AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT by and among SEITEL Holdings, INC. ValueAct Capital Master Fund, L.P. CENTERBRIDGE CAPITAL PARTNERS II, L.P. CENTERBRIDGE CAPITAL PARTNERS SBS II, L.P. AND THE MANAGEMENT INVESTORS IDENTIFIED HEREIN...
AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT
by and among
SEITEL Holdings, INC.
ValueAct Capital Master Fund, L.P.
CENTERBRIDGE CAPITAL PARTNERS II, L.P.
CENTERBRIDGE CAPITAL PARTNERS SBS II, L.P.
AND
THE MANAGEMENT INVESTORS IDENTIFIED HEREIN
Dated as of May 23, 2011
TABLE OF CONTENTS
ARTICLE I. Restrictions On Transfer Of Securities *
1.1. Restrictions on Transfers of Securities *
1.2. Legend *
1.3. Notation *
1.4. Transfer of Rights. *
1.5. Change in Ownership Percentage *
ARTICLE II. Other Covenants and Representations *
2.1. Inspection and Access *
2.2. Public Offering or Sale of the Company *
2.3. Corporate Opportunity *
2.4. Right of First Offer *
2.5. Tag-Along Rights *
2.6. Preemptive Rights *
ARTICLE III. Corporate Actions *
3.1. Directors and Voting Agreements *
3.2. Right to Remove Certain of the Company's Directors *
3.3. Right to Fill Certain Vacancies on the Board of Directors *
3.4. Committees; Directors of Subsidiaries *
3.5. Amendment of Certificate and Bylaws *
3.6. Centerbridge Approval *
3.7. Management and Information Rights *
ARTICLE IV. Additional Restrictions On Securities Held By Management Investors *
4.1. Repurchase and Put Options *
4.2. Repurchase Price *
4.3. Certain Obligations of the Company *
4.4. Repurchase by ValueAct Capital and Centerbridge *
4.5. Repurchase by the Company *
4.6. Repurchase by ValueAct Capital and Centerbridge at the Option of the Holder *
4.7. Closing *
4.8. Fair Market Value *
ARTICLE V. Miscellaneous *
5.1. Effective Time *
5.2. Amendment and Modification *
5.3. Successors and Assigns *
5.4. Separability *
5.5. Notices *
5.6. Governing Law *
5.7. Headings; Definitions *
5.8. Counterparts *
5.9. Further Assurances *
5.10. Termination *
5.11. Indemnification of Centerbridge and ValueAct Capital *
5.12. Exhibits and Supplement and Disclosure Letter *
5.13. Confidentiality *
5.14. Remedies *
5.15. Party No Longer Owning Securities *
5.16. No Effect on Employment *
5.17. Pronouns *
5.18. Future Individual Investors *
5.19. Entire Agreement *
Defined Terms
EXHIBITS
exhibit a form of amended and restated certificate of incorporation
EXHIBIT B FORM OF MANAGEMENT RIGHTS LETTER
Amended And Restated Securities Holders Agreement
THIS IS AN AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT, dated as of May 23, 2011 (the "Agreement"), by and among Seitel Holdings, Inc., a Delaware corporation (the "Company"), ValueAct Capital Master Fund, L.P., a British Virgin Islands limited partnership ("ValueAct Capital"), Centerbridge Capital Partners II, L.P., a Delaware limited partnership (the "Centerbridge Fund" or "Centerbridge"), Centerbridge Capital Partners SBS II, L.P., a Delaware limited partnership (the "Centerbridge Coinvest Fund") and the individuals listed on the signature pages hereto as "Management Investors" (such individuals, the "Management Investors," and each such individual, a "Management Investor"). ValueAct Capital, the Centerbridge Fund, the Centerbridge Coinvest Fund and each of the Management Investors and any other investor in the Company who becomes a party to or agrees to be bound by this Agreement are sometimes referred to herein individually as an "Investor" and collectively as the "Investors." ValueAct Capital and Centerbridge are together referred to as the "Major Stockholders" and each individually as a "Major Stockholder."
Background
A. This Agreement is being entered into concurrently with the consummation of the transactions contemplated by the Stock Purchase Agreement, dated as of May 21, 2011 (the "Stock Purchase Agreement"), by and between the Company, the Centerbridge Fund and the Centerbridge Coinvest Fund.
B. Pursuant to the terms of the Stock Purchase Agreement, the Centerbridge Fund and the Centerbridge Coinvest Fund are acquiring 483,803 shares of common stock, par value $0.001 of the Company (the "Common Stock") for an aggregate purchase price of $125,000,000 (the "Investment").
C. ValueAct Capital and the Management Investors currently own Common Stock and are party to that certain Security Holders Agreement, dated as of January 8, 2007, by and among the Company, ValueAct Capital and the Management Investors (the "Original Agreement").
D. In connection with the Investment, the Company, ValueAct Capital and the Management Investors wish to amend and restate in its entirety the Original Agreement, and the Investors, including the Centerbridge Fund, the Centerbridge Coinvest Fund, and the Company wish to set forth herein certain agreements regarding their future relationships and their rights and obligations with respect to Securities (as defined below) of the Company, which agreements shall be effective from and after the closing of the Investment in accordance with the terms of the Stock Purchase Agreement.
E. As used herein, the term "Securities" shall mean Common Stock (including but not limited to any shares of Common Stock issued in connection with the exercise of options issued pursuant to the Seitel Holdings, Inc. 2007 Non-Qualified Stock Option Plan and the Seitel Holdings, Inc. 2008 Restricted Stock and Restricted Stock Unit Plan, which shares of Common Stock are referred to herein as "Incentive Securities") and any other shares of capital stock of the Company, and any securities convertible into or exchangeable for such capital stock, and any options (including, but not limited to, any options now or hereafter issued to Investors and options issued pursuant to the Seitel Holdings, Inc. 2007 Non-Qualified Stock Option Plan and the Seitel Holdings, Inc. 2008 Restricted Stock and Restricted Stock Unit Plan), warrants or other rights to acquire such capital stock or securities, now or hereafter held by any party hereto, including all other securities of the Company (or a successor to the Company) received on account of ownership of Common Stock, including all securities issued in connection with any merger, consolidation, stock dividend, stock distribution, stock split, reverse stock split, stock combination, recapitalization, reclassification, subdivision, conversion or similar transaction in respect thereof and the provisions of this Agreement shall apply, to the full extent set forth herein, with respect to any of such Securities and shall be appropriately adjusted for any dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof.
Terms
In consideration of the mutual covenants contained herein and intending to be legally bound hereby, the parties agree to amend and restate the Original Agreement in its entirety to read as follows:
Restrictions On Transfer Of Securities- Restrictions on Transfers of Securities
- (i). No Investor other than a Major Stockholder and its Affiliates shall Transfer (other than in connection with a redemption by the Company made in compliance with Section 3.6 below) any Securities unless (x) such Transfer is to a Person approved in advance in writing by the Board of Directors, and (y) such Transfer complies with the provisions of this Section 1.1 and Article II hereof. Until the first anniversary of the closing of the Investment, no Major Stockholder or its Affiliates shall Transfer any Securities to any Person other than a Permitted Transferee unless such Transfer has been approved in advance in writing by the other Major Stockholder. Any purported Transfer in violation of this Agreement shall be null and void and of no force and effect, and the purported transferee shall have no rights or privileges in or with respect to the Company. As used herein, "Transfer" includes the making of any sale, exchange, assignment, hypothecation, gift, security interest, pledge or other encumbrance, or any contract therefor, any voting trust or other agreement or arrangement with respect to the transfer or grant of voting rights (except for the voting agreement set forth in Article III hereof) or any other beneficial interest in any of the Securities, the creation of any other claim thereto or any other transfer or disposition whatsoever, whether voluntary or involuntary, affecting the right, title, interest or possession in or to such Securities. As used herein, "Person" means an individual or a corporation, partnership, limited liability company, joint venture, trust, regulatory or governmental agency or authority or other organization or entity of any kind.
- As used herein, "Permitted Transferee" shall mean:
- in the case of any Investor who is a natural person, such person's spouse or children or grandchildren (in each case, natural or adopted), or any trust for the sole benefit of such person, such person's spouse or children or grandchildren (in each case, natural or adopted), or any corporation, partnership or limited liability company in which the direct and beneficial owner of all of the equity interests is such individual person or such person's spouse or children or grandchildren (in each case, natural or adopted);
- in the case of any Investor who is a natural person, the heirs, executors, administrators or personal representatives upon the death of such person or upon the incompetency or disability of such person for purposes of the protection and management of such person's assets;
- (A) in the case of ValueAct Capital or any ValueAct Capital Affiliates, a general partner, managing partner or managing member of ValueAct Capital or a managing member of VA Partners I, LLC or ValueAct Capital Management, LLC (each of the foregoing, a "ValueAct Capital Partner") and any corporation, partnership, limited liability company or other entity that is controlled by a ValueAct Capital Partner or that is an Affiliate (as hereinafter defined) of ValueAct Capital or any ValueAct Capital Partner, or ValueAct Capital Partners, L.P., ValueAct Capital Partners II, L.P.,ValueAct Capital International I, L.P. or ValueAct Capital International II, L.P. (each of the entities and individuals described in this clause (iii)(A) collectively, "ValueAct Capital Affiliates") and (B) in the case of Centerbridge or any of its Affiliates, any corporation, partnership, limited liability company or other Person that is an Affiliate of Centerbridge or any current or former managing director, director, general partner or member of Centerbridge;
- in the case of any Investor, any Person if such Person takes such Securities pursuant to a sale in connection with a Public Offering. As used herein, "Public Offering" means a successfully completed firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act (other than a registration statement on Form S-8 or S-4 or any similar or successor form or any other registration statement relating to an exchange offer or an offering of securities solely to the Company's or a Subsidiary's employees or security holders or to security holders of a corporation or other entity being acquired by, or merged with, the Company or used to offer or sell a combination of debt and equity securities of the Company in which (i) not more than 10% of the gross proceeds from such offering is attributable to the equity securities and (ii) after giving effect to such offering, the Company does not have a class of equity securities required to be registered under the Exchange Act) in respect of the offer and sale of shares of Common Stock for the account of the Company resulting in aggregate net proceeds to the Company and any stockholder selling shares of Common Stock in such offering of not less than $50,000,000; or
- in the case of any Investor that is not a natural person, such Investor's Affiliates.
- As used herein, "Affiliate" means, with respect to any Person, any Person (other than portfolio companies of such Person) directly or indirectly controlling, controlled by or under common control with such Person. No Limited Transferee of any Person shall be an "Affiliate" of such Person for any purpose under this Agreement.
- Legend
- Notation
- Transfer of Rights.
. The following restrictions on Transfer (as defined in Section 1.1(a) below) shall apply to all Securities owned by any Investor:
(ii). Prior to any proposed Transfer of any Securities, the holder thereof shall give written notice to the Company describing the manner and circumstances of the proposed Transfer, together with, if requested by the Company, a written opinion of legal counsel, addressed to the Company and the transfer agent for the Company's equity securities, if other than the Company, and reasonably satisfactory in form and substance to the Company, to the effect that the proposed Transfer of the Securities may be effected without registration under the Securities Act of 1933, as amended (the "Securities Act"). Each certificate evidencing the Securities transferred shall bear the legends set forth in Section 1.2 hereof, except that such certificate shall not bear the legend contained in the first paragraph of Section 1.2 hereof if the opinion of counsel referred to above is to the further effect that such legend is not required in order to establish compliance with any provision of the Securities Act.
(iii). Nothing in this Section 1.1(a) shall prevent the Transfer of Securities by an Investor to one or more of its Permitted Transferees or to the Company; provided, however, that each such Permitted Transferee (except a Permitted Transferee by virtue of Section 1.1(b)(iv) hereof) shall take such Securities subject to and be fully bound by the terms of this Agreement applicable to it with the same effect as if it was an Investor (or if the Permitted Transferee was a Management Investor, a Management Investor) hereunder; and provided further, however, that (x) no Person (other than a Permitted Transferee by virtue of Section 1.1(b)(iv) hereof) shall be a Permitted Transferee unless such transferee executes and delivers a joinder to this Agreement reasonably satisfactory in form and substance to the Company which joinder states that such Person agrees to be fully bound by this Agreement as if it were an Investor and shall be deemed an Investor for all purposes hereunder (or if the transferor to the Permitted Transferee is a Management Investor hereunder, as a Management Investor and shall be deemed a Management Investor for all purposes hereunder) (a "Joinder"), and (y) no Transfer shall be effected except in compliance with the registration requirements of the Securities Act and any applicable state securities laws or pursuant to an available exemption therefrom. Other than a Transfer (x) pursuant to an Approved Sale or a Requested Sale, (y) pursuant to Rule 144 promulgated under the Securities Act that is otherwise in compliance with this Agreement, or (z) pursuant to a sale in connection with a Public Offering, it shall be a condition to any Transfer hereunder that such transferee executes and delivers a Joinder.
(iv). Nothing in this Section 1.1(a) shall prevent the Transfer by ValueAct Capital, Centerbridge or either of their respective Affiliates who have obtained Securities from ValueAct Capital, Centerbridge or either of their respective Affiliates in compliance with this Agreement to make an in-kind distribution effected in accordance with the fund and/or governing documents of such Person (an "In-Kind Distribution") to its limited partners (the "Limited Transferees"), who shall not be entitled to any of the rights or benefits of an Investor or a Major Stockholder under this Agreement other than those of a Tag Offeree under Section 2.5 and shall at all times be obligated to comply with the provisions of Section 2.2 in connection with an Approved Sale or a Requested Sale, as the case may be. As a condition to the right to distribute Securities pursuant to an In-Kind Distribution, the transferor shall require each Limited Transferee to execute and deliver a Joinder. Centerbridge and ValueAct Capital acknowledge and agree that the right to effect an In-Kind Distribution may be exercised solely by ValueAct Capital, Centerbridge or either of their respective Affiliates and only to the extent permitted by the fund or other governing documents of ValueAct Capital, Centerbridge or their respective Affiliates, as applicable.
. Any certificates representing Securities (other than Securities transferred pursuant to (i) an Approved Sale or a Requested Sale (with respect to the second legend), (ii) Rule 144 promulgated under the Securities Act or (iii) a sale in connection with a Public Offering), shall bear the following legends (in addition to any other legend required under applicable law):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE CORPORATION, THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE TERMS AND CONDITIONS OF A SECURITIES HOLDERS AGREEMENT BY AND AMONG THE CORPORATION AND THE HOLDERS SPECIFIED THEREIN, AS AMENDED FROM TIME TO TIME (THE "SECURITIES HOLDERS AGREEMENT"), A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION. THE SALE, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF THE SECURITIES IS SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE TRANSFERABLE OR OTHERWISE DISPOSABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.
. A notation will be made in the appropriate transfer records of the Company with respect to the restrictions on transfer of the Securities referred to in this Agreement.
.
- In connection with any Transfer of Common Stock by Centerbridge as may be permitted pursuant to the terms of this Agreement, the rights of Centerbridge which are specific to Centerbridge and/or the rights that Centerbridge is entitled to as a Major Stockholder hereunder or under the Registration Rights Agreement pursuant to the terms hereof or thereof shall not be assignable without the prior written approval of ValueAct Capital; provided that: (i) in connection with a Transfer of Common Stock by Centerbridge and/or its Affiliates to one Person or a Group (as defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) in one transaction or series of related transactions that results in such Person or Group having an Ownership Percentage of at least 15%, notwithstanding anything in this Agreement to the contrary, the rights of Centerbridge and/or the rights that Centerbridge is entitled to as a Major Stockholder hereunder or under the Registration Rights Agreement pursuant to the terms hereof or thereof prior to giving effect to such Transfer may be assigned to such Person or Group without the prior written approval of ValueAct Capital; provided further that: (ii) in the event that Centerbridge becomes entitled to the rights of ValueAct Capital pursuant to Section 1.5 (the "ValueAct Majority Rights"), in connection with a Transfer of Common Stock by Centerbridge and/or its Affiliates to one Person or a Group in one transaction or a series of related transactions that results in such Person or Group having an Ownership Percentage of at least 50%, notwithstanding anything in this Agreement to the contrary, the ValueAct Majority Rights and/or the rights that Centerbridge is entitled to as a Major Stockholder hereunder or under the Registration Rights Agreement pursuant to the terms hereof or thereof prior to giving effect to such Transfer may be assigned to such Person or Group without the prior written approval of ValueAct Capital.
- In connection with any Transfer of Common Stock by ValueAct Capital as may be permitted pursuant to the terms of this Agreement, the rights of ValueAct Capital which are specific to ValueAct Capital and/or the rights that ValueAct Capital is entitled to as a Major Stockholder hereunder or under the Registration Rights Agreement pursuant to the terms hereof or thereof shall not be assignable without the prior written approval of Centerbridge; provided that: (i) in connection with a Transfer of Common Stock by ValueAct Capital to one Person or a Group in one transaction or series of related transactions that results in such Person or Group having an Ownership Percentage of at least 50%, notwithstanding anything in this Agreement to the contrary, the rights of ValueAct Capital and/or the rights that ValueAct Capital is entitled to as a Major Stockholder hereunder or under the Registration Rights Agreement pursuant to the terms hereof or thereof prior to giving effect to such Transfer may be assigned to such Person or Group without the prior written approval of Centerbridge; provided further that: (ii) in the event that ValueAct Capital becomes entitled to the rights of Centerbridge pursuant to Section 1.5 (the "Centerbridge Minority Rights"), in connection with a Transfer by ValueAct Capital of Common Stock to one Person or a Group in one transaction or series of related transactions that results in such Person or Group having an Ownership Percentage equal to at least 15%, notwithstanding anything in this Agreement to the contrary, the Centerbridge Minority Rights and/or the rights that ValueAct Capital is entitled to as a Major Stockholder hereunder or under the Registration Rights Agreement pursuant to the terms hereof or thereof prior to giving effect to such Transfer may be assigned to such Person or Group without the prior written approval of Centerbridge.
- To the extent that the rights of a party or a Major Stockholder are assigned pursuant to the terms of this Section 1.4, the obligations of such party or Major Stockholder shall be assigned as well. The rights of a Major Stockholder to assign the ValueAct Majority Rights or Centerbridge Minority Rights, as the case may be, under this Agreement may only be exercised once by any particular Major Stockholder and may only be assigned to one Person or Group. If a Major Stockholder intends to exercise its right to assign the ValueAct Majority Rights or Centerbridge Minority Rights, as the case may be, under this Agreement in connection with any Transfer of Common Stock, a Major Stockholder shall provide prior written notice of the identity of the assignee and the terms and conditions of the proposed assignment to the Company and to the other Major Stockholder that the Major Stockholder effecting such Transfer is electing to assign, and is assigning, its ValueAct Majority Rights or Centerbridge Minority Rights, as the case may be, under this Section 1.4.
- The parties agree to amend this Agreement, to the extent necessary, in connection with a Transfer of Common Stock to implement the provisions of this Section 1.4 (including, if applicable, to provide that the provisions applicable to ValueAct Capital or Centerbridge, as the case may be, apply mutatis mutandis to the applicable assignee).
- For purposes of this Agreement, "Ownership Percentage" means an Investor's and its Affiliates' ownership of Common Stock as a percentage of all outstanding Common Stock as of the date of determination.
. If (i) Centerbridge's Ownership Percentage is greater than 50%, Centerbridge shall be entitled to the majority rights granted to ValueAct Capital under this Agreement (including Section 2.2 and Section 3 hereof) and/or (ii) ValueAct Capital's Ownership Percentage is less than 50%, ValueAct Capital shall be entitled to the minority rights granted to Centerbridge under this Agreement (including Section 2.2 and Section 3 hereof) (provided that Centerbridge shall also continue to be entitled to such rights in accordance with the terms of this Agreement).
. The Company shall provide the Centerbridge Fund and each of the Major Stockholders with the following information for so long as such party owns Securities:
- unaudited monthly (as soon as available and in any event within 30 days of the end of each month), unaudited quarterly (as soon as available and in any event within 45 days of the end of each quarter) and audited (by a nationally recognized accounting firm) annual (as soon as available and in any event within 90 days of the end of each year) financial statements prepared in accordance with generally accepted accounting principles in the United States as in effect from time to time, which statements shall include:
- the consolidated balance sheets of Seitel, Inc. ("Seitel") (and, to the extent otherwise prepared and available, the Company) and its Subsidiaries and the related consolidated statements of income, stockholders' equity and cash flows;
- a comparison to the corresponding data for the corresponding periods of the previous fiscal year and to Seitel's (and, to the extent otherwise prepared and available, the Company's) financial plan;
- in the case of the quarterly and annual financial statements only, unless management has otherwise prepared a narrative report for such monthly period, a reasonably detailed narrative descriptive report of the operations of Seitel (and, to the extent otherwise prepared and available, the Company) and its Subsidiaries in the form prepared for presentation to the senior management of Seitel (and, to the extent otherwise prepared and available, the Company) for the applicable period and for the period from the beginning of the then current fiscal year to the end of such period, if any;
- to the extent Seitel or the Company is required by law or pursuant to the terms of any outstanding indebtedness of Seitel or the Company to prepare such reports, any annual reports, quarterly reports and other periodic reports actually prepared and filed by Seitel or the Company pursuant to Section 13 or 15(d) of the Exchange Act as soon as available (provided, that any such reports shall be deemed to have been provided when such reports are publicly available via the Commission's XXXXX system or any successor to the XXXXX system); and
- such other information as the Centerbridge Fund or a Major Stockholder shall reasonably request. Nothing in this Agreement shall require the Company to prepare financial statements of the Company, whether audited or unaudited, or any other financial data or narrative descriptions thereof that it would otherwise not prepare.
Additionally, (x) the Company shall permit any authorized representatives designated by the Centerbridge Fund or a Major Stockholder reasonable access to visit and inspect any of the properties of the Company or any of its Subsidiaries, including its and their books of account, and to discuss its and their affairs, finances and accounts with its and their officers, all at such times as the Centerbridge Fund or a Major Stockholder may reasonably request, and (y) the Centerbridge Fund and the Major Stockholders shall have the right to consult with and advise the management of the Company and its Subsidiaries, upon reasonable prior notice at reasonable times from time to time, on all matters relating to the operation of the Company and its Subsidiaries.
- Public Offering or Sale of the Company
- At any time and from time to time, so long as ValueAct Capital's Ownership Percentage is greater than or equal to 50%, ValueAct Capital shall have the right, by delivery of a written notice to the Company and Centerbridge (the "Public Offering Notice"), to demand that the Company consummate a Public Offering and each Investor will cooperate and use its respective reasonable commercial efforts to facilitate the consummation of such Public Offering, including, but not limited to, taking, facilitating or observing the applicable actions and obligations set forth in the Registration Rights Agreement and other matters, provided that at the time of the pricing of such Public Offering and after giving pro forma effect thereto, the Return Conditions (as defined in Schedule 2.2(b) of the Supplement and Disclosure Letter) are satisfied. Notwithstanding the foregoing, ValueAct Capital shall have the right to deliver (but not the right to consummate a Public Offering) a Public Offering Notice if it believes, in good faith and after consultation with Centerbridge, that based upon then current market conditions, it is reasonably likely that the Return Conditions will be satisfied upon the consummation of such Public Offering. In connection with and in order to facilitate a Public Offering, each Investor agrees to take all such action as is necessary, including the voting of all shares of Securities owned by such Person in order to effectuate (i) any amendments to the Company's certificate of incorporation regarding the number of shares of the Company's authorized capital stock, (ii) any proposal to effect a stock split of the Common Stock, and any amendments to the Company's certificate of incorporation, to the extent reasonably requested by the Company or ValueAct Capital in connection with such offering, (iii) any other amendments to the Company's certificate of incorporation and bylaws as are customary for a company which is to engage in an initial public offering of its common stock and which is reasonably requested by the managing underwriters or by ValueAct Capital in order to expedite or facilitate the disposition of the Common Stock in connection with such offering, and (iv) the entering into of any contract, agreement or commitment reasonably necessary in order to effectuate any of the matters contemplated by this Section 2.2.
- Following the first anniversary of the closing of the Investment (the "Closing"), so long as ValueAct Capital's Ownership Percentage is greater than or equal to 50%, ValueAct Capital shall have the right, by delivery of a written notice to the Company and Centerbridge, to elect to require that the Company be sold to a Person or Group that is not an Affiliate of ValueAct Capital, whether by merger, consolidation, sale of all of the outstanding capital stock, sale of all or substantially all of its assets, Public Offering or otherwise (any of the foregoing, an "Approved Sale"), (i) each Investor will be obligated to consent to, vote for and raise no objections against, and waive dissenters and appraisal rights (if any) with respect to, the Approved Sale, (ii) if the Approved Sale is structured as a sale of stock, each Investor will agree to sell and will be permitted to sell all of such Investor's Common Stock (and shall deliver their shares of Common Stock with appropriate instruments of transfer as may reasonably be requested by ValueAct Capital, free and clear of all claims, liens or other encumbrances) on the terms and conditions approved by ValueAct Capital; provided that such terms and conditions must be the same terms and conditions that apply to ValueAct Capital and its Affiliates, and (iii) if the Approved Sale includes the sale, exchange, redemption, cancellation or other disposition of securities convertible into or exchangeable for capital stock of the Company, or options, warrants or other rights to purchase such capital stock or securities, each Investor will sell, exchange, redeem, agree to cancel or otherwise dispose of such Securities or options, warrants or other rights on the terms and conditions approved by ValueAct Capital. Each Investor will take all necessary and desirable actions in connection with the consummation of an Approved Sale, including executing all documents, including a sale, purchase or merger agreement, reasonably requested by the Company or ValueAct Capital containing the terms and conditions of the Approved Sale; provided, however, that no Investor shall be required to make any representations or warranties in any agreement relating to an Approved Sale other than representations and warranties relating to such Investor, as applicable, and the ownership of its Securities that are customary in similar transactions, including representations and warranties relating to title, authorization and execution and delivery, nor shall any Investor be required to provide indemnification with respect to any representations or warranties made by any other Investor or in an amount exceeding the amount of the gross proceeds received by such Investor in the Approved Sale and any such indemnification obligation shall be shared pro rata (in accordance with the Securities being sold) by all Investors selling Securities in such transaction (other than indemnification as a result of a breach of a representation or warranty as to title, which shall be solely the responsibility of the applicable Investor and shall not be subject to any limitation of liability hereunder). Notwithstanding anything to the contrary contained in this Agreement, any Approved Sale effected pursuant to this Section 2.2(b) prior to the fourth anniversary of the Closing must imply an indicative value of the Company (to the extent that there is any non-cash consideration, as set forth in a report prepared by an independent valuation expert retained by the Company and reasonably acceptable to Centerbridge) equal to the greater of the Return Conditions; provided, that, the Return Conditions shall be calculated upon Centerbridge's Investment in the Company on the date hereof but after giving effect to any dividends or distributions actually paid to Centerbridge or its Affiliates.
- Following the fifth anniversary of the Closing, so long as Centerbridge and its Affiliates own at least 50% of the shares of the Common Stock purchased in the Investment, Centerbridge shall have the right, by delivery of a written notice to the Company and ValueAct Capital, to elect to require that the Company be sold other than to a Person or Group that is not an Affiliate of Centerbridge, whether by merger, consolidation, sale of all of the outstanding capital stock, sale of all or substantially all of its assets, Public Offering or otherwise (any of the foregoing, a "Requested Sale"), and (i) each Investor will be obligated to consent to, vote for and raise no objections against, and waive dissenters and appraisal rights (if any) with respect to, the Requested Sale, (ii) if the Requested Sale is structured as a sale of stock, each Investor will agree to sell and will be permitted to sell all of such Investor's Common Stock (and shall deliver their shares of Common Stock with appropriate instruments of transfer as may reasonably be requested by Centerbridge, free and clear of all claims, liens or other encumbrances) on the terms and conditions approved by Centerbridge; provided that such terms and conditions must be the same terms and conditions that apply to Centerbridge and its Affiliates, and (iii) if the Requested Sale includes the sale, exchange, redemption, cancellation or other disposition of securities convertible into or exchangeable for capital stock of the Company, or options, warrants or other rights to purchase such capital stock or securities, each Investor will sell, exchange, redeem, agree to cancel or otherwise dispose of such Securities or options, warrants or other rights on the terms and conditions approved by Centerbridge. Each Investor will take all necessary and desirable actions in connection with the consummation of a Requested Sale, including executing all documents, including a sale, purchase or merger agreement, reasonably requested by the Company or Centerbridge containing the terms and conditions of the Requested Sale; provided, however, that no Investor shall be required to make any representations or warranties in any agreement relating to a Requested Sale other than representations and warranties relating to such Investor, as applicable, and the ownership of its Securities that are customary in similar transactions, including representations and warranties relating to title, authorization and execution and delivery, nor shall any Investor be required to provide indemnification with respect to any representations or warranties made by any other Investor or in an amount exceeding the amount of the gross proceeds received by such Investor in the Requested Sale and any such indemnification obligation shall be shared pro rata (in accordance with the Securities being sold) by all Investors selling Securities in such transaction (other than indemnification as a result of a breach of a representation or warranty as to title, which shall be solely the responsibility of the applicable Investor and shall not be subject to any limitation of liability hereunder). In connection with and in order to facilitate a Public Offering, each Investor agrees to take all such action as is necessary, including the voting of all shares of Securities owned by such Person in order to effectuate (i) any amendments to the Company's certificate of incorporation regarding the number of shares of the Company's authorized capital stock, (ii) any proposal to effect a stock split of the Common Stock, and any amendments to the Company's certificate of incorporation, to the extent reasonably requested by the Company or Centerbridge in connection with such offering, (iii) any other amendments to the Company's certificate of incorporation and bylaws as are customary for a company which is to engage in an initial public offering of its common stock and which is reasonably requested by the managing underwriters or by Centerbridge in order to expedite or facilitate the disposition of the Common Stock in connection with such offering, and (iv) the entering into of any contract, agreement or commitment reasonably necessary in order to effectuate any of the matters contemplated by this Section 2.2.
- The obligations of each of the Investors with respect to an Approved Sale or Requested Sale (other than a Public Offering), as applicable, are subject to the satisfaction of the conditions that: (i) upon the consummation of the Approved Sale or Requested Sale, as applicable, all of the Investors holding Common Stock will receive the same form and amount of consideration per share of Common Stock, or if any holder of Common Stock is given an option as to the form and amount of consideration to be received in respect of Common Stock, all Investors holding Common Stock will be given the same option and (ii) in the case of a holder of any securities referred to in clause (iii) of paragraph (b) above, (I) in the event such Securities are vested, the holder shall receive in such Approved Sale or Requested Sale, as applicable, unless otherwise provided in the terms of any agreement or instrument governing or evidencing such security, either (x) the same securities or other property that such holder would have received if such holder had converted, exchanged or exercised such security immediately prior to such Approved Sale or Requested Sale, as applicable, (after taking into account the conversion, exchange or exercise price applying to such Security and any applicable tax obligations of the holder in connection with such conversion, exchange or exercise) or (y) a security convertible or exchangeable for, or option, warrant or right to purchase, capital stock or other securities of a successor entity having substantially equivalent value, or (II) in the case where such securities are not vested, unless otherwise provided in the terms of any agreement or instrument governing or evidencing such security, such securities shall be cancelled.
- Each Investor acknowledges that its pro rata share (based upon the number of shares of Common Stock owned (or acquirable pursuant to options, warrants or other rights to purchase Common Stock or securities convertible into or exchangeable for Common Stock) by such holder) of the aggregate proceeds of an Approved Sale or Requested Sale, as applicable, may be reduced by transaction expenses incurred by the Company on behalf of all holders related to such Approved Sale or Requested Sale, as applicable.
- If the Approved Sale is a Public Offering, to the extent that ValueAct Capital or its Permitted Transferees are selling shares of Common Stock in such Public Offering, Centerbridge and its Affiliates shall have the right to sell shares of Common Stock in such Public Offering (on a pro rata basis with ValueAct Capital and its Permitted Transferees relative to the number of shares of Common Stock held by ValueAct Capital and its Affiliates and Centerbridge and its Affiliates, respectively). If the Requested Sale is a Public Offering, to the extent that Centerbridge or its Permitted Transferees are selling shares of Common Stock in such Public Offering, ValueAct Capital and its Affiliates shall have the right to sell shares of Common Stock in such Public Offering (on a pro rata basis with Centerbridge and its Permitted Transferees relative to the number of shares of Common Stock held by Centerbridge and its Affiliates and ValueAct Capital and its Affiliates, respectively). In either case, the Management Investors shall have the right to sell shares of Common Stock as set forth in the registration rights agreement to which they are a party.
- Corporate Opportunity
- Right of First Offer
- In the event that a Major Stockholder (which shall include a Major Stockholder's Permitted Transferee's and any Person assigned the rights of a Major Stockholder pursuant to Section 1.4 hereof) desires (i) to sell or otherwise effect the Transfer of any Common Stock (or other Securities) (in one or a series of transactions) to a third party, other than a Permitted Transferee and other than as an Investor being required to participate in an Approved Sale or a Requested Sale, as applicable, pursuant to Section 2.2 or as a Tag Offeree, or (ii) to cause the Company to effect an Approved Sale or a Requested Sale (other than a Public Offering), as applicable, (in the case of either of clauses (i) or (ii), the "Offered Property"), such Major Stockholder (for purposes of this Section 2.4, such Major Stockholder shall be referred to as the "Transferring Stockholder") shall give prompt written notice (a "First Offer Notice") to the non-transferring Major Stockholder (the "Non-Transferring Holder") of its desire to sell or cause to be sold the Offered Property. The Transferring Stockholder agrees not to consummate any such sale until the expiration of the Option Period (as defined below). The First Offer Notice shall identify (i) the number (if the Offered Property consists of Securities) and type of Offered Property, (ii) the purchase price at which the Transferring Stockholder wishes to sell and form of consideration (the "Offer Price") and (iii) all other material terms and conditions of the proposed sale (but need not specify the identity of the proposed transferee, if any).
- For a period of thirty (30) days (the "Option Period") following the receipt of the First Offer Notice, the Non-Transferring Holder (or its designated Affiliate(s), who shall execute a Joinder if the Offered Property constitutes Securities) shall have the right and option (but not the obligation) to purchase, at the Offer Price and on the same terms and conditions as set forth in the First Offer Notice, all but not less than all of the Offered Property. The rights of the Non-Transferring Holder set forth in this Section 2.4 are exercisable by delivery, within the Option Period, by the Non-Transferring Holder of an irrevocable written notice to the Transferring Stockholder (the "Notice of Acceptance") of the Non-Transferring Holder's commitment to purchase the Offered Property on the terms set forth in the First Offer Notice and this Section 2.4 (such Non-Transferring Holder's "Accepted Property"). Failure by the Non-Transferring Holder to give the Notice of Acceptance within the Option Period shall be deemed an election by such Non-Transferring Holder not to purchase the Offered Property.
- Delivery of a Notice of Acceptance by the Non-Transferring Holder shall constitute a contract between the Non-Transferring Holder, on the one hand, and the Transferring Stockholder, on the other hand, for the purchase and sale of the Accepted Property at the Offer Price and on the same terms and conditions as set forth in the First Offer Notice and this Section 2.4. If the Non-Transferring Holder has elected to purchase Offered Property hereunder, the Transfer of such Offered Property shall be consummated as soon as practical after the delivery of the Notice of Acceptance to the Transferring Stockholder, but in any event within ten (10) days after the expiration of the Option Period, subject to receipt of any required material third party or governmental approvals, compliance with applicable laws and the absence of any injunction or similar legal order preventing such transaction (collectively, the "Conditions"), in which case the purchase of the Accepted Property shall be delayed pending the satisfaction of the Conditions up to an additional ninety (90) days. The Transferring Stockholder and the Non-Transferring Holder shall be obligated to use commercially reasonable efforts to satisfy the Conditions as soon as possible. On the applicable closing date, the Transferring Stockholder and Non-Transferring Holder shall take all actions reasonably necessary (including cooperation in obtaining any required governmental consents) to convey such Offered Property, including any Securities, to be transferred in accordance with this Agreement, free of all claims, liens or other encumbrances, other than pursuant to this Agreement.
- If all notices required to be given pursuant to this Section 2.4 have been duly given, and (A) the Non-Transferring Holder determines not to exercise its option to purchase the Offered Property at the Offer Price and on the same terms and conditions as set forth in the First Offer Notice or (B) the purchase of Offered Property agreed to by the Non-Transferring Holder is not consummated in accordance with this Section 2.4 during the applicable time periods described in this Section 2.4 (and any such failure to consummate is not as a result of any breach hereof by the Transferring Stockholder), then the Transferring Stockholder shall have the right to enter into and consummate an agreement to sell to a third-party (a "Third-Party") the Offered Property at a price not less than the Offer Price and on terms and conditions no less favorable in any material respect to the Transferring Stockholder, economically or otherwise, than as set forth in the First Offer Notice; provided that, if any portion of the Offered Property consists of Securities, simultaneously with any such sale to a Third-Party, such Third-Party executes and delivers to the Company, for the benefit of the Company and all Investors, a Joinder. If the sale to a Third-Party is not consummated pursuant to the terms of the immediately preceding sentence and within the time periods described in the next paragraph (e), the Transferring Stockholder will not effect the transfer of any of the Offered Property without commencing de novo the procedures set forth in this Section 2.4.
- The closing of the sale of the Offered Property to any Third-Party under this Section 2.4 shall take place at the Company's principal executive offices (or such other place as the Transferring Stockholder and the applicable purchaser shall agree) on a date no later than one-hundred eighty (180) days following the date of delivery of the First Offer Notice (or if such date is not a business day, the first (1st) day thereafter that is a business day) at 10:00 a.m., local time.
- Tag-Along Rights
- No Major Stockholder (which shall include a Major Stockholder's Permitted Transferees and any Person assigned the rights of a Major Stockholder pursuant to Section 1.4) shall sell or otherwise effect the Transfer of any Common Stock (or other Securities) (in one or a series of transactions) to a third party other than a Permitted Transferee of the Major Stockholder or to the Company in compliance with Section 3.6(c) and Article IV below (in either case, a "Major Stockholder Transferee") unless all other Investors at such time (the "Tag Offerees") are offered an opportunity to participate ratably (as determined according to Section 2.5(b) below) in such transaction on the same terms as are to be received by the selling Major Stockholder (the "Selling Major Stockholder").
- Prior to any sale of any Common Stock subject to this Section 2.5, the Selling Major Stockholder shall notify the Company and the other Major Stockholder in writing of the proposed sale. Such notice (the "Inclusion Notice") shall set forth: (A) the number of shares of Common Stock subject to the proposed sale; (B) the name and address of the Major Stockholder Transferee; and (C) the proposed amount and form of consideration and the terms and conditions of payment offered by such Major Stockholder Transferee. The Company shall promptly, and in any event within 3 business days of the receipt by the Company of the Inclusion Notice, mail or cause to be mailed the Inclusion Notice to each Investor who owns shares of Common Stock. An Investor may exercise the tag-along right pursuant to this Section 2.5(a) and 2.5(b) (the "Tag-Along Right") by delivery of a written notice (the "Tag-Along Notice") to the Selling Major Stockholder within 10 days of the date the Company delivered the Inclusion Notice. The Tag-Along Notice shall state the number of shares of Common Stock that the Investor proposes to include in the proposed sale upon the terms and conditions set forth in the Inclusion Notice; provided, however, that if the proposed Major Stockholder Transferee is unwilling to purchase all of the Common Stock requested to be sold by all exercising Tag Offerees together with the Selling Major Stockholder, then each Tag Offeree shall have the right to sell pursuant to such Major Stockholder Transferee's offer, and upon the terms and conditions set forth in the Inclusion Notice, a number of such Tag Offeree's shares of Common Stock equal to such Tag Offeree's pro rata percentage (based on the shares of Common Stock held by the Selling Major Stockholder and its Affiliates and Tag Offerees and their respective affiliates exercising their Tag-Along Rights) of Common Stock that the Major Stockholder Transferee is willing to purchase pursuant to this Section 2.5. If any Tag Offeree elects not to participate in full or in part, the Selling Major Stockholder and each Tag Offeree that has elected to participate in full may increase the number of shares to be sold by it based upon its pro rata percentage (based upon the shares of Common Stock held by the Selling Major Stockholder and its Affiliates and the fully participating Tag Offerees and their respective Affiliates) of the number of shares any such Tag Offeree elects not to include pursuant to the terms hereof (the "Over-Allotted Shares") and this process shall continue until there are no more Over-Allotted Shares. If any Tag Offeree does not deliver a Tag-Along Notice during the 10-day period referred to above, the Selling Major Stockholder shall have the right for a 120-day period to effect the proposed sale of shares of Common Stock on terms and conditions no more favorable in any material respect, economically or otherwise, to the Selling Major Stockholder than those stated in the notice and in accordance with the provisions of this Section 2.5.
- If the proposed Major Stockholder Transferee of Common Stock proposed to be transferred by a Selling Major Stockholder is unwilling to purchase any Common Stock from a Tag Offeree that delivered a Tag-Along Notice even after any pro rata reduction pursuant to Section 2.5(b) (a "Non-Included Tag Offeree"), such Selling Major Stockholder may elect to purchase from such Non-Included Tag Offeree, for cash (in U.S. dollars), Common Stock having a purchase price equal to the aggregate purchase price such Non-Included Tag Offeree would have received in connection with the closing of such sale by the Selling Major Stockholder if such Non-Included Tag Offeree had been able to exercise its Tag-Along Rights (but only to the extent of its pro rata percentage) with respect to such sale and otherwise on the same terms and conditions. The closing of such sale to the Selling Major Stockholder shall only occur concurrently with or immediately following such sale by the Selling Major Stockholder.
- Each Investor acknowledges for itself and its transferees that the Major Stockholders may grant in the future tag-along rights to other holders of Common Stock and such holders will (i) have substantially the same opportunity to participate in sales by the Major Stockholders as provided to the parties hereto, and (ii) be included in the calculation of the pro rata basis upon which Investors may participate in a sale.
- Notwithstanding the requirements of this Section 2.5, a Selling Major Stockholder may sell shares of Common Stock at any time without complying with the requirements of Section 2.5(b) so long as the Selling Major Stockholder or the Major Stockholder Transferee deposits into escrow (the "Escrow Account") with an independent third party escrow agent, the identity of which is consented to by the other Major Stockholder (such consent not to be unreasonably conditioned, delayed or withheld) (the "Escrow Agent") pursuant to an escrow agreement (the "Escrow Agreement") with customary terms and conditions, the form of which is consented to by the other Major Stockholder (such consent not to be unreasonably conditioned, delayed or withheld) at the time of sale or other Transfer that amount of the consideration received in such sale or other Transfer equal to the "Escrow Amount." The "Escrow Amount" shall equal that amount of consideration as all the Investors would have been entitled to receive if they had the opportunity to participate in the sale on a pro rata basis, determined as if each Investor (A) delivered a Tag-Along Notice to the Selling Major Stockholder in the time period set forth in Section 2.5(b) and (B) proposed to include all of his, her or its shares of Common Stock which it would have been entitled to include in the sale. No later than five (5) business days after the date of the sale, the Selling Major Stockholder shall notify the Company in writing of the sale. Such notice (the "Escrow Notice") shall set forth the information required in the Inclusion Notice, and in addition, such notice shall state the name of the Escrow Agent and the account number of the Escrow Account. The Company shall promptly, and in any event within 10 days, mail or cause to be mailed the Escrow Notice to each Investor. A holder may exercise his, her or its tag-along right with respect to an Escrow Notice by delivery to the Escrow Agent, within 10 days of the date the Company mailed or caused to be mailed the Escrow Notice, of a written notice specifying the number of shares of Common Stock it, he or she proposes to sell (with a copy to the Selling Major Stockholder)(a "Participating Investor"). Promptly after the expiration of the 10th day after the Company has mailed or caused to be mailed the Escrow Notice, (A) the Selling Major Stockholder shall purchase that number of shares of Common Stock as the Selling Major Stockholder would have been required to include in the sale had the Selling Major Stockholder complied with the provisions of Section 2.5(b), (B) the certificates for such shares shall be delivered to the Selling Major Stockholder, free and clear of all claims, liens or other encumbrances, with appropriate instruments of transfer as may be reasonably requested by the Selling Major Stockholder, and (C) all remaining funds and other consideration held in the Escrow Account shall be released to the Selling Major Stockholder by the Escrow Agent. If the Selling Major Stockholder received consideration other than cash in its sale, the Selling Major Stockholder shall purchase the shares of Common Stock tendered by paying to the Investors non-cash consideration and cash in the same proportion as received by the Selling Major Stockholder in the sale. Notwithstanding anything to the contrary in this Section 2.5(e), it shall be the obligation of the Selling Major Stockholder to ensure that in connection with a sale effected pursuant to this Section 2.5(e) each Participating Investor receives, whether from the Escrow Amount or otherwise, the amount of consideration that such Participating Investor would have been entitled to receive if such Participating Investor had the opportunity to participate in the Transfer on a pro rata basis in accordance with Section 2.5(a), (b) and (c).
- Notwithstanding anything in this Agreement to the contrary, a Selling Major Stockholder may make any of the following Transfers without complying with the provisions of this Section 2.5: (i) sales in connection with a Public Offering and (ii) sales pursuant to an Approved Sale or a Requested Sale.
- Each Investor who exercises its rights pursuant to this Section 2.5 shall, at the request of the Selling Major Stockholder and without further cost and expense to the Selling Major Stockholder, execute and deliver such other instruments of conveyance and transfer, and take such other actions as may reasonably be requested to consummate the proposed sale of Common Stock by the Selling Major Stockholder and the Investors who have exercised their tag-along rights pursuant to this Section 2.5. In connection with the consummation of a Transfer pursuant to this Section 2.5, each Tag Offeree exercising the Tag-Along Right shall execute all documents containing such terms and conditions, including representations and warranties solely with respect to (x) matters of title to such Tag Offeree's Common Stock and (y) the due authorization (or capacity) and due and valid execution and delivery by such Tag Offeree of documentation in respect of such transfer, as those executed by the Selling Major Stockholder.
- Preemptive Rights
- If the Company proposes to issue and sell to any Investor or any other party (the "Proposed Purchasers") (i) any Securities or (ii) any securities containing options or rights to acquire any shares of Common Stock, or (iii) any securities convertible into shares of Common Stock (such shares and other securities are hereinafter collectively referred to as "Newly Issued Securities"), the Company will first offer to each of the Major Stockholders other than the Proposed Purchasers (each a "Preemptive Investor") a portion of the number or amount of such securities proposed to be sold in any such transaction or series of related transactions equal to such Preemptive Investor's Ownership Percentage of the number of shares proposed to be issued and sold by the Company in any such transaction or series of related transactions, all for the same price and upon the same terms and conditions (including any requirement to purchase other securities) as the securities that are being offered in such transaction or series of transactions (such portion, the "Pro Rata Share"). The Major Stockholders shall have the same rights set forth in this Section 2.6 in regards to issuances of equity securities of any subsidiary of the Company other than to the Company.
- Notwithstanding the foregoing, the provisions of this Section 2.6 shall not be applicable to the issuance of securities (i) upon the conversion of shares of one class of Company capital stock into shares of another class; (ii) as a dividend or distribution on (or payment of accrued yield in respect of) the outstanding Securities or in connection with any ratable stock splits, reclassifications, recapitalizations, consolidations or similar events affecting the Securities, (iii) in any transaction in respect of a Security that offered by the Company to all holders of such Security on a pro rata basis, (iv) to financing sources of the Company in connection with the issuance of debt or restructuring or recapitalization of existing debt, on terms approved by the Board of Directors, after consultation with Centerbridge, and in accordance with this Agreement; provided, however, in no event may more than an aggregate of one percent (1%) of the outstanding shares of Common Stock be issued pursuant to this clause (iv), (v) to officers, directors or employees of the Company or any Subsidiary pursuant to stock option plans or other equity incentive compensation plans or arrangements, on terms approved by the Board of Directors, (vi) in a Public Offering, or (vii) as consideration in connection with a business acquisition by the Company pursuant to a bona fide sale, whether by merger, consolidation, sale of assets or sale or exchange of capital stock or otherwise, to the extent approved by the Board of Directors and otherwise in accordance with this Agreement, including Section 3.6. The Company shall not be under any obligation to consummate any proposed issuance of Newly Issued Securities, nor shall there be any liability on the part of the Company to any Investor if the Company has not consummated any proposed issuance of Newly Issued Securities pursuant to this Section 2.6 for whatever reason, regardless of whether it shall have delivered a Preemptive Notice (as defined below) in respect of such proposed issuance.
- The Company will give to the Preemptive Investors a written notice setting forth the price, terms and conditions (including the proposed closing date on which the Newly Issued Securities will be purchased and sold) (the "New Issuance Closing Date") upon which the Preemptive Investors may purchase such shares or other securities in accordance with Section 2.6(a) (the "Preemptive Notice"). After receiving a Preemptive Notice, the Preemptive Investors must reply, in writing, within ten (10) days of the date of delivery of such Preemptive Notice that such Persons (or its designated Affiliate(s), who shall execute a Joinder) agree to purchase the shares or other securities offered pursuant to this Section 2.6 on the date of proposed sale (the "Preemptive Reply"). Each Preemptive Investor shall provide a copy of its Preemptive Reply to the other Preemptive Investor concurrently with its delivery of its Preemptive Reply to the Company. If any Preemptive Investor fails to exercise its rights under this Section 2.6 or elects to exercise such rights with respect to less than such Preemptive Investor's Pro Rata Share (the "Non-Electing Preemptive Investor"), the other Preemptive Investor that has exercised or elected to exercise its rights to purchase its entire Pro Rata Share (the "Electing Preemptive Investor") shall be entitled to purchase from the Company the number of Newly Issued Securities that the Non-Electing Preemptive Investor would have been entitled to purchase had it elected to purchase its entire Pro Rata Share or such number of Newly Issued Securities equal to the difference between the Non-Electing Preemptive Investor's Pro Rata Share and the number of Newly Issued Securities elected to be purchased by the Non-Electing Preemptive Investor (all such unpurchased securities, the "Excess Shares"), as the case may be. An Electing Preemptive Investor shall deliver written notice to the Company and the Non-Electing Preemptive Investor of the Electing Preemptive Investor's decision to purchase the Excess Shares within 5 days after the earlier of (i) the Non-Electing Preemptive Investor's delivery of its Preemptive Reply to the Company and (ii) the end of the ten (10) day period referred to above. If the Preemptive Investors fail to deliver a Preemptive Reply or if all Newly Issued Securities are not purchased by the Preemptive Investors in accordance with this Section 2.6, shares or other securities offered to the Preemptive Investors may thereafter, for a period not exceeding six (6) months following the date of the Preemptive Notice, be issued, sold or subjected to rights or options to the proposed original investors at a price and on terms no less than that at which they were offered to the Preemptive Investors. The purchase and sale shall take place on the New Issuance Closing Date or such other date as the parties may agree.
- Notwithstanding the requirements of this Section 2.6, the Company may make an issuance of Newly Issued Securities at any time without complying with the requirements of Section 2.6(a) and (c) (a "Delayed Issuance")so long as within three (3) business days after the date of the issuance of the Newly Issued Securities, the Company delivers a "Preemptive Escrow Notice" to the Preemptive Investors and otherwise complies with this Section 2.6(d). Such Preemptive Escrow Notice shall set forth the price, terms and conditions upon which the Preemptive Investors may purchase shares of Newly Issued Securities (which shall be the same price, terms and conditions with respect to which the Newly Issued Securities were issued), the amount of Newly Issued Securities that such Preemptive Investor is entitled to receive (such amount to equal the amount of Newly Issued Securities that such Preemptive Investor would have been entitled to receive if such Preemptive Investor had the opportunity to participate in the issuance of the Newly Issued Securities on a pro rata basis in accordance with Section 2.6(a)).
. After compliance with the requirements of Section 2.4, the following provisions shall apply:
. To the fullest extent permitted by any applicable law, the doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Major Stockholders or their Affiliates or representatives thereof (including any directors of the Company designated by such Persons). In particular, (a) the Major Stockholders and their Affiliates shall have the right to engage in business activities, whether or not in competition with the Company or any of its Subsidiaries or the Company's or any of its Subsidiaries' business activities, without consulting any other Investor, and (b) the Major Stockholders and their Affiliates shall not have any obligation to any other Investor with respect to any opportunity to acquire property or make investments at any time.
.
. After the first anniversary of the closing of the Investment, after giving effect to the provisions of Section 2.4, the following provisions shall apply:
.
A Preemptive Investor may exercise the preemptive right by delivery to the Company and the other Preemptive Investor, within twenty (20) days of the date the Company mailed or caused to be mailed the Preemptive Escrow Notice, of a written notice specifying the number of shares of Newly Issued Securities such Preemptive Investor proposes to purchase of the number of shares of Newly Issued Securities such Preemptive Investor is entitled to purchase (the "Preemptive Election"). If there is a Non-Electing Preemptive Investor, the other Electing Preemptive Investor shall be entitled to purchase the Excess Shares and shall deliver written notice thereof to the Company within five (5) days after the earlier of (i) the delivery of the Non-Electing Preemptive Investor's Preemptive Election and (ii) the end of such twenty (20) day period referred to above.
Promptly after the expiration of the twentieth (20th) day after the Company has given the Preemptive Escrow Notice, (A) the Company shall sell to each Preemptive Investor that number of shares of Newly Issued Securities that each such Preemptive Investor proposed to purchase pursuant to its Preemptive Election and (B) when such shares have been issued to such Preemptive Investors, all remaining Newly Issued Securities which Preemptive Investors were entitled to purchase but for which they did not deliver a Preemptive Election may be sold to the original proposed investors upon the terms and conditions set forth in the Preemptive Escrow Notice for a period not exceeding six (6) months after the original issuance of Newly Issued Securities to such investors.
In the event of a Delayed Issuance, the Company shall not make any dividend or distribution on the Newly Issued Securities or otherwise effect any transaction involving the Newly Issued Securities until after the Company has complied in full with this Section 2.6(d).
Corporate Actions- Directors and Voting Agreements
- Each Investor agrees that it shall take, at any time and from time to time, all action necessary (including voting the Common Stock entitled to vote owned by it, calling special meetings of stockholders and executing and delivering written consents) to ensure that the Board of Directors of the Company (the "Board of Directors") is composed of eleven (11) directors from the date hereof until December 31, 2011 (the "Reduction Date)." From and after the Reduction Date, each Investor agrees that it shall take, at any time and from time to time, all action necessary (including voting the Common Stock entitled to vote owned by it, calling special meetings of stockholders and executing and delivering written consents) to ensure that the Board of Directors of the Company is composed of ten (10) directors.
- The members of the Board of Directors shall be designated as follows: (i) so long as ValueAct Capital's Ownership Percentage is greater than or equal to (A) 50%, it shall be entitled to designate six directors (which number shall be reduced to five from and after the Reduction Date), one of whom shall be the chairman of the Board of Directors (the "Chairman"), and two of whom shall be individuals not employed by or affiliated with ValueAct Capital or any ValueAct Capital Affiliates or the Company; (B) 40% but less than 50%, it shall be entitled to designate four directors, two of whom shall be individuals not employed by or affiliated with ValueAct Capital or any ValueAct Capital Affiliates or the Company; (C) 25 % but less than 40%, it shall be entitled to designate three directors, one of whom shall be an individual not employed by or affiliated with ValueAct Capital or any ValueAct Capital Affiliates or the Company; (D) 10% but less than 25%, it shall be entitled to designate two directors; and (E) 5% but less than 10%, it shall be entitled to designate one director; (ii) so long as Centerbridge's Ownership Percentage is greater than or equal to (A) 25%, the Centerbridge Fund shall be entitled to designate three directors, one of whom shall be an individual not employed by or affiliated with Centerbridge or any of its Affiliates or the Company; provided that for so long as Centerbridge has not Transferred any shares of Common Stock (other than Transfers to Affiliates), the Centerbridge Fund shall continue to be entitled to designate three directors in accordance with this clause (A), and clauses (B) - (C) of this Section 3.1(b)(ii) shall not apply; (B) 10% but less than 25%, the Centerbridge Fund shall be entitled to designate two directors and (C) 5%, but less than 10%, the Centerbridge Fund shall be entitled to designate one director; and (iii) the Management Investors as a group shall be entitled to designate two directors, one of whom shall be the Chief Executive Officer of the Company. If at any time an Investor is no longer entitled to designate directors pursuant to this Section 3.1, such Investor agrees to take all action necessary to remove from the Board of Directors such Investor's designees and such vacancy shall be filled by the holders of 50% of the outstanding Common Stock. If any Major Stockholder's Ownership Percentage is greater than 0% but less than 5%, then such Major Stockholder (or the Centerbridge Fund if such Major Stockholder is Centerbridge) shall have the right to have a representative present at all meetings of the Board of Directors who shall have all rights as a member of the Board of Directors other than the right to vote at meetings (including all rights to receive information provided to the Board of Directors). As of the date hereof, the Board of Directors shall be composed of: Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxxxx, Xxxx X. Xxxxxxxx, Xxxxx X. Xxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxxxxxx, Xxxx X. Xxxxxxx, Xxx X. Xxxxxxx, Xxxx Xxxx and Xxx Xxxxxx.
- Subject to the terms and provisions of Section 3.1(e) hereof, each Investor agrees to take all necessary action to cause the composition of the Board of Directors to remain in accordance with Section 3.1(a) hereof (including, without limitation, voting or causing to vote or acting by written consent with respect to, all shares of Common Stock entitled to vote thereon or any other voting capital stock of the Company now or hereafter owned or held by such Investor in favor of the nomination and election of such Persons) to the Board of Directors and to act itself (if a member of the Board of Directors) or cause its designee (if any) on the Board of Directors to vote or act by written consent to cause the composition of the Board of Directors to remain in accordance with Section 3.1(a) hereof.
- Concurrently with, or immediately prior to, the execution and delivery of this Agreement by the parties hereto, the certificate of incorporation of the Company shall be amended and restated in its entirety as set forth on Exhibit A to provide, among other things, that: (A) so long as ValueAct Capital's Ownership Percentage is greater than or equal to 50%, (i) the Chairman shall be entitled to three (3) votes on all matters brought before the Board of Directors and (ii) the directors designated to the Board of Directors by ValueAct Capital (other than those designees not employed by or affiliated with ValueAct Capital or any ValueAct Capital Affiliates or the Company) shall be entitled to two (2) votes on all matters brought before the Board of Directors; and (B) all other directors shall be entitled to one (1) vote on all matters brought before the Board of Directors.
- The Board of Directors and the Investors shall take all actions necessary and appropriate to elect Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxxxx, Xxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxxxxx, Xxxx X. Xxxxxxx, Xxx X. Xxxxxxx, Xxxx Xxxx and Xxx Xxxxxx (collectively, the "New Directors") to the Board of Directors effective promptly following the Closing. The Board of Directors shall take all actions necessary and appropriate to cause at least one of the New Directors to be appointed to each committee of the Board of Directors promptly following the Closing. Centerbridge shall receive evidence satisfactory to it of the taking of such actions immediately following the Closing. Any director that is not affiliated with or employed by Centerbridge or the Company shall be entitled to compensation (including option grants) that is customary for "independent" directors of similar companies and in any event that is no less favorable than the compensation provided to directors not affiliated with or employed by ValueAct Capital or any ValueAct Capital Affiliates or the Company.
- Subject to Section 3.6, all actions of the Board of Directors shall require (i) the affirmative vote of at least a majority of the votes of directors present at a duly convened meeting of the Board of Directors at which a majority of the votes of the Board of Directors is present (in person or telephonically) or (ii) the unanimous written consent of all Directors.
- Right to Remove Certain of the Company's Directors
- Right to Fill Certain Vacancies on the Board of Directors
- Committees; Directors of Subsidiaries
- Amendment of Certificate and Bylaws
- Centerbridge Approval
- enter into any equity financing transaction or series of transactions (including any issuance or sale of equity securities) that would, after giving pro forma effect thereto, increase the amount of outstanding equity by 25% or more as of the relevant date of determination; provided, however, that in no event shall any such equity financing transaction, after giving pro forma effect thereto, increase the amount of outstanding equity by 25% or more as of the date hereof;
- enter into any debt financing transaction or series of transactions (including any incurrence, creation, assumption, guarantee or otherwise becoming liable in respect of any indebtedness) that would, after giving pro forma effect thereto, increase the amount of outstanding indebtedness of the Company and its Subsidiaries for borrowed money, net of cash, by 25% or more as of the relevant date of determination; provided, however, that in no event shall any such debt financing transaction, after giving pro forma effect thereto, result in the Company or any of its Subsidiaries having indebtedness for borrowed money, net of cash, in excess of $280,000,000;
- declare, pay, or set aside any dividend or distribution, effect any dividend recapitalization or repurchase (except as permitted by this Section 3.6 and Article IV of this Agreement), redeem or reacquire any Securities;
- hire, or terminate the employment of, the Company's or Seitel's Chief Executive Officer or Chief Operating Officer;
- enter into or materially modify any related party transaction involving payments by or to the Company or its Subsidiaries in excess of $200,000 annually;
- increase the annual compensation of any senior executive officer of the Company or Seitel by more than 10% from such executive officer's prior level of annual compensation;
- (i) acquire in any one transaction or series of related transactions, by purchase of securities or assets or otherwise, any Person, business or other enterprise, or any assets, for an amount in excess of $20,000,000, (ii) make any investment in any Person (or group of related Persons) in excess of $20,000,000 in any one transaction or series of related transactions (whether by way of exchange, purchase, capital contribution or otherwise), (iii) authorize, or make, any loans, advances or guarantees to or for the benefit of any Persons in excess of $10,000,000, in the aggregate, or (iv) acquire an option to make any such acquisition or investment.
- modify in any material respect the Company's annual capital budget as delivered to Centerbridge by the Company on the date hereof (such annual capital budget set forth in that certain Supplement and Disclosure Letter, dated the date hereof, delivered by the Company to Centerbridge (the "Supplement and Disclosure Letter"), or any other annual capital budget otherwise agreed to by Centerbridge and ValueAct Capital pursuant to this paragraph (h), a "Capital Budget"), but only if such modification involves expenditures in excess of 10% of such Capital Budget; provided that if the Company does not realize at least ninety percent (90%) of the Cash EBITDA (as such term has historically been used in Seitel's public reporting) forecasted for any annual period as set forth in the Capital Budget (the "Cash EBITDA Forecast"), Centerbridge shall have the right to approve the Company's capital budget for the following annual period (it being understood that appropriate and proportionate modifications to the level of forecasted Cash EBITDA shall be reasonably agreed by Centerbridge and ValueAct Capital to the extent the amount of capital expenditures actually made during such annual period is more or less than the level of capital expenditures set forth in the Capital Budget for such annual period).
- sell or divest in any one transaction or series of related transactions any division or other business enterprise, or any assets, of the Company or any Subsidiary for an amount in excess of $20,000,000 (other than the sale of inventory in the ordinary course of business).
- make, alter, amend or repeal the certificate of incorporation, articles of incorporation, bylaws, partnership agreement, limited liability company agreement, operating agreement, membership agreement or other constituent documents of the Company, including the designations of any preferred stock or resolutions establishing any preferred stock.
- grant, enact, implement or authorize any equity based compensation plan or arrangement, including any incentive or deferred compensation plan, other than those in effect as of the date hereof, or grant or authorize grants under any such existing equity based compensation plan or arrangement.
- engage in any business which was not being conducted by the Company or any Subsidiary as of the Closing, other than reasonably related extensions of the businesses conducted by the Company and the Subsidiaries on the date of the Closing, or cease to be engaged in any material line of business engaged in by the Company or any Subsidiary on the date of the Closing.
- settle any outstanding claim, litigation, audit or other dispute for an amount in excess of $4,000,000 (net of insurance coverage), individually or in the aggregate, on an annual basis.
- enter into any transaction set forth in Schedule 3.6(n) of the Supplement and Disclosure Letter.
- Management and Information Rights
Additional Restrictions On Securities Held By Management Investors- Repurchase and Put Options
- Repurchase Price
- Certain Obligations of the Company
- Repurchase by ValueAct Capital and Centerbridge
- Repurchase by the Company
- Repurchase by ValueAct Capital and Centerbridge at the Option of the Holder
- If for any reason ValueAct Capital, Centerbridge or their designated Affiliate(s) or the Company does not elect to repurchase all of the Securities consisting of Common Stock or other shares of capital stock of the Company pursuant to the Repurchase Option, then the Management Investor and his or her Affiliates and Permitted Transferees shall be entitled to require ValueAct Capital and Centerbridge to repurchase, on a pro rata basis, such Securities (provided that ValueAct Capital or Centerbridge may designate an Affiliate to repurchase such Securities). Within 30 days after the date on which the Company Repurchase Option expires or 30 days after the date that the Company exercised the Company Repurchase Option (in the event that it elected to repurchase less than all of such Management Investor's (or his or her Affiliates' and Permitted Transferees') Securities consisting of Common Stock or other capital stock of the Company), the Management Investor or his or her Affiliates and Permitted Transferees may notify the Company, ValueAct Capital and Centerbridge of its intent to exercise its Put Option with respect to all Securities that such holder owns which consist of Common Stock or other capital stock of the Company (the "Holder Notice"). Within 30 days after receipt of a proper Holder Notice, the Company shall notify the relevant holder(s), ValueAct Capital and Centerbridge of the relevant Fair Market Value (the "Value Notice"), and of the time and place for the closing of the transaction.
- Each Management Investor and/or his or her Affiliates and Permitted Transferees who delivers a Holder Notice shall, at the request of the Company, ValueAct Capital or Centerbridge and without further cost and expense to the Company, ValueAct Capital or Centerbridge, execute and deliver such other instruments of conveyance and transfer, including any sales or indemnification agreements, and take such other actions as may reasonably be requested to consummate the Transfer. At the closing, the Management Investor and/or his or her Affiliates and Permitted Transferees will deliver certificates representing all the Securities subject to the Put Option (accompanied by appropriate documentation of authority to transfer). The Management Investor and/or his or her Affiliates and Permitted Transferees will deliver such securities free and clear of all liens, claims or other encumbrances, other than pursuant to this Agreement. ValueAct Capital and Centerbridge will be entitled to receive customary representations and warranties as to ownership, title, authority to sell and the like from the sellers regarding such sale and to require that all sellers' signatures be guaranteed.
- Closing
- Fair Market Value
Miscellaneous- Effective Time
- Amendment and Modification
- Successors and Assigns
- Separability
- Notices
- Governing Law
- Headings; Definitions
- Counterparts
- Further Assurances
- Termination
- Indemnification of Centerbridge and ValueAct Capital
- Exhibits and Supplement and Disclosure Letter
- Confidentiality
- Remedies
- Party No Longer Owning Securities
- No Effect on Employment
- Pronouns
- Future Individual Investors
- Entire Agreement
.
. Each Investor agrees that it will not vote any of its Common Stock or any other voting capital stock of the Company now or hereafter owned or controlled by it in favor of the removal of any Director who shall have been designated or nominated in accordance with Section 3.1, unless the Investor or Investors entitled to designate or nominate such director shall have consented to such removal in writing; provided that if the Investor or Investors entitled to designate or nominate any director pursuant to Section 3.1 shall request in writing the removal, with or without cause, of such director, each Investor shall vote its Common Stock in favor of such removal.
. In the event that a vacancy is created on the Board of Directors at any time by the death, disability, retirement, resignation or removal (with or without cause) or if otherwise there shall exist or occur any vacancy on the Board of Directors (including without limitation immediately after the Closing as a result of Centerbridge having only designated two directors), such vacancy shall not be filled by the remaining members of the Board of Directors, but each Investor hereby agrees promptly to consent in writing or vote or cause to be voted all shares of Common Stock entitled to vote thereon or any other voting capital stock of the Company now or hereafter owned or controlled by it to elect that individual designated to fill such vacancy and serve as a director, as shall be designated by the Investor or Investors (or, if applicable, holders of Common Stock) then entitled to designate such director pursuant to Section 3.1.
. The composition of any committee of the Board of Directors, and any committee of the board of directors (or equivalent governing body) of Seitel, shall consist of directors designated by the Investors in proportion to the Investors' right to designate board members pursuant to Section 3.1. Each of the Investors or group of Investors with the right to designate a director pursuant to Section 3.1 (other than the Management Investors) shall have the option of appointing its designated director(s) to any committee of the board of directors (or equivalent governing body) of any of the Company's Subsidiaries (other than Seitel) in proportion to such Investor(s)' right to designate board members pursuant to Section 3.1. "Subsidiary" as used herein shall mean "a corporation, partnership, limited liability company or other business entity with respect to which the Company and/or any direct or indirect subsidiary of the Company individually or collectively own 50% or more of the total combined voting power of all classes of stock (or other voting interests)"). At any time that Centerbridge is entitled to designate for nomination directors in accordance with Section 3.1 hereof, one director nominated by Centerbridge will be entitled to serve as a member of each committee of the Board of Directors. Centerbridge will have the right to designate which director serves on which committee or committees of the Board of Directors.
. Each Investor agrees that it shall not consent in writing or vote or cause to be voted any shares of Common Stock now or hereafter owned or controlled by it in favor of any amendment, repeal, modification, alteration or rescission of, or the adoption of any provision in the Company's certificate of incorporation or bylaws inconsistent with Article III of this Agreement unless the Board of Directors (including at least one director designated by Centerbridge) consent in writing thereto.
. Notwithstanding anything to the contrary contained herein, so long as Centerbridge has an Ownership Percentage equal to at least 15%, the Company shall not and, if applicable, shall not permit any of its Subsidiaries to, without the prior written consent of Centerbridge, such consent not to be unreasonably withheld, conditioned or delayed:
. As of the date hereof, the Company shall cause Seitel to enter into a letter agreement with the Centerbridge Fund and ValueAct Capital in substantially the form attached hereto as Exhibit B, which shall provide the Centerbridge Fund and ValueAct Capital with substantially identical rights with respect to Seitel, Inc. as the Centerbridge Fund and ValueAct Capital have with respect to the Company pursuant to Sections 2.1 and 3.1 hereof. The parties acknowledge and agree that the rights provided to the Centerbridge Fund pursuant to Sections 2.1, 3.1 and this Section 3.7 are intended to satisfy the requirement of management rights for purposes of qualifying the Investment by the Centerbridge Fund as a "venture capital investment" for purposes of the Department of Labor "plan assets" regulation, 29 C.F.R. Section 2510.3-101. In the event modifications are made to such regulations or interpretations thereof subsequent to the date hereof that would result in the aforementioned rights not being satisfactory for such purposes, the parties shall evaluate in good faith whether modification of the rights provided to the Centerbridge Fund can be made that would satisfy such regulations as modified and that would not adversely affect the terms, conditions or purposes of this Agreement.
. If a Management Investor is no longer an employee or director, as applicable, of the Company or any of its Subsidiaries for any reason (the "Termination"), all of the Securities (including but not limited to Incentive Securities) held by that Management Investor (whether held directly by the Management Investor or by one or more of his or her Affiliates or Permitted Transferees, other than the Company, ValueAct Capital, Centerbridge, a ValueAct Capital Affiliate or a Centerbridge Affiliate) will be subject to repurchase by ValueAct Capital and Centerbridge , in the first instance, and the Company, in the second instance, at their option, pursuant to the terms and conditions set forth in this Article IV (the "Repurchase Option"). If the Repurchase Option is not exercised with regard to all applicable Securities consisting of Common Stock or other shares of capital stock of the Company following a Termination, then all, but not less than all, of such remaining Securities consisting of Common Stock or other shares of capital stock of the Company held by such holder will be subject to repurchase by ValueAct Capital and Centerbridge, on a pro rata basis (based upon their respective Ownership Percentages at the time of repurchase), at the option of such holder (which option may only be exercised with respect to all such Securities held by the holder), pursuant to the terms and conditions set forth in this Article IV (the "Put Option").
. At any time on or after the date of Termination ("Termination Date"), ValueAct Capital and Centerbridge, in the first instance, and the Company, in the second instance, may elect to repurchase all or a portion of the Securities held by the Management Investor, and the Management Investor and his or her Affiliates or Permitted Transferees may elect to require ValueAct Capital or Centerbridge to repurchase any Common Stock or other shares of capital stock of the Company, in each case at the Fair Market Value (as defined below) in accordance with Sections 4.4, 4.5, 4.6 or 4.7 of this Agreement, as applicable.
. In addition to any other obligation of the Company set forth herein, in the event of any Termination, the Company shall give ValueAct Capital and Centerbridge prompt written notice of any Termination, which notice of Termination shall in any event be given to ValueAct Capital and Centerbridge by the Company within two (2) business days of the Termination Date (as defined below). The Company also shall be required to inform ValueAct Capital and Centerbridge, as applicable, in writing promptly following the request of ValueAct Capital or Centerbridge at any time and from time to time of (i) the total number of Securities held by any Management Investor, such Management Investor's Affiliates and such Management Investor's Permitted Transferees (collectively, the "Available Shares") and (ii) the price for each Available Share.
. ValueAct Capital, Centerbridge or their designated Affiliate(s) may elect to purchase their pro rata share of the Available Shares held by any Management Investor by delivery of written notice (the "Repurchase Notice") to the Management Investor and to the Company (and/or his or her Affiliates and transferees, as appropriate) within 60 days after the Termination Date. The Repurchase Notice shall set forth the number and type of Securities to be acquired from the Management Investor and his or her Affiliates and Permitted Transferees, the aggregate consideration to be paid for such Securities and the time and place for the closing of the transaction. The number of Securities to be repurchased by ValueAct Capital, Centerbridge or their designated Affiliate(s) (who shall sign a Joinder) shall first be satisfied to the extent possible from the Common Stock held by the Management Investor at the time of delivery of the Repurchase Notice. If the number of Securities then held by the Management Investor is less than the total number of Securities ValueAct Capital, Centerbridge or their designated Affiliate(s) has elected to repurchase, then ValueAct Capital, Centerbridge or their designated Affiliate(s) shall repurchase the remaining shares elected to be repurchased first from the Management Investor's Affiliates, and then from the Management Investor's Permitted Transferees.
. If for any reason ValueAct Capital or its designated Affiliates or Centerbridge or its designated Affiliates does not elect to purchase its pro rata share of all Available Shares, the Company shall promptly deliver written notice thereof to ValueAct Capital or Centerbridge, as the case may be, and ValueAct Capital or Centerbridge, as the case may be, shall be entitled to purchase the other party's pro rata portion of Available Shares in accordance with the terms hereof within 60 days after the Termination Date. If for any reason ValueAct Capital, Centerbridge or their designated Affiliate(s) do not elect to repurchase all of the Securities pursuant to the Repurchase Option, then the Company shall be entitled to exercise the Repurchase Option in the manner set forth in Section 4.4 to purchase all of the Securities not purchased by ValueAct Capital, Centerbridge or their designated Affiliate(s) (the "Remaining Available Shares"). As soon as practicable after the Company has determined that there shall be Remaining Available Shares, but in any event within 10 days after the delivery of a Repurchase Notice or 10 days after the date which is 90 days after the Termination Date, whichever is earlier, the Company shall notify the Management Investor and his or her Affiliates and Permitted Transferees as to whether the Company will be purchasing the Securities from the Management Investor or his or her Affiliates and Permitted Transferees (the "Company Repurchase Notice"), which Company Repurchase Notice shall set forth the number and type of Securities to be acquired from the Management Investor or his or her Affiliates and Permitted Transferees, the aggregate consideration to be paid for such Securities and the time and place for the closing of the transaction.
.
. The closing of the transactions contemplated by this Article IV will take place on the date designated in the applicable Repurchase Notice, Company Repurchase Notice or Holder Notice, which date, in the case of a repurchase pursuant to Section 4.4 or 4.5 above, will not be more than 10 days after the expiration of the 60 day period referred to in Section 4.4 above, and in the case of a repurchase pursuant to Section 4.6 above, will not be more than 10 days after the expiration of the 30 day period referred to in Section 4.6 above. ValueAct Capital, Centerbridge or their designated Affiliate(s), will pay for the Securities to be purchased by it by delivery of a check payable to the holder of such Securities. The Company will pay for the Securities to be purchased by it by first offsetting amounts outstanding under any bona fide debts owing by the Management Investor to the Company or any of its Subsidiaries, now existing or hereinafter arising (irrespective as to whether such amounts are owing by the holder of such Securities), and will pay the remainder of the purchase price by delivery of a bank check payable to the holder of such Securities. Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Securities by the Company will be subject to applicable restrictions contained in the General Corporation Law of the State of Delaware and in the Company's and its Subsidiaries' debt and equity financing agreements. If any such restrictions prohibit the repurchase of Securities hereunder which the Company is otherwise entitled to make, the Company may make such repurchases as soon as it is permitted to do so under such restrictions (and, prior thereto, there shall be no breach of the terms hereof by the Company). The party or parties exercising the Repurchase Option, whether ValueAct Capital, Centerbridge or their designated Affiliate(s) or the Company, as the case may be, will receive customary representations and warranties from each seller regarding the sale of the Securities, including, but not limited to, representations that such seller has good and marketable title to the Securities to be transferred free and clear of all liens, claims or other encumbrances.
. As used herein, "Fair Market Value" has the meaning indicated below:
"Fair Market Value" for each share of Securities means, as of the date the Repurchase Notice or the Company Repurchase Notice is given, the relevant fair market value price as determined in good faith by the Board of Directors. If the Management Investor or current holder of the Management Investor's Securities disagrees with such determination, the Board of Directors and the Management Investor will negotiate in good faith to agree on such Fair Market Value. If such agreement is not reached within 10 days after the delivery of notice to the Board of Directors of such Management Investor's disagreement, the Fair Market Value shall be determined by an independent and nationally recognized appraiser selected by the Board of Directors (subject to the approval of the Management Investor, not to be unreasonably withheld), which appraiser shall be instructed to submit to the Board of Directors and the Management Investor a report within 30 days of its engagement setting forth such determination. The costs and expenses of such appraiser shall be borne 50% by the Company and 50% by the Management Investor, unless (i) the appraiser's valuation is not less than 25% greater than the amount determined by the Board of Directors, in which case 100% of the costs and expenses of the appraiser shall be borne by the Company or (ii) the appraiser's valuation is not more than 10% greater than, or is less than or equal to, the amount determined by the Board of Directors, in which case 100% of the costs and expenses of the appraiser shall be borne by the Management Investor. The determination of such appraiser shall be final and binding upon all parties. Notwithstanding the foregoing, if any appraisal under this subparagraph (b) has been completed within the six month period prior to the determination of the Board of Directors, at the option of the Company, such appraised value shall be the final and binding Fair Market Value for purposes hereof. The termination of the exercise period of the Repurchase Option set forth in Section 4.4 and of the Put Option set forth in Section 4.6, as applicable, shall be tolled during the pendency of and until ten (10) days following the conclusion of any negotiation or arbitration of the Fair Market Value. Further, in the event of any such negotiation or arbitration, the Company and/or ValueAct Capital or Centerbridge, as applicable, shall have the right to revoke any notice of exercise of the Repurchase Option previously given by such party and the applicable holder(s) shall have the right to revoke any notice of exercise of the Put Option previously given by such party, as applicable (provided that, in either case, no closing with respect thereto has occurred).
. The provisions of this Agreement shall be effective from and after the date hereof.
. This Agreement may be amended or modified, or any provision hereof may be waived, provided that such amendment, modification or waiver is set forth in a writing executed by the Company and the Major Stockholders; provided, however, that any amendment of this Agreement which materially adversely affects any Investor in a manner materially different from other Investors (other than due to any difference in the number of shares or other Securities owned by any such Investor) shall require the prior written consent of such Investor. No course of dealing between or among any Persons having any interest in this Agreement will be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Person under or by reason of this Agreement.
. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the successors and permitted assigns and executors, administrators and heirs of each party hereto. Except as contemplated hereby within this Section 5.3 or in connection with Transfers of Securities permitted by this Agreement and as permitted by Section 1.4 and Section 1.5 of this Agreement, this Agreement, and any rights or obligations existing hereunder, may not be assigned or otherwise transferred by any party without the prior written consent of the other parties hereto.
. In the event that any provision of this Agreement or the application of any provision hereof is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect unless deletion of such provision causes this Agreement to become materially adverse to any party, in which event the parties shall use reasonable efforts to arrive at an accommodation which best preserves for the parties the benefits and obligations of the offending provision.
. All notices provided for or permitted hereunder shall be made in writing by hand-delivery, registered or certified first-class mail, fax or reputable courier guaranteeing overnight delivery to the other party at the following addresses (or at such other address as shall be given in writing by any party to the others):
If to the Company:
Seitel Holdings, Inc.
c/o Seitel, Inc.
10811 S. Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
with a required copy to:
Dechert LLP
Xxxx Centre
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxx
If to ValueAct Capital, to:
ValueAct Capital Master Fund, L.P.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxxx, General Counsel
with a required copy to:
Dechert LLP
Xxxx Centre
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxx
If to Centerbridge or any of its Affiliates:
Centerbridge Capital Partners, L.P.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxx
with a required copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx and Xxxxxxxx Xxxxxxx
if to any of the Management Investors, to such Management Investor's address as set forth on the signature page hereto or such other address as may be specified from time to time in writing to the Company by such Management Investor.
All such notices and other communications hereunder shall be in writing and shall be deemed to have been duly given or delivered if delivered personally, sent by telecopier (subject to electronic confirmation of such facsimile transmission and the sending (on the date of such facsimile transmission) of a confirmation copy of such facsimile by nationally recognized overnight courier service or by certified or registered mail, postage prepaid) or on the second business day after being sent by nationally recognized overnight courier service or on the fifth business day after being sent by registered or certified mail (postage prepaid, return receipt requested) to the respective party.
. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to principles of conflicts of law.
. The headings preceding the text of the sections and subsections of this Agreement are for convenience of reference only and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.
. This Agreement may be executed in two or more counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original, and all of which taken together shall constitute one and the same instrument.
. Each party shall cooperate and take such action as may be reasonably requested by another party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby.
. This Agreement shall terminate (a) on the written agreement of the Investors who are parties hereto or when all the Investors except any one Investor no longer hold any Securities or (b) upon the date of the consummation of the Company's initial Public Offering; provided, however, that the provisions of Sections 3.1, 3.2, 3.3, 3.4 and 3.5 shall survive the Company's initial Public Offering, with appropriate modifications to be reasonably agreed by the Major Stockholders to reflect the size of the Company's Board of Directors following its initial Public Offering.
. Any director, officer, employee or agent of the Company entitled to indemnification, advancement of expenses and/or insurance, pursuant to this Agreement, the certificate of incorporation of the Company or the bylaws of the Company and that is an officer, employee, partner or advisor of Centerbridge, ValueAct Capital or their respective Affiliates (each such Person, an "Indemnitee"), may have certain rights to indemnification, advancement of expenses and/or insurance provided by or on behalf of Centerbridge, ValueAct and/or their respective Affiliates (collectively, the "Indemnitors"). Notwithstanding anything to the contrary in this Agreement, the certificate of incorporation of the Company or the bylaws of the Company or otherwise: (i) the Company is the indemnitor of first resort (i.e., the Company's obligations to each Indemnitee are primary and any obligation of the Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by each Indemnitee are secondary), (ii) the Company will be required to advance the full amount of expenses incurred by each Indemnitee and will be liable for the full amount of all liabilities, expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by this Agreement, without regard to any rights each Indemnitee may have against the Indemnitors, and (iii) the Company irrevocably waives, relinquishes and releases the Indemnitors from any and all claims against the Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. Notwithstanding anything to the contrary in this Agreement, the certificate of incorporation of the Company or the bylaws of the Company or otherwise, no advancement or payment by the Indemnitors on behalf of an Indemnitee with respect to any claim for which such Indemnitee has sought indemnification or advancement of expenses from the Company will affect the foregoing and the Indemnitors will have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Indemnitee against the Company. The Indemnitors are express third party beneficiaries of the terms of this Section 5.11. The Company's certificate of incorporation shall at all times include language that reflects the substance of this Section 5.11.
. For so long as an Investor is party to this Agreement and such Investor has an Ownership Percentage greater than 15%, such Investor shall comply with the covenant set forth in Schedule 5.12 of the Disclosure Letter. All Exhibits attached hereto and the Supplement and Disclosure Letter are hereby incorporated herein by reference and made a part hereof.
. All information disclosed by the Company to any Investor pursuant to this Agreement shall be confidential information of the Company (other than information which is publicly available) and, unless as otherwise provided in this Agreement or consented to by each Major Stockholder in writing in advance, shall not be used by the recipients thereof for any purpose other than to monitor and manage their investment in the Company, and shall not be disclosed to any third party other than (i) any Person who is an Affiliate, member, partner, officer, director, investor, potential investor, employee, accountant, attorney or advisor of such Investor who has a need to know such information, (ii) any proposed transferee of such Investor to the extent that such proposed transferee is bound by similarly restrictive confidentiality obligations with respect to such information or (iii) as otherwise permitted pursuant to any other written agreement by and between the Company and the recipient of such confidential information. The obligations of the parties hereunder shall not apply to the extent that the disclosure of information otherwise determined to be confidential is required by applicable law, regulations, subpoena, civil investigative demand or other process or compulsion, provided, that: (x) prior to disclosing such confidential information, a party shall notify the Company thereof, which notice shall include the basis upon which such party believes the information is required to be disclosed; and (y) such party shall, if requested by the Company and at the sole cost and expense of the Company, provide reasonable cooperation with the Company to protect the continued confidentiality thereof.
. In the event of a breach or a threatened breach by any party to this Agreement of its obligations under this Agreement, any party injured or to be injured by such breach, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The parties agree that the provisions of this Agreement shall be specifically enforceable, it being agreed by the parties that the remedy at law, including monetary damages, for breach of such provision will be inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived.
. If a party hereto ceases to own any Securities following the consummation of a transaction permitted under this Agreement, such party will no longer be deemed to be a Major Stockholder, Investor or Management Investor for purposes of this Agreement and shall no longer be a party to this Agreement.
. Nothing herein contained shall confer on any Management Investor the right to be employed by or remain in the employ or service of the Company or any of its Subsidiaries or Affiliates.
. Whenever the context may require, any pronouns used herein shall be deemed also to include the corresponding neuter, masculine or feminine forms.
. The parties hereto agree that any current or future employee of the Company or any of its Subsidiaries or other Person who agrees to purchase Securities from the Company subsequent to the date hereof may become a signatory to this Agreement by executing a written instrument setting forth that such Person agrees to be bound by the terms and conditions of this Agreement and this Agreement will be deemed to be amended to include such Person as a Management Investor (or Investor, as determined by the Company) and the number of Securities purchased by him or her. Without limiting the generality of the foregoing, any Person who has received an award of options to purchase Common Stock under the Seitel Holdings, Inc. 2007 Non-Qualified Stock Option Plan and the Seitel Holdings, Inc. 2008 Restricted Stock and Restricted Stock Unit Plan shall be bound by the terms and conditions of the Agreement as a Management Investor.
. This Agreement, together with the Stock Purchase Agreement and the Registration Rights Agreement, sets forth the entire agreement and understanding among the parties and supersedes all prior agreements and understandings, written or oral, relating to the subject matter of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Securities Holders Agreement the day and year first above written.
|
COMPANY |
SEITEL HOLDINGS, INC. By: /s/ Xxxxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxx Title: |
|
VALUEACT CAPITAL |
VALUEACT CAPITAL MASTER FUND, L.P. By: VA Partners I, LLC, its General Partner By: /s/ Xxxxxx X. Xxxxx, Xx. Name: Xxxxxx X. Xxxxx, Xx. Title: Managing Member |
|
CENTERBRIDGE |
CENTERBRIDGE CAPITAL PARTNERS II, L.P. By: Centerbridge Associates II, L.P., its general partner By: /s/ Xxxxx Xxxxxxx Name: Xxxxx Xxxxxxx Title: Authorized Person CENTERBRIDGE CAPITAL PARTNERS SBS II, L.P. By: Centerbridge Associates II, L.P., its general partner By: /s/ Xxxxx Xxxxxxx Name: Xxxxx Xxxxxxx Title: Authorized Person |
|
MANAGEMENT INVESTORS |
/s/ Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxxxx X. Xxxxx Xxxxxx X. Xxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxxxxx Xxxxx Xxxxxxx Xxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxxxxx Xxxxxx Xxxxxxx Xxxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxxxx X. Xxxxxxxxxx Xxxxxx X. Xxxxxxxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxx X. Xxxxxxx Xxxx X. Xxxxxxx |
|
MANAGEMENT INVESTORS (continued) |
Xxxxxxx Brothers 1996 Partners, Ltd. By: /s/ Xxx X. Xxxxxxx Name: Xxx X. Xxxxxxx Title: |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxxxx X. Xxxxx Xxxxxx X. Xxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxx Xxxxxxx Xxxx Xxxxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxxx Xxxxxxx Xxxxx Xxxxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxx Xxxxxxx Xxxx Xxxxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Chynna Winter Xxxxxxxx Xxxxxx Winter Xxxxxxxx |
|
MANAGEMENT INVESTORS (continued) |
/s/ Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx |
