EFTA01296945.pdf

NAME SEARCHED: NES, LLC PWM BIS-RESEARCH performed due diligence research in accordance with the standards set by AML Compliance for your business. We completed thorough searches on your subject name(s) in the required databases and have attached the search results under the correct heading below. Significant negative media results may require escalation to senior business, Legal and Compliance management. Also, all accounts invoMng PEPs must be escalated. Search: Result: Click here for results: Reviewer Comments (as necessary): No Hit El Not Required RDC I. RDC Results No RDC alert (Please cee attached) ■ Hit No Hit 0 Not Required PCR It. peR ResultS No PCR alert (Please sec attached) 0 Hit IS Yes 0 No III. Negative Media There was no information found 1313 m Not Required IV. Non-Negative Media Result found(Plcasc sec attached) V. Other Language Media There was no information found Result found(Plaisc sec attached) Results? Yes • No D&B • Not Required VI. D&B Result found(Please see attached) Smartlinx Results? Yes 0 No 2 MI Not Required VII. Smartlinx 0 Review by Legal May There was no information found court Cases be Required g No Results VIII. Con Cases 0 Search not required Prepared by: Shanu Gujaria Date:06/16/2017 Research Analyst Instructions: 1. Review and confirm that all results are returned for your client. 2. Please note that you are still required to perform any Martindale-Hubbell search (if applicable) on each search subject. We have attached the web link below for your eonvenience:Martindale-Hubbellhttp://www.manindale.comhip/Martindak/home.xml 3. As needed, provide comment for any negative results. 4. If applicable, please obtain clearance from Compliance for all alerts. 5. Save any changes you make to this document and attach file to your KYC. Please note: Submission of a sipped KYC is your confirmation that you have fully reviewed the research documents. For internal use only S0NY_GM_00059799 CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0022623 EFTA_00170349 EFTA01296945  OFAC RESULTS RDC: 11602688 Not. Alerted KYC 1790755 Country:UNITED STATES NES, LLC Country:VIRGIN ISLANDS, 11602689 Not Alerted KYC 1790755 NE, LLC U.S. PCR: C20170637909092 NES, LLC 6201215544 NCA customised Closed - No Hit 16/06/2017 C20170637909091 NES, LLC 6201215544 NCA customised Closed - No Hit 16/06/2017 BIS RESULTS Negative Media: There was no information found Non-Negative Media: Targeted News Service April 7, 2017 Friday 6:58 PM EST MILITARY $128,278 Federal Contract Awarded to NES BYLINE: Targeted News Service LENGTH: 82 words For internal use only SDNY_GM_00059800 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022624 EFTA_00I 70350 EFTA01296946  Page 2 DATELINE: MONTGOMERY, Ala. MONTGOMERY, Ala., April 7 -- NES LLC, Albuquerque, New Mexico, won a $128,277.99 federal contract set aside for small business from the Alabama Air National Guard for the installation of lightning protection systems and surge protection devices at Building 1403 at the 187th Fighter Wing. For more information about Targeted News Service contract awards please contact: Myron Struck, Editor, Direct: 703/866-4708, Cell: 703/304-1897, [email protected] 08A-DayandanteE 170407-966210 07M-Vitin LOAD-DATE: April 7, 2017 LANGUAGE: ENGLISH PUBLICATION-TYPE: Newswire Copyright 2017 Targeted News Service LLC All Rights Reserved #ivvis Plus Media Solutions US Official News August 2, 2016 Tuesday FORM 8-K: SAExploration Holdings, Inc FILES Current report LENGTH: 7616 words DATELINE: New York Washington: SAExploration Holdings, Inc, has filed FORM 8-K (Current Report) with Securities and Exchange Commission on August 01, 2016 Item 1.01. For internal use only SDNY_GM_00059801 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022625 EFTA_OOI 7035 1 EFTA01296947  Page 3 Entry into a Material Definitive Agreement. As previously announced, on June 13, 2016, SAExploration Holdings, Inc. (the "Company") entered into a comprehensive restructuring support agreement (the "Restructuring Support Agreement") with holders (the "Supporting Holders") of approximately 66.67% of the par value of the Company's 10.000% Senior Secured Notes due 2019 (the "Existing Notes"), pursuant to which the Supporting Holders and the Company agreed to enter into and implement a comprehensive restructuring of the Company's balance sheet (the "Restructuring"). On July 27, 2016, the Company completed its previously announced exchange offer and consent solicitation (the "Exchange Offer") related to the Company's Existing Notes. In the Exchange Offer, the Company offered to exchange any and all of the Existing Notes held by eligible holders for up to (i) $70,000,000 aggregate principal amount of 10.000% Senior Secured Second Lien Notes due 2019 (the "New Notes") and (ii) 6,497,979 shares of the Company's common stock (the "New Notes Shares"), upon the terms and subject to the conditions set forth in the Company's Exchange Offer Memorandum and Consent Solicitation Statement and related Letter of Transmittal and Consent, each dated June 24, 2016. Concurrently with the Exchange Offer, the Company solicited consents from holders of the Existing Notes to adopt certain proposed amendments (the "Proposed Amendments") to the Indenture under which the Existing Notes were issued (the "Existing Notes Indenture"), the existing intercreditor agreement and related collateral and security agreements relating to the Existing Notes. As previously announced, following the irrevocable receipt of the requisite consents, on June 29, 2016, the Company entered into a first supplemental indenture to the Existing Notes Indenture, an amended and restated intercreditor agreement dated as of June 29, 2016, by and among Wells Fargo Bank, National Association, as lender and collateral agent for the Existing Revolving Credit Facility, Wilmington Savings Fund Society, FSB, as trustee and collateral agent for the Existing Notes, and Delaware Trust Company, as administrative and collateral agent for the New Senior Loan Facility, which was joined by the noteholder collateral agent for the New Notes on July 27, 2016 (the "New Intercreditor Agreement"), and a first amendment to the security agreement relating to the Existing Notes, among other things. In addition, as previously announced, on June 29, 2016, (i) the Company, as borrower, and each of the Company's domestic subsidiaries, as guarantors (the "Guarantors"), entered into a new senior secured multi-draw term loan facility (the "New Senior Loan Facility") with the lenders, including the Supporting Holders, from time to time party thereto, and Delaware Trust Company, as collateral agent and administrative agent (the "New Senior Loan For internal use only SDNY_GM_00059802 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SDNY-0022626 EFTA_00170352 EFTA01296948  Page 4 Facility Agent") and (ii) the Company, the Guarantors and Wells Fargo Bank, National Association, as lender, entered into an amendment to the Credit and Security Agreement, dated November 6, 2014 (as amended, the "Existing Revolving Credit Facility"). For additional information on the agreements giving effect to the Proposed Amendments, refer to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 1, 2016. In exchange for $138,128,000 in aggregate principal amount of Existing Notes, representing approximately 98.7% of the outstanding aggregate principal amount of the Existing Notes, validly tendered and accepted for exchange in the Exchange Offer, the Company issued (i) $69,064,000 aggregate principal amount of its New Notes and (ii) 6,410,502 New Notes Shares, after giving effect to the Reverse Stock Split described below. The Company delivered cash in lieu of any fractional shares. In addition, each participating holder received accrued and unpaid interest on its tendered Existing Notes that were accepted for exchange from their last interest payment date to, but not including, the settlement date, which was paid in the form of additional New Notes, in an aggregate amount of $7,458,912. Indenture The terms of the New Notes are governed by the indenture (the "Indenture"), dated as of July 27, 2016, among the Company, its domestic subsidiaries party thereto (the "Guarantors") and Wilmington Savings Fund Society, FSB, as trustee (the 'Trustee") and noteholder collateral agent (the "Noteholder Collateral Agent"). The New Notes will mature on September 24, 2019, provided that, if any Existing Notes remain outstanding as of 5:00 p.m. (New York City time) on March 31, 2019, then upon the affirmative vote of the holders of a majority of then-outstanding principal amount of New Notes, the maturity date of the New Notes shall become April 14, 2019. Interest is payable on January 15, April 15, July 15 and October 15 of each year, commencing on October 15, 2016. The New Notes will bear interest at a rate of 10.000% per annum payable in cash, accruing from July 27, 2016; provided, however, that for each interest payment date for the New Notes through, and including the July 15, 2017 interest payment date, the Company may, at its option, pay interest on any or all such interest payment dates in kind by the issuance of additional New Notes. Interest paid in-kind will accrue on the New Notes at a rate per annum of 11.000%, which is the cash interest rate plus 100 basis points. Any additional New Notes issued as in-kind interest will be fungible with, and will accrue interest at the same rate as, the New Notes. 1 For internal use only SDNY_GM_00059803 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022627 EFTA_OOI 70353 EFTA01296949  Page 5 The New Notes are unconditionally guaranteed, jointly and severally, by all of the Company's existing and future domestic restricted subsidiaries, except for immaterial subsidiaries and certain holding companies holding interests in controlled foreign corporations (the "New Guarantees"). The New Notes and the New Guarantees are secured on a second priority basis by liens on substantially all of the Company's and the Guarantors' assets, subject to certain exceptions and permitted liens, securing CO the obligations under the Existing Revolving Credit Facility on a senior first priority basis, (ii) the New Senior Loan Facility on a junior first priority basis and (iii) the Existing Notes on a third priority basis. Further, the New Notes will be: O equal in right of payment to all of the Company's and the Guarantors' existing and future senior indebtedness; O structurally subordinated to all existing and future liabilities of any of the Company's non-guarantor subsidiaries; For internal use only SDNY_GM_00059804 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SONY-0022628 EFTA_OOI 70354 EFTA01296950  Page 6 O senior in right of payment to all of the Company's and the Guarantors' future subordinated indebtedness; O effectively senior to the Existing Notes and any of the Company's and the Guarantors' existing and future unsecured senior indebtedness, to the extent of the value of the collateral securing such indebtedness; O For internal use only SDNY_GM_00059805 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022629 EFTA_00I 70355 EFTA01296951  Page 7 effectively junior to the Company's and the Guarantors' obligations under the Existing Revolving Credit Facility and the New Senior Loan Facility, to the extent of the value of the collateral securing such indebtedness; and O effectively junior to any existing and future secured indebtedness secured by assets not constituting collateral for the New Notes and the New Guarantees to the extent of the value of the collateral securing such indebtedness. The Company has the right to redeem up to $35 million of the New Notes at a redemption price of 100% of the principal amount of the New Notes plus accrued and unpaid interest out of proceeds received from certain Alaska tax credit certificates that have been assigned to the Company, provided that the Company has first repaid in full the Existing Revolving Credit Facility and the New Senior Loan Facility and all commitments thereunder have been canceled. The Company has no other optional redemption rights. The New Notes are subject to a make-whole provision requiring that if the New Notes are accelerated or otherwise become due and payable prior to their stated maturity due to an event of default, then an applicable premium determined in accordance with the Indenture will also be immediately due and payable, together with principal of, accrued and unpaid interest on, the New Notes. Subject to certain exceptions, upon the occurrence of a Change of Control (as defined in the Indenture), each holder of New Notes will have the right to require the Company to purchase that holder's New Notes for a cash price equal to 101% of the principal amounts to be purchased, plus accrued and unpaid interest to the date of purchase. Upon the occurrence of an Asset Sale (as defined in the Indenture), each holder of New Notes will have the right to require the Company to purchase that holders New Notes for a cash price equal to 100% of the principal amounts to be purchased, plus accrued and unpaid interest to the date of purchase, prepayment or redemption, from any proceeds from the For internal use only SDNY_GM_00059806 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SONY-0022630 EFTA_00I 70356 EFTA01296952  Page 8 Asset Sale in excess of $7.5 million that are not otherwise used by the Company to either reduce its debt, reinvest in assets or acquire a permitted business. The Indenture contains various covenants that, subject to certain exceptions, limit the ability of the Company and its restricted subsidiaries to, among other things: (i) transfer or sell assets; (ii) pay dividends, redeem subordinated indebtedness or make other restricted payments; (iii) incur or guarantee additional indebtedness or, with respect to its restricted subsidiaries, issue preferred stock; (iv) create or incur liens; (v) incur dividend or other payment restrictions affecting its restricted subsidiaries; (vi) consummate a merger, consolidation or sale of all or substantially all of its or its subsidiaries' assets; (vii) enter into transactions with affiliates; (viii) engage in business other than its current business and reasonably related extensions thereof; and (ix) take or omit to take any actions that would adversely affect or impair in any material respect the collateral securing the New Notes. 2 The Indenture also contains other customary terms and conditions, including relating to customary events of default. If an event of default occurs and is continuing, then all outstanding New Notes either become due and payable immediately without further action or notice (in the event of a bankruptcy default), or the Trustee or the holders of at least 25% in aggregate principal amount of the outstanding New Notes may declare the principal of, and any accrued interest on, the New Notes to be due and payable immediately (in the event of another default). The summary of the Indenture, the New Notes, the form of which is included in the Indenture, and the New Guarantees set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the text of the Indenture, a copy of which is being filed as Exhibit 4.1 hereto and is incorporated herein by reference, and the Notation of Guarantee, a copy of which is being filed as Exhibit 4.3 hereto and is incorporated herein by reference. Additional Indebtedness Joinder and Designation In connection with the entry into the Indenture and the issuance of the New Notes, the Trustee and Noteholder Collateral Agent entered into an Additional Indebtedness Joinder and Designation dated July 27, 2016 (the "Joinder") with the collateral agent for the Existing Revolving Credit Facility, the collateral agent for the New Senior Loan Facility and the noteholder collateral agent for the Existing Notes. Pursuant to the Joinder, the Noteholder Collateral Agent, for and on behalf of the holders of the New Notes, agreed to become a party to, and to be subject to the terms of, the New Intercreditor Agreement and the existing parties to the New Intercreditor Agreement agreed that the New Notes and the For internal use only SDNY_GM_00059807 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SONY-0022631 EFTA_00I 70357 EFTA01296953  Page 9 New Guarantees shall constitute additional debt under the New Intercreditor Agreement with the relative ranking described above. The summary of the Joinder set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the text of the Joinder, a copy of which is being filed as Exhibit 4.4 hereto and is incorporated herein by reference. Security Agreement In connection with the issuance of the New Notes and execution of the Indenture, the Company, the Guarantors and the Noteholder Collateral Agent entered into a Security Agreement, dated as of July 27, 2016 (the "Security Agreement"), pursuant to which the Company and the Guarantors pledged substantially all of their assets to secure their obligations under the New Notes and the Indenture, subject to certain exclusions and exceptions as set forth in such agreement as well as the New Intercreditor Agreement. The New Notes and the New Guarantees are not secured by the assets of the Company's subsidiaries that are not Guarantors. The summary of the Security Agreement set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the text of the Security Agreement, a copy of which is being filed as Exhibit 10.1 hereto and is incorporated herein by reference. Registration Rights Agreement On July 27, 2016, the Company entered into a registration rights agreement (the "Registration Rights Agreement") with parties who received newly issued common stock on July 27, 2016 (the "RRA Holders"). The Registration Rights Agreement requires the Company to use its commercially reasonable efforts to prepare and file a shelf registration statement (the "Shelf Registration Statement") registering the offering and sale on a delayed or continuous basis of all Registrable Securities (as defined in the Registration Rights Agreement), and to keep such Shelf Registration Statement effective until the earliest of (i) the date as of which all Registrable Securities have been sold pursuant to the Shelf Registration Statement, (ii) the date on which the Registration Rights Agreement terminates and (iii) such shorter period as the RRA Holders of at least 50% of Registrable Securities with respect to the Shelf Registration shall agree in writing Pursuant to the Registration Rights Agreement, RRA Holders have customary underwritten offering and piggyback registration rights, subject to the limitations set forth in the Registration Rights Agreement. Under their underwritten 3 For internal use only SDNY_GM_00059808 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SDNY-0022632 EFTA_00I 70358 EFTA01296954  Page 10 offering rights, individual RRA Holders that together own Registrable Securities representing at least 50% of the outstanding shares of the Company's common stock have the right to demand the Company to effectuate the distribution of any or all of their Registrable Securities by means of an underwritten offering pursuant to the Shelf Registration Statement. No individual holder may exercise this right more than two times. The Company is not obligated to effect an underwritten demand notice within 90 days of closing another underwritten offering. Under their piggyback registration rights, if at any time the Company proposes to conduct an underwritten offering for its own account, the Company must allow such RRA Holders to include a specified number of their Registrable Securities in the offering. These rights are subject to certain conditions and limitations, including certain rights to limit the number of shares to be included in an underwritten offering and the Company's right to delay or withdraw a registration statement or an offer and sale of Registrable Securities pursuant to such registration statement (including underwritten offerings) under certain circumstances. The registration rights granted in the Registration Rights Agreement are subject to customary indemnification and contribution provisions. The summary of the Registration Rights Agreement set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the text of the Registration Rights Agreement, a copy of which is being filed as Exhibit 10.2 hereto and is incorporated herein by reference. Warrant Agreement On July 27, 2016, the Company entered into a warrant agreement (the 'Warrant Agreement") with Continental Stock Transfer and Trust Company, as warrant agent (the 'Warrant Agent"). Pursuant to the Warrant Agreement, the Company issued two series of warrants (the "Series A Warrants" and the "Series B Warrants", together, the "Warrants") to the holders of the Company's common stock as of July 26, 2016, such Warrants to expire at the close of business on July 27, 2021 (the "Expiration Date"). Following July 27, 2016, there are 154,108 Series A Warrants outstanding to purchase up to an aggregate of 154,108 shares of common stock at an initial exercise price of $10.30 per share (the "Series A Exercise Price"). Following July 27, 2016, there are 154,108 Series B Warrants outstanding to purchase up to an aggregate of 154,108 shares of common stock at an initial exercise price of $12.88 per share (the "Series B Exercise Price"). The Warrants may generally be exercised during the period commencing 30 days prior to the Expiration Date, subject to receipt by the Company of certain Alaska tax credits. Upon issuance, the shares issued under the Warrants will represent 4.5% of the outstanding shares of common stock as of July 27, 2016, subject to the issuance of (i) additional shares of common stock under a new 2016 Long-Term Incentive Plan, which, once adopted, will reserve 1,038,258 shares of common stock for issuance, and (ii) 132,093 shares of common stock to the lenders under the New Senior Loan Facility as an anti-dilution protection relative to the Warrants. For internal use only SDNY_GM_00059809 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SDNY-0022633 EFTA_00170359 EFTA01296955  Page 11 Until such time as the Warrants and the shares of common stock issuable under the Warrants are registered under the Securities Act of 1933, as amended (the "Securities Act"), they will be subject to restrictions on transfer. The Company has agreed in the Warrant Agreement to customary resale registration rights. Adjustments. The number of shares of common stock for which a Warrant is exercisable, and the exercise price per share of such Warrant are subject to adjustment pursuant to a customary anti-dilution provision. Reorganization Event. Upon the occurrence of certain events constituting a Fundamental Equity Change (as defined in the Warrant Agreement) or a reorganization, recapitalization, reclassification, consolidation or similar event as a result of which the common stock would be converted into, changed into or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof), each Warrant holder will have the right to receive, upon exercise of a Warrant, an amount of securities, cash or other property received in connection with such event with respect to or in exchange for the number of shares of common stock for which such Warrant is exercisable immediately prior to such event. Net Share Settlement. No payment of cash will be required in connection with the exercise of a Warrant (a "Net Share Settlement"). In connection with such Net Share Settlement, the Company shall deliver, without any cash payment therefor, a number of shares of common stock equal to the fair value (as of the exercise date for such Warrant) of one share of common stock minus the Series A Exercise Price or Series B Exercise Price, as applicable, divided by the fair value of one share of common stock. 4 The summary of the Warrant Agreement set forth in this Item 1.01 does not purport to be complete and is qualified in its entirety by reference to the text of the Warrant Agreement, a copy of which is being filed as Exhibit 10.3 hereto and is incorporated herein by reference. The information in Item 5.02 with respect to the Indemnification Agreements is incorporated into this Item 1.01 by reference. Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information in Item 1.01 is incorporated into this Item 2.03 by reference. For internal use only SDNY_GM_00059810 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022634 EFTA_(()170360 EFTA01296956  Page 12 Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. On July 27, 2016, the Company provided notice to the Nasdaq Stock Market that, as a result of the resignation of certain directors from the Board of Directors, and the appointment of new members to the Board of Directors, as described in more detail in Item 5.02 below, the Company is currently not in compliance with the audit committee composition requirement of Nasdaq Listing Rule 5605(c)(2)(A) due to one vacancy on the Audit Committee. The Company fully expects to regain compliance with Nasdaq Rule 5605(c)(2)(A) within the cure period provided for in Nasdaq Rule 5605(c)(4)(B). Item 3.02 Unregistered Sales of Equity Securities. The information in Item 1.01 regarding the New Notes Shares and Warrants is incorporated into this Item 3.02 by reference. In addition, in connection with the entry into the New Senior Loan Facility and draws under the New Senior Loan Facility, the Company has issued 2,803,302 shares of common stock, after giving effect to the Reverse Stock Split described below, to the lenders thereunder (the "New Senior Loan Shares"), which include the Supporting Holders who participated in the Exchange Offer. These New Senior Loan Shares include shares of common stock equal to 9.4% of the Company's outstanding stock upon consummation of the Exchange Offer issued to the initial lenders who funded the Company's borrowings pursuant to its initial draw under the New Senior Loan Facility and additional shares of common stock equal to 18.8% of the Company's outstanding common stock upon consummation of the Exchange Offer, or 934,432 and 1,868,870 shares, respectively, after giving effect to the Reverse Stock Split described below. For internal use only SDNY_GM_00059811 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022635 EFTA_00170361 EFTA01296957  Page 13 The New Notes Shares and New Senior Loan Shares collectively represent 9,213,804 shares, or 98.6% of the Company's 9,344,325 shares of common stock outstanding as of July 27, 2016, and as a result of these issuances, subject to dilution by the issuance of (i) additional shares of common stock under a new 2016 Long-Term Incentive Plan, which, once adopted, will reserve 1,038,258 shares of common stock for issuance, (ii) approximately 308,217 shares under the Warrants, and (iii) approximately 132,093 shares issuable to the lenders under the New Senior Loan Facility as an anti-dilution protection relative to the Warrants. The New Notes Shares, the New Senior Loan Shares and the Warrants were issued upon consummation of the Exchange Offer on July 27, 2016. The New Notes, the New Guarantees, the New Notes Shares and the New Senior Loan Shares were issued in reliance on an exemption from registration set forth in Section 4(a)(2) and/or Regulation S of the Securities Act. The Warrants were issued in a transaction not involving a sale and not required to be registered under the Securities Act. Item 3.03. Material Modification to Rights of Security Holders. The information in Item 1.01 with respect to the Joinder is incorporated into this Item 3.03 by reference. Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. On July 27, 2016, each of Gregory R. Monahan, Eric S. Rosenfeld, David D. Sgro and Brent Whiteley resigned from the Board of the Directors of the Company, effective upon acceptance of such resignations by the remaining directors, which occurred on July 27, 2016. 5 For internal use only SDNY_GM_00059812 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022636 EFTA_00I 70362 EFTA01296958  Page 14 Immediately following such resignation, the remaining directors of the Company's Board of Directors filled such vacancies through the immediately effective appointment of L. Melvin Cooper, Michael Kass and Jacob Mercer as directors (the "New Directors") of the Company. L. Melvin Cooper currently serves as the Senior Vice President and Chief Financial Officer of Forbes Energy Services Ltd. (NASDAQ: FES) ("Forbes"), a public company in the energy services industry. Prior to joining Forbes in 2007, Mr. Cooper served in financial or operating roles of various companies involved oilfield site preparation, serving new home builders, supply chain management, and other industries. Since October 2010, Mr. Cooper has served on the Board of Directors of Flotek Industries, Inc. (NYSE: FTK), where he is a member of the Nominating and Corporate Governance, Audit, and Compensation Committees. Since August 2012, Mr. Cooper has served on the Board of Directors of Par Pacific Holdings, Inc. (NYSE: PARR), where he is a member of the Audit and Nominating and Corporate Governance Committees. Mr. Cooper received the Board Leadership Fellow certification from the National Association of Corporate Directors ("NACD") where he is also a member of the Board of Directors of the NACD Houston/Austin/San Antonio Chapter. Mr. Cooper earned a degree in accounting from Texas A&M University-Kingsville (formerly Texas A&I) in 1975 and is a Certified Public Accountant. Michael Kass is a Senior Research Analyst at BlueMountain Capital concentrating on stressed and distressed credit across multiple industry sectors. Previously, Mr. Kass was a co-founder and Head of Research at 3-Sigma Value Management. Prior to 3-Sigma, Mr. Kass served for several years as a Vice President in Lehman's Global Restructuring Group, where he advised debtors, financial sponsors and GSEs in bankruptcy proceedings in sectors including aviation, media and natural resources. Prior to Lehman, Mr. Kass was an Associate at Miller Buckfire and Co., focusing on restructurings in telecom, industrials, and restaurants. He began his career at McKinsey and Co., which he joined after receiving his JD magna cum laude from Harvard Law School, his BSE in International Finance from Wharton, and his BA summa cum laude from University of Pennsylvania. Jacob Mercer is a Senior Portfolio Manager at Whitebox Advisors. Prior to joining Whitebox, Mr. Mercer worked for Xcel Energy as Assistant Treasurer and Managing Director. Before joining Xcel Energy, he was a Senior Credit Analyst and Principal at Piper Jaffray and a Research Analyst at Voyageur Asset Management. Mr. Mercer also served as a logistics officer in the United States Army. Mr. Mercer has served on a number of boards of directors including Par Pacific (NYSE: PARR), Piceance Energy. Platinum Energy Solutions, and Ceres Global Ag (TSX: CRP). Mr. Mercer holds a BA with a double major in economics and business management from St. John's University. He also holds the Chartered Financial Analyst (CFA) designation. Messrs. Kass and Mercer were designated as Class B directors, and Mr. Cooper was designated as a Class C director. Messrs. Cooper and Dalton shall serve as members of the Audit Committee of the Company, Messrs. Cooper, Dalton and Mercer shall serve as members of the Compensation Committee of the Company and Messrs. Dalton, Kass and Mercer shall serve as members of the Nominating Committee of the Company. The Board For internal use only SDNY_GM_00059813 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022637 EFTA_00I 70363 EFTA01296959  Page 15 of Directors determined that each of the members of the Audit Committee, the Compensation Committee and the Nominating Committee is independent under the applicable Nasdaq listing standards and that the members of the Audit Committee are independent under Rule 10A-3 of the Securities Exchange Act of 1934, as amended. With respect to director compensation for each of the New Directors, see "Item 11. Executive Compensation-Director Compensation-General" in the Company's Form 10-K/A filed with the Securities and Exchange Commission on April 29, 2016. In connection with the consummation of the Exchange Offer, the Company has terminated its 2013 Long-Term Incentive Plan. On July 27, 2016, the Company entered into indemnification agreements (the "Indemnification Agreements") with Jeff Hastings, Brian Beatty, Brent Whiteley, Mike Scott, Darin Silvernagle, Ryan Abney, Gary Dalton and each of the New Directors (each, an "Indemnitee"). The Indemnification Agreements supersede and replace the indemnification agreements previously entered into with any such individuals. The Indemnification Agreements are intended to provide indemnification rights for actions or omissions to act while the Indemnitees are or were acting as directors, officers, employees or agents of the Company (among certain other limited roles). In connection 6 therewith, the Company will indemnify (except in certain limited circumstances) the Indemnitees against, among other things, all expenses (including attorneys' fees), damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), Employee Retirement Income Security Act of 1974 losses and amounts paid in settlement pursuant to (i) any threatened, asserted, pending or completed claim, demand, action, suit or proceeding, whether civil, criminal, administrative, arbitrative, investigative or other, and whether made pursuant to federal, state or other law, and (ii) any threatened, pending or completed inquiry or investigation, whether made, instituted or conducted by or at the behest of the Company or any other person, including any federal, state or other court or governmental entity or agency and any committee or other representative of any corporate constituency, to the fullest extent permitted by applicable law. In addition, the Indemnification Agreements provide for the advancement of expenses incurred by the Indemnitees in connection with any proceeding covered by the Indemnification Agreements, provided that the Indemnitees must repay the advanced amounts if, upon conclusion of the proceeding, it is ultimately determined that the Indemnitees were not entitled to indemnification. The summary of the Indemnification Agreements set forth in this Item 5.02 does not purport to be complete and is qualified in its entirety by reference to the text of the Form of For internal use only SDNY_GM_00059814 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022638 EFTA_OOI 70364 EFTA01296960  Page 16 Director and Officer Indemnification Agreement, a copy of which is being filed as Exhibit 10.4 hereto and is incorporated herein by reference. The appointment of the New Directors, reflects an arrangement incorporated into the Restructuring Support Agreement, pursuant to which the Supporting Holders are entitled to select six of the seven members of the Board of Directors. The Restructuring Support Agreement contemplates that each of BlueMountain Capital Management, LLC ("Blue Mountain") and Whitebox Advisors LLC ("Whitebox") shall have the right to select one director to be nominated by the Company for so long as each of their equity holdings following the consummation of the Exchange Offer exceeds 10% of the Company's total outstanding shares. Mr. Kass is an employee of BlueMountain and Mr. Mercer is an employee of Whitebox. Each of BlueMountain and Whitebox are Supporting Holders. Each of the Supporting Holders, including BlueMountain and Whitebox, are lenders under the Company's New Senior Loan Facility and parties to the Registration Rights Agreement with respect to shares of common stock received in connection with the Restructuring. The information in Item 1.01 is incorporated into this Item 5.02 by reference. Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. In connection with the Restructuring, on June 14, 2016, the Board of Directors authorized an amendment (the "Amendment") to the Second Amended and Restated Certificate of Incorporation of the Company to effect a reverse stock split of the shares of common stock of the Company at a ratio of 135-to-1 (the "Reverse Stock Split"). The Amendment did not affect the number of authorized shares under the Second Amended and Restated Certificate of Incorporation. On June 15, 2016, the Amendment was approved by the written consent of the Company's stockholders holding a majorit