Exhibit 10.1

RESTRUCTURING SUPPORT AGREEMENT

dated as of December 19, 2017

among

SAExploration Holdings, Inc.

SAExploration Sub, Inc.

SAExploration, Inc.

SAExploration Seismic Services (US), LLC

NES, LLC

and

the Supporting Holders Identified Herein

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This RESTRUCTURING SUPPORT AGREEMENT (as amended, supplemented, or otherwise
modified from time to time, and collectively with all exhibits thereto,
including, without limitation, the term sheet (the “Term Sheet”) attached hereto
as Annex A, this “Agreement”) is dated as of December 19, 2017, among:
(i) SAExploration Holdings, Inc. (“SAE” and collectively with all of its
domestic subsidiaries and affiliates, the “Company”) on behalf of itself and the
guarantors party to that certain indenture, dated as of July 27, 2016 (the
“Second Lien Notes Indenture”) among SAE, as issuer, each of such guarantors
party thereto (each, a “Guarantor” and collectively, the “Guarantors”), and
Wilmington Savings Fund Society, FSB, as trustee (together, and with its
permitted successors and assigns, the “Indenture Trustee”) pursuant to which SAE
issued its 10.000% Senior Secured Second Lien Notes due 2019 (the “Second Lien
Notes”) and that certain indenture, dated as of July 2, 2014 (the “Stub Notes
Indenture”), among SAE, as issuer, each of such guarantors party thereto, and
Wilmington Savings Fund Society, FSB, as successor trustee pursuant to which SAE
issued its 10.000% Senior Secured Notes due 2019 (the “Stub Notes”, and the
holders thereof, the “Stub Holders”) and (ii) the holders of the Second Lien
Notes party hereto from time to time in their capacities as such (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.

RECITALS

WHEREAS, the Parties have agreed to a financial restructuring of the Company
that will be implemented consistent with the terms and conditions set forth
herein and in the Term Sheet (the “Restructuring”);

WHEREAS, this Agreement is the product of arm’s-length, good-faith discussions
between the Parties and their respective professional representatives; and

WHEREAS, the Company 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:

 

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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 each Guarantor shall have executed and
delivered counterpart signature pages of this Agreement and (ii) Supporting
Holders representing not less than 85% of the aggregate principal amount of
Second Lien Notes outstanding shall have executed and delivered counterpart
signature pages of this Agreement to counsel for the Company (such date,
the “RSA Effective Date”). The date on which the Restructuring is consummated is
referred to herein as “Closing Date.”

Section 2. Commitments Regarding the Restructuring

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;

(b) to provide to counsel and investment banker for the Company on a
confidential basis a schedule showing the principal amount of Second Lien Notes
held by such Supporting Holder (the “Confidential Schedule of Holdings”), which
shall not be disclosed by such counsel or investment banker to any third party
without such Supporting Holder’s prior written consent;

(c) to assist the Company with the implementation and consummation of the
Restructuring and take any and all commercially reasonable and appropriate
actions in furtherance of the Restructuring as contemplated under this
Agreement, provided that such actions shall be limited to review and negotiation
of the applicable Definitive Documents (as defined below), which Definitive
Documents shall contain terms and conditions consistent in all material respects
with this Agreement, and execution of the same (to the extent any Definitive
Documents require execution thereof by such Supporting Holder to implement and
consummate the Restructuring in accordance with the terms hereof); 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 unless and until all of the
conditions to effectiveness of the Restructuring (including the Exchange Offer
and the Second Lien Consent Solicitation and Stub Notes 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 or have been waived with the prior written consent of the
Required Supporting Holders (defined below);

(d) to support the Exchange Offer on the terms and conditions thereof summarized
in Annex A hereto and implemented pursuant to the Definitive Documents and,
subject to the receipt of the Offering Memorandum (as defined below), to
(i) tender its Second Lien Notes for exchange on the first day of the Exchange
Offer, in accordance with the terms and conditions set forth in

Annex A; and (ii) not withdraw such tenders and consents, with the understanding
that,

 

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among other things, SAE and the Indenture Trustee will, at the appropriate time,
enter into a supplemental indenture to supplement the Second Lien Notes
Indenture to permit the entry into the Exchange Offer and related matters on the
Closing Date in accordance with Annex A and that consents will be irrevocable
thereafter, provided that the Supporting Holders shall have no obligation to
tender their Second Lien Notes and may withdraw any tenders after the
termination of this Agreement pursuant to Section 4.01 and Section 4.02;

(e) not to (i) object to SAE’s implementation and effectuation of the
Restructuring on the terms and conditions set forth in this Agreement;
(ii) object to or otherwise commence or participate in any proceeding to oppose
any of the Restructuring and (iii) directly or indirectly (1) seek, solicit,
support, encourage, or vote or cause to be voted (to the extent applicable) all
claims with respect to the Second Lien Notes for which such Supporting Holder
has voting power for, consent to, or encourage any 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 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;

(f) to acknowledge that, on the Closing Date, SAE’s existing executives
identified on Exhibit B will remain in their current positions, subject to the
amended and ratified Employment Agreements as described in Exhibit A;

(g) to the extent applicable, in their capacity as (i) parties to that certain
Amended and Restated Credit and Security Agreement, dated as of September 22,
2017 (as may be amended or modified from time to time, the “ABL Credit
Agreement”), and/or (ii) parties to that certain Term Loan and Security
Agreement, dated as of June 29, 2016, as amended by Amendment No. 1 to Term Loan
and Security Agreement, dated as of October 24, 2016, as further amended by
Amendment No. 2 to Term Loan and Security Agreement, dated as of September 8,
2017 (the “Term Loan Agreement”), to support amending, as applicable, the ABL
Credit Agreement and Term Loan Agreement as needed to effectuate the
Restructuring;

(h) as shareholders of Common Stock of SAE, to the extent applicable, to support
and take action needed to effectuate the Restructuring; and

(i) not pursue, propose, support, or encourage the pursuit, proposal, or support
of any other restructuring or reorganization for or the liquidation of the
Company or object to, or support any other person’s efforts to oppose or object
to, in each case, directly or indirectly, the Restructuring or any of the
transactions contemplated herein.

2.02 Obligations of the Company.

(a) Affirmative 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 Second Lien
Notes Indenture, as applicable, agrees to satisfy the following covenants and
makes the following acknowledgements and commitments:

(i) to support the Restructuring;

 

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(ii) to implement and consummate the Restructuring in a timely manner and take
any and all commercially reasonable and appropriate actions in furtherance of
the Restructuring, as contemplated under this Agreement;

(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 take all necessary corporate action to authorize such number of
additional shares of Common Stock and Preferred Stock as shall be sufficient to
permit the issuance of all shares of Common Stock and Preferred Stock as
contemplated by Annex A and to amend the Company’s organizational documents in
contemplation of the Restructuring;

(v) 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 reflected in Annex A and applicable law; and (2) enter
into the supplemental indenture to supplement the Second Lien Notes Indenture,
as contemplated by Annex A;

(vi) deliver on the Closing Date, or within two (2) business days thereafter, to
each existing holder of the Second Lien Notes and Stub Holders participating in
the Exchange Offer (the “Participating Holders”) the Common Stock, Preferred
Stock and Series C Warrants in accordance herewith and as set forth in the Term
Sheet;

(vii) enter into the Warrant Agreement on terms and conditions consistent in all
respects with this Agreement, as of the Closing Date, with SAE’s transfer agent
and as warrant agent, and to issue the Warrants pursuant thereto;

(viii) 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;

(ix) support all reasonably necessary actions of the Supporting Holders to
facilitate the consummation of the Restructuring;

(x) within five days of delivery to SAE of invoices or receipts with respect
thereto, pay in cash all reasonable and documented fees and expenses of Paul,
Weiss, Rifkind, Wharton & Garrison LLP (“Paul Weiss”), primary legal counsel to
the Supporting Holders (the “Professional Fees”);

(xi) to obtain by the Launch Date such waivers, consents or amendments to the
ABL Credit Facility and the Term Loan Facility as necessary to give effect to
and permit the Restructuring;

 

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(xii) use 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;

(xiii) use commercially reasonable efforts to make the shares of Common Stock to
be issued in connection with the Restructuring eligible to be issued in
book-entry form through the direct registry system of SAE’s transfer agent
and/or The Depository Trust Company;

(xiv) maintain SAE’s and each Guarantor’s good standing under the laws of the
State of Delaware and make any necessary amendments to, and take all requisite
actions, corporate or otherwise under the organizational documents in
furtherance of the Restructuring as soon as reasonably practicable on or after
the Closing Date;

(xv) to (a) remain an SEC-registered public company and continue to file reports
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
the rules and regulations promulgated thereunder and (b) use commercially
reasonable efforts to continue to comply with the listing requirements of the
Nasdaq Capital Market as of the effective date of the Restructuring so that
existing shares of Common Stock will continue to be, and the new shares of
Common Stock issued in the Restructuring will be, listed on the Nasdaq Capital
Market on or as soon as reasonably practicable after the effective date of the
Restructuring;

(xvi) to the extent that any legal or structural impediment arises that would
prevent, hinder, or delay the consummation of the Restructuring, to negotiate in
good faith commercially reasonable additional or alternative provisions to
address any such impediment, in consultation with the Supporting Holders;

(xvii) provide prompt written notice to the Supporting Holders of (A) receipt of
any written notice from any third party alleging that the consent of such party
is or may be required in connection with the transactions contemplated by the
Restructuring, (B) receipt of any written notice from any governmental body in
connection with this Agreement or the transactions contemplated by the
Restructuring, and (C) receipt of any written notice of any proceeding
commenced, or, to the actual knowledge of the Company, threatened against the
Company, relating to or involving or otherwise affecting in any material respect
the transactions contemplated by the Restructuring.

(xviii) continue to operate its business in the ordinary course;

(xix) use commercially reasonable efforts to ensure the Alaskan tax credits are
monetized in a timely manner; and

(xx) provide to the Supporting Holders and/or their respective professionals,
upon reasonable advance notice to the Company; (A) reasonable access (without
any material disruption to the conduct of the Company’s business) during normal
business hours to the Company’s books, records, and facilities; (B) reasonable
access to the respective management and advisors of the Company for the purposes
of evaluating the Company’s finances and operations and participating in the
planning process with respect to the Restructuring; and (C) prompt access to any
information provided to any existing or prospective financing sources (including
lenders under any exit financing).

 

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(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
Second Lien Notes Indenture, 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, 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;

(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 ABL Credit Facility or Term Loan and liabilities
arising and incurred in the ordinary course of business; or

(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
venture, partnership, sale of assets, or restructuring of SAE other than the
Restructuring (an “Alternative Proposal”), (2) publicly announce its intention
not to pursue the Restructuring or (3) take any other action that is
inconsistent with or is likely to delay the consummation of the Restructuring.

(c) Fiduciary Duty. Nothing in this Agreement or the Term Sheet 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.

2.03 Definitive Documents.

(a) The “Definitive Documents” include, without limitation, (i) the definitive
offering memorandum relating to the Exchange Offer (the “Offering Memorandum”)
and ancillary documents and other amendments or consents related to the Exchange
Offer, including, for the avoidance of doubt, the Consent Solicitation; (ii) the
supplemental indenture to permit the entry into the Exchange Offer and related
matters on the Closing Date; (iii) the definitive documents governing the
Preferred Stock, including, without limitation, the certificate of designation,
the material terms of which will be set forth in the Offering Memorandum;
(iv) the definitive documents with respect to the Series C Warrants to be issued
in connection with the Restructuring; (v) the definitive documents with respect
to the management compensation arrangements set forth in the Term Sheet and any
agreements or definitive documents related thereto; and (vi) any amended
organizational documents or other governance documents. Each of the Definitive
Documents shall be reasonably acceptable in all respects to the Required
Supporting Holders, including with respect to any modifications, amendments or
supplements to such Definitive Documents as permitted hereunder.

 

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(b) Without limiting the foregoing, each Party hereby covenants and agrees to
(a) negotiate in good faith 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, the purposes of this Agreement and the Definitive Documents.

Section 3. Representations and Warranties

3.01 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
and perform its respective obligations under this Agreement and the Definitive
Documents to which it is a party, and such Party has been authorized to enter
into and perform its respective obligations under this Agreement and the
Definitive Documents;

(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) 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;

(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 by the Exchange Act or other securities regulatory
authorities under applicable securities laws;

(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 Party’s 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.

 

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3.02 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 Second Lien Notes (each a “Holding”) held by such
Supporting Holder, it:

(i) either (1) is the sole beneficial owner of the principal amount of such
Holding, or (2) has sole investment or voting discretion with respect to the
principal amount of such Holding and has the power and authority to bind the
beneficial owners of such Holding 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 Holding; provided that the amount of Holding held by such
Supporting Holder shall not include any Holding held in a fiduciary capacity or
held by any other division, distinct business unit or trading desk of such
Supporting Holder (other than the division, business unit or trading desk
expressly identified on the signature pages hereto) whose activities in
connection with the administration of such Holding are separated from and not
coordinated with such Supporting Holder’s activities, unless and until such
division, business unit or trading desk is or becomes a party to this Agreement;
provided further that, the foregoing representation shall not be violated as a
result of Holdings currently being out for loan pursuant to a securities lending
program so long as the Supporting Holder recalls such Holding (and the
settlement of such recall occurs) prior to the expiration of the Exchange Offer;
and

(ii) except as expressly permitted and accomplished in accordance with Section 5
of this Agreement, 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 Holding held by the Supporting Holder
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, in all
material respects; and

(b) the Supporting Holders, in entering into this Agreement and participating in
the Restructuring, 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; and

(c) with respect to the Second Lien Notes held by each Supporting Holder, such
Second Lien Notes are owned by a person that is either (x) not a Company
Affiliate or (y) a Specified Supporting Holder. For purposes of this
Section 3.02(c), “Company Affiliate” means any owner of Second Lien Notes that
directly or indirectly controls or is controlled by or is under direct or
indirect common control with SAE or any Guarantor. For purposes of this
Section 3.02(c), “Specified Supporting Holder” means any owner of Second Lien
Notes who was a holder of Stub Notes as of July 27, 2016 and who entered into
the Restructuring Support Agreement dated June 13, 2016, as amended, with SAE.

 

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Notwithstanding the foregoing, the Parties acknowledge that all representations,
warranties, covenants, and other agreements made by any Supporting Holder that
is a separately managed account of an investment manager are being made only
with respect to the claims managed by such investment manager, and shall not
apply to (or be deemed to be made in relation to) any claims that may be
beneficially owned by such Supporting Holder that are not held through accounts
managed by such investment manager.

3.03 Representations and Warranties of the Company. SAE, on behalf of itself and
each Guarantor party to the Second Lien Notes Indenture, 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 and Preferred Stock to effect the
Restructuring as contemplated by this Agreement; and

(b) it has no knowledge of any “Default” or “Event of Default” under the ABL
Credit Facility, Term Loan, or the Second Lien Notes Indenture which has
occurred and is continuing.

Section 4. Termination Events

4.01 Supporting Holder Termination Events. The Required Supporting Holders may
terminate this Agreement upon three business days’ prior written notice to SAE,
unless otherwise set forth below, delivered in accordance with Section 8.11
hereof, upon the occurrence and continuation of any of the following events
(each, a “Supporting Holder Termination Event”):

(a) the Launch Date shall not have occurred by December 22, 2017 or such later
date as mutually agreed to by the Company and the Required Supporting Holders;

(b) the Closing Date with respect to the Exchange Offer shall not have occurred
or the Minimum Condition has not been satisfied by February 14, 2018 or such
later date as mutually agreed to by the Company and the Required Supporting
Holders;

(c) the breach or noncompliance by SAE or any Guarantor under the Second Lien
Notes Indenture (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 limitation, in Sections 2.02 or 2.04
hereto) that remains uncured for three 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 the Supporting Holders or materially
affects the ability of SAE, on behalf of itself and its subsidiary Guarantors,
to consummate the Restructuring contemplated herein;

(d) 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 to be unenforceable or enjoining or
otherwise restricting the consummation of the Restructuring in a way that cannot
reasonably be remedied by SAE;

 

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(e) the occurrence of an event of default beyond applicable grace period under
(i) the ABL Credit Facility, (ii) the Term Loan Facility, (iii) the Stub Notes
Indenture, or (iv) the Second Lien Notes Indenture, in each case, subject to all
applicable notice, waiver, and cure provisions;

(f) SAE or any Guarantor under the Second Lien 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

(g) any of the Definitive Documents, or other documents in respect of the
Restructuring are inconsistent with the material terms and conditions set forth
in this Agreement, the Term Sheet or their respective exhibits and schedules;

Notwithstanding the foregoing, this Agreement shall, without any additional act
or notice by any party, terminate immediately upon the occurrence of any of the
following, except to effect the Restructuring as contemplated by this Agreement:
(1) SAE or any Guarantor under the Second Lien Notes Indenture (a) 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 SAE’s
property, (b) seeking any arrangement, adjustment, protection, or relief from
its debts, or (c) making a general assignment for the benefit of its creditors;
(2) SAE or any Guarantor under the Second Lien Notes Indenture commencing a
voluntary case filed under title 11 of the United States Code; or (3) an
involuntary case is filed against SAE or any Guarantor under the Second Lien
Notes Indenture.

4.02 SAE Termination Events. SAE may terminate its obligations under this
Agreement upon five business days’ prior written notice delivered to the Parties
in accordance with Section 8.11 hereof, upon SAE’s 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 and that remains uncured for a period of five
business days after the receipt by the breaching Supporting Holder(s) of written
notice of such breach from SAE, but only if the non-breaching Supporting Holders
own less than 85% of the Second Lien Notes;

(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 in a way that
cannot reasonably be remedied by SAE; or

 

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(c) 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.

4.03 Effect of Termination

(a) Upon any termination of this Agreement under Sections 4.01 or 4.02, 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 or otherwise, that they would have been entitled to take
had they not entered into this Agreement; provided, however, that the SAE’s
obligation to pay Professional Fees shall survive with respect to those
reasonable and documented 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 Party’s 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 then in material breach of any
provision hereof.

4.04 Termination Upon Consummation of the Restructuring. This Agreement shall
terminate automatically without any further required action or notice upon the
Closing Date.

Section 5. Transfer of Holdings

Without limiting the transfer restrictions under the Second Lien Indenture, 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 (each, a “Transfer”) in any Holding, unless the transferee thereof
either (i) is a Supporting Holder and agrees to exchange such additional Holding
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 Holding 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 8.11 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 Holdings to any entity that, as of the date of the Transfer,
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 any Holdings that
does not comply with the terms and procedures set forth in this Section 5 shall
be deemed null and void ab initio.

 

12

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Notwithstanding anything to the contrary in this Section 5, (i) a Qualified
Marketmaker (as defined below) that acquires any Holdings from a Supporting
Holder with the purpose and intent of acting as a Qualified Marketmaker for such
Holdings (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; 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 Holdings that it acquires from an existing holder of the Second Lien
Notes 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 6. Amendments

This Agreement, the Definitive Documents and 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 Whitebox Advisors LLC, BlueMountain Capital Management, LLC, and
Highbridge Capital Management LLC. Notwithstanding the foregoing, no
modification, amendment or alteration shall be made in connection with the
Restructuring to (a) the material terms of the Second Lien Notes or (b) the
material economic terms of the Exchange Offer, in each case, without the prior
written consent of each Supporting Holder.

Section 7. 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 8. Miscellaneous

8.01 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 in accordance with
this Agreement.

8.02 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.

 

13

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8.03 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.

8.04 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.

8.05 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.

8.06 Counterparts. This Agreement may be executed and delivered (by facsimile,
email, 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.

8.07 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 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.

8.08 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 Second Lien 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; 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 Holder 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 Supporting Holders 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 duties (actual or implied) to any other Supporting Holder.

 

14

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8.09 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.

8.10 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 SAE’s creditors or other stakeholders.

8.11 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

with copies to:

Akin Gump Strauss Hauer & Feld LLP

1700 Pacific Ave., Suite 4100

Dallas, Texas 75201

Attn:    Sarah Link Schultz

    David H. Botter

E-mail address:    sschultz@akingump.com

    dbotter@akingump.com

 

  (b) if to the Supporting Holders, to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York 10019

Attn:    Andrew N. Rosenberg

     Larry G. Wee

E-mail address:    arosenberg@paulweiss.com

    lwee@paulweiss.com

Any notice given by hand delivery, electronic mail, mail, or courier shall be
effective when received.

 

15

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8.12 Disclosure of Supporting Holder Information. Unless required by applicable
law or regulation, each Party agrees to keep confidential the amount of all
Holdings in the Company held (beneficially or otherwise) by any individual
Supporting Holder absent the prior written consent of such Supporting Holder;
provided, however, that the Company may disclose the identity of each Supporting
Holder and the aggregate amount of all Holdings in the Company held by the
Supporting Holders. The Company shall use commercially reasonable efforts to
submit drafts to the Supporting Holders of any press releases, public documents
and any and all filings with the SEC that constitute disclosure of the existence
or terms of this Agreement or any amendment to the terms of this Agreement at
least one (1) business day prior to making any such disclosure. Any public
filing of this Agreement that includes executed signature pages to this
Agreement shall include such signature pages only in redacted form with respect
to the holdings of each Supporting Holder. The Parties’ obligations under this
Section 8.12 shall survive termination of this Support Agreement.

8.13 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, Indenture Trustee or SAE or the ability of each of the
Supporting Holders, Indenture Trustee or SAE to protect and preserve its
respective rights, remedies and interests. If the Restructuring is not
consummated, or if this Agreement is terminated for any reason, the Parties
fully reserve any and all of their rights.

8.14 Several, Not Joint, Obligations. The agreements, representations and
obligations of the Parties under this Agreement are, in all respects, several
and not joint.

8.15 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.

8.16 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.

8.17 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.

8.18 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 in
accordance with the terms and conditions of this Agreement.

 

16

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8.19 Survival. Notwithstanding anything herein to the contrary, the
acknowledgements, agreements and obligations of the Parties in this Section 8.19
and Sections 2.01(e), 4.03(a), 8.08, 8.09, 8.12 and 8.15 shall survive any
termination of this Agreement and shall continue in full force and effect in
accordance with the terms thereof.

[Signatures on Following Page]

 

17

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IN WITNESS WHEREOF, the Company 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.

/s/ Brent Whiteley

Name: Brent Whiteley Title: CFO & General Counsel SAExploration Sub, Inc.

/s/ Brent Whiteley

Name: Brent Whiteley Title: CFO & General Counsel SAExploration, Inc.

/s/ Brent Whiteley

Name: Brent Whiteley Title: CFO & General Counsel SAExploration Seismic Services
(US), LLC

/s/ Brent Whiteley

Name: Brent Whiteley Title: CFO & General Counsel NES, LLC

/s/ Brent Whiteley

Name: Brent Whiteley Title: CFO & General Counsel

--------------------------------------------------------------------------------

Whitebox Asymetric Partners, LP By:  

/s/ Mark Strefling

Name:   Mark Strefling Title:   CEO Whitebox Credit Partners, LP By:  

/s/ Mark Strefling

Name:   Mark Strefling Title:   CEO Whitebox Multi-Strategy Partners, LP By:  

/s/ Mark Strefling

Name:   Mark Strefling Title:   CEO Whitebox Institutional Partners, LP By:  

/s/ Mark Strefling

Name:   Mark Strefling Title:   CEO

Signature Page to Restructuring Support Agreement

--------------------------------------------------------------------------------

Blue Mountain Credit Alternatives Master Fund L.P. By:  

/s/ David M. O’Mara

Name:   David M. O’Mara Title:   Deputy General Counsel BlueMountain Guadalupe
Peak Fund L.P. By:  

/s/ David M. O’Mara

Name:   David M. O’Mara Title:   Deputy General Counsel

BlueMountain Montenvers Master Fund SCA

SICAV-SIF

By:  

/s/ David M. O’Mara

Name:   David M. O’Mara Title:   Deputy General Counsel BlueMountain Summit
Trading L.P. By:  

/s/ David M. O’Mara

Name:   David M. O’Mara Title:   Deputy General Counsel

Signature Page to Restructuring Support Agreement

--------------------------------------------------------------------------------

Blue Mountain Kicking Horse Fund L.P. By:  

/s/ David M. O’Mara

Name:   David M. O’Mara Title:   Deputy General Counsel BlueMountain Timberline
Ltd. By:  

/s/ David M. O’Mara

Name:   David M. O’Mara Title:   Deputy General Counsel

Signature Page to Restructuring Support Agreement

--------------------------------------------------------------------------------

1992 MSF International Ltd. By Highbridge Capital Management, LLC, as Trading
Manager By:  

/s/ Jonathan Segal

Name:   Jonathan Segal Title:   Portfolio Manager/Managing Director 1992
Tactical Credit Master Fund, L.P. By Highbridge Capital Management, LLC, as
Trading Manager By:  

/s/ Jonathan Segal

Name:   Jonathan Segal Title:   Portfolio Manager/Managing Director

Signature Page to Restructuring Support Agreement

--------------------------------------------------------------------------------

MORGAN STANLEY INVESTMENT MANAGEMENT INC., as investment manager on behalf of
certain funds and accounts By:  

/s/ Richard J. Lindquist

Name:   Richard J. Lindquist Title:   Managing Director

Signature Page to Restructuring Support Agreement

--------------------------------------------------------------------------------

[Supporting Holder] By:  

/s/ Ming Shao

Name:   Ming Shao Title:   Director of Fixed Income Investments   DuPont Capital
Management

Signature Page to Restructuring Support Agreement

--------------------------------------------------------------------------------

[Supporting Holder] By:  

/s/ Samuel Barker

Name:   Samuel Barker Title:   Senior Analyst   AMZAK CAPITAL MANAGEMENT LLC

Signature Page to Restructuring Support Agreement

--------------------------------------------------------------------------------

[Supporting Holder] By:  

/s/ David P. Cohen

Name:   David P. Cohen Title:   President, Minerva Advisors

Signature Page to Restructuring Support Agreement

--------------------------------------------------------------------------------

[Supporting Holder] By:  

/s/ Steven Roth

Name:   Steven Roth Title:   Beneficial Owner

Signature Page to Restructuring Support Agreement

--------------------------------------------------------------------------------

Acknowledgment1

Reference is hereby made to that certain Amended and Restated Credit and
Security Agreement, dated as of September 22, 2017 (the “ABL Credit Agreement”)
and that certain Term Loan and Security Agreement, dated as of June 29, 2016, as
amended by Amendment No. 1 to Term Loan and Security Agreement, dated as of
October 24, 2016, as further amended by Amendment No. 2 to Term Loan and
Security Agreement, dated as of September 8, 2017 (the “Term Loan Agreement”).

Each of the undersigned, in its capacity as a lender under the ABL Credit
Agreement and/or Term Loan Agreement, agrees subject to the terms and conditions
of the Agreement, and for so long as the Agreement has not been terminated in
accordance with the terms thereof, if and when solicited, to timely vote all
claims with respect to the ABL Credit Agreement and/or Term Loan Agreement for
which such lender has voting power in favor of the Plan.

 

 

1  Capitalized terms used herein but not otherwise defined shall have the
meanings given to them in the Restructuring Support Agreement set forth above.

--------------------------------------------------------------------------------

Whitebox Asymetric Partners, LP, in its capacity as lender under the ABL Credit
Agreement By:  

/s/ Mark Strefling

Name:   Mark Strefling Title:   CEO Whitebox Credit Partners, LP, in its
capacity as lender under the ABL Credit Agreement By:  

/s/ Mark Strefling

Name:   Mark Strefling Title:   CEO Whitebox Multi-Strategy Partners, LP, in its
capacity as lender under the ABL Credit Agreement By:  

/s/ Mark Strefling

Name:   Mark Strefling Title:   CEO Whitebox Institutional Partners, LP in its
capacity as lender under the ABL Credit Agreement By:  

/s/ Mark Strefling

Name:   Mark Strefling Title:   CEO

Signature Page to Acknowledgement

--------------------------------------------------------------------------------

WBox 2015-7 Ltd., in its capacity as lender under the Term Loan Agreement By:  

/s/ Mark Strefling

Name:   Mark Strefling Title:   Director

Signature Page to Acknowledgement

--------------------------------------------------------------------------------

Acknowledgment2

Reference is hereby made to that certain Amended and Restated Credit and
Security Agreement, dated as of September 22, 2017 (the “ABL Credit Agreement”)
and that certain Term Loan and Security Agreement, dated as of June 29, 2016, as
amended by Amendment No. 1 to Term Loan and Security Agreement, dated as of
October 24, 2016, as further amended by Amendment No. 2 to Term Loan and
Security Agreement, dated as of September 8, 2017 (the “Term Loan Agreement”).

Each of the undersigned, in its capacity as a lender under the ABL Credit
Agreement and/or Term Loan Agreement, agrees subject to the terms and conditions
of the Agreement, and for so long as the Agreement has not been terminated in
accordance with the terms thereof, if and when solicited, to timely vote all
claims with respect to the ABL Credit Agreement and/or Term Loan Agreement for
which such lender has voting power in favor of the Plan.

 

 

2  Capitalized terms used herein but not otherwise defined shall have the
meanings given to them in the Restructuring Support Agreement set forth above.

--------------------------------------------------------------------------------

Blue Mountain Credit Alternatives Master Fund L.P., in its capacity as lender
under the Term Loan Agreement By:  

/s/ David M. O’Mara

Name:   David M. O’Mara Title:   Deputy General Counsel BlueMountain Guadalupe
Peak Fund L.P., in its capacity as lender under the Term Loan Agreement By:  

/s/ David M. O’Mara

Name:   David M. O’Mara Title:   Deputy General Counsel BlueMountain Montenvers
Master Fund SCA SICAV-SIF, in its capacity as lender under the Term Loan
Agreement By:  

/s/ David M. O’Mara

Name:   David M. O’Mara Title:   Deputy General Counsel BlueMountain Summit
Trading L.P. , in its capacity as lender under the Term Loan Agreement By:  

/s/ David M. O’Mara

Name:   David M. O’Mara Title:   Deputy General Counsel

Signature Page to Acknowledgement

--------------------------------------------------------------------------------

Blue Mountain Kicking Horse Fund L.P. , in its capacity as lender under the Term
Loan Agreement By:  

/s/ David M. O’Mara

Name:   David M. O’Mara Title:   Deputy General Counsel

Signature Page to Acknowledgement

--------------------------------------------------------------------------------

Acknowledgment3

Reference is hereby made to that certain Amended and Restated Credit and
Security Agreement, dated as of September 22, 2017 (the “ABL Credit Agreement”)
and that certain Term Loan and Security Agreement, dated as of June 29, 2016, as
amended by Amendment No. 1 to Term Loan and Security Agreement, dated as of
October 24, 2016, as further amended by Amendment No. 2 to Term Loan and
Security Agreement, dated as of September 8, 2017 (the “Term Loan Agreement”).

Each of the undersigned, in its capacity as a lender under the ABL Credit
Agreement and/or Term Loan Agreement, agrees subject to the terms and conditions
of the Agreement, and for so long as the Agreement has not been terminated in
accordance with the terms thereof, if and when solicited, to timely vote all
claims with respect to the ABL Credit Agreement and/or Term Loan Agreement for
which such lender has voting power in favor of the Plan.

 

MORGAN STANLEY INVESTMENT MANAGEMENT INC., as investment manager on behalf of
certain funds and accounts By:  

/s/ Richard J. Lindquist

Name:   Richard J. Lindquist Title:   Managing Director

 

 

3  Capitalized terms used herein but not otherwise defined shall have the
meanings given to them in the Restructuring Support Agreement set forth above.

--------------------------------------------------------------------------------

Acknowledgment4

Reference is hereby made to that certain Amended and Restated Credit and
Security Agreement, dated as of September 22, 2017 (the “ABL Credit Agreement”)
and that certain Term Loan and Security Agreement, dated as of June 29, 2016, as
amended by Amendment No. 1 to Term Loan and Security Agreement, dated as of
October 24, 2016, as further amended by Amendment No. 2 to Term Loan and
Security Agreement, dated as of September 8, 2017 (the “Term Loan Agreement”).

Each of the undersigned, in its capacity as a lender under the ABL Credit
Agreement and/or Term Loan Agreement, agrees subject to the terms and conditions
of the Agreement, and for so long as the Agreement has not been terminated in
accordance with the terms thereof, if and when solicited, to timely vote all
claims with respect to the ABL Credit Agreement and/or Term Loan Agreement for
which such lender has voting power in favor of the Plan.

 

[Supporting Holder] By:  

/s/ Ming Shao

Name:   Ming Shao Title:   Director of Fixed Income Investments   DuPont Capital
Management

 

 

4  Capitalized terms used herein but not otherwise defined shall have the
meanings given to them in the Restructuring Support Agreement set forth above.

--------------------------------------------------------------------------------

Acknowledgment5

Reference is hereby made to that certain Amended and Restated Credit and
Security Agreement, dated as of September 22, 2017 (the “ABL Credit Agreement”)
and that certain Term Loan and Security Agreement, dated as of June 29, 2016, as
amended by Amendment No. 1 to Term Loan and Security Agreement, dated as of
October 24, 2016, as further amended by Amendment No. 2 to Term Loan and
Security Agreement, dated as of September 8, 2017 (the “Term Loan Agreement”).

Each of the undersigned, in its capacity as a lender under the ABL Credit
Agreement and/or Term Loan Agreement, agrees subject to the terms and conditions
of the Agreement, and for so long as the Agreement has not been terminated in
accordance with the terms thereof, if and when solicited, to timely vote all
claims with respect to the ABL Credit Agreement and/or Term Loan Agreement for
which such lender has voting power in favor of the Plan.

 

[Supporting Holder] By:  

/s/ Samuel Barker

Name:   Samuel Barker Title:   Senior Analyst   AMZAK CAPITAL MANAGEMENT LLC

 

 

5  Capitalized terms used herein but not otherwise defined shall have the
meanings given to them in the Restructuring Support Agreement set forth above.

--------------------------------------------------------------------------------

Acknowledgment6

Reference is hereby made to that certain Amended and Restated Credit and
Security Agreement, dated as of September 22, 2017 (the “ABL Credit Agreement”)
and that certain Term Loan and Security Agreement, dated as of June 29, 2016, as
amended by Amendment No. 1 to Term Loan and Security Agreement, dated as of
October 24, 2016, as further amended by Amendment No. 2 to Term Loan and
Security Agreement, dated as of September 8, 2017 (the “Term Loan Agreement”).

Each of the undersigned, in its capacity as a lender under the ABL Credit
Agreement and/or Term Loan Agreement, agrees subject to the terms and conditions
of the Agreement, and for so long as the Agreement has not been terminated in
accordance with the terms thereof, if and when solicited, to timely vote all
claims with respect to the ABL Credit Agreement and/or Term Loan Agreement for
which such lender has voting power in favor of the Plan.

 

[Supporting Holder] By:  

/s/ David P. Cohen

Name:   David P. Cohen Title:   President, Minerva Advisors

 

 

6  Capitalized terms used herein but not otherwise defined shall have the
meanings given to them in the Restructuring Support Agreement set forth above.

--------------------------------------------------------------------------------

Annex A

Term Sheet

--------------------------------------------------------------------------------

SAEXPLORATION HOLDINGS, INC.

Term Sheet

December 19, 2017

This term sheet (the “Term Sheet”) is an exhibit to the Restructuring Support
Agreement (the “RSA”) and 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) other than as set forth in the RSA. 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.

Overview of the Restructuring

Pursuant to the Restructuring, on the Closing Date (as defined below), the
Supporting Holders will exchange their Second Lien Notes (as defined below) for
(i) shares of common stock (the “Common Stock”) of the Company,7 (ii) shares of
convertible preferred stock (the “Preferred Stock”) of the Company on the terms
set forth on Schedule 1 hereto, and (iii) warrants (the “Series C Warrants”) of
the Company, on the terms set forth on Schedule 2 hereto, as contemplated by the
Exchange Offer (as defined below). Other Participating Holders (as defined
below), including eligible holders of Stub Notes8 (as defined below) shall have
the opportunity to participate in the Exchange Offer on equal terms with the
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 Amended and Restated Credit and Security Agreement, dated as of
September 22, 2017, by and among the lenders party thereto, SAExploration, Inc.,
as borrower, the Company and the other guarantors party thereto, as

 

7  To facilitate the expeditious closing of the Exchange Offer, the Company will
limit the amount of Common Stock initially issued to the Participating Holders
pursuant to the exchange to 19.99% of the Company’s outstanding Common Stock,
with any shares that would be in excess of the 19.99% threshold to be issued as
convertible preferred stock that would automatically convert (subject to the
last sentence of the first bullet under the section below captioned “The
Exchange Offer”) into common stock upon shareholder approval.

8  For the purposes of calculating the exchange consideration, the parties have
assumed that holders of Eligible Stub Notes hold $1.25 million in Stub Notes. In
the event of participation by Second Lien Holders and Stub Notes Holders
tendering Existing Notes and Stub Notes in an aggregate principal amount in
excess of $86,239,643, the total exchange consideration would remain the same
and the exchange consideration per each $1,000 in principal amount of Second
Lien Notes plus accrued and unpaid interest thereon or $1,000 principal amount
of Stub Notes plus accrued and unpaid interest thereon would be adjusted
downward accordingly, such that the exchange consideration otherwise receivable
will be multiplied by a fraction, the numerator of which is $86,239,643 and the
denominator of which is the sum of (x) the aggregate principal amount of
Existing Notes validly tendered and accepted and (y) the aggregate principal
amount of Stub Notes validly tendered and accepted.

 

6

--------------------------------------------------------------------------------

 

guarantors, and Cantor Fitzgerald Securities, as agent, providing for, among
other things, a $16 million line of credit secured by the Company’s U.S. assets,
including accounts receivable and equipment, subject to certain exclusions and
exceptions (the “ABL Credit Facility”);

 

•  that certain Term Loan and Security Agreement, dated as of June 29, 2016, as
amended by Amendment No. 1 to Term Loan and Security Agreement, dated as of
October 24, 2016, as further amended by Amendment No. 2 to Term Loan and
Security Agreement, dated as of September 8, 2017, by and among the Company, the
guarantors party thereto, the lenders party thereto and Delaware Trust Company,
as agent, providing for, among other things, a $30 million multi-draw senior
secured term loan facility secured by the Company’s U.S. assets, including
accounts receivable and equipment, subject to certain exclusions and exceptions
(the “Term Loan Facility”);

 

•  10.000% Senior Secured Notes due 2019 (the “Stub Notes”, and the holders
thereof, the “Stub Holders”), issued pursuant to that certain indenture, dated
as of July 2, 2014 (the “Stub Notes Indenture”), by and among the Company, the
guarantors party thereto and Wilmington Savings Fund Society, FSB, as successor
trustee, of which there is outstanding as of the date of this Term Sheet
approximately $1.9 million in aggregate principal amount; and

 

•  10.000% Senior Secured Second Lien Notes due 2019 (the “Second Lien Notes”,
and the holders thereof, the “Second Lien Holders”), issued pursuant to that
certain indenture, dated as of July 27, 2016 (the “Second Lien Notes
Indenture”), by and among the Company, the guarantors party thereto and
Wilmington Savings Fund Society, FSB, as trustee, of which there is outstanding
as of the date of this Term Sheet approximately $85 million in aggregate
principal amount.

  The equity capitalization of the Company as of the date of this Term Sheet is
as follows:  

•  55,000,000 shares of Common Stock are authorized to be issued.

 

•  9,424,534 shares of Common Stock are issued and outstanding.

 

•  519,125 shares of Common Stock are issuable pursuant to outstanding grants
under the Company’s Amended and Restated 2016 Long-Term Incentive Plan (the
“Existing MIP”).

 

•  799,091 shares of Common Stock may be granted, and are reserved for issuance,
under the Existing MIP.

 

7

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•  154,376 Series A warrants (the “Series A Warrants”) with an expiration date
of July 27, 2021 are outstanding. The Series A Warrants have an exercise price
of $10.30 and become exercisable 30 days in advance of their expiration date
contingent upon the receipt by the Company of Tax Credit certificates in a face
amount of at least $25 million issued by the State of Alaska.

 

•  154,376 Series B warrants (the “Series B Warrants” and together with the
Series A Warrants, the “Existing Warrants”) with an expiration date of July 27,
2021 are outstanding. The Series B Warrants have an exercise price of $12.88 and
become exercisable 30 days in advance of their expiration date contingent upon
the receipt by the Company of Tax Credit certificates in a face amount of at
least $25 million issued by the State of Alaska.

 

•  An additional 44,467,623 shares of Common Stock are authorized to be issued
(net of shares reserved for the Existing MIP and the Existing Warrants).

 

•  1,000,000 shares of Preferred Stock are authorized to be issued. No shares of
Preferred Stock are currently outstanding.

Supporting Holders   “Supporting Holders” means the Second Lien Holders
executing the RSA, including those Second Lien Holders listed on Schedule 3.
“Required Supporting Holders” has the meaning set forth in the RSA. Overview of
the Restructuring   Subject to the terms set forth in the RSA and this Term
Sheet, the Restructuring will include:  

•  on or about December 19, 2017 (the “RSA Effective Date”), the Company and
holders of not less than 85% of the aggregate principal amount of Second Lien
Notes shall execute the RSA;

 

•  on or before December 22, 2017 (the “Consent Date”), the Company shall have
obtained such waivers, consents or amendments to the ABL Credit Facility and the
Term Loan Facility as necessary to give effect to and permit the Restructuring
referred to herein; and

 

•  on or before December 22, 2017 (the “Launch Date”), the Company shall
commence an exchange offer and consent solicitation pursuant to which, assuming
all Second Lien Notes and Stub Notes held by eligible Stub Holders (the
“Eligible Stub Notes”) are validly tendered, the Second Lien Notes and Eligible
Stub Notes shall be exchanged for (i) 22,426,160 shares of Common Stock equal to
54.9% of the outstanding shares of Common Stock on the Closing Date (on

 

8

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a fully diluted basis after giving effect to dilution from full exercise of the
Series C Warrants) subject to future dilution by the MIP Shares (as defined
below), the conversion of the Preferred Stock and the exercise of the Existing
Warrants, (ii) 35,000 shares of Preferred Stock, and (iii) 8,169,822 Series C
Warrants to purchase 8,169,822 shares of Common Stock, as may be adjusted from
time to time; provided that the shares of Common Stock referred to in clause
(i) and the Series C Warrants referred to in clause (iii) would be adjusted
pursuant to any Participating Holder’s right to elect to receive Series C
Warrants in lieu of shares of Common Stock as described below.

  It is anticipated that the Exchange Offer will close, and that the shares of
Common Stock, Preferred Stock and the Series C Warrants will be issued, on a
date that is intended to be no later than 45 days after the Launch Date, subject
to the satisfaction or waiver of the closing conditions set forth herein and in
the RSA (assuming no amendments and/or extensions of the offer period
(the “Closing Date”)). The Exchange Offer   Eligible9 Second Lien Holders and
Eligible4 Stub Holders will be offered an opportunity to participate pro rata in
the exchange offer for the Second Lien Notes and Stub Notes (together, the
“Exchange Offer”), pursuant to which each participating Second Lien Holder (the
“Participating Second Lien Holders”) and participating Eligible Stub Holder (the
“Participating Eligible Stub Holders” and together with the Participating Second
Lien Holders, the “Participating Holders”) shall receive, on the Closing Date,
for every $1,000 principal amount of Second Lien Notes plus accrued and unpaid
interest, from and including January 15, 2018, thereon10 or $1,000 principal
amount of Stub Notes plus accrued and unpaid interest, from and including
January 15, 2018, thereon11 tendered for exchange (subject to a minimum tender
of $1 principal amount and in $1 increments in excess thereof on Existing Notes
and $2,000 principal amount and in $1,000 in excess thereof on Stub Notes):

 

9  To include Second Lien Holders and Stub Holders who are “Qualified
Institutional Buyers” and/or “Accredited Investors.” For the purposes of
calculating the exchange consideration, the parties have assumed that holders of
Eligible Stub Notes hold $1.25 million in Stub Notes. In the event of
participation by Second Lien Holders and Stub Notes Holders tendering Existing
Notes and Stub Notes in an aggregate principal amount in excess of $86,239,643,
the total exchange consideration would remain the same and the exchange
consideration per $1,000 in principal amount of Second Lien Notes plus accrued
and unpaid interest thereon or $1,000 principal amount of Stub Notes plus
accrued and unpaid interest thereon would be adjusted downward accordingly, such
that the exchange consideration otherwise receivable will be multiplied by a
fraction, the numerator of which is $86,239,643 and the denominator of which is
the sum of (x) the aggregate principal amount of Existing Notes validly tendered
and accepted and (y) the aggregate principal amount of Stub Notes validly
tendered and accepted.

10  Accrued and unpaid interest from October 15, 2017 to, but not including,
January 15, 2018 will be paid on the Closing Date in cash.

11  Accrued and unpaid interest from July 15, 2017 to, but not including,
January 15, 2018 will be paid on the Closing Date in cash.

 

9

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•  260.0447 shares of Common Stock (such that, if all Second Lien Notes and
Eligible Stub Notes are validly tendered, the Participating Holders would own
approximately 54.9% of the outstanding shares of Common Stock as of the Closing
Date (on a fully diluted basis after giving effect to dilution from full
exercise of the Series C Warrants), subject to future dilution by the MIP
Shares, the conversion of the Preferred Stock and the Existing Warrants). To the
extent that any Participating Holder would be the beneficial owner of 10% or
more of the outstanding shares of Common Stock (calculated in accordance with
Rule 13d-3 under the Exchange Act) after giving effect to the issuance of Common
Stock in connection with the Exchange Offer, such Participating Holder shall
have the option to instead receive, on a one-for-one basis in lieu of the number
of shares of Common Stock to be issued in connection with the Exchange Offer
that would cause such Participating Holder to be the beneficial owner of 10% or
more of the outstanding shares of Common Stock (calculated in accordance with
Rule 13d-3 under the Exchange Act), Series C Warrants;

 

•  0.4058 shares of Preferred Stock; and

 

•  94.7339 Series C Warrants that, together with all other Series C Warrants
issued in the Exchange Offer, upon exercise would be entitled to 5.26% of the
fully diluted shares of Common Stock as of the Closing Date (after giving effect
to the conversion of the Preferred Stock), but subject to future dilution by the
MIP Shares and the exercise of the Existing Warrants.

  The Restructuring will be conditioned on participation in the Exchange Offer
by Participating Second Lien Holders holding at least 95% of the principal
amount of the Second Lien Notes outstanding as of the Closing Date or such
requisite lower amount as may be determined by the Company and the Supporting
Holders pursuant to the terms of the RSA (the “Minimum Condition”).   Pursuant
to, and subject to the terms of, the RSA and this Term Sheet, the Supporting
Holders shall agree to participate in the Exchange Offer for the full amount of
their Second Lien Notes (including both principal and interest through the
Closing Date), to deliver consents to amend the Second Lien Notes Indenture and
to waive withdrawal rights with respect to their tendered Second

 

10

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  Lien Notes and related Second Lien Consents, each as further described below
under “Second Lien Consent Solicitation” and to the extent set forth in the RSA.
Notwithstanding the foregoing or anything else to the contrary herein, the
obligation of the Supporting Holders to participate in the Exchange Offer will
be subject to the terms and conditions set forth herein and in the RSA. Second
Lien Consent Solicitation   In connection with the Exchange Offer, the Company
will seek consents (the “Second Lien Consents”) from Participating Second Lien
Holders to amend the Second Lien Notes Indenture (the “Second Lien Consent
Solicitation”) to:  

•  waive the applicable change of control provisions; amend the definition of
“Permitted Holders” for purposes of the Change of Control covenant to include
the Supporting Holders and their related parties; and/or delete the change of
control provisions entirely;

 

•  amend the Payments for Consents covenants in connection with the transactions
contemplated by this Term Sheet;

 

•  eliminate all restrictive covenants that may be modified with the approval of
the Participating Second Lien Holders, including change of control, incurrence
of indebtedness and issuance of preferred stock, making of restricted payments,
restrictions on dividend blockers, restrictions on liens, additional guarantors,
additional collateral, limitation on asset sales and entry into affiliate
transactions;

 

•  eliminate rights to the Collateral (as defined in the Second Lien Indenture)
and the proceeds thereof; and

 

•  provide for the release of all liens on such Collateral.

  In order to tender Second Lien Notes for exchange in the Exchange Offer,
Participating Second Lien Holders shall be required to deliver consents in the
Second Lien Consent Solicitation. Supporting Holders will participate in the
Exchange Offer and Second Lien Consent Solicitation on the terms and conditions
set forth herein and in the RSA, and Supporting Holders shall, subject to the
terms and conditions of the RSA, waive withdrawal rights with respect to
tendered Second Lien Notes and the related Second Lien Consents, with the effect
that the Company and the trustee for the Second Lien Notes Indenture shall be
able to enter into a supplemental indenture with respect to the Second Lien
Notes to permit the entry into the Exchange Offer and related matters on the
Closing Date. The amendments to the Second Lien Notes Indenture that are made
pursuant to the Second Lien Consent Solicitation will not be operative unless
the Exchange Offer is completed according to its terms.

 

11

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Stub Notes Consent Solicitation   In connection with the Exchange Offer, the
Company will seek consents (the “Stub Notes Consents”) from Participating
Eligible Stub Holders to amend the Stub Notes Indenture (the “Stub Notes Consent
Solicitation”) to:  

•  waive the applicable change of control provisions; amend the definition of
“Permitted Holders” for purposes of the Change of Control covenant to include
the Supporting Holders and their related parties; and/or delete the change of
control provisions entirely;

 

•  amend the Payments for Consents covenants in connection with the transactions
contemplated by this Term Sheet;

 

•  eliminate all restrictive covenants that may be modified with the approval of
the Participating Eligible Stub Holders, including change of control, incurrence
of indebtedness and issuance of preferred stock, making of restricted payments,
restrictions on dividend blockers, restrictions on liens, additional guarantors,
additional collateral, limitation on asset sales and entry into affiliate
transactions;

 

•  eliminate rights to the Collateral (as defined in the Stub Notes Indenture)
and the proceeds thereof; and

 

•  provide for the release of all liens on such Collateral.

  In order to tender Stub Notes for exchange in the Exchange Offer,
Participating Eligible Stub Holders shall be required to deliver consents in the
Stub Notes Consent Solicitation. The amendments to the Stub Notes Indenture that
are made pursuant to the Stub Notes Consent Solicitation will not be operative
unless the requisite consents are received and the Exchange Offer is completed
according to its terms. ABL Credit Facility   The ABL Credit Facility shall
remain in place; provided that consummation of the Restructuring shall be
subject to obtaining the necessary consents or waivers from the lenders thereto.
Term Loan Facility   The Term Loan Facility shall remain in place; provided that
consummation of the Restructuring shall be subject to obtaining the necessary
consents or waivers from the lenders thereto. Management Incentive Plan   The
Management Incentive Plan will have terms set forth on Exhibit C. Treatment of
Existing Equity Holders   Following the Restructuring and after giving effect to
the Exchange Offer, all existing equity interests in the Company shall be
unaffected and the holders thereof shall retain all legal, equitable and
contractual rights to which the holders of such

 

12

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  interests are otherwise entitled. Assuming all Second Lien Notes and Eligible
Stub Notes are validly tendered, the existing holders of Common Stock in the
aggregate will own approximately 6.6% of the outstanding shares of Common Stock
as of the Closing Date (on a fully diluted basis after giving effect to dilution
from full conversion of the Preferred Stock and full exercise of the Series C
Warrants); provided that such ownership shall be subject to future dilution by
the issuance of the MIP Shares and the exercise of the Existing Warrants. Public
Status; Listing   The Company shall use commercially reasonable efforts to
remain an SEC-registered public company and shall continue to 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 continue to comply with the listing requirements of the Nasdaq
Capital Market as of the effective date of the Restructuring so that existing
shares of Common Stock will continue to be, and the new shares of Common Stock
issued in the Restructuring will be, listed on the Nasdaq Capital Market on or
as soon as reasonably practicable after the effective date of the Restructuring.
  On or prior to the Launch Date, the Company shall have obtained board approval
and the requisite shareholder votes to affect the Restructuring and to amend its
corporate governance documents, as necessary. Registration Rights   Customary
demand, shelf and piggyback registration rights will be provided to holders of
greater than 2.5% of the outstanding Common Stock on a fully-diluted basis
(including dilution from the issuances of Common Stock in the Exchange Offer,
full conversion of the Preferred Stock and full exercise of the Series C
Warrants) with respect to the Common Stock (including the Common Stock issued
upon conversion of the Preferred Stock or exercise of the Series C Warrants),
whether held at closing or thereafter acquired. The calculation of holdings for
purposes of registration rights will be made on the basis of aggregation
principles under Rule 144 under the Securities Act. Customary registration
expenses of the holders will be paid by the Company. 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;

 

13

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•  participation by holders of the outstanding Second Lien Notes satisfying the
Minimum Condition in the Exchange Offer and Second Lien Consent Solicitation;

 

•  the receipt of any and all government and other necessary consents in
connection with the Restructuring;

 

•  the closing of the Exchange Offer occurring on or prior to February 14, 2018
(or such later date as mutually acceptable to the Company and the Supporting
Holders);

 

•  receipt of any necessary amendments and/or waivers from the lenders under the
ABL Credit Facility and the Term Loan Facility;

 

•  continued listing of the Company’s Common Stock on a national securities
exchange, i.e., NASDAQ;

 

•  payment of all fees and expenses incurred by the Supporting Holders and the
indenture trustee, including, without limitation, the fees and expenses of their
legal advisors, as described below; and

 

•  such other conditions as set forth in the RSA and as are customary for
transactions of this type.

Fiduciary Out / Shop Right   As set forth in the RSA, the Company may terminate
the RSA upon five 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. 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
fees, costs and expenses incurred by one primary outside counsel and one local
counsel representing 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.

 

14

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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. Governing Law   New York, except to the extent governed by
Delaware law as provided for herein or in the RSA.

 

15

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Schedule 1

Capitalized Terms used and not otherwise defined herein shall have the meanings
set forth in the Term Sheet.

Preferred Stock Term Sheet

 

Issuer    The Company.

Participating

Holders

   The Supporting Holders and any additional Participating Holders who validly
tender their Second Lien Notes or Stub Notes in the Exchange Offer.

Number of

Shares

   On the Closing Date, each Participating Holder will receive 0.4058 shares of
Preferred Stock for each $1,000 in aggregate principal amount of Second Lien
Notes plus accrued and unpaid interest thereon or $1,000 principal amount of
Stub Notes plus accrued and unpaid interest thereon validly tendered. If all of
the outstanding Second Lien Notes and Eligible Stub Notes are validly tendered,
then the Participating Holders would receive 35,000 shares of Preferred Stock in
the aggregate.

Anticipated

Closing Date

   February 14, 2018 but subject to “Closing Conditions” described in the Term
Sheet. Maturity    The Company is required to redeem the Preferred Stock as set
forth in the redemption section below. Dividends    The Preferred Stock will
have an 8% annual dividend, which dividend shall be payable with additional
shares of Preferred Stock, unless the Company’s Free Cash Flow for the
twelve-month period prior to such dividend payment exceeded $15 million, in
which case the dividend shall be payable in cash. “Free Cash Flow” means
adjusted EBITDA less capital expenditures. Voting Rights    The Preferred Stock
will have certain separate class voting rights with respect to amendments that
adversely affect the rights, preferences and privileges of the Preferred Stock,
including, without limitation, their distribution, Liquidation Preference,
redemption and conversion rights, their ranking and certain other protections,
including, but not limited to, an anti-layering provision and certain consent
rights with respect to the granting of liens on the Alaskan tax credits (other
than the liens granted to secure obligations under the ABL Credit Agreement and
the Term Credit Agreement).

Conversion,

including Upon

Change of

   The Preferred Stock will not be convertible prior to the third anniversary of
the Closing Date, other than by the Company (with respect to all Preferred Stock
outstanding) or by each of the Holders (with respect to the Preferred

 

16

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Control   

Stock of such Holder), in each case, upon a Change of Control (as defined
below). Upon request of the Company, the three-year non-conversion period may be
waived by Holders of 66 2/3% of the shares of Preferred Stock. Following the
third anniversary of the Closing Date or the earlier waiver by Holders of 66
2/3% of the shares of the Preferred Stock of the three-year non-conversion
period, the Company shall have the right to cause the conversion of shares of
all outstanding Preferred Stock into shares of Common Stock, and each Holder
shall have the right to cause the conversion of its shares of outstanding
Preferred Stock into shares of Common Stock. The initial conversion rate shall
be 3,271.4653 shares of Common Stock per share of Preferred Stock (subject to
the “Conversion Rate Adjustments” referenced below and adjusted for accrued and
unpaid dividends).

 

Any investment (a “Qualified Investment”) by a Strategic Investor (definition to
be agreed) of 10% or more and less than 50% of the outstanding primary shares
(i.e., assuming conversion of everything but the Preferred Stock) will result in
the neutering of the anti-dilution adjustment for the Preferred Stock with
respect to shares purchased by the Strategic Investor. Any investment of more
than 50% will result in a Change of Control, which will trigger the right for
the Company to force conversion of the Preferred Stock or for any Holder to
force conversion of its Preferred Stock. Under any circumstances, the Company is
free to redeem the Preferred Stock at par.

 

“Change of Control” means the occurrence of any of the following: (i) the direct
or indirect sale, lease, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the properties or assets of the Company and its
subsidiaries taken as a whole to any “person” (as that term is used in
Section 13(d) of the U.S. Securities Exchange Act of 1934, as amended) other
than a Permitted Holder (as defined below); (ii) the adoption or the approval by
the holders of capital stock of a plan relating to the liquidation or
dissolution of the Company; (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation), the result of
which is that any person, other than a Permitted Holder, becomes the beneficial
owner, directly or indirectly, of more than 50% of the voting stock of the
Company, measured by voting power rather than number of shares; or (iv) the
Company consolidates with, or merges with or into, any person, or any person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which any of the outstanding voting stock of the
Company or such other person is converted into or exchanged for cash, securities
or other property, other than any such transaction where the voting stock of the
Company outstanding immediately prior to such transaction is converted into or
exchanged for voting stock (other than Disqualified Stock

 

17

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(as defined in the Second Lien Notes Indenture)) of the surviving or transferee
person constituting a majority of the outstanding shares of such voting stock of
such surviving or transferee person (immediately after giving effect to such
issuance).

 

“Permitted Holders” means any of (a) the Supporting Holders, (b) any Related
Party (definition to be agreed) 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.

Conversion Rate Adjustments    If, after the Closing Date, subject to certain
customary exceptions, the Company (i) makes a dividend on its Common Stock
payable in shares of Common Stock or other Company shares, (ii) subdivides or
splits its outstanding shares of Common Stock into a greater number of shares of
Common Stock, (iii) combines or reclassifies its Common Stock into a lesser
number of shares of Common Stock, (iv) issues by reclassification of its Common
Stock any Company shares (including any reclassification in connection with a
merger, consolidation or business combination in which the Company is the
surviving entity), (v) effects a pro rata repurchase of Common Stock,
(vi) issues to any person, other than in a Qualified Investment, shares of
Common Stock, rights, options, warrants or convertible Preferred Stock entitling
them to subscribe for or purchase shares of Common Stock at less than the market
value thereof, (vii) distributes to holders of shares of Common Stock evidences
of indebtedness, Company shares (other than Common Stock) or other assets
(including securities, but excluding any dividend referred to in clause (i), any
rights or warrants referred to in clause (vi), any consideration payable in
connection with a tender or exchange offer made by the Company or any of its
subsidiaries and any dividend of Preferred Stock, Common Stock or any class or
series, or similar Company shares, of or relating to a subsidiary or other
business unit in the case of certain spin-off transactions described below), or
(viii) consummates a spin-off, where the Company makes a distribution to all
holders of shares of Common Stock consisting of stock of any class or series, or
similar equity interests of, or relating to, a subsidiary or other business
unit, then the Conversion Rate in effect at the time of the record date for such
dividend or the effective date of any such other transaction shall be
proportionately adjusted: (1) in respect of clauses (i) through (iv) above, so
that the conversion of the shares of Preferred Stock after such time shall
entitle each holder of shares of Preferred Stock to receive the aggregate number
of shares of Common Stock (or any Company shares into which such shares of
Common Stock would have been combined, consolidated, merged or reclassified, as
applicable) that such holder of shares of Preferred Stock would have been
entitled to receive if the shares of Preferred Stock had been converted into
shares of

 

18

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   Common Stock immediately prior to such record date or effective date, as the
case may be, or (2) in respect of clauses (v) through (viii) above, in the
reasonable discretion of the board of directors to appropriately ensure that the
shares of Preferred Stock are convertible into an economically equivalent number
of shares of Common Stock after taking into account the event described in
clauses (v) through (viii) above. For the avoidance of doubt, in the event of
any issuances of Common Stock or rights, options or warrants for subscription or
purchase of Common Stock, other than in a Qualified Investment, including under
clause (vi) above, the conversion ratio of the Preferred Stock shall be subject
to customary weighted average anti-dilution protection for issuance of below the
market price of the Common Stock (except in the case of a rights offering, in
which case all holders of Preferred Stock shall participate). No Transfer
Restrictions    Each of the Participating Holders may freely transfer any shares
of Preferred Stock owned by such Participating Holder other than in a manner
that violates applicable law. Liquidation Preference    $1,000 per share of
Preferred Stock (subject to Conversion Rate Adjustments).

Redemption upon

Payment of

Liquidation

Preference

   The Company (1) shall be required to redeem the Preferred Stock on a pro rata
basis with proceeds of Alaska Tax Credit monetization of at least $2 million in
excess of the proceeds required to repay the ABL Credit Facility and the Term
Loan Facility, such redemption being subject, in all respects, to the
restrictions contemplated in the Company’s and the Guarantors’ credit facilities
and indentures and (2) will have the right, at any time on or after the Closing
Date, at its option, to cause all of the shares of Preferred Stock then
outstanding to be redeemed, in each case, upon the repayment in cash of the
aggregate Liquidation Preference (plus accrued and unpaid dividends). Ranking   
The shares of Preferred Stock will rank senior to the shares of Common Stock and
each other class or series of equity securities established after the original
issue date of the shares of Preferred Stock that is not expressly made senior to
or on parity with the shares of Preferred Stock, with respect to distribution
rights and Liquidation Preference. The Company will not be permitted to issue
any preferred stock that is senior to or pari passu with the Preferred Stock
without the consent of the majority of the holders thereof.

Conversion

Restriction

   A customary restriction limiting the conversion of the Preferred Stock such
that beneficial owners of less than 10% of the outstanding shares of Common
Stock (calculated in accordance with Rule 13d-3 under the Exchange Act) that are
not otherwise affiliates of the Company shall not be permitted to convert their
shares of Preferred Stock into a number of

 

19

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   shares of Common Stock that would result in beneficial ownership of more than
10% of the outstanding shares of Common Stock (calculated in accordance with
Rule 13d-3 under the Exchange Act). To the extent that the Company exercises its
right to cause the conversion of the Preferred Stock in any circumstance other
than a Change of Control, if any Holder of Preferred Stock, but for the
restrictions set forth in this paragraph, would have been issued additional
Common Stock pursuant to the conversion, such Holder shall instead receive, on a
one-for-one basis in lieu of such additional Common Stock, warrants of the
Company with terms identical to those of the Series C Warrants. Governing Law   
Delaware.

 

20

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Schedule 2

Capitalized Terms used and not otherwise defined herein shall have the meanings
set forth in the Term Sheet.

Warrant Term Sheet

 

Topic

  

Provision

Series    The Company will issue one series of warrants in connection with the
Exchange Offer (the “Series C Warrants”). Value    Assuming all Second Lien
Notes and Eligible Stub Notes are validly tendered, the Series C Warrants will
represent 5.26% of the fully diluted shares of Common Stock as of the Closing
Date (after giving effect to the conversion of the Preferred Stock), subject to
dilution from the issuance of the MIP Shares and the Existing Warrants. Exercise
Price    The exercise price of the Series C Warrants will be $0.0001.
Exercisability   

The Series C Warrants shall be exercisable, at the option of the Holder thereof,
at any time and from time to time, in whole or in part, into Common Stock as
provided above, by delivering to the Company such Series C Warrant(s), together
with a notice of exercise of such Series C Warrant(s).

 

Subject to exercise restrictions, the Series C Warrants will be exercisable by
the Company in connection with (i) a full redemption of Preferred Stock,
provided that, without the consent of such Holder, the Company may not exercise
Series C Warrants held by any Holder that beneficially owns less than 10% of the
outstanding shares of Common Stock (calculated in accordance with Rule 13d-3
under the Exchange Act) and is not otherwise an affiliate of the Company if such
exercise would result in such Holder beneficially owning 10% or more of the
outstanding shares of Common Stock (calculated in accordance with Rule 13d-3
under the Exchange Act), or (ii) upon a Change of Control.

Dividends    The Series C Warrants shall participate in all dividends and
distributions when, as and if paid on the Common Stock (in cash or otherwise on
an as-exercised basis assuming exercise at the time of such dividend or
distribution). Voting Rights    Holders of the Series C Warrants shall not be
entitled to vote with the Common Stock on an as-exercised basis. Holders of
Common Stock issued upon exercise of Series C Warrants shall have the same
voting and other rights as other holders of Common Stock in the Company. Term   
The Series C Warrants will not have an expiration date and shall be perpetual.

 

21

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Adjustments to Exercise Price    The exercise price of the Series C Warrants
shall be adjusted upon customary anti-dilution events, including: (i) making a
dividend on the Company’s Common Stock payable in shares of Common Stock or
other Company shares, (ii) subdividing or splitting the Company’s outstanding
shares of Common Stock into a greater number of shares of Common Stock,
(iii) combining or reclassifying the Company’s Common Stock into a lesser number
of shares of Common Stock, (iv) issuing by reclassification of the Company’s
Common Stock any Company shares (including any reclassification in connection
with a merger, consolidation or business combination in which the Company is the
surviving entity), (v) effecting a pro rata repurchase of Common Stock,
(vi) issuing to holders of shares of Common Stock, in their capacity as holders
of shares of Common Stock, rights, options or warrants entitling them to
subscribe for or purchase shares of Common Stock at less than the market value
thereof, (vii) distributing to holders of shares of Common Stock evidences of
indebtedness, Company shares (other than Common Stock) or other assets
(including securities, but excluding any dividend referred to in clause (i), any
rights or warrants referred to in clause (vi), any consideration payable in
connection with a tender or exchange offer made by the Company or any of its
subsidiaries and any dividend of Preferred Stock, Common Stock or any class or
series, or similar Company shares, of or relating to a subsidiary or other
business unit in the case of certain spin-off transactions described below), or
(viii) consummating a spin-off, where the Company makes a distribution to all
holders of shares of Common Stock consisting of stock of any class or series, or
similar equity interests of, or relating to, a subsidiary or other business
unit.    If an anti-dilution event described above occurs, then the exercise
price of the Series C Warrants shall be proportionately adjusted: (1) in respect
of clauses (i) through (iv) above, so that the exercise price of the Series C
Warrants after such time shall entitle each holder of Series C Warrants to
receive the aggregate number of shares of Common Stock (or any Company shares
into which such shares of Common Stock would have been combined, consolidated,
merged or reclassified, as applicable) that such holder of Series C Warrants
would have been entitled to receive if the Series C Warrants had been exercised
for shares of Common Stock immediately prior to such record date or effective
date, as the case may be, or (2) in respect of clauses (v) through (viii) above,
in the reasonable discretion of the board of directors to appropriately ensure
that the Series C Warrants are exercisable into an economically equivalent
number of shares of Common Stock after taking into account the event described
in clauses (v) through (viii) above.

 

22

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Cashless Exercise    The Warrant Agreement will contain a customary cashless
exercise provision. Transferability    The Series C Warrants shall be
transferrable, subject to applicable securities laws. Exercise Restriction    A
customary restriction limiting the exercise of the Series C Warrants such that,
except in the context of a Change of Control, beneficial owners of less than 10%
of the outstanding shares of Common Stock (calculated in accordance with Rule
13d-3 under the Exchange Act) that are not otherwise affiliates of the Company
shall not be permitted to exercise (and the Company shall not be entitled to
cause the exercise of) their Series C Warrants into a number of shares of Common
Stock that would result in beneficial ownership of more than 10% of the
outstanding shares of Common Stock (calculated in accordance with Rule 13d-3
under the Exchange Act). Governing Law    Delaware

 

23

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Schedule 3

Supporting Holders

 

  •   Whitebox Asymetric Partners, LP

 

  •   Whitebox Credit Partners, LP

 

  •   Whitebox Multi-Strategy Partners, LP

 

  •   Whitebox Institutional Partners, LP

 

  •   Blue Mountain Credit Alternatives Master Fund L.P.

 

  •   BlueMountain Guadalupe Peak Fund L.P.

 

  •   BlueMountain Montenvers Master Fund SCA SICAV-SIF

 

  •   BlueMountain Summit Trading L.P.

 

  •   BlueMountain Kicking Horse Fund L.P.

 

  •   BlueMountain Timberline Ltd.

 

  •   1992 MSF International Ltd.

 

  •   1992 Tactical Credit Master Fund, L.P.

 

  •   Morgan Stanley Investment Management Inc.

 

  •   DuPont Capital Management

 

  •   Amzak Capital Management LLC

 

  •   Minerva Advisors

 

  •   Steven Roth

 

24

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Schedule 4

Capitalized Terms used and not otherwise defined herein shall have the meanings
set forth in the Term Sheet.

Closing Date Allocation of Common Stock

Assuming all Second Lien Notes and Eligible Stub Notes are validly tendered, as
of the Closing Date, after giving effect to the issuance of the new shares of
Common Stock, the full redemption of the shares of Preferred Stock, the full
exercise of the Series C Warrants and the issuance of the MIP Shares (as shown
in the table below), the allocation of Common Stock of the Company shall be as
follows (based on 10,253,126 shares outstanding on a fully-diluted basis prior
to the Closing Date and a total of 55,000,000 shares of Common Stock authorized
to be issued):

 

     Excluding MIP Shares     Including MIP Shares        Shares of
Common Stock      Percentage
Ownership     Shares of
Common Stock      Percentage
Ownership  

Existing Common Stock

     10,253,126        6.60 %      10,253,126        5.94 % 

Amended Management Incentive Plan

     N/A        N/A       17,261,155        10.00 % 

Newly Issued Shares of Common Stock

     22,426,160        14.44 %      22,426,160        12.99 % 

Common Shares Issuable upon Exercise of Series C Warrants

     8,169,822        5.26 %      8,169,822        4.73 % 

Common Shares Issuable upon Conversion of the Preferred Stock

     114,501,286        73.71 %      114,501,286        66.33 % 

 

25

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Exhibit C

Management Compensation Arrangements

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Key Revisions to Management Compensation Arrangements

The following term sheet sets forth the key revisions to the management
compensation arrangements of SAExploration Holdings, Inc. (the “Company”) for
Jeff Hastings, Brian Beatty, Brent Whiteley, Mike Scott, Darin Silvernagle and
Ryan Abney (each, an “Executive”), which will take effect in connection with the
closing of the restructuring transactions of the Company (the “Restructuring”)
contemplated by the Exchange Offer Memorandum and Consent Solicitation Statement
dated December     , 2017 of the Company (the “Memorandum”) and the
Restructuring Support Agreement (the “Agreement”) to which this Exhibit A is
attached. Other than with respect to the amendments described below, the
employment agreements between the Company and each of the Executives (each, an
“Employment Agreement”) will remain in effect in accordance with their terms. It
shall be a condition to the Executives’ willingness to enter into the amendments
to the Employment Agreements that the Restructuring closes as contemplated by
the Memorandum and the Agreement and that a condition to the closing of the
Restructuring (including as set forth in the Memorandum) is the entering into of
such amendments.

 

  •   Employment Term and Non-Renewal. The Employment Agreements will be amended
to extend the current term of each Employment Agreement through December 31,
2020, and to clarify that if the Company gives notice to an Executive that the
applicable Employment Agreement will not be renewed pursuant to Section 1 of
such Employment Agreement, the post-employment obligations (e.g., the
non-competition covenants) set forth in Section 7 or Section 8 of such
Employment Agreement, as applicable, will not apply following such Executive’s
termination of employment. In the event Executive is offered a renewed
Employment Agreement at the same or better terms than the current Employment
Agreement and the Executive refuses to renew then the post-employment
obligations set for in Sections 7 and 8 shall remain in effect.

 

  •   2017 Annual Bonus. Each Executive’s 2017 annual bonus will be considered
earned and will be paid in accordance with past practice when such payment
becomes due. The amounts of such annual bonuses will not be affected by the
Restructuring.

 

  •   Annual Base Salary and Annual Target Bonus.

 

  •   Amount of Annual Base Salary and Annual Target Bonus. The Employment
Agreements will be amended to provide that the annual base salary rate and
annual bonus Target Percentages (as defined in the applicable Employment
Agreement) set forth in Section 4 of the applicable Employment Agreement shall
only be in effect for any calendar year following a calendar year in which the
Free Cash Flow (as defined below) equals or exceeds $15,000,000. The Employment
Agreements shall be further amended to provide that, in the event that Free Cash
Flow for the prior calendar year was less than $15,000,000, each Executive’s
annual base salary and annual bonus Target Percentage for the applicable
calendar year shall be no less than the annual base salary and annual bonus
Target Percentages as set forth in the following table; provided that such
annual base salary and annual bonus Target Percentages may, in the discretion of
the Company’s Chief Executive Officer and approval of the Compensation
Committee, be increased (but in no event decreased):

 

In the event Free Cash Flow for the prior calendar year was less than
$15,000,000:  

Executive

   Annual Base Salary ($)      Target Bonus (Percentage of Annual
Base Salary)  

Jeff Hastings

     552,780        35 % 

Brian Beatty

     552,780        35 % 

Brent Whiteley

     403,410        30 % 

Mike Scott

     300,600        30 % 

Darin Silvernagle

     262,800        30 % 

Ryan Abney

     193,500        30 % 

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  •   Calculating Free Cash Flow.

 

  •   For purposes of the Employment Agreements, Free Cash Flow for any calendar
year shall be calculated as the difference between the Company’s adjusted EBITDA
for the full calendar year (as determined by the Board of Directors of the
Company (the “Board”)) and the Company’s capital expenditures approved by the
Board for the following calendar year. For clarification, the approved capital
expenditure and the adjusted EBITDA will be amounts approved by the Board in the
current fiscal year.

 

  •   The Compensation Committee of the Board may adjust the Free Cash Flow
calculation to reflect any actual or projected increases in capital expenditures
required to capture business opportunities.

 

  •   The Board will calculate Free Cash Flow for the applicable calendar year
following delivery of the Company’s earnings statements for the prior year, but
in any event by March of the applicable calendar year. The corresponding
determination of each Executive’s annual base salary and annual bonus Target
Percentages shall, following such determination, be retroactive to January 1 of
such calendar year, and any payments of additional base salary that become due
to the Executives for the period of such calendar year preceding the Board’s
determination shall be paid to the Executives no later than the first payroll
date immediately following the date on which the Board makes such determination.

 

  •   Annual Bonus Criteria. The Executive Goals (as defined in each Employment
Agreement) that determine the amount of each Executive’s annual bonus will
remain tied to Free Cash Flow targets, EBITDA targets, individual performance
targets and health, safety and environment (“HSE”) targets, on the same basis as
currently in effect. Each Executive’s individual performance targets and HSE
targets for any calendar year shall be set by the Compensation Committee of the
Board prior to December 31 of the prior calendar year. The financial targets for
determining each Executive’s Free Cash Flow targets and EBITDA targets for any
calendar year shall be determined by the Board at its third quarterly meeting of
the prior calendar year.

 

  •   Annual Bonus Payment Timing. Each Executive’s annual bonus will be paid in
the first pay period following the date of the earnings release for the calendar
year to which such annual bonus relates unless an alternative timing of payment
is agreed to by the applicable Executive; provided that such annual bonus will
in any event be paid in the calendar year following the calendar year to which
such bonus relates.

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  •   LTIP. After the completion of the Restructuring, the Company will adopt a
new Long Term Incentive Program (the “LTIP”). Key terms for the LTIP will
include the following:

 

  •   Target Value of LTIP Awards. For any calendar year following a calendar
year in which the Free Cash Flow was less than $15,000,000, the target aggregate
value of the LTIP awards to be granted to each Executive shall be as set forth
in the following table:

 

In the event Free Cash Flow for the prior calendar year was less than
$15,000,000:  

Executive

   Target Aggregate Value of LTIP Awards (Percentage of
Annual Base Salary)  

Jeff Hastings

     60 % 

Brian Beatty

     60 % 

Brent Whiteley

     40 % 

Mike Scott

     35 % 

Darin Silvernagle

     14 % 

Ryan Abney

     12 % 

For any calendar year following a calendar year in which the Free Cash Flow
equals or exceeds $15,000,000, the target aggregate value of the LTIP awards to
be granted to each Executive shall be as set forth in the following table

 

In the event Free Cash Flow for the prior calendar year equals or exceeds
$15,000,000:  

Executive

   Target Value of LTIP Awards (Percentage of Annual  Base
Salary)1  

Jeff Hastings

     20 % 

Brian Beatty

     20 % 

Brent Whiteley

     13 % 

Mike Scott

     11 % 

Darin Silvernagle

     4.6 % 

Ryan Abney

     3.9 % 

 

  •   Types of Grants Awarded. LTIP grants shall be made in the form of
restricted stock, stock options or other forms of equity compensation. For
grants made in 2018, the Executives and the Company will agree to the types and
relative amounts of equity awards issuable to each Executive under the LTIP. For
2019 and thereafter, the Board shall determine in its discretion the types and
relative amounts of equity awards issuable to each Executive under the LTIP;
provided that no less than 50% of the value of the equity awards granted to each
Executive under the LTIP for each such year shall be in the form of restricted
stock awards.

 

  •   Minimum Grant Thresholds. The minimum aggregate value of LTIP awards
granted to each Executive for each year shall be discussed between the Company
and the applicable Executive prior to completion of the Restructuring. Such
minimum thresholds shall be determined following discussion with the applicable
Executive and recommended by the Chief Executive Officer to the Compensation
Committee of the Board, which committee shall have final approval of such
thresholds.

 

1  The column lists minimum target percentages only. The Compensation Committee
will retain the ability to reset the Target Value of LTIP Awards based upon Free
Cash Flow generation in excess of the Board approved plan for the year.

--------------------------------------------------------------------------------

  •   LTIP Award Criteria. The criteria for determining the actual value of each
Executive’s awards under the LTIP for each calendar year shall be the same
criteria set by the Compensation Committee of the Board for determining such
Executive’s annual cash bonus, which criteria is described above.

 

  •   Vesting of LTIP Grants. Each annual award granted under the LTIP shall
vest on the eighteen month anniversary of the date of grant of such award.
Notwithstanding the foregoing, all of an Executive’s awards granted under the
LTIP will vest in full upon the earlier of (i) such Executive’s attaining the
age of 64 years or (ii) a Change of Control (as defined in the applicable
Executive’s Employment Agreement.

 

  •   MIP. After the completion of the Restructuring, the Company will adopt a
new Management Incentive Program (the “MIP”), substantially similar to the
Company’s current Management Incentive Program. Key terms for the MIP will
include the following:

 

  •   Types of Grants Awarded. All awards granted under the MIP shall be in the
form of restricted stock and restricted stock units pursuant to standard forms
of agreement approved by the Company and management.

 

  •   Aggregate Value of MIP Awards. The aggregate number of shares of common
stock subject to awards issuable under the MIP shall be equal to 10% of the
fully diluted common stock of the Company outstanding as of the date of
consummation of the Restructuring, after giving effect to the issuance of all
common stock, warrants and other equity-linked securities of the Company. The
entire pool of awards under the MIP shall be issued to the Executives on the
date of consummation of the Restructuring.

 

  •   Vesting of MIP Grants. Of the pool of common stock reserved for issuance
pursuant to MIP awards, 60% of such common stock shall be issued pursuant to MIP
awards (the “Initial Awards”) that will vest as follows: 25% of each Initial
Award shall vest on the 18-month anniversary of the consummation of the
Restructuring, an additional 25% of each Initial Award shall vest on the second
anniversary of the consummation of the Restructuring and the remaining 50% of
each Initial Award shall vest on the third anniversary of the consummation of
the Restructuring, provided the applicable Executive remains employed through
each such date. The remaining 40% of such common stock issued pursuant to MIP
awards (the “Reserved Awards”) shall be allocated on the recommendation of the
chief executive officer and will vest based upon goals set by the Compensation
Committee but in all cases the Reserved Awards will fully vest no later than
December 31, 2021, provided the applicable Executive remains employed through
such date. Notwithstanding the foregoing, all of an Executive’s awards granted
under the MIP will vest in full on the earliest to occur of (i) such Executive’s
attaining the age of 64 years, (ii) a Change of Control (as defined in the
applicable Executive’s Employment Agreement)2 , (iii) December 31, 2020, if such
Executive’s Employment Agreement is not renewed, and (iv) the termination of
such Executive’s employment for any reason other than a termination for Cause
(as defined in the applicable Executive’s Employment Agreement) or a termination
by such Executive without Good Reason (as defined in the applicable Executive’s
Employment Agreement).

In the event of a change of control (CIC) where the Executives contract is not
renewed, maintained or extended by the surviving entity or the Executive’s
position is changed, the executive will be entitled to CIC cash payments
pursuant to his contract and to accelerated vesting of granted MIP shares.

 

2  For clarification, in the event of a change of control (CIC) where the
executives’ contract is renewed, maintained, or extended by the surviving entity
and the Executive’s position is unchanged the Executive will not be entitled to
any CIC cash payments pursuant to his contract nor to any accelerated vesting of
MIP shares.