SAExploration Holdings, Inc. (Form: 8-K, Received: 12/26/2017 16:38:24)

Date: December 26, 2017

SAExploration Holdings, Inc.

/s/ Brent Whiteley

Brent Whiteley

Chief Financial Officer, General Counsel and Secretary

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 21, 2017

SAEXPLORATION HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

001-35471

(Commission file number)

27-4867100

(IRS Employer Identification No.)

1160 Dairy Ashford Rd., Suite 160, Houston, Texas 77079

(Address of principal executive offices) (Zip Code)

(281) 258-4400

(Company’s telephone number, including area code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14(d)-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01

Entry into a Material Definitive Agreement.

On December 21, 2017, SAExploration Holdings, Inc. (the “Company”) entered into Amendment No. 1 to First Amended and Restated Credit and Security Agreement (the “Credit Agreement Amendment”) among SAExploration, Inc., as borrower, the Company and the other guarantors party thereto, the lenders party thereto (the “Lenders”) and Cantor Fitzgerald Securities, as administrative agent and collateral agent for the Lenders (the “Credit Agreement”). The Credit Agreement Amendment, among other things, (i) increases the maximum amount of borrowings under the Credit Agreement to $20 million (from $16 million), and (ii) adds new lenders to the Credit Agreement and the other loan documents related thereto.

The foregoing summary is qualified in its entirety by reference to the Credit Agreement Amendment, which is attached as Exhibit 10.1. The representations and warranties of the Company in the Credit Agreement Amendment were made only for purposes of that agreement and as of specific dates and were solely for the benefit of the Lenders. The Credit Agreement Amendment is a contractual document that establishes and governs the legal relations among the parties thereto and is not intended to be a source of factual, business, or operational information about the Company and its subsidiaries. The representations and warranties made by the Company in the Credit Agreement Amendment may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, investors and security holders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 is incorporated into this Item 2.03 by reference.

Item 8.01

Other Events.

On December 22, 2017, the Company issued a press release announcing the commencement of an exchange offer and consent solicitation related to the Company’s outstanding 10.000% Senior Secured Notes due and the Company’s outstanding 10.000% Senior Secured Second Lien Notes due 2019. A copy of the press release is filed herewith as Exhibit 99.1 and incorporated by reference herein.

This Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of any of these securities, in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements” within the meaning of the U.S. federal securities laws, with respect to the Company’s financial condition, results of operations, cash flows and business, and expectations or beliefs concerning future events. These forward-looking statements can generally be identified by phrases such as “expects,” “anticipates,” “believes,” “estimates,” “intends,” “plans to,” “ought,” “could,” “will,” “should,” “likely,” “appears,” “projects,” “forecasts,” “outlook” or other similar words or phrases. There are inherent risks and uncertainties in any forward-looking statements. Although the Company believes that its expectations are reasonable, it can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Except as required by law, the Company undertakes no obligation to update, amend or clarify any forward-looking statements to reflect events, new information or otherwise. Some of the important factors that could cause actual results to differ materially from the Company’s expectations are discussed below. All written and oral forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements.

Factors that could cause actual results to vary materially from the Company’s expectations include the following:

•

the ability to satisfy, or effectively waive, the conditions to the exchange offer and consent solicitation;

•

the ability to succeed in and the timing to complete any of the restructuring and recapitalization transactions described in this report;

•

the ability to effectively manage the Company’s operations during the significant cash flow and liquidity difficulties it is currently experiencing;

•

negative events or publicity associated with the Company’s restructuring and recapitalization transactions could adversely affect our relationships with our suppliers, service providers, customers, employees, and other third parties, which in turn could adversely affect our operations and financial condition;

•

the ability to negotiate the definitive documentation with respect to the restructuring transactions or to do so effectively;

•

the negative consequences if the Company is unsuccessful in achieving a successful restructuring transaction;

•

the negative consequences if the Company is successful in achieving a restructuring transaction, including the possibility of significant dilution to the Company’s existing stockholders;

•

developments with respect to the Alaskan oil and natural gas exploration tax credit system that may continue to affect the willingness of third parties to participate in financing and monetization transactions and the Company’s ability to timely monetize tax credits that have been assigned to it by its customer;

•

changes in the Alaskan oil and natural gas exploration tax credit system that may significantly affect the level of Alaskan exploration spending;

•

fluctuations in the levels of exploration and development activity in the oil and natural gas industry;

•

intense industry competition;

•

limited number of customers;

•

credit and delayed payment risks related to the Company’s customers;

•

the availability of liquidity and capital resources, including the Company’s ability to make capital expenditures due to its current liquidity and cash flow situation and the potential impact this has on the Company’s business and competitiveness;

•

need to manage rapid growth and contraction of the Company’s business;

•

delays, reductions or cancellations of service contracts;

•

operational disruptions due to seasonality, weather and other external factors;

•

crew availability and productivity;

•

whether the Company enters into turnkey or term contracts;

•

high fixed costs of operations;

•

substantial international business exposing the Company to currency fluctuations and global factors, including economic, political and military uncertainties;

•

ability to retain key executives; and

•

need to comply with diverse and complex laws and regulations.

You should refer to the risk factors from the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017 for specific risks which would cause actual results to be significantly different from those expressed or implied by any of the Company’s forward-looking statements. It is not possible to identify all of the risks, uncertainties and other factors that may affect future results. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. Accordingly, readers of this report are cautioned not to place undue reliance on the forward-looking statements.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits.


Exhibit No.		Description

10.1		Amendment No. 1 to First Amended and Restated Credit and Security Agreement, dated as of December 21, 2017, among SAExploration, Inc., as Borrower, the Guarantors party thereto, the Lenders party thereto, and Cantor Fitzgerald Securities, as Agent.

99.1		Press Release dated December 22, 2017

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 10.1

AMENDMENT NO. 1

FIRST AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

This AMENDMENT NO. 1 TO FIRST AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT (this “ Amendment ”) dated as of December 21, 2017, is entered into among SAExploration, Inc., a Delaware corporation (“ Borrower ”), the Guarantors party hereto, the Lenders party hereto, and Cantor Fitzgerald Securities, as administrative agent and collateral agent for the Lenders (in such capacity, the “ Agent ”), and amends that certain First Amended and Restated Credit and Security Agreement dated as of September 22, 2017 (as so amended, the “ Agreement ”), entered into among the Borrower, the Guarantors, the Lenders party thereto and Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Agreement.

WITNESSETH:

WHEREAS, the Borrower has requested that all of the Lenders party to the Agreement on the date hereof (including after giving effect to this Amendment) (such Lenders, “ All Lenders ”) amend the Agreement to effect the changes described below; and

WHEREAS, All Lenders have agreed to amend the Agreement to effect such changes subject to the terms and conditions hereof;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereto hereby agree as follows:

1. New Lenders . 1992 MSF International Ltd. and 1992 Tactical Credit Master Fund, L.P., each, is hereby joined as a “Lender” to the Agreement and each of the other Loan Documents (each, a “ New Lender ”), as applicable, and each such New Lender hereby joins in, ratifies and confirms all terms, conditions and other provisions set forth in the Agreement and the other Loan Documents made by or pertaining to the “Lenders”. Each New Lender hereby (a) represents, warrants, and covenants that (i) it shall be bound by the provisions of the Agreement and the other Loan Documents and other instruments or documents furnished pursuant thereto as a Lender thereunder and shall have the obligations of a Lender thereunder, (ii) it has received a copy of the Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.1 of the Agreement, if any, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Amendment (and become a Lender under the Agreement and the other Loan Documents); and (b) agrees that (i) it will, independently and without reliance on the Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations that by the terms of the Loan Documents are required to be performed by it as a Lender. Each New Lender acknowledges and agrees that, as of the date hereof, (x) it is not a Lender in regards to the Existing Obligations or the First Amended and Restated Effective Date Advance and no such Obligations are owed to it (or will be owed to it as a result of joining as a “Lender” to the Agreement in accordance with the provisions hereof) and (y) it shall not be required to issue any Commitments, other than Subsequent Advance Commitments (solely to the extent it agrees to do so) pursuant to Section 2.1(c) of the Agreement, or make any Advances, other than Subsequent Advances (solely to the extent it agrees to do so) pursuant to Section 2.1(c) of the Agreement, in each case, subject to the terms and conditions set forth in the Agreement.

2. Amendments .

a) The following defined term is added to Schedule 1.1A to the Agreement in the appropriate alphabetical order:

“ First Amendment Effective Date ” shall mean December 22, 2017.”

“ RSA ” means that certain Restructuring Support Agreement dated as of December 19, 2017, among the Borrower, the Guarantors and the other Persons party thereto, pursuant to which the Borrower has agreed to enter into certain transactions, including the exchange of certain Indebtedness of the Parent for Equity Interests issued by the Parent, as in effect on the date hereof.

b) The following defined terms in Schedule 1.1 A to the Agreement are hereby amended and restated as follows:

“ Intercompany Canadian Note ” means the Secured Promissory Note dated December 5, 2012, issued by SAExploration (Canada) Ltd. to the Borrower in the original principal amount of U.S. $50,000,000, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Interest Rate ” means an interest rate equal to (i) ten and one quarter percent (10.25%) per annum for the period from the Funding Date in regards to the First Amended and Restated Effective Date Advance through and including March 22, 2018, (ii) ten and three quarter percent (10.75%) per annum for the period from March 23, 2018 through and including September 22, 2018, and eleven and three quarter percent (11.75%) per annum, thereafter, provided that upon the occurrence of a Chapter 11 Trigger Event (as defined in the RSA), the Obligations shall automatically bear interest at a per annum rate equal to two percent (2%) above the per annum rate otherwise applicable hereunder.

“ Maximum Amount ” means $20,000,000.00.

“ Subsequent Advance Amount ” means an aggregate amount equal to $15,000,000, which amount shall be uncommitted as of the First Amendment Effective Date.

c) The following sentence is hereby added after the last sentence in Section 2.1(c) of the Agreement:

“As of the First Amendment Effective Date, (i) no Subsequent Advance Commitments have been issued hereunder and (ii) the maximum amount of Subsequent Advance Commitments that may be issued by the Lenders hereunder and the allocations of the Lenders with respect thereto, in each case, is set forth on Schedule 2.1(c) attached hereto. Each Lender’s pro rata or ratable portion of Subsequent Advance Commitments shall be based upon the allocations set forth in Schedule 2.1(c) attached hereto.”

Section 2.5(b) of the Agreement is hereby amended and restated, in its entirety, as follows:

(b) Overadvances . If at any time, the aggregate principal amount of the Advances made hereunder exceeds the Maximum Amount (such overage, the “Overadvance Amount”), then the Borrower shall immediately, upon demand of the Agent (at the direction of the Required Lenders) pay the Obligations in an aggregate amount equal to the Overadvance Amount.

d) Schedule 2.1(c) attached hereto is hereby added to the Agreement immediately after Schedule 2.1.

e) Schedule 5.1(b)(i), (ii), (iv) attached hereto amends, restates and replaces the existing Schedule 5.1(b)(i), (ii), (iv) to the Agreement.

f) Exhibit G attached hereto amend, restates and replaces the existing Exhibit G to the Agreement.

3. Reserved .

4. Conditions Precedent . As a condition to the effectiveness of this Amendment, the Agent and the Lenders shall have received, in form and substance satisfactory to the Agent and All Lenders, the following:

a) this Amendment, duly executed by the Borrower, the Guarantors, All Lenders and the Agent;

b) evidence that the execution, delivery and performance of this Amendment by the Borrower and the Guarantors has been duly authorized by all necessary corporate action, including without limitation the approval of the Board of Directors of the Borrower and the Guarantors;

c) the consent of the Term Lenders, in form and substance satisfactory to Agent and All Lenders, to this Amendment (and the amendments and other provisions set forth herein, including, without limitation, the increase in the maximum amount of Subsequent Advance Commitments that may be issued by the Lenders);

d) payment of all costs and expenses of Agent and Lenders (i) incurred by or on behalf of the Agent or Lenders (including reasonable attorneys’ fees and expenses) arising under or in connection with the preparation, execution and delivery of this Amendment and the other documents contemplated thereby and (ii) outstanding on the date hereof (to the extent that such costs and expenses are reimbursable and/or payable under the Agreement and/or the other Loan Documents).

For purposes of determining compliance with the conditions specified in this Section 4, each Lender shall, by delivery of its executed signature page (or executed counterpart of a signature page) be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lenders.

5. Borrower Acknowledgement . The Borrower and Guarantors, each, hereby acknowledges and agrees that it is unconditionally liable to the Agent and Lenders for the full and immediate payment of each of the Obligations set forth at Schedule A attached hereto and incorporated herein by reference, and that the Borrower and Guarantors have no offsets, defenses, counterclaims or set-offs with respect to the full and immediate payment and performance of any or all Obligations and Guaranteed Obligations, as applicable, under the Loan Documents, all of which offsets, defenses, counterclaims are set-offs are hereby waived. The Borrower and Guarantors acknowledge and agree that, as of the date hereof, (i) no Subsequent Advance Commitments have been issued and (ii) the Subsequent Advance Amount is uncommitted.

6. Enforceability of Obligations; Waiver and Consents . The Borrower and each of the Guarantors agrees that the Loan Documents are in full force and effect, and enforceable against Borrower and Guarantors in accordance with their respective terms (other than as amended hereby). The Borrower and each Guarantor hereby waives and affirmatively agrees not to challenge or otherwise pursue any and all defenses, affirmative defenses, counterclaims, claims, cause of actions, setoffs or other rights that it may have relating to the Obligations, Guaranteed Obligations, the Loan Documents, or the Collateral, including, but not limited to, the liens and security interests in favor of Agent and Lenders, or the conduct of Agent and Lenders in administering any such Obligations, Guaranteed Obligations or any other agreements.

7. Release . Each Loan Party hereby absolutely and unconditionally releases and forever discharges, the Agent and each Lender (including for the avoidance of doubt, the Original Lender, whether in its capacity as Lender, Agent, ABL Agent or otherwise), and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which each Loan Party has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Amendment (including, without limitation, related to the Loan Documents, the transactions contemplated hereunder, the Original Credit Agreement, the Loan Documents (as defined in the Original Credit Agreement) or any act or omission of the Original Lender in any capacity under such Loan Documents), whether such claims, demands and causes of action are matured or unmatured or known or unknown.

8. Confirmation of Compliance with Section 15.1 of the Agreement . The Borrower and the Lenders party hereto hereby confirm that all of the actions required to be taken by the Lenders and Borrower pursuant to Section 15.1 of the Agreement have been taken in accordance with the provisions of such Section. The Borrower confirms that this Amendment is permitted under the Agreement, the Intercreditor Agreement and the Junior Documents (as defined in the Intercreditor Agreement).

9. Representations and Warranties . Each of the Loan Parties hereby represents and warrants that the execution and delivery of this Amendment and, after giving effect to the amendments contained herein, the performance by each of them of their respective obligations under the Agreement, in each case, are within its powers, have been duly authorized, are not in contravention of applicable law or the terms of its operating agreement or other organizational documents and except as have been previously obtained, do not require the consent or approval of any governmental body, agency or authority, and this Amendment and the Agreement (as amended hereby) will constitute the valid and binding obligations of the Loan Parties, as applicable, enforceable in accordance with their terms, except as enforcement thereof may be limited by applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance, ERISA or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (whether enforcement is sought in a proceeding in equity or at law).

10. Reference to and Effect on the Agreement . Each of the Loan Parties hereby reaffirms, confirms, ratifies, covenants, and agrees to be bound by each of its covenants, agreements, and obligations under the Agreement (as amended hereby), and each other Loan Document previously executed and delivered by it. Each reference in the Agreement to “this Agreement” or “the Loan Agreement” shall be deemed to refer to the Agreement after giving effect to this Amendment. This Amendment is a Loan Document.

11. Execution in Counterparts . This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier or electronic mail shall be effective as delivery of a manually executed counterpart of this Amendment.

12. Direction; Indemnity; Expenses . Each of the Lenders party hereto hereby (i) authorizes and directs the Agent to execute and deliver this Amendment, and (ii) acknowledges and agrees that the foregoing directed action constitutes a direction from the Lenders under Article 17 of

the Agreement, including, without limitation, Section 17.1 and Section 17.3 of the Agreement. The Borrower, the Guarantors party hereto and the Lenders party hereto expressly agree and confirm that the Agent’s right to indemnification, as set forth in Sections 11.3 and 17.5 of the Agreement shall apply with respect to any and all losses, claims, liabilities costs and expenses that the Agent suffers, incurs or is threatened with relating to actions taken or omitted by the Agent (in accordance with the Agreement) in connection with this Amendment and the other documents contemplated hereby. The Borrower hereby agrees to pay on demand all costs and expenses in accordance with Section 19.9 of the Agreement, in each case, incurred in connection with the preparation, negotiation and execution of this Amendment and all related documents.

13. Governing Law . This Amendment shall be a contract made under and governed by the laws of the State of New York without giving effect to its principles of conflicts of laws.

14. Guarantor Acknowledgement . Guarantors, for value received, hereby consent to the Borrower’s execution and delivery of this Amendment, and the performance by the Borrower of its agreements and obligations hereunder. This Amendment and the performance or consummation of any transaction that may be contemplated under this Amendment, shall not limit, restrict, extinguish or otherwise impair the Guarantors’ liabilities and obligations to Agent and Lenders under the Loan Documents (including without limitation the Guaranteed Obligations). Each of the Guarantors acknowledges and agrees that (i) the Guaranty to which such Guarantor is a party remains in full force and effect and is fully enforceable against such Guarantor in accordance with its terms and (ii) it has no offsets, claims or defenses to or in connection with the Guaranteed Obligations, all of such offsets, claims and/or defenses are hereby waived.

15. Notices . For purposes of the Agreement, in case of notices to any Lender, they shall be sent to the respective address set forth below the signature of each Lender on the signature pages hereto.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered under seal as of the date first above written.


BORROWER :

SAEXPLORATION, INC.

By:		/s/ Brent Whiteley
Name:		Brent Whiteley
Title:		Chief Financial Officer, General Counsel and Secretary

GUARANTORS :

SAEXPLORATION HOLDINGS, INC.

By:		/s/ Brent Whiteley
Name:		Brent Whiteley
Title:		Chief Financial Officer, General Counsel and Secretary

SAEXPLORATION SUB, INC.

By:		/s/ Brent Whiteley
Name:		Brent Whiteley
Title:		Chief Financial Officer, General Counsel and Secretary

NES, LLC

By:		/s/ Brent Whiteley
Name:		Brent Whiteley
Title:		Chief Financial Officer, General Counsel and Secretary

SAEXPLORATION SEISMIC SERVICES (US), LLC

By:		/s/ Brent Whiteley
Name:		Brent Whiteley
Title:		Chief Financial Officer, General Counsel and Secretary