any Subsidiary or any of their respective officers or
directors, in their capacity as such, are a party or which affect any of the
Company's or its Subsidiaries' respective properties, including ordinary routine
litigation incidental to the business of the Company or any Subsidiary, are
reasonably expected not to have a Material Adverse Effect.
(xiii) No authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign (other
than under the 1933 Act and the rules and regulations thereunder with respect to
the Registration Rights Agreement and the transactions contemplated thereunder
and the securities or "blue sky" laws of the various states) is required for the
valid authorization, issuance, sale and delivery of the Securities, for the
execution, delivery or performance by the Company of this Agreement, the
Registration Rights Agreement or the Indenture or for the consummation by the
Company of the transactions contemplated in this Agreement and the Offering
Memorandum, except such of the foregoing as will be obtained prior to the
Closing Time.
(xiv) Neither the Company nor any Subsidiary is in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which it is a party or by which it may be bound
or to which any of its properties may be subject, except for such defaults as
have been waived in writing by the other party thereto or that would not have a
Material Adverse Effect. The execution and delivery by the Company of this
Agreement, the Registration Rights Agreement and the Indenture, the issuance,
sale and delivery of the Securities by the Company, the consummation by the
Company of the transactions contemplated in this Agreement and the Offering
Memorandum and the compliance by the Company with the terms of this Agreement,
the Registration Rights Agreement and the Indenture have been duly authorized by
all necessary corporate action on the part of the Company and do not and will
not result in any violation of the charter or by-laws of the Company or any
Subsidiary, and do not and will not conflict with, or result in a breach of any
of the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
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any property or assets of the Company or any Subsidiary under, (A) any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any Subsidiary is a party or by which they
may be bound or to which any of their respective properties may be subject or
(B) any existing applicable law, rule, regulation, judgment, order or decree of
any government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
respective properties.
(xv) The Company and each of its Subsidiaries owns, possesses or has
obtained all material governmental licenses, permits, certificates, franchises,
consents, orders, approvals and other authorizations necessary to own or lease,
as the case may be, and to operate its properties and to carry on its business
as presently conducted, and neither the Company nor any Subsidiary has any
reason to believe that any governmental agency or body is considering limiting,
suspending or revoking any such license, permit, certificate, franchise,
consent, order, approval or authorization.
(xvi) The Company and each of its Subsidiaries has good and marketable
title to all properties and assets described in the Offering Memorandum as owned
by it, free and clear of all liens, charges, encumbrances or restrictions,
except such as (A) are described in the Offering Memorandum or (B) are neither
material in amount nor materially significant in relation to the business of the
Company and its Subsidiaries, considered as one enterprise; all of the leases
and subleases material to the business of the Company and its Subsidiaries,
considered as one enterprise, and under which the Company or any Subsidiary
holds properties or assets described in the Offering Memorandum, are in full
force and effect, and neither the Company nor any Subsidiary has received any
notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any Subsidiary under any of the leases
or subleases mentioned above, or affecting or questioning the rights of the
Company or its Subsidiaries (as the case may be) to the continued possession of
the leased or subleased premises or assets under any such lease or sublease.
(xvii) The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as the Company reasonably
believes is adequate for the conduct of their respective businesses and the
value of their respective properties or assets and is customary for companies
engaged in similar businesses in similar industries.
(xviii) The Company and each of its Subsidiaries owns or possesses
adequate patents, patent licenses, trademarks, service marks and trade names
necessary to carry on their respective businesses as presently conducted, and
neither the Company nor any Subsidiary has received any notice of infringement
of or conflict with asserted rights of others with respect to any patents,
patent licenses, trademarks, service marks or trade names that in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could materially
adversely affect the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its subsidiaries, considered as
one enterprise.
(xix) No material event of default exists under any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any Subsidiary is a party or to which the
Company or any Subsidiary is subject except as may have been waived in writing
by the other party thereto.
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(xx) There are no contracts or documents of a character that would be
required to be described in the Offering Memorandum, if it were a prospectus
filed as part of a registration statement on Form S-1 under the 1933 Act, that
are not described as would be so required. All such contracts to which the
Company or any Subsidiary is party have been duly authorized, executed and
delivered by the Company or such Subsidiary, constitute valid and binding
agreements of the Company or such Subsidiary and are enforceable against the
Company or such Subsidiary in accordance with the terms thereof.
(xxi) To the best knowledge of the Company, no labor problem exists
with its employees or with the employees of any Subsidiary or is imminent that
could adversely affect the Company and its Subsidiaries, considered as one
enterprise, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any Subsidiary's principal
suppliers, contractors or customers that could be expected to have a Material
Adverse Effect.
(xxii) All United States federal income tax returns of the Company and
the Subsidiaries required by law to be filed have been filed and all United
States federal income taxes which are due and payable have been paid, except
assessments against which appeals have been or will be promptly taken and as to
which adequate reserves have been provided. The Company and its Subsidiaries
each has filed all other tax returns that are required to have been filed by it
pursuant to applicable foreign, state, local or other law except insofar as the
failure to file such returns would not have a Material Adverse Effect, and has
paid all taxes due pursuant to such returns or pursuant to any assessment
received by the Company or its Subsidiaries, except for such taxes, if any, as
are being contested in good faith and as to which adequate reserves have been
provided. The charges, accruals and reserves on the books of the Company in
respect of any income and corporation tax liability for any years not finally
determined are adequate to meet any assessments or re-assessments for additional
income tax for any years not finally determined, except to the extent of any
inadequacy that would not have a Material Adverse Effect.
(xxiii) The Company and its Subsidiaries each maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxiv) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (A) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (B) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the
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"Code"); and each "pension plan" for which the Company would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.
(xxv) When the Securities are issued and delivered pursuant to this
Agreement, such securities will not be of the same class (within the meaning of
Rule 144A) as securities of the Company which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or quoted on
a U.S. automated interdealer quotation system.
(xxvi) The Company has been advised that the Securities have been
designated PORTAL securities in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc. ("NASD").
(xxvii) None of the Company or any affiliate (as defined in Rule 501(b)
under the 1933 Act) of the Company has directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the 1933 Act) by or for the Company that are of the
same or similar class as the Securities (other than with respect to the Exchange
Securities) in a manner that would require the registration of the Securities
under the 1933 Act.
(xxviii) None of the Company or any affiliate of the Company or any
person acting on their behalf has (A) engaged, in connection with the offering
of the Securities, in any form of general solicitation or general advertising
(as those terms are used within the meaning of Regulation D) or (B) solicited
offers for, or offered or sold, such Securities by means of any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the 1933 Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the 1933 Act.
(xxix) With respect to those Securities sold in reliance on Regulation
S, (A) none of the Company, its affiliates (as defined in rule 501(b) under the
1933 Act) or any person acting on its or their behalf (other than the Initial
Purchasers, as to whom the Company makes no representation) has engaged or will
engage in any directed selling efforts within the meaning of Regulation S and
(B) each of the Company and its affiliates and any person acting on its or their
behalf (other than the Initial Purchasers, as to whom the Company makes no
representation) has complied and will comply with the offering restrictions
requirement of Regulation S.
(xxx) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sold (except pursuant to this Agreement), bid for,
purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(xxxi) Assuming (A) the accuracy of the representations and warranties
of the Initial Purchasers in Section 2 hereof and (B) the due performance by the
Initial Purchasers of the
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covenants and agreements set forth in Section 2 hereof, it is not necessary in
connection with the offer, sale and delivery of the Securities to the Initial
Purchasers under, or in connection with the initial resale of such Securities by
the Initial Purchasers in accordance with, this Agreement to register the
Securities under the 1933 Act or to qualify the Indenture in respect of the
Securities under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(xxxii) No relationship, direct or indirect, exists between or among
the Company or any of its Subsidiaries, on the one hand, and the directors,
officers, securityholders, customers or suppliers of the Company or any
Subsidiary, on the other hand, that is of a character that would be required to
be described in the Offering Memorandum if it were a prospectus filed as part of
a registration statement on Form S-1 under the 1933 Act, that is not described
as would be so required.
(xxxiii) The Company is not an "investment company" or a company
controlled by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxxiv) Neither the Company nor any of its Subsidiaries, nor any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its Subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(xxxv) All offers and sales by the Company of the Company's securities
that have taken place within the past three years were at all relevant times
exempt from the registration requirements of the 1933 Act or duly registered
under the 1933 Act, and were duly registered or the subject of an available
exemption from the requirements of applicable state securities laws.
(xxxvi) Since the respective dates as of which information is given in
the Offering Memorandum, except as otherwise stated therein or contemplated
thereby, there has not been (A) any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business prospects of
the Company and its Subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business, (B) any transaction entered into by
the Company or any Subsidiary, other than in the ordinary course of business,
that is material to the Company and its Subsidiaries, considered as one
enterprise, or (C) any dividend or distribution of any kind declared, paid or
made by the Company on its capital stock.
(xxxvii) Except as disclosed in the Offering Memorandum and except as
would not individually or in the aggregate have a Material Adverse Effect, (A)
the Company and its Subsidiaries are each in compliance with all applicable
Environmental Laws, (B) the Company and its Subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, (C) there are no pending or,
to the knowledge of the Company, threatened Environmental Claims against the
Company or any of its Subsidiaries, and (D) there are no circumstances with
respect to any
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property or operations of the Company or any Subsidiary that could reasonably be
anticipated to form the basis of an Environmental Claim against the Company or
any Subsidiary.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) federal, state, local, maritime or municipal statute,
law, rule, regulation, ordinance, code, policy or rule of common law and any
judicial or administrative interpretation thereof including any judicial or
administrative order, consent decree or judgment, relating to the environment,
water, land, health, safety or any chemical, material or substance, exposure to
which is prohibited, limited or regulated by any governmental authority.
"Environmental Claims" means any and all administrative, regulatory, maritime or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in any way to
any Environmental Law.
(b) Any certificate signed by any officer of the Company or
any Subsidiary and delivered to the Initial Purchasers or to counsel for the
Initial Purchasers shall be deemed a representation and warranty by the Company
to the Initial Purchasers as to the matters covered thereby.
Section 2. Purchase, Sale and Resale of the Securities;
Closing; Representations, Warranties and Agreements of the Initial Purchasers.
(a) On the basis of the representations and warranties herein contained, and
subject to the terms and conditions herein set forth, the Company agrees to sell
to each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Company, at a purchase price of 97% of the principal amount thereof, the
principal amount of the Securities set forth opposite its name on Schedule II
hereto.
(b) Payment of the purchase price for, and delivery of, the
Securities shall be made at the offices of Gardere Wynne Sewell & Riggs, L.L.P.,
333 Clay Avenue, Suite 800, Houston, Texas 77002 or at such other place as shall
be agreed upon by the Company and the Initial Purchasers, at 10:00 A.M., local
time, on July 20, 1998, or at such other time not more than two business days
thereafter as the Initial Purchasers and the Company shall agree (such date and
time of payment and delivery being herein called the "Closing Time"). It is
contemplated that the Securities will be issued to Cede & Co., as nominee of the
Depository Trust Company ("DTC"). The Securities shall be in such denominations
and registered in such names as you may request in writing at least two business
days before the Closing Time. The Securities, which may be in temporary form,
will be made available in New York City for examination and packaging not later
than 10:00 A.M., local time, on the last business day prior to the Closing Time.
(c) At the Closing Time, payment shall be made to the Company
in the aggregate amount of $97,000,000 in immediately available funds payable to
the order of the Company against delivery of the Securities to you and the
Company shall promptly reimburse you for your costs in obtaining immediately
available funds.
(d) The Initial Purchasers have advised the Company that they
propose to offer the Securities for sale, upon the terms and conditions set
forth in this Agreement and in the
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Offering Memorandum. Each Initial Purchaser hereby represents and warrants to
the Company that it is a Qualified Institutional Buyer as defined in Rule 144A
and an "Accredited Investor" as defined in Rule 501 of Regulation D. Each
Initial Purchaser agrees with the Company that it (i) will not solicit offers
for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising or in any manner involving a public offering
within the meaning of Section 4(2) of the 1933 Act, (ii) will solicit offers for
the Securities only from, and will offer, sell or deliver the Securities, as
part of its initial offering, only to (A) persons whom it reasonably believes to
be Qualified Institutional Buyers or, if any such person is buying for one or
more institutional accounts for which such person is acting as fiduciary or
agent, only when such person has represented to it that each such account is a
Qualified Institutional Buyer to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A, and, in each case, in a
transaction under Rule 144A, (B) other institutional investors that it
reasonably believes to be Accredited Investors or, if any such person is buying
for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to the relevant
Initial Purchaser that each such account is an Accredited Investor; provided
that, with respect to clause (B), each such transfer of Securities is effected
by the delivery to such purchaser of Securities in definitive form and
registered in its name (or its nominee's name) on the books maintained by the
Trustee or (C) non-U.S. persons outside the United States, as defined in
Regulation S under the 1933 Act, to whom the offeror or seller reasonably
believes offers and sales of the Securities may be made in reliance upon
Regulation S under the 1933 Act and (iii) if offers and sales of Securities will
be made by the Initial Purchasers to non-U.S. persons outside the United States,
as defined in Regulation S, such offers and sales will be made in compliance
with Regulation S.
Section 3. Certain Covenants of the Company. The Company
covenants and agrees with each of the Initial Purchasers as follows:
(a) The Company will not at any time make any amendment or
supplement to the Offering Memorandum of which the Initial Purchasers shall not
have previously been advised and furnished a copy or to which the Initial
Purchasers or their counsel shall reasonably object.
(b) The Company will promptly deliver to the Initial
Purchasers, without charge, during the period from the date hereof to the date
of the completion of the distribution of the Securities by the Initial
Purchasers, such number of copies of the Offering Memorandum, as it may then be
amended or supplemented, or the Preliminary Offering Memorandum, as it may then
be amended or supplemented, as the Initial Purchasers and their counsel may
reasonably request.
(c) If, at any time prior to completion of the distribution of
the Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of their counsel or
counsel for the Company, to amend or supplement the Offering Memorandum in order
that the Offering Memorandum will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered
to a purchaser, not misleading or if, in the opinion of counsel to the Initial
Purchasers or counsel for the Company, it is necessary to amend or supplement
the Offering Memorandum to comply with applicable law, the
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Company, at its own expense, will promptly prepare such amendment or supplement
as may be necessary so that the statements in the Offering Memorandum as so
amended or supplemented will not, in the light of the circumstances existing at
the time it is delivered to a purchaser, be misleading or so that such Offering
Memorandum as so amended or supplemented will comply with applicable law, as the
case may be, and furnish the Initial Purchasers such number of copies as they
may reasonably request.
(d) The Company will endeavor, in cooperation with the Initial
Purchasers, to qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions as the Initial Purchasers
may designate and to maintain such qualifications in effect for a period of not
less than a year from the date of the Offering Memorandum; provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. The Company will file such statements and reports as may
be required by the laws of each jurisdiction in which the Securities have been
qualified as above provided. The Company will also supply the Initial Purchasers
with such information as is necessary for the determination of the legality of
the Securities for investment under the laws of such jurisdictions as the
Initial Purchasers may request.
(e) Except following the effectiveness of the Registration
Statement or the Shelf Registration Statement, neither the Company nor any of
its affiliates (as such term is defined in Rule 501(b) of Regulation D) will
solicit any offer to buy or offer to sell the Securities by means of any form of
general solicitation or general advertising (within the meaning of Rule 502(C)
of Regulation D) or in any manner involving a public offering within the meaning
of Section 4(2) of the 1933 Act.
(f) Neither the Company nor any of its affiliates (as such
term is defined in Rule 501(b) of the 1933 Act) will offer, sell or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the 1933 Act) the offering of which security could be integrated with the sale
of the Securities in a manner that would require the registration of any of the
Securities under the 1933 Act
(g) The Company will not be or become an open-end investment
company, unit investment trust or face-amount certificate company that is or is
required to be registered under the 1940 Act, and will not be or become a
closed-end investment company required to be registered thereunder.
(h) During the period from the Closing Time to the earlier of
(i) two years after the Closing Time or (ii) the date of effectiveness of the
Registration Statement or the Shelf Registration Statement, the Company will
not, and will not permit any of its affiliates (as such term is defined in Rule
144 under the 1933 Act) to, resell any of the Securities that have been
reacquired thereby, except for Securities purchased by the Company or any of its
affiliates and resold in a transaction registered under the 1933 Act.
(i) The Company will, so long as the Securities are
outstanding and are "restricted securities" within the meaning of Rule 144(a)(3)
under the 1933 Act, either (i) file
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reports and other information with the Commission under Section 13 or Section
15(d) of the Exchange Act, or (ii) in the event the Company is not subject to
Section 13 or Section 15(d) of the Exchange Act, furnish to holders of the
Securities and prospective purchasers of the Securities designated by such
holders, upon request of such holders or such prospective purchasers, the
information required to be delivered pursuant to Rule 144A(d)(4) under the 1933
Act to permit compliance with Rule 144A in connection with resale of the
Securities. For a period of five years after the Closing Time, the Company will
make available to the Initial Purchasers upon request copies of all such reports
and information, together with such other documents, reports and information as
shall be furnished by the Company to the holders of the Securities issued by it.
(j) If requested by the Initial Purchasers, the Company will
use its best efforts in cooperation with the Initial Purchasers to permit the
Securities sold in transactions described in Section 2(d)(ii)(A) hereof to be
eligible for clearance and settlement through The Depository Trust Company.
(k) Each Security will bear the following legend until such
legend shall no longer be necessary or advisable because such Security is no
longer subject to the restrictions on transfer described therein:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933,AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE DATE OF
ORIGINAL ISSUE HEREOF AND THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED,
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (D) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT,
FOR INVESTMENT PURPOSES AND NOT WITH A
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VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (E) PURSUANT
TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT; PROVIDED THAT THE COMPANY SHALL HAVE
THE RIGHT PRIOR TO ANY SUCH OFFER, SALE, PLEDGE OR TRANSFER
(i) PURSUANT TO CLAUSE (E) OR (F) ABOVE TO REQUIRE THE
DELIVERY OF AN OPINION (IN FORM AND SUBSTANCE SATISFACTORY TO
THE COMPANY) OF COUNSEL SATISFACTORY TO THE COMPANY, AND
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO THE
COMPANY, AND (ii) IN THE CASE OF CLAUSE (D) ABOVE, THE
TRANSFEROR SHALL DELIVER A LETTER FROM THE TRANSFEREE,
SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING
MEMORANDUM TO THE COMPANY AND THE TRUSTEE, WHICH SHALL
PROVIDE, AMONG OTHER THINGS, THAT SUCH TRANSFEREE IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" AND THAT IT IS ACQUIRING
SUCH SECURITIES FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION
UNDER THE SECURITIES ACT AND IN EACH OF THE FOREGOING CASES,
TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE COMPANY.
(l) The Company will apply the net proceeds from the sale of
the Securities as set forth in the Offering Memorandum under the heading "Use of
Proceeds".
(m) After the date hereof and prior to the Closing Time, the
Company will not issue any press release or other communications directly or
indirectly or hold any press conference with respect to the Company, the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company, without the prior written consent of Prudential
Securities Incorporated, unless in the judgment of the Company and its counsel,
and after notification to the Initial Purchasers, such press release or
communication is required by law.
(n) For a period of 180 days from the date of the Offering
Memorandum, the Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, directly or indirectly,
offer, guarantee, sell, grant any option to purchase or otherwise dispose of any
debt securities of the Company, other than the Securities, the Exchange
Securities referred to in the Registration Rights Agreement, bank indebtedness
and debt securities convertible into equity securities.
(o) The Company will take all reasonable action necessary to
enable Standard & Poor's, a division of The McGraw Hill Companies, Inc., and
Moody's Investors Service, Inc.,
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<PAGE> 15
or such other rating agencies approved by Prudential Securities Incorporated, to
provide their respective credit ratings of the Securities.
(p) The Company will comply with all of the terms and
conditions of the Registration Rights Agreement.
(q) The Company will, prior to any registration of the
Securities or the Exchange Securities pursuant to the Registration Rights
Agreement, or at such earlier time as may be so required, qualify the Indenture
under the Trust Indenture Act and enter into any necessary supplemental
indentures in connection therewith.
(r) The Company will cooperate with the Initial Purchasers and
use its best efforts to permit the Securities to be eligible for clearance and
settlement through DTC.
Section 4. Payment of Expenses. (a) The Company will pay all
costs and expenses incident to the performance of its obligations under this
Agreement, whether or not the transactions contemplated herein are consummated
or this Agreement is terminated pursuant to Section 9 hereof, including, but not
limited to, all costs and expenses incident to (a) the preparation and printing
or other production of documents with respect to the transactions, including any
costs of printing the Preliminary Offering Memorandum, the Offering Memorandum
and any amendments or supplements thereto, the Indenture, this Agreement, the
Registration Rights Agreement and any blue sky memoranda, (b) all arrangements
relating to the delivery to the Initial Purchasers of copies of the foregoing
documents, (c) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Company, (d) preparation, issuance
and delivery to the Initial Purchasers of any certificates evidencing the
Securities, including transfer agent's and registrar's fees, (e) the
qualification of the Securities under state securities and blue sky laws in
accordance with Section 3(d), and any filing for review of the offering or the
Exchange Offer with NASD, in each case including filing fees and reasonable fees
and disbursements of counsel for the Initial Purchasers relating thereto and in
connection with the preparation of any "blue sky" or legal investment memoranda,
(f) the fees and disbursements of the Trustee, including the fees and
disbursements of counsel for the Trustee, in connection with the Indenture and
the Securities, (g) any meetings with prospective investors in the Securities
(other than as shall have been specifically approved by the Initial Purchasers
to be paid for by the Initial Purchasers), (h) any fees charged by investment
rating agencies for the rating of Securities and (i) the fees associated with
any listing of the Securities on any securities exchange, including the cost of
obtaining approval for the trading of the Securities through PORTAL.
(b) In addition to its obligations under Section 6(a) hereof,
the Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any loss, claim, damage or liability described in Section 6(a) hereof, it will
reimburse the Initial Purchasers, and each of them, on a monthly basis against
submission of invoices and such additional information as the Company reasonably
may request for all reasonable legal or other expenses incurred in connection
with investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the obligations of the Company to
reimburse the Initial Purchasers for such expenses and the
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<PAGE> 16
possibility that such payments might later be held to have been improper by a
court of jurisdiction. To the extent that any portion, or all, of any such
interim reimbursement payments are so held to have been improper, the Initial
Purchasers receiving the same shall promptly return such amounts to the party or
parties who have paid such amounts together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by
Citibank, N.A. (the "Prime Rate"). Any such interim reimbursement payments that
are not made to the Initial Purchasers within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request until the date paid.
(c) In addition to their obligations under Section 6(b)
hereof, the Initial Purchasers agree that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any loss, claim, damage or liability described in
Section 6(b)(i) or 6(b)(ii) hereof, (in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by the Initial Purchasers specifically for
use therein), they will reimburse the Company on a monthly basis, against
submission of invoices and such additional information as the Initial Purchasers
reasonably may request, for all reasonable legal or other expenses incurred by
the Company in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
Initial Purchasers' obligation to reimburse the Company for such expenses and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any portion, or all, of
any such interim reimbursement payments are so held to have been improper, the
Company shall promptly return such amounts to the Initial Purchasers together
with interest, compounded daily, determined on the basis of the Prime Rate. Any
such interim reimbursement payments that are not made to the Company within 30
days of a request for reimbursement shall bear interest at the Prime Rate from
the date of such request until the date paid.
(d) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in Sections 4 (b)
and 4 (c) above, including the amounts of any requested reimbursement payments,
the method of determining such amounts and the basis on which such amounts shall
be apportioned among the indemnifying parties, shall be settled by arbitration
conducted pursuant to the Code of Arbitration Procedure of the NASD. Any such
arbitration must be commenced by service of a written demand for arbitration or
a written notice of intention to arbitrate, therein electing the arbitration
tribunal. If the party demanding arbitration does not make designation of an
arbitration tribunal in such demand or notice, then the party responding to said
demand or notice is authorized to do so. Any such arbitration will be limited to
the interpretation of obligations of the parties under the interim reimbursement
provisions contained in Sections 4(b) and 4(c) hereof and will not resolve the
ultimate propriety or enforceability of the obligation to indemnify for expenses
that is created by the provisions of Section 6 hereof.
Section 5. Conditions of Initial Purchasers' Obligations. The
obligation of each Initial Purchaser to purchase and pay for the Securities that
it has severally agreed to purchase hereunder is subject to the accuracy of the
representations and warranties of the Company
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<PAGE> 17
contained herein and in certificates of any officer of the Company and any
Subsidiary delivered pursuant to the provisions hereof, to the performance by
the Company of its obligations hereunder, and to the following further
conditions:
(a) At the Closing Time, each of the Initial Purchasers shall
have received a signed opinion of Gardere Wynne Sewell & Riggs, L.L.P., counsel
for the Company, dated as of the Closing Time, in substantially the form
attached hereto as Exhibit B-1.
(b) At the Closing Time, each of the Initial Purchasers shall
have received the signed opinion of Brown & Wood LLP, counsel for the Initial
Purchasers, dated as of the Closing Time, to the effect that the opinion
delivered pursuant to Section 5(a) appears on its face to be appropriately
responsive to the requirements of this Agreement and with respect to the
incorporation and legal existence of the Company, the Securities, this
Agreement, the Indenture, the Registration Rights Agreement, the Offering
Memorandum and such other related matters as the Initial Purchasers may require.
The Company shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
(c) At the time that this Agreement is executed by the Company
and at the Closing Time, each of the Initial Purchasers shall have received from
Arthur Andersen LLP, independent auditors for the Company, a letter, dated
respectively as of the date of this Agreement and as of the Closing Time, in
form and substance satisfactory to the Initial Purchasers, confirming that they
are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published rules and regulations
thereunder, and setting forth certain matters customarily included in
accountants "comfort letters," in form and substance satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers.
(d) At the time that this Agreement is executed by the Company
and at the Closing Time, each of the Initial Purchasers shall have received from
KPMG Peat Marwick LLP, independent auditors for Energy Resources International,
a letter, dated respectively as of the date of this Agreement and as of the
Closing Time, in form and substance satisfactory to the Initial Purchasers,
confirming that they were independent public accountants with respect to Energy
Resources International within the meaning of the 1933 Act and the applicable
published rules and regulations thereunder, and setting forth certain matters
customarily included in accountants "comfort letters," in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial Purchasers.
(e) The Company shall have furnished to the Initial Purchasers
a certificate, signed by the Chief Executive Officer and the principal financial
or accounting officer of the Company, dated as of the Closing Time, to the
effect that the signers of such certificate have examined the Offering
Memorandum, any amendment or supplement to the Offering Memorandum, and this
Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Time with the same effect as
if made at the Closing Time; and the Offering
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<PAGE> 18
Memorandum, as it may then be amended or supplemented, shall
not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
the Company has complied with all the agreements and satisfied
all the conditions under this Agreement on its part to be
performed or satisfied at or prior to the Closing Time; and
(ii) since the respective dates as of which
information is given in the Offering Memorandum (exclusive of
any amendment or supplement thereto), neither the Company nor
any of its Subsidiaries have sustained any material loss or
interference with their respective businesses or properties
from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding, and there has not
been any material adverse change, or any development involving
a prospective material adverse change, in the condition
(financial or otherwise), management, business prospects, net
worth or results of operations of the Company or any of its
Subsidiaries, except in each case as described in or
contemplated by the Offering Memorandum (exclusive of any
amendment or supplement thereto).
(f) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Time, there shall not have been any downgrading, nor
any notice given of any intended or potential downgrading or of a possible
change that does not indicate the direction of the possible change, in the
rating accorded any of the Company's securities, including the Securities, by
any "nationally recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the 1933 Act.
(g) Subsequent to the date hereof or, if earlier, the dates as
of which information is given in the Offering Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been any change, or any
development involving a prospective change, in or affecting the business or
properties of the Company the effect of which is, in the sole judgment of the
Initial Purchasers, so material and adverse as to make it impractical or
inadvisable to proceed with the purchase and the delivery of the Securities as
contemplated by the Offering Memorandum (exclusive of any amendment or
supplement thereto).
(h) Prior to or concurrent with the Closing Time, counsel for
the Initial Purchasers shall have been furnished with all such documents,
certificates and opinions as they may have reasonably requested from the
Company.
(i) At the Closing Time, the Indenture shall have been fully
executed and delivered by the parties thereto and be in full force and effect.
(j) At the Closing Time, the Registration Rights Agreement
shall have been fully executed and delivered by the parties thereto and be in
full force and effect.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement, this Agreement may
be terminated by the Initial Purchasers on notice to the Company at any time at
or prior to the Closing Time, and such
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termination shall be without liability of any party to any other party, except
as provided in Section 4. Notwithstanding any such termination, the provisions
of Sections 4, 6, 7 and 14 shall remain in effect.
Section 6. Indemnification and Contribution. (a) The Company
agrees to indemnify and hold harmless each Initial Purchaser and each person, if
any, who controls any Initial Purchaser within the meaning of Section 15 of the
1933 Act or Section 20 of the Exchange Act against any losses, claims, damages
or liabilities, joint or several, to which such Initial Purchaser or such
controlling person may become subject under the 1933 Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement
made by the Company in Section 1 of this Agreement,
(ii) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Preliminary Offering
Memorandum or the Offering Memorandum or any amendment or supplement
thereto or (B) any application or other document, or any amendment or
supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Securities under the securities or
blue sky laws thereof or filed with the Commission or any securities
association or securities exchange (each an "Application"),
(iii) the omission or alleged omission to state in
the Preliminary Offering Memorandum or the Offering Memorandum or any
amendment or supplement thereto, or any Application a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or
(iv) any untrue statement or alleged untrue statement
of any material fact contained in any audio or visual materials used by
the Company in connection with the marketing of the Securities,
including without limitation, slides, videos, films and tape
recordings,
and will reimburse, as incurred and pursuant to Section 4(b) hereof, each
Initial Purchaser and each such controlling person for any legal or other
expenses reasonably incurred by such Initial Purchaser or such controlling
person in connection with investigating, defending against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in the Preliminary Offering Memorandum, the Offering
Memorandum or any amendment or supplement thereto or any Application in reliance
upon and in conformity with written information furnished to the Company by such
Initial Purchaser specifically for use therein. This indemnity agreement will be
in addition to any liability which the Company may otherwise have. The Company
will not, without the prior written consent of the Initial Purchaser or Initial
Purchasers purchasing, in the aggregate, more than fifty percent (50%) of the
Securities, settle or compromise or consent to the
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entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Initial Purchaser or any person who controls any such Initial
Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of all of
the Initial Purchasers and such controlling persons from all liability arising
out of such claim, action, suit or proceeding.
(b) Each Initial Purchaser, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its
executive officers and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act against
any losses, claims, damages or liabilities to which the Company, any such
director, officer or controlling person may become subject under the 1933 Act,
the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Preliminary Offering Memorandum, the Offering Memorandum or any amendment
or supplement thereto or any Application or (ii) the omission or alleged
omission to state therein a material fact required to be stated in the
Preliminary Offering Memorandum, the Offering Memorandum or any amendment or
supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Initial Purchaser specifically for use therein;
and, subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred and pursuant to Section 4(c) hereof, any legal or other
expenses reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Initial Purchaser may
otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 6. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election to assume the defense thereof and approval by such
indemnified party of counsel appointed to
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defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 6 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchasers in the case of paragraph (a) of this
Section 6, representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party does not
promptly retain counsel satisfactory to the indemnified party or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not be
liable for the costs and expenses of any settlement of such action effected by
such indemnified party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 6 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchasers on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by the Initial Purchasers. The relative fault of the parties 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 or the Initial
Purchasers, the parties' relative intents, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company and the
Initial Purchasers agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (d). Notwithstanding any
other provision of this paragraph (d), no Initial Purchaser shall be obligated
to make contributions hereunder that in the aggregate exceed the total public
offering price of the Securities purchased by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that
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such Initial Purchaser has otherwise been required to pay in respect of the
same or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute hereunder
are several in proportion to their respective underwriting obligations and not
joint, and contributions among Initial Purchasers shall be governed by the
provisions of the Prudential Securities Incorporated Master Agreement Among
Underwriters, as applicable. For purposes of this paragraph (d), each person, if
any, who controls an Initial Purchaser within the meaning of Section 15 of the
1933 Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Initial Purchaser, and each director of the Company, each
officer of the Company and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as the Company.
(e) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of Sections 4(b), 4(c) and 4(d) hereof and this
Section 6, and are fully informed regarding said provisions. They further
acknowledge that the provisions of Sections 4(b), 4(c) and 4(d) hereof and this
Section 6 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Offering Memorandum as required by the 1933 Act. The
parties are advised that federal or state policy, as interpreted by the courts
in certain jurisdictions, may be contrary to certain provisions of Sections
4(b), 4(c) and 4(d) hereof and this Section 6, and the parties hereto hereby
expressly waive and relinquish any right or ability to assert such public policy
as a defense to a claim under Sections 4(b), 4(c) and 4(d) hereof or this
Section 6 and further agree not to attempt to assert any such defense.
Section 7. Survival. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Company, its officers, and the several Initial Purchasers set forth in or made
pursuant to this Agreement, respectively, shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of the
Company, any of its officers or directors, any Initial Purchaser or any person
who controls the Company or the Initial Purchasers within the meaning of Section
15 of the 1933 Act or Section 20(a) of the Exchange Act and (ii) delivery of and
payment for the Securities. The respective agreements, covenants, indemnities
and other statements set forth in Sections 3, 4, 6, 7 and 14 hereof shall remain
in full force and effect, regardless of any termination or cancellation of this
Agreement.
Section 8. Default of Initial Purchasers. If one of the
Initial Purchasers defaults in its obligations to purchase Securities hereunder
and the aggregate principal amount of such Securities that such defaulting
Initial Purchaser agreed but failed to purchase is ten percent or less of the
aggregate principal amount of Securities to be purchased by all of the Initial
Purchasers at such time hereunder, the other Initial Purchaser may make
arrangements satisfactory to the Initial Purchaser for the purchase of such
Securities by other persons, but if no such arrangements are made by the Closing
Time, the other Initial Purchaser shall be obligated to purchase the Securities
that such defaulting Initial Purchaser agreed but failed to purchase. If
22
<PAGE> 23
one of the Initial Purchasers so defaults with respect to an aggregate principal
amount of Securities that is more than ten percent of the aggregate principal
amount of Securities to be purchased by all of the Initial Purchasers at such
time hereunder, and if arrangements satisfactory to the Initial Purchaser are
not made within 36 hours after such default for the purchase by other persons,
of the Securities with respect to which such default occurs, this Agreement will
terminate without liability on the part of any non-defaulting Initial Purchaser
or the Company other than as provided in Section 4 hereof. In the event of any
default by one of the Initial Purchasers as described in this Section 8, the
Initial Purchasers shall have the right to postpone the Closing Time established
as provided in Section 2 hereof for not more than seven business days in order
that any necessary changes may be made in the arrangements or documents for the
purchase and delivery of the Securities. As used in this Agreement, the term
"Initial Purchaser" includes any person substituted for a Initial Purchaser
under this Section 8. Nothing herein shall relieve any defaulting Initial
Purchaser from liability for its default.
Section 9. Termination of Agreement. (a) This agreement may be
terminated with respect to the Securities in the sole discretion of the Initial
Purchasers by notice to the Company given prior to the Closing Time in the event
that the Company shall have failed, refused or been unable to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to the Closing Time,
(i) the Company or any of its Subsidiaries shall
have, in the sole judgment of the Initial Purchasers, sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding or there shall have been any material
adverse change, or any development involving a prospective material
adverse change (including without limitation a change in management or
control of the Company), in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company
and its subsidiaries, except in each case as described in or
contemplated by the Offering Memorandum (exclusive of any amendment or
supplement thereto);
(ii) trading in the Company's Common Stock shall have
been suspended by the Commission or The Nasdaq Stock Market, Inc. or
trading in securities generally on the New York Stock Exchange, Inc. or
The Nasdaq Stock Market, Inc. shall have been suspended or minimum or
maximum prices shall have been established on either such exchange or
market system;
(iii) a banking moratorium shall have been declared
by New York or United States authorities; or
(iv) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign
power, (B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States or (C) any other calamity or
crisis or material adverse change in general economic, political or
financial conditions having an effect on the financial markets or the
market for the Securities that, in the sole judgment of the Initial
Purchasers, makes it impractical or inadvisable to proceed with the
23
<PAGE> 24
offer, sale or the delivery of the Securities as contemplated by the
Offering Memorandum.
(b) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party,
except to the extent provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 6 and 7 shall remain in effect.
Section 10. Information Supplied by the Initial Purchasers.
The statements set forth in the last paragraph on the cover page, the fourth
full paragraph on page (ii), the statements regarding market making under the
heading "Risk Factors - Absence of Market for the Notes; Restrictions on
Resales", the amounts of Securities purchased by the Initial Purchasers in the
first paragraph, the fourth paragraph, the first sentence of the sixth paragraph
and the eighth paragraph under the heading "Plan of Distribution" in the
Preliminary Offering Memorandum and the Offering Memorandum (to the extent such
statements relate to the Initial Purchasers) constitute the only information
furnished by the Initial Purchasers to the Company for the purposes of Sections
1(a)(i) and 6 hereof. The Initial Purchasers confirm that such statements (to
such extent) are correct.
Section 11. Notices. All notices and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered, mailed or transmitted by any standard form of
telecommunication to the applicable party at the addresses indicated below:
If to the Initial Purchasers:
c/o Prudential Securities Incorporated
One New York Plaza-18th Floor
New York, NY 10292-2018,
Attention: Steven C. Benfield
Telecopy: (212) 778-5718
with copies to:
Brown & Wood LLP
One World Trade Center
New York, New York 10048
Attention: Joseph W. Armbrust
If to the Company:
50 Briar Hollow Lane,
7th Floor West
Houston, TX 77027
Attention: Jay Silverman, President
24
<PAGE> 25
with copies to:
Gardere Wynne Sewell & Riggs, L.L.P.
333 Clay Avenue, Suite 800
Houston, Texas 77002-4086
Attention: N.L. Stevens, III
Section 12. Consent to Jurisdiction and Service of Process.
All judicial proceedings arising out of or relating to this Agreement may be
brought in any state or federal court of competent jurisdiction in the State of
New York, and by execution and delivery of this Agreement, the Company accepts
for itself and in connection with its properties, generally and unconditionally,
the nonexclusive jurisdiction of the aforesaid courts and waive any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement.
To the extent that the Company has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
Section 13. Parties. This Agreement is made solely for the
benefit of the Initial Purchasers, the Company and, to the extent expressed, any
person who controls the Company or any Initial Purchaser within the meaning of
Section 15 of the 1933 Act or Section 20 of the Exchange Act, and the directors
of the Company, its officers and their respective executors, administrators,
successors and assigns and no other person shall acquire or have any right under
or by virtue of this Agreement. The term "successors and assigns" shall not
include any purchaser, as a purchaser, from the Initial Purchasers of the
Securities. No purchaser of Securities from any Initial Purchaser shall be
deemed to be a successor by reason merely of such purchase.
Section 14. Governing Law and Time. This Agreement shall be
governed by the laws of the State of New York, without regard to conflict of
laws provisions.
Section 15. Counterparts. This Agreement may be executed in
one or more counterparts and when a counterpart has been executed by each party,
all such counterparts taken together shall constitute one and the same
agreement.
-------------------------
25
<PAGE> 26
If the foregoing correctly sets forth our understanding,
please sign and return to us a counterpart hereof, whereupon this instrument
will become a binding agreement between the Company and the Initial Purchasers
in accordance with its terms.
Very truly yours,
EAGLE GEOPHYSICAL, INC.
By: /s/ Jay N. Silverman
--------------------------------
Name: Jay N. Silverman
Title: Chief Executive Officer
and President
Confirmed and accepted as of
the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Steven C. Benfield
-------------------------------
Name: Steven C. Benfield
Title: Managing Director
BANC ONE CAPITAL MARKETS, INC.
By: /s/ Suzanne B. Kriscunas
-------------------------------
Name: Suzanne B. Kriscunas
Title: Managing Director
26
<PAGE> 27
SCHEDULE I
Subsidiaries of the Company
<TABLE>
<CAPTION>
Subsidiary: Formed In:
- ----------- ----------
<S> <C> <C>
Eagle Geophysical Onshore, Inc. (100% owned by the Company) Delaware
Eagle Geophysical Offshore, Inc. (100% owned by the Company) Delaware
Eagle Geophysical Leasing, Inc. (100% owned by the Company) Delaware
Eagle Geophysical de Mexico, Inc. (100% owned by the Company) Delaware
Eagle Front End Services, Inc. (100% owned by the Company) Delaware
Austral Horizon, Inc. (100% owned by the Company) Delaware
Atlantic Horizon, Inc. (100% owned by the Company) Delaware
Eagle Geophysical de Colombia, Inc. (100% owned by the Company) Delaware
Eagle Geophysical Management, Inc. (100% owned by the Company) Delaware
Eagle Front End Services, Ltd. (Eagle Geophysical Management, Inc. - 1% GP, Texas
Eagle Front End Services, Inc. - 99% LP)
Eagle Geophysical GOM, Inc. (f/k/a (100% owned by Exploration Holdings Ltd.) Texas
Eagle Geophysical Offshore, Inc.)
Energy Research International (100% owned by the Company) Cayman Islands
Exploration Holdings Limited (100% owned by Energy Research International) England
Horizon Exploration Limited (100% owned by Exploration Holdings Ltd.) England
</TABLE>
Sch-1
<PAGE> 28
SCHEDULE II
<TABLE>
<CAPTION>
Principal Amount
Of Securities
Initial Purchasers to be Purchased
------------------ ----------------
<S> <C>
Prudential Securities Incorporated...................... $ 90,000,000
Banc One Capital Markets, Inc........................... $ 10,000,000
Total........................................... ------------
$100,000,000
</TABLE>
Sch-2
<PAGE> 29
EXHIBIT A
FORM OF
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of July 20, 1998, among Eagle Geophysical, Inc., a Delaware
corporation (the "Company"), and the subsidiaries of the Company (the
"Subsidiaries") set forth in Schedule I hereto on the one hand, and Prudential
Securities Incorporated and Banc One Capital Markets, Inc. (collectively, the
"Initial Purchasers"), on the other hand.
This Agreement is made pursuant to the Purchase Agreement
dated July 15, 1998 among the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of $100,000,000 aggregate principal amount of the Company's 10 3/4%
Senior Notes due 2008 (the "Notes"). In order to induce the Initial Purchasers
to enter into the Purchase Agreement, the Company has agreed to provide to the
Initial Purchasers and their direct and indirect transferees and assigns the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time
to time, and the rules and regulations of the SEC promulgated
thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"Closing Time" shall mean the Closing Time as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble of this
Agreement and also includes the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company, provided, however, that any such
depositary must have an address in the Borough of Manhattan, in the
City of New York.
"Exchange Notes" shall mean 10 3/4% Series B Senior Notes due 2008
issued by the Company under the Indenture containing terms identical to
the Notes (except that (i) interest thereon shall accrue from the last
date on which interest was paid on the Notes or, if no such interest
has been paid, from July 20, 1998, (ii) the transfer restrictions
thereon shall be eliminated and (iii) certain provisions relating to an
increase in the stated rate of interest thereon shall be eliminated) to
be
A-1
<PAGE> 30
offered to Holders of Notes in exchange for Notes pursuant to the
Exchange Offer.
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Notes for Registrable Notes pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such
registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by
reference therein.
"Holders" shall mean the Initial Purchasers, for so long as they own
any Registrable Notes, and each of their successors, assigns and direct
and indirect transferees who become registered owners of Registrable
Notes under the Indenture.
"Indenture" shall mean the Indenture relating to the Notes dated as of
July 20, 1998 among the Company, the subsidiaries of the Company
signatory thereto and Chase Bank of Texas, National Association, a
national banking association, as trustee, as the same may be amended
from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble
of this Agreement.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Notes; provided
that whenever the consent or approval of Holders of a specified
percentage of Registrable Notes is required hereunder, Registrable
Notes held by the Company or any of its affiliates (as such term is
defined in Rule 405 under the 1933 Act) (other than the Initial
Purchasers or subsequent holders of Registrable Notes if such
subsequent holders are deemed to be such affiliates solely by reason of
their holding of such Registrable Notes) shall be disregarded in
determining whether such consent or approval was given by the Holders
of such required percentage or amount.
"Person" shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement,
including a prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Notes covered by a Shelf
Registration Statement, and by all other amendments and
A-2
<PAGE> 31
supplements to a prospectus, including post-effective amendments, and
in each case including all material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
of this Agreement.
"Registrable Notes" shall mean the Notes; provided, however, that the
Notes shall cease to be Registrable Notes when (i) a Registration
Statement with respect to such Notes shall have been declared effective
under the 1933 Act and such Notes shall have been disposed of pursuant
to such Registration Statement, (ii) such Notes shall have been sold to
the public pursuant to Rule 144 (or any similar provision then in
force, but not Rule 144A) under the 1933 Act, (iii) such Notes shall
have ceased to be outstanding or (iv) such Notes have been exchanged
for Exchange Notes upon consummation of the Exchange Offer.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement,
including without limitation: (i) all SEC, stock exchange or National
Association of Securities Dealers, Inc. ("NASD") registration and
filing fees, (ii) all fees and expenses incurred in connection with
compliance with state or other securities or blue sky laws and
compliance with the rules of the NASD (including reasonable fees and
disbursements of counsel for any underwriters or Holders in connection
with state or other securities or blue sky qualification of any of the
Exchange Notes or Registrable Notes), (iii) all expenses of any Persons
in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments
or supplements thereto, certificates representing the Exchange Notes
and other documents relating to the performance of and compliance with
this Agreement, (iv) all rating agency fees, (v) all fees and expenses
incurred in connection with the listing, if any, of any of the
Registrable Notes on any securities exchange or exchanges, (vi) all
fees and disbursements relating to the qualification of the Indenture
under applicable securities laws, (vii) the reasonable fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements (including the expenses of preparing and distributing any
underwriting or securities sales agreement) of one counsel (in addition
to appropriate local counsel) for the Holders (which counsel shall be
selected in writing by the Majority Holders), (viii) the fees and
expenses of the independent public accountants of the Company,
including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance, (ix) the
fees and expenses of a "qualified independent underwriter" as defined
by Conduct Rule 2720 of the NASD (if required by the NASD rules) in
connection with the offering of the Registrable Securities, (x) the
fees and expenses of the trustee, including its counsel, and any escrow
agent or custodian, and (xi) any fees and disbursements of the
underwriters customarily required to be paid by issuers or sellers of
securities and the reasonable fees and expenses of any special experts
retained by the Company in connection with any Registration Statement,
but excluding underwriting
A-3
<PAGE> 32
discounts and commissions and transfer taxes, if any, relating to the
sale or disposition of Registrable Notes by a Holder.
"Registration Statement" shall mean any registration statement of the
Company which covers any of the Exchange Notes or Registrable Notes
pursuant to the provisions of this Agreement, and all amendments and
supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated
by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) of
this Agreement which covers all of the then Registrable Notes on an
appropriate form under Rule 415 under the 1933 Act, or any similar rule
that may be adopted by the SEC, and all amendments and supplements to
such registration statement, including post-effective amendments, in
each case including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the Notes and the
Exchange Notes under the Indenture.
2. Registration Under the 1933 Act. (a) Exchange Offer
Registration. To the extent not prohibited by any applicable law or applicable
interpretation of the Staff of the SEC, the Company shall (A) file on or prior
to the 60th calendar day following the Closing Time an Exchange Offer
Registration Statement covering the offer by the Company to the Holders of
Exchange Notes in exchange for all of the Registrable Notes, (B) use its best
efforts to cause such Exchange Offer Registration Statement to be declared
effective by the SEC on or prior to the 180th calendar day following the Closing
Time, (C) use its best efforts to cause such Exchange Offer Registration
Statement to remain effective until the closing of the Exchange Offer and (D)
use its best efforts to consummate the Exchange Offer on or prior to the 210th
calendar day following the Closing Date. Upon the effectiveness of the Exchange
Offer Registration Statement, the Company shall promptly commence the Exchange
Offer, it being the objective of such Exchange Offer to enable each Holder
(other than Participating Broker-Dealers (as defined in Section 3(f)) eligible
and electing to exchange Registrable Notes for Exchange Notes (assuming that
such Holder is not an affiliate of the Company within the meaning of Rule 405
under the 1933 Act, acquires the Exchange Notes in the ordinary course of such
Holder's business and has no arrangements or understandings with any person to
participate in the Exchange Offer for the purpose of distributing the Exchange
Notes) to trade such Exchange Notes from and after their receipt without any
limitations or restrictions under the 1933 Act and without material restrictions
under the securities laws of a substantial proportion of the several states of
the United States. The Exchange Notes will be issued under the Indenture.
A-4
<PAGE> 33
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 30 days
after the date notice thereof is mailed to the Holders (or longer if
required by applicable law);
(iii) use the services of the Depositary for the Exchange
Offer with respect to Notes evidenced by global certificates;
(iv) permit Holders to withdraw tendered Registrable Notes at
any time prior to the close of business, New York City time, on the
last business day on which the Exchange Offer shall remain open, by
sending to the institution specified in the notice, a telegram, telex,
facsimile transmission or letter setting forth the name of such Holder,
the principal amount of Registrable Notes delivered for exchange, and a
statement that such Holder is withdrawing his election to have such
Notes exchanged; and
(v) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer,
the Company shall:
(i) accept for exchange Registrable Notes duly tendered and
not validly withdrawn pursuant to the Exchange Offer in accordance with
the terms of the Exchange Offer Registration Statement and the letter
of transmittal which is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Notes so accepted for exchange by the
Company; and
(iii) cause the Trustee promptly to authenticate and deliver
Exchange Notes to each Holder of Registrable Notes equal in amount to
the Registrable Notes of such Holder so accepted for exchange.
Interest on each Exchange Note will accrue from the last date
on which interest was paid on the Registrable Notes surrendered in exchange
therefor or, if no interest has been paid on the Registrable Notes, from July
20, 1998. The Exchange Offer shall not be subject to any conditions, other than
that the Exchange Offer, or the making of any exchange by a Holder, does not
violate applicable law or any applicable interpretation of the Staff of the SEC.
Each Holder of Registrable Notes (other than Participating Broker-Dealers) who
wishes to exchange such Registrable Notes for Exchange Notes in the Exchange
Offer shall have represented that (i) any Exchange Notes to be received by it
were acquired in the ordinary course of business, (ii) at the time of the
commencement of the Exchange Offer it has no arrangement with any person to
participate in the distribution (within the meaning of the 1933 Act) of the
Exchange Notes, (iii) it is not an affiliate (as defined in Rule 405 under the
1933 Act) of the Company, or if it is an affiliate it will comply with the
registration and prospectus delivery requirements of the 1933 Act to the extent
applicable and (iv) it is not acting on behalf of any person who could not make
the
A-5
<PAGE> 34
representations in clauses (i) through (iii). The Company shall inform the
Initial Purchasers of the names and addresses of the Holders to whom the
Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders and otherwise facilitate the tender of Registrable Notes in
the Exchange Offer.
(b) Shelf Registration. (i) If, because of any change in law
or applicable interpretations thereof by the Staff of the SEC, the Company is
not permitted to effect the Exchange Offer as contemplated by Section 2(a)
hereof, or (ii) if for any other reason the Exchange Offer cannot be consummated
within 210 calendar days following the Closing Time, or (iii) if any Holder
(other than an Initial Purchaser) is not eligible to participate in the Exchange
Offer or (iv) upon the request of any Initial Purchaser (with respect to any
Registrable Notes which it acquired directly from the Company) following the
consummation of the Exchange Offer if any such Initial Purchaser shall hold
Registrable Notes which it acquired directly from the Company and if such
Initial Purchaser is not permitted, in the opinion of counsel to such Initial
Purchaser, pursuant to applicable law or applicable interpretation of the Staff
of the SEC to participate in the Exchange Offer, the Company shall, at its cost:
(A) as promptly as practicable, and in any event within 60
days after the date on which such filing obligation arises, file with
the SEC a Shelf Registration Statement relating to the offer and sale
of the then outstanding Registrable Notes by the Holders from time to
time in accordance with the methods of distribution elected by the
Majority Holders of such Registrable Notes and set forth in such Shelf
Registration Statement, and use its best efforts to cause such Shelf
Registration Statement to be declared effective by the SEC on or prior
to 45 days after the date on which such filing occurs.
(B) use its best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of two years
after the Closing Time or such shorter period which will terminate when
all of the Registrable Notes covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement
or all of the Registrable Notes become eligible for resale pursuant to
Rule 144 under the 1933 Act without volume restrictions; and
(C) notwithstanding any other provisions hereof, use its best
efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming a part thereof and any
supplement thereto complies in all material respects with the 1933 Act
and the rules and regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) any Prospectus
forming part of any Shelf Registration Statement, and any supplement to
such Prospectus (as amended or supplemented from time to time), does
not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements, in light of
the circumstances under which they were made, not misleading.
The Company further agrees, if necessary, to supplement or
amend the Shelf Registration Statement if reasonably requested by the Majority
Holders with respect to
A-6
<PAGE> 35
information relating to the Holders and otherwise as required by Section 3(b)
below, to use all reasonable efforts to cause any such amendment to become
effective and such Shelf Registration to become usable as soon as practicable
thereafter and to furnish to the Holders of Registrable Notes copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.
(c) Expenses. The Company shall pay all Registration Expenses
in connection with the registration pursuant to Section 2(a) and 2(b). Each
Holder shall pay all expenses of its counsel other than as set forth in the
preceding sentence, underwriting discounts and commissions (prior to the
reduction thereof with respect to selling concessions, if any) and transfer
taxes, if any, relating to the sale or disposition of such Holder's Registrable
Notes pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. (i) The Company will be
deemed not to have used its best efforts to cause a Registration Statement to
become, or to remain, effective during the requisite period if the Company
voluntarily takes any action that would result in any such Registration
Statement not being declared effective or in the Holders of Registrable Notes
covered thereby not being able to exchange or offer and sell such Registrable
Notes during that period unless (A) such action is required by applicable law or
(B) such action is taken by the Company in good faith and for valid business
reasons (but not including avoidance of the Company's obligations hereunder),
including a material corporate transaction, so long as the Company promptly
complies with the requirements of Section 3(k) hereof, if applicable.
(ii) An Exchange Offer Registration Statement pursuant to
Section 2(a) hereof or a Shelf Registration Statement pursuant to
Section 2(b) hereof will not be deemed to have become effective unless
it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable Notes
pursuant to a Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be
deemed not to have been effective during the period of such
interference, until the offering of Registrable Notes pursuant to such
Registration Statement may legally resume.
(e) Increase in Interest Rate. In the event that either (i)
the Exchange Offer Registration Statement is not filed with the Commission on or
prior to the 60th calendar day following the Closing Time, or (ii) the Exchange
Offer Registration Statement is not declared effective on or prior to the 180th
calendar day following the Closing Time, or (iii) the Exchange Offer is not
consummated on or prior to the 210th calendar day following the Closing Time or
a Shelf Registration Statement with respect to the Registrable Notes is not
declared effective on or prior to the 210th calendar day following the Closing
Time, or (iv) either (A) the Exchange Offer Registration Statement ceases to be
effective at any time prior to the time that the Exchange Offer is consummated
or (B) if applicable, the Shelf Registration Statement has been declared
effective and such Shelf Registration Statement ceases to be effective at any
time prior to the second anniversary of the Closing Time, the interest rate
borne by the Notes shall be increased by 25 basis points per annum following
such 60-day period in the case of clause (i) above, following such 180-day
period in the case of clause (ii) above, following such 30-day period in the
case of clause (iii) above, or immediately in the case of clause (iv) above,
which rate will be
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increased by an additional 25 basis points per annum for each 30-day period that
any such additional interest continues to accrue in the case of clauses (i),
(ii) and (iii) above or for each 90-day period that any such additional interest
continues to accrue in the case of clause (iv) above, provided that the
aggregate per annum increase in such interest rate will in no event exceed 150
basis points. Upon (x) the filing of the Exchange Offer Registration Statement
after the 60-day period described in clause (i) above, (y) the consummation of
the Exchange Offer or the effectiveness of a Shelf Registration Statement, as
the case may be, after the 210-day period described in clause (iii) above, as
the case may be, or (z) the effectiveness of the Exchange Offer Registration
Statement or the Shelf Registration Statement following an event described in
clause (iv) above, the interest rate borne by the Notes from the date of such
filing, effectiveness or consummation, as the case may be, will be reduced to
the original interest rate if the Company is otherwise in compliance with this
paragraph; provided, however, that, if after any such reduction in interest
rate, a different event specified in clauses (i), (ii), (iii) or (iv) above
occurs, the interest rate will again be increased and thereafter reduced
pursuant to the foregoing conditions. If the Company issues a notice that the
Shelf Registration Statement is unusable pending the announcement of a material
corporate transaction or otherwise pursuant to Section 3(k) hereof, or such a
notice is required under applicable securities laws to be issued by the Company,
and the aggregate number of days in any consecutive twelve-month period for
which all such notices are issued or required to be issued exceeds 30 days in
the aggregate, then the interest rate borne by the Notes will be increased by 25
basis points per annum following the date that such Shelf Registration Statement
ceases to be usable beyond the 30-day period permitted above, which rate shall
be increased by an additional 25 basis points per annum for each 90-day period
that such additional interest continues to accrue; provided that the aggregate
increase in such annual interest rate may in no event exceed 150 basis points.
Upon the Company declaring that the Shelf Registration Statement is usable after
the interest rate has been increased pursuant to the preceding sentence, the
interest rate borne by the Notes will be reduced to the original interest rate
if the Company is otherwise in compliance with this paragraph; provided,
however, that if after any such reduction in interest rate the Shelf
Registration Statement again ceases to be usable beyond the period permitted
above, the interest rate will again be increased and thereafter reduced pursuant
to the foregoing provisions.
(f) Specific Enforcement. Without limiting the remedies
available to the Initial Purchasers and the Holders, the Company acknowledges
that any failure by the Company to comply with its respective obligations under
Sections 2(a) and 2(b) hereof may result in material irreparable injury to the
Initial Purchasers or the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, the Initial Purchasers or any Holder may
obtain such relief as may be required to specifically enforce the Company's
obligations under Sections 2(a) and 2(b) hereof.
3. Registration Procedures. In connection with the obligations
of the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement,
within the time period specified in Section 2, on the appropriate form
under the 1933 Act, which form (i) shall be selected by the Company,
(ii) shall, in the case of a Shelf Registration, be
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available for the sale of the Registrable Notes by the selling Holders
thereof and (iii) shall comply as to form in all material respects
with the requirements of the applicable form and include or
incorporate by reference all financial statements required by the SEC
to be filed therewith, and use its best efforts to cause such
Registration Statement to become effective and remain effective in
accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to (i) the Exchange Offer Registration
Statement as may be necessary under applicable law to keep such
Exchange Offer Registration Statement effective for the period required
to comply with Section 2(a) (except to the extent the Company is unable
to consummate the Exchange Offer and the Company complies with Section
2(b), subject in all respects to Section 3(f) hereof), and (ii) the
Shelf Registration Statement as may be necessary under applicable law
to keep such Shelf Registration Statement effective for the period
required pursuant to Section 2(b) hereof; cause each Prospectus to be
supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the 1933 Act; and
comply with the provisions of the 1933 Act with respect to the
disposition of all securities covered by each Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Notes, at least ten days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Notes is
being filed and advising such Holders that the distribution of
Registrable Notes will be made in accordance with the method elected by
the Majority Holders; and (ii) furnish to each Holder of Registrable
Notes, to counsel for the Initial Purchasers, to counsel for the
Holders and to each underwriter of an underwritten offering of
Registrable Notes, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or
underwriter may reasonably request, including financial statements and
schedules and, if the Holder so requests, all exhibits (including those
incorporated by reference) in order to facilitate the public sale or
other disposition of the Registrable Notes; and (iii) subject to the
last paragraph of Section 3, hereby consent to the use of the
Prospectus, including each preliminary Prospectus, or any amendment or
supplement thereto by each of the selling Holders of Registrable Notes
in connection with the offering and sale of the Registrable Notes
covered by the Prospectus or any amendment or supplement thereto;
(d) use its best efforts to register or qualify the
Registrable Notes under all applicable state securities or "blue sky"
laws of such jurisdictions as any Holder of Registrable Notes covered
by a Registration Statement and each underwriter of an underwritten
offering of Registrable Notes shall reasonably request by the time the
applicable Registration Statement is declared effective by the SEC, to
cooperate with the Holders in connection with any filings required to
be made with the NASD, keep each such registration or qualification
effective during the period such Registration Statement is required to
be effective and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate
the disposition in each such jurisdiction of such Registrable Notes
owned by such Holder; provided,
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however, that the Company shall not be required to (i) qualify as a
foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to qualify but for this
Section 3(d) or (ii) take any action which would subject it to general
service of process or taxation in any such jurisdiction if it is not
then so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Notes and counsel for such Holders promptly and, if
requested by such Holder or counsel, confirm such advice in writing
promptly (i) when a Registration Statement has become effective and
when any post-effective amendments and supplements thereto become
effective, (ii) of any request by the SEC or any state securities
authority for post-effective amendments and supplements to a
Registration Statement and Prospectus or for additional information
after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) if, between the
effective date of a Registration Statement and the closing of any sale
of Registrable Notes covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating
to such offering cease to be true and correct in all material respects,
(v) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Notes for sale
in any jurisdiction or the initiation or threatening of any proceeding
for such purpose, (vi) of the happening of any event or the discovery
of any facts during the period a Shelf Registration Statement is
effective which makes any statement made in such Shelf Registration
Statement or the related Prospectus untrue in any material respect or
which requires the making of any changes in such Shelf Registration
Statement or Prospectus in order to make the statements therein not
misleading and (vii) of any determination by the Company that a
post-effective amendment to a Registration Statement would be
appropriate;
(f) (A) in the case of the Exchange Offer, (i) include in the
Exchange Offer Registration Statement a "Plan of Distribution" section
covering the use of the Prospectus included in the Exchange Offer
Registration Statement by broker-dealers who have exchanged their
Registrable Notes for Exchange Notes for the resale of such Exchange
Notes, (ii) furnish to each broker-dealer who desires to participate in
the Exchange Offer, without charge, as many copies of each Prospectus
included in the Exchange Offer Registration Statement, including any
preliminary prospectus, and any amendment or supplement thereto, as
such broker-dealer may reasonably request, (iii) include in the
Exchange Offer Registration Statement a statement that any
broker-dealer who holds Registrable Notes acquired for its own account
as a result of market-making activities or other trading activities (a
"Participating Broker-Dealer"), and who receives Exchange Notes for
Registrable Notes pursuant to the Exchange Offer, may be a statutory
underwriter and must deliver a prospectus meeting the requirements of
the 1933 Act in connection with any resale of such Exchange Notes, (iv)
subject to the last paragraph of Section 3, hereby consent to the use
of the Prospectus forming part of the Exchange Offer Registration
Statement or any amendment or supplement thereto, by any broker-dealer
in connection with the sale or transfer of the Exchange Notes covered
by the Prospectus or any amendment or supplement thereto, and (v)
include in the transmittal letter or similar
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<PAGE> 39
documentation to be executed by an exchange offeree in order to
participate in the Exchange Offer (x) the following provision:
"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 Exchange Notes. If the
undersigned is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Registrable Notes,
it represents that the Registrable Notes to be exchanged for
Exchange Notes were acquired by it as a result of
market-making activities or other trading activities and
acknowledges that it will deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of
such Exchange Notes pursuant to the Exchange Offer; 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 1933 Act"; and
(y) a statement to the effect that by a broker-dealer making the acknowledgment
described in subclause (x) and by delivering a Prospectus in connection with the
exchange of Registrable Securities, the broker-dealer will not be deemed to
admit that it is an underwriter within the meaning of the 1933 Act; and
(B) to the extent any Participating Broker-Dealer participates
in the Exchange Offer, the Company shall use its best efforts to cause
to be delivered at the request of an entity representing the
Participating Broker-Dealers (which entity shall be one of the Initial
Purchasers, unless it elects not to act as such representative) only
one, if any, "cold comfort" letter with respect to the Prospectus in
the form existing on the last date for which exchanges are accepted
pursuant to the Exchange Offer and with respect to each subsequent
amendment or supplement, if any, effected during the period specified
in clause (C) below; and
(C) to the extent any Participating Broker-Dealer participates
in the Exchange Offer, the Company shall use its best efforts to
maintain the effectiveness of the Exchange Offer Registration Statement
for a period of 180 days following the closing of the Exchange Offer
and make available the Prospectus to any Participating Broker-Dealer;
and
(D) the Company shall not be required to amend or supplement
the Prospectus contained in the Exchange Offer Registration Statement
as would otherwise be contemplated by Section 3(b), or take any other
action as a result of this Section 3(f), for a period exceeding 180
days after the last date for which exchanges are accepted pursuant to
the Exchange Offer (as such period may be extended by the Company) and
Participating Broker-Dealers shall not be authorized by the Company to,
and shall not, deliver such Prospectus after such period in connection
with resales contemplated by this Section 3.
(g) (A) in the case of an Exchange Offer, furnish counsel for
the Initial Purchasers and (B) in the case of a Shelf Registration,
furnish counsel for the Holders of
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<PAGE> 40
Registrable Notes copies of any request by the SEC or any state
securities authority for amendments or supplements to a Registration
Statement and Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement as
soon as practicable and provide immediate notice to each Holder of the
withdrawal of any such order;
(i) in the case of a Shelf Registration, furnish to each
Holder of Registrable Notes, without charge, at least one conformed
copy of each Registration Statement and any post-effective amendment
thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(j) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Notes to facilitate the timely
preparation and delivery of certificates representing Registrable Notes
to be sold and not bearing any restrictive legends; and cause such
Registrable Notes to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the
selling Holders or the underwriters, if any, may reasonably request at
least one business day prior to the closing of any sale of Registrable
Notes;
(k) in the case of a Shelf Registration, upon the occurrence
of any event or the discovery of any facts, each as contemplated by
Section 3(e)(vi) hereof, use its best efforts to prepare a supplement
or post-effective amendment to a Registration Statement or the related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of the Registrable Notes, such Prospectus will not contain
at the time of such delivery any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading. The Company agrees to notify each Holder to suspend use of
the Prospectus as promptly as practicable after the occurrence of such
an event, and each Holder hereby agrees to suspend use of the
Prospectus until the Company has amended or supplemented the Prospectus
to correct such misstatement or omission. At such time as such public
disclosure is otherwise made or the Company determines that such
disclosure is not necessary, in each case to correct any misstatement
of a material fact or to include any omitted material fact, the Company
agrees promptly to notify each Holder of such determination and to
furnish each Holder such numbers of copies of the Prospectus, as
amended or supplemented, as such Holder may reasonably request;
(l) obtain a CUSIP number for all Exchange Notes, or
Registrable Notes, as the case may be, not later than the effective
date of a Registration Statement, and provide the Trustee with printed
certificates for the Exchange Notes or the Registrable Notes, as the
case may be, in a form eligible for deposit with the Depositary;
(m) (i) cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Notes, or Registrable Notes, as the case
may be, (ii) cooperate with the Trustee and the Holders
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to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA
and (iii) execute, and use its best efforts to cause the Trustee to
execute, all documents as may be required to effect such changes, and
all other forms and documents required to be filed with the SEC to
enable the Indenture to be so qualified in a timely manner;
(n) in the case of a Shelf Registration, enter into agreements
(including underwriting agreements) and take all other customary and
appropriate actions (including those reasonably requested by the
Majority Holders) in order to expedite or facilitate the disposition of
such Registrable Notes and in such connection whether or not an
underwriting agreement is entered into and whether or not the
registration is an underwritten registration:
(i) make such representations and warranties to
the Holders of such Registrable Notes and
the underwriters, if any, in form, substance
and scope as are customarily made by issuers
to underwriters in similar underwritten
offerings as may be reasonably requested by
them;
(ii) obtain opinions of counsel to the Company
and updates thereof (which counsel and
opinions (in form, scope and substance)
shall be reasonably satisfactory to the
managing underwriters, if any, and the
holders of a majority in principal amount of
the Registrable Notes being sold) addressed
to each selling Holder and the underwriters,
if any, covering the matters customarily
covered in opinions requested in sales of
securities or underwritten offerings;
(iii) obtain "cold comfort" letters and updates
thereof from the Company's independent
certified public accountants addressed to
the underwriters, if any, and use best
efforts to have such letters addressed to
the selling Holders of Registrable Notes,
such letters to be in customary form and
covering matters of the type customarily
covered in "cold comfort" letters to
underwriters in connection with similar
underwritten offerings;
(iv) enter into a securities sales agreement with
the Holders and an agent of the Holders
providing for, among other things, the
appointment of such agent for the selling
Holders for the purpose of soliciting
purchases of Registrable Notes, which
agreement shall be in form, substance and
scope customary for similar offerings; and
(v) deliver such documents and certificates as
may be reasonably requested and as are
customarily delivered in similar offerings.
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The above shall be done at (i) the effectiveness of such Shelf
Registration Statement (and, if appropriate, each post-effective
amendment thereto) and (ii) each closing under any underwriting or
similar agreement as and to the extent required thereunder. In the case
of any underwritten offering, the Company shall provide written notice
to the Holders of all Registrable Notes of such underwritten offering
at least 30 days (or such shorter, reasonable time period as is
practicable) prior to the filing of a prospectus supplement for such
underwritten offering. Such notice shall (x) if satisfactory to the
investment banker or manager of such underwritten offering, offer each
such Holder the right to participate in such underwritten offering, (y)
specify a date, which shall be no earlier than 10 days following the
date of such notice, by which such Holder must inform the Company of
its intent to participate in such underwritten offering and (z) include
the instructions such Holder must follow in order to participate in
such underwritten offering;
(o) in the case of a Shelf Registration, make available for
inspection by representatives of the Holders of the Registrable Notes
and any underwriters participating in any disposition pursuant to a
Shelf Registration Statement and any counsel or accountant retained by
such Holders or underwriters, at reasonable times and in a reasonable
manner, all financial and other records, pertinent corporate documents
and properties of the Company reasonably requested by any such persons,
and cause the respective officers, directors, employees, and any other
agents of the Company to supply all information reasonably requested by
any such representative, underwriter, special counsel or accountant in
connection with such Shelf Registration Statement, provided, however,
that such Persons shall first agree in writing with the Company that
any information that is reasonably and in good faith designated by the
Company in writing as confidential at the time of delivery of such
information shall be kept confidential by such Persons, unless (i)
disclosure of such information is required by court or administrative
order or is necessary to respond to inquiries of regulatory
authorities, (ii) disclosure of such information is required by law
(including any disclosure requirements pursuant to Federal securities
laws in connection with the filing of such Shelf Registration Statement
or the use of any Prospectus), (iii) such information becomes generally
available to the public other than as a result of a disclosure or
failure to safeguard such information by such Person or (iv) such
information becomes available to such Person from a source other than
the Company and its subsidiaries and such source is not bound by a
confidentiality agreement; provided, further, that the foregoing
investigation shall be coordinated on behalf of the Holders by one
representative designated by and on behalf of such Holders and any such
confidential information shall be available from such representative to
such Holders so long as any Holder agrees to be bound by such
confidentiality agreement;
(p) (i) a reasonable time prior to the filing of any Exchange
Offer Registration Statement, any Prospectus forming a part thereof,
any amendment to an Exchange Offer Registration Statement or amendment
or supplement to a Prospectus, provide copies of such document to the
Initial Purchasers, and make such changes in any such document prior to
the filing thereof as any of the Initial Purchasers or their counsel
may reasonably request; (ii) in the case of a Shelf Registration, a
reasonable time prior to filing any Shelf Registration Statement, any
Prospectus forming a part thereof, any amendment to such Shelf
Registration Statement or amendment or supplement to such
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Prospectus, provide copies of such document to the Holders of
Registrable Notes, to the Initial Purchasers, to counsel on behalf of
the Holders and to the underwriter or underwriters of an underwritten
offering of Registrable Notes, if any, and make such changes in any
such document prior to the filing thereof as the Holders of
Registrable Notes, the Initial Purchasers on behalf of such Holders,
their counsel and any underwriter may reasonably request; and (iii)
cause the representatives of the Company to be available for
discussion of such document as shall be reasonably requested by the
Holders of Registrable Notes, the Initial Purchasers on behalf of such
Holders or any underwriter and shall not at any time make any filing
of any such document of which such Holders, the Initial Purchasers on
behalf of such Holders, their counsel or any underwriter shall not
have previously been advised and furnished a copy or to which such
Holders, the Initial Purchasers on behalf of such Holders, their
counsel or any underwriter shall reasonably object, each of which
actions in this clause (iii) by the Holders shall be coordinated by
one representative for all the Holders at reasonable times and in a
reasonable manner;
(q) in the case of a Shelf Registration, use its best efforts
to cause all Registrable Securities to be listed on any securities
exchange on which similar debt securities issued by the Company are
then listed if requested by the Majority Holders or by the underwriter
or underwriters of an underwritten offering of Registrable Securities,
if any;
(r) in the case of a Shelf Registration, unless the rating in
effect for the Notes applies to the Exchange Notes and the Notes to be
sold pursuant to a Shelf Registration, use its best efforts to cause
the Registrable Notes to be rated with the appropriate rating agencies,
if so requested by the Majority Holders or by the underwriter or
underwriters of an underwritten offering of Registrable Notes, if any,
unless the Registrable Notes are already so rated;
(s) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering at least 12 months which shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;
and
(t) cooperate and assist in any filings required to be made
with the NASD.
In the case of a Shelf Registration Statement, the Company may
(as a condition to such Holder's participation in the Shelf Registration)
require each Holder of Registrable Notes to furnish to the Company such
information regarding such Holder and the proposed distribution by such Holder
of such Registrable Notes and make such representations, in each case, as the
Company may from time to time reasonably request in writing.
In the case of a Shelf Registration Statement, each Holder
agrees that, upon receipt of any notice from the Company of the happening of any
event or the discovery of any facts, each of the kind described in Section
3(e)(ii)-(vi) hereof, such Holder will forthwith discontinue disposition of
Registrable Notes pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
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Section 3(k) hereof, and, if so directed by the Company, such Holder will
deliver to the Company (at the Company's expense) all copies in its possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Notes current at the time of receipt of
such notice. If the Company shall give any such notice to suspend the
disposition of Registrable Notes pursuant to a Shelf Registration Statement as a
result of the happening of any event or the discovery of any facts, each of the
kind described in Section 3(e)(vi) hereof, the Company shall be deemed to have
used its best efforts to keep the Shelf Registration Statement effective during
such period of suspension provided that the Company shall use its best efforts
to file and have declared effective (if an amendment) as soon as practicable an
amendment or supplement to the Shelf Registration Statement and shall extend the
period during which the Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from and
including the date of the giving of such notice to and including the date when
the Holders shall have received copies of the supplemented or amended Prospectus
necessary to resume such dispositions.
4. Underwritten Registrations. If any of the Registrable Notes
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Majority Holders of such Registrable
Notes included in such offering and shall be reasonably acceptable to the
Company.
No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Notes on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
5. Indemnification and Contribution. (a) The Company and each
Subsidiary, jointly and severally, agree to indemnify and hold harmless each
Holder and each person, if any, who controls any Holder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any losses,
claims, damages or liabilities, joint or several, to which such Holder or such
controlling person may become subject under the 1933 Act, the 1934 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by
the Company in Section 1 of the Purchase Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) any Registration Statement or Prospectus
or any amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the
Registrable Notes or Exchange Notes under the securities or blue sky
laws thereof or filed with the SEC or any securities association or
securities exchange (each an "Application"),
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<PAGE> 45
(iii) the omission or alleged omission to state in any
Registration Statement or Prospectus or any amendment or supplement
thereto, or any Application a material fact required to be stated
therein or necessary to make the statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used by the
Company in connection with the marketing of the Registrable Notes or
Exchange Notes, including without limitation, slides, videos, films and
tape recordings,
and will reimburse, as incurred, each Holder and each such controlling person
for any legal or other expenses reasonably incurred by such Holder or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and each
Subsidiary, jointly and severally, will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in any Registration Statement or Prospectus or any amendment or
supplement thereto or any Application in reliance upon and in conformity with
written information relating to any Holder furnished to the Company by such
Holder specifically for use therein. This indemnity agreement will be in
addition to any liability which the Company and each Subsidiary, jointly and
severally, may otherwise have. The Company will not, without the prior written
consent of each Holder, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
Holder or any person who controls any such Holder within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or consent
includes an unconditional release of all of such Holders and such controlling
persons from all liability arising out of such claim, action, suit or
proceeding.
(b) Each Holder, severally and not jointly, agrees, by
acquiring any Notes, to indemnify and hold harmless the Company, each of its
directors, each of its executive officers and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any losses, claims, damages or liabilities to which the
Company, any such director, officer or controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement or Prospectus or any amendment or supplement
thereto or any Application or (ii) the omission or alleged omission to state
therein a material fact required to be stated in any Registration Statement or
Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information relating to any Holder furnished to the
Company by such Holder specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
A-17
<PAGE> 46
defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 5, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 5. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 5 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by such Holder in the case of paragraph
(a) of this Section 5, representing the indemnified parties under such paragraph
(a) who are parties to such action or actions) or (ii) the indemnifying party
does not promptly retain counsel satisfactory to the indemnified party or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 5 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one
A-18
<PAGE> 47
hand and the indemnified party on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and each Subsidiary on the one hand and the Initial Purchasers on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by such Holder. The
relative fault of the parties 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 or such Holder, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Company, each Subsidiary and each Holder agree that it would
not be equitable if the amount of such contribution were determined by pro rata
or per capita allocation or by any other method of allocation that does not take
into account the equitable considerations referred to above in this paragraph
(d). Notwithstanding any other provision of this paragraph (d), no Holder shall
be obligated to make contributions hereunder that in the aggregate exceed the
total public offering price of the Securities purchased by such Holder under
this Agreement, less the aggregate amount of any damages that such Holder has
otherwise been required to pay in respect of the same or any substantially
similar claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), each person, if any, who controls a Holder within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as such Holder, and each director of the
Company, each officer of the Company who signed the Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, shall have the same rights to
contribution as the Company.
(e) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of this Section 5, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 5
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Offering Memorandum as required by the 1933 Act. The parties are advised
that federal or state policy, as interpreted by the courts in certain
jurisdictions, may be contrary to certain provisions of this Section 5, and the
parties hereto hereby expressly waive and relinquish any right or ability to
assert such public policy as a defense to a claim under this Section 5 and
further agree not to attempt to assert any such defense.
6. Miscellaneous. (a) Rule 144 and Rule 144A. For so long as
the Company is subject to the reporting requirements of Section 13 or 15 of the
1934 Act, the Company covenants that it will file the reports required to be
filed by it under Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder. The Company further covenants that if
it ceases to be so required to file such reports, it will upon the request of
any Holder of Registrable Notes (i) make publicly available such information as
is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (ii)
deliver such information to a
A-19
<PAGE> 48
prospective purchaser as is necessary to permit sales pursuant to Rule 144A
under the 1933 Act and it will take such further action as any Holder of
Registrable Notes may reasonably request, and (iii) take such further action
that is reasonable in the circumstances, in each case, to the extent required
from time to time to enable such Holder to sell its Registrable Notes without
registration under the 1933 Act within the limitation of the exemptions provided
by (x) Rule 144 under the 1933 Act, as such Rule may be amended from time to
time, (y) Rule 144A under the 1933 Act, as such Rule may be amended from time to
time, or (z) any similar rules or regulations hereafter adopted by the SEC. Upon
the request of any Holder of Registrable Notes, the Company will deliver to such
Holder a written statement as to whether it has complied with such requirements.
(b) No Inconsistent Agreements. The Company has not entered
into nor will the Company on or after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Notes 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
Company's other issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Notes affected by such amendment, modification, supplement, waiver
or departure; provided, however, that no amendment, modification, supplement or
waiver or consent to any departure from the provisions of Section 5 hereof shall
be effective as against any Holder of Registrable Notes unless consented to in
writing by such Holder.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or any courier guaranteeing overnight delivery (i)
if to a Holder (other than an Initial Purchaser), at the most current address
set forth on the records of the Registrar under the Indenture, (ii) if to an
Initial Purchaser, at the most current address given by such Initial Purchaser
to the Company by means of a notice given in accordance with the provisions of
this Section 6(d), which address initially is the address set forth in the
Purchase Agreement; and (iii) if to the Company, initially at the Company's
address set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 6(d).
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 is acknowledged, if telecopied; and on the next business day if
timely delivered to an air courier guaranteeing overnight delivery.
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.
A-20
<PAGE> 49
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Registrable Notes, in
any manner, whether by operation of law or otherwise, such Registrable Notes
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Notes, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. Each of the Holders shall be
third party beneficiaries to the agreements made hereunder between the Company
on the one hand, and the Initial Purchasers, on the other hand, and shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) 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.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAWS PROVISIONS.
(j) 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.
A-21
<PAGE> 50
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
EAGLE GEOPHYSICAL, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL ONSHORE, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL GOM, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL OFFSHORE, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL LEASING, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL DE MEXICO, INC.
By:
-----------------------------------
Name:
Title:
A-22
<PAGE> 51
EAGLE FRONT END SERVICES, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL MANAGEMENT, INC.
By:
-----------------------------------
Name:
Title:
EAGLE FRONT END SERVICES, LTD.
By: Eagle Geophysical Management, Inc.,
its General Partner
By:
-----------------------------------
Name:
Title:
AUSTRAL HORIZON, INC.
By:
-----------------------------------
Name:
Title:
ATLANTIC HORIZON, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL DE COLOMBIA, INC.
By:
-----------------------------------
Name:
Title:
A-23
<PAGE> 52
Confirmed and accepted as of
the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By:
----------------------------------
Authorized Signatory
BANC ONE CAPITAL MARKETS, INC.
By:
----------------------------------
Authorized Signatory
A-24
<PAGE> 53
SCHEDULE I
Certain Subsidiaries of the Company
<TABLE>
<CAPTION>
Subsidiary: Formed In:
- ----------- ----------
<S> <C>
Eagle Geophysical Onshore, Inc. Delaware
Eagle Geophysical GOM, Inc. Texas
Eagle Geophysical Offshore, Inc Delaware
Eagle Geophysical Leasing, Inc. Delaware
Eagle Geophysical de Mexico, Inc Delaware
Eagle Front End Services, Inc Delaware
Eagle Geophysical Management, Inc. Delaware
Eagle Front End Services, Ltd. Texas
Austral Horizon, Inc. Delaware
Atlantic Horizon, Inc. Delaware
Eagle Geophysical de Colombia, Inc. Delaware
</TABLE>
Sch-1
<PAGE> 54
EXHIBIT B-1
FORM OF
OPINION OF GARDERE WYNNE SEWELL & RIGGS, L.L.P.
1. Each of the Company and its U.S. Subsidiaries has been duly
organized and is validly existing and in good standing under the laws of its
respective jurisdiction of incorporation, organization or formation, with full
power (corporate or otherwise) and authority to own, lease and operate its
properties and assets and conduct its business as described in the Offering
Memorandum. The Company has full power (corporate or otherwise) and authority to
issue, sell and deliver the Securities, to execute and deliver the Purchase
Agreement, the Registration Rights Agreement and the Indenture, and to perform
its obligations thereunder.
2. Each of the Company and its U.S. Subsidiaries is qualified
to transact business as a foreign corporation or limited partnership and is in
good standing in each other jurisdiction in which, to our knowledge, the
ownership or leasing of its property or the conduct of its business would make
such qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on the
condition, financial or otherwise, or on the assets, earnings, results of
operations, business affairs or business prospects of the Company and the U.S.
Subsidiaries taken as a whole (a "Material Adverse Effect").
3. All of the outstanding capital stock or partnership
interests of each of the U.S. Subsidiaries listed on Schedule I to the Purchase
Agreement are owned of record as set forth on Schedule I. Such capital stock is
owned free and clear of any perfected security interests or, to the best of our
knowledge, any other security interests, liens, encumbrances, equities, claims,
restrictions on transferability or voting, except as set forth in the Offering
Memorandum. Such partnership interests are owned, to the best of our knowledge,
free and clear of any security interests, liens, encumbrances, equities, claims,
restrictions on transferability or voting, except as set forth in the Offering
Memorandum.
4. All of the outstanding capital stock of the Company has
been duly authorized and validly issued, is fully paid and nonassessable and was
not issued in violation of any statutory preemptive or similar rights, or, to
our knowledge, in violation of any other preemptive or similar rights.
5. The execution and delivery of the Purchase Agreement have
been duly authorized by all necessary corporate action of the Company and the
Purchase Agreement has been duly executed and delivered by the Company.
6. The execution and delivery of the Indenture have been duly
authorized by the Company and the Subsidiary Guarantors thereto. The Indenture
has been duly executed and delivered by the Company and the Subsidiary
Guarantors thereto and assuming due execution and delivery thereof by the
Trustee, constitutes a legal, valid and binding obligation of each of the
Company and the
B-1
<PAGE> 55
Subsidiary Guarantors thereto, enforceable against the Company and the
Subsidiary Guarantors thereto in accordance with its terms, except as such
enforceability may be subject to the effect of any applicable bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar law affecting creditor's
rights generally and subject to the effect of general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
7. The issuance, execution and delivery of the Securities and
the Exchange Securities have been duly authorized by the Company. When executed,
authenticated, issued and delivered in the manner provided for in the Indenture
and sold and paid for as provided in the Purchase Agreement, the Securities will
constitute valid and binding obligations of the Company entitled to the benefits
of the Indenture and enforceable against the Company in accordance with their
terms, except as such enforceability may be subject to the effect of any
applicable bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar law
affecting creditor's rights generally and subject to the effect of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law). The Exchange Securities, when executed, authenticated, issued and
delivered in exchange for the Securities, will constitute valid and binding
obligations of the Company, entitled to the benefits of the Indenture,
enforceable against the Company in accordance with the terms thereof, except as
such enforceability may be subject to the effect of any applicable bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar law affecting creditor's
rights generally and subject to the effect of general principles of equity
(regardless of whether considered in a proceeding in equity or at law). The
Securities conform in all material respects to the description thereof in the
Offering Memorandum.
8. The execution and delivery of the Registration Rights
Agreement have been duly authorized by the Company and the Subsidiary Guarantors
thereto. The Registration Rights Agreement has been duly executed and delivered
by the Company and the Subsidiary Guarantors thereto and constitutes a legal,
valid and binding obligation of each of the Company and the Subsidiary
Guarantors thereto, enforceable against the Company and the Subsidiary
Guarantors in accordance with its terms, except to the extent that Section 5
thereof may be held to be unenforceable due to the Securities and Exchange
Commission's policies and except as such enforceability may be subject to the
effect of any applicable bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
similar law affecting creditor's rights generally and subject to the effect of
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).
9. No authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign (other
than under the 1933 Act and the 1934 Act, the Trust Indenture Act of 1939, and
the rules and regulations thereunder with respect to the Registration Rights
Agreement and the transactions contemplated thereunder and the securities or
"blue sky" laws of the various states, provided that we express no opinion as to
the requirements of such state securities or blue sky laws) is required for the
valid authorization, issuance, sale and delivery of the Securities, for the
execution, delivery or performance by the Company of the Purchase Agreement, the
Registration Rights Agreement, or the Indenture or for the consummation by the
Company of the transactions contemplated in the Purchase Agreement,
B-2
<PAGE> 56
the Registration Rights Agreement and the Offering Memorandum, except such of
the foregoing as have been obtained.
10. The execution and delivery by the Company of the Purchase
Agreement, the Registration Rights Agreement and the Indenture, the issuance,
sale and delivery of the Securities by the Company, the consummation by the
Company of the transactions contemplated in the Purchase Agreement, the
Registration Rights Agreement and the Offering Memorandum and the compliance by
the Company with the terms of the Purchase Agreement, the Registration Rights
Agreement and the Indenture do not and will not result in any violation of the
charter or by-laws of the Company, and do not and will not conflict with, or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any U.S. Subsidiary
under, (A) any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which the Company or any U.S. Subsidiary is a
party or by which they may be bound or to which any of their respective
properties may be subject and of which we have knowledge or (B) any existing
applicable law, rule or regulation (other than possible violations of state
securities or blue sky laws, as to which we express no opinion), or, to our
knowledge after having made inquiry of the Company, any judgment, order, writ,
injunction or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties, and which in the case of (A) or (B), could reasonably be expected to
have a Material Adverse Effect.
11. The Company is not an "investment company" or a company
controlled by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
12. Assuming (i) the accuracy of the representations and
warranties of the Initial Purchasers in Section 2 of the Purchase Agreement and
(ii) the due performance by the Initial Purchasers of the covenants and
agreements set forth in Section 2 of the Purchase Agreement, it is not necessary
in connection with the offer, sale and delivery of the Securities to the Initial
Purchasers under, or in connection with the initial resale of such Securities by
the Initial Purchasers in accordance with, the Purchase Agreement to register
the Securities under the Securities Act or to qualify the Indenture in respect
of the Securities under the Trust Indenture Act.
13. The statements made in the Offering Memorandum under the
caption "Certain Federal Income Tax Consequences," to the extent that they
constitute matters of law or legal conclusions, have been reviewed by us and
fairly present the information disclosed therein in all material respects.
14. The statements set forth in the Offering Memorandum under
the headings "Description of the Notes" and "Exchange Offer; Registration
Rights" insofar as such statements purport to summarize certain provisions of
the Securities, the Indenture and the Registration Rights Agreement, fairly and
accurately summarize such provisions in all material respects.
We have not independently verified the accuracy, completeness
or fairness of the statements made or the information contained in the Offering
Memorandum and, except with
B-3
<PAGE> 57
respect to the descriptions referred to in paragraphs 13 and 14 above, we are
not passing upon and do not assume any responsibility therefor. In the course of
the preparation by the Company of the Offering Memorandum, we have participated
in discussions with your representatives and those of the Company and its
independent accountants, in which the business and affairs of the Company and
the contents of the Offering Memorandum were discussed. On the basis of
information that we have gained in the course of our representation of the
Company in connection with its preparation of the Offering Memorandum and our
participation in the discussions referred to above, we have no reason to believe
that the Offering Memorandum (as supplemented or amended) as of its date or the
date hereof contained or contains any untrue statement of a material fact or
omitted 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. We express no opinion, however, as to the financial statements,
including the notes and schedules thereto, or any other financial or accounting
information set forth or referred to in the Offering Memorandum.
B-4
<PAGE> 1
EXHIBIT 12.1
EAGLE GEOPHYSICAL, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
($ IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months
Ended
June 30, Years Ended December 31,
----------------- ----------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------ ------ ------- ------ ------ ------ -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from continuing operations
before income tax expense, minority
interest and extraordinary gain ........... $4,839 $3,616 $ 7,394 $6,599 $2,536 $1,777 $1,390
Add
Portion of rents representative of
the interest factor ..................... 2,345 617 1,965 1,083 523 1,248 28
Interest on indebtedness inclusive of
amortization of deferred financing
charges ................................. 656 612 1,586 699 450 387 147
------ ------ ------- ------ ------ ------ ------
Income as adjusted ..................... $7,840 $4,845 $10,945 $8,381 $3,509 $3,412 $1,565
====== ====== ======= ====== ====== ====== ======
Fixed charges
Interest on indebtedness inclusive of
amortization of financing
charges ................................. $ 656 $ 612 $ 1,586 $ 699 $ 450 $ 387 $ 147
Interest capitalized ..................... -- -- -- -- -- -- --
Portion of rents representative
of the interest factor .................. 2,345 617 1,965 1,083 523 1,248 28
------ ------ ------- ------ ------ ------ ------
Fixed charges .......................... $3,001 $1,229 $ 3,551 $1,782 $ 973 $1,635 $ 175
------ ------ ------- ------ ------ ------ ------
Ratio of earnings to fixed charges ......... 2.61 3.94 3.08 4.70 3.61 2.09 8.94
====== ====== ======= ====== ====== ====== ======
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report included in this registration statement and to the incorporation by
reference in this registration statement of our report dated March 6, 1998
included in Eagle Geophysical, Inc.'s annual report on Form 10-K for the year
ended December 31, 1997 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
Houston, Texas
September 18, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
February 26, 1998 included in Eagle Geophysical, Inc.'s annual report on Form
10-K for the year ended December 31, 1997, and to all references to our firm
included in this registration statement.
/s/ KPMG
KPMG
Plymouth, England
September 18, 1998
<PAGE> 1
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) ____
-----------------------
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
74-0800980
(I.R.S. Employer Identification Number)
712 MAIN STREET, HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip code)
LEE BOOCKER, 712 MAIN STREET, 26TH FLOOR
HOUSTON, TEXAS 77002 (713) 216-2448
(Name, address and telephone number of agent for service)
EAGLE GEOPHYSICAL, INC.
(Exact name of obligor as specified in its charter)
SEE TABLE OF ADDITIONAL OBLIGORS BELOW
DELAWARE 76-0522659
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification Number)
50 BRIAR HOLLOW LANE, 6TH FLOOR, WEST BUILDING
HOUSTON, TEXAS 77027
(Address of principal executive offices) (Zip code)
10 3/4% SENIOR NOTES DUE 2008
(Title of indenture securities)
===============================================================================
<PAGE> 2
TABLE OF ADDITIONAL OBLIGORS
<TABLE>
<CAPTION>
ADDRESS, INCLUDING ZIP
CODE, AND TELEPHONE
NUMBER, INCLUDING AREA
STATE OR OTHER CODE, OF REGISTRANT'S
JURISDICTION OF IRS EMPLOYER PRINCIPAL EXECUTIVE
NAME INCORPORATION ID NO. OFFICES
---- ------------- ------------ -----------------------
<S> <C> <C> <C>
Eagle Geophysical Onshore, Inc. Delaware 76-0522657 *
Eagle Geophysical Offshore, Inc. Delaware 76-0555183 *
Eagle Geophysical Royalty, Inc. Delaware 76-0555184 *
(f/k/a Eagle Geophysical Leasing, Inc.)
Eagle Geophysical de Mexico, Inc. Delaware 76-0547307 *
Eagle Front End Services, Inc. Delaware 76-0566426 *
Eagle Geophysical Management, Inc. Delaware 76-0566429 *
Eagle Geophysical de Columbia, Inc. Delaware Applied for *
Austral Horizon, Inc. Delaware Applied for *
Atlantic Horizon, Inc. Delaware Applied for *
Eagle Geophysical GOM, Inc. Texas 76-0405274 *
Eagle Front End Services, Ltd. Texas 76-0566434 *
Eagle Geophysical de Bolivia, Inc. Delaware Applied for *
Eagle Geophysical de Ecuador, Inc. Delaware Applied for *
</TABLE>
* 50 Briar Hollow Lane, 6th Floor, West Building, Houston, Texas 77027
Telephone: (713) 881-2800
<PAGE> 3
ITEM 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.
Comptroller of the Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System, Washington,
D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
The obligor is not an affiliate of the trustee.
(See Note on Page 7.)
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING
SECURITIES OF THE TRUSTEE.
COL. A COL. B
TITLE OF CLASS AMOUNT OUTSTANDING
-------------- ------------------
Not applicable by virtue of Form T-1 General Instruction B
and response to Item 13.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER
WHICH ANY OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY
OTHER SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING
INFORMATION:
(a) TITLE OF THE SECURITIES OUTSTANDING UNDER EACH SUCH
OTHER INDENTURE.
Not applicable by virtue of Form T-1 General Instruction B
and response to Item 13.
1
<PAGE> 4
ITEM 4. (CONTINUED)
(b) A BRIEF STATEMENT OF THE FACTS RELIED UPON AS A BASIS FOR
THE CLAIM THAT NO CONFLICTING INTEREST WITHIN THE MEANING OF
SECTION 310(B)(1) OF THE ACT ARISES AS A RESULT OF THE
TRUSTEESHIP UNDER ANY SUCH OTHER INDENTURE, INCLUDING A
STATEMENT AS TO HOW THE INDENTURE SECURITIES WILL RANK AS
COMPARED WITH THE SECURITIES ISSUED UNDER SUCH OTHER
INDENTURE.
Not applicable by virtue of Form T-1 General Instruction B
and response to Item 13.
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH OBLIGOR OR
UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICER OF
THE TRUSTEE IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR
REPRESENTATIVE OF THE OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY
EACH SUCH PERSON HAVING ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH
CONNECTION.
Not applicable by virtue of Form T-1 General Instruction B
and response to Item 13.
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES
OF THE TRUSTEE OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER AND
EXECUTIVE OFFICER OF THE OBLIGOR.
<TABLE>
<S> <C> <C> <C>
COL. A COL. B COL. C COL. D
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COL. C
------------- -------------- ------------ -----------------
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
2
<PAGE> 5
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES
OF THE TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH
DIRECTOR, PARTNER AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER.
<TABLE>
<S> <C> <C> <C>
COL. A COL. B COL. C COL. D
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COL. C
------------- -------------- ------------ -----------------
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO THE SECURITIES OF THE
OBLIGOR OWNED BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN
DEFAULT BY THE TRUSTEE.
<TABLE>
<S> <C> <C> <C>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
WHETHER THE BENEFICIALLY OR PERCENT OF
SECURITIES HELD AS COLLATERAL CLASS
ARE VOTING SECURITY FOR REPRESENTED BY
OR NONVOTING OBLIGATIONS IN AMOUNT GIVEN IN
TITLE OF CLASS SECURITIES DEFAULT COL. C
-------------- -------------- ------------------ -----------------
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
3
<PAGE> 6
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE OBLIGOR, FURNISH
THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH UNDERWRITER ANY
OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
<TABLE>
<S> <C> <C> <C>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN IN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
-------------- ----------- ------------------- ----------------
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF
THE TRUSTEE (1) OWNS 10% OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR OR (2)
IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH THE FOLLOWING
INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON.
<TABLE>
<S> <C> <C> <C>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN IN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
-------------- ----------- -------------------- ----------------
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
4
<PAGE> 7
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50% OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF THE
TRUSTEE, OWNS 50% OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR, FURNISH THE
FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OR SUCH PERSON ANY OF WHICH
ARE SO OWNED OR HELD BY THE TRUSTEE.
<TABLE>
<S> <C> <C> <C>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN IN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
-------------- ----------- -------------------- ----------------
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED TO THE
TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
<TABLE>
<S> <C> <C>
COL. A COL. B COL. C
NATURE OF AMOUNT
INDEBTEDNESS OUTSTANDING DATE DUE
------------ ----------- --------
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response
to Item 13.
ITEM 13. DEFAULTS BY THE OBLIGOR.
(a) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE
SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There is not, nor has there been, a default with respect to the
securities under this indenture. (See Note on Page 7.)
5
<PAGE> 8
ITEM 13. (CONTINUED)
(b) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN ONE
OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE HAS
BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE INDENTURE OR
SERIES AFFECTED, AND EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There has not been a default under any such indenture or series.
(See Note on Page 7.)
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
IF ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
Not applicable by virtue of Form T-1 General Instruction B and response
to Item 13.
ITEM 15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN TRUSTEE IS
AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE QUALIFIED
UNDER THE ACT.
Not applicable.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
o 1. A copy of the articles of association of the trustee
now in effect.
# 2. A copy of the certificate of authority of the trustee
to commence business.
* 3. A copy of the certificate of authorization of the trustee
to exercise corporate trust powers issued by the Board of
Governors of the Federal Reserve System under date of January
21, 1948.
+ 4. A copy of the existing bylaws of the trustee.
5. Not applicable.
6. The consent of the United States institutional trustees
required by Section 321(b) of the Act.
6
<PAGE> 9
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not applicable.
9. Not applicable.
NOTE REGARDING INCORPORATED EXHIBITS
Effective January 20, 1998, the name of the Trustee was changed from
Texas Commerce Bank National Association to Chase Bank of Texas, National
Association. The exhibits incorporated herein by reference, except for Exhibit
7, were filed under the former name of the Trustee.
o Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and Exchange Commission
as exhibits to the Form S-3 File No. 33-56195.
# Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and Exchange Commission
as exhibits to the Form S-3 File No. 33-42814.
* Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and Exchange Commission
as exhibits to the Form S-11 File No. 33-25132.
+ Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and Exchange Commission
as exhibits to the Form S-3 File No. 33-65055.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment
by the trustee of all facts on which to base responsive answers to Items 2 and
13, the answers to said Items are based on incomplete information. Such Items
may, however, be considered as correct unless amended by an amendment to this
Form T-1.
7
<PAGE> 10
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939 THE
TRUSTEE, CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, FORMERLY KNOWN AS TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY CAUSED THIS
STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO AUTHORIZED, ALL IN THE CITY OF HOUSTON, AND STATE OF TEXAS, ON THE
18TH DAY OF SEPTEMBER, 1998.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, AS TRUSTEE
By: /s/ JANET MYSINGER
--------------------------
Janet Mysinger
Vice President and Trust Officer
9
<PAGE> 11
EXHIBIT 6
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
The undersigned is trustee under an Indenture between Eagle
Geophysical, Inc., a Delaware corporation (the "Company"), together with certain
subsidiary guarantors, and Chase Bank of Texas, National Association, as
Trustee, entered into in connection with the issuance of the Company's 10 3/4%
Senior Notes due 2008.
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned hereby consents that reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, AS TRUSTEE
By: /s/ JANET MYSINGER
--------------------------
Janet Mysinger
Vice President and Trust Officer
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE
10 3/4% SENIOR NOTES DUE 2008, SERIES B,
FOR ANY AND ALL OUTSTANDING
10 3/4% SENIOR NOTES DUE 2008, SERIES A
OF
EAGLE GEOPHYSICAL, INC.
PURSUANT TO THE PROSPECTUS DATED , 1998
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON , 1998, UNLESS THE OFFER IS EXTENDED. TENDERS MAY BE
WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
The Exchange Agent for the Exchange Offer Is:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
<TABLE>
<S> <C>
By Mail, Hand or Overnight Delivery: By Facsimile Transmission:
Chase Bank of Texas, National Association (For Eligible Institutions Only)
1201 Main Street (214) 672-5746
18th Floor Confirm by Telephone:
Dallas, Texas 75202 (214) 672-5678
Attention: Frank Ivins For Inquiries:
Janet Mysinger
(713) 216-4650
</TABLE>
---------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA A FACSIMILE NUMBER
OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
For purposes of this Letter of Transmittal, all capitalized terms used but
not defined herein shall have the same meanings given them in the Prospectus (as
defined below).
This Letter of Transmittal is to be completed by holders (which term, for
purposes of this Letter of Transmittal, shall include any participant in The
Depository Trust Company ("DTC")) either if (a) certificates are to be forwarded
herewith or (b) tenders are to be made pursuant to the procedures for tender by
book-entry transfer set forth under "The Exchange Offer -- Procedures for
Tendering" in the Prospectus and an Agent's Message (as defined below) is not
delivered. Certificates, or book-entry confirmation of a book-entry transfer of
such Private Notes into the Exchange Agent's account at DTC, as well as this
Letter of Transmittal (or a facsimile thereof or delivery of an Agent's Message
in lieu thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to the Expiration Date. Tenders by book-entry transfer may
also be made by delivering an Agent's Message in lieu of this Letter of
Transmittal. The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Private Notes into the Exchange Agent's account at DTC.
The term "Agent's Message" means a message, transmitted by DTC to and received
by the Exchange Agent and
<PAGE> 2
forming part of a book-entry confirmation, that states that DTC has received an
express acknowledgment from the tendering participant, which acknowledgment
states that such participant has received and agrees to be bound by this Letter
of Transmittal and that R&B Falcon Corporation may enforce this Letter of
Transmittal against such participant.
Holders of Private Notes whose certificates (the "Certificates") for such
Private Notes are not immediately available or who cannot deliver their
Certificates and all other required documents to the Exchange Agent on or prior
to the Expiration Date or who cannot complete the procedures for book-entry
transfer on or prior to the Expiration Date must tender their Private Notes
according to the guaranteed delivery procedures set forth in "The Exchange
Offer -- Procedures for Tendering" in the Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
THE UNDERSIGNED HAS COMPLETED 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.
---------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
DESCRIPTION OF PRIVATE NOTES
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PRINCIPAL
AMOUNT
CERTIFICATE AGGREGATE TENDERED FOR
NUMBER(S) PRINCIPAL EXCHANGE (MUST
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (ATTACH SIGNED AMOUNT BE IN INTEGRAL
OF PRIVATE NOTE(S), EXACTLY AS NAMES APPEARS(S) LIST IF REPRESENTED BY MULTIPLES OF
ON CERTIFICATE(S) (PLEASE FILL IN, IF BLANK) NECESSARY)(1) CERTIFICATE(S) $1,000)(2)
- ------------------------------------------------------------------------------------------------------------
$ $
------------------------------------------------------
$ $
------------------------------------------------------
$ $
------------------------------------------------------
$ $
- ------------------------------------------------------------------------------------------------------------
TOTAL AMOUNT OF PRIVATE NOTES TENDERED: $ $
- ------------------------------------------------------------------------------------------------------------
(1) Need not be completed by book-entry holders. Such holders should check the appropriate box below and
provide the requested information.
(2) Need not be completed if tendering for exchange all Private Notes held. Private Notes may be tendered
in whole or in part in integral multiples of $1,000 in aggregate principal amount. All Private Notes
held shall be deemed tendered unless a lesser number is specified in this column.
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS
(DEFINED IN INSTRUCTION 1) ONLY)
[ ] CHECK HERE IF TENDERED PRIVATE NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
--------------------------------------------------------------------------
DTC Account Number
--------------------------------------------------------------------------
Transaction Code Number
--------------------------------------------------------------------------
By crediting the Private Notes to the Exchange Agent's account at DTC
in accordance with DTC's Automated Tender Offer Program ("ATOP") and by
complying with applicable ATOP procedures with respect to the Exchange
Offer, including transmitting an Agent's Message to the Exchange Agent in
which the holder of the Private Notes acknowledges and agrees to be bound by
the terms of this Letter of Transmittal, the participant in ATOP confirms on
behalf of itself and the beneficial owners of such Private Notes all
provisions of this Letter of Transmittal applicable to it and such
beneficial owners as fully as if it had completed the information required
herein and executed and transmitted this Letter of Transmittal to the
Exchange Agent.
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY
IF TENDERED PRIVATE NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING:
Name of Registered Holder
--------------------------------------------------------------------------
Window Ticket Number (if any)
--------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
--------------------------------------------------------------------------
Name of Institution Which Guaranteed Delivery
--------------------------------------------------------------------------
If Guaranteed Delivery is to be made by Book-Entry Transfer:
--------------------------------------------------------------------------
Name of Tendering Institution
--------------------------------------------------------------------------
DTC Account Number
--------------------------------------------------------------------------
Transaction Code Number
--------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED PRIVATE
NOTES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH
ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE PRIVATE NOTES FOR
ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES
(A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name
--------------------------------------------------------------------------
Address
--------------------------------------------------------------------------
Area Code and Telephone Number
--------------------------------------------------------------------------
Contact Person
--------------------------------------------------------------------------
<PAGE> 4
Ladies and Gentlemen:
The undersigned hereby tenders to Eagle Geophysical, Inc., a Delaware
corporation (the "Company"), the above-described aggregate principal amount of
its 10 3/4% Senior Notes due 2008, Series A (the "Private Notes"), in exchange
for a like aggregate principal amount of its 10 3/4% Senior Notes due 2003,
Series B (the "Exchange Notes"), which Exchange Notes have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), upon the terms
and subject to the conditions set forth in the Prospectus dated
, 1998 (as the same may be amended or supplemented from time
to time, the "Prospectus"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which, together with the Prospectus, constitutes the
"Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Private Notes tendered herewith in accordance with the terms and
conditions of the Exchange Offer (including, if the Exchange Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to or upon the order of the
Company all right, title and interest in and to such Private Notes as are being
tendered herewith. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent as its agent and attorney-in-fact (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 Private Notes, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), subject only to the right of withdrawal described in
the Prospectus to (i) deliver Certificates for Private Notes to the Company
together with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Company, upon receipt by the Exchange Agent, as the
undersigned's agent, of the Exchange Notes to be issued in exchange for such
Private Notes, (ii) present Certificates for such Private Notes for registration
of transfer, and transfer the Private Notes on the books of the Company, and
(iii) receive for the account of the Company all benefits and otherwise exercise
all rights of beneficial ownership of such Private Notes, all in accordance with
the terms and conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE
PRIVATE NOTES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR EXCHANGE,
THE COMPANY WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE THERETO, FREE
AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES, AND THAT THE
PRIVATE NOTES TENDERED HEREBY ARE NOT SUBJECT TO ANY ADVERSE CLAIMS OR PROXIES.
THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS
DEEMED BY THE COMPANY OR THE EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO
COMPLETE THE EXCHANGE, ASSIGNMENT AND TRANSFER OF THE PRIVATE NOTES TENDERED
HEREBY, AND THE UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER THE
REGISTRATION RIGHTS AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE
TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) (which term, for
the purposes of this Letter of Transmittal, shall include any participant in
DTC) of the Private Notes tendered hereby should be printed above, if they are
not already set forth above, as they appear on the Certificates representing
such Private Notes. The Certificate number(s) of the Private Notes that the
undersigned wishes to tender should be indicated in the appropriate boxes above.
If any tendered Private Notes are not exchanged pursuant to the Exchange
Offer for any reason, or if Certificates are submitted for more Private Notes
than are tendered or accepted for exchange, Certificates for such nonexchanged
or nontendered Private Notes will be returned (or, in the case of Private Notes
tendered by book-entry transfer, such Private Notes will be credited to an
account maintained at DTC), without expense to the tendering holder, promptly
following the expiration or termination of the Exchange Offer.
The undersigned understands that tenders of Private Notes pursuant to any
one of the procedures described under "The Exchange Offer -- Procedures for
Tendering" in the Prospectus and in the instructions
<PAGE> 5
herein will, upon the Company's acceptance for exchange of such tendered Private
Notes, constitute a binding agreement between the undersigned and the Company
upon the terms and subject to the conditions of the Exchange Offer. The
undersigned recognizes that, under certain circumstances set forth in the
Prospectus, the Company may not be required to accept for exchange any of the
Private Notes tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Notes be
issued in the name of the undersigned or, in the case of a book-entry transfer
of Private Notes, that such Exchange Notes be credited to the account indicated
above maintained at DTC. If applicable, substitute Certificates representing
Private Notes not exchanged or not accepted for exchange will be issued to the
undersigned or, in the case of a book-entry transfer of Private Notes, will be
credited to the account indicated above maintained at DTC. Similarly, unless
otherwise indicated under "Special Delivery Instructions" below, please deliver
Exchange Notes to the undersigned at the address shown below the undersigned's
signature.
BY TENDERING PRIVATE NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, OR
EFFECTING DELIVERY OF AN AGENT'S MESSAGE IN LIEU THEREOF, THE UNDERSIGNED HEREBY
REPRESENTS AND AGREES THAT (I) THE UNDERSIGNED IS NOT AN "AFFILIATE" OF THE
COMPANY WITHIN THE MEANING OF RULE 405 UNDER THE SECURITIES ACT, (II) ANY
EXCHANGE NOTES TO BE RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE
ORDINARY COURSE OF ITS BUSINESS, (III) THE UNDERSIGNED HAS NO ARRANGEMENT OR
UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE
MEANING OF THE SECURITIES ACT) OF EXCHANGE NOTES TO BE RECEIVED IN THE EXCHANGE
OFFER, AND (IV) IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED IS
NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE
MEANING OF THE SECURITIES ACT) OF SUCH EXCHANGE NOTES. BY TENDERING PRIVATE
NOTES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF TRANSMITTAL,
OR EFFECTING DELIVERY OF AN AGENT'S MESSAGE IN LIEU THEREOF, A HOLDER OF PRIVATE
NOTES WHICH IS A BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN
INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE
OF THE SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (A) SUCH
PRIVATE NOTES HELD BY THE BROKER-DEALER ARE HELD ONLY AS A NOMINEE OR (B) SUCH
PRIVATE NOTES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER THE
PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING THE
REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH
EXCHANGE NOTES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A
PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN
"UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
THE COMPANY HAS AGREED THAT, SUBJECT TO THE PROVISIONS OF THE REGISTRATION
RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME
TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER IN CONNECTION WITH RESALES
OF EXCHANGE NOTES RECEIVED IN EXCHANGE FOR PRIVATE NOTES, WHERE SUCH PRIVATE
NOTES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING 180
DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER CERTAIN LIMITED
CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH
EXCHANGE NOTES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER. IN
THAT REGARD, EACH PARTICIPATING BROKER-DEALER, BY TENDERING SUCH PRIVATE NOTES
AND EXECUTING THIS LETTER OF TRANSMITTAL, OR EFFECTING DELIVERY OF AN AGENT'S
MESSAGE IN LIEU THEREOF, AGREES THAT, UPON RECEIPT OF NOTICE FROM
<PAGE> 6
THE COMPANY OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT THAT
MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS
UNTRUE IN ANY MATERIAL RESPECT OR THAT CAUSES THE PROSPECTUS TO OMIT TO STATE A
MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR
INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH
THEY WERE MADE, NOT MISLEADING, OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS
SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER
WILL SUSPEND THE SALE OF EXCHANGE NOTES PURSUANT TO THE PROSPECTUS UNTIL THE
COMPANY HAS AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT
OR OMISSION AND HAS FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS
TO THE PARTICIPATING BROKER-DEALER, OR THE COMPANY HAS GIVEN NOTICE THAT THE
SALE OF THE EXCHANGE NOTES MAY BE RESUMED, AS THE CASE MAY BE. IF THE COMPANY
GIVES SUCH NOTICE TO SUSPEND THE USE OF THE PROSPECTUS, IT SHALL EXTEND THE
180-DAY PERIOD REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE
ENTITLED TO USE THE PROSPECTUS IN CONNECTION WITH THE RESALE OF EXCHANGE NOTES
BY THE NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE
GIVING OF SUCH NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING
BROKER-DEALERS SHALL HAVE RECEIVED COPIES OF THE AMENDED OR SUPPLEMENTED
PROSPECTUS NECESSARY TO PERMIT RESALES OF THE EXCHANGE NOTES OR TO AND INCLUDING
THE DATE ON WHICH THE COMPANY HAS GIVEN NOTICE THAT THE USE OF THE PROSPECTUS
MAY BE RESUMED, AS THE CASE MAY BE.
AS A RESULT, A PARTICIPATING BROKER-DEALER WHO INTENDS TO USE THE
PROSPECTUS IN CONNECTION WITH RESALES OF EXCHANGE NOTES RECEIVED IN EXCHANGE FOR
PRIVATE NOTES PURSUANT TO THE EXCHANGE OFFER MUST NOTIFY THE COMPANY, OR CAUSE
THE COMPANY TO BE NOTIFIED, ON OR PRIOR TO THE EXPIRATION DATE, THAT IT IS A
PARTICIPATING BROKER-DEALER. SUCH NOTICE MAY BE GIVEN IN THE SPACE PROVIDED
ABOVE OR MAY BE DELIVERED TO THE EXCHANGE AGENT AT THE ADDRESS SET FORTH IN THE
PROSPECTUS UNDER "THE EXCHANGE OFFER -- EXCHANGE AGENT."
Holders of Private Notes which are accepted for exchange will not receive
interest payments on such Private Notes, and the undersigned waives the right to
receive any interest payments on such Private Notes accumulated from and after
July 20, 1998. Accordingly, holders of Exchange Notes as of the record date for
the payment of interest on January 15, 1999 will be entitled to receive interest
accumulated from and after July 20, 1998.
The undersigned agrees that acceptance of any tendered Private Notes and
transfer of tendered Private Notes in exchange therefor shall constitute
performance in full by the Company of its obligations under the Registration
Rights Agreement.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
THE UNDERSIGNED, BY COMPLETING THE BOXES ENTITLED "DESCRIPTION OF PRIVATE
NOTES" ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE DEEMED TO HAVE
TENDERED THE PRIVATE NOTES AS SET FORTH IN EACH SUCH BOX.
<PAGE> 7
HOLDERS SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 CONTAINED HEREIN)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered holder(s) (which term, for purposes of this
Letter of Transmittal, shall include any participant in DTC) exactly as name(s)
appear(s) on Certificate(s) for the Private Notes hereby tendered or on the
register of holders maintained by the Company, or by any person authorized to
become the registered holder by endorsements and documents transmitted herewith
(including such opinions of counsel, certifications and other information as may
be required by the Company for the Private Notes to comply with the restrictions
on transfer applicable to the Private Notes). If signature is by an
attorney-in-fact, executor, administrator, trustee, guardian, officer of a
corporation or another acting in a fiduciary or representative capacity, please
set forth the signer's full title. See Instruction 5.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE OF HOLDER(S) OR AUTHORIZED SIGNATORY)
Date:
- --------------------------------------- , 1998
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
- --------------------------------------------------------------------------------
(SEE INSTRUCTIONS)
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
- --------------------------------------------------------------------------------
Taxpayer Identification or Social Security Number:
- --------------------------------------------------------------------------------
SIGNATURE(S) GUARANTEE
(IF REQUIRED -- SEE INSTRUCTIONS 2 AND 5)
- --------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Date:
- --------------------------------------- , 1998
Name of Eligible Institution Guaranteeing Signatures:
- --------------------------------------------------------------------------------
Capacity (full title):
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
- --------------------------------------------------------------------------------
<PAGE> 8
- ------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the Exchange Notes or any Private Notes that are
not tendered are to be issued in the name of someone other than the registered
holder of the Private Notes whose name appears above.
Issue
[ ] Exchange Notes and/or
[ ] Private Notes not tendered
to:
Name ---------------------------------------------------------------------------
(Please Print)
Address-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
(Area Code and Phone Number)
- --------------------------------------------------------------------------------
(Tax Identification or Social Security Number(s))
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the Exchange Notes or any Private Notes that are
not tendered are to be sent to someone other than the registered holder of the
Private Notes whose name appears above, or to such registered holder at an
address other than that shown above.
Mail
[ ] Exchange Notes and/or
[ ] Private Notes not tendered
to:
Name
- --------------------------------------------------------------------------------
(Please Print)
Address-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
(Area Code and Phone Number)
- --------------------------------------------------------------------------------
(Tax Identification or Social Security Number(s))
- --------------------------------------------------------------------------------
<PAGE> 9
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made pursuant
to the procedures for tender by book-entry transfer set forth under "The
Exchange Offer -- Procedures for Tendering" in the Prospectus and an Agent's
Message is not delivered. Certificates, or book-entry confirmation of a
book-entry transfer of such Private Notes into the Exchange Agent's account at
DTC, as well as this Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message in lieu thereof, and any other documents required by this Letter
of Transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to the Expiration Date. Private Notes may be tendered in
whole or in part in integral multiples of $1,000 in aggregate principal amount.
Holders who wish to tender their Private Notes and (i) whose Private Notes
are not immediately available or (ii) who cannot deliver their Private Notes,
this Letter of Transmittal and all other required documents to the Exchange
Agent on or prior to the Expiration Date or (iii) who cannot complete the
procedures for delivery by book-entry transfer on or prior to the Expiration
Date, may tender their Private Notes by properly completing and duly executing a
Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set
forth under "The Exchange Offer -- Procedures for Tendering" and "-- Guaranteed
Delivery Procedures" in the Prospectus. Pursuant to such procedures: (a) such
tender must be made by or through an Eligible Institution (as defined below);
(b) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by the Company, must be received by the
Exchange Agent on or prior to the Expiration Date; and (c) the Certificates (or
a book-entry confirmation (as defined in the Prospectus)) representing all
tendered Private Notes, in proper form for transfer, together with a Letter of
Transmittal (or facsimile thereof or Agent's Message in lieu thereof), properly
completed and duly executed, with any required signature guarantees and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent within three New York Stock Exchange trading days after the date
of execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer -- Procedures for Tendering" and "-- Guaranteed Delivery
Procedures" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Private Notes to
be properly tendered pursuant to the guaranteed delivery procedure, the Exchange
Agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration
Date. As used herein and in the Prospectus, "Eligible Institution" means a firm
or other entity identified in Rule 17Ad-15 under the Exchange Act as "an
eligible guarantor institution," including (as such terms are defined therein)
(i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or
government securities broker or dealer; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing agency; or
(v) a savings association that is a participant in a Securities Transfer
Association recognized program.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY ON OR PRIOR TO THE
EXPIRATION DATE. NO DOCUMENTS SHOULD BE SENT TO THE COMPANY. DELIVERY OF
DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The Company will not accept any alternative, conditional or contingent
tenders. Each tendering holder, by executing a Letter of Transmittal (or a
facsimile thereof or an Agent's Message in lieu thereof), waives any right to
receive any notice of the acceptance of such tender.
<PAGE> 10
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder
(which term, for purposes of this Letter of Transmittal, shall include any
participant in DTC whose name appears on a security position listing as the
owner of the Private Notes) of Private Notes tendered herewith, unless such
holder has completed either the box entitled "Special Issuance
Instructions" or the box entitled "Special Delivery Instructions" above, or
(ii) such Private Notes are tendered for the account of a firm that is
an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature on
this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the boxes captioned
"Description of Private Notes" is inadequate, the Certificate numbers and/or the
principal amount of Private Notes and any other required information should be
listed on a separate signed schedule that is attached to this Letter of
Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Private Notes will be
accepted only in integral multiples of $1,000 in aggregate principal amount. If
less than all the Private Notes evidenced by any Certificate submitted are to be
tendered, fill in the principal amount of Private Notes that are to be tendered
in the box entitled "Principal Amount of Private Notes Tendered for Exchange."
In such case, a new Certificate for the remainder of the Private Notes that were
evidenced by the old Certificate will be sent to the holder of the Private Notes
promptly after the Expiration Date, unless the appropriate boxes on this Letter
of Transmittal are completed. All Private Notes represented by Certificates
delivered to the Exchange Agent will be deemed to have been tendered unless
otherwise indicated.
Except as otherwise provided herein, tenders of Private Notes may be
withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at its address set forth above or in the Prospectus on or prior
to the Expiration Date. Any such notice of withdrawal must specify the name of
the person who tendered the Private Notes to be withdrawn, the aggregate
principal amount of Private Notes to be withdrawn, and (if Certificates for
Private Notes have been tendered) the name of the registered holder of the
Private Notes as set forth on the Certificate for the Private Notes, if
different from that of the person who tendered such Private Notes. If
Certificates for the Private Notes have been delivered or otherwise identified
to the Exchange Agent, then prior to the physical release of such Certificates
for the Private Notes, the tendering holder must submit the serial numbers shown
on the particular Certificates for the Private Notes to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Private Notes tendered for the account of an
Eligible Institution. If Private Notes have been tendered pursuant to the
procedures for book-entry transfer set forth under "The Exchange
Offer -- Procedures for Tendering," the notice of withdrawal must specify the
name and number of the account at DTC to be credited with the withdrawal of
Private Notes, in which case a notice of withdrawal will be effective if
delivered to the Exchange Agent by written or facsimile transmission on or prior
to the Expiration Date. Withdrawals of tenders of Private Notes may not be
rescinded. Private Notes properly withdrawn will not be deemed validly tendered
for purposes of the Exchange Offer, but may be retendered at any subsequent time
on or prior to the Expiration Date by following any of the procedures described
in the Prospectus under "The Exchange Offer -- Procedures for Tendering."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company, in its
sole discretion, which determination shall be final and binding on all parties.
None of the Company, any affiliates or assigns of the Company, the Exchange
Agent or any other person shall be under any duty to give any notification of
any irregularities in any notice of withdrawal or incur any liability for
failure to give any such notification. Any Private Notes that have been tendered
but are withdrawn on or prior to the Expiration Date will be returned to the
holder thereof without cost to such holder promptly after withdrawal.
<PAGE> 11
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Private
Notes tendered hereby, the signature(s) must correspond exactly with the name(s)
as written on the face of the Certificate(s) or on a security position listing
without alteration, enlargement or any change whatsoever.
If any of the Private Notes tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Private Notes are registered in different names on several
Certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal (or facsimiles thereof or Agent's Messages in lieu
thereof) as there are different registrations of Certificates.
If this Letter of Transmittal or any Certificates 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, such
persons should so indicate when signing and must submit proper evidence
satisfactory to the Company, in its sole discretion, of such persons' authority
to so act.
When this Letter of Transmittal is signed by the registered owner of the
Private Notes listed and transmitted hereby, no endorsement of Certificates or
separate bond powers are required unless Exchange Notes are to be issued in the
name of a person other than the registered holder. Signatures on such
Certificates or bond powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner of the Private Notes listed, the Certificates must be endorsed
or accompanied by appropriate bond powers, signed exactly as the name of the
registered owner appears on the Certificates, and also must be accompanied by
such opinions of counsel, certifications and other information as the Company or
the Exchange Agent may require in accordance with the restrictions on transfer
applicable to the Private Notes. Signatures on such Certificates or bond powers
must be guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If Exchange Notes are to be
issued in the name of a person other than the signer of this Letter of
Transmittal, or if Exchange Notes are to be sent to someone other than the
signer of this Letter of Transmittal or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Certificates for Private Notes not exchanged will be returned by mail or, if
tendered by book-entry transfer, by crediting the account indicated above
maintained at DTC unless the appropriate boxes on this Letter of Transmittal are
completed. See Instruction 4.
7. IRREGULARITIES. The Company will determine, in its sole discretion, all
questions as to the form of documents, validity, eligibility (including time of
receipt) and acceptance for exchange of any tender of Private Notes, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance of which, or exchange for, may, in the view of
counsel to the Company, be unlawful. The Company also reserves the absolute
right, subject to applicable law, to waive any of the conditions of the Exchange
Offer set forth in the Prospectus under "The Exchange Offer -- Conditions to
Exchange Offer," or any conditions or irregularities in any tender of Private
Notes of any particular holder whether or not similar conditions or
irregularities are waived in the case of other holders. The Company's
interpretation of the terms and conditions of the Exchange Offer (including this
Letter of Transmittal and the instructions hereto) will be final and binding. No
tender of Private Notes will be deemed to have been validly made until all
irregularities with respect to such tender have been cured or waived. The
Company, any affiliates or assigns of the Company, the Exchange Agent, or any
other person shall not be under a duty to give notification of any
irregularities in tenders or incur any liability for failure to give such
notification.
8. LOST, DESTROYED OR STOLEN CERTIFICATES. The holder should promptly
notify the Exchange Agent if any Certificates representing Private Notes have
been lost, destroyed or stolen. The holder will then be instructed as to the
steps that must be taken in order to replace the Certificates. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen Certificates have been followed.
<PAGE> 12
9. SECURITY TRANSFER TAXES. Holders who tender their Private Notes for
exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, Exchange Notes are to be delivered to, or are to be
issued in the name of, any person other than the registered holder of the
Private Notes tendered, or if a transfer tax is imposed for any reason other
than the exchange of Private Notes in connection with the Exchange Offer, then
the amount of any such transfer tax (whether imposed on the registered holder or
any other persons) will be payable by the tendering holder. The amount of such
transfer taxes will be billed directly to such tendering holder if satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
this Letter of Transmittal.
10. INCORPORATION OF LETTER OF TRANSMITTAL. This Letter of Transmittal
shall be deemed to be incorporated in and acknowledged and accepted by any
tender through the DTC's ATOP procedures by any participant in DTC on behalf of
itself and the beneficial owners of any Private Notes so tendered.
11. WAIVER OF CONDITIONS. The Company reserves the absolute right to waive
satisfaction of any or all conditions enumerated in the Prospectus.
12. NO CONDITIONAL TENDERS. No alternative, conditional or contingent
tenders will be accepted. All tendering holders of Private Notes, by executing
this Letter of Transmittal, shall waive any right to receive notice of the
acceptance of Private Notes for exchange.
Questions and requests for assistance may be directed to the Exchange Agent
at its address and telephone number set forth on the front of this Letter of
Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed
Delivery and this Letter of Transmittal may be obtained from the Exchange Agent
or from the holder's broker, dealer, commercial bank, trust company or other
nominee.
None of the Company, the Exchange Agent or any other person is obligated to
give notice of any defect or irregularity with respect to any tender of Private
Notes nor shall any of them incur any liability for failure to give any such
notice.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF OR AN AGENT'S
MESSAGE IN LIEU HEREOF) AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE
EXCHANGE AGENT AT OR PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION
DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a holder whose tendered Private Notes are
accepted for exchange is required by law to provide the Exchange Agent with such
holder's correct taxpayer identification number ("TIN") on the Substitute Form
W-9 included herein or otherwise establish a basis for exemption from backup
withholding. If such holder is an individual, the TIN is his or her social
security number. If the Exchange Agent is not provided with the correct TIN, the
Internal Revenue Service may subject the holder or transferee to a $50 penalty.
In addition, delivery of such holder's Exchange Notes may be subject to backup
withholding. Failure to comply truthfully with the backup withholding
requirements also may result in the imposition of severe criminal and/or civil
fines and penalties.
Certain holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt holders should furnish their TIN, write "Exempt" on the
face of the Substitute Form W-9, and sign, date and return the Substitute Form
W-9 to the Exchange Agent. A foreign person, including entities, may qualify as
an exempt recipient by submitting to the Exchange Agent a properly completed
Internal Revenue Service Form W-8, signed under penalties of perjury, attesting
to that holder's foreign status. See the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
instructions.
If backup withholding applies, the Exchange Agent is required to withhold
31% of any payments made to the holder or other transferee. Backup withholding
is not an additional federal income tax. Rather, the federal
<PAGE> 13
income tax liability of persons subject to backup withholding will be reduced by
the amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Private
Notes exchanged in the Exchange Offer, the holder is required to provide the
Exchange Agent with either: (i) the holder's correct TIN by completing the form
included herein, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such holder is awaiting a TIN) and that (a) the holder has not
been notified by the Internal Revenue Service that the holder is subject to
backup withholding as a result of failure to report all interest or dividends or
(b) the Internal Revenue Service has notified the holder that the holder is no
longer subject to backup withholding; or (ii) an adequate basis for exemption.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60-day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60-day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60-day period,
amounts withheld will be remitted to the Internal Revenue Service as backup
withholding. In addition, 31% of all payments made thereafter will be withheld
and remitted to the Internal Revenue Service until a correct TIN is provided.
NUMBER TO GIVE THE EXCHANGE AGENT
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered holder of
the Private Notes or of the last transferee appearing on the transfers attached
to, or endorsed on, the Private Notes. If the Private Notes are held in more
than one name or are held not in the name of the actual owner, consult the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional guidance on which number to report.
<PAGE> 14
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
PAYOR'S NAME: Chase Bank of Texas, National Association
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT ------------------------------------
RIGHT AND CERTIFY BY SIGNING AND DATING BELOW Social Security Number
FORM W-9 or
Department of the Treasury ------------------------------------
Internal Revenue Service Employer Identification Number
-------------------------------------------------------------------------------------------
PAYER'S REQUEST FOR PART II -- UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
TAXPAYER IDENTIFICATION
NUMBER ("TIN") (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 (the "IRS") that I am
subject to backup withholding as a result of failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding.
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 of underreporting
interest or dividends on your tax return. However, if after being notified by the IRS that
you are subject to backup withholding, you received another notification from the IRS that
you are no longer subject to backup withholding, do not cross out such item (2).
------------------------------------------------------------------------------------------
Signature -------------------------- Date----------- PART III --
Name (please print)---------------------------------
Address (please print)------------------------------ Awaiting TIN [ ]
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU. PLEASE REVIEW THE
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON FORM W-9
FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE
IF YOU CHECKED THE BOX IN PART III OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number within sixty (60) days, 31
percent of all reportable payments made to me thereafter will be withheld until
I provide a number. In addition, I understand that if, after seven business days
after this certification is received, the Company is required to make a payment
to me which, in its judgment, will close my account, or cause the cessation of
my relationship, with the Company, then such payment may be subject to backup
withholding.
<TABLE>
<S> <C>
- ------------------------ ----------------------------------------------------------------------------------------------------
Date Signature
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
OFFER TO EXCHANGE
10 3/4% SENIOR NOTES DUE 2008, SERIES B,
FOR ANY AND ALL OUTSTANDING
10 3/4% SENIOR NOTES DUE 2008, SERIES A
OF
EAGLE GEOPHYSICAL, INC.
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Company's (as defined below) 10 3/4% Senior Notes due 2008,
Series A (the "Private Notes") are not immediately available, (ii) Private
Notes, the Letter of Transmittal and all other required documents cannot be
delivered to Chase Bank of Texas, National Association (the "Exchange Agent") on
or prior to the Expiration Date (as defined in the Prospectus defined below), or
(iii) the procedures for delivery by book-entry transfer cannot be completed on
a timely basis. This Notice of Guaranteed Delivery may be delivered by hand,
overnight courier or mail, or transmitted by facsimile transmission, to the
Exchange Agent. See "The Exchange Offer -- Procedures for Tendering" and
"-- Guaranteed Delivery Procedures" in the Prospectus. In addition, in order to
utilize the guaranteed delivery procedure to tender Private Notes pursuant to
the Exchange Offer, a completed, signed and dated Letter of Transmittal relating
to the Private Notes (or facsimile thereof) must also be received by the
Exchange Agent on or prior to the Expiration Date. Capitalized terms used but
not defined herein have the meanings assigned to them in the Prospectus.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON , 1998, UNLESS THE OFFER IS EXTENDED. TENDERS MAY
BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
The Exchange Agent for the Exchange Offer Is:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
<TABLE>
<S> <C>
By Mail, Hand or Overnight Delivery: By Facsimile Transmission:
Chase Bank of Texas, National Association (For Eligible Institutions Only)
1201 Main Street (214) 672-5746
18th Floor
Dallas, Texas 75202 Confirm by Telephone:
Attention: Frank Ivins (214) 672-5678
For Inquiries:
Janet Mysinger
(713) 216-4650
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA A
FACSIMILE NUMBER OTHER THAN THE ONE LISTED 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
signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Eagle Geophysical, Inc., a Delaware
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Prospectus dated , 1998 (as the same may be amended or
supplemented from time to time, the "Prospectus"), and the related Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of which
is hereby acknowledged, the aggregate principal amount of Private Notes set
forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer -- Procedures for Tendering"
and "-- Guaranteed Delivery Procedures."
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PRIVATE NOTES
- ----------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
AGGREGATE PRINCIPAL TENDERED FOR EXCHANGE
CERTIFICATE NUMBER(S) AMOUNT REPRESENTED BY (MUST BE IN INTEGRAL
(IF AVAILABLE) CERTIFICATE(S) MULTIPLES OF $1,000)*
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
$ $
- ----------------------------------------------------------------------------------------------
$ $
- ----------------------------------------------------------------------------------------------
$ $
- ----------------------------------------------------------------------------------------------
$ $
- ----------------------------------------------------------------------------------------------
TOTAL AMOUNT OF PRIVATE
NOTES TENDERED: $ $
- ----------------------------------------------------------------------------------------------
* Need not be completed if tendering for exchange all Private Notes held. Private Notes may
be tendered in whole or in part in integral multiples of $1,000 in aggregate principal
amount. All Private Notes held shall be deemed tendered unless a lesser number is
specified in this column.
- ----------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 3
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE
DEATH, INCAPACITY, OR DISSOLUTION OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE
UNDERSIGNED HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES,
SUCCESSORS AND ASSIGNS OF THE UNDERSIGNED.
If Private Notes will be tendered by book-entry transfer, please provide the
following information:
Name of Tendering Institution
- --------------------------------------------------------------------------------
The Depository Trust Company Account No.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
------------------------------------------------
Signature(s)
------------------------------------------------
Name(s)(Please Print)
------------------------------------------------
------------------------------------------------
Address (Include Zip Code)
------------------------------------------------
(Area Code and Phone Number)
------------------------------------------------
Date
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Private Notes exactly as its (their) name(s) appear on certificates
for Private Notes, or by person(s) authorized to become registered 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)
- --------------------------------------------------------------------------------
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in a Recognized Signature Guarantee
Medallion Program, guarantees deposit with the Exchange Agent of the Letter of
Transmittal (or facsimile thereof), together with the Private Notes tendered
hereby in proper form for transfer, or confirmation of the book-entry transfer
of such Private Notes into the Exchange Agent's account at the Depository Trust
Company, pursuant to the procedure for book-entry transfer set forth in the
prospectus, and any other required documents, all by 5:00 p.m., New York City
time, on the third New York Stock Exchange trading day following the Expiration
Date (as defined in the Prospectus).
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------------------
Name of Firm Authorized Signature
- -------------------------------------------- --------------------------------------------
Name (please print)
- -------------------------------------------- --------------------------------------------
Address Title
- -------------------------------------------- --------------------------------------------
Area Code and Telephone No. Date
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR PRIVATE NOTES WITH THIS FORM. CERTIFICATES
FOR PRIVATE NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
4
