=============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities and Exchange Act of 1934
(Amendment No. 8)1
Seitel, Inc.
------------------------------------------------
(Name of Issuer)
Common Stock, $0.01 Par Value
------------------------------------------------
(Title of Class of Securities)
816074405
------------------------------------------------
(CUSIP Number)
Allison Bennington
ValueAct Capital
435 Pacific Avenue, Fourth Floor
San Francisco, CA 94133
(415) 362-3700
------------------------------------------------
(Name, address and telephone number of Person
Authorized to Receive Notices and Communications)
Christopher G. Karras, Esq.
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104-2808
(215) 994-4000
March 1, 2006
------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of 240.13d.1(e), 240.13d.1(f) or 240.13d.1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 240.13d.7 for other
parties to whom copies are to be sent.
1The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
This information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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SCHEDULE 13D
-------------------------- -------------------------
CUSIP NO. 816074405 Page 2 of 36
-----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)
ValueAct Capital Master Fund, L.P.
-----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
-----------------------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------------------
4. SOURCE OF FUNDS (See Instructions)*
WC*
-----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION British Virgin Islands
-----------------------------------------------------------------------------
7. SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 65,856,616**
OWNED BY EACH ----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER
0
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
65,856,616**
-----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
65,856,616**
-----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.0%
-----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
PN
-----------------------------------------------------------------------------
*See Item 3
**See Item 2 and 5
SCHEDULE 13D
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CUSIP NO. 816074405 Page 3 of 36
----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)
ValueAct Capital Partners Co-Investors, L.P.
-----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
-----------------------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------------------
4. SOURCE OF FUNDS*
WC*
-----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-----------------------------------------------------------------------------
7. SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 382,298**
OWNED BY EACH ----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER
0
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
382,298**
-----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
382,298**
-----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than 1%
-----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
PN
-----------------------------------------------------------------------------
*See Item 3
**See Item 2 and 5
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
SCHEDULE 13D
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CUSIP NO. 816074405 Page 4 of 36
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1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)
VA Partners, L.L.C.
-----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
-----------------------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00*
-----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-----------------------------------------------------------------------------
7. SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 66,238,914**
OWNED BY EACH ----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER
0
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
66,238,914**
-----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
66,238,914**
-----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.3%
-----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
00 (LLC)
-----------------------------------------------------------------------------
*See Item 3
**See Item 2 and 5
SCHEDULE 13D
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CUSIP NO. 816074405 Page 5 of 36
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1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)
ValueAct Capital Management, L.P.
-----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
-----------------------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00*
-----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-----------------------------------------------------------------------------
7. SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 66,238,914**
OWNED BY EACH ----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER
0
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
66,238,914**
-----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
66,238,914**
-----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.3%
-----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
PN
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*See Item 3
**See Item 2 and 5
SCHEDULE 13D
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CUSIP NO. 816074405 Page 6 of 36
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1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)
ValueAct Capital Management, LLC
-----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
-----------------------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00*
-----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-----------------------------------------------------------------------------
7. SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 66,238,914**
OWNED BY EACH ----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER
0
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
66,238,914**
-----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
66,238,914**
-----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.3%
-----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
00 (LLC)
-----------------------------------------------------------------------------
*See Item 3
**See Item 2 and 5
SCHEDULE 13D
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CUSIP NO. 816074405 Page 7 of 36
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1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)
Jeffrey W. Ubben
---------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
-----------------------------------------------------------------------------
3. SEC USE ONLY
---------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00*
-----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
-----------------------------------------------------------------------------
7. SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 66,238,914**
OWNED BY EACH ----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER
0
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
66,238,914**
-----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
66,238,914**
-----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.3%
-----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
-----------------------------------------------------------------------------
*See Item 3
**See Item 2 and 5
SCHEDULE 13D
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CUSIP NO. 816074405 Page 8 of 36
-----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)
George F. Hamel, Jr.
---------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
-----------------------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00*
-----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
-----------------------------------------------------------------------------
7. SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 66,238,914**
OWNED BY EACH ----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER
0
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
66,238,914**
-----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
66,238,914**
-----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.3%
-----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
-----------------------------------------------------------------------------
*See Item 3
**See Item 2 and 5
SCHEDULE 13D
-------------------------- -------------------------
CUSIP NO. 816074405 Page 9 of 36
-----------------------------------------------------------------------------
1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)
Peter H. Kamin
-----------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
---------------------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------------------
4. SOURCE OF FUNDS*
00*
-----------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
-----------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
-----------------------------------------------------------------------------
7. SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 66,238,914**
OWNED BY EACH ----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER
0
----------------------------------------------------------
10. SHARED DISPOSITIVE POWER
66,238,914**
-----------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
66,238,914**
-----------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.3%
-----------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
-----------------------------------------------------------------------------
*See Item 3
**See Item 2 and 5
THE PURPOSE OF THIS AMENDMENT NO. 8 TO SCHEDULE 13D IS TO AMEND THE
OWNERSHIP REPORTS OF THE REPORTING PERSONS. THE INFORMATION BELOW
SUPPLEMENTS THE INFORMATION PREVIOUSLY PROVIDED.
Item 1. Security and Issuer
This Schedule 13D relates to the Common Stock, $0.01 par
value per share (the "Common Stock"), of Seitel, Inc., a Delaware
corporation (the "Issuer"). The address of the principal executive
offices of the Issuer is 10811 South Westview Circle Drive, Suite 100,
Building C, Houston, TX 77043.
Item 2. Identity and Background
This statement is filed jointly by (a) ValueAct Capital Master Fund,
L.P. ("ValueAct Master Fund"), (b) ValueAct Capital Partners Co-Investors,
L.P. ("ValueAct Co-Investors"), (c) VA Partners, L.L.C. ("VA Partners"), (d)
ValueAct Capital Management, L.P. ("ValueAct Management L.P. "), (e)
ValueAct Capital Management, LLC ("ValueAct Management LLC"), (f) Jeffrey W.
Ubben, (g) George F. Hamel, Jr. and (h) Peter H. Kamin (collectively, the
"Reporting Persons").
ValueAct Co-Investors is a Delaware limited partnership. ValueAct
Master Fund is a limited partnership organized under the laws of the
British Virgin Islands. Each has a principal business address of 435
Pacific Avenue, Fourth Floor, San Francisco, CA 94133.
VA Partners is a Delaware limited liability company, the principal
business of which is to serve as the General Partner to ValueAct Master
Fund and ValueAct Co-Investors. VA Partners has a principal business
address of 435 Pacific Avenue, Fourth Floor, San Francisco, CA 94133.
ValueAct Management L.P. is a Delaware limited partnership which
renders management services to ValueAct Master Fund and ValueAct Co
Investors. ValueAct Management LLC is a Delaware limited liability
company, the principal business of which is to serve as the General Partner
to ValueAct Management L.P. Each has a principal business address of 435
Pacific Avenue, Fourth Floor, San Francisco, CA 94133.
(a), (b) and (c). Messrs. Ubben, Hamel and Kamin are each managing
members, principal owners and controlling persons of VA Partners and
ValueAct Management LLC, and such activities constitute their principal
occupations. Such individuals are sometimes collectively referred to
herein as the "Managing Members" or individually as a "Managing Member".
Each Managing Member is a United States citizen and has a principal
business address of 435 Pacific Avenue, Fourth Floor, San Francisco, CA
94133.
(d) and (e). None of the entities or persons identified in this Item 2
has during the past five years been convicted of any criminal proceeding
(excluding traffic violations or similar misdemeanors), nor been a party to
a civil proceeding of a judicial or administrative body of competent
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
Page 10 of 36
Item 3. Source and Amount of Funds or Other Consideration
The source of funds used for the purchase of the Issuer's securities
was the working capital of ValueAct Master Fund. The aggregate funds used
by these Reporting Persons to make the purchases were $89,200,089.25.
Item 4. Purpose of Transaction
The Reporting Persons have acquired the Issuer's Common Stock and
warrants to purchase Common Stock (the "Purchase Warrants") for investment
purposes, and such purchases have been made in the Reporting Persons'
ordinary course of business.
In pursuing such investment purposes, the Reporting Persons may
further purchase, hold, vote, trade, dispose or otherwise deal in the
Common Stock at times, and in such manner, as they deem advisable to
benefit from changes in market prices of such Common Stock, changes in the
Issuer's operations, business strategy or prospects, or from sale or merger
of the Issuer. To evaluate such alternatives, the Reporting Persons will
routinely monitor the Issuer's operations, prospects, business development,
management, competitive and strategic matters, capital structure, and
prevailing market conditions, as well as alternative investment
opportunities, liquidity requirements of the Reporting Persons and other
investment considerations. Consistent with its investment research methods
and evaluation criteria, the Reporting Persons may discuss such matters
with management or directors of the Issuer, other shareholders, industry
analysts, existing or potential strategic partners or competitors,
investment and financing professionals, sources of credit and other
investors. Such factors and discussions may materially affect, and result
in, the Reporting Persons' modifying their ownership of Common Stock,
exchanging information with the Issuer pursuant to appropriate
confidentiality or similar agreements, proposing changes in the Issuer's
operations, governance or capitalization, or in proposing one or more of
the other actions described in subsections (a) through (j) of Item 4 of
Schedule 13D.
The Reporting Persons reserve the right to formulate other plans
and/or make other proposals, and take such actions with respect to their
investment in the Issuer, including any or all of the actions set forth in
paragraphs (a) through (j) of Item 4 of Schedule 13D, or acquire additional
Common Stock or dispose of all the Common Stock beneficially owned by them,
in the public market or privately negotiated transactions. The Reporting
Persons may at any time reconsider and change their plans or proposals
relating to the foregoing.
On March 1, 2006, the Company acquired 21,499,983 shares of
common stock of Seitel, Inc. ("Issuer") and 15,037,568 warrants to purchase
the Issuer's common stock for an aggregate purchase price of $89,200,089.25
pursuant to a Securities Purchase Agreement ("Securities Purchase Agreement")
dated February 14, 2006 between the Company and Mellon HBV Alternative
Strategies LLC ("Mellon HBV"), a Delaware limited liability company. Mellon
HBV had sole voting and dispositive power over the securities acquired which
were nominally held by entities managed by Mellon HBV. Under the terms of
the Securities Purchase Agreement, the Company also acquired any and all
Page 11 of 36
rights under a certain Registration Rights Agreement ("Registration Rights
Agreement") dated July 2, 2004 between the Issuer and Mellon HBV. All of the
securities acquired pursuant to the Securities Purchase Agreement (other than
19,500 shares of common stock) are entitled to certain registration rights
under the Registration Rights Agreement. The Securities Purchase Agreement
was conditioned upon, among other things, the resignation of J.D Williams
from the Issuer's board of directors and the Issuer not appointing any
persons, other than Peter H. Kamin and Gregory P. Spivy, to fill any vacancy
on the Issuer's board of directors. A copy of the Securities Purchase
Agreement is attached as Exhibit 2 to this Schedule 13D and is incorporated
herein by reference.
Item 5. Interest in Securities of the Issuer
(a) and (b). Set forth below is the beneficial ownership of shares
of Common Stock of the Issuer for each person named in Item 2. Shares
reported as beneficially owned by ValueAct Master Fund and ValueAct Co-
Investors are also reported as beneficially owned by (i) VA Partners, as
General Partner of each such investment partnership,(ii) ValueAct
Management L.P. as the manager of each such investment partnership, (iii)
ValueAct Management LLC, as General Partner of ValueAct Management L.P. and
(iv) the Managing Members as controlling persons of VA Partners and
ValueAct Management LLC. VA Partners, ValueAct Management LLC and the
Managing Members also, directly or indirectly, may own interests in one or
more than one of the partnerships from time to time. Unless otherwise
indicated below, by reason of such relationships each of the ValueAct
Master Fund and ValueAct Co-Investors is reported as having shared power to
vote or to direct the vote, and shared power to dispose or direct the
disposition of, such shares of Common Stock, with VA Partners, ValueAct
Management L.P., ValueAct Management LLC and the Managing Members.
As of the date hereof, ValueAct Master Fund is the beneficial owner of
65,856,616 shares of Common Stock (including 15,037,568 shares issuable
upon exercise of Purchase Warrants), representing approximately 39.0% of
the Issuer's outstanding Common Stock. ValueAct Co-Investors
is the beneficial owner of 382,298 shares of Common Stock, representing
less than 1% of the Issuer's outstanding Common Stock. VA Partners,
ValueAct Management L.P., ValueAct Management LLC and the Managing
Members may each be deemed the beneficial owner of an aggregate of
66,238,914 shares of Common Stock (including 15,037,568 shares issuable
upon exercise of Purchase Warrants), representing approximately 39.3% of
the Issuer's outstanding Common Stock. All percentages set forth in this
Schedule 13D assume that the Issuer has 168,730,079 outstanding shares of
Common Stock. This includes 153,692,511 outstanding shares as reported in
the Issuer's Form 10-Q for the quarter ended September 30, 2005 and the
issuance of an additional 15,037,568 shares upon the exercise of
15,037,568 Purchase Warrants beneficially owned by the Reporting Persons.
One Purchase Warrant represents the right to purchase one share of the
Issuer's Common Stock, at an exercise price of $.72 per share,
exercisable at any time during the period ending on 08/12/11.
Page 12 of 36
(c) During the sixty (60) days preceding the date of this report, the
Reporting Persons purchased the following shares of Common Stock and
Purchase Warrants:
Reporting Person Trade Date Shares Price/Share
----------- --------- ------- -----------
ValueAct Master Fund
Common Stock 03/01/06 21,499,983 $2.75
Price/ Shares
Trade Date Warrants Warrants Underlying
--------- ------- --------- ----------
ValueAct Master Fund
Purchase Warrants 03/01/06 15,037,568 $2.0 15,037,568
(d) and (e) Not applicable.
Page 13 of 36
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Other than as described elsewhere in this Report and as previously
reported, the Reporting Persons have no understandings, arrangements,
relationships or contracts relating to the Issuer's Common Stock which are
required to be described hereunder.
Item 7. Material to Be Filed as Exhibits
(1) Joint Filing Agreement.
(2) Securities Purchase Agreement
Page 14 of 36
SIGNATURE
After reasonable inquiry and to the best of his knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below on this Schedule 13D hereby constitutes and appoints Jeffrey W. Ubben,
George F. Hamel, Jr. and Peter H. Kamin, and each of them, with full power to
act without the other, his or its true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him or it and in his
or its name, place and stead, in any and all capacities (until revoked in
writing) to sign any and all amendments to this Schedule 13D, and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary fully to all intents and
purposes as he or it might or could do in person, thereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
ValueAct Capital Master Fund L.P., by
VA Partners, L.L.C., its General Partner
By: /s/ George F. Hamel, Jr.
--------------------------------------
Dated: March 2, 2006 George F. Hamel, Jr., Managing Member
ValueAct Capital Partners Co-Investors L.P.,
by VA Partners, L.L.C., its General Partner
By: /s/ George F. Hamel, Jr.
--------------------------------------
Dated: March 2, 2006 George F. Hamel, Jr., Managing Member
VA Partners, L.L.C.
By: /s/ George F. Hamel, Jr.
--------------------------------------
Dated: March 2, 2006 George F. Hamel, Jr., Managing Member
ValueAct Capital Management, L.P., by
ValueAct Capital Management, LLC its
General Partner
By: /s/ George F. Hamel, Jr.
--------------------------------------
Dated: March 2, 2006 George F. Hamel, Jr., Managing Member
Page 15 of 36
ValueAct Capital Management, LLC
By: /s/ George F. Hamel, Jr.
--------------------------------------
Dated: March 2, 2006 George F. Hamel, Jr., Managing Member
By: /s/ Jeffrey W. Ubben
--------------------------------------
Dated: March 2, 2006 Jeffrey W. Ubben, Managing Member
By: /s/ George F. Hamel, Jr.
--------------------------------------
Dated: March 2, 2006 George F. Hamel, Jr., Managing Member
By: /s/ Peter H. Kamin
--------------------------------------
Dated: March 2, 2006 Peter H. Kamin, Managing Member
Page 16 of 36
Exhibit 1
JOINT FILING UNDERTAKING
The undersigned parties hereby agree that the Schedule 13D filed herewith
(and any amendments thereto) relating to the Common Stock of Seitel, Inc. is
being filed jointly on behalf of each of them with the Securities and
Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act
of 1934, as amended.
ValueAct Capital Master Fund L.P., by
VA Partners, L.L.C., its General Partner
By: /s/ George F. Hamel, Jr.
--------------------------------------
Dated: March 2, 2006 George F. Hamel, Jr., Managing Member
ValueAct Capital Partners Co-Investors L.P.,
by VA Partners, L.L.C., its General Partner
By: /s/ George F. Hamel, Jr.
--------------------------------------
Dated: March 2, 2006 George F. Hamel, Jr., Managing Member
VA Partners, L.L.C.
By: /s/ George F. Hamel, Jr.
--------------------------------------
Dated: March 2, 2006 George F. Hamel, Jr., Managing Member
ValueAct Capital Management, L.P.,
by, ValueAct Capital Management, LLC
its General Partner
By: /s/ George F. Hamel, Jr.
--------------------------------------
Dated: March 2, 2006 George F. Hamel, Jr., Managing Member
ValueAct Capital Management, LLC
By: /s/ George F. Hamel, Jr.
--------------------------------------
Dated: March 2, 2006 George F. Hamel, Jr., Managing Member
Page 17 of 36
By: /s/ Jeffrey W. Ubben
--------------------------------------
Dated: March 2, 2006 Jeffrey W. Ubben, Managing Member
By: /s/ George F. Hamel, Jr.
--------------------------------------
Dated: March 2, 2006 George F. Hamel, Jr., Managing Member
By: /s/ Peter H. Kamin
--------------------------------------
Dated: March 2, 2006 Peter H. Kamin, Managing Member
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Exhibit 2
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT, dated February 14,
2006, is by and between Mellon HBV Alternative Strategies LLC, a
Delaware limited liability company ("Mellon HBV" or "Seller") as the
manager of the entities (the "Fund Companies") listed on Schedule A
hereto, and Value Act Capital Master Fund, L.P., a Delaware limited
partnership (the "Purchaser").
Background
Seller wishes to sell to the Purchaser and the Purchaser
wishes to purchase from Seller an aggregate of 21,499,983 shares (the
"Shares") of Class A Common Stock, par value $0.01 per share (the
"Common Stock"), of Seitel, Inc., a Delaware corporation (the
"Company"), and an aggregate of 15,037,568 warrants (the "Funding
Guarantor Warrants") each to purchase one share of Class A Common Stock
of the Company. The Shares and Funding Guarantor Warrants to be sold
hereunder are collectively referred to as the "Securities."
Mellon HBV wishes to assign to Purchaser all of its rights
under the Registration Rights Agreement (the "Registration Rights
Agreement") dated July 2, 2004 between the Company and Mellon HBV.
Terms
In consideration of the agreements and obligations
contained in this Agreement and intending to be legally bound, the
parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. As used in this Agreement, and
unless the context requires a different meaning, the following terms
have the meanings indicated:
"Agreement" means this Agreement as the same may be
amended, supplemented or modified in accordance with the terms hereof.
"Assignment and Assumption Agreement" means Assignment and
Assumption Agreement dated the Closing Date, by and between Mellon HBV,
as Assignor and the Purchaser, as Assignee in the form of Exhibit A
attached hereto.
"Business Day" means any day other than a Saturday, Sunday
or other day on which commercial banks in the State of New York are
authorized or required by law or executive order to close.
"Commission" means the United States Securities and
Exchange Commission.
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"Funding Guarantor Warrant Assignment" means the Funding
Guarantor Warrant Assignment attached as Exhibit B to the Funding
Guarantor Warrants.
"Governmental Authority" means the government of any
nation, state, city, locality or other political subdivision thereof,
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Governmental Order" means any order, writ, rule,
judgment, injunction, decree, stipulation, determination, award,
citation or notice of violation entered by or with any Governmental
Authority.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other) or
other security interest or preferential arrangement of any kind or
nature whatsoever.
"Person" means any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint
venture, joint stock company, limited liability company, Governmental
Authority or other entity of any kind, and shall include any successor
(by merger or otherwise) of such entity.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder.
"Transaction Documents" means, collectively, this
Agreement, the Funding Guarantor Warrant Assignments and the Assignment
and Assumption Agreement.
ARTICLE II
SALE AND PURCHASE
2.1. Purchase and Sale of Common Stock. On the
Closing Date, Seller shall sell to the Purchaser, and the Purchaser
shall purchase from Seller, the number of Shares set forth on Schedule A
hereto at the price of $2.75 per Share, an aggregate purchase price set
forth on Schedule A hereto and the number of Funding Guarantor Warrants
set forth on Schedule A hereto at the price of $2.00 per Warrant and an
aggregate purchase price set forth on Schedule A hereto (the "Purchase
Price"), payable in immediately available United States funds. At the
Closing (a) Seller shall deliver to the Purchaser (i) a certificate or
certificates representing the Shares, together with stock powers duly
executed in blank or duly executed instruments of transfer, or via book
entry to an account specified by Purchaser for any Shares that may be in
book entry form at The Depository Trust Company, (ii) executed Funding
Guarantor Warrant Assignments sufficient to transfer all of the Funding
Guarantor Warrants and (iii) a duly executed Assignment and Assumption
Agreement, and (b) the Purchaser shall deliver to Seller (i) the
Purchase Price by wire transfer of immediately available funds to an
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account designated by Seller pursuant to wire instructions delivered to
the Purchaser at least two Business Days prior to the Closing and (ii) a
duly executed Assignment and Assumption Agreement.
2.2. Legends.
(a) Shares. The Purchaser acknowledges that
the certificates representing the Shares may bear a legend in
substantially the one of the following forms:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THESE SHARES UNDER THE SECURITIES
ACT OF 1933 OR AN OPINION OF THE COMPANY'S COUNSEL THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT. "
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY
AN AFFILIATE OF SEITEL, INC. AS THAT TERM IS DEFINED UNDER
THE GENERAL RULES AND REGULATIONS OF THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") OR AN OPINION OF COUNSEL
SATISFACTORY TO SEITEL, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED."
(b) Funding Guarantor Warrants. The Purchaser
acknowledges that the Funding Guarantor Warrants shall bear a legend in
substantially the following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 AS AMENDED
(THE "SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES
LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO A TRANSACTION WHICH, IN THE OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, IS EXEMPT
FROM , OR NOT SUBJECT TO, SUCH REGISTRATION."
(c) The certificates and warrants to be issued,
upon registration of the transfer of the Securities, in the name of the
Purchaser, will not bear restrictive legends to the extent that the
transfer contemplated hereby is pursuant to the Company's Registration
Statement on Form S-3 effective June 2, 2005 ("Shelf Registration
Statement").
2.3. Closing. The Closing shall take place at the
offices of Dechert LLP, 30 Rockefeller Plaza, New York, NY 10112-2200
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at 10:00 a.m., local time (or as soon thereafter as practicable) on the
second business day following the date on which the last of the
conditions set forth in Article VI (other than conditions in respect of
documents or agreements to be delivered at Closing) are fulfilled or
waived in accordance with this Agreement (the "Closing Date") or (b) at
such other place, time or date as Purchaser and Seller may agree.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller represents and warrants to the Purchaser as
follows:
3.1. Authority. Seller has all requisite limited
liability corporation power and authority to execute and deliver the
Transaction Documents, to perform its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of the Transaction
Documents by Seller and the consummation by Seller of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary limited liability corporation action and no other proceedings
on the part of Seller are necessary to authorize the Transaction
Documents or to consummate the transactions contemplated hereby and
thereby. The Transaction Documents have been duly executed and
delivered by Seller and constitute the legal, valid and binding
obligations of Seller enforceable against Seller in accordance with
their terms.
3.2. Title to Securities. Seller has sole voting and
dispositive power over the Securities set forth on Schedule A hereto,
and such Securities are held by Seller for the benefit of the entities
indicated on Schedule A hereto. At the Closing, Seller will deliver to
the Purchaser the Securities, and the Purchaser will acquire good and
valid title to the Securities, free and clear of all Liens, other than
any Liens that may be imposed or created by the Purchaser.
3.3. No Contravention. The execution and delivery of
the Transaction Documents by Seller does not, and the consummation of
the transactions contemplated by the Transaction Documents and the
compliance with the terms, conditions and provisions of the Transaction
Documents by Seller will not, (i) contravene the terms of the
organizational documents of Seller or any of its affiliates or (ii)
conflict with or result in a breach of or constitute a default (or an
event which might, with the passage of time or the giving of notice or
both, constitute a default) under (A) any of the terms, conditions or
provisions of any agreement or instrument to which Seller or any of its
affiliates is a party or by which Seller or any of its affiliates or any
of their assets may be bound or affected, (B) any judgment or order of
any court or Governmental Authority, or (C) any applicable law or
Governmental Order.
3.4. Litigation. There are no actions, suits,
proceedings, claims, complaints, disputes, arbitrations or
investigations (collectively, "Claims") pending or, to the knowledge of
Seller or any of its affiliates, threatened, at law, in equity, in
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arbitration or before any Governmental Authority against Seller or any
of its affiliates affecting the Securities or Seller's or any of its
affiliates' rights thereto, the Transaction Documents or the matters
contemplated hereby and thereby. No Governmental Order has been issued
by any court or other Governmental Authority against or affecting the
Securities or Seller's or any of its affiliates' rights thereto, the
Transaction Documents or the matters contemplated hereby and thereby.
3.5. Contracts. There are no contracts, agreements,
or enforceable arrangements to which the Seller or any of its affiliates
is a party, whether written or oral, which grant, or purport to grant,
voting rights, registration rights or other rights with respect to the
Common Stock or any other class or series of capital stock of the
Company or any securities convertible, exercisable or exchangeable into
shares of capital stock of the Company other than the Registration
Rights Agreement.
3.6. Information. No facts have come to the attention
of Seller or any of its affiliates that has caused it to believe that
any information contained in any document filed by the Company with the
Commission since the date that Seller or any of its affiliates first
acquired any of the Securities, as of the date of such document and the
date hereof, contained or contains any untrue statement of material fact
or omitted or omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading.
3.7. Registration Rights Agreement. Seller has
provided to Purchaser a true, correct and complete copy of the
Registration Rights Agreement.
3.8. Registrable Securities. All of the Securities
listed on Schedule A, other than 19,500 shares of common stock in the
name of Blackfriars Special Purpose Vehicle LLC Series 2, are
Registrable Securities (as defined in the Registration Rights
Agreement).
3.9. Broker's, Finder's or Similar Fees. There are no
brokerage commissions, finder's fees or similar fees or commissions
payable by Seller or any of its affiliates which could be payable by the
Purchaser in connection with the transactions contemplated hereby based
on any agreement, arrangement or understanding with Seller or any of its
affiliates or any action taken by such Person.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to Seller
that:
4.1. Authority. The Purchaser has all requisite
limited partnership power and authority to execute and deliver the
Transaction Documents, to perform its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of the Transaction
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Documents by the Purchaser and the consummation by the Purchaser of the
transactions contemplated hereby and thereby have been duly authorized
by all necessary limited partnership action and no other proceedings on
the part of the Purchaser are necessary to authorize the Transaction
Documents or to consummate the transactions contemplated hereby. The
Transaction Documents have been duly executed and delivered by the
Purchaser and constitutes the legal, valid and binding obligations of
the Purchaser enforceable against the Purchaser in accordance with their
terms.
4.2. No Contravention. The execution and delivery of
the Transaction Documents by the Purchaser does not, and the
consummation of the transactions contemplated by the Transaction
Documents and the compliance with the terms, conditions and provisions
of the Transaction Documents by the Purchaser will not (i) contravene
the terms of the organizational documents of the Purchaser or (ii)
conflict with or result in a breach of or constitute a default (or an
event which might, with the passage of time or the giving of notice or
both, constitute a default) under (A) any of the terms, conditions or
provisions of any agreement or instrument to which the Purchaser is a
party or by which the Purchaser or any of its assets may be bound or
affected, (B) any judgment or order of any court or Governmental
Authority, or (C) any applicable law or Governmental Order.
4.3. Litigation. There are no Claims pending or, to
the knowledge of the Purchaser, threatened, at law, in equity, in
arbitration or before any Governmental Authority pending against the
Purchaser affecting the Transaction Documents or the matters
contemplated hereby and thereby. No Governmental Order has been issued
by any court or other Governmental Authority against or affecting the
Purchaser affecting the Transaction Documents or the matters
contemplated hereby and thereby.
4.4. Sufficient Funds. The Purchaser has immediately
available cash in the amount of the aggregate Purchase Price for the
Securities.
4.5. Investment Intent. The Purchaser is acquiring
the Securities for investment for its own account and not with the view
to, or for resale in connection with, any distribution thereof in
violation of the Securities Act.
4.6. Broker's, Finder's or Similar Fees. There are no
brokerage commissions, finder's fees or similar fees or commissions
payable by the Purchaser which could be payable by Seller or any of its
affiliates in connection with the transactions contemplated hereby based
on any agreement, arrangement or understanding with the Purchaser or any
action taken by such Person.
ARTICLE V
COVENANTS; OTHER AGREEMENTS
5.1. HSR Act. The Purchaser shall, and the parties
shall use reasonable best efforts to cause the Company to, (i) make the
filings ("HSR Filing") required of the Purchaser or the Company or any
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of their affiliates under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), in connection with this
Agreement and the transactions contemplated hereby, as soon as
practicable and (ii) comply at the earliest practicable date and after
consultation with the Purchaser, in the case of the Company or the
Company, in the case of the Purchaser, with any request for additional
information or documentary material received by it or any of its
affiliates from any applicable Governmental Authority in connection with
filings required under the HSR Act. The filing fees assessed under the
HSR Act shall be paid by the Purchaser.
5.2. Reasonable Best Efforts. Subject to the terms
and conditions of this Agreement, each of the parties hereto agrees to
use its reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated
by the Transaction Documents.
5.2. Corporate Governance Matters. The parties to
this Agreement recognize the importance to Purchaser of appropriate
Board representation consistent with the Company's By-Laws. As such,
Mellon HBV agrees to use diligent efforts to cooperate with Purchaser in
its efforts to have seated on the Company's Board at the time of Closing
Messrs. Peter H. Kamin and Gregory P. Spivy. Mellon HBV's efforts shall
include making its preferences known to the Company's Board and
Management, and supporting the Company's requirement to discharge its
obligations in accordance with its By-Laws such that any stockholder
holding more than 30% beneficial ownership in the Company should have no
less than three (3) representatives on the Company's Board.
ARTICLE VI
CONDITIONS TO CLOSING
6.1. Conditions to Seller's Obligations. The
obligations of Seller to effect the transactions contemplated hereby
shall be subject to each of the following conditions, any one or more of
which may be waived in writing by Seller in whole or in part:
(a) each of the representations and warranties
of Purchaser contained in this Agreement shall be true and correct in
all material respects, when made and as of the Closing Date, with the
same effect as though such representations and warranties had been made
on and as of the Closing Date (except as contemplated or permitted by
this Agreement to change between the date of this Agreement and the
Closing Date);
(b) Purchaser shall have performed and
complied in all material respects with all agreements, covenants,
obligations and conditions required by this Agreement to be performed or
complied with by Purchaser at or prior to the Closing Date;
(c) The waiting period (and any extension
thereof) applicable under the HSR Act shall have been terminated or
shall have expired; and
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(d) Purchaser shall have delivered to Seller
such other agreements, documents and instruments reasonably requested by
Seller to effectuate the transactions contemplated in the Transaction
Documents.
6.2. Conditions to Purchaser's Obligations. The
obligations of Purchaser to effect the transactions contemplated hereby
shall be subject to each of the following conditions, any one or more of
which may be waived in writing by Purchaser in whole or in part:
(a) each of the representations and warranties
of Seller contained in this Agreement shall be true and correct in all
material respects, when made and as of the Closing Date, with the same
effect as though such representations and warranties had been made on
and as of the Closing Date (except as contemplated or permitted by this
Agreement to change between the date of this Agreement and the Closing
Date);
(b) Seller shall have performed and complied
in all material respects with all agreements, covenants, obligations and
conditions required by this Agreement to be performed or complied with
by Seller at or prior to the Closing Date;
(c) J.D. Williams shall have resigned from the
Company's board of directors effective as of the Closing;
(d) The Company shall not have appointed any
person other than Peter H. Kamin and Gregory P. Spivy to fill any
vacancy on the Company's Board of Directors without the prior written
approval of Purchaser;
(e) Seller shall have delivered to Purchaser
certificates, in genuine and unaltered form, representing all of the
Shares duly endorsed in blank or accompanied by duly executed unit
powers endorsed in blank, for transfer to Purchaser, or arranged to take
such steps, as may be necessary to transfer to Purchaser any Shares in
electronic book entry form;
(f) Seller shall have delivered to Purchaser
duly executed Funding Guarantor Warrant Assignments sufficient to
transfer all of the Funding Guarantor Warrants;
(g) Seller shall have delivered to Purchaser a
duly executed Assignment and Assumption Agreement;
(h) Purchaser shall have received a written
opinion of the Seller's counsel, dated the Closing Date, substantially
in the form of Exhibit B attached hereto;
(i) No event, development, circumstance or
occurrence shall have occurred, since the date hereof that, individually
or in the aggregate, has had or would reasonably be expected to have a
material adverse effect upon the condition (financial or otherwise),
business, assets, liabilities, or results of operations of the Company
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taken as a whole, other than any event, development, circumstance or
occurrence generally affecting businesses operating in the same markets
in which the Company operates;
(j) The waiting period (and any extension
thereof) applicable under the HSR Act shall have been terminated or
shall have expired; and
(k) Seller shall have delivered to Purchaser
such other agreements, documents and instruments reasonably requested by
Purchaser to effectuate the transactions contemplated in the Transaction
Documents.
ARTICLE VII
INDEMNIFICATION
7.1. Survival and Knowledge. All of the terms and
conditions of this Agreement, together with the representations,
warranties and covenants contained herein or in any instrument or
document delivered or to be delivered pursuant to this Agreement, shall
survive the execution of this Agreement and the Closing notwithstanding
any investigation heretofore or hereafter made by or on behalf of any
party hereto.
7.2. Indemnification by Seller. Seller shall
indemnify, defend and hold harmless Purchaser and each of the officers,
directors, employees, shareholders, attorneys, accountants, partners,
representatives, agents, successors and assigns of the foregoing (each a
"Purchaser Indemnified Party" and collectively, the "Purchaser
Indemnified Parties"), at all times after the date of this Agreement,
from and against any liabilities, damages, losses, claims, liens, costs,
or expenses (including attorney's reasonable fees) of any nature (any or
all of the foregoing are hereinafter referred to as a "Loss") sustained
by any Purchaser Indemnified Party, resulting or arising from or
otherwise relating to (i) any breaches of the Seller's representations
and warranties set forth in Article II of this Agreement or in any
written certificate furnished pursuant hereto or in connection with the
transactions contemplated hereby, or (ii) any nonfulfillment of or
failure to comply with any covenant of Seller set forth in this
Agreement.
7.3. Indemnification by Purchaser. Purchaser shall
indemnify, defend and hold harmless Seller and each of its affiliates,
representatives, agents, successors and assigns (each a "Seller
Indemnified Party" and collectively, the "Seller Indemnified Parties"),
at all times after the date of this agreement, from and against any Loss
sustained by any Seller Indemnified Party, resulting or arising from or
otherwise relating to any breaches of Purchaser's representations and
warranties set forth in Article III of this Agreement or in any
certificate furnished pursuant hereto or in connection with the
transactions contemplated hereby.
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ARTICLE VIII
TERMINATION
8.1. Termination. The parties hereto agree and
understand that time is of the essence, and notwithstanding anything
herein or elsewhere to the contrary, this Agreement may be terminated
and the transactions contemplated herein may be abandoned at any time
prior to the Closing at the election of any party, if the Closing shall
not have occurred on or before February 28, 2006, provided, however,
that in the event Purchaser and the Company make their HSR Filing within
four (4) business days of signing this Agreement, the date of Closing
may be extended solely to accommodate HSR Compliance purposes to a date
no later than the 31st day after making the HSR Filing, but in no event
later than March 24, 2006. If Purchaser or any party hereto shall
receive a second request related to the HSR Filing from either the U.S.
Department of Justice ("DOJ") or the U.S. Federal Trade Commission
("FTC") for "additional information and documentary material relevant to
the proposed acquisition" under 15 U.S.C. 18a(e)(1), Seller shall have
the right to unilaterally terminate this Agreement without liability at
any such time after the issuance of any second request.
(b) The termination of this Agreement shall be
effectuated by the delivery by the party terminating this Agreement to
the other party of a written notice of such termination. If this
Agreement so terminates, it shall become null and void and have no
further force or effect.
ARTICLE IX
MISCELLANEOUS
9.1. Amendments and Waivers. The provisions of this
Agreement may not be amended, modified, supplemented or terminated, and
waivers or consents to departures from the provisions hereof may not be
given, without the written consent of the Seller and the Purchaser.
9.2. Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand
delivery, telecopier, any courier guaranteeing overnight delivery or
first class registered or certified mail, return receipt requested,
postage prepaid, addressed to the applicable party at the address set
forth below or such other address as may hereafter be designated in
writing by such party to the other parties in accordance with the
provisions of this Section:
If to the Seller, to:
Mellon HBV Alternative Strategies
200 Park Avenue
54th Floor
New York, NY 10166-3399
Telecopy: 212 922 8953
Attention: James Jenkins, Portfolio Manager
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With a copy to:
Heller Ehrman LLP
Times Square Tower
7 Times Square
New York, NY 10036-6524
Telecopy: 212 763 7600
Attention: Guy N. Molinari, Esq.
If to the Purchaser, to:
Value Act Capital Master Fund, L.P.
435 Pacific Avenue, Fourth Floor
San Francisco, CA 94133
Telecopy: 415 362 5727
Attention: Allison Bennington, Esq.
With a copy to:
Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104-2808
Telecopy: +1 215 994 2222
Attention: Christopher G. Karras, Esq.
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if personally
delivered; when receipt is acknowledged, if telecopied; on the next
Business Day, if timely delivered to a courier guaranteeing overnight
delivery; and five days after being deposited in the mail, if sent first
class or certified mail, return receipt requested, postage prepaid.
9.3. Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns; provided however that neither the
Seller, on the one hand, nor the Purchaser on the other hand, shall
assign or delegate any of the rights or obligations created under this
Agreement without the prior written consent of the other party; provided
further that, the Purchaser may assign any of their rights under this
Agreement, but not any of its obligations hereunder, to any controlled
affiliate of the Purchaser without the Seller's consent.
9.4. No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties
hereto and their permitted assigns, and nothing herein, express or
implied, is intended to or shall confer upon any other Person any legal
or equitable right, benefit or remedy of any nature whatsoever or by
reason of this Agreement.
9.5. Counterparts. This Agreement may be executed in
two or more counterparts, each of which, when so executed and delivered,
shall be deemed to be an original, but all of which counterparts, taken
together, shall constitute one and the same instrument.
9.6. Descriptive Headings, Etc. The headings in this
Agreement are for convenience of reference only and shall not limit or
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otherwise affect the meaning of terms contained herein. Unless the
context of this Agreement otherwise requires: (1) words of any gender
shall be deemed to include each other gender; (2) words using the
singular or plural number shall also include the plural or singular
number, respectively; (3) the words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement, and Section and paragraph references are to the Sections and
paragraphs of this Agreement unless otherwise specified; (4) the word
"including" and words of similar import when used in this Agreement
shall mean "including, without limitation," unless otherwise specified;
(5) "or" is not exclusive; and (6) provisions apply to successive events
and transactions.
9.7. Severability. In the event that any one or more
of the provisions, paragraphs, words, clauses, phrases or sentences
contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason,
the validity, legality and enforceability of any such provision,
paragraph, word, clause, phrase or sentence in every other respect and
of the other remaining provisions, paragraphs, words, clauses, phrases
or sentences hereof shall not be in any way impaired, it being intended
that all rights, powers and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
9.8. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
(without giving effect to the conflict of law principles thereof).
9.9. Remedies. Except as otherwise provided by law, a
delay or omission by a party hereto in exercising any right or remedy
accruing upon any such breach shall not impair the right or remedy or
constitute a waiver of or acquiescence in any such breach. No remedy
shall be exclusive of any other remedy, and all available remedies shall
be cumulative.
9.10. Entire Agreement. the Transaction Documents are
intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings relating to such subject matter,
other than those expressly set forth herein or in the other Transaction
Document. The Transaction Documents supersedes all prior agreements and
understandings between the parties to this Agreement with respect to
such subject matter.
9.11. Consent to Jurisdiction; Waiver of Jury. Each
party to this Agreement hereby irrevocably and unconditionally agrees
that any legal action, suit or proceeding arising out of or relating to
this Agreement or any agreements or transactions contemplated hereby may
be brought only in any federal court of the Southern District of New
York or any state court located in New York County, State of New York,
and hereby irrevocably and unconditionally expressly submits to the
exclusive personal jurisdiction and venue of such courts for the
purposes thereof and hereby irrevocably and unconditionally waives any
Page 30 of 36
claim (by way of motion, as a defense or otherwise) of improper venue,
that it is not subject personally to the jurisdiction of such court,
that such courts are an inconvenient forum or that this Agreement or the
subject matter may not be enforced in or by such court. Each party
hereby irrevocably and unconditionally consents to the service of
process of any of the aforementioned courts in any such action, suit or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the address set forth or provided for in
Section 9.2 of this Agreement, such service to become effective 10 days
after such mailing. Nothing herein contained shall be deemed to affect
the right of any party to serve process in any manner permitted by law
or commence legal proceedings or otherwise proceed against any other
party in any other jurisdiction to enforce judgments obtained in any
action, suit or proceeding brought pursuant to this Section. Each of
the parties hereby irrevocably waives trial by jury in any action, suit
or proceeding, whether at law or equity, brought by any of them in
connection with this Agreement or the transactions contemplated hereby.
9.12. Further Assurances. Each party hereto shall in
good faith do and perform or cause to be done and performed all such
further acts and things and shall execute and deliver all such other
agreements, certificates, instruments and documents as any other party
hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
9.13. Construction. The parties acknowledge that each
of them has had the benefit of legal counsel of its own choice and has
been afforded an opportunity to review this Agreement with its, his or
her legal counsel and that this Agreement shall be construed as if
jointly drafted by the Seller and the Purchaser.
[Remainder of page intentionally left blank.]
Page 31 of 36
IN WITNESS WHEREOF, the parties have executed this
Securities Purchase Agreement as of the date first above written.
VALUEACT CAPITAL MASTER FUND, L.P.
By: /s/ George F. Hamel, Jr.
--------------------------------------
Name: George F. Hamel, Jr.
Title: Managing Member
MELLON HBV ALTERNATIVE STRATEGIES LLC, as
holder of sole voting and dispository power
over the Securities it holds on behalf of
each of the Fund Companies
By: /s/ James R. Jenkins
--------------------------------------
Name: James R. Jenkins
Title: Portfolio Manager
Page 32 of 36
SCHEDULE A
Fund's Name Number of Shares Purchase Price
Blackfriars Special Purpose Vehicle LLC Series 2 212,599(1) $584,647.25
HBV Master Rediscovered Opportunities Fund LP 4,727,805 $13,001,463.75
Mellon HBV Capital Partners LP 542,869 $1,492,889.75
AXIS-RDO Limited 395,219 $1,086,852.25
Mellon HBV Master US Event Driven Fund LP 1,022,718(2) $2,812,474.50
Mellon HBV Master Global Event Driven Fund LP 12,787,364(3) $35,165,251.00
Lyxor Mellon HBV Rediscovered Opportunities 1,811,409(4) 4,981,374.75
Fund Ltd.
TOTAL 21,499,983 $59,124,953.25
Number of Funding Purchase Price
Fund's Name Guarantor Warrants
Blackfriars Special Purpose Vehicle LLC Series 2 370,400 $740,800.00
Mellon HBV Master Rediscovered Opportunities Fund LP 6,798,567 $13,597,134.00
Mellon HBV Capital Partners LP 100,000 $200,000.00
AXIS-RDO Limited 758,804 $1,517,608.00
Mellon HBV Master US Event Driven Fund LP 654,810 $1,309 620.00
Mellon HBV Master Global Event Driven Fund LP 5,928,160 $11,856,320.00
Lyxor Mellon HBV Rediscovered Opportunities Fund Ltd. 426,827 $853,654.00
TOTAL 15,037,568 $30,075,136.00
---------------------------------
Notes:
(1) Of such shares, 19,500 are held in book entry form, are not registered
pursuant to the Registration Statement on Form S-3 dated 6/2/2005 and are not
Registrable Securities (as defined in the Registration Rights Agreement).
(2) Of such shares, 125,000 shares are held in book entry form; registered
pursuant to the Registration Statement.
(3) Of such shares, 121,132 shares are held in book entry form; registered
pursuant to the Registration Statement.
(4) Of such shares, 1,644,200 shares are held in book entry form, registered
pursuant to the Registration Statement.
Page 33 of 36
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment
Agreement") dated as of February _, 2006, is by and between Mellon HBV
Alternative Strategies LLC ("Assignor") and Value Act Capital Master
Fund, L.P. ("Assignee").
Background
Assignor and Assignee have entered into a Securities
Purchase Agreement dated as of February _, 2006 ("Sale Agreement")
pursuant to which Assignor has agreed to sell, assign, transfer, convey
and deliver to Assignee all of its claims, rights and benefits existing
at or arising after the Closing pursuant to the Registration Rights
Agreement (the "Registration Rights Agreement") dated July 2, 2004
between Seitel, Inc. and Assignor.
Assignor now wish to fulfill its agreement to sell,
assign, transfer, convey and deliver to Assignee the Registration Rights
Agreement in accordance with the terms of the Sale Agreement.
Terms
In consideration of the agreements and obligations
contained in this Agreement and intending to be legally bound, the
parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1. Any capitalized item used but not defined herein
will have the meaning set forth in the Sale Agreement.
ARTICLE II
ASSIGNMENT BY ASSIGNOR
2.1. Assignment. Assignor hereby sells, assigns,
transfers, conveys and delivers to Assignee all of its claims, rights
and benefits existing at or arising after Closing pursuant to the
Registration Rights Agreement in accordance with the Sale Agreement, and
Assignee hereby accepts such assignment.
ARTICLE III
ASSUMPTION BY ASSIGNEE
3.1. Assumption. Assignee hereby assumes and agrees,
in accordance with the Registration Rights Agreement, to be bound by the
terms and conditions of the Registration Rights Agreement and to be
subject to the rights, duties and obligations of an Investor (as defined
in the Registration Rights Agreement) pursuant to the terms of such
agreement as if the Assignee was originally a party thereto.
Page 34 of 36
ARTICLE IV
MISCELLANEOUS
4.1. Binding Effect. This Assignment Agreement shall
be binding upon and inure to the benefit of the Assignor and the
Assignee and their respective successors and assignees in accordance
with the Sale Agreement.
4.2. Governing Law. This Assignment Agreement shall
be governed by and construed in accordance with the laws of New York,
whether common law or statutory, without reference to the choice of law
provisions thereof.
4.3. Counterparts. This Assignment Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.
4.4. Conflict. In the event of a conflict between
the terms of this Assignment Agreement and the terms and conditions of
the Sale Agreement, the terms and conditions of the Sale Agreement shall
govern, supersede and prevail.
Page 35 of 36
IN WITNESS WHEREOF, the parties have executed this Assignment
Agreement as of the date first above written.
VALUEACT CAPITAL MASTER FUND, L.P.
By: /s/ George F. Hamel, Jr.
--------------------------------------
Name: George F. Hamel, Jr.
Title: Managing Member
MELLON HBV ALTERNATIVE STRATEGIES LLC
By: /s/ James R. Jenkins
--------------------------------------
Name: James R. Jenkins
Title: Portfolio Manager
Page 36 of 36