<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 1, 1998
REGISTRATION NO. 333-43219
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------
GRANT GEOPHYSICAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 1382 76-0548468
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
16850 PARK ROW
HOUSTON, TEXAS 77084
(281) 398-9503
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
<TABLE>
<S> <C>
LARRY E. LENIG, JR. JONATHAN D. POLLOCK
PRESIDENT AND CHIEF EXECUTIVE OFFICER ELLIOTT ASSOCIATES, L.P.
GRANT GEOPHYSICAL, INC. 712 FIFTH AVE.
16850 PARK ROW NEW YORK, NEW YORK 10011
HOUSTON, TEXAS 77084 (212) 506-2999
(281) 398-9503
</TABLE>
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENTS FOR SERVICE)
------------------------
COPY TO:
CHRISTOPHER M. KELLY, ESQ.
JONES, DAY, REAVIS & POGUE
901 LAKESIDE AVENUE
CLEVELAND, OHIO 44114
(216) 586-3939
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, 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, please 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(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a list of the estimated expenses to be incurred by the
Company in connection with the issuance and distribution of the Common Stock
being registered hereby.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 5,103
National Association of Securities Dealers, Inc. filing
fee....................................................... $ 2,230
Transfer Agent's and Registrar's fees....................... $ 10,000
Subscription Agent's fees................................... $ 15,000
Printing costs.............................................. $160,000
Accounting fees and expenses................................ $115,000
Legal fees and expenses..................................... $225,000
Miscellaneous expenses...................................... $ 42,667
--------
Total.................................................. $575,000
========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL") makes
provision for the indemnification of officers and directors of corporations in
terms sufficiently broad to indemnify the officers and directors of the
Registrant under certain circumstances from liabilities (including reimbursement
of expenses incurred) arising under the Securities Act of 1933, as amended (the
"Securities Act").
As permitted by the DGCL, the Registrant's Certificate of Incorporation
(the "Charter") provides that, to the fullest extent permitted by the DGCL, no
director shall be liable to the Registrant or to its stockholders for monetary
damages for breach of his fiduciary duty as a director. Delaware law does not
permit the elimination of liability (i) for any breach of the director's duty of
loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) in respect of certain unlawful dividend payments or stock redemptions
or repurchases or (iv) for any transaction from which the director derives an
improper personal benefit. The effect of this provision in the Charter is to
eliminate the rights of the Registrant and its stockholders (through
stockholders' derivative suits on behalf of the Registrant) to recover monetary
damages against a director for breach of fiduciary duty as a director thereof
(including breaches resulting from negligent or grossly negligent behavior)
except in the situations described in clauses (i)-(iv), inclusive, above. These
provisions will not alter the liability of directors under federal securities
laws.
The Registrant's Bylaws (the "Bylaws") provide that the Registrant may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Registrant) by reason of the fact that he is or was a director,
officer, employee or agent of the Registrant or is or was serving at the request
of the Registrant as a director, officer, employee or agent of another
corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Registrant, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful.
The Bylaws also provide that the Registrant may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Registrant to procure a
judgment in its favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit if such person acted under similar
standards, except that no indemnification may be made in respect of any claim,
issue or matter as to which such person shall have been
II-1
<PAGE> 3
adjudged to be liable to the Registrant unless and only to the extent that the
Court of Chancery of the State of Delaware or the court in which such action or
suit was brought shall determine upon application that despite the adjudication
of liability but in view of all the circumstances of the case, such person if
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
The Bylaws also provide that to the extent a director or officer of the
Registrant has been successful in the defense of any action, suit or proceeding
referred to in the previous paragraphs or in the defense of any claim, issue, or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith; that
indemnification provided for in the Bylaws shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the
Registrant may purchase and maintain insurance on behalf of a director or
officer of the Registrant against any liability asserted against him or incurred
by him in any such capacity or arising out of his status as such whether or not
the Registrant would have the power to indemnify him against such liabilities
under such Bylaws.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
On September 30, 1997, the Company issued 9,785,581 shares of Preferred
Stock to each of Elliott and Westgate in exchange for an aggregate of
$19,571,162 in cash and/or satisfaction of indebtedness of the Company.
In connection with the consummation of the Plan, on September 30, 1997, the
Company issued one share of Common Stock to Elliott in exchange for $1.00. On
December 19, 1997, the Company effected a two-to-one stock split in the form of
a stock dividend of shares to Elliott.
On December 18, 1997, Grant exchanged 9,571.162 shares of Preferred Stock
held by Elliott, together with accrued dividends thereon, for the Subordinated
Note.
On December 19, 1997, in connection with the Acquisition, the Selling
Stockholders transferred their shares of Solid State Stock to Grant in exchange
for 4,652,555 shares of Common Stock.
On December 30, 1997, the Company issued 4,094,494 shares of Common Stock
to Elliott and 5,405,504 shares of Common Stock to Westgate in exchange for an
aggregate of $33,953,054.
On February 18, 1998, the Company issued $100 million aggregate principal
amount of its 9 3/4% Senior Notes due 2008, Series A to Jefferies & Company,
Inc. (the "Initial Purchaser"). The Original Notes are guaranteed by the
Subsidiary Guarantors.
The foregoing transactions were effected pursuant to the exemption from
registration provided by Section 4(2) of the Securities Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits. The following Exhibits are filed herewith and made a part
hereof:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<C> <S>
2.1 GGI's Second Amended Plan of Reorganization under chapter 11
of the Bankruptcy Code.
2.2 Offer to Purchase for Cash all of the Common Shares of Solid
State not already held by or on behalf of SSGI or its
Affiliates at a price of Cdn $3.50 per Common Share by SSGI.
3.1(i) Restated Certificate of Incorporation of the Company, as
amended.
3.1(ii) Amended and Restated By-Laws of the Company.
4.1 Specimen Certificate for the Common Stock, par value $.001,
of the Company.
4.2 Registration Rights Agreement between Grant and Elliott,
dated September 19, 1997.
4.3 Amendment No. 1 to Registration Rights Agreement between
Grant and Elliott, dated October 1, 1997.
4.4 Amendment No. 2 to Registration Rights Agreement between
Grant and Elliott, dated December 17, 1997.
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<C> <S>
4.5 Registration Rights Agreement among the Company, the
Subsidiary Guarantors and the Initial Purchaser, dated
February 18, 1998.
4.6 Indenture among the Company, the Subsidiary Guarantors and
LaSalle National Bank, as Trustee, dated February 18, 1998.
5.1 Opinion of Jones, Day, Reavis & Pogue as to the validity of
the securities being offered.
10.1 Loan and Security Agreement between Grant and Elliott, dated
October 1, 1997.
10.2 First Amendment to Loan and Security Agreement between Grant
and Elliott, dated December 19, 1997.
10.3 Demand Promissory Note from Grant to Elliott, dated November
26, 1997.
10.4 Subordinated Promissory Note from Grant to Elliott, dated
December 18, 1997.
10.5 Stock Purchase Agreement among the Company, Elliott and
Westgate, dated December 19, 1997.
10.6 Restated and Amended Employment Agreement between Grant and
Larry E. Lenig, Jr., dated October 1, 1997.
10.7 Executive Employment Agreement between Solid State and
Mitchell L. Peters, dated November 24, 1997.
10.8 Grant Geophysical, Inc. 1997 Equity and Performance
Incentive Plan.
10.9 Loan Agreement among Elliott, Westgate, Solid State and the
U.S. Subsidiary, dated October 16, 1996.
10.10 Form of Promissory Note from the U.S. Subsidiary to Elliott.
10.11 Letter Agreement among Elliott, Westgate, Solid State and
the U.S. Subsidiary, dated June 17, 1997.
10.12 Letter Agreement among Elliott, Westgate, Solid State and
the U.S. Subsidiary, dated September 4, 1997.
10.13 Letter Agreement among Elliott, Westgate, Solid State and
the U.S. Subsidiary, dated October 17, 1997.
10.14 Letter Agreement among Elliott, Westgate, Solid State and
the U.S. Subsidiary, dated November 30, 1997.
10.15 Letter Agreement between Elliott and Mitchell L. Peters,
dated November 24, 1997.
10.16 Consulting Agreement between the Company and Donald W.
Wilson, dated April 28, 1998.
10.17* Second Amendment, Consent and Waiver to Loan and Security
Agreement between Grant and Elliott, dated June 5, 1998.
21.1 Subsidiaries of the Company.
23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5.1).
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of Price Waterhouse, Chartered Accountants.
24.1 Powers of Attorney.
99.1 Form of Subscription Exercise Notice.
</TABLE>
- ---------------
* Filed herewith
(b) Financial Statement Schedules.
All schedules have been omitted because they are not applicable, not
required or the required information is included in the financial statements and
notes thereto.
II-3
<PAGE> 5
ITEM 17. UNDERTAKINGS.
(a) Acceleration of Effectiveness. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the Company pursuant to the
foregoing provisions or otherwise, the Company 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 Company of expenses incurred or paid by a director,
officer or controlling person of the Company 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 Company 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.
(b) Rule 430A Prospectuses. The undersigned Registrant hereby undertakes
that:
(1) For the purpose of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
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 public offering thereof.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company has
duly caused this Amendment No. 4 to the Registration Statement to be signed on
its behalf by the undersigned, thereunder duly authorized, in the City of
Houston, State of Texas, on July 1, 1998.
GRANT GEOPHYSICAL, INC.
By: /s/ LARRY E. LENIG, JR.
------------------------------------
Larry E. Lenig, Jr.
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 4 to the 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/ LARRY E. LENIG, JR. President, Chief Executive Officer and Director July 1, 1998
- -------------------------------------- (Principal Executive Officer)
Larry E. Lenig, Jr.
* Chief Financial Officer, Treasurer and Secretary July 1, 1998
- -------------------------------------- (Principal Financial Officer)
Michael P. Keirnan
* Controller July 1, 1998
- -------------------------------------- (Principal Accounting Officer)
Charles Ackerman
* Chairman of the Board July 1, 1998
- --------------------------------------
Donald W. Wilson
* Director July 1, 1998
- --------------------------------------
W. Richard Anderson
* Director July 1, 1998
- --------------------------------------
James R. Brock
* Director July 1, 1998
- --------------------------------------
J. Kelly Elliott
Director
- --------------------------------------
Jonathan D. Pollock
* Director July 1, 1998
- --------------------------------------
Donald G. Russell
</TABLE>
* The undersigned by signing his name hereto, does sign and execute this
Amendment No. 4 to the Registration Statement pursuant to the Powers of
Attorney executed by the above-named officers and directors of the Company and
which have been filed with the Securities and Exchange Commission on behalf of
such officers and directors.
By: /s/ LARRY E. LENIG, JR.
---------------------------------------------------------
Larry E. Lenig, Jr.
as Attorney-in-Fact
II-5
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<C> <S>
2.1 GGI's Second Amended Plan of Reorganization under chapter 11
of the Bankruptcy Code.
2.2 Offer to Purchase for Cash all of the Common Shares of Solid
State not already held by or on behalf of SSGI or its
Affiliates at a price of Cdn $3.50 per Common Share by SSGI.
3.1 (i) Restated Certificate of Incorporation of the Company, as
amended.
3.1 (ii) Amended and Restated By-Laws of the Company.
4.1 Specimen Certificate for the Common Stock, par value $.001,
of the Company.
4.2 Registration Rights Agreement between Grant and Elliott,
dated September 19, 1997.
4.3 Amendment No. 1 to Registration Rights Agreement between
Grant and Elliott, dated October 1, 1997.
4.4 Amendment No. 2 to Registration Rights Agreement between
Grant and Elliott, dated December 17, 1997.
4.5 Registration Rights Agreement among the Company, the
Subsidiary Guarantors and the Initial Purchaser, dated
February 18, 1998.
4.6 Indenture among the Company, the Subsidiary Guarantors and
LaSalle National Bank, as Trustee, dated February 18, 1998.
5.1 Opinion of Jones, Day, Reavis & Pogue as to the validity of
the securities being offered.
10.1 Loan and Security Agreement between Grant and Elliott, dated
October 1, 1997.
10.2 First Amendment to Loan and Security Agreement between Grant
and Elliott, dated December 19, 1997.
10.3 Demand Promissory Note from Grant to Elliott, dated November
26, 1997.
10.4 Subordinated Promissory Note from Grant to Elliott, dated
December 18, 1997.
10.5 Stock Purchase Agreement among the Company, Elliott and
Westgate, dated December 19, 1997.
10.6 Restated and Amended Employment Agreement between Grant and
Larry E. Lenig, Jr., dated October 1, 1997.
10.7 Executive Employment Agreement between Solid State and
Mitchell L. Peters, dated November 24, 1997.
10.8 Grant Geophysical, Inc. 1997 Equity and Performance
Incentive Plan.
10.9 Loan Agreement among Elliott, Westgate, Solid State and the
U.S. Subsidiary, dated October 16, 1996.
10.10 Form of Promissory Note from the U.S. Subsidiary to Elliott.
10.11 Letter Agreement among Elliott, Westgate, Solid State and
the U.S. Subsidiary, dated June 17, 1997.
10.12 Letter Agreement among Elliott, Westgate, Solid State and
the U.S. Subsidiary, dated September 4, 1997.
10.13 Letter Agreement among Elliott, Westgate, Solid State and
the U.S. Subsidiary, dated October 17, 1997.
10.14 Letter Agreement among Elliott, Westgate, Solid State and
the U.S. Subsidiary, dated November 30, 1997.
10.15 Letter Agreement between Elliott and Mitchell L. Peters,
dated November 24, 1997.
10.16 Consulting Agreement between the Company and Donald W.
Wilson, dated April 28, 1998.
10.17 * Second Amendment, Consent and Waiver to Loan and Security
Agreement between Grant and Elliott, dated June 5, 1998.
21.1 Subsidiaries of the Company.
23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5.1).
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of Price Waterhouse, Chartered Accountants.
24.1 Powers of Attorney.
99.1 Form of Subscription Exercise Notice.
</TABLE>
- ---------------
* Filed herewith
<PAGE> 1
EXHIBIT 10.17
SECOND AMENDMENT, CONSENT AND WAIVER
TO LOAN AND SECURITY AGREEMENT
This Second Amendment, Consent and Waiver to Loan and Security Agreement,
dated as of June 5, 1998 (this "AGREEMENT"), is between GRANT GEOPHYSICAL, INC.,
a Delaware corporation (the "BORROWER"), and ELLIOTT ASSOCIATES, L.P., a
Delaware limited partnership (the "LENDER"). Capitalized terms used in this
Agreement and not otherwise defined have the meanings assigned to such terms in
the Secured Loan Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender are parties to the Loan and Security
Agreement dated as of October 1, 1997 (as amended and modified from time to
time, the "SECURED LOAN AGREEMENT");
WHEREAS, the Lender has extended credit under the Secured Loan Agreement as
evidenced by, among other things, the Revolving Note dated as of October 1, 1997
(the "EXISTING NOTE"), made by the Borrower in favor of the Lender in the
original principal amount of $5,000,000;
WHEREAS, the Borrower and the Lender desire to amend and restate the
Existing Note to increase the maximum principal amount to $15,000,000 and to
extend the maturity date to March 31, 2000;
WHEREAS, the Borrower and the Lender desire to amend the Secured Loan
Agreement to, among other things, (i) reflect the amendments to the Existing
Note, (ii) increase the Maximum Revolving Facility available under the Secured
Loan Agreement to $15,000,000 and (iii) extend the Maturity Date to March 31,
2000;
WHEREAS, the Borrower has informed the Lender that it has created Grant
Geophysical Corp., a Texas corporation and a wholly owned subsidiary of the
Borrower ("GGC"), and has transferred substantially all of its operating assets
to GGC (the "TRANSFER"); in addition, one of the Borrower's Subsidiaries, Grant
Geophysical (Int'l), Inc., a Texas corporation ("INT'L"), has created Recursos
Energeticos Ltda, a Columbian corporation ("REL");
WHEREAS, the Borrower has informed the Lender that it has created SSGI
Acquisition Corp., a Canadian corporation and a wholly owned subsidiary of the
Borrower ("SSGI"), and that SSGI has acquired all of the capital stock of Solid
State Geophysical Inc., a Canadian corporation ("SOLID STATE"), in a cash tender
offer consummated in December, 1997 (the "ACQUISITION"); Solid State has the
following wholly owned subsidiaries: Solid State Internacional Ingenieria C.A.,
a Venezuelan corporation ("SSII") and Solid State Geophysical Corp., a Colorado
corporation ("SSGC");
WHEREAS, the Borrower has requested that the Lender consent to the creation
of GGC and REL, the consummation of the Transfer as described above, the
creation of SSGI and the
<PAGE> 2
consummation of the Acquisition as described above and waive certain covenants
of the Loan Agreement to permit such actions; and
WHEREAS, the Borrower has informed the Lender that it intends to redeem all
of the outstanding cumulative pay-in-kind preferred stock, par value $.001 per
share, of the Borrower (the "Preferred Stock Redemption"), and upon completion
of the Preferred Stock Redemption, the Borrower intends to amend its Restated
Certificate of Incorporation (the "Charter Amendment");
NOW, THEREFORE, in consideration of the foregoing recitals, the actions
contemplated therein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS TO SECURED LOAN AGREEMENT
On the date this Agreement becomes effective, after satisfaction by the
Borrower of each of the conditions set forth in Section 4:
1.1 THE DEFINITION OF "LIABILITIES" AND SUBSECTIONS 2.4, 4.2, 7.4, 10.5,
10.9, 10.14 AND 10.18 of the Secured Loan Agreement hereby are amended by (i)
replacing each reference in such subsections to "Loan(s)" to "Revolving Loan(s)"
and (ii) replacing each reference in such subsections to "Note(s)" to "Revolving
Note(s)".
1.2 SUBSECTION 1.1 of the Secured Loan Agreement hereby is amended by
deleting the definitions of "DEBT OFFERING", "LOANS", "NOTES", "TERM LOAN" and
"TERM NOTE" in such subsection in their entirety.
1.3 SUBSECTION 1.1 of the Secured Loan Agreement is amended by deleting the
reference to "$20,800,000" in the definition of "TOTAL FACILITY" and replacing
it with "$15,000,000".
1.4 SUBSECTION 2.1 of the Secured Loan Agreement is amended by deleting the
reference to "$5,000,000" in the first sentence of such section and replacing it
with "$15,000,000".
1.5 SUBSECTION 2.2(A) of the Secured Loan Agreement hereby is amended by
deleting such subsection in its entirety and replacing it as follows:
(A) OPTIONAL PREPAYMENTS. Borrower may prepay the Revolving Loans
without premium or penalty in whole or in part, provided that (i) Borrower
shall give Lender not less than one (1) Business Day's prior notice
thereof, specifying the Revolving Loans to be prepaid and the date and
amount of prepayments, (ii) each partial prepayment shall be made in a
principal amount of $25,000 or an integral multiple thereof and (iii) if
such prepayment prepays all Revolving Loans in full and is accompanied by
the termination in whole of all Revolving Loans, Borrower shall pay Lender
accrued interest on the Revolving Loans to the date of prepayment. Amounts
repaid pursuant to this SUBSECTION 2.2(A) may be reborrowed subject to
SUBSECTION 2.1.
2
<PAGE> 3
1.6 SUBSECTION 2.2(B) of the Secured Loan Agreement hereby is amended by
deleting such subsection in its entirety and replacing it as follows:
(B) MANDATORY PREPAYMENTS:
(i) EXCESS CASH FLOW. Borrower agrees to automatically make an
Excess Cash Flow Payment, if any, by 1:00 p.m. on every Friday
following the Closing Date (if any such Friday is not a Business Day
then any payment required to be made on such day shall be made by 1:00
p.m. on the preceding Thursday). Any Excess Cash Flow Payments shall
be applied to reduce the principal amount of the Revolving Loans then
outstanding; provided, however, that if the amount of any Excess Cash
Flow Payment exceeds the principal amount of the Revolving Loans then
outstanding, the amount by which such Excess Cash Flow Payment exceeds
the amount equal to the sum of the principal amount of the Revolving
Loans then outstanding plus any interest and fees then owing to Lender
shall be deducted from such Excess Cash Flow Payment. Amounts repaid
pursuant to this SUBSECTION 2.2(B)(i) may be reborrowed subject to
SUBSECTION 2.1.
(ii) FOREIGN EXCESS CASH FLOW. In the event of the occurrence and
continuation of an Event of Default, Lender may require Borrower to
make one or more Foreign Excess Cash Flow Payments on such date or
dates as Lender shall determine. Any Foreign Excess Cash Flow Payment
shall be applied to reduce the principal amount of the Revolving Loans
then outstanding. Amounts repaid pursuant to this SUBSECTION
2.2(B)(ii) shall reduce the Maximum Revolving Facility by such amounts
and may not be reborrowed.
1.7 SUBSECTION 2.6 of the Secured Loan Agreement is amended by deleting the
first sentence of such section in its entirety and replacing it as follows:
The term for this Agreement shall be from the date hereof until March
31, 2000 (the "MATURITY DATE") and shall not be renewable without the prior
written consent of Lender.
1.8 SECTION 2 of the Secured Loan Agreement hereby is amended by deleting
Subsection 2.8 in its entirety.
1.9 SECTION 7.9 of the Secured Loan Agreement hereby is amended by deleting
such subsection in its entirety and replacing it as follows:
7.9 USE OF PROCEEDS. Borrower shall use the proceeds of the Revolving
Loans for general working capital purposes.
SECTION 2. AMENDMENT TO RELATED DOCUMENTS
2.1 AMENDMENT TO EXHIBITS. On the date this Agreement becomes effective,
Exhibit G to the Secured Loan Agreement shall be deleted in its entirety.
2.2 EXISTING NOTE. On the date this Agreement becomes effective, the
Existing Note is amended, restated and replaced in its entirety by the Amended
and Restated Revolving Note (the
3
<PAGE> 4
"AMENDED NOTE"), made by the Borrower in favor of the Lender substantially in
the form of EXHIBIT A to this Agreement, and EXHIBIT A to the Secured Loan
Agreement is replaced by EXHIBIT A to this Agreement. Upon receipt of the
executed Amended Note, the Lender will mark the Existing Note "superseded" and
return it to the Borrower.
2.3 AMENDMENT AND REAFFIRMATION OF GUARANTY. On the date this Agreement
becomes effective, each Guaranty and Security Agreement dated as of the Closing
Date (the "GUARANTIES"), and made by each applicable Subsidiary in favor of the
Lender will be reaffirmed pursuant to the Second Consent and Reaffirmation of
Guaranty and Security Agreement executed by such Subsidiary in favor of the
Lender substantially in the form of EXHIBIT B to this Agreement (the
"REAFFIRMATION OF GUARANTIES").
SECTION 3. CONSENT AND WAIVER
3.1 CONSENT AND WAIVER. (A) On the date this Agreement becomes effective,
after satisfaction by the Borrower of each of the conditions set forth in
SECTION 5 below (the "EFFECTIVE DATE"), the Lender consents to the creation of
GGC and SSGI and agrees that such creation does not constitute an Event of
Default under the Secured Loan Agreement.
(B) On the Effective Date, the Lender consents to the Transfer and
waives any Event of Default under Section 9.1(B) of the Secured Loan
Agreement due to the Borrower's noncompliance with the covenants set forth
in Sections 8.6 and 8.12 of the Secured Loan Agreement due solely to the
Transfer.
(C) On the Effective Date, the Lender consents to the Acquisition and
waives any Event of Default under Section 9.1(B) of the Secured Loan
Agreement due to the Borrower's noncompliance with the covenants set forth
in Sections 8.3, 8.4 and 8.12 of the Secured Loan Agreement due solely to
the Acquisition.
(D) On the Effective Date, the Lender consents to the Preferred Stock
Redemption and the Charter Amendment and waives any Event of Default under
Section 9.1(B) of the Secured Loan Agreement due to the Borrower's
noncompliance with the covenants set forth in Sections 8.8 and 8.10 of the
Secured Loan Agreement due to the Preferred Stock Redemption and the
Charter Amendment or any previous such redemption or amendment.
3.2 NO OTHER WAIVER. Nothing in this Agreement should in any way be deemed
(i) a waiver of any Event of Default other than as specifically set forth above
or (ii) an agreement to forbear from exercising any remedies with respect to any
such other Event of Default.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement and to make all future
Loans under the Secured Loan Agreement, as amended hereby, the Borrower
represents and warrants to the Lender that:
(a) DUE AUTHORIZATION, ETC. The execution, delivery and performance by
the Borrower of this Agreement is within its corporate powers, have been
duly authorized by
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all necessary corporate action (including, without limitation, shareholder
approval), have received all necessary consents and governmental approval
(if any shall be required), and does not and will not contravene or
conflict with any requirement of law or contractual obligation binding upon
such entity. This Agreement is the legal, valid and binding obligations of
the Borrower and the Reaffirmation of Guaranties are the legal, valid and
binding obligation of each Subsidiary a party thereto, enforceable against
the Borrower and each Subsidiary, respectively, in accordance with their
respective terms.
(b) CERTAIN AGREEMENTS. On the date hereof, all representations and
warranties of the Borrower set forth in the Secured Loan Agreement and the
Financing Agreements are true and correct in all material respects, without
any waiver or modification thereof and no default of any party exists under
any Financing Agreement.
SECTION 5. CONDITIONS TO EFFECTIVENESS
The obligation of the Lender to make the amendments, consents and waivers
contemplated by this Agreement, and the effectiveness thereof, are subject to
the following:
(a) NO DEFAULT. As of the Effective Date, no Default or Event of
Default under the Secured Loan Agreement has occurred and is continuing or
will result from the amendments set forth herein.
(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Borrower contained in this Agreement and the Secured Loan Agreement,
as amended hereby, and the Financing Agreements, as amended hereby, shall
be true and correct as of the date hereof.
(c) DOCUMENTS. The Lender shall have received all of the following,
each duly executed and dated the date hereof (or such earlier date as shall
be satisfactory to the Lender) in form and substance satisfactory to the
Lender:
(1) This Agreement.
(2) The Amended Note substantially in the form of Exhibit A to
this Agreement.
(3) Reaffirmation of Guaranties from each applicable Subsidiary
substantially in the form of EXHIBIT B to this Agreement.
(4) A Guaranty and Security Agreement from each of GGC, SSGI,
Solid State, SSII, SSGC and REL in favor of the Lender substantially
in the form of EXHIBIT F to the Secured Loan Agreement.
(5) UCC financing statements from GGC, SSGI, Solid State, SSII,
SSGC and REL covering the Guarantor Collateral (as defined in the
Guaranty and Security Agreements described in CLAUSE (4) above) for
such jurisdictions as the Lender deems necessary or advisable.
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(6) A Pledge Amendment to the Stock Pledge Agreement dated as of
October 1, 1997, made by the Borrower in favor of the Lender, which
amendment includes the all of the outstanding capital stock of GGC and
SSGI owned by the Borrower.
(7) A Stock Pledge Agreement from each of Int'l (relating to the
capital stock of REL and Grant Geophysical do Brasil Ltda.), SSGI
(relating to the capital stock of Solid State) and Solid State
(relating to the capital stock of SSII and SSGC) in favor of the
Lender substantially in the form of EXHIBIT E to the Secured Loan
Agreement.
(8) Original stock certificates, along with undated stock powers
signed in blank, evidencing the capital stock pledged under CLAUSES
(6) and (7) above.
(9) Copies of resolutions by the board of directors of each of
GGC, SSGI, Solid State, SSII, SSGC, Grant Geophysical do Brasil Ltda.
and REL authorizing or ratifying the execution, delivery and
performance by such Subsidiary of the Guaranty and Security Agreements
described in CLAUSE (4) above.
(10) Copies of all documents evidencing any necessary corporate
action, consents and governmental approvals, if any, with respect to
this Agreement.
(11) Such other documents as the Lender may reasonably request.
SECTION 6. MISCELLANEOUS
6.1 CAPTIONS. The recitals to this Agreement (except for definitions) and
the section captions used in this Agreement are for convenience only, and shall
not affect the construction of this Agreement.
6.2 GOVERNING LAW; SEVERABILITY. THIS AGREEMENT SHALL BE A CONTRACT MADE
UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES. WHEREVER POSSIBLE EACH PROVISION OF THIS AGREEMENT
SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS AGREEMENT SHALL BE PROHIBITED BY OR
INVALID UNDER SUCH LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF
SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH
PROVISION OR THE REMAINING PROVISIONS OF THIS AGREEMENT.
6.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Agreement.
6.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Borrower and the Lender and their respective successors and assigns, and shall
inure to the sole benefit of the
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Borrower and the Lender and the successors and assigns of the Borrower and the
Lender. The Borrower shall have no right to assign its rights or delegate its
duties under this Agreement.
6.5 REFERENCES. From and after the date hereof, each reference in the
Secured Loan Agreement or any other Financing Agreement to "this Agreement,"
"hereunder," "hereof," "herein," or words of like import, and each reference in
the Secured Loan Agreement or any other Financing Agreement to another Financing
Agreement to the Secured Loan Agreement or to any term, condition or provision
contained "thereunder," "thereof," "therein," or words of like import, shall
mean and be a reference to the Secured Loan Agreement or such other Financing
Agreement, as applicable (or such term, condition or provision, as applicable),
as amended, supplemented or otherwise modified by this Agreement and the
Reaffirmation of Guaranties, as applicable.
6.6 CONTINUED EFFECTIVENESS. Notwithstanding anything contained herein, the
terms of this Agreement are not intended to and do not serve to effect a
novation as to the Secured Loan Agreement, any Revolving Note, the Guaranties or
any of the Financing Agreements provided to furnish security therefor. The
parties hereto expressly do not intend to extinguish the Secured Loan Agreement,
any Revolving Note, the Guaranties or any Financing Agreement. Instead, it is
the express intention of the parties hereto to reaffirm any indebtedness
outstanding under the Secured Loan Agreement, which is evidenced by the
Revolving Note and reaffirm that any such indebtedness is secured by the various
Financing Agreements. The Secured Loan Agreement, as amended hereby, the
Revolving Note, and all other Financing Agreements, as amended, remain in full
force and effect.
6.7 COSTS, EXPENSES AND TAXES. The Borrower affirms and acknowledges that
SUBSECTION 10.3 of the Secured Loan Agreement applies to this Agreement and the
transactions and agreements and documents contemplated hereunder.
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Delivered at New York, New York, as of the day and year first above
written.
GRANT GEOPHYSICAL, INC., a Delaware
corporation
By: /s/ Larry E. Lenig, Jr.
----------------------------------------
Name: Larry E. Lenig, Jr.
Title: President and Chief Executive Officer
ELLIOTT ASSOCIATES, L.P., a Delaware
limited partnership
By: /s/ Paul Singer
----------------------------------------
Name: Paul Singer
Title: General Partner
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