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): June 29, 2016
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
(Companys 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)) |
Item 1.01. Entry into a Material Definitive Agreement.
As previously announced, on June 13, 2016, SAExploration Holdings, Inc. (the Company) entered into a comprehensive restructuring support agreement (the Restructuring Support Agreement) with holders (the Supporting Holders) of approximately 66.67% of the par value of the Companys 10.000% Senior Secured Notes due 2019 (the Existing Notes), pursuant to which the Supporting Holders and the Company have agreed to enter into and implement a proposed comprehensive restructuring of the Companys balance sheet (the Restructuring).
New Senior Loan Facility
In connection with the Restructuring, on June 29, 2016, the Company, as borrower, and each of the Companys domestic subsidiaries, as guarantors (the Guarantors), entered into a new senior secured multi-draw term loan facility (the New Senior Loan Facility) with the lenders, including the Supporting Holders, from time to time party thereto, and Delaware Trust Company, as collateral agent and administrative agent (the New Senior Loan Facility Agent). In addition to the Supporting Holders, holders of Existing Notes that participate in the Companys previously announced exchange offer (the Exchange Offer), which commenced on June 24, 2016, may participate as lenders in the New Senior Loan Facility based on their proportionate ownership of Existing Notes.
The New Senior Loan Facility provides, pursuant to the borrowing schedule described below, up to a maximum amount of $30.0 million.
Interest Rate and Maturity
Borrowings under the New Senior Loan Facility bear interest at a rate of 10.000% per year, to be paid monthly in cash. The New Senior Loan Facility has a maturity date of January 2, 2018, unless terminated earlier.
Borrowing Schedule
The Company has made the initial borrowing under the New Senior Loan Facility in the amount of $5.6 million, which includes $0.6 million of borrowings to pay a facility fee associated with the New Senior Loan Facility. A second draw may be made in an amount up to $9.4 million upon the consummation of the Exchange Offer, and the remaining $15.0 million will become available for borrowing on up to three separate dates upon receipt by the Company or an affiliate of the Company of Alaska tax credit certificates in a face amount of not less than $25 million (the Alaska Tax Credit).
Guarantors and Security
The obligations of the borrower under the New Senior Loan Facility are guaranteed by each of the Companys domestic subsidiaries.
The New Senior Loan Facility is secured by substantially all of the collateral securing the obligations under the Credit and Security Agreement dated November 6, 2014, among SAExploration, Inc., the Company and its domestic subsidiaries and Wells Fargo Bank, National Association (the Existing Revolving Credit Facility) and the Existing Notes, respectively, including the receivable due to the Company from Alaska Seismic Ventures, LLC and any Alaska Tax Credits, and all proceeds therefrom. This security interest is junior to the security interest in such collateral securing the obligations under the Existing Revolving Credit Facility and senior to the security interests in such collateral securing the obligations under the Existing Notes, and will be senior to the security interests in such collateral securing the obligations under the Companys new 10.000% Senior Secured Second Lien Notes due 2019 to be issued in the Exchange Offer (the New Notes).
Covenants
The New Senior Loan Facility contains negative covenants that restrict the borrowers and the guarantors ability to:
| incur indebtedness, |
| create or incur liens, |
| enter into fundamental changes to the Companys corporate structure or to the nature of the Companys business, |
| dispose of assets, |
| permit a change in control to occur, |
| make certain prepayments, other payments and distributions, |
| make certain investments, and |
| enter into affiliate transactions or make certain distributions. |
The borrower and the guarantors are also required to maintain and deliver to the New Senior Loan Facility Agent certain financial reports, projections, records and other items.
Other Provisions
The New Senior Loan Facility also contains customary representations, warranties, covenants and other terms and conditions, including relating to the payment of fees to the New Senior Loan Facility Agent and the lenders, and customary events of default. If an event of default occurs and is continuing, then the New Senior Loan Facility Agent, on behalf of the lenders, may, among other options, declare the Companys obligations to be due and payable immediately and/or declare the funding obligations of the lenders terminated immediately. The New Senior Loan Facility Agent, on behalf of the lenders, may exercise all remedies available at law or under the terms of the New Senior Loan Facility, including foreclosing on the collateral or any portion thereof, subject to the terms of the Amended and Restated Intercreditor Agreement described below.
As part of the consideration for providing the New Senior Loan Facility, the Company has agreed to issue to the lenders under the New Senior Loan Facility shares of the Companys common stock equal to 28.2% of the outstanding shares of the Companys common stock as of the closing of the Exchange Offer, without giving effect to any subsequent issuances.
The summary of the New Senior Loan Facility set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to such agreement, a copy of which is being filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Supplemental Indenture
In connection with the Restructuring, on June 29, 2016, the Company, the guarantors party thereto (the Existing Notes Guarantors) and Wilmington Savings Fund Society, FSB (successor to U.S. Bank National Association), as trustee for the Existing Notes (the Existing Trustee), entered into a first supplemental indenture (the Supplemental Indenture) to the indenture governing the Existing Notes (the Existing Indenture).
The Supplemental Indenture modified the Existing Indenture to, among other things, permit the incurrence of additional secured indebtedness pursuant to the New Senior Loan Facility and through the issuance of the New Notes in the Exchange Offer.
The Supplemental Indenture includes additional changes necessary to give effect to the Restructuring and directs the Existing Trustee, in its capacity as noteholder collateral agent for the Existing Notes, to enter into the Amended and Restated Intercreditor Agreement and the amendment to the Existing Security Agreement, each as described below, on behalf of the Existing Holders.
The material terms of the Existing Indenture, other than the amendments summarized above, remain substantially as set forth in the Existing Indenture.
The summary of the Supplemental Indenture set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the text of the Supplemental Indenture, a copy of which is being filed as Exhibit 4.1 hereto and is incorporated herein by reference.
Amended and Restated Intercreditor Agreement
In connection with the Restructuring, on June 29, 2016, Wells Fargo Bank, National Association (Wells Fargo), in its capacity as lender and collateral agent under the Existing Revolving Credit Facility, Wilmington Savings Fund Society, FSB (successor to U.S. Bank National Association), in its capacity as trustee and collateral agent for the Existing Notes, and Delaware Trust Company, in its capacity as administrative agent and collateral agent for the New Senior Loan Facility, amended and restated the Intercreditor Agreement, dated as of November 6, 2014, by and between Wells Fargo and Wilmington Savings Fund Society, FSB (as successor to U.S. Bank National Association) (the Existing Intercreditor Agreement and as amended and restated, the Amended and Restated Intercreditor Agreement), to govern the relationship of the holders of Existing Notes (the Existing Noteholders), the holders of New Notes (the New Noteholders), which are expected to be issued upon consummation of the Exchange Offer, and the lenders under the Companys Existing Revolving Credit Facility and New Senior Loan Facility, with respect to the collateral and certain other matters.
The following summary assumes the issuance of the New Notes, which the Company expects to issue in connection with the Exchange Offer.
The Amended and Restated Intercreditor Agreement, among other things, modifies the terms of the Existing Intercreditor Agreement to (i) establish the relative priorities, rights, obligations and remedies with respect to the collateral among the holders of the Existing Notes, the holders of the New Notes, the lenders under the Existing Revolving Credit Facility, the lenders under the New Senior Loan Facility, the holders of future debt that is permitted to share the security interests currently held by the holders of the Existing Notes, the holders of the New Notes, the lenders under the Existing Revolving Credit Facility and the lenders under the New Senior Loan Facility, as the case may be, on a pari passu basis and the collateral agents of the foregoing (collectively, the Secured Parties); and (ii) modify the terms of the Existing Intercreditor Agreement to permit the holders of obligations under the New Senior Loan Facility and the New Notes to share the security interests currently held by the Existing Noteholders and Wells Fargo as the lender under the Existing Revolving Credit Facility as follows:
¡ | the obligations under the Existing Revolving Credit Facility will be secured by all of the existing collateral on a senior first lien priority basis; |
¡ | the obligations under the New Senior Loan Facility will be secured by all of the existing collateral on a junior first lien priority basis; |
¡ | the obligations under the New Notes will be secured by substantially all of the existing collateral on a second lien priority basis; |
¡ | the obligations under the Existing Notes will be secured by substantially all of the existing collateral on a third lien priority basis; and |
¡ | the Secured Parties will agree that Wells Fargo Bank, National Association, as the collateral agent under the Existing Revolving Credit Facility, will exercise enforcement actions in respect of the collateral in most cases under the Amended and Restated Intercreditor Agreement. |
In addition, the Amended and Restated Intercreditor Agreement provides that, following a triggering event, as among the Secured Parties, the Senior Representative will have the right (subject to a purchase option by the other Secured Parties) to, or the right to direct any other collateral agent to, adjust or settle insurance policies or claims in the event of any loss thereunder relating to insurance proceeds with respect to collateral, to approve any award granted in any condemnation or similar proceeding affecting such insurance proceeds and to enforce rights, exercise remedies and discretionary rights and powers with respect to collateral; and similarly, the Secured Parties will agree that if the Company or any guarantor becomes subject to a case under the U.S. Bankruptcy Code, the Secured Parties will only be permitted to object to a debtor-in-possession financing or the use of cash collateral if the Secured Parties for which the Senior Representative is the collateral agent also object. The Senior Representative under the Amended and Restated Intercreditor Agreement will be Wells Fargo Bank, National Association, as the Existing Revolving Credit Facility Agent, until the obligations under the Existing Revolving Credit Facility have been discharged in full, after which the New Senior Loan Facility Agent will be the Senior Representative; and once the Existing Revolving Credit Facility Agent and the New Senior Loan Facility Agent each cease to be the Senior Representative and the obligations under each of the Existing Revolving Credit Facility and New Senior Loan Facility have been discharged in full, the Senior Representative will be Wilmington Savings Fund Society, FSB, as the New Noteholder Collateral Agent.
The material terms of the Amended and Restated Intercreditor Agreement, other than those summarized above, remain substantially as set forth in the Existing Intercreditor Agreement, except that the Noteholder Collateral Agent will no longer have a first-priority security interest in the Noteholder Priority Collateral (as such term is defined in the Existing Intercreditor Agreement).
The holders of obligations under the Existing Revolving Credit Facility will continue to have lien priority in respect of proceeds of collateral under the Amended and Restated Intercreditor Agreement.
The summary of the Amended and Restated Intercreditor Agreement set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to such agreement, a copy of which is being filed as Exhibit 10.2 hereto and is incorporated herein by reference.
Amendment to Existing Security Agreement
On June 29, 2016, the Company and the Existing Notes Guarantors, as pledgors, also entered into an amendment (the Security Agreement Amendment) to the Security Agreement, dated as of July 2, 2014 (as amended from time to time, the Existing Security Agreement), with Wilmington Savings Fund Society, FSB (successor to U.S. Bank National Association), as noteholder collateral agent for the Existing Notes. The Security Agreement Amendment introduced conforming changes to reflect the provisions incorporated into the Amended and Restated Intercreditor Agreement.
The summary of the amendment to the Existing Security Agreement set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to such agreement, a copy of which is being filed as Exhibit 10.3 hereto and is incorporated herein by reference.
Amendment to Existing Revolving Credit Facility
In connection with the Restructuring, on June 29, 2016, the Company, the guarantors and Wells Fargo, as lender under the Existing Revolving Credit Facility, entered into an amendment to the Existing Revolving Credit Facility to permit the entry into and borrowings under the New Senior Loan Facility, the issuance of the New Notes, the entry into the Amended and Restated Intercreditor Agreement, the amendments to the Existing Security Agreement and any necessary amendments to the collateral agreements relating to the Existing Notes and consented to the Restructuring.
The summary of the amendment to the Existing Revolving Credit Facility set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to such agreement, a copy of which is being filed as Exhibit 10.4 hereto and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information in Item 1.01 under the caption New Senior Loan Facility is incorporated into this Item 2.03 by reference.
Item 3.02. Unregistered Sales of Equity Securities.
In connection with the entry into the New Senior Loan Facility, the Company has agreed to issue new shares of common stock, $0.0001 par value, to the lenders thereunder equal to 28.2% of the Companys outstanding common stock upon consummation of the Exchange Offer (2,841,682 shares after giving effect to a 135-to-1 reverse stock split, assuming that all outstanding Existing Notes as of the commencement of the Exchange Offer are tendered and accepted for exchange in the Exchange Offer) (the New Senior Loan Shares). These New Senior Loan Shares include shares of common stock equal to 9.40% of the Companys outstanding stock upon consummation of the Exchange Offer that will be issued to the initial lenders who funded the Companys borrowings pursuant to its initial draw under the New Senior Loan Facility and additional shares of common stock equal to 18.8% of the Companys outstanding common stock upon consummation of the Exchange Offer (947,227 and 1,894,454 shares, respectively, after giving effect to a 135-to-1 reverse stock split, assuming that all outstanding Existing Notes as of the commencement of the Exchange Offer are tendered and accepted for exchange in the Exchange Offer), which will become issuable in connection with future draws under the New Senior Loan Facility. The New Senior Loan Shares will be issued upon consummation of the Exchange Offer, which is currently expected to occur on July 27, 2016, subject to the terms and conditions of the Exchange Offer, including any potential extension of the Exchange Offer by the Company. The New Senior Loan Shares will be issued directly to the lenders under the New Senior Loan Facility pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended, under Section 4(a)(2) thereof.
Item 3.03. Material Modification to Rights of Security Holders.
The information in Item 1.01 is incorporated into this Item 3.03 by reference.
Item 8.01. Other Events.
On June 29, 2016 the Company filed an Information Statement on Schedule 14C (the Information Statement) with the Securities and Exchange Commission and sent the Information Statement to stockholders of the Company. The Information Statement describes actions taken by the written consent of holders of approximately 57% of the Companys common stock on June 15, 2016 to approve a 135-to-1 reverse stock split with respect to the Companys common stock as well as the issuances of shares of our Common Stock in connection with the Restructuring, including issuances to the lenders under the New Senior Loan Facility and to holders of our Existing Notes who participate in the Exchange Offer. The actions taken by written consent will be effected no earlier than the date that is 20 calendar days after the date the Information Statement was first sent to stockholders.
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 Companys 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 Companys 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 Companys 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 Companys operations during the significant cash flow and liquidity difficulties it is currently experiencing; |
| negative events or publicity associated with the Companys restructuring and recapitalization transactions; |
| 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 and must file for bankruptcy; |
| the negative consequences if the Company is successful in achieving a restructuring transaction, including the possibility of significant dilution to the Companys 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 Companys 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 Companys customers; |
| the availability of liquidity and capital resources, including the Companys ability to make capital expenditures due to its current liquidity and cash flow situation and the potential impact this has on the Companys business and competitiveness; |
| need to manage rapid growth and contraction of the Companys 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 Companys Annual Report on Form 10-K for the year ended December 31, 2015, as amended by the Companys Annual Report on Form 10-K/A filed on April 29, 2016 for specific risks which would cause actual results to be significantly different from those expressed or implied by any of the Companys 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 |
Description | |
4.1 | First Supplemental Indenture, dated as of June 29, 2016, among SAExploration Holdings, Inc., the guarantors party thereto, and Wilmington Savings Fund Society, FSB, as trustee and noteholder collateral agent. | |
10.1 | Term Loan and Security Agreement, dated as of June 29, 2016, by and among SAExploration Holdings, Inc., as borrower, the guarantors named therein, as guarantors, the lenders from time to time party thereto, as lenders and Delaware Trust Company, as collateral agent and administrative agent. | |
10.2 | Amended and Restated Intercreditor Agreement, dated as of June 29, 2016, by and among Wells Fargo Bank, National Association, as lender and collateral agent, Wilmington Savings Fund Society, FSB, as trustee and collateral agent, Delaware Trust Company, as administrative agent and collateral agent and, upon execution of an additional indebtedness joinder and designation, the additional noteholder agent. | |
10.3 | First Amendment to Security Agreement, dated as of June 29, 2016, by and among Wilmington Savings Fund Society, FSB, SAExploration Holdings, Inc., SAExploration, Inc., SAExploration Sub, Inc., NES, LLC, and SAExploration Seismic Services (US), LLC. | |
10.4 | First Amendment to Credit and Security Agreement, dated as of June 29, 2016, by and among Wells Fargo Bank, National Association, SAExploration, Inc., SAExploration Holdings, Inc., SAExploration Sub, Inc., NES, LLC, and SAExploration Seismic Services (US), LLC. |
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.
Date: July 1, 2016 | SAExploration Holdings, Inc. | |||||
By: | /s/ Brent Whiteley | |||||
Name: | Brent Whiteley | |||||
Title: | Chief Financial Officer, General Counsel and Secretary |
EXHIBIT INDEX
Exhibit |
Description | |
4.1 | First Supplemental Indenture, dated as of June 29, 2016, among SAExploration Holdings, Inc., the guarantors party thereto, and Wilmington Savings Fund Society, FSB, as trustee and noteholder collateral agent. | |
10.1 | Term Loan and Security Agreement, dated as of June 29, 2016, by and among SAExploration Holdings, Inc., as borrower, the guarantors named therein, as guarantors, the lenders from time to time party thereto, as lenders and Delaware Trust Company, as collateral agent and administrative agent. | |
10.2 | Amended and Restated Intercreditor Agreement, dated as of June 29, 2016, by and among Wells Fargo Bank, National Association, as lender and collateral agent, Wilmington Savings Fund Society, FSB, as trustee and collateral agent, Delaware Trust Company, as administrative agent and collateral agent and, upon execution of an additional indebtedness joinder and designation, the additional noteholder agent. | |
10.3 | First Amendment to Security Agreement, dated as of June 29, 2016, by and among Wilmington Savings Fund Society, FSB, SAExploration Holdings, Inc., SAExploration, Inc., SAExploration Sub, Inc., NES, LLC, and SAExploration Seismic Services (US), LLC. | |
10.4 | First Amendment to Credit and Security Agreement, dated as of June 29, 2016, by and among Wells Fargo Bank, National Association, SAExploration, Inc., SAExploration Holdings, Inc., SAExploration Sub, Inc., NES, LLC, and SAExploration Seismic Services (US), LLC. |
Exhibit 4.1
FIRST SUPPLEMENTAL INDENTURE
dated as of June 29, 2016
among
SAEXPLORATION HOLDINGS, INC.,
The Guarantors Party Hereto
and
WILMINGTON SAVINGS FUND SOCIETY, FSB
(as successor to U.S. Bank National Association),
as Trustee and Noteholder Collateral Agent
10.000% Senior Secured Notes due 2019
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of June 29, 2016 (this Supplemental Indenture), among SAEXPLORATION HOLDINGS, INC., a Delaware corporation (together with its successors and assigns, the Company), each of the Guarantors appearing on the signature pages hereto (the Guarantors), and WILMINGTON SAVINGS FUND SOCIETY, FSB (as successor to U.S. Bank National Association), as trustee (the Trustee) and as Noteholder Collateral Agent (the Noteholder Collateral Agent).
RECITALS
WHEREAS, the Company, the Guarantors and the Trustee and Noteholder Collateral Agent have previously entered into the Indenture, dated as of July 2, 2014 (the Indenture), relating to the Companys 10.000% Senior Secured Notes due 2019 (the Notes);
WHEREAS, each of the Guarantors, jointly and severally, fully and unconditionally guarantees the prompt payment in full of the principal of, premium, if any, and interest on the Notes in accordance with the terms of the Indenture (the Note Guarantees);
WHEREAS, the Company has offered to exchange any and all of its outstanding Notes (the Exchange Offer) for (i) New Senior Secured Second Lien Notes, and (ii) shares of the Companys common stock upon the terms and subject to the conditions set forth in the Confidential Exchange Offer Memorandum and Consent Solicitation Statement, dated June 24, 2016 (as amended, supplemented or otherwise modified, the Memorandum);
WHEREAS, concurrently with the Exchange Offer, and pursuant to the Memorandum and the related letter of transmittal (as amended, supplemented or otherwise modified), the Company has requested that holders of the Notes deliver consents to the adoption of certain proposed amendments (the Proposed Amendments) to the Indenture to permit certain restructuring transactions described in the Memorandum;
WHEREAS, Section 9.02 of the Indenture provides that the Company, the Guarantors and the Trustee and Noteholder Collateral Agent may amend or supplement the Indenture, the Notes, the Note Guarantees and the Security Documents with the consent of the Holders of at least a majority in aggregate principal amount of the Notes outstanding voting as a single class (the Requisite Consents);
WHEREAS, Holders of the Notes have delivered the Requisite Consents and thereby have duly consented to the Proposed Amendments set forth in this Supplemental Indenture in accordance with Section 9.02 of the Indenture;
WHEREAS, the Trustee and Noteholder Collateral Agent has received, in accordance with Section 9.06 of the Indenture, an Opinion of Counsel and an Officers Certificate stating that the execution of this Supplemental Indenture is permitted by the Indenture; and
WHEREAS, all other conditions precedent provided under the Indenture have been satisfied to permit the Company, the Guarantors and the Trustee and Noteholder Collateral Agent to enter into this Supplemental Indenture.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and intending to be legally bound, the parties to this Supplemental Indenture hereby mutually covenant and agree as follows:
SECTION 1. Capitalized Terms. Capitalized terms used herein and not otherwise defined herein are used as defined in the Indenture.
SECTION 2. Amendments. The Indenture is hereby amended as follows:
a. | Amendment to Section 1.01. Section 1.01 is hereby amended to insert in the appropriate alphabetical position the defined terms CFC Subsidiary and CFC Subsidiary Holding Company, which shall read as follows: |
CFC Subsidiary means any Subsidiary that constitutes a controlled foreign corporation within the meaning of Section 957 of the Internal Revenue Code of 1986, as amended.
CFC Subsidiary Holding Company means any subsidiary organized under the laws of the United States, any State of the United States or the District of Columbia that is (a) engaged in no material business activities other than the holding of Equity Interests and other investments in one or more CFC Subsidiaries or (b) disregarded for U.S. federal income tax purposes that owns Equity Interests or other investments in one or more CFC Subsidiaries.
b. | Amendment to Section 1.01. Section 1.01 is hereby amended to add a proviso at the end of the defined term Change of Control, to read as follows: |
provided that, for the avoidance of doubt, none of the Transactions, as such term is defined in the Companys Exchange Offer Memorandum and Consent Solicitation Statement dated as of June 24, 2016, or any further transactions contemplated by, or in furtherance of, the Transactions, whether individually or in the aggregate, shall constitute a Change of Control within the meaning hereof.
c. | Amendment to Section 1.01. Section 1.01 is hereby amended by amending and restating the defined term Credit Facilities in its entirety to read as follows: |
Credit Facilities means one or more debt facilities (including, without limitation, each of the Credit Agreement and the Supporting Term Loan) or commercial paper facilities, in each case, with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.
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d. | Amendment to Section 1.01. Section 1.01 is hereby amended to insert in the appropriate alphabetical position the defined term Exchange Offer, to read as follows: |
Exchange Offer means the Companys offer to exchange any and all outstanding Notes for New Notes and shares of common stock of the Company and consent solicitation, as described in the Companys Exchange Offer Memorandum and Consent Solicitation Statement dated as of June 24, 2016.
e. | Amendment to Section 1.01. Section 1.01 is hereby amended by amending and restating the defined term Guarantors in its entirety to read as follows: |
Guarantors means (1) each Domestic Subsidiary of the Company on the date of this Indenture and (2) each other Subsidiary of the Company (other than a CFC Subsidiary Holding Company) that executes a Note Guarantee in accordance with the provisions of this Indenture, in each case, together with their respective successors and assigns until the Note Guarantee of such Person has been released in accordance with the provisions of this Indenture; provided, however, that for the avoidance of doubt, Guarantors shall not, notwithstanding anything herein to the contrary, include any CFC Subsidiary or CFC Subsidiary Holding Company.
f. | Amendment to Section 1.01. Section 1.01 is hereby amended by amending and restating the defined term Intercreditor Agreement in its entirety to read as follows: |
Intercreditor Agreement means the Amended and Restated Intercreditor Agreement, dated as of June 29, 2016, by and among SAExploration, Inc., SAExploration Holdings, Inc., SAExploration Sub, Inc., SAExploration Seismic Services (US), LLC, NES LLC, Wells Fargo Bank, National Association, as lender and collateral agent, Wilmington Savings Fund Society, FSB (successor to U.S. Bank National Association), as trustee and collateral agent for the Indenture Secured Parties (as defined therein), and Delaware Trust Company, as administrative agent and collateral agent under the Supporting Term Loan, as described in the Companys Exchange Offer Memorandum and Consent Solicitation Statement dated as of June 24, 2016, as the same may be supplemented, modified, amended or amended and restated from time to time.
g. | Amendment to Section 1.01. Section 1.01 is hereby amended to insert in the appropriate alphabetical position the defined term New Notes, to read as follows: |
New Notes means the Companys 10.000% Senior Secured Second Lien Notes due 2019 issued pursuant to an indenture by and among the Company, the guarantors party thereto and Wilmington Savings Fund Society, FSB, as trustee and noteholder collateral agent to be entered into in connection with the Exchange Offer, including any additional New Notes issued as PIK Interest.
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h. | Amendment to Section 1.01. Section 1.01 is hereby amended by amending and restating the defined term Permitted Holders in its entirety to read as follows: |
Permitted Holders means any of (a) Whitebox Advisors LLC, BlueMountain Capital Management, LLC, Morgan Stanley Investment Management Inc., Aristides Capital LLC, Taegean Capital Management, LLC, Amzak Capital Management, LLC, John Pecora, Jeff Hastings, Brian Beatty and Brent Whiteley, (b) any Related Party thereof and (c) any Person acting in the capacity of an underwriter or initial purchaser in connection with a public or private offering of the Capital Stock of the Company or any direct or indirect parent entity or securities convertible into or exchangeable or exercisable for such Capital Stock.
i. | Amendment to Section 1.01. Section 1.01 is hereby amended to insert in the appropriate alphabetical position the defined term PIK Interest, to read as follows: |
PIK Interest means interest on the New Notes paid in the form of (1) an increase in the outstanding principal amount of the New Notes or (2) the issuance of additional New Notes issued under the indenture governing the New Notes on the same terms as the New Notes issued on the issue date of such New Notes in connection with the payment of interest due on the New Notes.
j. | Amendment to Section 1.01. Section 1.01 is hereby amended to add a new clause (19) to the defined term Permitted Liens, to read as follows: |
(19) Liens on assets of the Company or any Guarantor securing the New Notes or the Guarantee of each Guarantor of the Companys obligations under the indenture governing the New Notes.
k. | Amendment of Section 1.01. Section 1.01 is hereby amended to insert in the appropriate alphabetical position the defined term Supporting Term Loan, to read as follows: |
Supporting Term Loan means a new multi-draw term loan dated as of June 29, 2016, among SAExploration, Inc., the Company, the other guarantors party thereto and the lenders from time to time party thereto, providing for borrowings in an amount not to exceed the amount of Indebtedness permitted pursuant to Section 4.08(b)(1), including any related notes, Guarantees, collateral documents, security documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, supplemented, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to investors) in whole or in part from time to time.
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l. | Amendment of Section 4.07. Section 4.07 is hereby amended by redesignating the existing subsection (c) as subsection (d) and inserting a new subsection (c), which shall read as follows: |
The preceding provisions will not prohibit the payment by the Company of cash in lieu of fractional shares in connection with the 135-to-1 reverse stock split to be effected in connection with the Transactions nor to be issued in connection with the issuance of the exchange consideration in the Exchange Offer, each as defined and described in the Companys Exchange Offer Memorandum and Consent Solicitation Statement dated as of June 24, 2016.
m. | Amendment of Section 4.08(b). Section 4.08(b) is hereby amended by amending and restating clause (1) thereof in its entirety to read as follows: |
the incurrence by the Company and the Guarantors of additional Indebtedness and letters of credit under Credit Facilities in an aggregate amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (a) $50.0 million, less the aggregate amount of all permanent commitment reductions with respect to any revolving credit borrowings under a Credit Facility that have been made by the Company or any of its Restricted Subsidiaries since the date of this Indenture and (b) 19.0% of the Companys Consolidated Net Tangible Assets; provided, however, that in no event shall the aggregate principal amount of Indebtedness under such Credit Facilities that is not revolving credit borrowings exceed $30.0 million;
n. | Amendment to Section 4.08(b). Section 4.08(b), which defines Permitted Debt, is hereby amended to add a new clause (17) thereto, to read as follows: |
(17) the issuance by the Company of the New Notes in an initial aggregate principal amount not to exceed $70 million, and any additional New Notes issued (i) as PIK Interest and/or (ii) in satisfaction of accrued and unpaid interest on any Notes tendered in the Exchange Offer, and, in each case, all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (17).
o. | Amendment to Section 4.12(b). Section 4.12(b) is hereby amended by amending clause (1) thereto by inserting the phrase in connection with any Transaction, as such term is defined in the Companys Exchange Offer Memorandum and Consent Solicitation Statement dated as of June 24, 2016, or immediately preceding the words in the ordinary course of business. |
p. | Amendment to Section 4.12(b). Section 4.12(b) is hereby amended to insert a new clause (9) thereto, to read as follows: |
(9) any Transaction, as such term is defined in the Companys Exchange Offer Memorandum and Consent Solicitation Statement dated as of June 24, 2016, or any further transactions contemplated by, or in furtherance of, the Transactions, whether considered individually or in the aggregate.
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q. | Amendment to Section 4.17. Section 4.17 is hereby amended to add a proviso at the end of such covenant, to read as follows: |
provided, that, for the avoidance of doubt, no amounts, fees or other consideration paid in connection with the Transactions, as such term is defined in the Companys Exchange Offer Memorandum and Consent Solicitation Statement dated as of June 24, 2016, or any further transactions contemplated by, or in furtherance of, the Transactions, whether individually or in the aggregate, shall be deemed to be a payment of consideration in contravention of this Section 4.17.
r. | Amendment to Section 12.07(a). Section 12.07(a) is hereby amended by amending and restating clause (7) in its entirety to read as follows: |
(7) if, in connection with the exercise of the ABL Agents remedies in respect of any Collateral, the ABL Agent, on behalf of holders of ABL Obligations, as defined in the Intercreditor Agreement, releases any of its Liens on any part of the Collateral, then the Liens, if any, of the Noteholder Collateral Agent for the benefit of the Holders of the Notes on the Collateral sold or disposed of in connection with such exercise will be automatically, unconditionally and simultaneously released; and, in such event, the Noteholder Collateral Agent, on behalf of itself and the Holders of the Notes, at the Companys expense, promptly will execute and deliver to the ABL Agent such termination statement, releases and other documents as the ABL Agent may request in writing to effectively confirm such release.
Any changes to the Indenture, the Notes, the Security Documents and any related documents, of a technical or conforming nature shall hereby be deemed made to the extent necessary to reflect the amendments described herein. The Trustee and Noteholder Collateral Agent are authorized and directed to enter into such other amendments or waivers to the Indenture, the Notes, the Note Guarantees, the Security Documents and the Intercreditor Agreement and any other applicable documents as are necessary to effectuate this Supplemental Indenture, including, without limitation, the entry into (i) the Amended and Restated Intercreditor Agreement in the form attached hereto as Annex A and (ii) the First Amendment to Security Agreement in the form attached hereto as Annex B.
SECTION 3. Effect and Operation of Supplemental Indenture. This Supplemental Indenture shall be effective and binding immediately upon its execution by the Company, the Guarantors and the Trustee and Noteholder Collateral Agent, and thereupon this Supplemental Indenture shall form a part of the Indenture for all purposes, and every Note and Guarantee heretofore or hereafter authenticated and delivered under the Indenture shall be bound hereby. Except as modified and amended by this Supplemental Indenture, all provisions of the Indenture shall remain in full force and effect; provided, that clauses d, g, h, i, j and n of Section 2 of this Supplemental Indenture shall not become operative until the time and date at which the Company notifies the Trustee and D.F. King & Co, Inc., in its capacity as Information Agent and Exchange Agent in connection with the Exchange Offer and Consent Solicitation (as defined in the Memorandum), of its acceptance of the Notes validly tendered in the Exchange Offer for exchange pursuant to, and subject to the terms and conditions set forth in, the Memorandum.
SECTION 4. Indenture and Supplemental Indenture Construed Together. This Supplemental Indenture is an amendment supplemental to the Indenture, and the Indenture and this Supplemental Indenture will henceforth be read and construed together.
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SECTION 5. Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.
SECTION 6. Counterparts. This Supplemental Indenture may be signed in various counterparts (including by portable document format), which together will constitute one and the same instrument.
SECTION 7. Trust Indenture Act Controls. If any provisions hereof limit, qualify or conflict with any provisions of the Trust Indenture Act of 1939, as amended (the TIA), required under the TIA to be a part of or govern this Supplemental Indenture, the provisions of the TIA shall control. If any provision hereof modifies or excludes any provision of the TIA that pursuant to the TIA may be so modified or excluded, the provision of the TIA as so modified or excluded hereby shall apply.
SECTION 8. No Recourse Against Others. No past, present or future director, officer, employee, incorporator or stockholder of the Company or of any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Indenture, the Notes or, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation.
SECTION 9. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.
SECTION 10. The Trustee and Noteholder Collateral Agent. The Trustee and Noteholder Collateral Agent accepts the amendments of the Indenture effected by this Supplemental Indenture. Without limiting the generality of the foregoing, the Trustee and Noteholder Collateral Agent shall not be responsible in any manner whatsoever for or with respect to any of the recitals contained herein, all of which recitals are made solely by the Company, or for or with respect to (i) the validity or sufficiency of this Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper authorization hereof by the Company by action or otherwise, (iii) the due execution hereof by the Company or (iv) the consequences of any amendment herein provided for, and the Trustee and Noteholder Collateral Agent makes no representation with respect to any such matters.
SECTION 11. Separability. In case any provision in this Supplemental Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.
SAEXPLORATION HOLDINGS, INC. | ||
as Issuer | ||
By: | /s/ Brent Whiteley | |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer, General Counsel and Secretary | |
SAEXPLORATION SUB, INC. as a Guarantor | ||
By: | /s/ Brent Whiteley | |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer, General Counsel and Secretary | |
SAEXPLORATION, INC. as a Guarantor | ||
By: | /s/ Brent Whiteley | |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer, General Counsel and Secretary | |
NES, LLC as a Guarantor | ||
By: | /s/ Brent Whiteley | |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer, General Counsel and Secretary |
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SAEXPLORATION SEISMIC SERVICES (US) LLC | ||
as a Guarantor | ||
By: | /s/ Brent Whiteley | |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer, General Counsel and Secretary |
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WILMINGTON SAVINGS FUND SOCIETY, FSB, | ||
as Trustee | ||
By: | /s/ Geoffrey J. Lewis | |
Name: | Geoffrey J. Lewis | |
Title: | Vice President | |
WILMINGTON SAVINGS FUND SOCIETY, FSB, as Noteholder Collateral Agent | ||
By: | /s/ Geoffrey J. Lewis | |
Name: | Geoffrey J. Lewis | |
Title: | Vice President |
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ANNEX A
Form of Amended & Restated Intercreditor Agreement
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Exhibit 10.2
EXECUTION VERSION
AMENDED AND RESTATED
INTERCREDITOR AGREEMENT
This AMENDED & RESTATED INTERCREDITOR AGREEMENT (this Agreement), dated as of June 29, 2016, is by and among WELLS FARGO BANK, NATIONAL ASSOCIATION, as lender and collateral agent (in such capacities, with its successors and assigns, and as more specifically defined below, the ABL Agent), WILMINGTON SAVINGS FUND SOCIETY, FSB, as trustee and collateral agent (with its successors and assigns, and as more specifically defined below, the Existing Noteholder Agent), Delaware Trust Company, as administrative agent and collateral agent (in such capacities with its successors and assigns, and as more specifically defined below, the Term Agent) and, upon execution of an Additional Indebtedness Joinder and Designation (as defined below), the Additional Noteholder Agent (as defined below).
WHEREAS, SAExploration, Inc., a Delaware corporation (the ABL Borrower) and SAExploration Holdings, Inc., a Delaware corporation (Holdings), certain subsidiaries of Holdings, as Guarantors, and the ABL Agent are parties to that certain Credit and Security Agreement dated as of November 6, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the ABL Credit Agreement), pursuant to which, among other things, the ABL Agent has agreed to make loans and extend other financial accommodations to the ABL Borrower, which loans and financial accommodations are guaranteed by the other Loan Parties (as defined below);
WHEREAS, Holdings, certain subsidiaries of Holdings (including the ABL Borrower), as Guarantors, and the Existing Noteholder Agent are parties to that certain Indenture dated as of July 2, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the Existing Indenture), pursuant to which, among other things, Holdings issued secured notes in the aggregate original principal amount of $150,000,000 (the Existing Notes), which Existing Notes are guaranteed by certain Subsidiaries of Holdings;
WHEREAS, Holdings has entered into that certain Restructuring Support Agreement, dated as of June 13, 2016 (the Restructuring Support Agreement), among Holdings, on behalf of itself and the other Loan Parties under the Existing Indenture, and certain of the Existing Noteholders (as defined herein), pursuant to which the applicable Loan Parties have entered, or will enter, as the case may be, into and perform the following transactions, among other transactions, on the terms contemplated by the Restructuring Support Agreement: (i) one or more term loans on the terms set forth in the Term Credit Agreement (as defined below), (ii) the issuance of new shares in Holdings, and (iii) the consummation of an exchange offer in which Existing Notes are exchanged for Additional Notes (as defined below) and stock in Holdings, on the terms described in that certain Exchange Offer Memorandum and Consent Solicitation Statement, dated as of June 24, 2016 (the Exchange Offer), and the issuance of Additional Notes and new stock in Holdings pursuant to such Exchange Offer (such notes collectively referred to herein, the Additional Notes and the indenture by which such Additional Notes are issued, the Additional Indenture and the trustee and collateral agent under the Additional Indenture, the Additional Noteholder Agent).
WHEREAS, pursuant to the Restructuring Support Agreement, Holdings, certain subsidiaries of Holdings (including the ABL Borrower), as Guarantors, the lenders party thereto (the Term Lenders) and the Term Agent are parties to that certain Term Loan and Security Agreement, dated as of June 29, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the Term Credit Agreement), pursuant to which, among other things, the Term Lenders have agreed to make loans and extend other financial accommodations to Holdings, which loans and financial accommodations are guaranteed by the other Loan Parties (as defined below);
WHEREAS, the Loan Parties have granted to the ABL Agent security interests in the ABL Collateral (as defined below) as security for payment and performance of the ABL Obligations (as defined below);
WHEREAS, the Loan Parties have granted to the Existing Noteholder Agent security interests in the Existing Notes Collateral (as defined below) as security for payment and performance of the Existing Indenture Obligations (as defined below);
WHEREAS, the Loan Parties have granted to the Term Agent security interests in the Term Collateral (as defined below) as security for payment and performance of the Term Obligations (as defined below); and
WHEREAS, the Loan Parties plan to grant to the Additional Noteholder Agent security interests in the Collateral as security for payment and performance of the obligations of the Loan Parties under the Additional Indenture.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants contained herein and other good and valuable consideration, the existence and sufficiency of which is expressly recognized by all of the parties hereto, the parties agree as follows.
SECTION 1. Definitions; Rules Of Construction.
1.1 UCC Definitions. The following terms which are defined in the Uniform Commercial Code are used herein as so defined: Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Equipment, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter of Credit, Letter of Credit Rights, Records and Supporting Obligations.
1.2 Defined Terms. The following terms, as used herein, have the following meanings:
ABL Agent has the meaning set forth in the introductory paragraph hereof. In the case of any Replacement ABL Agreement, the ABL Agent shall be the Person identified as such in such agreement.
ABL Agent Cash Collateral means cash collateral for letter of credit or Hedging Obligations that is pledged or delivered to ABL Agent for Hedge Obligations and letters of credit
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issued by ABL Agent securing, in the case of letters of credit, an amount not to exceed 105% of the face amount of cash collateralized letters of credit issued upon the application of ABL Borrower and, in the case of Hedging Obligations, not to exceed the amount of such Hedging Obligations.
ABL Agreement means the collective reference to (a) the ABL Credit Agreement, and (b) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations outstanding under the ABL Credit Agreement (regardless of whether such replacement, refunding or refinancing is a working capital facility, asset-based facility or otherwise) or any other agreement or instrument referred to in this clause (b) unless such agreement or instrument expressly provides that it is not intended to be and is not an ABL Agreement hereunder (a Replacement ABL Agreement). Any reference to the ABL Agreement hereunder shall be deemed a reference to any ABL Agreement then extant.
ABL Borrower has the meaning set forth in the recitals above.
ABL Collateral means all Property of each Loan Party, whether now owned or hereafter acquired, whether arising before or after any Insolvency Proceeding, in which a Lien is obtained, granted or purported to be granted at any time to the ABL Agent as security for any ABL Obligation.
ABL Credit Agreement has the meaning set forth in the recitals above.
ABL Documents means the ABL Credit Agreement, each ABL Security Document, each ABL Guarantee and each other ABL Loan Document.
ABL Guarantee means any Guarantee by any Loan Party of any or all of the ABL Obligations.
ABL Lien means any Lien created by or pursuant to the ABL Security Documents.
ABL Loan Documents means the Loan Documents as defined in the ABL Credit Agreement.
ABL Obligations means (a) all principal of and interest (including any Post-Petition Interest), costs and premium (if any) on all loans and other extensions of credit made pursuant to the ABL Agreement or any DIP Financing by the ABL Agent to the extent permitted hereunder, (b) all reimbursement obligations (if any) and interest thereon (including any Post-Petition Interest) with respect to any letter of credit or similar instruments issued pursuant to the ABL Agreement, (c) all Guarantee obligations, indemnities, fees, expenses and other amounts payable from time to time pursuant to the ABL Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding, and (d) all other Obligations as defined under the ABL Credit Agreement, including, without limitation, Banking Services Obligations and Hedging Obligations. To the extent any payment with respect to any ABL Obligation (whether by or on behalf of any Loan Party, as Proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance, fraudulent transfer or a preference in any
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respect, set aside or required to be paid to a debtor in possession, any Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the ABL Agent and the other Classes of Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.
ABL Obligations Cap means the amount of $30,000,000, plus fees, costs, and interest thereon, plus Hedging Obligations relating to the ABL Obligations not to exceed $5,000,000, plus Indebtedness at any time owing to ABL Agent on account of a DIP Financing in a principal amount not to exceed $5,000,000.
ABL Obligations Payment Date means the first date on which (a) the ABL Obligations (other than those that constitute Unasserted Contingent Obligations and in the case of any sale of ABL Collateral, any Excess ABL Obligations) have been indefeasibly paid in cash in full (or cash collateralized or defeased in accordance with the terms of the ABL Documents), (b) all commitments to extend credit under the ABL Documents have been terminated, (c) there are no outstanding letters of credit issued under the ABL Documents (other than such as have been cash collateralized or defeased in accordance with the terms of the ABL Documents), (d) any other conditions to termination of the ABL Liens set forth in Section 2.10 of the ABL Credit Agreement have been satisfied, and (e) so long as the Term Obligations Payment Date, the Existing Indenture Obligations Payment Date or the Additional Indenture Obligations Payment Date, to the extent applicable, shall not have occurred, the ABL Agent has delivered a written notice to the respective Representative(s) stating that the events described in clauses (a), (b), (c), and (d), have occurred to the satisfaction of the ABL Agent.
ABL Post-Petition Assets has the meaning set forth in Section 5.2(b).
ABL Security Documents means any and all agreements securing satisfaction of the ABL Obligations, including the ABL Credit Agreement, those certain Deposit Account Control Agreements between ABL Agent, the Existing Noteholder Agent, the ABL Borrower, and certain other Loan Parties (as may be amended to add Additional Noteholder Agent and Term Agent as parties thereto as contemplated by the Loan Documents), that certain Preferred Ship Mortgage of November 6, 2014, executed by SAExploration Seismic Services (US), LLC in favor of the ABL Agent, and any other ABL Loan Documents under which a security interest is granted to the ABL Agent.
Additional Debt has the meaning set forth in Section 10.5(b).
Additional Indenture has the meaning set forth in the recitals above.
Additional Indenture Agreement means the collective reference to (a) the Additional Indenture; (b) any agreement under which notes are sold or issued pursuant to the terms of the Additional Indenture or any supplemental indenture relating to such notes, if any; and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any Indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the Indebtedness and other obligations outstanding under or issued pursuant to the
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Additional Indenture or any other agreement or instrument referred to in this clause (c) unless such agreement or instrument expressly provides that it is not intended to be and is not an Additional Indenture Agreement hereunder (a Replacement Additional Indenture Agreement). Any reference to the Additional Indenture Agreement hereunder shall be deemed a reference to any Additional Indenture Agreement then extant.
Additional Indenture Documents means the Additional Indenture Agreement, each Additional Indenture Security Document and each Additional Indenture Guarantee.
Additional Indenture Guarantee means any Guarantee by any Loan Party of any or all of the Additional Indenture Obligations.
Additional Indenture Lien means any Lien created by or pursuant to the Additional Indenture Security Documents.
Additional Indenture Obligations means (a) all principal of and interest (including any Post-Petition Interest), costs and premium (if any) on all indebtedness issued under the Additional Indenture Agreement or any DIP Financing provided by some or all of the Additional Indenture Secured Parties to the extent permitted hereunder, and (b) all Guarantee obligations, indemnities, fees, expenses and other amounts payable from time to time pursuant to the Additional Indenture Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any Additional Indenture Obligation (whether by or on behalf of any Loan Party, as Proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance, fraudulent transfer or a preference in any respect, set aside or required to be paid to a debtor in possession, a Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the Additional Noteholder Agent and the other Classes of Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.
Additional Indenture Obligations Payment Date means the first date on which (a) the Additional Indenture Obligations (other than those that constitute Unasserted Contingent Obligations) have been indefeasibly paid in cash in full, (b) all commitments to extend credit under the Additional Indenture Documents have been terminated, and (c) so long as the ABL Obligations Payment Date, Term Obligations Payment Date or Existing Indenture Obligations Payment Date shall not have occurred, the Additional Noteholder Agent has delivered a written notice to the respective Representative(s) stating that the events described in clauses (a) and (b) have occurred to the satisfaction of the Additional Indenture Secured Parties.
Additional Indenture Secured Parties means the Additional Noteholder Agent and the Additional Noteholders.
Additional Indenture Security Documents means any and all agreements securing satisfaction of the Additional Indenture Obligations.
Additional Noteholder Agent has the meaning set forth in the recitals above and shall become a party hereto and be bound by all terms hereof upon the execution of an Additional Indebtedness Joinder and Designation.
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Additional Noteholders means the holders of the notes issued under any Additional Indenture Agreement.
Additional Notes has the meaning set forth in the recitals above.
Additional Notes Collateral means all Property of each Loan Party, whether now owned or hereafter acquired, whether arising before or after any Insolvency Proceeding, in which a Lien is granted or purported to be granted to any Additional Indenture Secured Party as security for any Additional Indenture Obligation.
Additional Term Agreement means any agreement approved for designation as such by the Representatives in any Additional Indebtedness Joinder and Designation delivered to the Loan Parties after the date hereof, a form of which is attached hereto as Exhibit A.
Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, control, as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
Banking Services Obligations means with respect to any Loan Party, any obligations of such Loan Party owed to ABL Agent (or any of its affiliates) in respect of Cash Management Services.
Bankruptcy Code means Title 11 of the United States Code entitled Bankruptcy, as now and hereafter in effect, or any successor statute.
Board of Directors means:
(1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
(2) with respect to a partnership, the board of directors of a direct or indirect general partner of the partnership;
(3) with respect to a limited liability company, the direct or indirect managing member or members or any controlling committee of managing members thereof; and
(4) with respect to any other Person, the board or committee of such Person serving a similar function.
Business Day means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed.
Capital Lease Obligation means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the Stated Maturity
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thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.
Capital Stock means, (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) in the equity of such entity, (c) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests, and (d) in the case of any other entity, any other interests or participations that confer on a Person that right to receive a share of the profits and losses of, or distributions of assets of, the issuing entity, but excluding for each of (a) through (d) any debt securities convertible or exchangeable for Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
Cash Management Services means any cash management or related services including treasury, depository, return items, overdraft, controlled disbursement, merchant stored value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other cash management arrangements.
Class, when used in reference to (a) any Secured Obligations, refers to whether such Secured Obligations are the ABL Obligations, the Term Obligations, the Additional Indenture Obligations or the Existing Indenture Obligations, (b) any Representative, refers to whether such Representative is the ABL Agent, the Term Agent, the Additional Noteholder Agent or the Existing Noteholder Agent, (c) any Secured Parties, refers to whether such Secured Parties are the ABL Agent, the Term Secured Parties, the Additional Indenture Secured Parties or the Existing Indenture Secured Parties and/or (d) any Loan Documents, refers to whether such Loan Documents are the ABL Documents, the Term Documents, the Additional Indenture Documents or the Existing Indenture Documents.
Collateral means all existing and future assets and property of Holdings, each Domestic Subsidiary of Holdings (including the ABL Borrower) and each other Subsidiary of Holdings that becomes party to any Loan Documents after the date hereof, with respect to which a Lien is granted as security for any Secured Obligations under each Class of Loan Documents that constitutes:
(1) | Accounts (as defined in the UCC), payment intangibles and all other receivables; |
(2) | Equipment (as defined in the UCC) and documents therefor; |
(3) | Investment Property (as defined in the UCC); |
(4) | commodity accounts, deposit accounts, collection accounts and securities accounts (including all cash, cash equivalents, financial assets, negotiable instruments and other evidence of payment, and other funds on deposit therein or credited thereto); |
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(5) | letter of credit rights, supporting obligations and commercial tort claims with respect to any of the foregoing and letters of credit transferred to the ABL Agent; |
(6) | all contracts, contract rights, Inventory, General Intangibles, documents, Chattel Paper (whether tangible or electronic) (each as defined in the UCC), drafts and acceptances, payment intangibles and instruments, in each case, in connection with, used in, acquired for, or necessary to the realization on any of the assets identified in clauses (1) through (5); excluding intercompany notes by or among Holdings and any of its Subsidiaries; |
(7) | all other tangible and intangible property of Holdings, its Domestic Subsidiaries and each of its other Subsidiaries that becomes a party to the Loan Documents after the date hereof; |
(8) | all books and records relating to the items referred to in items (1) through (7); and |
(9) | all collateral security and guarantees with respect to any of the foregoing and, subject to the terms of this Agreement, all proceeds, products, substitutions, replacements, accessions, cash, money, insurance proceeds, instruments, securities, security entitlements, financial assets and deposit accounts received as proceeds of any of the foregoing and any other proceeds of the above as such are set forth in the ABL Credit Agreement; provided that any Collateral, regardless of type, received in exchange for any Collateral pursuant to an Enforcement Action pursuant to the terms of the ABL Credit Agreement (or the Term Credit Agreement in the event the ABL Credit Agreement has been paid in cash in full) and this Agreement shall be treated as Collateral under this Agreement and the Security Documents. |
Comparable Security Document means, in relation to any Senior Collateral subject to any Senior Security Document, that Junior Security Document that creates a security interest in the same Senior Collateral, granted by the same Loan Party, as applicable.
DIP Financing has the meaning set forth in Section 5.2(a).
Domestic Subsidiary means any Restricted Subsidiary of the ABL Borrower that was formed under the laws of the United States or any state of the United States or the District of Columbia.
Enforcement Action means, with respect to the Secured Obligations, the exercise of any default rights and remedies with respect to any Collateral securing such Secured Obligations or the commencement or prosecution of enforcement of any of such rights and remedies with respect to Collateral under, as applicable, the Loan Documents, or applicable law, and the exercise of any default rights or remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction or under the Bankruptcy Code.
Equity Interests mean, with respect to any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents, including membership interests (however designated, whether voting or nonvoting), of equity of such Person, including, if such
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Person is a partnership, partnership interests (whether general or limited), joint venture interests, or if such Person is a limited liability company, membership interests and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of Property of, such partnership, whether outstanding on the date hereof or issued on or after the date hereof, but excluding debt securities convertible or exchangeable into such equity.
Excess ABL Obligations means the sum of (a) the portion of the principal amount of the loans outstanding under the ABL Documents and the undrawn amount of outstanding letters of credit issued thereunder that is in excess of the ABL Obligations Cap, plus (b) the portion of interest and fees that accrues or is charged with respect to that portion of the principal amount of the loans and letters of credit described in clause (a) of this definition.
Excluded Accounts means, as to any Loan Party, all Deposit Accounts used solely for (i) payroll and/or accrued employee benefits, or (ii) employee benefit plans.
Existing Indenture has the meaning set forth in the recitals above.
Existing Indenture Agreement means the collective reference to (a) the Existing Indenture; (b) any agreement under which Existing Notes are sold or issued pursuant to the terms of the Existing Indenture or any supplemental indenture (including that certain supplemental indenture, dated as of June 29, 2016) relating to Additional Notes, if any, including, without limitation, that certain Purchase Agreement, dated as of June 25, 2014 by and between Holdings, Jefferies LLC and certain subsidiaries of Holdings, as guarantors; and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any Indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the Indebtedness and other obligations outstanding under or issued pursuant to the Existing Indenture or any other agreement or instrument referred to in this clause (c) unless such agreement or instrument expressly provides that it is not intended to be and is not an Existing Indenture Agreement hereunder (a Replacement Existing Indenture Agreement); provided that, for the avoidance of doubt the Additional Indenture shall not be considered an Existing Indenture Agreement hereunder. Any reference to the Existing Indenture Agreement hereunder shall be deemed a reference to any Existing Indenture Agreement then extant.
Existing Indenture Documents means the Existing Indenture Agreement, each Existing Indenture Security Document and each Existing Indenture Guarantee.
Existing Indenture Guarantee means any Guarantee by any Loan Party of any or all of the Existing Indenture Obligations.
Existing Indenture Lien means any Lien created by or pursuant to the Existing Indenture Security Documents.
Existing Indenture Obligations means (a) all principal of and interest (including any Post-Petition Interest), costs and premium (if any) on all indebtedness issued under the Existing Indenture Agreement or any DIP Financing provided by some or all of the Existing Indenture Secured Parties to the extent permitted hereunder, and (b) all Guarantee obligations, indemnities,
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fees, expenses and other amounts payable from time to time pursuant to the Existing Indenture Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any Existing Indenture Obligation (whether by or on behalf of any Loan Party, as Proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance, fraudulent transfer or a preference in any respect, set aside or required to be paid to a debtor in possession, a Representative, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of such Representative and the respective Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.
Existing Indenture Obligations Payment Date means the first date on which (a) the Existing Indenture Obligations (other than those that constitute Unasserted Contingent Obligations) have been indefeasibly paid in cash in full, (b) all commitments to extend credit under the Existing Indenture Documents have been terminated, and (c) so long as the ABL Obligations Payment Date, the Term Obligations Payment Date or the Additional Indenture Obligations Payment Date shall not have occurred, the Existing Noteholder Agent has delivered a written notice to the respective Representative(s) stating that the events described in clauses (a) and (b) have occurred to the satisfaction of the Existing Indenture Secured Parties.
Existing Indenture Secured Parties means the Existing Noteholder Agent and the Existing Noteholders.
Existing Indenture Security Documents means any and all agreements securing satisfaction of the Existing Indenture Obligations, including, without limitation, that certain Security Agreement, dated as of July 2, 2014 by and among the ABL Borrower and the other Loan Parties, as co-Pledgors, and the Existing Noteholder Agent, that certain Trademark Security Agreement, dated as of July 2, 2014 by and among the ABL Borrower and the other Loan Parties, as co-Pledgors, and the Existing Noteholder Agent, those certain Deposit Account Control Agreements, each dated as of November 6, 2014 by and among the ABL Agent, the Existing Noteholder Agent, the ABL Borrower, and certain other Loan Parties (to be amended to add Additional Noteholder Agent and Term Agent as parties thereto as contemplated by the Loan Documents), and that certain Preferred Ship Mortgage, dated as of November 6, 2014, executed by SAExploration Seismic Services (US), LLC in favor of the Existing Noteholder Agent.
Existing Noteholder Agent has the meaning set forth in the recitals above.
Existing Noteholders means the holders of the Existing Notes.
Existing Notes has the meaning set forth in the recitals above.
Existing Notes Collateral means all Property of each Loan Party, whether now owned or hereafter acquired, whether arising before or after any Insolvency Proceeding, in which a Lien is granted or purported to be granted to any Existing Indenture Secured Party as security for any Existing Indenture Obligation.
Fair Market Value means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party,
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determined in good faith by the Chief Financial Officer or Board of Directors of Holdings (unless otherwise provided in the Term Credit Agreement, the Existing Indenture and the Additional Indenture).
Foreign Equity means Equity Interests in any Foreign Subsidiary that are owned by any Loan Party.
Foreign Subsidiary means any Restricted Subsidiary of Holdings that is not a Domestic Subsidiary.
GAAP means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in any other statements by such other entity as may have been approved by a significant segment of the accounting profession, which are in effect from time to time.
Governmental Authority means any federal, state, local or foreign (whether civil, criminal, military or otherwise) court, central bank or governmental agency, tribunal, authority, instrumentality or regulatory body or any subdivision thereof or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
Guarantee means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).
Hedging Obligations means with respect to any specified Person, the obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreement, and interest rate collar agreements;
(2) other agreements or arrangements designed to manage interest rates or interest rate risk; and
(3) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.
Holdings has the meaning set forth in the recitals above.
Impairment has the meaning set forth in Section 2.7.
Indebtedness means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:
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(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of bankers acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price of any property or services due more than one year after such property is acquired or such services are completed; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term Indebtedness includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person. Indebtedness shall be calculated without giving effect to the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under any Loan Documents as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.
Insolvency Proceedings means with respect to any Person, (a) any voluntary or involuntary case or proceeding under the Bankruptcy Code with respect to such Person, (b) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to such Person or with respect to a material portion of its assets; (c) any composition of liabilities or similar arrangement relating to such Person, whether or not under a courts jurisdiction or supervision; (d) any liquidation, dissolution, reorganization or winding up of such Person, whether voluntary or involuntary, whether or not under a courts jurisdiction or supervision, and whether or not involving insolvency or bankruptcy; or (e) any general assignment for the benefit of creditors or any other marshaling of assets and liabilities of such Person.
Intervening Creditor has the meaning set forth in Section 2.7.
Intervening Lien has the meaning set forth in Section 2.7.
Issue Date means July 2, 2014.
Joint Venture means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form; provided, in no event shall any corporate Subsidiary of any Person be considered to be a Joint Venture to which such Person is a party.
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Junior Collateral means with respect to any Junior Secured Party, any Collateral on which it has a Junior Lien.
Junior Documents means, collectively, with respect to any Junior Obligations, any provision pertaining to such Junior Obligation in any Loan Document or any other document, instrument or certificate evidencing or delivered in connection with such Junior Obligation.
Junior Liens means (a) with respect to any ABL Collateral, all Liens securing the Term Obligations, the Additional Indenture Obligations and the Existing Indenture Obligations, (b) with respect to any Term Collateral, all Liens securing the Additional Indenture Obligations and the Existing Indenture Obligations and (c) with respect to any Additional Notes Collateral, all Liens securing the Existing Indenture Obligations.
Junior Obligations means (a) with respect to any ABL Collateral, the Term Obligations, the Additional Indenture Obligations and the Existing Indenture Obligations, (b) with respect to any Term Collateral, the Additional Indenture Obligations and the Existing Indenture Obligations and (c) with respect to any Additional Notes Collateral, the Existing Indenture Obligations.
Junior Obligations Payment Date means (a) with respect to any ABL Obligations, the Term Obligations Payment Date, the Additional Indenture Obligations Payment Date and the Existing Indenture Obligations Payment Date, (b) with respect to any Term Obligations, the Additional Indenture Obligations Payment Date and the Existing Indenture Obligations Payment Date and (c) with respect to any Additional Indenture Obligations, the Existing Indenture Obligations Payment Date.
Junior Representative means (a) with respect to any ABL Obligations or any ABL Collateral, the Term Agent, the Additional Noteholder Agent and the Existing Noteholder Agent, (b) with respect to any Term Obligations or any Term Collateral, the Additional Noteholder Agent and the Existing Noteholder Agent and (c) with respect to the Additional Indenture Obligations or any Additional Notes Collateral the Existing Noteholder Agent.
Junior Representative Waiver Event has the meaning set forth in Section 3.2(c).
Junior Secured Parties means (a) with respect to the ABL Collateral, the Term Secured Parties, Additional Indenture Secured Parties and Existing Indenture Secured Parties, (b) with respect to the Term Collateral, all Additional Indenture Secured Parties and Existing Indenture Secured Parties and (c) with respect to the Additional Notes Collateral, the Existing Indenture Secured Parties.
Junior Security Documents means with respect to any Junior Secured Party, the Security Documents that secure the Junior Obligations.
Legal Requirements means, as to any Person, the Organizational Documents of such Person, and any governmental treaty, law (including the common law), statute, ordinance, code, rule, regulation, guidelines, license, permit requirement, Order or determination of an arbitrator or a court or other Governmental Authority, and the interpretation or administration thereof, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.
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Lien means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not field recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the UCC (or equivalent statutes) of any jurisdiction.
Lien Priority means with respect to any Lien of a Representative in the Collateral, the order of priority of such Lien specified in Section 2.1.
Loan Documents shall mean, collectively, the ABL Documents, the Term Documents, the Additional Indenture Documents and the Existing Indenture Documents.
Loan Party means Holdings, the ABL Borrower and each Subsidiary of Holdings that is now or hereafter becomes a party to any Loan Document. All references in this Agreement to any Loan Party shall include such Loan Party as a debtor-in-possession and any receiver or trustee for such Loan Party in any Insolvency Proceeding.
Non-Recourse Debt means Indebtedness:
(1) as to which neither Holdings nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), or (b) is directly or indirectly liable as a guarantor or otherwise;
(2) no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time, or both, any holder of any other Indebtedness of Holdings or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity; and
(3) as to which the lenders will not have any recourse to the stock or assets of Holdings or any of its Restricted Subsidiaries (other than Equity Interests of an Unrestricted Subsidiary).
Organizational Documents means, with respect to any Person, (a) in the case of any corporation, the certificate of incorporation and by-laws (or similar documents) of such Person, (b) in the case of any limited liability company, the certificate of formation and operating agreement (or similar documents) of such Person, (c) in the case of any limited partnership, the certificate of formation and limited partnership agreement (or similar documents) of such Person (and, where applicable, the equity holders or shareholders registry of such Person), (d) in the case of any general partnership, the partnership agreement (or similar document) of such Person, (e) in any other case, the functional equivalent of the foregoing, and (f) any shareholder, voting trust or similar agreement between or among any holders of Equity Interests of such Person.
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Person means and includes natural persons, corporations, limited partnerships, general partnerships, partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.
Post-Petition Interest means any interest or entitlement to fees or expenses or other charges that accrues after the commencement of any Insolvency Proceeding (or would accrue but for the commencement of an Insolvency Proceeding), whether or not allowed or allowable in any such Insolvency Proceeding.
Proceeds means (a) when used with respect to the Collateral, all proceeds, as defined in Article 9 of the Uniform Commercial Code (including, without limitation, insurance proceeds on Collateral but excluding any business interruption insurance), and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.
Property means any right, title, or interest in or to property of assets of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible and including Equity Interests of any other Person owned by the Person in question and whether now in existence or owned or hereafter entered into or acquired, including all Real Property, cash, securities, accounts, revenues and contract rights.
Purchase Option Period has the meaning set forth in Section 7.1(a).
Recovery has the meaning set forth in Section 5.5.
Replacement ABL Agreement has the meaning set forth in the definition of ABL Agreement.
Replacement Term Agreement has the meaning set forth in the definition of Term Agreement.
Replacement Additional Indenture Agreement has the meaning set forth in the definition of Additional Indenture Agreement.
Replacement Existing Indenture Agreement has the meaning set forth in the definition of Existing Indenture Agreement.
Representative means each of the ABL Agent, Term Agent, Additional Noteholder Agent and the Existing Noteholder Agent.
Restricted Subsidiary of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.
Retained Interest has the meaning set forth in Section 7.5.
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Secured Obligations means ABL Obligations, the Term Obligations, the Additional Indenture Obligations and the Existing Indenture Obligations.
Secured Parties means the ABL Agent, the Term Secured Parties, the Additional Indenture Secured Parties and the Existing Indenture Secured Parties.
Security Documents means, collectively, the ABL Security Documents, the Term Security Documents, the Additional Indenture Security Documents and the Existing Indenture Security Documents.
Senior Collateral means with respect to any Senior Secured Party, any Collateral on which it has a Senior Lien.
Senior Documents means, collectively, with respect to any Senior Obligation, any provision pertaining to such Senior Obligation in any Loan Document or any other document, instrument or certificate evidencing or delivered in connection with such Senior Obligation.
Senior Liens means (a) with respect to the Term Collateral, all Liens securing the ABL Obligations, (b) with respect to the Additional Notes Collateral, all Liens securing the Term Obligations and all Liens securing the ABL Obligations and (c) with respect to the Existing Notes Collateral, all Liens securing the Additional Indenture Obligations, all Liens securing the Term Obligations and all Liens securing the ABL Obligations.
Senior Obligations means (a) with respect to any Term Collateral, all ABL Obligations, (b) with respect to any Additional Notes Collateral, all Term Obligations and all ABL Obligations and (c) with respect to any Existing Notes Collateral, all Additional Indenture Obligations, all Term Obligations and all ABL Obligations.
Senior Obligations Payment Date means (a) with respect to Term Obligations, the ABL Obligations Payment Date, (b) with respect to any Additional Indenture Obligations, the Term Obligations Payment Date and the ABL Obligations Payment Date and (c) with respect to any Existing Indenture Obligations, the Additional Indenture Obligations Payment Date, the Term Obligations Payment Date and the ABL Obligations Payment Date.
Senior Representative means (a) with respect to any Term Collateral, the ABL Agent, (b) with respect to any Additional Notes Collateral, the ABL Agent or (if the ABL Obligations Payment Date shall have occurred) the Term Agent and (c) with respect to any Existing Notes Collateral, the ABL Agent, (if the ABL Obligations Payment Date shall have occurred) the Term Agent or (if the Term Obligations Payment Date shall have occurred) the Additional Noteholder Agent.
Senior Secured Parties means (a) with respect to the Term Collateral, the ABL Agent, (b) with respect to the Additional Notes Collateral, the Term Secured Parties and the ABL Agent and (c) with respect to the Existing Notes Collateral, the Additional Indenture Secured Parties, the Term Secured Parties and the ABL Agent.
Senior Security Documents means with respect to any Senior Secured Party, the Security Documents that secure the Senior Obligations.
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Stated Maturity means, with respect to any installment of interest or principal of any Indebtedness, the date on which the payment of interest or principal is scheduled to be paid in the documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
Subsidiary means, with respect to any specified Person:
(1) any corporation, association, or other business entity of which more than 50% of the total voting power of shares of Equity Interests entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders agreement that effectively transfers voting power) to vote in the election of directors, managers, trustees or similar persons of the corporation, association, or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership or limited liability company of which (a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (b) such Person or any Subsidiary of such Person is a controlling general partner or controlling managing member or otherwise controls such entity.
Term Agent has the meaning set forth in the introductory paragraph hereof. In the case of any Replacement Term Agreement, the Term Agent shall be the Person identified as such in such agreement.
Term Agreement means the collective reference to (a) the Term Credit Agreement, (b) any Additional Term Agreement and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations outstanding under the Term Credit Agreement (regardless of whether such replacement, refunding or refinancing is a working capital facility, asset-based facility or otherwise), any Additional Term Agreement or any other agreement or instrument referred to in this clause (c) unless such agreement or instrument expressly provides that it is not intended to be and is not a Term Agreement hereunder (a Replacement Term Agreement). Any reference to the Term Agreement hereunder shall be deemed a reference to any Term Agreement then extant.
Term Collateral means all Property of each Loan Party, whether now owned or hereafter acquired, whether arising before or after any Insolvency Proceeding, in which a Lien is obtained, granted or purported to be granted at any time to the Term Agent, for the benefit of the Term Secured Parties, as security for any Term Obligation.
Term Credit Agreement has the meaning set forth in the recitals above.
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Term Documents means the Term Agreement, each Term Security Document, each Term Guarantee and each other Term Loan Document.
Term Guarantee means any Guarantee by any Loan Party of any or all of the Term Obligations.
Term Lender has the meaning set forth in the introductory paragraph hereof. In the case of any Replacement Term Agreement, the Term Lenders shall be the Persons identified as such in such agreement.
Term Lien means any Lien created by or pursuant to the Term Security Documents.
Term Loan Documents means the Loan Documents as defined in the Term Credit Agreement or the Term Agreement, as applicable.
Term Obligations means (a) all principal of and interest (including any Post-Petition Interest), costs and premium (if any) on all loans and other extensions of credit made pursuant to the Term Agreement or any DIP Financing by some or all of the Term Secured Parties to the extent permitted hereunder, and (b) all Guarantee obligations, indemnities, fees, expenses and other amounts payable from time to time pursuant to the Term Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any Term Obligation (whether by or on behalf of any Loan Party, as Proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance, fraudulent transfer or a preference in any respect, set aside or required to be paid to a debtor in possession, any Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the Term Agent and the Term Lenders and the other Classes of Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.
Term Obligations Payment Date means the first date on which (a) the Term Obligations (other than those that constitute Unasserted Contingent Obligations) have been indefeasibly paid in cash in full, (b) all commitments to extend credit under the Term Documents have been terminated, and (c) so long as the ABL Obligations Payment Date, Existing Indenture Obligations Payment Date or Additional Indenture Obligations Payment Date shall not have occurred, the Term Agent has delivered a written notice to the respective Representative stating that the events described in clauses (a) and (b), have occurred to the satisfaction of the Term Secured Parties.
Term Secured Parties means the Term Agent and the Term Lenders.
Term Security Documents means any and all agreements securing satisfaction of the Term Obligations, including the Term Credit Agreement.
Triggering Event means (i) the acceleration of any Senior Obligations with first ranking Lien Priority under Section 2.1 hereof prior to maturity, (ii) the termination of the Senior Representatives commitment to make advances under the related Senior Documents, by written notice, (iii) the exercise of any Enforcement Action in respect of such Senior Obligations, (iv) any default in any scheduled payment of principal, premium, if any, interest or fees under any
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related Senior Document that remains uncured or unwaived for a period of 30 consecutive days, (v) the commencement of an Insolvency Proceeding or (vi) a Junior Representative Waiver Event.
Unasserted Contingent Obligations means, at any time, Secured Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (excluding (a) the principal of, and interest and premium (if any) on, and fees and expenses relating to, any Secured Obligation, and (b) with respect to Secured Obligations, contingent reimbursement obligations in respect of amounts that may be drawn under outstanding letters of credit) in respect of which no assertion of liability (whether oral or written) and no claim or demand for payment (whether oral or written) has been made (and, in the case of Secured Obligations for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.
Uniform Commercial Code or UCC means the Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
Unrestricted Subsidiary means any Subsidiary of Holdings that is designated by the Board of Directors of Holdings as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) except as permitted under the terms of the Term Credit Agreement, the Existing Indenture and the Additional Indenture, is not party to any agreement, contract, arrangement, or understanding with Holdings or any Restricted Subsidiary of Holdings unless the terms of any such agreement, contract, arrangement, or understanding are no less favorable to Holdings or such Restricted Subsidiary than those that might be obtained at the time for Persons who are not Affiliates of Holdings;
(3) is a Person with respect to which neither Holdings nor any of its Restricted Subsidiaries has any direct or indirect obligation to (a) subscribe for additional Equity Interests, or (b) maintain or preserve such Persons financial condition or to cause such Person to achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Holdings or any of its Restricted Subsidiaries.
Voting Stock of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
1.3 Rules of Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words include, includes and including shall be deemed to be followed by the phrase without limitation. The word will shall be construed to have the same meaning and effect as the word shall. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise
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modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Persons successors and assigns, (c) the words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time and (f) the words asset and property shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
SECTION 2. Lien Priority.
2.1 Lien Subordination. Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Junior Lien in respect of any Collateral or of any Senior Lien in respect of any Collateral and notwithstanding any provision of the UCC, any applicable law (including the Bankruptcy Code), any Loan Document, any alleged or actual defect or deficiency in any of the foregoing, any failure to attach or (if required under any Loan Document) perfect any Lien created under any Loan Document or any other circumstance whatsoever, each Junior Representative, on behalf of the respective Junior Secured Parties, in respect of such Collateral hereby agrees that:
(a) any Senior Lien in respect of such Collateral, regardless of how or when acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be and shall remain senior and prior to any Junior Lien in respect of such Collateral (whether or not such Senior Lien is subordinated to any Lien securing any other obligation); and
(b) any Junior Lien in respect of such Collateral, regardless of how or when acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to any Senior Lien in respect of such Collateral.
For the avoidance of doubt, as between the ABL Agent and the other Secured Parties, the Lien on the Collateral securing the obligations to the ABL Agent under the ABL Credit Agreement (other than Excess ABL Obligations) shall always be senior to the Lien on the Collateral securing the obligations to (i) the Term Secured Parties under the Term Credit Agreement, (ii) the Additional Indenture Secured Parties under the Additional Indenture and (iii) the Existing Indenture Secured Parties under the Existing Indenture. For the avoidance of doubt, (A) as between the Term Secured Parties and the other Secured Parties, the Lien on the Collateral securing the obligations to the Term Secured Parties under the Term Credit Agreement shall be (i) senior to the Lien on the Collateral securing the obligations to (x) the Additional Indenture Secured Parties under the Additional Indenture and (y) the Existing Indenture Secured Parties under the Existing Indenture and (ii) junior to the Lien on the Collateral securing the obligations to the ABL Agent; (B) as between the Additional Indenture Secured Parties and the other Secured Parties, the Lien on the Collateral securing the obligations to the Additional Indenture Secured Parties shall be (x) senior to the Lien on the Collateral securing the obligations to the Existing Indenture Secured Parties under the Existing Indenture and (y) junior to the Lien on the
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Collateral securing the obligations to (i) the ABL Agent and (ii) the Term Secured Parties under the Term Credit Agreement; and (C) as between the Existing Indenture Secured Parties and the other Secured Parties, the Lien on the Collateral securing the obligations to the Existing Indenture Secured Parties under the Existing Indenture shall be junior to the Lien on the Collateral securing the obligations to (i) the ABL Agent, (ii) the Term Secured Parties under the Term Credit Agreement and (iii) the Additional Indenture Secured Parties under the Additional Indenture.
2.2 Prohibition on Contesting Liens. In respect of any Collateral, each Junior Representative, on behalf of the respective Junior Secured Parties, in respect of such Collateral agrees that it shall not, and hereby waives any right to:
(a) contest, or support any other Person in contesting, in any proceeding (including any Insolvency Proceeding), the priority, validity or enforceability of any Senior Lien on such Collateral; or
(b) demand, request, plead or otherwise assert or claim the benefit of any marshaling, appraisal, valuation or similar right which it may have in respect of such Collateral or the Senior Liens on such Collateral, except to the extent that such rights are expressly granted in this Agreement.
2.3 Nature of Obligations. Each Junior Representative on behalf of itself and the respective Junior Secured Parties acknowledges that a portion of the ABL Obligations represents debt that is revolving in nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently re-borrowed, and that the terms of the ABL Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the ABL Obligations may be increased, replaced or refinanced, subject to the limitations on Indebtedness contained in the Junior Documents, in each event, without notice to or consent by the Junior Secured Parties and without affecting the provisions hereof. The ABL Agent, the Additional Noteholder Agent and the Existing Noteholder Agent acknowledge that the terms of the Term Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the Term Obligations may be increased, replaced or refinanced, subject to the limitations on Indebtedness contained in the ABL Loan Documents, the Existing Indenture Documents or the Additional Indenture Documents in each event, without notice to or consent by the other Representatives and without affecting the provisions hereof. The ABL Agent, the Term Agent and the Additional Noteholder Agent acknowledge that the Existing Indenture Obligations may be replaced or refinanced, and Additional Notes and/or Exchange Notes (as such terms are defined in the Existing Indenture) may be issued under the Existing Indenture, without notice to or consent by the other Representatives and without affecting the provisions hereof. The ABL Agent, the Term Agent and the Existing Noteholder Agent acknowledge that the Additional Indenture Obligations may be replaced or refinanced, and Additional Notes and/or Exchange Notes (as such terms are defined in the Additional Indenture) may be issued under the Additional Indenture, without notice to or consent by the other Representatives and without affecting the provisions hereof. The Lien Priorities provided in Section 2.1 shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, re-borrowing, increase, replacement, renewal, restatement or refinancing of any Class of Secured Obligations, or any portion thereof.
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2.4 No New Liens.
(a) Until the Senior Obligations Payment Date, no Junior Secured Party shall acquire or hold any Lien on any assets of any Loan Party securing any Junior Obligation which assets are not also subject to the Lien of the Senior Secured Parties under the Senior Documents, subject to the Lien Priority set forth herein. If any Junior Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Loan Party securing any Junior Obligation which assets are not also subject to the Lien of the Senior Secured Parties under the Senior Documents, subject to the Lien Priority set forth herein, then such Junior Representative (or the relevant Junior Secured Party) shall, without the need for any further consent of any other Junior Secured Party and notwithstanding anything to the contrary in any other Junior Document be deemed to also hold and have held such lien for the benefit of the Senior Representative or Senior Representatives (as applicable) as security for the Senior Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the Senior Representative or Senior Representatives (as applicable) in writing of the existence of such Lien.
(b) Until the applicable Junior Obligation Payment Date, the Senior Secured Parties shall not acquire or hold any Lien on any assets of any Loan Party securing any Senior Obligation which assets are not also subject to the Lien of the respective Junior Representative under the applicable Junior Documents, subject to the Lien Priority set forth herein; provided, however, the ABL Agent may hold Liens on ABL Agent Cash Collateral notwithstanding such Junior Representatives lack of a Lien thereon. If a Senior Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Loan Party securing any Senior Obligation which assets are not also subject to the Lien of each Junior Representative under the applicable Junior Documents, subject to the Lien Priority set forth herein, then such Senior Secured Party shall, notwithstanding anything to the contrary in any other Senior Document be deemed to also hold and have held such lien for the benefit of such Junior Representative as security for the applicable Junior Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify such Junior Representative in writing of the existence of such Lien.
2.5 Separate Grants of Security and Separate Classification. Each Secured Party acknowledges and agrees that (i) the grants of Liens pursuant to the ABL Security Documents, the Term Security Documents, the Additional Indenture Security Documents and the Existing Indenture Security Documents constitute separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the Secured Obligations of each Class are fundamentally different from the Secured Obligations of the other Classes and should be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the Secured Parties in respect of the Collateral constitute claims in the same class (rather than separate classes of senior and junior secured claims), then the Secured Parties hereby acknowledge and agree that all distributions shall be made as if there were separate classes of Secured Obligation claims against the Loan Parties with the effect being that, to the extent that the aggregate value of the Senior Collateral is sufficient (for this purpose ignoring all claims held by the other Secured Parties), such Senior Secured
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Party shall be entitled to receive, in addition to amounts distributed to it in respect of principal, pre-petition interest and other claims, all amounts owing in respect of Post-Petition Interest that is available from the pool of Collateral for such Senior Secured Party, before any distribution is made in respect of the claims held by the other Secured Parties, with the other Secured Parties hereby acknowledging and agreeing to turn over to the Senior Representative on behalf of the respective Senior Secured Party amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the aggregate recoveries.
2.6 Agreements Regarding Actions to Perfect Liens.
(a) [Reserved.]
(b) The Senior Representative hereby acknowledges that, to the extent that it holds, or a third party holds on its behalf, physical possession of or control (as defined in the Uniform Commercial Code) over Collateral pursuant to the Security Documents, such possession or control is also for the benefit of each Junior Representative and the respective Junior Secured Parties solely to the extent required to perfect their security interest in such Collateral. Nothing in the preceding sentence shall be construed to impose any duty on the Senior Representative (or any third party acting on either such Persons behalf) with respect to such Collateral or provide any Junior Representative and the respective Junior Secured Parties with any rights with respect to such Collateral beyond those specified in this Agreement and each Security Document, as applicable, provided that subsequent to the occurrence of the Senior Obligations Payment Date with respect to such Senior Representative (so long as the applicable Junior Obligations Payment Date shall not have occurred), each Junior Representative shall (i) deliver to the successor Senior Representative, at the Loan Parties sole cost and expense, the Collateral in its possession or control together with any necessary endorsements to the extent required by the Senior Documents of the Senior Representative or (ii) direct and deliver such Collateral as a court of competent jurisdiction otherwise directs. The provisions of this Agreement are intended solely to govern the respective Lien priorities as among the Secured Parties and shall not impose on the Secured Parties any obligations in respect of the disposition of any Collateral (or any proceeds thereof) that would conflict with prior perfected Liens or any claims thereon in favor of any other Person that is not a Secured Party.
2.7 Impairments. It is the intention of the parties hereto that the Secured Parties of each Class (and not the Secured Parties of any other Class) bear the risk of (a) any determination by a court of competent jurisdiction that (i) any Secured Obligations of such Class are unenforceable under applicable law or are subordinated to any other obligations (other than to any Secured Obligations of any other Class to the extent provided hereunder), (ii) any Secured Obligations of such Class do not have a valid and perfected Lien on any of the Collateral securing any Secured Obligations of the other Classes or (iii) any Person (other than any Representative or any Secured Party) has a Lien on any Collateral that is senior in priority to the Lien on such Collateral securing any Secured Obligations of such Class, but junior to the Lien on such Collateral securing any Secured Obligations of another Class (any such Lien being referred to as an Intervening Lien, and any such Person being referred to as an Intervening Creditor) and (b) the existence of any Collateral securing Secured Obligations of the other Class that does not constitute Collateral with respect to any Secured Obligations of such Class (any condition
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referred to in clause (a) or (b) with respect to the Secured Obligations of such Class being referred to as an Impairment of such Class); provided that the existence of any limitation on the maximum claim that may be made against any real property subject to a mortgage that applies to Secured Obligations of any Class shall not be deemed to be an Impairment of Obligations of any other Class. In the event an Impairment exists with respect to the Secured Obligations of a Class, the results of such Impairment shall be borne solely by the Secured Parties of such Class, and the rights of the Secured Parties of such Class (including the right to receive distributions in respect of the Secured Obligations of such Class pursuant to the Loan Documents of such Class and in accordance herewith) set forth herein shall be modified to the extent necessary so that the results of such Impairment are borne solely by the Secured Parties of such Class. In furtherance of the foregoing, in the event the Secured Obligations of a Class shall be subject to an Impairment in the form of an Intervening Lien of any Intervening Creditor, the value of any Collateral or Proceeds that are allocated to such Intervening Creditor shall be deducted solely from the Collateral or Proceeds to be distributed in respect of the Secured Obligations of such Class. In addition, in the event the Secured Obligations of a Class are modified pursuant to applicable law (including pursuant to Section 1129 of the Bankruptcy Code or any equivalent provision of, or order granted pursuant to, any other bankruptcy law), any reference to the Secured Obligations of such Class or the Loan Documents of such Class shall refer to such obligations or such documents as so modified.
SECTION 3. Enforcement Rights.
3.1 Exclusive Enforcement. Subject to a purchase of the Senior Obligations pursuant to Section 7, until the Senior Obligations Payment Date has occurred, whether or not an Insolvency Proceeding has been commenced by or against any Loan Party, the Senior Secured Parties shall have the exclusive right to take and continue any Enforcement Action (including the right to credit bid their debt) with respect to the Senior Collateral, without any consultation with or consent of any Junior Secured Party; provided, however, each Senior Secured Party shall use its best efforts to provide the Junior Secured Parties with copies of any written notice of (i) acceleration, (ii) payment default, or (iii) an Enforcement Action, within five (5) business days of providing such notice to any Loan Party.
3.2 Junior Representative Standstill and Waivers. Each Junior Representative, on behalf of itself and the respective Junior Secured Parties, agrees that until the Senior Obligations Payment Date has occurred, or upon the Senior Secured Parties advance written consent, but subject to the provisos set forth in Section 5.1 and Section 7:
(a) they will not take or cause to be taken any action, the purpose or effect of which is to make any Lien on any Senior Collateral that secures any Junior Obligation pari passu with or senior to, or to give any Junior Secured Party any preference or priority relative to, the Liens on the Senior Collateral securing the Senior Obligations;
(b) they will not contest, oppose, object to, interfere with, hinder or delay, in any manner, whether by judicial proceedings (including the filing of an Insolvency Proceeding) or otherwise, any foreclosure, sale, lease, exchange, transfer or other disposition of the Senior Collateral by any Senior Secured Party or any other Enforcement Action taken (or any forbearance from taking any Enforcement Action) in respect of the Senior Collateral by or on behalf of any Senior Secured Party;
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(c) they have no right to (i) direct either the Senior Representative or any other Senior Secured Party to exercise any right, remedy or power with respect to the Senior Collateral or pursuant to the Senior Security Documents in respect of the Senior Collateral, or (ii) consent or object to the exercise by the Senior Representative or any other Senior Secured Party, pursuant to an Enforcement Action, of any right, remedy or power with respect to the Senior Collateral or pursuant to the Senior Security Documents with respect to the Senior Collateral or to the timing or manner in which any such right is exercised or not exercised (or, to the extent they may have any such right described in this clause (c), whether as a junior lien creditor in respect of the Senior Collateral or otherwise, they hereby irrevocably waive such right; provided, however, if, pursuant to the terms of this subsection (ii), a Junior Representative is required to waive a contractual right in connection with a disposition of Collateral with an aggregate value in excess of $1,000,000, outside the ordinary course of business, such waiver shall constitute a Triggering Event if the Junior Representative provides written notification to the Senior Representative of the contractual right subject to such waiver and its status as a Triggering Event under this subsection and Section 7, and the Senior Representative nonetheless elects to proceed with the exercise of such right, remedy or power after receipt of such notice (a Junior Representative Waiver Event));
(d) they will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any Senior Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, and no Senior Secured Party shall be liable for, any action taken or omitted to be taken by any Senior Secured Party with respect to the Senior Collateral or pursuant to the Senior Documents in respect of the Senior Collateral;
(e) they will not commence judicial or non-judicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce their interest in or realize upon, the Senior Collateral; and
(f) they will not seek, and hereby waive any right, to have the Senior Collateral or any part thereof marshaled upon any foreclosure or other disposition of the Senior Collateral.
3.3 Judgment Creditors. In the event that any Secured Party becomes a judgment lien creditor in respect of any Collateral as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subject to the terms of this Agreement for all purposes to the same extent as all other Liens in favor of such Secured Party with respect to such Collateral are subject to the terms of this Agreement.
3.4 Cooperation; Sharing of Information and Access.
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(a) Each Junior Representative, on behalf of itself and the related Junior Secured Parties, agrees that each of them shall take such actions as the Senior Representative shall reasonably request in connection with the exercise by the Senior Representative of its rights set forth herein in respect of the Collateral.
(b) In the event that a Representative shall, in the exercise of its rights under the related Security Documents or otherwise, receive possession or control of any books and Records of any Loan Party which contain information identifying or pertaining to the Collateral, such Representative shall promptly notify each other Representative of such fact and, upon reasonable request from any other Representative and as promptly as practicable thereafter, either make available to such Representative such books and Records for inspection and duplication or provide to such Representative copies thereof.
(c) [Reserved].
3.5 No Additional Rights For the Loan Parties Hereunder. Except as provided in Section 3.6, if a Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, no Loan Party shall be entitled to use such violation as a defense to any action by such Secured Party, nor to assert such violation as a counterclaim or basis for set off or recoupment against such Secured Party.
3.6 Actions Upon Breach.
(a) If any Secured Party, contrary to this Agreement, commences or participates in any action or proceeding against any Loan Party or the Collateral, such Loan Party, with the prior written consent of the applicable Representative, may interpose as a defense or dilatory plea the making of this Agreement, and other Secured Parties may intervene and interpose such defense or plea in its or their name or in the name of such Loan Party.
(b) Should a Secured Party, contrary to this Agreement, in any way take, attempt to or threaten to take any action with respect to the Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement), or fail to take any action required by this Agreement, another Secured Party (in its own name or in the name of the relevant Loan Party), as applicable, or the relevant Loan Party, may obtain relief against such Secured Party by injunction, specific performance and/or other appropriate equitable relief, it being understood and agreed by each of the Representatives on behalf of the related Secured Parties that (i) a Secured Partys damages from its actions may at that time be difficult to ascertain and may be irreparable, and (ii) each Secured Party waives any defense that the Loan Parties and/or the other Secured Parties cannot demonstrate damage and/or be made whole by the awarding of damages.
3.7 Rights as Unsecured Creditors. The Secured Parties may, in accordance with the terms of the Loan Documents and applicable law, enforce rights and exercise remedies against the Loan Parties as unsecured creditors; provided that no such action is otherwise expressly or impliedly inconsistent with the terms of this Agreement.
3.8 Other Rights. For the avoidance of doubt, the Secured Parties shall be entitled to (a) take any action (not adverse to the priority status of the Liens on the Collateral, or the rights
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of the other Secured Parties or any of the holders of Secured Obligations to exercise remedies in respect thereof) in order to create, prove, perfect, preserve or protect (but not enforce) its Lien on and rights in, and the perfection and priority of its Lien on, any of the Collateral, (b) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Loan Parties arising under either any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law and, subject to the restrictions set forth herein, any pleadings, objections, motions or agreements which assert rights or interests available to secured creditors solely with respect to the Collateral, and (c) vote on any plan of reorganization, file any proof of claim, make other filings and make any arguments and motions that are, in each case, in accordance with the terms of this Agreement, with respect to their respective Secured Obligations and the Collateral.
SECTION 4. Application of Proceeds of Senior Collateral; Dispositions and Releases of Lien; Notices and Insurance.
4.1 Application of Proceeds.
(a) Application of Proceeds of Senior Collateral. The Senior Representative and each Junior Representative hereby agree that all Senior Collateral, and all Proceeds thereof, received by any of them in connection with the collection, sale or disposition of Senior Collateral shall be applied, first, to the payment of costs and expenses (including reasonable attorneys fees and expenses and court costs) of the Senior Representative in connection with such Enforcement Action, second, to the payment of the Senior Obligations in accordance with the Senior Documents until the Senior Obligations Payment Date, third, to the payment of the Junior Obligations in accordance with the terms thereof and the Lien Priority established in Section 2.1, fourth, to the payment in full in cash of the Excess ABL Obligations in accordance with the ABL Documents, and fifth, the balance, if any, to the Loan Parties or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct; provided, however, nothing herein shall prohibit the Junior Representatives, prior to an event of default under the Senior Documents and as otherwise permitted hereunder, from receiving regularly scheduled payments and reimbursement of fees and expenses from Proceeds, to the extent such Proceeds (i) are obtained by Loan Parties in the ordinary course of business as cash flow from operating activities or (ii) constitute Proceeds from the Alaska Tax Credits (as such term is defined in the ABL Credit Agreement).
(b) Limited Obligation or Liability. In exercising remedies, whether as a secured creditor or otherwise, the Senior Representative shall have no obligation or liability to any Junior Representative or to any Junior Secured Party, regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each party under the terms of this Agreement.
(c) Segregation of Collateral. Until the occurrence of the Senior Obligations Payment Date, any Senior Collateral that may be received by any Junior Secured Party in violation of this Agreement shall be segregated and held in trust and promptly paid over to the Senior Representative, for the benefit of the Senior Secured Parties, in the same form as received, with any necessary endorsements, and each Junior Secured Party hereby authorizes the Senior Representative to make any such endorsements as agent for each Junior Representative (which authorization, being coupled with an interest, is irrevocable).
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4.2 Release of Liens. Upon any release, sale or disposition of Senior Collateral permitted (or consented to) pursuant to the terms of the Senior Documents and this Agreement that results in the release of the Senior Lien on any Senior Collateral (including, after the occurrence of an Event of Default, any sale or other disposition pursuant to any Enforcement Action) (other than release of the Senior Lien due to the occurrence of the Senior Obligations Payment Date), the Junior Lien on such Senior Collateral (excluding any portion of the proceeds of such Senior Collateral remaining after the Senior Obligations Payment Date occurs) shall be automatically and unconditionally released with no further consent or action of any Person. Each Junior Representative shall promptly execute and deliver such release documents and instruments and shall take such further actions as the Senior Representative shall reasonably request to evidence any release of the Junior Lien described in this Section 4.2. Each Junior Representative hereby appoints the Senior Representative and any officer or duly authorized person of the Senior Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of such Junior Representative and in the name of such Junior Representative or in the Senior Representatives own name, from time to time, in the Senior Representatives sole discretion, for the purposes of carrying out the terms of this Section 4.2, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this Section 4.2, including any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).
4.3 [Reserved]
4.4 Insurance.
(a) Until the Senior Obligations Payment Date and subject to the terms of, and the rights of the Loan Parties under, the Senior Documents, the Senior Representative shall have the sole and exclusive right to adjust settlement for any insurance policy covering the Collateral in the event of any loss or claim thereunder, the sole and exclusive right to adjust settlement of any business interruption insurance, and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Collateral. Until the Senior Obligations Payment Date, (i) all Proceeds of any such policies and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect of the Collateral and to the extent required by the Senior Documents shall be paid to the Senior Representative pursuant to the terms of the Senior Documents (including, without limitation, for purposes of cash collateralization of Letters of Credit) and thereafter, following the Senior Obligations Payment Date, and subject to the rights of the Loan Parties under the Documents, in full to the applicable Junior Representative for the benefit of the respective Junior Secured Parties in accordance with the Lien Priority established in Section 2.1, until each applicable Junior Obligations Payment Date, and then to the owner of the subject property, such other Person as may be entitled thereto, or as a court of competent jurisdiction may otherwise direct, and (ii) if any Junior Representative or the respective Junior Secured Parties shall, at any time receive any Proceeds of any such insurance policy or any such award or payment with respect to Collateral in contravention of this Agreement, it shall segregate and hold in trust and forthwith pay such Proceeds over to the Senior Representative in accordance with the terms of Section 4.1.
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(b) [Reserved].
(c) To effectuate the foregoing, and to the extent that the pertinent insurance company agrees to issue such endorsements, the Secured Parties shall each receive separate lenders loss payable endorsements naming themselves as loss payee and additional insured, as their interests may appear, with respect to policies which insure Collateral hereunder.
SECTION 5. Insolvency Proceedings.
5.1 Filing of Motions. Until the Senior Obligations Payment Date has occurred, each Junior Representative agrees on behalf of itself and the respective Junior Secured Parties that no such Junior Secured Party shall, in or in connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding of any nature, or otherwise take any action whatsoever, in each case in respect of any of the Senior Collateral, including with respect to the determination of any Liens or claims held by the Senior Representative (including the validity and enforceability thereof) or any other Senior Secured Party in respect of any Senior Collateral or the value of any claims of such parties under Section 506(a) of the Bankruptcy Code or otherwise; provided that each Junior Representative may (i) file a proof of claim or statement of interest in an Insolvency Proceeding, and (ii) file any necessary responsive or defensive pleadings in opposition of any motion, claim, adversary proceeding or other pleadings made by any Person objecting to or otherwise seeking the disallowance of any Person objecting to or otherwise seeking the disallowance of the claims of the applicable Junior Secured Parties on the Senior Collateral subject to the limitations contained in this Agreement and only if consistent with the terms and the limitations on each Junior Representative imposed hereby.
5.2 Financing Matters.
(a) If any Loan Party becomes subject to any Insolvency Proceeding in the United States at any time prior to the Senior Obligations Payment Date, and if the Senior Representative desires to consent (or not object) to the use of cash collateral under the Bankruptcy Code (or similar bankruptcy law) that represents proceeds of Collateral or to provide financing to any Loan Party under the Bankruptcy Code (or similar bankruptcy law) or to consent (or not object) to the provision of such financing to any Loan Party secured by a Lien on any Collateral (any such financing, DIP Financing), then, so long as (1) the maximum principal amount of Indebtedness that may be outstanding from time to time in connection with such DIP Financing, together with the principal amount of Senior Obligations outstanding at such time (after giving effect to the application of the proceeds of any DIP Financing to refinance all or any portion of the Senior Obligations) does not exceed the principal amount of $35,000,000, (2) subject to clause (B) of this subparagraph (a), each Junior Representative retains a Lien on all Collateral with the same priority as existed prior to the commencement of the Insolvency Proceeding, (3) to the extent that the Senior Representative is granted adequate protection in the form of a Lien on Collateral, each Junior Representative is permitted to seek a Lien on such additional Collateral as existed prior to the commencement of the Insolvency Proceeding and the Senior Representative agrees not to object to such action by the applicable
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Junior Representative, (4) the terms of such DIP Financing do not require Holdings or any other Loan Party to seek approval for any plan of reorganization that is inconsistent with this Agreement, and (5) the terms of such DIP Financing do not require any Junior Secured Parties to advance additional funds pursuant to such DIP Financing, each Junior Representative agrees, on behalf of itself and the respective Junior Secured Parties, that such Junior Secured Parties (A) will be deemed to have consented to, will raise no objection to, nor support any other Person objecting to, the use of such cash collateral or to such DIP Financing on the grounds of a failure to provide adequate protection for such Junior Representatives Lien on the Collateral to secure the applicable Junior Obligations or on any other grounds and (B) if requested by the Senior Representative, will subordinate (and will be deemed hereunder to have subordinated) the applicable Junior Liens on any Collateral (i) to such DIP Financing on the same terms as the Senior Liens are subordinated thereto (and such subordination will not alter in any manner the terms of this Agreement), (ii) to any adequate protection provided to the Senior Representative and (iii) to any carve-out agreed to by the Senior Representative, so long as such Junior Representative retains its Lien on the Collateral to secure its Obligations (in each case, including Proceeds thereof arising after the commencement of the case under the Bankruptcy Code).
(b) [Reserved].
(c) All Liens granted to any Representative in any Insolvency Proceeding, whether as adequate protection or otherwise, are intended to be and shall be deemed to be subject to the Lien Priority and the other terms and conditions of this Agreement.
5.3 Relief From the Automatic Stay. Until the Senior Obligations Payment Date, each Junior Representative agrees, on behalf of itself and the respective Junior Secured Parties, that none of them will seek relief from the automatic stay or from any other stay in any Insolvency Proceeding or take any action in derogation thereof, in each case in respect of any Collateral, without the prior written consent of the Senior Representative, unless the Senior Representative already has filed a pending motion for such relief with respect to its interest in the Collateral and a corresponding motion must be filed solely for the purpose of preserving such Junior Representatives ability to receive residual distributions.
5.4 No Contest. Each Junior Representative, on behalf of itself and the respective Junior Secured Parties, agrees that, prior to the Senior Obligations Payment Date, none of them shall contest (or support any other Person contesting) (a) any request by the Senior Representative or any Senior Secured Party for adequate protection of its interest in the Senior Collateral (unless in contravention of Section 5.2(a)) or for relief from the automatic stay with respect to the Senior Collateral, or (b) any objection by the Senior Representative or any Senior Secured Party to any motion, relief, action, or proceeding based on a claim by the Senior Representative or any Senior Secured Party that its interests in the Senior Collateral (unless in contravention of Section 5.2(a) or (b), as applicable) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to the Senior Representative as adequate protection of its interests are subject to this Agreement.
5.5 Avoidance Issues. If any Senior Secured Party is required in any Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of any Loan Party,
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because such amount was avoided or ordered to be paid or disgorged for any reason, including because it was found to be a fraudulent or preferential transfer or conveyance, any amount (a Recovery), whether received as proceeds of security, enforcement of any right of set-off or otherwise, then the Senior Obligations shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred and the Senior Obligations Payment Date shall be deemed not to have occurred. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. The Junior Secured Parties agree that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated and turned over for application in accordance with the priorities set forth in this Agreement.
5.6 Asset Dispositions in Insolvency Proceedings. Neither the Junior Representatives nor any of the respective Junior Secured Parties shall, in an Insolvency Proceeding or otherwise, oppose any sale or disposition of any Senior Collateral that is supported by the Senior Secured Parties, and each Junior Representative and each respective Junior Secured Party will be deemed to have consented under Section 363 of the Bankruptcy Code (and otherwise) to any sale of any Senior Collateral supported by the Senior Secured Parties, free and clear of the applicable Junior Liens so long as (a) the requisite Senior Secured Parties have consented to such sale or other disposition of such assets, (b) such motion does not impair, subject to the priorities set forth in this Agreement, the rights of such Junior Secured Parties under Section 363(k) of the Bankruptcy Code (so long as the right of such Junior Secured Parties to offset their claim against the purchase price is only after the Senior Obligations (other than, with respect to the ABL Obligations, the Excess ABL Obligations) have been paid in full in cash), (c) either (i) pursuant to court order, the Junior Liens attach to the net proceeds of the sale or other disposition with the same priority and validity as the Junior Liens on such Senior Collateral, and the Liens remain subject to the terms of this Agreement, or (ii) the proceeds of the sale or other disposition are applied in accordance with Section 4.1(a), (d) such sale or disposition is not in contravention of the terms of this Agreement and (e) the net cash proceeds of the sale or other disposition that are applied to Senior Obligations permanently reduce the Senior Obligations (and, in respect of the ABL Obligations, the ABL Obligations Cap shall be reduced by an amount equal to such net cash proceeds) to the extent provided in Section 4.1(a). The foregoing to the contrary notwithstanding, the Junior Secured Parties may raise any objections to any sale or disposition of the Senior Collateral that could be raised by a creditor of the Loan Parties whose claims are not secured by Liens on the Senior Collateral, provided such objections are not inconsistent with any other term or provision of this Agreement and are not based on their status as secured creditors (without limiting the foregoing, the Junior Secured Parties may not raise any objections based on rights afforded by Sections 363(e) and (f) of the Bankruptcy Code to secured creditors (or any comparable provision of any other bankruptcy law) with respect to the Liens granted to the Junior Secured Parties in respect of the Senior Collateral).
5.7 Other Matters. To the extent that the Senior Representative or any Senior Secured Party has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the Junior Collateral, the Senior Representative agrees, on behalf of itself and
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the other Senior Secured Parties, not to assert any of such rights without the prior written consent of any Junior Representative; provided that if reasonably requested by a Junior Representative, the Senior Representative shall timely exercise such rights in the manner requested by such Junior Representative, including any rights to payments in respect of such rights.
5.8 Effectiveness in Insolvency Proceedings. This Agreement, which the parties hereto expressly acknowledge is a subordination agreement under Section 510(a) of the Bankruptcy Code, including, without limitation, the Lien Priorities set forth in Section 2, shall be effective before, during and after the commencement of an Insolvency Proceeding.
5.9 Certain Waivers. Each Representative on behalf of the respective Secured Parties, waives any claim it may hereafter have against any other Secured Party arising out of (a) the election by such Secured Party of the application of Section 1111(b)(2) of the Bankruptcy Code, or any comparable provision of any other applicable law, or (b) any use of cash collateral or financing arrangement, or any grant of a security interest in the Collateral or otherwise in any Insolvency Proceeding, in each case, to the extent consistent with the terms of this Agreement.
SECTION 6. Loan Documents.
6.1 Amendments of Loan Documents. Each Loan Party and each Representative, on behalf of itself and the respective Secured Parties, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the Loan Documents inconsistent with or in violation of this Agreement.
6.2 [Reserved].
6.3 Comparable Amendments. In the event the Senior Representative enters into any amendment, waiver or consent in respect of any of the Senior Security Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any Senior Security Document or changing in any manner the rights of any parties thereunder, in each case solely with respect to any Senior Collateral, then such amendment, waiver or consent shall apply automatically to any comparable provision of the Comparable Security Document without the consent of or action by any Junior Secured Party (with all such amendments, waivers and modifications subject to the terms hereof); provided that, (i) no such amendment, waiver or consent shall have the effect of removing assets subject to the Lien of any Junior Security Document, except to the extent that a release of such Lien is permitted by Section 4.2, (ii) any such amendment, waiver or consent that materially and adversely affects the rights of the Junior Secured Parties and does not affect the Senior Secured Parties in a like or similar manner shall not apply to the Junior Security Documents without the consent of such Junior Representative, (iii) no such amendment, waiver or consent with respect to any provision applicable to a Junior Representative under the Junior Loan Documents shall be made without the prior written consent of such Junior Representative and (iv) notice of such amendment, waiver or consent shall be given to a Junior Representative no later than 30 days after its effectiveness; provided that the failure to give such notice shall not affect the effectiveness and validity thereof.
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SECTION 7. Purchase Option.
7.1 Notice of Exercise. Upon the occurrence and during the continuance of any Triggering Event, (a) the Senior Representative shall endeavor to promptly give notice thereof to each Junior Representative, and (b) each respective Class of Junior Secured Parties, acting as a single group, through its respective Junior Representative, shall have the option for a period of fifteen (15) Business Days (or an unlimited number of days in the case of a Triggering Event of the type described in clause (v) of the definition thereof) (the Purchase Option Period), after the receipt of such notice, to issue a notice to each Representative of its respective Senior Secured Parties that such Class of Junior Secured Parties intends to purchase all of the Senior Obligations from all of such Senior Secured Parties. For the avoidance of doubt, each Class of Junior Secured Parties that exercises and is bound to exercise its purchase option pursuant to this Section 7.1 must purchase all of the Senior Obligations of its respective Senior Secured Parties (and not only the Senior Obligations of the Senior Representative). Except with respect to a Triggering Event of the type described in clause (v) of the definition thereof, such Purchase Option Period shall run simultaneously for each Class of Junior Secured Parties for a total aggregate period of fifteen (15) Business Days; provided, however, that if the Senior Representative gives notice to a Junior Representative more than one Business Day after the other Junior Representatives, the Purchase Option Period for such Junior Representative shall be extended by the same number of days that delivery of such notice has been delayed. In the event of receipt by the Senior Representative of multiple notices of intent to purchase, the Class of Junior Secured Parties with the Senior Liens (as set forth in the Lien Priorities provided in Section 2.1) that issues such notice shall be irrevocably bound and entitled to purchase the Senior Obligations on the terms of this Section 7 and the Senior Representative shall notify each Junior Representative for each Class of Junior Secured Parties that issues such notice as to which Class of Junior Secured Parties is bound. The failure of the Senior Representative to provide the notice described in subsection (a) above shall not constitute a breach of its obligations hereunder and shall not impair any of the Senior Representatives rights hereunder or under any of the respective Loan Documents. Notwithstanding anything to the contrary in this Agreement, the occurrence of a Triggering Event or the delivery of any notice under this Section 7.1, shall not prevent, postpone, or otherwise affect the right of the Senior Representative to exercise any rights or remedies permitted under this Agreement, including, without limitation, the commencement or continuation of any Enforcement Action.
7.2 Purchase and Sale. On the date specified by the relevant Junior Secured Parties in the notice contemplated by Section 7.1(b) (which shall not be less than 5 Business Days, nor more than 10 Business Days, after the receipt by the Senior Representative of the notice of the relevant Junior Secured Parties election to exercise such option), the applicable Senior Secured Parties shall sell to the relevant Junior Secured Parties, and the relevant Junior Secured Parties shall purchase from the applicable Senior Secured Parties, the Senior Obligations (other than the Excess ABL Obligations, if applicable) on an as-is, where-is basis; provided that, such Senior Secured Parties shall retain all rights to be indemnified or held harmless by the Loan Parties in accordance with the terms of the Senior Documents but shall not retain any rights to the security therefor.
7.3 Payment of Purchase Price. Upon the date of such purchase and sale, the relevant Junior Secured Parties shall (i) pay to the relevant Senior Secured Parties as the purchase price
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therefor the full amount of all the Senior Obligations (other than the Excess ABL Obligations, if applicable) then outstanding and unpaid (including principal, interest, fees (including facility fees and expenses (including, without limitation, reasonable attorneys fees and legal expenses)), (ii) furnish cash collateral in an amount equal to 105% of the face amount of the issued and outstanding letters of credit secured by the Senior Documents, if applicable, (iii) agree to reimburse the relevant Senior Secured Parties and letter of credit issuing banks for any loss, cost, damage or expense (including reasonable attorneys fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any issued and outstanding letters of credit as described above and any checks or other payments provisionally credited to the Senior Obligations, and/or as to which the relevant Senior Secured Parties have not yet received final payment, as applicable, (iv) agree to reimburse the relevant Senior Secured Parties and letter of credit issuing banks, in respect of indemnification obligations of the Loan Parties under the Senior Documents as to matters or circumstances known to such Senior Secured Parties at the time of the purchase and sale which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys fees and legal expenses) to such Senior Secured Parties or letter of credit issuing banks, as applicable, and (v) agree to indemnify and hold harmless the relevant Senior Secured Parties and letter of credit issuing banks, as applicable, from and against any loss, liability, claim, damage or expense (including reasonable fees and expenses of legal counsel) arising out of any claim asserted (excluding, for the avoidance of doubt, any unasserted contingent third-party obligations not described above) by a third party in respect of the Senior Obligations as a direct result of any acts by such Senior Secured Parties occurring prior to the date of such purchase to the extent such acts comply with the applicable standard of care (if any) set forth for such actions in the Senior Documents. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account as the respective Representative of the relevant Senior Secured Parties may designate in writing for such purpose.
7.4 Limitation on Representations and Warranties. Such purchase shall be expressly made without representation or warranty of any kind by the relevant Senior Secured Parties and without recourse of any kind, and the applicable Junior Secured Parties shall assume all obligations of such Senior Secured Parties under the relevant Senior Documents and indemnify such Senior Secured Parties for any breach thereof, all in accordance with assignment documentation in form and substance acceptable to the respective Representative of the relevant Senior Secured Parties, except that Senior Secured Parties shall represent and warrant that such Senior Secured Parties own the Senior Obligations free and clear of any Liens or encumbrances created by it.
7.5 Excess ABL Obligations. In the event that any one or more Junior Secured Parties exercises and consummates the purchase option set forth in this Section 7 and at the time of such purchase, there exists Excess ABL Obligations, the consummation of such purchase option shall not include (nor shall the purchase price be calculated with respect to) such Excess ABL Obligations (such amount, the Retained Interest).
7.6 Retained Interest. In the event that a Retained Interest exists, the ABL Agent shall, at the request of the purchasing Junior Secured Parties, execute an amendment to the ABL Agreement acknowledging that such Retained Interest consisting of Excess ABL Obligations is a last-out tranche, payable after the ABL Obligations Payment Date and each Junior Obligations
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Payment Date. Interest with respect to such Retained Interest consisting of Excess ABL Obligations shall continue to accrue and be payable in accordance with the terms of the ABL Documents, the Retained Interest shall continue to be secured by the Collateral (but shall be junior and subordinate to all Liens on the Collateral in favor of each Junior Representative), and the Retained Interest shall be paid (or cash collateralized, as applicable) in accordance with the terms of the ABL Agreement and this Agreement. The ABL Agent shall continue to have all of its rights and remedies under the ABL Agreement and the other ABL Documents; provided that the ABL Agent shall have no right to vote on or otherwise consent to any amendment, waiver, departure from, or other modification of any provision of any Junior Document except that the consent of the ABL Agent shall be required for matters in contravention of the provisions and priorities set forth in this Agreement.
7.7 Junior Representatives. For the avoidance of doubt, notwithstanding anything to the contrary herein, (i) any obligations to pay the purchase price, furnish cash collateral, and indemnify and reimburse the Senior Secured Parties in connection with the exercise of the purchase option set forth herein shall be obligations of the relevant Junior Secured Parties other than the Junior Representatives, and (ii) the Junior Representatives shall have no obligations under this Section 7 except to the extent they are required to act in an administrative capacity for their respective Class of Junior Secured Parties in accordance with their respective Loan Documents.
SECTION 8. Reliance; Waivers; etc.
8.1 Reliance. Each Class of Loan Documents are deemed to have been executed and delivered, and all extensions of credit thereunder are deemed to have been made or incurred, in reliance upon this Agreement. Each Representative, on behalf of it itself and the respective Secured Parties, expressly waives all notice of the acceptance of and reliance on this Agreement by the other Representatives.
8.2 No Warranties or Liability. Each Representative acknowledges and agrees that the other Representatives have made no representation or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any Loan Document, the ownership by any Loan Party of any Collateral or the perfection of any Liens thereon. Except as otherwise provided in this Agreement, each Representative will be entitled to manage and supervise the respective extensions of credit to any Loan Party in accordance with law and their usual practices, modified from time to time as they deem appropriate. No Representative shall have any obligation whatsoever to the other Secured Parties to ensure that any Collateral in its possession is genuine or owned by a Loan Party or to preserve the rights or benefits of any Person.
8.3 No Waivers. No right or benefit of any party hereunder shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of such party or any other party hereto or by any noncompliance by any Loan Party with the terms and conditions of any of the Loan Documents.
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SECTION 9. Obligations Unconditional.
All rights, interests, agreements and obligations hereunder of the Senior Representative and the Senior Secured Parties in respect of any Collateral and the Junior Representative and the Junior Secured Parties in respect of such Collateral shall remain in full force and effect regardless of:
(a) any lack of validity or enforceability of any Senior Document or any Junior Document and regardless of whether the Liens of the Senior Representative and Senior Secured Parties are not perfected or are voidable for any reason;
(b) any change in the time, manner or place of payment of, or in any other terms of, all or any of the Senior Obligations or Junior Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any Senior Document or any Junior Document;
(c) any exchange, release or lack of perfection of any Lien or any Collateral or any other asset, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the Senior Obligations or Junior Obligations or any guarantee thereof;
(d) the commencement of any Insolvency Proceeding in respect of any Loan Party; or
(e) any other circumstances which otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of any Secured Obligation or of any Junior Secured Party in respect of this Agreement.
SECTION 10. Miscellaneous.
10.1 Rights of Subrogation. Each Junior Representative, for and on behalf of itself and the respective Junior Secured Parties, agrees that no payment to the Senior Representative pursuant to the provisions of this Agreement shall entitle such Junior Representative or respective Junior Secured Party to exercise any rights of subrogation in respect thereof until the Senior Obligations Payment Date. Following the Senior Obligations Payment Date, the Senior Representative agrees to execute such documents, agreements, and instruments as such Junior Representative or any Junior Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Senior Obligations resulting from payments to the Senior Representative by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the Senior Representative are paid by such Person upon request for payment thereof. The Senior Representative agrees that no payment to a Junior Representative or the respective Junior Secured Party pursuant to the provisions of this Agreement shall entitle the Senior Representative to exercise any rights of subrogation in respect thereof until the applicable Junior Obligations Payment Date. Following any Junior Obligations Payment Date, the applicable Junior Representative agrees to execute such documents, agreements, and instruments as the Senior Representative may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Junior Obligations resulting from payments to such Junior
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Representative by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by such Junior Representative are paid by such Person upon request for payment thereof.
10.2 Further Assurances. Each of the Representatives will, at the Loan Parties expense and at any time and from time to time, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that any other party may reasonably request, in order to protect any right or interest granted or purported to be granted hereby or to enable each Representative to exercise and enforce its rights and remedies hereunder; provided that no party shall be required to pay over any payment or distribution, execute any instruments or documents, or take any other action referred to in this Section 10.2, to the extent that such action would contravene any law, order or other legal requirement or any of the terms or provisions of this Agreement, and in the event of a controversy or dispute, such party may interplead any payment or distribution in any court of competent jurisdiction, without further responsibility in respect of such payment or distribution under this Section 10.2.
10.3 Conflicts. In the event of any conflict between the provisions of this Agreement and the provisions of any Loan Document, the provisions of this Agreement shall govern.
10.4 Continuing Nature of Provisions. Subject to Section 5.5, this Agreement shall continue to be effective, and shall not be revocable by any party hereto, until the Senior Obligations Payment Date shall have occurred for three of the four Classes of Security Interests. This is a continuing agreement and the Secured Parties may continue, at any time and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide indebtedness to, or for the benefit of, any Loan Party on the faith hereof.
10.5 Amendments; Waivers; Acknowledgment; Authority.
(a) No amendment or modification of any of the provisions of this Agreement shall be effective unless the same shall be in writing and signed by each Representative. A copy of any amendment or modification shall be promptly provided to the ABL Borrower.
(b) It is understood that the Representatives, without the consent of any other Secured Party (other than the Secured Parties of their respective Class), may in their discretion determine that a supplemental agreement (which may take the form of Exhibit A: Form of Additional Indebtedness Joinder and Designation) is necessary or appropriate to facilitate having additional indebtedness or other obligations (Additional Debt) of any of the Loan Parties become ABL Obligations, Term Obligations, Additional Indenture Obligations or Existing Indenture Obligations, as the case may be, under this Agreement, which supplemental agreement shall specify which class of Secured Obligations such Additional Debt shall constitute; provided, that such Additional Debt is permitted to be incurred by this Agreement and the other Loan Documents, and is permitted by said agreements to be subject to the provisions of this Agreement as a Class of Secured Obligations, as applicable.
(c) By its signature, each person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to
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execute this Agreement. Each Representative executing this Agreement as agent for any Secured Party represents and warrants to the other parties hereto that it is duly authorized to bind such Secured Party.
(d) It is understood and agreed that each of the Term Agent, Existing Noteholder Agent, and Additional Noteholder Agent is executing this Agreement solely in its capacity as administrative agent or trustee (as applicable) and collateral agent for its respective Class of Secured Parties and shall be entitled to request the written direction or the written consent of the requisite percentage of such Secured Parties as provided in its respective Loan Documents in connection with any action taken on behalf of such Class of Secured Parties hereunder.
10.6 Information Concerning Financial Condition of the Loan Parties. Each of the Representatives hereby assume responsibility for keeping itself informed of the financial condition of the Loan Parties and all other circumstances bearing upon the risk of nonpayment of the Secured Obligations. The Representatives hereby agree that no party shall have any duty to advise any other party of information known to it regarding such condition or any such circumstances (except as otherwise expressly provided in the Loan Documents or this Agreement). Except to the extent otherwise expressly required under this Agreement, in the event any Representative, in its sole discretion, undertakes at any time or from time to time to provide any information to any other party to this Agreement, it shall be under no obligation (a) to provide any such information to such other party or any other party on any subsequent occasion, (b) to undertake any investigation not a part of its regular business routine, or (c) to disclose any other information.
10.7 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK ARE GOVERNED BY THE LAWS OF SUCH JURISDICTION.
10.8 CONSENT TO JURISDICTION; JURY TRIAL WAIVER.
(A) EACH REPRESENTATIVE HEREBY AGREES THAT ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST IT ARISING OUT OF OR RELATING HERETO MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH REPRESENTATIVE, FOR ITSELF AND FOR THE RESPECTIVE SECURED PARTIES, IRREVOCABLY (i) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (ii) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (iii) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE REPRESENTATIVE AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.9 IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH REPRESENTATIVE IN ANY SUCH
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PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (iv) AGREES THAT EACH SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
(B) EACH REPRESENTATIVE HEREBY AGREES THAT PROCESS MAY BE SERVED ON IT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE ADDRESSES PERTAINING TO IT AS SPECIFIED IN SECTION 10.9. ANY AND ALL SERVICE OF PROCESS AND ANY OTHER NOTICE IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE EFFECTIVE AGAINST SUCH REPRESENTATIVE IF GIVEN BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANY OTHER MEANS OR MAIL WHICH REQUIRES A SIGNED RECEIPT, POSTAGE PREPAID, MAILED AS PROVIDED ABOVE.
(C) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.8(C) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.9 Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, or sent by overnight express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or five days after deposit in the United States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section 10.9) shall be, in the case of the Representatives, as set forth below such Persons name on the signature pages hereof, or,
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in the case of any Loan Party, on the signature page to the Acknowledgment attached as Annex 1, or such other address as may be designated by such Person in a written notice to all of the other parties.
10.10 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and each other Secured Party and their respective successors and assigns, and nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this Agreement or any Collateral.
10.11 Headings. Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
10.12 Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
10.13 Other Remedies. For avoidance of doubt, it is understood that nothing in this Agreement shall prevent any Secured Party from exercising any available remedy to accelerate the maturity of any indebtedness or other obligations owing under the Senior Documents or the Junior Documents, as applicable, or to demand payment under any Guarantee in respect thereof.
10.14 Counterparts; Integration; Effectiveness. This agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall become effective when it shall have been executed by each party hereto.
10.15 Additional Loan Parties. The ABL Borrower shall cause each Person that becomes a Loan Party after the date hereof to acknowledge this Agreement by execution and delivery by such Person of an Acknowledgment in the form of Annex 1.
10.16 Bailment. The Senior Representative agrees that if it shall at any time hold in its possession or control any Collateral, such Senior Representative shall, solely for the purpose of perfecting the Junior Liens granted under the Junior Documents and subject to the terms and conditions of this Section 10.16, also hold and/or maintain control of such Collateral as gratuitous bailee or representative (as defined in Section 1-201(35) of the UCC) of the Junior Representatives. The Senior Representative, until the occurrence of the Senior Obligations Payment Date or all of the Junior Obligations Payment Dates, as applicable, shall be entitled to deal with such Collateral in accordance with the terms of this Agreement and the other Loan Documents as if the applicable Junior Liens did not exist. Without limiting the foregoing, the Senior Representative shall have no obligation or responsibility to ensure that any Collateral is genuine or owned by any of the Loan Parties. No Senior Representative shall, by reason of this Agreement, any other Security Document or any other agreement, document or instrument, have
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a fiduciary relationship in respect of any other Secured Party. After the occurrence of the Senior Obligations Payment Date or any of the Junior Obligations Payment Dates, as applicable, the Senior Representative shall transfer the possession and control of such Collateral, together with any necessary endorsements but without recourse or warranty, (i) if any Junior Obligations are outstanding at such time, to the applicable Junior Representative, as determined by the Lien Priority set forth in Section 2.1, and (ii) if no Junior Obligations are outstanding at such time, to the applicable Loan Party, in each case so as to allow such person to obtain possession and control of such Collateral.
10.17 Reinstatement. If, in any Insolvency Proceeding or otherwise, all or part of any payment with respect to the Senior Obligations previously made shall be rescinded for any reason whatsoever, then such Senior Obligations shall be reinstated to the extent of the amount so rescinded and, if theretofore terminated, this Agreement shall be reinstated in full force and effect and such prior termination shall not diminish, release, discharge, impair or otherwise affect the Lien Priorities and the relative rights and obligations of the Secured Parties provided for herein. In addition, each Representative further agrees that if, at any time, all or part of any payment with respect to any Senior Obligations secured by any Senior Collateral previously made shall be rescinded for any reason whatsoever, such Representative will promptly pay over to the applicable Senior Representative any payment received by it in respect of any such Senior Collateral that is still in such Representatives possession and shall promptly turn any such Senior Collateral then held by it over to the applicable Senior Representative, and the provisions set forth in this Agreement will be reinstated as if such payment had not been made, until the payment and satisfaction in full of the applicable Senior Obligations.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
ABL AGENT: | WELLS FARGO BANK, NATIONAL ASSOCIATION, as ABL Agent | |||||||
By: | /s/ Michael White | |||||||
Name: | Michael White | |||||||
Title: | Vice President | |||||||
Address for Notices: | ||||||||
Wells Fargo Bank, National Association 1300 SW Fifth Avenue, 6th Floor Portland, OR 97201 MAC P6101-068 Attn: SAExploration Relationship Manager Fax No. (877) 518-9602 Email: Michael.white@wellsfargo.com | ||||||||
With a copy to (which shall not constitute notice): | ||||||||
Lane Powell PC 1420 Fifth Avenue, Suite 4200 P.O. Box 91302 Seattle, WA 98111-9402 Attention: Gregory R. Fox Email: foxg@lanepowell.com Facsimile: (206) 223-7107 |
INTERCREDITOR AGREEMENT
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EXISTING NOTEHOLDER AGENT: | WILMINGTON SAVINGS FUND SOCIETY, FSB, as Existing Noteholder Agent for and on behalf of the Existing Indenture Secured Parties | |||||||
By: | /s/ Geoffrey J. Lewis | |||||||
Name: | Geoffrey J. Lewis | |||||||
Title: | Vice President | |||||||
Address for Notices: | ||||||||
Wilmington Savings Fund Society, FSB 500 Delaware Avenue Wilmington, Delaware 19801 Attention: Corporate Trust Reference: SAExploration Holdings, Inc. 10.000% Senior Secured Notes due 2019 Facsimile: (302) 421-9137 | ||||||||
With a copy to (which shall not constitute notice): | ||||||||
Morrison & Foerster LLP 250 West 55th Street New York, New York 10019 Attention: Jon I. Levine Facsimile: (212) 468-7900 |
INTERCREDITOR AGREEMENT
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TERM AGENT | DELAWARE TRUST COMPANY, as Term Agent for and on behalf of the Term Secured Parties | |||||||
By: | /s/ Alan R. Halpern | |||||||
Name: | Alan R. Halpern | |||||||
Title: | Vice President | |||||||
Address for Notices: | ||||||||
Delaware Trust Company 2711 Centerville Road Wilmington, DE 19808 Attention: Corporate Trust Administration Facsimile: (302) 636-8666 | ||||||||
With a copy to (which shall not constitute notice): | ||||||||
Ropes & Gray LLP 1211 Avenue of the Americas New York, NY 10036-8704 Attention: Mark R. Somerstein Facsimile: (646) 728-1663 Email: mark.somerstein@ropesgray.com |
INTERCREDITOR AGREEMENT
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ACKNOWLEDGMENT
The undersigned hereby acknowledge and consent to the foregoing Amended and Restated Intercreditor Agreement, dated as of June 29, 2016 (as in effect on the date hereof, the Intercreditor Agreement), by and between Wells Fargo Bank, National Association, as ABL Agent, and Wilmington Savings Fund Society, FSB, as Existing Noteholder Agent and Delaware Trust Company, as Term Agent. Unless otherwise defined in this Acknowledgement, terms defined in the Intercreditor Agreement have the same meanings when used in this Acknowledgement.
Each Loan Party agrees to be bound by the Intercreditor Agreement and agrees that it will, together with its successors and assigns, recognize all rights granted pursuant to the Intercreditor Agreement to each Representative and each Class of Secured Parties and will not do any act or perform any obligation which is not in accordance with the agreements set forth in the Intercreditor Agreement.
Each Loan Party agrees that any Representative holding Collateral does so as bailee (under the UCC) for the other Representatives and is hereby authorized to and may turn over to such other Representatives upon request therefor any such Collateral, after all obligations and indebtedness of each of undersigned to the bailee Representative and the Secured Parties for which it acts have been fully paid and performed.
Each Loan Party further acknowledges and agrees that (i) it is not an intended beneficiary or third party beneficiary under the Intercreditor Agreement or under any amendment thereto, (ii) in the event of a breach by any Loan Party that is continuing of any of the terms and provisions contained in the foregoing Intercreditor Agreement, such a breach shall constitute an Event of Default as defined in and under the ABL Agreement, the Term Credit Agreement, the Existing Notes Indenture and the Additional Notes Indenture, (iii) it will execute and deliver such additional documents and take such additional actions as may be necessary or desirable in the opinion of any Representative to effectuate the provisions and purposes of the foregoing Intercreditor Agreement and (iv) the Intercreditor Agreement may be amended or supplemented from time to time without notice to, or the consent of, any Loan Party so long as such amendment or supplement does not impose any additional obligations on such Loan Party.
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ANNEX 1 - ACKNOWLEDGMENT
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SAEXPLORATION HOLDINGS, INC. | ||
By: | /s/ Brent Whiteley | |
Name: Brent Whiteley | ||
Title: Chief Financial Officer, General Counsel and Secretary | ||
SAEXPLORATION, 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 | ||
SAEXPLORATION SEISMIC SERVICES (US), LLC | ||
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 | ||
Address for Notices: 1160 Dairy Ashford, Suite 160 Houston, Texas 77079 Attention: Chief Financial Officer Email: bwhiteley@saexploration.com Facsimile: (281) 258-4418 |
INTERCREDITOR AGREEMENT
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EXHIBIT A
FORM OF
ADDITIONAL INDEBTEDNESS JOINDER AND DESIGNATION
ADDITIONAL INDEBTEDNESS JOINDER AND DESIGNATION, dated as of [ , ] (this Joinder), by and among Wells Fargo Bank, National Association, as ABL Agent (ABL Agent), Wilmington Savings Fund Society, FSB, as Existing Noteholder Agent (Existing Noteholder Agent), Delaware Trust Company, as Term Agent (Term Agent) and [ ], as [Agent] (as defined below) and any successors or assigns thereof, to the Amended and Restated Intercreditor Agreement dated as of June [ ], 2016 (as amended, supplemented, waived or otherwise modified from time to time, the Intercreditor Agreement) among the ABL Agent, Existing Noteholder Agent, Term Agent, and the other parties party thereto from time to time. Capitalized terms used herein and not otherwise defined herein shall have the meaning specified in the Intercreditor Agreement.
Reference is made to that certain [Document], dated as of [ , ] (the [ ]), among [ ], and [ ], as [trustee and notes collateral agent] (in such capacity, the [specify agent]).
Section 10.5 of the Intercreditor Agreement permits the Representatives to designate Additional Debt under the Intercreditor Agreement.
Accordingly, the [Agent], for itself and on behalf of [ ], hereby agrees with the ABL Agent, Existing Noteholder Agent and Term Agent as follows:
Section 1. Designation of Additional Indebtedness. The Representatives hereby designate such Additional Indebtedness as [ ] Obligations under the Intercreditor Agreement.
Section 2. Agreement to be Bound. The [Agent], for itself and on behalf of [ ], hereby agrees to be bound by the terms and provisions of the Intercreditor Agreement and shall, as of the date hereof with respect to the [ ] Obligations incurred or to be incurred under the [Document] referred to above, be deemed to be a party to the Intercreditor Agreement.
Section 2. Notices. Notices and other communications provided for under the Intercreditor Agreement to be provided to the [Agent] shall be sent to the address set forth below its name on the signature page hereto (until notice of a change thereof is delivered as provided in Section 10.9 of the Intercreditor Agreement).
Section 3. Miscellaneous. THIS JOINDER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
[SIGNATURES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have executed this Joinder to Intercreditor Agreement as of the date first written above.
[ ], | ||
as [Agent] | ||
By: |
| |
Name: | ||
Title: | ||
Address for Notices: |
ABL AGENT: | WELLS FARGO BANK, NATIONAL ASSOCIATION, as ABL Agent | |||||
By: |
| |||||
Name: | ||||||
Title: | ||||||
Address for Notices: | ||||||
EXISTING NOTEHOLDER AGENT: | WILMINGTON SAVINGS FUND SOCIETY, FSB, as Existing Noteholder Agent for and on behalf of the Existing Indenture Secured Parties | |||||
By: |
| |||||
Name: | ||||||
Title: | ||||||
TERM AGENT: | DELAWARE TRUST COMPANY, as Term Agent for and on behalf of the Term Secured Parties | |||||
By: |
| |||||
Name: | ||||||
Title: |
ANNEX B
Form of First Amendment to Security Agreement
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Exhibit 10.3
EXECUTION VERSION
FIRST AMENDMENT TO SECURITY AGREEMENT
THIS FIRST AMENDMENT TO SECURITY AGREEMENT (this Amendment), is entered into as of the 29th day of June, 2016, by and among Wilmington Savings Fund Society, FSB (Noteholder Collateral Agent), SAExploration Holdings, Inc., a Delaware corporation (the Company), SAExploration, Inc., a Delaware corporation, SAExploration Sub, Inc., a Delaware corporation, NES, LLC, an Alaska limited liability company, and SAExploration Seismic Services (US), LLC, a Delaware limited liability company (such parties, the Guarantors and together with the Company, the Pledgors and each, a Pledgor).
RECITALS
A. The Pledgors and Noteholder Collateral Agent are parties to that certain Security Agreement, dated as of July 2, 2014 (as amended from time to time, the Security Agreement). Capitalized terms used herein have the meaning given to them in the Security Agreement unless otherwise specified.
B. The Company has entered into that certain Restructuring Support Agreement, dated as of June 13, 2016 (the Restructuring Support Agreement), among the Company, on behalf of itself and the Guarantors, Management (as defined in the Restructuring Support Agreement), and certain of the Existing Noteholders, a copy of which is attached hereto as Exhibit A.
C. The Company has requested that Noteholder Collateral Agent consent to the transactions contemplated in the Restructuring Support Agreement, some or all of which are prohibited by the Security Agreement absent Noteholder Collateral Agents consent, and that certain amendments be made to the Security Agreement, which Noteholder Collateral Agent is willing to do and make pursuant to the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, it is agreed as follows:
1. Amendments to Recitals. Clause E of the Recitals of the Security Agreement is hereby deleted in its entirety and restated as follows:
E. The Pledgors may, in the future, grant to the ABL Agent for the benefit of the lenders under the ABL Agreement, the Term Agent for the benefit of the lenders under the Term Agreement and/or the Additional Noteholder Agent for the benefit of the noteholders under the Additional Indenture, if applicable, a security interest in the Collateral (it being understood that, in such case, the relative rights and priorities of the grantees in respect of the Collateral shall be governed by the Intercreditor Agreement).
2. Amendments to Definitions.
a. Additional Definitions. Section 1.1(b) of the Security Agreement is hereby amended to add the following definitions:
ABL Credit Agreement means that certain Credit Agreement, dated as of November 6, 2014, by and among SAExploration, Inc., the Company, certain subsidiaries of the Company, as guarantors, and the ABL Agent (as the same may be amended, restated, supplemented or otherwise modified from time to time).
ABL Security Documents has the meaning assigned to such term in the Intercreditor Agreement.
Additional Indenture means any indenture approved for designation as such by the Representatives under the Intercreditor Agreement.
Additional Indenture Documents has the meaning assigned to such term in the Intercreditor Agreement.
Additional Noteholder Agent means any agent designated as such by the Representatives (as such term is defined in the Intercreditor Agreement) under the Intercreditor Agreement.
Additional Notes has the meaning assigned to such term in the Intercreditor Agreement.
Additional Notes Obligations means all the Obligations payable by any Pledgor to any Secured Party under the Additional Notes, the Additional Indenture and any other Additional Indenture Documents, including all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) after commencement of an Insolvency or Liquidation Proceeding in accordance with the rate specified in the relevant Additional Notes Document, whether or not the claim for such interest is allowed as a claim in such Insolvency or Liquidation Proceeding.
Senior Obligations Payment Date has the meaning assigned to such term in the Intercreditor Agreement.
Senior Representative has the meaning assigned to such term in the Intercreditor Agreement.
Term Agent means the collateral agent for the benefit of the Term Claimholders, together with its successors in that capacity.
Term Claimholders means, at any time of determination, collectively, (a) the Term Agent, (b) the lenders under the Term Credit Agreement at such time, (c) each other person to whom any of the Obligations under the Term Credit Agreement is owed at such time and (e) the successors, replacements and assigns of each of the foregoing.
Term Credit Agreement means that certain Term Loan and Security Agreement, dated as of June 29, 2016, by and among the Company, SAExploration, Inc. and certain other subsidiaries of the Company, as guarantors, and the Term Agent (as the same may be amended, restated, supplemented or otherwise modified from time to time).
Term Loan Documents has the meaning assigned to such term in the Intercreditor Agreement.
Term Security Documents has the meaning assigned to such term in the Intercreditor Agreement.
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b. Amendments to Certain Definitions. The following definitions in Section 1.1(b) of the Security Agreement are hereby deleted in their entirety and restated as follows:
ABL Claimholders means, at any time of determination, collectively, (a) the ABL Agent, (b) the lenders under the ABL Credit Agreement at such time, (c) the issuing bank or banks of letters of credit or similar instruments under the ABL Credit Agreement, (d) each other person to whom any of the Obligations under the ABL Credit Agreement is owed at such time and (e) the successors, replacements and assigns of each of the foregoing.
Agents means the Noteholder Collateral Agent, the ABL Agent, the Term Agent, the Additional Noteholder Agent (if applicable) and the Trustee; and Agent means any of them.
Deposit Account Control Agreement means an agreement substantially in the form of Exhibit 5 hereto among the applicable Pledgor, the relevant depository bank, the Noteholder Collateral Agent, the ABL Agent (if applicable), the Term Agent (if applicable) and the Additional Noteholder Agent (if applicable) as such form may be modified to reflect any changes that may be reasonably required by a new depository bank (or substituted by an agreement based on a form provided by the applicable depository bank); provided that any such changes or any such other agreement shall not be materially worse for the Secured Parties, when taken as a whole, than such terms as are set out in the agreement set forth on Exhibit 5.
Securities Account Control Agreement means an agreement substantially in the form of Exhibit 4 hereto among the applicable Pledgor, the relevant securities intermediary, the Noteholder Collateral Agent, the ABL Agent (if applicable), the Term Agent (if applicable), and the Additional Noteholder Agent (if applicable) as such form may be modified to reflect any changes that may be reasonably required by a new securities intermediary (or substituted by an agreement based on a form provided by the applicable securities intermediary); provided that any such changes or any such other agreement shall not be materially worse for the Secured Parties, when taken as a whole, than such terms as are set out in the agreement set forth on Exhibit 4.
c. Deleted Definitions. The following definitions in Section 1.1(b) of the Security Agreement are hereby deleted in their entirety:
ABL Priority Collateral, ABL Security Documents, Discharge of ABL Obligations, and Notes Priority Collateral.
d. Amendment to Excluded Property Definition. Subsection (10) of the definition of Excluded Property is hereby reserved, and Subsection (9) and the proviso immediately following Subsection (13) are hereby deleted in their entirety and restated as follows:
(9) any Collateral that has been released in accordance with the Security Documents, the ABL Security Documents, the Term Security Documents and the Additional Indenture Security Documents (as such term is defined in the Intercreditor Agreement) and the Intercreditor Agreement;
provided that notwithstanding anything to the contrary contained in clauses (1) through (13) above to the contrary, (a) Excluded Property shall not include any Proceeds of Property described in clauses (1) through (13) above (unless such proceeds are also described in such clauses), and (b) subject to the provisions of the Intercreditor Agreement, no property or assets that are subject to a Lien securing ABL Obligations, Term Obligations and/or Additional Indenture Obligations shall constitute Excluded Property so long as such Lien remains in effect; provided, further, that at such time as any of the foregoing Property no longer constitutes Excluded Property, such Property shall immediately constitute Collateral and a Lien on and security interest in and to all of the right, title and interest of the applicable Pledgor in, to and under such Property shall immediately attach thereto.
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3. Amendment to Section 2.1. Section 2.1 is hereby amended by deleting clause (iii) in the paragraph immediately following the end of Section 2.1(u), which clause (iii) is hereby reserved.
4. Amendment to Section 2.4. Section 2.4 is hereby deleted in its entirety and restated as follows:
Section 2.4 Possession or Control of Collateral. Notwithstanding anything herein to the contrary and subject to the terms of the Intercreditor Agreement, prior to the Senior Obligations Payment Date and for so long as the Intercreditor Agreement and Senior Documents (as such term is defined in the Intercreditor Agreement) shall require the delivery of possession or control to the Senior Representative of any Collateral, any covenant hereunder requiring (or any representation or warranty hereunder to the extent that it would have the effect of requiring) the delivery of possession or control to the Noteholder Collateral Agent of such Collateral shall be deemed to have been satisfied (or, in the case of any representation and warranty, shall be deemed to be true) if, prior to the applicable Senior Obligations Payment Date, possession or control of such Collateral shall have been delivered to the Senior Representative.
5. Amendment to Section 3.1. Section 3.1 is hereby amended by adding the words (subject to the terms of the Intercreditor Agreement) immediately following the words first priority security interest.
6. Amendment to Section 3.2. Section 3.2 is hereby amended by adding the words (subject to the terms of the Intercreditor Agreement) following each occurrence of the words first priority security interest.
7. Amendment to Section 3.4. Subsection (b) of Section 3.4 is hereby amended by replacing the words Discharge of ABL Obligations with Senior Obligations Payment Date and by replacing the words ABL Agent with Senior Representative. Subsection (d) and the final sentence of Subsection (i) of Section 3.4 are hereby deleted in their entirety and restated as follows:
(d) Investment Property. If any Pledgor shall at any time acquire any certificated securities constituting Investment Property, such Pledgor shall promptly (and in any event within ten Business Days or such longer period as may be agreed to in writing by the Noteholder Collateral Agent in its sole discretion) after acquiring such security, (i) endorse, assign and deliver the same to the Noteholder Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank, all in form and substance reasonably satisfactory to the Noteholder Collateral Agent or (ii) deliver such securities into a Securities Account with respect to which a Securities Account Control Agreement is in effect in favor of the Noteholder Collateral Agent. If any securities now or hereafter acquired by any Pledgor constituting Investment Property are uncertificated and are issued to such Pledgor or its nominee directly by the issuer thereof, such Pledgor shall promptly (and in any event within ten Business Days or such longer period as may be agreed to in writing by the Noteholder Collateral Agent in its sole discretion) after acquiring such security notify the Noteholder Collateral Agent thereof and pursuant to an agreement in form and substance reasonably satisfactory to the Noteholder Collateral Agent, either (i) cause the issuer to agree to comply with Entitlement Orders or other instructions from the Noteholder Collateral Agent as to such securities, without further consent of any Pledgor or such nominee, (ii) cause a Security Entitlement with respect to such uncertificated security to be held in a Securities Account with respect to which the Noteholder Collateral Agent has Control or (iii) arrange for the Noteholder Collateral Agent to become the registered owner of the securities. The Pledgors shall not hereafter establish and
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maintain any Securities Account or Commodity Account with any Securities Intermediary or Commodity Intermediary unless (1) the applicable Pledgor shall have given the Noteholder Collateral Agent at least 15 days (or such shorter period as may be agreed to in writing by the Noteholder Collateral Agent in its sole discretion) prior written notice of its intention to establish such new Securities Account or Commodity Account with such Securities Intermediary or Commodity Intermediary, (2) such Securities Intermediary or Commodity Intermediary shall be reasonably acceptable to the Noteholder Collateral Agent and (3) such Securities Intermediary or Commodity Intermediary, as the case may be, and such Pledgor shall have duly executed and delivered a Control Agreement with respect to such Securities Account or Commodity Account, as the case may be. The Noteholder Collateral Agent shall not give any Entitlement Orders or instructions or directions to any issuer of uncertificated securities, Securities Intermediary or Commodity Intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by such Pledgor, unless an Event of Default has occurred and is continuing or, after giving effect to any such withdrawal or dealing rights, would occur. The provisions of this Section 3.4(d) shall not apply to any Financial Assets credited to a Securities Account for which the Noteholder Collateral Agent is the Securities Intermediary. No Pledgor shall grant Control over any Investment Property to any Person other than the Noteholder Collateral Agent and, prior to the Senior Obligations Payment Date and to the extent required under the Intercreditor Agreement, the Senior Representative, and each Pledgor shall promptly (and in any event within ten Business Days or such longer period as may be agreed to in writing by the Noteholder Collateral Agent in its sole discretion) notify the Noteholder Collateral Agent if any issuer of Pledged Interests takes any action to have any Pledged Interests issued by it treated as Securities under Article 8 of the UCC and such Pledgor shall take all steps deemed necessary, advisable or prudent by the Noteholder Collateral Agent in order to grant Control of such Pledged Interests in favor of the Noteholder Collateral Agent. As between the Noteholder Collateral Agent and the Pledgors, the Pledgors shall bear the investment risk with respect to the Investment Property and Pledged Securities, and the risk of loss of, damage to, or the destruction of the Investment Property and Pledged Securities, whether in the possession of, or maintained as a security entitlement or deposit by, or subject to the control of, the Noteholder Collateral Agent, the ABL Agent, the Term Agent, the Additional Noteholder Agent (if applicable), a Securities Intermediary, Commodity Intermediary, any Pledgor or any other Person; provided, however, that nothing contained in this Section 3.4(d) shall release or relieve any Securities Intermediary or Commodity Intermediary of its duties and obligations to the Pledgors or any other Person under any Control Agreement or under applicable Legal Requirements. Each Pledgor shall promptly pay all Charges and fees of whatever kind or nature with respect to the Investment Property and Pledged Securities pledged by it under this Agreement. In the event any Pledgor shall fail to make such payment contemplated in the immediately preceding sentence, the Noteholder Collateral Agent may, after providing written notice thereof to the Pledgors, do so for the account of such Pledgor, and the Pledgors shall promptly reimburse and indemnify the Noteholder Collateral Agent in accordance with Section 11.4(a) hereof and Section 7.07 of the Indenture from all costs and expenses incurred by the Noteholder Collateral Agent under this Section 3.4(d).
Notwithstanding anything contained herein, if any such Bailee Letter is obtained under the ABL Credit Agreement in favor of the ABL Agent, under the Term Credit Agreement in favor of the Term Agent and/or under the Additional Indenture (if applicable) in favor of the Additional Noteholder Agent with respect to any location for which the Noteholder Collateral Agent has not received such Bailee Letter, the applicable Pledgor shall obtain and deliver a Bailee Letter to the Noteholder Collateral Agent concurrently with delivery to such other Agent of such Bailee Letter under the ABL Credit Agreement, the Term Credit Agreement or the Additional Indenture, if applicable.
8. Amendment to Section 3.6. Section 3.6 is hereby amended by deleting the first sentence thereof in its entirety and restating it as follows:
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Subject to Section 3.7, each Pledgor shall take such further actions, and execute and deliver to the Noteholder Collateral Agent such additional assignments, agreements, supplements, powers and instruments, as the Noteholder Collateral Agent may deem necessary, advisable or prudent, wherever required by applicable Legal Requirements, in order to perfect, preserve and protect the security interest and the priority thereof in the Collateral as provided herein, subject to the Intercreditor Agreement, and the rights and interests granted to the Noteholder Collateral Agent hereunder, to carry into effect the purposes hereof or better to assure and confirm unto the Noteholder Collateral Agent the Collateral or permit the Noteholder Collateral Agent, subject to the terms of the Intercreditor Agreement, to exercise and enforce its rights, powers and remedies hereunder with respect to any Collateral.
9. Amendment to Section 3.7. Subsections (b) and (d)(i) of Section 3.7 are hereby deleted in their entirety and restated as follows:
(b) Subject to the Intercreditor Agreement, no Pledgor shall be required to take any action to establish Foreign Perfection with respect to (i) any Specified Movable Property, (ii) any Foreign Located Asset or Foreign Equity prior to the date that is 30 days after the date hereof (or, if any such asset or property becomes a Foreign Located Asset or Foreign Equity after the date hereof, 180 days after the date on which such asset or property becomes a Foreign Located Asset or Foreign Equity) or (iii) any Foreign Located Asset or Foreign Equity (A) that the Board of Directors has determined to be Pledgor Foreign Property and (B) as to which such Pledgor has notified the Noteholder Collateral Agent thereof in writing within 30 days after the date hereof (or, if any such asset or property becomes a Foreign Located Asset or Foreign Equity after the date hereof, 180 days after the date on which such asset or property becomes a Foreign Located Asset or Foreign Equity).
(i) in the case of any Foreign Located Asset or Foreign Equity as to which clause (b)(iii)(B) above applies, the 180th day after the date hereof;
10. Amendment to Section 4.1. Section 4.1 is hereby amended by deleting the final sentence thereof in its entirety and restating such sentence as follows:
No Person other than the Noteholder Collateral Agent and, to the extent required under the Intercreditor Agreement, prior to the ABL Obligations Payment Date (as defined in the Intercreditor Agreement) the ABL Agent, prior to the Term Obligations Payment Date (as defined in the Intercreditor Agreement) the Term Agent, and prior to the Additional Indenture Obligations Payment Date (as defined in the Intercreditor Agreement) the Additional Noteholder Agent (if applicable), has, or will have, control or possession of all or any part of the Collateral, except to the extent not prohibited by the Notes Documents.
11. Amendment to Section 4.2. Section 4.2 is hereby deleted in its entirety and restated as follows:
Section 4.2 Validity of Security Interest. The security interest in and Lien on the Collateral granted to the Noteholder Collateral Agent for the benefit of the Secured Parties hereunder constitutes (a) a legal and valid security interest in all the Collateral securing the payment and performance of the Notes Obligations under applicable Legal Requirements in the United States, and (b) (i) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, subject to the filings and other actions described on Schedule 7 to the Perfection Certificate, a valid and enforceable perfected first priority security interest (subject to Permitted Liens and the Intercreditor Agreement) in all such Collateral under applicable Legal Requirements in the United States to the extent required by this Agreement and (ii) with respect to certificated Securities Collateral, Instruments, Tangible Chattel Paper, Deposit Accounts, Securities Accounts, Commodities Accounts, certificated
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Investment Property, Electronic Chattel Paper, Transferable Records and Letter-of-Credit Rights, subject to the deliveries contemplated pursuant to Section 3.1 and Section 3.4 and the filings contemplated pursuant to Section 3.3, a valid and enforceable perfected first priority security interest (with respect to the perfected first priority security interest contemplated by Section 3.3, subject to the Intercreditor Agreement and Permitted Liens) in all such Collateral under applicable Legal Requirements in the United States to the extent required by this Agreement. The security interest and Lien granted to the Noteholder Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement in and on the Collateral will at all times constitute a valid and enforceable perfected, continuing first priority security interest therein under applicable Legal Requirements in the United States to the extent required by this Agreement, subject only to clause (b) of the preceding sentence, Permitted Liens and the Intercreditor Agreement.
12. Amendment to Section 4.4. Section 4.4 is hereby amended by adding the words or the Intercreditor Agreement at the end of the last sentence thereof.
13. Amendment to Section 5.3. Section 5.3 is hereby deleted in its entirety and restated as follows:
Section 5.3 Default. No Pledgor is in default or violation under any agreement to which such Pledgor is a party relating to the Pledged Securities pledged by it (including with respect to the payment of any portion of any mandatory capital contribution, if any, required to be made thereunder). No Securities Collateral pledged by such Pledgor is subject to any defense, offset or counterclaim, nor have any of the foregoing been asserted or alleged against such Pledgor by any Person with respect thereto, and as of the date hereof, there are no certificates, instruments, documents or other writings (other than the Organizational Documents of such Pledgor and certificates, if any, delivered to the Noteholder Collateral Agent or, prior to the discharge of the various Classes of Obligations (as such terms are defined in the Intercreditor Agreement) and to the extent required by the Intercreditor Agreement, one or more other Agents) which evidence any Pledged Securities of such Pledgor.
14. Amendment to Section 5.4. Subsection (b) of Section 5.4 is hereby amended by replacing the words Discharge of ABL Obligations with the words applicable Senior Obligations Payment Date and by replacing the words ABL Agent with Senior Representative.
15. Amendment to Section 6.1. Section 6.1 is hereby deleted in its entirety and restated as follows:
Section 6.1 Grant of License. For the purpose of enabling the Noteholder Collateral Agent, during the continuance of an Event of Default, to exercise rights and remedies under Article IX at such time as the Noteholder Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Pledgor hereby grants to the Noteholder Collateral Agent, to the extent licensable, an irrevocable, non-exclusive worldwide license (subject to the terms of the Intercreditor Agreement) (exercisable without payment of royalty or other compensation to such Pledgor) to use, assign, license sublicense or otherwise dispose of the Intellectual Property Collateral now owned or hereafter acquired by such Pledgor, wherever the same may be located. Such license shall include access to all media in which any of the Intellectual Property Collateral may be recorded or stored and to all computer programs used for the compilation or printout hereof.
16. Amendment to Section 6.3. Subsections (c) and (h) of Section 6.3 are hereby deleted in their entirety and restated as follows:
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(c) In the event that any Pledgor becomes aware that any item of the Intellectual Property Collateral is being infringed or misappropriated by a third party, such Pledgor shall promptly (and in any event within ten Business Days) notify the Noteholder Collateral Agent in writing and shall take such actions, at its expense, as such Pledgor or the Noteholder Collateral Agent, subject to the terms of the Intercreditor Agreement, deems reasonable and appropriate under the circumstances to protect or enforce such Intellectual Property Collateral, including, without limitation, suing for infringement or misappropriation and for an injunction against such infringement or misappropriation. Without limiting the foregoing, upon such Pledgor obtaining knowledge thereof, such Pledgor shall promptly (and in any event within ten Business Days) notify the Noteholder Collateral Agent in writing of any event that may be reasonably expected to materially and adversely affect the value or utility of any item of Intellectual Property Collateral, the ability of such Pledgor or the Noteholder Collateral Agent to dispose of such Intellectual Property Collateral or any portion thereof or the rights and remedies of the Noteholder Collateral Agent in relation thereto, including a levy or written threat of levy or any legal process against such Intellectual Property Collateral or any portion thereof.
(h) During the continuance of an Event of Default, within ten Business Days (or such longer period as may be agreed to in writing by the Noteholder Collateral Agent in its sole discretion) after written notice from the Noteholder Collateral Agent to any Pledgor, such Pledgor shall make available to the Noteholder Collateral Agent, to the extent within such Pledgors power and authority and subject to the Intercreditor Agreement, such personnel in such Pledgors employ on the date of such Event of Default as the Noteholder Collateral Agent may designate, by name, title or job responsibility, to permit such Pledgor to continue, directly or indirectly, to produce, advertise and sell the products and services sold or delivered by such Pledgor under or in connection with the Intellectual Property Collateral, and each Pledgor shall use commercially reasonable efforts to ensure that such Persons shall be available to perform their prior functions on the Noteholder Collateral Agents behalf if compensated at such Pledgors expense on a per diem, pro rata basis consistent with the salary and benefits structure applicable to each as of the date of such Event of Default.
17. Amendment to Section 8.1. Section 8.1 is hereby deleted in its entirety and restated as follows:
Section 8.1 Transfers of Collateral. No Pledgor shall (a) sell, convey, assign or otherwise dispose of, or grant any option with respect to, any of the Collateral pledged by it hereunder except to the extent not prohibited by and otherwise subject to the requirements of this Agreement or the Indenture or (b) create or permit to exist any Lien upon or with respect to any of the Collateral pledged by it hereunder other than Permitted Liens.
18. Amendment to Section 10.1. Section 10.1 is hereby deleted in its entirety and restated as follows:
Section 10.1 Proceeds of Casualty Events and Collateral Dispositions. Subject to the terms of the Intercreditor Agreement, the Pledgors shall take all actions required by the Indenture with respect to any Net Cash Proceeds of any Casualty Event or from the sale or disposition of any Collateral.
19. Amendment to Section 11.1. Subsection (a) of Section 11.1 is hereby amended by deleting the first sentence thereof and restating such sentence in its entirety as follows:
The Noteholder Collateral Agent has been appointed as Noteholder Collateral Agent pursuant to the Indenture and as Existing Noteholder Collateral Agent pursuant to the Intercreditor Agreement. The actions of the Noteholder Collateral Agent hereunder are subject to the terms of the Indenture and the Intercreditor Agreement.
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20. Amendment to Section 11.2. Section 11.2 is hereby amended by replacing the first word of such Section with the words Subject to the terms of the Intercreditor Agreement, if.
21. Amendment to Section 11.4. Subsection (a) of Section 11.4 is hereby deleted in its entirety and restated as follows:
(a) Collateral hereunder shall be released if and to the extent so provided in Sections 12.07 and 12.08 of the Indenture or upon the transfer or sale of any asset or property (other than transfers or sales to the Company or any Guarantor) theretofore included in Collateral to the extent permitted under Sections 3.7 or 8.1 of this Agreement, or as otherwise permitted in the Intercreditor Agreement.
22. Amendment to Section 11.12. The first sentence of Section 11.12 is hereby deleted in its entirety and restated as follows:
Each Pledgor covenants that in the event that such Pledgor or any property or assets of such Pledgor shall hereafter become the subject of a voluntary or involuntary proceeding under the Bankruptcy Code or such Pledgor shall otherwise be a party to any federal or state bankruptcy, insolvency, moratorium or similar proceeding to which the provisions relating to the automatic stay under Section 362 of the Bankruptcy Code or any similar provision in any such Legal Requirement is applicable, then, in any such case, whether or not the Noteholder Collateral Agent has commenced foreclosure proceedings under this Agreement, such Pledgor shall not, and each Pledgor hereby expressly waives its right to (to the extent it may lawfully do so) at any time insist upon, plead or in any manner whatsoever, claim or take the benefit or advantage of any such automatic stay or such similar provision as it relates to the exercise of any of the rights and remedies (including any foreclosure proceedings) available to the Noteholder Collateral Agent as provided in this Agreement, in any other Security Document or any other document evidencing the Notes Obligations, provided however that, for the avoidance of doubt, any such rights and remedies shall remain subject to the terms of the Intercreditor Agreement.
23. No Other Changes. Except as explicitly amended by this Amendment, all of the terms and conditions of the Security Agreement shall remain in full force and effect.
24. Conditions Precedent. This Amendment shall be effective when Noteholder Collateral Agent shall have received an executed original hereof, together with each of the following, each in substance and form reasonably acceptable to Noteholder Collateral Agent:
a. The duly executed Restructuring Support Agreement, together with all exhibits and attachments thereto;
b. Evidence that the Supporting Holders (as such term is defined in the Restructuring Support Agreement) have consented to the Restructuring Transactions; and
c. Evidence that all conditions to Pledgors receipt of the initial advance under the Term Loan (as such term is defined in the Restructuring Support Agreement) have been satisfied.
25. Representations and Warranties. The Pledgors hereby represent and warrant to Noteholder Collateral Agent as follows:
a. Each Pledgor and such other parties that have executed any documents required under the Security Agreement or this Amendment, have all requisite power and authority to execute this Amendment and any other agreements or instruments required hereunder and to perform all of their obligations hereunder, and this Amendment and all such other agreements and instruments have been duly executed and delivered by the applicable party and constitute the legal, valid and binding obligation of the applicable party, enforceable in accordance with its terms.
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b. The execution, delivery and performance by each of the Pledgors of this Amendment and any other agreements or instruments required hereunder has been duly authorized by all necessary corporate action and does not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to such Pledgor, or the articles of incorporation or by-laws of such Pledgor, or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which such Pledgor is a party or by which it or its properties may be bound or affected.
c. The performance by each of the Pledgors of the Security Agreement as amended hereby has been duly authorized by all necessary corporate action and does not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to such Pledgor, or the articles of incorporation or by-laws of such Pledgor, or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which such Pledgor is a party or by which it or its properties may be bound or affected.
d. All of the representations and warranties contained in Article IV of the Security Agreement are true and correct in all material respects on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).
26. References. All references in the Security Agreement to this Agreement shall be deemed to refer to the Security Agreement as amended hereby; and any and all references in the Security Documents to the Security Agreement shall be deemed to refer to the Security Agreement as amended hereby.
27. No Waiver. The execution of this Amendment and the acceptance of all other agreements and instruments related hereto, and Noteholder Collateral Agents consent to the Restructuring Transactions (as such term is defined in the Restructuring Support Agreement), shall not be deemed to be a waiver of any Default or Event of Default under the Security Agreement or a waiver of any breach, default or event of default under any Security Document or other document held by the Noteholder Collateral Agent, except to the extent provided in the Restructuring Support Agreement, or a consent to any future transactions, whether or not known to the Noteholder Collateral Agent and whether or not existing on the date of this Amendment.
28. Release. Each Pledgor hereby absolutely and unconditionally releases and forever discharges, Noteholder Collateral Agent 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 Pledgor 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, whether such claims, demands and causes of action are matured or unmatured or known or unknown.
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29. Miscellaneous. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which counterparts, taken together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Pledgors and the Noteholder Collateral Agent have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the date first above written.
SAEXPLORATION HOLDINGS, INC., as a Pledgor | ||||||
By: | /s/ Brent Whiteley | |||||
Name: Brent Whiteley | ||||||
Title: Chief Financial Officer, General Counsel and Secretary | ||||||
SAEXPLORATION SUB, INC., as a Pledgor | ||||||
By: | /s/ Brent Whiteley | |||||
Name: Brent Whiteley | ||||||
Title: Chief Financial Officer, General Counsel and Secretary | ||||||
SAEXPLORATION, INC., as a Pledgor | ||||||
By: | /s/ Brent Whiteley | |||||
Name: Brent Whiteley | ||||||
Title: Chief Financial Officer, General Counsel and Secretary |
SAEXPLORATION SEISMIC SERVICES (US), LLC, as a Pledgor | ||||||
By: | /s/ Brent Whiteley | |||||
Name: Brent Whiteley | ||||||
Title: Chief Financial Officer, General Counsel and Secretary | ||||||
NES, LLC, as a Pledgor | ||||||
By: | /s/ Brent Whiteley | |||||
Name: Brent Whiteley | ||||||
Title: Chief Financial Officer, General Counsel and Secretary | ||||||
WILMINGTON SAVINGS FUND SOCIETY, FSB as Noteholder Collateral Agent | ||||||
By: | /s/ Geoffrey J. Lewis | |||||
Name: Geoffrey J. Lewis | ||||||
Title: Vice President |
EXHIBIT A
TO FIRST AMENDMENT TO SECURITY AGREEMENT
[Restructuring Support Agreement]
RESTRUCTURING SUPPORT AGREEMENT
dated as of June 13, 2016
among
SAExploration Holdings, Inc., Certain Members of Management Identified Herein
and
the Supporting Holders Identified Herein
TABLE OF CONTENTS
Page | ||||||||
Section 1. | AGREEMENT EFFECTIVE DATE | 2 | ||||||
Section 2. | COMMITMENTS REGARDING THE RESTRUCTURING TRANSACTIONS | 2 | ||||||
2.01. | Covenants, Acknowledgments and Commitments of the Supporting Holders | 2 | ||||||
2.02. | Obligations of SAE | 4 | ||||||
2.03 | Covenants, Acknowledgements and Commitments of Management | 9 | ||||||
2.03. | Definitive Documents | 9 | ||||||
Section 3. | FORBEARANCE | 9 | ||||||
Section 4. | REPRESENTATIONS AND WARRANTIES | 10 | ||||||
4.01. | Mutual Representations and Warranties | 10 | ||||||
4.02. | Representations and Warranties of the Supporting Holders | 11 | ||||||
4.03. | Representations and Warranties of SAE. | 12 | ||||||
Section 5. | TERMINATION EVENTS | 12 | ||||||
5.01. | Supporting Holder Termination Events | 12 | ||||||
5.02. | SAE Termination Events | 13 | ||||||
5.03. | Effect of Termination | 14 | ||||||
5.04. | Termination Upon Consummation of the Restructuring Transactions | 14 | ||||||
Section 6. | TRANSFER OF EXISTING NOTES | 14 | ||||||
Section 7. | AMENDMENTS | 15 | ||||||
Section 8. | NO SOLICITATION OF SECURITIES | 16 | ||||||
Section 9. | MISCELLANEOUS | 16 | ||||||
9.01. | Further Assurances | 16 | ||||||
9.02. | Complete Agreement | 16 | ||||||
9.03. | No Assignment | 16 | ||||||
9.04. | Headings | 16 | ||||||
9.05. | Governing Law; Submission to Jurisdiction; Selection of Forum; Waiver of Trial by Jury | 16 | ||||||
9.06. | Counterparts | 16 | ||||||
9.07. | Interpretation | 16 | ||||||
9.08. | Relationship Among Supporting Holders | 17 | ||||||
9.09. | Successors and Assigns | 17 | ||||||
9.10. | Acknowledgements | 17 | ||||||
9.11. | Notices | 17 | ||||||
9.12. | Waiver | 18 | ||||||
9.13. | Several, Not Joint, Obligations | 18 |
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9.14. | Remedies | 18 | ||||||
9.15. | Specific Performance | 18 | ||||||
9.16. | No Third-Party Beneficiaries | 19 | ||||||
9.17 | Management Liability | 19 | ||||||
9.18. | Settlement Discussions | 19 | ||||||
9.19. | Consideration | 19 |
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This RESTRUCTURING SUPPORT AGREEMENT (as amended, supplemented, or otherwise modified from time to time, and collectively with all exhibits thereto, this Agreement) is dated as of June 13, 2016, among: (i) SAExploration Holdings, Inc. (SAE) on behalf of itself and the guarantors party to the Indenture dated as of July 2, 2014 (the Existing Notes Indenture) among SAE, as issuer, each of such guarantors party thereto and U.S. Bank National Association, as trustee and collateral agent (together, and with its permitted successors and assigns, the Indenture Trustee) pursuant to which SAE issued its 10.000% Senior Secured Noted due 2019 (the Existing Notes); (ii) solely with respect to Section 2.03 and Section 9.17 herein, Jeff Hastings, Brian Beatty and Brent Whiteley (collectively, Management); and (iii) certain holders of the Existing Notes party hereto from time to time (together with their respective successors and permitted assigns, the Supporting Holders). SAE and the Supporting Holders, and any subsequent person or entity that becomes a party hereto in accordance with the terms hereof, are referred to herein as the Parties and, each, individually as a Party. Capitalized terms, unless otherwise defined in this Agreement, have the meanings used in the Term Sheet (defined below).
RECITALS
WHEREAS, SAE and the Supporting Holders have agreed to enter into certain transactions that will have the effect of restructuring and recapitalizing SAE as contemplated by (1) the Term Sheet (the Term Sheet) attached hereto as Exhibit A, and (2) the entry into and performance of, as the case may be, the New Senior Loan Facility, the issuance of the New Loan Shares, the consummation of the Exchange Offer and the Consent Solicitation, the issuance of the New Second Lien Notes and the New Notes Shares, the amending and restating of the Intercreditor Agreement, the entry into the Warrant Agreement and the issuance of the Warrants, the amendment and ratification of the Employment Agreements and the entry into the Management Incentive Plan, the issuance of the MIP Shares, the amendment of the Organizational Documents (in each case, as these capitalized terms are defined herein) and the transactions contemplated thereby (clauses (1) and (2) together, the Restructuring Transactions), with the understanding that to the degree the definitive documents governing the transactions listed and contemplated by clause (2) above are more specific, or have different terms than those contemplated in the Term Sheet, then, for purposes of this Agreement and the definition of Restructuring Transactions, the definitive documents governing the transactions in clause (2) shall control;
WHEREAS, the Parties have agreed to support the Restructuring Transactions pursuant to, and subject to the terms and conditions set forth in, this Agreement;
WHEREAS, this Agreement is the product of arms-length, good-faith discussions between the Parties and their respective professional representatives; and
WHEREAS, SAE, Management and the Supporting Holders are prepared to perform their obligations hereunder, subject to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Party, intending to be legally bound hereby, agrees as follows:
AGREEMENT
Section 1. | Agreement Effective Date |
This Agreement shall be effective and binding with respect to each of the Parties on the date on which (i) SAE and Management shall have executed and delivered counterpart signature pages of this Agreement to counsel for the Supporting Holders and (ii) Supporting Holders representing not less than 66% of the aggregate principal amount of Existing Notes outstanding shall have executed and delivered counterpart signature pages of this Agreement to counsel for SAE (such date, the RSA Effective Date). After the RSA Effective Date, the terms and conditions of the Restructuring Transactions, the terms and conditions of the Definitive Documents (defined below) set forth in Exhibits to this Agreement, and this Agreement may only be amended, modified, waived, or otherwise supplemented as set forth in Section 7 herein.
Section 2. | Commitments Regarding the Restructuring Transactions |
2.01. Covenants, Acknowledgments and Commitments of the Supporting Holders. Subject to the terms and conditions hereof, and for so long as this Agreement has not been terminated in accordance with the terms hereof, each Supporting Holder (severally and not jointly) agrees to satisfy the following covenants and makes the following acknowledgements and commitments:
(a) to support the Restructuring Transactions under this Agreement;
(b) to implement and consummate the Restructuring Transactions in a timely manner and take any and all commercially reasonable and appropriate actions in furtherance of the Restructuring Transactions as contemplated under this Agreement, provided that such actions shall be limited to review and negotiation of the applicable Definitive Documents and execution of the same (to the extent any Definitive Documents require execution thereof by such Supporting Holder to implement and consummate the Restructuring Transactions); provided further that, except as otherwise provided herein, no Supporting Holder shall be obligated to participate in or consummate, as the case may be, the Exchange Offer or any other part of the Restructuring Transactions unless and until all of the conditions to effectiveness of the Restructuring Transactions (including the Exchange Offer and the Consent Solicitation) set forth in the Term Sheet and Definitive Documents shall have been satisfied or waived or will be satisfied or waived contemporaneously with the closing of the Restructuring Transactions or have been waived with the prior written consent of the Required Supporting Holders (defined below);
(c) to negotiate in good faith the Definitive Documents, which Definitive Documents shall contain terms and conditions consistent in all material respects with this Agreement;
(d) solely with respect to the Supporting Holders identified on Exhibit B hereto as New Senior Lenders, and solely in their capacity as New Senior Lenders, (1) to execute and enter into, on the Funding Date, a new senior secured multi-draw term loan facility, substantially on the terms and subject to the conditions specified in Schedule 1 of the Term Sheet
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attached hereto as Exhibit A (such agreement, including all exhibits, attachments, supplements, and amendments thereto, the New Senior Loan Facility), subject to a maximum commitment amount of $30 million, (2) to extend their respective committed portion of the $5 million initial draw (the Initial Draw) thereof on the Funding Date, upon the request of SAE, as set forth in the schedule of commitments attached hereto as Exhibit C, on the terms and conditions contained in the New Senior Loan Facility, and (3) to extend their respective committed portions of any subsequent draws thereunder when required by, and on the terms and conditions contained in, the New Senior Loan Facility; provided however that nothing contained in this Support Agreement shall require or otherwise oblige any Supporting Holder who is not identified on Exhibit B hereto to serve as a New Senior Lender or make any commitments or fund any amounts in connection with the New Senior Loan Facility;
(e) to support the exchange offer and consent solicitation (the Exchange Offer) in which SAE shall offer, on a pro rata basis, the holders of Existing Notes (the Existing Holders), on the terms and conditions set forth in an Exchange Offer Memorandum and Consent Solicitation Statement (as amended and supplemented from time to time, together with the related Letter of Transmittal and Consent, the Memorandum), with the terms and conditions thereof summarized in Exhibit A hereto, and to (i) tender its Existing Notes for exchange, together with its consent to the amendments described in the Memorandum, on the first day of the Exchange Offer, in accordance with the terms and conditions set forth in the Memorandum; and (ii) not withdraw such tenders and consents, with the understanding that, among other things, SAE and the Trustee will, at that time, enter into a supplemental indenture to supplement the Existing Notes Indenture in accordance with Exhibit A and that consents will be irrevocable thereafter, provided that the Supporting Holders shall have no obligation to tender their Existing Notes and may withdraw any tenders after the termination of this Agreement pursuant to Section 5.01 and Section 5.02.
(f) not to object to SAEs (i) amendment and ratification, effective as of the Closing Date, of the existing employment agreements, as summarized in Exhibit D hereto (such agreements, including all exhibits, attachments, supplements and amendments thereto, the Employment Agreements) with each of the individuals identified in Exhibit E hereto, (ii) adoption on the Closing Date of the management incentive plan, incorporating the terms set forth in Exhibit F hereto (such plan, including all exhibits, attachments and supplements, and amendments thereto, the Management Incentive Plan), and (iii) entry into a warrant agreement with the SAEs transfer agent, as warrant agent, incorporating the terms set forth in Exhibit G hereto (such agreement, including all exhibits, attachments, supplements, and amendments thereto, the Warrant Agreement), providing for the issuance of Warrants (as defined in Exhibit G) to all existing holders of common stock of SAE (the Common Stock), provided that each of the Employment Agreements, the Management Incentive Plan, and Warrant Agreement are consistent in all aspects with this Agreement or otherwise in a form and substance reasonably acceptable to the Required Supporting Holders.
(g) to acknowledge that, on the Closing Date, SAEs existing executives identified on Exhibit E will remain in their current positions, subject to the amended and ratified Employment Agreements as described in Exhibit D;
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(h) to the extent that any legal or structural impediment arises that would prevent, hinder, or delay the consummation of the Restructuring Transactions, to negotiate in good faith commercially reasonable additional or alternative provisions to address any such impediment; provided, however, that the economic outcome for the Supporting Holders and other material terms as contemplated herein must be substantially preserved, as determined by the Supporting Holders in their reasonable discretion; and
(i) not to (i) object to or otherwise commence or participate in any proceeding to oppose any of the Restructuring Transactions and (ii) directly or indirectly (1) seek, solicit, support, encourage, or vote or cause to be voted (to the extent applicable) its Existing Notes for, consent to, or encourage any plan of reorganization or liquidation, proposal, offer, dissolution, wind-up, liquidation, reorganization, merger, consolidation, business combination, joint venture, partnership, sale of assets, or restructuring for SAE other than the Restructuring Transactions or (2) take any other action that is inconsistent with, or that would reasonably be expected to delay or obstruct the consummation of the Restructuring Transactions.
Notwithstanding anything to the contrary contained in this Section 2.01 or elsewhere in this Agreement, no Supporting Holder shall be required to (1) incur, or agree to any commitments, undertakings, concessions, indemnities, or other arrangements that could result in its incurrence of material expenses, liabilities, or other obligations, provided that the foregoing does not apply to any internal expenses incurred by a Supporting Holder in connection with obtaining internal approvals or consents to authorize the Restructuring Transactions or this Agreement or to perform such Supporting Holders obligations thereunder; or (2) take (or fail to take) any action that would inhibit a Supporting Holders performance of any duty, fiduciary or otherwise, or obligation that such Supporting Holder owes to any other person or entity under applicable law.
2.02. Obligations of SAE.
Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement is intended to, nor shall, prevent SAE from taking or failing to take any action that it is obligated to take (or fail to take) in the performance of any fiduciary duty or as otherwise required by applicable law, which SAE owes to any other person or entity as applicable.
(a) Covenants. Subject to the terms and conditions hereof, and for so long as this Agreement has not been terminated in accordance with the terms hereof, SAE, on behalf of itself and each guarantor party to the Existing Notes, as applicable, agrees to satisfy the following covenants and makes the following acknowledgements and commitments:
(i) to support the Restructuring Transactions under this Agreement;
(ii) to implement and consummate the Restructuring Transactions in a timely manner and take any and all commercially reasonable and appropriate actions in furtherance of the Restructuring Transactions, as contemplated under this Agreement, unless and until all of the conditions to effectiveness of the Restructuring Transactions (including the Exchange Offer) set forth in the Term Sheet and Definitive Documents have been waived with the prior written consent of the Required Supporting Holders or satisfied or will be satisfied or waived contemporaneously with the closing of the Restructuring Transactions;
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(iii) to negotiate in good faith the Definitive Documents, which Definitive Documents shall contain terms and conditions consistent in all respects with this Agreement, or as otherwise agreed to by the Required Supporting Holders;
(iv) to enter into the New Senior Loan Facility on the Funding Date, submit the initial draw notice for $5 million thereunder and agree to use the proceeds for general corporate purposes;
(v) to take all necessary corporate action to authorize such number of additional shares of Common Stock as shall be sufficient to permit the issuance of all shares of Common Stock as contemplated by the Restructuring Transactions;
(vi) reserve (a) by the Launch Date, authorized and unissued shares of Common Stock equal to 64.48% of the total number of shares of Common Stock that will be outstanding as of the Closing Date (the New Notes Shares) and to issue such New Notes Shares in connection with the closing of the Exchange Offer as contemplated by Exhibit A; (b) by the RSA Effective Date, authorized and unissued shares of Common Stock equal to 3.14% of the total number of shares of Common Stock that will be outstanding as of the closing date, and, by the Funding Date, authorized and unissued shares of Common Stock equal to 6.26% of the total number of shares of Common Stock that will be outstanding as of the Closing Date (the Backstop Shares) and to issue such Backstop Shares on the Closing Date pro rata to those New Senior Lenders who fund the Initial Draw, as indicated in Exhibit C; and (3) by the Funding Date, authorized and unissued shares of Common Stock equal to 18.80% of the total number of shares of Common Stock that will be outstanding as of the Closing Date (the New Loan Shares) and to issue such New Loan Shares on the Closing Date pro rata to each New Senior Lender, including to any Participating Holder participating in the New Senior Loan Facility;
(vii) use its commercially reasonable efforts to (1) commence the Exchange Offer on the Launch Date and, if not commenced on such date, to commence the Exchange Offer as promptly as possible thereafter, and to conduct the Exchange Offer in accordance with the terms thereof as reflected in Exhibit A) and applicable law; (2) enter into the supplemental indenture to supplement the Existing Notes Indenture, as contemplated by Exhibit A; and (3) consummate the Exchange Offer by the date that is 60 days after the Launch Date, provided that (1) the Parties understand that the Exchange Offer expiration time may be extended at SAEs option to amend the terms of the Exchange Offer (subject to Section 5.01(d) of this Agreement), and (2) the Closing Date, as used in this Agreement, shall be the date on which the Exchange Offer actually closes;
(viii) to use commercially reasonable efforts to amend and restate the existing intercreditor agreement as contemplated by Exhibit A (the Intercreditor Agreement);
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(ix) deliver to each Existing Holder participating in the Exchange Offer (the Participating Holders) for every $1,000 principal amount of Existing Notes tendered for exchange (subject to a minimum tender of $2000 principal amount and $1000 increments in excess thereof), (i) $500 principal amount of new second lien notes (the New Second Lien Notes) and related consents to be delivered on the terms summarized in the Description of New Second Lien Notes contained in Exhibit A hereto and (ii) a pro rata portion of the New Notes Shares;
(x) enter into the Warrant Agreement, as of the Closing Date, with SAEs transfer agent, as warrant agent, and issue the Warrants pursuant thereto;
(xi) negotiate in good faith the Definitive Documents, which Definitive Documents shall contain terms and conditions consistent in all respects with this Agreement and to execute and otherwise support the implementation of such Definitive Documents;
(xii) support all reasonably necessary actions of the Supporting Holders to facilitate the consummation of the Restructuring Transactions;
(xiii) within seven days of delivery to SAE of invoices or receipts with respect thereto, pay in cash all (a) reasonable fees and expenses of (1) Paul, Weiss, Rifkind, Wharton & Garrison LLP (Paul Weiss) under that certain engagement letter among certain Supporting Holders, SAE, and Paul Weiss dated as of April 5, 2016, (2) K&L Gates, and (3) any other professional retained by the Supporting Holders pursuant to an engagement letter with SAE; and (b) reasonable and documents out of pocket expenses (other than professional fees) incurred any Supporting Holder in connection with this Agreement or the Restructuring Transaction (provided that the each Supporting Holder shall consult with SAE and provide SAE with advance notice of the occurrence of such expenses to the extent reasonably practicable);
(xiv) to obtain by the Launch Date any amendments, waivers and/or consents under the Credit and Security Agreement, dated as of November 6, 2014, among SAExploration, Inc., as borrower, SAE and the other guarantors party thereto and Wells Fargo Bank, National Association, as lender (the Existing Revolver), that are necessary to permit the Restructuring Transactions;
(xv) use commercially reasonable efforts to obtain any shareholder approvals or other consents or approvals, when required, and as required by SAEs Second Amended and Restated Certificate of Incorporation, dated as of June 24, 2013, Amended and Restated By Laws, adopted as of June 24, 2013, and all applicable law for the consummation of the Restructuring Transactions;
(xvi) to use commercially reasonable efforts to adopt, on or as soon as reasonably practicable after the Closing Date, an Amended and Restated Certificate of Incorporation and an Amended and Restated Bylaws of SAE
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(collectively, the Organizational Documents), incorporating the terms set forth in Exhibit H (the Governance Terms), which shall include provisions regarding the size and composition of the board of directors of SAE (the Board) as set forth in Exhibit H;
(xvii) use commercially reasonable efforts to make the shares of Common Stock to be issued in connection with the Restructuring Transactions eligible to be issued in book-entry form through the direct registry system of SAEs transfer agent and/or The Depository Trust Company;
(xviii) maintain its good standing under the laws of the State of Delaware and take all requisite actions, corporate or otherwise, for the Organizational Documents to become effective as soon as reasonably practicable after the Closing Date;
(xix) use commercially reasonable efforts to maintain (i) SAEs status as an SEC-registered, public company, including filing all periodic and current reports required under the reporting obligations of the Securities Exchange Act of 1934, as amended (the Exchange Act), and (ii) a listing on either the Nasdaq Global Market or the Nasdaq Capital Market, including taking commercially reasonable actions to regain compliance with the continuing listing standards of such applicable market within the compliance periods established by Nasdaq, as described in the deficiency letters of Nasdaq dated as of February 3, 2016 and April 19, 2016;
(xx) promptly notify the Supporting Holders in writing of any governmental or third party complaints, litigations, investigations, or hearings relating to the Restructuring Transactions (or communications indicating that the same may be contemplated or threatened);
(xxi) comply in all material respects with the covenants (except to the extent waived, as contemplated herein) contained in the Existing Revolver, Existing Notes Indenture and, when entered into, the New Senior Loan Facility;
(xxii) amend and ratify, effective as of the Closing Date, the Employment Agreements with respect to each of the executives of SAE identified in Exhibit E hereto, (ii) adopt on the Closing Date the Management Incentive Plan, incorporating the terms set forth in Exhibit F hereto, and (iii) enter into the Warrant Agreement, incorporating the terms set forth in Exhibit G hereto;
(xxiii) to the extent that any legal or structural impediment arises that would prevent, hinder, or delay the consummation of the Restructuring Transactions, to negotiate in good faith commercially reasonable additional or alternative provisions to address any such impediment, in consultation with the Supporting Holders; provided, however, that the economic outcome for the Supporting Holders and other material terms as contemplated herein must be substantially preserved, as determined by the Supporting Holders in their reasonable discretion;
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(xxiv) if SAE knows of a breach in any material respect of any of the obligations, representations, warranties, or covenants of SAE set forth in this Agreement, furnish prompt written notice (and in any event within three business days of such actual knowledge) to the Supporting Holders and promptly take all remedial action necessary to cure such breach;
(xxv) continue to operate its business in the ordinary course;
(xxvi) provide the Supporting Holders and their advisors reasonable access to management upon reasonable notice and keep the Supporting Holders and their advisors reasonably apprised of any material developments regarding SAEs business operations, condition, assets, liabilities, or finances and promptly notify the Supporting Holders upon the receipt of any proposal or expression of interest with respect to the negotiation or formulation of any proposal, offer, dissolution, winding up, liquidation, reorganization, recapitalization, assignment for the benefit of creditors, merger, consolidation, business combination, joint venture, partnership, sale of assets, or restructuring of SAE other than the Restructuring Transactions; and
(xxvii) use commercially reasonable efforts to ensure the Alaskan tax credits are issued to SAE in a timely manner.
(b) Negative Covenants. Subject to the terms and conditions hereof, and for so long as this Agreement has not been terminated in accordance with the terms hereof, SAE agrees that, on behalf of itself and each guarantor party to the Existing Notes, as applicable, it shall not, directly or indirectly, take any of the following actions, unless such action is consented to by the Required Supporting Holders:
(i) modify the Restructuring Transactions, in whole or in part, in a manner that is inconsistent with the terms of this Agreement;
(ii) commence any proceeding opposing any of the terms of this Agreement or otherwise take any action to obstruct or delay the consummation of the Restructuring Transactions;
(iii) incur or suffer to exist any material indebtedness, except indebtedness existing and outstanding immediately prior to the date hereof, trade payables, ordinary course draws under the Existing Revolver, liabilities arising and incurred in the ordinary course of business, and indebtedness arising under or permitted by the New Senior Loan Facility;
(iv) directly or indirectly (1) affirmatively seek or solicit any discussions regarding the negotiation or formulation of any proposal, offer, dissolution, winding up, liquidation, reorganization, recapitalization, assignment for the benefit of creditors, merger, consolidation, business combination, joint
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venture, partnership, sale of assets, or restructuring of SAE other than the Restructuring Transactions (an Alternative Proposal), (2) publicly announce its intention not to pursue the Restructuring Transactions or (3) take any other action that is inconsistent with or is likely to delay the consummation of the Restructuring Transaction, in the case of each of clauses (1) through and including (3) of this paragraph, subject to the fiduciary obligations of SAE; or
(v) incur any material liens or security interests, except in the ordinary course of business or pursuant to, or as permitted under, the New Senior Loan Facility and the New Second Lien Notes.
2.03. Covenants, Acknowledgments and Commitments of Management. Subject to the terms and conditions hereof, and for so long as this Agreement has not been terminated in accordance with the terms hereof, each member of Management (severally and not jointly) agrees to negotiate in good faith their respective amended Employment Agreements with SAE on the terms set forth in Exhibit D hereto on the Closing Date.
2.04. Definitive Documents
Without limiting the foregoing, each Party hereby covenants and agrees to (a) negotiate in good faith the Memorandum, the indenture for the New Second Lien Notes, the New Senior Loan Facility credit agreement, the Intercreditor Agreement, the Employment Agreements, the Management Incentive Plan, the Warrant Agreement, the Organizational Documents and all ancillary documents related to each of the foregoing (collectively, the Definitive Documents), which Definitive Documents shall contain terms and conditions consistent in all respects with this Agreement and (b) execute (to the extent such Party is a party thereto) and otherwise support implementation of the Definitive Documents and any other such documents or agreements as may be reasonably necessary or advisable to implement the Restructuring Transactions, the purposes of this Agreement and the Definitive Documents. All Parties shall have the right to review and comment on the Definitive Documents, the terms of which shall be consistent with this Agreement and otherwise in form and substance reasonably acceptable to SAE and the Required Supporting Holders before the execution and delivery of the Definitive Documents.
Section 3. | Forbearance. |
(a) The Parties agree and acknowledge that if the Restructuring Transactions have not been consummated prior to July 15, 2016, in order to consummate the Restructuring Transactions, SAE will not make the interest payment due to be paid on July 15, 2016 under the terms of the Notes Indenture and will instead enter into the 30 day grace period with respect to such payment as permitted by the Notes Indenture.
(b) For so long as the Termination Date has not occurred, and subject to the limitations provided in clause (c) below, each Supporting Holder (severally and not jointly), agrees until August 15, 2016:
(i) to forbear from the exercise of any rights and remedies against SAE to which the Supporting Holders or the Indenture Trustee are or may become entitled as a result of any Default or Event of Default (each as defined in the
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Existing Notes Indenture) arising or existing under the Existing Notes Indenture in respect of SAEs failure to make the interest payment on July 15, 2016 and decision to enter into the grace period in respect thereof (the Potential Default);
(ii) to refrain from exercising any right and remedy that may become available to it under the Existing Notes Indenture by reason of the Potential Default (other than, in the case of the Indenture Trustee, ordinary course acts which it may take under the Existing Notes Indenture which would not adversely affect any other Party); and
(iii) to refrain from initiating, joining in, or encouraging in any way an instruction or direction from any Noteholder to the Indenture Trustee to exercise any rights and remedies under the Existing Notes Indenture in connection with the Potential Default.
(c) For so long as the Termination Date has not occurred, SAE on behalf of itself and the guarantors party to the Existing Notes Indenture, agrees not to make any payment to any Noteholder in respect of the interest payment due on July 15, 2016 prior to the expiration of the applicable grace period.
(d) Nothing contained in this Section 3 shall impair, impede or otherwise prevent any Supporting Holder or the Indenture Trustee from exercising any rights and remedies against SAE in respect of any other Default or Event of Default arising under the Existing Notes Indenture or taking any other action available to it by reason of such a Default or Event of Default.
Section 4. | Representations and Warranties |
4.01. Mutual Representations and Warranties. Each of the Parties, severally and not jointly, represents, warrants, and covenants to each other Party (to the extent applicable), as of the RSA Effective Date, as follows (each of which is a continuing representation, warranty, and covenant):
(a) to the extent it is an entity, it is validly existing and in good standing under the laws of the state or other jurisdiction of its organization;
(b) it has all requisite direct or indirect power and authority to enter into this Agreement and the Definitive Documents to which it is a party and to carry out the Restructuring Transactions contemplated by, and perform its respective obligations under, this Agreement and such Party has been authorized to enter into this Agreement, the New Senior Loan Facility and the Definitive Documents and to carry out the Restructuring Transactions contemplated by, and perform its respective obligations under this Agreement;
(c) the execution, delivery, and performance by such Party of this Agreement does not and will not (i) violate any provision of law, rule, or regulation applicable to it or any of its subsidiaries or its charter or bylaws (or other similar governing documents) or those of any of its subsidiaries, or (ii) except as described in Section 3 hereof conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its subsidiaries is a party;
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(d) the execution, delivery, and performance by such Party of this Agreement does not and will not require any registration or filing with, consent, or approval of, or notice to, or other action to, with or by, any federal, state, or governmental authority or regulatory body, except such filings as may be necessary and/or required for disclosure by the Exchange Act;
(e) this Agreement is the legally valid and binding obligation of such Party, enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, fraudulent conveyance or other similar laws relating to or limiting creditors rights generally, by equitable principles relating to enforceability or by the implied covenant of good faith and fair dealing; and
(f) it has been represented by legal counsel of its choosing in connection with this Agreement and the transactions contemplated by this Agreement, has had the opportunity to review this Agreement with its legal counsel, and has not relied on any statements made by any other Party or such other Partys legal counsel as to the meaning of any term or condition contained herein or in deciding whether to enter into this Agreement or the transactions contemplated hereby.
4.02. Representations and Warranties of the Supporting Holders. Each Supporting Holder, separately and not jointly, represents and warrants to the best of its knowledge, as of the date hereof that:
(a) with respect to the Existing Notes held by such Supporting Holder, such Supporting Holder (i) either (1) is the sole beneficial owner of the principal amount of such Existing Notes indicated on the respective signature page hereto, or (2) has sole investment or voting discretion with respect to the principal amount of such Existing Notes indicated on the respective signature page hereto and has the power and authority to bind the beneficial owners of such Existing Notes to the terms of this Agreement, and (ii) has full power and authority to act on behalf of, vote, and consent to matters concerning such Existing Notes and to dispose of, exchange, assign, and transfer such Existing Notes, including the power and authority to execute this Agreement and to perform its obligations hereunder;
(b) with respect to the Existing Notes held by each Supporting Holder, such Supporting Holder has made no assignment, sale, participation, grant, conveyance, pledge, or other transfer of, and has not entered into any other agreement to assign, sell, use, participate, grant, convey, pledge, or otherwise transfer, in whole in or part, any portion of its right, title, or interests in any such Existing Notes that materially conflicts with the representations and warranties of such Supporting Holder in this Agreement or that would render such Supporting Holder otherwise unable to comply with this Agreement and perform its obligations hereunder, including its obligation to support the Restructuring Transactions, in all material respects;
(c) the amount of debt listed on the signature page of each Supporting Holder is correct as of the date hereof; and
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(d) the Supporting Holders, in entering into this Agreement and participating in the Restructuring Transactions, have not acted as a partnership, limited partnership, syndicate, or other group (as that term is used in Section 13(d) of the Exchange Act) for the purpose of acquiring, holding, disposing, or voting of securities of SAE.
4.03. Representations and Warranties of SAE. SAE, on behalf of itself and each guarantor party to the Existing Notes, as applicable, represents and warrants to the best of its knowledge, as of the date hereof that:
(a) it has, or upon the receipt of shareholder consents will have, authorized sufficient shares of Common Stock to effect the Restructuring Transactions as contemplated by this Agreement;
(b) its financial condition has not materially and adversely changed from that set forth in the Form 10-K for the year ended December 31, 2015, the amended Form 10-K for the year ended December 31, 2015 and the Form 10-Q for the period ended March 31, 2016, other than as contemplated by such reports regarding its liquidity and cash flow difficulties;
(c) as of June 13, 2016, the aggregate outstanding indebtedness (excluding any interest, fees, costs, expenses, and indemnities that may be owed by the applicable obligors) under (1) the Existing Notes is $140.0 million and (2) the Existing Revolver is $13.8 million, and such amounts (together with accrued interest and fees thereon) are outstanding and justly and truly owing by SAE and the guarantors that are party to the Existing Notes Indenture or Existing Revolver, as applicable, without defense, offset, or counterclaim; and
(d) it has no knowledge of any Default or Event of Default under the Existing Revolver or the Existing Notes Indenture which has occurred and is continuing.
Section 5. | Termination Events |
5.01. Supporting Holder Termination Events. The Required Supporting Holders may terminate this Agreement upon three business days prior written notice, unless otherwise set forth below, delivered in accordance with Section 9.11 hereof, upon the occurrence and continuation of any of the following events (each, a Supporting Holder Termination Event):
(a) SAE fails to receive (i) the consent or waiver from the lender under the Existing Revolver or (ii) the shareholder consents or other approvals, in each case that is necessary for the consummation of the Restructuring Transactions, including entry into the New Senior Loan Facility and issuance of the Common Stock;
(b) the Launch Date shall not have occurred by June 20, 2016;
(c) the Funding Date shall not have occurred by July 1, 2016;
(d) the Closing Date shall not have occurred by August 15, 2016;
(e) the breach or noncompliance by SAE or any guarantor under the Notes Indenture of (or failure to satisfy) in any material respect any of the obligations, representations, warranties, or covenants of such parties as set forth in this Agreement (including, without
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limitation, in Sections 2.02, 2.04 or Section 3 hereto) that remains uncured for five business days after the receipt by SAE of written notice of such breach, but solely to the extent such breach or noncompliance is materially adverse to such Supporting Holder and materially affects the ability of SAE, on behalf of itself and its subsidiary guarantors, to consummate the Restructuring Transactions contemplated herein;
(f) the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any ruling or order declaring this Agreement or any material portion hereof to be unenforceable or enjoining or otherwise restricting the consummation of the Restructuring Transactions in a way that cannot reasonably be remedied by SAE;
(g) the occurrence of an event of default under (i) the Existing Revolver, (ii) the New Senior Loan Facility, or (iii) the Existing Notes Indenture (other than the failure to pay interest as set forth in Section 3 hereof), in each case, subject to all applicable notice, waiver, and cure provisions;
(h) SAE or any guarantor under the Notes Indenture executes a letter of intent or similar document stating an intention to pursue an alternative restructuring, liquidation, reorganization, wind-down, exchange, transaction, including an Alternative Proposal, other than that contemplated by this Agreement; or
(i) any of the Definitive Documents or other documents in respect of the Restructuring Transactions are inconsistent with the material terms and conditions set forth in this Agreement, the Term Sheet or their respective exhibits and schedules;
provided that this Agreement shall, without any additional act or notice by any party, terminate immediately upon the occurrence of (1) SAE or any guarantor under the Notes Indenture (i) consenting to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, or similar official of SAE or any substantial part of SAEs property, (ii) seeking any arrangement, adjustment, protection, or relief from its debts, or (iii) making a general assignment for the benefit of its creditors; (2) SAE or any guarantor under the Notes Indenture commencing a voluntary case filed under title 11 of the United States Code (the Bankruptcy Code); or (3) the commencement of an involuntary case against SAE or any guarantor under the Notes Indenture under the Bankruptcy Code.
5.02. SAE Termination Events. SAE may terminate its obligations under this Agreement upon three business days prior written notice delivered to the Parties in accordance with Section 9.11 hereof, upon SAEs knowledge of the occurrence of any of the following events (each, an SAE Termination Event, and together with the Supporting Holder Termination Events, the Termination Events, and each a Termination Event):
(a) the material breach by any of the Supporting Holders of any of the obligations, or covenants of such Supporting Holders set forth in this Agreement or any representation and warranty of such Supporting Holders failing to be accurate that would have a material adverse impact on the implementation or consummation of the Restructuring Transactions that remains uncured for a period of five business days after the receipt by the breaching Supporting Holders of written notice of such breach from SAE;
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(b) the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any ruling or order declaring this Agreement or any material portion hereof to be unenforceable or enjoining or otherwise restricting the consummation of the Restructuring Transactions in a way that cannot reasonably be remedied by SAE; or
(c) upon notice to the Supporting Holders, if the Board determines, after receiving advice from counsel, that proceeding with the transactions contemplated under this Agreement (including, without limitation, the Restructuring Transactions) would be inconsistent with the exercise of its fiduciary duties.
5.03. Effect of Termination
(a) Upon any termination of this Agreement under Sections 5.01 or 5.02, this Agreement shall be of no further force and effect and each Party hereto shall be released from its commitments, undertakings, and agreements under or related to this Agreement and shall be entitled to take all actions, whether with respect to the Restructuring Transactions or otherwise, that they would have been entitled to take had they not entered into this Agreement; provided, however, that SAEs obligation to pay reasonable Professional Fees shall survive with respect to those reasonable Professional Fees incurred through and including the date this Agreement is terminated. Notwithstanding the foregoing, any claim for breach of this Agreement that accrued prior to the date of a Partys termination or termination of this Agreement (as the case may be) and all rights and remedies of the Parties hereto shall not be prejudiced as a result of termination.
(b) Notwithstanding any provision in this Agreement to the contrary, no Party shall terminate this Agreement if such Party is in material breach of any provision hereof.
5.04. Termination Upon Consummation of the Restructuring Transactions. This Agreement shall terminate automatically without any further required action or notice upon the Closing Date.
Section 6. | Transfer of Existing Notes |
Each Supporting Holder agrees that so long as this Agreement has not been terminated in accordance with its terms, it shall not directly or indirectly sell, assign, pledge, hypothecate, convey, or otherwise transfer or dispose of or grant, issue, or sell any option, right to acquire, voting, participation, or other interest in any Existing Notes (each, a Transfer), unless the transferee thereof either (i) is a Supporting Holder and agrees to exchange such additional Existing Notes and deliver related consents in the Exchange Offer, or (ii) prior to such Transfer, agrees in writing for the benefit of the other Parties to become a Supporting Holder and to be bound by all of the terms of this Agreement with respect to such acquired Existing Notes by executing the joinder in the form attached hereto as Exhibit I (the Joinder Agreement), and delivering an executed copy thereof, within five business days of closing of such Transfer, to counsel to SAE and counsel to the Supporting Holders, as listed in Section 9.11 hereof, in which event the transferee (including a Supporting Holder transferee, if applicable) shall be deemed to be a Supporting Holder under this Agreement with respect to such transferred rights, claims, and obligations. Notwithstanding anything contained herein to the contrary, a Supporting Holder may Transfer any or all of its Existing Notes to any entity that, as of the date of the Transfer,
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controls, is controlled by, or is under common control with such Supporting Holder; provided, however, that such entity shall automatically be subject to the terms of this Agreement and deemed a Party hereto and must deliver an executed Joinder Agreement within five business days of the closing of such Transfer to counsel to SAE and counsel to the Supporting Holders. Each Supporting Holder agrees and acknowledges that any Transfer of Existing Notes that does not comply with the terms and procedures set forth in this Section 6 shall be deemed null and void ab initio.
Notwithstanding anything to the contrary in this Section 6, (i) a Qualified Marketmaker (as defined below) that acquires any Existing Notes from a Supporting Holder with the purpose and intent of acting as a Qualified Marketmaker for such Existing Notes (with the understanding that the Qualified Marketmaker will agree at the time of such acquisition to the terms of this paragraph), shall not be required to execute and deliver a Joinder Agreement or otherwise agree to be bound by this Agreement if such Qualified Marketmaker transfers such Existing Notes within ten (10) business days of its acquisition to a Supporting Holder or transferee that executes and delivers a Joinder Agreement in accordance with the terms set forth in the immediately preceding paragraph no later than (2) business days after consummation of the Transfer; and (ii) to the extent any Party is acting solely in its capacity as a Qualified Marketmaker, it may Transfer any ownership interests in the Existing Notes that it acquires from an Existing Holder that is not or has not been a Supporting Holder to a transferee that is not a Supporting Holder at the time of such Transfer without the requirement that the transferee be or become a signatory to this Agreement or execute a Joinder Agreement.
As used herein, Qualified Marketmaker) means an entity that (a) holds itself out to the public or applicable private markets as standing ready in the ordinary course of business to purchase from customers and sell to customers claims against SAE (or enter with customers into long and short positions in claims against SAE), in its capacity as a dealer or marketmaker in claims against SAE and (b) is, in fact, regularly in the business of making a market in claims against issuers or borrowers (including debt securities or other debt).
Section 7. | Amendments |
This Agreement, the Definitive Documents, and, in each case, any annexes or exhibits thereto may not be modified, amended, or supplemented, nor may any terms and conditions hereof or thereof be waived, without the prior written consent of SAE and the Required Supporting Holders. As used in this Agreement, Required Supporting Holders means Supporting Holders holding more than a majority of the aggregate principal amount of the Existing Notes held by all the Supporting Holders as of the date such consents are solicited; provided, however, that any waiver, change, modification, or amendment to this Agreement that materially and adversely affects the economic interests of any Supporting Holder may not be made without the written consent of each such affected Supporting Holder. Notwithstanding the foregoing, no modification, amendment or alteration shall be made to (a) the material terms of the New Term Loan Facility and the New Second Lien Notes, (b) the equity allocations set forth on Schedule 3 of the Term Sheet, or (d) the material economic terms of the Exchange Offer without the consent of each Supporting Holder.
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Section 8. | No Solicitation of Securities |
Notwithstanding anything to the contrary herein, this Agreement is not and shall not be deemed to be an offer for the issuance, purchase, sale, exchange, hypothecation, or other transfer of securities or a solicitation of an offer to purchase, sell, exchange or acquire securities for purposes of the Securities Act of 1933, as amended, and the Exchange Act.
Section 9. | Miscellaneous |
9.01. Further Assurances. Subject to the other terms hereof, the Parties agree to execute and deliver such other instruments and perform such acts, in addition to the matters herein specified, as may be commercially reasonably appropriate or necessary, from time to time, to effectuate the Restructuring Transactions in accordance with this Agreement.
9.02. Complete Agreement. This Agreement, exhibits and the annexes hereto, represent the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements, oral or written, between the Parties with respect thereto. No claim of waiver, consent, or acquiescence with respect to any provision of this Agreement, exhibits, and annexes hereto shall be made against any Party, except on the basis of a written instrument executed by or on behalf of such Party.
9.03. No Assignment. This Agreement shall be binding upon, and inure to the benefit of, the Parties. No rights or obligations of any Party under this Agreement may be assigned or transferred to any other person or entity, except as provided in this Agreement. Nothing in this Agreement, express or implied, shall give to any person or entity, other than the Parties, any benefit or any legal or equitable right, remedy, or claim under this Agreement.
9.04. Headings. The headings of all Sections of this Agreement are inserted solely for the convenience of reference and are not a part of and are not intended to govern, limit, or aid in the construction or interpretation of any term or provision hereof.
9.05. Governing Law; Submission to Jurisdiction; Selection of Forum; Waiver of Trial by Jury. This Agreement is to be governed by and construed in accordance with the laws of the State of New York. Each Party hereto agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement in the United States District Court for the Southern District of New York, and by execution and delivery of this Agreement, each of the Parties irrevocably accepts and submits itself to the exclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding. Each Party here irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby.
9.06. Counterparts. This Agreement may be executed and delivered (by facsimile, electronic mail, or otherwise) in any number of counterparts, each of which, when executed and delivered, shall be deemed an original, and all of which together shall constitute the same agreement.
9.07. Interpretation. This Agreement is the product of negotiations between the Parties, and in the enforcement or interpretation hereof, is to be interpreted in a neutral manner, and any
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presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Agreement, or any portion hereof, shall not be effective in regard to the interpretation hereof.
9.08. Relationship Among Supporting Holders. It is understood and agreed that no Supporting Holder has any duty of trust or confidence of any kind or form with any other Supporting Holders as a result of this Agreement, and, except as expressly provided in this Agreement, there are no commitments among or between them. It is further understood and agreed that any Supporting Holder may trade in the Existing Notes or other debt or equity securities of SAE without the consent of SAE or any other Supporting Holder, subject to applicable securities laws and the terms of this Agreement, and subject to Section 6 of this Agreement; provided, however, that no Supporting Holder shall have any responsibility for any such trading by any other entity by virtue of this Agreement. No prior history, pattern, or practice of sharing confidences among or between the Supporting Holders shall in any way affect or negate this understanding and agreement. No Supporting Holders shall, as a result of its entering into and performing its obligations under this Agreement, be deemed to be a part of a group (as that term is used in Section 13(d) of the Exchange Act) with any other Party. For the avoidance of doubt, no action taken by a Supporting Holder pursuant to this Agreement shall be deemed to constitute or to create a presumption by any of the Parties that the Consenting Noteholders are in any way acting in concert or as such a group. The execution of this Agreement by any Supporting Holder shall not create, or be deemed to create, any fiduciary or other duties (actual or implied) to any other Supporting Holder other than non-fiduciary duties expressly set forth in this Agreement.
9.09. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, administrators and representatives, other than a trustee or similar representative appointed in a bankruptcy case.
9.10. Acknowledgements. Notwithstanding anything herein to the contrary, none of the Supporting Holders shall (a) have any fiduciary duty or (b) other duties or responsibilities to each other, SAE, any subsidiary or affiliate of SAE, or any of SAEs creditors or other stakeholders.
9.11. Notices. All notices hereunder shall be deemed given if in writing and delivered, if sent by hand delivery, electronic mail, courier, or overnight delivery (return receipt requested) to the following addresses (or at such other addresses as shall be specified by like notice):
(a) | if to SAE, to: |
SAExploration Holdings, Inc.
1160 Dairy Ashford Rd., Suite 160
Houston, Texas 77079
Attn: Brent Whiteley Chief Financial Officer, General Counsel and Secretary
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with copies to:
Jones Day
222 E. 41st Street
New York, New York 10017
Attn: Alex Gendzier
Brad Erens
E-mail address: agendzier@jonesday.com
bberens@jonesday.com
(b) | if to the Supporting Holders, to: |
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
Attn: Brian Hermann
Lauren Shumejda
E-mail address: bhermann@paulweiss.com
lshumejda@paulweiss.com
Any notice given by hand delivery, electronic mail, mail, or courier shall be effective when received.
9.12. Waiver. Except as expressly provided in this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict any right of any Supporting Holder or SAE or the ability of each of the Supporting Holders or SAE to protect and preserve its respective rights, remedies and interests. If the Restructuring Transactions are not consummated, or if this Agreement is terminated for any reason, the Parties fully reserve any and all of their rights.
9.13. Several, Not Joint, Obligations. The agreements, representations and obligations of the Parties under this Agreement are, in all respects, several and not joint.
9.14. Remedies. All rights, powers, and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any right, power, or remedy thereof by any Party shall not preclude the simultaneous or later exercise of any other such right, power, or remedy by such Party or any other Party.
9.15. Specific Performance. This Agreement is intended as a binding commitment enforceable in accordance with its terms against the Parties. It is understood and expressly agreed by each of the Parties that money damages would not be a sufficient remedy for any breach of this Agreement by any Party, and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief as a remedy for any such breach without the necessity of proving the inadequacy of money damages as a remedy and without posting security for such relief.
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9.16. No Third-Party Beneficiaries. Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties, and no other person or entity shall be a third-party beneficiary hereof.
9.17. Management Liability. The Parties hereby acknowledge that Management is party to this Agreement solely with respect to Section 2.03 and shall incur no liability pursuant to (i) any breach by SAE of this Agreement and (ii) any delay of, or failure to consummate, any or all of the Restructuring Transactions contemplated in this Agreement.
9.18. Consideration. The Parties hereby acknowledge that no consideration, other than that specifically described herein and the Definitive Documents, shall be due or paid to any Party for its agreement to accept the Restructuring Transactions in accordance with the terms and conditions of this Agreement.
9.19. Survival. Notwithstanding anything herein to the contrary, the acknowledgements, agreements and obligations of the Parties in this Section 9.18 and Sections 2.01(e), 5.03(a), 9.08, 9.09 and 9.17 shall survive any termination of this Agreement and shall continue in full force and effect in accordance with the terms thereof.
Section 10. | Releases |
10.01. On the Closing Date, SAE and the Supporting Holders shall enter into mutual releases of all claims and causes of action arising before the Closing Date.
[Signatures on Following Page]
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IN WITNESS WHEREOF, SAE, Management and the Supporting Holders have caused this Agreement to be executed and delivered by their respective and duly authorized officers or other agents, solely in their respective capacity as officers or other agents of the undersigned and not in any other capacity, as of the date first set forth above.
SAEXPLORATION HOLDINGS, INC. | ||
By: |
/s/ Brian Beatty | |
Name: |
Brian Beatty | |
Title: |
CEO & President |
JEFF HASTINGS | ||
By: |
/s/ Jeff Hastings | |
Title: |
Executive Chairman |
BRIAN BEATTY | ||
By: |
/s/ Brian Beatty | |
Title: |
CEO & President |
BRENT WHITELEY | ||
By: |
/s/ Brent Whiteley | |
Title: |
CFO, General Counsel and Secretary |
Amzak Capital Management, LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Samuel J. Barker | |
Name: |
Samuel J. Barker | |
Title: |
Senior Fixed Income Analyst |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Aristides Capital LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Christopher M. Brown | |
Name: |
Christopher M. Brown | |
Title: |
Managing Member |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
BlueMountain Capital Management, LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Kyle Brady | |
Name: |
Kyle Brady | |
Title: |
Assistant General Counsel |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Morgan Stanley Investment Management, Inc., as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Kim W. Cross | |
Name: |
Kim W. Cross | |
Title: |
Managing Director |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Mr. John Pecora | ||
By: |
/s/ John Pecora | |
Name: |
John Pecora | |
Title: |
N/A |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Tegean Capital Management, LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Ariel Rothman | |
Name: |
Ariel Rothman | |
Title: |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Whitebox Advisors LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Mark Strefling | |
Name: |
Mark Strefling | |
Title: |
General Counsel & Chief Operating Officer |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Exhibit A
Term Sheet
SAEXPLORATION HOLDINGS, INC.
Term Sheet
June 13, 2016
This term sheet (the Term Sheet) sets forth an outline of certain material terms and conditions of a comprehensive restructuring and recapitalization (the Restructuring) of the balance sheet of SAExploration Holdings, Inc. (the Company). This Term Sheet is intended as a summary for discussion purposes only and does not constitute a commitment, obligation, or agreement to provide, arrange, or syndicate any financing on the part of the Supporting Holders (as defined below). Only execution and delivery of definitive documentation relating to the Restructuring shall result in any binding or enforceable obligations of any party with respect thereto. It is anticipated that the Company and the Supporting Holders (as defined below) will execute a restructuring support agreement (the RSA) on June 13, 2016 (the RSA Date) with standard terms and conditions evidencing, among other things, their intent to support consummation of the Restructuring.
Overview of the Restructuring
Pursuant to the Restructuring, (i) the Supporting Holders (as defined below) shall exchange the Existing Notes (as defined below) into New Second Lien Notes (as defined below) and shares of common stock (the Common Stock) of the Company, as contemplated by the Exchange Offer (as defined below) and (ii) certain Supporting Holders shall provide the Company with a multi-draw senior secured term loan facility (the New Senior Loan Facility) in an aggregate principal amount of up to $30 million on the terms set forth on Schedule 1 hereto. Other Participating Holders (as defined below) shall have the opportunity to participate in the New Senior Loan Facility on equal terms with the other Supporting Holders.
The Company |
SAExploration Holdings, Inc. |
Current Capital Structure |
The indebtedness of the Company as of the date of this Term Sheet is as follows: |
| that certain Credit and Security Agreement, dated as of November 6, 2014, by and among Wells Fargo Bank, N.A., as lender, SAExploration, Inc., as borrower, and the Company and the other guarantors party thereto, as guarantors, providing for, among other things, a $20 million revolving line of credit secured by the Companys U.S. assets, including accounts receivable and equipment, subject to certain exclusions and exceptions (the Revolving Credit Facility); and |
| 10.000% Senior Secured Notes due 2019 (the Existing Notes, and the holders thereof, the Existing Holders), issued pursuant to that certain indenture, dated as of July 2, 2014 (the Existing Notes Indenture) by and among the Company, the guarantors named therein and U.S. Bank National Association, as indenture trustee, of which there is outstanding as of the date of this Term Sheet $140 million in an aggregate principal amount. |
Supporting Holders |
Supporting Holders means the Existing Holders executing the RSA, including those Existing Holders listed on Schedule 2. |
Overview of the Restructuring |
Subject to the terms set forth in the RSA and this Term Sheet, the Restructuring shall be implemented as follows: |
| on June 13, 2016, the Company and holders of not less than 66% of the aggregate principal amount of Existing Notes shall execute the RSA; |
| on or before June 20, 2016 (the Launch Date), the Company shall commence an exchange offer and consent solicitation pursuant to which (i) Existing Notes shall be exchanged for (1) new second lien notes (the New Second Lien Notes) on the terms described below and (2) shares of Common Stock of the Company (the New Notes Shares), equal to 64.48% of the total outstanding Common Stock of the Company on the Closing Date (as defined below), on a fully diluted basis, as set forth in Schedule 3 hereto, and (ii) tendering Existing Holders will deliver consents to certain proposed amendments as described below; |
| on or before July 1, 2016 (such date, the Funding Date), the parties shall obtain (i) any consents required from Existing Holders to amend the Existing Notes Indenture, existing security documents and existing intercreditor agreement (as summarized below under Consent Solicitation) and (ii) such waivers, consents or amendments to the Revolving Credit Facility from Wells Fargo, N.A., as lender under the Revolving Credit Facility, in both cases, as necessary to give effect to and permit the Restructuring referred to herein. Upon receipt of such consents and amendments or waivers, (1) the Supporting Holders and any other Participating Holders (together, the New Senior Lenders) shall enter into the New Senior Loan Facility with the Company on the terms set forth on Schedule 1 hereto, in connection with which the New Senior Lenders shall receive, subject to the terms and conditions described in Schedule 1, shares of Common Stock of the Company (together with the Backstop Shares (as defined in Schedule 1 hereto), the New Senior Loan Shares), equal to 28.20% of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3 hereto, (2) the Initial Draw (as defined in Schedule 1) shall occur, and (3) the Company and the trustee and collateral agent under the Existing Notes Indenture shall enter into the supplemental indenture to the Existing Notes Indenture, the amendments to the existing security documents and the amendments to the existing intercreditor agreement; |
| in the RSA, the Company shall, if necessary, enter into the 30-day grace period provided for in the Existing Indenture in respect of the July 15, 2016 interest payment under the Existing Notes, and the Supporting Holders shall agree to forbear, if necessary, from exercising remedies in respect thereof for a period extending to August 15, 2016 to allow the Restructuring to be consummated; and |
2
| existing holders of the Companys Common Stock shall retain, on a pro rata basis after giving effect to the Restructuring, shares of Common Stock of the Company equal to 1.32% of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3. |
It is anticipated that the Exchange Offer will close, and that the New Senior Loan Shares and the New Note Shares will be issued, on the date that is intended to be no later than 30 days after the Launch Date (assuming no amendments and/or extensions of the offer period) (the Closing Date). |
The New Senior Loan Shares and the New Notes Shares shall be subject to mutual dilution and shall, together with shares issued under the Management Incentive Plan (as defined below), dilute the existing Common Stock of the Company. The New Senior Loan Shares and the New Notes Shares shall not be dilutive to the Management Incentive Plan. Schedule 3 presents the allocation of the Companys Common Stock as of the Funding Date, on an as-issued basis, and the allocation of the Companys Common Stock as of the Closing Date. |
In connection with the Restructuring, on the Closing Date, the Company will: |
| enter into new amended employment agreements with the Companys senior management (Jeff Hastings, Brian Beatty, Brent Whitely, Mike Scott, Darin Silvernagle, Trisha Gerber and Ryan Abney), as described below; |
| adopt the Management Incentive Plan, as described below; and |
| issue Warrants to existing holders of the Companys Common Stock, as described below. |
3
The Exchange Offer |
Eligible Existing Holders will be offered an opportunity to participate pro rata in the exchange offer for the Existing Notes (together, the Exchange Offer), pursuant to which each participating Existing Holder (the Participating Holders) shall receive, on the Closing Date, for every $1,000 principal amount of Existing Notes tendered for exchange (subject to a minimum tender of $2,000 principal amount and in $1,000 increments in excess thereof): |
| $500 principal amount of New Second Lien Notes, which shall have terms substantially similar to the Existing Notes; provided that (1) the New Second Lien Notes shall have a maturity date of September 24, 2019, provided that, if any of the Existing Notes remain outstanding as of March 31, 2019, the maturity date of the New Second Lien Notes will become April 14, 2019 upon the vote of the holders of a majority of the then-outstanding New Second Lien Notes, (2) the liens securing the New Second Lien Notes shall be junior to the liens securing the New Senior Loan Facility and senior to the liens securing the Existing Notes after the Closing Date, (3) the Company may elect to pay interest on the New Second Lien Notes in kind with additional New Second Lien Notes for the first twelve months of interest payment dates following the Closing Date, provided that, if the Company makes this election, the interest on the New Second Lien Notes for such in kind payments will accrue at a per annum rate 100 basis points higher than the cash interest rate, (4) the definition of Permitted Holders for purposes of the Change of Control covenant will include the Supporting Holders and their related parties, (5) the New Second Lien Notes will have a special redemption right at par of up to $35 million of the issuance to be paid out of the proceeds of the Alaska tax credit certificates and shall be conditioned upon payment in full of the Revolving Credit Facility and the New Senior Loan Facility, and (6) the New Second Lien Notes shall include a make-whole provision requiring that if the New Second Lien Notes are accelerated or otherwise become due and payable prior to their stated maturity due to an Event of Default (including but not limited to a bankruptcy or liquidation of the Company (including the acceleration of claims by operation of law)), then the Applicable Premium payable with respect to an optional redemption will also be immediately due and payable, along with the principal of, accrued and unpaid interest on, the notes and shall constitute part of the obligations in respect thereof as if such acceleration were an optional redemption of the notes, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each holders lost profits as a result thereof; and |
| a pro rata portion the New Notes Shares, collectively representing 64.48% of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3. |
The indenture for the New Second Lien Notes shall include the following additional language in respect of the make-whole: |
Any Applicable Premium payable shall be presumed to be the liquidated damages sustained by each holder as the result of the early redemption and the Company agrees that it is reasonable under the circumstances currently existing. The Applicable Premium shall also be payable in the event the New Second Lien Notes (and/or the Indenture) are satisfied or released by foreclosure, deed in lieu of foreclosure or any other means. The Company expressly waives (to the fullest extent it may lawfully do so) the provisions of any present or future statute or law that prohibits or may prohibit the collection of the foregoing Applicable Premium in connection with any such acceleration. The Company expressly agrees (to the fullest extent it may lawfully do so) that: (A) the Applicable Premium is reasonable and is the product of an arms length transaction between sophisticated business people, ably represented by counsel; (B) the Applicable Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between holders and the Company giving specific consideration in this transaction for such agreement to pay the premium; and (D) the Company shall be estopped hereafter from claiming differently than as agreed to in this paragraph. The Company expressly acknowledges that its agreement to pay the Applicable Premium to Holders as herein described is a material inducement to holders to purchase the Notes. The Applicable Premium shall constitute part of the holders claim in respect of the New Second Lien Notes in the event of a bankruptcy or liquidation, and such claim shall be allowed against the debtors without the need to file a proof of claim. |
The calculation of the Applicable Premium shall be the same as that appearing in the Existing Notes Indenture, except that the discount rate will be based on Treasuries plus 25 basis points. |
The Restructuring will be conditioned on participation in the Exchange Offer by Existing Holders holding at least 90% of the Existing Notes outstanding as of the date of this Term Sheet. The Participating Holders shall deliver consents to the amendments to the Existing Notes Indenture as described below under Consent Solicitation. |
Pursuant to, and subject to the terms of, the RSA, the Supporting Holders shall agree to participate in the Exchange Offer for the full amount of their Existing Notes, to deliver consents to amend the Existing Notes Indenture and to waive withdrawal rights with respect to their tendered Existing Notes and related Consents, each as described below under Consent Solicitation. |
4
Consent Solicitation |
In connection with the Exchange Offer, the Company will seek consents from Participating Holders to: |
| amend the Existing Notes Indenture (the Consent Solicitation) to: |
| waive the applicable change of control provisions; |
| permit the entry into, and incurrence of draws pursuant to, the New Senior Loan Facility on the Funding Date and the issuance of the New Second Lien Notes (including any additional New Second Lien Notes issued in lieu of cash interest payments) by amending the Incurrence of Indebtedness and Issuance of Preferred Stock and Liens covenants; |
| amend the definition of Permitted Holders for purposes of the Change of Control covenant to include the Supporting Holders and their related parties; and |
| amend the Payments for Consents and Transactions with Affiliates covenants in connection with the transactions contemplated by this Term Sheet; |
| amend the security documents relating to the Existing Notes to give effect to the Term Sheet, including to consent to full subordination of the liens securing the Existing Notes to the New Senior Loan Facility and the New Second Lien Notes; and |
| amend and restate the existing intercreditor agreement to account for the entry into the New Senior Loan Facility on the Funding Date, the New Second Lien Notes and the related liens and the relative lien priorities of the Revolving Credit Facility, the New Senior Loan Facility, the New Second Lien Notes and the Existing Notes as contemplated by Schedule 1. |
In order to tender Existing Notes for exchange in the Exchange Offer, Participating Holders shall be required to deliver consents in the Consent Solicitation. Supporting Holders participation in the Exchange Offer and Consent Solicitation will occur at the launch of the deal and Supporting Holders shall, subject to the terms of the RSA, waive withdrawal rights with respect to tendered Existing Notes and the related Consents, with the effect that, the Company and the trustee for the Existing Notes Indenture shall be able to enter into a supplemental indenture to permit the entry into the New Senior Loan Facility and related matters on the Funding Date. |
Amendment of the Revolving Credit Facility |
The Revolving Credit Facility shall remain in place; provided that consummation of the New Senior Loan Facility shall be subject to obtaining the necessary consents or waivers from Wells Fargo (as discussed below). |
5
Management Incentive Plan |
On the Closing Date, the Company shall adopt a management incentive plan (the Management Incentive Plan), which shall reserve 10%, on a fully diluted basis, of the total shares of common stock outstanding as of the Closing Date (the MIP Shares) for distribution to covered employees on terms to be agreed with senior management. The Management Incentive Plan shall supersede any prior management or employee stock compensation plan of the Company in effect on the Closing Date. Senior management shall receive 60% of the MIP Shares on the Closing Date, of which 1/3 shall vest on each of (1) the earlier of (a) the first anniversary of the Closing Date and (b) the date the Company shall have received Alaskan tax credit certificates in a face amount of at least $25 million (the Tax Credit), and (2) each anniversary of the Closing Date for the two years thereafter in the form of: |
(i) shares equal to 3% of the Companys outstanding Common Stock as of the Closing Date on a fully diluted basis; and |
(ii) at-the-money incentive options to acquire shares equal to 3% of the Companys outstanding Common Stock as of the Closing Date, based on an equity value (a) if options are initially distributed on the first anniversary of the Closing Date or after the 60th calendar day following the Closing Date due to the receipt of the Tax Credit (the Tax Credit Valuation Date), the volume-weighted average price (the VWAP) per share of SAE Common Stock during the 30-day period ending on the date that is the 60th calendar day following the Closing Date or (b) if options are initially distributed due to the receipt of the Tax Credit prior to the 60th calendar date following the Closing Date, the VWAP per share of SAE Common Stock during the 30-day period ending on the date one day preceding any public announcement of the Tax Credit Valuation Date; provided, however, that if the Tax Credit Valuation Date occurs before the expiration of 30 days following the Closing Date, then the VWAP calculation period shall be the number of days between the Closing Date and the Tax Credit Valuation Date. |
If any member of senior management terminates his or her employment without good reason within the first twelve months after the Closing Date, that employees vested MIP Shares or the cash proceeds thereof will be clawed back. |
The remaining 40% of MIP Shares shall be granted to members of management and other key employees and distributed according to a vesting schedule to be determined by the New Board, provided, however, that the MIP Shares may not be used to fund any of the Annual Performance Awards (as defined in Schedule 4). |
Warrants |
In connection with the Restructuring, the Company will enter into, as of the Closing Date, a warrant agreement with its transfer agent, as warrant agent (the Warrant Agreement), that shall provide for the issuance of warrants in two series to all existing holders of Common Stock that, upon exercise, will each represent 2.25% of the outstanding shares of Common Stock as of the Closing Date, subject to dilution by the New Loan Shares and the MIP Shares, at an exercise price to reflect market capitalizations of $112 million and $140 million, respectively, with five year terms (Warrants). The Warrant Agreement will contain customary cashless exercise and anti-dilution provisions. |
6
The Warrants will not become exercisable until 30 days before their expiration date. In addition, it shall be a condition precedent to any exercise that the Company shall have received Alaska tax credit certificates in a face amount of at least $25 million. |
Holders of the Warrants will be entitled to the benefit of a customary resale registration rights agreement. |
Treatment of Existing Equity Holders |
In connection with the Restructuring, existing holders of Common Stock will retain 1.32% of the outstanding shares of Common Stock on a fully diluted basis, as of the Closing Date, provided that these shares shall be subject to dilution by the subsequent issuance of the remaining 40% of the MIP Shares. |
Employment Agreements |
On the Closing Date, the Company shall enter into new amended employment agreements with the Companys senior management (Jeff Hastings, Brian Beatty, Brent Whiteley, Mike Scott, Darin Silvernagle, Trisha Gerber and Ryan Abney), to reflect the material terms and conditions set forth on Schedule 4 hereto. |
New Board |
As of the Closing Date, the Companys board of directors (the New Board) shall consist of 7 members, one of whom shall be a member of senior management appointed by the Company. The remaining 6 directors shall be selected by the Supporting Holders in their sole discretion; provided that the Supporting Holders shall consult in good faith with the Companys management in the selection thereof; provided, further, that a sufficient number of independent directors will be selected to comply with any applicable listing requirements. |
Amended Articles & Bylaws |
As soon as reasonably practicable after the Closing Date, the Companys existing articles and bylaws will be subject to customary amendments and modifications to be agreed upon in the RSA. |
Public Status; Listing |
The Company shall remain an SEC-registered public company and shall file reports under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. The Company shall use its commercially reasonable efforts to comply with the listing requirements of the Nasdaq Global Market or the Nasdaq Capital Market, as applicable. |
The Company shall use its commercially reasonable efforts to receive the requisite shareholder votes to affect the Restructuring, to the extent required by its charter, other corporate governance documents and applicable law. |
7
Closing Conditions |
The effectiveness of the Restructuring shall be conditioned upon the absence of any material business, regulatory or legal impediments thereto, as determined by the Supporting Holders in their reasonable discretion, and shall be subject to customary closing conditions, including, without limitation: |
| the negotiation and execution of definitive documentation acceptable to the Supporting Holders and the Company; |
| participation by holders of 90% of the outstanding Existing Notes in the Exchange Offer and Consent Solicitation; |
| no success fee shall be payable to a financial advisor, if any, to the Company, except on terms reasonably acceptable to the Supporting Holders; |
| receipt of any necessary amendments and/or waivers from the lender under the Revolving Credit Facility to permit the Restructuring; and |
| payment of all fees and expenses incurred by the Supporting Holders. |
Fiduciary Out / Shop Right |
The Company may terminate this Term Sheet or the RSA upon three business days prior notice if the board of directors of the Company determines, after receiving advice from counsel, that proceeding with the Restructuring would be inconsistent with the exercise of its fiduciary duties. Notwithstanding anything in this Term Sheet or the RSA to the contrary, nothing in this Term Sheet or the RSA shall prevent the Company from taking or failing to take any action that it is obligated to take (or to fail to take) in the performance of any fiduciary duty or as otherwise required by applicable law which the Company owes to any other person or entity under applicable law. |
Fees and Expenses |
The Company shall pay promptly all accrued and unpaid fees and expenses of the Supporting Holders and any agent or trustee under the various debt documents in connection with the Restructuring (whether or not the Restructuring is consummated) including, without limitation, the costs and expenses incurred by counsel to the Supporting Holders in connection with the Restructuring. |
Reservation of Rights |
Nothing herein is intended to, or does, in any manner waive, limit, impair or restrict the ability of each of the Company and the Supporting Holders to protect and fully preserve all of their rights, remedies, claims and interests, including the Supporting Holders claims against the Company or any other party in interest or their respective property. If the Restructuring is not consummated, the Company and the Supporting Holders fully reserve any and all of their respective rights. |
No Admission |
Nothing in the Term Sheet is or shall be deemed to be an admission of fact or liability or deemed binding on the Company or the Supporting Holders. |
8
Schedule 1
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Term Sheet.
New Senior Loan Facility Term Sheet | ||
Borrower | The Company | |
Guarantors | All of the Companys domestic subsidiaries | |
Lenders | Certain of the Supporting Holders and Other Participating Holders. | |
Facility | Senior secured multi-draw term loan facility in an aggregate principal amount of $30 million.
The initial draw (the Initial Draw), which shall occur on or about the Funding Date, shall be not more than $5.6 million in the aggregate. It shall be a condition precedent to the Initial Draw that the Company and holders of not less than 66% of the aggregate principal amount of Existing Notes shall have executed the RSA.
The second draw (the Second Draw) shall be not more than $9.4 million in the aggregate. It shall be a condition precedent to the Second Draw that the Restructuring described in the RSA and the transactions contemplated by the exhibits thereto that are intended to be closed by the Closing Date shall have been consummated by or on the Closing Date.
It shall be a condition precedent to any additional subsequent draw (a Subsequent Draw) that the Company shall have received Alaska tax credit certificates in a face amount of at least $25 million. | |
Security Interest | The obligations of the Company and the guarantors under the New Senior Loan Facility will be secured on a 1.5 lien priority basis by the collateral currently securing the obligations under the Revolving Credit Facility and the Existing Notes, respectively, and the receivable due to the Company from Alaska Seismic Ventures and any tax credit or tax certificate assigned or issued to the Company in connection therewith, and all proceeds therefrom (the Collateral). The Collateral will secure those obligations of the Company and the guarantors (1) under the Revolving Credit Facility on a first lien priority basis, (2) under the New Notes on a second lien priority basis and (3) under the Existing Notes on a third lien priority basis.
As of the Funding Date, the agent under the New Senior Loan Facility, the agent under the Revolving Credit Facility, and the collateral agent under the Existing Indenture will enter into an Intercreditor Agreement with the Company and the Guarantors which will provide for contractual subordination of the liens of each such agent and collateral agent in the Collateral to the extent necessary to reflect the relative lien priority set forth herein. The Intercreditor Agreement will also govern the relationship of the parties in respect of the Collateral and certain other matters. This new Intercreditor Agreement will, in effect amend and restate the existing intercreditor agreement. The collateral agent under the New Indenture will sign a joinder to the new Intercreditor Agreement on the Closing Date. | |
Interest | 10% per year, payable monthly in cash. |
9
New Senior Loan Facility Term Sheet | ||
Facility Fee | The Company shall pay a facility fee of $600,000 in the aggregate to the New Senior Lenders on the Funding Date with the proceeds of the Initial Draw under the New Senior Loan Facility. | |
Syndication; Backstop Shares |
Subsequent to the Initial Draw but prior to the Second Draw, Participating Holders shall have the opportunity to participate in the New Senior Loan Facility. On the RSA Date and the Funding Date, the New Senior Lenders who fund the Initial Draw shall become entitled on such date, subject to issuance, to a pro rata portion of shares of the Companys Common Stock (the Backstop Shares), representing 3.14% and 6.26%, respectively, of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3. The Backstop Shares shall be issued on the earliest of (1) the Closing Date; (2) the date on which the RSA terminates according to its terms, or (3) August 15, 2016. | |
Equity | The Backstop Shares shall be deemed earned by the New Senior Lenders as of the Funding Date, provided that the Backstop Shares shall not be issued to the New Senior Lenders until the earlier of (1) the Closing Date and (2) August 15, 2016.
On the Closing Date, each New Senior Lender shall receive a pro rata portion of shares of the Companys Common Stock (collectively, with the Backstop Shares, the New Senior Loan Shares), representing 18.80% (excluding Backstop Shares) of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3 hereto; provided that, if the stockholders of the Company have not then approved the issuance of these shares, then the Company will issue 19.9% of the outstanding shares of Common Stock to the New Senior Lenders and will covenant to issue the remaining 8.3% after such stockholder consent has been received, for the purpose of remaining in compliance with NASDAQ Listing Rule 5635.
The New Senior Loan Shares and the New Notes Shares shall be subject to mutual dilution and shall, together with shares issued under the Management Incentive Plan, dilute the existing Common Stock of the Company. The New Senior Loan Shares and the New Notes Shares shall not be dilutive to the Management Incentive Plan. | |
Maturity | January 1, 2018. | |
Restrictive Covenants | The New Senior Loan Facility will contain restrictive covenants, financial covenants, and selected maintenance covenants that are mutually acceptable to the Company and the New Senior Lenders, including, without limitation, that the proceeds of the New Senior Loan Facility and available cash shall be used in accordance with a budget mutually acceptable to the Company and the New Senior Lenders. | |
Governing Law | The New Senior Loan Facility and related transaction documents will be governed by New York law. |
10
Schedule 2
Supporting Holders
| Whitebox Advisors LLC |
| BlueMountain Capital Management, LLC |
| Morgan Stanley Investment Management Inc. |
| Aristides Capital LLC |
| Tegean Capital Management, LLC |
| Amzak Capital Management, LLC |
| Mr. John Pecora |
11
Schedule 3
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Term Sheet.
RSA Date Allocation of Common Stock*
As of the RSA Date, after giving effect to the Backstop Shares, on an as-issued basis1, and excluding the issuance of any other New Senior Loan Shares, New Notes Shares and MIP Shares, the allocation of Common Stock of the Company shall be as follows (based on 17,451,353 shares outstanding prior to the Funding Date):
Existing Common Stock |
96.86%2 | |
Management Incentive Plan |
0% | |
New Notes Shares |
0% | |
New Senior Loan Shares (other than Backstop Shares) |
0% | |
Backstop Shares |
3.14% |
Funding Date Allocation of Common Stock*
As of the Funding Date, after giving effect to the Backstop Shares, on an as-issued basis1, and excluding the issuance of any other New Senior Loan Shares, New Notes Shares and MIP Shares, the allocation of Common Stock of the Company shall be as follows (based on 17,451,353 shares outstanding prior to the Funding Date):
Existing Common Stock |
90.0%2 | |
Management Incentive Plan |
0% | |
New Notes Shares |
0% | |
New Senior Loan Shares (other than Backstop Shares) |
0% | |
Backstop Shares |
10.0% |
Closing Date Allocation of Common Stock*
As of the Closing Date, after giving effect to the issuance of the New Senior Loan Shares, the Backstop Shares, the New Notes Shares and the MIP Shares (as shown in the table below), the allocation of Common Stock of the Company shall be as follows (based on 17,451,353 shares outstanding prior to the Funding Date):
Initial Issuance of 60% of MIP Shares |
Fully-Diluted for All MIP Shares |
|||||||
Existing Common Stock |
1.32 | % | 1.26 | % | ||||
Management Incentive Plan3 |
6.00 | % | 10.00 | % | ||||
New Notes Shares |
64.48 | % | 61.74 | % |
1 | The Backstop Shares will deemed to be earned as of the RSA Date and the Funding Date as set forth in the allocation tables herein, but will be issued on the earliest of (1) the Closing Date; (2) the date on which the RSA terminates according to its terms, or (3) August 15, 2016. |
2 | The New Senior Lenders that fund the Initial Draw (as defined in Schedule 3 hereto) shall become entitled to receive the Backstop Shares on the Funding Date, provided that the New Senior Loan Shares shall not be issued to the New Senior Loan Lenders until the Closing Date. |
3 | Includes shares held by Messrs. Hastings, Beatty and Whiteley. |
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New Senior Loan Shares (other than Backstop Shares)4 |
18.8 | % | 18.00 | % | ||||
Backstop Shares5 |
9.40 | % | 9.00 | % |
* | Excludes any impact of shares issuable in connection with Warrants. |
4 | Pre-dilution: 20.0%. |
5 | Pre-dilution: 10.0%. |
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Schedule 4
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Term Sheet.
Topic |
Amendment | |
Term | New three-year terms, starting as of the Closing Date, with evergreen features providing for successive one year terms thereafter as contained in the current employment agreements. | |
Base Salary | No changes to 2016 base salary under the current employment agreements. Starting in 2017, annual increases in base salary will be set by the new board of directors (the New Board), provided that the New Board may not unilaterally decrease the base salary at any point without the consent of the executive. | |
Annual Cash Performance Award | No change to 2016 amounts, targets, calculation, or methodology, under the current employment agreements. Starting in 2017, the New Board can set Executive Goals but not the Target Percentages (as defined in the employment agreements). In addition, no more than 50% of any award may be in common stock of the Company. | |
Existing Management/Employee Equity | All issued equity compensation (LTIP shares, preferred shares, etc.) shall vest and convert into common shares immediately prior to the Closing Date and be treated as existing equity subject to dilution pursuant to the Term Sheet. | |
Existing MIP | All existing equity-based compensation programs shall be replaced by the Management Incentive Plan. | |
Severance | No change to existing severance packages under the current employment agreements; however, executives shall not be entitled to any severance if the executive voluntarily terminates the employment agreement other than for cause or good reason. | |
Non-compete | The non-compete shall last for one year with no additional severance, with the option to extend for an additional year in the Companys sole discretion, provided that the Company must pay the executive one years base salary and 100% of the target bonus of that base salary if it elects to extend. | |
Change of Control | Waived to allow for the Restructuring Transactions. | |
280G Gross-Up | To be deleted. | |
Constructive Dismissal | Revision to the definition of Good Reason in the current employment agreements to reflect that the New Board will have discretion to set base salary increases and annual bonuses and such adjustments will not constitute Good Reason, provided that the New Board may not unilaterally decrease the base salary at any point without the consent of the executive. | |
Indemnification | Employment agreements shall include indemnification by the Company against any officer or director liability related to the Restructuring Transactions. |
14
Exhibit B
New Senior Lenders (as of the date hereof)
| Whitebox Advisors LLC |
| BlueMountain Capital Management, LLC |
| Morgan Stanley Investment Management Inc. |
| Aristides Capital LLC |
| Tegean Capital Management, LLC |
| Amzak Capital Management, LLC |
| Mr. John Pecora |
24
Exhibit C
Pre-Syndication Initial Commitment Amounts
25
Exhibit D
Amendments to Employment Agreements
Amendments to Employment Agreements
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
Topic |
Amendment | |
Term | New three-year terms, starting as of the Closing Date, with evergreen features providing for successive one year terms as contained in the current employment agreements. | |
Base Salary | No changes to 2016 base salary under the current employment agreements. Starting in 2017, annual increases in base salary will be set by the new board of directors (the New Board), provided that the New Board may not unilaterally decrease the base salary at any point without the consent of the executive. | |
Annual Cash Performance Award | No change to 2016 amounts, targets, calculation, or methodology under the current employment agreements. Starting in 2017, the New Board can set Executive Goals but not the Target Percentages (as defined in the employment agreements). In addition, no more than 50% of any award may be in Common Stock. | |
Existing Management/Employee Equity | All issued equity compensation (LTIP shares, preferred shares, etc.) shall vest and convert into common shares immediately prior to the Closing Date and be treated as existing equity subject to dilution pursuant to the Term Sheet. | |
Existing MIP | All existing equity-based compensation programs shall be replaced by the Management Incentive Plan. | |
Severance | No change to existing severance package under the current employment agreements; however, executives shall not be entitled to any severance if the executive voluntarily terminates the employment agreement other than for cause or good reason. | |
Non-compete | The non-compete shall last for one year with no additional severance, with the option to extend for an additional year in the Companys sole discretion, provided that the Company must pay the executive one years base salary and 100% of the target bonus of that base salary if it elects to extend. | |
Change of Control | Waived to allow for the Restructuring Transactions. | |
280G Gross-Up | To be deleted. | |
Constructive Dismissal | Revision to the definition of Good Reason in the current employment agreements to reflect that the New Board will have discretion to set base salary increases and annual bonuses and such adjustments will not constitute Good Reason, provided that the New Board may not unilaterally decrease the base salary at any point without the consent of the executive. |
Topic |
Amendment | |
Indemnification | Employment agreements shall include indemnification by the Company against any officer or director liability related to the Restructuring Transactions. |
Exhibit E
Executives Executing Employment Agreements
| Jeff Hastings |
| Brian Beatty |
| Brent Whitely |
| Mike Scott |
| Darin Silvernagle |
| Trisha Gerber |
| Ryan Abney |
Exhibit F
Terms of Management Incentive Plan
Preliminary Management Incentive Plan Term Sheet
This management incentive plan term sheet sets forth an outline of certain key terms and conditions of the employment agreements between SAExploration Holdings, Inc. (the Company) and certain key executives set forth on Exhibit E. Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
On the Closing Date, the Company shall adopt the Management Incentive Plan, which shall reserve 10%, on a fully diluted basis, of the total shares of common stock outstanding as of the Closing Date (the MIP Shares) for distribution to covered employees on terms to be agreed with senior management. The Management Incentive Plan shall supersede any prior management or employee stock compensation plan of the Company in effect on the Closing Date. Senior management shall receive 60% of the MIP Shares on the Closing Date, of which 1/3 shall vest on each of (1) the earlier of (a) the first anniversary of the Closing Date and (b) the date the Company shall have received Alaskan tax credit certificates in a face amount of at least $25 million (the Tax Credit), and (2) each anniversary of the Closing Date for the two years thereafter in the form of:
(i) shares equal to 3% of the Companys outstanding Common Stock as of the Closing Date on a fully diluted basis; and
(ii) at-the-money incentive options to acquire shares equal to 3% of the Companys outstanding Common Stock as of the Closing Date, based on an equity value (a) if options are initially distributed on the first anniversary of the Closing Date or after the 60th calendar day following the Closing Date due to the receipt of the Tax Credit (the Tax Credit Valuation Date), the volume-weighted average price (the VWAP) per share of SAE Common Stock during the 30-day period ending on the date that is the 60th calendar day following the Closing Date or (b) if options are initially distributed due to the receipt of the Tax Credit prior to the 60th calendar date following the Closing Date, the VWAP per share of SAE Common Stock during the 30-day period ending on the date one day preceding any public announcement of the Tax Credit Valuation Date; provided, however, that if the Tax Credit Valuation Date occurs before the expiration of 30 days following the Closing Date, then the VWAP calculation period shall be the number of days between the Closing Date and the Tax Credit Valuation Date.
If any member of senior management terminates his or her employment without good reason within the first twelve months after the Closing Date, that employees vested MIP Shares or the cash proceeds thereof will be clawed back.
The remaining 40% of MIP Shares shall be granted to members of management and other key employees and distributed according to a vesting schedule to be determined by the New Board, provided, however, that the MIP Shares may not be used to fund any of the Annual Performance Awards as defined in Schedule 4 to the Term Sheet attached as Exhibit A.
Vesting of the MIP Shares will not be conditioned on any financial, operating or other performance metrics. Except for termination due to death, disability, termination without cause, termination for good reason or termination six (6) months prior to or within 12 months following a change in control, individuals need to be employed on each vesting date to receive settlement of the MIP Shares.
Exhibit G
Terms of Warrant Agreement
Warrant Term Sheet
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
Topic |
Provision | |
Series | The Company will issue two series of warrants (the Series A Warrants and Series B Warrants and, together, the Warrants). | |
Term | The Warrants will have five year terms. | |
Value | The Series A Warrants and Series B Warrants will each represent 2.25% of the outstanding shares of Common Stock as of the Closing Date. | |
Exercise price | The exercise price of the Series A Warrants will reflect a market capitalization of $112 million.
The Exercise price of the Series B Warrants will reflect a market capitalization of $140 million. | |
Exercisability | Exercise of the Warrants shall be contingent upon the receipt by the Company of Alaska tax credit certificates in a face amount of at least $25 million.
The Warrants will become exercisable only in the 30 days before they expire. | |
Adjustments to Exercise Price | The exercise prices of the Warrants shall be adjusted upon customary anti-dilution events, including:
an issuance of Common Stock as a dividend or distribution to all holders of Common Stock;
a change in the total number of shares of Common Stock by way of a subdivision, combination, split, reverse split, or reclassification;
an issuance as a dividend or distribution to all holders of Common Stock of evidences of indebtedness or securities of the Company or any other person; and
payment of any tender offer or exchange offer for Common Stock in which the consideration exceeds the fair value of the Common Stock as of the open of business on the second business day preceding the expiration date of the tender offer or exchange offer. | |
Cashless Exercise | The Warrant Agreement will contain a customary cashless exercise provision. | |
Registration Rights | Holders of Warrants will be entitled to the benefit of a customary resale registration rights agreement. |
Listing | The Company will use commercially reasonable efforts to list the Warrants and the shares issuable upon exercise of the Warrants on the Nasdaq Global Market, or whatever exchange the Companys Common Stock is then listed on. |
Exhibit H
Governance Terms
Corporate Governance Term Sheet
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
Topic |
Provision | |
Capital Stock |
||
Common stock |
55,000,000 authorized shares of Common Stock, par value $.0001 per share.
The number of authorized shares can be increased only with a majority vote of the stockholders.
One vote per share. | |
Preferred stock |
1,00,000 authorized shares of preferred stock, par value $.0001 per share.
Preferred stock may be issued by the Board with whatever rights, privileges or preferences they determine. | |
Pre-emptive rights |
None. | |
Directors |
||
Initial Directors |
Effective as of the Closing Date, the Board will initially be made up of seven directors, to include: one member of senior management, four directors chosen by the Supporting Holders, one director chosen by Whitebox and one director chosen by Blue Mountain.
Each of BlueMountain and Whitebox shall have the right to choose one director to be nominated by SAE for so long as each of their equity holdings following the Closing Date exceeds 10% of the total outstanding shares. Subject to the foregoing, and the director nomination section of this Term Sheet, following the Closing Date, other non-management directors shall be nominated by the Board and approved by shareholder vote. | |
Number |
No less than one or more than nine directors as determined by resolution of the board. The Board will initially be made up of seven directors. | |
Election |
Directors are elected by a majority of the stockholders unless appointed as described above. | |
Staggered board |
There will be three classes of directors each with staggered terms, with individual seats and each of the three classes to be agreed upon; provided that the number of directors in each class shall be as nearly equal as possible. |
Topic |
Provision | |
Removal of directors |
A majority vote of the stockholders is required to remove a director, except that the initially appointed directors can only be removed by the entity that appointed them. | |
Vacancies |
Vacancies are filled by a majority vote of the directors unless the vacancy is caused by the departure of an appointed director. The vacant seat of an appointed director will be filled by the entity that appointed the director. | |
Indemnification |
Directors and officers have guaranteed rights to indemnification to the fullest extent permitted by Delaware General Corporation Law. | |
Insurance |
Company will maintain Director and Officer liability insurance. | |
Action without a meeting |
Directors may act by unanimous written consent. | |
Stockholders |
||
Stockholder proposals |
Stockholders must give notice of a proposal not less than 60 or more than 90 days before the meeting. If this is not possible, they must give notice within the 10 days of the notice of an upcoming annual meeting being mailed. They must disclose the matter to be proposed, why it is being proposed, any material interest of the stockholder in such business and information regarding their interests in the company, including any voting arrangements. The stockholder must also certify that they will attend the meeting and disclose whether they intend to distribute a proxy statement or form of proxy to the stockholders. | |
Director nominations |
Stockholder must give notice not less than 60 or more than 90 days before the meeting. If this is not possible, must give notice within the 10 days of a notice of annual meeting being mailed. They must disclose details of nominee that would be required for the solicitation of proxies under Section 14 of the Exchange Act. The nominating stockholder must provide personal details of the proposed director, information regarding their interests in the company, including any voting arrangements. The stockholder must also provide personal details certify that they will attend the meeting and disclose whether they intend to distribute a proxy statement or form of proxy to the stockholders. | |
Meetings |
||
Special meetings |
Only the board may call a special meeting. | |
Action without a meeting |
Any action required to be taken at an annual or special meeting may be taken without a meeting if consent in writing is obtained by the holders of outstanding stock having the not less than the minimum number of votes to authorize or take such action. |
Topic |
Provision | |
Amendments |
||
Amendments to Organization Documents | Amendments to Organizational Documents require a majority vote of the stockholders. |
Exhibit I
Joinder Agreement
Joinder Agreement
[ ], 2016
The undersigned (Joining Holder) hereby acknowledges that it has read and understands the Restructuring Support Agreement, dated as of [ ], 2016, a copy of which is attached hereto as Annex I (as it may be amended, supplemented, or otherwise modified from time to time, the Restructuring Support Agreement), among SAE and the Supporting Holders. Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
1. Agreement to be Bound. The Joining Holder hereby agrees to be bound by all of the terms of the Restructuring Support Agreement. The Joining Holder shall hereafter be deemed to be a Supporting Holder and a Party for all purposes under the Restructuring Support Agreement.
2. Representations and Warranties. With respect to the aggregate principal amount of Existing Notes set forth below its name on the signature page hereof, the Joining Holder hereby makes the representations and warranties of the Supporting Holders set forth in Section 4 of the Restructuring Support Agreement to each other Party.
3. Governing Law. This joinder agreement (the Joinder Agreement) to the Restructuring Support Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.
* * * * *
IN WITNESS WHEREOF, the Joining Holder has caused this Joinder Agreement to be executed as of the date first written above.
By: | ||
Name: | ||
Title: | ||
Principal Amount of Existing Notes: $ | ||
Notice Address: |
| ||
| ||
| ||
Fax: | ||
Attention: | ||
With a copy to: | ||
| ||
| ||
| ||
Fax: | ||
Attention: | ||
|
Exhibit 10.1
EXECUTION VERSION
TERM LOAN AND SECURITY AGREEMENT
by and among
SAEXPLORATION HOLDINGS, INC.,
as Borrower,
THE GUARANTORS NAMED HEREIN,
as Guarantors,
THE LENDERS FROM TIME TO TIME PARTY HERETO,
as Lenders
and
DELAWARE TRUST COMPANY,
as Collateral Agent and Administrative Agent
Dated as of June 29, 2016
TABLE OF CONTENTS
PAGE | ||||||||
1. |
DEFINITIONS AND CONSTRUCTION. |
1 | ||||||
1.1 |
Definitions, Code Terms, Accounting Terms and Construction |
1 | ||||||
2. |
LOANS AND TERMS OF PAYMENT. |
1 | ||||||
2.1 |
Loan Advances. |
1 | ||||||
2.2 |
Evidence of Advances; Notes |
1 | ||||||
2.3 |
Borrowing Procedures. |
1 | ||||||
2.4 |
Payments; Optional Prepayments. |
2 | ||||||
2.5 |
Mandatory Prepayments. |
3 | ||||||
2.6 |
Interest Rates: Rates, Payments, and Calculations. |
4 | ||||||
2.7 |
Designated Account |
5 | ||||||
2.8 |
Statements of Obligations |
5 | ||||||
2.9 |
Maturity Termination Dates and Reduction of Commitments |
5 | ||||||
2.10 |
Effect of Maturity |
6 | ||||||
2.11 |
[Intentionally Omitted] |
6 | ||||||
2.12 |
Fees |
6 | ||||||
2.13 |
Payments by the Lenders to the Agent; Settlement |
6 | ||||||
2.14 |
[Intentionally Omitted] |
7 | ||||||
2.15 |
[Intentionally Omitted] |
7 | ||||||
3. |
SECURITY INTEREST. |
8 | ||||||
3.1 |
Grant of Security Interest. |
8 | ||||||
3.2 |
Borrower Remains Liable. |
8 | ||||||
3.3 |
Assignment of Insurance. |
8 | ||||||
3.4 |
Financing Statements. |
8 | ||||||
3.5 |
[Intentionally Omitted] |
8 | ||||||
4. |
CONDITIONS. |
8 | ||||||
4.1 |
Conditions Precedent to the Initial Advance. |
8 | ||||||
4.2 |
Conditions Precedent to the Second Advance. |
8 | ||||||
4.3 |
Conditions Precedent to any Subsequent Advance. |
9 | ||||||
4.4 |
Conditions Precedent to all Advances. |
9 | ||||||
5. |
REPRESENTATIONS AND WARRANTIES. |
9 | ||||||
6. |
AFFIRMATIVE COVENANTS. |
9 | ||||||
6.1 |
Financial Statements, Reports, Certificates. |
9 | ||||||
6.2 |
Collateral Reporting |
9 | ||||||
6.3 |
Existence |
9 | ||||||
6.4 |
Maintenance of Properties |
10 | ||||||
6.5 |
Taxes; Obligations. |
10 | ||||||
6.6 |
Insurance |
10 | ||||||
6.7 |
Inspections, Exams, Collateral Exams and Appraisals |
10 | ||||||
6.8 |
Account Verification |
10 | ||||||
6.9 |
Compliance with Laws |
11 | ||||||
6.10 |
Environmental. |
11 | ||||||
6.11 |
Disclosure Updates. |
11 | ||||||
6.12 |
Collateral Covenants |
12 | ||||||
6.13 |
Material Contracts |
15 | ||||||
6.14 |
Location of Inventory, Equipment and Books |
15 | ||||||
6.15 |
Further Assurances. |
16 | ||||||
6.16 |
Revolving Credit Agreement, Existing Notes and New Senior Notes |
16 | ||||||
6.17 |
Post-Closing Deliverables |
16 | ||||||
7. |
NEGATIVE COVENANTS. |
17 | ||||||
7.1 |
Indebtedness. |
17 | ||||||
7.2 |
Liens |
17 | ||||||
7.3 |
Restrictions on Fundamental Changes. |
17 | ||||||
7.4 |
Disposal of Assets |
18 | ||||||
7.5 |
Change of Name |
18 | ||||||
7.6 |
Nature of Business |
18 |
i
7.7 | Prepayments | 18 | ||||||
7.8 |
Amendments |
18 | ||||||
7.9 |
Change of Control |
19 | ||||||
7.10 |
Accounting Methods |
19 | ||||||
7.11 |
Investments; Controlled Investments. |
19 | ||||||
7.12 |
Transactions with Affiliates |
19 | ||||||
7.13 |
Use of Proceeds |
19 | ||||||
7.14 |
Limitation on Issuance of Stock |
20 | ||||||
7.15 |
Consignments |
20 | ||||||
7.16 |
Inventory and Equipment with Bailees |
20 | ||||||
7.17 |
Other Payments and Distributions |
20 | ||||||
7.18 |
Revolving Credit Documents, Existing Notes Documents and New Senior Notes Documents |
20 | ||||||
8. |
[INTENTIONALLY OMITTED] |
20 | ||||||
9. |
EVENTS OF DEFAULT. |
20 | ||||||
10. |
RIGHTS AND REMEDIES. |
22 | ||||||
10.1 |
Rights and Remedies. |
22 | ||||||
10.2 |
Pledged Collateral. |
24 | ||||||
10.3 |
Agent Appointed Attorney in Fact |
25 | ||||||
10.4 |
Remedies Cumulative |
26 | ||||||
10.5 |
Crediting of Payments and Proceeds |
26 | ||||||
10.6 |
Marshaling |
26 | ||||||
10.7 |
License |
26 | ||||||
11. |
WAIVERS; INDEMNIFICATION. |
27 | ||||||
11.1 |
Demand; Protest; etc. |
27 | ||||||
11.2 |
Agents Liability for Collateral |
27 | ||||||
11.3 |
Indemnification |
27 | ||||||
12. |
NOTICES. |
28 | ||||||
13. |
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. |
29 | ||||||
14. |
ASSIGNS; SUCCESSORS; REPLACEMENT OF LENDERS. |
29 | ||||||
14.1 |
Binding Effect; Successors and Assigns |
29 | ||||||
14.2 |
Assignments and Participations. |
30 | ||||||
14.3 |
Replacement of Lender |
32 | ||||||
15. |
AMENDMENTS; WAIVERS. |
32 | ||||||
15.1 |
Amendments and Waivers |
32 | ||||||
15.2 |
No Waiver; Cumulative Remedies |
33 | ||||||
16. |
TAXES, YIELD PROTECTION AND ILLEGALITY. |
33 | ||||||
16.1 |
Taxes |
33 | ||||||
16.2 |
Increased Costs and Reduction of Return. |
36 | ||||||
16.3 |
Certificates of Lenders |
36 | ||||||
17. |
THE ADMINISTRATIVE AGENT |
36 | ||||||
17.1 |
Appointment |
36 | ||||||
17.2 |
Nature of Duties |
37 | ||||||
17.3 |
Rights, Exculpation, Etc. |
37 | ||||||
17.4 |
Reliance |
39 | ||||||
17.5 |
Indemnification |
39 | ||||||
17.6 |
Agent Individually |
39 | ||||||
17.7 |
Sub-agents |
39 | ||||||
17.8 |
Successor Agent. |
39 | ||||||
17.9 |
Delivery of Information |
40 | ||||||
17.10 |
Collateral Matters |
40 | ||||||
17.11 |
Agency for Perfection |
41 | ||||||
17.12 |
Actions With Respect To Collateral |
41 | ||||||
17.13 |
Filing of Proofs of Claim |
41 | ||||||
18. |
GUARANTY |
42 | ||||||
18.1 |
Guarantors |
42 | ||||||
18.2 |
Guaranty; Limitation of Liability |
42 |
ii
18.3 |
Guaranty Absolute |
42 | ||||||
18.4 |
Waivers and Acknowledgments |
43 | ||||||
18.5 |
Subrogation |
43 | ||||||
18.6 |
Guaranty Supplements |
44 | ||||||
18.7 |
Subordination |
44 | ||||||
18.8 |
Continuing Guaranty; Assignments |
45 | ||||||
19. |
GENERAL PROVISIONS. |
45 | ||||||
19.1 |
Effectiveness |
45 | ||||||
19.2 |
Section Headings |
45 | ||||||
19.3 |
Interpretation |
45 | ||||||
19.4 |
Severability of Provisions |
45 | ||||||
19.5 |
Debtor-Creditor Relationship |
45 | ||||||
19.6 |
Counterparts; Electronic Execution |
45 | ||||||
19.7 |
Revival and Reinstatement of Obligations |
45 | ||||||
19.8 |
Confidentiality. |
45 | ||||||
19.9 |
Expenses. |
47 | ||||||
19.10 |
Setoff. |
47 | ||||||
19.11 |
Release; Retention in Satisfaction; Etc. |
47 | ||||||
19.12 |
Survival. |
48 | ||||||
19.13 |
Patriot Act. |
48 | ||||||
19.14 |
Integration. |
48 | ||||||
19.15 |
Lender Instructions. |
48 | ||||||
19.16 |
Original Issue Discount; Contingent Payment Debt Instrument |
48 | ||||||
19.17 |
Intercreditor Agreement. |
49 |
iii
EXHIBITS AND SCHEDULES
Schedule 1.1 | Definitions | |
Schedule 2.1 | Commitments | |
Schedule 2.12 | Fees | |
Schedule 6.1 | Financial Statement, Reports, Certificates | |
Schedule 6.2 | Other Reporting | |
Schedule 6.6 | Schedule of Insurance | |
Schedule 6.12(l) | Pledged Debt Instruments | |
Exhibit A | Form of Compliance Certificate | |
Exhibit B | Conditions Precedent | |
Exhibit C | [Intentionally Omitted] | |
Exhibit D | Representations and Warranties | |
Exhibit E | Information Certificate | |
Exhibit F | Form of Guaranty Supplement | |
Exhibit G | Form of Borrowing Certificate | |
Exhibit H | Form of Assignment & Assumption Agreement | |
Exhibit I | Post-Closing Deliverables | |
Schedule A-1 | Collection Account | |
Schedule A-2 | Authorized Person | |
Schedule D-1 | Designated Account | |
Schedule P-1 | Permitted Investments | |
Schedule P-2 | Permitted Liens |
iv
TERM LOAN AND SECURITY AGREEMENT
THIS TERM LOAN AND SECURITY AGREEMENT (this Agreement), is entered into as of this 29th day of June, 2016, by and among SAExploration Holdings, Inc., a Delaware corporation (Borrower), SAExploration Inc., a Delaware corporation, SAExploration Sub, Inc., a Delaware corporation, NES, LLC, an Alaska limited liability company, and SAExploration Seismic Services (US), LLC, a Delaware limited liability company (collectively, together with any Additional Guarantors (as defined herein), the Guarantors), the lenders party hereto from time to time (the Lenders) and Delaware Trust Company, in its capacities as administrative agent (the Administrative Agent) and collateral agent hereunder (the Collateral Agent, and together with the Administrative Agent, collectively, the Agent).
WHEREAS, Borrower has requested that the Lenders provide it with a multiple draw term loan facility in an aggregate principal amount not to exceed $30,000,000 (the Credit Facility). All of Borrowers obligations under the Credit Facility are to be guaranteed by the Guarantors. The Lenders are willing to extend such credit to Borrower on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree, subject to the satisfaction of the conditions set forth herein, as follows:
1. | DEFINITIONS AND CONSTRUCTION. |
1.1 Definitions, Code Terms, Accounting Terms and Construction. Capitalized terms used in this Agreement shall have the meanings specified therefor on Schedule 1.1. Additionally, matters of (i) interpretation of terms defined in the Code, (ii) interpretation of accounting terms and (iii) construction are set forth in Schedule 1.1.
2. | LOANS AND TERMS OF PAYMENT. |
2.1 Loan Advances.
(a) Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Loan Parties contained herein, during the term of this Agreement, each Lender, severally and not jointly, agrees to make loans (each, an Advance) to Borrower during the Availability Period in an aggregate principal amount not to exceed the amount of such Lenders Commitment. Each Lenders Commitment shall (i) reduce on a dollar-for-dollar basis immediately following any and each making of an Advance by it pursuant to this Section 2.1(a) by the principal amount of such Advance and (ii) terminate immediately and without further action on the Termination Date. Each Borrowing shall be in an aggregate amount of not less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof (or the full remaining amount); provided, that (x) the Initial Advance shall be in an amount not to exceed $5,600,000 and (y) the Second Advance shall be in an amount not to exceed $9,400,000.
(b) Amounts borrowed pursuant to this Section 2.1 that are repaid or prepaid may not be reborrowed at any time during the term of this Agreement. The outstanding principal amount of the Advances, together with interest accrued and unpaid thereon, shall be due and payable on the Termination Date. The Lenders have no obligation to make an Advance at any time following the occurrence and during the continuance of a Default or an Event of Default.
2.2 Evidence of Advances; Notes. The Advances made by each Lender with a Commitment is evidenced by this Agreement and, if requested by such Lender, Borrower shall promptly execute and deliver to such Lender a Note payable to such Lender and its registered assigns in a principal amount equal to the Commitment of such Lender and its registered assigns.
2.3 Borrowing Procedures.
(a) Procedure for Borrowing.
(i) Each Borrowing shall be made by a written request, in the form of the Borrowing Certificate, by an Authorized Person delivered to the Agent. Such written request must be received by the Agent no later than 9:00 a.m. (New York City Time) at least three (3) Business Days (or four (4) Business Days if the Borrowing request is received after 1:00 p.m. New York City time) prior to the date that is the requested Funding Date
specifying (i) the amount of such Borrowing, (ii) the requested Funding Date, which shall be a Business Day and (iii) with respect to the Initial Advance, that the conditions set forth in Sections 4.1 and 4.4 shall have been satisfied, with respect to the Second Advance, that the conditions set forth in Sections 4.2 and 4.4 shall have been satisfied and with respect to any Subsequent Advance, that the conditions set forth in Sections 4.3 and 4.4 shall have been satisfied, in each case, as of the Funding Date; provided, that the written Borrowing request for the Initial Advance may be received by the Agent no later than 9:00 a.m. (New York City time) on the Closing Date.
(ii) Promptly following receipt of a Borrowing request in accordance with Section 2.3(a)(i) (other than a Borrowing request for the Initial Advance), the Administrative Agent shall forthwith advise each Lender of the details thereof.
(b) Making of Loans. Each Lender shall make each Advance to be made by it hereunder on the proposed Funding Date by wire transfer of immediately available funds to such account as the Agent may designate not later than 12:00 p.m. (New York City time), on the Funding Date and the Agent shall promptly credit and/or remit the amounts so received to the Designated Account or, if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met or waived by the Required Lenders, return the amounts so received to the respective Lenders; provided, that, the Agent shall only be required to advance funds to Borrower with respect to an Advance to the extent that the Agent shall have received such funds from the Lenders. Notwithstanding anything to the contrary herein, no Lender shall be obligated to make any Advance if one (1) or more of the applicable conditions precedent set forth in Section 4 will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has been waived by the Required Lenders.
(c) [Intentionally Omitted]
(d) Protective Advances. Each Lender, acting through the Agent, may make an Advance for any reason at any time in its Permitted Discretion, without Borrowers compliance with any of the conditions of this Agreement, and (i) disburse the proceeds directly to third Persons in order to protect the Agents interest in the Collateral or to perform any obligation of Borrower under this Agreement or otherwise to enhance the likelihood of repayment of the Obligations, or (ii) apply the proceeds to outstanding Obligations then due and payable (such Advance, a Protective Advance).
(e) [Intentionally Omitted]
2.4 Payments; Optional Prepayments.
(a) Payments by Borrower. Except as otherwise expressly provided herein, all payments by Borrower shall be made by means as directed by the Agent for the account of each Lender from time to time.
(b) Optional Prepayments Generally. Borrower may at any time upon written notice by Borrower to the Agent, not later than 12:00 p.m. (New York City time) three Business Days prior to the day of prepayment (which notice shall specify the amount and date of the prepayment), prepay the Advances in whole or in part in an amount greater than or equal to $1,000,000 (or the full remaining amount), in each instance, without penalty or premium. Any partial prepayments of Advances shall be applied as directed by Borrower.
(c) Notices. The notice of any prepayment pursuant to clause (b) above shall not thereafter be revocable by Borrower and the Agent will promptly notify each Lender thereof and of such Lenders Commitment Percentage of such prepayment; provided, however, that a notice of prepayment delivered by Borrower in connection with a prepayment of the Obligations in full may state that such prepayment is conditioned upon the effectiveness of other credit facilities, the proceeds of which shall be used to repay the Obligations in full in cash, in which case such notice may be revoked by Borrower (by written notice provided to the Agent on or prior to the specified effective date thereof) if such condition is not satisfied. The payment amount specified in such notice shall be due and payable on the date specified therein (except as provided in the foregoing proviso).
(d) Application of Payments.
(i) Payments Prior to Event of Default. At all times during which an Event of Default is not continuing, all amounts paid by Borrower to the Lenders in respect of the Obligations (other than payments specifically earmarked by Borrower under Section 2.4(b) for application to certain principal, interest, fees or expenses hereunder), shall be applied in the following order of priority:
FIRST, to the payment of fees and reasonable documented out-of-pocket costs and expenses (including reasonable documented out-of-pocket attorneys fees) of the Agent then due and payable hereunder or under any other Loan Documents;
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SECOND, pro rata, to the payment of reasonable documented out-of-pocket costs and expenses (including reasonable documented out-of-pocket attorneys fees) of the Secured Parties in connection with the enforcement of the rights of the Lenders and/or the Agent under the Loan Documents;
THIRD, pro rata to the payment of any fees then due and payable to the Secured Parties hereunder or under any other Loan Documents;
FOURTH, pro rata to the payment of all Obligations consisting of accrued unpaid interest then due and payable to the Lenders hereunder;
FIFTH, pro rata, to the payment of principal then due and payable on the Obligations; and
SIXTH, pro rata, to the payment of all other Obligations not otherwise referred to in this Section 2.4(d)(i) then due and payable.
In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category and (ii) each of the Secured Parties entitled to payment shall receive an amount equal to its pro rata share of amounts available to be applied pursuant to clauses second, third, fourth, fifth and sixth above.
(ii) Payments Subsequent to Event of Default. Notwithstanding anything in this Agreement or any other Loan Document which may be construed to the contrary, subsequent to the occurrence and during the continuance of an Event of Default, payments and prepayments with respect to the Obligations (from realization on Collateral or otherwise) shall be applied as provided in Section 2.4(d)(i) or with respect to any amounts remaining after the application of such payments and prepayments as set forth in clause FIRST of Section 2.4(d)(i), as otherwise determined by the Required Lenders in their sole discretion; provided that, upon satisfaction in full of all Obligations, such amount shall be paid to Borrower or such other Person entitled thereto under applicable law. Borrower and each other Loan Party hereby irrevocably waives the right to direct the application during the continuance of an Event of Default of any and all payments in respect of any Obligation and any Proceeds of Collateral.
2.5 Mandatory Prepayments.
(a) Scheduled Principal Payments. Subject to Section 2.9, the principal amount of the Advances, together with all interest and fees due thereon, shall be paid in full in cash on January 2, 2018 (the Maturity Date).
(b) [Intentionally Omitted]
(c) Asset Dispositions; Events of Loss. Subject to the Intercreditor Agreement and Section 2.5(g)(ii), if a Loan Party or any Subsidiary of a Loan Party shall at any time or from time to time:
(i) make a Disposition; or
(ii) suffer an Event of Loss;
and the aggregate amount of the Net Proceeds received by the Loan Parties in connection with such Disposition or Event of Loss and all other Dispositions and Events of Loss occurring during such fiscal year exceeds $250,000, then (A) Borrower shall promptly notify the Agent of such Disposition or Event of Loss (including the amount of the estimated Net Proceeds to be received by a Loan Party and/or such Subsidiary in respect thereof) and (B) promptly following receipt by a Loan Party and/or such Subsidiary of the Net Proceeds of such Disposition or Event of Loss, Borrower shall deliver, or cause to be delivered, an amount equal to such excess Net Proceeds to the Agent for distribution to the Lenders as a prepayment of the Advances, which prepayment shall be applied in accordance with Section 2.5(g) hereof. Notwithstanding the foregoing and provided no Event of Default has occurred and is continuing, such prepayment shall not be required to the extent a Loan Party or such Subsidiary reinvests such excess Net Proceeds
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of such Disposition or Event of Loss in capital assets then used or usable in the business of Borrower or such Subsidiary or to repair or replace the property subject to such Event of Loss, within one hundred eighty (180) days after the date of such Disposition or Event of Loss.
(d) [Intentionally Omitted]
(e) Alaska Tax Credits. Subject to the Intercreditor Agreement and Section 2.5(g)(ii), within five (5) Business Days after receipt by any Loan Party or any Subsidiary of any Loan Party of any payment or monetization with respect to the Alaska Tax Credits in excess of $15,000,000, Borrower shall deliver, or cause to be delivered, to the Agent an amount equal to such payment or monetization for application to the Advances in accordance with Section 2.5(g).
(f) [Intentionally Omitted]
(g) Application of Prepayments.
(i) Any prepayments pursuant to Section 2.5(c) or Section 2.5(e) shall be applied to prepay the Obligations in accordance with Section 2.4(d).
(ii) Notwithstanding anything to the contrary, unless otherwise provided in the Revolving Credit Agreement or the Intercreditor Agreement, (A) it is understood and agreed that any mandatory prepayment obligations under this Agreement will be reduced dollar-for-dollar with the proceeds that have been applied to prepay and permanently reduce the Revolving Obligations (and related commitments) under the Revolving Credit Agreement, and the Lenders shall be permitted to receive any such prepayments pursuant to this Section 2.5 to the extent the same is declined or waived under the Revolving Credit Agreement and (B) any of the Lenders hereunder shall be permitted to waive all or any portion of any such prepayments under this Section 2.5.
(h) No Implied Consent. Provisions contained in this Section 2.5 for the application of proceeds of certain transactions shall not be deemed to constitute consent of the Lenders to transactions that are not otherwise permitted by the terms hereof or the other Loan Documents.
2.6 Interest Rates: Rates, Payments, and Calculations.
(a) Interest Rates. Subject to Sections 2.6(b) and 2.6(d), each Advance shall bear interest on the outstanding principal amount thereof at a rate per annum equal to the Interest Rate.
(b) Default Rate. Upon the occurrence and during the continuation of an Event of Default and at any time following the Termination Date, at the reasonable discretion of the Required Lenders and upon written notice by the Required Lenders to the Agent, the principal amount of all Obligations shall bear interest at a per annum rate equal to 2 percentage points above the per annum rate otherwise applicable hereunder (the Default Rate). For avoidance of doubt, the Default Rate shall commence on the date of the occurrence of an Event of Default irrespective of the date of reporting or declaration of such Event of Default. All such interest shall be payable in cash on demand of the Agent or the Required Lenders.
(c) Payment. Except as otherwise provided under Sections 2.5 and 2.6(b), interest on each Advance shall be paid in arrears not later than 1:00 p.m. (New York City time) on the last Business Day of each calendar month. All payments received by the Agent after 1:00 p.m. (New York City time) shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. Interest shall also be paid with respect to any payment or prepayment of Advances on the date so paid. If the Agent pays an amount to a Lender under this Agreement in the belief or expectation that a related payment has been or will be received by the Agent from Borrower and such related payment is not received by the Agent, then the Agent will be entitled to recover such amount from such Lender on demand without setoff, counterclaim or deduction of any kind. If any payment to be made by Borrower hereunder shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected on computing interest or fees, as the case may be.
(d) Computation. All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360 day year, in each case, for the actual number of days elapsed in the period during which the interest or fees accrue.
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(e) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable. Borrower, the Agent and the Lenders, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, however, that, anything contained herein to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, as of the date of this Agreement, Borrower is and shall be liable only for the payment of such maximum amount as is allowed by law, and payment received from Borrower in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess.
2.7 Designated Account. Borrower agrees to establish and maintain one or more Designated Accounts, each in the name of Borrower, for the purpose of receiving the proceeds of the Advances requested by Borrower and made by the Lenders hereunder. Unless otherwise agreed by the Agent and Borrower, any Advance requested by Borrower and made by the Lenders hereunder shall be paid by the Agent to the applicable Designated Account.
2.8 Statements of Obligations.
(a) The Agent, on behalf of the Lenders, shall record on its books and records the amount of each Advance made, the interest rate applicable, all payments of principal and interest thereon and the principal balance thereof from time to time outstanding. The Agent shall deliver to Borrower on a monthly basis a loan statement setting forth the amount of the principal balance of the Advances and the interest payment due on the next interest payment date. Such record and such loan statement shall, absent manifest error, be conclusive evidence of the amount of the Advances made by the Lenders to Borrower and the interest and payments thereon unless, within 30 calendar days after Borrowers request to inspect such record or Borrowers receipt of a loan statement, as applicable, Borrower shall deliver to the Agent written objection thereto describing the error or errors contained in such record or loan statement, as applicable. Any failure to so record or any error in doing so, or any failure to deliver such loan statement shall not, however, limit or otherwise affect the obligation on Borrower hereunder (or under any Note) to pay any amount owing with respect to the Advances or provide the basis for any claim against the Agent.
(b) The Agent, acting as a non-fiduciary agent of Borrower solely with respect to the actions described in this Section 2.8(b), shall establish and maintain at its address referred to in Section 12 (or at such other U.S. address as the Agent may notify Borrower) (A) a record of ownership (the Register) in which the Agent agrees to register by book entry the interests (including any rights to receive payment hereunder) of each Lender in the Advances, each of their obligations under this Agreement to participate in each Advance, and any assignment of any such interest, obligation or right and (B) accounts in the Register in which it shall record (1) the names and addresses of the Lenders (and each change thereto pursuant to Section 14), (2) the Commitments of each Lender, (3) the amount of each Advance and each funding of any participation described in clause (A) above, (4) the amount of any principal amounts of (and stated interest on) each Advance owing to each Lender pursuant to the terms hereof from time to time, and (5) any other payment received by the Agent from Borrower and its application to the Obligations. The entries in the Register shall be conclusive absent manifest error.
(c) Notwithstanding anything to the contrary contained in this Agreement, the Advances (including any Notes evidencing such Advances) are registered obligations, the right, title and interest of the Lenders and their assignees in and to such Advances shall be transferable only upon notation of such transfer in the Register and no assignment thereof shall be effective until recorded therein. This Section 2.8 and Section 14 shall be construed so that the Advances are at all times maintained in registered form within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code.
(d) The Loan Parties, the Agent and Lenders shall treat each Person whose name is recorded in the Register pursuant to this Section 2.8 as a Lender for all purposes of this Agreement. Information contained in the Register with respect to any Lender shall be available for access by Borrower, the Agent or such Lender during normal business hours and from time to time upon at least one Business Days prior notice. No Lender shall, in such capacity, have access to or be otherwise permitted to review any information in the Register other than information with respect to such Lender unless otherwise agreed by the Agent or Borrower.
2.9 Maturity Termination Dates and Reduction of Commitments.
(a) The Commitments and the Secured Parties obligations under this Agreement shall continue in full force and effect for a term ending on the earliest of (i) the Maturity Date or (ii) the date Borrower
5
terminates the Credit Facility, or (iii) the date the Credit Facility terminates pursuant to Section 10.1 following an Event of Default (the earliest of these dates, the Termination Date). Borrower promises to pay the Obligations (including principal, interest, fees, costs, and expenses, including Expenses) in full in cash on the Termination Date.
(b) At its option, Borrower may at any time terminate, or from time to time permanently reduce, the unfunded Commitments on a pro rata basis; provided, that each reduction of the Commitments shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $1,000,000.
(c) Borrower shall notify the Administrative Agent in writing of any election to terminate or reduce the Commitment under Section 2.9(b) at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall notify the Lenders in writing of the contents thereof. Each notice delivered by Borrower pursuant to this Section 2.9(c) shall be irrevocable, provided, however, that notwithstanding the foregoing, such notice may be revoked upon written notice to the Administrative Agent, if the election to terminate or reduce the Commitments pursuant to this Section 2.9 was conditioned on a refinancing and such refinancing is not consummated and such written notice of revocation so states. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.
2.10 Effect of Maturity. On the Termination Date, all obligations of the Lenders to provide Advances and any other additional credit hereunder shall automatically be terminated and all of the Obligations shall immediately become due and payable without notice or demand and Borrower shall immediately repay all of the Obligations in cash in full. No termination of the obligations of the Lenders (other than cash payment in full of the Obligations (other than unasserted contingent indemnification obligations) and termination of the Commitments and any other obligation of the Lenders to provide additional credit hereunder) shall relieve or discharge any Loan Party of its duties, obligations, or covenants hereunder or under any other Loan Document and the Agents Liens in the Collateral shall continue to secure the Obligations and shall remain in effect until all Obligations (other than unasserted contingent indemnification obligations) have been paid in full in cash and the Lenders obligations to provide additional credit hereunder shall have been terminated. Provided that the Agent has not received prior written notice that there is a suit, action, proceeding or claim pending or threatened against an Indemnified Person under this Agreement with respect to any Indemnified Liabilities, the Agent shall, at the Loan Parties expense, release or terminate any filings or other agreements that perfect the Agents Liens in the Collateral, upon the Agents receipt of each of the following, in form and content satisfactory to the Agent and the Required Lenders: (i) cash payment in full of all Obligations (other than unasserted contingent indemnification obligations), (ii) evidence that any obligation of the Lenders to make Advances to Borrower or provide any further credit to Borrower has been terminated, (iii) a general release of all claims against the Secured Parties and their respective Affiliates, Agent-Related Parties, and Lender-Related Parties by Borrower and each Loan Party relating to the Secured Parties performance and obligations under the Loan Documents, and (iv) an agreement by Borrower and each Guarantor to indemnify the Secured Parties and their respective Affiliates, Agent-Related Parties, and Lender-Related Parties for any payments received by the Secured Parties or their Affiliates that are applied to the Obligations as a final payoff that may subsequently be returned or otherwise not paid for any reason. The Agent shall have no duty to investigate whether there is any suit, action, proceeding or claim pending or threatened against an Indemnified Person under this Agreement with respect to any Indemnified Liabilities, and shall be fully protected and shall have no liability to any Indemnified Person or any other Person for releasing or terminating any filings or other agreements that perfect the Agents Liens in the Collateral in accordance with this Section 2.10.
2.11 [Intentionally Omitted].
2.12 Fees. Borrower shall pay (i) to Lenders the fees set forth on Schedule 2.12 attached hereto and (ii) to the Agent the fees payable in the amounts and at times separately agreed upon in writing between Borrower and the Agent. Such fees shall be fully earned and irrevocable when paid and shall not be refundable for any reason whatsoever.
2.13 Payments by the Lenders to the Agent; Settlement.
(a) On a monthly basis or more frequently at the Agents election, the Agent shall notify each Lender by telephone, email or fax of the amount of such Lenders Commitment Percentage of the principal balance of the Advances and the interest payment due on the next interest payment date. Except as otherwise provided in Section 2.13(d)(iv) and provided that Borrower has provided the Agent with prior written notice of such payment as required by Sections 2.4 and 2.5, in the case of any payment of principal received by the Agent from Borrower in respect of any Advance prior to 12:00 p.m. (New York City time) on any Business Day, the Agent shall pay to each applicable Lender such Lenders Commitment Percentage of such payment on such Business Day, and, in the case of
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any payment of principal received by the Agent from Borrower in respect of any Advance later than 12:00 p.m. (New York City time) on any Business Day, the Agent shall pay to each applicable Lender such Lenders Commitment Percentage of such payment on the next Business Day.
(b) [Intentionally Omitted].
(c) [Intentionally Omitted].
(d) Non-Funding Lenders. Nothing in this Section 2.13(d) or elsewhere in this Agreement or the other Loan Documents, including the remaining provisions of Section 2.13, shall be deemed to require the Agent to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that the Agent, any Lender or Borrower may have against any Lender as a result of any default by such Lender hereunder.
(i) Responsibility. The failure of any Non-Funding Lender to fund any Advance hereunder on the date specified herein shall not relieve any other Lender of its obligations to make such Advance and neither the Agent nor, other than as expressly set forth herein, any other Lender shall be responsible for the failure of any Non-Funding Lender to make any Advance hereunder.
(ii) [Intentionally Omitted].
(iii) Voting Rights. Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender shall not have any voting or consent rights under or with respect to any Loan Document or constitute a Lender (or be, or have its Advances and Commitments, included in the determination of Required Lenders or Lenders directly affected pursuant to Section 15) for any voting or consent rights under or with respect to any Loan Document, provided, that (A) the Commitment of a Non-Funding Lender may not be increased, extended or reinstated, (B) the principal of a Non-Funding Lenders Advances may not be reduced or forgiven, and (C) the interest rate applicable to Obligations owing to a Non-Funding Lender may not be reduced, in each case, without the consent of such Non-Funding Lender. Moreover, for the purposes of determining Required Lenders, the Advances and Commitments held by Non-Funding Lenders shall be excluded from the total Advances and Commitments outstanding.
(iv) Borrower Payments to a Non-Funding Lender. The Agent shall be authorized to use all portions of any payments received by the Agent for the benefit of any Non-Funding Lender pursuant to this Agreement to pay in full the Aggregate Excess Funding Amount to the appropriate Secured Parties thereof (or Borrower). The Agent shall be entitled to hold as cash collateral in a non-interest bearing account up to an amount equal to such Non-Funding Lenders pro rata share, until the Obligations (other than contingent indemnification Obligations to the extent no claim giving rise thereto has been asserted) are paid in full in cash and all Commitments have been terminated. Upon any such unfunded obligations owing by a Non-Funding Lender becoming due and payable, the Agent shall be authorized to use such cash collateral to make such payment on behalf of such Non-Funding Lender. In the event that the Agent is holding cash collateral of a Non-Funding Lender that cures pursuant to clause (v) below or ceases to be a Non-Funding Lender pursuant to the definition of Non-Funding Lender, the Agent shall return the unused portion of such cash collateral to such Lender. The Aggregate Excess Funding Amount of a Non-Funding Lender shall be the aggregate amount of all unfunded or unpaid obligations owing by such Lender to the Agent and other Lenders under the Loan Documents.
(v) Cure. A Lender may cure its status as a Non-Funding Lender under clause (a) of the definition of Non-Funding Lender if such Lender (A) fully pays to the Agent, on behalf of the applicable Secured Parties, the Aggregate Excess Funding Amount, plus all interest due thereon and (B) timely makes the next reimbursement required to be made by such Lender. Any such cure shall not relieve any Lender from liability for breaching its contractual obligations hereunder.
(e) Procedures. The Agent is hereby authorized by each Loan Party and each other Secured Party to establish procedures (and to amend such procedures from time to time) to facilitate administration and servicing of the Advances and other matters incidental thereto. Without limiting the generality of the foregoing, the Agent is hereby authorized to establish procedures to make available or deliver, or to accept, notices, documents and similar items on, by posting to or submitting and/or completion, on Debtdomain or Intralinks systems.
2.14 [Intentionally Omitted]
2.15 [Intentionally Omitted]
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3. | SECURITY INTEREST. |
3.1 Grant of Security Interest. Borrower and each Loan Party hereby unconditionally grants, assigns, and pledges to the Agent for the benefit of the Secured Parties, to secure payment and performance of the Obligations, a continuing security interest (hereinafter referred to as the Security Interest) in all of such Borrowers and Loan Partys right, title, and interest in and to the Collateral, as security for the payment and performance of all Obligations. Borrower and each Loan Party shall also grant the Agent a Lien and security interest in all Commercial Tort Claims that it may have against any Person. The Security Interest created hereby secures the payment and performance of the Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts which constitute part of the Obligations and would be owed by Borrower or any other Loan Party to the Secured Parties, but for the fact that they are unenforceable or not allowable (in whole or in part) as a claim in an Insolvency Proceeding involving Borrower or any other Loan Party due to the existence of such Insolvency Proceeding.
3.2 Borrower Remains Liable. Anything herein to the contrary notwithstanding, (a) Borrower and each other Loan Party shall remain liable under the contracts and agreements included in the Collateral to perform all of the duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Secured Parties of any of the rights hereunder shall not release Borrower or any other Loan Party from any of its duties or obligations under such contracts and agreements included in the Collateral, and (c) the Secured Parties shall not have any obligation or liability under such contracts and agreements included in the Collateral by reason of this Agreement, nor shall the Secured Parties be obligated to perform any of the obligations or duties of Borrower or any other Loan Party thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.
3.3 Assignment of Insurance. As additional security for the Obligations, Borrower and each other Loan Party hereby assigns to the Agent for the benefit of the Secured Parties all rights of Borrower and such Loan Party under every policy of insurance covering the Collateral and all other assets and property of Borrower and each other Loan Party (including, without limitation business interruption insurance and proceeds thereof) and all business records and other documents relating to it subject to the Intercreditor Agreement and Section 2.5(c) hereof, and all monies (including proceeds and refunds) that may be payable under any policy, and Borrower and (subject to the Intercreditor Agreement) each other Loan Party hereby directs the issuer of each policy to pay all such monies directly and solely to the Agent for the benefit of the Secured Parties. At any time, whether or not a Default or Event of Default shall have occurred, (subject to the Intercreditor Agreement) the Agent may (but shall not be obligated to), in the Agents or Borrowers or any other Loan Partys name, execute and deliver proofs of claim, receive payment of proceeds and endorse checks and other instruments representing payment of the policy of insurance, and adjust, litigate, compromise or release claims against the issuer of any policy. Any monies received under any insurance policy assigned to the Agent, other than liability insurance policies, or received as payment of any award or compensation for condemnation or taking by eminent domain, (subject to the Intercreditor Agreement) shall be paid to the Agent and, as determined by the Required Lenders in their Permitted Discretion, may be applied to prepayment of the Obligations or disbursed to Borrower under the terms set forth in Section 2.5(c) hereof.
3.4 Financing Statements. Borrower and each other Loan Party authorizes the Agent to file, at the expense of the Loan Parties, financing statements describing Collateral to perfect the Agents Security Interest in the Collateral, and the Agent may describe the Collateral as all personal property or all assets or describe specific items of Collateral including without limitation any Commercial Tort Claims. All, if any, financing statements filed before the date of this Agreement to perfect the Security Interest were authorized by Borrower and each other Loan Party and are hereby ratified.
3.5 [Intentionally Omitted]
4. | CONDITIONS. |
4.1 Conditions Precedent to the Initial Advance. The obligation of the Lenders to make the Initial Advance provided for hereunder is subject to the fulfillment, to the satisfaction of the Agent and the Required Lenders, of each of the applicable conditions precedent set forth on Exhibit B.
4.2 Conditions Precedent to the Second Advance. The obligation of the Lenders to make the Second Advance provided for hereunder is subject to the fulfillment, to the satisfaction of the Agent and the Required Lenders, of each of the applicable conditions precedent set forth on Exhibit B.
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4.3 Conditions Precedent to any Subsequent Advance. The obligation of the Lenders to make any Subsequent Advance provided for hereunder is subject to the fulfillment, to the satisfaction of the Agent and the Required Lenders, of each of the applicable conditions precedent set forth on Exhibit B.
4.4 Conditions Precedent to all Advances. The obligations of the Lenders to make any Advances hereunder (or to extend any other credit hereunder) at any time shall be subject to the following additional conditions precedent:
(a) the representations and warranties of Borrower and each other Loan Party or its Subsidiaries contained in this Agreement or in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of such Advance, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall continue to be true and correct as of such earlier date); and
(b) no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof.
Any request for an Advance shall be deemed to be a representation by Borrower and each other Loan Party that the statements set forth in this Section 4.4 are correct as of the time of such request.
5. | REPRESENTATIONS AND WARRANTIES. |
In order to induce the Agent and the Lenders to enter into this Agreement, Borrower, and each other Loan Party makes the representations and warranties to the Agent and the Lenders set forth on Exhibit D. Each of such representations and warranties shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date, and shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date of the making of each Advance, as though made on and as of the date of such Advance (except to the extent that such representations and warranties relate solely to an earlier date in which case such representations and warranties shall continue to be true and correct as of such earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement.
6. | AFFIRMATIVE COVENANTS. |
Borrower and each other Loan Party covenants and agrees that, until termination of all of the Commitments of each Lender hereunder and payment in full of the Obligations (other than unasserted contingent indemnification obligations), Borrower and each other Loan Party shall and shall cause their respective Subsidiaries to comply with each of the following:
6.1 Financial Statements, Reports, Certificates. Deliver to Agent copies of each of the financial statements, reports, Projections and other items set forth on Schedule 6.1 no later than the times specified therein. In addition, Borrower agrees that no Loan Party or Domestic Subsidiary of Borrower will have a fiscal year different from that of Borrower. Borrower agrees to maintain a system of accounting that enables Borrower to produce financial statements in accordance with GAAP. Each Loan Party shall also (a) keep a reporting system that shows all additions, sales, claims, returns, and allowances with respect to the sales of such Loan Party and its Subsidiaries, and (b) maintain its billing systems/practices substantially as in effect as of the Closing Date and shall only make material modifications following prior notice to the Agent.
6.2 Collateral Reporting. Provide the Agent with each of the reports set forth on Schedule 6.2 at the times specified therein.
6.3 Existence. Except as otherwise permitted under Section 7.3 or Section 7.4, each Loan Party and any Domestic Subsidiary shall at all times maintain and preserve in full force and effect (a) its existence (including being in good standing in its jurisdiction of organization) and (b) all rights and franchises, contracts, licenses and permits material to its business; provided, however, that no Loan Party nor any of its Subsidiaries shall be required to preserve any such right or franchise, licenses, contracts, or permits if such Persons Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of such Person, and that the loss thereof is not disadvantageous in any material respect to such Person or to the Agent or the Lenders; provided that Borrower delivers at least ten (10) days prior written notice to the Agent of the election of such Loan Party or such Subsidiary not to preserve any such right or franchise, contract, license or permit.
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6.4 Maintenance of Properties. Maintain and preserve all of its assets that are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear, tear and casualty excepted and Permitted Dispositions excepted (and except where the failure to so maintain and preserve such assets could not reasonably be expected to result in a Material Adverse Change), and comply with the material provisions of all material leases and licenses to which it is a party as lessee or licensee, so as to prevent the loss or forfeiture thereof, unless such provisions are the subject of a Permitted Protest.
6.5 Taxes; Obligations.
Borrower shall and shall cause each Loan Party or its Subsidiaries to (i) timely file all federal and state income tax returns and other material tax returns required to be filed or otherwise supplied to a Governmental Authority with respect to taxes, and (ii) pay and discharge (y) all material Taxes imposed, levied, or assessed against any Loan Party or its Subsidiaries, or any of their respective assets or in respect of any of its income, businesses, or franchises to be paid in full, before delinquency or the expiration of any extension period, and (z) all material claims (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of their properties or assets which, in each case, could be a liability of or be imposed on Borrower or any of its Subsidiaries); provided no such Tax, claim or obligation need to be paid if it could not reasonably be expected to result in a Material Adverse Change or the validity of such claim, Tax or obligation is the subject of a Permitted Protest and so long as, in the case of a claim, Tax or obligation that has or may become a Lien against any of the Collateral, such Permitted Protest conclusively operates to stay the sale of any portion of the Collateral to satisfy such assessment or Tax.
6.6 Insurance. At the Loan Parties expense, maintain insurance with respect to the assets of each Loan Party and each of its Subsidiaries wherever located, covering liabilities, losses or damages as are customarily insured against by other Persons engaged in the same or similar businesses, including, without limitation, the insurance coverage set forth in Schedule 6.6. All such policies of insurance shall be with financially sound and reputable insurance companies acceptable to the Required Lenders and in such amounts as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and located and in any event in amount, adequacy and scope reasonably satisfactory to the Required Lenders. All property insurance policies covering the Collateral are to be made payable to the Agent for the benefit of the Secured Parties (subject to the Intercreditor Agreement), as its interests may appear, in case of loss, pursuant to a lender loss payable endorsement acceptable to the Agent and are to contain such other provisions as the Agent may reasonably require to fully protect the Secured Parties interest in the Collateral and to any payments to be made under such policies. Such evidence of property and general liability insurance shall be delivered to the Agent, with the lender loss payable endorsements (but only in respect of Collateral) and additional insured endorsements (with respect to general liability coverage) in favor of the Agent (subject to the Intercreditor Agreement) and shall provide for not less than 30 days (10 days in the case of non-payment) prior written notice to the Agent of the exercise of any right of cancellation. If Borrower fails to maintain such insurance, the Agent may, but shall not be obligated to, arrange for such insurance, but at the Loan Parties expense and without any responsibility on the Agents part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Borrower shall give the Agent prompt notice of any loss exceeding $250,000 covered by its casualty or business interruption insurance. Upon the occurrence and during the continuance of an Event of Default, (subject to the Intercreditor Agreement) the Agent shall have the sole right to file claims under any property and general liability insurance policies in respect of the Collateral, to receive and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.
6.7 Inspections, Exams, Collateral Exams and Appraisals. At the Loan Parties expense, permit the Agent and each of the Agents duly authorized representatives to visit any of its properties, or cause any other Person to allow the Agent to visit any such Persons property on which any Collateral is located, and inspect any of any Loan Partys assets or Books and Records, to conduct inspections, exams and appraisals of the Collateral, to examine and make copies of its Books and Records, and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers and employees at such reasonable times and intervals as the Required Lenders may designate and, so long as no Default or Event of Default exists, with reasonable prior notice to Borrower.
6.8 Account Verification. Permit the Agent, in the Agents name or in the name of a nominee of the Agent, to verify the validity, amount or any other matter relating to any Account, by mail, telephone, facsimile transmission or otherwise. Further, (subject to the Intercreditor Agreement) at the request of the Agent, each Loan Party shall send requests for verification of Accounts or send notices of assignment of Accounts to Account Debtors and other obligors.
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6.9 Compliance with Laws. Comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental Authority, other than laws, rules, regulations, and orders the non-compliance with which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change, subject to Loan Parties right to engage in a Permitted Protest; provided, however, that this Section 6.9 shall not apply to laws related to Taxes, which are the subject of Section 6.5.
6.10 Environmental.
(a) Keep any property either owned or operated by Borrower or any other Loan Party free of any Environmental Liens or post bonds or other financial assurances satisfactory to the Required Lenders and in an amount sufficient to satisfy the obligations or liability evidenced by such Environmental Liens, subject to Loan Parties right to engage in a Permitted Protest so long as, in the case of an Environmental Lien that has become a Lien against any of the Collateral, (i) such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Environmental Lien(s), and (ii) any such other Lien is at all times subordinate to the Agents Liens;
(b) Comply, in all material respects, with Environmental Laws and provide to the Agent documentation of such compliance which the Agent reasonably requests, subject to Loan Parties right to engage in a Permitted Protest;
(c) Promptly notify the Agent of any release of which Borrower or any other Loan Party has knowledge of a Hazardous Material in any reportable quantity from or onto property owned or operated by Borrower or any other Loan Party and take any Remedial Actions required to abate said release or otherwise to come into compliance, in all material respects, with applicable Environmental Law; and
(d) Promptly, but in any event within 5 Business Days of its receipt thereof, provide the Agent with written notice of any of the following: (i) notice that an Environmental Lien has been filed against any of the real or personal property of any Loan Party or its Domestic Subsidiaries, (ii) commencement of any Environmental Action or written notice that an Environmental Action will be filed against any Loan Party or any of its Domestic Subsidiaries, and (iii) written notice of a violation, citation, or other administrative order from a Governmental Authority located in the United States or Canada.
6.11 Disclosure Updates.
(a) Promptly and in no event later than 5 Business Days after obtaining knowledge thereof or after the occurrence thereof, whichever is earlier, notify the Agent:
(i) if any written information, exhibit, or report furnished to the Agent or the Lenders contained, at the time it was furnished, any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made. Any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any material fact nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto;
(ii) of all actions, suits, or proceedings brought by or against any Loan Party or any of its Subsidiaries before any court or Governmental Authority which reasonably could be expected to result in a Material Adverse Change, provided that, in any event, such notification shall not be later than 5 days after service of process with respect thereto on any Loan Party or any of its Subsidiaries;
(iii) of (i) any disputes or claims by Borrowers or any other Loan Partys customers exceeding $100,000 individually or $250,000 in the aggregate during any fiscal year; or (ii) Goods returned to or recovered by Borrower outside of the ordinary course of business, with a fair market value exceeding $100,000 individually or $250,000 in the aggregate;
(iv) of any material loss or damage to any Collateral or any substantial adverse change in the Collateral;
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(v) of a violation of any law, rule or regulation, the non-compliance with which reasonably could be expected to result in a Material Adverse Change;
(vi) of any disputes or claims by Borrowers or any other Loan Partys subcontractors exceeding $100,000 individually or $250,000 in the aggregate during any fiscal year; or
(vii) of any Default or Event of Default under any of the Existing Notes Documents, the Revolving Credit Documents or the New Senior Notes Documents.
(b) Immediately upon obtaining knowledge thereof or after the occurrence thereof, notify the Agent of any event or condition which constitutes a Default or an Event of Default and provide a statement of the action that such Borrower proposes to take with respect to such Default or Event of Default.
(c) Upon request of the Agent (at the written direction of the Required Lenders), each Loan Party shall deliver to the Agent any other materials, reports, records or information reasonably requested relating to the operations, business affairs, financial condition of any Loan Party or its Subsidiaries or the Collateral.
6.12 Collateral Covenants. The covenants in this Section 6.12 shall apply to all Collateral other than Foreign Located Assets, except as expressly provided below. For clarification purposes, the covenants in this Section 6.12 shall not apply to any assets owned by Foreign Subsidiaries of the Loan Parties (other than Collateral transferred to a Foreign Subsidiary after the Closing Date, unless expressly permitted hereunder) or otherwise not constituting the Collateral.
(a) Possession of Collateral. In the event that any Collateral, including Proceeds, is evidenced by or consists of Negotiable Collateral, Investment Related Property, or Chattel Paper, in each case, having an aggregate value or face amount of $250,000 or more for all such Negotiable Collateral, Investment Related Property, or Chattel Paper, the Loan Parties shall promptly (and in any event within 3 Business Days after receipt thereof), notify the Agent thereof, and if and to the extent that perfection or priority of the Agents Liens are dependent on or enhanced by possession, the applicable Loan Party, promptly (and in any event within 3 Business Days) after request by the Agent (at the written direction of the Required Lenders), shall execute such other documents and instruments as shall be requested by the Agent or, if applicable, endorse and deliver physical possession of such Negotiable Collateral, Investment Related Property, or Chattel Paper to the Agent, together with such undated powers (or other relevant document of assignment or transfer acceptable to the Agent) endorsed in blank as shall be requested by the Agent, and shall do such other acts or things deemed necessary or desirable by Agent (at the written direction of the Required Lenders) to enhance, perfect and protect the Agents Liens therein; provided, that this Section 6.12(a) shall not apply to any Collateral evidenced by documents or instruments in the possession of the Existing Noteholder Collateral Agent, the New Noteholder Collateral Agent or the Revolving Loan Lender and subject to the Intercreditor Agreement.
(b) Chattel Paper.
(i) Promptly (and in any event within 3 Business Days) after request by the Agent (at the written direction of the Required Lenders), each Loan Party shall take all steps reasonably necessary to grant the Agent control of all electronic Chattel Paper of any Loan Party in accordance with the Code and all transferable records as that term is defined in Section 16 of the Uniform Electronic Transaction Act and Section 201 of the federal Electronic Signatures in Global and National Commerce Act as in effect in any relevant jurisdiction, to the extent that the individual or aggregate value or face amount of such electronic Chattel Paper equals or exceeds $250,000;
(ii) If any Loan Party retains possession of any Chattel Paper or instruments (which retention of possession shall be subject to the extent permitted hereby), promptly upon the request of the Agent (at the written direction of the Required Lenders), such Chattel Paper and instruments shall be marked with the following legend: This writing and the obligations evidenced or secured hereby are subject to the Security Interest of Delaware Trust Company, as Agent; and
(iii) This Section 6.12(b) shall be subject to the Intercreditor Agreement.
(c) Control Agreements. If requested by the Agent (at the written direction of the Required Lenders) and subject to the Intercreditor Agreement:
(i) Each Loan Party shall obtain a Control Agreement from each bank maintaining a Deposit Account for such Loan Party;
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(ii) [Intentionally Omitted];
(iii) Except to the extent otherwise provided by Section 7.11 or the Intercreditor Agreement, each Loan Party shall obtain a Control Agreement, from each issuer of uncertificated securities, securities intermediary, or commodities intermediary issuing or holding any financial assets or commodities to or for any such Loan Party; and
(iv) Except to the extent otherwise provided by Section 7.11, each Loan Party shall cause the Agent to obtain control, as such term is defined in the Code, with respect to all of such Loan Partys investment property; provided, that this Section 6.12(c)(iv) shall not apply to any investment property evidenced by documents or instruments in the possession of the Existing Noteholder Collateral Agent, the New Noteholder Collateral Agent or the Revolving Loan Lender, and subject to the Intercreditor Agreement.
(d) Letter-of-Credit Rights. If the Loan Parties (or any of them) are or become the beneficiary of letters of credit having a face amount or value of $250,000 or more in the aggregate, then the applicable Loan Party or Loan Parties shall promptly (and in any event within 3 Business Days after becoming a beneficiary), notify the Agent thereof and, promptly (and in any event within 3 Business Days) after request by the Agent (at the written direction of the Required Lenders), enter into a tri-party agreement with the Agent and the issuer or confirming bank with respect to letter-of-credit rights assigning such letter-of-credit rights to the Agent and directing all payments thereunder to the Collection Account unless otherwise directed by the Agent, all in form and substance reasonably satisfactory to the Required Lenders; provided, that this Section 6.12(d) shall be subject to the Intercreditor Agreement.
(e) Commercial Tort Claims. If the Loan Parties (or any of them) obtain Commercial Tort Claims having a value, or involving an asserted claim, in the amount of $250,000 or more in the aggregate for all Commercial Tort Claims, then the applicable Loan Party or Loan Parties shall promptly (and in any event within 3 Business Days of obtaining such Commercial Tort Claim), notify the Agent upon incurring or otherwise obtaining such Commercial Tort Claims and, promptly (and in any event within 3 Business Days) after request by the Agent (at the written direction of the Required Lenders), amend Schedule 5.6(d) to the Information Certificate to describe such Commercial Tort Claims in a manner that reasonably identifies such Commercial Tort Claims and which is otherwise reasonably satisfactory to the Required Lenders, and hereby authorizes the filing of additional financing statements or amendments to existing financing statements describing such Commercial Tort Claims, and agrees to do such other acts or things deemed necessary or desirable by the Agent to give the Agent for the benefit of the Secured Parties a perfected security interest in any such Commercial Tort Claim with such priority as provided by the Intercreditor Agreement, which Commercial Tort Claim shall not be subject to any other Liens.
(f) Government Contracts. Other than Accounts the aggregate value of which does not at any one time exceed $250,000, if any Account of any Loan Party arises out of a contract or contracts with the United States of America or any State or any department, agency, or instrumentality thereof, Loan Parties shall promptly (and in any event within 3 Business Days of the creation thereof) notify the Agent thereof and, promptly (and in any event within 3 Business Days) after request by the Agent (at the written direction of the Required Lenders), subject to the Intercreditor Agreement, execute any instruments or take any steps reasonably required by the Agent in order that all moneys due or to become due under such contract or contracts shall be assigned to the Agent, for the benefit of the Secured Parties, and shall provide written notice thereof under the Assignment of Claims Act or other applicable law.
(g) Intellectual Property.
(i) Upon the request of the Agent (at the written direction of the Required Lenders), in order to facilitate filings with the PTO and the United States Copyright Office, each Loan Party shall execute and deliver to the Agent one or more Copyright security agreements (if such Loan Party owns any Copyrights) or Patent and Trademark security agreements (if such Loan Party owns any Patents or Trademarks) to further evidence the Agents Lien on such Loan Partys Patents, Trademarks, or Copyrights (if any), and the General Intangibles of such Loan Party relating thereto or represented thereby;
(ii) Each Loan Party shall have the duty, exercised in a commercially reasonable manner in the reasonable business judgment of such Loan Party, with respect to Intellectual Property that is necessary in the proper conduct of such Loan Partys business, to protect and diligently enforce and defend at such Loan Partys expense its Intellectual Property, including (A) to diligently enforce and defend, including promptly suing for infringement, misappropriation, dilution, or other similar violation and to recover any and all damages for such infringement, misappropriation, dilution, or other similar violation, and filing for opposition, interference, and cancellation against conflicting Intellectual Property rights of any Person, (B) to prosecute diligently any trademark application or service mark application that is part of the Trademarks pending as of the date hereof or hereafter, (C) to
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prosecute diligently any patent application that is part of the Patents pending as of the date hereof or hereafter, (D) to prosecute diligently any copyright application that is part of the Copyrights pending as of the date hereof or hereafter, (E) to take all reasonable and necessary action to preserve and maintain all of such Loan Partys Trademarks, Patents, Copyrights, other Intellectual Property, Intellectual Property Licenses, and its rights therein, including paying all maintenance fees and filing of applications for renewal, affidavits of use, and affidavits of noncontestability, and (F) to require all employees, consultants, and contractors of each Loan Party who were involved in the creation or development of such Intellectual Property to sign agreements containing assignment to such Loan Party of Intellectual Property rights created or developed and obligations of confidentiality. No Loan Party shall abandon any Intellectual Property or Intellectual Property License that is necessary in the proper conduct of such Loan Partys business. Each Loan Party shall take the steps described in this Section 6.12(g)(ii) with respect to all new or acquired Intellectual Property to which it or any of its Subsidiaries is now or later becomes entitled that is necessary in the proper conduct of such Loan Partys or Domestic Subsidiarys business;
(iii) Each Loan Party acknowledges and agrees that the Secured Parties shall have no duties with respect to any Intellectual Property or Intellectual Property Licenses of any Loan Party. Without limiting the generality of this Section 6.12(g)(iii), each Loan Party acknowledges and agrees that the Secured Parties shall not be under any obligation to take any steps necessary to preserve rights in the Collateral consisting of Intellectual Property or Intellectual Property Licenses against any other Person, but the Agent (at the written direction of the Required Lenders), subject to the Intercreditor Agreement, may do so at its option from and after the occurrence and during the continuance of an Event of Default, and all expenses incurred in connection therewith (including reasonable documented out-of-pocket fees and expenses of attorneys and other professionals) shall constitute Obligations hereunder;
(iv) Each Loan Party shall promptly file an application with the United States Copyright Office for any Copyright that has not been registered with the United States Copyright Office if such Copyright that is necessary in the proper conduct of such Loan Partys business. Any expenses incurred in connection with the foregoing shall be borne by the Loan Parties; and
(v) No Loan Party shall enter into any Intellectual Property License to receive any license or rights in any Intellectual Property of any other Person unless such Loan Party has used commercially reasonable efforts to permit the assignment of or grant of a Lien in such Intellectual Property License (and all rights of such Loan Party thereunder) to the Agent (and any transferees of the Agent) for the benefit of the Secured Parties.
(h) Investment Related Property.
(i) Upon the occurrence and during the continuance of an Event of Default, following the request of the Agent (at the written direction of the Required Lenders), subject to the Intercreditor Agreement, all sums of money and property paid or distributed in respect of the Investment Related Property (other than any Investment Related Property evidenced by documents or instruments in the possession of the Revolving Loan Lender and subject to the Intercreditor Agreement) that are received by any Loan Party shall be held by such Loan Party in trust for the benefit of the Agent segregated from such Loan Partys other property, and such Loan Party shall deliver it promptly to the Agent in the exact form received; and
(ii) Except for Foreign Located Assets, each Loan Party shall cooperate with the Agent in obtaining all necessary approvals and making all necessary filings under federal, state, local, or foreign law to effect the perfection of the Security Interest on the Investment Related Property or to effect any sale or transfer thereof.
(i) [Intentionally Omitted]
(j) [Intentionally Omitted]
(k) Motor Vehicles; Vessels; Titled Goods. Subject to the Intercreditor Agreement, promptly (and in any event within five (5) Business Days) after (i) request by the Agent (at the written direction of the Required Lenders) with respect to (x) any titled Equipment or (y) Equipment used in Loan Parties Alaska Operations that is not susceptible to perfection by the filing of a financing statement pursuant to the Code (Preempted Perfection Equipment), (ii) the value of any titled Equipment or Preempted Perfection Equipment exceeds $100,000 individually or all such Equipment exceeds $500,000 in the aggregate, or (iii) the occurrence and continuation of a Default or an Event of Default, each Loan Party owning such Equipment shall deliver to the Agent, (x) an original certificate of title or similar document issued by the applicable Governmental Authority for each such Equipment titled under state law, together with a signed title application naming the Agent as lien holder with respect to such Equipment and will cause such title certificates to be filed (with the Agents Lien noted thereon) in the appropriate filing office, and (y) a similar perfection instrument for any Preempted Perfection Equipment, including a signed preferred ship mortgage for any federally registered vessel.
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(l) Pledged Collateral. Subject in all respects to the Intercreditor Agreement and except if the Revolving Loan Lender shall have taken action in respect of such Collateral, as long as any Obligation remains outstanding (other than contingent indemnification obligations to the extent no claim giving rise thereto has been asserted):
(i) Delivery of Pledged Collateral. Each Loan Party shall (i) deliver to the Agent, in suitable form for transfer and in form and substance satisfactory to the Required Lenders, (A) all Pledged Certificated Stock, (B) all Pledged Debt Instruments, including all Indebtedness described on Schedule 6.12(l), having a stated value in excess of $250,000 in the aggregate and (C) all certificates and instruments evidencing Pledged Investment Property with a stated value in excess of $250,000 in the aggregate and (ii) maintain all other Pledged Investment Property with a stated value in excess of $250,000 in the aggregate in a Controlled Securities Account.
(ii) Event of Default. Subject to the terms of the Intercreditor Agreement, during the continuance of an Event of Default, the Agent shall have the right, at the written direction of the Required Lenders and upon notice to the Loan Parties, to (i) transfer to or to register in its name or in the name of its nominees any Pledged Collateral or any Pledged Investment Property and (ii) exchange any certificate or instrument representing or evidencing any Pledged Collateral or any Pledged Investment Property for certificates or instruments of smaller or larger denominations.
(iii) Pledged Uncertificated Stock. Each Loan Party hereby covenants and agrees that, without the prior express written consent of the Required Lenders, it will not agree to any election by any limited liability company to treat the Pledged Stock as securities governed by Article 8 of the Uniform Commercial Code of any jurisdiction and in any event will promptly notify the Agent in writing if such Pledged Stock will be treated as a security governed by Article 8 of the Uniform Commercial Code of any jurisdiction and, in such event, take such action as the Agent make request in order to establish the Agents control (within the meaning of Section 8-106 of the UCC) over such Pledged Stock.
(iv) Cash Distributions with respect to Pledged Collateral. Except as provided in Section 10.2 and subject to the limitations set forth in this Agreement, such Loan Party shall be entitled to receive all cash distributions and dividends paid in respect of the Pledged Collateral.
(v) Voting Rights. Except as provided in Section 10.2, the Loan Parties shall be entitled to exercise all voting, consent and corporate, partnership, limited liability company and similar rights with respect to the Pledged Collateral; provided, however, that no vote shall be cast, consent given or right exercised or other action taken by such Loan Party that would contravene or result in any violation of any provision of any Loan Document in any material respect.
(m) Subject to the foregoing, to the extent the provisions of this Agreement (or any other Loan Document) require the delivery of, or control over, the Collateral to be granted to the Agent at any time prior to the Senior Obligations Payment Date (as defined in the Intercreditor Agreement), then delivery of such Collateral (or control with respect thereto, (and any related approval or consent rights)) shall instead be granted to the Revolving Loan Lender, to be held by the Revolving Loan Lender as bailee and sub-collateral agent for the Agent for the sole purpose of perfection, in accordance with the Revolving Credit Documents and subject to the Intercreditor Agreement.
6.13 Material Contracts. Contemporaneously with the delivery of each Compliance Certificate pursuant to Section 6.1, provide the Agent with copies of (a) each Material Contract entered into since the delivery of the previous Compliance Certificate, (b) each material amendment or modification of any Material Contract entered into since the delivery of the previous Compliance Certificate, and (c) at the request of the Agent (at the written direction of the Required Lenders), a no-offset letter in form and substance reasonably acceptable to the Required Lenders from each customer of any Loan Party which is a party to any Material Contract. Borrower and each other Loan Party shall maintain all Material Contracts in full force and effect and shall not default in the payment or performance of any material obligations thereunder.
6.14 Location of Inventory, Equipment and Books. Each Loan Party shall keep its Inventory and Equipment (other than vehicles and Equipment out for repair) and Books of each Loan Party and each of its Domestic Subsidiaries only at the locations identified on Schedule 5.29 to the Information Certificate and keep the chief executive office of each Loan Party and each of its Subsidiaries only at the locations identified on Schedule 5.6(b) to the Information Certificate; provided, however, that, so long as no Event of Default has occurred and is continuing,
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each Loan Party may (a) move Equipment to and from and keep Equipment at any domestic location accessible by a Loan Party without restriction and owned, leased or licensed by a Loan Partys customer(s) to the extent necessary for such Loan Partys provision of services to such customer, and so long as such Loan Party timely reports the presence of such Equipment at such new location pursuant to Schedule 6.2; (b) move Equipment to a location outside the United States to the extent necessary for a Loan Partys provision of services to a customer in such location, and so long as such Loan Party timely reports the presence of such Equipment at such new location pursuant to Schedule 6.2, and (c) amend Schedule 5.29 to the Information Certificate so long as such amendment occurs by the next monthly update delivered to the Agent following the date on which such Inventory, Equipment or Books are moved to such new location.
6.15 Further Assurances.
(a) At any time upon the reasonable request of the Agent or the Required Lenders, execute or deliver to the Agent any and all financing statements, fixture filings, security agreements, pledges, assignments, endorsements of certificates of title, mortgages, deeds of trust, opinions of counsel, and all other documents (the Additional Documents) that the Agent or the Required Lenders may reasonably request and in form and substance reasonably satisfactory to the Agent or the Required Lenders, to create, perfect, and continue perfection or to better perfect the Agents Liens in all of the assets that constitutes Collateral of each Loan Party under applicable Legal Requirements in the United States (whether now owned or hereafter arising or acquired, tangible or intangible, real or personal), and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents. To the maximum extent permitted by applicable law, if Borrower or any other Loan Party refuses or fails to execute or deliver any reasonably requested Additional Documents, such Borrower and such other Loan Party hereby authorizes the Agent to execute any such Additional Documents in the applicable Loan Partys name, as applicable, and authorizes the Agent to file such executed Additional Documents in any appropriate filing office. In furtherance and not in limitation of the foregoing, each Loan Party shall take such actions as the Agent may reasonably request from time to time to ensure that the Obligations are guaranteed by the Guarantors and are secured by substantially all of the assets of Borrower and each other Loan Party other than Excluded Property (but including Pledgor Foreign Property).
(b) Borrower and each other Loan Party authorizes the filing by the Agent of financing or continuation statements, or amendments thereto, and such Loan Party will execute and deliver to the Agent such other instruments or notices, as the Agent may reasonably request, in order to perfect and preserve the Security Interest granted or purported to be granted hereby under applicable Legal Requirements in the United States.
(c) Borrower and each other Loan Party authorizes the Agent at any time and from time to time to file, transmit, or communicate, as applicable, financing statements and amendments (i) describing the Collateral as all personal property of debtor or all assets of debtor or words of similar effect, (ii) describing the Collateral as being of equal or lesser scope or with greater detail, or (iii) that contain any information required by Part 5 of Article 9 of the Code for the sufficiency or filing office acceptance of such financing statement. Borrower and each other Loan Party also hereby ratifies any and all financing statements or amendments previously filed by the Agent in any jurisdiction.
(d) Borrower and each other Loan Party acknowledges that no Loan Party is authorized to file any financing statement or amendment or termination statement with respect to any financing statement filed in connection with this Agreement without the prior written consent of the Agent (at the written direction of the Required Lenders), subject to such Loan Partys rights under Section 9-509(d)(2) of the Code.
6.16 Revolving Credit Agreement, Existing Notes and New Senior Notes. With respect to the Revolving Credit Documents, the Revolving Loan Lender, the Existing Noteholders, the Existing Notes Documents, the New Senior Notes Documents and the New Senior Noteholders, the Loan Parties shall (a) provide the Agent with copies of any proposed amendments to the Revolving Credit Documents, the Existing Notes Documents and the New Senior Notes Documents before any such amendments are executed, (b) provide the Agent with copies of any default notices or other material notices or communications received from the Existing Noteholders, the Existing Notes Trustee, Revolving Loan Lender, the New Senior Notes Trustee or the New Senior Noteholders in connection with the Existing Notes Documents, Revolving Credit Documents or the New Senior Notes Documents, as applicable, and (c) upon knowledge thereof, advise the Agent of any circumstance that Loan Parties anticipate will result in a default or event of default under the Revolving Credit Documents, the Existing Notes Documents or the New Senior Notes Documents.
6.17 Post-Closing Deliverables. Borrower shall satisfy the requirements and/or provide to the Agent each of the documents, instruments, agreements and information set forth on Exhibit I hereto, on or before the date
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specified for such requirement on such Exhibit or such later date to be determined by the Required Lenders in their reasonable discretion, each of which shall be completed or provided in form and substance reasonably satisfactory to the Agent and the Required Lenders.
7. | NEGATIVE COVENANTS. |
Borrower and each Loan Party covenants and agrees that, until termination of all of the Commitments of each of the Lenders hereunder and payment in full of the Obligations (other than any unasserted contingent indemnification obligations), neither Borrower nor any other Loan Party will do, nor will Borrower or any other Loan Party permit any of their Domestic Subsidiaries to do any of the following:
7.1 Indebtedness.
(a) Create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except for Permitted Indebtedness.
(b) Incur any Permitted Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of a Loan Party unless such Indebtedness is also contractually subordinated in right of payment to the Obligations on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of Borrower solely by virtue of being unsecured or by virtue of being secured on a junior Lien basis.
For purposes of determining compliance with Section 7.1, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness, or is entitled to be incurred pursuant to Section 7.1(a), Borrower will be permitted to classify and divide such item of Indebtedness on the date of its incurrence, and later reclassify and redivide all or a portion of such item of Indebtedness among any one or more of such clauses and/or Section 7.1(a), in any manner that complies with Section 7.1. Indebtedness under this Agreement will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Indebtedness. For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that any Loan Party may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. In determining the amount of Indebtedness outstanding, the outstanding amount of any particular Indebtedness of any Person shall be counted only once.
7.2 Liens. Create, incur, assume, or suffer to exist, directly or indirectly, any (a) Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens; or (b) Lien of any subcontractor of Borrower or any other Loan Party on the assets of any customer of Borrower or any other Loan Party, unless, and to the extent, such subcontractor Lien is discharged, satisfied, vacated, bonded, or stayed within seven (7) days thereof.
7.3 Restrictions on Fundamental Changes.
(a) Enter into any merger, consolidation, reorganization, or recapitalization, or reclassify its Stock, except for (i) any merger between Loan Parties, provided that Borrower must be the surviving entity of any such merger to which it is a party, and (ii) any merger between any Loan Partys Subsidiaries that are not Loan Parties.
(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), except for (i) the liquidation or dissolution of non-operating Subsidiaries of Borrower with nominal assets and nominal liabilities, (ii) the liquidation or dissolution of a Loan Party (other than a Borrower) or any of its wholly-owned Subsidiaries so long as all of the assets (including any interest in any Stock) of such liquidating or dissolving Loan Party or Subsidiary are transferred to a Loan Party that is not liquidating or dissolving, or (iii) the liquidation or dissolution of a Subsidiary of a Borrower that is not a Loan Party (other than any such Subsidiary the Stock of which (or any portion thereof) is subject to a Lien in favor of the Agent) so long as all of the assets of such liquidating or dissolving Subsidiary are transferred to a Subsidiary of a Borrower that is not liquidating or dissolving.
(c) Suspend or cease operation of a substantial portion of its or their business, except as permitted pursuant to Sections 7.3(a) or (b) above or in connection with the transactions permitted pursuant to Section 7.4.
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(d) Form or acquire any (i) direct Subsidiary, (ii) indirect Subsidiary in the United States, or (iii) indirect Subsidiary in a Foreign Jurisdiction unless Loan Parties provide the Agent with written notice of the formation of such indirect Subsidiary in a Foreign Jurisdiction within ten (10) days after such formation and provide the Agent with copies of all organizational and formation documents related thereto as the Agent or the Required Lenders may request in its Permitted Discretion.
7.4 Disposal of Assets. Other than Permitted Dispositions or transactions expressly permitted by Section 7.3 or Section 7.12, sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, any of the Collateral or any other asset except as expressly permitted by this Agreement. The Agent and the Required Lenders shall not be deemed to have consented to any sale or other disposition of any of the Collateral or any other asset except as expressly permitted in this Agreement or the other Loan Documents.
7.5 Change of Name. Change the name, organizational identification number, state of organization, organizational identity or location for purposes of Section 9-307 of the Code of any Loan Party, or change the name, organizational identification number, state of organization, organizational identity or location for purposes of Section 9-307 of the Code of any Loan Partys Subsidiaries.
7.6 Nature of Business. Make any change in the nature of its or their business as conducted on the date of this Agreement or acquire any properties or assets that are not reasonably related to the conduct of such business activities; provided, however, that the foregoing shall not prevent Borrower or any other Loan Party or any of its Subsidiaries from engaging in any business that is reasonably related or ancillary to its business.
7.7 Prepayments. Except in connection with Refinancing Indebtedness permitted under the definition of Permitted Indebtedness,
(a) optionally prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of any Loan Party or any of its Subsidiaries, other than (A) the Obligations in accordance with this Agreement, (B) Permitted Indebtedness owing to a Loan Party provided that no Event of Default has occurred and is occurring, or would occur after giving effect to such payment, and (C) the obligations under the Revolving Credit Documents,
(b) make any payment on account of Indebtedness that has been contractually subordinated in right of payment to the Obligations if such payment is not permitted at such time under the subordination terms and conditions,
(c) make any payments on the Existing Noteholder Obligations other than payments of regularly scheduled interest or as otherwise permitted by the Intercreditor Agreement, and
(d) make any payments on the obligations under the New Senior Notes Documents other than payments of regularly scheduled interest or any Additional Interest due thereunder or as otherwise permitted by the Intercreditor Agreement.
7.8 Amendments. Directly or indirectly, amend, modify, or change any of the terms or provisions of:
(a) any agreement, instrument, document, indenture, or other writing evidencing or concerning Permitted Indebtedness other than (i) the Obligations in accordance with this Agreement, and (ii) Indebtedness permitted under clauses (c), (e) and (f) of the definition of Permitted Indebtedness;
(b) any Material Contract except (i) in connection with the transactions contemplated by the Restructuring Support Agreement or (ii) to the extent that such amendment, modification, or change could not, individually or in the aggregate, reasonably be expected to be materially adverse to the interests of the Agent or the Lenders;
(c) the Governing Documents of any Loan Party or any of its Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Agent or the Lenders; provided, that, the Governing Documents may be amended, modified or changed in connection with the transactions contemplated by the Restructuring Support Agreement;
(d) the Revolving Credit Documents, except as permitted by the Intercreditor Agreement or in connection with the transactions contemplated by the Restructuring Support Agreement or if the effect thereof, either individually or in the aggregate, is not materially adverse to the interests of the Secured Parties and does not alter the payment terms of this Agreement or as otherwise permitted by the Intercreditor Agreement;
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(e) the Existing Notes Documents, except as permitted by the Intercreditor Agreement or in connection with the Restructuring Support Agreement or if the effect thereof, either individually or in the aggregate, is not materially adverse to the interests of the Secured Parties and does not alter the payment terms of this Agreement or as otherwise permitted by the Intercreditor Agreement; or
(f) the New Senior Notes Documents, except as permitted by the Intercreditor Agreement or in connection with the Restructuring Support Agreement or if the effect thereof, either individually or in the aggregate, is not materially adverse to the interests of the Secured Parties and does not alter the payment terms of this Agreement or as otherwise permitted by the Intercreditor Agreement.
7.9 Change of Control. Cause, permit, or suffer to exist, directly or indirectly, any Change of Control.
7.10 Accounting Methods. Modify or change its fiscal year or its method of accounting (other than as may be required to conform to GAAP).
7.11 Investments; Controlled Investments.
(a) Except for Permitted Investments, directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment.
(b) [Intentionally Omitted].
(c) [Intentionally Omitted].
7.12 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any transaction with any Affiliate of Borrower, any other Loan Party or any of their Subsidiaries except for:
(a) transactions contemplated by the Loan Documents or transactions (other than the payment of management, consulting, monitoring, or advisory fees) with any non-Loan Party Affiliates of any Loan Party in the ordinary course of business of such Loan Party, consistent with past practices and undertaken in good faith, upon fair and reasonable terms fully disclosed to the Agent and no less favorable than would be obtained in a comparable arms length transaction with a non-Affiliate;
(b) so long as it has been approved by a Loan Partys Board of Directors in accordance with applicable law, any customary indemnities provided for the benefit of directors (or comparable managers) of such Loan Party;
(c) so long as it has been approved by a Loan Partys Board of Directors in accordance with applicable law, the payment of reasonable compensation, severance, or employee benefit arrangements to employees, officers, and outside directors of a Loan Party and its Subsidiaries in the ordinary course of business and consistent with industry practice;
(d) transactions permitted by Section 7.3 or Section 7.17;
(e) Permitted Affiliate Transactions; and
(f) transactions contemplated under the Restructuring Support Agreement.
7.13 Use of Proceeds. Use the proceeds of any loan made hereunder for any purpose other than (a) to pay fees, costs, and expenses, including Expenses, incurred in connection with this Agreement, the other Loan Documents, and the transactions contemplated hereby and thereby, and (b) consistent with the terms and conditions hereof, for general corporate and working capital purposes (provided that no part of the proceeds of the loans made to Borrower will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System).
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7.14 Limitation on Issuance of Stock. Except for the issuance or sale of common stock or Permitted Preferred Stock by Borrower, issue or sell or enter into any agreement or arrangement for the issuance and sale of any Stock of Borrower or a Subsidiary of Borrower other than to a Loan Party.
7.15 Consignments. Consign any of its Inventory or sell any of its Inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale, except as set forth on Schedule 7.15 to the Information Certificate.
7.16 Inventory and Equipment with Bailees. Store the Inventory or Equipment of any Loan Party or any of its Subsidiaries at any time now or hereafter with a bailee, warehouseman, or similar party, except as set forth on Schedule 7.16 to the Information Certificate or except as otherwise permitted herein.
7.17 Other Payments and Distributions. Except for Permitted Distributions, the Loan Parties will not, and will not permit any of their Domestic Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or distribution on account of any Loan Partys Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving any Loan Party or any of its Subsidiaries), or to the direct or indirect holders of any Loan Partys Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Prohibited Preferred Stock) of Borrower);
(ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving Borrower) any Equity Interests of any Loan Party;
(iii) except as permitted by Section 7.7 hereof, make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of any Loan Party that is contractually subordinated in right of payment to the Obligations of such Loan Party, as the case may be, except a payment of regularly scheduled interest or principal at the Stated Maturity thereof or otherwise to the extent permitted under any applicable subordination agreement; or
(iv) make any Investment other than Permitted Investments (all such payments and other actions set forth in these clauses (i) through (iii) above being collectively referred to as Restricted Payments).
For purposes of determining compliance with this Section 7.17, if a Restricted Payment meets the criteria of more than one of the types of distributions described in clauses (a) through (d) of the definition of Permitted Distributions or this Section 7.17, Borrower, in its sole discretion, may divide or classify and from time to time divide, re-divide, classify and reclassify such Permitted Distributions among such clauses and/or paragraphs above in any manner in compliance with this Section 7.17.
7.18 Revolving Credit Documents, Existing Notes Documents and New Senior Notes Documents. With respect to the Revolving Credit Documents, the Revolving Loan Lender, the Existing Noteholders, the Existing Notes Documents, the New Senior Notes Documents and the New Senior Noteholders, make any payment or perform any act to or for the benefit of the Revolving Loan Lender, Existing Noteholders or the New Senior Noteholders, as applicable, that is prohibited by the terms of the Intercreditor Agreement.
8. | [INTENTIONALLY OMITTED] |
9. | EVENTS OF DEFAULT. |
Any one or more of the following events shall constitute an event of default (each, an Event of Default) under this Agreement:
9.1 If Borrower fails to pay when due and payable, or when declared due and payable, all or any portion of the Obligations consisting of principal, interest, fees, charges or other amounts due any Lender or the Agent, reimbursement of Expenses, or other amounts constituting Obligations (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding);
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9.2 If any Loan Party or any of its Subsidiaries (other than its Foreign Subsidiaries):
(a) fails to perform or observe any covenant or other agreement contained in any of (i) Sections 6.1, 6.3 (solely if any Loan Party or any of its Subsidiaries is not in good standing in its jurisdiction of organization), 6.6, 6.7 (solely if any Loan Party or any of its Subsidiaries refuses to allow the Agent or its representatives or agents to visit its properties, inspect its assets or books or records, examine and make copies of its books and records, or discuss its affairs, finances, and accounts with its officers and employees), 6.8, 6.11, 6.12; 6.13 or 6.14, (ii) Section 7, or (iii) the Intercreditor Agreement;
(b) fails to perform or observe any covenant or other agreement contained in any of Sections 6.3 (other than if a Loan Party is not in good standing in its jurisdiction of organization), 6.4, 6.5, 6.9, 6.10, and 6.15 and such failure continues for a period of 15 days after the earlier of (i) the date on which such failure shall first become known to or should have been known by any officer of any Loan Party or (ii) the date on which written notice thereof is given to any Loan Party by the Agent; or
(c) fails to perform or observe any covenant or other agreement contained in this Agreement, or in any of the other Loan Documents, in each case, other than any such covenant or agreement that is unable to be cured or is the subject of another provision of this Section 9 (in which event such other provision of this Section 9 shall govern), and such failure continues for a period of 30 days after the earlier of (i) the date on which such failure shall first become known to or should have been known by any officer of any Loan Party or (ii) the date on which written notice thereof is given to any Loan Party by the Agent;
9.3 If one or more judgments, orders, or awards for the payment of money in an amount in excess of $250,000 in any one case or in excess of $500,000 in the aggregate (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has not denied coverage) is entered or filed against a Loan Party or any of its Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of 30 consecutive days at any time after the entry of any such judgment, order, or award during which (1) the same is not discharged, satisfied, vacated, or bonded pending appeal, or (2) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;
9.4 If an Insolvency Proceeding is commenced by a Loan Party or any of its Subsidiaries;
9.5 If an Insolvency Proceeding is commenced against a Loan Party or any of its Subsidiaries and any of the following events occur: (a) such Loan Party or such Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, such Loan Party or its Subsidiary, or (e) an order for relief shall have been issued or entered therein; provided that the Lenders shall have no obligation to provide any Advances to Borrower during such 60 calendar day period specified in subsection (c);
9.6 If any Loan Party or any of its Subsidiaries is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of the business affairs of such Loan Party and its Subsidiaries, taken as a whole;
9.7 If there is (a) a default in one or more agreements to which a Loan Party or any of its Subsidiaries is a party with one or more Persons (other than an Affiliate of a Loan Party or any of its Subsidiaries that has waived such default in writing) relative to the Indebtedness of such Loan Party or such Subsidiary involving an aggregate amount of $500,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such Person, irrespective of whether exercised, to accelerate the maturity of such Loan Partys or its Subsidiarys obligations thereunder, (b) a default in or an involuntary early termination of any Hedge Agreement to which a Loan Party or any of its Subsidiaries is a party, (c) an event of default has occurred and is continuing under the Existing Notes Documents, (d) an event of default has occurred and is continuing under any Revolving Credit Documents, (e) an event of default has occurred and is continuing under any New Senior Notes Documents, (f) breach or default under the Restructuring Agreement that results in a termination thereof or (g) the Restructuring and/or the Exchange, and the transactions contemplated thereby, is not consummated as contemplated by the Restructuring Support Agreement by August 31, 2016;
9.8 If any warranty, representation, certificate, statement, or Record made herein or in any other Loan Document or delivered in writing to the Agent in connection with this Agreement or any other Loan Document proves to be untrue in any material respect (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of the date of issuance or making or deemed making thereof;
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9.9 If the obligation of any Guarantor under its Guaranty or any other Loan Document to which any Guarantor is a party is limited or terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement), or if any Guarantor fails to perform any obligation under its Guaranty or under any such Loan Document, or repudiates or revokes or purports to repudiate or revoke any obligation under its Guaranty, or under any such Loan Document, or any individual Guarantor dies or becomes incapacitated, or any other Guarantor ceases to exist for any reason;
9.10 If this Agreement or any other Loan Document that purports to create a Lien on Collateral, shall, for any reason, fail or cease to create a valid and perfected Lien thereon having the priority set forth in the Intercreditor Agreement, provided that Permitted Liens securing Permitted Indebtedness described in clauses (d), (f), (n) or (u) of the definition thereof, and any Permitted Liens given first-priority status by operation of law, may be first-priority liens;
9.11 If any event or circumstance occurs that the Required Lenders in their Permitted Discretion believe may impair the prospect of payment of all or part of the Obligations, or any Loan Partys ability to perform any of its material obligations under any of the Loan Documents, or any other document or agreement described in or related to this Agreement, or there occurs any Material Adverse Change;
9.12 If any event or circumstance shall occur which, in the Permitted Discretion of the Required Lenders exercised in good faith, would be reasonably likely to cause the Required Lenders to suspect that any Loan Party has engaged in fraudulent activity with respect to the Collateral or other matters;
9.13 Any director, officer, or owner of at least 20% of the issued and outstanding ownership interests of a Loan Party is indicted for a felony offense under state or federal law, or a Loan Party hires an officer or appoints a director who has been convicted of any felony offense and Borrower does not cause such persons connection to such Loan Party to be terminated within 30 days of obtaining knowledge of such conviction, or a Person becomes an owner of at least 20% of the issued and outstanding ownership interests of a Loan Party who has been convicted of any such felony offense;
9.14 [Intentionally Omitted];
9.15 The validity or enforceability of any Loan Document shall at any time for any reason be declared to be null and void by a court of competent jurisdiction, or a proceeding shall be commenced by a Loan Party or any of its Subsidiaries, or a proceeding shall be commenced by any Governmental Authority having jurisdiction over a Loan Party or any of its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or any of its Subsidiaries shall deny that such Loan Party or such Subsidiary has any liability or obligation purported to be created under any Loan Document.
10. | RIGHTS AND REMEDIES. |
10.1 Rights and Remedies.
(a) Subject to the Intercreditor Agreement, upon the occurrence and during the continuation of an Event of Default, the Agent or its authorized representatives (at the written direction of the Required Lenders) may in addition to any other rights or remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or more of the following:
(i) declare the Obligations, whether evidenced by this Agreement or by any of the other Loan Documents, immediately due and payable, whereupon the same shall become and be immediately due and payable and Borrower shall be obligated to repay all of such Obligations in full, without presentment, demand, protest, or further notice or other requirements of any kind, all of which are hereby expressly waived by Borrower and each other Loan Party;
(ii) declare the Commitments and any other funding obligations of each Lender under this Agreement terminated, whereupon such Commitments or other funding obligations shall immediately be terminated together with any obligation of any Lender hereunder to make Advances or extend any other credit hereunder;
(iii) give notice to an Account Debtor or other Person obligated to pay an Account, a General Intangible, Negotiable Collateral, or other amount due, notice that the Account, General Intangible, Negotiable Collateral or other amount due has been assigned to the Agent for security and must be paid directly to the Agent and the Agent may collect the Accounts, General Intangible and Negotiable Collateral of Borrower and each other Loan Party directly, and any collection costs and expenses shall constitute part of the Obligations under the Loan Documents;
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(iv) without notice to or consent from any Loan Party or any of its Subsidiaries, and without any obligation to pay rent or other compensation, take exclusive possession of all locations where any Loan Party or any of its Subsidiaries conduct its business or has any rights of possession and use the locations to store, process, manufacture, sell, use, and liquidate or otherwise dispose of items that are Collateral, and for any other incidental purposes deemed appropriate by the Required Lenders in good faith, including, without limitation, the right, in the Required Lenders Permitted Discretion, through any Person or otherwise, to enter upon any job site and complete any portion of any of Borrowers projects as the Required Lenders deem necessary to collect or realize on any Collateral; and
(v) exercise in respect of the Collateral, in addition to other rights and remedies provided for herein, in the other Loan Documents, in the Intercreditor Agreement, or otherwise available to it, all the rights and remedies of a secured party on default under the Code or any other applicable law.
(b) Subject to the Intercreditor Agreement, without limiting the generality of the foregoing, Borrower and each other Loan Party expressly agrees that upon the occurrence and during the continuation of an Event of Default:
(i) The Agent or its authorized representatives (at the written direction of the Required Lenders), without demand of performance or other demand, advertisement or notice of any kind (except a notice specified below of time and place of public or private sale) to or upon Borrower, any other Loan Party or any other Person (all and each of which demands, advertisements and notices are hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), may take immediate possession of all or any portion of the Collateral, including with respect to any Collateral consisting of Intellectual Property, to cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Collateral by the applicable Loan Party to the Agent, or to license or sublicense, whether general, special or otherwise, and whether on an exclusive or nonexclusive basis, any such Collateral throughout the world on such terms and conditions and in such manner as the Required Lenders shall determine (other than in violation of any then-existing licensing arrangements to the extent that waivers cannot be obtained) and (i) require Loan Parties to, and Borrower and each other Loan Party hereby agrees that it will at its own expense and upon request of the Agent (at the written direction of the Required Lenders) forthwith, assemble all or part of the Collateral as directed by the Agent and make it available to the Agent at one or more locations designated by the Agent where such Borrower or other Loan Party conducts business, and (ii) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Agents or Loan Partys offices or elsewhere, for cash, on credit, and upon such other terms as the Required Lenders may deem commercially reasonable. Borrower and each other Loan Party acknowledges and agrees that Borrower and each Loan Partys Equipment is highly specialized and not widely marketable, and as such, the Agent shall not be required to widely or generally advertise any private or public sale of such Equipment. Borrower and each other Loan Party agrees that, to the extent notice of sale shall be required by law, at least 10 days notice to such Borrower or such other Loan Party of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification and such notice shall constitute a reasonable authenticated notification of disposition within the meaning of Section 9-611 of the Code. The Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Agent (at the written direction of the Required Lenders) may adjourn any public or private sale from time to time, and such sale may be made at the time and place to which it was so adjourned. Borrower and each other Loan Party agrees that the internet shall constitute a place for purposes of Section 9-610(b) of the Code. Borrower and each other Loan Party agrees that any sale of Collateral to a counterparty to a Material Contract, or to a licensor pursuant to the terms of a license agreement between such licensor and Borrower or such other Loan Party, is sufficient to constitute a commercially reasonable sale (including as to method, terms, manner, and time) within the meaning of Section 9-610 of the Code;
(ii) The Agent or its authorized representatives (at the written direction of the Required Lenders) may, in addition to other rights and remedies provided for herein, in the other Loan Documents, or otherwise available to it under applicable law and without the requirement of notice to or upon any Loan Party or any other Person (which notice is hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), (i) with respect to any Loan Partys Deposit Accounts in which the Agents Liens are perfected by control under Section 9-104 of the Code, instruct the bank maintaining such Deposit Account for the applicable Loan Party to pay the balance of such Deposit Account to or for the benefit of the Agent, and (ii) with respect to any Loan Partys Securities Accounts in which the Agents Liens are perfected by control under Section 9-106 of the Code, instruct the securities intermediary maintaining such Securities Account for the applicable Loan Party to (A) transfer
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any cash in such Securities Account to or for the benefit of the Agent, or (B) liquidate any financial assets in such Securities Account that are customarily sold on a recognized market and transfer the cash proceeds thereof to or for the benefit of the Agent;
(iii) any cash held by the Agent as Collateral and all cash proceeds received by the Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied against the Obligations in the order set forth in Section 10.5. In the event the proceeds of Collateral are insufficient to satisfy all of the Obligations in full, Borrower and each other Loan Party shall remain jointly and severally liable for any such deficiency; and
(iv) the Obligations arise out of a commercial transaction, and that if an Event of Default shall occur the Agent shall have the right to an immediate writ of possession without notice of a hearing. The Agent shall have the right to the appointment of a receiver for each Loan Party or for the properties and assets of each Loan Party, and Borrower and each other Loan Party hereby consents to such rights and such appointment and hereby waives any objection such Borrower or such other Loan Party may have thereto or the right to have a bond or other security posted by the Agent, and further agrees that, to the extent permitted by applicable law, such receiver may be granted the power to sell any Collateral, subject only to the Agents rights therein. Borrower acknowledges that the nature of its business, which includes progress billing, technical contracts, and the use of Equipment in varied and remote locations, renders the appointment of a receiver reasonably necessary and, makes other remedies inadequate for the liquidation of the Collateral, to the extent the Agent elects to proceed with such appointment.
Notwithstanding the foregoing or anything to the contrary contained in Section 10.1(a), upon the occurrence of any Event of Default described in Section 9.4 or Section 9.5, in addition to the remedies set forth above, without any notice to Borrower or any other Person or any act by the Agent or the Lenders, all obligations of the Lenders to provide any further Advances or extensions of credit hereunder shall automatically terminate and the Obligations shall automatically and immediately become due and payable and Borrower shall be obligated to repay all of such Obligations in full, without presentment, demand, protest, or notice of any kind, all of which are expressly waived by Borrower.
10.2 Pledged Collateral.
Subject in all respects to the Intercreditor Agreement:
(a) Voting Rights. During the continuance of an Event of Default, upon notice by the Agent to the relevant Loan Party or Loan Parties, the Agent or its nominee (at the written direction of the Required Lenders) may exercise (A) any voting, consent, corporate or other right pertaining to the Pledged Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged Collateral or otherwise and (B) any right of conversion, exchange and subscription and any other right, privilege or option pertaining to the Pledged Collateral as if it were the absolute owner thereof (including the right to exchange at its discretion any Pledged Collateral upon the merger, amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the corporate or equivalent structure of any issuer of Pledged Stock, the right to deposit and deliver any Pledged Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Agent (at the written direction of the Required Lenders) may reasonably determine), all without liability (except for the gross negligence or willful misconduct of the Agent or Lenders as determined by a final order of a court of competent jurisdiction no longer subject to appeal) except to account for property actually received by it; provided, however, that the Agent shall have no duty to any Loan Party to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.
(b) Proxies. In order to permit the Agent to exercise the voting and other consensual rights that it may be entitled to exercise pursuant hereto during the continuance of an Event of Default and to receive all dividends and other distributions that it may be entitled to receive hereunder, upon an Event of Default (i) each Loan Party shall promptly execute and deliver (or cause to be executed and delivered) to the Agent all such proxies, dividend payment orders and other instruments as the Agent may from time to time reasonably request and (ii) without limiting the effect of clause (i) above, such Loan Party hereby grants to the Agent (subject to the terms of Section 10.3(a)) an irrevocable proxy to vote all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Collateral would be entitled (including giving or withholding written consents of shareholders, partners or members, as the case may be, calling special meetings of shareholders, partners or members, as the case may be, and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Collateral on the record books of the issuer thereof) by any other person (including the issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an Event of Default and which proxy shall only terminate upon the payment in full of the Obligations (other than contingent indemnification obligations to the extent no claim giving rise thereto has been asserted).
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(c) Authorization of Issuers. Each Loan Party hereby expressly irrevocably authorizes and instructs, without any further instructions from such Loan Party, each issuer of any Pledged Collateral pledged hereunder by such Loan Party to (i) comply with any instruction received by it from the Agent in writing that states that an Event of Default is continuing and is otherwise in accordance with the terms of this Agreement and each Loan Party agrees that such issuer shall be fully protected from liabilities to such Loan Party in so complying and (ii) unless otherwise expressly permitted by this Agreement, during the continuance of an Event of Default pay any dividend or make any other payment with respect to the Pledged Collateral directly to the Agent.
(d) Sale of Pledged Collateral.
(i) Each Loan Party recognizes that the Agent may be unable to effect a public sale of any Pledged Collateral by reason of certain prohibitions contained in the Securities Act and applicable state or foreign securities laws or otherwise or may determine that a public sale is impracticable, not desirable or not commercially reasonable and, accordingly, may resort to one or more private sales thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Loan Party acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Agent shall be under no obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the issuer thereof to register such securities for public sale under the Securities Act or under applicable state securities laws even if such issuer would agree to do so.
(ii) Each Loan Party agrees to use its commercially reasonable efforts to do or cause to be done all such other acts (other than registering securities for public sale under the Securities Act or under applicable state securities laws) as may be necessary to make such sale or sales of any portion of the Pledged Collateral pursuant to Section 10 valid and binding and in compliance with all applicable Legal Requirements. Each Loan Party further agrees that a breach of any covenant contained herein will cause irreparable injury to the Agent and other Secured Parties, that the Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained herein shall be specifically enforceable against such Loan Party, and such Loan Party hereby waives and agrees not to assert any defense against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under this Agreement or gross negligence or willful misconduct of the Agent as determined by a final order of a court of competent jurisdiction no longer subject to appeal. Each Loan Party waives any and all rights of contribution or subrogation upon the sale or disposition of all or any portion of the Pledged Collateral by the Agent.
10.3 Agent Appointed Attorney in Fact. Subject in all respects to the Intercreditor Agreement, Borrower and each other Loan Party hereby irrevocably appoints the Agent its attorney-in-fact, with full authority in the place and stead of Borrower and such Loan Party and in the name of Borrower or such Loan Party or otherwise, at such time as an Event of Default has occurred and is continuing, to take any action and to execute any instrument which the Agent has been directed in writing by the Required Lenders to accomplish the purposes of this Agreement, including:
(i) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in connection with the Accounts or any other Collateral of such Borrower or such other Loan Party;
(ii) to receive, indorse, and collect any drafts or other instruments, documents, Negotiable Collateral or Chattel Paper;
(iii) to file any claims or take any action or institute any proceedings which the Agent (at the written direction of the Required Lenders) may deem necessary or desirable for the collection of any of the Collateral of such Borrower or such other Loan Party or otherwise to enforce the rights of the Secured Parties with respect to any of the Collateral;
(iv) to repair, alter, or supply Goods, if any, necessary to fulfill in whole or in part the purchase order of any Person obligated to Borrower or such other Loan Party in respect of any Account of such Borrower or such other Loan Party;
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(v) to use any Intellectual Property or Intellectual Property Licenses of such Borrower or such other Loan Party including but not limited to any labels, Patents, Trademarks, URLs, domain names, industrial designs, Copyrights, or advertising matter, in preparing for sale, advertising for sale, or selling Inventory or other Collateral and to collect any amounts due under Accounts, contracts or Negotiable Collateral of such Borrower or such other Loan Party;
(vi) to take exclusive possession of all locations where Borrower or any other Loan Party conducts its business or has rights of possession, without notice to or consent of Borrower or any Loan Party and to use such locations to store, process, manufacture, sell, use, and liquidate or otherwise dispose of items that are Collateral, without obligation to pay rent or other compensation for the possession or use of any location;
(vii) the Agent shall have the right, but shall not be obligated, to bring suit in its own name or in the applicable Loan Partys name, to enforce the Intellectual Property and Intellectual Property Licenses and, if the Agent shall commence any such suit, the appropriate Borrower or such other Loan Party shall, at the request of the Agent, do any and all lawful acts and execute any and all proper documents reasonably required by the Agent in aid of such enforcement; and
(viii) to the extent permitted by applicable law, Borrower and each other Loan Party hereby ratifies all that such attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocable until all Commitments of the Lenders to provide Advances are terminated and all Obligations (other than unasserted contingent indemnification obligations) have been paid in full in cash.
10.4 Remedies Cumulative. The rights and remedies of the Agent and the Lenders under this Agreement, the other Loan Documents, and all other agreements shall be cumulative. The Agent and the Lenders shall have all other rights and remedies not inconsistent herewith as provided under the Code, by applicable law, or in equity. No exercise by the Agent or the Lenders of one right or remedy shall be deemed an election, and no waiver by the Lenders of any Default or Event of Default shall be deemed a continuing waiver. No delay by the Agent or the Lenders shall constitute a waiver, election, or acquiescence by it.
10.5 Crediting of Payments and Proceeds. In the event that the Obligations have been accelerated pursuant to Section 10.1(a) or the Agent or the Lenders have exercised any remedy set forth in this Agreement or any other Loan Document, all payments received by the Agent or the Lenders upon the Obligations and all net proceeds from the enforcement of the Obligations shall be applied to the Obligations in accordance with Section 2.4(d).
10.6 Marshaling. The Agent or the Lenders shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of its rights and remedies under this Agreement and under the other Loan Documents and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, Borrower and each other Loan Party hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the Agent or the Lenders rights and remedies under this Agreement or under any other Loan Document or instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, Borrower hereby irrevocably waives the benefits of all such laws.
10.7 License. To the extent permitted by applicable law, subject in all regards to the Intercreditor Agreement, Borrower and each other Loan Party hereby grants to the Agent an irrevocable (so long as Obligations remain outstanding), non-exclusive, worldwide and royalty-free license or sublicense to use or otherwise exploit all Intellectual Property rights of Borrower and such Loan Party now owned or hereafter acquired, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used in the compilation or printout thereof (subject to any confidentiality provisions applicable to such Intellectual Property rights), for the purpose of enabling the Agent to exercise rights and remedies under this Article 10, including: (a) completing the manufacture of any in-process materials following any Event of Default so that such materials become saleable Inventory, all in accordance with the same quality standards previously adopted by Borrower or such other Loan Party for its own manufacturing; and (b) selling, leasing or otherwise disposing of any or all Collateral following any Event of Default.
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11. | WAIVERS; INDEMNIFICATION. |
11.1 Demand; Protest; etc. Borrower and each other Loan Party waives demand, protest, notice of protest, notice of default (except as expressly provided for herein or in any other Loan Document) or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guaranties at any time held by the Agent or any Lender on which Borrower or such other Loan Party may in any way be liable.
11.2 Agents Liability for Collateral. Borrower and each other Loan Party hereby agrees that: (a) except as otherwise provided under the Code or expressly provided under this Agreement, the Agent shall not in any way or manner be liable or responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by Borrower and such other Loan Parties.
11.3 Indemnification. Borrower and each other Loan Party shall pay, indemnify, defend, and hold the Lender-Related Persons and Agent-Related Parties (each, an Indemnified Person) harmless (to the fullest extent permitted by applicable law) from and against any and all claims, demands, suits, actions, investigations, proceedings, losses, liabilities, fines, costs, penalties, and damages, and all reasonable documented out-of-pocket fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution and delivery, enforcement, performance, or administration (including any restructuring, forbearance or workout with respect hereto) of this Agreement, any of the other Loan Documents and the transactions related to the Loan Documents as set forth in the Restructuring Support Agreement or the transactions contemplated hereby or thereby or the monitoring of compliance by Borrower and each other Loan Party and each of its Subsidiaries with the terms of the Loan Documents, (b) with respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan Document and the transactions related to the Loan Documents as set forth in the Restructuring Support Agreement or the use of the proceeds of the credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto, (c) in connection with the custody, preservation, use or operation of, or, upon an Event of Default, the sale of, collection from, or other realization upon, any of the Collateral in accordance with this Agreement and the other Loan Documents, (d) with respect to the failure by Borrower or any other Loan Party to perform or observe any of the provisions hereof or any other Loan Document, (e) in connection with the exercise or enforcement of any of the rights of the Agent or Lenders hereunder or under any other Loan Document, and (f) in connection with or arising out of any presence or release of Hazardous Materials at, on, under, to or from any assets or properties owned, leased or operated by Borrower or any other Loan Party or any Subsidiary of Borrower or any other Loan Party or any Environmental Actions, Environmental Liabilities or Remedial Actions related in any way to any such assets or properties of such Loan Party or any of its Subsidiaries (each and all of the foregoing, the Indemnified Liabilities). The foregoing to the contrary notwithstanding, neither Borrower nor any other Loan Party shall have any obligation to any Indemnified Person under this Section 11.3 with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person or its officers, directors, employees, or attorneys. This provision shall survive the termination of this Agreement and the repayment of the Obligations. If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which Borrower or any other Loan Party was required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrower or such other Loan Party with respect thereto. This Section 11.3 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
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12. | NOTICES. |
Unless otherwise provided in this Agreement, all notices or demands relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as a party may designate in accordance herewith), or tele facsimile. In the case of notices or demands to Borrower, any other Loan Party, or the Agent, as the case may be, they shall be sent to the respective address set forth below:
If to Borrower and/or any Guarantor: | ||
SAEXPLORATION HOLDINGS, INC. | ||
1160 Dairy Ashford, Suite 160 | ||
Houston, Texas 77079 | ||
Attention: Chief Financial Officer | ||
Fax No. (281) 258-4418 | ||
with courtesy copies to (which shall not constitute Notice for purposes of this Section 12): | ||
JONES DAY | ||
222 East 41st Street | ||
New York, New York 10017 | ||
Attention: Alex Gendzier | ||
Office (212) 326-7821 | ||
Fax (212) 755-7306 | ||
agendzier@jonesday.com | ||
If to the Agent: | ||
Delaware Trust Company | ||
2711 Centerville Road | ||
Wilmington, DE 19808 | ||
Attention: Corporate Trust Administration | ||
Fax No. (302) 636-8666 | ||
with courtesy copies to (which shall not constitute Notice for purposes of this Section 12): | ||
ROPES & GRAY LLP | ||
1211 Avenue of the Americas | ||
New York, NY 10036-8704 | ||
Attention: Mark R. Somerstein | ||
Office: (212) 841-8814 | ||
Fax: (646) 728-1663 | ||
mark.somerstein@ropesgray.com |
Any party hereto may change the address at which it is to receive notices hereunder, by notice in writing in the foregoing manner given to the other parties. All notices or demands sent in accordance with this Section 12 shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail; provided, that (a) notices sent by overnight courier service shall be deemed to have been given when received, (b) notices by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient) and (c) notices by electronic mail shall be deemed received upon the senders receipt of an acknowledgment from the intended recipient (such as by the return receipt requested function, as available, return email or other written acknowledgment). Any notice given by the Agent or any Lender to Borrower as provided in this Section 12 shall be deemed sufficient notice as to all Loan Parties, regardless of whether each Loan Party is sent a separate copy of such notice or whether each Loan Party is specifically identified in such notice.
Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Section 2 if such Lender has notified the Agent that it is incapable of receiving notices under Section 2 by electronic communication. The Agent may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or
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communications. Unless the Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the senders receipt of an acknowledgment from the intended recipient (such as by the return receipt requested function, as available, return e-mail or other written acknowledgment), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
13. | CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. |
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO AS WELL AS ALL CLAIMS, CONTROVERSIES OR DISPUTES ARISING UNDER OR RELATED TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE TRIED AND LITIGATED IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK AND THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENTS OPTION, IN THE COURTS OF ANY JURISDICTION WHERE THE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER, EACH OTHER LOAN PARTY AND THE SECURED PARTIES WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b).
(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, EACH OTHER LOAN PARTY, THE AGENT AND EACH LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH, A CLAIM). BORROWER, EACH OTHER LOAN PARTY, THE AGENT AND EACH LENDER REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(d) NO CLAIM MAY BE MADE BY ANY LOAN PARTY AGAINST THE AGENT OR ANY LENDER, OR ANY AFFILIATE OF THE AGENT OR ANY LENDER OR ANY DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, THE AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH LOAN PARTY HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
14. | ASSIGNS; SUCCESSORS; REPLACEMENT OF LENDERS. |
14.1 Binding Effect; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of, but only to the benefit of, Borrower, the other Loan Parties hereto (in each case except for Section 17), the
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Agent and each Lender receiving the benefits of the Loan Documents and each other Secured Party and, in each case, their respective successors and permitted assigns. Except as expressly provided in any Loan Document (including in Section 17.8), none of Borrower, any other Loan Party or the Agent shall have the right to assign any rights or obligations hereunder or any interest herein. No consent to assignment by the Required Lenders shall release Borrower nor any other Loan Party from its Obligations.
14.2 Assignments and Participations.
(a) [Intentionally Omitted]
(b) Right to Assign. Subject to clause (c) below and the next sentence, each Lender may sell, transfer, negotiate or assign (a Sale) all or a portion of its rights and obligations hereunder (including all or a portion of Commitments and its rights and obligations with respect to Advances) to (i) any existing Lender (other than a Non-Funding Lender or Impacted Lender), (ii) any Affiliate or Approved Fund of any existing Lender (other than a Non-Funding Lender or Impacted Lender) or (iii) any other Person with the prior written consent (which consent shall, in each case, not be unreasonably withheld or delayed) of the Agent and, as long as no Event of Default under Sections 9.1, 9.4 or 9.5 is continuing, Borrower (which consent shall be deemed to have been given if Borrower has not responded in writing within ten (10) Business Days after any request for such consent); provided, however, that (w) such Sales must be ratable among the obligations owing to and owed by such Lender with respect to the Advances and Commitments, (x) the aggregate outstanding principal amount (determined as of the effective date of the applicable Assignment) of the Advances and Commitments subject to any such Sale shall be in a minimum amount of $1,000,000, unless such Sale is made to an existing Lender or an Affiliate or Approved Fund of any existing Lender, is of the assignors (together with its Affiliates and Approved Funds) entire interest in the Credit Facility or is made with the prior written consent of Borrower (to the extent Borrowers consent is otherwise required) and the Agent and (y) such Sales by Lenders who are Non-Funding Lenders due to clause (a) of the definition of Non-Funding Lender shall be subject to the Agents prior written consent in all instances, unless in connection with such sale, such Non-Funding Lender cures, or causes the cure of, its Non-Funding Lender status as contemplated in Section 2.13(e)(v). The Agents refusal to accept a Sale to a Loan Party, or to a Person that would be a Non-Funding Lender or an Impacted Lender, or the imposition of conditions or limitations (including limitations on voting) upon Sales to such Persons, shall not be deemed to be unreasonable.
Notwithstanding anything else to the contrary provided herein, as long as no Event of Default under Sections 9.1, 9.4 or 9.5 is continuing, no Lender shall be permitted to assign any Advances or Commitments to any Disqualified Person. The Agent and each assignor of a Commitment or an Advance hereunder shall be entitled to rely conclusively on a representation of the assignee Lender in the relevant Assignment that such assignee is not a Disqualified Person, provided that such reliance by such assignor is in good faith and reasonable under the circumstances existing at the time of the Sale. The Agent shall not have any responsibility or liability for monitoring the list or identities of, or enforcing provisions relating to, Disqualified Persons.
(c) Assignment to Participating Holders. During the Participation Period, a Participating Holder (as defined in the Restructuring Support Agreement) shall be permitted to participate in the Credit Facility (i) by giving the Agent written notice of its intent to participate at any time during the Participation Period, together with a written certification that it is a Participating Holder and either a qualified institutional buyer (as defined in Rule 144A under the Securities Act of 1933, as amended) or an accredited investor (as defined under Regulation D of the Securities Act of 1933, as amended) and (ii) with the prior written consent of the Agent (which consent shall not be unreasonably withheld or delayed). Such Participating Holder shall be entitled to purchase no more than a proportionate share (based on its pro rata share of Existing Notes held immediately prior to the Closing Date) of the aggregate Commitments but in no event for amounts less than $1,000,000 (and the Lenders shall be obligated to assign their respective pro rata shares thereof). In connection with one or more Participating Holders participating in the Credit Facility, the Lenders, each Participating Holder, and the Agent shall enter into a master assignment and assumption agreement, with standard terms and conditions substantially similar to those in the Assignment and otherwise as agreed among the Lenders, each Participating Holder, and the Agent. Each Participating Holder electing to participate in the Credit Facility pursuant to this clause (c) shall deliver to the Agent a completed administrative questionnaire in form and substance satisfactory to the Agent and any Tax forms required to be delivered pursuant to Section 16.1. Borrower shall pay to the Agent the fees for such master assignment and assumption agreement(s) in the amounts and at times separately agreed upon in writing between Borrower and the Agent, and such fees shall be fully earned and irrevocable when paid and not refundable for any reason whatsoever.
(d) Procedure. The parties to each Sale made in reliance on clause (b) above (other than those described in clause (f) or (g) below) shall execute and deliver to the Agent an Assignment via an electronic settlement system designated by the Agent (or, if previously agreed with the Agent, via a manual execution and
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delivery of the Assignment) evidencing such Sale, together with any existing Note subject to such Sale (or any affidavit of loss therefor acceptable to the Agent), a completed administrative questionnaire in form and substance satisfactory to the Agent, any Tax forms required to be delivered pursuant to Section 16.1 and payment of an assignment fee in the amount of $3,500 to the Agent, unless waived or reduced by the Agent in its sole discretion; provided, that (i) if a Sale by a Lender is made to an Affiliate or an Approved Fund of such assigning Lender, then no assignment fee shall be due in connection with such Sale, and (ii) if a Sale by a Lender is made to an assignee that is not an Affiliate or Approved Fund of such assignor Lender, and concurrently to one or more Affiliates or Approved Funds of such assignee, then only one assignment fee of $3,500 shall be due in connection with such Sale (unless waived or reduced by the Agent). Upon receipt of all the foregoing, and conditioned upon such receipt and, if such Assignment is made in accordance with clause (iii) of Section 14.2(b), upon the Agent (and Borrower, if applicable) consenting to such Assignment, from and after the effective date specified in such Assignment, the Agent shall record or cause to be recorded in the Register the information contained in such Assignment.
(e) Effectiveness. Subject to the recording of an Assignment by the Agent in the Register pursuant to Section 2.8(b), (i) the assignee thereunder shall become a party hereto and, subject to the requirements of Section 16.1 and to the extent that rights and obligations under the Loan Documents have been assigned to such assignee pursuant to such Assignment, shall have the rights and obligations of a Lender, including the obligation to make Advances hereunder, (ii) any applicable Note shall be transferred to such assignee through such entry and (iii) the assignor thereunder shall, to the extent that rights and obligations under this Agreement have been assigned by it pursuant to such Assignment, relinquish its rights (except for those surviving the termination of the Commitments and the payment in full of the Obligations) and be released from its obligations under the Loan Documents, other than those relating to events or circumstances occurring prior to such assignment and those obligations that survive the termination of this Agreement, including such assigning Lenders obligations under Section 19.8(a) (and, in the case of an Assignment covering all or the remaining portion of an assigning Lenders rights and obligations under the Loan Documents, such Lender shall cease to be a party hereto).
(f) Grant of Security Interests. In addition to the other rights provided in this Section 14.2, each Lender may grant a security interest in, or otherwise assign as collateral, any of its rights under this Agreement, whether now owned or hereafter acquired (including rights to payments of principal or interest on the Advances), to (A) any federal reserve bank (pursuant to Regulation A of the Federal Reserve Board), without notice to the Agent or Borrower or (B) any holder of, or trustee for the benefit of the holders of, such Lenders Indebtedness or equity securities, by notice to the Agent and Borrower; provided, however, that no such holder or trustee, whether because of such grant or assignment or any foreclosure thereon (unless such foreclosure is made through an assignment in accordance with clause (b) above), shall be entitled to any rights of such Lender hereunder and no such Lender shall be relieved of any of its obligations hereunder and the Agent and the Loan Parties shall continue to deal solely and directly with the assigning Lender.
(g) Participants. In addition to the other rights provided in this Section 14.2, each Lender may, without notice to or consent from the Agent or Borrower, sell participations to one or more Persons in or to all or a portion of its rights and obligations under the Loan Documents (including all its rights and obligations with respect to the Advances); provided, however, that, whether as a result of any term of any Loan Document or of such participation, (i) no such participant shall have a commitment, or be deemed to have made an offer to commit, to make Advances hereunder, and none shall be liable for any obligation of such Lender hereunder and such Lender shall remain liable for the making of all Advances hereunder, (ii) such Lenders rights and obligations, and the rights and obligations of the Loan Parties and the Secured Parties towards such Lender, under any Loan Document shall remain unchanged and each other party hereto shall continue to deal solely with such Lender, which shall remain the holder of the Obligations in the Register, except that each such participant shall be entitled to the benefit of Section 16, but, with respect to Section 16.1, only to the extent such participant delivers the Tax forms required pursuant to Section 16.1(f) (it being understood that the documentation required thereunder shall be delivered to the participating Lender) and then only to the extent of any amount to which such Lender would be entitled in the absence of any such participation, provided, however, that in no case shall a participant have the right to enforce any of the terms of any Loan Document, (iii) each such participant shall be subject to the provisions of Section 14.3 and Section 16.1(e) as if it were an assignee under Section 14.2(b), and (iv) the consent of such participant shall not be required (either directly, as a restraint on such Lenders ability to consent hereunder or otherwise) for any amendments, waivers or consents with respect to any Loan Document or to exercise or refrain from exercising any powers or rights such Lender may have under or in respect of the Loan Documents (including the right to enforce or direct enforcement of the Obligations), except that the agreement pursuant to which the Lender sells such participation may provide that such Lender will not, without the consent of such participant, agree to any amendments, waivers or consents described in clauses (ii) and (iii) of Section 15.1(a) with respect to amounts, or dates fixed for payment of amounts, to which such participant would otherwise be entitled or those described in clause (vii) of Section 15.1(a). Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participants interest in the Advances or other
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obligations under the Loan Documents (the Participant Register); provided, that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participants interest in any such Advance or obligations under any Loan Document) to any Person other than the Agent except to the extent that such disclosure is necessary to establish that such Advance or obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Agent (in its capacity as the Agent) shall have no responsibility for maintaining a Participant Register. Notwithstanding anything else to the contrary provided herein, no Lender shall be permitted to sell participations with respect to Advances to a Disqualified Person.
14.3 Replacement of Lender. Within forty-five days after: (i) receipt by Borrower of written notice and demand from any Lender (an Affected Lender) for payment of additional amounts as provided in Sections 16.1 and/or 16.2; or (ii) any failure by any Lender (other than the Agent or an Affiliate of the Agent) to consent to a requested amendment, waiver or modification to any Loan Document in which Required Lenders have already consented to such amendment, waiver or modification but the consent of each Lender (or each Lender directly affected thereby, as applicable) is required with respect thereto, Borrower may, at its option, notify the Agent and such Affected Lender (or such defaulting or non-consenting Lender) of Borrowers intention to obtain, at Borrowers expense, a replacement Lender (Replacement Lender) for such Affected Lender (or such defaulting or non-consenting Lender, as the case may be), which Replacement Lender shall be reasonably satisfactory to the Agent and the Required Lenders. In the event Borrower obtains a Replacement Lender within forty-five (45) days following notice of its intention to do so, the Affected Lender (or such defaulting or non-consenting Lender, as the case may be) shall sell and assign its Advances and Commitments to such Replacement Lender, at par, provided that Borrower has reimbursed such Affected Lender for its increased costs, if any, for which it is entitled to reimbursement under this Agreement through the date of such sale and assignment. In the event that a replaced Lender does not execute an Assignment pursuant to Section 14.2 within five (5) Business Days after receipt by such replaced Lender of notice of replacement pursuant to this Section 14.3 and presentation to such replaced Lender of an Assignment evidencing an assignment pursuant to this Section 14.3, Borrower shall be entitled (but not obligated) to execute such an Assignment on behalf of such replaced Lender, and any such Assignment so executed by Borrower, the Replacement Lender and the Agent, shall be effective for purposes of this Section 14.3 and Section 14.2. Notwithstanding the foregoing, with respect to a Lender that is an Impacted Lender, the Agent or Borrower may, but shall not be obligated to, obtain a Replacement Lender and execute an Assignment on behalf of such Impacted Lender at any time with three (3) Business Days prior notice to such Lender (unless notice is not practicable under the circumstances) and cause such Lenders Advances and Commitments to be sold and assigned, in whole or in part, at par. Upon any such assignment and payment and compliance with the other provisions of Section 14.2, such replaced Lender shall no longer constitute a Lender for purposes hereof; provided, any rights of such replaced Lender to indemnification hereunder shall survive.
15. | AMENDMENTS; WAIVERS. |
15.1 Amendments and Waivers
(a) Subject to the provisions of Sections 17.10 and 15.1(f) hereof, no amendment or waiver of, or supplement or other modification (which shall include any direction to the Agent by the Required Lenders) to, any Loan Document (other than any fee letter or similar agreement) or any provision thereof, and no consent with respect to any departure by any Loan Party therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by the Agent with the consent of the Required Lenders), and Borrower and then such waiver shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, supplement (including any additional Loan Document) or consent shall, unless in writing and signed by all the Lenders directly and adversely affected thereby (or by the Agent with the consent of all the Lenders directly and adversely affected thereby), in addition to the Agent, the Required Lenders (or by the Agent with the consent of the Required Lenders) and Borrower, do any of the following:
(i) increase or extend the Commitment of any Lender (or reinstate any Commitment of any Lender terminated pursuant to Section 10) (it being understood that waivers or modifications of any Defaults or Events of Default or of any mandatory prepayment or reductions of Commitments shall not constitute an increase in the Commitment of any such Lender);
(ii) postpone or delay any date fixed for, or reduce or waive, any scheduled installment of principal or any payment of interest, fees or other amounts (other than principal) due to the Lenders (or any of them) hereunder or under any other Loan Document (for the avoidance of doubt, mandatory prepayments pursuant to Section 2.5 may be postponed, delayed, reduced, waived or modified with only the consent of Required Lenders);
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(iii) reduce the principal of, or the rate of interest specified herein (it being agreed that waiver of the default interest margin shall only require the consent of Required Lenders) or the amount of interest payable in cash specified herein on any Advance, or of any fees or other amounts payable hereunder or under any other Loan Document;
(iv) (A) change or have the effect of changing the priority or pro rata treatment of any payments (including voluntary and mandatory prepayments) or of any reductions in Commitments, or (B) extend the date fixed for any scheduled installment of principal or interest due to any of the Lenders under any Loan Document;
(v) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Advances which shall be required for the Lenders or any of them to take any action hereunder;
(vi) amend this Section 15.1 or, subject to the terms of this Agreement, the definition of Required Lenders or any provision providing for consent or other action by all Lenders; or
(vii) discharge any Loan Party from its respective payment Obligations under the Loan Documents, or release all or substantially all of the Collateral, in each case, except as otherwise may be provided or permitted under this Agreement or the other Loan Documents.
(b) No amendment, waiver or consent shall, unless in writing and signed by the Agent, in addition to the Required Lenders or all Lenders directly affected thereby, as the case may be (or by the Agent with the consent of the Required Lenders or all the Lenders directly affected thereby, as the case may be), affect the rights or duties of the Agent under this Agreement or any other Loan Document.
(c) [Reserved].
(d) If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender (or each affected Lender) and that has been approved by the Required Lenders, Borrower may replace such non-consenting Lender in accordance with Section 14.3.
15.2 No Waiver; Cumulative Remedies. No failure by the Agent or the Lenders to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay by the Agent or the Lenders in exercising the same, will operate as a waiver thereof. No waiver by the Agent or the Lenders will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by the Agent or the Lenders on any occasion shall affect or diminish the Agents or any Lenders rights thereafter to require strict performance by Borrower or any other Loan Party of any provision of this Agreement. The Agents and Lenders rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that the Agent and Lenders may have.
16. | TAXES, YIELD PROTECTION AND ILLEGALITY. |
16.1 Taxes
(a) All payments made by or on behalf of any Loan Party hereunder or under any note or other Loan Document will be made free and clear of, and without deduction or withholding for, any Indemnified Taxes; provided that if any Taxes are required to be withheld or deducted from such payments under applicable law then (i) the Loan Party making such payment shall be entitled to withhold or deduct such Taxes as required by applicable law, (ii) such Loan Party shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law, and (iii) if such Taxes are Indemnified Taxes, the sum payable by the Loan Party shall be increased as necessary so that the payment of the applicable amount due under this Agreement, any note, or Loan Document, including any additional amount paid pursuant to this Section 16.1(a), after withholding or deduction for or on account of such Indemnified Taxes, will not be less than the amount that would have been payable had no such deductions or withholdings been made; provided further, however, that no Loan Party shall be required to increase any such amounts if the increase in such amount payable results from any Lenders willful misconduct or gross negligence (as finally determined by a court of competent jurisdiction).
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(b) Any Loan Party that made a payment of Taxes to a Governmental Authority pursuant to Section 16.1(a) will furnish to the Agent as soon as practicable after such payment, certified copies of receipts evidencing such payment by the applicable Loan Party, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Agent.
(c) Without limiting the foregoing provisions, the Loan Parties shall timely pay, or shall cause to be timely paid, to the relevant Governmental Authority in accordance with applicable law any Other Taxes.
(d) The Loan Parties shall jointly and severally reimburse and indemnify, within 10 days after receipt of demand therefor (with copy to the Agent), the Agent or each Lender for all Indemnified Taxes (including any Taxes imposed by any jurisdiction on amounts payable under this Section 16.1) paid or payable by the Agent or such Lender, as the case may be, or required to be withheld or deducted from a payment to the Agent or such Lender, as the case may be, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally asserted. A certificate of the Agent or such Lender (or of the Agent on behalf of such Lender) claiming any compensation under this Section 16.1(d), setting forth in reasonable detail the amounts to be paid thereunder and delivered to Borrower with copy to the Agent, shall be conclusive, binding and final for all purposes, absent manifest error.
(e) Any Lender claiming any additional amounts payable or requiring the Loan Parties to pay additional amounts to any Governmental Authority pursuant to this Section 16.1 shall use its reasonable efforts to change the jurisdiction of its Lending Office or assign its rights and obligations hereunder to another or its offices, branches or affiliates if such a change or assignment (i) would reduce payment of any such additional amounts pursuant to this Section 16.1 and (ii) would not be otherwise disadvantageous to such Lender.
(f) (i) Each Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Agent and Borrower at the time or times reasonably requested by Borrower or the Agent and at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Agent or Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, each Lender, if reasonably requested by the Agent or Borrower, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Agent or Borrower as will enable the Agent or Borrower to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 16.1(f)(ii)(A), (ii)(B), (ii)(C), (iii), (iv) and (v) below) shall not be required if in the Lenders reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(ii) Each Foreign Lender shall on or prior to the date such Foreign Lender becomes a Lender hereunder and from time to time as required by applicable law and if requested by Borrower or the Agent, provide the Agent and Borrower with two duly executed and properly completed originals of each of the following, as applicable: (A) Form W-8ECI (or successor form) claiming exemption from U.S. withholding Tax because the income is effectively connected with a U.S. trade or business or Form W-8BEN or W-8BEN-E (or successor form), as applicable, claiming exemption from, or a reduction of, U.S. withholding Tax under an income Tax treaty, (B) in the case of a Foreign Lender claiming exemption under Sections 871(h) or 881(c) of the IRC, Form W-8BEN or W-8BEN-E (or successor forms), as applicable, claiming exemption from U.S. withholding Tax under the portfolio interest exemption and a certificate in form and substance acceptable to Borrower and the Agent that such Foreign Lender is not (1) a bank within the meaning of Section 881(c)(3)(A) of the IRC, (2) a 10 percent shareholder of Borrower within the meaning of Section 881(c)(3)(B) of the IRC or (3) a controlled foreign corporation described in Section 881(c)(3)(C) of the IRC (a U.S. Tax Compliance Certificate), (C) to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY (or successor form), accompanied by IRS Form W-8ECI or IRS Form W-8BEN or W-8BEN-E (or successor forms), as applicable, a U.S. Tax Compliance Certificate and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership for U.S. federal income tax purposes and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption under Sections 871(h) or 881(c) of the IRC, such Foreign Lender may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner or (D) any other applicable form prescribed by applicable law certifying as to the entitlement of such Foreign Lender to such exemption from U.S. withholding Tax or reduced rate with respect to all payments to be made to such Foreign Lender under the Loan Documents, together with such supplementary documentation as may be prescribed by applicable law to permit Borrower or the Agent to determine the withholding or deduction required to be made. Unless Borrower and the Agent have received forms or other documents satisfactory to them indicating that payments under any Loan Document to or
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for a Foreign Lender are not subject to U.S. withholding Tax or are subject to such Tax at a rate reduced by an applicable Tax treaty, the Loan Parties and the Agent shall withhold amounts required to be withheld by applicable law from such payments at the applicable statutory rate.
(iii) Each Lender that is a U.S. Person shall on or prior to the date such Lender becomes a Lender hereunder and from time to time if requested by Borrower or the Agent, provide the Agent and Borrower with two completed originals of Form W-9 (certifying that such Lender is entitled to an exemption from U.S. backup withholding Tax) or any successor form.
(iv) [Intentionally Omitted].
(v) If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the IRC, as applicable), such Lender shall deliver to the Agent and Borrower at the time or times prescribed by law and at such time or times reasonably requested by the Agent and Borrower such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation reasonably requested by the Agent and Borrower as may be necessary for the Agent and Borrower to comply with their obligations under FATCA and to determine that such Lender has complied with such Lenders obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (v), FATCA shall include any amendments made to FATCA after the date of this Agreement.
Each Lender agrees that if any form or certification it previously delivers expires or becomes obsolete or inaccurate in any respect, it shall promptly (1) deliver to Borrower and the Agent (in such number of originals or certified copies as shall be requested by the recipient) renewals, amendments or additional or successor forms, properly completed and duly executed by such Lender, together with any other certificate or statement of exemption from or reduction in U.S. federal withholding Tax or backup withholding or (2) notify the Agent and Borrower in writing of its legal inability to do so.
(g) If any Lender determines in its sole discretion exercised in good faith that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 16.1, it shall pay to the relevant Loan Party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 16.1 with respect to the Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses (including Taxes) of such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such Loan Party, upon the request of such Lender, shall repay to such Lender the amount paid over pursuant to this Section 16.1(g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 16.1(g), in no event shall the Lender be required to pay any amount to a Loan Party pursuant to this Section 16.1(g) the payment of which would place the Lender in a less favorable net after-Tax position than the Lender would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 16.1(g) shall not be construed to require any Lender to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Loan Party or any other Person.
(h) Each Lender shall severally indemnify the Agent, within 10 days after demand therefor, for (i) any Taxes as to which it has been indemnified pursuant to this Section 16.1 attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Agent for such Taxes and without limiting the obligation of the Loan Parties to do so) and (ii) any Taxes attributable to such Lenders failure to comply with the provisions of Section 14.2(g) relating to the maintenance of a Participant Register, in each case, that are payable or paid by the Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Agent to the Lender from any other source against any amount due to the Agent under this paragraph (h).
(i) For purposes of this Section 16.1, the term applicable law includes FATCA.
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16.2 Increased Costs and Reduction of Return.
(a) If any Lender shall have determined that:
(i) the introduction of any Capital Adequacy Regulation after the Closing Date;
(ii) any change in any Capital Adequacy Regulation after the Closing Date;
(iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof after the Closing Date; or
(iv) compliance by such Lender (or its Lending Office) or any entity controlling the Lender, with any Capital Adequacy Regulation in clauses (i) through (iii) above;
materially affects the amount of capital required or expected to be maintained by such Lender or any entity controlling such Lender and (taking into consideration such Lenders or such entities policies with respect to capital adequacy) determines that the amount of such capital is increased as a consequence of its Commitment(s), loans, credits or obligations under this Agreement, then, within thirty (30) days of written demand of such Lender (with a copy to the Agent), Borrower shall pay to such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender (or the entity controlling the Lender) for such increase; provided, that Borrower shall not be required to compensate any Lender pursuant to this Section 16.2(a) for any amounts incurred more than 180 days prior to the date that such Lender notifies Borrower in writing of the amounts and of such Lenders intention to claim compensation thereof; provided, further, that if the event giving rise to such increase is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.
(b) Notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case in respect of this clause (ii) pursuant to Basel III, shall, in each case, be deemed to be a change in Capital Adequacy Regulation after the Closing Date under Section 16.2(a) above, as applicable, regardless of the date enacted, adopted or issued.
(i) Any Lender claiming any additional amounts payable pursuant to this Section 16.2 shall use reasonable efforts (consistent with its internal policies and Legal Requirements), to change the jurisdiction of its lending office if such a change would reduce any such additional amounts (or any similar amount that may thereafter accrue) and would not, in the sole determination of such Lender, be otherwise disadvantageous to such Lender.
16.3 Certificates of Lenders. Any Lender claiming reimbursement or compensation pursuant to this Section 16 shall deliver to Borrower (with a copy to the Agent) a certificate setting forth in reasonable detail the amount payable to such Lender hereunder and such certificate shall be conclusive and binding on Borrower in the absence of manifest error.
17. | THE ADMINISTRATIVE AGENT |
17.1 Appointment.
(a) Subject to Section 17.8 and the Intercreditor Agreement, each Lender (and each subsequent maker of any Advance by its making thereof) hereby irrevocably appoints and authorizes the Administrative Agent and the Collateral Agent to exercise the powers of each such Agent as set forth in this Agreement and the other Loan Documents, including: (i) to receive on behalf of each Lender any payment of principal of or interest on the Advances outstanding hereunder and all other amounts accrued hereunder for the account of the Lenders and paid to such Agent, and to distribute promptly to each Lender its share of all payments so received; (ii) to maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Advances, and related matters and to maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Collateral and related matters; (iii) to execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to this Agreement or any other
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Loan Document; (iv) to make the Advances on behalf of the applicable Lenders as provided in this Agreement or any other Loan Document; (v) to perform, exercise, and enforce any and all other rights and remedies of the Lenders with respect to Borrower or any other Loan Party, the Obligations, or otherwise related to any of same to the extent reasonably incidental to the exercise by such Agent of the rights and remedies specifically authorized to be exercised by such Agent by the terms of this Agreement or any other Loan Document; (vi) to incur and pay such fees necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to this Agreement or any other Loan Document; and (vii) to take such action as such Agent deems appropriate on its behalf to administer the Advances and the Loan Documents and to exercise such other powers delegated to such Agent by the terms hereof or the other Loan Documents (including, without limitation, the power to give or to refuse to give notices, waivers, consents, approvals and instructions and the power to make or to refuse to make determinations and calculations) together with such powers as are reasonably incidental thereto to carry out the purposes hereof and thereof. As to any matters not expressly provided for by this Agreement and the other Loan Documents (including, without limitation, enforcement or collection of the Advances), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) only upon the written instructions of the Required Lenders (or such other number or percentage of the Lenders as the Agent shall believe in good faith to be necessary hereunder or under the Loan Documents), and such instructions of the Required Lenders shall be binding upon all Lenders and all makers of Advances; provided, however, that the Agent shall not be required to take any action which, in the reasonable opinion of the Agent, exposes the Agent to liability or which may expose the Agent to liability or is contrary to this Agreement or any other Loan Document or applicable law. Except as otherwise provided in this Section 17, each of the Administrative Agent and the Collateral Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Each of the Administrative Agent and the Collateral Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects as long as such selection was made in compliance with this section and without gross negligence or willful misconduct of the Administrative Agent or the Collateral Agent as determined by a final order of a court of competent jurisdiction no longer subject to appeal. The provisions of this Article are solely for the benefit of the Agent and the Lenders, and no Loan Party shall have any rights as a third-party beneficiary of any of such provisions.
17.2 Nature of Duties. The Agent shall have no duties or responsibilities except those expressly set forth in this Agreement or in the other Loan Documents. The duties of the Agent shall be mechanical and administrative in nature. Nothing in this Agreement or any other Loan Document, express or implied, is intended to or shall be construed to impose upon the Agent any obligations in respect of this Agreement or any other Loan Document except as expressly set forth herein or therein. Each Lender shall make its own independent investigation of the financial condition and affairs of Borrower and the Guarantors in connection with the making and the continuance of the Advances hereunder and shall make its own appraisal of the creditworthiness of Borrower and the Guarantors and the value of the Collateral, and the Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into their possession before the Initial Advance hereunder or at any time or times thereafter. The Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until written notice thereof is given to the Administrative Agent by Borrower or the Lenders, and shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or under any other Loan Document or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or in any other Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, and other Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to it or as to those conditions precedent specifically required to be to its satisfaction, (vi) the existence, value, perfection or priority of any collateral security or the financial or other condition of Borrower and its Subsidiaries or any other Loan Party, obligor or guarantor, or (vii) any failure by Borrower, any Loan Party or any other Person (other than itself) to perform any of its obligations hereunder or under any other Loan Document or the performance or observance of any covenants, agreements or other terms or conditions set forth herein or therein. Anything contained herein to the contrary notwithstanding, the Administrative Agent shall not have any liability arising from confirmations of the amount of the outstanding Advances or any components thereof.
17.3 Rights, Exculpation, Etc.
(a) The Agent and its directors, officers, affiliates (other than any affiliate in its capacity as Lender, such Lender to be subject to the corresponding applicable provisions of this Agreement), agents or employees shall not be liable for any action taken or omitted to be taken by them under or in connection with this Agreement or the other Loan Documents, except for their own gross negligence or willful misconduct (which shall not include any action taken or omitted to be taken strictly in accordance with any express direction, instruction or certificate of the Required Lenders (or such other number or percentage of the Lenders as the Agent shall believe in good faith to be necessary hereunder or under the Loan Documents), for which the Agent shall have no liability) as determined by a final judgment of a court of competent jurisdiction no longer subject to appeal. Without limiting the generality of the foregoing, the Agent (i) may treat the payee of any Advance as the owner thereof until the Agent receives written notice of the assignment or transfer thereof, pursuant to Section 14 hereof, signed by such payee and in form
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satisfactory to the Administrative Agent; (ii) may consult with legal counsel (including, without limitation, counsel to the Agent or counsel to any Loan Party), independent public accountants, and other experts selected by any of them and shall not be liable for any action taken or omitted to be taken in good faith by any of them in accordance with the advice of such counsel, accountant or experts; (iii) make no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, certificates, warranties or representations made in or in connection with this Agreement or the other Loan Documents; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or the other Loan Documents on the part of any Person, the existence or possible existence of any Default or Event of Default, or to inspect the Collateral or other property (including, without limitation, the books and records) of any Person; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; and (vi) shall not be deemed to have made any representation or warranty regarding the existence, sufficiency, value or collectibility of the Collateral, the condition of the Collateral, the existence, priority or perfection of the Collateral Agents Lien thereon, or any certificate prepared by Borrower or any Guarantor in connection therewith, nor shall the Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral. The Agent shall not be liable for any apportionment or distribution of payments made in good faith pursuant to Section 2.4(d), 2.5(g) and 10.5, and if any such apportionment or distribution is subsequently determined to have been made in error the sole recourse of any Lender to whom payment was due but not made, shall be to recover from other Lenders any payment in excess of the amount which they are determined to be entitled. The Agent may at any time request written instructions from the Required Lenders (or such other number or percentage of the Lenders as the Agent shall believe in good faith to be necessary hereunder or under the Loan Documents) with respect to any actions or approvals which by the terms of this Agreement or of any of the other Loan Documents the Agent is permitted or required to take or to grant, and if such instructions are promptly requested, the Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval under any of the Loan Documents until they shall have received such instructions from the Required Lenders (or such other number or percentage of the Lenders as the Agent shall believe in good faith to be necessary hereunder or under the Loan Documents). The instructions as aforesaid and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Agent as a result of the Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of the Required Lenders (or such other number or percentage of the Lenders as the Agent shall believe in good faith to be necessary hereunder or under the Loan Documents).
(b) The Agent shall have the right at any time to seek instructions concerning the administration of the Collateral from any court of competent jurisdiction.
(c) The Agent shall be obligated to perform such duties and only such duties as are specifically set forth in this Agreement or in any Loan Document, and no implied covenants or obligations shall be read into this Agreement or any Loan Document against the Agent. It is understood and agreed that the use of the term agent herein or in any other Loan Documents (or any other similar term) with reference to the Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law, and the Agent shall not have by reason of this Agreement or any other Loan Document a fiduciary relationship in respect of any Lender. The Agent shall not be under any obligation to take any action which is discretionary under the provisions hereof except as set forth in Section 17.1(a). The Agent shall be under no obligation to exercise any of the rights or powers vested in them by this Agreement at the request or direction of the Required Lenders (or such other number or percentage of the Lenders as the Agent shall believe in good faith to be necessary hereunder or under the Loan Documents) pursuant to this Agreement, unless (i) the Agent shall have been provided adequate security and indemnity as determined by the Agent in its sole discretion (including without limitation from the Lenders and/or Borrower or the Guarantors) against any and all costs, expenses and liabilities which might be incurred by them in compliance with such request or direction, including reasonable advances as may be requested by the Agent and (ii) the Agent shall receive such written instructions as the Agent deems appropriate. If a Default or Event of Default has occurred and is continuing, then the Agent shall take such action with respect to such Default or Event of Default as shall be instructed by the Required Lenders (or such other number or percentage of the Lenders as the Agent shall believe in good faith to be necessary hereunder or under the Loan Documents) in the written instructions (with indemnities) described in this Section 17.3(d), provided that, unless and until the Agent shall have received such instructions, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as they shall deem advisable in the best interests of the Lenders, and the Agent shall not incur liability to any Lender by reason of so refraining.
(d) Whenever in the administration of this Agreement, or pursuant to any of the Loan Documents, the Agent shall deem it necessary or desirable (in each case, in its sole discretion) that a matter be proved or established with respect to Borrower or the Guarantors in connection with the taking, suffering or omitting of any action hereunder by the Agent, such matter (unless other evidence in respect thereof be herein specifically prescribed)
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may be deemed to be conclusively provided or established by a certificate of the chief executive officer and chief restructuring officer of Borrower delivered to the Agent and such certificate shall be full warranty to the Agent for any action taken, suffered or omitted in reliance thereon; provided that Borrower shall have no obligation to provide any such certificate except as otherwise required hereunder.
17.4 Reliance. The Agent may rely, and shall be fully protected in acting, upon any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order, bond or other paper or document which they believe in good faith to be genuine and to have been signed or presented by the proper party or parties or, in the case of facsimiles, to have been sent by the proper party or parties. In the absence of its gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction no longer subject to appeal, each Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to it and conforming to the requirements of this Agreement or any Loan Document. The Agent shall not be required to keep themselves informed as to the performance or observance by Borrower, any other Loan Party or any of their respective Subsidiaries of this Agreement, the Loan Documents or any other document, referred to or provided for herein or to inspect the properties or books of Borrower, any other Loan Party or their respective Subsidiaries. Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Agent hereunder, the Agent shall have no duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of Borrower or any other Loan Party (or any of its Affiliates) which may come into the possession of the Agent or any of its Affiliates. Each other party hereto will consult with its own legal counsel to the extent that it deems necessary in connection with the Loan Documents and the matters contemplated therein.
17.5 Indemnification. Whether or not the transactions contemplated hereby are consummated, to the extent that any Agent is not promptly reimbursed and indemnified by Borrower, each Lender will reimburse and indemnify such Agent and any Agent-Related Party from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses, advances or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against such Agent in any way relating to or arising out of this Agreement or any of the other Loan Documents or any action taken or omitted by such Agent under this Agreement or any of the other Loan Documents, in proportion to each Lenders Commitment Percentage, including, without limitation, advances and disbursements made pursuant to Section 17.10, and the reasonable fees, charges and disbursements of any counsel for each Agent; provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses, advances or disbursements for which there has been a final judgment of a court of competent jurisdiction no longer subject to appeal that such liability resulted from such Agents gross negligence or willful misconduct. The obligations of the Lenders under this Section 10.05 shall survive the payment in full of the Obligations and the termination of this Agreement.
17.6 Agent Individually. The Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, trust, financial or other business with Borrower or any other Loan Party as if it were not acting as an Agent pursuant hereto without any duty to account to the other Lenders.
17.7 Sub-agents. The Agent may perform any and all of its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Agent. The Agent and any such sub-agent may perform any and all of their duties and exercise their rights and powers through their respective Agent-Related Parties. The provisions of Section 11.3, this Section 17 and Section 19.9 shall apply to any such sub-agent and to the Agent-Related Parties of the Agent and such sub-agent, and shall apply to their respective activities in connection with the activities of the Agent. The Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.
17.8 Successor Agent.
(a) The Agent may resign from the performance of all its functions and duties hereunder and under the other Loan Documents at any time by giving at least thirty (30) days prior written notice to Borrower and each Lender. The Agent may be removed with or without cause by the Required Lenders upon thirty (30) days prior written notice from the Required Lenders to the Agent. Such resignation or removal shall take effect upon the acceptance by a successor Agent of appointment pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation or removal, the Required Lenders shall appoint a successor Agent with, so long as no Event of Default under Sections 9.4 or 9.5 exists, the prior written consent of Borrower (such consent not to be unreasonably delayed or withheld). Upon the acceptance of any appointment as
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Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be immediately discharged from its duties and obligations under this Agreement and the other Loan Documents.
(c) If no such successor Agent shall have been so appointed by the Required Lenders within 30 days after the retiring Agent gives notice of its resignation or thirty (30) days after the Required Lenders give notice of removal to the retiring Agent, then the retiring Agent may (but is not required to) on behalf of the Lenders, appoint a successor Agent, provided that if the Agent shall notify Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation or removal shall nonetheless become effective in accordance with such notice and (1) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Agent on behalf of the Lenders under any of the Loan Documents, the retiring Agent shall continue to hold such collateral security until such time as a successor Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Agent as provided for in clause (b) above. The fees payable by Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrower and such successor.
(d) After the retiring Agents resignation or removal under this Section 17.8, the provisions of this Article 17, Section 11.3, and Section 19.9 shall continue in effect for the benefit of such retiring Agent, its sub-agents and their respective Agent-Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Agent or on behalf of the Agent and if applicable, while continuing to hold collateral security on behalf of the Lenders under any of the Loan Documents. Any corporation or association into which the Agent may be merged or converted or with which it may be consolidated shall be the Agent under this Agreement without further act.
17.9 Delivery of Information. The Agent shall not be required to deliver to any Lender originals or copies of any documents, instruments, notices, communications or other information received by the Agent from Borrower, any Subsidiary, the Required Lenders, any Lender or any other Person under or in connection with this Agreement or any other Loan Document except (i) as specifically provided in this Agreement or any other Loan Document and (ii) as specifically requested from time to time in writing by any Lender with respect to a specific document, instrument, notice or other written communication received by and in the possession of the Agent at the time of receipt of such request and then only in accordance with such specific request. Notwithstanding anything to the contrary herein, upon receipt of notices from the Loan Parties required by this Agreement, Agent shall forthwith notify the Lenders of the existence and content of such notices.
17.10 Collateral Matters. (a) The Lenders hereby irrevocably authorize the Collateral Agent, at its option and in its discretion, to release any Lien granted to or held by the Collateral Agent upon any Collateral upon the payment of all Obligations (other than unasserted contingent indemnification obligations) and termination of the Commitments; or constituting property being sold or disposed of in compliance with the terms of this Agreement and the other Loan Documents; or if approved, authorized or ratified in writing by the Required Lenders.
(b) Without in any manner limiting the Collateral Agents authority to act without any specific or further authorization or consent by the Lenders (as set forth in Section 17.10(a)), each Lender agrees to confirm in writing, upon request by the Collateral Agent, the authority to release Collateral conferred upon the Collateral Agent under Section 17.10(a). Upon receipt by the Collateral Agent of confirmation from the requisite amount of Lenders of its authority to release any particular item or types of Collateral, and upon prior written request by Borrower, the Collateral Agent shall at Borrowers sole cost and expense (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Collateral Agent for the benefit of the Lenders upon such Collateral, and acknowledge and agree that any such action by the Collateral Agent shall bind the Lenders; provided, however, that (i) the Collateral Agent shall not be required to execute any such document on terms which, in the Collateral Agents opinion, would expose the Collateral Agent to liability or create any obligations or entail any consequence other than the release of such Liens without recourse, representation or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any Lien upon all interests in the Collateral retained by Borrower or any Guarantor.
(c) The Collateral Agent shall have no obligation whatsoever to any Lender to assure that the Collateral exists, is genuine, or is owned by Borrower or any Guarantor or is cared for, protected or insured or has been encumbered or that the Agent s Liens granted to the Collateral Agent pursuant to this Agreement or any other Loan Document are valid or have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to maintain the perfection of any Agents Liens on the Collateral, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 17.10 or in any other Loan
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Document, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given that the Collateral Agent shall have no duty or liability whatsoever to any Lender, except as otherwise provided herein.
(d) Notwithstanding anything set forth herein to the contrary, the Agent shall have a duty of ordinary care with respect to any Collateral delivered to the Agent or its designated representatives that is in the Agents or its designated representatives possession or control. The Agent shall not be responsible for insuring the Collateral or for the payment of Taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. The Agent will be deemed to have exercised ordinary care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property, and the Agent will not be liable or responsible for any loss or diminution in the value of any of the Collateral by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Agent in good faith, including, without limitation, by reason of the act or omission of the Revolving Loan Lender.
17.11 Agency for Perfection. Each Agent and each Lender hereby appoints each other Agent and each other Lender as agent and bailee for the purpose of perfecting the security interests in and liens upon the Collateral in assets which, in accordance with Article 9 of the Uniform Commercial Code, can be perfected only by possession or control (or where the security interest of a secured party with possession or control has priority over the security interest of another secured party) and each Agent and each Lender hereby acknowledges that it holds possession of or otherwise controls any such Collateral for the benefit of the Agent and the Lenders, collectively, as secured party. Should the Administrative Agent or any Lender obtain possession or control of any such Collateral, the Administrative Agent or such Lender shall notify the Collateral Agent thereof, and, promptly upon the Collateral Agents request therefor shall deliver such Collateral to the Collateral Agent or in accordance with the Collateral Agents instructions. In addition, the Collateral Agent shall also have the power and authority hereunder to appoint such other sub-agents as may be necessary or required under applicable state law or otherwise to perform its duties and enforce its rights with respect to the Collateral and under the Loan Documents. By its execution and delivery of this Agreement, Borrower hereby consents to the foregoing.
17.12 Actions With Respect To Collateral. The Agent shall not have any responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Collateral, whether or not the Agent has or is deemed to have knowledge of such matters, (ii) taking any necessary steps to preserve the rights against any parties with respect to any Collateral or (iii) taking any action other than as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as the Agent shall believe in good faith to be necessary hereunder or under the Loan Documents), subject to the provisions of this Agreement.
17.13 Filing of Proofs of Claim. In case of any Default or Event of Default under Sections 9.4 and 9.5 the Agent (regardless of whether the principal of any Advance shall then be due and payable and regardless of whether the Agent has made any demand on Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a) To (i) file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Advances and all other Obligations that is owing and unpaid and (ii) file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Agent and their respective agents and counsel and all other amounts due to the Lenders, the Agent under Sections 2.12, 11.3 and 19.9) allowed in such judicial proceeding; and
(b) To collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same.
Each Lender hereby authorizes any custodian, receiver, assignee, trustee, conservator, sequestrator or other similar official in any such judicial proceeding: (i) to make such payments to the Agent; and (ii) if the Agent shall consent to the making of such payments directly to the Lenders, to pay to the Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Agent and their respective agents and counsel, and any other amounts due to the Agent under Sections 2.12, 11.3 and 19.9. Nothing contained herein shall be deemed to authorize the Agent to authorize or consent to or accept or adopt on behalf of any lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any lender or to authorize the Agent to vote in respect of the claim of any Lender in any such proceeding. Each Lender retains the right to file and prove a claim separately.
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18. | GUARANTY |
18.1 Guarantors. Each Guarantor confirms that its guarantee of the Obligations hereunder is secured by the Collateral pledged by it pursuant to and in accordance with the Loan Documents delivered by it in connection herewith.
18.2 Guaranty; Limitation of Liability.
(a) Each Guarantor, jointly and severally, hereby absolutely, unconditionally and irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise, of all Obligations of each other Loan Party now or hereafter existing under or in respect of the Loan Documents (including, without limitation, any extensions, modifications, substitutions, amendments or renewals of any or all of the foregoing Obligations), whether direct or indirect, absolute or contingent, and whether for principal, interest, premiums, fees, indemnities, contract causes of action, costs, reasonable and documented out-of-pocket expenses or otherwise (such Obligations being the Guaranteed Obligations), and agrees to pay reasonable and documented out-of-pocket expenses (including, without limitation, reasonable and documented out-of-pocket fees and expenses of counsel) incurred by the Agent or any other Lender in enforcing any rights under this Guaranty or any other Loan Document. Without limiting the generality of the foregoing, each Guarantors liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any other Loan Party to the Agent or any Lender under or in respect of the Loan Documents but for the fact that they are unenforceable or not allowed due to the existence of a bankruptcy, reorganization or similar proceeding involving such other Loan Party.
(b) Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment shall be required to be made to any Lender under this Guaranty, such Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other Guarantor and each other guarantor so as to maximize the aggregate amount paid to the Agent or Lenders under or in respect of the Loan Documents.
18.3 Guaranty Absolute. Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Agent or any Lender with respect thereto. The obligations of each Guarantor under or in respect of this Guaranty are independent of the Guaranteed Obligations or any other Obligations of any other Loan Party under or in respect of the Loan Documents, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce this Guaranty, irrespective of whether any action is brought against Borrower or any other Loan Party or whether Borrower or any other Loan Party is joined in any such action or actions. The liability of each Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses (other than payment of the Obligations to the extent of such payment) it may now have or hereafter acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Documents or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other Obligations of any other Loan Party under or in respect of the Loan Documents, or any other amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Loan Party or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any Collateral or any other collateral, or any taking, release or amendment or waiver of, or consent to departure from, any other guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Guaranteed Obligations or any other Obligations of any Loan Party under the Loan Documents or any other assets of any Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate structure or existence of any Loan Party or any of its Subsidiaries;
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(f) any failure of the Agent or any Lender to disclose to any Loan Party any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Loan Party now or hereafter known to the Agent or such Lender (each Guarantor waiving any duty on the part of the Agent or Lenders to disclose such information) provided that each Guarantor shall have any contractual defenses that the applicable Loan Party has under any Loan Document including payment in full of the Obligations;
(g) the failure of any other Person to execute or deliver any Guaranty Supplement or any other guaranty or agreement or the release or reduction of liability of any Guarantor or other guarantor or surety with respect to the Guaranteed Obligations; or
(h) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Agent or any Lender that might otherwise constitute a defense available to, or a discharge of, any Loan Party or any other guarantor or surety other than payment in full of the Guaranteed Obligations; provided that each Guarantor shall have any contractual defenses that the applicable Loan Party has under any Loan Document.
This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any Lender or any other Person upon the insolvency, bankruptcy or reorganization of Borrower or any other Loan Party or otherwise, all as though such payment had not been made.
18.4 Waivers and Acknowledgments.
(a) To the extent allowed under applicable law, each Guarantor hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of nonperformance, default, acceleration, protest or dishonor and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Agent or any Lender protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against any Loan Party or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives any right to revoke this Guaranty and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by the Agent or any Lender that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights of such Guarantor to proceed against any of the other Loan Parties, any other guarantor or any other Person or any Collateral and (ii) any defense based on any right of set-off or counterclaim against or in respect of the Guaranteed Obligations of such Guarantor hereunder.
(d) Each Guarantor acknowledges that the Agent may, without notice to or demand upon such Guarantor and without affecting the liability of such Guarantor under this Guaranty, foreclose under any mortgage by nonjudicial sale, and each Guarantor hereby waives any defense to the recovery by the Agent and the other Lenders against such Guarantor of any deficiency after such nonjudicial sale and any defense or benefits that may be afforded by applicable law.
(e) Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of the Agent or any Lender to disclose to such Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Loan Party or any of its Subsidiaries now or hereafter known by the Agent or such Lender.
(f) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Loan Documents and that the waivers set forth in Section 18.3 and this Section 18.4 are knowingly made in contemplation of such benefits.
18.5 Subrogation. Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against Borrower, any other Loan Party or any other insider guarantor that arise from the existence, payment, performance or enforcement of such Guarantors Obligations under or in respect of this Guaranty or any other Loan Document, including, without limitation, any right of subrogation, reimbursement,
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exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Agent or any Lender against Borrower, any other Loan Party or any other insider guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from Borrower, any other Loan Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash and the Commitments shall have expired or been terminated. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in cash of the Guaranteed Obligations (other than unasserted contingent indemnification obligations) and all other amounts payable under this Guaranty, such amount shall be received and held in trust for the benefit of the Agent and the Lenders, shall be segregated from other property and funds of such Guarantor and shall forthwith be paid or delivered to the Agent in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Loan Documents, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising. If (i) any Guarantor shall make payment to the Agent or any Lender of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash and (iii) the Maturity Date, the Agent or Lenders will, at such Guarantors request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment made by such Guarantor pursuant to this Guaranty.
18.6 Guaranty Supplements. If any Loan Party creates or acquires a wholly-owned Domestic Subsidiary (other than a Foreign Subsidiary Holding Company) on or after the Closing Date, such Loan Party shall cause such Domestic Subsidiary to be a Guarantor hereunder. Upon the execution and delivery to the Agent by any such Person of a guaranty supplement in substantially the form of Exhibit F hereto (each, a Guaranty Supplement), (a) such Person shall be referred to as an Additional Guarantor and shall become and be a Guarantor hereunder, and each reference in this Guaranty to a Guarantor shall also mean and be a reference to such Additional Guarantor, and each reference in any other Loan Document to a Loan Party shall also mean and be a reference to such Additional Guarantor if it is a Subsidiary of Borrower, and (b) each reference herein to this Guaranty, hereunder, hereof or words of like import referring to this Guaranty, and each reference in any other Loan Document to the Guaranty, thereunder, thereof or words of like import referring to this Guaranty, shall mean and be a reference to this Guaranty as supplemented by such Guaranty Supplement. For the avoidance of doubt, in no event shall a Subsidiary of a Loan Party that is a Foreign Subsidiary or a Foreign Subsidiary Holding Company (or a Subsidiary of a Foreign Subsidiary or Foreign Subsidiary Holding Company) be required to join in the Guaranty or become a Guarantor hereunder.
18.7 Subordination. Each Guarantor hereby subordinates any and all debts, liabilities and other Obligations owed to such Guarantor by each other Loan Party (the Subordinated Obligations) to the Guaranteed Obligations to the extent and in the manner hereinafter set forth in this Section 18.7:
(a) Prohibited Payments, Etc. Unless the Required Lenders otherwise agree, upon the occurrence and during the continuance of an Event of Default, no Guarantor shall demand, accept or take any action to collect any payment on account of the Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligations. In any Insolvency Proceeding relating to any other Loan Party, each Guarantor agrees that the Agent and Lenders shall be entitled to receive payment in full in cash of all Guaranteed Obligations (including all interest and expenses accruing after the commencement of an Insolvency Proceeding, whether or not constituting an allowed claim in such proceeding (Postpetition Interest)) before such Guarantor receives payment of any Subordinated Obligations.
(c) Turn-Over. After the occurrence and during the continuance of any Event of Default, but subject to the Intercreditor Agreement and notice provisions described in Section 10, each Guarantor shall, if the Agent so requests, collect, enforce and receive payments on account of the Subordinated Obligations as trustee for the Agent and the Lenders and deliver such payments to the Agent on account of the Guaranteed Obligations (including all Postpetition Interest), together with any necessary endorsements or other instruments of transfer, but without reducing or affecting in any manner the liability of such Guarantor under the other provisions of this Guaranty.
(d) Agent Authorization. After the occurrence and during the continuance of any Event of Default, but subject to the Intercreditor Agreement and notice provisions described in Section 10, the Agent is authorized and empowered (but without any obligation to so do), in its discretion, (i) in the name of each Guarantor, to
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collect and enforce, and to submit claims in respect of, the Subordinated Obligations and to apply any amounts received thereon to the Guaranteed Obligations (including any and all Postpetition Interest), and (ii) to require each Guarantor (A) to collect and enforce, and to submit claims in respect of, the Subordinated Obligations and (B) to pay any amounts received on such obligations to the Agent for application to the Guaranteed Obligations (including any and all Postpetition Interest).
18.8 Continuing Guaranty; Assignments. This Guaranty is a continuing guaranty and shall (a) remain in full force and effect until the latest of (i) the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty and (iii) the Maturity Date, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Agent, the Lenders and their respective successors, transferees and assigns. No Guarantor shall have the right to assign its rights hereunder or any interest herein without the prior written consent of the Agent (acting at the written direction of the Required Lenders).
19. | GENERAL PROVISIONS. |
19.1 Effectiveness This Agreement shall be binding and deemed effective when executed by Borrower, each other Loan Party, the Agent and the Lenders.
19.2 Section Headings Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.
19.3 Interpretation Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against the Agent, the Lenders or any Loan Party, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.
19.4 Severability of Provisions Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.
19.5 Debtor-Creditor Relationship The relationship between the Agent and Lenders, on the one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor. The Agent and the Lenders shall not have (and shall not be deemed to have) any fiduciary relationship or duty to any Loan Party arising out of or in connection with the Loan Documents or the transactions contemplated thereby, and there is no agency or joint venture relationship between the Agent and the Lenders, on the one hand, and the Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated therein.
19.6 Counterparts; Electronic Execution This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by tele facsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by tele facsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.
19.7 Revival and Reinstatement of Obligations If the incurrence or payment of the Obligations by Borrower or any other Loan Party or the transfer to the Agent or the Lenders of any property should for any reason subsequently be asserted, or declared, to be void or voidable under any state or federal law relating to creditors rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (each, a Voidable Transfer), and if the Agent or any Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that the Agent or such Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys fees of the Agent or such Lender related thereto, the liability of Borrower or such other Loan Party automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made and all of the Agents Liens in the Collateral shall be automatically reinstated without further action.
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19.8 Confidentiality.
(a) The Lender Parties agree that material, non-public information regarding the Loan Parties and their Subsidiaries, their operations, assets, and existing and contemplated business plans (Confidential Information) shall be treated by the Lender Parties in a confidential manner, and shall not be disclosed by the Lender Parties to Persons who are not parties to this Agreement, except: (i) to attorneys for and other advisors, accountants, auditors, and consultants to the Lender Parties and to employees, directors and officers of the Lender Parties (the Persons in this clause (i), Lender Representatives) on a need to know basis in connection with this Agreement, the Restructuring Support Agreement and the other Loan Documents, and the transactions contemplated hereby and thereby on a confidential basis, (ii) to Subsidiaries and Affiliates of the Lender Parties, provided that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 19.8 and keep such Confidential Information confidential, (iii) as may be required by regulatory authorities, (iv) as may be required by statute, decision, or judicial or administrative order, rule, or regulation; provided that (x) prior to any disclosure under this clause (iv), the disclosing party agrees to provide Borrower with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Borrower pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation and (y) any disclosure under this clause (iv) shall be limited to the portion of the Confidential Information as may be required by such statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance in writing by Borrower, (vi) as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, provided, that, (x) prior to any disclosure under this clause (vi) the disclosing party agrees to provide Borrower with prior written notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior written notice to Borrower pursuant to the terms of the subpoena or other legal process and (y) any disclosure under this clause (vi) shall be limited to the portion of the Confidential Information as may be required by such Governmental Authority pursuant to such subpoena or other legal process, (vii) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by the Lender Parties or Lender Representatives), (viii) in connection with any assignment, participation or pledge of any Lender Partys interest under this Agreement or the Intercreditor Agreement, provided that prior to receipt of Confidential Information any such assignee, participant, or pledgee shall have agreed in writing to receive such Confidential Information hereunder subject to the terms of this Section 19.8, (ix) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents; (x) to equity owners of each Loan Party, (xi) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement or under any other Loan Document, (xii) to Existing Noteholders, and Existing Noteholders agents and representatives on a confidential basis, (xiii) to the Revolving Loan Lender and agents and representatives on a confidential basis and (xiv) to the New Senior Noteholders and their agents and representatives on a confidential basis.
(b) Anything in this Agreement to the contrary notwithstanding, the Agent and the Lenders may use the name, logos, and other insignia of the Loan Parties and the total Credit Facility amount provided hereunder in any tombstone or comparable advertising, on its website or in other marketing materials of the Agent or the Lenders.
(c) The Loan Parties hereby acknowledge that (i) the Agent may, but shall not be obligated to, make available to the Lenders materials and/or information provided by or on behalf of the Loan Parties hereunder (collectively, Borrower Materials) by posting the Borrower Materials on Debtdomain, IntraLinks or another similar electronic system (the Platform) and (ii) certain of the Lenders (each, a Public Lender) may have personnel who do not wish to receive material non-public information with respect to the Loan Parties or their Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons securities. Each of the Loan Parties hereby agrees that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that: (w) all such Borrower Materials shall be clearly and conspicuously marked PUBLIC which, at a minimum, shall mean that the word PUBLIC shall appear prominently on the first page thereof; (x) by marking Borrower Materials PUBLIC, the Loan Parties shall be deemed to have authorized the Agent and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to each Loan Party or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Confidential Information, they shall be treated as set forth in clause (a) above); (y) all Borrower Materials marked PUBLIC are permitted to be made available through a portion of the Platform designated Public Side Information; and (z) the Agent shall be entitled to treat any Borrower Materials that are not marked PUBLIC as being suitable only for posting on a portion of the Platform not designated Public Side Information.
(d) The Platform is provided as is and as available. Neither the Agent nor any Agent-Related Party warrants the accuracy or completeness of the communications through the Platform or the adequacy of the Platform and each expressly disclaims liability for errors or omissions in such communications. No warranty or
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representation of any kind, express, implied, or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects is made by the Agent or any Agent-Related Party in connection with such communications or the Platform. In no event shall the Agent or any Agent-Related Party have any liability to any Loan Party, any Lender, or any other Person for damages of any kind, whether or not based on strict liability and whether or not direct or indirect, special, incidental, or consequential damages, losses, or expenses (whether in tort, contract, or otherwise) arising out of any Loan Partys or Agents transmission of communications through the Internet, except to the extent the liability of any such Person is found in a final ruling by a court of competent jurisdiction to have resulted primarily from such Persons gross negligence or willful misconduct.
19.9 Expenses. Borrower and each other Loan Party agrees to pay the Expenses on the earlier of (a) the first day of the month following the date on which such Expenses were first incurred, or (b) the date on which demand therefor is made by the Agent or a Lender on Borrower, and each other Loan Party agrees that its obligations contained in this Section 19.9 shall survive payment or satisfaction in full of all other Obligations, provided that the Loan Parties shall not be deemed in default for non-payment of such Expenses unless such expenses remain unpaid following demand therefor.
19.10 Setoff.
(a) Right of Setoff. Each of the Agent, each Lender and each Affiliate (including each branch office thereof) of any of them is hereby authorized, without notice or demand (each of which is hereby waived by each Loan Party), at any time and from time to time during the continuance of any Event of Default and to the fullest extent permitted by applicable Legal Requirements, to set off and apply any and all deposits (whether general or special, time or demand, provisional or final) at any time held and other Indebtedness, claims or other obligations at any time owing by the Agent, such Lender or any of their respective Affiliates to or for the credit or the account of Borrower or any other Loan Party against any Obligation of any Loan Party now or hereafter existing, whether or not any demand was made under any Loan Document with respect to such Obligation and even though such Obligation may be unmatured. No Lender shall exercise any such right of setoff without the prior consent of the Agent or Required Lenders. Each of the Agent and each Lender agrees promptly to notify Borrower and the Agent after any such setoff and application made by such Lender or its Affiliates; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights under this Section 19.10 are in addition to any other rights and remedies (including other rights of setoff) that the Agent, the Lenders, their Affiliates and the other Secured Parties, may have.
(b) Sharing of Payments, Etc. If any Lender, directly or through an Affiliate or branch office thereof, obtains any payment of any Obligation of any Loan Party (whether voluntary, involuntary or through the exercise of any right of setoff or the receipt of any Collateral or proceeds (as defined under the applicable UCC) of Collateral) other than pursuant to Section 14.2 or Section 16 and such payment exceeds the amount such Lender would have been entitled to receive if all payments had gone to, and been distributed by, the Agent in accordance with the provisions of the Loan Documents, such Lender shall purchase for cash from other Lenders such participations in their Obligations as necessary for such Lender to share such excess payment with such Lenders to ensure such payment is applied as though it had been received by the Agent and applied in accordance with this Agreement (or, if such application would then be at the discretion of Borrower, applied to repay the Obligations in accordance herewith); provided, however, that (a) if such payment is rescinded or otherwise recovered from such Lender in whole or in part, such purchase shall be rescinded and the purchase price therefor shall be returned to such Lender without interest and (b) such Lender shall, to the fullest extent permitted by applicable Legal Requirements, be able to exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if such Lender were the direct creditor of the applicable Loan Party in the amount of such participation.
19.11 Release; Retention in Satisfaction; Etc.
(a) Collateral hereunder shall be released if and to the extent so provided hereunder or upon the transfer or sale of any asset or property (other than transfers or sales to a Loan Party) theretofore included in Collateral to the extent permitted under Section 7.4, or otherwise permitted under this Agreement, the Intercreditor Agreement or the Revolving Credit Agreement; provided, that the Agent shall have received a certificate reasonably satisfactory to the Agent from a responsible officer of each Loan Party certifying that the release of such Collateral is permitted under this Agreement, the Intercreditor Agreement or the Revolving Credit Agreement (the Release Certificate).
(b) Except as may be expressly applicable pursuant to Section 9-620 of the UCC, no action taken or omission to act by the Agent or the Lenders hereunder or the other Loan Documents shall be deemed to
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constitute a retention of the Collateral in satisfaction of the Obligations or otherwise to be in full satisfaction of the Obligations, and the Obligations shall remain in full force and effect until the Agent and the Lenders shall have applied payments (including, without limitation, collections from Collateral) towards the Obligations in the full amount then outstanding.
(c) Upon such release or any release of Collateral or any part thereof in accordance with the provisions of the Loan Documents and provided that the Agent shall have received the Release Certificate, the Agent shall, subject to the terms of the Intercreditor Agreement, upon the request and at the sole cost and expense of the Loan Parties and promptly after the Agents receipt of such request, (i) assign, transfer and deliver to the Loan Parties, against receipt and without recourse to or representation or warranty by the Agent except as to the fact that the Agent has not encumbered the released assets except in accordance with the Loan Documents, such of the Collateral or any part thereof to be released (in the case of a release) as may be in possession of the Agent and as shall not have been sold or otherwise applied pursuant to the terms hereof or any other Loan Document, and (ii) execute documents and instruments prepared by the Loan Parties and acceptable to the Agent (including UCC-3 termination financing statements or releases) acknowledging the release of such Collateral.
19.12 Survival. All representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Agent may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as any of the Obligations is outstanding and unpaid and so long as the obligation of the Lenders to provide extensions of credit hereunder has not expired or been terminated. Section 11.3, Section 16.1(h), Section 17, and Section 19.9 shall survive the termination of the Commitments or this Agreement and the repayment, satisfaction, or discharge of the Obligations
19.13 Patriot Act. The Agent and each Lender hereby notify the Loan Parties that pursuant to the requirements of the Patriot Act, they are required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow the Agent or the Lenders to identify each Loan Party in accordance with the Patriot Act. In addition, if the Agent or any Lender is required by law or regulation or internal policies to do so, it shall have the right to periodically conduct (a) Patriot Act searches, OFAC/PEP searches, and customary individual background checks for the Loan Parties, and (b) OFAC/PEP searches and customary individual background checks of the Loan Parties senior management and key principals, and Borrower and each other Loan Party agrees to cooperate in respect of the conduct of such searches and further agrees that the reasonable costs and charges for such searches shall constitute Expenses hereunder and be for the account of Borrower.
19.14 Integration. This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.
19.15 Lender Instructions. Each Lender hereby instructs the Agent to execute and deliver on behalf of such Lender, and agrees to be bound by, the Intercreditor Agreement, Amended Intercompany Subordination Agreement, and any other documents and filings that are contemplated to be executed and delivered or filed in connection herewith or therewith, including, without limitation, all documents and filings listed on Exhibit I attached hereto (Post-Closing Deliverables) and on or after the closing of the New Senior Notes Indenture, the Additional Indebtedness Joinder and Designation (as defined in the Intercreditor Agreement) in respect of such New Senior Notes Indenture. Each Lender hereby acknowledges and agrees that (x) the foregoing instructed actions constitute an instruction from all the Lenders under Section 17 and (y) Sections 11.3, 17.3, 17.5, and 19.9 and any other rights, privileges, protections, immunities, and indemnities in favor the Agent hereunder apply to any and all actions taken or not taken by the Agent in accordance with such instruction.
19.16 Original Issue Discount.
EACH ADVANCE ISSUED PURSUANT TO THIS AGREEMENT WILL BE ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE IRC. A LENDER MAY OBTAIN THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY BY SUBMITTING A REQUEST FOR SUCH INFORMATION TO BORROWER AT THE ADDRESS SET FORTH IN SECTION 12.
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19.17 Intercreditor Agreement.
(a) Notwithstanding anything to the contrary in this Agreement or in any other Loan Document, to the extent any provision of this Agreement or any other Loan Document conflicts with the terms of the Intercreditor Agreement, the terms and provisions of the Intercreditor Agreement shall govern.
(b) Notwithstanding anything to the contrary in this Agreement or in any other Loan Document, the Liens granted to the Agent pursuant to this Agreement and the other Loan Documents and the exercise of any right related to any Collateral shall be subject, in each case, to the terms of the Intercreditor Agreement.
(c) It is agreed that any requirement to deliver possession of Collateral hereunder shall be deemed satisfied upon receipt of such delivery by the Revolving Loan Lender or the Existing Notes Trustee in accordance with the Intercreditor Agreement.
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered under seal as of the date first above written.
BORROWER: | ||
SAEXPLORATION HOLDINGS, INC. | ||
By: |
/s/ Brent Whiteley | |
Name: |
Brent Whiteley | |
Title: |
Chief Financial Officer | |
Federal Employer Identification No. | ||
27-4867100 | ||
Organizational Identification No. | ||
4931384 (Delaware) | ||
OTHER LOAN PARTIES: | ||
SAEXPLORATION, INC. | ||
By: |
/s/ Brent Whiteley | |
Name: |
Brent Whiteley | |
Title: |
Chief Financial Officer | |
Federal Employer Identification No. | ||
45-2959022 | ||
Organizational Identification No. | ||
5009432 (Delaware) |
SAEXPLORATION SUB, INC. | ||
By: |
/s/ Brent Whiteley | |
Name: |
Brent Whiteley | |
Title: |
Chief Financial Officer | |
Federal Employer Identification No. | ||
46-4918859 | ||
Organizational Identification No. | ||
5253643 (Delaware) |
Page 2
NES, LLC | ||||
By: | /s/ Brent Whiteley | |||
Name: | Brent Whiteley | |||
Title: | Chief Financial Officer | |||
Federal Employer Identification No. | ||||
27-5152915 | ||||
Organizational Identification No. | ||||
110456 (Alaska) | ||||
SAEXPLORATION SEISMIC SERVICES (US), LLC | ||||
By: | /s/ Brent Whiteley | |||
Name: | Brent Whiteley | |||
Title: | Chief Financial Officer | |||
Federal Employer Identification No. | ||||
90-0855057 | ||||
Organizational Identification No. | ||||
5156435 (Delaware) | ||||
THE ADMINISTRATIVE AND COLLATERAL AGENT: | ||||
DELAWARE TRUST COMPANY | ||||
By: | /s/ Alan R. Halpern | |||
Name: | Alan R. Halpern | |||
Title: | Vice President |
Page 3
THE LENDERS: | ||||
WBOX 2015-7 Ltd. | ||||
By: | /s/ Mark Strefling | |||
Name: | Mark Strefling | |||
Title: | Partner, General Counsel, Chief Operating Officer |
Page 4
BLUEMOUNTAIN CREDIT ALTERNATIVES MASTER FUND L.P. | ||
By: BlueMountain Capital Management, LLC, its investment manager | ||
By: | /s/ David OMara | |
Name: | David OMara | |
Title: | Deputy General Counsel | |
BLUEMOUNTAIN MONTENVERS MASTER FUND SCA SICAV-SIF | ||
By: BlueMountain Capital Management, LLC, its investment manager | ||
By: | /s/ David OMara | |
Name: | David OMara | |
Title: | Deputy General Counsel | |
BLUEMOUNTAIN KICKING HORSE FUND L.P. | ||
By: BlueMountain Capital Management, LLC, its investment manager | ||
By: | /s/ David OMara | |
Name: | David OMara | |
Title: | Deputy General Counsel | |
BLUEMOUNTAIN GUADALUPE PEAK FUND L.P. | ||
By: BlueMountain Capital Management, LLC, its investment manager | ||
By: | /s/ David OMara | |
Name: | David OMara | |
Title: | Deputy General Counsel | |
BLUEMOUNTAIN SUMMIT TRADING L.P. | ||
By: | /s/ David OMara | |
Name: | David OMara | |
Title: | Deputy General Counsel |
Page 5
MORGAN STANLEY INSTITUTIONAL FUND TRUST HIGH YIELD PORTFOLIO | ||
By: MORGAN STANLEY INVESTMENT MANAGEMENT INC., as its Investment Advisor | ||
By: | /s/ Jennifer Accomando | |
Name: | Jennifer Accomando | |
Title: | Executive Director | |
MORGAN STANLEY GLOBAL FIXED INCOME OPPORTUNITIES FUND | ||
By: MORGAN STANLEY INVESTMENT MANAGEMENT INC., as its Investment Advisor | ||
By: | /s/ Jennifer Accomando | |
Name: | Jennifer Accomando | |
Title: | Executive Director | |
SUNSUPER SUPERANNUATION FUND | ||
By: MORGAN STANLEY INVESTMENT MANAGEMENT INC., as its Investment Advisor | ||
By: | /s/ Jennifer Accomando | |
Name: | Jennifer Accomando | |
Title: | Executive Director |
Page 6
ARISTIDES FUND LP | ||
By: | /s/ Daniel C. Nall | |
Name: | Daniel C. Nall | |
Title: | Chief Compliance Officer of GP | |
ARISTIDES FUND QP, LP | ||
By: | /s/ Daniel C. Nall | |
Name: | Daniel C. Nall | |
Title: | Chief Compliance Officer of GP |
Page 7
TEGEAN MASTER FUND, LTD | ||
By: | /s/ Joseph N. Levy | |
Name: | Joseph N. Levy | |
Title: | Chief Compliance Officer Controller |
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AMZAK CAPITAL MANAGEMENT, LLC | ||
By: | /s/ Michael Kazma | |
Name: | Michael Kazma | |
Title: | President |
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MR. JOHN PECORA | ||
By: | /s/ John Pecora | |
Title: |
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Schedule 1.1
a. Definitions. As used in this Agreement, the following terms shall have the following definitions:
Account means an account (as that term is defined in Article 9 of the Code).
Account Debtor means an account debtor (as that term is defined in the Code).
Accounting Change is defined in section b of this Schedule.
Additional Documents has the meaning specified therefor in Section 6.15(a).
Additional Guarantor has the meaning specified therefor in Section 18.6.
Advances has the meaning specified therefor in Section 2.1(a).
Affiliate means, as applied to any Person, any other Person who controls, is controlled by, or is under common control with, such Person. For purposes of this definition, control means the possession, directly or indirectly through one or more intermediaries, of the power to direct the management and policies of a Person, whether through the ownership of Stock, by contract, or otherwise.
Agent-Related Parties means the Agents Affiliates and the respective directors, officers, employees, agents and advisors (including attorneys, accountants and experts) of the Agent and the Agents Affiliates.
Agents Liens mean the Liens granted by Borrower and the other Loan Parties to the Agent for the benefit of the Lenders under the Loan Documents.
Aggregate Excess Funding Amount has the meaning specified therefor in Section 2.13(d)(iv).
Agreement means the Term Loan and Security Agreement to which this Schedule 1.1 is attached.
Alaska Tax Credits means any tax credit, refund or refund claim relating to Alaska Oil and Gas Production Tax Credits.
Amended Intercompany Subordination Agreement means a second amended and restated intercompany subordination agreement with respect to the Intercompany Subordinated Note and any other debt between or among any one or more of the Loan Parties and any of their Subsidiaries, dated as of even date with this Agreement, executed and delivered by each Loan Party, each of their Subsidiaries, the Existing Notes Trustee, the Revolving Loan Lender, the Agent and, upon the Closing Date (as defined in the Restructuring Support Agreement), the New Senior Notes Trustee, the form and substance of which is reasonably satisfactory to the Agent and the Required Lenders.
Approved Fund means, with respect to any Lender, any Person (other than a natural Person) that (a) (i) is or will be engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of business or (ii) temporarily warehouses loans for any Lender or any Person described in clause (i) above and (b) is advised or managed by (i) such Lender, (ii) any Affiliate of such Lender or (iii) any Person (other than an individual) that administers or manages such Lender.
Assignment means an assignment agreement entered into by a Lender, as assignor, and any Person, as assignee, pursuant to the terms and provisions of Section 14.2 (with the consent of any party whose consent is required by Section 14.2), in form and substance attached as Exhibit H hereto.
Authorized Person means any one of the individuals identified on Schedule A-2, as such schedule is updated from time to time by written notice from Borrower to the Agent.
Availability Period means the period from and including the Initial Advance Date to but not including the Termination Date.
Bankruptcy Code means title 11 of the United States Code, as in effect from time to time.
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Beneficial Owner has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular person (as that term is used in Section 13(d)(3) of the Exchange Act), such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms Beneficially Owns and Beneficially Owned have a corresponding meaning.
Benefit Plan means a defined benefit plan (as defined in Section 3(35) of ERISA) or multiemployer plan (as defined in Section 3(37) of ERISA).
Board of Directors means:
(a) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
(b) with respect to a partnership, the board of directors of a direct or indirect general partner of the partnership;
(c) with respect to a limited liability company, the direct or indirect managing member or members or any controlling committee of managing members thereof; and
(d) with respect to any other Person, the board or committee of such Person serving a similar function.
Books means books and records (including Borrowers or any other Loan Partys Records indicating, summarizing, or evidencing Borrowers or such other Loan Partys assets (including the Collateral) or liabilities, Borrowers or such other Loan Partys Records relating to Borrowers or such other Loan Partys business operations or financial condition, or Borrowers or such other Loan Partys Goods or General Intangibles containing such information).
Borrower means SAExploration Holdings, Inc., a Delaware corporation.
Borrower Materials has the meaning specified therefor in Section 19.8(c).
Borrowing means a borrowing consisting of Advances made to or for the benefit of Borrower by the Lenders pursuant to Section 2, including any Protective Advance.
Borrowing Certificate means the Borrowing Certificate attached hereto as Exhibit G.
Business Day means any day that is not a Saturday, Sunday, or other day on which banks are authorized or required to close pursuant to the rules and regulations of the Federal Reserve System.
Capital Adequacy Regulation means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any Lender or of any corporation controlling a Lender.
Capitalized Lease Obligation means that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP.
Capital Lease means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.
Capital Stock means:
(a) in the case of a corporation, capital stock;
(b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) in the equity of such entity;
(c) in the case of a partnership or limited liability Borrower, partnership interests (whether general or limited) or membership interests; and
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(d) in the case of any other entity, any other interests or participations that confer on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing entity;
but excluding from all of the foregoing any debt securities convertible into or exchangeable for Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
Cash Equivalents means (a) marketable direct obligations issued by, or unconditionally guarantied by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued or fully guarantied by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and having one of the two highest ratings obtainable from either Standard & Poors Rating Group (S&P) or Moodys Investors Service, Inc. (Moodys), (c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moodys, (d) certificates of deposit, time deposits, overnight bank deposits or bankers acceptances maturing within 1 year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia or any United States branch of a foreign bank having combined capital and surplus of not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or any state thereof so long as the full amount maintained with any such other bank is insured by the Federal Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of clause (d) of this definition or recognized securities dealer having combined capital and surplus of not less than $250,000,000, having a term of not more than seven days, with respect to securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the criteria described in clause (d) above, (h) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (g) above, and (i) Investments in the BlackRock Temp Fund Cash Management Class (the Share Class), an institutional money market mutual fund for which the Agent serves as shareholder servicing agent and/or custodian or subcustodian. The parties hereto: (i) acknowledge the Agents disclosure of the services the Agent is providing to and the fees it receives from BlackRock; (ii) consent to the Agents receipt of these fees in return for providing shareholder services for the Share Class; and (iii) acknowledge that the Agent has provided on or before the date hereof a BlackRock Temp Fund Cash Management Class prospectus which discloses, among other things, the various expenses of the Share Class and the fees to be received by the Agent.
Change of Control means that (a) at any time, Borrower shall fail to own one hundred percent (100%) of the Capital Stock of SAExploration Sub, Inc. entitled to vote in the election of members of the Board of Directors (or equivalent governing body) of SAExploration Sub, Inc., (b) at any time, SAExploration Sub, Inc. shall fail to own one hundred percent (100%) of the Capital Stock of SAExploration, Inc. entitled to vote in the election of members of the Board of Directors of SAExploration, Inc., (c) at any time, SAExploration, Inc. shall fail to own one hundred percent (100%) of the Capital Stock of each of NES, LLC and SAExploration Seismic Services (US), LLC entitled to vote in the election of members of the Board of Directors of such Loan Parties, (d) Permitted Holders fail to own and control, directly or indirectly, 30%, or more, of the Stock of Borrower having the right to vote for the election of members of the Board of Directors, or (e) any person or group (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, becomes the Beneficial Owner, directly or indirectly, of 50%, or more, of the Stock of Borrower having the right to vote for the election of members of the Board of Directors.
Chattel Paper means chattel paper (as that term is defined in the Code), and includes tangible chattel paper and electronic chattel paper.
Claim is defined in Section 13(c).
Closing Date means June 29, 2016.
Code means the Uniform Commercial Code, as in effect in the State of New York from time to time; provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, priority, or remedies with respect to the Lenders Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term Code shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for the purpose of the provisions thereof relating to such attachment, perfection, priority, or remedies. To the extent that defined terms set forth herein shall have different meanings under different Articles under the Uniform Commercial Code, the meaning assigned to such defined term under Article 9 of the Uniform Commercial Code shall control.
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Collateral means all of Borrowers and each Loan Partys now owned or hereafter acquired:
(a) Accounts;
(b) Books;
(c) Chattel Paper;
(d) Deposit Accounts;
(e) Goods, including Equipment;
(f) General Intangibles, including, without limitation, Material Contracts, Intellectual Property and Intellectual Property Licenses;
(g) Inventory;
(h) Investment Related Property;
(i) Negotiable Collateral;
(j) Supporting Obligations;
(k) Commercial Tort Claims;
(l) money, Cash Equivalents, or other assets of such Loan Party that now or hereafter come into the possession, custody, or control of the Agent or the Lenders (or any of their agents or designees);
(m) receivables due to Borrower or another Loan Party from Alaska Seismic Ventures and any tax credit or tax certificate assigned or issued to Borrower or such other Loan Party in connection therewith, including any Alaska Tax Credits; and
(n) all of the proceeds (as such term is defined in the Code) and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance or Commercial Tort Claims covering or relating to any or all of the foregoing, and any and all Accounts, Books, Chattel Paper, Deposit Accounts, Equipment, Fixtures, General Intangibles (including, without limitation, Intellectual Property and Intellectual Property Licenses), Inventory, Investment Related Property, Negotiable Collateral, Supporting Obligations, money, or other tangible or intangible property resulting from the sale, lease, license, exchange, collection, or other disposition of any of the foregoing, the proceeds of any award in condemnation with respect to any of the foregoing, any rebates or refunds, whether for taxes or otherwise, and all proceeds of any such proceeds, or any portion thereof or interest therein, and the proceeds thereof, and all proceeds of any loss of, damage to, or destruction of the above, whether insured or not insured, and, to the extent not otherwise included, any indemnity, warranty, or guaranty payable by reason of loss or damage to, or otherwise with respect to any of the foregoing (collectively, the Proceeds). Without limiting the generality of the foregoing, the term Proceeds includes whatever is receivable or received when Investment Related Property or proceeds are sold, exchanged, collected, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes proceeds of any indemnity or guaranty payable to such Loan Party or Lender from time to time with respect to any of the Investment Related Property.
Notwithstanding anything contained in this Agreement to the contrary, the term Collateral shall not include any Excluded Property (but shall include the Proceeds and products of Excluded Property and each other item set forth in clause (n) above with respect to Excluded Property, in each case, to the extent that such Proceeds, products and other items do not themselves constitute Excluded Property) and Excluded Property shall include Pledgor Foreign Property.
Collection Account means the Deposit Account identified on Schedule A-1.
Commercial Tort Claims means commercial tort claims (as that term is defined in the Code), and includes those commercial tort claims listed on Schedule 5.6(d) to the Information Certificate.
Commitment means, with respect to each Lender, the obligation to make Advances to Borrower pursuant to Section 2.1 in the amount set forth under the caption Commitment opposite such Lenders name on Schedule 2.1, as such amount may be adjusted from time to time in accordance with this Agreement. As of the Closing Date, the aggregate amount of the Commitments is $30,000,000.
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Commitment Percentage means, as to any Lender, the percentage equivalent of such Lenders unused Commitment plus the outstanding principal amount of all such Lenders Advances divided by the total unused Commitments and Advances; provided, that after the Commitments have been reduced to zero, Commitment Percentages shall be determined by reference only to the outstanding principal balance of all Advances as of any date of determination.
Compliance Certificate means a certificate substantially in the form of Exhibit A delivered by the chief financial officer of Borrower to the Agent.
Confidential Information has the meaning specified therefor in Section 19.8(a).
Control Agreement means, with respect to any deposit account, securities account, commodity account, securities entitlement or commodity contract, an agreement, in form and substance reasonably satisfactory to the Agent, among the Agent, the financial institution or other Person at which such account is maintained or with which such entitlement or contract is carried and the Loan Party maintaining such account or owning such entitlement or contract, effective to grant control (within the meaning of Articles 8 and 9 under the applicable UCC) over such account to the Agent.
Controlled Securities Account means each securities account (including all financial assets held therein and all certificates and instruments, if any, representing or evidencing such financial assets) that is the subject of an effective control agreement.
Copyrights means any and all rights in any works of authorship, including (i) copyrights and moral rights, (ii) copyright registrations and recordings thereof and all applications in connection therewith including those listed on Schedule 5.26(b) to the Information Certificate, (iii) income, license fees, royalties, damages, and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (iv) the right to sue for past, present, and future infringements thereof, and (v) all of Borrowers and each other Loan Partys rights corresponding thereto throughout the world.
Credit Facility has the meaning specified therefor on the introductory statement hereto.
Default means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default.
Default Rate has the meaning specified therefor in Section 2.6.
Deposit Account means any deposit account (as that term is defined in the Code).
Designated Account means the operating Deposit Account of Borrower identified on Schedule D-1.
Disposition means (a) the sale, lease, conveyance or other disposition of property, other than sales or other dispositions expressly permitted under clauses (a), (b), (c), (d), (f), (g), (h), (i) and (j) of the definition of Permitted Dispositions and (b) the sale or transfer by Borrower or any Subsidiary of Borrower of any Stock or Stock equivalent issued by any Subsidiary of Borrower and held by such transferor Person (other than (i) a sale or transfer of the Stock or Stock equivalents of a Subsidiary of Borrower to Borrower permitted hereunder and (ii) a sale or transfer of the Stock or Stock equivalents of a Foreign Subsidiary of Borrower to another Foreign Subsidiary permitted hereunder).
Disqualified Person means (a) a direct competitor of Borrower or its Subsidiaries that has been specified in writing to the Agent and the Required Lenders prior to the Closing Date and (b) any Person that is clearly identifiable, solely on the basis of such Persons name, as an Affiliate of any Person referred to in clause (a) above. It is understood and agreed that Borrower shall be permitted to supplement, after the Closing Date and in writing, the list of Disqualified Persons to add additional direct competitors of Borrower upon reasonable written notice to the Agent and the Required Lenders. Such supplement shall become effective immediately upon delivery to the Agent and the Required Lenders and shall not apply retroactively to disqualify the transfer of an interest in any Advances that was effective prior to the effective date of such supplement.
Dollars or $ means United States dollars.
Domestic Subsidiary means any Subsidiary of a Loan Party that is not a Foreign Subsidiary.
Environmental Action means any written complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or other written communication from any
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Governmental Authority, or any third party involving violations of Environmental Laws or releases of Hazardous Materials (a) from any assets, properties, or businesses of any Loan Party, any Subsidiary of a Loan Party, or any of their predecessors in interest, (b) from adjoining properties or businesses, or (c) from or onto any facilities which received Hazardous Materials generated by any Loan Party, any Subsidiary of a Loan Party, or any of their predecessors in interest.
Environmental Law means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, in each case, to the extent binding on any Loan Party or any of its Subsidiaries, relating to the environment, the effect of the environment on employee health, or Hazardous Materials, in each case as amended from time to time.
Environmental Liabilities means all liabilities, monetary obligations, losses, damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or consultants, and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand, or Remedial Action required, by any Governmental Authority or any third party, and which relate to any Environmental Action.
Environmental Lien means any Lien in favor of any Governmental Authority for Environmental Liabilities.
Equipment means equipment (as that term is defined in the Code).
Equity Interest means, with respect to any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents, including membership interests (however designated, whether voting or nonvoting), of equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited), joint venture interests, or if such Person is a limited liability company, membership interests and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of property of, such partnership, whether outstanding on the date hereof or issued on or after the Closing Date, but excluding debt securities convertible or exchangeable into such equity.
ERISA means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto.
ERISA Affiliate means (a) any Person subject to ERISA whose employees are treated as employed by the same employer as the employees of any Loan Party or its Subsidiaries under IRC Section 414(b), (b) any trade or business subject to ERISA whose employees are treated as employed by the same employer as the employees of any Loan Party or its Subsidiaries under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any organization subject to ERISA that is a member of an affiliated service group of which any Loan Party or any of its Subsidiaries is a member under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 and 430 of the IRC, any Person subject to ERISA that is a party to an arrangement with any Loan Party or any of its Subsidiaries and whose employees are aggregated with the employees of a Loan Party or its Subsidiaries under IRC Section 414(o).
Event of Default has the meaning specified therefor in Section 9.
Event of Loss means, with respect to any property, any of the following: (a) any loss, destruction or damage of such property; or (b) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such property, or confiscation of such property or the requisition of the use of such property.
Exchange Act means the Securities Exchange Act of 1934, as in effect from time to time.
Excluded Accounts means, as to any Loan Party, all Deposit Accounts used solely for (i) payroll and/or accrued employee benefits or (ii) employee benefit plans, to the extent Lender is not the depository bank thereof.
Excluded Property means:
(a) all of any Loan Partys right, title and interest in any leasehold or other non-fee simple interest in any Real Property of such Loan Party (whether leased or otherwise held on the date hereof or leased or otherwise acquired after the date hereof);
(b) any permit or lease or license or any contractual obligation entered into by any Loan Party, (i) that prohibits or requires the consent of any Person other than Borrower or any of its Affiliates as a condition
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to the creation by any Loan Party of a Lien on any right, title or interest in such permit, lease, license or contractual agreement or any Capital Stock or equivalent related thereto or (ii) to the extent that any Legal Requirement applicable thereto prohibits the creation of a Lien thereon, but only, with respect to the prohibition in (i) and (ii), to the extent, and for as long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the Code or any other Legal Requirement;
(c) (i) all foreign intellectual property and (ii) any intent-to-use trademark applications prior to the filing of a Statement of Use or Amendment to Allege Use with respect thereto, to the extent, if any, that, and solely during the period, if any, in which the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under applicable federal law;
(d) fixed or capital assets owned by any Loan Party that are subject to a purchase money Lien or a capital lease if the contractual obligation pursuant to which such Lien is granted (or in the document providing for such capital lease) prohibits or requires the consent of any Person other than Borrower or any of its Affiliates as a condition to the creation of any other Lien on such equipment;
(e) motor vehicles subject to certificates of title (except to the extent perfection can be obtained by the filing of UCC financing statements);
(f) cash collateral pledged to a third-party to the extent permitted by the Revolving Credit Agreement, securing, in the case of letters of credit, an amount not to exceed the face amount of cash collateralized letters of credit for the benefit of any of the Loan Parties and, in the case of Hedging Obligations, not to exceed the amount of such Hedging Obligations;
(g) (i) the Equity Interests in the Kuukpik Joint Venture, (ii) any interest in any Equity Interests that is not directly owned by any Loan Party and (iii) any interest in any Equity Interests of any other joint venture, partnership or other entity that was or is existing (A) on the date hereof or (B) from and after the date hereof if such joint venture, partnership or other entity is not a Subsidiary of a Loan Party, in each case if and for so long as (x) the grant of a Lien with respect thereto is not permitted by the other partner, joint venture or joint venture partner, as applicable, and (y) the applicable Loan Party has used commercially reasonable efforts to obtain the right to grant a lien in such joint venture, partnership or other entity;
(h) Equity Interests in excess of 65% of all outstanding voting Equity Interests of any Foreign Subsidiary or any Foreign Subsidiary Holding Company and (ii) any Equity Interest of any Subsidiary of such Foreign Subsidiary or Foreign Subsidiary Holding Company;
(i) Any Collateral that has been released in accordance with the Security Documents, this Agreement, the Revolving Credit Agreement or the Intercreditor Agreement;
(j) [Intentionally Omitted];
(k) the Excluded Accounts;
(l) to the extent otherwise permitted under Section 6.12, any property or assets owned at any time or from time to time by any Foreign Subsidiary; and
(m) any asset or property constituting Equity Interests in a Foreign Subsidiary as to which the Required Lenders in their reasonable discretion will not seek to obtain or perfect a security interest thereon if the costs of obtaining or perfecting such security interest outweighs the benefit to the Secured Parties of the security afforded thereby (based on the fair market value of such asset or property) (it being understood that such determination in respect of assets described in this clause (m) shall only apply with respect to actions required to create or perfect a security interest in the Collateral under the laws of any non-U.S. jurisdiction).
provided that notwithstanding anything to the contrary contained in clauses (a) through (l) above to the contrary, (a) Excluded Property shall not include any Proceeds of property described in clauses (a) through (l) above (unless such proceeds are also described in such clauses), and (b) no property or assets that are subject to a Lien securing the Obligations, including, without limitation, Proceeds of Collateral in the form of Excluded Property, shall constitute Excluded Property so long as such Lien remains in effect; provided, further, that at such time as any of the foregoing property no longer constitutes Excluded Property, such property shall immediately constitute Collateral and a Lien on and security interest in and to all of the right, title and interest of the applicable Loan Party in, to and under such property shall immediately attach thereto.
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Excluded Taxes means any of the following Taxes imposed on or with respect to an Agent or Lender or required to be withheld or deducted from a payment to an Agent or Lender, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Agent or Lender being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in an Advance or Commitment pursuant to a law in effect on the date of which (i) such Lender acquires such interest in the Advance or Commitment (other than pursuant to an assignment request by Borrower under Section 14.3) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 16.1, amount with respect to such Taxes were payable either to such Lenders assignor immediately before such Lender became a party hereto or to such Lender immediately before it changes its lending office, (c) Taxes attributable to such Lenders failure to provide the documents and information described in Section 16.1(f) and (d) any withholding Taxes imposed under FATCA.
Existing Notes Documents means the Existing Notes Indenture and all other documents and agreements executed in connection therewith, together with the Intercreditor Agreement, and all other documents and agreements executed by Existing Notes Trustee and Loan Parties.
Existing Noteholder Obligations means the Existing Indenture Obligations as defined in the Intercreditor Agreement.
Existing Noteholders means Existing Noteholders, Existing Indenture Secured Parties, and Wilmington Savings Fund Society, FSB, as trustee and collateral agent for the Existing Noteholders, all as defined in the Intercreditor Agreement.
Existing Notes means the 10.000% Senior Secured Notes due 2019 issued by Borrower under the Existing Notes Indenture.
Existing Notes Indenture means the Indenture dated as of July 2, 2014 for 10.000% Senior Secured Notes due 2019, by and among Borrower, the Guarantors, and Wilmington Savings Fund Society, FSB as trustee and Existing Noteholder Collateral Agent.
Existing Notes Indenture Security Agreement means the Security Agreement as defined in the Existing Notes Indenture.
Existing Notes Indenture Secured Parties means the Secured Parties as defined in the Existing Notes Indenture Security Agreement.
Existing Notes Trustee means Wilmington Savings Fund Society, FSB in its capacity as noteholder collateral agent and trustee under the Existing Notes Indenture.
Expenses means all (a) reasonable documented out-of-pocket costs and expenses (including taxes, and insurance premiums) required to be paid by any Loan Party or any of its Subsidiaries or any Guarantor under any of the Loan Documents that are paid, advanced, or incurred by the Agent or the Lenders, (b) reasonable documented out-of-pocket fees or charges paid or incurred by the Agent or any Supporting Holder in connection with the negotiation, documentation, and execution of any of the Loan Documents and the transactions contemplated thereby, including reasonable documented out-of-pocket fees or charges for photocopying, notarization, couriers and messengers, telecommunication, public record searches (including tax lien, judgment lien, litigation, bankruptcy and Code searches and including searches with the patent and trademark office, the copyright office, or the department of motor vehicles), filing, recording, publication, appraisal (including periodic collateral appraisals or business valuations to the extent of the fees and charges (and up to the amount of any limitation contained in this Agreement), real estate surveys, real estate title insurance policies and endorsements, and environmental audits, (c) reasonable documented out-of-pocket charges paid or incurred by the Agent resulting from the dishonor of checks payable by or to any Loan Party, (d) reasonable documented out-of-pocket costs and expenses paid or incurred by the Agent or Lenders to correct any default or enforce any provision of the Loan Documents, or during the continuance of an Event of Default, in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated, (e) reasonable documented out-of-pocket fees and expenses to initiate electronic reporting by Borrower to the Agent, (f) reasonable documented out-of-pocket examination fees and expenses (including reasonable travel, meals, and lodging) of the Agent related to any inspections, audits, examinations, or appraisals to the extent of the fees and charges (and up to the amount of any limitation) contained in this Agreement, (g) reasonable documented out-of-pocket costs and expenses of third party claims or any other suit paid or incurred by the Agent or Lenders in enforcing or defending the Loan Documents or in connection with the transactions contemplated by the Loan Documents, (h) the Agents and the Supporting Holders reasonable documented out-of-pocket costs and expenses (including
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reasonable attorneys fees) incurred in advising, structuring, drafting, reviewing, administering (including reasonable travel, meals, and lodging), or amending the Loan Documents, (i) the Agent and Lenders reasonable documented out-of-pocket costs and expenses (including reasonable documented out-of-pocket attorneys, accountants, consultants, and other advisors fees and expenses) incurred in terminating, enforcing (including reasonable attorneys, accountants, consultants, and other advisors fees and expenses incurred in connection with a workout, a restructuring, or an Insolvency Proceeding concerning any Loan Party or any of its Subsidiaries or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether suit is brought, or in taking any Remedial Action concerning the Collateral and (j) any other reasonably documented out-of-pocket fees or expenses payable to the Agent in the amounts and at times separately agreed upon between Borrower and the Agent.
FATCA means Section 1471 through 1474 of the IRC, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the IRC, any published intergovernmental agreement entered into in connection with the implementation of the foregoing and any fiscal or regulatory legislation or rules adopted pursuant to such published intergovernmental agreements.
Fixtures means fixtures (as that term is defined in the Code).
Foreign Jurisdiction means a jurisdiction that is not a federal, state, or local jurisdiction in the United States or any territories thereof.
Foreign Lender means a Lender that is not a U.S. Person.
Foreign Located Assets means the assets or properties of Borrower or any Loan Party that are located in a Foreign Jurisdiction on the Closing Date and at all times thereafter, and that were reported as such in financial statements provided to Lender on or before the Closing Date.
Foreign Subsidiary means a Subsidiary of a Loan Party that is organized under the laws of a jurisdiction other than the United States, any state thereof or the District of Columbia.
Foreign Subsidiary Holding Company means any Domestic Subsidiary that is engaged in no material business activities other than the holding of Equity Interests and other investments in one or more Foreign Subsidiaries or other Foreign Subsidiary Holding Companies.
Funding Date means the date on which a Borrowing occurs and shall be the Initial Advance Date, the Second Advance Date or any Subsequent Advance Date.
GAAP means generally accepted accounting principles as in effect from time to time in the United States, consistently applied; provided, however, that all calculations relative to liabilities shall be made without giving effect to Statement of Financial Accounting Standards No. 159.
General Intangibles means general intangibles (as that term is defined in the Code), and includes payment intangibles, contract rights, rights to payment, rights under Hedge Agreements (including the right to receive payment on account of the termination (voluntarily or involuntarily) of any such Hedge Agreements), rights arising under common law, statutes, or regulations, choses or things in action, goodwill, Intellectual Property, Intellectual Property Licenses, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under any royalty or licensing agreements, including Intellectual Property Licenses, infringement claims, pension plan refunds, pension plan refund claims, insurance premium rebates, tax refunds, and tax refund claims, interests in a partnership or limited liability company which do not constitute a security under Article 8 of the Code, and any other personal property other than Commercial Tort Claims, money, Accounts, Chattel Paper, Deposit Accounts, Goods, Investment Related Property, Negotiable Collateral, and oil, gas, or other minerals before extraction.
Goods means goods (as that term is defined in the Code).
Governing Documents means, with respect to any Person, the certificate or articles of incorporation, by-laws, or other organizational documents of such Person.
Governmental Authority means any federal, state, local or foreign (whether civil, criminal, military or otherwise) court, central bank or governmental agency, tribunal, authority, instrumentality or regulatory body or any subdivision thereof or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
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Guaranteed Obligations has the meaning specified therefor in Section 18.2(a).
Guarantors means SAExploration, Inc., SAExploration Sub, Inc., NES, LLC, SAExploration Seismic Services (US), LLC and any Additional Guarantors, and each of them is a Guarantor.
Guaranty means the guaranty of the Guaranteed Obligations made by the Guarantors as set forth in Section 18 of this Agreement.
Guaranty Supplement has the meaning specified therefor in Section 18.6.
Hazardous Materials means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as hazardous substances, hazardous materials, hazardous wastes, toxic substances, or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or EP toxicity, (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million.
Hedge Agreement means a swap agreement as that term is defined in Section 101(53B) (A) of the Bankruptcy Code.
Hedging Obligations means Hedging Obligations as defined in the Revolving Credit Agreement.
Impacted Lender means any Lender that has a Person that directly or indirectly controls such Lender and such Person (a) becomes subject to a voluntary or involuntary case under the Bankruptcy Code or any similar bankruptcy laws, (b) has appointed a custodian, conservator, receiver or similar official for such Person or any substantial part of such Persons assets, or (c) makes a general assignment for the benefit of creditors, is liquidated, or is otherwise adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be, insolvent or bankrupt. For purposes of this definition, control means the possession of either (a) the power to vote, or the beneficial ownership of, 10% or more of the voting Stock of such Person (either directly or through the ownership of Stock equivalents) or (b) the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
Indebtedness as to any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, or other financial products, (c) all obligations of such Person as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of such Person, irrespective of whether such obligation or liability is assumed, (e) all obligations of such Person to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business and repayable in accordance with customary trade practices), (f) all obligations of such Person owing under Hedge Agreements (which amount shall be calculated based on the amount that would be payable by such Person if the Hedge Agreement were terminated on the date of determination), (g) any Prohibited Preferred Stock of such Person, and (h) any obligation of such Person guarantying or intended to guaranty (whether directly or indirectly guarantied, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (g) above. For purposes of this definition, the amount of any Indebtedness outstanding as of any date will be: (i) the accreted value of Indebtedness, in the cause of any Indebtedness issued with original issue discount; (ii) with respect to contingent obligations, the maximum liability upon the occurrences of the contingency giving rise to the obligation; (iii) with respect to Hedging Obligations, the net amount payable, if any, by the specified Persons if such Hedging Obligations terminated at that time due to default by such Person; (iv) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of: (1) the fair market value of such assets at the date of determination; or (2) the amount of such Indebtedness of the other Person; (v) the maximum amount Borrower and Loan Parties would become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, any Preferred Stock; (vi) the amount of the liability in respect thereof determined in accordance with GAAP, in the case of Indebtedness issued at a price that is less than the principal amount thereof; and (vii) the principal amount of the Indebtedness, in the case of any other Indebtedness. Indebtedness shall be calculated without giving effect to the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under the Loan Documents, the Revolving Loan Documents, the Existing Notes Documents or the New Senior Loan Documents as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.
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Indemnified Liabilities has the meaning specified therefor in Section 11.3.
Indemnified Person has the meaning specified therefor in Section 11.3.
Indemnified Taxes shall mean (i) Taxes imposed on or with respect to any payment made or due under any Loan Document other than Excluded Taxes and (ii) Other Taxes.
Information Certificate means the Information Certificate completed and executed by the Loan Parties attached hereto as Exhibit E.
Initial Advance means the Advance made pursuant to Section 2.1, in an amount not to exceed $5,600,000, that shall occur on the date on which the applicable conditions precedent set forth in Section 4 have been satisfied to the satisfaction of the Lenders.
Initial Advance Date means the date on which the Initial Advance is funded by the Lenders to Borrower.
Insolvency Proceeding means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, receiverships, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.
Intellectual Property means any and all Patents, Copyrights, Trademarks, trade secrets, know-how, inventions (whether or not patentable), algorithms, software programs (including source code and object code), processes, product designs, industrial designs, blueprints, drawings, data, customer lists, URLs and domain names, social media accounts and identifiers, specifications, documentations, reports, catalogs, literature, and any other forms of technology or proprietary information of any kind, including all rights therein and all applications for registration or registrations thereof.
Intellectual Property Licenses means, with respect to any Person (the Specified Party), (i) any licenses or other similar rights provided to the Specified Party in or with respect to Intellectual Property owned or controlled by any other Person, and (ii) any licenses or other similar rights provided to any other Person in or with respect to Intellectual Property owned or controlled by the Specified Party, in each case, including (A) any software license agreements (other than license agreements for commercially available off-the-shelf software that is generally available to the public on non-discriminatory terms which have been licensed to the Specified Party pursuant to end-user licenses), (B) the license agreements listed on Schedule 5.26(b) to the Information Certificate, and (C) the right to use any of the licenses or other similar rights described in this definition in connection with the enforcement of the Lenders rights under the Loan Documents.
Intercompany Canadian Note means the Promissory Note dated December 5, 2012, issued by SAExploration (Canada) Ltd. to SAExploration, Inc. 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.
Intercompany Indebtedness means all Indebtedness between or among any one or more of Borrower, the Loan Parties, and any of their Subsidiaries.
Intercompany Notes means the Intercompany Canadian Note, the Intercompany Subordinated Note and any other intercompany notes now owned or hereafter acquired by any of the Loan Parties and all certificates, instruments or agreements evidencing the Intercompany Notes and such other intercompany notes, and all assignments, amendments, amendments and restatements, supplements, extensions, renewals, replacements or modifications thereof.
Intercompany Subordinated Note means the Amended and Restated Global Intercompany Subordinated Note dated as of the Closing Date, issued by the Loan Parties and each of their direct Subsidiaries, evidencing the intercompany Indebtedness among them from time to time and at any time outstanding, as the same may be amended, restated, supplemented or otherwise modified from time to time.
Intercreditor Agreement means that certain Amended and Restated Intercreditor Agreement by and among the Revolving Loan Lender, the Existing Notes Trustee and Existing Noteholder Collateral Agent and the Agent, and, on or before the Second Advance Date and the New Senior Notes Trustee, and acknowledged and consented to by the Loan Parties, of even date herewith.
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Interest Rate means an interest rate equal to ten percent (10%) per year.
Inventory means inventory (as that term is defined in the Code).
Investment means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, guaranties, advances, capital contributions (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business not to exceed $500,000 in the aggregate during any fiscal year of Borrower, and (b) bona fide Accounts arising in the ordinary course of business), or acquisitions of Indebtedness, Stock, or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), and any other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.
Investment Related Property means (i) any and all investment property (as that term is defined in the Code), and (ii) any and all of the following (regardless of whether classified as investment property under the Code): all other Equity Interests.
IRC means the Internal Revenue Code of 1986, as amended.
Kuukpik Joint Venture means Kuukpik/SAExploration, LLC, an Alaska limited liability company and a joint venture between SAExploration, Inc. and Kuukpik Corporation.
Legal Requirements means, as to any Person, the organizational documents of such Person, and any governmental treaty, law (including the common law), statute, ordinance, code, rule, regulation, guidelines, license, permit requirement, order or determination of an arbitrator or a court or other Governmental Authority, and the interpretation or administration thereof, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Lender Party means each of the Agent, each Lender, and each participant.
Lender Representatives has the meaning specified therefor in Section 19.8(a).
Lender-Related Persons means for any Lender and the Agent, such Lender or Agent, together with its or their Affiliates officers, directors, employees, attorneys, and agents.
Lenders has the meaning specified therefor in the preamble to this Agreement and their respective permitted successors and assigns.
Lending Office means, with respect to any Lender, the office or offices of such Lender specified as its Lending Office beneath its name on the applicable signature page hereto, or such other office or offices of such Lender as it may from time to time notify Borrower and the Agent.
Lien means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest, or other security arrangement and any other preference, priority, or preferential arrangement of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.
Loan Documents means this Agreement, the Intercreditor Agreement, the Amended Intercompany Subordination Agreement, any collateral or security documents executed in connection herewith, and any Notes executed by Borrower in connection with this Agreement and payable to the Lenders, and any other instrument or agreement entered into, now or in the future, by any Loan Party or any of its Subsidiaries and the Lenders or the Agent in connection with this Agreement.
Loan Parties means collectively, Borrower and each Guarantor and each of them is a Loan Party.
Loan Parties Alaska Operations means all assets of the Loan Parties located in Alaska on the Closing Date, and all operations of the Loan Parties performed in Alaska, as represented to Lender in the Loan Parties financial statements provided to the Lenders prior to the Closing Date.
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Margin Stock as defined in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.
Material Adverse Change means (a) a material adverse change in the business, prospects, operations, results of operations, assets, liabilities or condition (financial or otherwise) of the Loan Parties and their Subsidiaries taken as a whole, (b) a material impairment of the ability of any Loan Party or any of its Subsidiaries to perform its obligations under the Loan Documents to which it is a party or of the Agents ability to enforce the Obligations or realize upon the Collateral, (c) a material impairment of the enforceability or priority of the Agents Liens with respect to the Collateral as a result of an action or failure to act on the part of any Loan Party or its Subsidiaries, or (d) any claim against any Loan Party or its Subsidiaries or written threat of material litigation which if determined adversely to any Loan Party or any of its Subsidiaries, would result in the occurrence of an event described in clauses (a), (b) or (c) above.
Material Contract means, with respect to any Person, (i) each contract or agreement to which such Person or any of its Subsidiaries is a party involving aggregate consideration payable to or by such Person or such Subsidiary of $500,000 or more (other than purchase orders in the ordinary course of the business of such Person or such Subsidiary), and, (ii) all other contracts or agreements, the loss of which could reasonably be expected to result in a Material Adverse Change.
Maturity Date has the meaning specified therefor in Section 2.5(a).
Moodys has the meaning specified therefor in the definition of Cash Equivalents.
Negotiable Collateral means letters of credit, letter-of-credit rights, instruments, promissory notes, drafts and documents (as each such term is defined in the Code).
Net Issuance Proceeds means, in respect of any issuance of debt or equity, cash proceeds (including cash proceeds as and when received in respect of non-cash proceeds received or receivable in connection with such issuance), net of underwriting discounts and reasonable out-of-pocket costs and expenses paid or incurred in connection therewith in favor of any Person not an Affiliate of Borrower (other than any Lender or Permitted Holder).
Net Proceeds means proceeds in cash, checks or other cash equivalent financial instruments (including Cash Equivalents) as and when received by the Person making a Disposition as well as insurance proceeds and condemnation and similar awards received on account of an Event of Loss, net of: (a) in the event of a Disposition (i) the direct costs relating to such Disposition excluding amounts payable to Borrower or any Affiliate of Borrower (other than any Lender or Permitted Holder), (ii) sale, use or other transaction Taxes paid or payable as a result thereof, (iii) amounts required to be applied to repay principal, interest and prepayment premiums and penalties on Indebtedness secured by a Lien on the asset which is the subject of such Disposition, (iv) income Taxes or gains (whether imposed on a Loan Party or, if such Loan Party is treated as a pass-through or disregarded entity for federal and state income Tax purposes or is a member of any consolidated, affiliated or unitary group, distributions pursuant to the paragraph (a) of the definition of Permitted Distributions), and (v) the amount of cash reserves or escrows established in connection with purchase price adjustments and retained liabilities; provided, however, when such cash or escrow is released to a Loan Party or one of its Subsidiaries, the amount so released shall be deemed to be Net Proceeds hereunder at such time, and (b) in the event of an Event of Loss, (i) all money actually applied to repair or reconstruct the damaged property or property affected by the condemnation or taking, (ii) all of the costs and expenses reasonably incurred in connection with the collection of such proceeds, award or other payments, and (iii) any amounts retained by or paid to parties having superior rights to such proceeds, awards or other payments.
New Senior Notes means the 10.000% Senior Notes due 2019 to be issued by Borrower under the New Senior Notes Indenture.
New Senior Notes Indenture means the indenture governing the New Senior Notes that will be issued as contemplated by the terms of the Restructuring Support Agreement.
New Senior Notes Documents means the New Senior Notes Indenture and any other instrument or agreement entered into, now or in the future, by any Loan Party or any of its Subsidiaries or the trustee of the New Senior Notes Indenture in connection with the New Senior Notes Indenture.
New Senior Notes Trustee means the trustee and collateral agent under the New Senior Notes Indenture.
New Senior Noteholders means Senior Noteholders as defined in the New Senior Notes Indenture, Additional Indenture Secured Parties as defined in the Intercreditor Agreement and the trustee and the collateral agent for the New Senior Noteholders.
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Non-Funding Lender means any Lender that has (a) failed to fund any payments required to be made by it under the Loan Documents within two (2) Business Days after any such payment is due (excluding expense and similar reimbursements that are subject to good faith disputes), unless and until such Lender has cured such failure in accordance with Section 2.13(e)(v), (b) given written notice (and the Agent has not received a revocation in writing), to Borrower, the Agent or any Lender or has otherwise publicly announced (and the Agent has not received notice of a public retraction) that such Lender believes it will fail to fund payments or purchases of participations required to be funded by it under the Loan Documents or two or more other syndicated credit facilities agented by the Agent, (c) failed to fund, and not cured, loans, participations, advances, or reimbursement obligations under two or more other syndicated credit facilities agented by the Agent, unless subject to a good faith dispute, or (d) any Lender that has (i) become subject to a voluntary or involuntary case under the Bankruptcy Code or any similar bankruptcy laws, (ii) a custodian, conservator, receiver or similar official appointed for it or any substantial part of such Persons assets, or (iii) made a general assignment for the benefit of creditors, been liquidated, or otherwise been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be, insolvent or bankrupt, and for this clause (d), the Agent has determined that such Lender is reasonably likely to fail to fund any payments required to be made by it under the Loan Documents.
Note means a promissory note of Borrower payable to a Lender, evidencing the Indebtedness of Borrower to such Lender resulting from Advances made to Borrower by such Lender or its predecessor(s) hereunder.
Obligations means all loans (including the Advances), debts, principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), premiums, liabilities, obligations (including indemnification obligations), fees, Expenses (including any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), guaranties, and all covenants and duties of any other kind and description owing by any Loan Party pursuant to or evidenced by this Agreement or any of the other Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, liquidated or unliquidated, determined or undetermined, voluntary or involuntary, due, not due or to become due, sole, joint, several or joint and several, incurred in the past or now existing or hereafter arising, however arising, and including all interest not paid when due, and all other expenses or other amounts that Borrower or any other Loan Party is required to pay or reimburse by the Loan Documents or by law or otherwise in connection with the Loan Documents. Any reference in this Agreement or in the Loan Documents to the Obligations shall include all or any portion thereof and any extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.
OFAC means The Office of Foreign Assets Control of the U.S. Department of the Treasury.
Officers Certificate means a certificate from an officer of Borrower, stating that: (i) the representations and warranties of Borrower and each other Loan Party set forth in this Agreement and in the other Loan Documents are true and correct in all material respects as of the date hereof (except to the extent such representations and warranties expressly relate solely to an earlier date, in which case such representations and warranties shall continue to be true and correct in all material respects as of such earlier date); and (ii) no Default or Event of Default has occurred and is continuing on and as of the date hereof, and neither will result from the Advance made on the date hereof.
Other Connection Taxes means, with respect to the Agent or any Lender, Taxes imposed as a result of a present or former connection between the Agent or such Lender and the jurisdiction imposing such Tax (other than connections arising from the Agent or such Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Advance or Loan Document).
Other Taxes means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 14.3).
Participation Period means the period commencing on the Closing Date and ending on the earlier of (i) the date that is twenty (20) days after the Closing Date and (ii) ten (10) Business Days prior to the Second Advance Date.
Patents means patents and patent applications, including (i) the patents and patent applications listed on Schedule 5.26(b) to the Information Certificate, (ii) all continuations, divisionals, continuations-in-part, re-examinations, reissues, and renewals thereof and improvements thereon, (iii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (iv) the right to sue for past, present, and future infringements thereof, and (v) all of Borrowers and each other Loan Partys rights corresponding thereto throughout the world.
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Patriot Act has the meaning specified therefor in Section 5.18 of Exhibit D to this Agreement.
PEP means politically exposed party under OFAC.
Permitted Affiliate Transactions means the following:
(a) any employment agreement, employee benefit plan, equity incentive plan, employee stock ownership plan, officer or director indemnification agreement, compensation agreement or arrangement, customary benefit programs or arrangements for employees, officers or directors (including vacation plans, health and life insurance plans, deferred compensation plans and retirement or savings plans) or any similar agreement or arrangement authorized by the applicable Board of Directors and entered into by any Loan Party in the ordinary course of business and payments pursuant thereto;
(b) payment of reasonable and customary fees and reimbursements of expenses (pursuant to indemnity arrangements or otherwise) of directors or officers of Loan Parties;
(c) loans or advances to employees for employment-related expenses in the ordinary course of business not to exceed $500,000 in the aggregate at any one time outstanding;
(d) so long as no Event of Default has occurred and is continuing, and to the extent not otherwise prohibited by this Agreement, transactions between or among Loan Parties and/or their Subsidiaries, other than the transfer of assets from a Loan Party to a non-Loan Party, unless otherwise expressly permitted hereunder;
(e) Permitted Indebtedness;
(f) Permitted Transactions;
(g) Permitted Investments;
(h) to the extent otherwise permitted, any transactions between Borrower or any Subsidiary of Borrower and any Person, a director of which is also a director of Borrower or a Subsidiary; provided that such director abstains from voting as a director of Borrower or the Subsidiary, as applicable, in connection with the approval of the transaction; and
(i) Permitted Dispositions.
Permitted Discretion means a determination made in the exercise of the good faith judgment of the Agent or the Required Lenders, as applicable (from the perspective of a secured lender). For the purposes of this agreement, acting on advice of counsel shall be deemed to be exercising good faith judgment.
Permitted Dispositions means:
(a) sales, abandonment, or other dispositions of Equipment that is substantially worn, damaged, or obsolete in the ordinary course of business;
(b) sales of Inventory to buyers in the ordinary course of business;
(c) the granting of Permitted Liens;
(d) the making of a Permitted Distribution or other disposition that is expressly permitted pursuant to Section 7.17 of this Agreement;
(e) the making of a Permitted Investment;
(f) sales, leases, conveyances or other dispositions of assets between or among the Loan Parties so long as the Agent is notified of such disposition;
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(g) the abandonment or relinquishment of assets, the waiver of contract rights or the settlement, release or surrender or contract, tort or other claims, in each case, in the ordinary course of business and in the exercise of reasonable business judgment;
(h) dispositions pursuant to condemnation or similar involuntary dispositions initiated by a Governmental Authority for consideration;
(i) dispositions in respect of Permitted Transactions;
(j) dispositions of assets for fair value of up to $1,500,000 in aggregate per fiscal year; and
(k) the sale or other dispositions of Alaska Tax Credits in an arms length transaction for fair value as determined by the applicable Loan Party in its reasonable business judgment.
Permitted Distributions means, to the extent permitted by law, the following distributions or dividends:
(a) distributions by a Loan Party or its Subsidiaries to any direct or indirect parent entity of any consolidated, affiliated or unitary group of which such Loan Party is a member in an amount sufficient to pay taxes imposed on such parent under applicable law to the extent attributable to the income or operations of such Loan Party or Subsidiary or their respective Subsidiaries; provided, that such parent entity is a Loan Party or a Subsidiary of a Loan Party;
(b) [Intentionally Omitted];
(c) so long as no Default or Event of Default shall have occurred and be continuing, the repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness of any Loan Party that is contractually subordinated to the Obligations with the net cash proceeds from or in exchange for a substantially concurrent incurrence of Refinancing Indebtedness;
(d) so long as no Default or Event of Default shall have occurred and be continuing, the payment of (i) any payments permitted pursuant to Section 7.7, (ii) fees and expenses described in subsection (b) of the definition of Permitted Affiliate Transactions, (iii) the payment of any dividend (or, in the case of any partnership, limited liability company, or other Person, any similar distribution) by a Loan Party or a Subsidiary of any Loan Party to any other Loan Party and (iv) other payments in an amount not to exceed $50,000 per year;
(e) so long as no Default or Event of Default shall have occurred and be continuing, the payments required to be made in accordance with the terms of the Management Incentive Plan (as defined under the Restructuring Support Agreement);
(f) so long as no Default or Event of Default shall have occurred and be continuing, the repurchase of Equity Interests deemed to occur upon the exercise of stock options or other equity awards to the extent such Equity Interests represent a portion of the exercise price of those stock options or other equity awards and any repurchase or other acquisition of Equity Interests made in lieu of or to satisfy withholding or similar Taxes in connection with any exercise or exchange of stock options, warrants, equity incentives, other equity awards or other rights to acquire Equity Interests;
(g) Permitted Transactions; and
(h) so long as no Default or Event of Default shall have occurred and be continuing, payments of cash, dividends, distributions, advances or other Restricted Payments by any Loan Party or any Subsidiary of a Loan Party to allow the payment of cash in lieu of the issuance of fractional shares upon (i) the exercise of warrants, stock options, awards under equity incentive plans or similar securities or (ii) the conversion or exchange of Capital Stock of any such Person or the conversion or exchange of Indebtedness of any such Person that is convertible into or exchangeable for Capital Stock of such Person.
Permitted Holder means any of (i) each Supporting Holder (as defined in the Restructuring Support Agreement) and (ii) any Related Party thereof.
Permitted Indebtedness means:
(a) Indebtedness evidenced by this Agreement or the other Loan Documents;
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(b) Indebtedness set forth on Schedule 5.19 to the Information Certificate and any Refinancing Indebtedness in respect of such Indebtedness;
(c) the incurrence by Borrower and the Guarantors of Indebtedness represented by the Existing Notes and the related Note Guarantees (as defined in the Existing Notes Indenture) issued under the Existing Notes Indenture, after giving effect to the Permitted Transactions and subject to the terms of the Intercreditor Agreement;
(d) Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in respect of such Indebtedness;
(e) endorsement of instruments or other payment items for deposit;
(f) the incurrence by any Loan Party or its/their Subsidiaries of Hedging Obligations that are permitted under the Revolving Credit Agreement and incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with such Loan Partys and its/their Subsidiaries operations and not for speculative purposes;
(g) Indebtedness incurred in respect of Bank Products (as defined in and permitted by the Revolving Credit Agreement) other than pursuant to Hedge Agreements;
(h) Indebtedness constituting Permitted Investments;
(i) the incurrence by Borrower or any other Loan Party of Intercompany Indebtedness between or among Loan Parties and/or any of their Subsidiaries; provided, however, that:
(i) such parties thereto are parties to the Amended Intercompany Subordination Agreement;
(ii) if any Loan Party is the obligor on such Indebtedness and the payee is not another Loan Party, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due;
(iii) any (aa) subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than a Loan Party or Subsidiary of any Loan Party, or (bb) sale or other transfer of any such Indebtedness to a Person that is not a Loan Party or Subsidiary of a Loan Party will be deemed, in each case, to constitute an incurrence of such Indebtedness by such Loan Party that was not permitted by this clause (i); and
(iv) such Intercompany Indebtedness is permitted under the Revolving Credit Agreement;
(j) the issuance by any Loan Party to any other Loan Party or a Subsidiary of a Loan Party of Permitted Preferred Stock; provided, however, that any:
(i) subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than a Loan Party or Subsidiary of a Loan Party,
(ii) sale or other transfer of any such Preferred Stock to a Person that is not either a Loan Party or Subsidiary of a Loan Party, or
(iii) issuance prohibited by the Revolving Credit Documents, in each case, will be deemed, to constitute an issuance of such Preferred Stock that was not permitted by this clause (j);
(k) the Guaranty by any Loan Party of Indebtedness of a Loan Party or Subsidiary of a Loan Party that was permitted to be incurred by such Loan Party pursuant to Section 7.1 or another provision of this definition; provided that if the Indebtedness being guarantied is subordinated to or pari passu with the Obligations, then the Guaranty shall be subordinated or pari passu, as applicable, to other Indebtedness of the Guarantor to the same extent as the Indebtedness guarantied;
(l) the incurrence by any Loan Party in the ordinary course of business of Indebtedness in favor of insurers, bond companies, and other direct counterparties in respect of workers compensation claims, insurance contracts, self-insurance obligations, bankers acceptances, performance and surety bonds and other similar guaranties of obligations not constituting Indebtedness;
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(m) the incurrence by a Loan Party or its Subsidiary of Indebtedness arising from the honoring by a bank or other financial institution other than the Lenders of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is less than $100,000 and is covered within five Business Days following receipt by Loan Party or such Subsidiary of notice or such event;
(n) [Intentionally Omitted];
(o) the accrual of interest or dividends on Permitted Preferred Stock, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Preferred Stock in the form of additional shares of the same class of Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Prohibited Preferred Stock;
(p) any Indebtedness equal to amounts advanced to a Loan Party in connection with the monetization of Alaska Tax Credits, in an amount not to exceed the amount of such Alaska Tax Credit(s), and secured exclusively by a Permitted Tax Credit Lien, provided that all amounts received in connection with the monetization of Alaska Tax Credits shall be used for the repayment of the Obligations other than as required by the Revolving Credit Agreement or as otherwise agreed by the Required Lenders;
(q) Indebtedness evidenced by the Revolving Credit Documents, to the extent permitted by the Intercreditor Agreement;
(r) the incurrence by Borrower and the Guarantors of Indebtedness represented by the New Senior Notes (and the related note guarantees) issued under the New Senior Notes Indenture subject to the terms of the Intercreditor Agreement; and
(s) Indebtedness incurred in respect of Permitted Transactions.
Permitted Investments means:
(a) Investments in Cash Equivalents;
(b) Investments in negotiable instruments deposited or to be deposited for collection in the ordinary course of business;
(c) advances made in connection with purchases of Goods or services in the ordinary course of business;
(d) Investments owned by any Loan Party or any of its Subsidiaries on the Closing Date and set forth on Schedule P-1;
(e) Investments resulting from entering into agreements relative to Indebtedness that is permitted under clause (f) or (g) of the definition of Permitted Indebtedness;
(f) any Investment in Borrower or a Loan Party, provided that no Event of Default has occurred and is continuing;
(g) any Investments received in compromise or resolution of (i) obligations of trade creditors or customers that were incurred in the ordinary course of business of Borrower or any Loan Party, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or (ii) litigation, arbitration or other disputes;
(h) funds expended on goods, deposits, and related items in the ordinary course of business in connection with services to be provided by a Loan Party to its customer, and for which such customer is required to reimburse such Loan Party;
(i) Investments made in connection with the Restructuring Support Agreement and any Permitted Transactions; and
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(j) any Investment by any Foreign Subsidiary in any other Foreign Subsidiary or any Person, if as a result the Person becomes a Foreign Subsidiary or the Person is merged or consolidated with or into a transfer or conveyance of all or substantially all of its assets to, or is liquidated into, any Foreign Subsidiary.
Permitted Liens means
(a) Liens granted to, or for the benefit of, Lender to secure the Obligations;
(b) Liens for Taxes (i) that are not yet delinquent, or (ii) are the subject of Permitted Protests;
(c) judgment Liens and notices of lis pendens arising solely as a result of the existence of lawsuits, judgments, orders, or awards that do not constitute an Event of Default under Section 9.3, provides that adequate reserves have been made therefor;
(d) Liens set forth on Schedule P-2; provided, however, that to qualify as a Permitted Lien, any such Lien described on Schedule P-2 shall only secure the Indebtedness that it secures on the Closing Date and any Refinancing Indebtedness in respect thereof;
(e) the interests of lessors under operating leases and non-exclusive licensors under license agreements entered into in the ordinary course of business;
(f) purchase money Liens or the interests of lessors under Capital Leases to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness and so long as (i) such Lien attaches only to the asset purchased or acquired and the proceeds thereof, and (ii) such Lien only secures the Indebtedness that was incurred to acquire the asset purchased or acquired or any Refinancing Indebtedness in respect thereof;
(g) Liens that are replacements of Permitted Liens to the extent that the original Indebtedness is the subject of permitted Refinancing Indebtedness and so long as the replacement Liens only encumber those assets that secured the original Indebtedness;
(h) Liens securing the Existing Notes and obligations under the Existing Notes Documents, subject to the terms of the Intercreditor Agreement;
(i) Liens in favor of any Loan Party on the assets of (i) any non-Loan Party, or (ii) a Loan Party if subject to a subordination and standstill agreement acceptable to the Lenders;
(j) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted Protests;
(k) Liens on amounts deposited to secure a Loan Partys obligations in connection with workers compensation or other unemployment insurance;
(l) Liens on amounts deposited to secure a Loan Partys reimbursement obligations with respect to surety or appeal bonds obtained in the ordinary course of business;
(m) Liens securing Indebtedness under the Revolving Credit Documents, subject to the terms of the Intercreditor Agreement;
(n) Liens on cash collateral for Hedging Obligations not to exceed the amount of such Hedging Obligations, to the extent such Hedging Obligations are permitted under the terms of the Revolving Credit Agreement;
(o) survey exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property or improvements or accessions that were not incurred in connection with Indebtedness and that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;
(p) any extension, renewal or replacement, in whole or in part of any Lien described above in this definition of Permitted Liens (other than Liens described in clause (a) of this definition of Permitted Liens); provided that any such extension, renewal or replacement does not extend to any additional property or assets (plus improvements, accessions, proceeds, replacements or dividends or distributions in respect thereof);
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(q) Liens securing the New Senior Notes and obligations under the New Senior Notes Documents, subject to the terms of the Intercreditor Agreement;
(r) Liens on any property in favor of a Governmental Authority to secure partial, progress, advance or other payments pursuant to any contract or statute, not yet due and payable;
(s) Liens encumbering deposits delivered to a Person to secure obligations arising from statutory, regulatory, contractual or warranty requirements incurred in the ordinary course of business;
(t) Liens on the assets of any Foreign Subsidiary securing Indebtedness of any Foreign Subsidiary; and
(u) any Permitted Tax Credit Lien; and
(v) Liens contemplated by the Restructuring Support Agreement or in respect of Permitted Transactions.
Permitted Preferred Stock means and refers to any Preferred Stock issued by a Borrower (and not by one or more of its Subsidiaries) that is not Prohibited Preferred Stock.
Permitted Protest means the right of Borrower or any other Loan Party or any of their respective Subsidiaries to protest any Lien (other than any Lien that secures the Obligations), Taxes, or rental payment, provided that (a) a reserve with respect to such obligation is established on Books and Records of such Borrower, such other Loan Party or such Subsidiary in such amount as is required under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by such Borrower, Loan Party or Subsidiary, as applicable, in good faith, (c) the Required Lenders are satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority (except as resulting from operation of law) of any of the Agents Liens, and (d) with respect to Liens of any Loan Partys subcontractors and suppliers, the Lien does not constitute a default under the Material Contract between such Loan Party and its customer relating thereto.
Permitted Purchase Money Indebtedness means, as of any date of determination, Purchase Money Indebtedness incurred after the Closing Date in an aggregate principal amount outstanding at any one time not in excess of $1,000,000.
Permitted Tax Credit Lien means a Lien on the rights of any Loan Party in or to any Alaska Tax Credit to secure the Indebtedness described in subsection (p) of the definition of Permitted Indebtedness.
Permitted Transactions means transactions contemplated by the Restructuring Support Agreement.
Person means and includes natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.
Platform has the meaning specified therefor in Section 19.8(c).
Pledged Certificated Stock means all certificated securities and any other Stock or Stock equivalent of any Person evidenced by a certificate, instrument or other similar document (as defined in the UCC), in each case owned by any Loan Party, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including all Stock and Stock equivalents listed on Schedule 5.1 to the Information Certificate. Pledged Certificated Stock excludes any Excluded Property and any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by this Agreement.
Pledged Collateral means, collectively, the Pledged Stock and the Pledged Debt Instruments.
Pledged Debt Instruments means all right, title and interest of any Loan Party in instruments evidencing any Indebtedness or other obligations owed to such Loan Party, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including all Indebtedness described on Schedule 6.12(l), issued by the obligors named therein. Pledged Debt Instruments excludes any Excluded Property and any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by this Agreement.
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Pledged Investment Property means any investment property of any Loan Party, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, other than any Pledged Stock or Pledged Debt Instruments. Pledged Investment Property excludes any Excluded Property and any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by this Agreement.
Pledged Stock means all Pledged Certificated Stock and all Pledged Uncertificated Stock.
Pledged Uncertificated Stock means any Stock or Stock equivalent of any Person that is not Pledged Certificated Stock, including all right, title and interest of any Loan Party as a limited or general partner in any partnership not constituting Pledged Certificated Stock or as a member of any limited liability company, all right, title and interest of any Loan Party in, to and under any organization document of any partnership or limited liability company to which it is a party, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including in each case those interests set forth on Schedule 5.1 to the Information Certificate, to the extent such interests are not certificated. Pledged Uncertificated Stock excludes any Excluded Property and any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by this Agreement.
Pledgor Foreign Property means any asset or property of the nature described in clause 13 of the definition of Excluded Property in the Intercreditor Agreement.
Postpetition Interest has the meaning specified therefor in Section 18.7(b).
Preempted Perfection Equipment has the meaning specified therefor in Section 6.12(k).
Preferred Stock means, as applied to the Stock of any Person, the Stock of any class or classes (however designated) that is preferred with respect to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Stock of any other class of such Person.
Proceeds has the meaning specified therefor in the definition of Collateral set forth in Schedule 1.1.
Prohibited Preferred Stock means any Preferred Stock that by its terms is mandatorily redeemable or subject to any other payment obligation (including any obligation to pay dividends, other than dividends of shares of Preferred Stock of the same class and series payable in kind or dividends of shares of common stock) on or before a date that is less than 1 year after the Maturity Date, or, on or before the date that is less than 1 year after the Maturity Date, is redeemable at the option of the holder thereof for cash or assets or securities (other than distributions in kind of shares of Preferred Stock of the same class and series or of shares of common stock).
Projections means Borrowers forecasted (a) balance sheets, (b) profit and loss statements, and (c) cash flow statements, all prepared on a basis consistent with such Borrowers historical financial statements, together with appropriate supporting details and a statement of underlying assumptions.
Protective Advance has the meaning specified therefor in Section 2.3(d).
PTO means the United States Patent and Trademark Office.
Public Lender has the meaning specified therefor in Section 19.8(c).
Purchase Money Indebtedness means Indebtedness (other than the Obligations, but including Capitalized Lease Obligations), incurred at the time of, or within 20 days after, the acquisition of any fixed assets for the purpose of financing all or any part of the acquisition cost thereof.
Real Property means any estates or interests in real property now owned or hereafter acquired by a Loan Party and the improvements thereto.
Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
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Refinancing Indebtedness means refinancings, renewals, or extensions of Indebtedness so long as:
(a) such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, or extended, other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto,
(b) such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity (measured as of the refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a whole, are or could reasonably be expected to be materially adverse to the interests of Lender,
(c) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are at least as favorable to Lender as those that were applicable to the refinanced, renewed, or extended Indebtedness, and
(d) the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended.
Related Party means:
(a) any controlling stockholder, 80% or more (based on voting power) owned Subsidiary, or immediate family member (in the case of an individual) of a Person described in clause (a) of the definition of Permitted Holder; or
(b) any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, members, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Permitted Holders.
Remedial Action means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) restore or reclaim natural resources or the environment, (d) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or (e) conduct any other actions with respect to Hazardous Materials required by Environmental Laws.
Required Lenders means, at any time, Lenders owed or holding more than 50% of the sum of (a) the aggregate principal amount of the Advances outstanding at such time and (b) the aggregate unused Commitments at such time.
Restricted Payments has the meaning specified therefor in Section 7.17(a)(iv).
Restructuring Support Agreement means the Restructuring Support Agreement, dated as of June 13, 2016, by and among Borrower and the Supporting Holders (as defined therein).
Revolving Credit Agreement means the Credit and Security Agreement by and among, SAExploration, Inc., as borrower, and SAExploration Holdings Inc., SAExploration Sub, Inc., NES, LLC, and SAExploration Seismic Services (US), LLC, as guarantors, and Wells Fargo Bank, National Association, as lender, dated as of November 6, 2014.
Revolving Credit Documents means the Revolving Credit Agreement and any Loan Document as defined in the Revolving Credit Agreement.
Revolving Loan Lender means the lender under the Revolving Credit Agreement.
Revolving Obligations means Obligations as defined in the Revolving Credit Agreement.
Sanctioned Entity means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.
Sanctioned Person means a person named on the list of Specially Designated Nationals maintained by OFAC.
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S&P has the meaning specified therefor in the definition of Cash Equivalents.
SEC means the United States Securities and Exchange Commission and any successor thereto.
Second Advance means the Advance made pursuant to Section 2.1, in an amount not to exceed $9,400,000, that shall occur on the date on which the applicable conditions precedent set forth in Section 4 have been satisfied to the satisfaction of the Lenders.
Second Advance Date means the date on which the Second Advance is funded by the Lenders to Borrower.
Secured Parties means collectively the Agent and the Lenders.
Securities Account means a securities account (as that term is defined in the Code).
Security Interest has the meaning specified therefor in Section 3.1.
Solvent means, with respect to any Person as of any date of determination, that (a) at fair valuations, the sum of such Persons debts (including contingent liabilities) is less than all of such Persons assets, (b) such Person is not engaged or about to engage in a business or transaction for which the remaining assets of such Person are unreasonably small in relation to the business or transaction or for which the property remaining with such Person is an unreasonably small capital, and (c) such Person has not incurred and does not intend to incur, or reasonably believe that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise), and (d) such Person is solvent or not insolvent, as applicable within the meaning given those terms and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).
Specified Movable Property means, the assets or properties of any Loan Party that are currently located in a Foreign Jurisdiction or hereafter are moved to a Foreign Jurisdiction, in each case that are under either an export or import or similar license or permit that requires such assets or property to leave such Foreign Jurisdiction no more than six months from the date they became situated in such Foreign Jurisdiction.
Stated Maturity means, with respect to any installment of interest or principal of any Indebtedness, the date on which the payment of interest or principal is scheduled to be paid in the documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
Stock means all shares, options, warrants, interests, participations, or other equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting, including common stock, preferred stock, or any other equity security (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).
Subordinated Obligations has the meaning specified therefor in Section 18.7.
Subsequent Advance means the Advances made pursuant to Section 2.1, in a maximum aggregate amount not to exceed the lesser of $15,000,000 and the aggregate amount of Lenders remaining Commitments, subject to the applicable conditions precedent set forth in Section 4 having been satisfied to the satisfaction of the Lenders; provided that there shall be no more than three (3) Subsequent Advances funded by the Lenders to the Borrower under this Agreement.
Subsequent Advance Date means the date on which any Subsequent Advance is funded by the Lenders to Borrower.
Subsidiary of a Person means a corporation, partnership, limited liability company, or other entity in which that Person directly or indirectly owns or controls the shares of Stock having ordinary voting power to elect a majority of the Board of Directors of such corporation, partnership, limited liability company, or other entity.
Supporting Obligations means supporting obligations (as such term is defined in the Code), and includes letters of credit and guaranties issued in support of Accounts, Chattel Paper, documents, General Intangibles, instruments or Investment Related Property.
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Taxes means any taxes, levies, imposts, duties, fees, assessments, withholding or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to such payments and all interest, penalties or similar additions with respect thereto.
Termination Date has the meaning specified therefor in Section 2.9.
Trademarks means any and all trademarks, trade names, service marks, trade dress, taglines, brand names, logos and corporate names, and all registrations and applications therefor, including (i) the trademarks, trade names, service marks, trade dress, taglines, brand names, logos and corporate names, and all registrations and applications therefor listed on Schedule 5.26(b) to the Information Certificate, (ii) all renewals thereof, (iii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements or dilutions thereof, (iv) the right to sue for past, present and future infringements and dilutions thereof, (v) the goodwill of each Loan Partys business symbolized by the foregoing or connected therewith, and (vi) all of Borrowers and each other Loan Partys rights corresponding thereto throughout the world.
United States means the United States of America.
URL means uniform resource locator, an internet web address.
U.S. Person means any Person that is a United States Person as defined in Section 7701(a)(30) of the IRC.
U.S. Tax Compliance Certificate has the meaning specified therefor in Section 16.1.
Voidable Transfer has the meaning specified therefor in Section 19.7.
b. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP; provided, however, that if Borrower notifies the Lenders that Borrower requests an amendment to any provision hereof to eliminate the effect of any change in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions) (an Accounting Change) occurring after the Closing Date, or in the application thereof (or if the Lenders notify Borrower that the Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such Accounting Change or in the application thereof, then the Lenders and Borrower agree that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such Accounting Change with the intent of having the respective positions of the Lenders and Borrower after such Accounting Change conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon, the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred. Whenever used herein, the term financial statements shall include the footnotes and schedules thereto. Whenever the term Borrower is used in respect of a financial covenant or a related definition, it shall be understood to mean Borrower and its respective Subsidiaries on a consolidated basis, unless the context clearly requires otherwise.
c. [Intentionally Omitted].
d. Construction. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms includes and including are not limiting, and the term or has, except where otherwise indicated, the inclusive meaning represented by the phrase and/or. The words hereof, herein, hereby, hereunder, and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in any other Loan Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). The words asset and property shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights. Except as expressly provided otherwise herein, any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations shall mean the repayment in full in cash or immediately available funds of all of the Obligations (including the payment of any Expenses that have accrued irrespective of whether demand has been made therefor and the payment of any termination amount then applicable (or which would or could become applicable as a result of the repayment of the other Obligations) under Hedge Agreements) other than unasserted contingent indemnification Obligations.
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Any reference herein to any Person shall be construed to include such Persons successors and assigns. Any requirement of a writing contained herein or in any other Loan Document shall be satisfied by the transmission of a Record. References herein to any statute or any provision thereof include such statute or provision (and all rules, regulations and interpretations thereunder) as amended, revised, re-enacted, and /or consolidated from time to time and any successor statute thereto.
e. Schedules and Exhibits. All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.
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Schedule 2.1
TO TERM LOAN AND SECURITY AGREEMENT
Pre-Syndication Initial Commitments
[See attached chart]
Schedule 2.1
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Schedule 2.12
TO TERM LOAN AND SECURITY AGREEMENT
Borrower shall pay to the Lenders each of the following fees, all of which shall be earned as of the Closing Date, but payable as follows:
On the Initial Advance Date:
Facility Fee. A facility fee equal to $600,000 shall be paid to the Lenders pro rata with the proceeds of the Initial Advance being made by them under this Agreement.
Schedule 2.12
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Schedule 6.1
TO TERM LOAN AND SECURITY AGREEMENT
Deliver to the Agent, each of the financial statements, reports, Projections or other items set forth below at the following times in form satisfactory to the Required Lenders:
as soon as available, but in any event within 30 days after the end of each month | (a) an unaudited consolidated and consolidating balance sheet, income statement, statement of cash flow, and statement of shareholders equity with respect to Borrower and its Subsidiaries during such period and compared to the prior period and plan, prepared in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes, together with a corresponding discussion and analysis of results from management; and
(b) a Compliance Certificate. | |
as soon as available, but in any event within 120 days after the end of each fiscal year | (a) consolidated and consolidating financial statements of Borrower and its Subsidiaries for such fiscal year, audited by independent certified public accountants reasonably acceptable to the Required Lenders, prepared in accordance with GAAP, and certified, without any qualifications (including any (A) going concern or like qualification or exception, (B) qualification or exception as to the scope of such audit, or (C) qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item), by such accountants to have been prepared in accordance with GAAP (such audited financial statements to include a balance sheet, income statement, statement of cash flow, and statement of shareholders equity and, if prepared, such accountants letter to management); and
(b) a Compliance Certificate. | |
as soon as available, but in any event within 30 days before the start of Borrowers fiscal years, | (a) copies of Borrowers Projections, in form and substance (including as to scope and underlying assumptions) satisfactory to the Required Lenders, in their Permitted Discretion, for the forthcoming fiscal year, on a monthly basis, certified by the chief financial officer of Borrower as being such officers good faith estimate of the financial performance of Borrower and its respective Subsidiaries during the period covered thereby. | |
if and when filed by Borrower, | (a) Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current reports;
(b) any other filings made by Borrower with the SEC; and
(c) any other information that is provided by Borrower to its shareholders generally. |
Schedule 6.1
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Schedule 6.2
TO TERM LOAN AND SECURITY AGREEMENT
Provide the Agent with each of the documents and information set forth below at the following times:
When delivered to Revolving Loan Lender | (a) copies of any documentation, report, notice, compliance certificate, or other material information, delivered to the Revolving Loan Lender pursuant to the terms of the Revolving Credit Documents. | |
When delivered to Existing Noteholders | (a) copies of any documentation, report, notice, compliance certificate, or other material information, delivered to Existing Noteholders pursuant to the terms of the Existing Notes Documents. | |
When delivered to the New Senior Noteholders | (a) copies of any documentation, report, notice, compliance certificate, or other material information, delivered to New Senior Noteholders pursuant to the terms of the New Senior Notes Documents. |
Schedule 6.2
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Schedule 6.6
TO TERM LOAN AND SECURITY AGREEMENT
Insurance
Policy Description |
Policy Number | |
CAN Limits/Funds | ||
Property Office Contents |
PF7434712 | |
Aircraft Non-Owned Liability |
AIM1264675 | |
CAN Automobile Liability |
99488490 | |
Contingent Cover(s) Various |
||
USA Limits/Funds | ||
Property Cargo/CEF/Interruption |
ERS127429 | |
Commercial General Liability |
5466082 | |
Umbrella Legal Liability |
5466083 | |
Foreign Commercial General Liability |
80-0269295 | |
Foreign Automobile Liability |
80-0266296 | |
Foreign WC/Employers Liability |
84-49864 | |
Hull & Machinery/Protection & Indemnity |
OCH7222151 | |
Charters Legal Liability |
OCM7222152 | |
Excess Charters Legal Liability |
ER127429 | |
USA Automobile Liability |
BAP549889 | |
USA Workers Compensation/Employers Liability |
WC5489890 |
Schedule 6.6
Page 1
Schedule 6.12(l)
TO TERM LOAN AND SECURITY AGREEMENT
Pledged Debt Instruments
1. | Intercompany Canadian Note. |
2. | Intercompany Subordinated Note. |
Schedule 6.12(l)
Page 1
EXHIBIT A
TO TERM LOAN AND SECURITY AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
[on Borrowers letterhead]
To: | Delaware Trust Company, as Administrative Agent and Collateral Agent |
[●]
Re: | Compliance Certificate dated [ ] |
Ladies and Gentlemen:
Reference is made to that certain Term Loan and Security Agreement ( as amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement) dated as of June 29, 2016, by and among SAExploration Holdings, Inc., a Delaware corporation (Borrower), SAExploration Inc., a Delaware corporation, SAExploration Sub, Inc., a Delaware corporation, NES, LLC, an Alaska limited liability company, and SAExploration Seismic Services (US), LLC, a Delaware limited liability company (collectively, the Guarantors), the lenders party thereto from time to time (the Lenders), and Delaware Trust Company, in its capacity as administrative agent (the Administrative Agent) and as collateral agent (the Collateral Agent, and together with the Administrative Agent, collectively, the Agent). Capitalized terms used in this Compliance Certificate have the meanings set forth in the Credit Agreement unless specifically defined herein.
Pursuant to Schedule 6.1 of the Credit Agreement, the undersigned officer of SAExploration Holdings, Inc. on behalf of Borrower and the other Loan Parties hereby certifies (solely in his or her capacity as an officer of Borrower and not in an individual capacity) that:
1. Attached is the financial information of Borrower and its Subsidiaries which is required to be furnished to the Agent pursuant to Section 6.1 of the Credit Agreement for the period ended , (the Reporting Date). Such financial information has been prepared in accordance with GAAP, and fairly presents in all material respects the financial condition of Borrower and its Subsidiaries.
2. Such officer has reviewed the terms of the Credit Agreement and has made, or caused to be made under his/her supervision, a review in reasonable detail of the transactions and condition of Borrower and its Subsidiaries during the accounting period covered by the financial statements delivered pursuant to Schedule 6.1 of the Credit Agreement.
3. Such review has not disclosed the existence on and as of the date hereof, and the undersigned does not have knowledge of the existence as of the date hereof, of any event or condition that constitutes a Default or Event of Default.
4. The representations and warranties of each Loan Party and its Subsidiaries set forth in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the date hereof (except to the extent they relate to a specified date).
5. As of the Reporting Date, the Loan Parties and their respective Subsidiaries are in compliance with the applicable covenants contained in Section 7 of the Credit Agreement.
IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned this day of , 20 .
SAEXPLORATION HOLDINGS, INC. | ||
By: |
| |
Name: |
| |
Title: |
|
Exhibit A
Page 1
EXHIBIT B
TO TERM LOAN AND SECURITY AGREEMENT
CONDITIONS PRECEDENT
1. | The obligations of the Lenders to make the Initial Advance provided for in Section 2.1 of this Agreement is subject to the fulfilment, to the satisfaction of the Agent and the Required Lenders, of each of the following conditions precedent on or before June 29, 2016: |
(a) the Agent shall have received appropriate financing statements in proper form for filing in such office or offices as may be necessary or, in the opinion of the Required Lenders, desirable to perfect the Agents Liens in and to the Collateral;
(b) the Agent and the Lenders shall have received each of the following documents, in form and substance satisfactory to the Agent and the Lenders, duly executed, and each such document shall be in full force and effect:
(i) | this Agreement and the other Loan Documents, |
(ii) | the Intercreditor Agreement, and |
(iii) | the Officers Certificate, |
(c) the Agent and the Lenders shall have received a certificate from the Secretary of each Loan Party (i) attesting to the resolutions of such Loan Partys Board of Directors authorizing its execution, delivery, and performance of this Agreement and the other Loan Documents to which such Loan Party is a party, (ii) authorizing specific officers of such Loan Party to execute the same, and (iii) attesting to the incumbency and signatures of such specific officers of such Loan Party;
(d) the Lenders shall have received copies of each Loan Partys Governing Documents, as amended, modified, or supplemented to the Closing Date, certified as true, correct and complete by the Secretary of such Loan Party;
(e) the Lenders shall have received a certificate of status with respect to each Loan Party, dated within 10 days of the Closing Date, or such earlier date as the Lenders permit in their sole discretion, such certificate to be issued by the appropriate officer of the jurisdiction of organization of each Loan Party, which certificate shall indicate that such Loan Party is in good standing in such jurisdiction;
(f) the Agent and the Lenders shall have received an opinion of Borrowers counsel in form and substance satisfactory to the Agent and the Lenders;
(g) the Agent shall have received, at least five days prior to the Closing Date, all documentation and other information required by regulatory authorities under applicable know your customer and anti-money laundering rules and regulations, including, without limitation, the Patriot Act, that is requested in writing by the Agent at least ten days prior to the Closing Date.
(h) Borrower shall have paid all Expenses incurred in connection with the transactions evidenced by this Agreement and invoiced to Borrower at least two days prior to the Closing Date;
(i) all other documents and legal matters in connection with the transactions contemplated by this Agreement shall have been delivered, executed, or recorded and shall be in form and substance reasonably satisfactory to the Lenders;
(j) Borrower and Existing Noteholders holding not less than 66.67% of the outstanding principal amounts of the Existing Notes shall have executed the Restructuring Support Agreement, and such Restructuring Support Agreement shall be in full force and effect and each of the transactions or actions contemplated thereunder to occur prior to the Initial Advance shall have been consummated or waived;
(k) the Exchange Offer (as defined in the Restructuring Support Agreement) shall have been launched;
Exhibit B
Page 1
(l) Borrower shall have obtained the necessary consents, amendments and waivers under the Revolving Credit Documents to permit the Restructuring (as defined in the Restructuring Support Agreement) and the incurrence of Indebtedness under this Agreement and the New Senior Notes Indenture; and
(m) Borrower shall have obtained the necessary consents, amendments and waivers under the Existing Notes Documents as contemplated by the Restructuring Support Agreement to permit the Restructuring (as defined in the Restructuring Support Agreement) and the incurrence of Indebtedness under this Agreement and the New Senior Notes Indenture.
2. | The obligations of the Lenders to make its second extension of credit, the Second Advance provided for in Section 2.1 of this Agreement, are subject to the fulfilment, to the satisfaction of the Lenders, of each of the following conditions precedent on or before the date of such extension: |
(a) Borrower shall have fulfilled, to the satisfaction of the Lenders, each condition to the Initial Advance set forth above.
(b) The Restructuring (as defined in the Restructuring Support Agreement) and the other transactions contemplated by the exhibits thereto that are intended by the Restructuring Support Agreement to be consummated prior to the making of the Second Advance shall have been consummated, including the issuance of Backstop Shares (as defined in the Restructuring Support Agreement) and the issuance of the New Senior Notes.
(c) the Agent and the Lenders shall have received copies of the policies of insurance and certificates of insurance, together with the endorsements thereto, as are required by Section 6.6, the form and substance of which shall be reasonably satisfactory to the Required Lenders.
3. | The obligation of the Lenders to make any Subsequent Advance is subject to the fulfilment, to the satisfaction of the Lenders, of each of the following conditions precedent on or before the date of such extension: |
(a) Borrower shall have fulfilled, to the satisfaction of the Lenders, each condition to the Second Advance set forth above.
(b) Borrower shall have received tax credit certificates from the State of Alaska in a face amount of at least $25,000,000.
For purposes of determining compliance with the conditions specified in this Exhibit B, each Lender shall 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 unless an officer of the Agent responsible for the transactions contemplated by the Loan Documents shall have received written notice from such Lender prior to the Closing Date specifying its objection thereto and such Lender shall not have made available to the Agent such Lenders ratable portion of the Initial Advance, Second Advance, or Subsequent Advance, as applicable.
Exhibit B
Page 2
EXHIBIT C
TO TERM LOAN AND SECURITY AGREEMENT
[INTENTIONALLY OMITTED]
Exhibit C
Page 1
EXHIBIT D
TO TERM LOAN AND SECURITY AGREEMENT
REPRESENTATIONS AND WARRANTIES
5.1 Due Organization and Qualification; Subsidiaries.
(a) Each Loan Party and each Subsidiary of each Loan Party (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its organization, (ii) is qualified to do business in any jurisdiction where the failure to be so qualified could reasonably be expected to result in a Material Adverse Change, and (iii) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.
(b) Set forth on Schedule 5.1(b) to the Information Certificate is a complete and accurate description of the authorized Capital Stock of each Loan Party, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding. Other than as described on Schedule 5.1(b) to the Information Certificate or as contemplated under the Restructuring Support Agreement, as of the Closing Date, there are no subscriptions, options, warrants, or calls relating to any shares of any Loan Partys Capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. No Loan Party is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its Capital Stock or any security convertible into or exchangeable for any of its Capital Stock.
(c) Set forth on Schedule 5.1(c) to the Information Certificate (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement), is a complete and accurate list of the Loan Parties direct and indirect Subsidiaries, showing: (i) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries, and (ii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by each Loan Party. All of the outstanding Capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable.
(d) Except as set forth on Schedule 5.1(c) to the Information Certificate or as contemplated under the Restructuring Support Agreement, there are no subscriptions, options, warrants, or calls relating to any shares of any Capital stock or any Loan Party or of any of its Subsidiaries, including any right of conversion or exchange under any outstanding security or other instrument. No Loan Party nor any of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of such Loan Partys Subsidiaries Capital Stock or any security convertible into or exchangeable for any such Capital Stock.
5.2 Due Authorization; No Conflict.
(a) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party have been duly authorized by all necessary action on the part of such Loan Party.
(b) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party do not and will not (i) violate any material provision of federal, state, or local law or regulation applicable to any Loan Party or its Subsidiaries, the Governing Documents of any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party or its Subsidiaries, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Loan Party or its Subsidiaries except to the extent that any such conflict, breach or default has been waived or could not individually or in the aggregate reasonably be expected to cause a Material Adverse Change, (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, other than Permitted Liens, or (iv) require any approval of any Loan Partys interest holders or any approval or consent of any Person under any Material Contract of any Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Material Contracts, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Change.
5.3 Governmental and Other Consents. Other than the consents necessary under the Revolving Credit Documents and the Existing Notes Documents which have been obtained, and subject to the Intercreditor Agreement, no consent, approval, authorization, or other order or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required (a) for the grant of a Lien by such Loan Party in and to the Collateral pursuant to this Agreement or the
Exhibit D
Page 1
other Loan Documents or for the execution, delivery, or performance of this Agreement by such Loan Party, or (b) for the exercise by the Agent or Lenders of the voting or other rights provided for in this Agreement with respect to the Investment Related Property or the remedies in respect of the Collateral pursuant to this Agreement, except as may be required in connection with such disposition of Investment Related Property by laws affecting the offering and sale of securities generally. No Intellectual Property License of any Loan Party that is necessary to the conduct of such Loan Partys business requires any consent of any other Person in order for such Loan Party to grant the security interest granted hereunder in such Loan Partys right, title or interest in or to such Intellectual Property License.
5.4 Binding Obligations. Each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors rights generally.
5.5 Title to Assets; No Encumbrances. Each of the Loan Parties and its Subsidiaries has (a) good, sufficient and legal title to (in the case of fee interests in Real Property), (b) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (c) good and marketable title to (in the case of all other personal property), all of their respective assets reflected in their most recent financial statements delivered pursuant to Section 6.1, except for assets disposed of since the date of such financial statements to the extent permitted hereby. All of such assets are free and clear of Liens except for Permitted Liens.
5.6 Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number; Commercial Tort Claims.
(a) The exact legal name of and jurisdiction of organization of each Loan Party is set forth on Schedule 5.6(a) to the Information Certificate (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).
(b) The chief executive office of each Loan Party is located at the address indicated on Schedule 5.6(b) to the Information Certificate (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).
(c) The tax identification number and organizational identification number, if any, of each Loan Party are identified on Schedule 5.6(c) to the Information Certificate (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).
(d) As of the Closing Date, no Loan Party holds any Commercial Tort Claims that exceed $250,000 in amount, except as set forth on Schedule 5.6(d) to the Information Certificate.
5.7 Litigation.
(a) There are no actions, suits, or proceedings pending or, to the knowledge of any Loan Party, after due inquiry, threatened in writing against a Loan Party or any of its Subsidiaries that either individually or in the aggregate could reasonably be expected to result in a Material Adverse Change.
(b) Schedule 5.7(b) to the Information Certificate sets forth a complete and accurate description, with respect to each of the actions, suits, or proceedings in excess of, or that could reasonably be expected to result in liabilities in excess of, $250,000 that, as of the Closing Date, is pending or, to the knowledge of any Loan Party, after due inquiry, threatened against any Loan Party or any of its Subsidiaries, including (i) the parties to such actions, suits, or proceedings, (ii) the nature of the dispute that is the subject of such actions, suits, or proceedings, (iii) the status, as of the Closing Date, with respect to such actions, suits, or proceedings, and (iv) whether any liability of any Loan Party or any Subsidiary in connection with such actions, suits, or proceedings is covered by insurance.
5.8 Compliance with Laws. No Loan Party nor any of its Subsidiaries (a) is in violation of any applicable laws, rules, regulations, executive orders, or codes (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change.
5.9 No Material Adverse Change. All historical financial statements relating to the Loan Parties and their Subsidiaries that have been delivered by Borrower to the Agent and the Lenders hereunder have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit
Exhibit D
Page 2
adjustments) and present fairly in all material respects, the consolidated financial condition of the Loan Parties and their Subsidiaries as of the date thereof and results of operations for the period then ended. Since the date of the most recent financial statement delivered to the Agent and the Lenders hereunder, no event, circumstance, or change has occurred that has or could reasonably be expected to result in a Material Adverse Change with respect to the Loan Parties and their Subsidiaries.
5.10 Fraudulent Transfer.
(a) After giving effect to the Restructuring (as defined in the Restructuring Support Agreement), each Loan Party is Solvent.
(b) No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.
(c) All Loan Parties have and will receive a direct or indirect benefit from the transactions contemplated by this Agreement and the other Loan Documents.
5.11 Employee Benefits. No Loan Party, none of their Subsidiaries, nor any of their ERISA Affiliates maintains, contributes to, or has an obligation to contribute to, or, within the past six (6) years, has maintained, contributed to or had an obligation to contribute to any Benefit Plan.
5.12 Environmental Condition. Except as set forth on Schedule 5.12 to the Information Certificate, (a) to each Loan Partys knowledge, no properties or assets of any Loan Party or any of its Subsidiaries have ever been used by a Loan Party, its Subsidiaries, or by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such disposal, production, storage, handling, treatment, release or transport was in violation, in any material respect, of any applicable Environmental Law, (b) to each Loan Partys knowledge, after due inquiry, no Loan Partys nor any of its Subsidiaries properties or assets have ever been designated or identified in any manner pursuant to any environmental protection statute as a Hazardous Materials disposal site, (c) no Loan Party nor any of its Subsidiaries has received notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by a Loan Party or its Subsidiaries, and (d) no Loan Party nor any of its Subsidiaries nor any of their respective facilities or operations is subject to any outstanding written order, consent decree, or settlement agreement with any Person relating to any Environmental Law or Environmental Liability that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change.
5.13 Intellectual Property. Each Loan Party and each of its Subsidiaries own, or hold licenses in, all Intellectual Property and Intellectual Property Licenses that are necessary or useful to the conduct of its business as currently conducted free and clear of all Liens except for Permitted Liens.
5.14 Leases. Each Loan Party and each of its Subsidiaries enjoy peaceful and undisturbed possession under all leases material to their business and to which it is a party or under which it is operating, and, subject to Permitted Protests, all of such material leases are valid and subsisting and no material default by the applicable Loan Party or the applicable Subsidiary exists under any of them.
5.15 Deposit Accounts and Securities Accounts. Set forth on Schedule 5.15 to the Information Certificate (as updated pursuant to Section 6.12(j)(iv)) is a listing of all of the Deposit Accounts and Securities Accounts of each Loan Party and each of its Subsidiaries, including, with respect to each bank or securities intermediary (a) the name and address of such Person, and (b) the account numbers of the Deposit Accounts or Securities Accounts maintained with such Person.
5.16 Complete Disclosure. All factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about the industry of a Loan Party or any of its Subsidiaries) furnished by or on behalf of a Loan Party or any of its Subsidiaries in writing to the Agent and the Lenders (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement or the other Loan Documents, and all other such factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about the industry of a Loan Party or any of its Subsidiaries) hereafter furnished by or on behalf of a Loan Party or any of its Subsidiaries in writing to the Agent and the Lenders will be, true and accurate, in all material respects, on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. The Projections most recently delivered to the Agent and the Lenders represent, and as of the date on which any other Projections are delivered to the Agent and the Lenders, such additional Projections represent, Borrowers good faith estimate, on the date such Projections are delivered, of the future performance of a Loan Party or any of its Subsidiaries for the periods covered thereby based upon assumptions believed by Borrower to be reasonable at the time of the delivery thereof to the Agent and the Lenders.
Exhibit D
Page 3
5.17 Material Contracts. Set forth on Schedule 5.17 to the Information Certificate (as such Schedule may be updated from time to time in accordance herewith) is a reasonably detailed description of the Material Contracts of each Loan Party and each of its Subsidiaries as of the most recent date on which Borrower provided its Compliance Certificate pursuant to Section 6.1; provided, however, that Borrower may amend Schedule 5.17 to the Information Certificate to add additional Material Contracts so long as such amendment occurs by written notice to the Agent on the date that such Borrower provides its Compliance Certificate. Except for matters which, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change, each Material Contract (other than those that have expired at the end of their normal terms) (a) is in full force and effect and is binding upon and enforceable against the applicable Loan Party or the applicable Subsidiary and, to such Borrowers knowledge, after due inquiry, each other Person that is a party thereto in accordance with its terms, (b) has not been otherwise amended or modified (other than amendments or modifications permitted by Section 7.8), and (c) is not in default due to the action or inaction of the applicable Loan Party or the applicable Subsidiary.
5.18 Patriot Act. To the extent applicable, each Loan Party and each of its Subsidiaries is in compliance, in all material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the Patriot Act). No part of the proceeds of the loans made hereunder will be used by any Loan Party or any of its Subsidiaries or any of their Affiliates, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
5.19 Indebtedness. Set forth on Schedule 5.19 to the Information Certificate is a true and complete list of all Indebtedness of each Loan Party and each of its Subsidiaries outstanding immediately prior to the Closing Date that is to remain outstanding immediately after giving effect to the closing hereunder on the Closing Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the Closing Date.
5.20 Payment of Taxes. Except as otherwise permitted under Section 6.5, all material Tax returns and reports of each Loan Party and each of its Subsidiaries required to be filed by any of them have been timely filed, and are substantially correct and complete. Except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change, each Loan Party and each of its Subsidiaries has timely paid all material Taxes shown on such Tax returns to be due and payable and all assessments, fees and other governmental charges upon a Loan Party and its Subsidiaries and upon their respective assets, income, businesses and franchises that are due and payable have been paid when due and payable. Each Loan Party and each of its Subsidiaries have made adequate provision in accordance with GAAP for all material Taxes not yet due and payable. No Borrower knows of any proposed Tax assessment against a Loan Party or any of its Subsidiaries that is not being actively contested by such Loan Party or such Subsidiary diligently, in good faith, and by appropriate proceedings; provided such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.
5.21 Margin Stock. No Loan Party nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the loans made to Borrower will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors of the United States Federal Reserve.
5.22 Governmental Regulation. No Loan Party nor any of its Subsidiaries is subject to regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable. No Loan Party nor any of its Subsidiaries is a registered investment company or a company controlled by a registered investment company or a principal underwriter of a registered investment company as such terms are defined in the Investment Company Act of 1940.
5.23 OFAC. No Loan Party nor any of its Subsidiaries is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC. No Loan Party nor any of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. No proceeds of any loan made hereunder will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.
5.24 Employee and Labor Matters. There is (a) no unfair labor practice complaint pending or, to the knowledge of Borrower, threatened against any Loan Party or any of its Subsidiaries before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against any Loan Party or any of its Subsidiaries which arises out of or under any
Exhibit D
Page 4
collective bargaining agreement and that could reasonably be expected to result in a material liability, (b) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or threatened in writing against any Loan Party or any of its Subsidiaries that could reasonably be expected to result in a material liability, or (c) to the knowledge of Borrower, after due inquiry, no union representation question existing with respect to the employees of any Loan Party or any of its Subsidiaries and no union organizing activity taking place with respect to any of the employees of any Loan Party or any of its Subsidiaries. No Loan Party or any of its Subsidiaries has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act or similar state law, which remains unpaid or unsatisfied. The hours worked and payments made to employees of each Loan Party and each of its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable legal requirements, except to the extent such violations could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change. All material payments due from any Loan Party or any of its Subsidiaries on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the Books of such Loan Party, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.
5.25 [Intentionally Omitted]
5.26 Collateral.
(a) Real Property. Schedule 5.26(a) to the Information Certificate sets forth all Real Property owned by any of the Loan Parties as of the Closing Date.
(b) Intellectual Property.
(i) As of the Closing Date, Schedule 5.26(b) to the Information Certificate provides a complete and correct list of: (A) all registered Copyrights owned by any Loan Party, all applications for registration of Copyrights owned by any Loan Party, and all other Copyrights owned by any Loan Party and material to the conduct of the business of any Loan Party; (B) all Intellectual Property Licenses entered into by any Loan Party that is material to the business of such Loan Party, including any Intellectual Property that is incorporated in any Inventory, software, or other product marketed, sold, licensed, or distributed by such Loan Party; (C) all Patents owned by any Loan Party and all applications for Patents owned by any Loan Party; and (D) all registered Trademarks owned by any Loan Party, all applications for registration of Trademarks owned by any Loan Party, and all other Trademarks owned by any Loan Party and material to the conduct of the business of any Loan Party;
(ii) all employees and contractors of each Loan Party who were involved in the creation or development of any Intellectual Property for such Loan Party that is necessary to the business of such Loan Party have signed agreements containing assignment of Intellectual Property rights to such Loan Party and obligations of confidentiality;
(iii) to each Loan Partys knowledge after reasonable inquiry, no Person has infringed, misappropriated or otherwise violated or is currently infringing, misappropriating or otherwise violating any Intellectual Property rights owned by such Loan Party, in each case, that either individually or in the aggregate could reasonably be expected to result in a Material Adverse Change;
(iv) to each Loan Partys knowledge after reasonable inquiry, (x) no holding, injunction, decision or judgment has been rendered by a Governmental Authority against Borrower or any other Loan Party and neither Borrower nor any other Loan Party has entered into any stipulation, settlement or other agreement that would limit, cancel or question the validity of Borrowers or any other Loan Partys rights in any Intellectual Property, (y) no claim has been asserted or threatened or is pending by any Person challenging or questioning the use by Borrower or any other Loan Party of any Intellectual Property owned by such party or the validity or effectiveness of any Intellectual Property, and (z) the use of Intellectual Property by Borrower and each other Loan Party does not infringe on the rights of any Person, in each case, in any respect that could reasonably be expected to result in a Material Adverse Change;
(v) to each Loan Partys knowledge after reasonable inquiry, all registered Copyrights, registered Trademarks, and issued Patents that are owned by such Loan Party and necessary in to the conduct of its business are valid, subsisting and enforceable and in compliance with all legal requirements, filings, and payments and other actions that are required to maintain such Intellectual Property in full force and effect;
(vi) any Intellectual Property contained in, or necessary for the operation of Equipment is embedded in such Equipment and constitutes a part of such Goods pursuant to the Code;
(vii) each Loan Party has taken all reasonable steps to protect their Intellectual Property, including to maintain the confidentiality of and otherwise protect and enforce its rights in all trade secrets owned by such Loan Party that are necessary in the business of such Loan Party;
Exhibit D
Page 5
(c) Schedule 5.26(c) to the Information Certificate sets forth all motor vehicles and vessels owned by each Loan Party as of the Closing Date by model, model year and vehicle or vessel identification number.
(d) Valid Security Interest. This Agreement creates a valid security interest in the Collateral of each Loan Party, to the extent a security interest therein can be created under the Code, securing the payment of the Obligations. Except to the extent a security interest in the Collateral cannot be perfected by the filing of a financing statement under the Code, all filings and other actions necessary or desirable to perfect and protect such security interest have been duly taken or will have been taken upon the filing of financing statements listing each applicable Loan Party, as a debtor, and the Agent, as secured party, in the jurisdictions listed next to such Loan Partys name on Schedule 5.6(a) to the Information Certificate. Upon the making of such filings, the Agent shall have a perfected security interest in the Collateral of each Loan Party (with priorities as specified in the Intercreditor Agreement), to the extent such security interest can be perfected by the filing of a financing statement, subject to Permitted Liens which are purchase money Liens. Upon filing of any Copyright security agreement with the United States Copyright Office, filing of any Patent and Trademark security agreement with the PTO, and the filing of appropriate financing statements in the jurisdictions listed on Schedule 5.6(a) to the Information Certificate, all action necessary or desirable to protect and perfect the Security Interest in and to on each Loan Partys Patents, Trademarks, or Copyrights has been taken and such perfected Security Interest is enforceable as such as against any and all creditors of and purchasers from any Loan Party. All action by any Loan Party necessary to protect and perfect such security interest on each item of Collateral or is reasonably requested by the Agent or the Required Lenders has been duly taken.
Exhibit D
Page 6
EXHIBIT E
TO TERM LOAN AND SECURITY AGREEMENT
INFORMATION CERTIFICATE
OF
SAExploration Holdings, Inc.
SAExploration Sub, Inc.
SAExploration, Inc.
SAExploration Seismic Services (US), LLC
NES, LLC
Dated: June 29, 2016
Delaware Trust Company,
as Administrative Agent and Collateral Agent
2711 Centerville Road
Wilmington, DE 19808
In connection with certain financing provided or to be provided by the Lenders, each of the undersigned Borrower and Guarantors (each a Loan Party) represents and warrants to the Agent and the Lenders the following information about each Loan Party (capitalized terms not specifically defined shall have the meaning set forth in the Agreement):
1. | Attached as Schedule 5.1(b) is a complete and accurate description of (i) the authorized capital Stock of each Loan Party and its Subsidiaries, by class, and the number of shares issued and outstanding and the names of the owners thereof (including stockholders, members and partners) and their holdings, all as of the date of this Agreement, (ii) all subscriptions, options, warrants or calls relating to any shares of any Loan Partys or its Subsidiaries capital Stock, including any right of conversion or exchange, as of the date of the Agreement; (iii) each stockholders agreement, restrictive agreement, voting agreement or similar agreement relating to any such capital Stock, as of the date of the Agreement; and (iv) and organization chart of each Loan Party and all Subsidiaries. |
2. | Each Loan Party is affiliated with, or has ownership in, the entities (including Subsidiaries) set forth on Schedule 5.1(c). |
3. | The Loan Parties use the following trade name(s) in the operation of their business (e.g. billing, advertising, etc.): |
SAExploration, Inc.
SAExploration, Inc. d/b/a South American Exploration, Inc. (in Texas only)
4. | Each of the Loan Parties is a registered organization of the following type: |
Delaware Corporation
SAExploration Holdings, Inc.
SAExploration Sub, Inc.
SAExploration, Inc.
Delaware Limited Liability Company
SAExploration Seismic Services (US), LLC
Alaska Limited Liability Company
NES, LLC
5. | The exact legal name of each Loan Party as set forth in its respective certificate of incorporation, organization or formation, or other public organic document, as amended to date is set forth in Schedule 5.5(a). |
6. | Each Loan Party is organized solely under the laws of the State set forth on Schedule 5.6(a). Each Loan Party is in good standing under those laws and no Loan Party is organized in any other State. |
7. | The chief executive office and mailing address of each Loan Party is located at the address set forth on Schedule 5.6(b) hereto. |
Exhibit E
Page 1
8. | The books and records of each Loan Party pertaining to Accounts, contract rights, Inventory, and other assets are located at the addresses specified on Schedule 5.6(b). |
9. | The identity and Federal Employer Identification Number of each Loan Party and organizational identification number, if any, is set forth on Schedule 5.6(c). (Please Use Form Attached) |
10. | No Loan Party has any Commercial Tort Claims, except as set forth on Schedule 5.6(d). |
11. | There are no judgments, actions, suits, proceedings or other litigation pending by or against or threatened by or against any Loan Party, any of its Subsidiaries and/or Affiliates or any of its officers or principals, except as set forth on Schedule 5.7(b). |
12. | Since its date of organization, the name as set forth in each Loan Partys organizational documentation filed of record with the applicable state authority has been changed as follows: |
SAExploration Holdings, Inc. | ||
Date |
Prior Name | |
2/2/2011 | Trio Merger Corp. | |
6/24/2013 | Name Change of Trio Merger Corp. to SAExploration Holdings, Inc. | |
SAExploration Sub, Inc. | ||
Date |
Prior Name | |
10/15/2012 | SAExploration Holdings, Inc. (Former Holdings) | |
12/6/2012 | Trio Merger Sub, Inc. | |
6/24/2013 | Name Change of Trio Merger Sub, Inc. to SAExploration Sub, Inc. | |
SAExploration, Inc. | ||
Date |
Prior Name | |
6/6/2006 | South American Exploration, LLC (Alaska entity) | |
7/20/2011 | South American Exploration, LLC (Delaware entity) | |
8/5/2011 | SAExploration, Inc. (conversion from Delaware LLC to Delaware Corporation) | |
SAExploration Seismic Services (US), LLC | ||
Date |
Prior Name | |
| None. | |
NES, LLC | ||
Date |
Prior Name | |
5/31/2006 | NES, LLC | |
8/7/2007 | Fairweather Investments, LLC | |
10/30/2008 | Northern Exploration Services, LLC | |
6/21/2011 | NES, LLC |
13. | Since the dates of their respective organization, the Loan Parties have made or entered into the following mergers or acquisitions: |
SAExploration Holdings, Inc. | ||
Date |
Action | |
| None. | |
SAExploration Sub, Inc. | ||
Date |
Action | |
6/24/2013 | Merger of SAExploration Holdings, Inc. (Former Holdings) with and into SAExploration Sub, Inc. | |
SAExploration, Inc. | ||
Date |
Action | |
7/20/2011 | Merger of South American Exploration, LLC (Alaska) with and into South American Exploration, LLC (Delaware) | |
8/5/2011 | Conversion of South American Exploration, LLC to SAExploration, Inc. |
Exhibit E
Page 2
SAExploration Seismic Services (US), LLC | ||
Date |
Action | |
| None. | |
NES, LLC | ||
Date |
Action | |
6/21/2011 | Merger of Northern Exploration Services, LLC with and into NES, LLC | |
10/31/2011 | Acquired by SAExploration, Inc. |
14. | Each Loan Partys assets are owned and held free and clear of Liens, mortgages, pledges, security interests, encumbrances or charges except as set forth below: |
Name and Address of Secured Party |
Description of Collateral | File No. of Financing Statement/Jurisdiction | ||
Please see Schedule 5.19. |
||||
15. | Each Loan Party has been and remains in compliance with all environmental laws applicable to its business or operations except as set forth on Schedule 5.12. |
16. | The Loan Parties do not have any Deposit Accounts, investment accounts, Securities Accounts or similar accounts with any bank, securities intermediary or other financial institution, except as set forth on Schedule 5.15 for the purposes and of the types indicated therein. |
17. | No Loan Party is a party to or bound by any collective bargaining or similar agreement with any union, labor organization or other bargaining agent except as set forth below (indicate date of agreement, parties to agreement, description of employees covered, and date of termination) |
Name of Agreement |
Date of Agreement |
Parties to Agreement | Date of Expiration / Termination | |||
None. |
||||||
18. | Set forth on Schedule 5.17 is a reasonably detailed description of each Material Contract of each Loan Party and its Subsidiaries as of the date of the Agreement. |
19. | Set forth on Schedule 5.19 is a true and complete list of all Indebtedness of each Loan Party and its Subsidiaries outstanding immediately prior to the Closing Date. |
Exhibit E
Page 3
20. | No Loan Party has made any loans or advances or guaranteed or otherwise become liable for the obligations of any others, except as set forth below: |
Name / Address of Debtor |
Outstanding Balance of Loan as of March 31, 2016 |
Secured / Unsecured |
Due Date | |||
Please see Schedule 5.20. |
||||||
21. | No Loan Party has any Chattel Paper (whether tangible or electronic) or instruments as of the date hereof, except as follows: |
None.
22. | Schedule 5.26(a) sets forth all Real Property owned by each Loan Party. |
23. | No Loan Party owns or licenses any Trademarks, Patents, Copyrights or other Intellectual Property in the United States of America, and is not a party to any Intellectual Property License in the United States of America, except as set forth on Schedule 5.26(b) (indicate type of Intellectual Property and whether owned or licensed, registration number, date of registration, and, if licensed, the name and address of the licensor). |
24. | Schedule 5.26(c) sets forth all motor vehicles and vessels owned by each Loan Party as of the Closing Date by model, model year and vehicle or vessel identification number. |
25. | Except for Specified Movable Property, the Inventory and Equipment of each Loan Party is located only at the locations set forth on Schedule 5.29. |
26. | At the present time, there are no delinquent taxes due (including, but not limited to, all payroll taxes, personal property taxes, real estate taxes or income taxes) except as follows: |
None.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Exhibit E
Page 4
Lenders and the Agent shall be entitled to rely upon the foregoing in all respects and the undersigned is duly authorized to execute and deliver this Information Certificate on behalf of each Loan Party.
Very truly yours,
SAExploration Holdings, Inc. | ||
By: |
| |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer, General Counsel & Secretary | |
SAExploration Sub, Inc. | ||
By: |
| |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer, General Counsel & Secretary | |
SAExploration, Inc. | ||
By: |
| |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer, General Counsel & Secretary | |
SAExploration Seismic Services (US), LLC | ||
By: |
| |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer, General Counsel & Secretary | |
NES, LLC | ||
By: |
| |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer, General Counsel & Secretary |
Exhibit E
Page 5
Schedule 5.1(b)(i), (ii), (iv)
TO INFORMATION CERTIFICATE
Capitalization of Loan Parties
and Subsidiaries
Organization Chart
Loan Party |
Authorized |
Holder |
Type of Rights/Stock (common/pre ferred/option / class) |
Number of Shares (after exercise of all rights to acquire shares) |
Percent Interest (on a fully diluted basis) |
Registration | ||||||
SAExploration Holdings, Inc. |
| Public Stockholders and Warrant Holders | Common Stock, Warrants to Purchase, Options to Purchase Preferred Stock | Common Stock: 55,000,000 shares authorized; 17,451,353 shares outstanding
Warrants to purchase 581,807 shares of common stock outstanding
Options to purchase 241,642 shares of common stock outstanding
Preferred Stock: 1,000,000 shares authorized; 0 shares outstanding |
| 4931384 (Delaware) | ||||||
SAExploration Sub, Inc. |
2 | SAExploration Holdings, Inc. | Common Shares | 100 shares | 100% | 5253643 (Delaware) | ||||||
SAExploration, Inc. |
17 & A-3 | SAExploration Holdings, Inc., now known as SAExploration Sub, Inc. | Common Shares
Series A preferred shares |
948,750 common shares
5,000,000 Series A preferred shares |
100% |
5009432 (Delaware) | ||||||
SAExploration Seismic Services (US), LLC |
1 | SAExploration, Inc. | Membership Interest | 100% Membership Interest | 100% | 5156435 (Delaware) |
Schedule 5.1(b)
Page 1
NES, LLC |
1 | SAExploration, Inc. | Membership Interest | 100% Membership Interest | 100% | 110456 (Alaska) | ||||||
First Tier Subsidiaries |
||||||||||||
SAExploration México S. de R.L. de C.V. |
N/A | SAExploration, Inc. 99% SAExploration Seismic Services 1% |
Membership Interest | 100% Membership Interest | SAExploration, Inc. 99%
SAExploration Seismic Services 1% |
201312121228390795 | ||||||
SAExploration (Australia) Pty. Ltd. |
N/A | SAExploration, Inc. | Shares | 100 shares | 100% | CAN/ABN: 144 635 923 Corporate Key: 18897518 | ||||||
SAExploration (Malaysia) Sdn. Bhd. |
003, 004, & 005 | SAExploration, Inc. | Shares | 500,000 Shares | 100% | 1047252-T | ||||||
Southeast Asian Exploration Pte. Ltd. |
3 & 4 | SAExploration, Inc. | Shares | 100 Shares | 100% | 201013035D | ||||||
Calgary Finance Company Ltd. |
A-1 | SAExploration, Inc. | Shares | 1,000 Shares | 100% | 2018617429 | ||||||
1623739 Alberta Ltd. |
A-1 | SAExploration, Inc. | Shares | 1,000 Shares | 100% | 2016237394 | ||||||
SAExploration (Brasil) Serviços Sísmicos Ltda. |
N/A | SAExploration, Inc. 99.9%
SAExploration Seismic Services (US), LLC -.1% |
Membership Interest | 100% Membership Interest | SAExploration, Inc. 99.9%
SAExploration Seismic Services (US), LLC -.1% |
3320934015-8 - NIRE | ||||||
Kuukpik/SAExploration LLC |
N/A | SAExploration, Inc. | Membership Interest | 49% Membership Interest | 49% | 10008611 | ||||||
SAExploration Global Holdings (UK) Ltd. |
1 | SAExploration, Inc. | Ordinary Shares | 1,000 Ordinary Shares | 100% | 09193975 |
Schedule 5.1(b)
Page 2
Schedule 5.1(b)(iii)
TO INFORMATION CERTIFICATE
Registration Rights Agreement:
http://www.sec.gov/Archives/edgar/data/1514732/000114420413037279/v348788_ex10-7.htm
Employment Agreements with SAE Holdings:
http://www.sec.gov/Archives/edgar/data/1514732/000114420413037279/v348788_ex10-10.htm
http://www.sec.gov/Archives/edgar/data/1514732/000114420413037279/v348788_ex10-11.htm
http://www.sec.gov/Archives/edgar/data/1514732/000114420413037279/v348788_ex10-12.htm
2013 LTIP:
http://www.sec.gov/Archives/edgar/data/1514732/000114420413037279/v348788_ex10-17.htm
Irrevocable Proxy Agreement, Irrevocable Proxy and Power of Attorney, dated effective June 24, 2013:
http://www.sec.gov/Archives/edgar/data/1514732/000114420413038619/v349568_sc13d.htm
See Exhibit 4 for agreement and Exhibit 13 for names of stockholders.
Revocable Proxy Agreement, dated effective June 24, 2013:
http://www.sec.gov/Archives/edgar/data/1514732/000114420413038619/v349568_sc13d.htm
See Exhibit 4 for agreement and Exhibit 14 for names of stockholders.
Lock Up Agreement:
http://www.sec.gov/Archives/edgar/data/1514732/000114420413038619/v349568_sc13d.htm
See Exhibit 6 for agreement and Exhibit 15 for names of stockholders.
Merger Consideration Escrow Agreement:
http://www.sec.gov/Archives/edgar/data/1514732/000114420413037279/v348788_ex10-6.htm
Indemnity Escrow Agreement:
http://www.sec.gov/Archives/edgar/data/1514732/000114420413037279/v348788_ex10-5.htm
Irrevocable Proxy and Power of Attorney, dated effective February 14, 2014:
http://www.sec.gov/Archives/edgar/data/1514732/000114420414032852/v379444_sc13da.htm
See Exhibit 18 for agreement and Exhibit 20 for names of stockholders.
Revocable Voting Proxy, dated effective as of February 13, 2014.
http://www.sec.gov/Archives/edgar/data/1514732/000114420414032852/v379444_sc13da.htm
See Exhibit 19 for agreement and Exhibit 21 for names of stockholders.
Restructuring Support Agreement, dated effective June 13, 2016.
http://www.sec.gov/Archives/edgar/data/1514732/000119312516620170/d209976dex101.htm
Schedule 5.1(b)
Page 3
Schedule 5.1(c)
TO INFORMATION CERTIFICATE
Subsidiaries; Affiliates; Investments
Part 1 - Subsidiaries (More than 50% owned by a Loan Party)
Name |
Jurisdiction of Organization |
Percentage Owned* | ||
SAExploration México S. de R.L. de C.V. |
Mexico | 99% | ||
SAExploration (Australia) Pty. Ltd. |
Australia | 100% | ||
SAExploration (Malaysia) Sdn. Bhd. |
Malaysia | 100% | ||
Southeast Asian Exploration Pte. Ltd. |
Singapore | 100% | ||
1623739 Alberta Ltd. |
Alberta, Canada | 100% | ||
Calgary Finance Company Ltd. |
Alberta, Canada | 100% | ||
SAExploration (Brasil) Serviços Sísmicos Ltda. |
Brazil | 99.9% | ||
SAExploration Global Holdings (UK) Ltd. |
United Kingdom | 100% |
* | Percentage represents ownership by SAExploration, Inc.; for entities with less than 100% ownership, the remainder is owned by SAExploration Seismic Services (US), LLC, so that each Subsidiary is owned 100% by one or more Loan Party. |
Part 2 - Affiliates (Less than 50% Owned by a Loan Party)
Name |
Jurisdiction of Organization |
Percentage Owned | ||
Kuukpik/SAExploration LLC |
Alaska | 49% | ||
SAExploration (Peru) S.R.L. |
Peru | 1%** |
** | Percentage represents ownership by SAExploration Seismic Services (US), LLC; the remaining 99% is owned by SAExploration Global Holdings (UK) Ltd. |
Part 3 - Affiliates (Subject to common ownership with a Loan Party)
Name |
Jurisdiction of Organization |
Parent | Percentage Owned | |||
Part 4 - Shareholders (If widely held, only holders with more than 10%)
Name |
Jurisdiction of Organization* |
Percentage Owned | ||
* | If shareholders are individuals, indicate N/A |
Schedule 5.1(c)
Page 1
Schedule 5.5(a)
TO INFORMATION CERTIFICATE
Exact Legal Name
SAExploration Holdings, Inc.
SAExploration Sub, Inc.
SAExploration, Inc.
SAExploration Seismic Services (US), LLC
NES, LLC
Schedule 5.5(a)
Page 1
Schedule 5.6(a)
TO INFORMATION CERTIFICATE
Jurisdiction of Organization
Name |
Jurisdiction of Organization* | |
SAExploration Holdings, Inc. |
Delaware | |
SAExploration Sub, Inc. |
Delaware | |
SAExploration, Inc. |
Delaware | |
SAExploration Seismic Services (US), LLC |
Delaware | |
NES, LLC |
Alaska |
* | If shareholders are individuals, indicate N/A |
Schedule 5.6(a)
Page 1
Schedule 5.6(b)
TO INFORMATION CERTIFICATE
Locations
Part 1 - Chief Executive Offices
Company |
Address | |
SAExploration Holdings, Inc. | 1160 Dairy Ashford Rd., Suite 160 Houston, TX 77079 | |
SAExploration Sub, Inc. | 1160 Dairy Ashford Rd., Suite 160 Houston, TX 77079 | |
SAExploration, Inc. | 1160 Dairy Ashford Rd., Suite 160 Houston, TX 77079 | |
SAExploration Seismic Services (US), LLC | 1160 Dairy Ashford Rd., Suite 160 Houston, TX 77079 | |
NES, LLC | 8240 Sandlewood Pl., Suite 102 Anchorage, AK 99507 | |
Foreign Branches of SAExploration, Inc. | Address | |
SAExploration, Inc. - Sucursal Bolivia | Av. Iberica, Calle 3 Oeste No. 11 Barrio Las Palmas Santa Cruz, Bolivia | |
SAExploration, Inc. - Sucursal Colombiana | Calle 93, No. 14-20 Of. 709 Bogotá, Colombia | |
SAExploration, Inc. - Sucursal del Perú | Francisco Masias 544, Of. 301 San Isidro, Lima 27 Peru | |
SAExploration, Inc. - Sucursal de la Amazonia | Calle Miraflores No. 300 San Juan Bautista Iquitos, Maynas, Loreto Peru |
Part 2 - Location of Books and Records
Company |
Address |
Additional Addresses | ||
SAExploration Holdings, Inc. | 1160 Dairy Ashford Rd., Suite 160 Houston, TX 77079 |
3333 8th St. SE 3rd Calgary, Alberta T2G3A4 Canada | ||
SAExploration Sub, Inc. | 1160 Dairy Ashford Rd., Suite 160 Houston, TX 77079 |
3333 8th St. SE 3rd Calgary, Alberta T2G3A4 Canada | ||
SAExploration, Inc. | 1160 Dairy Ashford Rd., Suite 160 Houston, TX 77079 |
3333 8th St. SE 3rd Calgary, Alberta T2G3A4 Canada
8240 Sandlewood Place Suite 102 Anchorage, AK 99507 | ||
SAExploration Seismic Services (US), LLC | 1160 Dairy Ashford Rd., Suite 160 Houston, TX 77079 |
3333 8th St. SE 3rd Calgary, Alberta T2G3A4 Canada | ||
NES, LLC | 8240 Sandlewood Place Suite 102 Anchorage, AK 99507 |
3333 8th St. SE 3rd Calgary, Alberta T2G3A4 Canada
1160 Dairy Ashford Rd., Suite 160 Houston, TX 77079 |
Schedule 5.6(b)
Page 1
Schedule 5.6(c)
TO INFORMATION CERTIFICATE
Federal Employer Identification Number
Organizational Identification Number
(Please Use Form Attached For Tax Identification Number)
Name |
Organizational Identification Number |
Federal Employer Identification Number | ||
SAExploration Holdings, Inc. | 4931384 (Delaware) |
27-4867100 | ||
SAExploration Sub, Inc. | 5253643 (Delaware) |
46-4918859 | ||
SAExploration, Inc. | 5009432 (Delaware) |
45-2959022 | ||
SAExploration Seismic Services (US), LLC | 5156435 (Delaware) |
90-0855057 | ||
NES, LLC | 110456 (Alaska) |
27-5152915 |
Schedule 5.6(c)
Page 1
Schedule 5.6(d)
TO INFORMATION CERTIFICATE
Commercial Tort Claims
None.
Schedule 5.6(d)
Page 1
Schedule 5.7(b)
TO INFORMATION CERTIFICATE
Judgments/Pending Litigation
None.
Schedule 5.7(b)
Page 1
Schedule 5.12
TO INFORMATION CERTIFICATE
Environmental Compliance
N/A
Schedule 5.12
Page 1
Schedule 5.15
TO INFORMATION CERTIFICATE
Deposit Accounts; Investment Accounts
Part 1 - Deposit Accounts
Name and Address of Bank |
Account Holder |
Account No. |
Purpose* | |||
Wells Fargo Bank, N.A. |
SAExploration Holdings, Inc. | Collection Account | ||||
Wells Fargo Bank, N.A. |
SAExploration Seismic Services (US), LLC | Disbursement Account | ||||
HSBC USA, N.A. |
SAExploration, Inc. | Collection Account | ||||
Wells Fargo Bank, N.A. |
SAExploration, Inc. | Collection Account | ||||
Wells Fargo Bank, N.A. |
SAExploration, Inc. | Disbursement Account: Payroll | ||||
Wells Fargo Bank, N.A. |
SAExploration, Inc. | Collection Account | ||||
Wells Fargo Bank, N.A. |
SAExploration, Inc. | Collection Account | ||||
Banco Nacional de Bolivia |
SAExploration, Inc. Sucursal Bolivia | Disbursement Account | ||||
Banco Nacional de Bolivia |
SAExploration, Inc. Sucursal Bolivia | Disbursement Account | ||||
Banco de Bogotá CTA 223 |
SAExploration, Inc. Sucursal Colombiana | Disbursement Account | ||||
Banco de Bogotá PTO GAI |
SAExploration, Inc. Sucursal Colombiana | Disbursement Account | ||||
Banco de Bogotá PTO GAI 2 |
SAExploration, Inc. Sucursal Colombiana | Disbursement Account | ||||
Helm Bank |
SAExploration, Inc. Sucursal Colombiana | Disbursement Account | ||||
Bancolombia |
SAExploration, Inc. Sucursal Colombiana | Disbursement Account | ||||
Citibank Colombia |
SAExploration, Inc. Sucursal Colombiana | Disbursement Account | ||||
Banco de Bogotá Yopal |
SAExploration, Inc. Sucursal Colombiana | Disbursement Account | ||||
Banco HSBC CTA CTE |
SAExploration, Inc. Sucursal Colombiana | Inactive Account | ||||
Banco BBVA CTA CTE |
SAExploration, Inc. Sucursal Colombiana | Inactive Account | ||||
Banco BBVA PORE |
SAExploration, Inc. Sucursal Colombiana | Inactive Account | ||||
Banco de Bogotá Villavi |
SAExploration, Inc. Sucursal Colombiana | Inactive Account |
* | For Purpose indicate either: collection account if proceeds of receivables or other assets are deposited in it, and note lockbox if it is subject to lockbox servicing arrangements with the applicable bank or disbursement account if it is a checking account or account used for transferring funds to third parties and note if it is used for a specific purpose, e.g., payroll, medical, insurance, escrow etc. Also, please note any zero balance or other automatic sweep or investment sweep accounts. |
Schedule 5.15
Page 1
Banco de Bogotá Agua Chic |
SAExploration, Inc. Sucursal Colombiana | Inactive Account | ||||
Banco de Bogotá Guamal |
SAExploration, Inc. Sucursal Colombiana | Inactive Account | ||||
Banco de Bogotá San Martin Cesar |
SAExploration, Inc. Sucursal Colombiana | Inactive Account | ||||
Banco Agrario Bogotá |
SAExploration, Inc. Sucursal Colombiana | Inactive Account | ||||
Banco Agrario San Pablo |
SAExploration, Inc. Sucursal Colombiana | Inactive Account | ||||
Banco Agrario Simiti |
SAExploration, Inc. Sucursal Colombiana | Inactive Account | ||||
Banco Agrario Cravo Norte |
SAExploration, Inc. Sucursal Colombiana | Inactive Account | ||||
Banco de Crédito del Perú |
SAExploration, Inc. Sucursal del Peru | Disbursement Account | ||||
Banco de Crédito del Perú |
SAExploration, Inc. Sucursal del Peru | Disbursement Account | ||||
Banco de la Nación |
SAExploration, Inc. Sucursal del Peru | Collection Account |
Part 2 - Investment and Other Accounts
Name and Address of Broker or Other Institution |
Account No. |
Purpose |
Types of Investments |
Balance as of [Date] | ||||
Schedule 5.15
Page 2
Schedule 5.17
TO INFORMATION CERTIFICATE
Material Contracts
1. Indenture dated as of July 2, 2014, as amended, supplemented or otherwise modified, between SAExploration Holdings, Inc. as issuer, the Guarantors (as defined therein) and Wilmington Savings Fund Society, FSB (successor to U.S. Bank, National Association) as trustee and noteholder collateral agent.
2. Registration Rights Agreement dated as of July 2, 2014 between Jefferies LLC, SAExploration Holdings, Inc. and the Guarantors (as defined therein).
3. Indenture Security Agreement dated as of July 2, 2014, as amended, supplemented or otherwise modified, by and among the SAExploration, Inc., the Borrower and the other Guarantors named therein, and Wilmington Savings Fund Society, FSB (successor to U.S. Bank, National Association) as trustee and noteholder collateral agent.
4. Credit and Security Agreement, dated November 6, 2014, as amended, supplemented or otherwise modified, by and among SAExploration, Inc., as Borrower, SAExploration Holdings, Inc., SAExploration Sub, Inc., NES, LLC and SAExploration Seismic Services (US), LLC, each as Guarantors, and Wells Fargo Bank, National Association, as Lender.
5. Amended and Restated Intercreditor Agreement, dated as of the date hereof, by and among Wells Fargo Bank, National Association, as lender and collateral agent, Wilmington Savings Fund Society, FSB, as trustee and collateral agent, Delaware Trust Company, as administrative agent and collateral agent, and, upon execution of an Additional Indebtedness Joinder and Designation, the Additional Noteholder Agent (as such terms are defined therein).
Schedule 5.17
Page 1
Schedule 5.19
TO INFORMATION CERTIFICATE
Existing Indebtedness
Existing Notes
SAExploration Holdings, Inc. and its domestic subsidiaries and Wilmington Savings Fund Society, FSB, as trustee and noteholder collateral agent, entered into an Indenture dated as of July 2, 2014, in which the Borrower issued $150 million aggregate principal amount of its 10.000% senior secured notes due 2019 (the Notes). The Notes will mature on July 15, 2019, and interest is payable on January 15 and July 15 of each year, commencing on January 15, 2015. As of the date hereof, $140 million in the aggregate remains outstanding.
Guarantees
The Notes are unconditionally guaranteed, jointly and severally, by all of the Borrowers existing and future domestic restricted subsidiaries, except for immaterial subsidiaries (the Guarantees). The Notes and the Guarantees are secured by a lien on substantially all of the Borrowers and Guarantors assets, subject to certain exceptions and permitted liens.
Revolving Credit Agreement
SAExploration, Inc., as borrower, entered into that certain Credit and Security Agreement as of November 6, 2014 with SAExploration Holdings, Inc., SAExploration Sub, Inc., NES, LLC, and SAExploration Seismic Services (US), LLC, as guarantors, and Wells Fargo Bank, National Association, as lender. As of March 31, 2016, $10,535,000 remained outstanding.
Intercompany Note
That certain Second Amended and Restated Global Intercompany Note, dated as of the date hereof, as amended, restated, supplemented or otherwise modified, issued by the Loan Parties and each of their direct subsidiaries, evidencing the intercompany indebtedness among them from time to time outstanding.
Capital Lease Obligations
Lease |
Lease Date |
USD | ||||||||||||
Balance | Current | Long Term | ||||||||||||
Cal Worthington |
December 31, 2013 | (14,904.44 | ) | (14,904.44 | ) | (0.00 | ) | |||||||
Cal Worthington |
May 31, 2014 | (51,600.42 | ) | (51,600.42 | ) | (0.00 | ) | |||||||
De Lage |
February 2014 | (7,971.98 | ) | (7,971.98 | ) | (0.00 | ) |
Schedule 5.19
Page 1
Schedule 5.20
TO INFORMATION CERTIFICATE
Guarantees
Existing Notes
SAExploration Holdings, Inc. and our domestic subsidiaries and Wilmington Savings Fund Society, FSB, as trustee and noteholder collateral agent, entered into an Indenture dated as of July 2, 2014, in which the Borrower issued $150 million aggregate principal amount of its 10.000% senior secured notes due 2019 (the Notes). The Notes will mature on July 15, 2019, and interest is payable on January 15 and July 15 of each year, commencing on January 15, 2015.
Guarantees
The Notes are unconditionally guaranteed, jointly and severally, by all of the Borrowers existing and future domestic restricted subsidiaries, except for immaterial subsidiaries (the Guarantees). The Notes and the Guarantees are secured by a lien on substantially all of the Borrowers and Guarantors assets, subject to certain exceptions and permitted liens, as of the issue date.
Schedule 5.20
Page 1
Schedule 5.26(a)
TO INFORMATION CERTIFICATE
Owned Real Estate
None.
Schedule 5.26(a)
Page 1
Schedule 5.26(b)
TO INFORMATION CERTIFICATE
U.S. Intellectual Property
Part 1 Trademarks Owned
Record |
Trademark | Registration Date | Registration No. | Owner | ||||
US Federal |
SAEXPLORATION | 10/23/2012 | SN:85-401848 RN:4,231,156 |
SAExploration, Inc. (Delaware corp.) 8240 Sandlewood Place Anchorage, AK 95507 | ||||
US Federal |
![]() |
10/23/2012 | SN:85-401855 RN:4,231,157 |
SAExploration, Inc. (Delaware corp.) 8240 Sandlewood Place Anchorage, AK 95507 | ||||
US Federal |
![]() |
11/13/2012 | SN:85-401859 RN:4,243,112 |
SAExploration, Inc. (Delaware corp.) 8240 Sandlewood Place Anchorage, AK 95507 |
Trademark Application |
Application/Serial Number |
Application Date | ||
None |
Part 2 Trademarks Licensed
Trademark |
Registration Number |
Registration Date |
Expiration Date |
Licensor | ||||
None |
Trademark Application |
Application/Serial Number |
Application Date | ||
None |
Part 3 Patents Owned
Patent Description |
Registration Number |
Registration Date |
Expiration Date | |||
None |
Patent Application |
Application/Serial Number |
Application Date | ||
None |
Schedule 5.26(b)
Page 1
Part 4 Patents Licensed
Patent Description |
Registration Number |
Registration Date |
Expiration Date | Licensor | ||||
None |
Patent Application |
Application / Serial Number | Application Date | ||
None |
Part 5 Copyrights Owned
Copyright |
Registration Number | Registration Date | ||
Assertive discipline text & 2 other titles. |
V3525D813 | 5/19/05 | ||
Assertive discipline video package, K-8 & 34 other titles. |
V3523D532 | 4/12/05 |
Part 6 Copyrights Licensed
Copyright |
Registration Number |
Registration Date |
Licensor | |||
None |
Part 7 Other License Agreements
Name of Document |
Date of Document |
Licensor | Term | Licensed Intellectual Property | ||||
None |
Schedule 5.26(b)
Page 2
Schedule 5.26(c)
TO INFORMATION CERTIFICATE
Owned Ship Vessel
Name of Vessel |
Official Number |
HIM Number | ||
Mark Steven |
1238385 | PEB78166J812 |
Owned Motor Vehicles
Make |
Model |
Model Year |
Vehicle Identification Number/Serial Number | |||
Ford |
F-250 Super Duty | 2011 | 1FT7W2B67BEA59787 | |||
Ford |
E-350 | 2011 | 1FBSS3BL08DB19873 | |||
Ford |
E-350 | 2011 | 1FBSS3BL2BDB19874 | |||
Ford |
E-450 | 1998 | 1FDXE40FXWHA29507 | |||
Ford |
F-350 | 2014 | 1FT7W3B60EEB26269 | |||
Ford |
F-350 | 2014 | IFT7W3B63EEA42964 |
Schedule 5.26(c)
Page 1
Schedule 5.29
TO INFORMATION CERTIFICATE
Locations of Inventory and Equipment
Locations of Inventory, Equipment and Other Assets
Address |
Owned/Leased/Third |
Name/Address of Lessor or Third Party, as Applicable |
Recording District, as | |||
8240 Sandlewood Place, Anchorage, AK 99507 |
Leased | David Faulk, dba Pacific Alaska Leasing Co. 9191 Old Seward Hwy #15, Anchorage, AK 99515 |
Anchorage | |||
Lot 6, Block 302, Deadhorse Prudhoe Bay, AK 99734 |
Leased | Alutiq Oilfield Solutions, LLC 3909 Arctic Blvd., Suite 400 Anchorage, AK 99503 |
Barrow | |||
Calle Corpac 1112 de la Provincia del Callao Lima Peru |
Leased | Keith George Koehler Monson Calle Antero Aspillaga 435, Int 101 San Isidro, Lima Peru |
||||
Calle Miraflores No. 300 San Juan Bautista Iquitos, Maynas, Loreto Peru |
Leased | Manfo SAC Constructora e Inmobillaria Av. del Parque N° 747, Urb. Canto Grande, Et. 1, San Juan de Lurigancho, Lima Peru |
||||
Autopista Medellín Kilómetro 1.5 via la Florida Kl. 1, Parque Terrapuerto Industrial el Dorado, Bodega No. 5 Bogotá, Colombia | Leased | Broker Inmobiliaria de la Sabana Ltda. Autopista Medellín Kilómetro 3 via Siberia Bogotá, Colombia |
||||
1160 Dairy Ashford Rd., Suite 160 Houston, TX 77079 |
Leased | Rosemont Property Management of Texas, LLC 1235 North Loop West, Suite 1025 Houston, TX 77008 |
||||
Doble Via a la Guardia UV 138, Maz 46, Santa Cruz de la Sierra Bolivia |
Leased | Ovidio Melendres Rojas & Martha Cuellar de Melendres |
* | Indicate in this column next to applicable address whether the locations is owned by the Company, leased by the Company or owned and operated by a third party (e.g., warehouse, processor, consignee, etc.) |
Schedule 5.29
Page 1
EXHIBIT F
FORM OF GUARANTY SUPPLEMENT
SUPPLEMENT NO. [ ], dated as of [ ], 20[ ] (the Supplement), to the Term Loan and Security Agreement, dated as of June 29, 2016 (as amended, restated, amended and restated, supplemented and/or otherwise modified from time to time, the Loan Agreement), among SAEXPLORATION HOLDINGS, INC., a Delaware corporation (the Borrower), the other Guarantors party thereto from time to time, the Lenders party thereto from time to time and DELAWARE TRUST COMPANY, as Administrative Agent and Collateral Agent (in such capacities, the Agent).
A. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Loan Agreement.
B. The Borrower and the Guarantors have entered into the Loan Agreement in order to induce the Lenders to make Advances to the Borrower. Section 18.6 of the Loan Agreement provides that additional wholly-owned Domestic Subsidiaries (other than a Foreign Subsidiary Holding Company) of the Borrower shall become Guarantors under the Loan Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Domestic Subsidiaries (the Additional Guarantors) are executing this Supplement in accordance with the requirements of the Loan Agreement, or as directed by the Borrower in its sole discretion, to become a Guarantor under the Loan Agreement in order to induce the Lenders to make additional Advances and as consideration for Advances previously made.
Accordingly, the Agent and the Additional Guarantors hereby agree as follows:
Section 1. In accordance with Section 18.6 of the Loan Agreement, each Additional Guarantor by its signature below becomes a Guarantor under the Loan Agreement with the same force and effect as if originally named therein as a Guarantor and each Additional Guarantor hereby (a) agrees to all the terms and provisions of the Loan Agreement applicable to it as a Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct on and as of the date hereof, provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all respects as of such earlier date. In furtherance of the foregoing, each Additional Guarantor does hereby, irrevocably, absolutely and unconditionally guaranty, jointly with the other Guarantors and severally, as primary obligor and not merely as surety, the due and punctual payment and performance of the Guaranteed Obligations, in each case, whether such Guaranteed Obligations are now existing or hereafter incurred under, arising out of or in connection with any Loan Document, and whether at maturity, by acceleration or otherwise. Each reference to a Guarantor and Loan Party (to the extent such Additional Guarantor is a Subsidiary of the Borrower) in the Loan Agreement shall be deemed to include each Additional Guarantor as if originally named therein as a Guarantor or Loan Party, as applicable. The applicable provisions of the Loan Agreement are hereby incorporated herein by reference.
Section 2. Each Additional Guarantor represents and warrants to the Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as such enforceability may be limited by under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, receiverships, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief and by general principles of equity.
Section 3. This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument. This Supplement shall become effective when the Agent shall have received a counterpart of this Supplement that bears the signature of each Additional Guarantor and the Agent has executed a counterpart hereof. Delivery by telecopier or by electronic .pdf copy of an executed counterpart of a signature page to this Supplement shall be effective as delivery of an original executed counterpart of this Supplement.
Section 4. Except as expressly supplemented hereby, the Loan Agreement shall remain in full force and effect, subject to the termination of the Loan Agreement pursuant to Section 2.9 of the Loan Agreement.
Section 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. The terms of Section 13 of the Loan Agreement with respect to submission of jurisdiction, venue, consent to services of process and waiver of jury trial are incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms.
Exhibit F
Page 1
Section 6. If any provision of this Supplement is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Supplement shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 7. All communications and notices hereunder shall be in writing and given as provided in Section 12 of the Loan Agreement.
Section 8. Each Additional Guarantor agrees to reimburse or to cause reimbursement to the Agent for its reasonable and documented out-of-pocket Expenses in connection with this Supplement as provided in Section 19.9 of the Loan Agreement.
[The remainder of this page is intentionally left blank]
Exhibit F
Page 2
IN WITNESS WHEREOF, each Additional Guarantor and the Agent have duly executed this Supplement to the Loan Agreement as of the day and year first above written.
ADDITIONAL GUARANTOR: | ||
[ ] | ||
By: |
| |
Name: | ||
Title: | ||
[ ] | ||
By: |
| |
Name: | ||
Title: |
Exhibit F
Page 3
DELAWARE TRUST COMPANY, as Administrative Agent and Collateral Agent | ||
By: |
| |
Name: |
||
Title: |
Exhibit F
Page 4
EXHIBIT G
Form of Borrowing Certificate
[Date]
To: | Delaware Trust Company, |
as Administrative Agent (the Administrative Agent)
Ladies and Gentlemen:
Reference is made to that certain Term Loan and Security Agreement, dated as of June 29, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the Term Loan Agreement), by and among SAExploration Holdings, Inc., a Delaware corporation (the Borrower), the Guarantors party thereto from time to time, the Lenders party thereto from time to time, and Delaware Trust Company, in its capacity as Administrative Agent and Collateral Agent thereunder. Capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Term Loan Agreement.
1. | The requested Funding Date shall be [ ]1 (for the avoidance of doubt, such Funding Date shall be a Business Day). |
2. | (select one) |
¨ | A Borrowing constituting the Initial Advance |
¨ | A Borrowing constituting the Second Advance |
¨ | A Borrowing constituting a Subsequent Advance |
3. | The principal amount of the Borrowing to which this notice applies is $[ ]2. |
5. | The account to be credited with the proceeds of the Borrowing is the Designated Account, located at [ ].3 |
6. | The undersigned hereby certifies on behalf of Borrower and the other Loan Parties that, as of the date hereof, [the conditions set forth in Sections 4.1 and 4.4 of the Term Loan Agreement have been satisfied]4 [the conditions set forth in Sections 4.2 and 4.4 of the Term Loan Agreement have been satisfied]5 [the conditions set forth in Sections 4.3 and 4.4 of the Term Loan Agreement have been satisfied]6 and that such conditions shall be satisfied as of the requested Funding Date. |
1 | Each Borrowing Certificate must be received by the Administrative Agent not later than (i) 9:00 a.m. (New York City Time) at least three (3) Business Days (or four (4) Business Days if the Borrowing request is received after 1:00 p.m. New York City time) prior to the date that is the requested Funding Date. |
2 | Each Borrowing shall be in an aggregate amount of not less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof (or the full remaining amount); provided, that (x) the Initial Advance shall be in an amount not to exceed $5,600,000 and (y) the Second Advance shall be in an amount not to exceed $9,400,000. |
3 | Insert wire instructions for Designated Account. |
4 | To be used for the Initial Advance. |
5 | To be used for the Second Advance. |
6 | To be used for a Subsequent Advance. |
Exhibit G
Page 1
7. | The undersigned hereby certifies on behalf of Borrower and the other Loan Parties that the following statements are true and correct on the date hereof and shall be true on the requested Funding Date, before and after giving effect thereto and to the application of the proceeds thereof: |
(a) the representations and warranties of Borrower and each other Loan Party or its Subsidiaries contained in this Agreement or in the other Loan Documents are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of such date, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall continue to be true and correct in all material respects as of such earlier date); and
(b) no Default or Event of Default has occurred and is continuing, nor shall either result from the making of the requested Advance.
This Borrowing Certificate complies with Section 2.3(a) of the Term Loan Agreement.
Very truly yours, | ||
SAExploration Holdings, Inc., as Borrower | ||
By: |
| |
Name: | ||
Title: |
Exhibit G
Page 2
EXHIBIT H
Form of Assignment and Assumption
This Assignment and Assumption (this Assignment and Assumption) is dated as of the Effective Date set forth below and is entered into by and between [ASSIGNOR NAME] (the Assignor) and [ASSIGNEE NAME] (the Assignee). Capitalized terms used herein but not otherwise defined herein shall have the meaning given to such terms in that certain Term Loan Agreement identified below (the Term Loan Agreement), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full (the Standard Terms and Conditions).
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Term Loan Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignors rights and obligations in its capacity as a Lender under the Term Loan Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the facility identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Term Loan Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the Assigned Interest). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.
1 | Assignor: [Assignor Name] |
2 | Assignee: [Assignee Name] [and is an Affiliate/Approved Fund of [LENDER NAME]] |
The Assignee hereby represents and warrants that it is not a Disqualified Person.
3 | Borrower: SAExploration Holdings, Inc. (the Borrower) |
4 | Administrative Agent: Delaware Trust Company, as the administrative agent under the Term Loan Agreement (the Administrative Agent) |
5 | Term Loan Agreement: Term Loan and Security Agreement dated as of June 29, 2016 (as amended, restated, supplemented, or otherwise modified from time to time), among Borrower, each Guarantor from time to time party thereto, each Lender from time to time party thereto, and the Administrative Agent. |
6 | Assigned Interest: |
Aggregate Amount of Advances for all Lenders* |
Amount of Advances Assigned* |
Percentage Assigned of Advances1 |
||||||||
$ | $ | $ |
* | Amount to be adjusted by the counterparties to take into account any payments, prepayments, or Advances made between the date of the Assignment and the Effective Date. |
1 | Set forth as a percentage of the aggregate principal amount of the Advances of all Lenders. |
Exhibit H
Page 1
Aggregate Amount of Commitments for all Lenders* |
Amount of Commitment Assigned* |
Percentage Assigned of Commitment2 | ||||
$ | $ | $ |
7 | Date of Assignment: |
8 | Effective Date:3 [ ], 20[ ] |
[The remainder of this page has been intentionally left blank]
2 | Set forth as a percentage of the aggregate principal amount of the Commitments of all Lenders. |
3 | To be inserted by the Administrative Agent and which shall be the effective date of recordation of transfer in the Register therefor. |
Exhibit H
Page 2
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR [NAME OF ASSIGNOR] | ||
By: |
| |
Name: | ||
Title: | ||
ASSIGNEE [NAME OF ASSIGNEE] | ||
By: |
| |
Name: | ||
Title: |
Consented to and Accepted: | ||
Delaware Trust Company, as Administrative Agent4 | ||
By: |
| |
Name: | ||
Title: | ||
Consented to: | ||
SAExploration Holdings, Inc., as Borrower5 | ||
By: |
| |
Name: | ||
Title: |
4 | To be executed to the extent required under Section 14.2(b) of the Term Loan Agreement. |
5 | To be executed to the extent required under Section 14.2(b) of the Term Loan Agreement and so long as no Event of Default under Section 9.1, 9.4 or 9.5 has occurred and is continuing. |
Exhibit H
Page 3
ANNEX 1 TO
ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Term Loan Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of Borrower or the other Loan Parties, any of their respective Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by Borrower or the other Loan Parties, any of their respective Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Term Loan Agreement, (ii) it meets all requirements of an Eligible Assignee under the Term Loan Agreement (subject to receipt of such consents as may be required under the Term Loan Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Term Loan Agreement and the other Loan Documents and other instruments or documents furnished pursuant thereto as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Term Loan Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.1 of the Term Loan Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, (vi) if it is not already a Lender under the Term Loan Agreement, attached to the Assignment and Assumption is a completed administrative questionnaire, (vii) subject to Section 14.2(d) of the Term Loan Agreement, the Administrative Agent has received a processing and recordation fee of $3,500 as of the Effective Date, unless waived by the Administrative Agent in its sole discretion, and (viii) attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to Section 16.1 of the Term Loan Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor 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.
2. Payments. From and after the Effective Date referred to in this Assignment and Assumption, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York, without regard to conflicts of laws principles that would require the application of the laws of another jurisdiction.
Exhibit H
Page 4
EXHIBIT I
Post-Closing Items
Borrower shall satisfy the requirements and/or provide to the Agent each of the documents, instruments, agreements and information set forth on this Exhibit I, on or before the date specified for such requirement on this Exhibit or such later date to be determined by the Required Lenders in their reasonable discretion, each of which shall be completed or provided in form and substance reasonably satisfactory to the Agent and the Required Lenders:
1. | Within 30 days of the Closing Date, Borrower shall cause to be delivered (i) certificates of insurance naming the Agent as lender loss payee and (ii) lender loss payable endorsements as required by the terms of Section 6.6 of the Agreement. |
2. | As soon as reasonably practicable and in accordance with the Intercreditor Agreement, each Loan Party shall obtain Control Agreements from each bank maintaining a Deposit Account, including HSBC USA, N.A. and Wells Fargo Bank, N.A., for such Loan Party as required by Section 6.12(c) of the this Agreement. |
3. | On or prior to the Second Advance Date, upon request by the Agent (at the written direction of the Required Lenders) the Agent and the Lenders shall have received, in form, scope and substance reasonably satisfactory to the Agent and the Required Lenders, a legal opinion of Alaskan counsel to the Loan Parties, addressed to the Agent and each of the Lenders. |
4. | Promptly, and in any event within 5 Business Days after request by the Agent (at the written direction of the Required Lenders), with respect to any titled Equipment or Preempted Perfection Equipment whose value exceeds $100,000 individually or $500,000 in the aggregate, each Loan Party owning such Equipment shall deliver an original certificate of title or other similar document issued by the applicable Governmental Authority for each such Equipment titled under state law, together with a signed title application naming the Agent as lien holder with respect to such Equipment and evidence that such title certificates have been filed (with the Agents Lien noted thereon) in the appropriate filing office in accordance with Section 6.12(k) of the this Agreement. |
5. | As soon as reasonably practicable after the Closing Date, Borrower shall deliver to the Agent a signed preferred ship mortgage for any federally registered vessel. |
6. | Within 10 Business Days of the Closing Date, Borrower shall deliver to the Agent executed trademark and copyright security agreements in favor of the Agent for the Intellectual Property identified on Schedule 5.26(b) to the Information Certificate, in addition to all necessary filings with the United States Patent and Trademark Office and United States Copyright Office, as applicable. |
7. | Borrower agrees to issue the Backstop Shares (as defined in the Restructuring Support Agreement) in accordance with the terms of the Restructuring Support Agreement. |
Exhibit I
Page 1
Schedule A-1
TO TERM LOAN AND SECURITY AGREEMENT
Collection Account
Schedule A-1
Schedule A-2
TO TERM LOAN AND SECURITY AGREEMENT
Authorized Person
Brent Whiteley, Chief Financial Officer, General Counsel and Secretary
Jeff Hastings, Chairman
Susan Stewart, Authorized Person
Brian Beatty, Authorized Person
Schedule A-2
Schedule D-1
TO TERM LOAN AND SECURITY AGREEMENT
Designated Account
Schedule D-1
Schedule P-1
TO TERM LOAN AND SECURITY AGREEMENT
Permitted Investments
1. | The Equity Interests held by Loan Parties on the Closing Date in Subsidiaries listed in Schedule 5.1(c) of the Information Certificate; |
2. | The Equity Interests held by SAExploration, Inc. on the Closing Date in the Kuukpik Joint Venture; |
3. | The Investments evidenced by the Intercompany Notes, to the extent constituting Permitted Indebtedness; and |
4. | Guarantees of Subsidiary performance of customer contracts entered into in the ordinary course of business. |
Schedule P-1
Schedule P-2
TO TERM LOAN AND SECURITY AGREEMENT
Permitted Liens
Debtor |
Secured Party |
Initial Financing Statement No. | ||
SAExploration Holdings, Inc. | U.S. Bank National Association, as Trustee and Noteholder Collateral Agent | 2014 2630432 | ||
SAExploration Holdings, Inc. | Wells Fargo Bank, National Association | 2014 4133153 | ||
SAExploration, Inc. | U.S. Bank National Association, as Trustee and Noteholder Collateral Agent | 2014 2630499 | ||
SAExploration, Inc. | Wells Fargo Bank, National Association | 2014 4133013 | ||
SAExploration, Inc. | PACIFIC WESTERN EQUIPMENT FINANCE, A DIVISION OF PACIFIC WESTERN BANK | 2014 4650081 | ||
SAExploration Sub, Inc. | U.S. Bank National Association, as Trustee and Noteholder Collateral Agent | 2014 2630705 | ||
SAExploration Sub, Inc. | Wells Fargo Bank, National Association | 2014 4133088 | ||
NES, LLC | U.S. Bank National Association, as Trustee and Noteholder Collateral Agent | 2014-785028-7 | ||
NES, LLC | Wells Fargo Bank, National Association | 2014 791848-3 | ||
SAExploration Seismic Services (US), LLC | U.S. Bank National Association, as Trustee and Noteholder Collateral Agent | 2014 2630572 | ||
SAExploration Seismic Services (US), LLC | Wells Fargo Bank, National Association | 2014 4133229 |
Schedule P-2
Exhibit 10.2
EXECUTION VERSION
AMENDED AND RESTATED
INTERCREDITOR AGREEMENT
This AMENDED & RESTATED INTERCREDITOR AGREEMENT (this Agreement), dated as of June 29, 2016, is by and among WELLS FARGO BANK, NATIONAL ASSOCIATION, as lender and collateral agent (in such capacities, with its successors and assigns, and as more specifically defined below, the ABL Agent), WILMINGTON SAVINGS FUND SOCIETY, FSB, as trustee and collateral agent (with its successors and assigns, and as more specifically defined below, the Existing Noteholder Agent), Delaware Trust Company, as administrative agent and collateral agent (in such capacities with its successors and assigns, and as more specifically defined below, the Term Agent) and, upon execution of an Additional Indebtedness Joinder and Designation (as defined below), the Additional Noteholder Agent (as defined below).
WHEREAS, SAExploration, Inc., a Delaware corporation (the ABL Borrower) and SAExploration Holdings, Inc., a Delaware corporation (Holdings), certain subsidiaries of Holdings, as Guarantors, and the ABL Agent are parties to that certain Credit and Security Agreement dated as of November 6, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the ABL Credit Agreement), pursuant to which, among other things, the ABL Agent has agreed to make loans and extend other financial accommodations to the ABL Borrower, which loans and financial accommodations are guaranteed by the other Loan Parties (as defined below);
WHEREAS, Holdings, certain subsidiaries of Holdings (including the ABL Borrower), as Guarantors, and the Existing Noteholder Agent are parties to that certain Indenture dated as of July 2, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the Existing Indenture), pursuant to which, among other things, Holdings issued secured notes in the aggregate original principal amount of $150,000,000 (the Existing Notes), which Existing Notes are guaranteed by certain Subsidiaries of Holdings;
WHEREAS, Holdings has entered into that certain Restructuring Support Agreement, dated as of June 13, 2016 (the Restructuring Support Agreement), among Holdings, on behalf of itself and the other Loan Parties under the Existing Indenture, and certain of the Existing Noteholders (as defined herein), pursuant to which the applicable Loan Parties have entered, or will enter, as the case may be, into and perform the following transactions, among other transactions, on the terms contemplated by the Restructuring Support Agreement: (i) one or more term loans on the terms set forth in the Term Credit Agreement (as defined below), (ii) the issuance of new shares in Holdings, and (iii) the consummation of an exchange offer in which Existing Notes are exchanged for Additional Notes (as defined below) and stock in Holdings, on the terms described in that certain Exchange Offer Memorandum and Consent Solicitation Statement, dated as of June 24, 2016 (the Exchange Offer), and the issuance of Additional Notes and new stock in Holdings pursuant to such Exchange Offer (such notes collectively referred to herein, the Additional Notes and the indenture by which such Additional Notes are issued, the Additional Indenture and the trustee and collateral agent under the Additional Indenture, the Additional Noteholder Agent).
WHEREAS, pursuant to the Restructuring Support Agreement, Holdings, certain subsidiaries of Holdings (including the ABL Borrower), as Guarantors, the lenders party thereto (the Term Lenders) and the Term Agent are parties to that certain Term Loan and Security Agreement, dated as of June 29, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the Term Credit Agreement), pursuant to which, among other things, the Term Lenders have agreed to make loans and extend other financial accommodations to Holdings, which loans and financial accommodations are guaranteed by the other Loan Parties (as defined below);
WHEREAS, the Loan Parties have granted to the ABL Agent security interests in the ABL Collateral (as defined below) as security for payment and performance of the ABL Obligations (as defined below);
WHEREAS, the Loan Parties have granted to the Existing Noteholder Agent security interests in the Existing Notes Collateral (as defined below) as security for payment and performance of the Existing Indenture Obligations (as defined below);
WHEREAS, the Loan Parties have granted to the Term Agent security interests in the Term Collateral (as defined below) as security for payment and performance of the Term Obligations (as defined below); and
WHEREAS, the Loan Parties plan to grant to the Additional Noteholder Agent security interests in the Collateral as security for payment and performance of the obligations of the Loan Parties under the Additional Indenture.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants contained herein and other good and valuable consideration, the existence and sufficiency of which is expressly recognized by all of the parties hereto, the parties agree as follows.
SECTION 1. Definitions; Rules Of Construction.
1.1 UCC Definitions. The following terms which are defined in the Uniform Commercial Code are used herein as so defined: Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Equipment, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter of Credit, Letter of Credit Rights, Records and Supporting Obligations.
1.2 Defined Terms. The following terms, as used herein, have the following meanings:
ABL Agent has the meaning set forth in the introductory paragraph hereof. In the case of any Replacement ABL Agreement, the ABL Agent shall be the Person identified as such in such agreement.
ABL Agent Cash Collateral means cash collateral for letter of credit or Hedging Obligations that is pledged or delivered to ABL Agent for Hedge Obligations and letters of credit
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issued by ABL Agent securing, in the case of letters of credit, an amount not to exceed 105% of the face amount of cash collateralized letters of credit issued upon the application of ABL Borrower and, in the case of Hedging Obligations, not to exceed the amount of such Hedging Obligations.
ABL Agreement means the collective reference to (a) the ABL Credit Agreement, and (b) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations outstanding under the ABL Credit Agreement (regardless of whether such replacement, refunding or refinancing is a working capital facility, asset-based facility or otherwise) or any other agreement or instrument referred to in this clause (b) unless such agreement or instrument expressly provides that it is not intended to be and is not an ABL Agreement hereunder (a Replacement ABL Agreement). Any reference to the ABL Agreement hereunder shall be deemed a reference to any ABL Agreement then extant.
ABL Borrower has the meaning set forth in the recitals above.
ABL Collateral means all Property of each Loan Party, whether now owned or hereafter acquired, whether arising before or after any Insolvency Proceeding, in which a Lien is obtained, granted or purported to be granted at any time to the ABL Agent as security for any ABL Obligation.
ABL Credit Agreement has the meaning set forth in the recitals above.
ABL Documents means the ABL Credit Agreement, each ABL Security Document, each ABL Guarantee and each other ABL Loan Document.
ABL Guarantee means any Guarantee by any Loan Party of any or all of the ABL Obligations.
ABL Lien means any Lien created by or pursuant to the ABL Security Documents.
ABL Loan Documents means the Loan Documents as defined in the ABL Credit Agreement.
ABL Obligations means (a) all principal of and interest (including any Post-Petition Interest), costs and premium (if any) on all loans and other extensions of credit made pursuant to the ABL Agreement or any DIP Financing by the ABL Agent to the extent permitted hereunder, (b) all reimbursement obligations (if any) and interest thereon (including any Post-Petition Interest) with respect to any letter of credit or similar instruments issued pursuant to the ABL Agreement, (c) all Guarantee obligations, indemnities, fees, expenses and other amounts payable from time to time pursuant to the ABL Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding, and (d) all other Obligations as defined under the ABL Credit Agreement, including, without limitation, Banking Services Obligations and Hedging Obligations. To the extent any payment with respect to any ABL Obligation (whether by or on behalf of any Loan Party, as Proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance, fraudulent transfer or a preference in any
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respect, set aside or required to be paid to a debtor in possession, any Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the ABL Agent and the other Classes of Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.
ABL Obligations Cap means the amount of $30,000,000, plus fees, costs, and interest thereon, plus Hedging Obligations relating to the ABL Obligations not to exceed $5,000,000, plus Indebtedness at any time owing to ABL Agent on account of a DIP Financing in a principal amount not to exceed $5,000,000.
ABL Obligations Payment Date means the first date on which (a) the ABL Obligations (other than those that constitute Unasserted Contingent Obligations and in the case of any sale of ABL Collateral, any Excess ABL Obligations) have been indefeasibly paid in cash in full (or cash collateralized or defeased in accordance with the terms of the ABL Documents), (b) all commitments to extend credit under the ABL Documents have been terminated, (c) there are no outstanding letters of credit issued under the ABL Documents (other than such as have been cash collateralized or defeased in accordance with the terms of the ABL Documents), (d) any other conditions to termination of the ABL Liens set forth in Section 2.10 of the ABL Credit Agreement have been satisfied, and (e) so long as the Term Obligations Payment Date, the Existing Indenture Obligations Payment Date or the Additional Indenture Obligations Payment Date, to the extent applicable, shall not have occurred, the ABL Agent has delivered a written notice to the respective Representative(s) stating that the events described in clauses (a), (b), (c), and (d), have occurred to the satisfaction of the ABL Agent.
ABL Post-Petition Assets has the meaning set forth in Section 5.2(b).
ABL Security Documents means any and all agreements securing satisfaction of the ABL Obligations, including the ABL Credit Agreement, those certain Deposit Account Control Agreements between ABL Agent, the Existing Noteholder Agent, the ABL Borrower, and certain other Loan Parties (as may be amended to add Additional Noteholder Agent and Term Agent as parties thereto as contemplated by the Loan Documents), that certain Preferred Ship Mortgage of November 6, 2014, executed by SAExploration Seismic Services (US), LLC in favor of the ABL Agent, and any other ABL Loan Documents under which a security interest is granted to the ABL Agent.
Additional Debt has the meaning set forth in Section 10.5(b).
Additional Indenture has the meaning set forth in the recitals above.
Additional Indenture Agreement means the collective reference to (a) the Additional Indenture; (b) any agreement under which notes are sold or issued pursuant to the terms of the Additional Indenture or any supplemental indenture relating to such notes, if any; and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any Indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the Indebtedness and other obligations outstanding under or issued pursuant to the
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Additional Indenture or any other agreement or instrument referred to in this clause (c) unless such agreement or instrument expressly provides that it is not intended to be and is not an Additional Indenture Agreement hereunder (a Replacement Additional Indenture Agreement). Any reference to the Additional Indenture Agreement hereunder shall be deemed a reference to any Additional Indenture Agreement then extant.
Additional Indenture Documents means the Additional Indenture Agreement, each Additional Indenture Security Document and each Additional Indenture Guarantee.
Additional Indenture Guarantee means any Guarantee by any Loan Party of any or all of the Additional Indenture Obligations.
Additional Indenture Lien means any Lien created by or pursuant to the Additional Indenture Security Documents.
Additional Indenture Obligations means (a) all principal of and interest (including any Post-Petition Interest), costs and premium (if any) on all indebtedness issued under the Additional Indenture Agreement or any DIP Financing provided by some or all of the Additional Indenture Secured Parties to the extent permitted hereunder, and (b) all Guarantee obligations, indemnities, fees, expenses and other amounts payable from time to time pursuant to the Additional Indenture Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any Additional Indenture Obligation (whether by or on behalf of any Loan Party, as Proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance, fraudulent transfer or a preference in any respect, set aside or required to be paid to a debtor in possession, a Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the Additional Noteholder Agent and the other Classes of Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.
Additional Indenture Obligations Payment Date means the first date on which (a) the Additional Indenture Obligations (other than those that constitute Unasserted Contingent Obligations) have been indefeasibly paid in cash in full, (b) all commitments to extend credit under the Additional Indenture Documents have been terminated, and (c) so long as the ABL Obligations Payment Date, Term Obligations Payment Date or Existing Indenture Obligations Payment Date shall not have occurred, the Additional Noteholder Agent has delivered a written notice to the respective Representative(s) stating that the events described in clauses (a) and (b) have occurred to the satisfaction of the Additional Indenture Secured Parties.
Additional Indenture Secured Parties means the Additional Noteholder Agent and the Additional Noteholders.
Additional Indenture Security Documents means any and all agreements securing satisfaction of the Additional Indenture Obligations.
Additional Noteholder Agent has the meaning set forth in the recitals above and shall become a party hereto and be bound by all terms hereof upon the execution of an Additional Indebtedness Joinder and Designation.
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Additional Noteholders means the holders of the notes issued under any Additional Indenture Agreement.
Additional Notes has the meaning set forth in the recitals above.
Additional Notes Collateral means all Property of each Loan Party, whether now owned or hereafter acquired, whether arising before or after any Insolvency Proceeding, in which a Lien is granted or purported to be granted to any Additional Indenture Secured Party as security for any Additional Indenture Obligation.
Additional Term Agreement means any agreement approved for designation as such by the Representatives in any Additional Indebtedness Joinder and Designation delivered to the Loan Parties after the date hereof, a form of which is attached hereto as Exhibit A.
Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, control, as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
Banking Services Obligations means with respect to any Loan Party, any obligations of such Loan Party owed to ABL Agent (or any of its affiliates) in respect of Cash Management Services.
Bankruptcy Code means Title 11 of the United States Code entitled Bankruptcy, as now and hereafter in effect, or any successor statute.
Board of Directors means:
(1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
(2) with respect to a partnership, the board of directors of a direct or indirect general partner of the partnership;
(3) with respect to a limited liability company, the direct or indirect managing member or members or any controlling committee of managing members thereof; and
(4) with respect to any other Person, the board or committee of such Person serving a similar function.
Business Day means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed.
Capital Lease Obligation means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the Stated Maturity
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thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.
Capital Stock means, (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) in the equity of such entity, (c) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests, and (d) in the case of any other entity, any other interests or participations that confer on a Person that right to receive a share of the profits and losses of, or distributions of assets of, the issuing entity, but excluding for each of (a) through (d) any debt securities convertible or exchangeable for Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
Cash Management Services means any cash management or related services including treasury, depository, return items, overdraft, controlled disbursement, merchant stored value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other cash management arrangements.
Class, when used in reference to (a) any Secured Obligations, refers to whether such Secured Obligations are the ABL Obligations, the Term Obligations, the Additional Indenture Obligations or the Existing Indenture Obligations, (b) any Representative, refers to whether such Representative is the ABL Agent, the Term Agent, the Additional Noteholder Agent or the Existing Noteholder Agent, (c) any Secured Parties, refers to whether such Secured Parties are the ABL Agent, the Term Secured Parties, the Additional Indenture Secured Parties or the Existing Indenture Secured Parties and/or (d) any Loan Documents, refers to whether such Loan Documents are the ABL Documents, the Term Documents, the Additional Indenture Documents or the Existing Indenture Documents.
Collateral means all existing and future assets and property of Holdings, each Domestic Subsidiary of Holdings (including the ABL Borrower) and each other Subsidiary of Holdings that becomes party to any Loan Documents after the date hereof, with respect to which a Lien is granted as security for any Secured Obligations under each Class of Loan Documents that constitutes:
(1) | Accounts (as defined in the UCC), payment intangibles and all other receivables; |
(2) | Equipment (as defined in the UCC) and documents therefor; |
(3) | Investment Property (as defined in the UCC); |
(4) | commodity accounts, deposit accounts, collection accounts and securities accounts (including all cash, cash equivalents, financial assets, negotiable instruments and other evidence of payment, and other funds on deposit therein or credited thereto); |
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(5) | letter of credit rights, supporting obligations and commercial tort claims with respect to any of the foregoing and letters of credit transferred to the ABL Agent; |
(6) | all contracts, contract rights, Inventory, General Intangibles, documents, Chattel Paper (whether tangible or electronic) (each as defined in the UCC), drafts and acceptances, payment intangibles and instruments, in each case, in connection with, used in, acquired for, or necessary to the realization on any of the assets identified in clauses (1) through (5); excluding intercompany notes by or among Holdings and any of its Subsidiaries; |
(7) | all other tangible and intangible property of Holdings, its Domestic Subsidiaries and each of its other Subsidiaries that becomes a party to the Loan Documents after the date hereof; |
(8) | all books and records relating to the items referred to in items (1) through (7); and |
(9) | all collateral security and guarantees with respect to any of the foregoing and, subject to the terms of this Agreement, all proceeds, products, substitutions, replacements, accessions, cash, money, insurance proceeds, instruments, securities, security entitlements, financial assets and deposit accounts received as proceeds of any of the foregoing and any other proceeds of the above as such are set forth in the ABL Credit Agreement; provided that any Collateral, regardless of type, received in exchange for any Collateral pursuant to an Enforcement Action pursuant to the terms of the ABL Credit Agreement (or the Term Credit Agreement in the event the ABL Credit Agreement has been paid in cash in full) and this Agreement shall be treated as Collateral under this Agreement and the Security Documents. |
Comparable Security Document means, in relation to any Senior Collateral subject to any Senior Security Document, that Junior Security Document that creates a security interest in the same Senior Collateral, granted by the same Loan Party, as applicable.
DIP Financing has the meaning set forth in Section 5.2(a).
Domestic Subsidiary means any Restricted Subsidiary of the ABL Borrower that was formed under the laws of the United States or any state of the United States or the District of Columbia.
Enforcement Action means, with respect to the Secured Obligations, the exercise of any default rights and remedies with respect to any Collateral securing such Secured Obligations or the commencement or prosecution of enforcement of any of such rights and remedies with respect to Collateral under, as applicable, the Loan Documents, or applicable law, and the exercise of any default rights or remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction or under the Bankruptcy Code.
Equity Interests mean, with respect to any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents, including membership interests (however designated, whether voting or nonvoting), of equity of such Person, including, if such
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Person is a partnership, partnership interests (whether general or limited), joint venture interests, or if such Person is a limited liability company, membership interests and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of Property of, such partnership, whether outstanding on the date hereof or issued on or after the date hereof, but excluding debt securities convertible or exchangeable into such equity.
Excess ABL Obligations means the sum of (a) the portion of the principal amount of the loans outstanding under the ABL Documents and the undrawn amount of outstanding letters of credit issued thereunder that is in excess of the ABL Obligations Cap, plus (b) the portion of interest and fees that accrues or is charged with respect to that portion of the principal amount of the loans and letters of credit described in clause (a) of this definition.
Excluded Accounts means, as to any Loan Party, all Deposit Accounts used solely for (i) payroll and/or accrued employee benefits, or (ii) employee benefit plans.
Existing Indenture has the meaning set forth in the recitals above.
Existing Indenture Agreement means the collective reference to (a) the Existing Indenture; (b) any agreement under which Existing Notes are sold or issued pursuant to the terms of the Existing Indenture or any supplemental indenture (including that certain supplemental indenture, dated as of June 29, 2016) relating to Additional Notes, if any, including, without limitation, that certain Purchase Agreement, dated as of June 25, 2014 by and between Holdings, Jefferies LLC and certain subsidiaries of Holdings, as guarantors; and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any Indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the Indebtedness and other obligations outstanding under or issued pursuant to the Existing Indenture or any other agreement or instrument referred to in this clause (c) unless such agreement or instrument expressly provides that it is not intended to be and is not an Existing Indenture Agreement hereunder (a Replacement Existing Indenture Agreement); provided that, for the avoidance of doubt the Additional Indenture shall not be considered an Existing Indenture Agreement hereunder. Any reference to the Existing Indenture Agreement hereunder shall be deemed a reference to any Existing Indenture Agreement then extant.
Existing Indenture Documents means the Existing Indenture Agreement, each Existing Indenture Security Document and each Existing Indenture Guarantee.
Existing Indenture Guarantee means any Guarantee by any Loan Party of any or all of the Existing Indenture Obligations.
Existing Indenture Lien means any Lien created by or pursuant to the Existing Indenture Security Documents.
Existing Indenture Obligations means (a) all principal of and interest (including any Post-Petition Interest), costs and premium (if any) on all indebtedness issued under the Existing Indenture Agreement or any DIP Financing provided by some or all of the Existing Indenture Secured Parties to the extent permitted hereunder, and (b) all Guarantee obligations, indemnities,
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fees, expenses and other amounts payable from time to time pursuant to the Existing Indenture Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any Existing Indenture Obligation (whether by or on behalf of any Loan Party, as Proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance, fraudulent transfer or a preference in any respect, set aside or required to be paid to a debtor in possession, a Representative, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of such Representative and the respective Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.
Existing Indenture Obligations Payment Date means the first date on which (a) the Existing Indenture Obligations (other than those that constitute Unasserted Contingent Obligations) have been indefeasibly paid in cash in full, (b) all commitments to extend credit under the Existing Indenture Documents have been terminated, and (c) so long as the ABL Obligations Payment Date, the Term Obligations Payment Date or the Additional Indenture Obligations Payment Date shall not have occurred, the Existing Noteholder Agent has delivered a written notice to the respective Representative(s) stating that the events described in clauses (a) and (b) have occurred to the satisfaction of the Existing Indenture Secured Parties.
Existing Indenture Secured Parties means the Existing Noteholder Agent and the Existing Noteholders.
Existing Indenture Security Documents means any and all agreements securing satisfaction of the Existing Indenture Obligations, including, without limitation, that certain Security Agreement, dated as of July 2, 2014 by and among the ABL Borrower and the other Loan Parties, as co-Pledgors, and the Existing Noteholder Agent, that certain Trademark Security Agreement, dated as of July 2, 2014 by and among the ABL Borrower and the other Loan Parties, as co-Pledgors, and the Existing Noteholder Agent, those certain Deposit Account Control Agreements, each dated as of November 6, 2014 by and among the ABL Agent, the Existing Noteholder Agent, the ABL Borrower, and certain other Loan Parties (to be amended to add Additional Noteholder Agent and Term Agent as parties thereto as contemplated by the Loan Documents), and that certain Preferred Ship Mortgage, dated as of November 6, 2014, executed by SAExploration Seismic Services (US), LLC in favor of the Existing Noteholder Agent.
Existing Noteholder Agent has the meaning set forth in the recitals above.
Existing Noteholders means the holders of the Existing Notes.
Existing Notes has the meaning set forth in the recitals above.
Existing Notes Collateral means all Property of each Loan Party, whether now owned or hereafter acquired, whether arising before or after any Insolvency Proceeding, in which a Lien is granted or purported to be granted to any Existing Indenture Secured Party as security for any Existing Indenture Obligation.
Fair Market Value means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party,
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determined in good faith by the Chief Financial Officer or Board of Directors of Holdings (unless otherwise provided in the Term Credit Agreement, the Existing Indenture and the Additional Indenture).
Foreign Equity means Equity Interests in any Foreign Subsidiary that are owned by any Loan Party.
Foreign Subsidiary means any Restricted Subsidiary of Holdings that is not a Domestic Subsidiary.
GAAP means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in any other statements by such other entity as may have been approved by a significant segment of the accounting profession, which are in effect from time to time.
Governmental Authority means any federal, state, local or foreign (whether civil, criminal, military or otherwise) court, central bank or governmental agency, tribunal, authority, instrumentality or regulatory body or any subdivision thereof or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
Guarantee means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).
Hedging Obligations means with respect to any specified Person, the obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreement, and interest rate collar agreements;
(2) other agreements or arrangements designed to manage interest rates or interest rate risk; and
(3) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.
Holdings has the meaning set forth in the recitals above.
Impairment has the meaning set forth in Section 2.7.
Indebtedness means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:
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(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of bankers acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price of any property or services due more than one year after such property is acquired or such services are completed; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term Indebtedness includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person. Indebtedness shall be calculated without giving effect to the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under any Loan Documents as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.
Insolvency Proceedings means with respect to any Person, (a) any voluntary or involuntary case or proceeding under the Bankruptcy Code with respect to such Person, (b) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to such Person or with respect to a material portion of its assets; (c) any composition of liabilities or similar arrangement relating to such Person, whether or not under a courts jurisdiction or supervision; (d) any liquidation, dissolution, reorganization or winding up of such Person, whether voluntary or involuntary, whether or not under a courts jurisdiction or supervision, and whether or not involving insolvency or bankruptcy; or (e) any general assignment for the benefit of creditors or any other marshaling of assets and liabilities of such Person.
Intervening Creditor has the meaning set forth in Section 2.7.
Intervening Lien has the meaning set forth in Section 2.7.
Issue Date means July 2, 2014.
Joint Venture means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form; provided, in no event shall any corporate Subsidiary of any Person be considered to be a Joint Venture to which such Person is a party.
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Junior Collateral means with respect to any Junior Secured Party, any Collateral on which it has a Junior Lien.
Junior Documents means, collectively, with respect to any Junior Obligations, any provision pertaining to such Junior Obligation in any Loan Document or any other document, instrument or certificate evidencing or delivered in connection with such Junior Obligation.
Junior Liens means (a) with respect to any ABL Collateral, all Liens securing the Term Obligations, the Additional Indenture Obligations and the Existing Indenture Obligations, (b) with respect to any Term Collateral, all Liens securing the Additional Indenture Obligations and the Existing Indenture Obligations and (c) with respect to any Additional Notes Collateral, all Liens securing the Existing Indenture Obligations.
Junior Obligations means (a) with respect to any ABL Collateral, the Term Obligations, the Additional Indenture Obligations and the Existing Indenture Obligations, (b) with respect to any Term Collateral, the Additional Indenture Obligations and the Existing Indenture Obligations and (c) with respect to any Additional Notes Collateral, the Existing Indenture Obligations.
Junior Obligations Payment Date means (a) with respect to any ABL Obligations, the Term Obligations Payment Date, the Additional Indenture Obligations Payment Date and the Existing Indenture Obligations Payment Date, (b) with respect to any Term Obligations, the Additional Indenture Obligations Payment Date and the Existing Indenture Obligations Payment Date and (c) with respect to any Additional Indenture Obligations, the Existing Indenture Obligations Payment Date.
Junior Representative means (a) with respect to any ABL Obligations or any ABL Collateral, the Term Agent, the Additional Noteholder Agent and the Existing Noteholder Agent, (b) with respect to any Term Obligations or any Term Collateral, the Additional Noteholder Agent and the Existing Noteholder Agent and (c) with respect to the Additional Indenture Obligations or any Additional Notes Collateral the Existing Noteholder Agent.
Junior Representative Waiver Event has the meaning set forth in Section 3.2(c).
Junior Secured Parties means (a) with respect to the ABL Collateral, the Term Secured Parties, Additional Indenture Secured Parties and Existing Indenture Secured Parties, (b) with respect to the Term Collateral, all Additional Indenture Secured Parties and Existing Indenture Secured Parties and (c) with respect to the Additional Notes Collateral, the Existing Indenture Secured Parties.
Junior Security Documents means with respect to any Junior Secured Party, the Security Documents that secure the Junior Obligations.
Legal Requirements means, as to any Person, the Organizational Documents of such Person, and any governmental treaty, law (including the common law), statute, ordinance, code, rule, regulation, guidelines, license, permit requirement, Order or determination of an arbitrator or a court or other Governmental Authority, and the interpretation or administration thereof, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.
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Lien means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not field recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the UCC (or equivalent statutes) of any jurisdiction.
Lien Priority means with respect to any Lien of a Representative in the Collateral, the order of priority of such Lien specified in Section 2.1.
Loan Documents shall mean, collectively, the ABL Documents, the Term Documents, the Additional Indenture Documents and the Existing Indenture Documents.
Loan Party means Holdings, the ABL Borrower and each Subsidiary of Holdings that is now or hereafter becomes a party to any Loan Document. All references in this Agreement to any Loan Party shall include such Loan Party as a debtor-in-possession and any receiver or trustee for such Loan Party in any Insolvency Proceeding.
Non-Recourse Debt means Indebtedness:
(1) as to which neither Holdings nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), or (b) is directly or indirectly liable as a guarantor or otherwise;
(2) no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time, or both, any holder of any other Indebtedness of Holdings or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity; and
(3) as to which the lenders will not have any recourse to the stock or assets of Holdings or any of its Restricted Subsidiaries (other than Equity Interests of an Unrestricted Subsidiary).
Organizational Documents means, with respect to any Person, (a) in the case of any corporation, the certificate of incorporation and by-laws (or similar documents) of such Person, (b) in the case of any limited liability company, the certificate of formation and operating agreement (or similar documents) of such Person, (c) in the case of any limited partnership, the certificate of formation and limited partnership agreement (or similar documents) of such Person (and, where applicable, the equity holders or shareholders registry of such Person), (d) in the case of any general partnership, the partnership agreement (or similar document) of such Person, (e) in any other case, the functional equivalent of the foregoing, and (f) any shareholder, voting trust or similar agreement between or among any holders of Equity Interests of such Person.
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Person means and includes natural persons, corporations, limited partnerships, general partnerships, partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.
Post-Petition Interest means any interest or entitlement to fees or expenses or other charges that accrues after the commencement of any Insolvency Proceeding (or would accrue but for the commencement of an Insolvency Proceeding), whether or not allowed or allowable in any such Insolvency Proceeding.
Proceeds means (a) when used with respect to the Collateral, all proceeds, as defined in Article 9 of the Uniform Commercial Code (including, without limitation, insurance proceeds on Collateral but excluding any business interruption insurance), and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.
Property means any right, title, or interest in or to property of assets of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible and including Equity Interests of any other Person owned by the Person in question and whether now in existence or owned or hereafter entered into or acquired, including all Real Property, cash, securities, accounts, revenues and contract rights.
Purchase Option Period has the meaning set forth in Section 7.1(a).
Recovery has the meaning set forth in Section 5.5.
Replacement ABL Agreement has the meaning set forth in the definition of ABL Agreement.
Replacement Term Agreement has the meaning set forth in the definition of Term Agreement.
Replacement Additional Indenture Agreement has the meaning set forth in the definition of Additional Indenture Agreement.
Replacement Existing Indenture Agreement has the meaning set forth in the definition of Existing Indenture Agreement.
Representative means each of the ABL Agent, Term Agent, Additional Noteholder Agent and the Existing Noteholder Agent.
Restricted Subsidiary of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.
Retained Interest has the meaning set forth in Section 7.5.
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Secured Obligations means ABL Obligations, the Term Obligations, the Additional Indenture Obligations and the Existing Indenture Obligations.
Secured Parties means the ABL Agent, the Term Secured Parties, the Additional Indenture Secured Parties and the Existing Indenture Secured Parties.
Security Documents means, collectively, the ABL Security Documents, the Term Security Documents, the Additional Indenture Security Documents and the Existing Indenture Security Documents.
Senior Collateral means with respect to any Senior Secured Party, any Collateral on which it has a Senior Lien.
Senior Documents means, collectively, with respect to any Senior Obligation, any provision pertaining to such Senior Obligation in any Loan Document or any other document, instrument or certificate evidencing or delivered in connection with such Senior Obligation.
Senior Liens means (a) with respect to the Term Collateral, all Liens securing the ABL Obligations, (b) with respect to the Additional Notes Collateral, all Liens securing the Term Obligations and all Liens securing the ABL Obligations and (c) with respect to the Existing Notes Collateral, all Liens securing the Additional Indenture Obligations, all Liens securing the Term Obligations and all Liens securing the ABL Obligations.
Senior Obligations means (a) with respect to any Term Collateral, all ABL Obligations, (b) with respect to any Additional Notes Collateral, all Term Obligations and all ABL Obligations and (c) with respect to any Existing Notes Collateral, all Additional Indenture Obligations, all Term Obligations and all ABL Obligations.
Senior Obligations Payment Date means (a) with respect to Term Obligations, the ABL Obligations Payment Date, (b) with respect to any Additional Indenture Obligations, the Term Obligations Payment Date and the ABL Obligations Payment Date and (c) with respect to any Existing Indenture Obligations, the Additional Indenture Obligations Payment Date, the Term Obligations Payment Date and the ABL Obligations Payment Date.
Senior Representative means (a) with respect to any Term Collateral, the ABL Agent, (b) with respect to any Additional Notes Collateral, the ABL Agent or (if the ABL Obligations Payment Date shall have occurred) the Term Agent and (c) with respect to any Existing Notes Collateral, the ABL Agent, (if the ABL Obligations Payment Date shall have occurred) the Term Agent or (if the Term Obligations Payment Date shall have occurred) the Additional Noteholder Agent.
Senior Secured Parties means (a) with respect to the Term Collateral, the ABL Agent, (b) with respect to the Additional Notes Collateral, the Term Secured Parties and the ABL Agent and (c) with respect to the Existing Notes Collateral, the Additional Indenture Secured Parties, the Term Secured Parties and the ABL Agent.
Senior Security Documents means with respect to any Senior Secured Party, the Security Documents that secure the Senior Obligations.
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Stated Maturity means, with respect to any installment of interest or principal of any Indebtedness, the date on which the payment of interest or principal is scheduled to be paid in the documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
Subsidiary means, with respect to any specified Person:
(1) any corporation, association, or other business entity of which more than 50% of the total voting power of shares of Equity Interests entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders agreement that effectively transfers voting power) to vote in the election of directors, managers, trustees or similar persons of the corporation, association, or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership or limited liability company of which (a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (b) such Person or any Subsidiary of such Person is a controlling general partner or controlling managing member or otherwise controls such entity.
Term Agent has the meaning set forth in the introductory paragraph hereof. In the case of any Replacement Term Agreement, the Term Agent shall be the Person identified as such in such agreement.
Term Agreement means the collective reference to (a) the Term Credit Agreement, (b) any Additional Term Agreement and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations outstanding under the Term Credit Agreement (regardless of whether such replacement, refunding or refinancing is a working capital facility, asset-based facility or otherwise), any Additional Term Agreement or any other agreement or instrument referred to in this clause (c) unless such agreement or instrument expressly provides that it is not intended to be and is not a Term Agreement hereunder (a Replacement Term Agreement). Any reference to the Term Agreement hereunder shall be deemed a reference to any Term Agreement then extant.
Term Collateral means all Property of each Loan Party, whether now owned or hereafter acquired, whether arising before or after any Insolvency Proceeding, in which a Lien is obtained, granted or purported to be granted at any time to the Term Agent, for the benefit of the Term Secured Parties, as security for any Term Obligation.
Term Credit Agreement has the meaning set forth in the recitals above.
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Term Documents means the Term Agreement, each Term Security Document, each Term Guarantee and each other Term Loan Document.
Term Guarantee means any Guarantee by any Loan Party of any or all of the Term Obligations.
Term Lender has the meaning set forth in the introductory paragraph hereof. In the case of any Replacement Term Agreement, the Term Lenders shall be the Persons identified as such in such agreement.
Term Lien means any Lien created by or pursuant to the Term Security Documents.
Term Loan Documents means the Loan Documents as defined in the Term Credit Agreement or the Term Agreement, as applicable.
Term Obligations means (a) all principal of and interest (including any Post-Petition Interest), costs and premium (if any) on all loans and other extensions of credit made pursuant to the Term Agreement or any DIP Financing by some or all of the Term Secured Parties to the extent permitted hereunder, and (b) all Guarantee obligations, indemnities, fees, expenses and other amounts payable from time to time pursuant to the Term Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any Term Obligation (whether by or on behalf of any Loan Party, as Proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance, fraudulent transfer or a preference in any respect, set aside or required to be paid to a debtor in possession, any Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the Term Agent and the Term Lenders and the other Classes of Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.
Term Obligations Payment Date means the first date on which (a) the Term Obligations (other than those that constitute Unasserted Contingent Obligations) have been indefeasibly paid in cash in full, (b) all commitments to extend credit under the Term Documents have been terminated, and (c) so long as the ABL Obligations Payment Date, Existing Indenture Obligations Payment Date or Additional Indenture Obligations Payment Date shall not have occurred, the Term Agent has delivered a written notice to the respective Representative stating that the events described in clauses (a) and (b), have occurred to the satisfaction of the Term Secured Parties.
Term Secured Parties means the Term Agent and the Term Lenders.
Term Security Documents means any and all agreements securing satisfaction of the Term Obligations, including the Term Credit Agreement.
Triggering Event means (i) the acceleration of any Senior Obligations with first ranking Lien Priority under Section 2.1 hereof prior to maturity, (ii) the termination of the Senior Representatives commitment to make advances under the related Senior Documents, by written notice, (iii) the exercise of any Enforcement Action in respect of such Senior Obligations, (iv) any default in any scheduled payment of principal, premium, if any, interest or fees under any
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related Senior Document that remains uncured or unwaived for a period of 30 consecutive days, (v) the commencement of an Insolvency Proceeding or (vi) a Junior Representative Waiver Event.
Unasserted Contingent Obligations means, at any time, Secured Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (excluding (a) the principal of, and interest and premium (if any) on, and fees and expenses relating to, any Secured Obligation, and (b) with respect to Secured Obligations, contingent reimbursement obligations in respect of amounts that may be drawn under outstanding letters of credit) in respect of which no assertion of liability (whether oral or written) and no claim or demand for payment (whether oral or written) has been made (and, in the case of Secured Obligations for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.
Uniform Commercial Code or UCC means the Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
Unrestricted Subsidiary means any Subsidiary of Holdings that is designated by the Board of Directors of Holdings as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) except as permitted under the terms of the Term Credit Agreement, the Existing Indenture and the Additional Indenture, is not party to any agreement, contract, arrangement, or understanding with Holdings or any Restricted Subsidiary of Holdings unless the terms of any such agreement, contract, arrangement, or understanding are no less favorable to Holdings or such Restricted Subsidiary than those that might be obtained at the time for Persons who are not Affiliates of Holdings;
(3) is a Person with respect to which neither Holdings nor any of its Restricted Subsidiaries has any direct or indirect obligation to (a) subscribe for additional Equity Interests, or (b) maintain or preserve such Persons financial condition or to cause such Person to achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Holdings or any of its Restricted Subsidiaries.
Voting Stock of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
1.3 Rules of Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words include, includes and including shall be deemed to be followed by the phrase without limitation. The word will shall be construed to have the same meaning and effect as the word shall. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise
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modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Persons successors and assigns, (c) the words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time and (f) the words asset and property shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
SECTION 2. Lien Priority.
2.1 Lien Subordination. Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Junior Lien in respect of any Collateral or of any Senior Lien in respect of any Collateral and notwithstanding any provision of the UCC, any applicable law (including the Bankruptcy Code), any Loan Document, any alleged or actual defect or deficiency in any of the foregoing, any failure to attach or (if required under any Loan Document) perfect any Lien created under any Loan Document or any other circumstance whatsoever, each Junior Representative, on behalf of the respective Junior Secured Parties, in respect of such Collateral hereby agrees that:
(a) any Senior Lien in respect of such Collateral, regardless of how or when acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be and shall remain senior and prior to any Junior Lien in respect of such Collateral (whether or not such Senior Lien is subordinated to any Lien securing any other obligation); and
(b) any Junior Lien in respect of such Collateral, regardless of how or when acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to any Senior Lien in respect of such Collateral.
For the avoidance of doubt, as between the ABL Agent and the other Secured Parties, the Lien on the Collateral securing the obligations to the ABL Agent under the ABL Credit Agreement (other than Excess ABL Obligations) shall always be senior to the Lien on the Collateral securing the obligations to (i) the Term Secured Parties under the Term Credit Agreement, (ii) the Additional Indenture Secured Parties under the Additional Indenture and (iii) the Existing Indenture Secured Parties under the Existing Indenture. For the avoidance of doubt, (A) as between the Term Secured Parties and the other Secured Parties, the Lien on the Collateral securing the obligations to the Term Secured Parties under the Term Credit Agreement shall be (i) senior to the Lien on the Collateral securing the obligations to (x) the Additional Indenture Secured Parties under the Additional Indenture and (y) the Existing Indenture Secured Parties under the Existing Indenture and (ii) junior to the Lien on the Collateral securing the obligations to the ABL Agent; (B) as between the Additional Indenture Secured Parties and the other Secured Parties, the Lien on the Collateral securing the obligations to the Additional Indenture Secured Parties shall be (x) senior to the Lien on the Collateral securing the obligations to the Existing Indenture Secured Parties under the Existing Indenture and (y) junior to the Lien on the
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Collateral securing the obligations to (i) the ABL Agent and (ii) the Term Secured Parties under the Term Credit Agreement; and (C) as between the Existing Indenture Secured Parties and the other Secured Parties, the Lien on the Collateral securing the obligations to the Existing Indenture Secured Parties under the Existing Indenture shall be junior to the Lien on the Collateral securing the obligations to (i) the ABL Agent, (ii) the Term Secured Parties under the Term Credit Agreement and (iii) the Additional Indenture Secured Parties under the Additional Indenture.
2.2 Prohibition on Contesting Liens. In respect of any Collateral, each Junior Representative, on behalf of the respective Junior Secured Parties, in respect of such Collateral agrees that it shall not, and hereby waives any right to:
(a) contest, or support any other Person in contesting, in any proceeding (including any Insolvency Proceeding), the priority, validity or enforceability of any Senior Lien on such Collateral; or
(b) demand, request, plead or otherwise assert or claim the benefit of any marshaling, appraisal, valuation or similar right which it may have in respect of such Collateral or the Senior Liens on such Collateral, except to the extent that such rights are expressly granted in this Agreement.
2.3 Nature of Obligations. Each Junior Representative on behalf of itself and the respective Junior Secured Parties acknowledges that a portion of the ABL Obligations represents debt that is revolving in nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently re-borrowed, and that the terms of the ABL Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the ABL Obligations may be increased, replaced or refinanced, subject to the limitations on Indebtedness contained in the Junior Documents, in each event, without notice to or consent by the Junior Secured Parties and without affecting the provisions hereof. The ABL Agent, the Additional Noteholder Agent and the Existing Noteholder Agent acknowledge that the terms of the Term Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the Term Obligations may be increased, replaced or refinanced, subject to the limitations on Indebtedness contained in the ABL Loan Documents, the Existing Indenture Documents or the Additional Indenture Documents in each event, without notice to or consent by the other Representatives and without affecting the provisions hereof. The ABL Agent, the Term Agent and the Additional Noteholder Agent acknowledge that the Existing Indenture Obligations may be replaced or refinanced, and Additional Notes and/or Exchange Notes (as such terms are defined in the Existing Indenture) may be issued under the Existing Indenture, without notice to or consent by the other Representatives and without affecting the provisions hereof. The ABL Agent, the Term Agent and the Existing Noteholder Agent acknowledge that the Additional Indenture Obligations may be replaced or refinanced, and Additional Notes and/or Exchange Notes (as such terms are defined in the Additional Indenture) may be issued under the Additional Indenture, without notice to or consent by the other Representatives and without affecting the provisions hereof. The Lien Priorities provided in Section 2.1 shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, re-borrowing, increase, replacement, renewal, restatement or refinancing of any Class of Secured Obligations, or any portion thereof.
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2.4 No New Liens.
(a) Until the Senior Obligations Payment Date, no Junior Secured Party shall acquire or hold any Lien on any assets of any Loan Party securing any Junior Obligation which assets are not also subject to the Lien of the Senior Secured Parties under the Senior Documents, subject to the Lien Priority set forth herein. If any Junior Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Loan Party securing any Junior Obligation which assets are not also subject to the Lien of the Senior Secured Parties under the Senior Documents, subject to the Lien Priority set forth herein, then such Junior Representative (or the relevant Junior Secured Party) shall, without the need for any further consent of any other Junior Secured Party and notwithstanding anything to the contrary in any other Junior Document be deemed to also hold and have held such lien for the benefit of the Senior Representative or Senior Representatives (as applicable) as security for the Senior Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the Senior Representative or Senior Representatives (as applicable) in writing of the existence of such Lien.
(b) Until the applicable Junior Obligation Payment Date, the Senior Secured Parties shall not acquire or hold any Lien on any assets of any Loan Party securing any Senior Obligation which assets are not also subject to the Lien of the respective Junior Representative under the applicable Junior Documents, subject to the Lien Priority set forth herein; provided, however, the ABL Agent may hold Liens on ABL Agent Cash Collateral notwithstanding such Junior Representatives lack of a Lien thereon. If a Senior Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Loan Party securing any Senior Obligation which assets are not also subject to the Lien of each Junior Representative under the applicable Junior Documents, subject to the Lien Priority set forth herein, then such Senior Secured Party shall, notwithstanding anything to the contrary in any other Senior Document be deemed to also hold and have held such lien for the benefit of such Junior Representative as security for the applicable Junior Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify such Junior Representative in writing of the existence of such Lien.
2.5 Separate Grants of Security and Separate Classification. Each Secured Party acknowledges and agrees that (i) the grants of Liens pursuant to the ABL Security Documents, the Term Security Documents, the Additional Indenture Security Documents and the Existing Indenture Security Documents constitute separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the Secured Obligations of each Class are fundamentally different from the Secured Obligations of the other Classes and should be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the Secured Parties in respect of the Collateral constitute claims in the same class (rather than separate classes of senior and junior secured claims), then the Secured Parties hereby acknowledge and agree that all distributions shall be made as if there were separate classes of Secured Obligation claims against the Loan Parties with the effect being that, to the extent that the aggregate value of the Senior Collateral is sufficient (for this purpose ignoring all claims held by the other Secured Parties), such Senior Secured
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Party shall be entitled to receive, in addition to amounts distributed to it in respect of principal, pre-petition interest and other claims, all amounts owing in respect of Post-Petition Interest that is available from the pool of Collateral for such Senior Secured Party, before any distribution is made in respect of the claims held by the other Secured Parties, with the other Secured Parties hereby acknowledging and agreeing to turn over to the Senior Representative on behalf of the respective Senior Secured Party amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the aggregate recoveries.
2.6 Agreements Regarding Actions to Perfect Liens.
(a) [Reserved.]
(b) The Senior Representative hereby acknowledges that, to the extent that it holds, or a third party holds on its behalf, physical possession of or control (as defined in the Uniform Commercial Code) over Collateral pursuant to the Security Documents, such possession or control is also for the benefit of each Junior Representative and the respective Junior Secured Parties solely to the extent required to perfect their security interest in such Collateral. Nothing in the preceding sentence shall be construed to impose any duty on the Senior Representative (or any third party acting on either such Persons behalf) with respect to such Collateral or provide any Junior Representative and the respective Junior Secured Parties with any rights with respect to such Collateral beyond those specified in this Agreement and each Security Document, as applicable, provided that subsequent to the occurrence of the Senior Obligations Payment Date with respect to such Senior Representative (so long as the applicable Junior Obligations Payment Date shall not have occurred), each Junior Representative shall (i) deliver to the successor Senior Representative, at the Loan Parties sole cost and expense, the Collateral in its possession or control together with any necessary endorsements to the extent required by the Senior Documents of the Senior Representative or (ii) direct and deliver such Collateral as a court of competent jurisdiction otherwise directs. The provisions of this Agreement are intended solely to govern the respective Lien priorities as among the Secured Parties and shall not impose on the Secured Parties any obligations in respect of the disposition of any Collateral (or any proceeds thereof) that would conflict with prior perfected Liens or any claims thereon in favor of any other Person that is not a Secured Party.
2.7 Impairments. It is the intention of the parties hereto that the Secured Parties of each Class (and not the Secured Parties of any other Class) bear the risk of (a) any determination by a court of competent jurisdiction that (i) any Secured Obligations of such Class are unenforceable under applicable law or are subordinated to any other obligations (other than to any Secured Obligations of any other Class to the extent provided hereunder), (ii) any Secured Obligations of such Class do not have a valid and perfected Lien on any of the Collateral securing any Secured Obligations of the other Classes or (iii) any Person (other than any Representative or any Secured Party) has a Lien on any Collateral that is senior in priority to the Lien on such Collateral securing any Secured Obligations of such Class, but junior to the Lien on such Collateral securing any Secured Obligations of another Class (any such Lien being referred to as an Intervening Lien, and any such Person being referred to as an Intervening Creditor) and (b) the existence of any Collateral securing Secured Obligations of the other Class that does not constitute Collateral with respect to any Secured Obligations of such Class (any condition
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referred to in clause (a) or (b) with respect to the Secured Obligations of such Class being referred to as an Impairment of such Class); provided that the existence of any limitation on the maximum claim that may be made against any real property subject to a mortgage that applies to Secured Obligations of any Class shall not be deemed to be an Impairment of Obligations of any other Class. In the event an Impairment exists with respect to the Secured Obligations of a Class, the results of such Impairment shall be borne solely by the Secured Parties of such Class, and the rights of the Secured Parties of such Class (including the right to receive distributions in respect of the Secured Obligations of such Class pursuant to the Loan Documents of such Class and in accordance herewith) set forth herein shall be modified to the extent necessary so that the results of such Impairment are borne solely by the Secured Parties of such Class. In furtherance of the foregoing, in the event the Secured Obligations of a Class shall be subject to an Impairment in the form of an Intervening Lien of any Intervening Creditor, the value of any Collateral or Proceeds that are allocated to such Intervening Creditor shall be deducted solely from the Collateral or Proceeds to be distributed in respect of the Secured Obligations of such Class. In addition, in the event the Secured Obligations of a Class are modified pursuant to applicable law (including pursuant to Section 1129 of the Bankruptcy Code or any equivalent provision of, or order granted pursuant to, any other bankruptcy law), any reference to the Secured Obligations of such Class or the Loan Documents of such Class shall refer to such obligations or such documents as so modified.
SECTION 3. Enforcement Rights.
3.1 Exclusive Enforcement. Subject to a purchase of the Senior Obligations pursuant to Section 7, until the Senior Obligations Payment Date has occurred, whether or not an Insolvency Proceeding has been commenced by or against any Loan Party, the Senior Secured Parties shall have the exclusive right to take and continue any Enforcement Action (including the right to credit bid their debt) with respect to the Senior Collateral, without any consultation with or consent of any Junior Secured Party; provided, however, each Senior Secured Party shall use its best efforts to provide the Junior Secured Parties with copies of any written notice of (i) acceleration, (ii) payment default, or (iii) an Enforcement Action, within five (5) business days of providing such notice to any Loan Party.
3.2 Junior Representative Standstill and Waivers. Each Junior Representative, on behalf of itself and the respective Junior Secured Parties, agrees that until the Senior Obligations Payment Date has occurred, or upon the Senior Secured Parties advance written consent, but subject to the provisos set forth in Section 5.1 and Section 7:
(a) they will not take or cause to be taken any action, the purpose or effect of which is to make any Lien on any Senior Collateral that secures any Junior Obligation pari passu with or senior to, or to give any Junior Secured Party any preference or priority relative to, the Liens on the Senior Collateral securing the Senior Obligations;
(b) they will not contest, oppose, object to, interfere with, hinder or delay, in any manner, whether by judicial proceedings (including the filing of an Insolvency Proceeding) or otherwise, any foreclosure, sale, lease, exchange, transfer or other disposition of the Senior Collateral by any Senior Secured Party or any other Enforcement Action taken (or any forbearance from taking any Enforcement Action) in respect of the Senior Collateral by or on behalf of any Senior Secured Party;
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(c) they have no right to (i) direct either the Senior Representative or any other Senior Secured Party to exercise any right, remedy or power with respect to the Senior Collateral or pursuant to the Senior Security Documents in respect of the Senior Collateral, or (ii) consent or object to the exercise by the Senior Representative or any other Senior Secured Party, pursuant to an Enforcement Action, of any right, remedy or power with respect to the Senior Collateral or pursuant to the Senior Security Documents with respect to the Senior Collateral or to the timing or manner in which any such right is exercised or not exercised (or, to the extent they may have any such right described in this clause (c), whether as a junior lien creditor in respect of the Senior Collateral or otherwise, they hereby irrevocably waive such right; provided, however, if, pursuant to the terms of this subsection (ii), a Junior Representative is required to waive a contractual right in connection with a disposition of Collateral with an aggregate value in excess of $1,000,000, outside the ordinary course of business, such waiver shall constitute a Triggering Event if the Junior Representative provides written notification to the Senior Representative of the contractual right subject to such waiver and its status as a Triggering Event under this subsection and Section 7, and the Senior Representative nonetheless elects to proceed with the exercise of such right, remedy or power after receipt of such notice (a Junior Representative Waiver Event));
(d) they will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any Senior Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, and no Senior Secured Party shall be liable for, any action taken or omitted to be taken by any Senior Secured Party with respect to the Senior Collateral or pursuant to the Senior Documents in respect of the Senior Collateral;
(e) they will not commence judicial or non-judicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce their interest in or realize upon, the Senior Collateral; and
(f) they will not seek, and hereby waive any right, to have the Senior Collateral or any part thereof marshaled upon any foreclosure or other disposition of the Senior Collateral.
3.3 Judgment Creditors. In the event that any Secured Party becomes a judgment lien creditor in respect of any Collateral as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subject to the terms of this Agreement for all purposes to the same extent as all other Liens in favor of such Secured Party with respect to such Collateral are subject to the terms of this Agreement.
3.4 Cooperation; Sharing of Information and Access.
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(a) Each Junior Representative, on behalf of itself and the related Junior Secured Parties, agrees that each of them shall take such actions as the Senior Representative shall reasonably request in connection with the exercise by the Senior Representative of its rights set forth herein in respect of the Collateral.
(b) In the event that a Representative shall, in the exercise of its rights under the related Security Documents or otherwise, receive possession or control of any books and Records of any Loan Party which contain information identifying or pertaining to the Collateral, such Representative shall promptly notify each other Representative of such fact and, upon reasonable request from any other Representative and as promptly as practicable thereafter, either make available to such Representative such books and Records for inspection and duplication or provide to such Representative copies thereof.
(c) [Reserved].
3.5 No Additional Rights For the Loan Parties Hereunder. Except as provided in Section 3.6, if a Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, no Loan Party shall be entitled to use such violation as a defense to any action by such Secured Party, nor to assert such violation as a counterclaim or basis for set off or recoupment against such Secured Party.
3.6 Actions Upon Breach.
(a) If any Secured Party, contrary to this Agreement, commences or participates in any action or proceeding against any Loan Party or the Collateral, such Loan Party, with the prior written consent of the applicable Representative, may interpose as a defense or dilatory plea the making of this Agreement, and other Secured Parties may intervene and interpose such defense or plea in its or their name or in the name of such Loan Party.
(b) Should a Secured Party, contrary to this Agreement, in any way take, attempt to or threaten to take any action with respect to the Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement), or fail to take any action required by this Agreement, another Secured Party (in its own name or in the name of the relevant Loan Party), as applicable, or the relevant Loan Party, may obtain relief against such Secured Party by injunction, specific performance and/or other appropriate equitable relief, it being understood and agreed by each of the Representatives on behalf of the related Secured Parties that (i) a Secured Partys damages from its actions may at that time be difficult to ascertain and may be irreparable, and (ii) each Secured Party waives any defense that the Loan Parties and/or the other Secured Parties cannot demonstrate damage and/or be made whole by the awarding of damages.
3.7 Rights as Unsecured Creditors. The Secured Parties may, in accordance with the terms of the Loan Documents and applicable law, enforce rights and exercise remedies against the Loan Parties as unsecured creditors; provided that no such action is otherwise expressly or impliedly inconsistent with the terms of this Agreement.
3.8 Other Rights. For the avoidance of doubt, the Secured Parties shall be entitled to (a) take any action (not adverse to the priority status of the Liens on the Collateral, or the rights
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of the other Secured Parties or any of the holders of Secured Obligations to exercise remedies in respect thereof) in order to create, prove, perfect, preserve or protect (but not enforce) its Lien on and rights in, and the perfection and priority of its Lien on, any of the Collateral, (b) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Loan Parties arising under either any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law and, subject to the restrictions set forth herein, any pleadings, objections, motions or agreements which assert rights or interests available to secured creditors solely with respect to the Collateral, and (c) vote on any plan of reorganization, file any proof of claim, make other filings and make any arguments and motions that are, in each case, in accordance with the terms of this Agreement, with respect to their respective Secured Obligations and the Collateral.
SECTION 4. Application of Proceeds of Senior Collateral; Dispositions and Releases of Lien; Notices and Insurance.
4.1 Application of Proceeds.
(a) Application of Proceeds of Senior Collateral. The Senior Representative and each Junior Representative hereby agree that all Senior Collateral, and all Proceeds thereof, received by any of them in connection with the collection, sale or disposition of Senior Collateral shall be applied, first, to the payment of costs and expenses (including reasonable attorneys fees and expenses and court costs) of the Senior Representative in connection with such Enforcement Action, second, to the payment of the Senior Obligations in accordance with the Senior Documents until the Senior Obligations Payment Date, third, to the payment of the Junior Obligations in accordance with the terms thereof and the Lien Priority established in Section 2.1, fourth, to the payment in full in cash of the Excess ABL Obligations in accordance with the ABL Documents, and fifth, the balance, if any, to the Loan Parties or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct; provided, however, nothing herein shall prohibit the Junior Representatives, prior to an event of default under the Senior Documents and as otherwise permitted hereunder, from receiving regularly scheduled payments and reimbursement of fees and expenses from Proceeds, to the extent such Proceeds (i) are obtained by Loan Parties in the ordinary course of business as cash flow from operating activities or (ii) constitute Proceeds from the Alaska Tax Credits (as such term is defined in the ABL Credit Agreement).
(b) Limited Obligation or Liability. In exercising remedies, whether as a secured creditor or otherwise, the Senior Representative shall have no obligation or liability to any Junior Representative or to any Junior Secured Party, regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each party under the terms of this Agreement.
(c) Segregation of Collateral. Until the occurrence of the Senior Obligations Payment Date, any Senior Collateral that may be received by any Junior Secured Party in violation of this Agreement shall be segregated and held in trust and promptly paid over to the Senior Representative, for the benefit of the Senior Secured Parties, in the same form as received, with any necessary endorsements, and each Junior Secured Party hereby authorizes the Senior Representative to make any such endorsements as agent for each Junior Representative (which authorization, being coupled with an interest, is irrevocable).
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4.2 Release of Liens. Upon any release, sale or disposition of Senior Collateral permitted (or consented to) pursuant to the terms of the Senior Documents and this Agreement that results in the release of the Senior Lien on any Senior Collateral (including, after the occurrence of an Event of Default, any sale or other disposition pursuant to any Enforcement Action) (other than release of the Senior Lien due to the occurrence of the Senior Obligations Payment Date), the Junior Lien on such Senior Collateral (excluding any portion of the proceeds of such Senior Collateral remaining after the Senior Obligations Payment Date occurs) shall be automatically and unconditionally released with no further consent or action of any Person. Each Junior Representative shall promptly execute and deliver such release documents and instruments and shall take such further actions as the Senior Representative shall reasonably request to evidence any release of the Junior Lien described in this Section 4.2. Each Junior Representative hereby appoints the Senior Representative and any officer or duly authorized person of the Senior Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of such Junior Representative and in the name of such Junior Representative or in the Senior Representatives own name, from time to time, in the Senior Representatives sole discretion, for the purposes of carrying out the terms of this Section 4.2, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this Section 4.2, including any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).
4.3 [Reserved]
4.4 Insurance.
(a) Until the Senior Obligations Payment Date and subject to the terms of, and the rights of the Loan Parties under, the Senior Documents, the Senior Representative shall have the sole and exclusive right to adjust settlement for any insurance policy covering the Collateral in the event of any loss or claim thereunder, the sole and exclusive right to adjust settlement of any business interruption insurance, and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Collateral. Until the Senior Obligations Payment Date, (i) all Proceeds of any such policies and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect of the Collateral and to the extent required by the Senior Documents shall be paid to the Senior Representative pursuant to the terms of the Senior Documents (including, without limitation, for purposes of cash collateralization of Letters of Credit) and thereafter, following the Senior Obligations Payment Date, and subject to the rights of the Loan Parties under the Documents, in full to the applicable Junior Representative for the benefit of the respective Junior Secured Parties in accordance with the Lien Priority established in Section 2.1, until each applicable Junior Obligations Payment Date, and then to the owner of the subject property, such other Person as may be entitled thereto, or as a court of competent jurisdiction may otherwise direct, and (ii) if any Junior Representative or the respective Junior Secured Parties shall, at any time receive any Proceeds of any such insurance policy or any such award or payment with respect to Collateral in contravention of this Agreement, it shall segregate and hold in trust and forthwith pay such Proceeds over to the Senior Representative in accordance with the terms of Section 4.1.
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(b) [Reserved].
(c) To effectuate the foregoing, and to the extent that the pertinent insurance company agrees to issue such endorsements, the Secured Parties shall each receive separate lenders loss payable endorsements naming themselves as loss payee and additional insured, as their interests may appear, with respect to policies which insure Collateral hereunder.
SECTION 5. Insolvency Proceedings.
5.1 Filing of Motions. Until the Senior Obligations Payment Date has occurred, each Junior Representative agrees on behalf of itself and the respective Junior Secured Parties that no such Junior Secured Party shall, in or in connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding of any nature, or otherwise take any action whatsoever, in each case in respect of any of the Senior Collateral, including with respect to the determination of any Liens or claims held by the Senior Representative (including the validity and enforceability thereof) or any other Senior Secured Party in respect of any Senior Collateral or the value of any claims of such parties under Section 506(a) of the Bankruptcy Code or otherwise; provided that each Junior Representative may (i) file a proof of claim or statement of interest in an Insolvency Proceeding, and (ii) file any necessary responsive or defensive pleadings in opposition of any motion, claim, adversary proceeding or other pleadings made by any Person objecting to or otherwise seeking the disallowance of any Person objecting to or otherwise seeking the disallowance of the claims of the applicable Junior Secured Parties on the Senior Collateral subject to the limitations contained in this Agreement and only if consistent with the terms and the limitations on each Junior Representative imposed hereby.
5.2 Financing Matters.
(a) If any Loan Party becomes subject to any Insolvency Proceeding in the United States at any time prior to the Senior Obligations Payment Date, and if the Senior Representative desires to consent (or not object) to the use of cash collateral under the Bankruptcy Code (or similar bankruptcy law) that represents proceeds of Collateral or to provide financing to any Loan Party under the Bankruptcy Code (or similar bankruptcy law) or to consent (or not object) to the provision of such financing to any Loan Party secured by a Lien on any Collateral (any such financing, DIP Financing), then, so long as (1) the maximum principal amount of Indebtedness that may be outstanding from time to time in connection with such DIP Financing, together with the principal amount of Senior Obligations outstanding at such time (after giving effect to the application of the proceeds of any DIP Financing to refinance all or any portion of the Senior Obligations) does not exceed the principal amount of $35,000,000, (2) subject to clause (B) of this subparagraph (a), each Junior Representative retains a Lien on all Collateral with the same priority as existed prior to the commencement of the Insolvency Proceeding, (3) to the extent that the Senior Representative is granted adequate protection in the form of a Lien on Collateral, each Junior Representative is permitted to seek a Lien on such additional Collateral as existed prior to the commencement of the Insolvency Proceeding and the Senior Representative agrees not to object to such action by the applicable
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Junior Representative, (4) the terms of such DIP Financing do not require Holdings or any other Loan Party to seek approval for any plan of reorganization that is inconsistent with this Agreement, and (5) the terms of such DIP Financing do not require any Junior Secured Parties to advance additional funds pursuant to such DIP Financing, each Junior Representative agrees, on behalf of itself and the respective Junior Secured Parties, that such Junior Secured Parties (A) will be deemed to have consented to, will raise no objection to, nor support any other Person objecting to, the use of such cash collateral or to such DIP Financing on the grounds of a failure to provide adequate protection for such Junior Representatives Lien on the Collateral to secure the applicable Junior Obligations or on any other grounds and (B) if requested by the Senior Representative, will subordinate (and will be deemed hereunder to have subordinated) the applicable Junior Liens on any Collateral (i) to such DIP Financing on the same terms as the Senior Liens are subordinated thereto (and such subordination will not alter in any manner the terms of this Agreement), (ii) to any adequate protection provided to the Senior Representative and (iii) to any carve-out agreed to by the Senior Representative, so long as such Junior Representative retains its Lien on the Collateral to secure its Obligations (in each case, including Proceeds thereof arising after the commencement of the case under the Bankruptcy Code).
(b) [Reserved].
(c) All Liens granted to any Representative in any Insolvency Proceeding, whether as adequate protection or otherwise, are intended to be and shall be deemed to be subject to the Lien Priority and the other terms and conditions of this Agreement.
5.3 Relief From the Automatic Stay. Until the Senior Obligations Payment Date, each Junior Representative agrees, on behalf of itself and the respective Junior Secured Parties, that none of them will seek relief from the automatic stay or from any other stay in any Insolvency Proceeding or take any action in derogation thereof, in each case in respect of any Collateral, without the prior written consent of the Senior Representative, unless the Senior Representative already has filed a pending motion for such relief with respect to its interest in the Collateral and a corresponding motion must be filed solely for the purpose of preserving such Junior Representatives ability to receive residual distributions.
5.4 No Contest. Each Junior Representative, on behalf of itself and the respective Junior Secured Parties, agrees that, prior to the Senior Obligations Payment Date, none of them shall contest (or support any other Person contesting) (a) any request by the Senior Representative or any Senior Secured Party for adequate protection of its interest in the Senior Collateral (unless in contravention of Section 5.2(a)) or for relief from the automatic stay with respect to the Senior Collateral, or (b) any objection by the Senior Representative or any Senior Secured Party to any motion, relief, action, or proceeding based on a claim by the Senior Representative or any Senior Secured Party that its interests in the Senior Collateral (unless in contravention of Section 5.2(a) or (b), as applicable) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to the Senior Representative as adequate protection of its interests are subject to this Agreement.
5.5 Avoidance Issues. If any Senior Secured Party is required in any Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of any Loan Party,
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because such amount was avoided or ordered to be paid or disgorged for any reason, including because it was found to be a fraudulent or preferential transfer or conveyance, any amount (a Recovery), whether received as proceeds of security, enforcement of any right of set-off or otherwise, then the Senior Obligations shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred and the Senior Obligations Payment Date shall be deemed not to have occurred. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. The Junior Secured Parties agree that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated and turned over for application in accordance with the priorities set forth in this Agreement.
5.6 Asset Dispositions in Insolvency Proceedings. Neither the Junior Representatives nor any of the respective Junior Secured Parties shall, in an Insolvency Proceeding or otherwise, oppose any sale or disposition of any Senior Collateral that is supported by the Senior Secured Parties, and each Junior Representative and each respective Junior Secured Party will be deemed to have consented under Section 363 of the Bankruptcy Code (and otherwise) to any sale of any Senior Collateral supported by the Senior Secured Parties, free and clear of the applicable Junior Liens so long as (a) the requisite Senior Secured Parties have consented to such sale or other disposition of such assets, (b) such motion does not impair, subject to the priorities set forth in this Agreement, the rights of such Junior Secured Parties under Section 363(k) of the Bankruptcy Code (so long as the right of such Junior Secured Parties to offset their claim against the purchase price is only after the Senior Obligations (other than, with respect to the ABL Obligations, the Excess ABL Obligations) have been paid in full in cash), (c) either (i) pursuant to court order, the Junior Liens attach to the net proceeds of the sale or other disposition with the same priority and validity as the Junior Liens on such Senior Collateral, and the Liens remain subject to the terms of this Agreement, or (ii) the proceeds of the sale or other disposition are applied in accordance with Section 4.1(a), (d) such sale or disposition is not in contravention of the terms of this Agreement and (e) the net cash proceeds of the sale or other disposition that are applied to Senior Obligations permanently reduce the Senior Obligations (and, in respect of the ABL Obligations, the ABL Obligations Cap shall be reduced by an amount equal to such net cash proceeds) to the extent provided in Section 4.1(a). The foregoing to the contrary notwithstanding, the Junior Secured Parties may raise any objections to any sale or disposition of the Senior Collateral that could be raised by a creditor of the Loan Parties whose claims are not secured by Liens on the Senior Collateral, provided such objections are not inconsistent with any other term or provision of this Agreement and are not based on their status as secured creditors (without limiting the foregoing, the Junior Secured Parties may not raise any objections based on rights afforded by Sections 363(e) and (f) of the Bankruptcy Code to secured creditors (or any comparable provision of any other bankruptcy law) with respect to the Liens granted to the Junior Secured Parties in respect of the Senior Collateral).
5.7 Other Matters. To the extent that the Senior Representative or any Senior Secured Party has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the Junior Collateral, the Senior Representative agrees, on behalf of itself and
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the other Senior Secured Parties, not to assert any of such rights without the prior written consent of any Junior Representative; provided that if reasonably requested by a Junior Representative, the Senior Representative shall timely exercise such rights in the manner requested by such Junior Representative, including any rights to payments in respect of such rights.
5.8 Effectiveness in Insolvency Proceedings. This Agreement, which the parties hereto expressly acknowledge is a subordination agreement under Section 510(a) of the Bankruptcy Code, including, without limitation, the Lien Priorities set forth in Section 2, shall be effective before, during and after the commencement of an Insolvency Proceeding.
5.9 Certain Waivers. Each Representative on behalf of the respective Secured Parties, waives any claim it may hereafter have against any other Secured Party arising out of (a) the election by such Secured Party of the application of Section 1111(b)(2) of the Bankruptcy Code, or any comparable provision of any other applicable law, or (b) any use of cash collateral or financing arrangement, or any grant of a security interest in the Collateral or otherwise in any Insolvency Proceeding, in each case, to the extent consistent with the terms of this Agreement.
SECTION 6. Loan Documents.
6.1 Amendments of Loan Documents. Each Loan Party and each Representative, on behalf of itself and the respective Secured Parties, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the Loan Documents inconsistent with or in violation of this Agreement.
6.2 [Reserved].
6.3 Comparable Amendments. In the event the Senior Representative enters into any amendment, waiver or consent in respect of any of the Senior Security Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any Senior Security Document or changing in any manner the rights of any parties thereunder, in each case solely with respect to any Senior Collateral, then such amendment, waiver or consent shall apply automatically to any comparable provision of the Comparable Security Document without the consent of or action by any Junior Secured Party (with all such amendments, waivers and modifications subject to the terms hereof); provided that, (i) no such amendment, waiver or consent shall have the effect of removing assets subject to the Lien of any Junior Security Document, except to the extent that a release of such Lien is permitted by Section 4.2, (ii) any such amendment, waiver or consent that materially and adversely affects the rights of the Junior Secured Parties and does not affect the Senior Secured Parties in a like or similar manner shall not apply to the Junior Security Documents without the consent of such Junior Representative, (iii) no such amendment, waiver or consent with respect to any provision applicable to a Junior Representative under the Junior Loan Documents shall be made without the prior written consent of such Junior Representative and (iv) notice of such amendment, waiver or consent shall be given to a Junior Representative no later than 30 days after its effectiveness; provided that the failure to give such notice shall not affect the effectiveness and validity thereof.
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SECTION 7. Purchase Option.
7.1 Notice of Exercise. Upon the occurrence and during the continuance of any Triggering Event, (a) the Senior Representative shall endeavor to promptly give notice thereof to each Junior Representative, and (b) each respective Class of Junior Secured Parties, acting as a single group, through its respective Junior Representative, shall have the option for a period of fifteen (15) Business Days (or an unlimited number of days in the case of a Triggering Event of the type described in clause (v) of the definition thereof) (the Purchase Option Period), after the receipt of such notice, to issue a notice to each Representative of its respective Senior Secured Parties that such Class of Junior Secured Parties intends to purchase all of the Senior Obligations from all of such Senior Secured Parties. For the avoidance of doubt, each Class of Junior Secured Parties that exercises and is bound to exercise its purchase option pursuant to this Section 7.1 must purchase all of the Senior Obligations of its respective Senior Secured Parties (and not only the Senior Obligations of the Senior Representative). Except with respect to a Triggering Event of the type described in clause (v) of the definition thereof, such Purchase Option Period shall run simultaneously for each Class of Junior Secured Parties for a total aggregate period of fifteen (15) Business Days; provided, however, that if the Senior Representative gives notice to a Junior Representative more than one Business Day after the other Junior Representatives, the Purchase Option Period for such Junior Representative shall be extended by the same number of days that delivery of such notice has been delayed. In the event of receipt by the Senior Representative of multiple notices of intent to purchase, the Class of Junior Secured Parties with the Senior Liens (as set forth in the Lien Priorities provided in Section 2.1) that issues such notice shall be irrevocably bound and entitled to purchase the Senior Obligations on the terms of this Section 7 and the Senior Representative shall notify each Junior Representative for each Class of Junior Secured Parties that issues such notice as to which Class of Junior Secured Parties is bound. The failure of the Senior Representative to provide the notice described in subsection (a) above shall not constitute a breach of its obligations hereunder and shall not impair any of the Senior Representatives rights hereunder or under any of the respective Loan Documents. Notwithstanding anything to the contrary in this Agreement, the occurrence of a Triggering Event or the delivery of any notice under this Section 7.1, shall not prevent, postpone, or otherwise affect the right of the Senior Representative to exercise any rights or remedies permitted under this Agreement, including, without limitation, the commencement or continuation of any Enforcement Action.
7.2 Purchase and Sale. On the date specified by the relevant Junior Secured Parties in the notice contemplated by Section 7.1(b) (which shall not be less than 5 Business Days, nor more than 10 Business Days, after the receipt by the Senior Representative of the notice of the relevant Junior Secured Parties election to exercise such option), the applicable Senior Secured Parties shall sell to the relevant Junior Secured Parties, and the relevant Junior Secured Parties shall purchase from the applicable Senior Secured Parties, the Senior Obligations (other than the Excess ABL Obligations, if applicable) on an as-is, where-is basis; provided that, such Senior Secured Parties shall retain all rights to be indemnified or held harmless by the Loan Parties in accordance with the terms of the Senior Documents but shall not retain any rights to the security therefor.
7.3 Payment of Purchase Price. Upon the date of such purchase and sale, the relevant Junior Secured Parties shall (i) pay to the relevant Senior Secured Parties as the purchase price
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therefor the full amount of all the Senior Obligations (other than the Excess ABL Obligations, if applicable) then outstanding and unpaid (including principal, interest, fees (including facility fees and expenses (including, without limitation, reasonable attorneys fees and legal expenses)), (ii) furnish cash collateral in an amount equal to 105% of the face amount of the issued and outstanding letters of credit secured by the Senior Documents, if applicable, (iii) agree to reimburse the relevant Senior Secured Parties and letter of credit issuing banks for any loss, cost, damage or expense (including reasonable attorneys fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any issued and outstanding letters of credit as described above and any checks or other payments provisionally credited to the Senior Obligations, and/or as to which the relevant Senior Secured Parties have not yet received final payment, as applicable, (iv) agree to reimburse the relevant Senior Secured Parties and letter of credit issuing banks, in respect of indemnification obligations of the Loan Parties under the Senior Documents as to matters or circumstances known to such Senior Secured Parties at the time of the purchase and sale which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys fees and legal expenses) to such Senior Secured Parties or letter of credit issuing banks, as applicable, and (v) agree to indemnify and hold harmless the relevant Senior Secured Parties and letter of credit issuing banks, as applicable, from and against any loss, liability, claim, damage or expense (including reasonable fees and expenses of legal counsel) arising out of any claim asserted (excluding, for the avoidance of doubt, any unasserted contingent third-party obligations not described above) by a third party in respect of the Senior Obligations as a direct result of any acts by such Senior Secured Parties occurring prior to the date of such purchase to the extent such acts comply with the applicable standard of care (if any) set forth for such actions in the Senior Documents. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account as the respective Representative of the relevant Senior Secured Parties may designate in writing for such purpose.
7.4 Limitation on Representations and Warranties. Such purchase shall be expressly made without representation or warranty of any kind by the relevant Senior Secured Parties and without recourse of any kind, and the applicable Junior Secured Parties shall assume all obligations of such Senior Secured Parties under the relevant Senior Documents and indemnify such Senior Secured Parties for any breach thereof, all in accordance with assignment documentation in form and substance acceptable to the respective Representative of the relevant Senior Secured Parties, except that Senior Secured Parties shall represent and warrant that such Senior Secured Parties own the Senior Obligations free and clear of any Liens or encumbrances created by it.
7.5 Excess ABL Obligations. In the event that any one or more Junior Secured Parties exercises and consummates the purchase option set forth in this Section 7 and at the time of such purchase, there exists Excess ABL Obligations, the consummation of such purchase option shall not include (nor shall the purchase price be calculated with respect to) such Excess ABL Obligations (such amount, the Retained Interest).
7.6 Retained Interest. In the event that a Retained Interest exists, the ABL Agent shall, at the request of the purchasing Junior Secured Parties, execute an amendment to the ABL Agreement acknowledging that such Retained Interest consisting of Excess ABL Obligations is a last-out tranche, payable after the ABL Obligations Payment Date and each Junior Obligations
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Payment Date. Interest with respect to such Retained Interest consisting of Excess ABL Obligations shall continue to accrue and be payable in accordance with the terms of the ABL Documents, the Retained Interest shall continue to be secured by the Collateral (but shall be junior and subordinate to all Liens on the Collateral in favor of each Junior Representative), and the Retained Interest shall be paid (or cash collateralized, as applicable) in accordance with the terms of the ABL Agreement and this Agreement. The ABL Agent shall continue to have all of its rights and remedies under the ABL Agreement and the other ABL Documents; provided that the ABL Agent shall have no right to vote on or otherwise consent to any amendment, waiver, departure from, or other modification of any provision of any Junior Document except that the consent of the ABL Agent shall be required for matters in contravention of the provisions and priorities set forth in this Agreement.
7.7 Junior Representatives. For the avoidance of doubt, notwithstanding anything to the contrary herein, (i) any obligations to pay the purchase price, furnish cash collateral, and indemnify and reimburse the Senior Secured Parties in connection with the exercise of the purchase option set forth herein shall be obligations of the relevant Junior Secured Parties other than the Junior Representatives, and (ii) the Junior Representatives shall have no obligations under this Section 7 except to the extent they are required to act in an administrative capacity for their respective Class of Junior Secured Parties in accordance with their respective Loan Documents.
SECTION 8. Reliance; Waivers; etc.
8.1 Reliance. Each Class of Loan Documents are deemed to have been executed and delivered, and all extensions of credit thereunder are deemed to have been made or incurred, in reliance upon this Agreement. Each Representative, on behalf of it itself and the respective Secured Parties, expressly waives all notice of the acceptance of and reliance on this Agreement by the other Representatives.
8.2 No Warranties or Liability. Each Representative acknowledges and agrees that the other Representatives have made no representation or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any Loan Document, the ownership by any Loan Party of any Collateral or the perfection of any Liens thereon. Except as otherwise provided in this Agreement, each Representative will be entitled to manage and supervise the respective extensions of credit to any Loan Party in accordance with law and their usual practices, modified from time to time as they deem appropriate. No Representative shall have any obligation whatsoever to the other Secured Parties to ensure that any Collateral in its possession is genuine or owned by a Loan Party or to preserve the rights or benefits of any Person.
8.3 No Waivers. No right or benefit of any party hereunder shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of such party or any other party hereto or by any noncompliance by any Loan Party with the terms and conditions of any of the Loan Documents.
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SECTION 9. Obligations Unconditional.
All rights, interests, agreements and obligations hereunder of the Senior Representative and the Senior Secured Parties in respect of any Collateral and the Junior Representative and the Junior Secured Parties in respect of such Collateral shall remain in full force and effect regardless of:
(a) any lack of validity or enforceability of any Senior Document or any Junior Document and regardless of whether the Liens of the Senior Representative and Senior Secured Parties are not perfected or are voidable for any reason;
(b) any change in the time, manner or place of payment of, or in any other terms of, all or any of the Senior Obligations or Junior Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any Senior Document or any Junior Document;
(c) any exchange, release or lack of perfection of any Lien or any Collateral or any other asset, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the Senior Obligations or Junior Obligations or any guarantee thereof;
(d) the commencement of any Insolvency Proceeding in respect of any Loan Party; or
(e) any other circumstances which otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of any Secured Obligation or of any Junior Secured Party in respect of this Agreement.
SECTION 10. Miscellaneous.
10.1 Rights of Subrogation. Each Junior Representative, for and on behalf of itself and the respective Junior Secured Parties, agrees that no payment to the Senior Representative pursuant to the provisions of this Agreement shall entitle such Junior Representative or respective Junior Secured Party to exercise any rights of subrogation in respect thereof until the Senior Obligations Payment Date. Following the Senior Obligations Payment Date, the Senior Representative agrees to execute such documents, agreements, and instruments as such Junior Representative or any Junior Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Senior Obligations resulting from payments to the Senior Representative by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the Senior Representative are paid by such Person upon request for payment thereof. The Senior Representative agrees that no payment to a Junior Representative or the respective Junior Secured Party pursuant to the provisions of this Agreement shall entitle the Senior Representative to exercise any rights of subrogation in respect thereof until the applicable Junior Obligations Payment Date. Following any Junior Obligations Payment Date, the applicable Junior Representative agrees to execute such documents, agreements, and instruments as the Senior Representative may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Junior Obligations resulting from payments to such Junior
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Representative by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by such Junior Representative are paid by such Person upon request for payment thereof.
10.2 Further Assurances. Each of the Representatives will, at the Loan Parties expense and at any time and from time to time, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that any other party may reasonably request, in order to protect any right or interest granted or purported to be granted hereby or to enable each Representative to exercise and enforce its rights and remedies hereunder; provided that no party shall be required to pay over any payment or distribution, execute any instruments or documents, or take any other action referred to in this Section 10.2, to the extent that such action would contravene any law, order or other legal requirement or any of the terms or provisions of this Agreement, and in the event of a controversy or dispute, such party may interplead any payment or distribution in any court of competent jurisdiction, without further responsibility in respect of such payment or distribution under this Section 10.2.
10.3 Conflicts. In the event of any conflict between the provisions of this Agreement and the provisions of any Loan Document, the provisions of this Agreement shall govern.
10.4 Continuing Nature of Provisions. Subject to Section 5.5, this Agreement shall continue to be effective, and shall not be revocable by any party hereto, until the Senior Obligations Payment Date shall have occurred for three of the four Classes of Security Interests. This is a continuing agreement and the Secured Parties may continue, at any time and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide indebtedness to, or for the benefit of, any Loan Party on the faith hereof.
10.5 Amendments; Waivers; Acknowledgment; Authority.
(a) No amendment or modification of any of the provisions of this Agreement shall be effective unless the same shall be in writing and signed by each Representative. A copy of any amendment or modification shall be promptly provided to the ABL Borrower.
(b) It is understood that the Representatives, without the consent of any other Secured Party (other than the Secured Parties of their respective Class), may in their discretion determine that a supplemental agreement (which may take the form of Exhibit A: Form of Additional Indebtedness Joinder and Designation) is necessary or appropriate to facilitate having additional indebtedness or other obligations (Additional Debt) of any of the Loan Parties become ABL Obligations, Term Obligations, Additional Indenture Obligations or Existing Indenture Obligations, as the case may be, under this Agreement, which supplemental agreement shall specify which class of Secured Obligations such Additional Debt shall constitute; provided, that such Additional Debt is permitted to be incurred by this Agreement and the other Loan Documents, and is permitted by said agreements to be subject to the provisions of this Agreement as a Class of Secured Obligations, as applicable.
(c) By its signature, each person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to
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execute this Agreement. Each Representative executing this Agreement as agent for any Secured Party represents and warrants to the other parties hereto that it is duly authorized to bind such Secured Party.
(d) It is understood and agreed that each of the Term Agent, Existing Noteholder Agent, and Additional Noteholder Agent is executing this Agreement solely in its capacity as administrative agent or trustee (as applicable) and collateral agent for its respective Class of Secured Parties and shall be entitled to request the written direction or the written consent of the requisite percentage of such Secured Parties as provided in its respective Loan Documents in connection with any action taken on behalf of such Class of Secured Parties hereunder.
10.6 Information Concerning Financial Condition of the Loan Parties. Each of the Representatives hereby assume responsibility for keeping itself informed of the financial condition of the Loan Parties and all other circumstances bearing upon the risk of nonpayment of the Secured Obligations. The Representatives hereby agree that no party shall have any duty to advise any other party of information known to it regarding such condition or any such circumstances (except as otherwise expressly provided in the Loan Documents or this Agreement). Except to the extent otherwise expressly required under this Agreement, in the event any Representative, in its sole discretion, undertakes at any time or from time to time to provide any information to any other party to this Agreement, it shall be under no obligation (a) to provide any such information to such other party or any other party on any subsequent occasion, (b) to undertake any investigation not a part of its regular business routine, or (c) to disclose any other information.
10.7 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK ARE GOVERNED BY THE LAWS OF SUCH JURISDICTION.
10.8 CONSENT TO JURISDICTION; JURY TRIAL WAIVER.
(A) EACH REPRESENTATIVE HEREBY AGREES THAT ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST IT ARISING OUT OF OR RELATING HERETO MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH REPRESENTATIVE, FOR ITSELF AND FOR THE RESPECTIVE SECURED PARTIES, IRREVOCABLY (i) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (ii) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (iii) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE REPRESENTATIVE AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.9 IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH REPRESENTATIVE IN ANY SUCH
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PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (iv) AGREES THAT EACH SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
(B) EACH REPRESENTATIVE HEREBY AGREES THAT PROCESS MAY BE SERVED ON IT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE ADDRESSES PERTAINING TO IT AS SPECIFIED IN SECTION 10.9. ANY AND ALL SERVICE OF PROCESS AND ANY OTHER NOTICE IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE EFFECTIVE AGAINST SUCH REPRESENTATIVE IF GIVEN BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANY OTHER MEANS OR MAIL WHICH REQUIRES A SIGNED RECEIPT, POSTAGE PREPAID, MAILED AS PROVIDED ABOVE.
(C) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.8(C) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.9 Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, or sent by overnight express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or five days after deposit in the United States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section 10.9) shall be, in the case of the Representatives, as set forth below such Persons name on the signature pages hereof, or,
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in the case of any Loan Party, on the signature page to the Acknowledgment attached as Annex 1, or such other address as may be designated by such Person in a written notice to all of the other parties.
10.10 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and each other Secured Party and their respective successors and assigns, and nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this Agreement or any Collateral.
10.11 Headings. Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
10.12 Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
10.13 Other Remedies. For avoidance of doubt, it is understood that nothing in this Agreement shall prevent any Secured Party from exercising any available remedy to accelerate the maturity of any indebtedness or other obligations owing under the Senior Documents or the Junior Documents, as applicable, or to demand payment under any Guarantee in respect thereof.
10.14 Counterparts; Integration; Effectiveness. This agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall become effective when it shall have been executed by each party hereto.
10.15 Additional Loan Parties. The ABL Borrower shall cause each Person that becomes a Loan Party after the date hereof to acknowledge this Agreement by execution and delivery by such Person of an Acknowledgment in the form of Annex 1.
10.16 Bailment. The Senior Representative agrees that if it shall at any time hold in its possession or control any Collateral, such Senior Representative shall, solely for the purpose of perfecting the Junior Liens granted under the Junior Documents and subject to the terms and conditions of this Section 10.16, also hold and/or maintain control of such Collateral as gratuitous bailee or representative (as defined in Section 1-201(35) of the UCC) of the Junior Representatives. The Senior Representative, until the occurrence of the Senior Obligations Payment Date or all of the Junior Obligations Payment Dates, as applicable, shall be entitled to deal with such Collateral in accordance with the terms of this Agreement and the other Loan Documents as if the applicable Junior Liens did not exist. Without limiting the foregoing, the Senior Representative shall have no obligation or responsibility to ensure that any Collateral is genuine or owned by any of the Loan Parties. No Senior Representative shall, by reason of this Agreement, any other Security Document or any other agreement, document or instrument, have
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a fiduciary relationship in respect of any other Secured Party. After the occurrence of the Senior Obligations Payment Date or any of the Junior Obligations Payment Dates, as applicable, the Senior Representative shall transfer the possession and control of such Collateral, together with any necessary endorsements but without recourse or warranty, (i) if any Junior Obligations are outstanding at such time, to the applicable Junior Representative, as determined by the Lien Priority set forth in Section 2.1, and (ii) if no Junior Obligations are outstanding at such time, to the applicable Loan Party, in each case so as to allow such person to obtain possession and control of such Collateral.
10.17 Reinstatement. If, in any Insolvency Proceeding or otherwise, all or part of any payment with respect to the Senior Obligations previously made shall be rescinded for any reason whatsoever, then such Senior Obligations shall be reinstated to the extent of the amount so rescinded and, if theretofore terminated, this Agreement shall be reinstated in full force and effect and such prior termination shall not diminish, release, discharge, impair or otherwise affect the Lien Priorities and the relative rights and obligations of the Secured Parties provided for herein. In addition, each Representative further agrees that if, at any time, all or part of any payment with respect to any Senior Obligations secured by any Senior Collateral previously made shall be rescinded for any reason whatsoever, such Representative will promptly pay over to the applicable Senior Representative any payment received by it in respect of any such Senior Collateral that is still in such Representatives possession and shall promptly turn any such Senior Collateral then held by it over to the applicable Senior Representative, and the provisions set forth in this Agreement will be reinstated as if such payment had not been made, until the payment and satisfaction in full of the applicable Senior Obligations.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
ABL AGENT: | WELLS FARGO BANK, NATIONAL ASSOCIATION, as ABL Agent | |||||||
By: | /s/ Michael White | |||||||
Name: | Michael White | |||||||
Title: | Vice President | |||||||
Address for Notices: | ||||||||
Wells Fargo Bank, National Association 1300 SW Fifth Avenue, 6th Floor Portland, OR 97201 MAC P6101-068 Attn: SAExploration Relationship Manager Fax No. (877) 518-9602 Email: Michael.white@wellsfargo.com | ||||||||
With a copy to (which shall not constitute notice): | ||||||||
Lane Powell PC 1420 Fifth Avenue, Suite 4200 P.O. Box 91302 Seattle, WA 98111-9402 Attention: Gregory R. Fox Email: foxg@lanepowell.com Facsimile: (206) 223-7107 |
INTERCREDITOR AGREEMENT
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EXISTING NOTEHOLDER AGENT: | WILMINGTON SAVINGS FUND SOCIETY, FSB, as Existing Noteholder Agent for and on behalf of the Existing Indenture Secured Parties | |||||||
By: | /s/ Geoffrey J. Lewis | |||||||
Name: | Geoffrey J. Lewis | |||||||
Title: | Vice President | |||||||
Address for Notices: | ||||||||
Wilmington Savings Fund Society, FSB 500 Delaware Avenue Wilmington, Delaware 19801 Attention: Corporate Trust Reference: SAExploration Holdings, Inc. 10.000% Senior Secured Notes due 2019 Facsimile: (302) 421-9137 | ||||||||
With a copy to (which shall not constitute notice): | ||||||||
Morrison & Foerster LLP 250 West 55th Street New York, New York 10019 Attention: Jon I. Levine Facsimile: (212) 468-7900 |
INTERCREDITOR AGREEMENT
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TERM AGENT | DELAWARE TRUST COMPANY, as Term Agent for and on behalf of the Term Secured Parties | |||||||
By: | /s/ Alan R. Halpern | |||||||
Name: | Alan R. Halpern | |||||||
Title: | Vice President | |||||||
Address for Notices: | ||||||||
Delaware Trust Company 2711 Centerville Road Wilmington, DE 19808 Attention: Corporate Trust Administration Facsimile: (302) 636-8666 | ||||||||
With a copy to (which shall not constitute notice): | ||||||||
Ropes & Gray LLP 1211 Avenue of the Americas New York, NY 10036-8704 Attention: Mark R. Somerstein Facsimile: (646) 728-1663 Email: mark.somerstein@ropesgray.com |
INTERCREDITOR AGREEMENT
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ACKNOWLEDGMENT
The undersigned hereby acknowledge and consent to the foregoing Amended and Restated Intercreditor Agreement, dated as of June 29, 2016 (as in effect on the date hereof, the Intercreditor Agreement), by and between Wells Fargo Bank, National Association, as ABL Agent, and Wilmington Savings Fund Society, FSB, as Existing Noteholder Agent and Delaware Trust Company, as Term Agent. Unless otherwise defined in this Acknowledgement, terms defined in the Intercreditor Agreement have the same meanings when used in this Acknowledgement.
Each Loan Party agrees to be bound by the Intercreditor Agreement and agrees that it will, together with its successors and assigns, recognize all rights granted pursuant to the Intercreditor Agreement to each Representative and each Class of Secured Parties and will not do any act or perform any obligation which is not in accordance with the agreements set forth in the Intercreditor Agreement.
Each Loan Party agrees that any Representative holding Collateral does so as bailee (under the UCC) for the other Representatives and is hereby authorized to and may turn over to such other Representatives upon request therefor any such Collateral, after all obligations and indebtedness of each of undersigned to the bailee Representative and the Secured Parties for which it acts have been fully paid and performed.
Each Loan Party further acknowledges and agrees that (i) it is not an intended beneficiary or third party beneficiary under the Intercreditor Agreement or under any amendment thereto, (ii) in the event of a breach by any Loan Party that is continuing of any of the terms and provisions contained in the foregoing Intercreditor Agreement, such a breach shall constitute an Event of Default as defined in and under the ABL Agreement, the Term Credit Agreement, the Existing Notes Indenture and the Additional Notes Indenture, (iii) it will execute and deliver such additional documents and take such additional actions as may be necessary or desirable in the opinion of any Representative to effectuate the provisions and purposes of the foregoing Intercreditor Agreement and (iv) the Intercreditor Agreement may be amended or supplemented from time to time without notice to, or the consent of, any Loan Party so long as such amendment or supplement does not impose any additional obligations on such Loan Party.
[Remainder of page intentionally left blank]
ANNEX 1 - ACKNOWLEDGMENT
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SAEXPLORATION HOLDINGS, INC. | ||
By: | /s/ Brent Whiteley | |
Name: Brent Whiteley | ||
Title: Chief Financial Officer, General Counsel and Secretary | ||
SAEXPLORATION, 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 | ||
SAEXPLORATION SEISMIC SERVICES (US), LLC | ||
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 | ||
Address for Notices: 1160 Dairy Ashford, Suite 160 Houston, Texas 77079 Attention: Chief Financial Officer Email: bwhiteley@saexploration.com Facsimile: (281) 258-4418 |
INTERCREDITOR AGREEMENT
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EXHIBIT A
FORM OF
ADDITIONAL INDEBTEDNESS JOINDER AND DESIGNATION
ADDITIONAL INDEBTEDNESS JOINDER AND DESIGNATION, dated as of [ , ] (this Joinder), by and among Wells Fargo Bank, National Association, as ABL Agent (ABL Agent), Wilmington Savings Fund Society, FSB, as Existing Noteholder Agent (Existing Noteholder Agent), Delaware Trust Company, as Term Agent (Term Agent) and [ ], as [Agent] (as defined below) and any successors or assigns thereof, to the Amended and Restated Intercreditor Agreement dated as of June [ ], 2016 (as amended, supplemented, waived or otherwise modified from time to time, the Intercreditor Agreement) among the ABL Agent, Existing Noteholder Agent, Term Agent, and the other parties party thereto from time to time. Capitalized terms used herein and not otherwise defined herein shall have the meaning specified in the Intercreditor Agreement.
Reference is made to that certain [Document], dated as of [ , ] (the [ ]), among [ ], and [ ], as [trustee and notes collateral agent] (in such capacity, the [specify agent]).
Section 10.5 of the Intercreditor Agreement permits the Representatives to designate Additional Debt under the Intercreditor Agreement.
Accordingly, the [Agent], for itself and on behalf of [ ], hereby agrees with the ABL Agent, Existing Noteholder Agent and Term Agent as follows:
Section 1. Designation of Additional Indebtedness. The Representatives hereby designate such Additional Indebtedness as [ ] Obligations under the Intercreditor Agreement.
Section 2. Agreement to be Bound. The [Agent], for itself and on behalf of [ ], hereby agrees to be bound by the terms and provisions of the Intercreditor Agreement and shall, as of the date hereof with respect to the [ ] Obligations incurred or to be incurred under the [Document] referred to above, be deemed to be a party to the Intercreditor Agreement.
Section 2. Notices. Notices and other communications provided for under the Intercreditor Agreement to be provided to the [Agent] shall be sent to the address set forth below its name on the signature page hereto (until notice of a change thereof is delivered as provided in Section 10.9 of the Intercreditor Agreement).
Section 3. Miscellaneous. THIS JOINDER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
[SIGNATURES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have executed this Joinder to Intercreditor Agreement as of the date first written above.
[ ], | ||
as [Agent] | ||
By: |
| |
Name: | ||
Title: | ||
Address for Notices: |
ABL AGENT: | WELLS FARGO BANK, NATIONAL ASSOCIATION, as ABL Agent | |||||
By: |
| |||||
Name: | ||||||
Title: | ||||||
Address for Notices: | ||||||
EXISTING NOTEHOLDER AGENT: | WILMINGTON SAVINGS FUND SOCIETY, FSB, as Existing Noteholder Agent for and on behalf of the Existing Indenture Secured Parties | |||||
By: |
| |||||
Name: | ||||||
Title: | ||||||
TERM AGENT: | DELAWARE TRUST COMPANY, as Term Agent for and on behalf of the Term Secured Parties | |||||
By: |
| |||||
Name: | ||||||
Title: |
Exhibit 10.3
EXECUTION VERSION
FIRST AMENDMENT TO SECURITY AGREEMENT
THIS FIRST AMENDMENT TO SECURITY AGREEMENT (this Amendment), is entered into as of the 29th day of June, 2016, by and among Wilmington Savings Fund Society, FSB (Noteholder Collateral Agent), SAExploration Holdings, Inc., a Delaware corporation (the Company), SAExploration, Inc., a Delaware corporation, SAExploration Sub, Inc., a Delaware corporation, NES, LLC, an Alaska limited liability company, and SAExploration Seismic Services (US), LLC, a Delaware limited liability company (such parties, the Guarantors and together with the Company, the Pledgors and each, a Pledgor).
RECITALS
A. The Pledgors and Noteholder Collateral Agent are parties to that certain Security Agreement, dated as of July 2, 2014 (as amended from time to time, the Security Agreement). Capitalized terms used herein have the meaning given to them in the Security Agreement unless otherwise specified.
B. The Company has entered into that certain Restructuring Support Agreement, dated as of June 13, 2016 (the Restructuring Support Agreement), among the Company, on behalf of itself and the Guarantors, Management (as defined in the Restructuring Support Agreement), and certain of the Existing Noteholders, a copy of which is attached hereto as Exhibit A.
C. The Company has requested that Noteholder Collateral Agent consent to the transactions contemplated in the Restructuring Support Agreement, some or all of which are prohibited by the Security Agreement absent Noteholder Collateral Agents consent, and that certain amendments be made to the Security Agreement, which Noteholder Collateral Agent is willing to do and make pursuant to the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, it is agreed as follows:
1. Amendments to Recitals. Clause E of the Recitals of the Security Agreement is hereby deleted in its entirety and restated as follows:
E. The Pledgors may, in the future, grant to the ABL Agent for the benefit of the lenders under the ABL Agreement, the Term Agent for the benefit of the lenders under the Term Agreement and/or the Additional Noteholder Agent for the benefit of the noteholders under the Additional Indenture, if applicable, a security interest in the Collateral (it being understood that, in such case, the relative rights and priorities of the grantees in respect of the Collateral shall be governed by the Intercreditor Agreement).
2. Amendments to Definitions.
a. Additional Definitions. Section 1.1(b) of the Security Agreement is hereby amended to add the following definitions:
ABL Credit Agreement means that certain Credit Agreement, dated as of November 6, 2014, by and among SAExploration, Inc., the Company, certain subsidiaries of the Company, as guarantors, and the ABL Agent (as the same may be amended, restated, supplemented or otherwise modified from time to time).
ABL Security Documents has the meaning assigned to such term in the Intercreditor Agreement.
Additional Indenture means any indenture approved for designation as such by the Representatives under the Intercreditor Agreement.
Additional Indenture Documents has the meaning assigned to such term in the Intercreditor Agreement.
Additional Noteholder Agent means any agent designated as such by the Representatives (as such term is defined in the Intercreditor Agreement) under the Intercreditor Agreement.
Additional Notes has the meaning assigned to such term in the Intercreditor Agreement.
Additional Notes Obligations means all the Obligations payable by any Pledgor to any Secured Party under the Additional Notes, the Additional Indenture and any other Additional Indenture Documents, including all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) after commencement of an Insolvency or Liquidation Proceeding in accordance with the rate specified in the relevant Additional Notes Document, whether or not the claim for such interest is allowed as a claim in such Insolvency or Liquidation Proceeding.
Senior Obligations Payment Date has the meaning assigned to such term in the Intercreditor Agreement.
Senior Representative has the meaning assigned to such term in the Intercreditor Agreement.
Term Agent means the collateral agent for the benefit of the Term Claimholders, together with its successors in that capacity.
Term Claimholders means, at any time of determination, collectively, (a) the Term Agent, (b) the lenders under the Term Credit Agreement at such time, (c) each other person to whom any of the Obligations under the Term Credit Agreement is owed at such time and (e) the successors, replacements and assigns of each of the foregoing.
Term Credit Agreement means that certain Term Loan and Security Agreement, dated as of June 29, 2016, by and among the Company, SAExploration, Inc. and certain other subsidiaries of the Company, as guarantors, and the Term Agent (as the same may be amended, restated, supplemented or otherwise modified from time to time).
Term Loan Documents has the meaning assigned to such term in the Intercreditor Agreement.
Term Security Documents has the meaning assigned to such term in the Intercreditor Agreement.
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b. Amendments to Certain Definitions. The following definitions in Section 1.1(b) of the Security Agreement are hereby deleted in their entirety and restated as follows:
ABL Claimholders means, at any time of determination, collectively, (a) the ABL Agent, (b) the lenders under the ABL Credit Agreement at such time, (c) the issuing bank or banks of letters of credit or similar instruments under the ABL Credit Agreement, (d) each other person to whom any of the Obligations under the ABL Credit Agreement is owed at such time and (e) the successors, replacements and assigns of each of the foregoing.
Agents means the Noteholder Collateral Agent, the ABL Agent, the Term Agent, the Additional Noteholder Agent (if applicable) and the Trustee; and Agent means any of them.
Deposit Account Control Agreement means an agreement substantially in the form of Exhibit 5 hereto among the applicable Pledgor, the relevant depository bank, the Noteholder Collateral Agent, the ABL Agent (if applicable), the Term Agent (if applicable) and the Additional Noteholder Agent (if applicable) as such form may be modified to reflect any changes that may be reasonably required by a new depository bank (or substituted by an agreement based on a form provided by the applicable depository bank); provided that any such changes or any such other agreement shall not be materially worse for the Secured Parties, when taken as a whole, than such terms as are set out in the agreement set forth on Exhibit 5.
Securities Account Control Agreement means an agreement substantially in the form of Exhibit 4 hereto among the applicable Pledgor, the relevant securities intermediary, the Noteholder Collateral Agent, the ABL Agent (if applicable), the Term Agent (if applicable), and the Additional Noteholder Agent (if applicable) as such form may be modified to reflect any changes that may be reasonably required by a new securities intermediary (or substituted by an agreement based on a form provided by the applicable securities intermediary); provided that any such changes or any such other agreement shall not be materially worse for the Secured Parties, when taken as a whole, than such terms as are set out in the agreement set forth on Exhibit 4.
c. Deleted Definitions. The following definitions in Section 1.1(b) of the Security Agreement are hereby deleted in their entirety:
ABL Priority Collateral, ABL Security Documents, Discharge of ABL Obligations, and Notes Priority Collateral.
d. Amendment to Excluded Property Definition. Subsection (10) of the definition of Excluded Property is hereby reserved, and Subsection (9) and the proviso immediately following Subsection (13) are hereby deleted in their entirety and restated as follows:
(9) any Collateral that has been released in accordance with the Security Documents, the ABL Security Documents, the Term Security Documents and the Additional Indenture Security Documents (as such term is defined in the Intercreditor Agreement) and the Intercreditor Agreement;
provided that notwithstanding anything to the contrary contained in clauses (1) through (13) above to the contrary, (a) Excluded Property shall not include any Proceeds of Property described in clauses (1) through (13) above (unless such proceeds are also described in such clauses), and (b) subject to the provisions of the Intercreditor Agreement, no property or assets that are subject to a Lien securing ABL Obligations, Term Obligations and/or Additional Indenture Obligations shall constitute Excluded Property so long as such Lien remains in effect; provided, further, that at such time as any of the foregoing Property no longer constitutes Excluded Property, such Property shall immediately constitute Collateral and a Lien on and security interest in and to all of the right, title and interest of the applicable Pledgor in, to and under such Property shall immediately attach thereto.
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3. Amendment to Section 2.1. Section 2.1 is hereby amended by deleting clause (iii) in the paragraph immediately following the end of Section 2.1(u), which clause (iii) is hereby reserved.
4. Amendment to Section 2.4. Section 2.4 is hereby deleted in its entirety and restated as follows:
Section 2.4 Possession or Control of Collateral. Notwithstanding anything herein to the contrary and subject to the terms of the Intercreditor Agreement, prior to the Senior Obligations Payment Date and for so long as the Intercreditor Agreement and Senior Documents (as such term is defined in the Intercreditor Agreement) shall require the delivery of possession or control to the Senior Representative of any Collateral, any covenant hereunder requiring (or any representation or warranty hereunder to the extent that it would have the effect of requiring) the delivery of possession or control to the Noteholder Collateral Agent of such Collateral shall be deemed to have been satisfied (or, in the case of any representation and warranty, shall be deemed to be true) if, prior to the applicable Senior Obligations Payment Date, possession or control of such Collateral shall have been delivered to the Senior Representative.
5. Amendment to Section 3.1. Section 3.1 is hereby amended by adding the words (subject to the terms of the Intercreditor Agreement) immediately following the words first priority security interest.
6. Amendment to Section 3.2. Section 3.2 is hereby amended by adding the words (subject to the terms of the Intercreditor Agreement) following each occurrence of the words first priority security interest.
7. Amendment to Section 3.4. Subsection (b) of Section 3.4 is hereby amended by replacing the words Discharge of ABL Obligations with Senior Obligations Payment Date and by replacing the words ABL Agent with Senior Representative. Subsection (d) and the final sentence of Subsection (i) of Section 3.4 are hereby deleted in their entirety and restated as follows:
(d) Investment Property. If any Pledgor shall at any time acquire any certificated securities constituting Investment Property, such Pledgor shall promptly (and in any event within ten Business Days or such longer period as may be agreed to in writing by the Noteholder Collateral Agent in its sole discretion) after acquiring such security, (i) endorse, assign and deliver the same to the Noteholder Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank, all in form and substance reasonably satisfactory to the Noteholder Collateral Agent or (ii) deliver such securities into a Securities Account with respect to which a Securities Account Control Agreement is in effect in favor of the Noteholder Collateral Agent. If any securities now or hereafter acquired by any Pledgor constituting Investment Property are uncertificated and are issued to such Pledgor or its nominee directly by the issuer thereof, such Pledgor shall promptly (and in any event within ten Business Days or such longer period as may be agreed to in writing by the Noteholder Collateral Agent in its sole discretion) after acquiring such security notify the Noteholder Collateral Agent thereof and pursuant to an agreement in form and substance reasonably satisfactory to the Noteholder Collateral Agent, either (i) cause the issuer to agree to comply with Entitlement Orders or other instructions from the Noteholder Collateral Agent as to such securities, without further consent of any Pledgor or such nominee, (ii) cause a Security Entitlement with respect to such uncertificated security to be held in a Securities Account with respect to which the Noteholder Collateral Agent has Control or (iii) arrange for the Noteholder Collateral Agent to become the registered owner of the securities. The Pledgors shall not hereafter establish and
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maintain any Securities Account or Commodity Account with any Securities Intermediary or Commodity Intermediary unless (1) the applicable Pledgor shall have given the Noteholder Collateral Agent at least 15 days (or such shorter period as may be agreed to in writing by the Noteholder Collateral Agent in its sole discretion) prior written notice of its intention to establish such new Securities Account or Commodity Account with such Securities Intermediary or Commodity Intermediary, (2) such Securities Intermediary or Commodity Intermediary shall be reasonably acceptable to the Noteholder Collateral Agent and (3) such Securities Intermediary or Commodity Intermediary, as the case may be, and such Pledgor shall have duly executed and delivered a Control Agreement with respect to such Securities Account or Commodity Account, as the case may be. The Noteholder Collateral Agent shall not give any Entitlement Orders or instructions or directions to any issuer of uncertificated securities, Securities Intermediary or Commodity Intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by such Pledgor, unless an Event of Default has occurred and is continuing or, after giving effect to any such withdrawal or dealing rights, would occur. The provisions of this Section 3.4(d) shall not apply to any Financial Assets credited to a Securities Account for which the Noteholder Collateral Agent is the Securities Intermediary. No Pledgor shall grant Control over any Investment Property to any Person other than the Noteholder Collateral Agent and, prior to the Senior Obligations Payment Date and to the extent required under the Intercreditor Agreement, the Senior Representative, and each Pledgor shall promptly (and in any event within ten Business Days or such longer period as may be agreed to in writing by the Noteholder Collateral Agent in its sole discretion) notify the Noteholder Collateral Agent if any issuer of Pledged Interests takes any action to have any Pledged Interests issued by it treated as Securities under Article 8 of the UCC and such Pledgor shall take all steps deemed necessary, advisable or prudent by the Noteholder Collateral Agent in order to grant Control of such Pledged Interests in favor of the Noteholder Collateral Agent. As between the Noteholder Collateral Agent and the Pledgors, the Pledgors shall bear the investment risk with respect to the Investment Property and Pledged Securities, and the risk of loss of, damage to, or the destruction of the Investment Property and Pledged Securities, whether in the possession of, or maintained as a security entitlement or deposit by, or subject to the control of, the Noteholder Collateral Agent, the ABL Agent, the Term Agent, the Additional Noteholder Agent (if applicable), a Securities Intermediary, Commodity Intermediary, any Pledgor or any other Person; provided, however, that nothing contained in this Section 3.4(d) shall release or relieve any Securities Intermediary or Commodity Intermediary of its duties and obligations to the Pledgors or any other Person under any Control Agreement or under applicable Legal Requirements. Each Pledgor shall promptly pay all Charges and fees of whatever kind or nature with respect to the Investment Property and Pledged Securities pledged by it under this Agreement. In the event any Pledgor shall fail to make such payment contemplated in the immediately preceding sentence, the Noteholder Collateral Agent may, after providing written notice thereof to the Pledgors, do so for the account of such Pledgor, and the Pledgors shall promptly reimburse and indemnify the Noteholder Collateral Agent in accordance with Section 11.4(a) hereof and Section 7.07 of the Indenture from all costs and expenses incurred by the Noteholder Collateral Agent under this Section 3.4(d).
Notwithstanding anything contained herein, if any such Bailee Letter is obtained under the ABL Credit Agreement in favor of the ABL Agent, under the Term Credit Agreement in favor of the Term Agent and/or under the Additional Indenture (if applicable) in favor of the Additional Noteholder Agent with respect to any location for which the Noteholder Collateral Agent has not received such Bailee Letter, the applicable Pledgor shall obtain and deliver a Bailee Letter to the Noteholder Collateral Agent concurrently with delivery to such other Agent of such Bailee Letter under the ABL Credit Agreement, the Term Credit Agreement or the Additional Indenture, if applicable.
8. Amendment to Section 3.6. Section 3.6 is hereby amended by deleting the first sentence thereof in its entirety and restating it as follows:
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Subject to Section 3.7, each Pledgor shall take such further actions, and execute and deliver to the Noteholder Collateral Agent such additional assignments, agreements, supplements, powers and instruments, as the Noteholder Collateral Agent may deem necessary, advisable or prudent, wherever required by applicable Legal Requirements, in order to perfect, preserve and protect the security interest and the priority thereof in the Collateral as provided herein, subject to the Intercreditor Agreement, and the rights and interests granted to the Noteholder Collateral Agent hereunder, to carry into effect the purposes hereof or better to assure and confirm unto the Noteholder Collateral Agent the Collateral or permit the Noteholder Collateral Agent, subject to the terms of the Intercreditor Agreement, to exercise and enforce its rights, powers and remedies hereunder with respect to any Collateral.
9. Amendment to Section 3.7. Subsections (b) and (d)(i) of Section 3.7 are hereby deleted in their entirety and restated as follows:
(b) Subject to the Intercreditor Agreement, no Pledgor shall be required to take any action to establish Foreign Perfection with respect to (i) any Specified Movable Property, (ii) any Foreign Located Asset or Foreign Equity prior to the date that is 30 days after the date hereof (or, if any such asset or property becomes a Foreign Located Asset or Foreign Equity after the date hereof, 180 days after the date on which such asset or property becomes a Foreign Located Asset or Foreign Equity) or (iii) any Foreign Located Asset or Foreign Equity (A) that the Board of Directors has determined to be Pledgor Foreign Property and (B) as to which such Pledgor has notified the Noteholder Collateral Agent thereof in writing within 30 days after the date hereof (or, if any such asset or property becomes a Foreign Located Asset or Foreign Equity after the date hereof, 180 days after the date on which such asset or property becomes a Foreign Located Asset or Foreign Equity).
(i) in the case of any Foreign Located Asset or Foreign Equity as to which clause (b)(iii)(B) above applies, the 180th day after the date hereof;
10. Amendment to Section 4.1. Section 4.1 is hereby amended by deleting the final sentence thereof in its entirety and restating such sentence as follows:
No Person other than the Noteholder Collateral Agent and, to the extent required under the Intercreditor Agreement, prior to the ABL Obligations Payment Date (as defined in the Intercreditor Agreement) the ABL Agent, prior to the Term Obligations Payment Date (as defined in the Intercreditor Agreement) the Term Agent, and prior to the Additional Indenture Obligations Payment Date (as defined in the Intercreditor Agreement) the Additional Noteholder Agent (if applicable), has, or will have, control or possession of all or any part of the Collateral, except to the extent not prohibited by the Notes Documents.
11. Amendment to Section 4.2. Section 4.2 is hereby deleted in its entirety and restated as follows:
Section 4.2 Validity of Security Interest. The security interest in and Lien on the Collateral granted to the Noteholder Collateral Agent for the benefit of the Secured Parties hereunder constitutes (a) a legal and valid security interest in all the Collateral securing the payment and performance of the Notes Obligations under applicable Legal Requirements in the United States, and (b) (i) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, subject to the filings and other actions described on Schedule 7 to the Perfection Certificate, a valid and enforceable perfected first priority security interest (subject to Permitted Liens and the Intercreditor Agreement) in all such Collateral under applicable Legal Requirements in the United States to the extent required by this Agreement and (ii) with respect to certificated Securities Collateral, Instruments, Tangible Chattel Paper, Deposit Accounts, Securities Accounts, Commodities Accounts, certificated
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Investment Property, Electronic Chattel Paper, Transferable Records and Letter-of-Credit Rights, subject to the deliveries contemplated pursuant to Section 3.1 and Section 3.4 and the filings contemplated pursuant to Section 3.3, a valid and enforceable perfected first priority security interest (with respect to the perfected first priority security interest contemplated by Section 3.3, subject to the Intercreditor Agreement and Permitted Liens) in all such Collateral under applicable Legal Requirements in the United States to the extent required by this Agreement. The security interest and Lien granted to the Noteholder Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement in and on the Collateral will at all times constitute a valid and enforceable perfected, continuing first priority security interest therein under applicable Legal Requirements in the United States to the extent required by this Agreement, subject only to clause (b) of the preceding sentence, Permitted Liens and the Intercreditor Agreement.
12. Amendment to Section 4.4. Section 4.4 is hereby amended by adding the words or the Intercreditor Agreement at the end of the last sentence thereof.
13. Amendment to Section 5.3. Section 5.3 is hereby deleted in its entirety and restated as follows:
Section 5.3 Default. No Pledgor is in default or violation under any agreement to which such Pledgor is a party relating to the Pledged Securities pledged by it (including with respect to the payment of any portion of any mandatory capital contribution, if any, required to be made thereunder). No Securities Collateral pledged by such Pledgor is subject to any defense, offset or counterclaim, nor have any of the foregoing been asserted or alleged against such Pledgor by any Person with respect thereto, and as of the date hereof, there are no certificates, instruments, documents or other writings (other than the Organizational Documents of such Pledgor and certificates, if any, delivered to the Noteholder Collateral Agent or, prior to the discharge of the various Classes of Obligations (as such terms are defined in the Intercreditor Agreement) and to the extent required by the Intercreditor Agreement, one or more other Agents) which evidence any Pledged Securities of such Pledgor.
14. Amendment to Section 5.4. Subsection (b) of Section 5.4 is hereby amended by replacing the words Discharge of ABL Obligations with the words applicable Senior Obligations Payment Date and by replacing the words ABL Agent with Senior Representative.
15. Amendment to Section 6.1. Section 6.1 is hereby deleted in its entirety and restated as follows:
Section 6.1 Grant of License. For the purpose of enabling the Noteholder Collateral Agent, during the continuance of an Event of Default, to exercise rights and remedies under Article IX at such time as the Noteholder Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Pledgor hereby grants to the Noteholder Collateral Agent, to the extent licensable, an irrevocable, non-exclusive worldwide license (subject to the terms of the Intercreditor Agreement) (exercisable without payment of royalty or other compensation to such Pledgor) to use, assign, license sublicense or otherwise dispose of the Intellectual Property Collateral now owned or hereafter acquired by such Pledgor, wherever the same may be located. Such license shall include access to all media in which any of the Intellectual Property Collateral may be recorded or stored and to all computer programs used for the compilation or printout hereof.
16. Amendment to Section 6.3. Subsections (c) and (h) of Section 6.3 are hereby deleted in their entirety and restated as follows:
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(c) In the event that any Pledgor becomes aware that any item of the Intellectual Property Collateral is being infringed or misappropriated by a third party, such Pledgor shall promptly (and in any event within ten Business Days) notify the Noteholder Collateral Agent in writing and shall take such actions, at its expense, as such Pledgor or the Noteholder Collateral Agent, subject to the terms of the Intercreditor Agreement, deems reasonable and appropriate under the circumstances to protect or enforce such Intellectual Property Collateral, including, without limitation, suing for infringement or misappropriation and for an injunction against such infringement or misappropriation. Without limiting the foregoing, upon such Pledgor obtaining knowledge thereof, such Pledgor shall promptly (and in any event within ten Business Days) notify the Noteholder Collateral Agent in writing of any event that may be reasonably expected to materially and adversely affect the value or utility of any item of Intellectual Property Collateral, the ability of such Pledgor or the Noteholder Collateral Agent to dispose of such Intellectual Property Collateral or any portion thereof or the rights and remedies of the Noteholder Collateral Agent in relation thereto, including a levy or written threat of levy or any legal process against such Intellectual Property Collateral or any portion thereof.
(h) During the continuance of an Event of Default, within ten Business Days (or such longer period as may be agreed to in writing by the Noteholder Collateral Agent in its sole discretion) after written notice from the Noteholder Collateral Agent to any Pledgor, such Pledgor shall make available to the Noteholder Collateral Agent, to the extent within such Pledgors power and authority and subject to the Intercreditor Agreement, such personnel in such Pledgors employ on the date of such Event of Default as the Noteholder Collateral Agent may designate, by name, title or job responsibility, to permit such Pledgor to continue, directly or indirectly, to produce, advertise and sell the products and services sold or delivered by such Pledgor under or in connection with the Intellectual Property Collateral, and each Pledgor shall use commercially reasonable efforts to ensure that such Persons shall be available to perform their prior functions on the Noteholder Collateral Agents behalf if compensated at such Pledgors expense on a per diem, pro rata basis consistent with the salary and benefits structure applicable to each as of the date of such Event of Default.
17. Amendment to Section 8.1. Section 8.1 is hereby deleted in its entirety and restated as follows:
Section 8.1 Transfers of Collateral. No Pledgor shall (a) sell, convey, assign or otherwise dispose of, or grant any option with respect to, any of the Collateral pledged by it hereunder except to the extent not prohibited by and otherwise subject to the requirements of this Agreement or the Indenture or (b) create or permit to exist any Lien upon or with respect to any of the Collateral pledged by it hereunder other than Permitted Liens.
18. Amendment to Section 10.1. Section 10.1 is hereby deleted in its entirety and restated as follows:
Section 10.1 Proceeds of Casualty Events and Collateral Dispositions. Subject to the terms of the Intercreditor Agreement, the Pledgors shall take all actions required by the Indenture with respect to any Net Cash Proceeds of any Casualty Event or from the sale or disposition of any Collateral.
19. Amendment to Section 11.1. Subsection (a) of Section 11.1 is hereby amended by deleting the first sentence thereof and restating such sentence in its entirety as follows:
The Noteholder Collateral Agent has been appointed as Noteholder Collateral Agent pursuant to the Indenture and as Existing Noteholder Collateral Agent pursuant to the Intercreditor Agreement. The actions of the Noteholder Collateral Agent hereunder are subject to the terms of the Indenture and the Intercreditor Agreement.
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20. Amendment to Section 11.2. Section 11.2 is hereby amended by replacing the first word of such Section with the words Subject to the terms of the Intercreditor Agreement, if.
21. Amendment to Section 11.4. Subsection (a) of Section 11.4 is hereby deleted in its entirety and restated as follows:
(a) Collateral hereunder shall be released if and to the extent so provided in Sections 12.07 and 12.08 of the Indenture or upon the transfer or sale of any asset or property (other than transfers or sales to the Company or any Guarantor) theretofore included in Collateral to the extent permitted under Sections 3.7 or 8.1 of this Agreement, or as otherwise permitted in the Intercreditor Agreement.
22. Amendment to Section 11.12. The first sentence of Section 11.12 is hereby deleted in its entirety and restated as follows:
Each Pledgor covenants that in the event that such Pledgor or any property or assets of such Pledgor shall hereafter become the subject of a voluntary or involuntary proceeding under the Bankruptcy Code or such Pledgor shall otherwise be a party to any federal or state bankruptcy, insolvency, moratorium or similar proceeding to which the provisions relating to the automatic stay under Section 362 of the Bankruptcy Code or any similar provision in any such Legal Requirement is applicable, then, in any such case, whether or not the Noteholder Collateral Agent has commenced foreclosure proceedings under this Agreement, such Pledgor shall not, and each Pledgor hereby expressly waives its right to (to the extent it may lawfully do so) at any time insist upon, plead or in any manner whatsoever, claim or take the benefit or advantage of any such automatic stay or such similar provision as it relates to the exercise of any of the rights and remedies (including any foreclosure proceedings) available to the Noteholder Collateral Agent as provided in this Agreement, in any other Security Document or any other document evidencing the Notes Obligations, provided however that, for the avoidance of doubt, any such rights and remedies shall remain subject to the terms of the Intercreditor Agreement.
23. No Other Changes. Except as explicitly amended by this Amendment, all of the terms and conditions of the Security Agreement shall remain in full force and effect.
24. Conditions Precedent. This Amendment shall be effective when Noteholder Collateral Agent shall have received an executed original hereof, together with each of the following, each in substance and form reasonably acceptable to Noteholder Collateral Agent:
a. The duly executed Restructuring Support Agreement, together with all exhibits and attachments thereto;
b. Evidence that the Supporting Holders (as such term is defined in the Restructuring Support Agreement) have consented to the Restructuring Transactions; and
c. Evidence that all conditions to Pledgors receipt of the initial advance under the Term Loan (as such term is defined in the Restructuring Support Agreement) have been satisfied.
25. Representations and Warranties. The Pledgors hereby represent and warrant to Noteholder Collateral Agent as follows:
a. Each Pledgor and such other parties that have executed any documents required under the Security Agreement or this Amendment, have all requisite power and authority to execute this Amendment and any other agreements or instruments required hereunder and to perform all of their obligations hereunder, and this Amendment and all such other agreements and instruments have been duly executed and delivered by the applicable party and constitute the legal, valid and binding obligation of the applicable party, enforceable in accordance with its terms.
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b. The execution, delivery and performance by each of the Pledgors of this Amendment and any other agreements or instruments required hereunder has been duly authorized by all necessary corporate action and does not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to such Pledgor, or the articles of incorporation or by-laws of such Pledgor, or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which such Pledgor is a party or by which it or its properties may be bound or affected.
c. The performance by each of the Pledgors of the Security Agreement as amended hereby has been duly authorized by all necessary corporate action and does not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to such Pledgor, or the articles of incorporation or by-laws of such Pledgor, or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which such Pledgor is a party or by which it or its properties may be bound or affected.
d. All of the representations and warranties contained in Article IV of the Security Agreement are true and correct in all material respects on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).
26. References. All references in the Security Agreement to this Agreement shall be deemed to refer to the Security Agreement as amended hereby; and any and all references in the Security Documents to the Security Agreement shall be deemed to refer to the Security Agreement as amended hereby.
27. No Waiver. The execution of this Amendment and the acceptance of all other agreements and instruments related hereto, and Noteholder Collateral Agents consent to the Restructuring Transactions (as such term is defined in the Restructuring Support Agreement), shall not be deemed to be a waiver of any Default or Event of Default under the Security Agreement or a waiver of any breach, default or event of default under any Security Document or other document held by the Noteholder Collateral Agent, except to the extent provided in the Restructuring Support Agreement, or a consent to any future transactions, whether or not known to the Noteholder Collateral Agent and whether or not existing on the date of this Amendment.
28. Release. Each Pledgor hereby absolutely and unconditionally releases and forever discharges, Noteholder Collateral Agent 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 Pledgor 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, whether such claims, demands and causes of action are matured or unmatured or known or unknown.
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29. Miscellaneous. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which counterparts, taken together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Pledgors and the Noteholder Collateral Agent have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the date first above written.
SAEXPLORATION HOLDINGS, INC., as a Pledgor | ||||||
By: | /s/ Brent Whiteley | |||||
Name: Brent Whiteley | ||||||
Title: Chief Financial Officer, General Counsel and Secretary | ||||||
SAEXPLORATION SUB, INC., as a Pledgor | ||||||
By: | /s/ Brent Whiteley | |||||
Name: Brent Whiteley | ||||||
Title: Chief Financial Officer, General Counsel and Secretary | ||||||
SAEXPLORATION, INC., as a Pledgor | ||||||
By: | /s/ Brent Whiteley | |||||
Name: Brent Whiteley | ||||||
Title: Chief Financial Officer, General Counsel and Secretary |
SAEXPLORATION SEISMIC SERVICES (US), LLC, as a Pledgor | ||||||
By: | /s/ Brent Whiteley | |||||
Name: Brent Whiteley | ||||||
Title: Chief Financial Officer, General Counsel and Secretary | ||||||
NES, LLC, as a Pledgor | ||||||
By: | /s/ Brent Whiteley | |||||
Name: Brent Whiteley | ||||||
Title: Chief Financial Officer, General Counsel and Secretary | ||||||
WILMINGTON SAVINGS FUND SOCIETY, FSB as Noteholder Collateral Agent | ||||||
By: | /s/ Geoffrey J. Lewis | |||||
Name: Geoffrey J. Lewis | ||||||
Title: Vice President |
EXHIBIT A
TO FIRST AMENDMENT TO SECURITY AGREEMENT
[Restructuring Support Agreement]
RESTRUCTURING SUPPORT AGREEMENT
dated as of June 13, 2016
among
SAExploration Holdings, Inc., Certain Members of Management Identified Herein
and
the Supporting Holders Identified Herein
TABLE OF CONTENTS
Page | ||||||||
Section 1. | AGREEMENT EFFECTIVE DATE | 2 | ||||||
Section 2. | COMMITMENTS REGARDING THE RESTRUCTURING TRANSACTIONS | 2 | ||||||
2.01. | Covenants, Acknowledgments and Commitments of the Supporting Holders | 2 | ||||||
2.02. | Obligations of SAE | 4 | ||||||
2.03 | Covenants, Acknowledgements and Commitments of Management | 9 | ||||||
2.03. | Definitive Documents | 9 | ||||||
Section 3. | FORBEARANCE | 9 | ||||||
Section 4. | REPRESENTATIONS AND WARRANTIES | 10 | ||||||
4.01. | Mutual Representations and Warranties | 10 | ||||||
4.02. | Representations and Warranties of the Supporting Holders | 11 | ||||||
4.03. | Representations and Warranties of SAE. | 12 | ||||||
Section 5. | TERMINATION EVENTS | 12 | ||||||
5.01. | Supporting Holder Termination Events | 12 | ||||||
5.02. | SAE Termination Events | 13 | ||||||
5.03. | Effect of Termination | 14 | ||||||
5.04. | Termination Upon Consummation of the Restructuring Transactions | 14 | ||||||
Section 6. | TRANSFER OF EXISTING NOTES | 14 | ||||||
Section 7. | AMENDMENTS | 15 | ||||||
Section 8. | NO SOLICITATION OF SECURITIES | 16 | ||||||
Section 9. | MISCELLANEOUS | 16 | ||||||
9.01. | Further Assurances | 16 | ||||||
9.02. | Complete Agreement | 16 | ||||||
9.03. | No Assignment | 16 | ||||||
9.04. | Headings | 16 | ||||||
9.05. | Governing Law; Submission to Jurisdiction; Selection of Forum; Waiver of Trial by Jury | 16 | ||||||
9.06. | Counterparts | 16 | ||||||
9.07. | Interpretation | 16 | ||||||
9.08. | Relationship Among Supporting Holders | 17 | ||||||
9.09. | Successors and Assigns | 17 | ||||||
9.10. | Acknowledgements | 17 | ||||||
9.11. | Notices | 17 | ||||||
9.12. | Waiver | 18 | ||||||
9.13. | Several, Not Joint, Obligations | 18 |
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9.14. | Remedies | 18 | ||||||
9.15. | Specific Performance | 18 | ||||||
9.16. | No Third-Party Beneficiaries | 19 | ||||||
9.17 | Management Liability | 19 | ||||||
9.18. | Settlement Discussions | 19 | ||||||
9.19. | Consideration | 19 |
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This RESTRUCTURING SUPPORT AGREEMENT (as amended, supplemented, or otherwise modified from time to time, and collectively with all exhibits thereto, this Agreement) is dated as of June 13, 2016, among: (i) SAExploration Holdings, Inc. (SAE) on behalf of itself and the guarantors party to the Indenture dated as of July 2, 2014 (the Existing Notes Indenture) among SAE, as issuer, each of such guarantors party thereto and U.S. Bank National Association, as trustee and collateral agent (together, and with its permitted successors and assigns, the Indenture Trustee) pursuant to which SAE issued its 10.000% Senior Secured Noted due 2019 (the Existing Notes); (ii) solely with respect to Section 2.03 and Section 9.17 herein, Jeff Hastings, Brian Beatty and Brent Whiteley (collectively, Management); and (iii) certain holders of the Existing Notes party hereto from time to time (together with their respective successors and permitted assigns, the Supporting Holders). SAE and the Supporting Holders, and any subsequent person or entity that becomes a party hereto in accordance with the terms hereof, are referred to herein as the Parties and, each, individually as a Party. Capitalized terms, unless otherwise defined in this Agreement, have the meanings used in the Term Sheet (defined below).
RECITALS
WHEREAS, SAE and the Supporting Holders have agreed to enter into certain transactions that will have the effect of restructuring and recapitalizing SAE as contemplated by (1) the Term Sheet (the Term Sheet) attached hereto as Exhibit A, and (2) the entry into and performance of, as the case may be, the New Senior Loan Facility, the issuance of the New Loan Shares, the consummation of the Exchange Offer and the Consent Solicitation, the issuance of the New Second Lien Notes and the New Notes Shares, the amending and restating of the Intercreditor Agreement, the entry into the Warrant Agreement and the issuance of the Warrants, the amendment and ratification of the Employment Agreements and the entry into the Management Incentive Plan, the issuance of the MIP Shares, the amendment of the Organizational Documents (in each case, as these capitalized terms are defined herein) and the transactions contemplated thereby (clauses (1) and (2) together, the Restructuring Transactions), with the understanding that to the degree the definitive documents governing the transactions listed and contemplated by clause (2) above are more specific, or have different terms than those contemplated in the Term Sheet, then, for purposes of this Agreement and the definition of Restructuring Transactions, the definitive documents governing the transactions in clause (2) shall control;
WHEREAS, the Parties have agreed to support the Restructuring Transactions pursuant to, and subject to the terms and conditions set forth in, this Agreement;
WHEREAS, this Agreement is the product of arms-length, good-faith discussions between the Parties and their respective professional representatives; and
WHEREAS, SAE, Management and the Supporting Holders are prepared to perform their obligations hereunder, subject to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Party, intending to be legally bound hereby, agrees as follows:
AGREEMENT
Section 1. | Agreement Effective Date |
This Agreement shall be effective and binding with respect to each of the Parties on the date on which (i) SAE and Management shall have executed and delivered counterpart signature pages of this Agreement to counsel for the Supporting Holders and (ii) Supporting Holders representing not less than 66% of the aggregate principal amount of Existing Notes outstanding shall have executed and delivered counterpart signature pages of this Agreement to counsel for SAE (such date, the RSA Effective Date). After the RSA Effective Date, the terms and conditions of the Restructuring Transactions, the terms and conditions of the Definitive Documents (defined below) set forth in Exhibits to this Agreement, and this Agreement may only be amended, modified, waived, or otherwise supplemented as set forth in Section 7 herein.
Section 2. | Commitments Regarding the Restructuring Transactions |
2.01. Covenants, Acknowledgments and Commitments of the Supporting Holders. Subject to the terms and conditions hereof, and for so long as this Agreement has not been terminated in accordance with the terms hereof, each Supporting Holder (severally and not jointly) agrees to satisfy the following covenants and makes the following acknowledgements and commitments:
(a) to support the Restructuring Transactions under this Agreement;
(b) to implement and consummate the Restructuring Transactions in a timely manner and take any and all commercially reasonable and appropriate actions in furtherance of the Restructuring Transactions as contemplated under this Agreement, provided that such actions shall be limited to review and negotiation of the applicable Definitive Documents and execution of the same (to the extent any Definitive Documents require execution thereof by such Supporting Holder to implement and consummate the Restructuring Transactions); provided further that, except as otherwise provided herein, no Supporting Holder shall be obligated to participate in or consummate, as the case may be, the Exchange Offer or any other part of the Restructuring Transactions unless and until all of the conditions to effectiveness of the Restructuring Transactions (including the Exchange Offer and the Consent Solicitation) set forth in the Term Sheet and Definitive Documents shall have been satisfied or waived or will be satisfied or waived contemporaneously with the closing of the Restructuring Transactions or have been waived with the prior written consent of the Required Supporting Holders (defined below);
(c) to negotiate in good faith the Definitive Documents, which Definitive Documents shall contain terms and conditions consistent in all material respects with this Agreement;
(d) solely with respect to the Supporting Holders identified on Exhibit B hereto as New Senior Lenders, and solely in their capacity as New Senior Lenders, (1) to execute and enter into, on the Funding Date, a new senior secured multi-draw term loan facility, substantially on the terms and subject to the conditions specified in Schedule 1 of the Term Sheet
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attached hereto as Exhibit A (such agreement, including all exhibits, attachments, supplements, and amendments thereto, the New Senior Loan Facility), subject to a maximum commitment amount of $30 million, (2) to extend their respective committed portion of the $5 million initial draw (the Initial Draw) thereof on the Funding Date, upon the request of SAE, as set forth in the schedule of commitments attached hereto as Exhibit C, on the terms and conditions contained in the New Senior Loan Facility, and (3) to extend their respective committed portions of any subsequent draws thereunder when required by, and on the terms and conditions contained in, the New Senior Loan Facility; provided however that nothing contained in this Support Agreement shall require or otherwise oblige any Supporting Holder who is not identified on Exhibit B hereto to serve as a New Senior Lender or make any commitments or fund any amounts in connection with the New Senior Loan Facility;
(e) to support the exchange offer and consent solicitation (the Exchange Offer) in which SAE shall offer, on a pro rata basis, the holders of Existing Notes (the Existing Holders), on the terms and conditions set forth in an Exchange Offer Memorandum and Consent Solicitation Statement (as amended and supplemented from time to time, together with the related Letter of Transmittal and Consent, the Memorandum), with the terms and conditions thereof summarized in Exhibit A hereto, and to (i) tender its Existing Notes for exchange, together with its consent to the amendments described in the Memorandum, on the first day of the Exchange Offer, in accordance with the terms and conditions set forth in the Memorandum; and (ii) not withdraw such tenders and consents, with the understanding that, among other things, SAE and the Trustee will, at that time, enter into a supplemental indenture to supplement the Existing Notes Indenture in accordance with Exhibit A and that consents will be irrevocable thereafter, provided that the Supporting Holders shall have no obligation to tender their Existing Notes and may withdraw any tenders after the termination of this Agreement pursuant to Section 5.01 and Section 5.02.
(f) not to object to SAEs (i) amendment and ratification, effective as of the Closing Date, of the existing employment agreements, as summarized in Exhibit D hereto (such agreements, including all exhibits, attachments, supplements and amendments thereto, the Employment Agreements) with each of the individuals identified in Exhibit E hereto, (ii) adoption on the Closing Date of the management incentive plan, incorporating the terms set forth in Exhibit F hereto (such plan, including all exhibits, attachments and supplements, and amendments thereto, the Management Incentive Plan), and (iii) entry into a warrant agreement with the SAEs transfer agent, as warrant agent, incorporating the terms set forth in Exhibit G hereto (such agreement, including all exhibits, attachments, supplements, and amendments thereto, the Warrant Agreement), providing for the issuance of Warrants (as defined in Exhibit G) to all existing holders of common stock of SAE (the Common Stock), provided that each of the Employment Agreements, the Management Incentive Plan, and Warrant Agreement are consistent in all aspects with this Agreement or otherwise in a form and substance reasonably acceptable to the Required Supporting Holders.
(g) to acknowledge that, on the Closing Date, SAEs existing executives identified on Exhibit E will remain in their current positions, subject to the amended and ratified Employment Agreements as described in Exhibit D;
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(h) to the extent that any legal or structural impediment arises that would prevent, hinder, or delay the consummation of the Restructuring Transactions, to negotiate in good faith commercially reasonable additional or alternative provisions to address any such impediment; provided, however, that the economic outcome for the Supporting Holders and other material terms as contemplated herein must be substantially preserved, as determined by the Supporting Holders in their reasonable discretion; and
(i) not to (i) object to or otherwise commence or participate in any proceeding to oppose any of the Restructuring Transactions and (ii) directly or indirectly (1) seek, solicit, support, encourage, or vote or cause to be voted (to the extent applicable) its Existing Notes for, consent to, or encourage any plan of reorganization or liquidation, proposal, offer, dissolution, wind-up, liquidation, reorganization, merger, consolidation, business combination, joint venture, partnership, sale of assets, or restructuring for SAE other than the Restructuring Transactions or (2) take any other action that is inconsistent with, or that would reasonably be expected to delay or obstruct the consummation of the Restructuring Transactions.
Notwithstanding anything to the contrary contained in this Section 2.01 or elsewhere in this Agreement, no Supporting Holder shall be required to (1) incur, or agree to any commitments, undertakings, concessions, indemnities, or other arrangements that could result in its incurrence of material expenses, liabilities, or other obligations, provided that the foregoing does not apply to any internal expenses incurred by a Supporting Holder in connection with obtaining internal approvals or consents to authorize the Restructuring Transactions or this Agreement or to perform such Supporting Holders obligations thereunder; or (2) take (or fail to take) any action that would inhibit a Supporting Holders performance of any duty, fiduciary or otherwise, or obligation that such Supporting Holder owes to any other person or entity under applicable law.
2.02. Obligations of SAE.
Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement is intended to, nor shall, prevent SAE from taking or failing to take any action that it is obligated to take (or fail to take) in the performance of any fiduciary duty or as otherwise required by applicable law, which SAE owes to any other person or entity as applicable.
(a) Covenants. Subject to the terms and conditions hereof, and for so long as this Agreement has not been terminated in accordance with the terms hereof, SAE, on behalf of itself and each guarantor party to the Existing Notes, as applicable, agrees to satisfy the following covenants and makes the following acknowledgements and commitments:
(i) to support the Restructuring Transactions under this Agreement;
(ii) to implement and consummate the Restructuring Transactions in a timely manner and take any and all commercially reasonable and appropriate actions in furtherance of the Restructuring Transactions, as contemplated under this Agreement, unless and until all of the conditions to effectiveness of the Restructuring Transactions (including the Exchange Offer) set forth in the Term Sheet and Definitive Documents have been waived with the prior written consent of the Required Supporting Holders or satisfied or will be satisfied or waived contemporaneously with the closing of the Restructuring Transactions;
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(iii) to negotiate in good faith the Definitive Documents, which Definitive Documents shall contain terms and conditions consistent in all respects with this Agreement, or as otherwise agreed to by the Required Supporting Holders;
(iv) to enter into the New Senior Loan Facility on the Funding Date, submit the initial draw notice for $5 million thereunder and agree to use the proceeds for general corporate purposes;
(v) to take all necessary corporate action to authorize such number of additional shares of Common Stock as shall be sufficient to permit the issuance of all shares of Common Stock as contemplated by the Restructuring Transactions;
(vi) reserve (a) by the Launch Date, authorized and unissued shares of Common Stock equal to 64.48% of the total number of shares of Common Stock that will be outstanding as of the Closing Date (the New Notes Shares) and to issue such New Notes Shares in connection with the closing of the Exchange Offer as contemplated by Exhibit A; (b) by the RSA Effective Date, authorized and unissued shares of Common Stock equal to 3.14% of the total number of shares of Common Stock that will be outstanding as of the closing date, and, by the Funding Date, authorized and unissued shares of Common Stock equal to 6.26% of the total number of shares of Common Stock that will be outstanding as of the Closing Date (the Backstop Shares) and to issue such Backstop Shares on the Closing Date pro rata to those New Senior Lenders who fund the Initial Draw, as indicated in Exhibit C; and (3) by the Funding Date, authorized and unissued shares of Common Stock equal to 18.80% of the total number of shares of Common Stock that will be outstanding as of the Closing Date (the New Loan Shares) and to issue such New Loan Shares on the Closing Date pro rata to each New Senior Lender, including to any Participating Holder participating in the New Senior Loan Facility;
(vii) use its commercially reasonable efforts to (1) commence the Exchange Offer on the Launch Date and, if not commenced on such date, to commence the Exchange Offer as promptly as possible thereafter, and to conduct the Exchange Offer in accordance with the terms thereof as reflected in Exhibit A) and applicable law; (2) enter into the supplemental indenture to supplement the Existing Notes Indenture, as contemplated by Exhibit A; and (3) consummate the Exchange Offer by the date that is 60 days after the Launch Date, provided that (1) the Parties understand that the Exchange Offer expiration time may be extended at SAEs option to amend the terms of the Exchange Offer (subject to Section 5.01(d) of this Agreement), and (2) the Closing Date, as used in this Agreement, shall be the date on which the Exchange Offer actually closes;
(viii) to use commercially reasonable efforts to amend and restate the existing intercreditor agreement as contemplated by Exhibit A (the Intercreditor Agreement);
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(ix) deliver to each Existing Holder participating in the Exchange Offer (the Participating Holders) for every $1,000 principal amount of Existing Notes tendered for exchange (subject to a minimum tender of $2000 principal amount and $1000 increments in excess thereof), (i) $500 principal amount of new second lien notes (the New Second Lien Notes) and related consents to be delivered on the terms summarized in the Description of New Second Lien Notes contained in Exhibit A hereto and (ii) a pro rata portion of the New Notes Shares;
(x) enter into the Warrant Agreement, as of the Closing Date, with SAEs transfer agent, as warrant agent, and issue the Warrants pursuant thereto;
(xi) negotiate in good faith the Definitive Documents, which Definitive Documents shall contain terms and conditions consistent in all respects with this Agreement and to execute and otherwise support the implementation of such Definitive Documents;
(xii) support all reasonably necessary actions of the Supporting Holders to facilitate the consummation of the Restructuring Transactions;
(xiii) within seven days of delivery to SAE of invoices or receipts with respect thereto, pay in cash all (a) reasonable fees and expenses of (1) Paul, Weiss, Rifkind, Wharton & Garrison LLP (Paul Weiss) under that certain engagement letter among certain Supporting Holders, SAE, and Paul Weiss dated as of April 5, 2016, (2) K&L Gates, and (3) any other professional retained by the Supporting Holders pursuant to an engagement letter with SAE; and (b) reasonable and documents out of pocket expenses (other than professional fees) incurred any Supporting Holder in connection with this Agreement or the Restructuring Transaction (provided that the each Supporting Holder shall consult with SAE and provide SAE with advance notice of the occurrence of such expenses to the extent reasonably practicable);
(xiv) to obtain by the Launch Date any amendments, waivers and/or consents under the Credit and Security Agreement, dated as of November 6, 2014, among SAExploration, Inc., as borrower, SAE and the other guarantors party thereto and Wells Fargo Bank, National Association, as lender (the Existing Revolver), that are necessary to permit the Restructuring Transactions;
(xv) use commercially reasonable efforts to obtain any shareholder approvals or other consents or approvals, when required, and as required by SAEs Second Amended and Restated Certificate of Incorporation, dated as of June 24, 2013, Amended and Restated By Laws, adopted as of June 24, 2013, and all applicable law for the consummation of the Restructuring Transactions;
(xvi) to use commercially reasonable efforts to adopt, on or as soon as reasonably practicable after the Closing Date, an Amended and Restated Certificate of Incorporation and an Amended and Restated Bylaws of SAE
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(collectively, the Organizational Documents), incorporating the terms set forth in Exhibit H (the Governance Terms), which shall include provisions regarding the size and composition of the board of directors of SAE (the Board) as set forth in Exhibit H;
(xvii) use commercially reasonable efforts to make the shares of Common Stock to be issued in connection with the Restructuring Transactions eligible to be issued in book-entry form through the direct registry system of SAEs transfer agent and/or The Depository Trust Company;
(xviii) maintain its good standing under the laws of the State of Delaware and take all requisite actions, corporate or otherwise, for the Organizational Documents to become effective as soon as reasonably practicable after the Closing Date;
(xix) use commercially reasonable efforts to maintain (i) SAEs status as an SEC-registered, public company, including filing all periodic and current reports required under the reporting obligations of the Securities Exchange Act of 1934, as amended (the Exchange Act), and (ii) a listing on either the Nasdaq Global Market or the Nasdaq Capital Market, including taking commercially reasonable actions to regain compliance with the continuing listing standards of such applicable market within the compliance periods established by Nasdaq, as described in the deficiency letters of Nasdaq dated as of February 3, 2016 and April 19, 2016;
(xx) promptly notify the Supporting Holders in writing of any governmental or third party complaints, litigations, investigations, or hearings relating to the Restructuring Transactions (or communications indicating that the same may be contemplated or threatened);
(xxi) comply in all material respects with the covenants (except to the extent waived, as contemplated herein) contained in the Existing Revolver, Existing Notes Indenture and, when entered into, the New Senior Loan Facility;
(xxii) amend and ratify, effective as of the Closing Date, the Employment Agreements with respect to each of the executives of SAE identified in Exhibit E hereto, (ii) adopt on the Closing Date the Management Incentive Plan, incorporating the terms set forth in Exhibit F hereto, and (iii) enter into the Warrant Agreement, incorporating the terms set forth in Exhibit G hereto;
(xxiii) to the extent that any legal or structural impediment arises that would prevent, hinder, or delay the consummation of the Restructuring Transactions, to negotiate in good faith commercially reasonable additional or alternative provisions to address any such impediment, in consultation with the Supporting Holders; provided, however, that the economic outcome for the Supporting Holders and other material terms as contemplated herein must be substantially preserved, as determined by the Supporting Holders in their reasonable discretion;
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(xxiv) if SAE knows of a breach in any material respect of any of the obligations, representations, warranties, or covenants of SAE set forth in this Agreement, furnish prompt written notice (and in any event within three business days of such actual knowledge) to the Supporting Holders and promptly take all remedial action necessary to cure such breach;
(xxv) continue to operate its business in the ordinary course;
(xxvi) provide the Supporting Holders and their advisors reasonable access to management upon reasonable notice and keep the Supporting Holders and their advisors reasonably apprised of any material developments regarding SAEs business operations, condition, assets, liabilities, or finances and promptly notify the Supporting Holders upon the receipt of any proposal or expression of interest with respect to the negotiation or formulation of any proposal, offer, dissolution, winding up, liquidation, reorganization, recapitalization, assignment for the benefit of creditors, merger, consolidation, business combination, joint venture, partnership, sale of assets, or restructuring of SAE other than the Restructuring Transactions; and
(xxvii) use commercially reasonable efforts to ensure the Alaskan tax credits are issued to SAE in a timely manner.
(b) Negative Covenants. Subject to the terms and conditions hereof, and for so long as this Agreement has not been terminated in accordance with the terms hereof, SAE agrees that, on behalf of itself and each guarantor party to the Existing Notes, as applicable, it shall not, directly or indirectly, take any of the following actions, unless such action is consented to by the Required Supporting Holders:
(i) modify the Restructuring Transactions, in whole or in part, in a manner that is inconsistent with the terms of this Agreement;
(ii) commence any proceeding opposing any of the terms of this Agreement or otherwise take any action to obstruct or delay the consummation of the Restructuring Transactions;
(iii) incur or suffer to exist any material indebtedness, except indebtedness existing and outstanding immediately prior to the date hereof, trade payables, ordinary course draws under the Existing Revolver, liabilities arising and incurred in the ordinary course of business, and indebtedness arising under or permitted by the New Senior Loan Facility;
(iv) directly or indirectly (1) affirmatively seek or solicit any discussions regarding the negotiation or formulation of any proposal, offer, dissolution, winding up, liquidation, reorganization, recapitalization, assignment for the benefit of creditors, merger, consolidation, business combination, joint
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venture, partnership, sale of assets, or restructuring of SAE other than the Restructuring Transactions (an Alternative Proposal), (2) publicly announce its intention not to pursue the Restructuring Transactions or (3) take any other action that is inconsistent with or is likely to delay the consummation of the Restructuring Transaction, in the case of each of clauses (1) through and including (3) of this paragraph, subject to the fiduciary obligations of SAE; or
(v) incur any material liens or security interests, except in the ordinary course of business or pursuant to, or as permitted under, the New Senior Loan Facility and the New Second Lien Notes.
2.03. Covenants, Acknowledgments and Commitments of Management. Subject to the terms and conditions hereof, and for so long as this Agreement has not been terminated in accordance with the terms hereof, each member of Management (severally and not jointly) agrees to negotiate in good faith their respective amended Employment Agreements with SAE on the terms set forth in Exhibit D hereto on the Closing Date.
2.04. Definitive Documents
Without limiting the foregoing, each Party hereby covenants and agrees to (a) negotiate in good faith the Memorandum, the indenture for the New Second Lien Notes, the New Senior Loan Facility credit agreement, the Intercreditor Agreement, the Employment Agreements, the Management Incentive Plan, the Warrant Agreement, the Organizational Documents and all ancillary documents related to each of the foregoing (collectively, the Definitive Documents), which Definitive Documents shall contain terms and conditions consistent in all respects with this Agreement and (b) execute (to the extent such Party is a party thereto) and otherwise support implementation of the Definitive Documents and any other such documents or agreements as may be reasonably necessary or advisable to implement the Restructuring Transactions, the purposes of this Agreement and the Definitive Documents. All Parties shall have the right to review and comment on the Definitive Documents, the terms of which shall be consistent with this Agreement and otherwise in form and substance reasonably acceptable to SAE and the Required Supporting Holders before the execution and delivery of the Definitive Documents.
Section 3. | Forbearance. |
(a) The Parties agree and acknowledge that if the Restructuring Transactions have not been consummated prior to July 15, 2016, in order to consummate the Restructuring Transactions, SAE will not make the interest payment due to be paid on July 15, 2016 under the terms of the Notes Indenture and will instead enter into the 30 day grace period with respect to such payment as permitted by the Notes Indenture.
(b) For so long as the Termination Date has not occurred, and subject to the limitations provided in clause (c) below, each Supporting Holder (severally and not jointly), agrees until August 15, 2016:
(i) to forbear from the exercise of any rights and remedies against SAE to which the Supporting Holders or the Indenture Trustee are or may become entitled as a result of any Default or Event of Default (each as defined in the
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Existing Notes Indenture) arising or existing under the Existing Notes Indenture in respect of SAEs failure to make the interest payment on July 15, 2016 and decision to enter into the grace period in respect thereof (the Potential Default);
(ii) to refrain from exercising any right and remedy that may become available to it under the Existing Notes Indenture by reason of the Potential Default (other than, in the case of the Indenture Trustee, ordinary course acts which it may take under the Existing Notes Indenture which would not adversely affect any other Party); and
(iii) to refrain from initiating, joining in, or encouraging in any way an instruction or direction from any Noteholder to the Indenture Trustee to exercise any rights and remedies under the Existing Notes Indenture in connection with the Potential Default.
(c) For so long as the Termination Date has not occurred, SAE on behalf of itself and the guarantors party to the Existing Notes Indenture, agrees not to make any payment to any Noteholder in respect of the interest payment due on July 15, 2016 prior to the expiration of the applicable grace period.
(d) Nothing contained in this Section 3 shall impair, impede or otherwise prevent any Supporting Holder or the Indenture Trustee from exercising any rights and remedies against SAE in respect of any other Default or Event of Default arising under the Existing Notes Indenture or taking any other action available to it by reason of such a Default or Event of Default.
Section 4. | Representations and Warranties |
4.01. Mutual Representations and Warranties. Each of the Parties, severally and not jointly, represents, warrants, and covenants to each other Party (to the extent applicable), as of the RSA Effective Date, as follows (each of which is a continuing representation, warranty, and covenant):
(a) to the extent it is an entity, it is validly existing and in good standing under the laws of the state or other jurisdiction of its organization;
(b) it has all requisite direct or indirect power and authority to enter into this Agreement and the Definitive Documents to which it is a party and to carry out the Restructuring Transactions contemplated by, and perform its respective obligations under, this Agreement and such Party has been authorized to enter into this Agreement, the New Senior Loan Facility and the Definitive Documents and to carry out the Restructuring Transactions contemplated by, and perform its respective obligations under this Agreement;
(c) the execution, delivery, and performance by such Party of this Agreement does not and will not (i) violate any provision of law, rule, or regulation applicable to it or any of its subsidiaries or its charter or bylaws (or other similar governing documents) or those of any of its subsidiaries, or (ii) except as described in Section 3 hereof conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its subsidiaries is a party;
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(d) the execution, delivery, and performance by such Party of this Agreement does not and will not require any registration or filing with, consent, or approval of, or notice to, or other action to, with or by, any federal, state, or governmental authority or regulatory body, except such filings as may be necessary and/or required for disclosure by the Exchange Act;
(e) this Agreement is the legally valid and binding obligation of such Party, enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, fraudulent conveyance or other similar laws relating to or limiting creditors rights generally, by equitable principles relating to enforceability or by the implied covenant of good faith and fair dealing; and
(f) it has been represented by legal counsel of its choosing in connection with this Agreement and the transactions contemplated by this Agreement, has had the opportunity to review this Agreement with its legal counsel, and has not relied on any statements made by any other Party or such other Partys legal counsel as to the meaning of any term or condition contained herein or in deciding whether to enter into this Agreement or the transactions contemplated hereby.
4.02. Representations and Warranties of the Supporting Holders. Each Supporting Holder, separately and not jointly, represents and warrants to the best of its knowledge, as of the date hereof that:
(a) with respect to the Existing Notes held by such Supporting Holder, such Supporting Holder (i) either (1) is the sole beneficial owner of the principal amount of such Existing Notes indicated on the respective signature page hereto, or (2) has sole investment or voting discretion with respect to the principal amount of such Existing Notes indicated on the respective signature page hereto and has the power and authority to bind the beneficial owners of such Existing Notes to the terms of this Agreement, and (ii) has full power and authority to act on behalf of, vote, and consent to matters concerning such Existing Notes and to dispose of, exchange, assign, and transfer such Existing Notes, including the power and authority to execute this Agreement and to perform its obligations hereunder;
(b) with respect to the Existing Notes held by each Supporting Holder, such Supporting Holder has made no assignment, sale, participation, grant, conveyance, pledge, or other transfer of, and has not entered into any other agreement to assign, sell, use, participate, grant, convey, pledge, or otherwise transfer, in whole in or part, any portion of its right, title, or interests in any such Existing Notes that materially conflicts with the representations and warranties of such Supporting Holder in this Agreement or that would render such Supporting Holder otherwise unable to comply with this Agreement and perform its obligations hereunder, including its obligation to support the Restructuring Transactions, in all material respects;
(c) the amount of debt listed on the signature page of each Supporting Holder is correct as of the date hereof; and
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(d) the Supporting Holders, in entering into this Agreement and participating in the Restructuring Transactions, have not acted as a partnership, limited partnership, syndicate, or other group (as that term is used in Section 13(d) of the Exchange Act) for the purpose of acquiring, holding, disposing, or voting of securities of SAE.
4.03. Representations and Warranties of SAE. SAE, on behalf of itself and each guarantor party to the Existing Notes, as applicable, represents and warrants to the best of its knowledge, as of the date hereof that:
(a) it has, or upon the receipt of shareholder consents will have, authorized sufficient shares of Common Stock to effect the Restructuring Transactions as contemplated by this Agreement;
(b) its financial condition has not materially and adversely changed from that set forth in the Form 10-K for the year ended December 31, 2015, the amended Form 10-K for the year ended December 31, 2015 and the Form 10-Q for the period ended March 31, 2016, other than as contemplated by such reports regarding its liquidity and cash flow difficulties;
(c) as of June 13, 2016, the aggregate outstanding indebtedness (excluding any interest, fees, costs, expenses, and indemnities that may be owed by the applicable obligors) under (1) the Existing Notes is $140.0 million and (2) the Existing Revolver is $13.8 million, and such amounts (together with accrued interest and fees thereon) are outstanding and justly and truly owing by SAE and the guarantors that are party to the Existing Notes Indenture or Existing Revolver, as applicable, without defense, offset, or counterclaim; and
(d) it has no knowledge of any Default or Event of Default under the Existing Revolver or the Existing Notes Indenture which has occurred and is continuing.
Section 5. | Termination Events |
5.01. Supporting Holder Termination Events. The Required Supporting Holders may terminate this Agreement upon three business days prior written notice, unless otherwise set forth below, delivered in accordance with Section 9.11 hereof, upon the occurrence and continuation of any of the following events (each, a Supporting Holder Termination Event):
(a) SAE fails to receive (i) the consent or waiver from the lender under the Existing Revolver or (ii) the shareholder consents or other approvals, in each case that is necessary for the consummation of the Restructuring Transactions, including entry into the New Senior Loan Facility and issuance of the Common Stock;
(b) the Launch Date shall not have occurred by June 20, 2016;
(c) the Funding Date shall not have occurred by July 1, 2016;
(d) the Closing Date shall not have occurred by August 15, 2016;
(e) the breach or noncompliance by SAE or any guarantor under the Notes Indenture of (or failure to satisfy) in any material respect any of the obligations, representations, warranties, or covenants of such parties as set forth in this Agreement (including, without
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limitation, in Sections 2.02, 2.04 or Section 3 hereto) that remains uncured for five business days after the receipt by SAE of written notice of such breach, but solely to the extent such breach or noncompliance is materially adverse to such Supporting Holder and materially affects the ability of SAE, on behalf of itself and its subsidiary guarantors, to consummate the Restructuring Transactions contemplated herein;
(f) the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any ruling or order declaring this Agreement or any material portion hereof to be unenforceable or enjoining or otherwise restricting the consummation of the Restructuring Transactions in a way that cannot reasonably be remedied by SAE;
(g) the occurrence of an event of default under (i) the Existing Revolver, (ii) the New Senior Loan Facility, or (iii) the Existing Notes Indenture (other than the failure to pay interest as set forth in Section 3 hereof), in each case, subject to all applicable notice, waiver, and cure provisions;
(h) SAE or any guarantor under the Notes Indenture executes a letter of intent or similar document stating an intention to pursue an alternative restructuring, liquidation, reorganization, wind-down, exchange, transaction, including an Alternative Proposal, other than that contemplated by this Agreement; or
(i) any of the Definitive Documents or other documents in respect of the Restructuring Transactions are inconsistent with the material terms and conditions set forth in this Agreement, the Term Sheet or their respective exhibits and schedules;
provided that this Agreement shall, without any additional act or notice by any party, terminate immediately upon the occurrence of (1) SAE or any guarantor under the Notes Indenture (i) consenting to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, or similar official of SAE or any substantial part of SAEs property, (ii) seeking any arrangement, adjustment, protection, or relief from its debts, or (iii) making a general assignment for the benefit of its creditors; (2) SAE or any guarantor under the Notes Indenture commencing a voluntary case filed under title 11 of the United States Code (the Bankruptcy Code); or (3) the commencement of an involuntary case against SAE or any guarantor under the Notes Indenture under the Bankruptcy Code.
5.02. SAE Termination Events. SAE may terminate its obligations under this Agreement upon three business days prior written notice delivered to the Parties in accordance with Section 9.11 hereof, upon SAEs knowledge of the occurrence of any of the following events (each, an SAE Termination Event, and together with the Supporting Holder Termination Events, the Termination Events, and each a Termination Event):
(a) the material breach by any of the Supporting Holders of any of the obligations, or covenants of such Supporting Holders set forth in this Agreement or any representation and warranty of such Supporting Holders failing to be accurate that would have a material adverse impact on the implementation or consummation of the Restructuring Transactions that remains uncured for a period of five business days after the receipt by the breaching Supporting Holders of written notice of such breach from SAE;
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(b) the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any ruling or order declaring this Agreement or any material portion hereof to be unenforceable or enjoining or otherwise restricting the consummation of the Restructuring Transactions in a way that cannot reasonably be remedied by SAE; or
(c) upon notice to the Supporting Holders, if the Board determines, after receiving advice from counsel, that proceeding with the transactions contemplated under this Agreement (including, without limitation, the Restructuring Transactions) would be inconsistent with the exercise of its fiduciary duties.
5.03. Effect of Termination
(a) Upon any termination of this Agreement under Sections 5.01 or 5.02, this Agreement shall be of no further force and effect and each Party hereto shall be released from its commitments, undertakings, and agreements under or related to this Agreement and shall be entitled to take all actions, whether with respect to the Restructuring Transactions or otherwise, that they would have been entitled to take had they not entered into this Agreement; provided, however, that SAEs obligation to pay reasonable Professional Fees shall survive with respect to those reasonable Professional Fees incurred through and including the date this Agreement is terminated. Notwithstanding the foregoing, any claim for breach of this Agreement that accrued prior to the date of a Partys termination or termination of this Agreement (as the case may be) and all rights and remedies of the Parties hereto shall not be prejudiced as a result of termination.
(b) Notwithstanding any provision in this Agreement to the contrary, no Party shall terminate this Agreement if such Party is in material breach of any provision hereof.
5.04. Termination Upon Consummation of the Restructuring Transactions. This Agreement shall terminate automatically without any further required action or notice upon the Closing Date.
Section 6. | Transfer of Existing Notes |
Each Supporting Holder agrees that so long as this Agreement has not been terminated in accordance with its terms, it shall not directly or indirectly sell, assign, pledge, hypothecate, convey, or otherwise transfer or dispose of or grant, issue, or sell any option, right to acquire, voting, participation, or other interest in any Existing Notes (each, a Transfer), unless the transferee thereof either (i) is a Supporting Holder and agrees to exchange such additional Existing Notes and deliver related consents in the Exchange Offer, or (ii) prior to such Transfer, agrees in writing for the benefit of the other Parties to become a Supporting Holder and to be bound by all of the terms of this Agreement with respect to such acquired Existing Notes by executing the joinder in the form attached hereto as Exhibit I (the Joinder Agreement), and delivering an executed copy thereof, within five business days of closing of such Transfer, to counsel to SAE and counsel to the Supporting Holders, as listed in Section 9.11 hereof, in which event the transferee (including a Supporting Holder transferee, if applicable) shall be deemed to be a Supporting Holder under this Agreement with respect to such transferred rights, claims, and obligations. Notwithstanding anything contained herein to the contrary, a Supporting Holder may Transfer any or all of its Existing Notes to any entity that, as of the date of the Transfer,
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controls, is controlled by, or is under common control with such Supporting Holder; provided, however, that such entity shall automatically be subject to the terms of this Agreement and deemed a Party hereto and must deliver an executed Joinder Agreement within five business days of the closing of such Transfer to counsel to SAE and counsel to the Supporting Holders. Each Supporting Holder agrees and acknowledges that any Transfer of Existing Notes that does not comply with the terms and procedures set forth in this Section 6 shall be deemed null and void ab initio.
Notwithstanding anything to the contrary in this Section 6, (i) a Qualified Marketmaker (as defined below) that acquires any Existing Notes from a Supporting Holder with the purpose and intent of acting as a Qualified Marketmaker for such Existing Notes (with the understanding that the Qualified Marketmaker will agree at the time of such acquisition to the terms of this paragraph), shall not be required to execute and deliver a Joinder Agreement or otherwise agree to be bound by this Agreement if such Qualified Marketmaker transfers such Existing Notes within ten (10) business days of its acquisition to a Supporting Holder or transferee that executes and delivers a Joinder Agreement in accordance with the terms set forth in the immediately preceding paragraph no later than (2) business days after consummation of the Transfer; and (ii) to the extent any Party is acting solely in its capacity as a Qualified Marketmaker, it may Transfer any ownership interests in the Existing Notes that it acquires from an Existing Holder that is not or has not been a Supporting Holder to a transferee that is not a Supporting Holder at the time of such Transfer without the requirement that the transferee be or become a signatory to this Agreement or execute a Joinder Agreement.
As used herein, Qualified Marketmaker) means an entity that (a) holds itself out to the public or applicable private markets as standing ready in the ordinary course of business to purchase from customers and sell to customers claims against SAE (or enter with customers into long and short positions in claims against SAE), in its capacity as a dealer or marketmaker in claims against SAE and (b) is, in fact, regularly in the business of making a market in claims against issuers or borrowers (including debt securities or other debt).
Section 7. | Amendments |
This Agreement, the Definitive Documents, and, in each case, any annexes or exhibits thereto may not be modified, amended, or supplemented, nor may any terms and conditions hereof or thereof be waived, without the prior written consent of SAE and the Required Supporting Holders. As used in this Agreement, Required Supporting Holders means Supporting Holders holding more than a majority of the aggregate principal amount of the Existing Notes held by all the Supporting Holders as of the date such consents are solicited; provided, however, that any waiver, change, modification, or amendment to this Agreement that materially and adversely affects the economic interests of any Supporting Holder may not be made without the written consent of each such affected Supporting Holder. Notwithstanding the foregoing, no modification, amendment or alteration shall be made to (a) the material terms of the New Term Loan Facility and the New Second Lien Notes, (b) the equity allocations set forth on Schedule 3 of the Term Sheet, or (d) the material economic terms of the Exchange Offer without the consent of each Supporting Holder.
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Section 8. | No Solicitation of Securities |
Notwithstanding anything to the contrary herein, this Agreement is not and shall not be deemed to be an offer for the issuance, purchase, sale, exchange, hypothecation, or other transfer of securities or a solicitation of an offer to purchase, sell, exchange or acquire securities for purposes of the Securities Act of 1933, as amended, and the Exchange Act.
Section 9. | Miscellaneous |
9.01. Further Assurances. Subject to the other terms hereof, the Parties agree to execute and deliver such other instruments and perform such acts, in addition to the matters herein specified, as may be commercially reasonably appropriate or necessary, from time to time, to effectuate the Restructuring Transactions in accordance with this Agreement.
9.02. Complete Agreement. This Agreement, exhibits and the annexes hereto, represent the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements, oral or written, between the Parties with respect thereto. No claim of waiver, consent, or acquiescence with respect to any provision of this Agreement, exhibits, and annexes hereto shall be made against any Party, except on the basis of a written instrument executed by or on behalf of such Party.
9.03. No Assignment. This Agreement shall be binding upon, and inure to the benefit of, the Parties. No rights or obligations of any Party under this Agreement may be assigned or transferred to any other person or entity, except as provided in this Agreement. Nothing in this Agreement, express or implied, shall give to any person or entity, other than the Parties, any benefit or any legal or equitable right, remedy, or claim under this Agreement.
9.04. Headings. The headings of all Sections of this Agreement are inserted solely for the convenience of reference and are not a part of and are not intended to govern, limit, or aid in the construction or interpretation of any term or provision hereof.
9.05. Governing Law; Submission to Jurisdiction; Selection of Forum; Waiver of Trial by Jury. This Agreement is to be governed by and construed in accordance with the laws of the State of New York. Each Party hereto agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement in the United States District Court for the Southern District of New York, and by execution and delivery of this Agreement, each of the Parties irrevocably accepts and submits itself to the exclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding. Each Party here irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby.
9.06. Counterparts. This Agreement may be executed and delivered (by facsimile, electronic mail, or otherwise) in any number of counterparts, each of which, when executed and delivered, shall be deemed an original, and all of which together shall constitute the same agreement.
9.07. Interpretation. This Agreement is the product of negotiations between the Parties, and in the enforcement or interpretation hereof, is to be interpreted in a neutral manner, and any
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presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Agreement, or any portion hereof, shall not be effective in regard to the interpretation hereof.
9.08. Relationship Among Supporting Holders. It is understood and agreed that no Supporting Holder has any duty of trust or confidence of any kind or form with any other Supporting Holders as a result of this Agreement, and, except as expressly provided in this Agreement, there are no commitments among or between them. It is further understood and agreed that any Supporting Holder may trade in the Existing Notes or other debt or equity securities of SAE without the consent of SAE or any other Supporting Holder, subject to applicable securities laws and the terms of this Agreement, and subject to Section 6 of this Agreement; provided, however, that no Supporting Holder shall have any responsibility for any such trading by any other entity by virtue of this Agreement. No prior history, pattern, or practice of sharing confidences among or between the Supporting Holders shall in any way affect or negate this understanding and agreement. No Supporting Holders shall, as a result of its entering into and performing its obligations under this Agreement, be deemed to be a part of a group (as that term is used in Section 13(d) of the Exchange Act) with any other Party. For the avoidance of doubt, no action taken by a Supporting Holder pursuant to this Agreement shall be deemed to constitute or to create a presumption by any of the Parties that the Consenting Noteholders are in any way acting in concert or as such a group. The execution of this Agreement by any Supporting Holder shall not create, or be deemed to create, any fiduciary or other duties (actual or implied) to any other Supporting Holder other than non-fiduciary duties expressly set forth in this Agreement.
9.09. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, administrators and representatives, other than a trustee or similar representative appointed in a bankruptcy case.
9.10. Acknowledgements. Notwithstanding anything herein to the contrary, none of the Supporting Holders shall (a) have any fiduciary duty or (b) other duties or responsibilities to each other, SAE, any subsidiary or affiliate of SAE, or any of SAEs creditors or other stakeholders.
9.11. Notices. All notices hereunder shall be deemed given if in writing and delivered, if sent by hand delivery, electronic mail, courier, or overnight delivery (return receipt requested) to the following addresses (or at such other addresses as shall be specified by like notice):
(a) | if to SAE, to: |
SAExploration Holdings, Inc.
1160 Dairy Ashford Rd., Suite 160
Houston, Texas 77079
Attn: Brent Whiteley Chief Financial Officer, General Counsel and Secretary
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with copies to:
Jones Day
222 E. 41st Street
New York, New York 10017
Attn: Alex Gendzier
Brad Erens
E-mail address: agendzier@jonesday.com
bberens@jonesday.com
(b) | if to the Supporting Holders, to: |
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
Attn: Brian Hermann
Lauren Shumejda
E-mail address: bhermann@paulweiss.com
lshumejda@paulweiss.com
Any notice given by hand delivery, electronic mail, mail, or courier shall be effective when received.
9.12. Waiver. Except as expressly provided in this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict any right of any Supporting Holder or SAE or the ability of each of the Supporting Holders or SAE to protect and preserve its respective rights, remedies and interests. If the Restructuring Transactions are not consummated, or if this Agreement is terminated for any reason, the Parties fully reserve any and all of their rights.
9.13. Several, Not Joint, Obligations. The agreements, representations and obligations of the Parties under this Agreement are, in all respects, several and not joint.
9.14. Remedies. All rights, powers, and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any right, power, or remedy thereof by any Party shall not preclude the simultaneous or later exercise of any other such right, power, or remedy by such Party or any other Party.
9.15. Specific Performance. This Agreement is intended as a binding commitment enforceable in accordance with its terms against the Parties. It is understood and expressly agreed by each of the Parties that money damages would not be a sufficient remedy for any breach of this Agreement by any Party, and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief as a remedy for any such breach without the necessity of proving the inadequacy of money damages as a remedy and without posting security for such relief.
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9.16. No Third-Party Beneficiaries. Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties, and no other person or entity shall be a third-party beneficiary hereof.
9.17. Management Liability. The Parties hereby acknowledge that Management is party to this Agreement solely with respect to Section 2.03 and shall incur no liability pursuant to (i) any breach by SAE of this Agreement and (ii) any delay of, or failure to consummate, any or all of the Restructuring Transactions contemplated in this Agreement.
9.18. Consideration. The Parties hereby acknowledge that no consideration, other than that specifically described herein and the Definitive Documents, shall be due or paid to any Party for its agreement to accept the Restructuring Transactions in accordance with the terms and conditions of this Agreement.
9.19. Survival. Notwithstanding anything herein to the contrary, the acknowledgements, agreements and obligations of the Parties in this Section 9.18 and Sections 2.01(e), 5.03(a), 9.08, 9.09 and 9.17 shall survive any termination of this Agreement and shall continue in full force and effect in accordance with the terms thereof.
Section 10. | Releases |
10.01. On the Closing Date, SAE and the Supporting Holders shall enter into mutual releases of all claims and causes of action arising before the Closing Date.
[Signatures on Following Page]
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IN WITNESS WHEREOF, SAE, Management and the Supporting Holders have caused this Agreement to be executed and delivered by their respective and duly authorized officers or other agents, solely in their respective capacity as officers or other agents of the undersigned and not in any other capacity, as of the date first set forth above.
SAEXPLORATION HOLDINGS, INC. | ||
By: |
/s/ Brian Beatty | |
Name: |
Brian Beatty | |
Title: |
CEO & President |
JEFF HASTINGS | ||
By: |
/s/ Jeff Hastings | |
Title: |
Executive Chairman |
BRIAN BEATTY | ||
By: |
/s/ Brian Beatty | |
Title: |
CEO & President |
BRENT WHITELEY | ||
By: |
/s/ Brent Whiteley | |
Title: |
CFO, General Counsel and Secretary |
Amzak Capital Management, LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Samuel J. Barker | |
Name: |
Samuel J. Barker | |
Title: |
Senior Fixed Income Analyst |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Aristides Capital LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Christopher M. Brown | |
Name: |
Christopher M. Brown | |
Title: |
Managing Member |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
BlueMountain Capital Management, LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Kyle Brady | |
Name: |
Kyle Brady | |
Title: |
Assistant General Counsel |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Morgan Stanley Investment Management, Inc., as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Kim W. Cross | |
Name: |
Kim W. Cross | |
Title: |
Managing Director |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Mr. John Pecora | ||
By: |
/s/ John Pecora | |
Name: |
John Pecora | |
Title: |
N/A |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Tegean Capital Management, LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Ariel Rothman | |
Name: |
Ariel Rothman | |
Title: |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Whitebox Advisors LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Mark Strefling | |
Name: |
Mark Strefling | |
Title: |
General Counsel & Chief Operating Officer |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Exhibit A
Term Sheet
SAEXPLORATION HOLDINGS, INC.
Term Sheet
June 13, 2016
This term sheet (the Term Sheet) sets forth an outline of certain material terms and conditions of a comprehensive restructuring and recapitalization (the Restructuring) of the balance sheet of SAExploration Holdings, Inc. (the Company). This Term Sheet is intended as a summary for discussion purposes only and does not constitute a commitment, obligation, or agreement to provide, arrange, or syndicate any financing on the part of the Supporting Holders (as defined below). Only execution and delivery of definitive documentation relating to the Restructuring shall result in any binding or enforceable obligations of any party with respect thereto. It is anticipated that the Company and the Supporting Holders (as defined below) will execute a restructuring support agreement (the RSA) on June 13, 2016 (the RSA Date) with standard terms and conditions evidencing, among other things, their intent to support consummation of the Restructuring.
Overview of the Restructuring
Pursuant to the Restructuring, (i) the Supporting Holders (as defined below) shall exchange the Existing Notes (as defined below) into New Second Lien Notes (as defined below) and shares of common stock (the Common Stock) of the Company, as contemplated by the Exchange Offer (as defined below) and (ii) certain Supporting Holders shall provide the Company with a multi-draw senior secured term loan facility (the New Senior Loan Facility) in an aggregate principal amount of up to $30 million on the terms set forth on Schedule 1 hereto. Other Participating Holders (as defined below) shall have the opportunity to participate in the New Senior Loan Facility on equal terms with the other Supporting Holders.
The Company |
SAExploration Holdings, Inc. |
Current Capital Structure |
The indebtedness of the Company as of the date of this Term Sheet is as follows: |
| that certain Credit and Security Agreement, dated as of November 6, 2014, by and among Wells Fargo Bank, N.A., as lender, SAExploration, Inc., as borrower, and the Company and the other guarantors party thereto, as guarantors, providing for, among other things, a $20 million revolving line of credit secured by the Companys U.S. assets, including accounts receivable and equipment, subject to certain exclusions and exceptions (the Revolving Credit Facility); and |
| 10.000% Senior Secured Notes due 2019 (the Existing Notes, and the holders thereof, the Existing Holders), issued pursuant to that certain indenture, dated as of July 2, 2014 (the Existing Notes Indenture) by and among the Company, the guarantors named therein and U.S. Bank National Association, as indenture trustee, of which there is outstanding as of the date of this Term Sheet $140 million in an aggregate principal amount. |
Supporting Holders |
Supporting Holders means the Existing Holders executing the RSA, including those Existing Holders listed on Schedule 2. |
Overview of the Restructuring |
Subject to the terms set forth in the RSA and this Term Sheet, the Restructuring shall be implemented as follows: |
| on June 13, 2016, the Company and holders of not less than 66% of the aggregate principal amount of Existing Notes shall execute the RSA; |
| on or before June 20, 2016 (the Launch Date), the Company shall commence an exchange offer and consent solicitation pursuant to which (i) Existing Notes shall be exchanged for (1) new second lien notes (the New Second Lien Notes) on the terms described below and (2) shares of Common Stock of the Company (the New Notes Shares), equal to 64.48% of the total outstanding Common Stock of the Company on the Closing Date (as defined below), on a fully diluted basis, as set forth in Schedule 3 hereto, and (ii) tendering Existing Holders will deliver consents to certain proposed amendments as described below; |
| on or before July 1, 2016 (such date, the Funding Date), the parties shall obtain (i) any consents required from Existing Holders to amend the Existing Notes Indenture, existing security documents and existing intercreditor agreement (as summarized below under Consent Solicitation) and (ii) such waivers, consents or amendments to the Revolving Credit Facility from Wells Fargo, N.A., as lender under the Revolving Credit Facility, in both cases, as necessary to give effect to and permit the Restructuring referred to herein. Upon receipt of such consents and amendments or waivers, (1) the Supporting Holders and any other Participating Holders (together, the New Senior Lenders) shall enter into the New Senior Loan Facility with the Company on the terms set forth on Schedule 1 hereto, in connection with which the New Senior Lenders shall receive, subject to the terms and conditions described in Schedule 1, shares of Common Stock of the Company (together with the Backstop Shares (as defined in Schedule 1 hereto), the New Senior Loan Shares), equal to 28.20% of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3 hereto, (2) the Initial Draw (as defined in Schedule 1) shall occur, and (3) the Company and the trustee and collateral agent under the Existing Notes Indenture shall enter into the supplemental indenture to the Existing Notes Indenture, the amendments to the existing security documents and the amendments to the existing intercreditor agreement; |
| in the RSA, the Company shall, if necessary, enter into the 30-day grace period provided for in the Existing Indenture in respect of the July 15, 2016 interest payment under the Existing Notes, and the Supporting Holders shall agree to forbear, if necessary, from exercising remedies in respect thereof for a period extending to August 15, 2016 to allow the Restructuring to be consummated; and |
2
| existing holders of the Companys Common Stock shall retain, on a pro rata basis after giving effect to the Restructuring, shares of Common Stock of the Company equal to 1.32% of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3. |
It is anticipated that the Exchange Offer will close, and that the New Senior Loan Shares and the New Note Shares will be issued, on the date that is intended to be no later than 30 days after the Launch Date (assuming no amendments and/or extensions of the offer period) (the Closing Date). |
The New Senior Loan Shares and the New Notes Shares shall be subject to mutual dilution and shall, together with shares issued under the Management Incentive Plan (as defined below), dilute the existing Common Stock of the Company. The New Senior Loan Shares and the New Notes Shares shall not be dilutive to the Management Incentive Plan. Schedule 3 presents the allocation of the Companys Common Stock as of the Funding Date, on an as-issued basis, and the allocation of the Companys Common Stock as of the Closing Date. |
In connection with the Restructuring, on the Closing Date, the Company will: |
| enter into new amended employment agreements with the Companys senior management (Jeff Hastings, Brian Beatty, Brent Whitely, Mike Scott, Darin Silvernagle, Trisha Gerber and Ryan Abney), as described below; |
| adopt the Management Incentive Plan, as described below; and |
| issue Warrants to existing holders of the Companys Common Stock, as described below. |
3
The Exchange Offer |
Eligible Existing Holders will be offered an opportunity to participate pro rata in the exchange offer for the Existing Notes (together, the Exchange Offer), pursuant to which each participating Existing Holder (the Participating Holders) shall receive, on the Closing Date, for every $1,000 principal amount of Existing Notes tendered for exchange (subject to a minimum tender of $2,000 principal amount and in $1,000 increments in excess thereof): |
| $500 principal amount of New Second Lien Notes, which shall have terms substantially similar to the Existing Notes; provided that (1) the New Second Lien Notes shall have a maturity date of September 24, 2019, provided that, if any of the Existing Notes remain outstanding as of March 31, 2019, the maturity date of the New Second Lien Notes will become April 14, 2019 upon the vote of the holders of a majority of the then-outstanding New Second Lien Notes, (2) the liens securing the New Second Lien Notes shall be junior to the liens securing the New Senior Loan Facility and senior to the liens securing the Existing Notes after the Closing Date, (3) the Company may elect to pay interest on the New Second Lien Notes in kind with additional New Second Lien Notes for the first twelve months of interest payment dates following the Closing Date, provided that, if the Company makes this election, the interest on the New Second Lien Notes for such in kind payments will accrue at a per annum rate 100 basis points higher than the cash interest rate, (4) the definition of Permitted Holders for purposes of the Change of Control covenant will include the Supporting Holders and their related parties, (5) the New Second Lien Notes will have a special redemption right at par of up to $35 million of the issuance to be paid out of the proceeds of the Alaska tax credit certificates and shall be conditioned upon payment in full of the Revolving Credit Facility and the New Senior Loan Facility, and (6) the New Second Lien Notes shall include a make-whole provision requiring that if the New Second Lien Notes are accelerated or otherwise become due and payable prior to their stated maturity due to an Event of Default (including but not limited to a bankruptcy or liquidation of the Company (including the acceleration of claims by operation of law)), then the Applicable Premium payable with respect to an optional redemption will also be immediately due and payable, along with the principal of, accrued and unpaid interest on, the notes and shall constitute part of the obligations in respect thereof as if such acceleration were an optional redemption of the notes, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each holders lost profits as a result thereof; and |
| a pro rata portion the New Notes Shares, collectively representing 64.48% of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3. |
The indenture for the New Second Lien Notes shall include the following additional language in respect of the make-whole: |
Any Applicable Premium payable shall be presumed to be the liquidated damages sustained by each holder as the result of the early redemption and the Company agrees that it is reasonable under the circumstances currently existing. The Applicable Premium shall also be payable in the event the New Second Lien Notes (and/or the Indenture) are satisfied or released by foreclosure, deed in lieu of foreclosure or any other means. The Company expressly waives (to the fullest extent it may lawfully do so) the provisions of any present or future statute or law that prohibits or may prohibit the collection of the foregoing Applicable Premium in connection with any such acceleration. The Company expressly agrees (to the fullest extent it may lawfully do so) that: (A) the Applicable Premium is reasonable and is the product of an arms length transaction between sophisticated business people, ably represented by counsel; (B) the Applicable Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between holders and the Company giving specific consideration in this transaction for such agreement to pay the premium; and (D) the Company shall be estopped hereafter from claiming differently than as agreed to in this paragraph. The Company expressly acknowledges that its agreement to pay the Applicable Premium to Holders as herein described is a material inducement to holders to purchase the Notes. The Applicable Premium shall constitute part of the holders claim in respect of the New Second Lien Notes in the event of a bankruptcy or liquidation, and such claim shall be allowed against the debtors without the need to file a proof of claim. |
The calculation of the Applicable Premium shall be the same as that appearing in the Existing Notes Indenture, except that the discount rate will be based on Treasuries plus 25 basis points. |
The Restructuring will be conditioned on participation in the Exchange Offer by Existing Holders holding at least 90% of the Existing Notes outstanding as of the date of this Term Sheet. The Participating Holders shall deliver consents to the amendments to the Existing Notes Indenture as described below under Consent Solicitation. |
Pursuant to, and subject to the terms of, the RSA, the Supporting Holders shall agree to participate in the Exchange Offer for the full amount of their Existing Notes, to deliver consents to amend the Existing Notes Indenture and to waive withdrawal rights with respect to their tendered Existing Notes and related Consents, each as described below under Consent Solicitation. |
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Consent Solicitation |
In connection with the Exchange Offer, the Company will seek consents from Participating Holders to: |
| amend the Existing Notes Indenture (the Consent Solicitation) to: |
| waive the applicable change of control provisions; |
| permit the entry into, and incurrence of draws pursuant to, the New Senior Loan Facility on the Funding Date and the issuance of the New Second Lien Notes (including any additional New Second Lien Notes issued in lieu of cash interest payments) by amending the Incurrence of Indebtedness and Issuance of Preferred Stock and Liens covenants; |
| amend the definition of Permitted Holders for purposes of the Change of Control covenant to include the Supporting Holders and their related parties; and |
| amend the Payments for Consents and Transactions with Affiliates covenants in connection with the transactions contemplated by this Term Sheet; |
| amend the security documents relating to the Existing Notes to give effect to the Term Sheet, including to consent to full subordination of the liens securing the Existing Notes to the New Senior Loan Facility and the New Second Lien Notes; and |
| amend and restate the existing intercreditor agreement to account for the entry into the New Senior Loan Facility on the Funding Date, the New Second Lien Notes and the related liens and the relative lien priorities of the Revolving Credit Facility, the New Senior Loan Facility, the New Second Lien Notes and the Existing Notes as contemplated by Schedule 1. |
In order to tender Existing Notes for exchange in the Exchange Offer, Participating Holders shall be required to deliver consents in the Consent Solicitation. Supporting Holders participation in the Exchange Offer and Consent Solicitation will occur at the launch of the deal and Supporting Holders shall, subject to the terms of the RSA, waive withdrawal rights with respect to tendered Existing Notes and the related Consents, with the effect that, the Company and the trustee for the Existing Notes Indenture shall be able to enter into a supplemental indenture to permit the entry into the New Senior Loan Facility and related matters on the Funding Date. |
Amendment of the Revolving Credit Facility |
The Revolving Credit Facility shall remain in place; provided that consummation of the New Senior Loan Facility shall be subject to obtaining the necessary consents or waivers from Wells Fargo (as discussed below). |
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Management Incentive Plan |
On the Closing Date, the Company shall adopt a management incentive plan (the Management Incentive Plan), which shall reserve 10%, on a fully diluted basis, of the total shares of common stock outstanding as of the Closing Date (the MIP Shares) for distribution to covered employees on terms to be agreed with senior management. The Management Incentive Plan shall supersede any prior management or employee stock compensation plan of the Company in effect on the Closing Date. Senior management shall receive 60% of the MIP Shares on the Closing Date, of which 1/3 shall vest on each of (1) the earlier of (a) the first anniversary of the Closing Date and (b) the date the Company shall have received Alaskan tax credit certificates in a face amount of at least $25 million (the Tax Credit), and (2) each anniversary of the Closing Date for the two years thereafter in the form of: |
(i) shares equal to 3% of the Companys outstanding Common Stock as of the Closing Date on a fully diluted basis; and |
(ii) at-the-money incentive options to acquire shares equal to 3% of the Companys outstanding Common Stock as of the Closing Date, based on an equity value (a) if options are initially distributed on the first anniversary of the Closing Date or after the 60th calendar day following the Closing Date due to the receipt of the Tax Credit (the Tax Credit Valuation Date), the volume-weighted average price (the VWAP) per share of SAE Common Stock during the 30-day period ending on the date that is the 60th calendar day following the Closing Date or (b) if options are initially distributed due to the receipt of the Tax Credit prior to the 60th calendar date following the Closing Date, the VWAP per share of SAE Common Stock during the 30-day period ending on the date one day preceding any public announcement of the Tax Credit Valuation Date; provided, however, that if the Tax Credit Valuation Date occurs before the expiration of 30 days following the Closing Date, then the VWAP calculation period shall be the number of days between the Closing Date and the Tax Credit Valuation Date. |
If any member of senior management terminates his or her employment without good reason within the first twelve months after the Closing Date, that employees vested MIP Shares or the cash proceeds thereof will be clawed back. |
The remaining 40% of MIP Shares shall be granted to members of management and other key employees and distributed according to a vesting schedule to be determined by the New Board, provided, however, that the MIP Shares may not be used to fund any of the Annual Performance Awards (as defined in Schedule 4). |
Warrants |
In connection with the Restructuring, the Company will enter into, as of the Closing Date, a warrant agreement with its transfer agent, as warrant agent (the Warrant Agreement), that shall provide for the issuance of warrants in two series to all existing holders of Common Stock that, upon exercise, will each represent 2.25% of the outstanding shares of Common Stock as of the Closing Date, subject to dilution by the New Loan Shares and the MIP Shares, at an exercise price to reflect market capitalizations of $112 million and $140 million, respectively, with five year terms (Warrants). The Warrant Agreement will contain customary cashless exercise and anti-dilution provisions. |
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The Warrants will not become exercisable until 30 days before their expiration date. In addition, it shall be a condition precedent to any exercise that the Company shall have received Alaska tax credit certificates in a face amount of at least $25 million. |
Holders of the Warrants will be entitled to the benefit of a customary resale registration rights agreement. |
Treatment of Existing Equity Holders |
In connection with the Restructuring, existing holders of Common Stock will retain 1.32% of the outstanding shares of Common Stock on a fully diluted basis, as of the Closing Date, provided that these shares shall be subject to dilution by the subsequent issuance of the remaining 40% of the MIP Shares. |
Employment Agreements |
On the Closing Date, the Company shall enter into new amended employment agreements with the Companys senior management (Jeff Hastings, Brian Beatty, Brent Whiteley, Mike Scott, Darin Silvernagle, Trisha Gerber and Ryan Abney), to reflect the material terms and conditions set forth on Schedule 4 hereto. |
New Board |
As of the Closing Date, the Companys board of directors (the New Board) shall consist of 7 members, one of whom shall be a member of senior management appointed by the Company. The remaining 6 directors shall be selected by the Supporting Holders in their sole discretion; provided that the Supporting Holders shall consult in good faith with the Companys management in the selection thereof; provided, further, that a sufficient number of independent directors will be selected to comply with any applicable listing requirements. |
Amended Articles & Bylaws |
As soon as reasonably practicable after the Closing Date, the Companys existing articles and bylaws will be subject to customary amendments and modifications to be agreed upon in the RSA. |
Public Status; Listing |
The Company shall remain an SEC-registered public company and shall file reports under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. The Company shall use its commercially reasonable efforts to comply with the listing requirements of the Nasdaq Global Market or the Nasdaq Capital Market, as applicable. |
The Company shall use its commercially reasonable efforts to receive the requisite shareholder votes to affect the Restructuring, to the extent required by its charter, other corporate governance documents and applicable law. |
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Closing Conditions |
The effectiveness of the Restructuring shall be conditioned upon the absence of any material business, regulatory or legal impediments thereto, as determined by the Supporting Holders in their reasonable discretion, and shall be subject to customary closing conditions, including, without limitation: |
| the negotiation and execution of definitive documentation acceptable to the Supporting Holders and the Company; |
| participation by holders of 90% of the outstanding Existing Notes in the Exchange Offer and Consent Solicitation; |
| no success fee shall be payable to a financial advisor, if any, to the Company, except on terms reasonably acceptable to the Supporting Holders; |
| receipt of any necessary amendments and/or waivers from the lender under the Revolving Credit Facility to permit the Restructuring; and |
| payment of all fees and expenses incurred by the Supporting Holders. |
Fiduciary Out / Shop Right |
The Company may terminate this Term Sheet or the RSA upon three business days prior notice if the board of directors of the Company determines, after receiving advice from counsel, that proceeding with the Restructuring would be inconsistent with the exercise of its fiduciary duties. Notwithstanding anything in this Term Sheet or the RSA to the contrary, nothing in this Term Sheet or the RSA shall prevent the Company from taking or failing to take any action that it is obligated to take (or to fail to take) in the performance of any fiduciary duty or as otherwise required by applicable law which the Company owes to any other person or entity under applicable law. |
Fees and Expenses |
The Company shall pay promptly all accrued and unpaid fees and expenses of the Supporting Holders and any agent or trustee under the various debt documents in connection with the Restructuring (whether or not the Restructuring is consummated) including, without limitation, the costs and expenses incurred by counsel to the Supporting Holders in connection with the Restructuring. |
Reservation of Rights |
Nothing herein is intended to, or does, in any manner waive, limit, impair or restrict the ability of each of the Company and the Supporting Holders to protect and fully preserve all of their rights, remedies, claims and interests, including the Supporting Holders claims against the Company or any other party in interest or their respective property. If the Restructuring is not consummated, the Company and the Supporting Holders fully reserve any and all of their respective rights. |
No Admission |
Nothing in the Term Sheet is or shall be deemed to be an admission of fact or liability or deemed binding on the Company or the Supporting Holders. |
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Schedule 1
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Term Sheet.
New Senior Loan Facility Term Sheet | ||
Borrower | The Company | |
Guarantors | All of the Companys domestic subsidiaries | |
Lenders | Certain of the Supporting Holders and Other Participating Holders. | |
Facility | Senior secured multi-draw term loan facility in an aggregate principal amount of $30 million.
The initial draw (the Initial Draw), which shall occur on or about the Funding Date, shall be not more than $5.6 million in the aggregate. It shall be a condition precedent to the Initial Draw that the Company and holders of not less than 66% of the aggregate principal amount of Existing Notes shall have executed the RSA.
The second draw (the Second Draw) shall be not more than $9.4 million in the aggregate. It shall be a condition precedent to the Second Draw that the Restructuring described in the RSA and the transactions contemplated by the exhibits thereto that are intended to be closed by the Closing Date shall have been consummated by or on the Closing Date.
It shall be a condition precedent to any additional subsequent draw (a Subsequent Draw) that the Company shall have received Alaska tax credit certificates in a face amount of at least $25 million. | |
Security Interest | The obligations of the Company and the guarantors under the New Senior Loan Facility will be secured on a 1.5 lien priority basis by the collateral currently securing the obligations under the Revolving Credit Facility and the Existing Notes, respectively, and the receivable due to the Company from Alaska Seismic Ventures and any tax credit or tax certificate assigned or issued to the Company in connection therewith, and all proceeds therefrom (the Collateral). The Collateral will secure those obligations of the Company and the guarantors (1) under the Revolving Credit Facility on a first lien priority basis, (2) under the New Notes on a second lien priority basis and (3) under the Existing Notes on a third lien priority basis.
As of the Funding Date, the agent under the New Senior Loan Facility, the agent under the Revolving Credit Facility, and the collateral agent under the Existing Indenture will enter into an Intercreditor Agreement with the Company and the Guarantors which will provide for contractual subordination of the liens of each such agent and collateral agent in the Collateral to the extent necessary to reflect the relative lien priority set forth herein. The Intercreditor Agreement will also govern the relationship of the parties in respect of the Collateral and certain other matters. This new Intercreditor Agreement will, in effect amend and restate the existing intercreditor agreement. The collateral agent under the New Indenture will sign a joinder to the new Intercreditor Agreement on the Closing Date. | |
Interest | 10% per year, payable monthly in cash. |
9
New Senior Loan Facility Term Sheet | ||
Facility Fee | The Company shall pay a facility fee of $600,000 in the aggregate to the New Senior Lenders on the Funding Date with the proceeds of the Initial Draw under the New Senior Loan Facility. | |
Syndication; Backstop Shares |
Subsequent to the Initial Draw but prior to the Second Draw, Participating Holders shall have the opportunity to participate in the New Senior Loan Facility. On the RSA Date and the Funding Date, the New Senior Lenders who fund the Initial Draw shall become entitled on such date, subject to issuance, to a pro rata portion of shares of the Companys Common Stock (the Backstop Shares), representing 3.14% and 6.26%, respectively, of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3. The Backstop Shares shall be issued on the earliest of (1) the Closing Date; (2) the date on which the RSA terminates according to its terms, or (3) August 15, 2016. | |
Equity | The Backstop Shares shall be deemed earned by the New Senior Lenders as of the Funding Date, provided that the Backstop Shares shall not be issued to the New Senior Lenders until the earlier of (1) the Closing Date and (2) August 15, 2016.
On the Closing Date, each New Senior Lender shall receive a pro rata portion of shares of the Companys Common Stock (collectively, with the Backstop Shares, the New Senior Loan Shares), representing 18.80% (excluding Backstop Shares) of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3 hereto; provided that, if the stockholders of the Company have not then approved the issuance of these shares, then the Company will issue 19.9% of the outstanding shares of Common Stock to the New Senior Lenders and will covenant to issue the remaining 8.3% after such stockholder consent has been received, for the purpose of remaining in compliance with NASDAQ Listing Rule 5635.
The New Senior Loan Shares and the New Notes Shares shall be subject to mutual dilution and shall, together with shares issued under the Management Incentive Plan, dilute the existing Common Stock of the Company. The New Senior Loan Shares and the New Notes Shares shall not be dilutive to the Management Incentive Plan. | |
Maturity | January 1, 2018. | |
Restrictive Covenants | The New Senior Loan Facility will contain restrictive covenants, financial covenants, and selected maintenance covenants that are mutually acceptable to the Company and the New Senior Lenders, including, without limitation, that the proceeds of the New Senior Loan Facility and available cash shall be used in accordance with a budget mutually acceptable to the Company and the New Senior Lenders. | |
Governing Law | The New Senior Loan Facility and related transaction documents will be governed by New York law. |
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Schedule 2
Supporting Holders
| Whitebox Advisors LLC |
| BlueMountain Capital Management, LLC |
| Morgan Stanley Investment Management Inc. |
| Aristides Capital LLC |
| Tegean Capital Management, LLC |
| Amzak Capital Management, LLC |
| Mr. John Pecora |
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Schedule 3
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Term Sheet.
RSA Date Allocation of Common Stock*
As of the RSA Date, after giving effect to the Backstop Shares, on an as-issued basis1, and excluding the issuance of any other New Senior Loan Shares, New Notes Shares and MIP Shares, the allocation of Common Stock of the Company shall be as follows (based on 17,451,353 shares outstanding prior to the Funding Date):
Existing Common Stock |
96.86%2 | |
Management Incentive Plan |
0% | |
New Notes Shares |
0% | |
New Senior Loan Shares (other than Backstop Shares) |
0% | |
Backstop Shares |
3.14% |
Funding Date Allocation of Common Stock*
As of the Funding Date, after giving effect to the Backstop Shares, on an as-issued basis1, and excluding the issuance of any other New Senior Loan Shares, New Notes Shares and MIP Shares, the allocation of Common Stock of the Company shall be as follows (based on 17,451,353 shares outstanding prior to the Funding Date):
Existing Common Stock |
90.0%2 | |
Management Incentive Plan |
0% | |
New Notes Shares |
0% | |
New Senior Loan Shares (other than Backstop Shares) |
0% | |
Backstop Shares |
10.0% |
Closing Date Allocation of Common Stock*
As of the Closing Date, after giving effect to the issuance of the New Senior Loan Shares, the Backstop Shares, the New Notes Shares and the MIP Shares (as shown in the table below), the allocation of Common Stock of the Company shall be as follows (based on 17,451,353 shares outstanding prior to the Funding Date):
Initial Issuance of 60% of MIP Shares |
Fully-Diluted for All MIP Shares |
|||||||
Existing Common Stock |
1.32 | % | 1.26 | % | ||||
Management Incentive Plan3 |
6.00 | % | 10.00 | % | ||||
New Notes Shares |
64.48 | % | 61.74 | % |
1 | The Backstop Shares will deemed to be earned as of the RSA Date and the Funding Date as set forth in the allocation tables herein, but will be issued on the earliest of (1) the Closing Date; (2) the date on which the RSA terminates according to its terms, or (3) August 15, 2016. |
2 | The New Senior Lenders that fund the Initial Draw (as defined in Schedule 3 hereto) shall become entitled to receive the Backstop Shares on the Funding Date, provided that the New Senior Loan Shares shall not be issued to the New Senior Loan Lenders until the Closing Date. |
3 | Includes shares held by Messrs. Hastings, Beatty and Whiteley. |
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New Senior Loan Shares (other than Backstop Shares)4 |
18.8 | % | 18.00 | % | ||||
Backstop Shares5 |
9.40 | % | 9.00 | % |
* | Excludes any impact of shares issuable in connection with Warrants. |
4 | Pre-dilution: 20.0%. |
5 | Pre-dilution: 10.0%. |
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Schedule 4
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Term Sheet.
Topic |
Amendment | |
Term | New three-year terms, starting as of the Closing Date, with evergreen features providing for successive one year terms thereafter as contained in the current employment agreements. | |
Base Salary | No changes to 2016 base salary under the current employment agreements. Starting in 2017, annual increases in base salary will be set by the new board of directors (the New Board), provided that the New Board may not unilaterally decrease the base salary at any point without the consent of the executive. | |
Annual Cash Performance Award | No change to 2016 amounts, targets, calculation, or methodology, under the current employment agreements. Starting in 2017, the New Board can set Executive Goals but not the Target Percentages (as defined in the employment agreements). In addition, no more than 50% of any award may be in common stock of the Company. | |
Existing Management/Employee Equity | All issued equity compensation (LTIP shares, preferred shares, etc.) shall vest and convert into common shares immediately prior to the Closing Date and be treated as existing equity subject to dilution pursuant to the Term Sheet. | |
Existing MIP | All existing equity-based compensation programs shall be replaced by the Management Incentive Plan. | |
Severance | No change to existing severance packages under the current employment agreements; however, executives shall not be entitled to any severance if the executive voluntarily terminates the employment agreement other than for cause or good reason. | |
Non-compete | The non-compete shall last for one year with no additional severance, with the option to extend for an additional year in the Companys sole discretion, provided that the Company must pay the executive one years base salary and 100% of the target bonus of that base salary if it elects to extend. | |
Change of Control | Waived to allow for the Restructuring Transactions. | |
280G Gross-Up | To be deleted. | |
Constructive Dismissal | Revision to the definition of Good Reason in the current employment agreements to reflect that the New Board will have discretion to set base salary increases and annual bonuses and such adjustments will not constitute Good Reason, provided that the New Board may not unilaterally decrease the base salary at any point without the consent of the executive. | |
Indemnification | Employment agreements shall include indemnification by the Company against any officer or director liability related to the Restructuring Transactions. |
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Exhibit B
New Senior Lenders (as of the date hereof)
| Whitebox Advisors LLC |
| BlueMountain Capital Management, LLC |
| Morgan Stanley Investment Management Inc. |
| Aristides Capital LLC |
| Tegean Capital Management, LLC |
| Amzak Capital Management, LLC |
| Mr. John Pecora |
24
Exhibit C
Pre-Syndication Initial Commitment Amounts
25
Exhibit D
Amendments to Employment Agreements
Amendments to Employment Agreements
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
Topic |
Amendment | |
Term | New three-year terms, starting as of the Closing Date, with evergreen features providing for successive one year terms as contained in the current employment agreements. | |
Base Salary | No changes to 2016 base salary under the current employment agreements. Starting in 2017, annual increases in base salary will be set by the new board of directors (the New Board), provided that the New Board may not unilaterally decrease the base salary at any point without the consent of the executive. | |
Annual Cash Performance Award | No change to 2016 amounts, targets, calculation, or methodology under the current employment agreements. Starting in 2017, the New Board can set Executive Goals but not the Target Percentages (as defined in the employment agreements). In addition, no more than 50% of any award may be in Common Stock. | |
Existing Management/Employee Equity | All issued equity compensation (LTIP shares, preferred shares, etc.) shall vest and convert into common shares immediately prior to the Closing Date and be treated as existing equity subject to dilution pursuant to the Term Sheet. | |
Existing MIP | All existing equity-based compensation programs shall be replaced by the Management Incentive Plan. | |
Severance | No change to existing severance package under the current employment agreements; however, executives shall not be entitled to any severance if the executive voluntarily terminates the employment agreement other than for cause or good reason. | |
Non-compete | The non-compete shall last for one year with no additional severance, with the option to extend for an additional year in the Companys sole discretion, provided that the Company must pay the executive one years base salary and 100% of the target bonus of that base salary if it elects to extend. | |
Change of Control | Waived to allow for the Restructuring Transactions. | |
280G Gross-Up | To be deleted. | |
Constructive Dismissal | Revision to the definition of Good Reason in the current employment agreements to reflect that the New Board will have discretion to set base salary increases and annual bonuses and such adjustments will not constitute Good Reason, provided that the New Board may not unilaterally decrease the base salary at any point without the consent of the executive. |
Topic |
Amendment | |
Indemnification | Employment agreements shall include indemnification by the Company against any officer or director liability related to the Restructuring Transactions. |
Exhibit E
Executives Executing Employment Agreements
| Jeff Hastings |
| Brian Beatty |
| Brent Whitely |
| Mike Scott |
| Darin Silvernagle |
| Trisha Gerber |
| Ryan Abney |
Exhibit F
Terms of Management Incentive Plan
Preliminary Management Incentive Plan Term Sheet
This management incentive plan term sheet sets forth an outline of certain key terms and conditions of the employment agreements between SAExploration Holdings, Inc. (the Company) and certain key executives set forth on Exhibit E. Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
On the Closing Date, the Company shall adopt the Management Incentive Plan, which shall reserve 10%, on a fully diluted basis, of the total shares of common stock outstanding as of the Closing Date (the MIP Shares) for distribution to covered employees on terms to be agreed with senior management. The Management Incentive Plan shall supersede any prior management or employee stock compensation plan of the Company in effect on the Closing Date. Senior management shall receive 60% of the MIP Shares on the Closing Date, of which 1/3 shall vest on each of (1) the earlier of (a) the first anniversary of the Closing Date and (b) the date the Company shall have received Alaskan tax credit certificates in a face amount of at least $25 million (the Tax Credit), and (2) each anniversary of the Closing Date for the two years thereafter in the form of:
(i) shares equal to 3% of the Companys outstanding Common Stock as of the Closing Date on a fully diluted basis; and
(ii) at-the-money incentive options to acquire shares equal to 3% of the Companys outstanding Common Stock as of the Closing Date, based on an equity value (a) if options are initially distributed on the first anniversary of the Closing Date or after the 60th calendar day following the Closing Date due to the receipt of the Tax Credit (the Tax Credit Valuation Date), the volume-weighted average price (the VWAP) per share of SAE Common Stock during the 30-day period ending on the date that is the 60th calendar day following the Closing Date or (b) if options are initially distributed due to the receipt of the Tax Credit prior to the 60th calendar date following the Closing Date, the VWAP per share of SAE Common Stock during the 30-day period ending on the date one day preceding any public announcement of the Tax Credit Valuation Date; provided, however, that if the Tax Credit Valuation Date occurs before the expiration of 30 days following the Closing Date, then the VWAP calculation period shall be the number of days between the Closing Date and the Tax Credit Valuation Date.
If any member of senior management terminates his or her employment without good reason within the first twelve months after the Closing Date, that employees vested MIP Shares or the cash proceeds thereof will be clawed back.
The remaining 40% of MIP Shares shall be granted to members of management and other key employees and distributed according to a vesting schedule to be determined by the New Board, provided, however, that the MIP Shares may not be used to fund any of the Annual Performance Awards as defined in Schedule 4 to the Term Sheet attached as Exhibit A.
Vesting of the MIP Shares will not be conditioned on any financial, operating or other performance metrics. Except for termination due to death, disability, termination without cause, termination for good reason or termination six (6) months prior to or within 12 months following a change in control, individuals need to be employed on each vesting date to receive settlement of the MIP Shares.
Exhibit G
Terms of Warrant Agreement
Warrant Term Sheet
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
Topic |
Provision | |
Series | The Company will issue two series of warrants (the Series A Warrants and Series B Warrants and, together, the Warrants). | |
Term | The Warrants will have five year terms. | |
Value | The Series A Warrants and Series B Warrants will each represent 2.25% of the outstanding shares of Common Stock as of the Closing Date. | |
Exercise price | The exercise price of the Series A Warrants will reflect a market capitalization of $112 million.
The Exercise price of the Series B Warrants will reflect a market capitalization of $140 million. | |
Exercisability | Exercise of the Warrants shall be contingent upon the receipt by the Company of Alaska tax credit certificates in a face amount of at least $25 million.
The Warrants will become exercisable only in the 30 days before they expire. | |
Adjustments to Exercise Price | The exercise prices of the Warrants shall be adjusted upon customary anti-dilution events, including:
an issuance of Common Stock as a dividend or distribution to all holders of Common Stock;
a change in the total number of shares of Common Stock by way of a subdivision, combination, split, reverse split, or reclassification;
an issuance as a dividend or distribution to all holders of Common Stock of evidences of indebtedness or securities of the Company or any other person; and
payment of any tender offer or exchange offer for Common Stock in which the consideration exceeds the fair value of the Common Stock as of the open of business on the second business day preceding the expiration date of the tender offer or exchange offer. | |
Cashless Exercise | The Warrant Agreement will contain a customary cashless exercise provision. | |
Registration Rights | Holders of Warrants will be entitled to the benefit of a customary resale registration rights agreement. |
Listing | The Company will use commercially reasonable efforts to list the Warrants and the shares issuable upon exercise of the Warrants on the Nasdaq Global Market, or whatever exchange the Companys Common Stock is then listed on. |
Exhibit H
Governance Terms
Corporate Governance Term Sheet
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
Topic |
Provision | |
Capital Stock |
||
Common stock |
55,000,000 authorized shares of Common Stock, par value $.0001 per share.
The number of authorized shares can be increased only with a majority vote of the stockholders.
One vote per share. | |
Preferred stock |
1,00,000 authorized shares of preferred stock, par value $.0001 per share.
Preferred stock may be issued by the Board with whatever rights, privileges or preferences they determine. | |
Pre-emptive rights |
None. | |
Directors |
||
Initial Directors |
Effective as of the Closing Date, the Board will initially be made up of seven directors, to include: one member of senior management, four directors chosen by the Supporting Holders, one director chosen by Whitebox and one director chosen by Blue Mountain.
Each of BlueMountain and Whitebox shall have the right to choose one director to be nominated by SAE for so long as each of their equity holdings following the Closing Date exceeds 10% of the total outstanding shares. Subject to the foregoing, and the director nomination section of this Term Sheet, following the Closing Date, other non-management directors shall be nominated by the Board and approved by shareholder vote. | |
Number |
No less than one or more than nine directors as determined by resolution of the board. The Board will initially be made up of seven directors. | |
Election |
Directors are elected by a majority of the stockholders unless appointed as described above. | |
Staggered board |
There will be three classes of directors each with staggered terms, with individual seats and each of the three classes to be agreed upon; provided that the number of directors in each class shall be as nearly equal as possible. |
Topic |
Provision | |
Removal of directors |
A majority vote of the stockholders is required to remove a director, except that the initially appointed directors can only be removed by the entity that appointed them. | |
Vacancies |
Vacancies are filled by a majority vote of the directors unless the vacancy is caused by the departure of an appointed director. The vacant seat of an appointed director will be filled by the entity that appointed the director. | |
Indemnification |
Directors and officers have guaranteed rights to indemnification to the fullest extent permitted by Delaware General Corporation Law. | |
Insurance |
Company will maintain Director and Officer liability insurance. | |
Action without a meeting |
Directors may act by unanimous written consent. | |
Stockholders |
||
Stockholder proposals |
Stockholders must give notice of a proposal not less than 60 or more than 90 days before the meeting. If this is not possible, they must give notice within the 10 days of the notice of an upcoming annual meeting being mailed. They must disclose the matter to be proposed, why it is being proposed, any material interest of the stockholder in such business and information regarding their interests in the company, including any voting arrangements. The stockholder must also certify that they will attend the meeting and disclose whether they intend to distribute a proxy statement or form of proxy to the stockholders. | |
Director nominations |
Stockholder must give notice not less than 60 or more than 90 days before the meeting. If this is not possible, must give notice within the 10 days of a notice of annual meeting being mailed. They must disclose details of nominee that would be required for the solicitation of proxies under Section 14 of the Exchange Act. The nominating stockholder must provide personal details of the proposed director, information regarding their interests in the company, including any voting arrangements. The stockholder must also provide personal details certify that they will attend the meeting and disclose whether they intend to distribute a proxy statement or form of proxy to the stockholders. | |
Meetings |
||
Special meetings |
Only the board may call a special meeting. | |
Action without a meeting |
Any action required to be taken at an annual or special meeting may be taken without a meeting if consent in writing is obtained by the holders of outstanding stock having the not less than the minimum number of votes to authorize or take such action. |
Topic |
Provision | |
Amendments |
||
Amendments to Organization Documents | Amendments to Organizational Documents require a majority vote of the stockholders. |
Exhibit I
Joinder Agreement
Joinder Agreement
[ ], 2016
The undersigned (Joining Holder) hereby acknowledges that it has read and understands the Restructuring Support Agreement, dated as of [ ], 2016, a copy of which is attached hereto as Annex I (as it may be amended, supplemented, or otherwise modified from time to time, the Restructuring Support Agreement), among SAE and the Supporting Holders. Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
1. Agreement to be Bound. The Joining Holder hereby agrees to be bound by all of the terms of the Restructuring Support Agreement. The Joining Holder shall hereafter be deemed to be a Supporting Holder and a Party for all purposes under the Restructuring Support Agreement.
2. Representations and Warranties. With respect to the aggregate principal amount of Existing Notes set forth below its name on the signature page hereof, the Joining Holder hereby makes the representations and warranties of the Supporting Holders set forth in Section 4 of the Restructuring Support Agreement to each other Party.
3. Governing Law. This joinder agreement (the Joinder Agreement) to the Restructuring Support Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.
* * * * *
IN WITNESS WHEREOF, the Joining Holder has caused this Joinder Agreement to be executed as of the date first written above.
By: | ||
Name: | ||
Title: | ||
Principal Amount of Existing Notes: $ | ||
Notice Address: |
| ||
| ||
| ||
Fax: | ||
Attention: | ||
With a copy to: | ||
| ||
| ||
| ||
Fax: | ||
Attention: | ||
|
Exhibit 10.4
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this Amendment), is entered into as of the 29th day of June, 2016, by and among Wells Fargo Bank, National Association, a national banking association (Lender), SAExploration, Inc., a Delaware corporation (Borrower), and SAExploration Holdings, Inc., a Delaware corporation, SAExploration Sub, Inc., a Delaware corporation, NES, LLC, an Alaska limited liability company, and SAExploration Seismic Services (US), LLC, a Delaware limited liability company (collectively, the Guarantors).
RECITALS
A. Borrower, Guarantors (each a Loan Party and collectively, the Loan Parties) and Lender are parties to that certain Credit and Security Agreement dated as of November 6, 2014 (as amended from time to time, the Credit Agreement). Capitalized terms used herein have the meaning given to them in the Credit Agreement unless otherwise specified.
B. Parent has entered into that certain Restructuring Support Agreement dated as of June 13, 2016, among Parent on behalf of itself, Borrower and the other Guarantors, Management (as defined in the Restructuring Support Agreement), and certain of the Existing Noteholders, a copy of which is attached hereto as Exhibit A.
C. Borrower has requested that Lender consent to the transactions contemplated in the Restructuring Support Agreement, some or all of which are prohibited by the Credit Agreement absent Lenders consent, and that certain amendments be made to the Credit Agreement, which Lender is willing to do and make pursuant to the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, it is agreed as follows:
1. Amendments to Definitions.
a. Additional Definitions. Schedule 1.1(a) of the Credit Agreement is hereby amended to add the following definitions:
Additional Indenture shall mean an indenture entered into by and among Loan Parties and Additional Noteholder Agent pursuant to which, among other things, Parent issues Additional Notes to Additional Noteholders, and which indenture is approved for designation as an Additional Indenture under the Intercreditor Agreement.
Additional Indenture Documents has the meaning assigned to such term in the Intercreditor Agreement.
Additional Indenture Guarantee has the meaning assigned to such term in the Intercreditor Agreement.
Additional Indenture Obligations shall mean the obligations owing under the Additional Indenture and Additional Notes.
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Additional Indenture Security Documents has the meaning assigned to such term in the Intercreditor Agreement.
Additional Noteholder Agent has the meaning assigned to such term in the Intercreditor Agreement.
Additional Noteholders shall mean the Existing Noteholders that participate in the exchange of Existing Notes for Additional Notes issued under the Additional Indenture, their successors and assigns to the extent bound by the Intercreditor Agreement, and the Additional Noteholder Agent.
Additional Notes shall mean the New Second Lien Notes defined in the Restructuring Support Agreement that are issued to Additional Noteholders in exchange for Existing Notes pursuant to an exchange offer, on substantially the same terms as the Existing Notes.
Additional Notes Collateral has the meaning assigned to such term in the Intercreditor Agreement.
Existing Holders means the Existing Noteholder Agent and holders of Existing Notes issued under the Existing Indenture.
Existing Indenture means that certain Indenture dated as of July 2, 2014, for the issuance of Existing Notes due in 2019, by and among Parent, Borrower, the other Subsidiaries of Parent party thereto as guarantors, and Existing Noteholder Agent as Trustee and Existing Noteholder Collateral Agent, as amended from time to time.
Existing Indenture Documents means the Existing Indenture, Existing Indenture Guarantee, Existing Notes and Existing Indenture Security Documents.
Existing Indenture Guarantee means any guarantee by any Loan Party of the Existing Notes and related Existing Indenture Obligations.
Existing Indenture Obligations means principal, interest, and other obligations owing under the Existing Indenture Documents.
Existing Indenture Security Documents means the Indenture Security Agreement and any other indenture security documents executed on or around July 2, 2014 in connection with the Existing Indenture.
Existing Noteholder Agent means Wilmington Savings Fund Society, FSB, as successor trustee and collateral agent for the Existing Noteholders.
Existing Noteholders means the holders of the Existing Notes, secured parties identified in the Existing Indenture and Existing Noteholder Agent.
Existing Notes means the notes issued under the Existing Indenture in the aggregate principal amount of $150,000,000.
Existing Notes Collateral means the collateral securing the Existing Notes as described in the Existing Indenture Security Documents.
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Foreign Canadian Subsidiary means any Subsidiary domiciled and operating in Canada.
Foreign Subsidiary Holding Company means any domestic Subsidiary of a Loan Party that is engaged in no material business activities other than the holding of Equity Interests and other investments in one or more Foreign Subsidiaries or Foreign Canadian Subsidiaries (including for the avoidance of doubt any controlled foreign corporation within the meaning of Section 957 of the IRC) or other Foreign Subsidiary Holding Companies.
Restructuring Support Agreement means that certain Restructuring Support Agreement dated as of June 13, 2016, among Parent, on behalf of itself, Borrower and the other Guarantors, Management (as defined in the Restructuring Support Agreement), and certain of the Existing Noteholders.
Restructuring Transactions means the applicable Loan Partys entry into and performance of, as the case may be, the following transactions, on the terms contemplated by the Restructuring Support Agreement, unless otherwise specified herein: (a) the Term Loan on the terms set forth in the Term Credit Agreement (except as limited by the terms of an amended and restated Intercreditor Agreement, in form and substance acceptable to Lender), (b) the issuance of new shares in Parent, (c) the consummation of an exchange offer in which Existing Notes are exchanged for Additional Notes and Stock in Parent, on the terms described in the Exchange Offer Memorandum and Consent Solicitation Statement dated as of June 23, 2016 (the Exchange Offer), and the issuance of Additional Notes and new Stock in Parent pursuant to such Exchange Offer, (d) Parents entry into a warrant agreement and the issuance of warrants thereunder, (e) the amendment and ratification of certain employment agreements as described in Exhibit G to the Restructuring Support Agreement, (f) the entry into a management incentive plan and the issuance of shares in accordance therewith as described in Exhibit F to the Restructuring Support Agreement, (g) the amendment of Parents organizational documents to the extent necessary to effectuate the Restructuring Transactions, and (h) Parents entry into a Forbearance Agreement with the Existing Noteholders.
Term Agent means Delaware Trust Company, as collateral agent and administrative agent for Term Lenders under the Term Documents.
Term Credit Agreement means that certain Term Loan and Security Agreement dated June 29, 2016, between Parent, as borrower, the other Loan Parties as guarantors, Term Lenders, and Term Agent, providing for a $30,000,000 multi-draw term loan to Parent, for the benefit of Borrower.
Term Documents means the Term Credit Agreement and any other loan or security document executed in connection therewith.
Term Lenders means the lenders party to the Term Credit Agreement, and Term Agent, as agent.
Term Loan means a non-revolving, multi-draw term loan in the stated principal amount of $30,000,000, on the terms set forth in the Term Credit Agreement.
Term Loan Obligations means all principal, interest, and other obligations owing under the Term Documents.
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b. Amendment to Non-Covenant Definitions. The following definitions in Schedule 1.1(a) of the Credit Agreement are hereby deleted in their entirety and restated as follows:
Indenture means the Existing Indenture, Additional Indenture, and Term Credit Agreement.
Intercreditor Agreement means that certain Amended and Restated Intercreditor Agreement, dated as of June 29, 2016, by and among, Lender, as ABL Agent thereunder, Existing Noteholder Agent, Term Agent, and, if applicable, Additional Noteholder Agent upon its joinder therein in accordance with the terms of the Amended and Restated Intercreditor Agreement.
Noteholder Agreements means the collective reference to Existing Indenture Documents, Additional Indenture Documents, and Term Documents.
Noteholder Collateral Agent means the collective reference to Additional Noteholder Agent, Existing Noteholder Agent, and Term Agent.
Noteholder Obligations means the collective reference to Existing Indenture Obligations, Term Loan Obligations, and Additional Indenture Obligations.
Noteholders means the collective reference to Additional Noteholders, Existing Noteholders, and Term Lenders.
c. Deleted Definitions. The following definitions in Schedule 1.1(a) of the Credit Agreement are hereby deleted in their entirety:
Indenture Security Agreement, Indenture Secured Parties, Noteholder Priority Collateral, Noteholder Priority Collateral, ABL Priority Collateral.
2. Amendment to Permitted Indebtedness Definition. Subsection (c) of the definition of Permitted Indebtedness is hereby deleted in its entirety and restated as follows:
(c) the incurrence by Borrower and the Guarantors of Indebtedness constituting Noteholder Obligations, to the extent consistent with the Restructuring Support Agreement, or as otherwise approved by Lender in writing, and subject to the terms of the Intercreditor Agreement;
3. Amendment to Permitted Liens Definition. Subsection (h) of the definition of Permitted Liens is hereby deleted in its entirety and restated as follows:
(h) Subordinate Liens securing the Noteholder Obligations, to the extent consistent with the Restructuring Support Agreement, or as otherwise approved by Lender in writing, and subject to the terms of the Intercreditor Agreement;
4. Amendment to Permitted Holder Definition. The definition of Permitted Holder is hereby deleted in its entirety and restated as follows:
Permitted Holder means any of the Supporting Noteholders (as defined in the Restructuring Support Agreement), or any Related Party thereof, pursuant to the Restructuring Transactions.
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5. Amendment to Change of Control Definition. Sections (f) and (g) of the definition of Change of Control are hereby deleted in their entirety and the word or is inserted immediately before clause (e).
6. Amendment of Excluded Property Definition. Section (j) of the definition of Excluded Property is hereby deleted and reserved and Sections (h) and (i) are hereby deleted in their entirety and restated as follows:
(h) Equity Interests in excess of 65% of all outstanding voting Equity Interests of any Foreign Subsidiary or Foreign Canadian Subsidiary (including for the avoidance of doubt any controlled foreign corporation within the meaning of Section 957 of the IRC) or any Foreign Subsidiary Holding Company and 100% of the Equity Interests of any Subsidiary of such Foreign Subsidiary or Foreign Canadian Subsidiary or Foreign Subsidiary Holding Company;
(i) Any Collateral that has been released in accordance with the Loan Documents, or this Agreement;
7. Amendment to Section 6.11. Section 6.11 is hereby amended to add the following subsections (d) and (e):
(d) Upon the earlier of the closing of the Restructuring Transactions, or August 31, 2016, Borrower shall prepare and deliver to Lender a true and correct Information Certificate as of such date, in the form of existing Exhibit E to the Credit Agreement, and in form and substance acceptable to Lender in its Permitted Discretion.
(e) Within fifteen days of the closing of the Restructuring Transactions Borrower shall prepare and deliver to Lender an update to Schedule P-2 in form and substance acceptable to Lender in its Permitted Discretion.
8. Amendment to Section 7.7(c). Section 7.7(c) is hereby deleted in its entirety and restated as follows:
(c) make any payments on the Noteholder Obligations other than (i) payments of regularly scheduled interest or any Additional Interest due thereunder, (ii) mandatory prepayments under the Term Loan Agreement provided that the Lender shall have first declined the use of such proceeds for application to the Advances, or (iii) such as otherwise permitted by the Intercreditor Agreement.
9. Amendment to Section 7.8. Sections (b) and (c) of Section 7.8 are hereby deleted in their entirety and restated as follows:
(b) any Material Contract except (i) in connection with the transactions contemplated by the Restructuring Support Agreement, or (ii) to the extent that such amendment, modification, or change could not, individually or in the aggregate, reasonably be expected to be materially adverse to the interests of Lender; or
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(c) the Governing Documents of any Loan Party or any of its Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of Lender; provided, that, the Governing Documents may be amended, modified or changed in connection with the transactions contemplated by the Restructuring Support Agreement;
10. Amendment to Section 9.7. Section 9.7 is hereby deleted in its entirety and restated as follows:
If there is (a) a default in one or more agreements to which a Loan Party or any of its Subsidiaries is a party with one or more third Persons (other than an Affiliate of a Loan Party or Subsidiary) relative to the Indebtedness of such Loan Party or such Subsidiary involving an aggregate amount of $500,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such Person, irrespective of whether exercised, to accelerate the maturity of such Loan Partys or its Subsidiarys obligations thereunder, (b) a default in or an involuntary early termination of any Hedge Agreement to which a Loan Party or any of its Subsidiaries is a party, or (c) an Event of Default occurs under the Noteholder Agreements;
11. Amendment to Section 9.10. Section 9.10 is hereby amended by replacing the words ABL Priority Collateral with the word Collateral.
12. Amendment to Section 17.15. Section 17.15 is hereby amended by deleting subsection (c), which is hereby reserved.
13. Amendment to Section 5.26 of Exhibit D. Section 5.26(d) of Exhibit D is hereby amended by replacing the words ABL Priority Collateral with the word Collateral.
14. Consent to Restructuring Transactions. Upon satisfaction of the conditions precedent to this Amendment, including, without limitation, Lenders receipt of a duly executed amended and restated Intercreditor Agreement, in form and substance acceptable to Lender in its Permitted Discretion, notwithstanding anything to the contrary contained in the Credit Agreement, Lender consents to the Restructuring Transactions on substantially the terms described in the Restructuring Support Agreement and waives any and all Defaults and Events of Default otherwise directly resulting from the Restructuring Transactions; provided that such Restructuring Transactions close on or before August 31, 2016, provided, however, Lender does not consent to any Additional Indenture Obligations unless such Additional Noteholders join in the amended and restated Intercreditor Agreement pursuant to an Additional Indebtedness Joinder and Designation in the form attached thereto.
15. No Other Changes. Except as explicitly amended by this Amendment, all of the terms and conditions of the Credit Agreement shall remain in full force and effect and shall apply to any advance or letter of credit hereunder.
16. Amendment Fee. Borrower shall pay Lender as of the date hereof a fully earned, non-refundable fee in the amount of $30,000 in consideration of Lenders execution and delivery of this Amendment.
17. Conditions Precedent. This Amendment shall be effective when Lender shall have received an executed original hereof, together with each of the following, each in substance and form acceptable to Lender:
a. | A duly executed amended and restated Intercreditor Agreement; |
b. | The duly executed Restructuring Support Agreement, together with all exhibits and attachments thereto; |
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c. | Payment of the amendment fee described in Section 16, which Borrower authorizes as an Advance under the Credit Facility; |
d. | A closing certificate confirming that (i) Supporting Holders (as such term is defined in the Restructuring Support Agreement) have consented to the Restructuring Transactions, (ii) Existing Noteholder Agent has consented to the Term Loan, and (iii) all conditions to Loan Parties receipt of the initial advance under the Term Loan have been satisfied; and |
e. | A copy of the duly executed Term Credit Agreement. |
18. Representations and Warranties. Borrower and each other Loan Party hereby represents and warrants to Lender as follows:
a. Each Loan Party and such other parties that have executed any documents required under the Credit Agreement or this Amendment, have all requisite power and authority to execute this Amendment and any other agreements or instruments required hereunder and to perform all of their obligations hereunder, and this Amendment and all such other agreements and instruments have been duly executed and delivered by the applicable party and constitute the legal, valid and binding obligation of the applicable party, enforceable in accordance with its terms.
b. The execution, delivery and performance by each of the Loan Parties of this Amendment, and any other agreements or instruments required hereunder has been duly authorized by all necessary corporate action and does not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to such Loan Party, or the articles of incorporation or by-laws of such Loan Party, or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which such Loan Party is a party or by which it or its properties may be bound or affected.
c. The performance by each of the Loan Parties of the Credit Agreement as amended hereby has been duly authorized by all necessary corporate action and does not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to such Loan Party, or the articles of incorporation or by-laws of such Loan Party, or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which such Loan Party is a party or by which it or its properties may be bound or affected
d. All of the representations and warranties contained in Section 5 of the Credit Agreement are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that are already qualified or modified by materiality in the text thereof) on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date.
19. References. All references in the Credit Agreement to this Agreement shall be deemed to refer to the Credit Agreement as amended hereby; and any and all references in the Loan Documents to the Credit Agreement shall be deemed to refer to the Credit Agreement as amended hereby.
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20. No Waiver. The execution of this Amendment and the acceptance of all other agreements and instruments related hereto, and Lenders consent to the Restructuring Transactions, shall not be deemed to be a waiver of any Default or Event of Default under the Credit Agreement or a waiver of any breach, default or event of default under any Security Document or other document held by the Lender, except to the extent provided in Section 14 hereof, or a consent to any future transactions, whether or not known to the Lender and whether or not existing on the date of this Amendment.
21. Release. Each Loan Party hereby absolutely and unconditionally releases and forever discharges, Lender 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, whether such claims, demands and causes of action are matured or unmatured or known or unknown.
22. Attorneys Fees, Costs and Expenses. Borrower hereby reaffirms and supplements its agreement under the Credit Agreement to pay or reimburse the Lender on demand for all costs and expenses incurred by the Lender in connection with the Loan Documents (which term encompasses and includes all of the amendments, including this Amendment), including without limitation all attorneys fees and disbursements of legal counsel in collecting or enforcing the Obligations and/or protecting or realizing on any Collateral for the Line of Credit as well as attorneys fees and costs incurred with or without suit, in any appeal, bankruptcy, insolvency, or receivership proceeding, and/or any post-judgment collection proceedings, plus interest on such amounts at the Default Rate as set forth in the Credit Agreement in the amount such fees and costs are not paid on demand as provided herein. Without limiting the generality of the foregoing, Borrower specifically agrees to pay all legal fees and disbursements of counsel to the Lender for its review of the Restructuring Transactions, and the services performed by such counsel in connection with the preparation of this Amendment and the documents and instruments incidental hereto. The Borrower hereby agrees that the Lender may, at any time or from time to time in its sole discretion and without further authorization by the Borrower, make a loan to the Borrower under the Credit Agreement, or apply the proceeds of any loan, for the purpose of paying any such fees, disbursements, costs and expenses, and the fee required under Section 16 of this Amendment.
23. Miscellaneous. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which counterparts, taken together, shall constitute one and the same instrument.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY THE LENDER AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWERS RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY THE LENDER TO BE ENFORCEABLE.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and to be effective as of the date first above written.
LENDER: | ||
WELLS FARGO BANK, NATIONAL ASSOCIATION | ||
By: | /s/ Michael White | |
Name: | Michael White | |
Title: | Authorized Signatory |
BORROWER: | ||
SAEXPLORATION, INC. | ||
By: | /s/ Brent Whiteley | |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer | |
Federal Employer Identification No. 45-2959022 | ||
Organizational Identification No. 5009432 (Delaware) |
OTHER LOAN PARTIES: | ||
SAEXPLORATION HOLDINGS, INC. | ||
By: | /s/ Brent Whiteley | |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer | |
Federal Employer Identification No. 27-4867100 | ||
Organizational Identification No. 4931384 (Delaware) |
SAEXPLORATION SUB, INC. | ||
By: | /s/ Brent Whiteley | |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer | |
Federal Employer Identification No. 46-4918859 | ||
Organizational Identification No. 5253643 (Delaware) |
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
NES, LLC | ||
By: | /s/ Brent Whiteley | |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer | |
Federal Employer Identification No. 27-5152915 | ||
Organizational Identification No. 110456 (Alaska) |
SAEXPLORATION SEISMIC SERVICES (US), LLC | ||
By: | /s/ Brent Whiteley | |
Name: | Brent Whiteley | |
Title: | Chief Financial Officer | |
Federal Employer Identification No. 90-0855057 | ||
Organizational Identification No. 5156435 (Delaware) |
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
EXHIBIT A
TO CONSENT AND FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
[Restructuring Support Agreement]
RESTRUCTURING SUPPORT AGREEMENT
dated as of June 13, 2016
among
SAExploration Holdings, Inc., Certain Members of Management Identified Herein
and
the Supporting Holders Identified Herein
TABLE OF CONTENTS
Page | ||||||||
Section 1. | AGREEMENT EFFECTIVE DATE | 2 | ||||||
Section 2. | COMMITMENTS REGARDING THE RESTRUCTURING TRANSACTIONS | 2 | ||||||
2.01. | Covenants, Acknowledgments and Commitments of the Supporting Holders | 2 | ||||||
2.02. | Obligations of SAE | 4 | ||||||
2.03 | Covenants, Acknowledgements and Commitments of Management | 9 | ||||||
2.03. | Definitive Documents | 9 | ||||||
Section 3. | FORBEARANCE | 9 | ||||||
Section 4. | REPRESENTATIONS AND WARRANTIES | 10 | ||||||
4.01. | Mutual Representations and Warranties | 10 | ||||||
4.02. | Representations and Warranties of the Supporting Holders | 11 | ||||||
4.03. | Representations and Warranties of SAE. | 12 | ||||||
Section 5. | TERMINATION EVENTS | 12 | ||||||
5.01. | Supporting Holder Termination Events | 12 | ||||||
5.02. | SAE Termination Events | 13 | ||||||
5.03. | Effect of Termination | 14 | ||||||
5.04. | Termination Upon Consummation of the Restructuring Transactions | 14 | ||||||
Section 6. | TRANSFER OF EXISTING NOTES | 14 | ||||||
Section 7. | AMENDMENTS | 15 | ||||||
Section 8. | NO SOLICITATION OF SECURITIES | 16 | ||||||
Section 9. | MISCELLANEOUS | 16 | ||||||
9.01. | Further Assurances | 16 | ||||||
9.02. | Complete Agreement | 16 | ||||||
9.03. | No Assignment | 16 | ||||||
9.04. | Headings | 16 | ||||||
9.05. | Governing Law; Submission to Jurisdiction; Selection of Forum; Waiver of Trial by Jury | 16 | ||||||
9.06. | Counterparts | 16 | ||||||
9.07. | Interpretation | 16 | ||||||
9.08. | Relationship Among Supporting Holders | 17 | ||||||
9.09. | Successors and Assigns | 17 | ||||||
9.10. | Acknowledgements | 17 | ||||||
9.11. | Notices | 17 | ||||||
9.12. | Waiver | 18 | ||||||
9.13. | Several, Not Joint, Obligations | 18 |
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9.14. | Remedies | 18 | ||||||
9.15. | Specific Performance | 18 | ||||||
9.16. | No Third-Party Beneficiaries | 19 | ||||||
9.17 | Management Liability | 19 | ||||||
9.18. | Settlement Discussions | 19 | ||||||
9.19. | Consideration | 19 |
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This RESTRUCTURING SUPPORT AGREEMENT (as amended, supplemented, or otherwise modified from time to time, and collectively with all exhibits thereto, this Agreement) is dated as of June 13, 2016, among: (i) SAExploration Holdings, Inc. (SAE) on behalf of itself and the guarantors party to the Indenture dated as of July 2, 2014 (the Existing Notes Indenture) among SAE, as issuer, each of such guarantors party thereto and U.S. Bank National Association, as trustee and collateral agent (together, and with its permitted successors and assigns, the Indenture Trustee) pursuant to which SAE issued its 10.000% Senior Secured Noted due 2019 (the Existing Notes); (ii) solely with respect to Section 2.03 and Section 9.17 herein, Jeff Hastings, Brian Beatty and Brent Whiteley (collectively, Management); and (iii) certain holders of the Existing Notes party hereto from time to time (together with their respective successors and permitted assigns, the Supporting Holders). SAE and the Supporting Holders, and any subsequent person or entity that becomes a party hereto in accordance with the terms hereof, are referred to herein as the Parties and, each, individually as a Party. Capitalized terms, unless otherwise defined in this Agreement, have the meanings used in the Term Sheet (defined below).
RECITALS
WHEREAS, SAE and the Supporting Holders have agreed to enter into certain transactions that will have the effect of restructuring and recapitalizing SAE as contemplated by (1) the Term Sheet (the Term Sheet) attached hereto as Exhibit A, and (2) the entry into and performance of, as the case may be, the New Senior Loan Facility, the issuance of the New Loan Shares, the consummation of the Exchange Offer and the Consent Solicitation, the issuance of the New Second Lien Notes and the New Notes Shares, the amending and restating of the Intercreditor Agreement, the entry into the Warrant Agreement and the issuance of the Warrants, the amendment and ratification of the Employment Agreements and the entry into the Management Incentive Plan, the issuance of the MIP Shares, the amendment of the Organizational Documents (in each case, as these capitalized terms are defined herein) and the transactions contemplated thereby (clauses (1) and (2) together, the Restructuring Transactions), with the understanding that to the degree the definitive documents governing the transactions listed and contemplated by clause (2) above are more specific, or have different terms than those contemplated in the Term Sheet, then, for purposes of this Agreement and the definition of Restructuring Transactions, the definitive documents governing the transactions in clause (2) shall control;
WHEREAS, the Parties have agreed to support the Restructuring Transactions pursuant to, and subject to the terms and conditions set forth in, this Agreement;
WHEREAS, this Agreement is the product of arms-length, good-faith discussions between the Parties and their respective professional representatives; and
WHEREAS, SAE, Management and the Supporting Holders are prepared to perform their obligations hereunder, subject to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Party, intending to be legally bound hereby, agrees as follows:
AGREEMENT
Section 1. | Agreement Effective Date |
This Agreement shall be effective and binding with respect to each of the Parties on the date on which (i) SAE and Management shall have executed and delivered counterpart signature pages of this Agreement to counsel for the Supporting Holders and (ii) Supporting Holders representing not less than 66% of the aggregate principal amount of Existing Notes outstanding shall have executed and delivered counterpart signature pages of this Agreement to counsel for SAE (such date, the RSA Effective Date). After the RSA Effective Date, the terms and conditions of the Restructuring Transactions, the terms and conditions of the Definitive Documents (defined below) set forth in Exhibits to this Agreement, and this Agreement may only be amended, modified, waived, or otherwise supplemented as set forth in Section 7 herein.
Section 2. | Commitments Regarding the Restructuring Transactions |
2.01. Covenants, Acknowledgments and Commitments of the Supporting Holders. Subject to the terms and conditions hereof, and for so long as this Agreement has not been terminated in accordance with the terms hereof, each Supporting Holder (severally and not jointly) agrees to satisfy the following covenants and makes the following acknowledgements and commitments:
(a) to support the Restructuring Transactions under this Agreement;
(b) to implement and consummate the Restructuring Transactions in a timely manner and take any and all commercially reasonable and appropriate actions in furtherance of the Restructuring Transactions as contemplated under this Agreement, provided that such actions shall be limited to review and negotiation of the applicable Definitive Documents and execution of the same (to the extent any Definitive Documents require execution thereof by such Supporting Holder to implement and consummate the Restructuring Transactions); provided further that, except as otherwise provided herein, no Supporting Holder shall be obligated to participate in or consummate, as the case may be, the Exchange Offer or any other part of the Restructuring Transactions unless and until all of the conditions to effectiveness of the Restructuring Transactions (including the Exchange Offer and the Consent Solicitation) set forth in the Term Sheet and Definitive Documents shall have been satisfied or waived or will be satisfied or waived contemporaneously with the closing of the Restructuring Transactions or have been waived with the prior written consent of the Required Supporting Holders (defined below);
(c) to negotiate in good faith the Definitive Documents, which Definitive Documents shall contain terms and conditions consistent in all material respects with this Agreement;
(d) solely with respect to the Supporting Holders identified on Exhibit B hereto as New Senior Lenders, and solely in their capacity as New Senior Lenders, (1) to execute and enter into, on the Funding Date, a new senior secured multi-draw term loan facility, substantially on the terms and subject to the conditions specified in Schedule 1 of the Term Sheet
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attached hereto as Exhibit A (such agreement, including all exhibits, attachments, supplements, and amendments thereto, the New Senior Loan Facility), subject to a maximum commitment amount of $30 million, (2) to extend their respective committed portion of the $5 million initial draw (the Initial Draw) thereof on the Funding Date, upon the request of SAE, as set forth in the schedule of commitments attached hereto as Exhibit C, on the terms and conditions contained in the New Senior Loan Facility, and (3) to extend their respective committed portions of any subsequent draws thereunder when required by, and on the terms and conditions contained in, the New Senior Loan Facility; provided however that nothing contained in this Support Agreement shall require or otherwise oblige any Supporting Holder who is not identified on Exhibit B hereto to serve as a New Senior Lender or make any commitments or fund any amounts in connection with the New Senior Loan Facility;
(e) to support the exchange offer and consent solicitation (the Exchange Offer) in which SAE shall offer, on a pro rata basis, the holders of Existing Notes (the Existing Holders), on the terms and conditions set forth in an Exchange Offer Memorandum and Consent Solicitation Statement (as amended and supplemented from time to time, together with the related Letter of Transmittal and Consent, the Memorandum), with the terms and conditions thereof summarized in Exhibit A hereto, and to (i) tender its Existing Notes for exchange, together with its consent to the amendments described in the Memorandum, on the first day of the Exchange Offer, in accordance with the terms and conditions set forth in the Memorandum; and (ii) not withdraw such tenders and consents, with the understanding that, among other things, SAE and the Trustee will, at that time, enter into a supplemental indenture to supplement the Existing Notes Indenture in accordance with Exhibit A and that consents will be irrevocable thereafter, provided that the Supporting Holders shall have no obligation to tender their Existing Notes and may withdraw any tenders after the termination of this Agreement pursuant to Section 5.01 and Section 5.02.
(f) not to object to SAEs (i) amendment and ratification, effective as of the Closing Date, of the existing employment agreements, as summarized in Exhibit D hereto (such agreements, including all exhibits, attachments, supplements and amendments thereto, the Employment Agreements) with each of the individuals identified in Exhibit E hereto, (ii) adoption on the Closing Date of the management incentive plan, incorporating the terms set forth in Exhibit F hereto (such plan, including all exhibits, attachments and supplements, and amendments thereto, the Management Incentive Plan), and (iii) entry into a warrant agreement with the SAEs transfer agent, as warrant agent, incorporating the terms set forth in Exhibit G hereto (such agreement, including all exhibits, attachments, supplements, and amendments thereto, the Warrant Agreement), providing for the issuance of Warrants (as defined in Exhibit G) to all existing holders of common stock of SAE (the Common Stock), provided that each of the Employment Agreements, the Management Incentive Plan, and Warrant Agreement are consistent in all aspects with this Agreement or otherwise in a form and substance reasonably acceptable to the Required Supporting Holders.
(g) to acknowledge that, on the Closing Date, SAEs existing executives identified on Exhibit E will remain in their current positions, subject to the amended and ratified Employment Agreements as described in Exhibit D;
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(h) to the extent that any legal or structural impediment arises that would prevent, hinder, or delay the consummation of the Restructuring Transactions, to negotiate in good faith commercially reasonable additional or alternative provisions to address any such impediment; provided, however, that the economic outcome for the Supporting Holders and other material terms as contemplated herein must be substantially preserved, as determined by the Supporting Holders in their reasonable discretion; and
(i) not to (i) object to or otherwise commence or participate in any proceeding to oppose any of the Restructuring Transactions and (ii) directly or indirectly (1) seek, solicit, support, encourage, or vote or cause to be voted (to the extent applicable) its Existing Notes for, consent to, or encourage any plan of reorganization or liquidation, proposal, offer, dissolution, wind-up, liquidation, reorganization, merger, consolidation, business combination, joint venture, partnership, sale of assets, or restructuring for SAE other than the Restructuring Transactions or (2) take any other action that is inconsistent with, or that would reasonably be expected to delay or obstruct the consummation of the Restructuring Transactions.
Notwithstanding anything to the contrary contained in this Section 2.01 or elsewhere in this Agreement, no Supporting Holder shall be required to (1) incur, or agree to any commitments, undertakings, concessions, indemnities, or other arrangements that could result in its incurrence of material expenses, liabilities, or other obligations, provided that the foregoing does not apply to any internal expenses incurred by a Supporting Holder in connection with obtaining internal approvals or consents to authorize the Restructuring Transactions or this Agreement or to perform such Supporting Holders obligations thereunder; or (2) take (or fail to take) any action that would inhibit a Supporting Holders performance of any duty, fiduciary or otherwise, or obligation that such Supporting Holder owes to any other person or entity under applicable law.
2.02. Obligations of SAE.
Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement is intended to, nor shall, prevent SAE from taking or failing to take any action that it is obligated to take (or fail to take) in the performance of any fiduciary duty or as otherwise required by applicable law, which SAE owes to any other person or entity as applicable.
(a) Covenants. Subject to the terms and conditions hereof, and for so long as this Agreement has not been terminated in accordance with the terms hereof, SAE, on behalf of itself and each guarantor party to the Existing Notes, as applicable, agrees to satisfy the following covenants and makes the following acknowledgements and commitments:
(i) to support the Restructuring Transactions under this Agreement;
(ii) to implement and consummate the Restructuring Transactions in a timely manner and take any and all commercially reasonable and appropriate actions in furtherance of the Restructuring Transactions, as contemplated under this Agreement, unless and until all of the conditions to effectiveness of the Restructuring Transactions (including the Exchange Offer) set forth in the Term Sheet and Definitive Documents have been waived with the prior written consent of the Required Supporting Holders or satisfied or will be satisfied or waived contemporaneously with the closing of the Restructuring Transactions;
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(iii) to negotiate in good faith the Definitive Documents, which Definitive Documents shall contain terms and conditions consistent in all respects with this Agreement, or as otherwise agreed to by the Required Supporting Holders;
(iv) to enter into the New Senior Loan Facility on the Funding Date, submit the initial draw notice for $5 million thereunder and agree to use the proceeds for general corporate purposes;
(v) to take all necessary corporate action to authorize such number of additional shares of Common Stock as shall be sufficient to permit the issuance of all shares of Common Stock as contemplated by the Restructuring Transactions;
(vi) reserve (a) by the Launch Date, authorized and unissued shares of Common Stock equal to 64.48% of the total number of shares of Common Stock that will be outstanding as of the Closing Date (the New Notes Shares) and to issue such New Notes Shares in connection with the closing of the Exchange Offer as contemplated by Exhibit A; (b) by the RSA Effective Date, authorized and unissued shares of Common Stock equal to 3.14% of the total number of shares of Common Stock that will be outstanding as of the closing date, and, by the Funding Date, authorized and unissued shares of Common Stock equal to 6.26% of the total number of shares of Common Stock that will be outstanding as of the Closing Date (the Backstop Shares) and to issue such Backstop Shares on the Closing Date pro rata to those New Senior Lenders who fund the Initial Draw, as indicated in Exhibit C; and (3) by the Funding Date, authorized and unissued shares of Common Stock equal to 18.80% of the total number of shares of Common Stock that will be outstanding as of the Closing Date (the New Loan Shares) and to issue such New Loan Shares on the Closing Date pro rata to each New Senior Lender, including to any Participating Holder participating in the New Senior Loan Facility;
(vii) use its commercially reasonable efforts to (1) commence the Exchange Offer on the Launch Date and, if not commenced on such date, to commence the Exchange Offer as promptly as possible thereafter, and to conduct the Exchange Offer in accordance with the terms thereof as reflected in Exhibit A) and applicable law; (2) enter into the supplemental indenture to supplement the Existing Notes Indenture, as contemplated by Exhibit A; and (3) consummate the Exchange Offer by the date that is 60 days after the Launch Date, provided that (1) the Parties understand that the Exchange Offer expiration time may be extended at SAEs option to amend the terms of the Exchange Offer (subject to Section 5.01(d) of this Agreement), and (2) the Closing Date, as used in this Agreement, shall be the date on which the Exchange Offer actually closes;
(viii) to use commercially reasonable efforts to amend and restate the existing intercreditor agreement as contemplated by Exhibit A (the Intercreditor Agreement);
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(ix) deliver to each Existing Holder participating in the Exchange Offer (the Participating Holders) for every $1,000 principal amount of Existing Notes tendered for exchange (subject to a minimum tender of $2000 principal amount and $1000 increments in excess thereof), (i) $500 principal amount of new second lien notes (the New Second Lien Notes) and related consents to be delivered on the terms summarized in the Description of New Second Lien Notes contained in Exhibit A hereto and (ii) a pro rata portion of the New Notes Shares;
(x) enter into the Warrant Agreement, as of the Closing Date, with SAEs transfer agent, as warrant agent, and issue the Warrants pursuant thereto;
(xi) negotiate in good faith the Definitive Documents, which Definitive Documents shall contain terms and conditions consistent in all respects with this Agreement and to execute and otherwise support the implementation of such Definitive Documents;
(xii) support all reasonably necessary actions of the Supporting Holders to facilitate the consummation of the Restructuring Transactions;
(xiii) within seven days of delivery to SAE of invoices or receipts with respect thereto, pay in cash all (a) reasonable fees and expenses of (1) Paul, Weiss, Rifkind, Wharton & Garrison LLP (Paul Weiss) under that certain engagement letter among certain Supporting Holders, SAE, and Paul Weiss dated as of April 5, 2016, (2) K&L Gates, and (3) any other professional retained by the Supporting Holders pursuant to an engagement letter with SAE; and (b) reasonable and documents out of pocket expenses (other than professional fees) incurred any Supporting Holder in connection with this Agreement or the Restructuring Transaction (provided that the each Supporting Holder shall consult with SAE and provide SAE with advance notice of the occurrence of such expenses to the extent reasonably practicable);
(xiv) to obtain by the Launch Date any amendments, waivers and/or consents under the Credit and Security Agreement, dated as of November 6, 2014, among SAExploration, Inc., as borrower, SAE and the other guarantors party thereto and Wells Fargo Bank, National Association, as lender (the Existing Revolver), that are necessary to permit the Restructuring Transactions;
(xv) use commercially reasonable efforts to obtain any shareholder approvals or other consents or approvals, when required, and as required by SAEs Second Amended and Restated Certificate of Incorporation, dated as of June 24, 2013, Amended and Restated By Laws, adopted as of June 24, 2013, and all applicable law for the consummation of the Restructuring Transactions;
(xvi) to use commercially reasonable efforts to adopt, on or as soon as reasonably practicable after the Closing Date, an Amended and Restated Certificate of Incorporation and an Amended and Restated Bylaws of SAE
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(collectively, the Organizational Documents), incorporating the terms set forth in Exhibit H (the Governance Terms), which shall include provisions regarding the size and composition of the board of directors of SAE (the Board) as set forth in Exhibit H;
(xvii) use commercially reasonable efforts to make the shares of Common Stock to be issued in connection with the Restructuring Transactions eligible to be issued in book-entry form through the direct registry system of SAEs transfer agent and/or The Depository Trust Company;
(xviii) maintain its good standing under the laws of the State of Delaware and take all requisite actions, corporate or otherwise, for the Organizational Documents to become effective as soon as reasonably practicable after the Closing Date;
(xix) use commercially reasonable efforts to maintain (i) SAEs status as an SEC-registered, public company, including filing all periodic and current reports required under the reporting obligations of the Securities Exchange Act of 1934, as amended (the Exchange Act), and (ii) a listing on either the Nasdaq Global Market or the Nasdaq Capital Market, including taking commercially reasonable actions to regain compliance with the continuing listing standards of such applicable market within the compliance periods established by Nasdaq, as described in the deficiency letters of Nasdaq dated as of February 3, 2016 and April 19, 2016;
(xx) promptly notify the Supporting Holders in writing of any governmental or third party complaints, litigations, investigations, or hearings relating to the Restructuring Transactions (or communications indicating that the same may be contemplated or threatened);
(xxi) comply in all material respects with the covenants (except to the extent waived, as contemplated herein) contained in the Existing Revolver, Existing Notes Indenture and, when entered into, the New Senior Loan Facility;
(xxii) amend and ratify, effective as of the Closing Date, the Employment Agreements with respect to each of the executives of SAE identified in Exhibit E hereto, (ii) adopt on the Closing Date the Management Incentive Plan, incorporating the terms set forth in Exhibit F hereto, and (iii) enter into the Warrant Agreement, incorporating the terms set forth in Exhibit G hereto;
(xxiii) to the extent that any legal or structural impediment arises that would prevent, hinder, or delay the consummation of the Restructuring Transactions, to negotiate in good faith commercially reasonable additional or alternative provisions to address any such impediment, in consultation with the Supporting Holders; provided, however, that the economic outcome for the Supporting Holders and other material terms as contemplated herein must be substantially preserved, as determined by the Supporting Holders in their reasonable discretion;
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(xxiv) if SAE knows of a breach in any material respect of any of the obligations, representations, warranties, or covenants of SAE set forth in this Agreement, furnish prompt written notice (and in any event within three business days of such actual knowledge) to the Supporting Holders and promptly take all remedial action necessary to cure such breach;
(xxv) continue to operate its business in the ordinary course;
(xxvi) provide the Supporting Holders and their advisors reasonable access to management upon reasonable notice and keep the Supporting Holders and their advisors reasonably apprised of any material developments regarding SAEs business operations, condition, assets, liabilities, or finances and promptly notify the Supporting Holders upon the receipt of any proposal or expression of interest with respect to the negotiation or formulation of any proposal, offer, dissolution, winding up, liquidation, reorganization, recapitalization, assignment for the benefit of creditors, merger, consolidation, business combination, joint venture, partnership, sale of assets, or restructuring of SAE other than the Restructuring Transactions; and
(xxvii) use commercially reasonable efforts to ensure the Alaskan tax credits are issued to SAE in a timely manner.
(b) Negative Covenants. Subject to the terms and conditions hereof, and for so long as this Agreement has not been terminated in accordance with the terms hereof, SAE agrees that, on behalf of itself and each guarantor party to the Existing Notes, as applicable, it shall not, directly or indirectly, take any of the following actions, unless such action is consented to by the Required Supporting Holders:
(i) modify the Restructuring Transactions, in whole or in part, in a manner that is inconsistent with the terms of this Agreement;
(ii) commence any proceeding opposing any of the terms of this Agreement or otherwise take any action to obstruct or delay the consummation of the Restructuring Transactions;
(iii) incur or suffer to exist any material indebtedness, except indebtedness existing and outstanding immediately prior to the date hereof, trade payables, ordinary course draws under the Existing Revolver, liabilities arising and incurred in the ordinary course of business, and indebtedness arising under or permitted by the New Senior Loan Facility;
(iv) directly or indirectly (1) affirmatively seek or solicit any discussions regarding the negotiation or formulation of any proposal, offer, dissolution, winding up, liquidation, reorganization, recapitalization, assignment for the benefit of creditors, merger, consolidation, business combination, joint
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venture, partnership, sale of assets, or restructuring of SAE other than the Restructuring Transactions (an Alternative Proposal), (2) publicly announce its intention not to pursue the Restructuring Transactions or (3) take any other action that is inconsistent with or is likely to delay the consummation of the Restructuring Transaction, in the case of each of clauses (1) through and including (3) of this paragraph, subject to the fiduciary obligations of SAE; or
(v) incur any material liens or security interests, except in the ordinary course of business or pursuant to, or as permitted under, the New Senior Loan Facility and the New Second Lien Notes.
2.03. Covenants, Acknowledgments and Commitments of Management. Subject to the terms and conditions hereof, and for so long as this Agreement has not been terminated in accordance with the terms hereof, each member of Management (severally and not jointly) agrees to negotiate in good faith their respective amended Employment Agreements with SAE on the terms set forth in Exhibit D hereto on the Closing Date.
2.04. Definitive Documents
Without limiting the foregoing, each Party hereby covenants and agrees to (a) negotiate in good faith the Memorandum, the indenture for the New Second Lien Notes, the New Senior Loan Facility credit agreement, the Intercreditor Agreement, the Employment Agreements, the Management Incentive Plan, the Warrant Agreement, the Organizational Documents and all ancillary documents related to each of the foregoing (collectively, the Definitive Documents), which Definitive Documents shall contain terms and conditions consistent in all respects with this Agreement and (b) execute (to the extent such Party is a party thereto) and otherwise support implementation of the Definitive Documents and any other such documents or agreements as may be reasonably necessary or advisable to implement the Restructuring Transactions, the purposes of this Agreement and the Definitive Documents. All Parties shall have the right to review and comment on the Definitive Documents, the terms of which shall be consistent with this Agreement and otherwise in form and substance reasonably acceptable to SAE and the Required Supporting Holders before the execution and delivery of the Definitive Documents.
Section 3. | Forbearance. |
(a) The Parties agree and acknowledge that if the Restructuring Transactions have not been consummated prior to July 15, 2016, in order to consummate the Restructuring Transactions, SAE will not make the interest payment due to be paid on July 15, 2016 under the terms of the Notes Indenture and will instead enter into the 30 day grace period with respect to such payment as permitted by the Notes Indenture.
(b) For so long as the Termination Date has not occurred, and subject to the limitations provided in clause (c) below, each Supporting Holder (severally and not jointly), agrees until August 15, 2016:
(i) to forbear from the exercise of any rights and remedies against SAE to which the Supporting Holders or the Indenture Trustee are or may become entitled as a result of any Default or Event of Default (each as defined in the
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Existing Notes Indenture) arising or existing under the Existing Notes Indenture in respect of SAEs failure to make the interest payment on July 15, 2016 and decision to enter into the grace period in respect thereof (the Potential Default);
(ii) to refrain from exercising any right and remedy that may become available to it under the Existing Notes Indenture by reason of the Potential Default (other than, in the case of the Indenture Trustee, ordinary course acts which it may take under the Existing Notes Indenture which would not adversely affect any other Party); and
(iii) to refrain from initiating, joining in, or encouraging in any way an instruction or direction from any Noteholder to the Indenture Trustee to exercise any rights and remedies under the Existing Notes Indenture in connection with the Potential Default.
(c) For so long as the Termination Date has not occurred, SAE on behalf of itself and the guarantors party to the Existing Notes Indenture, agrees not to make any payment to any Noteholder in respect of the interest payment due on July 15, 2016 prior to the expiration of the applicable grace period.
(d) Nothing contained in this Section 3 shall impair, impede or otherwise prevent any Supporting Holder or the Indenture Trustee from exercising any rights and remedies against SAE in respect of any other Default or Event of Default arising under the Existing Notes Indenture or taking any other action available to it by reason of such a Default or Event of Default.
Section 4. | Representations and Warranties |
4.01. Mutual Representations and Warranties. Each of the Parties, severally and not jointly, represents, warrants, and covenants to each other Party (to the extent applicable), as of the RSA Effective Date, as follows (each of which is a continuing representation, warranty, and covenant):
(a) to the extent it is an entity, it is validly existing and in good standing under the laws of the state or other jurisdiction of its organization;
(b) it has all requisite direct or indirect power and authority to enter into this Agreement and the Definitive Documents to which it is a party and to carry out the Restructuring Transactions contemplated by, and perform its respective obligations under, this Agreement and such Party has been authorized to enter into this Agreement, the New Senior Loan Facility and the Definitive Documents and to carry out the Restructuring Transactions contemplated by, and perform its respective obligations under this Agreement;
(c) the execution, delivery, and performance by such Party of this Agreement does not and will not (i) violate any provision of law, rule, or regulation applicable to it or any of its subsidiaries or its charter or bylaws (or other similar governing documents) or those of any of its subsidiaries, or (ii) except as described in Section 3 hereof conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its subsidiaries is a party;
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(d) the execution, delivery, and performance by such Party of this Agreement does not and will not require any registration or filing with, consent, or approval of, or notice to, or other action to, with or by, any federal, state, or governmental authority or regulatory body, except such filings as may be necessary and/or required for disclosure by the Exchange Act;
(e) this Agreement is the legally valid and binding obligation of such Party, enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, fraudulent conveyance or other similar laws relating to or limiting creditors rights generally, by equitable principles relating to enforceability or by the implied covenant of good faith and fair dealing; and
(f) it has been represented by legal counsel of its choosing in connection with this Agreement and the transactions contemplated by this Agreement, has had the opportunity to review this Agreement with its legal counsel, and has not relied on any statements made by any other Party or such other Partys legal counsel as to the meaning of any term or condition contained herein or in deciding whether to enter into this Agreement or the transactions contemplated hereby.
4.02. Representations and Warranties of the Supporting Holders. Each Supporting Holder, separately and not jointly, represents and warrants to the best of its knowledge, as of the date hereof that:
(a) with respect to the Existing Notes held by such Supporting Holder, such Supporting Holder (i) either (1) is the sole beneficial owner of the principal amount of such Existing Notes indicated on the respective signature page hereto, or (2) has sole investment or voting discretion with respect to the principal amount of such Existing Notes indicated on the respective signature page hereto and has the power and authority to bind the beneficial owners of such Existing Notes to the terms of this Agreement, and (ii) has full power and authority to act on behalf of, vote, and consent to matters concerning such Existing Notes and to dispose of, exchange, assign, and transfer such Existing Notes, including the power and authority to execute this Agreement and to perform its obligations hereunder;
(b) with respect to the Existing Notes held by each Supporting Holder, such Supporting Holder has made no assignment, sale, participation, grant, conveyance, pledge, or other transfer of, and has not entered into any other agreement to assign, sell, use, participate, grant, convey, pledge, or otherwise transfer, in whole in or part, any portion of its right, title, or interests in any such Existing Notes that materially conflicts with the representations and warranties of such Supporting Holder in this Agreement or that would render such Supporting Holder otherwise unable to comply with this Agreement and perform its obligations hereunder, including its obligation to support the Restructuring Transactions, in all material respects;
(c) the amount of debt listed on the signature page of each Supporting Holder is correct as of the date hereof; and
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(d) the Supporting Holders, in entering into this Agreement and participating in the Restructuring Transactions, have not acted as a partnership, limited partnership, syndicate, or other group (as that term is used in Section 13(d) of the Exchange Act) for the purpose of acquiring, holding, disposing, or voting of securities of SAE.
4.03. Representations and Warranties of SAE. SAE, on behalf of itself and each guarantor party to the Existing Notes, as applicable, represents and warrants to the best of its knowledge, as of the date hereof that:
(a) it has, or upon the receipt of shareholder consents will have, authorized sufficient shares of Common Stock to effect the Restructuring Transactions as contemplated by this Agreement;
(b) its financial condition has not materially and adversely changed from that set forth in the Form 10-K for the year ended December 31, 2015, the amended Form 10-K for the year ended December 31, 2015 and the Form 10-Q for the period ended March 31, 2016, other than as contemplated by such reports regarding its liquidity and cash flow difficulties;
(c) as of June 13, 2016, the aggregate outstanding indebtedness (excluding any interest, fees, costs, expenses, and indemnities that may be owed by the applicable obligors) under (1) the Existing Notes is $140.0 million and (2) the Existing Revolver is $13.8 million, and such amounts (together with accrued interest and fees thereon) are outstanding and justly and truly owing by SAE and the guarantors that are party to the Existing Notes Indenture or Existing Revolver, as applicable, without defense, offset, or counterclaim; and
(d) it has no knowledge of any Default or Event of Default under the Existing Revolver or the Existing Notes Indenture which has occurred and is continuing.
Section 5. | Termination Events |
5.01. Supporting Holder Termination Events. The Required Supporting Holders may terminate this Agreement upon three business days prior written notice, unless otherwise set forth below, delivered in accordance with Section 9.11 hereof, upon the occurrence and continuation of any of the following events (each, a Supporting Holder Termination Event):
(a) SAE fails to receive (i) the consent or waiver from the lender under the Existing Revolver or (ii) the shareholder consents or other approvals, in each case that is necessary for the consummation of the Restructuring Transactions, including entry into the New Senior Loan Facility and issuance of the Common Stock;
(b) the Launch Date shall not have occurred by June 20, 2016;
(c) the Funding Date shall not have occurred by July 1, 2016;
(d) the Closing Date shall not have occurred by August 15, 2016;
(e) the breach or noncompliance by SAE or any guarantor under the Notes Indenture of (or failure to satisfy) in any material respect any of the obligations, representations, warranties, or covenants of such parties as set forth in this Agreement (including, without
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limitation, in Sections 2.02, 2.04 or Section 3 hereto) that remains uncured for five business days after the receipt by SAE of written notice of such breach, but solely to the extent such breach or noncompliance is materially adverse to such Supporting Holder and materially affects the ability of SAE, on behalf of itself and its subsidiary guarantors, to consummate the Restructuring Transactions contemplated herein;
(f) the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any ruling or order declaring this Agreement or any material portion hereof to be unenforceable or enjoining or otherwise restricting the consummation of the Restructuring Transactions in a way that cannot reasonably be remedied by SAE;
(g) the occurrence of an event of default under (i) the Existing Revolver, (ii) the New Senior Loan Facility, or (iii) the Existing Notes Indenture (other than the failure to pay interest as set forth in Section 3 hereof), in each case, subject to all applicable notice, waiver, and cure provisions;
(h) SAE or any guarantor under the Notes Indenture executes a letter of intent or similar document stating an intention to pursue an alternative restructuring, liquidation, reorganization, wind-down, exchange, transaction, including an Alternative Proposal, other than that contemplated by this Agreement; or
(i) any of the Definitive Documents or other documents in respect of the Restructuring Transactions are inconsistent with the material terms and conditions set forth in this Agreement, the Term Sheet or their respective exhibits and schedules;
provided that this Agreement shall, without any additional act or notice by any party, terminate immediately upon the occurrence of (1) SAE or any guarantor under the Notes Indenture (i) consenting to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, or similar official of SAE or any substantial part of SAEs property, (ii) seeking any arrangement, adjustment, protection, or relief from its debts, or (iii) making a general assignment for the benefit of its creditors; (2) SAE or any guarantor under the Notes Indenture commencing a voluntary case filed under title 11 of the United States Code (the Bankruptcy Code); or (3) the commencement of an involuntary case against SAE or any guarantor under the Notes Indenture under the Bankruptcy Code.
5.02. SAE Termination Events. SAE may terminate its obligations under this Agreement upon three business days prior written notice delivered to the Parties in accordance with Section 9.11 hereof, upon SAEs knowledge of the occurrence of any of the following events (each, an SAE Termination Event, and together with the Supporting Holder Termination Events, the Termination Events, and each a Termination Event):
(a) the material breach by any of the Supporting Holders of any of the obligations, or covenants of such Supporting Holders set forth in this Agreement or any representation and warranty of such Supporting Holders failing to be accurate that would have a material adverse impact on the implementation or consummation of the Restructuring Transactions that remains uncured for a period of five business days after the receipt by the breaching Supporting Holders of written notice of such breach from SAE;
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(b) the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any ruling or order declaring this Agreement or any material portion hereof to be unenforceable or enjoining or otherwise restricting the consummation of the Restructuring Transactions in a way that cannot reasonably be remedied by SAE; or
(c) upon notice to the Supporting Holders, if the Board determines, after receiving advice from counsel, that proceeding with the transactions contemplated under this Agreement (including, without limitation, the Restructuring Transactions) would be inconsistent with the exercise of its fiduciary duties.
5.03. Effect of Termination
(a) Upon any termination of this Agreement under Sections 5.01 or 5.02, this Agreement shall be of no further force and effect and each Party hereto shall be released from its commitments, undertakings, and agreements under or related to this Agreement and shall be entitled to take all actions, whether with respect to the Restructuring Transactions or otherwise, that they would have been entitled to take had they not entered into this Agreement; provided, however, that SAEs obligation to pay reasonable Professional Fees shall survive with respect to those reasonable Professional Fees incurred through and including the date this Agreement is terminated. Notwithstanding the foregoing, any claim for breach of this Agreement that accrued prior to the date of a Partys termination or termination of this Agreement (as the case may be) and all rights and remedies of the Parties hereto shall not be prejudiced as a result of termination.
(b) Notwithstanding any provision in this Agreement to the contrary, no Party shall terminate this Agreement if such Party is in material breach of any provision hereof.
5.04. Termination Upon Consummation of the Restructuring Transactions. This Agreement shall terminate automatically without any further required action or notice upon the Closing Date.
Section 6. | Transfer of Existing Notes |
Each Supporting Holder agrees that so long as this Agreement has not been terminated in accordance with its terms, it shall not directly or indirectly sell, assign, pledge, hypothecate, convey, or otherwise transfer or dispose of or grant, issue, or sell any option, right to acquire, voting, participation, or other interest in any Existing Notes (each, a Transfer), unless the transferee thereof either (i) is a Supporting Holder and agrees to exchange such additional Existing Notes and deliver related consents in the Exchange Offer, or (ii) prior to such Transfer, agrees in writing for the benefit of the other Parties to become a Supporting Holder and to be bound by all of the terms of this Agreement with respect to such acquired Existing Notes by executing the joinder in the form attached hereto as Exhibit I (the Joinder Agreement), and delivering an executed copy thereof, within five business days of closing of such Transfer, to counsel to SAE and counsel to the Supporting Holders, as listed in Section 9.11 hereof, in which event the transferee (including a Supporting Holder transferee, if applicable) shall be deemed to be a Supporting Holder under this Agreement with respect to such transferred rights, claims, and obligations. Notwithstanding anything contained herein to the contrary, a Supporting Holder may Transfer any or all of its Existing Notes to any entity that, as of the date of the Transfer,
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controls, is controlled by, or is under common control with such Supporting Holder; provided, however, that such entity shall automatically be subject to the terms of this Agreement and deemed a Party hereto and must deliver an executed Joinder Agreement within five business days of the closing of such Transfer to counsel to SAE and counsel to the Supporting Holders. Each Supporting Holder agrees and acknowledges that any Transfer of Existing Notes that does not comply with the terms and procedures set forth in this Section 6 shall be deemed null and void ab initio.
Notwithstanding anything to the contrary in this Section 6, (i) a Qualified Marketmaker (as defined below) that acquires any Existing Notes from a Supporting Holder with the purpose and intent of acting as a Qualified Marketmaker for such Existing Notes (with the understanding that the Qualified Marketmaker will agree at the time of such acquisition to the terms of this paragraph), shall not be required to execute and deliver a Joinder Agreement or otherwise agree to be bound by this Agreement if such Qualified Marketmaker transfers such Existing Notes within ten (10) business days of its acquisition to a Supporting Holder or transferee that executes and delivers a Joinder Agreement in accordance with the terms set forth in the immediately preceding paragraph no later than (2) business days after consummation of the Transfer; and (ii) to the extent any Party is acting solely in its capacity as a Qualified Marketmaker, it may Transfer any ownership interests in the Existing Notes that it acquires from an Existing Holder that is not or has not been a Supporting Holder to a transferee that is not a Supporting Holder at the time of such Transfer without the requirement that the transferee be or become a signatory to this Agreement or execute a Joinder Agreement.
As used herein, Qualified Marketmaker) means an entity that (a) holds itself out to the public or applicable private markets as standing ready in the ordinary course of business to purchase from customers and sell to customers claims against SAE (or enter with customers into long and short positions in claims against SAE), in its capacity as a dealer or marketmaker in claims against SAE and (b) is, in fact, regularly in the business of making a market in claims against issuers or borrowers (including debt securities or other debt).
Section 7. | Amendments |
This Agreement, the Definitive Documents, and, in each case, any annexes or exhibits thereto may not be modified, amended, or supplemented, nor may any terms and conditions hereof or thereof be waived, without the prior written consent of SAE and the Required Supporting Holders. As used in this Agreement, Required Supporting Holders means Supporting Holders holding more than a majority of the aggregate principal amount of the Existing Notes held by all the Supporting Holders as of the date such consents are solicited; provided, however, that any waiver, change, modification, or amendment to this Agreement that materially and adversely affects the economic interests of any Supporting Holder may not be made without the written consent of each such affected Supporting Holder. Notwithstanding the foregoing, no modification, amendment or alteration shall be made to (a) the material terms of the New Term Loan Facility and the New Second Lien Notes, (b) the equity allocations set forth on Schedule 3 of the Term Sheet, or (d) the material economic terms of the Exchange Offer without the consent of each Supporting Holder.
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Section 8. | No Solicitation of Securities |
Notwithstanding anything to the contrary herein, this Agreement is not and shall not be deemed to be an offer for the issuance, purchase, sale, exchange, hypothecation, or other transfer of securities or a solicitation of an offer to purchase, sell, exchange or acquire securities for purposes of the Securities Act of 1933, as amended, and the Exchange Act.
Section 9. | Miscellaneous |
9.01. Further Assurances. Subject to the other terms hereof, the Parties agree to execute and deliver such other instruments and perform such acts, in addition to the matters herein specified, as may be commercially reasonably appropriate or necessary, from time to time, to effectuate the Restructuring Transactions in accordance with this Agreement.
9.02. Complete Agreement. This Agreement, exhibits and the annexes hereto, represent the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements, oral or written, between the Parties with respect thereto. No claim of waiver, consent, or acquiescence with respect to any provision of this Agreement, exhibits, and annexes hereto shall be made against any Party, except on the basis of a written instrument executed by or on behalf of such Party.
9.03. No Assignment. This Agreement shall be binding upon, and inure to the benefit of, the Parties. No rights or obligations of any Party under this Agreement may be assigned or transferred to any other person or entity, except as provided in this Agreement. Nothing in this Agreement, express or implied, shall give to any person or entity, other than the Parties, any benefit or any legal or equitable right, remedy, or claim under this Agreement.
9.04. Headings. The headings of all Sections of this Agreement are inserted solely for the convenience of reference and are not a part of and are not intended to govern, limit, or aid in the construction or interpretation of any term or provision hereof.
9.05. Governing Law; Submission to Jurisdiction; Selection of Forum; Waiver of Trial by Jury. This Agreement is to be governed by and construed in accordance with the laws of the State of New York. Each Party hereto agrees that it shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement in the United States District Court for the Southern District of New York, and by execution and delivery of this Agreement, each of the Parties irrevocably accepts and submits itself to the exclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding. Each Party here irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby.
9.06. Counterparts. This Agreement may be executed and delivered (by facsimile, electronic mail, or otherwise) in any number of counterparts, each of which, when executed and delivered, shall be deemed an original, and all of which together shall constitute the same agreement.
9.07. Interpretation. This Agreement is the product of negotiations between the Parties, and in the enforcement or interpretation hereof, is to be interpreted in a neutral manner, and any
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presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Agreement, or any portion hereof, shall not be effective in regard to the interpretation hereof.
9.08. Relationship Among Supporting Holders. It is understood and agreed that no Supporting Holder has any duty of trust or confidence of any kind or form with any other Supporting Holders as a result of this Agreement, and, except as expressly provided in this Agreement, there are no commitments among or between them. It is further understood and agreed that any Supporting Holder may trade in the Existing Notes or other debt or equity securities of SAE without the consent of SAE or any other Supporting Holder, subject to applicable securities laws and the terms of this Agreement, and subject to Section 6 of this Agreement; provided, however, that no Supporting Holder shall have any responsibility for any such trading by any other entity by virtue of this Agreement. No prior history, pattern, or practice of sharing confidences among or between the Supporting Holders shall in any way affect or negate this understanding and agreement. No Supporting Holders shall, as a result of its entering into and performing its obligations under this Agreement, be deemed to be a part of a group (as that term is used in Section 13(d) of the Exchange Act) with any other Party. For the avoidance of doubt, no action taken by a Supporting Holder pursuant to this Agreement shall be deemed to constitute or to create a presumption by any of the Parties that the Consenting Noteholders are in any way acting in concert or as such a group. The execution of this Agreement by any Supporting Holder shall not create, or be deemed to create, any fiduciary or other duties (actual or implied) to any other Supporting Holder other than non-fiduciary duties expressly set forth in this Agreement.
9.09. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, administrators and representatives, other than a trustee or similar representative appointed in a bankruptcy case.
9.10. Acknowledgements. Notwithstanding anything herein to the contrary, none of the Supporting Holders shall (a) have any fiduciary duty or (b) other duties or responsibilities to each other, SAE, any subsidiary or affiliate of SAE, or any of SAEs creditors or other stakeholders.
9.11. Notices. All notices hereunder shall be deemed given if in writing and delivered, if sent by hand delivery, electronic mail, courier, or overnight delivery (return receipt requested) to the following addresses (or at such other addresses as shall be specified by like notice):
(a) | if to SAE, to: |
SAExploration Holdings, Inc.
1160 Dairy Ashford Rd., Suite 160
Houston, Texas 77079
Attn: Brent Whiteley Chief Financial Officer, General Counsel and Secretary
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with copies to:
Jones Day
222 E. 41st Street
New York, New York 10017
Attn: Alex Gendzier
Brad Erens
E-mail address: agendzier@jonesday.com
bberens@jonesday.com
(b) | if to the Supporting Holders, to: |
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
Attn: Brian Hermann
Lauren Shumejda
E-mail address: bhermann@paulweiss.com
lshumejda@paulweiss.com
Any notice given by hand delivery, electronic mail, mail, or courier shall be effective when received.
9.12. Waiver. Except as expressly provided in this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict any right of any Supporting Holder or SAE or the ability of each of the Supporting Holders or SAE to protect and preserve its respective rights, remedies and interests. If the Restructuring Transactions are not consummated, or if this Agreement is terminated for any reason, the Parties fully reserve any and all of their rights.
9.13. Several, Not Joint, Obligations. The agreements, representations and obligations of the Parties under this Agreement are, in all respects, several and not joint.
9.14. Remedies. All rights, powers, and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any right, power, or remedy thereof by any Party shall not preclude the simultaneous or later exercise of any other such right, power, or remedy by such Party or any other Party.
9.15. Specific Performance. This Agreement is intended as a binding commitment enforceable in accordance with its terms against the Parties. It is understood and expressly agreed by each of the Parties that money damages would not be a sufficient remedy for any breach of this Agreement by any Party, and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief as a remedy for any such breach without the necessity of proving the inadequacy of money damages as a remedy and without posting security for such relief.
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9.16. No Third-Party Beneficiaries. Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties, and no other person or entity shall be a third-party beneficiary hereof.
9.17. Management Liability. The Parties hereby acknowledge that Management is party to this Agreement solely with respect to Section 2.03 and shall incur no liability pursuant to (i) any breach by SAE of this Agreement and (ii) any delay of, or failure to consummate, any or all of the Restructuring Transactions contemplated in this Agreement.
9.18. Consideration. The Parties hereby acknowledge that no consideration, other than that specifically described herein and the Definitive Documents, shall be due or paid to any Party for its agreement to accept the Restructuring Transactions in accordance with the terms and conditions of this Agreement.
9.19. Survival. Notwithstanding anything herein to the contrary, the acknowledgements, agreements and obligations of the Parties in this Section 9.18 and Sections 2.01(e), 5.03(a), 9.08, 9.09 and 9.17 shall survive any termination of this Agreement and shall continue in full force and effect in accordance with the terms thereof.
Section 10. | Releases |
10.01. On the Closing Date, SAE and the Supporting Holders shall enter into mutual releases of all claims and causes of action arising before the Closing Date.
[Signatures on Following Page]
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IN WITNESS WHEREOF, SAE, Management and the Supporting Holders have caused this Agreement to be executed and delivered by their respective and duly authorized officers or other agents, solely in their respective capacity as officers or other agents of the undersigned and not in any other capacity, as of the date first set forth above.
SAEXPLORATION HOLDINGS, INC. | ||
By: |
/s/ Brian Beatty | |
Name: |
Brian Beatty | |
Title: |
CEO & President |
JEFF HASTINGS | ||
By: |
/s/ Jeff Hastings | |
Title: |
Executive Chairman |
BRIAN BEATTY | ||
By: |
/s/ Brian Beatty | |
Title: |
CEO & President |
BRENT WHITELEY | ||
By: |
/s/ Brent Whiteley | |
Title: |
CFO, General Counsel and Secretary |
Amzak Capital Management, LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Samuel J. Barker | |
Name: |
Samuel J. Barker | |
Title: |
Senior Fixed Income Analyst |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Aristides Capital LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Christopher M. Brown | |
Name: |
Christopher M. Brown | |
Title: |
Managing Member |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
BlueMountain Capital Management, LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Kyle Brady | |
Name: |
Kyle Brady | |
Title: |
Assistant General Counsel |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Morgan Stanley Investment Management, Inc., as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Kim W. Cross | |
Name: |
Kim W. Cross | |
Title: |
Managing Director |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Mr. John Pecora | ||
By: |
/s/ John Pecora | |
Name: |
John Pecora | |
Title: |
N/A |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Tegean Capital Management, LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Ariel Rothman | |
Name: |
Ariel Rothman | |
Title: |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Whitebox Advisors LLC, as investment manager on behalf of certain funds and accounts | ||
By: |
/s/ Mark Strefling | |
Name: |
Mark Strefling | |
Title: |
General Counsel & Chief Operating Officer |
Indenture | Aggregate Principal Amount | |||||
10.00% Existing Notes due 2019 |
Exhibit A
Term Sheet
SAEXPLORATION HOLDINGS, INC.
Term Sheet
June 13, 2016
This term sheet (the Term Sheet) sets forth an outline of certain material terms and conditions of a comprehensive restructuring and recapitalization (the Restructuring) of the balance sheet of SAExploration Holdings, Inc. (the Company). This Term Sheet is intended as a summary for discussion purposes only and does not constitute a commitment, obligation, or agreement to provide, arrange, or syndicate any financing on the part of the Supporting Holders (as defined below). Only execution and delivery of definitive documentation relating to the Restructuring shall result in any binding or enforceable obligations of any party with respect thereto. It is anticipated that the Company and the Supporting Holders (as defined below) will execute a restructuring support agreement (the RSA) on June 13, 2016 (the RSA Date) with standard terms and conditions evidencing, among other things, their intent to support consummation of the Restructuring.
Overview of the Restructuring
Pursuant to the Restructuring, (i) the Supporting Holders (as defined below) shall exchange the Existing Notes (as defined below) into New Second Lien Notes (as defined below) and shares of common stock (the Common Stock) of the Company, as contemplated by the Exchange Offer (as defined below) and (ii) certain Supporting Holders shall provide the Company with a multi-draw senior secured term loan facility (the New Senior Loan Facility) in an aggregate principal amount of up to $30 million on the terms set forth on Schedule 1 hereto. Other Participating Holders (as defined below) shall have the opportunity to participate in the New Senior Loan Facility on equal terms with the other Supporting Holders.
The Company |
SAExploration Holdings, Inc. |
Current Capital Structure |
The indebtedness of the Company as of the date of this Term Sheet is as follows: |
| that certain Credit and Security Agreement, dated as of November 6, 2014, by and among Wells Fargo Bank, N.A., as lender, SAExploration, Inc., as borrower, and the Company and the other guarantors party thereto, as guarantors, providing for, among other things, a $20 million revolving line of credit secured by the Companys U.S. assets, including accounts receivable and equipment, subject to certain exclusions and exceptions (the Revolving Credit Facility); and |
| 10.000% Senior Secured Notes due 2019 (the Existing Notes, and the holders thereof, the Existing Holders), issued pursuant to that certain indenture, dated as of July 2, 2014 (the Existing Notes Indenture) by and among the Company, the guarantors named therein and U.S. Bank National Association, as indenture trustee, of which there is outstanding as of the date of this Term Sheet $140 million in an aggregate principal amount. |
Supporting Holders |
Supporting Holders means the Existing Holders executing the RSA, including those Existing Holders listed on Schedule 2. |
Overview of the Restructuring |
Subject to the terms set forth in the RSA and this Term Sheet, the Restructuring shall be implemented as follows: |
| on June 13, 2016, the Company and holders of not less than 66% of the aggregate principal amount of Existing Notes shall execute the RSA; |
| on or before June 20, 2016 (the Launch Date), the Company shall commence an exchange offer and consent solicitation pursuant to which (i) Existing Notes shall be exchanged for (1) new second lien notes (the New Second Lien Notes) on the terms described below and (2) shares of Common Stock of the Company (the New Notes Shares), equal to 64.48% of the total outstanding Common Stock of the Company on the Closing Date (as defined below), on a fully diluted basis, as set forth in Schedule 3 hereto, and (ii) tendering Existing Holders will deliver consents to certain proposed amendments as described below; |
| on or before July 1, 2016 (such date, the Funding Date), the parties shall obtain (i) any consents required from Existing Holders to amend the Existing Notes Indenture, existing security documents and existing intercreditor agreement (as summarized below under Consent Solicitation) and (ii) such waivers, consents or amendments to the Revolving Credit Facility from Wells Fargo, N.A., as lender under the Revolving Credit Facility, in both cases, as necessary to give effect to and permit the Restructuring referred to herein. Upon receipt of such consents and amendments or waivers, (1) the Supporting Holders and any other Participating Holders (together, the New Senior Lenders) shall enter into the New Senior Loan Facility with the Company on the terms set forth on Schedule 1 hereto, in connection with which the New Senior Lenders shall receive, subject to the terms and conditions described in Schedule 1, shares of Common Stock of the Company (together with the Backstop Shares (as defined in Schedule 1 hereto), the New Senior Loan Shares), equal to 28.20% of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3 hereto, (2) the Initial Draw (as defined in Schedule 1) shall occur, and (3) the Company and the trustee and collateral agent under the Existing Notes Indenture shall enter into the supplemental indenture to the Existing Notes Indenture, the amendments to the existing security documents and the amendments to the existing intercreditor agreement; |
| in the RSA, the Company shall, if necessary, enter into the 30-day grace period provided for in the Existing Indenture in respect of the July 15, 2016 interest payment under the Existing Notes, and the Supporting Holders shall agree to forbear, if necessary, from exercising remedies in respect thereof for a period extending to August 15, 2016 to allow the Restructuring to be consummated; and |
2
| existing holders of the Companys Common Stock shall retain, on a pro rata basis after giving effect to the Restructuring, shares of Common Stock of the Company equal to 1.32% of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3. |
It is anticipated that the Exchange Offer will close, and that the New Senior Loan Shares and the New Note Shares will be issued, on the date that is intended to be no later than 30 days after the Launch Date (assuming no amendments and/or extensions of the offer period) (the Closing Date). |
The New Senior Loan Shares and the New Notes Shares shall be subject to mutual dilution and shall, together with shares issued under the Management Incentive Plan (as defined below), dilute the existing Common Stock of the Company. The New Senior Loan Shares and the New Notes Shares shall not be dilutive to the Management Incentive Plan. Schedule 3 presents the allocation of the Companys Common Stock as of the Funding Date, on an as-issued basis, and the allocation of the Companys Common Stock as of the Closing Date. |
In connection with the Restructuring, on the Closing Date, the Company will: |
| enter into new amended employment agreements with the Companys senior management (Jeff Hastings, Brian Beatty, Brent Whitely, Mike Scott, Darin Silvernagle, Trisha Gerber and Ryan Abney), as described below; |
| adopt the Management Incentive Plan, as described below; and |
| issue Warrants to existing holders of the Companys Common Stock, as described below. |
3
The Exchange Offer |
Eligible Existing Holders will be offered an opportunity to participate pro rata in the exchange offer for the Existing Notes (together, the Exchange Offer), pursuant to which each participating Existing Holder (the Participating Holders) shall receive, on the Closing Date, for every $1,000 principal amount of Existing Notes tendered for exchange (subject to a minimum tender of $2,000 principal amount and in $1,000 increments in excess thereof): |
| $500 principal amount of New Second Lien Notes, which shall have terms substantially similar to the Existing Notes; provided that (1) the New Second Lien Notes shall have a maturity date of September 24, 2019, provided that, if any of the Existing Notes remain outstanding as of March 31, 2019, the maturity date of the New Second Lien Notes will become April 14, 2019 upon the vote of the holders of a majority of the then-outstanding New Second Lien Notes, (2) the liens securing the New Second Lien Notes shall be junior to the liens securing the New Senior Loan Facility and senior to the liens securing the Existing Notes after the Closing Date, (3) the Company may elect to pay interest on the New Second Lien Notes in kind with additional New Second Lien Notes for the first twelve months of interest payment dates following the Closing Date, provided that, if the Company makes this election, the interest on the New Second Lien Notes for such in kind payments will accrue at a per annum rate 100 basis points higher than the cash interest rate, (4) the definition of Permitted Holders for purposes of the Change of Control covenant will include the Supporting Holders and their related parties, (5) the New Second Lien Notes will have a special redemption right at par of up to $35 million of the issuance to be paid out of the proceeds of the Alaska tax credit certificates and shall be conditioned upon payment in full of the Revolving Credit Facility and the New Senior Loan Facility, and (6) the New Second Lien Notes shall include a make-whole provision requiring that if the New Second Lien Notes are accelerated or otherwise become due and payable prior to their stated maturity due to an Event of Default (including but not limited to a bankruptcy or liquidation of the Company (including the acceleration of claims by operation of law)), then the Applicable Premium payable with respect to an optional redemption will also be immediately due and payable, along with the principal of, accrued and unpaid interest on, the notes and shall constitute part of the obligations in respect thereof as if such acceleration were an optional redemption of the notes, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each holders lost profits as a result thereof; and |
| a pro rata portion the New Notes Shares, collectively representing 64.48% of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3. |
The indenture for the New Second Lien Notes shall include the following additional language in respect of the make-whole: |
Any Applicable Premium payable shall be presumed to be the liquidated damages sustained by each holder as the result of the early redemption and the Company agrees that it is reasonable under the circumstances currently existing. The Applicable Premium shall also be payable in the event the New Second Lien Notes (and/or the Indenture) are satisfied or released by foreclosure, deed in lieu of foreclosure or any other means. The Company expressly waives (to the fullest extent it may lawfully do so) the provisions of any present or future statute or law that prohibits or may prohibit the collection of the foregoing Applicable Premium in connection with any such acceleration. The Company expressly agrees (to the fullest extent it may lawfully do so) that: (A) the Applicable Premium is reasonable and is the product of an arms length transaction between sophisticated business people, ably represented by counsel; (B) the Applicable Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between holders and the Company giving specific consideration in this transaction for such agreement to pay the premium; and (D) the Company shall be estopped hereafter from claiming differently than as agreed to in this paragraph. The Company expressly acknowledges that its agreement to pay the Applicable Premium to Holders as herein described is a material inducement to holders to purchase the Notes. The Applicable Premium shall constitute part of the holders claim in respect of the New Second Lien Notes in the event of a bankruptcy or liquidation, and such claim shall be allowed against the debtors without the need to file a proof of claim. |
The calculation of the Applicable Premium shall be the same as that appearing in the Existing Notes Indenture, except that the discount rate will be based on Treasuries plus 25 basis points. |
The Restructuring will be conditioned on participation in the Exchange Offer by Existing Holders holding at least 90% of the Existing Notes outstanding as of the date of this Term Sheet. The Participating Holders shall deliver consents to the amendments to the Existing Notes Indenture as described below under Consent Solicitation. |
Pursuant to, and subject to the terms of, the RSA, the Supporting Holders shall agree to participate in the Exchange Offer for the full amount of their Existing Notes, to deliver consents to amend the Existing Notes Indenture and to waive withdrawal rights with respect to their tendered Existing Notes and related Consents, each as described below under Consent Solicitation. |
4
Consent Solicitation |
In connection with the Exchange Offer, the Company will seek consents from Participating Holders to: |
| amend the Existing Notes Indenture (the Consent Solicitation) to: |
| waive the applicable change of control provisions; |
| permit the entry into, and incurrence of draws pursuant to, the New Senior Loan Facility on the Funding Date and the issuance of the New Second Lien Notes (including any additional New Second Lien Notes issued in lieu of cash interest payments) by amending the Incurrence of Indebtedness and Issuance of Preferred Stock and Liens covenants; |
| amend the definition of Permitted Holders for purposes of the Change of Control covenant to include the Supporting Holders and their related parties; and |
| amend the Payments for Consents and Transactions with Affiliates covenants in connection with the transactions contemplated by this Term Sheet; |
| amend the security documents relating to the Existing Notes to give effect to the Term Sheet, including to consent to full subordination of the liens securing the Existing Notes to the New Senior Loan Facility and the New Second Lien Notes; and |
| amend and restate the existing intercreditor agreement to account for the entry into the New Senior Loan Facility on the Funding Date, the New Second Lien Notes and the related liens and the relative lien priorities of the Revolving Credit Facility, the New Senior Loan Facility, the New Second Lien Notes and the Existing Notes as contemplated by Schedule 1. |
In order to tender Existing Notes for exchange in the Exchange Offer, Participating Holders shall be required to deliver consents in the Consent Solicitation. Supporting Holders participation in the Exchange Offer and Consent Solicitation will occur at the launch of the deal and Supporting Holders shall, subject to the terms of the RSA, waive withdrawal rights with respect to tendered Existing Notes and the related Consents, with the effect that, the Company and the trustee for the Existing Notes Indenture shall be able to enter into a supplemental indenture to permit the entry into the New Senior Loan Facility and related matters on the Funding Date. |
Amendment of the Revolving Credit Facility |
The Revolving Credit Facility shall remain in place; provided that consummation of the New Senior Loan Facility shall be subject to obtaining the necessary consents or waivers from Wells Fargo (as discussed below). |
5
Management Incentive Plan |
On the Closing Date, the Company shall adopt a management incentive plan (the Management Incentive Plan), which shall reserve 10%, on a fully diluted basis, of the total shares of common stock outstanding as of the Closing Date (the MIP Shares) for distribution to covered employees on terms to be agreed with senior management. The Management Incentive Plan shall supersede any prior management or employee stock compensation plan of the Company in effect on the Closing Date. Senior management shall receive 60% of the MIP Shares on the Closing Date, of which 1/3 shall vest on each of (1) the earlier of (a) the first anniversary of the Closing Date and (b) the date the Company shall have received Alaskan tax credit certificates in a face amount of at least $25 million (the Tax Credit), and (2) each anniversary of the Closing Date for the two years thereafter in the form of: |
(i) shares equal to 3% of the Companys outstanding Common Stock as of the Closing Date on a fully diluted basis; and |
(ii) at-the-money incentive options to acquire shares equal to 3% of the Companys outstanding Common Stock as of the Closing Date, based on an equity value (a) if options are initially distributed on the first anniversary of the Closing Date or after the 60th calendar day following the Closing Date due to the receipt of the Tax Credit (the Tax Credit Valuation Date), the volume-weighted average price (the VWAP) per share of SAE Common Stock during the 30-day period ending on the date that is the 60th calendar day following the Closing Date or (b) if options are initially distributed due to the receipt of the Tax Credit prior to the 60th calendar date following the Closing Date, the VWAP per share of SAE Common Stock during the 30-day period ending on the date one day preceding any public announcement of the Tax Credit Valuation Date; provided, however, that if the Tax Credit Valuation Date occurs before the expiration of 30 days following the Closing Date, then the VWAP calculation period shall be the number of days between the Closing Date and the Tax Credit Valuation Date. |
If any member of senior management terminates his or her employment without good reason within the first twelve months after the Closing Date, that employees vested MIP Shares or the cash proceeds thereof will be clawed back. |
The remaining 40% of MIP Shares shall be granted to members of management and other key employees and distributed according to a vesting schedule to be determined by the New Board, provided, however, that the MIP Shares may not be used to fund any of the Annual Performance Awards (as defined in Schedule 4). |
Warrants |
In connection with the Restructuring, the Company will enter into, as of the Closing Date, a warrant agreement with its transfer agent, as warrant agent (the Warrant Agreement), that shall provide for the issuance of warrants in two series to all existing holders of Common Stock that, upon exercise, will each represent 2.25% of the outstanding shares of Common Stock as of the Closing Date, subject to dilution by the New Loan Shares and the MIP Shares, at an exercise price to reflect market capitalizations of $112 million and $140 million, respectively, with five year terms (Warrants). The Warrant Agreement will contain customary cashless exercise and anti-dilution provisions. |
6
The Warrants will not become exercisable until 30 days before their expiration date. In addition, it shall be a condition precedent to any exercise that the Company shall have received Alaska tax credit certificates in a face amount of at least $25 million. |
Holders of the Warrants will be entitled to the benefit of a customary resale registration rights agreement. |
Treatment of Existing Equity Holders |
In connection with the Restructuring, existing holders of Common Stock will retain 1.32% of the outstanding shares of Common Stock on a fully diluted basis, as of the Closing Date, provided that these shares shall be subject to dilution by the subsequent issuance of the remaining 40% of the MIP Shares. |
Employment Agreements |
On the Closing Date, the Company shall enter into new amended employment agreements with the Companys senior management (Jeff Hastings, Brian Beatty, Brent Whiteley, Mike Scott, Darin Silvernagle, Trisha Gerber and Ryan Abney), to reflect the material terms and conditions set forth on Schedule 4 hereto. |
New Board |
As of the Closing Date, the Companys board of directors (the New Board) shall consist of 7 members, one of whom shall be a member of senior management appointed by the Company. The remaining 6 directors shall be selected by the Supporting Holders in their sole discretion; provided that the Supporting Holders shall consult in good faith with the Companys management in the selection thereof; provided, further, that a sufficient number of independent directors will be selected to comply with any applicable listing requirements. |
Amended Articles & Bylaws |
As soon as reasonably practicable after the Closing Date, the Companys existing articles and bylaws will be subject to customary amendments and modifications to be agreed upon in the RSA. |
Public Status; Listing |
The Company shall remain an SEC-registered public company and shall file reports under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. The Company shall use its commercially reasonable efforts to comply with the listing requirements of the Nasdaq Global Market or the Nasdaq Capital Market, as applicable. |
The Company shall use its commercially reasonable efforts to receive the requisite shareholder votes to affect the Restructuring, to the extent required by its charter, other corporate governance documents and applicable law. |
7
Closing Conditions |
The effectiveness of the Restructuring shall be conditioned upon the absence of any material business, regulatory or legal impediments thereto, as determined by the Supporting Holders in their reasonable discretion, and shall be subject to customary closing conditions, including, without limitation: |
| the negotiation and execution of definitive documentation acceptable to the Supporting Holders and the Company; |
| participation by holders of 90% of the outstanding Existing Notes in the Exchange Offer and Consent Solicitation; |
| no success fee shall be payable to a financial advisor, if any, to the Company, except on terms reasonably acceptable to the Supporting Holders; |
| receipt of any necessary amendments and/or waivers from the lender under the Revolving Credit Facility to permit the Restructuring; and |
| payment of all fees and expenses incurred by the Supporting Holders. |
Fiduciary Out / Shop Right |
The Company may terminate this Term Sheet or the RSA upon three business days prior notice if the board of directors of the Company determines, after receiving advice from counsel, that proceeding with the Restructuring would be inconsistent with the exercise of its fiduciary duties. Notwithstanding anything in this Term Sheet or the RSA to the contrary, nothing in this Term Sheet or the RSA shall prevent the Company from taking or failing to take any action that it is obligated to take (or to fail to take) in the performance of any fiduciary duty or as otherwise required by applicable law which the Company owes to any other person or entity under applicable law. |
Fees and Expenses |
The Company shall pay promptly all accrued and unpaid fees and expenses of the Supporting Holders and any agent or trustee under the various debt documents in connection with the Restructuring (whether or not the Restructuring is consummated) including, without limitation, the costs and expenses incurred by counsel to the Supporting Holders in connection with the Restructuring. |
Reservation of Rights |
Nothing herein is intended to, or does, in any manner waive, limit, impair or restrict the ability of each of the Company and the Supporting Holders to protect and fully preserve all of their rights, remedies, claims and interests, including the Supporting Holders claims against the Company or any other party in interest or their respective property. If the Restructuring is not consummated, the Company and the Supporting Holders fully reserve any and all of their respective rights. |
No Admission |
Nothing in the Term Sheet is or shall be deemed to be an admission of fact or liability or deemed binding on the Company or the Supporting Holders. |
8
Schedule 1
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Term Sheet.
New Senior Loan Facility Term Sheet | ||
Borrower | The Company | |
Guarantors | All of the Companys domestic subsidiaries | |
Lenders | Certain of the Supporting Holders and Other Participating Holders. | |
Facility | Senior secured multi-draw term loan facility in an aggregate principal amount of $30 million.
The initial draw (the Initial Draw), which shall occur on or about the Funding Date, shall be not more than $5.6 million in the aggregate. It shall be a condition precedent to the Initial Draw that the Company and holders of not less than 66% of the aggregate principal amount of Existing Notes shall have executed the RSA.
The second draw (the Second Draw) shall be not more than $9.4 million in the aggregate. It shall be a condition precedent to the Second Draw that the Restructuring described in the RSA and the transactions contemplated by the exhibits thereto that are intended to be closed by the Closing Date shall have been consummated by or on the Closing Date.
It shall be a condition precedent to any additional subsequent draw (a Subsequent Draw) that the Company shall have received Alaska tax credit certificates in a face amount of at least $25 million. | |
Security Interest | The obligations of the Company and the guarantors under the New Senior Loan Facility will be secured on a 1.5 lien priority basis by the collateral currently securing the obligations under the Revolving Credit Facility and the Existing Notes, respectively, and the receivable due to the Company from Alaska Seismic Ventures and any tax credit or tax certificate assigned or issued to the Company in connection therewith, and all proceeds therefrom (the Collateral). The Collateral will secure those obligations of the Company and the guarantors (1) under the Revolving Credit Facility on a first lien priority basis, (2) under the New Notes on a second lien priority basis and (3) under the Existing Notes on a third lien priority basis.
As of the Funding Date, the agent under the New Senior Loan Facility, the agent under the Revolving Credit Facility, and the collateral agent under the Existing Indenture will enter into an Intercreditor Agreement with the Company and the Guarantors which will provide for contractual subordination of the liens of each such agent and collateral agent in the Collateral to the extent necessary to reflect the relative lien priority set forth herein. The Intercreditor Agreement will also govern the relationship of the parties in respect of the Collateral and certain other matters. This new Intercreditor Agreement will, in effect amend and restate the existing intercreditor agreement. The collateral agent under the New Indenture will sign a joinder to the new Intercreditor Agreement on the Closing Date. | |
Interest | 10% per year, payable monthly in cash. |
9
New Senior Loan Facility Term Sheet | ||
Facility Fee | The Company shall pay a facility fee of $600,000 in the aggregate to the New Senior Lenders on the Funding Date with the proceeds of the Initial Draw under the New Senior Loan Facility. | |
Syndication; Backstop Shares |
Subsequent to the Initial Draw but prior to the Second Draw, Participating Holders shall have the opportunity to participate in the New Senior Loan Facility. On the RSA Date and the Funding Date, the New Senior Lenders who fund the Initial Draw shall become entitled on such date, subject to issuance, to a pro rata portion of shares of the Companys Common Stock (the Backstop Shares), representing 3.14% and 6.26%, respectively, of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3. The Backstop Shares shall be issued on the earliest of (1) the Closing Date; (2) the date on which the RSA terminates according to its terms, or (3) August 15, 2016. | |
Equity | The Backstop Shares shall be deemed earned by the New Senior Lenders as of the Funding Date, provided that the Backstop Shares shall not be issued to the New Senior Lenders until the earlier of (1) the Closing Date and (2) August 15, 2016.
On the Closing Date, each New Senior Lender shall receive a pro rata portion of shares of the Companys Common Stock (collectively, with the Backstop Shares, the New Senior Loan Shares), representing 18.80% (excluding Backstop Shares) of the total outstanding Common Stock of the Company on the Closing Date, on a fully diluted basis, as set forth in Schedule 3 hereto; provided that, if the stockholders of the Company have not then approved the issuance of these shares, then the Company will issue 19.9% of the outstanding shares of Common Stock to the New Senior Lenders and will covenant to issue the remaining 8.3% after such stockholder consent has been received, for the purpose of remaining in compliance with NASDAQ Listing Rule 5635.
The New Senior Loan Shares and the New Notes Shares shall be subject to mutual dilution and shall, together with shares issued under the Management Incentive Plan, dilute the existing Common Stock of the Company. The New Senior Loan Shares and the New Notes Shares shall not be dilutive to the Management Incentive Plan. | |
Maturity | January 1, 2018. | |
Restrictive Covenants | The New Senior Loan Facility will contain restrictive covenants, financial covenants, and selected maintenance covenants that are mutually acceptable to the Company and the New Senior Lenders, including, without limitation, that the proceeds of the New Senior Loan Facility and available cash shall be used in accordance with a budget mutually acceptable to the Company and the New Senior Lenders. | |
Governing Law | The New Senior Loan Facility and related transaction documents will be governed by New York law. |
10
Schedule 2
Supporting Holders
| Whitebox Advisors LLC |
| BlueMountain Capital Management, LLC |
| Morgan Stanley Investment Management Inc. |
| Aristides Capital LLC |
| Tegean Capital Management, LLC |
| Amzak Capital Management, LLC |
| Mr. John Pecora |
11
Schedule 3
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Term Sheet.
RSA Date Allocation of Common Stock*
As of the RSA Date, after giving effect to the Backstop Shares, on an as-issued basis1, and excluding the issuance of any other New Senior Loan Shares, New Notes Shares and MIP Shares, the allocation of Common Stock of the Company shall be as follows (based on 17,451,353 shares outstanding prior to the Funding Date):
Existing Common Stock |
96.86%2 | |
Management Incentive Plan |
0% | |
New Notes Shares |
0% | |
New Senior Loan Shares (other than Backstop Shares) |
0% | |
Backstop Shares |
3.14% |
Funding Date Allocation of Common Stock*
As of the Funding Date, after giving effect to the Backstop Shares, on an as-issued basis1, and excluding the issuance of any other New Senior Loan Shares, New Notes Shares and MIP Shares, the allocation of Common Stock of the Company shall be as follows (based on 17,451,353 shares outstanding prior to the Funding Date):
Existing Common Stock |
90.0%2 | |
Management Incentive Plan |
0% | |
New Notes Shares |
0% | |
New Senior Loan Shares (other than Backstop Shares) |
0% | |
Backstop Shares |
10.0% |
Closing Date Allocation of Common Stock*
As of the Closing Date, after giving effect to the issuance of the New Senior Loan Shares, the Backstop Shares, the New Notes Shares and the MIP Shares (as shown in the table below), the allocation of Common Stock of the Company shall be as follows (based on 17,451,353 shares outstanding prior to the Funding Date):
Initial Issuance of 60% of MIP Shares |
Fully-Diluted for All MIP Shares |
|||||||
Existing Common Stock |
1.32 | % | 1.26 | % | ||||
Management Incentive Plan3 |
6.00 | % | 10.00 | % | ||||
New Notes Shares |
64.48 | % | 61.74 | % |
1 | The Backstop Shares will deemed to be earned as of the RSA Date and the Funding Date as set forth in the allocation tables herein, but will be issued on the earliest of (1) the Closing Date; (2) the date on which the RSA terminates according to its terms, or (3) August 15, 2016. |
2 | The New Senior Lenders that fund the Initial Draw (as defined in Schedule 3 hereto) shall become entitled to receive the Backstop Shares on the Funding Date, provided that the New Senior Loan Shares shall not be issued to the New Senior Loan Lenders until the Closing Date. |
3 | Includes shares held by Messrs. Hastings, Beatty and Whiteley. |
12
New Senior Loan Shares (other than Backstop Shares)4 |
18.8 | % | 18.00 | % | ||||
Backstop Shares5 |
9.40 | % | 9.00 | % |
* | Excludes any impact of shares issuable in connection with Warrants. |
4 | Pre-dilution: 20.0%. |
5 | Pre-dilution: 10.0%. |
13
Schedule 4
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Term Sheet.
Topic |
Amendment | |
Term | New three-year terms, starting as of the Closing Date, with evergreen features providing for successive one year terms thereafter as contained in the current employment agreements. | |
Base Salary | No changes to 2016 base salary under the current employment agreements. Starting in 2017, annual increases in base salary will be set by the new board of directors (the New Board), provided that the New Board may not unilaterally decrease the base salary at any point without the consent of the executive. | |
Annual Cash Performance Award | No change to 2016 amounts, targets, calculation, or methodology, under the current employment agreements. Starting in 2017, the New Board can set Executive Goals but not the Target Percentages (as defined in the employment agreements). In addition, no more than 50% of any award may be in common stock of the Company. | |
Existing Management/Employee Equity | All issued equity compensation (LTIP shares, preferred shares, etc.) shall vest and convert into common shares immediately prior to the Closing Date and be treated as existing equity subject to dilution pursuant to the Term Sheet. | |
Existing MIP | All existing equity-based compensation programs shall be replaced by the Management Incentive Plan. | |
Severance | No change to existing severance packages under the current employment agreements; however, executives shall not be entitled to any severance if the executive voluntarily terminates the employment agreement other than for cause or good reason. | |
Non-compete | The non-compete shall last for one year with no additional severance, with the option to extend for an additional year in the Companys sole discretion, provided that the Company must pay the executive one years base salary and 100% of the target bonus of that base salary if it elects to extend. | |
Change of Control | Waived to allow for the Restructuring Transactions. | |
280G Gross-Up | To be deleted. | |
Constructive Dismissal | Revision to the definition of Good Reason in the current employment agreements to reflect that the New Board will have discretion to set base salary increases and annual bonuses and such adjustments will not constitute Good Reason, provided that the New Board may not unilaterally decrease the base salary at any point without the consent of the executive. | |
Indemnification | Employment agreements shall include indemnification by the Company against any officer or director liability related to the Restructuring Transactions. |
14
Exhibit B
New Senior Lenders (as of the date hereof)
| Whitebox Advisors LLC |
| BlueMountain Capital Management, LLC |
| Morgan Stanley Investment Management Inc. |
| Aristides Capital LLC |
| Tegean Capital Management, LLC |
| Amzak Capital Management, LLC |
| Mr. John Pecora |
24
Exhibit C
Pre-Syndication Initial Commitment Amounts
25
Exhibit D
Amendments to Employment Agreements
Amendments to Employment Agreements
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
Topic |
Amendment | |
Term | New three-year terms, starting as of the Closing Date, with evergreen features providing for successive one year terms as contained in the current employment agreements. | |
Base Salary | No changes to 2016 base salary under the current employment agreements. Starting in 2017, annual increases in base salary will be set by the new board of directors (the New Board), provided that the New Board may not unilaterally decrease the base salary at any point without the consent of the executive. | |
Annual Cash Performance Award | No change to 2016 amounts, targets, calculation, or methodology under the current employment agreements. Starting in 2017, the New Board can set Executive Goals but not the Target Percentages (as defined in the employment agreements). In addition, no more than 50% of any award may be in Common Stock. | |
Existing Management/Employee Equity | All issued equity compensation (LTIP shares, preferred shares, etc.) shall vest and convert into common shares immediately prior to the Closing Date and be treated as existing equity subject to dilution pursuant to the Term Sheet. | |
Existing MIP | All existing equity-based compensation programs shall be replaced by the Management Incentive Plan. | |
Severance | No change to existing severance package under the current employment agreements; however, executives shall not be entitled to any severance if the executive voluntarily terminates the employment agreement other than for cause or good reason. | |
Non-compete | The non-compete shall last for one year with no additional severance, with the option to extend for an additional year in the Companys sole discretion, provided that the Company must pay the executive one years base salary and 100% of the target bonus of that base salary if it elects to extend. | |
Change of Control | Waived to allow for the Restructuring Transactions. | |
280G Gross-Up | To be deleted. | |
Constructive Dismissal | Revision to the definition of Good Reason in the current employment agreements to reflect that the New Board will have discretion to set base salary increases and annual bonuses and such adjustments will not constitute Good Reason, provided that the New Board may not unilaterally decrease the base salary at any point without the consent of the executive. |
Topic |
Amendment | |
Indemnification | Employment agreements shall include indemnification by the Company against any officer or director liability related to the Restructuring Transactions. |
Exhibit E
Executives Executing Employment Agreements
| Jeff Hastings |
| Brian Beatty |
| Brent Whitely |
| Mike Scott |
| Darin Silvernagle |
| Trisha Gerber |
| Ryan Abney |
Exhibit F
Terms of Management Incentive Plan
Preliminary Management Incentive Plan Term Sheet
This management incentive plan term sheet sets forth an outline of certain key terms and conditions of the employment agreements between SAExploration Holdings, Inc. (the Company) and certain key executives set forth on Exhibit E. Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
On the Closing Date, the Company shall adopt the Management Incentive Plan, which shall reserve 10%, on a fully diluted basis, of the total shares of common stock outstanding as of the Closing Date (the MIP Shares) for distribution to covered employees on terms to be agreed with senior management. The Management Incentive Plan shall supersede any prior management or employee stock compensation plan of the Company in effect on the Closing Date. Senior management shall receive 60% of the MIP Shares on the Closing Date, of which 1/3 shall vest on each of (1) the earlier of (a) the first anniversary of the Closing Date and (b) the date the Company shall have received Alaskan tax credit certificates in a face amount of at least $25 million (the Tax Credit), and (2) each anniversary of the Closing Date for the two years thereafter in the form of:
(i) shares equal to 3% of the Companys outstanding Common Stock as of the Closing Date on a fully diluted basis; and
(ii) at-the-money incentive options to acquire shares equal to 3% of the Companys outstanding Common Stock as of the Closing Date, based on an equity value (a) if options are initially distributed on the first anniversary of the Closing Date or after the 60th calendar day following the Closing Date due to the receipt of the Tax Credit (the Tax Credit Valuation Date), the volume-weighted average price (the VWAP) per share of SAE Common Stock during the 30-day period ending on the date that is the 60th calendar day following the Closing Date or (b) if options are initially distributed due to the receipt of the Tax Credit prior to the 60th calendar date following the Closing Date, the VWAP per share of SAE Common Stock during the 30-day period ending on the date one day preceding any public announcement of the Tax Credit Valuation Date; provided, however, that if the Tax Credit Valuation Date occurs before the expiration of 30 days following the Closing Date, then the VWAP calculation period shall be the number of days between the Closing Date and the Tax Credit Valuation Date.
If any member of senior management terminates his or her employment without good reason within the first twelve months after the Closing Date, that employees vested MIP Shares or the cash proceeds thereof will be clawed back.
The remaining 40% of MIP Shares shall be granted to members of management and other key employees and distributed according to a vesting schedule to be determined by the New Board, provided, however, that the MIP Shares may not be used to fund any of the Annual Performance Awards as defined in Schedule 4 to the Term Sheet attached as Exhibit A.
Vesting of the MIP Shares will not be conditioned on any financial, operating or other performance metrics. Except for termination due to death, disability, termination without cause, termination for good reason or termination six (6) months prior to or within 12 months following a change in control, individuals need to be employed on each vesting date to receive settlement of the MIP Shares.
Exhibit G
Terms of Warrant Agreement
Warrant Term Sheet
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
Topic |
Provision | |
Series | The Company will issue two series of warrants (the Series A Warrants and Series B Warrants and, together, the Warrants). | |
Term | The Warrants will have five year terms. | |
Value | The Series A Warrants and Series B Warrants will each represent 2.25% of the outstanding shares of Common Stock as of the Closing Date. | |
Exercise price | The exercise price of the Series A Warrants will reflect a market capitalization of $112 million.
The Exercise price of the Series B Warrants will reflect a market capitalization of $140 million. | |
Exercisability | Exercise of the Warrants shall be contingent upon the receipt by the Company of Alaska tax credit certificates in a face amount of at least $25 million.
The Warrants will become exercisable only in the 30 days before they expire. | |
Adjustments to Exercise Price | The exercise prices of the Warrants shall be adjusted upon customary anti-dilution events, including:
an issuance of Common Stock as a dividend or distribution to all holders of Common Stock;
a change in the total number of shares of Common Stock by way of a subdivision, combination, split, reverse split, or reclassification;
an issuance as a dividend or distribution to all holders of Common Stock of evidences of indebtedness or securities of the Company or any other person; and
payment of any tender offer or exchange offer for Common Stock in which the consideration exceeds the fair value of the Common Stock as of the open of business on the second business day preceding the expiration date of the tender offer or exchange offer. | |
Cashless Exercise | The Warrant Agreement will contain a customary cashless exercise provision. | |
Registration Rights | Holders of Warrants will be entitled to the benefit of a customary resale registration rights agreement. |
Listing | The Company will use commercially reasonable efforts to list the Warrants and the shares issuable upon exercise of the Warrants on the Nasdaq Global Market, or whatever exchange the Companys Common Stock is then listed on. |
Exhibit H
Governance Terms
Corporate Governance Term Sheet
Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
Topic |
Provision | |
Capital Stock |
||
Common stock |
55,000,000 authorized shares of Common Stock, par value $.0001 per share.
The number of authorized shares can be increased only with a majority vote of the stockholders.
One vote per share. | |
Preferred stock |
1,00,000 authorized shares of preferred stock, par value $.0001 per share.
Preferred stock may be issued by the Board with whatever rights, privileges or preferences they determine. | |
Pre-emptive rights |
None. | |
Directors |
||
Initial Directors |
Effective as of the Closing Date, the Board will initially be made up of seven directors, to include: one member of senior management, four directors chosen by the Supporting Holders, one director chosen by Whitebox and one director chosen by Blue Mountain.
Each of BlueMountain and Whitebox shall have the right to choose one director to be nominated by SAE for so long as each of their equity holdings following the Closing Date exceeds 10% of the total outstanding shares. Subject to the foregoing, and the director nomination section of this Term Sheet, following the Closing Date, other non-management directors shall be nominated by the Board and approved by shareholder vote. | |
Number |
No less than one or more than nine directors as determined by resolution of the board. The Board will initially be made up of seven directors. | |
Election |
Directors are elected by a majority of the stockholders unless appointed as described above. | |
Staggered board |
There will be three classes of directors each with staggered terms, with individual seats and each of the three classes to be agreed upon; provided that the number of directors in each class shall be as nearly equal as possible. |
Topic |
Provision | |
Removal of directors |
A majority vote of the stockholders is required to remove a director, except that the initially appointed directors can only be removed by the entity that appointed them. | |
Vacancies |
Vacancies are filled by a majority vote of the directors unless the vacancy is caused by the departure of an appointed director. The vacant seat of an appointed director will be filled by the entity that appointed the director. | |
Indemnification |
Directors and officers have guaranteed rights to indemnification to the fullest extent permitted by Delaware General Corporation Law. | |
Insurance |
Company will maintain Director and Officer liability insurance. | |
Action without a meeting |
Directors may act by unanimous written consent. | |
Stockholders |
||
Stockholder proposals |
Stockholders must give notice of a proposal not less than 60 or more than 90 days before the meeting. If this is not possible, they must give notice within the 10 days of the notice of an upcoming annual meeting being mailed. They must disclose the matter to be proposed, why it is being proposed, any material interest of the stockholder in such business and information regarding their interests in the company, including any voting arrangements. The stockholder must also certify that they will attend the meeting and disclose whether they intend to distribute a proxy statement or form of proxy to the stockholders. | |
Director nominations |
Stockholder must give notice not less than 60 or more than 90 days before the meeting. If this is not possible, must give notice within the 10 days of a notice of annual meeting being mailed. They must disclose details of nominee that would be required for the solicitation of proxies under Section 14 of the Exchange Act. The nominating stockholder must provide personal details of the proposed director, information regarding their interests in the company, including any voting arrangements. The stockholder must also provide personal details certify that they will attend the meeting and disclose whether they intend to distribute a proxy statement or form of proxy to the stockholders. | |
Meetings |
||
Special meetings |
Only the board may call a special meeting. | |
Action without a meeting |
Any action required to be taken at an annual or special meeting may be taken without a meeting if consent in writing is obtained by the holders of outstanding stock having the not less than the minimum number of votes to authorize or take such action. |
Topic |
Provision | |
Amendments |
||
Amendments to Organization Documents | Amendments to Organizational Documents require a majority vote of the stockholders. |
Exhibit I
Joinder Agreement
Joinder Agreement
[ ], 2016
The undersigned (Joining Holder) hereby acknowledges that it has read and understands the Restructuring Support Agreement, dated as of [ ], 2016, a copy of which is attached hereto as Annex I (as it may be amended, supplemented, or otherwise modified from time to time, the Restructuring Support Agreement), among SAE and the Supporting Holders. Capitalized Terms used and not otherwise defined herein shall have the meanings set forth in the Restructuring Support Agreement.
1. Agreement to be Bound. The Joining Holder hereby agrees to be bound by all of the terms of the Restructuring Support Agreement. The Joining Holder shall hereafter be deemed to be a Supporting Holder and a Party for all purposes under the Restructuring Support Agreement.
2. Representations and Warranties. With respect to the aggregate principal amount of Existing Notes set forth below its name on the signature page hereof, the Joining Holder hereby makes the representations and warranties of the Supporting Holders set forth in Section 4 of the Restructuring Support Agreement to each other Party.
3. Governing Law. This joinder agreement (the Joinder Agreement) to the Restructuring Support Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.
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IN WITNESS WHEREOF, the Joining Holder has caused this Joinder Agreement to be executed as of the date first written above.
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Principal Amount of Existing Notes: $ | ||
Notice Address: |
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With a copy to: | ||
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