In addition, to the ABL Forbearance Agreement, the parties thereto have agreed to an amendment to the ABL Agreement, on the terms substantially as set forth in an exhibit to the ABL Forbearance Agreement (the “ABL Amendment”), and have agreed to use commercially reasonable efforts to promptly execute and deliver the ABL Amendment and cause the effectiveness thereof to occur and for the subsequent advances in the amount of $8 million (collectively, the “Advance”) to be funded under the ABL Agreement by no later than September 27, 2019, in accordance with the ABL Amendment. The ABL Amendment will amend the ABL Agreement to, among other things, (i) allow for the Advance to the Borrower and (ii) make certain other modifications to the ABL Agreement. Upon the effectiveness of the ABL Amendment, the Borrower expects to borrow the Advance and to repay in full the $7 million principal balance of its 10% Senior Notes due 2019, with the remainder to be used for additional working capital.

The foregoing description of the Forbearance Agreements is a summary only and is qualified in its entirety by reference to the complete text of (i) the ABL Forbearance Agreement, attached as Exhibit 10.1 hereto, (ii) the Term Loan Forbearance Agreement, attached as Exhibit 10.2 hereto, and (iii) the Convertible Notes Forbearance Agreement, attached as Exhibit 10.3 hereto, each incorporated herein by reference.

Item 8.01 Other Events.

Ongoing Discussions

The Company is continuing its discussions with the Forbearing Parties regarding a waiver of the events of default specified in the Forbearance Agreements. The Forbearing Parties constitute the required percentage of holders to agree to any waivers or amendments to the relevant Debt Instrument. The Company expects that the Forbearance Agreements and the consummation of the ABL Amendment will allow these discussions to continue while the Company works to complete the restatement of its financial statements, as disclosed in the Company’s Current Reports on Form 8-K filed with the Securities and Exchange Commission on August 16, 2019, and August 22, 2019. The Company cannot make any assurances regarding the timing of the restatement or whether the Company will be successful in receiving the requested waivers. If the Company is not successful in these efforts, it would likely have a material adverse effect on the Company’s business, financial condition and results of operations.

Derivative Lawsuit

On September 6, 2019, a purported stockholder, M. Shane Hamilton (the “Plaintiff”), filed a stockholder derivative lawsuit on behalf of the Company against certain former and current executive officers and directors of the Company named therein (the “Defendants”) in the U.S. District Court for the District of Delaware captioned M. Shane Hamilton, derivatively on behalf of SAExploration Holdings, Inc., v. Jeff Hastings, Brian Beatty, Brent Whiteley, L. Melvin Cooper, Gary Dalton, Michael Faust, Alan B. Menkes and Jacob Mercer. The derivative complaint generally alleges (i) breaches by the Defendants of their fiduciary duties as directors and/or officers of the Company, (ii) unjust enrichment, (iii) waste of corporate assets and (iv) violations of Section 14(a) of the Securities Exchange Act of 1934. The derivative complaint seeks, among other things, relief (i) directing the Company and the Defendants to take actions to reform and improve the Company’s corporate governance and internal procedures, (ii) awarding the Company restitution from the Defendants, and (iii) awarding the Plaintiff’s costs and attorneys’ and experts’ fees.

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Forward-looking Statements

Except for statements of historical fact, the matters discussed herein are “forward-looking statements” within the meaning of the applicable U.S. federal securities laws. The words “may,” “possible,” “estimates”, “expects,” “believes” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements, including statements regarding the possible impact of the matters summarized in this Form 8-K, may or may not be realized, and differences between estimated results and those actually realized may be material.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, risks relating to the following known and unknown things:

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Each of these risks, and the known and unknown consequences of these risks, could have a material negative impact on the Company, its business and prospects. As of the date of this Form 8-K, the Company cannot make any assurances regarding the impact or outcome of these risks. Forward-looking statements reflect the views of the Company as of the date hereof. The Company does not undertake to revise these statements to reflect subsequent developments, other than in compliance with U.S. federal securities laws and the Company’s determination that any such revised disclosure is necessary or advisable to do.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

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SAExploration Holdings, Inc. Exhibit
EX-10.1 2 d809405dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 EXECUTION VERSION FORBEARANCE AGREEMENT This FORBEARANCE AGREEMENT (this “Agreement”),…
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