Item 1.01 Entry into a Material Definitive Agreement.
On September 22, 2017, SAExploration, Inc. (the “Borrower”), a domestic subsidiary of SAExploration Holdings, Inc. (“Holdings”), entered into the First Amended and Restated Credit and Security Agreement (the “New Credit Agreement”), by and among the Borrower,
Holdings, SAExploration Sub, Inc. (“SAE Sub”), SAExploration Seismic Services (US), LLC (“SAE Seismic”), and NES, LLC (together with Holdings, SAE Sub, and SAE Seismic, the “Guarantors”), the lenders from time to time party thereto (the “Lenders”) and Cantor Fitzgerald Securities, as agent (the “New Agent”). The New Credit Agreement amends and restates that certain Credit and Security Agreement, dated as of November 6, 2014, by and among the
Borrower
, the Guarantors and Wells Fargo Bank, National Association, as lender (the “Original Lender”) (as amended by that certain First Amendment to Credit and Security Agreement, dated as of June 29, 2016, the “Original Credit Agreement”).
The New Credit Agreement provides for up to $16.0 million in borrowings secured primarily by the
Borrower
’s North American assets, mainly accounts receivable and equipment, subject to certain exclusions and exceptions as set forth in the New Credit Agreement. The proceeds of the credit facility will primarily be used to fund the
Borrower
’s working capital needs for its operations and for general corporate purposes. After giving effect to the amendment and restatement of the Original Credit Agreement and the entry into the New Credit Agreement, there was an outstanding balance of $5.0 million on September 22, 2017, which included approximately $2.6 million of loans outstanding under the Original Credit Agreement. Additional borrowings under the credit facility are subject to Lenders’ sole discretion and must be in minimum increments of $1.0 million. Any increased amount approved by the Lenders will also be subject to the terms and conditions of the New Credit Agreement.
Borrowings made under the credit facility will bear interest at a rate of 10.25% per annum for the period from September 22, 2017 through and including March 22, 2018, 10.75% per annum for the period from March 23, 2018 through and including September 22, 2018 and 11.75% per annum for the period from September 23, 2018 and thereafter. The credit facility will mature on January 2, 2020 (subject to an earlier maturity date of September 14, 2018 if certain indebtedness remains outstanding at such time), unless terminated earlier.
The New Credit Agreement contains customary affirmative and negative covenants similar to those in the Original Credit Agreement, including, but not limited to, (i) commitments to maintain and deliver to the Lenders, as required, certain financial reports, records and other items, and (ii) restrictions, subject to certain exceptions under the New Credit Agreement, on the ability of the Borrower to incur indebtedness, create or incur liens, enter into fundamental changes to corporate structure or to the nature of the business of the Borrower, dispose of assets, permit a change in control, acquire non-permitted investments, enter into affiliate transactions or make distributions. The New Credit Agreement also contains representations, warranties, covenants and other terms and conditions, including relating to the payment of fees to the Lenders, which are customary for agreements of this type.
The New Credit Agreement also provides for customary events of default. If an event of default occurs and is continuing, then the Lenders may, among other options as described in the New Credit Agreement, declare the obligations of the Borrower to be due and payable immediately or declare the funding obligations of the Lenders terminated immediately, subject to the terms of that certain Amended and Restated Intercreditor Agreement, dated as of June 29, 2016 (the “Intercreditor Agreement”), by and among the Original Lender, Wilmington Savings Fund Society, FSB, Delaware Trust Company and the Additional Noteholder Agent (as defined in the Intercreditor Agreement).
The foregoing description of the
New Credit Agreement
, 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
New Credit Agreement
, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
The representations and warranties of the Borrower in the New Credit Agreement were made only for purposes of that agreement and as of specific dates and were solely for the benefit of the New Agent and the Lenders. The New Credit Agreement is a contractual document that establishes and governs the legal relations among the parties thereto and is not intended to be a source of factual, business or operational information about the Borrower and its affiliates. The representations and warranties made by the Borrower in the New Credit Agreement may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, investors and security holders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances.