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): March 11, 2013
GEOKINETICS INC.
(Exact name of registrant as specified in its charter)
Delaware |
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001-33460 |
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94-1690082 |
(State or other jurisdiction of |
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(Commission File Number) |
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(I.R.S. Employer |
1500 CityWest Blvd.
Suite 800
Houston, Texas 77042
(Address of principal executive offices) (Zip Code)
(713) 850-7600
(Registrants telephone number, including area code)
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240-14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))
o 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.
On March 8, 2013, Geokinetics Inc. (the Company), Geokinetics Holdings USA, Inc., a wholly owned subsidiary of the Company (Holdings), and the Companys other direct and indirect domestic subsidiaries (together with the Company and Holdings, the Debtors) entered into Amendment Two (the Amendment) to the Restructuring Support Agreement (as amended, the Agreement), dated January 15, 2013, with American Securities Opportunities Advisors, LLC, Gates Capital Management, Inc., and other parties thereto, as beneficial owners of, or advisors, nominees or investment managers for beneficial owners of (collectively, the Noteholders), more than 70% in aggregate principal amount of Holdings 9.75% Senior Secured Notes due 2014 (collectively, the Notes), and Avista Capital Partners, L.P. and Avista Capital Partners (Offshore), L.P. (the Preferred Stockholders), the largest holders of the Companys outstanding Series B-1 Senior Convertible Preferred Stock, Series C-1 Senior Preferred Stock and Series D Junior Preferred Stock. The Amendment, among other things, extends the deadline for the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court) to confirm the Joint Chapter 11 Plan of Reorganization of the Debtors (the Plan) from 35 days to 45 days after the Debtors file Chapter 11 petitions and for the occurrence of the effective date of the Plan from 50 days to 60 days after the Debtors file Chapter 11 petitions before in either case the Noteholders may terminate the Agreement.
Item 1.03 Bankruptcy or Receivership.
On March 10, 2013, the Debtors filed voluntary petitions for relief under Chapter 11 of Title 11 of the U.S. Code (the Bankruptcy Code) in the Bankruptcy Court. The Debtors Chapter 11 cases are being jointly administered under the Companys caption and case number, In re: Geokinetics Inc. et al., Chapter 11 Case No. 13-10472. The pre-packaged Plan, which remains subject to the approval of the Bankruptcy Court, was approved by a large majority of the Companys stakeholders. The Debtors plan to continue to operate their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and order of the Bankruptcy Court.
On March 11, 2013, the Company issued a press release announcing the filing of the Chapter 11 petitions, a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K.
Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial Obligation under an Off-Balance Sheet Arrangement.
The filing of the Chapter 11 petitions on March 10, 2013 constituted an event of default and triggered the acceleration of a direct financial obligation as follows:
· Under the Amended and Restated Credit Agreement, dated as of August 11, 2011, among the Company, Holdings and Whitebox Advisors, LLC, as administrative agent and collateral agent, and the lenders party thereto, the commitment of the lenders to make loans automatically terminated and the unpaid principal amount of all outstanding loans and interest and other amounts thereunder became
automatically due and payable as a result of the filing of the Chapter 11 petitions. As of March 10, 2013, the obligations under the credit agreement included $50 million in aggregate principal amount outstanding plus accrued and unpaid interest and other payments.
· Under the Indenture, dated as of December 23, 2009, for the 9.75% Senior Secured Notes due 2014 among the Company, Holdings and U.S. Bank National Association, as trustee, all of the outstanding Notes became due and payable immediately as a result of the filing of the Chapter 11 petitions. As of March 10, 2013, there was $300 million in aggregate principal amount plus accrued and unpaid interest and other payments on the outstanding Notes.
Any efforts to enforce the payments or other obligations under these agreements or instruments are currently stayed as a result of the filing of the Chapter 11 petitions.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. |
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Description |
10.1 |
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Amendment Two, dated as of March 5, 2013, to the Restructuring Support Agreement dated as of January 15, 2013, by and among the Company, Holdings, Geokinetics Services Corp., Geokinetics Processing, Inc., Geokinetics Acquisition Company, Geokinetics USA, Inc., Geokinetics International Holdings, Inc., Geokinetics Management, Inc., Geokinetics International, Inc., and Advanced Seismic Technology, Inc., the Noteholders and the Preferred Stockholders |
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99.1 |
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Press release dated March 11, 2013 |
SIGNATURES
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.
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GEOKINETICS INC. | ||
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Date: March 11, 2013 |
By: |
/s/ William L. Moll. Jr. | |
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William L. Moll, Jr. Vice President, General Counsel and Corporate Secretary |
EXHIBIT INDEX
Exhibit No. |
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Description |
10.1 |
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Amendment Two, dated as of March 5, 2013, to the Restructuring Support Agreement dated as of January 15, 2013, by and among the Company, Holdings, Geokinetics Services Corp., Geokinetics Processing, Inc., Geokinetics Acquisition Company, Geokinetics USA, Inc., Geokinetics International Holdings, Inc., Geokinetics Management, Inc., Geokinetics International, Inc., and Advanced Seismic Technology, Inc., the Noteholders and the Preferred Stockholders |
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99.1 |
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Press release dated March 11, 2013 |
Exhibit 10.1
AMENDMENT TWO TO
RESTRUCTURING SUPPORT AGREEMENT
THIS AMENDMENT TWO TO RESTRUCTURING SUPPORT AGREEMENT (this Amendment) is dated as of March 5, 2013, by and among (i) Geokinetics Inc. on behalf of itself and each of its direct and indirect domestic subsidiaries and affiliates (collectively, the Company), which include: (a) Geokinetics Holdings USA, Inc., (b) Geokinetics Services Corp., (c) Geokinetics Processing, Inc., (d) Geokinetics Acquisition Company, (e) Geokinetics USA, Inc., (f) Geokinetics International Holdings, Inc., (g) Geokinetics Management, Inc., (h) Geokinetics International, Inc., and (i) Advanced Seismic Technology, Inc.; (ii) American Securities Opportunities Advisors, LLC (American Securities), Gates Capital Management, Inc. (Gates) and the other undersigned holders (the Noteholders), each as the beneficial owners (or advisor, nominee or investment manager for beneficial owner(s)) of the 9.75% Senior Secured Notes due 2014 issued by Geokinetics Holdings USA, Inc. and, if and as applicable, as lenders under that certain Amended and Restated Credit Agreement dated as of August 12, 2011; and (iii) Avista Capital Partners, L.P. and Avista Capital Partners (Offshore), L.P. (the Preferred Equity Holders and, together with the Company and the Noteholders, each referred to as a Party and collectively referred to as the Parties), each as the beneficial owners (or advisor, nominee or investment manager for beneficial owner(s)) of preferred equity interests in Geokinetics Inc. comprised of Series B-1 Senior Convertible Preferred Stock and Series C-1 Senior Preferred Stock as well as junior preferred equity interests in Geokinetics Inc. comprised of Series D Junior Preferred Stock.
WITNESSETH:
WHEREAS, the Company, Noteholders, and Preferred Equity Holders are party to that certain Restructuring Support Agreement, dated as of January 15, 2013 (together with the Amendment (defined below), the Support Agreement);
WHEREAS, the Company, Noteholders, and Preferred Equity Holders entered into that certain Amendment One to Restructuring Support Agreement, dated as of February 4, 2013 (the Amendment);
WHEREAS, capitalized terms used herein without definition shall have the meanings given to such terms in the Support Agreement (as amended hereby);
WHEREAS, the Parties wish to amend certain milestones set forth in the Support Agreement; and
WHEREAS, the Support Agreement may be amended in accordance with Section 12 thereof and the consent of the Company, Noteholders, and Preferred Equity Holders is required in connection with such amendment.
NOW, THEREFORE, for good and valuable consideration (receipt and sufficiency of which are hereby acknowledged), and intending to be legally bound hereby, the parties hereto agree as follows:
1. Recitals. The recitals set forth above are incorporated herein by reference and are expressly acknowledged and agreed to by the parties hereto.
2. Amendments to the Support Agreement.
(A) Section 5(a)(6). Section 5(a)(6) of the Support Agreement is hereby amended to replace 35 days where it appears with 45 days.
(B) Section 5(a)(7). Section 5(a)(7) of the Support Agreement is hereby amended to replace 50 days where it appears with 60 days.
3. Amendments to Exhibit 1 to Restructuring Term Sheet.
(A) The sixth bullet point in the fourth row of Section VII. Certain Documentation Matters of Exhibit 1 to the Restructuring Term Sheet, entitled Milestones, is hereby amended to replace 35 days where it appears with 45 days.
(B) The seventh bullet point in the fourth row of Section VII. Certain Documentation Matters of Exhibit 1 to the Restructuring Term Sheet, entitled Milestones, is hereby amended to replace 50 days where it appears with 60 days.
4. No Other Changes. Except as modified hereby, all of the terms and provisions of the Support Agreement shall remain in full force and effect. This Amendment shall be construed in connection with and as a part of the Support Agreement and, except as expressly contemplated by this Amendment, all terms, conditions and covenants contained in the Support Agreement are hereby ratified and shall be and remain in full force and effect.
5. References to the Support Agreement. In furtherance of the foregoing, all references in the Support Agreement to this Agreement or to the Restructuring Term Sheet shall mean the Support Agreement or the Restructuring Term Sheet, respectfully, each as amended as of the date hereof and as may be further amended, from time to time hereafter.
6. Counterparts; Electronic Signatures. This Amendment may be executed in multiple counterparts, each of which, when executed, will be deemed an original, and all of which will constitute but one and the same instrument. A signature of a Party transmitted to the other Party by facsimile, PDF or other electronic means shall constitute the original signature of such Party for all purposes.
7. Incorporation by Reference. Sections 12 through 31 of the Support Agreement, inclusive, are incorporated herein in their entirety by reference.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Amendment Two to Restructuring Support Agreement to be duly executed and delivered as of the date first above written.
Geokinetics Inc. |
Geokinetics USA, Inc. | |||
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By: |
/s/ Gary L. Pittman |
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By: |
/s/ Gary L. Pittman |
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Gary L. Pittman |
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Gary L. Pittman | |
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Geokinetics Holdings USA, Inc. |
Geokinetics International Holdings, Inc. | |||
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By: |
/s/ Gary L. Pittman |
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By: |
/s/ Gary L. Pittman |
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Gary L. Pittman |
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Gary L. Pittman | |
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Geokinetics Services Corp. |
Geokinetics Management, Inc. | |||
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By: |
/s/ Gary L. Pittman |
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By: |
/s/ Gary L. Pittman |
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Gary L. Pittman |
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Gary L. Pittman | |
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Geokinetics Processing, Inc. |
Geokinetics International, Inc. | |||
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By: |
/s/ Gary L. Pittman |
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By: |
/s/ Gary L. Pittman |
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Gary L. Pittman |
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Gary L. Pittman | |
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Geokinetics Acquisition Company |
Advanced Seismic Technology, Inc. | |||
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By: |
/s/ Gary L. Pittman |
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By: |
/s/ Gary L. Pittman |
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Gary L. Pittman |
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Gary L. Pittman | |
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[Signature Page to Amendment Two To Restructuring Support Agreement]
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American Securities Opportunities Advisors, LLC | ||
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ASOF II Investments, LLC (ASOF II) | ||
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American Securities Opportunity Fund, L.P. (ASOF) | ||
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American Securities Opportunities Fund (B), LP (ASOFB) | ||
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By: |
/s/ Lawrence First | |
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Name: |
Lawrence First | |
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Title: |
Managing Director | |
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Telephone: |
(212) 476-4971 | |
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[Signature Page to Amendment Two To Restructuring Support Agreement]
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Gates Capital Management, Inc. | ||
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By: |
/s/ Jeffrey L. Gates | |
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Name: |
Jeffrey L. Gates | |
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President | |
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Telephone: |
(212) 626-1421 | |
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Facsimile: |
(212) 626-1417 | |
[Signature Page to Amendment Two To Restructuring Support Agreement]
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Avista Capital Partners (Offshore), L.P. | ||
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By: |
/s/ Jeff Gunst | |
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Name: |
Jeff Gunst | |
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Authorized Signatory | |
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Telephone: |
(212) 593-6900 | |
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Facsimile: |
(212) 593-6901 | |
[Signature Page to Amendment Two To Restructuring Support Agreement]
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Avista Capital Partners, L.P. | ||
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By: |
/s/ Jeff Gunst | |
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Name: |
Jeff Gunst | |
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Title: |
Authorized Signatory | |
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Telephone: |
(212) 593-6900 | |
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Facsimile: |
(212) 593-6901 | |
[Signature Page to Amendment Two To Restructuring Support Agreement]
Exhibit 99.1
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NEWS RELEASE |
Geokinetics Files Voluntary Plan of Reorganization
HOUSTON, TEXAS March 11, 2013 Geokinetics Inc. (OTC: GEOK) announced today that it and its domestic subsidiaries have filed voluntary petitions under chapter 11 of title 11 of the United State Code in the United States Bankruptcy Court for the District of Delaware to complete their previously announced financial restructuring of the Company designed to restore the Company to long-term financial health. The Company intends to continue operating in the normal course of business without interruption and the restructuring is not expected to have an impact on the Companys operations.
The pre-packaged plan of reorganization, which has been overwhelmingly approved by the Companys stakeholders but remains subject to Bankruptcy Court approval, provides for the payment in full of the Companys secured credit facility, for the conversion of the $300 million (plus accrued and unpaid interest) of the Companys senior secured notes into newly issued common equity of the reorganized Company representing 100% of the reorganized Companys issued and outstanding common stock after the issuance (subject to dilution for a management incentive plan and distributions with respect to the debtor-in-possession financing described below) and for the payment of allowed general unsecured claims in full either at the conclusion of the chapter 11 case or in the ordinary course of business. The Company expects to receive Bankruptcy Court approval of its pre-packaged plan within 45 days.
To facilitate the chapter 11 process, the Company and certain holders of the Companys senior secured notes have agreed to an up to $25 million debtor-in-possession term loan to fund, among other things, the Companys working capital needs while in chapter 11. The term loan will be paid off in common stock of the reorganized Company at a discount to plan value, as provided in the Companys plan of reorganization.David J. Crowley, the President and Chief Executive Officer of the Company, commented, Today we have taken a decisive step to strengthen our balance sheet and emerge a stronger company that is well-positioned for growth on the horizon in all three product lines and enhances profitability, while maintaining our commitments to our customers, employees and vendors.
The Company has filed a series of first day motions to allow the Company to continue to operate in the ordinary course of business during the confirmation process. The first day motions ask the United States Bankruptcy Court in the District of Delaware to approve, among other things, the payment of wages, salaries and other employee benefits as well as payments to certain critical vendors and foreign vendors.
In connection with the debtor in possession financing discussed above, each holder of the Companys senior secured notes that is an accredited investor holding at least $1,000,000 in aggregate principal amount of the senior secured notes may elect to be a lender under the debtor-in-possession financing by contacting the agent for the debtor-in-possession financing within 5 days of entry of the interim order approving the debtor-in-possession financing and executing the necessary documents as required by the agent, as set forth in and subject to the interm order approving the debtor-in-possession financing that is entered by the Bankruptcy Court. Such eligible senior secured noteholders may contact the agent by sending an email to Bobbie Young (byoung@cantor.com) and to Nate Plotkin (nplotkin@cantor.com), with a copy to Stephen Castro (Stephen.Castro@kayescholer.com) and Emil Buchman (Emil.Buchman@friedfrank.com).
About Geokinetics Inc.
Geokinetics Inc. is a leading provider of seismic data acquisition, seismic data processing services and multi-client seismic data to the oil and gas industry worldwide. Headquartered in Houston, Texas,
Geokinetics is the largest Western contractor acquiring seismic data onshore and in transition zones in oil and gas basins around the world. Geokinetics has the crews, experience and capacity to provide cost-effective world class data to its international and North American clients. For more information on Geokinetics, visit www.geokinetics.com.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company has based these forward-looking statements on its current expectations and projections about future events based upon knowledge of facts as of the date of this press release and its assumptions about future events. These forward-looking statements are subject to various risks and uncertainties that may be outside the Companys control, including the outcome and timing of various approvals and confirmations by the Bankruptcy Court. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Contact:
David J. Crowley
Chief Executive Officer
Geokinetics
(713) 850-7600