NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT (the "Agreement") is entered into as of
December 31, 1998 by and among First Seismic Corporation, a Texas Corporation
("First"), and the undersigned holders (the "Noteholders" and each individually
a "Noteholder") of the 6% Secured Promissory Notes issued by First on May 12,
1993 in the aggregate principal amount of $500,000 (the "Notes").
RECITALS
1. First desires to purchase from the Noteholders the Notes in
exchange for 977,508 shares of First's common stock ("Common Stock"), par value
$0.01 per share, (the "Shares") and the Noteholders desire to sell such Notes to
First.
2. The Notes were secured by First through a Stock Pledge
Agreement, executed in May 1993, by the Noteholders and the Chairman of First,
Xxxxxx Xxxxx (the `Pledge Agreement"), by which the Noteholders received a
collateral interest in all of the shares of common stock of First Exchange
Corporation, a Delaware corporation and wholly-owned subsidiary of First (the
"Security Interests").
3. In addition to the Notes and the Security Interests, the
Noteholders received Warrants (the "Warrants") to purchase 500,000 shares of
First's common stock at a strike price of $.50 per share which will expire June
1, 2000.
4. The transactions contemplated by this Agreement are
conditioned upon and subject to each Noteholder conveying the Notes to First and
canceling all Security Interests held by such Noteholder, the holders of an
aggregate of 80% of the Warrants (the "80% Holders") entering into an agreement
with First to exercise all of the outstanding Warrants held by such Holders and
exchange all such Warrants for additional warrants to purchase shares of common
stock of First (the "Warrant Agreement") and the closing of such agreement
concurrently with the closing of this Agreement.
5. The Noteholders are familiar with the business, financial
condition and prospects of First and acknowledge that in connection with the
transactions contemplated by this Agreement and the Warrant Agreement they have
been afforded the opportunity to review certain financial information regarding
First and to ask questions of and receive satisfactory answers from management
of First concerning the business, financial condition and prospects of First.
In consideration of the premises and agreements contained herein, the
parties hereto hereby agree as follows:
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ARTICLE I
DEFINITIONS
In addition to the capitalized terms defined elsewhere in this
Agreement, the following capitalized terms shall have the following respective
meanings when used in this Agreement:
"BUSINESS DAY" means any day other than a Saturday, a Sunday,
or a day on which commercial banks in Houston, Texas are required or
authorized to be closed.
"FORTESA" shall mean Fortesa Corporation, a Texas corporation
whose principal place of business is 0000 Xxxx Xxxxx, Xxxxx 000,
Xxxxxxx, XX 00000.
"GAAP" means generally accepted accounting principles
(including principles of consolidation) in the United States of
America, in effect from time to time, consistently applied.
"GOVERNMENTAL REQUIREMENT" means any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization, or other
direction or requirement (including but not limited to any of the
foregoing which relate to Environmental Laws, energy regulations and
occupational, safety and health standards or controls) of any
Governmental Authority.
"LIEN" means, with respect to any Person, any mortgage, deed
of trust, lien, security interest, pledge, lease, conditional sale
contract, claim, charge, easement, right of way, assessment,
restriction and other encumbrance of every kind.
"PERSON" means an individual or individuals, a partnership, a
corporation, a company, a limited liability company, an association, a
joint stock company, a trust, a joint venture, an unincorporated
organization, any other form of legal entity, or a Governmental
Authority.
"PROPERTY" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"SUBSIDIARY" means, as to any Person, any corporation,
company, association, partnership, limited liability company or other
business entity of which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient
equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity, and
any partnership, limited liability company or joint venture if more
than a 50% interest in the profits of capital thereof is owned by such
Person or one or more of its Subsidiaries or such Person and one or
more of its Subsidiaries.
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"WARRANT AGREEMENT" means the Warrant Agreement to be executed
by First and holders of no less than 80% of the Warrants, substantially
in the form of Exhibit "A" hereto, as the same may be amended,
supplemented, or otherwise modified from time to time.
ARTICLE II
PURCHASE AND SALE OF THE NOTE; CLOSING
2.1 SALE AND PURCHASE OF NOTE AND SECURITY AGREEMENT. Upon the
terms and subject to the conditions set forth herein, each Noteholder shall sell
to First, and First shall purchase from such Noteholder, all Notes held by such
Noteholder, which Notes, including all outstanding principal and accrued
interest in connection therewith, shall be canceled in exchange for a number of
Shares equal to the outstanding balance of principal and interest of such Notes
in U.S. dollars multiplied by 2.18055 (the "Exchange Ratio"), resulting in an
aggregate of 977,508 Shares being issued pro rata to the Noteholders in exchange
for all Notes.
2.2 CLOSING. The closing (the "Closing") shall take place at the
offices of First Seismic Corporation, located at 0000 Xxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx on January 15, 1999, at 10:00 a.m., Houston time, or at such
other time, date and place as the parties may agree (the "Closing Date").
2.3 ACTIONS TO OCCUR AT CLOSING. At the Closing (i) each
Noteholder shall sell, transfer, convey and deliver to First, or its designated
closing agent, the Notes owned by such Noteholder and shall waive all rights and
claims to payment of principal and accrued interest thereunder evidenced by the
delivery of an assignment and release in form acceptable to First and its
counsel; (ii) First shall issue to each Noteholder the number of shares required
by Section 2.1, as evidenced by the delivery of a certificate representing such
number of Shares registered in the name of such Noteholder or its nominee, as
designated in writing by such Noteholder prior to the Closing; (iii) each
Noteholder shall deliver to First free of all liens all of the shares of common
stock of First Exchange Corporation held by such Noteholder as a Security
Interest; and (iv) each Noteholder shall file the necessary UCC filings to
record the removal of all Liens on the Security Interests. The closing of the
Warrant Agreement shall occur simultaneously with the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF FIRST. First (on its own
behalf and on behalf of its Subsidiaries) represents and warrants to each
Noteholder that:
3.1.1 CORPORATE EXISTENCE. First is duly organized, legally
existing, and in good standing under the laws of the jurisdictions in
which it is incorporated and is duly qualified as a foreign corporation
(or other legal entity) in all jurisdictions in which the nature of its
business activities or its ownership or leasing of property makes such
qualification necessary, except where the failure to so qualify would
not have a material adverse effect on the business
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condition or results of operations of First and its Subsidiaries, taken
as a whole (a "Material Adverse Effect").
3.1.2 CORPORATE POWER AND AUTHORIZATION. First has the
requisite corporate power and authority to execute, deliver, and
perform its obligations under this Agreement and the Warrant Agreement,
and to consummate the transactions contemplated hereby and thereby. All
action on First's part, including approval of its Board of Directors,
requisite for the due execution, delivery, and performance of this
Agreement has been duly and effectively taken.
3.1.3 VALID ISSUANCE. The Shares have been duly and validly
authorized for issuance by First and, when issued in accordance with
the terms and conditions contained in this Agreement, the Shares will
be duly authorized, validly issued, fully paid and nonassessable and
will not be subject to any preemptive or similar rights.
3.1.4 BINDING OBLIGATIONS. This Agreement is and, upon the
execution, issuance, and delivery by First, will be enforceable in
accordance with its terms except that enforcement may be subject to (i)
any applicable bankruptcy, insolvency or other similar laws generally
affecting the enforcement of creditors' rights and (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought.
3.1.5 NO VIOLATION. Neither the execution and delivery of
this Agreement nor the consummation of the transactions provided for
herein or contemplated hereby nor the fulfillment by First of the terms
hereof will (a) violate any provision of the Articles of Incorporation
or the bylaws of First, (b) require any consent or approval (other than
any consent or approval that has previously been obtained) under any of
the terms, conditions or provisions of any governmental permit, note,
bond, mortgage, indenture, loan, distribution agreement, license,
agreement, lease, or instrument or obligation to which First is a party
or by which First may be bound (except where the failure to obtain such
consent or approval will not have a Material Adverse Effect), or (c)
violate any law, judgment, order, writ, injunction, decree, statute,
rule, or regulation of any foreign or domestic federal, state, county,
municipal, or other governmental or regulatory authority, agency,
board, body, commission, instrumentality, court, or any political
subdivision thereof ("Governmental Authority")applicable to First
except where such violation will not have a Material Adverse Effect.
3.1.6 CONSENTS. All necessary consents, approvals,
qualifications, orders, or authorizations of, or filings with, any
Governmental Authority, and all consents under any material contracts,
agreements, or instruments by which First is bound or to which it is
subject, and required in connection with First's valid execution,
delivery, or performance of this Agreement and the offer, sale, and
delivery of the Shares and the consummation of any other transaction
contemplated on the part of First have been obtained or made.
3.1.7 MATERIAL ADVERSE CHANGES. Since December 31, 1997,
there has been no Material Adverse Effect.
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3.1.8 LITIGATION. Except as discussed in Schedule 3.1.8 or
as described in any report delivered to the Noteholders, there is no
action, suit, or proceeding, or any governmental investigation or any
arbitration, in each case pending or, to the knowledge of First,
threatened against First or any material property of First before any
court or arbitrator or any governmental or administrative body, agency
or official (i) which challenges the validity of this Agreement or the
issuance of the Shares; or (ii) which, if adversely determined, would
have a Material Adverse Effect.
3.1.9 FEES AND COMMISSIONS. Neither First nor, to the
knowledge of First, any of First's affiliates has retained a finder,
broker, agent, financial advisor, or other intermediary (collectively,
an "Intermediary") in connection with the transactions contemplated by
this Agreement. First has a regular investment banking agreement with
Xxxxxxxx Xxxxxxxxxxxx, for future fundraising which does not cover the
transactions contemplated by this Agreement.
3.1.10 STRUCTURE; CAPITALIZATION. As of the Closing Date and
after giving effect to the transactions contemplated in this Agreement
(i) First's authorized capital stock will consist of 11,000,000 shares,
of which 10,000,000 are designated Common Stock and 1,000,000 are
designated preferred stock, par value $1.00 ("Preferred Stock"); (ii)
8,708,593 shares of Common Stock will be issued and outstanding and
1,291,607 shares of Common Stock are or will be reserved for issuance
in connection with the Company's outstanding warrants and stock options
(500,000 of which will be reserved for issuance in connection with the
closing of the new Warrant Agreements), all of which, when issued in
accordance with the terms of such warrants and stock options, will be
validly issued, fully paid, and non-assessable; (iii) 50,000 shares of
Preferred Stock are issued and outstanding and 150,000 of Preferred
Stock are reserved for issuance in connection with the Fortesa Merger,
all of which, when issued in accordance with the Fortesa Merger
agreement will be validly issued, fully paid, and nonassessable; (iv)
except as disclosed on Schedule 3.1.10 no shares of Common Stock are
owned or held by or for the account of First or any of its
Subsidiaries; (v) except as disclosed on Schedule 3.1.10 neither First
nor any of its Subsidiaries has outstanding any stock or other
securities convertible into or exchangeable for any shares of capital
stock, any rights to subscribe for or to purchase or any options for
the purchase of or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of
any other character relating to the issuance of any capital stock, or
any stock or securities convertible into or exchangeable for any
capital stock which have not been waived (other than as contemplated by
this Agreement); and (vi) except as disclosed on Schedule 3.1.10,
neither First nor any of its Subsidiaries is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire
any shares of capital stock.
3.2 REPRESENTATIONS AND WARRANTIES OF NOTEHOLDER. To induce First
to enter into this Agreement, each Noteholder represents and warrants to First
that:
3.2.1 PURCHASE FOR INVESTMENT.
(a) Each Noteholder is acquiring the Shares for its own
account and not with a view to the public resale or distribution of all
or any part thereof in any transaction which would constitute a
"distribution" within the meaning of the Securities Act.
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(b) Each Noteholder acknowledges that the shares of
Common Stock issuable by First under this Agreement have not been
registered under the Securities Act and may not be sold or otherwise
transferred unless (i) pursuant to an effective registration statement
under the Securities Act or (ii) pursuant to an available exemption
from registration under, or otherwise in compliance with the Securities
Act. Each Noteholder acknowledges and agrees that in the case of a
transfer or other disposition pursuant to clause (ii) above, such
Noteholder shall be required to provide to First an opinion of counsel
satisfactory to First to the effect that registration under the
Securities Act is not required.
(c) Each Noteholder is an "accredited investor" within
the meaning of Rule 501 under Regulation D promulgated under the
Securities Act, is experienced in evaluating investments in companies
such as First, has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
its investment and has the ability to bear the entire economic risk of
its investment. Each Noteholder has made its own evaluation of its sale
of the Notes and First's issuance of Shares as contemplated by this
Agreement, based upon such information as is available to it and
without reliance upon First or any other person or entity, and each
Noteholder agrees that neither First nor any other person or entity has
any obligation to furnish any additional information to the Noteholders
except as expressly set forth herein.
(d) Each Noteholder acknowledges that the Shares may not
be sold, transferred, pledged, hypothecated, or otherwise disposed of
without registration under the Securities Act or an exemption
therefrom, and that in the absence of an effective registration
statement covering the Shares, issuable upon conversion of the Note, or
an available exemption from registration under the Securities Act, the
Shares must be held indefinitely.
(e) Each Noteholder agrees that stock certificates issued
as part of the Consideration shall bear legends in substantially the
following form:
"THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR OFFERED FOR SALE OR
OTHERWISE TRANSFERRED, EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (ii) AN
APPLICABLE EXEMPTION FROM REGISTRATION TINDER THE SECURITIES
ACT. ANY SALE PURSUANT TO CLAUSE (ii) OF THE PRECEDING
SENTENCE MUST BE ACCOMPANIED BY AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH
SUCH SALE."
3.2.2 AUTHORIZATION; NO CONFLICT. The Noteholders have all
requisite power and authority to enter into this Agreement and to carry
out and perform their obligations under
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the terms of this Agreement. This Agreement is a legal, valid, and
binding obligation of the Noteholders. The execution, delivery, and
performance of this Agreement by the Noteholders and the consummation
by the Noteholders of the transactions contemplated hereby will not
conflict with or result in a default under the terms of any material
contract, agreement, obligation, commitment, or organizational document
applicable to any Noteholder.
3.2.3 OWNERSHIP OF NOTE. Each Noteholder is the sole owner
and holder of the Notes which such Noteholder will sell to First. There
is no adverse claim against each Noteholder's interest in the Notes;
nor is there any person who should claim to be a "bona fide purchaser"
of the Notes other than Noteholder.
ARTICLE 1V
REGISTRATION RIGHTS
4.1 PIGGY-BACK REGISTRATION RIGHTS. First covenants and agrees
with the Noteholder, that, in the event First proposes to file a registration
statement under the Securities Act with respect to a firm commitment offering of
Common Stock (other than in connection with an exchange offer or a registration
statement on Form S-4 or S-8 or other similar registration statements not
available to register securities included), First shall in each case give
written notice of such proposed filing to the Noteholders at least 30 days
before the earlier of the anticipated or the actual effective date of the
registration statement and at least ten days before the initial filing of such
registration statement and such notice shall offer to such holders the
opportunity to include in such registration statement such number of shares of
Common Stock issued pursuant to this Agreement (the `Piggy-back Securities") as
they may request. Those Noteholders desiring inclusion of Piggy-back Securities
in such registration statement shall so inform First by written notice, given
within ten days of the giving of such notice by First in accordance with the
provisions of this Section 4.1. First shall permit, or shall cause the managing
underwriter of a proposed offering to permit, the holders of Piggy-back
Securities requested to be included in the registration to include such
securities in the proposed offering on the same terms and conditions as
applicable to securities of First. Notwithstanding the foregoing, if any such
managing underwriter shall advise First in writing that, in its opinion, the
distribution of all or a portion of the Piggy-back Securities requested to be
included in the registration concurrently with the securities being registered
by First would adversely affect the distribution of such securities by First for
its own account, then, provided that if any other securities are included in
such registration statement for the account of any person other than First and
the holders of Piggy-back Securities, such securities, including the Piggy-back
Securities, so included shall be apportioned among holders who wish to be
included therein pro rata according to amounts so requested to be included by
each such person. No such delay shall in any event impair any right granted
hereunder to make subsequent requests for inclusion pursuant to the terms of
this Agreement. All expenses of such registration shall be borne by First,
except that underwriting commissions and expenses attributable to the Piggy-back
Securities and fees and distributions of counsel and other advisors (if any) to
the holders requesting that the Piggy-back Securities be offered will be borne
by such holders.
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ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.1 CONDITIONS TO CLOSING BY FIRST. The obligation of First to
purchase the Notes on the Closing Date is subject to the fulfillment to its
satisfaction at or prior to the Closing Date of each of the following
conditions:
5.1.1 ACCEPTANCE OF OFFER. This Agreement shall have been
signed by all of the Noteholders and First shall have received evidence
to First's satisfaction that each of the Noteholders is authorized to
enter into this Agreement and to perform the terms and conditions
thereof.
5.1.2 FORTESA MERGER. Fortesa and First shall have entered
into an agreement by which First will merge with and into Fortesa and
Fortesa will become a wholly-owned Subsidiary of First (the "Fortesa
Merger"). The Fortesa Merger shall have closed concurrently with the
Closing.
5.1.3 BOARD OF DIRECTORS APPROVALS. The Board of Directors
of First shall have approved the issuance of additional shares of
common stock of First pursuant to the exercise of the outstanding
Warrants in accordance with the terms of the Warrant Agreement and
subject to the conditions contained therein, the issuance of a new
warrant to purchase additional common stock of First at an exercise
price of $.30 per share issuable in accordance with the terms of the
Warrant Agreement and subject to the conditions contained therein and
the conversion of the outstanding 12% Senior Notes into shares of
Common Stock.
5.1.4 EXERCISE OF $0.50 WARRANTS. Holders of an aggregate
of at least 80% of the outstanding Warrants shall have entered into the
Warrant Agreement which agreement is required to close concurrently
with the Closing as a condition precedent to the Closing. Those
Noteholders party to the Warrant Agreement shall have performed and
complied with all agreements and conditions contained in the Warrant
Agreement required to be complied with by it prior to the closing of
the Warrant Agreement.
5.1.5 REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in Section 3.2 shall be true and correct when
made and shall be true and correct as of the Closing Date as if made on
the Closing Date.
5.1.6 PERFORMANCE; DEFAULTS. The Noteholders shall have
performed and complied with all agreements and conditions contained in
this Agreement required to be performed or complied with by it prior to
or on the Closing Date and, after giving effect to the purchase and
sale of the Notes, no default or Event of Default shall have occurred
and be continuing.
5.1.7 LEGAL INVESTMENT. As of the Closing Date, the
purchase of the Notes and the issuance of Shares by First shall (a) be
legally permitted by all laws and regulations to which
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regulations of each jurisdiction to which each Noteholder and First are
subject, (b) not violate any applicable Governmental Requirement, and
(c) not subject to any tax, penalty, or liability under or pursuant to
any applicable Governmental Requirement.
5.1.8 PROCEEDINGS AND DOCUMENTS. As of the Closing Date,
all corporate, if applicable, and other proceedings in connection with
the transactions contemplated hereby shall be reasonably satisfactory
in form and substance to First, and First shall have received on or
prior to the Closing Date copies of all such legal documents or
proceedings taken in connection with the consummation of such
transactions.
5.1.9 QUALIFICATIONS. As of the Closing Date, all
authorizations, approvals, or permits of or filings with any
Governmental Authority that are required by law in connection with the
lawful issuance, sale, and delivery of the Shares (as applicable) shall
have been duly obtained by each Noteholder and shall be effective on
and as of the Closing Date.
5.1.10 CONSENTS. On or prior to the Closing Date, each
Noteholder shall have received in writing consents required of third
parties for the consummation of the transactions contemplated hereby,
pursuant to any law, contract, agreement, or instrument by which such
Noteholder is bound or to which it is subject.
5.2 CONDITIONS TO CLOSING BY THE NOTEHOLDERS. The obligations of
the Noteholders to sell the Note and the Warrants to First are subject to the
fulfillment to its satisfaction on or prior to the Closing Date of each of the
following conditions:
5.2.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of First contained in Section 3.1 shall be true and
correct when made, and shall be true and correct as of the Closing Date
as if made on the Closing Date.
5.2.2 PERFORMANCE. All covenants, agreements, and
conditions contained in this Agreement to be performed or complied with
by First on or prior to the Closing Date.
ARTICLE VI
MISCELLANEOUS
6.1 TERMINATION OF NOTES. Upon completion of the transactions in
this Agreement the Notes will be canceled and will be of no further force or
effect.
6.2 TERMINATION OF SECURITY AGREEMENT. Upon completion of the
transactions in this Agreement the Security Agreement will be terminated and
will be of no further force or effect and all Liens upon the common stock of
First Exchange Corporation will be canceled and all necessary UCC filings shall
have been made to evidence the removal of such Liens.
6.3 CONSENT TO AMENDMENTS; WAIVERS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended or waived only
by the written agreement of the Noteholders and First. Any waiver, permit,
consent, or approval of any kind or character on the part
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of such holder of any provisions or conditions of this Agreement must be made in
writing and shall be effective only to the extent specifically set forth in such
writing.
6.4 SURVIVAL OF TERMS; FAILURE TO CLOSE. All representations,
warranties, and covenants contained herein or made in writing by any party in
connection herewith will survive the execution and delivery of this Agreement
and any investigation made at any time by or on behalf of First for a period of
one year. Notwithstanding anything herein to the contrary, in the event the
Closing Date has not occurred on or before January 15, 1999 First may terminate
its obligations under this Agreement by written notice to the Noteholders.
6.5 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective successors of the parties hereto, whether so expressed or not and the
permitted assigns of the parties hereto including, without limitation and
without need of any express assignment. This Agreement and the rights and
obligations of the Noteholders shall not be assigned without the prior written
consent of First.
6.6 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement unless the consummation of the transaction contemplated hereby
is materially and adversely affected thereby.
6.7 EXPENSES. First and the Noteholders hereby agree that each
party hereunder shall bear its own costs and expenses in connection with this
Agreement or any of the transactions contemplated hereby.
6.8 DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience of reference only and do not constitute a
part of and shall not be utilized in interpreting this Agreement.
6.9 GOVERNING LAW. Each Noteholder hereby consents and agrees that
this Agreement shall be deemed a contract and instrument made under the laws of
the State of Texas and shall be construed and enforced in accordance with and
governed by the laws of the State of Texas without regard to principles of
conflicts of law.
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6.10 DISPUTES; EXCLUSIVE METHOD; JURISDICTION.
(a) ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THE NOTE OR THE
OTHER OPERATIVE DOCUMENTS, INCLUDING ANY CLAIM OR CONTROVERSY OF ANY KIND BASED
ON OR ARISING IN TORT, SHALL BE DETERMINED EXCLUSIVELY BY BINDING ARBITRATION IN
ACCORDANCE WITH THE U.S. FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE,
APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION
OF COMMERCIAL DISPUTES AND THE RULES SET FORTH BELOW. IN THE EVENT OF ANY
INCONSISTENCY, `THE RULES SET FORTH IN SECTION 6.10(b) BELOW SHALL CONTROL.
JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION. ANY PARTY TO THE NOTE OR THE OTHER OPERATIVE DOCUMENTS MAY BRING
AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF
ANY CONTROVERSY OR CLAIM TO WHICH EITHER THE NOTE OR ANY OPERATIVE DOCUMENT
APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
(b) THE ARBITRATION SHALL BE CONDUCTED IN HOUSTON, TEXAS AND
ADMINISTERED BY THE AMERICAN ARBITRATION ASSOCIATION. ALL ARBITRATION HEARINGS
WILL BE COMMENCE WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION. THE ARBITRATOR
SHALL, ONLY UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF
SUCH HEARING FOR AN ADDITIONAL 60 DAYS. THE ARBITRATOR SHALL NOT HAVE AUTHORITY
TO AWARD PUNITIVE, CONSEQUENTIAL, OR INCIDENTAL DAMAGES.
(c) THE PROVISIONS OF THIS SECTION 6.10 SHALL SURVIVE ANY
TERMINATION, AMENDMENT, OR EXPIRATION OF THE DOCUMENTS EVIDENCING THE
TRANSACTIONS. EACH PARTY AGREES TO KEEP ALL DISPUTES AND ARBITRATION
PROCEEDINGS STRICTLY CONFIDENTIAL, EXCEPT FOR DISCLOSURES OF INFORMATION
REQUIRED IN THE ORDINARY COURSE OF BUSINESS OF THE PARTIES OR BY APPLICABLE
LAW OR REGULATION.
(d) Each of the parties hereto submits itself and its property to
the personal jurisdiction of the United States District Court for the Southern
District of Texas and the courts of the State of Texas sitting in and for Xxxxxx
County in any such action or proceeding.
6.11 FINAL AGREEMENT. THIS AGREEMENT, AND THE OTHER OPERATIVE
DOCUMENTS CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE NOTEHOLDERS AND FIRST
CONCERNING THE MATTERS REFERRED TO HEREIN AND THEREIN, AND SUPERSEDE ALL
PRIOR AGREEMENTS AND UNDERSTANDINGS AMONG THE NOTEHOLDERS AND FIRST RELATING
TO THE SUBJECT MATTER HEREOF AND THEREOF. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN OR AMONG THE PARTIES. Any conflict or ambiguity between
the terms and provisions of this Agreement and
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the terms and provisions of any
other Operative Document shall be controlled by the terms and provisions hereof.
6.12 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be deemed an original, and such counterparts together shall constitute one
instrument.
6.13 FURTHER COOPERATION. At any time and from time to time, and at
its own expense, the Noteholders and/or First shall promptly execute and deliver
all such documents and instruments, and do all such acts and things, as any
party may reasonably request in order to further effect the purposes of this
Agreement.
6.14 NOTICES. Unless specifically provided otherwise, any notice
for purpose of this Agreement or any other document pursuant to this Agreement
shall be given in writing or by telex or by facsimile (fax) transmission and
shall be addressed or delivered to the respective addresses set forth at the end
of this Agreement, or to such other address as may have been previously
designated in writing by the intended recipient by notice given in accordance
with this paragraph. If sent by prepaid, registered or certified mail (return
receipt requested), the notice shall be deemed effective when the receipt is
signed or when the attempted initial delivery is refused or cannot be made
because of a change of address of which the sending party has not been notified;
and if transmitted by facsimile or personal delivery the notice shall be
effective when received. All notices, requests, and other communications to any
party hereunder shall be in writing (including bank wire, telecopy, or similar
teletransmission or writing) and shall be given to such party at its address or
telecopy number set forth on the signature pages hereof or such other address or
telecopy number as such party may hereafter specify by notice to the other
parties.
6.15 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of First in exercising any right or remedy under this Agreement and no
course of dealing between the Noteholders and First shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy under
this Agreement preclude any other or further exercise thereof or the exercise of
any other right or remedy under this Agreement. The rights and remedies
expressly provided are cumulative and not exclusive and any rights or remedies
that First would otherwise have. No notice to or demand on the Noteholders not
otherwise required by this Agreement in any case shall entitle the Noteholders
to any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of First to any other or further action in any
circumstances without notice or demand.
6.16 EXHIBITS; SCHEDULES. The exhibits and schedules attached to
this Agreement are incorporated herein and shall be considered to be a part of
this Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits or schedules and the
provisions of this Agreement, the provisions of this Agreement shall prevail.
12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first set forth above.
FIRST SEISMIC CORPORATION
By:
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
Address for Notice:
0000 Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxx
Telecopy: (000) 000-0000
[CORPORATE SEAL)
ATTEST:
----------------------------------
NOTEHOLDER
By:
------------------------------------
Name: ((Name))
Title: ((title))
Outstanding original balance plus
accrued interest: ((yellow))
Number of shares to be received upon
conversion: ((orange))
Address for Notice:
((Address))
((Address2))
((City)), ((State)) ((Zip))
Attention:
-----------------------------
Telecopy:
-------------------------------
with a copy to:
-------------------------
ATTEST:
-----------------------------
13
EXHIBIT A
TO
NOTE PURCHASE AGREEMENT
FORM OF
WARRANT AGREEMENT
14
SCHEDULE 3.1.8
PENDING LITIGATION
AND MATTERS FOR WHICH FORMAL WRITTEN
DEMANDS HAVE BEEN MADE
Filed 1997
Case No. 97CV981 BU(W); EAST TEXAS DATA, LLC AND CAPMAC EIGHTY-TWO
LIMITED PARTNERSHIP X. XXXXXX DATA, INC. AND FIRST SEISMIC CORPORATION, In the
United States District Court, Northern District of Oklahoma.
This case involves suit by minority partners of the previous owners of
First Seismic's East Texas data library for 7 1/2% of proceeds of use of that
seismic data acquired by First Seismic in 1989 from the majority partners,
Freeport-McMoran and SantaFe Energy. This data was re-sold by First Seismic to
Seitel in 1994, with revenue interests therefrom pledged to the 12% Senior
Noteholders of First Seismic. First Seismic was indemnified by Freeport-McMoran
and SantaFe Energy when data was initially acquired by First Seismic against the
plaintiffs. First Seismic has subsequently indemnified Seitel, but Seitel has
still held up payment of approximately $70,000 which corresponds to two (2)
years of First Seismic's revenue interest proceeds, pending the outcome of the
suit.
Schedule 3.1.8-1
SCHEDULE 3.1.10
CAPITAL STOCK OWNERSHIP
First Seismic currently holds 43,855 shares of Common Stock as Treasury stock.
