Exhibit 10.1

EXECUTION VERSION

 

 

 

SUPERPRIORITY DEBTOR-IN-POSSESSION TERM LOAN AGREEMENT

DATED AS OF

May 22, 2020

AMONG

HORNBECK OFFSHORE SERVICES, INC.,

AS PARENT BORROWER,

HORNBECK OFFSHORE SERVICES, LLC,

AS CO-BORROWER,

WILMINGTON TRUST, NATIONAL ASSOCIATION,

AS ADMINISTRATIVE AGENT,

WILMINGTON TRUST, NATIONAL ASSOCIATION,

AS COLLATERAL AGENT

AND

THE LENDERS PARTY HERETO

 

 

 

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I Definitions and Accounting Matters

     1  

Section 1.01

  Terms Defined Above      1  

Section 1.02

  Certain Defined Terms      2  

Section 1.03

  Types of Loans and Borrowings      36  

Section 1.04

  Terms Generally; Rules of Construction      36  

Section 1.05

  Accounting Terms and Determinations; GAAP      37  

Section 1.06

  Divisions      38  

ARTICLE II The Commitments

     38  

Section 2.01

  Commitments      38  

Section 2.02

  Borrowings; Several Obligations      38  

Section 2.03

  Interest Elections      40  

Section 2.04

  Funding of Borrowings      41  

Section 2.05

  Termination and Reduction of Commitments      42  

Section 2.06

  Replacement of Lenders      42  

Section 2.07

  Defaulting Lenders      43  

Section 2.08

  Priority and Liens; No Discharge      44  

ARTICLE III Payments of Principal and Interest; Prepayments; Fees

     45  

Section 3.01

  Repayment of Loans      45  

Section 3.02

  Interest      45  

Section 3.03

  Alternate Rate of Interest      46  

Section 3.04

  Prepayments      46  

Section 3.05

  Fees      48  

ARTICLE IV Payments; Pro Rata Treatment; Sharing Set-offs

     48  

Section 4.01

  Pro Rata Treatment; Sharing of Set-offs      48  

Section 4.02

  Presumption of Payment by the Borrowers      49  

Section 4.03

  Certain Deductions by the Administrative Agent      50  

ARTICLE V Increased Costs; Break Funding Payments; Taxes; Illegality

     50  

Section 5.01

  Increased Costs      50  

Section 5.02

  Break Funding Payments      51  

Section 5.03

  Taxes      52  

Section 5.04

  Mitigation Obligations      56  

Section 5.05

  Illegality      56  

 

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ARTICLE VI Conditions Precedent

     57  

Section 6.01

  Effective Date      57  

Section 6.02

  Delayed Draw Loans Availability Date      60  

Section 6.03

  Each Credit Event      60  

ARTICLE VII Representations and Warranties

     61  

Section 7.01

  Organization; Powers      61  

Section 7.02

  Authority; Enforceability      61  

Section 7.03

  Approvals; No Conflicts      61  

Section 7.04

  Financial Statements; No Material Adverse Change      62  

Section 7.05

  Litigation      62  

Section 7.06

  Environmental Matters      63  

Section 7.07

  Compliance with the Laws and Agreements; No Defaults      64  

Section 7.08

  Investment Company Act      64  

Section 7.09

  Anti-Terrorism Laws and Sanctions      64  

Section 7.10

  Taxes      65  

Section 7.11

  ERISA      65  

Section 7.12

  Disclosure; No Material Misstatements      66  

Section 7.13

  Insurance      67  

Section 7.14

  Subsidiaries      67  

Section 7.15

  Location of Business and Offices      67  

Section 7.16

  Properties; Titles, Etc      67  

Section 7.17

  Hedging Obligations      69  

Section 7.18

  Use of Proceeds      69  

Section 7.19

  [Reserved]      69  

Section 7.20

  Anti-Corruption Laws      70  

Section 7.21

  EEA Financial Institution      70  

Section 7.22

  Bankruptcy Matters      70  

ARTICLE VIII Affirmative Covenants

     71  

Section 8.01

  Financial Statements      71  

Section 8.02

  Certificates of Compliance; Etc.      72  

Section 8.03

  Taxes and Other Liens      72  

Section 8.04

  Existence; Compliance; Litigation      72  

Section 8.05

  Further Assurances      73  

Section 8.06

  Performance of Obligations      73  

Section 8.07

  Use of Proceeds      73  

Section 8.08

  Insurance      74  

Section 8.09

  Accounts and Records      75  

Section 8.10

  Right of Inspection      75  

Section 8.11

  Maintenance of Properties      75  

Section 8.12

  Notice of Certain Events      77  

Section 8.13

  ERISA Information and Compliance      77  

Section 8.14

  Security      78  

Section 8.15

  Sanctions, Anti-Corruption Laws and Anti-Terrorism Laws      80  

Section 8.16

  [Reserved]      80  

 

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Section 8.17

  Post-Closing Undertakings      80  

Section 8.18

  [Reserved]      80  

Section 8.19

  Case Milestones      80  

Section 8.20

  Bankruptcy Covenants      81  

Section 8.21

  Budget and Variance Reports      83  

Section 8.22

  Conference Calls      83  

ARTICLE IX Negative Covenants

     84  

Section 9.01

  Restricted Payments      84  

Section 9.02

  Incurrence of Debt and Issuance of Disqualified Stock      85  

Section 9.03

  Liens      87  

Section 9.04

  Merger or Consolidation      87  

Section 9.05

  [Reserved]      88  

Section 9.06

  Transactions with Affiliates      88  

Section 9.07

  Burdensome Restrictions      89  

Section 9.08

  Asset Sales      90  

Section 9.09

  [Reserved]      90  

Section 9.10

  [Reserved]      90  

Section 9.11

  [Reserved]      90  

Section 9.12

  Additional Bankruptcy Matters      90  

Section 9.13

  Use of Proceeds      91  

Section 9.14

  Budget Variance Covenant      92  

ARTICLE X Events of Default; Remedies

     92  

Section 10.01

  Events of Default      92  

Section 10.02

  Remedies      97  

ARTICLE XI The Agents

     98  

Section 11.01

  Appointment; Powers      98  

Section 11.02

  Duties and Obligations of the Agents      98  

Section 11.03

  Action by Agents      99  

Section 11.04

  Reliance by Agents      100  

Section 11.05

  Sub-Agents      100  

Section 11.06

  Resignation or Removal of Agents      101  

Section 11.07

  Agents as Lenders      101  

Section 11.08

  Funds held by Agents      101  

Section 11.09

  No Reliance      101  

Section 11.10

  Agents May File Proofs of Claim      102  

Section 11.11

  Authority of the Agents to Release Collateral, Liens and Guarantors      102  

Section 11.12

  Merger, Conversion or Consolidation of Agents      103  

Section 11.13

  Loan Parties’ Advisors      103  

 

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ARTICLE XII Miscellaneous

     103  

Section 12.01

  Notices      103  

Section 12.02

  Waivers; Amendments      105  

Section 12.03

  Expenses, Indemnity; Damage Waiver      106  

Section 12.04

  Successors and Assigns      109  

Section 12.05

  Survival; Revival; Reinstatement      113  

Section 12.06

  Counterparts; Integration; Effectiveness; Orders Control      113  

Section 12.07

  Severability      114  

Section 12.08

  Right of Setoff      114  

Section 12.09

  GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL      114  

Section 12.10

  Headings      115  

Section 12.11

  Confidentiality      115  

Section 12.12

  Interest Rate Limitation      116  

Section 12.13

  No Third Party Beneficiaries      117  

Section 12.14

  Electronic Communications      117  

Section 12.15

  USA Patriot Act Notice      119  

Section 12.16

  Acknowledgement and Consent to Bail-In Action      119  

Section 12.17

  [Reserved]      119  

Section 12.18

  Force Majeure      120  

Section 12.19

  Joint and Several Liability; Etc.      120  

 

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EXHIBITS AND SCHEDULES

 

Exhibit A    Form of Note Exhibit B-1    Form of Borrowing Request Exhibit B-2
   Form of Notice of Prepayment Exhibit C    Form of Interest Election Request
Exhibit D    Form of Closing Certificate Exhibit E    Form of Superpriority
Guaranty and Collateral Agreement Exhibit F-1    Form of U.S. Maritime Mortgage
Exhibit F-2    Form of Mexican Maritime Mortgage Exhibit F-3    [Reserved]
Exhibit F-4    Form of Vanuatu Maritime Mortgage Exhibit F-5    Form of Real
Property Interests Mortgage Exhibit F-6    Form of Real Property Interests SNDA
Exhibit F-7    Form of Assignment of Insurances Exhibit G    Form of Assignment
and Assumption Agreement Exhibits H-1 – H-4    Forms of Tax Certificates Exhibit
I    Form of Interim Order Exhibit J    Form of Initial Budget Exhibit K    Form
of Acceptable Plan Schedule 2.01    Commitments Schedule 7.05    Litigation
Schedule 7.06(f)    Property not in Compliance with OPA Schedule 7.14   
Subsidiaries Schedule 7.15    Location of Business and Offices Schedule 7.16   
Properties; Titles, Etc. Schedule 7.17    Hedging Obligations Schedule 8.11(b)
   Foreign Vessel Reflagging Transactions Schedule 8.14    Vessel Collateral
Schedule 8.14(a)(i)(x)    Real Property Interests Schedule 8.17    Post-Closing
Undertakings Schedule 9.01    Existing Investments Schedule 9.03    Existing
Liens Schedule 9.06(L)    Affiliate Transactions

 

 

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THIS SUPERPRIORITY DEBTOR-IN-POSSESSION TERM LOAN AGREEMENT dated as of May 22,
2020 (the “Effective Date”), is entered into by and among: Hornbeck Offshore
Services, Inc., a Delaware corporation (“HOSI” or the “Parent Borrower”);
Hornbeck Offshore Services, LLC, a Delaware limited liability company (“HOS” or
the “Co-Borrower”); and the Parent Borrower together with the Co-Borrower,
collectively, the “Borrowers” and each, a “Borrower”; each of the Lenders from
time to time party hereto; Wilmington Trust, National Association as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”); and Wilmington Trust,
National Association, as collateral agent for the Lenders (in such capacity,
together with its successors in such capacity, the “Collateral Agent”).

R E C I T A L S

WHEREAS, the capitalized terms used in these preliminary statements shall have
the respective meanings set forth for such terms in Section 1.01 hereof;

WHEREAS, on May 19, 2020, (the “Petition Date”), the Borrowers, and certain
Subsidiaries of the Borrowers (collectively, and together with any other
Affiliates that become debtors-in-possession in the Cases, the “Debtors”) filed
voluntary petitions with the Bankruptcy Court initiating their respective cases
that are pending under Chapter 11 of the Bankruptcy Code (each case of the
Borrowers and such Subsidiaries, a “Case” and collectively, the “Cases”) and
have continued in the possession of their assets and in the management of their
businesses pursuant to Section 1107 and 1108 of the Bankruptcy Code;

WHEREAS, the Borrowers have requested the Lenders to extend credit in the form
of term loans in an aggregate principal amount of $75,000,000;

WHEREAS, the Lenders are willing to extend such credit to the Borrowers on the
terms and subject to the conditions set forth herein;

WHEREAS, priority of the Indebtedness with respect to the Collateral granted to
secure the Indebtedness shall be as set forth in the Interim Order and the Final
Order, in each case upon entry thereof by the Bankruptcy Court, and in the
Security Instruments;

WHEREAS, all of the claims and the Liens granted under the Orders and the Loan
Documents to the Collateral Agent and the Lenders in respect of the Indebtedness
shall be subject to the Carve Out; and

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and of the loans, extensions of credit and commitments hereinafter
referred to, the parties hereto agree as follows:

ARTICLE I

Definitions and Accounting Matters

Section 1.01 Terms Defined Above. As used in this Agreement, each term defined
above has the meaning indicated above.

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Section 1.02 Certain Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

“Acceptable Confirmation Order” means an order of the Bankruptcy Court
confirming an Acceptable Plan, in form and substance satisfactory to the
Required Lenders (as the same may be amended, supplemented, or modified from
time to time after entry thereof with the consent of the Required Lenders).

“Acceptable Disclosure Statement” means the disclosure statement relating to the
Acceptable Plan, which disclosure statement is in all material respects
consistent with the Restructuring Support Agreement as in effect as of the
Effective Date and otherwise satisfactory to the Required Lenders (as the same
may be amended, supplemented or modified from time to time after the initial
filing thereof with the consent of the Required Lenders).

“Acceptable Plan” means a Chapter 11 Plan for each of the Cases, which Chapter
11 Plan is in all material respects consistent with the Restructuring Support
Agreement and otherwise in a form and substance satisfactory to the Required
Lenders (as the same may be amended, supplemented, or modified from time to time
after filing thereof with the consent of the Required Lenders). The Chapter 11
Plan attached hereto as Exhibit K shall be deemed an Acceptable Plan (as the
same may be amended, supplemented, or modified from time to time after filing
thereof with the consent of the Required Lenders).

“Account Control Agreement” has the meaning assigned to such term in the
Guaranty and Collateral Agreement.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” has the meaning specified in the recital of parties to
this Agreement.

“Administrative Agent Parties” has the meaning assigned to such term in
Section 12.14(f).

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affected Financial Institution” means (a) any EEA Financial Institution or
(b) any UK Financial Institution.

“Affected Loans” has the meaning assigned to such term in Section 5.05.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. For the
avoidance of doubt, an employee stock ownership plan sponsored by any Borrower
shall not be an “Affiliate”.

 

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“Affiliate Transaction” has the meaning assigned to such term in Section 9.06.

“Agents” means the Administrative Agent and the Collateral Agent.

“Agreement” means this Superpriority Debtor-In-Possession Term Loan Agreement,
together with any and all supplements, restatements, renewals, refinances,
modifications, amendments, extensions for any period, increases or
rearrangements thereof.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 0.50% and (c) the LIBO Rate for a one month
Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the
LIBO Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate,
respectively. Notwithstanding the foregoing, the Alternate Base Rate shall never
be less than 2.00%.

“Anti-Terrorism Laws” means any laws relating to sanctions, terrorism or money
laundering, including the USA PATRIOT Act, the laws comprising or implementing
the Bank Secrecy Act (as any of the foregoing laws may from time to time be
amended, renewed, extended, or replaced).

“Applicable Margin” means, for any day, with respect to any ABR Loan, 11.50% per
annum, and with respect to any Eurodollar Loan, 12.50% per annum.

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total unused Commitments and Loans represented by such Lender’s Commitment and
outstanding Loans from time to time in effect.

“Approved Bankruptcy Court Order” means (a) each of the Orders, as such order is
amended and in effect from time to time in accordance with this Agreement,
(b) any other order entered by the Bankruptcy Court regarding, relating to or
impacting (i) any rights or remedies of any Secured Party, (ii) the Loan
Documents (including the Loan Parties’ obligations thereunder), (iii) the
Collateral, any Liens thereon or any Superpriority Claims (including, without
limitation, any sale or other disposition of Collateral or the priority of any
such Liens or Superpriority Claims), (iv) use of cash collateral,
(v) debtor-in-possession financing, (vi) adequate protection or otherwise
relating to any Prepetition Secured Indebtedness or (vii) any Chapter 11 Plan,
in any such case, that (x) is in form and substance satisfactory to the Required
Lenders, (y) has not been vacated, reversed or stayed and (z) has not been
amended or modified except as agreed in writing by the Required Lenders, and
(c) any other order entered by the Bankruptcy Court that (i) is in form and
substance reasonably satisfactory to the Required Lenders, (ii) has not been
vacated, reversed or stayed and (iii) has not been amended or modified except in
a manner reasonably satisfactory to the Required Lenders.

 

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“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in commercial loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.

“Approved Lender” means, with respect to any Lender, (i) any fund or similar
investment vehicle the investment decisions with respect to which are made by
(x) such Lender or (y) an investment manager or other Person that manages such
Lender or (ii) the Affiliates of each of the foregoing to the extent that the
investment decisions with respect to which are made as specified in (x) and (y)
above.

“Asset Sale” means the sale, lease, conveyance or other disposition (including,
without limitation, as the result of an Event of Loss, by way of a sale and
leaseback or by an allocation of assets among newly divided limited liability
companies pursuant to a “plan of division”) (a “disposition”) of any Property of
any Borrower or any Restricted Subsidiary thereof (including any Equity
Interests held by any such Person), whether in a single transaction or a series
of related transactions. Notwithstanding the foregoing provisions of this
definition, the following transactions will be deemed not to be Asset Sales: (A)
[reserved]; (B) a disposition of any Property by any Borrower to another Loan
Party or by a Guarantor to any Borrower or another Guarantor; (C) a disposition
of Collateral that constitutes a Permitted Investment or a Restricted Payment
that is permitted by Section 9.01; (D) any charter or lease of any Vessel
Collateral or other Property entered into in the ordinary course of business and
with respect to which the Parent Borrower or any Restricted Subsidiary thereof
is the lessor or Person granting the charter, unless such charter or lease
provides for the acquisition of such Vessel Collateral or other Property by the
lessee during or at the end of the term thereof for an amount that is less than
the fair market value thereof at the time the right to acquire such Property
occurs; (E) a disposition of inventory in the ordinary course of business; (F) a
disposition of cash, Cash Equivalents or similar investments in the ordinary
course of business; (G) [reserved]; (H) any disposition of obsolete or excess
equipment or other Property (other than Vessels); (I) a disposition of Property
by a Restricted Subsidiary of the Parent Borrower to a Loan Party or by a
Restricted Subsidiary of the Parent Borrower that is not a Loan Party to another
Restricted Subsidiary of the Parent Borrower that is not a Loan Party;
(J) dispositions of Property (other than Vessel Collateral and Material Real
Property Interests) to the extent that (1) such Property is exchanged for credit
against the purchase price of similar replacement Property that is promptly
purchased or (2) the proceeds of such disposition are promptly applied to the
purchase price of such replacement Property (which replacement Property is
actually promptly purchased) (provided that, in the case of sub-clauses (1) and
(2), if the Property so disposed is Collateral, the replacement Property shall
be Collateral) and (K) leases, subleases, rights of use, passage or access in
respect of Real Property Interests.

“Asset Sale Proceeds Offer” has the meaning assigned to such term in
Section 3.04(c)(i).

“Assignment” has the meaning assigned to such term in Section 12.04(b)(i).

“Assignment of Insurances” means each, and “Assignments of Insurances” means
every, first priority assignment of the insurances with respect to the Vessel
Collateral, in substantially the form of Exhibit F-7 or such other form
reasonably determined by the Administrative Agent and the Collateral Agent to be
necessary.

 

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“Avoidance Action” means any and all claims and causes of action of the
Borrower’s estate arising under Sections 542, 544, 545, 547, 548, 549, 550, 551,
553(b) or 724(a) of the Bankruptcy Code.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable Resolution Authority in respect of any liability of an Affected
Financial Institution.

“Bail-In Legislation” means (a) in relation to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and
the Council of the European Union, the implementing law, regulation, rule or
requirement for such EEA Member Country as described in the EU Bail-In
Legislation Schedule from time to time and (b) with respect to the United
Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to
time) and any other law, regulation or rule applicable in the United Kingdom
relating to the resolution of unsound or failing banks, investment firms or
other financial institutions or their affiliates (other than through
liquidation, administration or other insolvency proceedings).

“Bank Secrecy Act” means the Bank Secrecy Act of 1970 (Titles I and II of Pub.
L. No. 91-508 (signed into law October 26, 1970 and as modified, amended,
supplemented or restated from time to time)).

“Bankruptcy Code” means Title 11, U.S.C., as now or hereafter in effect, or any
successor thereto.

“Bankruptcy Court” means the United States Bankruptcy Court for the Southern
District of Texas or any other court having jurisdiction over the Cases from
time to time.

“Bankruptcy Law” means each of (i) the Bankruptcy Code, (ii) any domestic or
foreign law relating to liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, administration, insolvency,
reorganization, debt adjustment, receivership or similar debtor relief from time
to time in effect and affecting the rights of creditors generally (including
without limitation any plan of arrangement provisions of applicable corporation
statutes), and (iii) any order made by a court of competent jurisdiction in
respect of any of the foregoing.

“Benefit Plan” means any employee pension benefit plan, as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan), which (a) is currently
or hereafter sponsored, maintained or contributed to by the Parent Borrower, a
Subsidiary or an ERISA Affiliate or (b) was at any time during the six
(6) calendar years preceding the date hereof, sponsored, maintained or
contributed to by the Parent Borrower or a Subsidiary or an ERISA Affiliate.

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America or any successor Governmental Authority.

“Board of Directors” means the Board of Directors of the Parent Borrower or any
other Person, as applicable, or any authorized committee of the Board of
Directors.

 

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“Borrower” and “Borrowers” have the meanings specified in the recital of parties
to this Agreement.

“Borrowing” means Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.

“Borrowing Request” means a request by a Borrower for a Borrowing in accordance
with Section 2.02.

“Budget” means the Initial Budget, as amended, modified, supplemented or
replaced from time to time in accordance with Section 8.21.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York are authorized or required by law to remain
closed; and if such day relates to a Borrowing or continuation of, a payment or
prepayment of principal of or interest on, or a conversion of or into, or the
Interest Period for, a Eurodollar Loan or a notice by any Borrower with respect
to any such Borrowing or continuation, payment, prepayment, conversion or
Interest Period, any day which is also a day on which dealings in dollar
deposits are carried out in the London interbank market.

“Capital Lease Obligation” means, at the time any determination thereof is to be
made, the amount of the liability in respect of a capital lease that would at
such time be required to be capitalized on a balance sheet in accordance with
GAAP. Notwithstanding the foregoing, any lease (whether entered into before or
after the Effective Date) that would have been classified as an operating lease
pursuant to GAAP as in effect on December 31, 2018 will be deemed not to
represent a Capital Lease Obligation.

“Carve Out” has the meaning set forth in the Interim Order or the Final Order,
as applicable.

“Case” has the meaning specified in the Recitals herein.

“Cash Equivalents” means:

(a) securities issued or directly and fully guaranteed or insured by the
government of the United States of America or any agency or instrumentality of
any such government having maturities of not more than six (6) months from the
date of acquisition,

(b) certificates of deposit and Eurodollar time deposits with maturities of six
(6) months or less from the date of acquisition, bankers’ acceptances with
maturities not exceeding six (6) months and overnight bank deposits, in each
case with or issued by any commercial bank organized under the laws of any
country that is a member of the Organization for Economic Cooperation and
Development having capital and surplus in excess of $300,000,000 and whose
long-term debt securities are rated at least A3 by Moody’s and at least A by
S&P,

(c) repurchase obligations with a term of not more than seven (7) days for
underlying securities of the types described in clauses (a) and (b) above
entered into with any financial institution meeting the qualifications specified
in clause (b) above,

 

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(d) commercial paper having a rating of at least P-1 from Moody’s or at least
A-1 from S&P and in each case maturing within two-hundred seventy (270) days
after the date of acquisition,

(e) deposits available for withdrawal on demand with any commercial bank not
meeting the qualifications specified in clause (b) above, provided that all
deposits referred to in this clause (e) are made in the ordinary course of
business and do not exceed $5,000,000 in the aggregate at any one time, and

(f) money market mutual funds substantially all of the assets of which are of
the type described in any of the foregoing clauses (a) through (d).

“Certificate of Incorporation” means HOSI’s Second Restated Certificate of
Incorporation.

“Change in Control” means the occurrence of any of the following: (a) the sale,
assignment, transfer, lease, 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 (x) the Property of the Parent Borrower and its
Subsidiaries, taken as a whole or (y) the Vessel Collateral (including pursuant
to a sale, assignment, transfer, lease or other disposition of Specified Equity
Interests), (b) the adoption of a voluntary plan relating to the liquidation or
dissolution of any Borrower, (c) the consummation of any transaction (including,
without limitation, any merger or consolidation, but excluding the effect of any
voting arrangement pursuant to any agreement among the Parent Borrower and any
stockholders of the Parent Borrower as in effect on the Effective Date) the
result of which is that any “person,” “persons” or “group” (as such terms are
used in Section 13(d) (3) of the Exchange Act) becomes the “beneficial owner”
(as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act),
directly or indirectly through one or more intermediaries, of more than 50% of
the voting power of the outstanding Voting Stock of the Parent Borrower;
provided, however, that a transaction in which the Parent Borrower becomes a
Subsidiary of another Person (other than a Person that is an individual) shall
not constitute a Change in Control if (i) the shareholders of the Parent
Borrower immediately prior to such transaction “beneficially own” (as such term
is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly through one or more intermediaries, a majority of the voting power of
the outstanding Voting Stock of such other Person immediately following the
consummation of such transaction and (ii) immediately following the consummation
of such transaction, no “person,” “persons” or “group” (as such terms are
defined above), other than such other Person (but including the holders of the
Equity Interests of such other Person), “beneficially owns” (as such term is
defined above), directly or indirectly through one or more intermediaries, more
than 50% of the voting power of the outstanding Voting Stock of the Parent
Borrower, or (d) the Parent Borrower shall fail to own and control 100% of the
Equity Interests of the Co-Borrower. For purposes of this definition, a time
charter of, bareboat charter or other contract for, Vessels to customers in the
ordinary course of business shall not be deemed a lease under clause (a) above.

“Change in Law” means the occurrence, after the Effective Date, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority;

 

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provided, that notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives thereunder or issued in connection therewith and
(y) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Chapter 11 Plan” means a plan of reorganization filed in any or all of the
Cases.

“Co-Borrower” has the meaning specified in the recital of parties to this
Agreement.

“Code” means the Internal Revenue Code of 1986, as amended from time to time
(unless otherwise provided herein), and any successor statute.

“Collateral” means any and all Property of any Borrower or any Guarantor,
whether real or personal, tangible or intangible, on which Liens are purported
to be granted pursuant to the Security Instruments (including the Orders) as
security for the payment or performance of the Indebtedness (including, for the
avoidance of doubt, the Vessel Collateral and any Real Property Interests).
Without limitation of the foregoing, subject to the terms of the Orders, the
Collateral shall not include any Avoidance Actions but shall include all
proceeds of any and all Avoidance Actions (including, without limitation, assets
to which Liens are avoided).

“Collateral Agent” has the meaning specified in the recital of parties to this
Agreement and shall include the institution named as Collateral Agent acting as
trustee/mortgagee under each Maritime Mortgage and each Real Property Interests
Mortgage.

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans pursuant to Section 2.01 as such commitment may be (a) reduced or
terminated from time to time pursuant to Section 2.05, (b) terminated pursuant
to ARTICLE X, or (c) modified from time to time to reflect any assignments
permitted by Section 12.04. The amount of each Lender’s Commitment on the
Effective Date shall be the amount set forth on Schedule 2.01, which schedule
includes both the Initial Draw Commitments and the Delayed Draw Commitments. The
aggregate amount of the Commitments on the Effective Date is $75,000,000, which
is inclusive of both the Initial Draw Commitments and the Delayed Draw
Commitments.

“Communications” has the meaning assigned to such term in Section 12.14(a).

“Company Competitors” means competitors operating in the same jurisdiction of
either Borrower or a Subsidiary and that are in the business of providing the
services of offshore supply vessels, or offshore service vessels (including,
without limitation, crew boats, fast supply vessels, multi-purpose support
vessels, flotels, services to Military Sealift Command and other governmental
agencies of the United States, construction vessels, anchor handling towing
supply vessels, tugs, double hulled tank barges and double hulled tankers or
other complementary offshore marine vessels).

“Company Parties” has the meaning assigned to such term in the Restructuring
Support Agreement.

 

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“Confirmation Date” has the meaning assigned to such term in Section 8.19(g).

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated Subsidiaries” means each Subsidiary of the Parent Borrower
(whether now existing or hereafter created or acquired) the financial statements
of which shall be (or should have been) consolidated with the financial
statements of the Parent Borrower in accordance with GAAP.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Debt” means, with respect to any Person, any indebtedness of such Person,
whether or not contingent or secured, in respect of (i) borrowed money
including, without limitation, any guarantee thereof, or (ii) evidenced by
bonds, debentures, notes, term loans or similar instruments or letters of credit
(or reimbursement agreements in respect thereof), bank guarantees or bankers’
acceptances or representing Capital Lease Obligations or the deferred and unpaid
purchase price of any Property, or representing any Hedging Obligations, if and
to the extent any of the foregoing indebtedness (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of
such Person prepared in accordance with GAAP; provided, however, that any
accrued expense or trade payable of such Person shall not constitute Debt. The
amount of any Debt outstanding as of any date shall be (a) the accreted value
thereof, in the case of any Debt that does not require current payments of
interest, and (b) the principal amount thereof, in the case of any other Debt
(with letters of credit being deemed to have a principal amount equal to the
maximum potential liability of such Person and its Restricted Subsidiaries
thereunder). Furthermore, notwithstanding the foregoing, the following shall not
constitute or be deemed “Debt”: (i) any indebtedness which has been defeased in
accordance with GAAP or defeased pursuant to the deposit of cash or Cash
Equivalents (in an amount sufficient to satisfy all such indebtedness
obligations at maturity or Redemption, as applicable, and all payments of
interest and premium, if any) in a trust or account created or pledged for the
sole benefit of the holders of such indebtedness, and subject to no other Liens,
and the other applicable terms of the instrument governing such indebtedness;
(ii) any obligations arising from agreements of a Person providing for
indemnification, guarantees, adjustment of purchase price, holdbacks, contingent
payment obligations based on a final financial statement or performance of
acquired or disposed of assets or similar obligations (other than guarantees of
Debt), in each case, incurred or assumed by such Person in connection with the
acquisition or disposition of assets (including through mergers, consolidations
or otherwise); and (iii) obligations with respect to letters of credit in
support of trade obligations incurred in the ordinary course or incurred in
connection with public liability insurance, workers’ compensation, unemployment
insurance, old-age pensions and other social security benefits other than in
respect of employee benefit plans subject to the Employee Retirement Income
Security Act of 1974, as amended.

 

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“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect.

“Debtors” has the meaning specified in the Recitals herein.

“Declined Amount” has the meaning assigned to such term in Section 3.04(c)(i).

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any
portion of its Loans within two (2) Business Days of the date such Loans were
required to be funded hereunder unless such Lender notifies the Administrative
Agent and the Borrowers in writing that such failure is the result of such
Lender’s good faith determination that one or more conditions precedent to
funding (each of which conditions precedent, together with any applicable
default, shall be specifically identified in such writing) has not been
satisfied, or (ii) pay to the Administrative Agent or any other Lender any other
amount required to be paid by it hereunder within two (2) Business Days of the
date when due, (b) has notified the Borrowers or the Administrative Agent in
writing that it does not intend to comply with its funding obligations
hereunder, or has made a public statement to that effect (unless such writing or
public statement relates to such Lender’s obligation to fund a Loan hereunder
and states that such position is based on such Lender’s determination that a
condition precedent to funding (which condition precedent, together with any
applicable default, shall be specifically identified in such writing or public
statement) cannot be satisfied), (c) has failed, within three (3) Business Days
after written request by the Administrative Agent or the Borrowers, to confirm
in writing to the Administrative Agent and the Borrowers that it will comply
with its prospective funding obligations hereunder (provided, that such Lender
shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt
of such written confirmation by the Administrative Agent and the Borrowers), or
(d) has, or has a direct or indirect parent company that has, (i) become the
subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a
receiver, custodian, conservator, trustee, administrator, assignee for the
benefit of creditors or similar Person charged with reorganization or
liquidation of its business or assets, including the Federal Deposit Insurance
Corporation or any other state or federal regulatory authority acting in such a
capacity, (iii) become the subject of a Bail-In Action; provided, that a Lender
shall not be a Defaulting Lender solely by virtue of the ownership or
acquisition of any equity interest in that Lender or any direct or indirect
parent company thereof by a Governmental Authority so long as such ownership
interest does not result in or provide such Lender with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender or (iv) become the subject of a Bail-in
Action. If a Lender is a Defaulting Lender under any one or more of clauses
(a) through (d) above, such Lender shall be deemed to be a Defaulting Lender
upon delivery of written notice of such determination to the Borrowers and each
Lender.

“Delayed Draw Availability Date” means the date on which the conditions set
forth in Sections 6.02 and 6.03 are satisfied (or waived in accordance with
Section 12.02).

 

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“Delayed Draw Commitments” means $25,000,000. The amount of each Lender’s
Delayed Draw Commitment on the Effective Date shall be the amount set forth on
Schedule 2.01, as such commitment may be (a) reduced or terminated from time to
time pursuant to Section 2.05, (b) terminated pursuant to ARTICLE X, or
(c) modified from time to time to reflect any assignments permitted by
Section 12.04.

“Delayed Draw Loans” means any Loan made pursuant to Section 2.01(b).

“Disqualified Lender” means (a) those Persons identified by the Borrowers on a
written list delivered to the Administrative Agent and the Lenders on May 18,
2020, (b) Company Competitors identified by the Borrowers on a written list
delivered to the Administrative Agent and the Lenders on May 18, 2020, which
list of Company Competitors may be supplemented from time to time after the
Effective Date by the Borrowers delivering a written supplement thereto to the
Administrative Agent (subject to the consent right of the Required Lenders as
set forth below) and (c) any Person that is (or becomes) an Affiliate of the
entities described in the preceding clauses (a) and (b) (other than any bona
fide debt fund affiliates thereof); provided, that such Person is either clearly
identifiable as an Affiliate solely on the basis of the similarity of its name,
is identified in writing to the Administrative Agent by the Borrowers or reveals
that it is such an Affiliate in a required certification by such Person prior to
any assignment to such Person. Any supplement to the list of Disqualified
Lenders shall be made by the Borrowers to the Administrative Agent in writing
(including by email) and such supplement shall take effect one Business Day
after (i) such notice has been received by the Administrative Agent and (ii) the
Administrative Agent has received a written consent to such supplement by the
Required Lenders; provided, that such supplement shall not apply retroactively
to disqualify any Person with respect to any Loans held by it immediately prior
to the delivery of such supplement. The list of Disqualified Lenders shall be
made available to any Lender upon request to the Administrative Agent.

“Disqualified Stock” means any Equity Interests that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures (excluding any
maturity as a result of an optional Redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date that is ninety-one (91) days after the Maturity Date; provided,
however, that any Equity Interests that would constitute Disqualified Stock
solely because the holders thereof (or of any security into which it is
convertible or for which it is exchangeable) have the right to require the
issuer to repurchase such Equity Interests (or such security into which it is
convertible or for which it is exchangeable) upon the occurrence of any of the
events constituting an Asset Sale or a Change in Control shall not constitute
Disqualified Stock if such Equity Interests (and all such securities into which
it is convertible or for which it is exchangeable) provide that the issuer
thereof will not repurchase or redeem any such Equity Interests (or any such
security into which it is convertible or for which it is exchangeable) pursuant
to such provisions prior to compliance by the Parent Borrower with
Section 3.04(c).

“dollars” or “$” refers to lawful money of the United States of America.

 

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“Domestic Subsidiary” means any Restricted Subsidiary that is organized under
the laws of the United States of America or any state thereof or the District of
Columbia.

“EEA Financial Institution” shall mean (a) any credit institution or investment
firm established in any EEA Member Country which is subject to the supervision
of an EEA Resolution Authority, (b) any entity established in an EEA Member
Country which is a parent of an institution described in clause (a) of this
definition, or (c) any financial institution established in an EEA Member
Country which is a subsidiary of an institution described in clauses (a) or (b)
of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein and Norway.

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Effective Date” has the meaning specified in the recital of parties to this
Agreement.

“Environmental Laws” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement,
whether now or hereafter in effect, pertaining to health or safety (solely to
the extent relating to exposure to Hazardous Materials), pollution or protection
of the environment or the preservation or reclamation of natural resources, in
effect in any and all jurisdictions in which the Parent Borrower or any
Subsidiary is conducting or at any time has conducted business, or where any
Property of the Parent Borrower or any Subsidiary is located, including without
limitation, the Oil Pollution Act of 1990 (“OPA”), as amended, the Clean Air
Act, as amended, the Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act (“TSCA”), as amended, the Superfund Amendments and Reauthorization Act of
1986, as amended, the Hazardous Materials Transportation Act (“HMTA”), as
amended, and other environmental conservation or protection Governmental
Requirements. The term “oil” shall have the meaning specified in OPA, the term
“release” (or “threatened release”) has the meanings specified in CERCLA, the
terms “solid waste” and “disposal” (or “disposed”) have the meanings specified
in RCRA; provided, however, that (a) in the event either OPA, CERCLA or RCRA is
amended so as to broaden the meaning of any term defined thereby, such broader
meaning shall apply subsequent to the effective date of such amendment and
(b) to the extent the laws of the state or other jurisdiction in which any
Property of the Parent Borrower or any Subsidiary is located establish a meaning
for “oil,” “hazardous substance,” “release,” “solid waste,” “disposal” or “oil
and gas waste” which is broader than that specified in either OPA, CERCLA or
RCRA, such broader meaning shall apply for such purpose.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest (but excluding any debt security that is convertible into or
exchangeable for Equity Interests).

 

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“ERISA” means the Employee Retirement Income Security Act of 1974, and the rules
and regulations thereunder as amended, and any successor statute.

“ERISA Affiliate” means each trade or business (whether or not incorporated)
which together with the Parent Borrower or a Subsidiary would be deemed to be a
“single employer” within the meaning of Section 4001(b)(1) of ERISA or
subsections (b), (c), (m) or (o) of Section 414 of the Code.

“ERISA Event” means:

(a) any “reportable event,” as defined in Section 4043 of ERISA or the
regulations issued thereunder, with respect to a Benefit Plan;

(b) the failure of a Benefit Plan to meet the minimum funding standards under
Section 412 of the Code or Section 302 of ERISA (determined without regard to
any waiver of the funding provisions therein or in Section 430 of the Code or
Section 303 of ERISA);

(c) the filing pursuant to Section 412 of the Code or Section 303 of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Benefit Plan;

(d) the incurrence by the Parent Borrower, a Subsidiary or any ERISA Affiliate
of any liability under Title IV of ERISA with respect to the termination of any
Benefit Plan;

(e) the receipt by the Parent Borrower, a Subsidiary or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to an intention to
terminate any Benefit Plan or Benefit Plans or to appoint a trustee to
administer any Benefit Plan, but only to the extent such Benefit Plan is subject
to Section 412 of the Code or Section 302 of ERISA;

(f) the incurrence by the Parent Borrower, a Subsidiary or any ERISA Affiliate
of any liability under Section 4062(e) of ERISA or with respect to the
withdrawal or partial withdrawal from any Benefit Plan (including as a
“substantial employer,” as defined in Section 4001(a)(2) of ERISA) or
Multiemployer Plan (including the incurrence by the Parent Borrower, a
Subsidiary or any ERISA Affiliate of any Withdrawal Liability); or

(g) the receipt by the Parent Borrower, a Subsidiary or any ERISA Affiliate of
any notice concerning the imposition of a Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, in endangered
or critical status, within the meaning of Section 305 of ERISA, or insolvent,
within the meaning of Title IV of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

 

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“Event of Default” has the meaning assigned to such term in Section 10.01.

“Event of Loss” means (i) with respect to any Real Property Interests, any of
the following events: (a) any fire or other casualty to all or any portion of
the Property with a cost to restore (as reasonably estimated by the Parent
Borrower) of $500,000 or more; and (b) the condemnation of, or termination
without cause, nationalization, requisition, seizure or other taking by any
Governmental Authority of all or substantially all of such Real Property
Interests; and (ii) with respect to any Vessel Collateral, any of the following
events: (a) the actual or constructive total loss of any Vessel Collateral or
the agreed, arranged or compromised total loss of any Vessel Collateral; or
(b) the capture, condemnation, confiscation, nationalization, requisition,
purchase, seizure or forfeiture of, or any taking of title to, or any other
actual or constructive taking of, any Vessel Collateral. An Event of Loss shall
be deemed to have occurred (i) in the event of an actual loss of any Vessel
Collateral, at noon Greenwich Mean Time on the date of such loss or if that is
not known on the date which such Vessel Collateral was last heard from; (ii) in
the event of damage which results in a constructive or an agreed, arranged or
compromised total loss of a Vessel, at noon Greenwich Mean Time on the date of
the event giving rise to such damage; or (iii) in the case of an event referred
to in clause (b) above, at noon Greenwich Mean Time on the date on which such
event is expressed to take effect by the Person making the same.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchanged Loans” has the meaning assigned to such term in Section 2.01(a).

“Excluded Assets” has the meaning set forth in the Guaranty and Collateral
Agreement.

“Excluded Subsidiary” means any Foreign Subsidiary with respect to which the
guarantee by such Foreign Subsidiary of the Loans would result in material
adverse tax consequences to the Parent Borrower as reasonably determined by the
Parent Borrower and consented to by the Required Lenders.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by any
Borrower under Section 2.06) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 5.03, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to such Recipient’s failure
to comply with Section 5.03(g), and (d) any withholding Taxes imposed under
FATCA.

 

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“Fair Market Value” means, with respect to any Property or Investment, the fair
market value of such Property or Investment at the time of the event requiring
such determination, as determined in good faith by management or the Board of
Directors of the Parent Borrower, or, with respect to any Property or Investment
in excess of $35,000,000 (other than cash or Cash Equivalents), as determined by
a reputable investment bank, accounting firm or appraisal firm that is, in the
judgment of the disinterested members of such Board of Directors, qualified to
perform the task for which such firm has been engaged and independent with
respect to the Borrowers.

“FATCA” means the Foreign Account Tax Compliance Act as set forth in sections
1471 through 1474 of the Code, as of the Effective Date (or any amended or
successor version that is substantively comparable and not materially more
onerous to comply with) and any current or future regulations or official
interpretations thereof and any agreement entered into pursuant to
Section 1471(b)(1) of the Code (or any amended or successor version described
above), and any intergovernmental agreement entered into in connection with the
implementation of such Sections of the Code and any fiscal or regulatory
legislation, rules or practices adopted pursuant to such intergovernmental
agreement.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
federal funds transactions with members of the Federal Reserve System, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day for such transactions received by the Administrative
Agent from three (3) federal funds brokers of recognized standing selected by
it.

“Federally Regulated Lender” means any bank, savings and loan association,
credit union, farm credit bank, federal land bank association, production credit
association, or similar institution subject to the supervision of a federal
entity or lending regulation.

“Federally Regulated Lender Excluded Property” means, solely with respect to any
Federally Regulated Lender, any right, title and interest of any Loan Party in
and to any real property improved by a Building (as defined in the Flood
Insurance Laws) or Manufactured (Mobile) Home (as defined in the Flood Insurance
Laws).

“Fee Letters” means, collectively, (a) the letter agreement, dated as of May 22,
2020 between the Parent Borrower and the Administrative Agent and (b) the letter
agreement dated as of May 22, 2020 between the Borrowers and the Lenders party
thereto.

“Final Order” means an order of the Bankruptcy Court (as such order may be
amended, supplemented or modified from time to time after entry thereof in
accordance with the terms hereof but only with the written consent of the
Administrative Agent and the Required Lenders) in substantially the form of the
Interim Order and in the form and substance acceptable to the Required Lenders,
which order shall authorize and approve, among other things on a final basis,
(a) the Indebtedness and extensions of credit hereunder including the incurrence
by the Loan

 

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Parties of secured indebtedness in accordance with this Agreement, (b) the form
of this Agreement and the other Loan Documents, (c) the granting of Liens and
Superpriority Claims in favor of the Agents and Lenders and (d) the other
obligations of the Loan Parties under this Agreement and the other Loan
Documents, and which order shall not have been vacated or reversed, shall not be
subject to any stay or appeal (and for which the time to appeal, petition for
certiorari, or seek re-argument or rehearing has expired, or as to which any
right to appeal, petition for certiorari or seek re-argument or rehearing has
been waived in writing in a manner satisfactory to the parties in interest, or
if a notice of appeal, petition for certiorari, or motion for re-argument or
rehearing was timely filed, the order or judgment has been affirmed by the
highest court to which the order or judgment was appealed or from which the
re-argument or rehearing was sought, or a certiorari has been denied, and the
time to file any further appeal or to petition for certiorari or to seek further
re-argument has expired) and shall not have been modified or amended without the
prior written consent of the Administrative Agent and the Required Lenders.

“Financial Advisor” means Ducera Partners LLC.

“First Day Orders” means the orders entered by the Bankruptcy Court in respect
of first day motions and applications in respect of the Cases.

“Flood Insurance Laws” shall mean, collectively, (i) the National Flood
Insurance Reform Act of 1994 (which comprehensively revised the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973) as now or
hereafter in effect or any successor statute thereto, (ii) the Flood Insurance
Reform Act of 2004 as now or hereafter in effect or any successor statute
thereto and (iii) the Biggert-Waters Flood Insurance Reform Act of 2012 as now
or hereafter in effect or any successor statute thereto.

“Foreign Law Guaranty Agreements” means any agreement executed by a Foreign
Subsidiary guarantying the payment of Indebtedness and governed by the laws of a
jurisdiction other than the laws of the United States of America or any state
thereof or the District of Columbia.

“Foreign Lender” means any Lender that is not a U.S. Person.

“Foreign Subsidiary” means any Restricted Subsidiary that is not a Domestic
Subsidiary.

“Foreign Subsidiary Holding Company” means (a) any Subsidiary that owns
(directly or indirectly) no material assets other than Equity Interests (or
Equity Interests and debt) of a Foreign Subsidiary and (b) any Subsidiary of a
Foreign Subsidiary Holding Company.

“Foreign Vessel Reflagging Transaction” has the meaning assigned to such term in
Section 8.11(b).

“Funded Debt” means all Debt of the Parent Borrower and its Restricted
Subsidiaries for borrowed money that matures more than one year from the date of
its creation or matures within one year from such date that is renewable or
extendable, at the option of the Parent Borrower or any such Restricted
Subsidiary, to a date more than one year from the date of its creation or arises
under a revolving credit or similar agreement that obligates the lender or
lenders to extend credit during a period of more than one year from such date
(including all amounts of such Funded Debt required to be paid or prepaid within
one year from the date of its creation), and, in the case of the Loan Parties,
Indebtedness in respect of the Loans.

 

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“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time subject to the terms and conditions set
forth in Section 1.05.

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether foreign or
domestic, federal, state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank, department, commissions, boards, officials
and officers or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any international organizations such as the United
Nations, or supra-national bodies such as the European Union or the European
Central Bank) over the Parent Borrower, any Subsidiary, any of their Properties,
the Administrative Agent or any Lender.

“Governmental Requirement” means any international convention, treaty, law,
statute, code, ordinance, order, determination, rule, regulation, judgment,
decree, injunction, franchise, permit, certificate, license, authorization or
other directive or requirement, whether now or hereafter in effect, including,
without limitation, Environmental Laws, and occupational, safety and health
standards or controls, of any Governmental Authority.

“Guarantors” means (i) each Restricted Subsidiary of the Parent Borrower (other
than the Co-Borrower) that is party to the Guaranty and Collateral Agreement on
the Effective Date, (ii) each Restricted Subsidiary of the Parent Borrower that
becomes a party to the Guaranty and Collateral Agreement as a guarantor and lien
grantor pursuant to Section 8.14, and (iii) each Foreign Subsidiary of the
Parent Borrower that enters into a Foreign Law Guaranty Agreement on the
Effective Date or thereafter, in each case until such time as any such
Restricted Subsidiary of the Parent Borrower shall be released and relieved of
its obligations pursuant to the provisions of this Agreement.

“Guaranty Agreements” means, collectively, the Guaranty and Collateral Agreement
and each Foreign Law Guaranty Agreement.

“Guaranty and Collateral Agreement” means an agreement executed by each
Borrower, the Guarantors party thereto (including each Guarantor that is a
Domestic Subsidiary of the Parent Borrower) and the Collateral Agent in
substantially the form of Exhibit E unconditionally guarantying on a joint and
several basis, payment of the Indebtedness, as the same may be amended, modified
or supplemented from time to time.

“Hazardous Materials” means:

(i) any “hazardous waste” as defined by RCRA;

(ii) any “hazardous substance” as defined by CERCLA;

(iii) any “toxic substance” as defined by TSCA;

(iv) any “hazardous material” as defined by HMTA;

 

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(v) asbestos;

(vi) polychlorinated biphenyls;

(vii) any substance the presence of which is prohibited by any lawful
Governmental Requirement from time to time in force and effect; and

(viii) any other substance which by any Governmental Requirement requires
special handling in its collection, storage, treatment or disposal or defines or
regulates as “hazardous,” “toxic” or words of similar import or effect.

“Hedging Obligations” means, with respect to any Person, the obligations of such
Person under (a) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements, (b) other agreements or arrangements designed
to protect such Person against fluctuations in interest rates and (c) any
foreign currency futures contract, option or similar agreement or arrangement
designed to protect such Person against fluctuations in foreign currency rates,
in each case to the extent such obligations are incurred in the ordinary course
of business of such Person.

“Highest Lawful Rate” means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Loans or on other
Indebtedness under laws applicable to such Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws allow as of the date hereof.

“HOS” has the meaning specified in the recital of parties to this Agreement.

“HOS Warhorse” means that certain newbuild hull, Official Number 1258860, under
construction by HOS.

“HOS Wild Horse” means that certain newbuild hull, Official Number 1258861,
under construction by HOS.

“HOSI” has the meaning specified in the recital of parties to this Agreement.

“Indebtedness” means any and all amounts owing or to be owing by the Borrowers
or any of the Guarantors, whether direct or indirect (including those acquired
by assumption), absolute or contingent, due or to become due, now existing or
hereafter arising, in each case to the Administrative Agent, the Collateral
Agent or any Lender under any Loan Document.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrowers under any Loan Document and (b) to the extent not otherwise described
in subsection (a) above, Other Taxes.

“Indemnitee” has the meaning assigned to such term in Section 12.03(b).

“Information” has the meaning assigned to such term in Section 12.11.

 

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“Initial Budget” means the initial 13-week consolidated weekly operating budget
of Parent Borrower and its consolidated Restricted Subsidiaries setting forth
sources and uses of cash for the periods described therein prepared by the
Borrowers’ management, in consultation with the Loan Party Financial Advisor, a
copy of which is attached as Exhibit J, such budget in form and substance
satisfactory to the Required Lenders.

“Initial Draw Availability Date” means the first date on which the conditions
set forth in Sections 6.01 and 6.03 are satisfied (or waived in accordance with
Section 12.02).

“Initial Draw Commitments” means $50,000,000. The amount of each Lender’s
Initial Draw Commitment on the Effective Date shall be the amount set forth on
Schedule 2.01.

“Initial Draw Loans” means any Loan made pursuant to Section 2.01(a).

“Intellectual Property” means all U.S. and non-U.S. (a) patents, (b) copyrights,
(c) design rights, inventions, original works of authorship, trade secrets,
confidential information, know-how, software and all other intellectual property
or proprietary rights and interests, whether registered or unregistered, (d) all
registrations and applications for registration related to the foregoing, and
(e) all rights to sue for any infringement, misappropriation or other violation
related to the foregoing, and all income, royalties, damages and payments due or
payable therefor.

“Interest Election Request” means a request by the Borrowers to convert or
continue a Borrowing in accordance with Section 2.03.

“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of
each calendar month and (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than
one month’s duration, each day prior to the last day of such Interest Period
that occurs at intervals of one month’s duration after the first day of such
Interest Period.

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrowers may elect; provided, that (a) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day; (b) any Interest Period
pertaining to a Eurodollar Borrowing that commences on the last Business Day of
a calendar month (or on a day for which there is no numerically corresponding
day in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period; (c) no Interest
Period for a Borrowing may end after the Maturity Date; and (d) the last
Interest Period may be such shorter period as to end on the Maturity Date. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.

 

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“Interim Order” means an interim order of the Bankruptcy Court (as such order
may be amended, supplemented, or modified from time to time after entry thereof
in accordance with the terms hereof but only with the written consent of the
Administrative Agent and the Required Lenders) in the form set forth as Exhibit
I (with changes to such form only as are satisfactory to the Required Lenders,
and with respect to any provision that affects the rights or duties of the
Agents, such Agents), which order shall authorize and approve, on an interim
basis, among other things, (a) the Indebtedness and extensions of credit
hereunder including the incurrence by the Loan Parties of secured indebtedness
in accordance with this Agreement, (b) the form of this Agreement and the other
Loan Documents, (c) the granting of Liens and Superpriority Claims in favor of
the Agents and Lenders, (d) the payment by the Loan Parties of the reasonable
and documented fees contemplated by this Agreement, (e) the provision of
adequate protection to the Secured Parties under and as defined in each of the
Prepetition First Lien Term Loan Agreement and the Prepetition Second Lien Term
Loan Agreement (and, until the Prepetition ABL Credit Agreement Refinancing, the
Secured Parties under and as defined in the Prepetition ABL Credit Agreement) in
a manner satisfactory to the Required Lenders, and (f) such other matters as are
usual and customary for orders of this kind, and which order shall not have been
vacated or reversed, shall not be subject to any stay or appeal and shall not
have been modified or amended without the prior written consent of the
Administrative Agent and the Required Lenders.

“Interim Order Entry Date” means the date on which the Interim Order is entered
by the Bankruptcy Court.

“Investment” means, with respect to any Person, all investments by such Person
in other Persons (including Affiliates) in the forms of direct or indirect loans
(including guarantees by the referent Person of, and Liens on any Properties of
the referent Person securing, Debt or other obligations of other Persons),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Debt, Equity Interests or
all or substantially all of the assets of a Person, or other securities, and
regardless of the form of consideration used to make any of the foregoing
(whether cash, Vessels, Equity Interests or otherwise, or any combination
thereof), together with all items that are or would be classified as investments
on a balance sheet prepared in accordance with GAAP, and “Investment” means any
of such Investments; provided, however, that the following shall not constitute
Investments: (i) extensions of trade credit or other advances to customers on
commercially reasonable terms in accordance with normal trade practices or
otherwise in the ordinary course of business, (ii) Hedging Obligations and
(iii) endorsements of negotiable instruments and documents in the ordinary
course of business. If the Parent Borrower or any Restricted Subsidiary of the
Parent Borrower sells or otherwise disposes of any Equity Interests of any
direct or indirect Restricted Subsidiary of the Parent Borrower such that, after
giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary of the Parent Borrower, the Parent Borrower shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the Fair Market Value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of.

“Joint Venture” means any Person that is not a direct or indirect Subsidiary of
the Parent Borrower in which the Parent Borrower or any of its Restricted
Subsidiaries owns an Equity Interest that constitutes a significant portion of
the Equity Interests of such Person.

 

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“Lenders” means the lenders signatory hereto and any other Person that shall
have become a party hereto pursuant to an Assignment, other than any such Person
that ceases to be a party hereto pursuant to an Assignment.

“LIBO Rate” means,

(a)    for any interest rate calculation with respect to a Eurodollar Loan, the
rate of interest per annum determined on the basis of the rate for deposits in
dollars for a period equal to the applicable Interest Period which appears on
Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day of the
applicable Interest Period (rounded upward, if necessary, to the nearest 1/100th
of 1%). If, for any reason, such rate does not appear on Reuters Screen LIBOR01
Page (or any applicable successor page), then the “LIBO Rate” shall be
determined by the Administrative Agent to be the arithmetic average of the rate
per annum at which deposits in dollars in minimum amounts of at least $5,000,000
would be offered by first class banks in the London interbank market to the
Administrative Agent at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest Period for a period equal
to such Interest Period.

(b)    for any interest rate calculation with respect to an ABR Loan, the rate
of interest per annum determined on the basis of the rate a for deposits in
dollars in minimum amounts of at least $5,000,000 for a period equal to one
month (commencing on the date of determination of such interest rate) which
appears on the Reuters Screen LIBOR01 Page (or any applicable successor page) at
approximately 11:00 a.m. (London time) on such date of determination, or, if
such date is not a Business Day, then the immediately preceding Business Day
(rounded upward, if necessary, to the nearest 1/100th of 1%). If, for any
reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any
applicable successor page) then the “LIBO Rate” for such ABR Loan shall be
determined by the Administrative Agent to be the arithmetic average of the rate
per annum at which deposits in dollars in minimum amounts of at least $5,000,000
would be offered by first class banks in the London interbank market to the
Administrative Agent at approximately 11:00 a.m. (London time) on such date of
determination for a period equal to one month commencing on such date of
determination.

Each calculation by the Administrative Agent of the LIBO Rate shall be
conclusive and binding for all purposes, absent manifest error.

Notwithstanding the foregoing, the LIBO Rate shall never be less than 1.00%.

“Lien” means, with respect to any Property, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such Property,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (“UCC”) (or equivalent statutes) of any jurisdiction
other than a precautionary financing statement respecting a lease not intended
as a security agreement) or any assignment (or agreement to assign) any right to
income or profits from any Property by way of security.

 

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“Loan Documents” means this Agreement, the Notes, Fee Letters and the Security
Instruments.

“Loan Guarantees” means, collectively, the guarantees of the Indebtedness made
by the Guarantors pursuant to the Guaranty Agreements.

“Loan Parties” means the Borrowers and the Guarantors, and “Loan Party” means
any one of them.

“Loan Party Financial Advisor” means Portage Point Partners.

“Loans” means the loans made by the Lenders to the Borrowers pursuant to this
Agreement, including for the avoidance of doubt, Loans made pursuant to
Section 2.01 (including both Initial Draw Loans and Delayed Draw Loans).

“Maritime Mortgage” means each, and “Maritime Mortgages” means every, mortgage
over all or a portion of the Vessel Collateral, in substantially the forms of
Exhibits F-1, F-2, F-3 or F-4, as applicable, or such other form reasonably
determined by the Administrative Agent and the Collateral Agent to be
appropriate in order to create a valid, enforceable and, when duly filed and
recorded or registered, perfected first preferred mortgage or first priority
mortgage under the laws of the applicable flag jurisdiction on the relevant
Vessel Collateral, including for the applicable flag jurisdiction a statutory
mortgage and the related separate deed of covenants, as applicable, with such
preference or priority subject in each instance only to Permitted Maritime
Liens.

“Material Adverse Effect” means a material adverse change in, or material
adverse effect on (a) the business, Properties, condition (financial or
otherwise) or results of operations of the Parent Borrower and its Subsidiaries
taken as a whole (other than by virtue of the commencement of the Cases and the
events and circumstances giving rise thereto), (b) the ability of the Borrowers
and the Guarantors, taken as a whole, to perform any of their payment or other
material obligations under the Loan Documents, (c) the validity or
enforceability of any Loan Document or (d) the ability of the Administrative
Agent or any Lender to enforce any of their respective material rights under the
Loan Documents.

“Material Debt” means Funded Debt (other than the Loans) or Hedging Obligations,
of any one or more of the Borrowers and the Guarantors in an aggregate principal
amount exceeding $5,000,000.

“Material Real Property Interests” means (i) any fee-owned Real Property
Interests owned by the Borrower or a Restricted Subsidiary as of the date hereof
or acquired after the date hereof by a Loan Party, in either case, having a fair
market value exceeding $1,000,000 on an individual basis as of the date hereof
or at the time acquisition, as applicable, and (ii) interests in (A) that
certain tract of land pursuant to a contract of lease dated December 12, 2002,
originally by and between Greater Lafourche Port Commission, as lessor, and
Rowan Marine Services, Inc., as lessee, registered in COB 1519, page 155, under
Entry No. 928941, of the Conveyance Records of Lafourche Parish, Louisiana (as
amended or otherwise modified from time to time) and (B) that certain tract of
land pursuant to a contract of lease dated January 1, 2003, originally by and
between Greater Lafourche Port Commission, as lessor, and ASCO USA, L.L.C., as
lessee, registered in COB 1524, page 691, under Entry No. 932370, of the
Conveyance Records of Lafourche Parish,

 

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Louisiana (as amended or otherwise modified from time to time), which, in each
case, is subject to (among other things) the receipt of the prior written
consent of the Greater Lafourche Port Commission (provided, with respect to real
property interests owned as of the date hereof, that the Property described on
Schedule 8.14(a)(i)(x) are Material Real Property Interests).

“Maturity Date” means November 22, 2020.

“Mortgage” means any mortgage, deed of trust, deed to secure debt, or similar
document creating a Lien on and security interest in real property.

“Multiemployer Plan” means a multiemployer plan as defined in Section 3(37) or
4001(a)(3) of ERISA.

“Net Proceeds” means the aggregate cash proceeds received by the Parent Borrower
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale) (including, for the avoidance
of doubt, any insurance proceeds received in the event of an Event of Loss), net
of (without duplication) the following: (a) the direct costs relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees, sales commissions, recording fees, title transfer fees, title
insurance premiums, appraiser fees and costs incurred in connection with
preparing such asset for sale) and any relocation expenses incurred as a result
thereof, (b) taxes paid or estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), (c) amounts required to be applied to the repayment of Debt
(other than under this Agreement or under any Prepetition Secured Indebtedness)
secured by a Permitted Lien on the Vessel Collateral that was the subject of
such Asset Sale (or otherwise to discharge Liens on such Vessel Collateral), and
(d) any reserve established in accordance with GAAP or any amount placed in
escrow, in either case for adjustment in respect of the sale price of such
Properties, until such time as such reserve is reversed or such escrow
arrangement is terminated, in which case Net Proceeds shall include only the
amount of the reserve so reversed or the amount returned to the Parent Borrower
or its Restricted Subsidiaries from such escrow arrangement, as the case may be.

“Notes” means the promissory notes of the Borrowers described in Section 2.02(b)
and being substantially in the form of Exhibit A together with any and all
supplements, restatements, renewals, refinances, modifications, amendments,
extensions for any period, increases and/or rearrangements thereof.

“Notice of Prepayment” has the meaning assigned to such term in Section 3.04(b).

“OFAC” means the United States Treasury Department’s Office of Foreign Asset
Control.

“Officer’s Certificate” means a certificate signed on behalf of the Borrowers by
a Responsible Officer of the Borrowers.

“OPA” has the meaning set forth in the definition of “Environmental Laws.”

“Orders” means, collectively, the Interim Order and the Final Order.

 

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“Organizational Documents” shall mean, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents); (b) with respect to any limited liability
company, the certificate or articles of formation or organization and operating
agreement; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any certificate or articles of
formation or organization of such entity.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.06).

“Parent Borrower” has the meaning specified in the recital of parties to this
Agreement.

“Participant” has the meaning assigned to such term in Section 12.04(c)(i).

“Participant Register” has the meaning specified in Section 12.04(e).

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

“Permitted Investments” means

(a) any Investment in the Parent Borrower or in another Loan Party,

(b) any Investment in Cash Equivalents,

(c) any Investment described on Schedule 9.01 and existing on the Petition Date,

(d) any Investment made as a result of the receipt of non-cash consideration
from (i) a disposition of assets that does not constitute an Asset Sale or
(ii) an Asset Sale; provided, that the aggregate amount of all such Investments
under this clause (d) shall not exceed $1,000,000,

(e) [reserved],

 

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(f) Investments in stock, obligations or securities received in settlement of
any debts owing to the Parent Borrower or any Restricted Subsidiary of the
Parent Borrower as a result of bankruptcy or insolvency proceedings or upon the
foreclosure, perfection or enforcement of any Lien in favor of the Parent
Borrower or any Restricted Subsidiary of the Parent Borrower, in each case as to
any debts owing to the Parent Borrower or any Restricted Subsidiary of the
Parent Borrower that arose in the ordinary course of business of the Parent
Borrower or any such Restricted Subsidiary, and

(g) intercompany loans, capital contributions and/or advances made to consummate
a Foreign Vessel Reflagging Transaction.

Except as otherwise explicitly addressed in any exception to Section 9.01, for
purposes of covenant compliance, the amount of any Investment at any time shall
be (1) the amount actually invested (measured at the time made), without
adjustment for subsequent increases or decreases in the value of such Investment
minus (2) the amount of dividends or distributions received in connection with
such Investment and any return of capital and any payment of principal received
in respect of such Investment that in each case is received in cash or Cash
Equivalents; provided, that if such Investment is made with Collateral or
proceeds of Collateral, such cash or Cash Equivalents are received by a Loan
Party in a deposit account or securities account, as applicable, that is subject
to an Account Control Agreement.

“Permitted Liens” means

(a) limitations and conditions under that certain Second Amended and Restated
License Agreement between HFR, LLC and Hornbeck Offshore Operators, LLC, as in
effect on the Effective Date,

(b) Liens existing on the Effective Date and described on Schedule 9.03,

(c) any interest or title of a lessor under an operating lease or precautionary
liens on Property covered by leases,

(d) Liens on Property (other than on Vessel Collateral and any Real Property
Interests) of the Parent Borrower or any of its Restricted Subsidiaries to
secure Debt incurred for the purpose of (i) financing all or any part of the
purchase price of such Property incurred prior to, at the time of, or within
ninety (90) days after, completion of the acquisition of such Property or
(ii) financing all or any part of the cost of construction, improvement or
conversion of any such Property, provided, that the amount of any such financing
shall not exceed the amount expended in the acquisition of, or the construction,
improvement or conversion of, such Property and such Liens shall not extend to
any other Property of the Parent Borrower or a Restricted Subsidiary thereof
(other than any accounts and contracts associated therewith, accessions thereto,
and upgrades and proceeds thereof),

(e) Liens (other than on Vessel Collateral and any Real Property Interests)
securing the performance of tenders, bids, statutory obligations, surety,
appeal, return-of-the-money or performance bonds, government contracts,
insurance obligations or other obligations of a like nature incurred in the
ordinary course of business,

(f) with respect to any Real Property Interests, Permitted Encumbrances (as
defined in each Mortgage) and Prior Recorded Interests,

 

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(g) Liens on cash collateral securing Debt permitted under Section 9.02(b)(x) in
an aggregate amount outstanding not to exceed $600,000 at any time.

(h) judgment Liens not giving rise to an Event of Default so long as any
appropriate legal proceeding that may have been duly initiated for the review of
such judgment has not been finally terminated or the period within which such
proceeding may be initiated has not expired,

(i) Liens upon specific items of inventory or other goods and proceeds of the
Parent Borrower or its Restricted Subsidiaries securing the Parent Borrower’s or
any such Restricted Subsidiary’s obligations in respect of bankers’ acceptances
issued or created for the account of any such Person to facilitate the purchase,
shipment or storage of such inventory or other goods in the ordinary course of
business,

(j) legal or equitable Liens deemed to exist by reason of negative pledge
covenants and other covenants or undertakings of a like nature,

(k)(1) Liens for Taxes not yet due or which are being contested in good faith by
appropriate action promptly initiated and diligently conducted, with such
accruals as shall be required by GAAP having been made therefor, (2) with
respect to U.S.-flag Vessels, “preferred maritime liens” as defined in 46 U.S.
Code §31301, and, with respect to non-U.S.-flag Vessels, those maritime liens
that are given preferred status over a Maritime Mortgage under the laws of the
applicable foreign-flag jurisdiction, in each case arising by law in the
ordinary course of business for sums either not yet due or being contested in
good faith by appropriate action promptly initiated and diligently conducted,
with such accruals as shall be required by GAAP having been made therefor, and
(3) shipyard Liens and other Liens arising by operation of law in the ordinary
course of business in constructing, operating, maintaining and repairing the
Vessels, including any Liens for charters or leases of a Vessel, for sums either
not yet due or being contested in good faith by appropriate action promptly
initiated and diligently conducted, with such accruals as shall be required by
GAAP having been made therefor, provided, that in each of case (1), (2) and (3),
such contest will, more likely than not, not result in (i) the sale, forfeiture,
confiscation, distraint, seizure, or loss of any Vessel Collateral or any
interest therein in the course of any such proceedings, or as a result of any
such Lien or (ii) any materially adverse effect on the interests of any
mortgagee under the applicable Maritime Mortgage or other such mortgage or
security,

(l) Liens created pursuant to the Loan Documents securing the Indebtedness,

(m) Liens in favor of the Borrowers and any other Loan Parties,

(n) customary rights of banks to set off deposits against Debt owed to said
bank,

(o) [reserved],

(p) Liens otherwise granted by or expressly permitted by the Orders,

(q) leases and sub-leases, rights of use, passage or occupancy entered into in
the ordinary course of business affecting the Real Property Interests, and

 

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(r) other Liens not otherwise permitted pursuant to the foregoing in the
aggregate at any one time outstanding not to exceed $750,000, so long as such
Liens do not secure Debt for borrowed money or indebtedness evidenced by bonds,
indentures, notes, term loans or similar instruments.

“Permitted Maritime Liens” means those Permitted Liens under clauses (b), (k)
and (l) of the definition thereof.

“Permitted Priority Liens” means valid, perfected and non-avoidable Liens on the
Collateral in favor of third parties that were (a) in existence immediately
prior to the Petition Date, (b) permitted under the Prepetition Secured Credit
Agreements, (c) either perfected as of the Petition Date or perfected subsequent
to the Petition Date solely to the extent permitted by Section 546(b) of the
Bankruptcy Code and (d) senior in priority to the Liens granted to the Secured
Parties (as defined in the Prepetition Secured Credit Agreements) in connection
with the Prepetition Secured Credit Agreements.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, unincorporated
organization, Governmental Authority or other entity.

“Petition Date” has the meaning specified in the Recitals herein.

“Plan Effective Date” means the date of the substantial consummation (as defined
in section 1101(2) of the Bankruptcy Code, which for purposes hereof shall be no
later than the effective date) of an Acceptable Plan confirmed pursuant to an
Acceptable Confirmation Order.

“Platform” has the meaning assigned to such term in Section 12.14(b).

“Prepetition 2020 Senior Notes” means the 5.875% Senior Notes due 2020 issued
pursuant to the Prepetition 2020 Senior Notes Indenture.

“Prepetition 2020 Senior Notes Indenture” means that certain Indenture, dated as
of March 16, 2012, among HOSI, the Guarantors (as defined therein) party thereto
and Wilmington Trust, as successor trustee, as amended, restated, supplemented
or otherwise modified from time to time in accordance with the requirements
thereof.

“Prepetition 2021 Senior Notes” means the 5.000% Senior Notes due 2021 issued
pursuant to the Prepetition 2021 Senior Notes Indenture.

“Prepetition 2021 Senior Notes Indenture” means that certain Indenture, dated as
of March 28, 2013, among HOSI, the Guarantors (as defined therein) party thereto
and Wilmington Trust, as successor trustee, as amended, restated, supplemented
or otherwise modified from time to time in accordance with the requirements
thereof.

“Prepetition ABL Credit Agreement” means that certain Senior Credit Agreement,
dated as of June 28, 2019, among HOSI, as borrower, certain financial
institutions, as lenders, and CIT Northbridge Credit LLC, as collateral agent
and as administrative agent thereunder, as amended, supplemented or otherwise
modified prior to the date hereof.

 

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“Prepetition ABL Credit Agreement Refinancing” has the meaning assigned to such
term in Section 6.01(p).

“Prepetition First Lien Term Loan Agreement” means that certain First Lien Term
Loan Agreement, dated as of June 15, 2017, among HOS and HOSI, as co-borrowers,
certain financial institutions, as lenders, and Wilmington Trust, as collateral
agent and as administrative agent thereunder, as amended, supplemented or
otherwise modified prior to the date hereof.

“Prepetition Indebtedness” means, collectively, the Prepetition 2020 Senior
Notes, the Prepetition 2021 Senior Notes, the Prepetition ABL Credit Agreement,
the Prepetition First Lien Term Loan Agreement and the Prepetition Second Lien
Term Loan Agreement.

“Prepetition Payment” means a payment on account of any Indebtedness incurred
prior to the Petition Date.

“Prepetition Second Lien Term Loan Agreement” means that certain Second Lien
Term Loan Agreement, dated as of February 7, 2019, among HOS and HOSI, as
co-borrowers, certain financial institutions, as lenders, and Wilmington Trust,
as collateral agent and as administrative agent thereunder, as amended,
supplemented or otherwise modified prior to the date hereof.

“Prepetition Secured Credit Agreements” means, collectively, the Prepetition ABL
Credit Agreement, the Prepetition First Lien Term Loan Agreement and the
Prepetition Second Lien Term Loan Agreement.

“Prepetition Secured Indebtedness” means the indebtedness in respect of the
Prepetition Secured Credit Agreements.

“Prepetition Secured Parties” means the “Secured Parties” under and as defined
in the Prepetition Secured Credit Agreements.

“Prime Rate” means the rate of interest per annum publicly quoted from time to
time by The Wall Street Journal as the “prime rate” (or, if The Wall Street
Journal ceases quoting a prime rate, the highest per annum rate of interest
published by the Federal Reserve Board in Federal Reserve statistical release
H.15 (519) entitled “Selected Interest Rates” as the bank prime loan rate or its
equivalent). Any change in such prime rate shall take effect at the opening of
business on the day specified in the public announcement of such change.

“Prior Recorded Interests” means ownership interests, servitudes, real rights,
liens, leases and other interests in property that appear in the public records
affecting the Real Property Interests and in existence as of the date hereof and
disclosed in title abstracts or reports provided to the Administrative Agent.

“Projections” has the meaning assigned to such term in Section 7.12.

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, including, without limitation,
cash, securities, accounts and contract rights.

 

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“Public Lender” has the meaning assigned to such term in Section 12.14(c).

“Real Property Interests” means any interest of any kind including fee
ownership, a leasehold or sub-leasehold interest, right of use, right of access,
servitude or other possessory rights in and to such Property.

“Real Property Interests Collateral Requirements” means, with respect to any
Material Real Property Interests subject to a Real Property Interests Mortgage
and subject to the applicable time period set forth in this Agreement, the
requirement that:

(a) the entity that owns such Material Real Property Interests shall be or shall
have become a Loan Party and shall have: (i) duly authorized, executed and
delivered (A) if necessary, a joinder to the Guaranty and Collateral Agreement
or a guaranty agreement comparable to the Guaranty and Collateral Agreement in
form and substance satisfactory to the Collateral Agent; (b) [reserved], and
(C) a Mortgage with respect to such Material Real Property Interests; and
(ii) caused such Mortgage to be recorded in accordance with the laws of the
applicable jurisdiction in which such Material Real Property Interests are
located and such Mortgage shall be effective to create in favor of the
Collateral Agent for the benefit of the Secured Parties a legal, valid and
enforceable mortgage upon such Material Real Property Interests under the laws
of such applicable jurisdiction subject only to Permitted Liens;

(b) subject to the applicable time period set forth in this Agreement, all
filings, deliveries of instruments and other actions necessary or desirable in
the reasonable opinion of the Collateral Agent to perfect and preserve the
security interests described in clause (a) above under the laws of the
applicable jurisdiction shall have been duly effected and the Collateral Agent
shall have received evidence thereof in form and substance reasonably
satisfactory to it; and

(c) the Collateral Agent shall, subject to the applicable time period set forth
in this Agreement, have received each of the following with respect to any Real
Property Interests Mortgage:

 

  (i)

a title commitment or title abstract confirming the record owner of the Real
Property Interests and all Liens of record for such Material Real Property
Interests;

 

  (ii)

evidence of insurance required by Section 8.08; and

 

  (iii)

if requested by the Administrative Agent and the Required Lenders, a legal
opinion from counsel to the Borrowers and other Loan Parties in form and
substance reasonably acceptable to the Administrative Agent and the Required
Lenders.

Notwithstanding the foregoing, the Loan Parties shall only be required to use
commercially reasonable efforts to comply with the Real Property Interests
Collateral Requirements with respect to the Material Real Property Interests
described in clause (ii) of the definition thereof.

“Real Property Interests Mortgage” means, with respect to any Material Real
Property Interests, a Mortgage granting to the Collateral Agent a valid lien
over such Real Property Interests, in the form of Exhibit F-5, hereto.

 

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“Real Property Interests SNDA” means, with respect to any Material Real Property
Interests consisting of a leasehold interest, a subordination, non-disturbance
and attornment agreement, substantially in the form of Exhibit F-6 hereto.

“Recipient” means (a) any Agent, and (b) any Lender, as applicable.

“Redemption” means with respect to any Debt, the refinancing, repurchase,
redemption, prepayment, repayment, or defeasance or any other acquisition or
retirement for value (or the segregation of funds with respect to any of the
foregoing) of such Debt, including by compromise, exchange, settlement at a
discount, whether in an exchange offer, block purchases, open market repurchases
or otherwise.

“Redeem” has the correlative meaning thereto.

“Register” has the meaning assigned to such term in Section 12.04(b).

“Regulation D” means Regulation D of the Board, as the same may be amended,
supplemented or replaced from time to time.

“Rejection Notice” has the meaning assigned to such term in Section 3.04(c)(i).

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the partners, directors, officers, employees, agents and advisors
(including attorneys, accountants and experts) of such Person and such Person’s
Affiliates.

“Required Lenders” means, at any time while no Loans are outstanding, Lenders
having more than fifty percent (50%) of the total Commitments; and at any time
while any Loans are outstanding, Lenders holding more than fifty percent (50%)
of the sum of (i) outstanding aggregate principal amount of the Loans (without
regard to any sale by a Lender of a participation in any Loan under
Section 12.04(c)) and (ii) the total outstanding Commitments; provided that, at
any time there are two or more Lenders (who are not Affiliates of one another or
who are not Approved Lenders with respect to each other), “Required Lenders”
must include at least two Lenders (who are not Affiliates of one another or who
are not Approved Lenders with respect to each other). The Commitment and Loans
of any Defaulting Lender shall be disregarded in determining Required Lenders at
any time.

“Resolution Authority” means an EEA Resolution Authority or, with respect to any
UK Financial Institution, a UK Resolution Authority.

“Responsible Officer” means, as to any Person, the chief executive officer, the
president, the chief financial officer, the principal accounting officer, the
treasurer, the corporate finance director or the controller of such Person.
Unless otherwise specified, all references to a Responsible Officer herein shall
mean a Responsible Officer of the Borrowers.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Payment” has the meaning set forth in Section 9.01.

 

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“Restricted Subsidiary” of a Person means any Subsidiary of such Person.

“Restructuring Support Agreement” means that certain Restructuring Support
Agreement, dated as of April 10, 2020 by and among the Parent Borrower, the
other “Company Parties” party thereto and the “Consenting Creditors” party
thereto, including the exhibits, schedules and other attachments thereto (as
amended, supplemented or otherwise modified from time to time in accordance with
its terms).

“Sanctioned Country” means, at any time, a country or territory which is the
subject or target of any Sanctions.

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC or the U.S.
Department of State, or by the United Nations Security Council, Her Majesty’s
Treasury of the United Kingdom, the European Union or any EU member state,
(b) any Person operating, organized or resident in a Sanctioned Country or
(c) any Person controlled by, or owned 50 percent or more, directly or
indirectly, by, any such Person or Persons.

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including
those administered by OFAC or the U.S. Department of State, or (b) the United
Nations Security Council, the European Union or Her Majesty’s Treasury of the
United Kingdom.

“SEC” means the Securities and Exchange Commission or any successor Governmental
Authority.

“Secured Parties” means, collectively, the Agents, the Lenders and each
sub-agent pursuant to Section 11.05 appointed by any Agent with respect to
matters relating to the Loan Documents.

“Securities Act” means the Securities Act of 1933, as amended.

“Security Instruments” means the Guaranty and Collateral Agreement, each
Maritime Mortgage, the Assignments of Insurances, each Real Property Interests
Mortgage, the Orders, and any and all other agreements now or hereafter executed
and delivered by the Borrowers or any other Person as security for the payment
or performance of the Indebtedness (including, without limitation, any such
agreements described on Schedule 8.17), as such agreements securing the
Indebtedness may be amended, modified, supplemented or restated from time to
time.

“Specified Equity Interests” means any Equity Interests of any Person that owns
Vessel Collateral.

“Specified Proceeds” means the net cash proceeds realized from the sale or
assignment to an unrelated third party of any construction contract related to
the HOS Warhorse or HOS Wild Horse or any other Vessel under construction as to
which monies of whatsoever nature are paid to the Parent Borrower or any of its
Restricted Subsidiaries in respect of such contracts, the HOS Warhorse or HOS
Wild Horse or any other Vessel under construction, including, without
limitation, the Vessel purchase price (or any refund thereof), commissions,
insurances, bonds, damages, awards or judgments.

 

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“Stacked Vessel” means a Vessel that has been removed from service in the
exercise of the Parent Borrower’s reasonable judgment consistent with reasonable
business practices in light of the facts known at the time the decision was made
(including, without limitation, operating costs and available marketing
opportunities).

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

“Subsidiary” means any Person of which at least a majority of the outstanding
Equity Interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors, manager or other governing body of such
Person (irrespective of whether or not at the time Equity Interests of any other
class or classes of such Person shall have or might have voting power by reason
of the happening of any contingency) is at the time directly or indirectly owned
or controlled by the Parent Borrower or one or more of its Subsidiaries. Unless
otherwise indicated herein, each reference to the term “Subsidiary” shall mean a
direct or indirect Subsidiary of the Parent Borrower.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

“Termination Date” means the first to occur of: (a) the Maturity Date, (b) the
date on which the Indebtedness becomes due and payable pursuant to
Section 10.02(a), (c) the effective date of any chapter 11 plan for the
Borrowers or any other Debtor and (d) the date on which all or substantially all
assets of the Borrowers are sold or otherwise disposed of pursuant to
Section 363 of the Bankruptcy Code.

“Transactions” means, with respect to (a) the Borrowers, the execution, delivery
and performance by the Borrowers of this Agreement, and each other Loan Document
to which it is a party, the borrowing of Loans, the use of the proceeds thereof,
and the granting of Liens by the Borrowers on Collateral pursuant to the
Security Instruments, (b) each Guarantor, the execution, delivery and
performance by such Guarantor of each Loan Document to which it is a party, the
guaranteeing of the Indebtedness and the other obligations under the Guaranty
Agreements by such Guarantor, and the granting of Liens by such Guarantor on
Collateral pursuant to the Security Instruments (for the avoidance of doubt,
excluding Excluded Assets (as defined in the Guaranty and Collateral Agreement))
and (c) the other transactions contemplated by the Restructuring Support
Agreement.

 

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“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing is
determined by reference to the Alternate Base Rate or the Adjusted LIBO Rate.

“UCC” has the meaning set forth in the definition of “Lien”.

“UK Financial Institution” means any BRRD Undertaking (as such term is defined
under the PRA Rulebook (as amended from time to time) promulgated by the United
Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6
of the FCA Handbook (as amended from time to time) promulgated by the United
Kingdom Financial Conduct Authority, which includes certain credit institutions
and investment firms, and certain affiliates of such credit institutions or
investment firms.

“UK Resolution Authority” means the Bank of England or any other public
administrative authority having responsibility for the resolutions of any UK
Financial Institution.

“USA PATRIOT Act” means The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. No. 107-56 (signed into law October 26, 2001 and as
modified, amended, supplemented or restated from time to time)).

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 5.03(g)(ii)(B)(3).

“U.S. Trustee” has the meaning assigned to such term in Section 8.20(d).

“Variance Report” means a variance report prepared by a Responsible Officer of
the Parent Borrower, comparing for each applicable Variance Reporting Period the
actual results against anticipated results under the applicable Budget, on a
line item basis and in the same level of detail as set forth in the Initial
Budget or in a form otherwise reasonably acceptable to the Financial Advisor;
provided, that such comparisons shall be presented on a bi-weekly basis (i.e.,
for each two week period included in such Variance Report) for each Variance
Reporting Period.

“Variance Reporting Period” means each of (i) commencing with the first Budget
Variance Report, the two (2) week calendar period ending on the Sunday
immediately preceding the delivery of the applicable Variance Report and
(ii) commencing with the second Budget Variance Report delivered after the
Effective Date pursuant to Section 8.21(c) and for each Budget Variance Report
delivered thereafter, the prior four (4) week calendar period ending on the
Sunday immediately preceding the delivery of the applicable Variance Report.

“Variance Testing Period” means (i) solely with respect to the first Variance
Report delivered after the Effective Date pursuant to Section 8.21(c), the prior
two (2) week calendar period ending on the Sunday immediately preceding the
delivery of such Variance Report and (ii) with respect to each subsequent
Variance Report delivered pursuant to Section 8.21(c), (x) for purposes of
Section 9.21(a) and (b), the prior four (4) week calendar period ending on the
Sunday immediately preceding the delivery of the applicable Variance Report and
(y) for purposes of Section 9.21(c) and (d), the prior two (2) week calendar
period ending on the Sunday immediately preceding the delivery of the applicable
Variance Report.

 

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“Vessel Collateral” means, collectively, any Vessels subject to Liens in favor
of the Collateral Agent, for the benefit of the Secured Parties, securing
obligations of the Loan Parties under the Loan Documents and guaranties thereof,
including, without limitation, all Vessels set forth on Schedule 8.14; provided,
that each of the HOS Warhorse and HOS Wild Horse shall be deemed to constitute
Vessel Collateral upon each such Vessel’s (i) delivery to Hornbeck and
(ii) documentation with the U.S. Coast Guard; provided, further, that prior to
the satisfaction of the conditions in the immediately preceding proviso, each of
the HOS Warhorse and HOS Wild Horse shall be deemed to constitute Vessel
Collateral for purposes of the definitions herein of “Event of Loss”, “Permitted
Liens” and “Specified Equity Interests” and for purposes of Section 9.01.

“Vessel Collateral Requirements” shall mean, with respect to any Vessel
Collateral and subject to the applicable time period set forth in this
Agreement, the requirement that:

(a) the entity that owns such Vessel Collateral shall be or shall have become a
Loan Party and shall have: (i) duly authorized, executed and delivered (A) if
necessary, a joinder to the Guaranty and Collateral Agreement or a guaranty
agreement comparable to the Guaranty and Collateral Agreement in form and
substance satisfactory to the Collateral Agent; (B) an Assignment of Insurances
with respect to such Vessel Collateral, and (C) a Maritime Mortgage with respect
to such Vessel Collateral; and (ii) caused such Maritime Mortgage to be filed
and recorded or registered in accordance with the laws of the applicable flag
jurisdiction in which such Vessel Collateral is registered and such Maritime
Mortgage shall be effective to create in favor of the Collateral Agent for the
benefit of the Secured Parties a legal, valid and enforceable perfected first
preferred or first priority mortgage lien upon such Vessel Collateral under the
laws of such applicable flag jurisdiction subject only to Permitted Maritime
Liens;

(b) all filings, deliveries of instruments and other actions necessary or
desirable in the reasonable opinion of the Collateral Agent to perfect and
preserve the security interests described in clause (a) above under the laws of
the applicable flag jurisdiction in which such Vessel Collateral is registered
and (if required) in the jurisdiction of organization of the entity that is the
owner of such Vessel Collateral shall have been duly effected (provided that
with respect to foreign Maritime Mortgages and other security interests their
effectiveness is subject to the applicable time period set forth in this
Agreement) and the Collateral Agent shall have received evidence thereof in form
and substance reasonably satisfactory to it and such customary legal opinions
reasonably satisfactory to it; and

(c) the Collateral Agent shall, subject to the applicable time period set forth
in this Agreement, have received each of the following:

 

  (i)

except with respect to Stacked Vessels or Vessels that are not classed, a copy
of the certificate of class issued by the American Bureau of Shipping or such
other classification society that is a member of the International Association
of Classification Societies, which is valid and unexpired, showing the Vessel
Collateral to be free of overdue recommendations affecting class and an
affidavit

 

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  executed by a Responsible Officer or the vessel documentation manager (who is
responsible for managing the class of the Vessels) of the Borrowers not more
than ten (10) days prior to the date such Vessel becomes Vessel Collateral
attesting that the Vessel Collateral is in class and free of overdue
recommendations affecting class as of the date of such affidavit;

 

  (ii)

a vessel title abstract, a certificate of ownership and encumbrance or
transcript of register or other equivalent certificate confirming registration
of such Vessel Collateral under the law and flag of the applicable flag
jurisdiction, the record owner of the Vessel Collateral and all Liens of record
(which shall be subject only to Permitted Maritime Liens) for such Vessel
Collateral, such certificate to be issued within forty-five (45) days after the
date any such Vessel documented under the U.S. flag or registered under the
Vanuatu flag becomes Vessel Collateral and within sixty (60) days after the date
any such Vessel registered under another flag becomes Vessel Collateral, and
reasonably satisfactory to the Collateral Agent and the Administrative Agent;

 

  (iii)

a customary letter of undertaking addressed to the Collateral Agent and the
Administrative Agent, issued by the protection and indemnity association in
which such Vessel Collateral is entered;

 

  (iv)

a broker’s letter of undertaking and report, addressed to and in form and scope
reasonably acceptable to the Collateral Agent and the Administrative Agent, from
the Borrowers’ marine insurance broker or such other firm of marine insurance
brokers reasonably acceptable to the Collateral Agent and the Administrative
Agent, confirming the particulars and placement of the marine insurances
covering such Vessel Collateral and its compliance with the provisions
hereunder, the endorsement of loss payable clauses and notices of assignment on
the policies, and containing such other confirmations and undertakings as are
customary for the marine insurance market for the offshore service vessel
industry and otherwise in conformity with the insurance requirements of the
Maritime Mortgages;

 

  (v)

a report from an independent marine insurance consultant appointed by the
Collateral Agent and the Administrative Agent confirming the adequacy of the
marine insurances covering the Vessel Collateral; and

 

  (vi)

a legal opinion from counsel to the Borrowers and other Loan Parties in form and
substance reasonably acceptable to the Administrative Agent and the Required
Lenders.

“Vessels” means marine vessels, and “Vessel” shall mean any of such Vessels.

“Voting Stock” of any Person as of any date means the Equity Interest of such
Person that is at the time entitled to vote in the election of the board of
directors, managers or trustees of such Person.

“Weekly Variance Report” means a weekly variance report prepared by a
Responsible Officer of the Parent Borrower, comparing for each applicable Weekly
Variance Reporting Period the actual results against anticipated results under
the applicable Budget, on a line item basis and in the same level of detail as
set forth in the Initial Budget.

 

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“Weekly Variance Reporting Period” means the one week calendar period ending on
the Sunday immediately preceding the delivery of the applicable Weekly Variance
Report.

“Wholly-Owned Restricted Subsidiary” means (a) any Restricted Subsidiary of
which all of the outstanding Equity Interests (other than any directors’
qualifying shares and Equity Interests held by other statutorily required
minority shareholders) shall at the time be owned directly or indirectly by such
Person or (b) any Restricted Subsidiary that is organized in a foreign
jurisdiction and is required by the applicable laws and regulations of such
foreign jurisdiction or its governmental agencies, authorities or state-owned
businesses to be partially owned by the government of such foreign jurisdiction
or individual or corporate citizens of such foreign jurisdiction in order for
such Restricted Subsidiary to transact business in such foreign jurisdiction,
provided, that such Person, directly or indirectly, owns the remaining Equity
Interests in such Restricted Subsidiary and, by contract or otherwise, controls
the management and business of such Restricted Subsidiary to substantially the
same extent as if such Restricted Subsidiary were a Wholly-Owned Restricted
Subsidiary.

“Wilmington Trust” means Wilmington Trust, National Association.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Title IV of ERISA.

“Withholding Agent” means the Parent Borrower and the Administrative Agent.

“Write-Down and Conversion Powers” means (a) with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule and (b) with respect to the United Kingdom, any powers of
the applicable Resolution Authority under the Bail-In Legislation to cancel,
reduce, modify or change the form of a liability of any UK Financial Institution
or any contract or instrument under which that liability arises, to convert all
or part of that liability into shares, securities or obligations of that person
or any other person, to provide that any such contract or instrument is to have
effect as if a right had been exercised under it or to suspend any obligation in
respect of that liability or any of the powers under that Bail-In Legislation
that are related to or ancillary to any of those powers.

Section 1.03 Types of Loans and Borrowings. For purposes of this Agreement,
Loans and Borrowings, respectively, may be classified and referred to by Type
(e.g., a “Eurodollar Loan” or a “Eurodollar Borrowing”).

Section 1.04 Terms Generally; Rules of Construction. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires otherwise:

 

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(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time supplemented, restated, renewed, refinanced,
modified, amended, extended for any period, increased and/or otherwise
rearranged (subject to any restrictions on such supplements, restatements,
renewals, refinances, modifications, amendments, extensions, increases and/or
rearrangements as set forth in the Loan Documents);

(b) any reference herein to any law shall be construed as referring to such law
as amended, modified, codified or reenacted, in whole or in part, and in effect
from time to time;

(c) any reference herein to any Person shall be construed to include such
Person’s successors and assigns (subject to the restrictions contained in the
Loan Documents);

(d) the words “herein”, “hereof” and “hereunder”, and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any
particular provision hereof,

(e) with respect to the determination of any time period, the word “from” means
“from and including” and the word “to” means “to and including” and

(f) any reference herein to Articles, Sections, Annexes, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Annexes, Exhibits
and Schedules to, this Agreement.

No provision of this Agreement or any other Loan Document shall be interpreted
or construed against any Person solely because such Person or its legal
representative drafted such provision.

Section 1.05 Accounting Terms and Determinations; GAAP. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Administrative Agent or the Lenders hereunder
shall be prepared, in accordance with GAAP, as in effect from time to time;
provided, that if the Parent Borrower notifies the Administrative Agent in
writing that the Parent Borrower requests an amendment to any provision hereof
to eliminate the effect of any change occurring after the date hereof in GAAP or
in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Parent Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn, such provision amended in
accordance herewith.

 

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Section 1.06 Divisions. For all purposes under the Loan Documents, in connection
with any division or plan of division under Delaware law (or any comparable
event under a different jurisdiction’s laws): (a) if any asset, right,
obligation or liability of any Person becomes the asset, right, obligation or
liability of a different Person, then it shall be deemed to have been
transferred from the original Person to the subsequent Person, and (b) if any
new Person comes into existence, such new Person shall be deemed to have been
organized on the first date of its existence by the holders of its Equity
Interests at such time.

ARTICLE II

The Commitments

Section 2.01 Commitments.

(a) Initial Draw Loans. Subject to the terms and conditions set forth herein,
including the occurrence of the Initial Draw Availability Date, each Lender
agrees to make Loans to the Borrowers (on a joint and several basis) on the
Effective Date in an aggregate principal amount that will not result in (a) such
Lender’s Initial Draw Loans exceeding such Lender’s Initial Draw Commitment or
(b) the total Initial Draw Loans exceeding the total Initial Draw Commitments.
The Initial Draw Loans shall be available in a single Borrowing. Any amounts
paid or prepaid in respect of the Initial Draw Loans may not be reborrowed. Any
Lender that is also a lender under the Prepetition ABL Credit Agreement may
elect to “cashlessly roll” all or any portion of its loans (the “Exchanged
Loans”) under the Prepetition ABL Credit Agreement into Initial Draw Loans, as
notified in writing to the Administrative Agent and the Parent Borrower. Each
party hereto agrees that on the Effective Date such loans (if any) shall be
deemed to have been made by a Lender pursuant to such “cashless roll” in the
amount set forth on Schedule 2.01.

(b) Delayed Draw Loans. Subject to the terms and conditions set forth herein,
each Lender agrees to make Loans to the Borrowers (on a joint and several basis)
on or following the Delayed Draw Availability Date in an aggregate principal
amount that will not result in (a) such Lender’s Delayed Draw Loans exceeding
such Lender’s Delayed Draw Commitment or (b) the total Delayed Draw Loans
exceeding the total Delayed Draw Commitments; provided, that if the Borrowers do
not borrow the Delayed Draw Loans within ten (10) Business Days of the Delayed
Draw Availability Date, the Delayed Draw Commitments shall automatically and
permanently terminate. The Delayed Draw Loans shall be available in a single
Borrowing on a single date. Any amounts paid or prepaid in respect of the
Delayed Draw Loans may not be reborrowed.

Section 2.02 Borrowings; Several Obligations. Each Loan made shall be made as
part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided, that the Commitments are several and no Lender
shall be responsible for any other Lender’s failure to make Loans as required.

(a) Types of Loans. Subject to Section 3.03, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrowers may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided, that any exercise of such option shall not affect the obligation
of the Borrowers to repay such Loan in accordance with the terms of this
Agreement and such domestic or foreign branch or Affiliate will be subject to
the requirements under Section 5.03(g).

 

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(b) Notes. Any Lender may request that the Loans made by it be evidenced by a
promissory note. In such event, the Borrowers shall prepare, execute and deliver
to such Lender a promissory note payable to such Lender or its registered
assigns, substantially in the form of Exhibit A (with a copy to the
Administrative Agent) dated (i) the Effective Date or (ii) the effective date of
an Assignment pursuant to Section 12.04(b), in a principal amount equal to its
Commitment as originally in effect and otherwise duly completed and such
substitute Notes as required by Section 12.04(b); provided, that promissory
notes requested in amounts less than $1,000,000 shall require the consent of the
Parent Borrower, such consent not to be unreasonably withheld or delayed. The
date, amount, Type, interest rate and Interest Period of each Loan made by each
Lender and all payments made on account of the principal thereof, shall be
recorded by such Lender on its books and maintained in accordance with its usual
practice. Failure to make such recordation shall not affect any Lender’s or the
Borrowers’ rights or obligations in respect of such Loans. In the event that one
or more Notes shall be issued after the Effective Date, it shall not be
necessary to tender or present any such Note to the Administrative Agent for any
payment hereunder, including on the Maturity Date.

(c) Requests for Borrowings. To request a Borrowing, the Borrowers shall deliver
to the Administrative Agent, for distribution to the Lenders, a written
Borrowing Request in substantially the form of Exhibit B-1 and signed by the
Borrowers (A) in the case of a Eurodollar Borrowing, (x) in the case of a
Borrowing pursuant to Section 2.01(a), within one Business Day of the Interim
Order Entry Date and (y) in the case of a Borrowing pursuant to Section 2.01(b),
not later than 12:00 p.m., Eastern time, eight (8) Business Days before the
proposed Borrowing and (B) in the case of an ABR Borrowing, (x) in the case of a
Borrowing pursuant to Section 2.01(a), within one Business Day of the Interim
Order Entry Date and (y) in the case of a Borrowing pursuant to Section 2.01(b),
not later than 12:00 p.m., Eastern time, eight (8) Business Days before the date
of the proposed Borrowing. Each such Borrowing Request shall specify the
following information:

(i) the aggregate amount of the requested Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and

(v) the wire instructions of the account to which funds are to be disbursed.

 

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Each Borrowing (other than Exchanged Loans) shall be in an aggregate amount that
is an integral multiple of $1,000,000 or such lesser amount equal to the
remaining Commitment. If no election as to the Type of Borrowing is specified,
then the requested Borrowing shall be a Eurodollar Borrowing with an Interest
Period of one month’s duration. If no Interest Period is specified with respect
to any requested Eurodollar Borrowing, then the Borrowers shall be deemed to
have selected an Interest Period of one month’s duration. Promptly following
receipt of a Borrowing Request in accordance with this Section 2.02, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

Section 2.03 Interest Elections.

(a) Conversion and Continuance. Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Borrowers may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Borrowing, may elect Interest Periods therefor, all as provided in this
Section 2.03. The Borrowers may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. Subject to clause (b) below, each conversion or continuation
shall be made by giving the Administrative Agent (x) in the case of a conversion
or continuation into a Eurodollar Loan, at least three (3) Business Days’ prior
written notice, and (y) in the case of a conversion into an ABR Loan, at least
one (1) Business Day’s prior written notice.

(b) Interest Election Requests. To make an election pursuant to this
Section 2.03, the Borrowers shall deliver an Interest Election Request in
substantially the form of Exhibit C and signed by the Borrowers to the
Administrative Agent at least three (3) Business Days prior to such election.

(c) Information in Interest Election Requests. Each Interest Election Request
shall specify the following information:

(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to Section 2.03(c)(iii) and (iv) shall
be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period.”

 

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If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrowers shall be deemed to have
selected an Interest Period of one month’s duration.

(d) Notice to Lenders by the Administrative Agent. Promptly following receipt of
an Interest Election Request, the Administrative Agent shall advise each Lender
of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e) Effect of Failure to Deliver Timely Interest Election Request and Events of
Default. If the Borrowers fail to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to a
Eurodollar Borrowing with an Interest Period of one month’s duration.
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing: (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing (and any Interest Election Request that
requests the conversion of any Borrowing to, or continuation of any Borrowing
as, a Eurodollar Borrowing shall be ineffective) and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.

Section 2.04 Funding of Borrowings.

(a) Funding by Lenders. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 1:00 p.m., Eastern time, to the account of the Administrative Agent
most recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrowers by promptly
crediting the amounts so received, in like funds, to an account designated by
the Borrowers in the applicable Borrowing Request, which shall be an account of
a Borrower. Nothing herein shall be deemed to obligate any Lender to obtain the
funds for its Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
its Loan in any particular place or manner; provided, that without limiting the
provisions of Section 12.19, the Parent Borrower hereby agrees and directs that
all Loans funded hereunder shall be funded to the Co-Borrower to an account
specified by the Co-Borrower.

(b) Presumption of Funding by the Lenders. Unless the Administrative Agent shall
have received notice from a Lender prior to the proposed date of any Borrowing
that such Lender will not make available to the Administrative Agent such
Lender’s Applicable Percentage of such Borrowing, the Administrative Agent may
assume that such Lender has made such Applicable Percentage available on such
date in accordance with Section 2.04(a) and may (but shall have no obligation
to), in reliance upon such assumption, make available to the Borrowers a
corresponding amount. In such event, if such Lender has not in fact made its
Applicable Percentage of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrowers severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrowers to but excluding the date of payment
to the Administrative Agent, at (i) in the case of a payment to be made by such
Lender, the greater of the Federal Funds

 

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Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation and (ii) in the case of a
payment to be made by the Borrowers, the interest rate applicable to ABR Loans.
If the Borrowers and such Lender shall pay such interest to the Administrative
Agent for the same or an overlapping period, the Administrative Agent shall
promptly remit to the Borrowers the amount of such interest paid by the
Borrowers for such period. If such Lender pays its share of the applicable
Borrowing to the Administrative Agent, then the amount so paid shall constitute
such Lender’s Loan included in such Borrowing. Any payment by the Borrowers
shall be without prejudice to any claim the Borrowers may have against a Lender
that shall have failed to make such payment to the Administrative Agent.

Section 2.05 Termination and Reduction of Commitments.

(a) Scheduled Termination of Commitments. Upon the making of the Initial Draw
Loans pursuant to Section 2.01(a), the Initial Draw Commitments shall terminate
in full. Upon the making of the Delayed Draw Loans pursuant to Section 2.01(b),
the Delayed Draw Commitments shall terminate in full. In addition, the Delayed
Draw Commitments shall terminate as set forth in the proviso to the first
sentence of Section 2.01(b).

(b) Optional Termination and Reduction of Commitments.

(i) The Borrowers may at any time terminate, or from time to time reduce, the
Commitments; provided, that each reduction of the Commitments shall be in an
amount that is an integral multiple of $1,000,000.

(ii) The Parent Borrower shall notify the Administrative Agent in writing of any
election to terminate or reduce the Commitments under Section 2.05(b)(i) at
least three (3) Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Parent Borrower
pursuant to this Section 2.05(b)(ii) shall be irrevocable; provided, that a
notice of termination of the Commitments delivered by the Parent Borrower may
state that such notice is conditioned upon the occurrence of a specified event,
in which case such notice may be revoked by the Parent Borrower (by written
notice to the Administrative Agent on or prior to the specified effective date)
if such condition is not satisfied. Any termination or reduction of the
Commitments shall be permanent and may not be reinstated. Each reduction of the
Commitments shall be made ratably among the Lenders in accordance with each
Lender’s Applicable Percentage; provided, that if any Lender is a Defaulting
Lender at such time as the Parent Borrower elects to terminate or reduce the
Commitments hereunder, the Parent Borrower may (in its discretion) apply all or
any portion of the Commitments to be reduced, to the Commitment of any one or
more Defaulting Lenders specified by the Parent Borrower before applying any
remaining reduction to all Lenders.

Section 2.06 Replacement of Lenders. The Parent Borrower shall be permitted to
replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 5.01 or 5.03, (b) fails to vote in favor of any measure requiring the
affirmative vote of one hundred percent (100%) of the Lenders or all affected
Lenders (and such measure has otherwise received the affirmative vote by the
Required Lenders) or (c) is a Defaulting Lender, with any Person that meets the
requirements to be an assignee under Section 12.04; provided, that:

 

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(i) such replacement does not conflict with any Governmental Requirement;

(ii) no Event of Default shall have occurred and be continuing at the time of
such replacement that has not been waived in accordance with the terms hereof;

(iii) prior to any such replacement, such Lender shall have taken no action
under Section 5.04 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 5.01 or 5.03(a);

(iv) the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Lender on or prior to the date of
replacement;

(v) the Borrowers shall be liable to such replaced Lender under Section 5.02 if
any Eurodollar Loan owing to such replaced Lender shall be purchased other than
on the last day of the Interest Period relating thereto;

(vi) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of Section 12.04 (provided, that any replaced
Lender shall be deemed to have consented to the assignment and delegation of its
interests, rights and obligations if it does not execute and deliver an
Assignment to the Administrative Agent within three (3) Business Days after
having received a request therefor, and the Borrowers shall be obligated to pay
the registration and processing fee referred to therein);

(vii) until such time as such replacement shall be consummated, the Borrowers
shall pay all additional amounts (if any) required pursuant to Section 5.01 or
5.03(a), as the case may be and

(viii) any such replacement shall not be deemed to be a waiver of any rights
that the Borrowers, the Administrative Agent or any other Lender shall have
against the replaced Lender.

Section 2.07 Defaulting Lenders. Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then,
until such time as such Lender is no longer a Defaulting Lender, to the extent
permitted by applicable law:

(a) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of Required Lenders.

(b) Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article X or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 12.08 shall be applied by the
Administrative Agent as follows: first, to the payment of any amounts owing by
such

 

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Defaulting Lender to the Administrative Agent hereunder (including any legal
fees and expenses); second, as the Parent Borrower may request (so long as no
Default or Event of Default exists), to the funding of any Loan in respect of
which such Defaulting Lender has failed to fund its portion thereof as required
by this Agreement; third, if so determined by the Parent Borrower, to be held in
a deposit account and released pro rata in order to satisfy such Defaulting
Lender’s potential future funding obligations with respect to Loans under this
Agreement; fourth, to the payment of any amounts owing to the Lenders as a
result of any judgment of a court of competent jurisdiction obtained by any
Lender against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement; fifth, so long as no Event of
Default exists, to the payment of any amounts owing to the Borrowers as a result
of any judgment of a court of competent jurisdiction obtained by any Borrower
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; and sixth, to such Defaulting Lender or as
otherwise directed by a court of competent jurisdiction; provided, that if
(x) such payment is a payment of the principal amount of any Loans in respect of
which such Defaulting Lender has not fully funded its appropriate share, and
(y) such Loans were made at a time when the conditions set forth in Section 6.03
were satisfied or waived, such payment shall be applied solely to pay the Loans
of all non-Defaulting Lenders on a pro rata basis prior to being applied to the
payment of any Loans of such Defaulting Lender until such time as all Loans are
held by the Lenders pro rata in accordance with the Commitments under the
applicable facility. Any payments, prepayments or other amounts paid or payable
to a Defaulting Lender that are applied (or held) to pay amounts owed by a
Defaulting Lender shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

Section 2.08 Priority and Liens; No Discharge

(a) Each of the Loan Parties hereby covenants and agrees that upon the entry of
an Interim Order (and when applicable, the Final Order) its obligations
hereunder and under the Loan Documents shall, subject to the Carve Out and
Permitted Priority Liens, at all times, pursuant to Section 364(c)(2), (c)(3)
and (d) of the Bankruptcy Code, be secured by a perfected Lien on and security
interest in all of the Collateral of the Loan Parties, whether consisting of
real property, or personal, tangible or intangible property (including (x) all
of the outstanding shares of capital stock of subsidiaries, (y) the Vessels
listed on Schedule 8.14 and any Vessels (if any) described in
Section 8.14(a)(iii), and (z) any Property and rights of the Loan Parties
described in the Guaranty and Collateral Agreement), whether now owned or
hereafter acquired, excepting, as provided in the Guaranty and Collateral
Agreement, Excluded Assets, unless such Collateral has been released in
accordance with Section 11.11 in connection with transactions permitted under
the Loan Documents.

(b) The relative priorities of the Liens with respect to the Collateral shall be
as set forth in the Interim Order (and, when entered, the Final Order).

(c) Each Loan Party hereby confirms and acknowledges that, pursuant to the
Interim Order (and, when entered, the Final Order), the Liens in favor of the
Collateral Agent on behalf of and for the benefit of the Secured Parties in all
of the Collateral shall be created and perfected, to the maximum extent
permitted by law, without the execution or the recordation or filing in any land
records or filing offices of, any Mortgage, assignment, security agreements,
mortgages, control agreements, pledge agreements, financing statements or other
similar documents, or the possession or control by the Collateral Agent of, or
over, any Collateral, as set forth in the Interim Order (and, when entered, the
Final Order).

 

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(d) Each of the Loan Parties agrees that to the extent that the Indebtedness
shall not have been satisfied in full in cash, (i) such Indebtedness shall not
be discharged by any order confirming a Chapter 11 Plan (and each of the Loan
Parties, pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives
any such discharge) and (ii) the Superpriority Claim granted to the
Administrative Agent and the Lenders pursuant to the Orders and the Liens
granted to the Collateral Agent and the Lenders pursuant to the Orders shall not
be affected in any manner by any order confirming a Chapter 11 Plan.

(e) [Reserved].

(f) Notwithstanding anything to the contrary herein, each Federally Regulated
Lender waives and releases any and all liens, security interests or the rights
it may have in and to any Federally Regulated Lender Excluded Property and
reserves all rights as a Secured Party with respect to all Collateral, other
than Federally Regulated Lender Excluded Property.

ARTICLE III

Payments of Principal and Interest; Prepayments; Fees

Section 3.01 Repayment of Loans. The Borrowers hereby unconditionally promise to
pay to the Administrative Agent, for the account of each Lender, the then unpaid
principal amount of each Loan on the Maturity Date (or, if earlier, the
Termination Date). Notwithstanding anything to the contrary herein, if the
Termination Date occurs as a result of the consummation of the Acceptable Plan
attached hereto as Exhibit K, the Loans shall be provided such treatment as is
contemplated under Article II.A. of the Acceptable Plan attached hereto as
Exhibit K, upon consummation thereof.

Section 3.02 Interest.

(a) ABR Loans. The Loans comprising each ABR Borrowing shall bear interest at
the Alternate Base Rate plus the Applicable Margin, but in no event to exceed
the Highest Lawful Rate.

(b) Eurodollar Loans. The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin, but in no event to exceed the Highest
Lawful Rate.

(c) Post-Default. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing, upon the request of the Required Lenders, all Loans
outstanding hereunder shall bear interest from and after the date of such Event
of Default until such Event of Default has been cured or waived, after as well
as before judgment, at a rate per annum equal to two percent (2.00%) plus the
then applicable rate of interest accruing on such Loan as provided in Sections
3.02(a) and (b), but in no event to exceed the Highest Lawful Rate.

 

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(d) Interest Payment Dates. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and on the Maturity Date and
shall be payable entirely in cash; provided, that (i) interest accrued pursuant
to Section 3.02(c) shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than an optional prepayment of an ABR
Loan prior to the Maturity Date), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment,
and (iii) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

(e) Interest Rate Computations. All interest hereunder shall be computed on the
basis of a year of 360 days, unless such computation would exceed the Highest
Lawful Rate, in which case interest shall be computed on the basis of a year of
365 days (or 366 days in a leap year), except that interest computed by
reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error, and be binding upon the parties hereto.

Section 3.03 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate for such Interest Period;
or

(b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period will
not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Parent Borrower
and the Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Parent Borrower and the Lenders
that the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

Section 3.04 Prepayments.

(a) Optional Prepayments. The Borrowers shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with Section 3.04(b), and subject to the premiums set forth
in Section 3.04(d).

(b) Notice and Terms of Optional Prepayment. The Parent Borrower shall notify
the Administrative Agent by delivery of a notice of prepayment in the form of
Exhibit B-2 hereto (“Notice of Prepayment”) executed by a Responsible Officer of
any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Borrowing, not later than 1:00 p.m., Eastern time, three (3) Business Days
before the date of prepayment, or (ii) in the case of prepayment of an ABR

 

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Borrowing, not later than 1:00 p.m., Eastern time, two (2) Business Days before
the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date, the principal amount of each Borrowing or portion thereof
to be prepaid; provided, that if a Notice of Prepayment is given in connection
with a conditional notice of termination of the Commitments as contemplated by
Section 2.05(b), then such Notice of Prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.05(b), but the Borrowers
shall be responsible for any break funding payments pursuant to Section 5.02.
Promptly following receipt of any such notice relating to a Borrowing, the
Administrative Agent shall advise the applicable Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of a Borrowing of the same Type as provided in
Section 2.03. Each prepayment of a Borrowing shall be applied ratably to the
Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 3.02, and subject to the
premiums set forth in Section 3.04(d). Each prepayment hereunder shall be in an
amount that is an integral multiple of $1,000,000 (or such lesser amount or
integral to repay a Borrowing in full).

(c) Mandatory Prepayments.

(i) Asset Sales. Not later than three (3) Business Days following each date on
which the aggregate amount of (x) Net Proceeds from all Asset Sales consummated
following the Effective Date and (y) Specified Proceeds received by the Parent
Borrower or any Restricted Subsidiary thereof in the aggregate exceeds
$1,000,000, the Parent Borrower shall deliver an offer to the Administrative
Agent (which shall furnish such offer pro rata (based on the amount of principal
of the outstanding Loans) to each Lender) to prepay the Loans of the Lenders in
an aggregate principal amount equal to the amount of such Net Proceeds and/or
Specified Proceeds, which prepayment shall be made in cash at par plus accrued
and unpaid interest (if any) (which prepayment, for the avoidance of doubt,
shall be made without any premium or call protection other than the premiums set
forth in Section 3.04(d)) to the date of such prepayment (each such offer, an
“Asset Sale Proceeds Offer”). Each Lender may decline all but not less than all
of its pro rata share of any Asset Sale Proceeds Offer (any such amounts not
accepted, the “Declined Amounts”) by providing written notice (a “Rejection
Notice”) to the Administrative Agent and the Parent Borrower no later than 5:00
p.m., Eastern time, three (3) Business Days after the date of delivery of such
Asset Sale Proceeds Offer. If a Lender fails to deliver a Rejection Notice to
the Administrative Agent within the time period specified above, such Lender
shall be deemed to have accepted such Asset Sale Proceeds Offer. The Borrowers
shall prepay all Loans required to be prepaid by it under this
Section 3.04(c)(i) no later than one (1) Business Day after expiration of the
time period specified above. Any Declined Amounts shall no longer be subject to
this Section 3.04(c)(i) and may be used by the Parent Borrower or any of its
Restricted Subsidiaries in any manner not prohibited by this Agreement. If the
aggregate principal amount of Loans requested to be repaid exceeds the aggregate
amount to be repaid by the Borrowers pursuant to this Section 3.04(c)(i) the
Administrative Agent shall apply the amounts to be repaid by the Borrowers to
the Loans requested to be repaid on a pro rata basis based on the principal
amount of such Loans.

(ii) [Reserved].

 

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(d) Premium. In the event all or any portion of the Loans are prepaid, repaid,
repriced or effectively refinanced through any amendment of the Loans
(including, without limitation, through the conversion of the Loans to an “exit”
financing upon or following the Confirmation Date) or accelerated for any reason
following the Effective Date, such prepayments, repayments, repricings,
refinancings or acceleration will be made at 101.0% of the amount repaid,
repriced, refinanced or accelerated (and for the avoidance of doubt such 1.00%
premium shall be payable in cash).

Section 3.05 Fees.

(a) Administrative Agent Fees. The Borrowers agree to pay to the Administrative
Agent, for its own account, fees payable in the amounts and at the times
separately agreed upon between the Borrowers and the Administrative Agent in the
applicable Fee Letter.

(b) Other Fees. The Borrowers agree to pay to the Lenders as of the Effective
Date (or such other Lenders as set forth in the applicable Fee Letter), fees
payable in the amounts and at the times separately agreed upon between the
Borrowers and such Lenders in the applicable Fee Letter.

ARTICLE IV

Payments; Pro Rata Treatment; Sharing Set-offs

Section 4.01 Pro Rata Treatment; Sharing of Set-offs.

(a) Payments by the Borrowers. The Borrowers shall make each payment required to
be made by them hereunder (whether of principal, interest, fees or reimbursement
of amounts payable under Section 5.01, Section 5.02, Section 5.03 or otherwise)
prior to 12:00 p.m., Eastern time, on the date when due, in immediately
available funds, without defense, deduction, recoupment, set-off or
counterclaim. Fees, once paid, shall be fully earned and shall not be refundable
under any circumstances. Any amounts received after such time on any date may,
in the discretion of the Administrative Agent, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent at its
offices specified in Section 12.01, except that payments pursuant to
Section 5.01, Section 5.02, Section 5.03 and Section 12.03 shall be made
directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate Recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in U.S. dollars.

(b) Application of Insufficient Payments. If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts
of principal, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
then due hereunder (plus any fees and expenses owed to the Administrative
Agent), pro rata among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.

 

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(c) Sharing of Payments by Lenders. If any Lender shall, by exercising any right
of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or other obligations hereunder
resulting in such Lender receiving payment of a proportion of the aggregate
amount of its Loans and accrued interest thereon or other such obligations
(other than pursuant to Section 5.01, Section 5.02, Section 5.03 and
Section 12.03) greater than its pro rata share thereof as provided herein, then
the Lender receiving such greater proportion shall (i) notify the Administrative
Agent of such fact, and (ii) purchase (for cash at face value) participations in
the Loans and such other obligations of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and other amounts
owing them; provided, that:

(A) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and

(B) the provisions of this Section 4.01(c) shall not be construed to apply to
(1) any payment made by the Borrowers pursuant to and in accordance with the
express terms of this Agreement or (2) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Parent Borrower or any
of its Subsidiaries. The Borrowers consent to the foregoing and agree, to the
extent they may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrowers rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of each Loan
Party in the amount of such participation.

Section 4.02 Presumption of Payment by the Borrowers. Unless the Administrative
Agent shall have received notice from the Borrowers prior to the date on which
any payment is due to the Administrative Agent for the account of the Lenders
that the Borrowers will not make such payment, the Administrative Agent may
assume that the Borrowers have made such payment on such date in accordance
herewith and may (but shall have no obligation to), in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrowers have not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

 

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Section 4.03 Certain Deductions by the Administrative Agent. If any Lender shall
fail to make any payment required to be made by it pursuant to Section 2.04(a)
or Section 4.02 then the Administrative Agent may (notwithstanding any contrary
provision hereof) apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid. If at any
time prior to the acceleration or maturity of the Loans, the Administrative
Agent shall receive any payment in respect of principal of a Loan while one or
more Defaulting Lenders shall be party to this Agreement, the Administrative
Agent shall apply such payment first to the Borrowing(s) for which such
Defaulting Lender(s) shall have failed to fund its pro rata share until such
time as such Borrowing(s) are paid in full or each Lender (including each
Defaulting Lender) is owed its Applicable Percentage of all Loans then
outstanding. After acceleration or maturity of the Loans, all principal will be
paid ratably as provided in Section 10.02(c).

ARTICLE V

Increased Costs; Break Funding Payments; Taxes; Illegality

Section 5.01 Increased Costs.

(a) Changes in Law. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any such reserve requirement reflected in the Adjusted LIBO Rate);

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

(iii) impose on any Lender or the London interbank market any other condition,
cost or expense (other than Taxes) affecting this Agreement or Loans made by
such Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, converting to, continuing or
maintaining any Loan or of maintaining its obligation to make any such Loan, or
to increase the cost to such Lender, or to reduce the amount of any sum received
or receivable by such Lender or other Recipient hereunder (whether of principal,
interest or any other amount) then, upon request of such Lender or other
Recipient in accordance with Section 5.01(c), the Borrowers will pay to such
Lender or other Recipient, as the case may be, such additional amount or amounts
as will compensate such Lender or other Recipient, as the case may be, for such
additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender determines that any Change in Law
affecting such Lender or any lending office of such Lender or such Lender’s
holding company, if any, regarding capital or liquidity requirements has or
would have the effect of reducing the rate of return on such Lender’s capital or
on the capital of such Lender’s holding company, if any, as

 

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a consequence of this Agreement the Commitments of such Lender or the Loans made
by such Lender to a level below that which such Lender or such Lender’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s policies and the policies of such Lender’s holding
company with respect to capital adequacy), then from time to time upon request
of such Lender in accordance with Section 5.01(c), the Borrowers will pay to
such Lender such additional amount or amounts as will compensate such Lender or
such Lender’s holding company for any such reduction suffered.

(c) Certificates. A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in Section 5.01(a) or (b) together with reasonable supporting
documentation shall be delivered to the Borrowers and shall be conclusive absent
manifest error. The Borrowers shall pay such Lender the amount shown as due on
any such certificate within ten (10) days after receipt thereof.

(d) Effect of Failure or Delay in Requesting Compensation. Failure or delay on
the part of any Lenders to demand compensation pursuant to this Section 5.01
shall not constitute a waiver of such Lender’s right to demand such
compensation; provided, that the Borrowers shall not be required to compensate a
Lender pursuant to this Section 5.01 for any increased costs incurred or
reductions suffered more than 180 days prior to the date that such Lender
notifies the Borrowers of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s intention to claim compensation therefor;
provided, further, that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.

Section 5.02 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan into an ABR Loan other than on the last
day of the Interest Period applicable thereto, or (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any
notice delivered pursuant hereto, then, in any such event, the Borrowers shall
compensate each Lender requesting a reimbursement for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market.

A certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 5.02 shall be delivered to the
Borrowers and shall be conclusive absent manifest error. The Borrowers shall pay
such Lender the amount shown as due on any such certificate within ten (10) days
after receipt thereof.

 

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Section 5.03 Taxes.

(a) For purposes of this Section 5.03, the term “applicable law” includes FATCA.

(b) Payments Free of Taxes. The Borrowers shall cause any and all payments by or
on account of any obligation of any Loan Party under any Loan Document to be
made without deduction or withholding for any Taxes, except as required by
applicable law. If any applicable law (as determined in the good faith
discretion of an applicable Withholding Agent) requires the deduction or
withholding of any Tax from any such payment by a Withholding Agent, then the
applicable Withholding Agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party
shall be increased as necessary so that after such deduction or withholding has
been made (including such deductions and withholdings applicable to additional
sums payable under this Section) the applicable Recipient receives an amount
equal to the sum it would have received had no such deduction or withholding
been made.

(c) Payment of Other Taxes. Without duplication of Section 5.03(b) (Payments
Free of Taxes), the Borrowers shall, and shall cause the other Loan Parties to,
pay to the relevant Governmental Authority in accordance with applicable law, or
at the option of the Administrative Agent timely reimburse it for the payment
of, any Other Taxes.

(d) Indemnification. Without duplication of any obligation under Section 5.03(b)
(Payments Free of Taxes) and Section 5.03(c) (Payment of Other Taxes), the
Borrowers shall, and shall cause the other Loan Parties to, jointly and
severally indemnify each Recipient, within ten (10) days after written demand
therefor, for the full amount of any Indemnified Taxes (including Indemnified
Taxes imposed or asserted on or attributable to amounts payable under this
Section 5.03) payable or paid by such Recipient or required to be withheld or
deducted from a payment to such Recipient and any reasonable out-of-pocket
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate of the Recipient as to the amount of such
payment or liability under this Section 5.03 shall be delivered to the Borrowers
and shall be conclusive absent manifest error.

(e) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that any
Loan Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Borrowers to do
so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 12.04(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

 

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(f) Evidence of Payments. As soon as practicable after any payment of Taxes by
any Loan Party to a Governmental Authority pursuant to this Section 5.03, such
Loan Party shall (or the Borrowers shall cause such Loan Party to) deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing any payment of Indemnified Taxes by such
Loan Party to a Governmental Authority, a copy of the return reporting such
payment or other evidence of such payment reasonably satisfactory to the
Administrative Agent.

(g) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrowers and the Administrative Agent, at the time or times reasonably
requested by the Borrowers or the Administrative Agent, such properly completed
and executed documentation reasonably requested by the Borrowers or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrowers or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrowers or the Administrative Agent as will enable the Borrowers or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 5.03(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii) Without limiting the generality of the foregoing:

(A) any Lender that is a U.S. Person shall deliver to the Borrowers and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrowers or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrowers and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrowers or the Administrative
Agent), whichever of the following is applicable:

 

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(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN or IRS
Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “interest” article of such tax
treaty and (y) with respect to any other applicable payments under any Loan
Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “business profits” or “other income”
article of such tax treaty;

(2) executed originals of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit H-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrowers within the meaning of Section 881(c)
(3)(B) of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and
(y) executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable;
or

(4) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN,
IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form
of Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided, that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit H-4 on behalf of each such direct and indirect partner.

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrowers and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrowers or the Administrative
Agent), executed originals of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrowers or the Administrative Agent
to determine the withholding or deduction required to be made; and

 

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(D) if a payment made to a Recipient under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Recipient were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Recipient shall deliver to the Borrowers (and the Administrative Agent, if
delivered by a Lender) at the time or times prescribed by law and at such time
or times reasonably requested by the Borrowers or the Administrative Agent such
documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrowers or the Administrative Agent as may be
necessary for the Borrowers and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Recipient has complied with
such Recipient’s obligations under FATCA or to determine the amount to deduct
and withhold from such payment. Solely for purposes of this clause (D), “FATCA”
shall include any amendments made to FATCA after the Effective Date.

(iii) The Administrative Agent (and any assignee or successor) will deliver, to
the Borrowers, on or prior to the Effective Date (or, assignment or succession,
if applicable), either (i) (A) two (2) executed copies of IRS Form W-8ECI or any
successor thereto with respect to any amounts payable to the Administrative
Agent for its own account and (B) two (2) duly completed copies of IRS Form
W-8IMY (certifying that it is either a “qualified intermediary” or a “U.S.
branch”) , accompanied by IRS Form W-8 ECI, W-8BEN (or Form W-8BEN-E if
applicable), a U.S. Tax Compliance Certificate substantially in the form of
Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification documents
for the amounts the Administrative Agent receives for the account of others, or
(ii) two (2) executed copies of IRS Form W-9 or any successor thereto, whichever
is applicable, and in each case of (i) and (ii), with the effect that the
Borrowers can make payments to the Administrative Agent without deduction or
withholding of any taxes imposed by the United States.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification (or a successor form thereto) upon the reasonable request
of the Borrowers.

(h) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any
Indemnified Taxes as to which it has been indemnified pursuant to this
Section 5.03 (including by the payment of additional amounts pursuant to this
Section 5.03), it shall pay to the indemnifying party an amount equal to such
refund (but only to the extent of indemnity payments made under this
Section with respect to the Indemnified Taxes giving rise to such refund), net
of all out-of-pocket expenses (including Taxes) of such indemnified party and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund). Such indemnifying party, upon the
request of such indemnified party, shall repay to such indemnified party the
amount paid over pursuant to this paragraph (h) (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) in the event that
such indemnified party is required to repay such refund

 

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to such Governmental Authority. Notwithstanding anything to the contrary in this
paragraph (h), in no event will the indemnified party be required to pay any
amount to an indemnifying party pursuant to this paragraph (h) the payment of
which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the indemnification
payments or additional amounts giving rise to such refund had never been
deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts with respect to such Tax had never been paid. This paragraph
shall not be construed to require any indemnified party to make available its
Tax returns (or any other information relating to its Taxes that it deems
confidential) to the indemnifying party or any other Person.

(i) Survival. Each party’s obligations under this Section 5.03 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

Section 5.04 Mitigation Obligations. If any Lender requests compensation under
Section 5.01, or if the Borrowers are required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 5.03, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 5.01 or
Section 5.03, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

Section 5.05 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its applicable lending
office to honor its obligation to make or maintain Eurodollar Loans either
generally or having a particular Interest Period hereunder, then (a) such Lender
shall promptly notify the Borrowers and the Administrative Agent thereof and
such Lender’s obligation to make such Eurodollar Loans shall be suspended (the
“Affected Loans”) until such time as such Lender may again make and maintain
such Eurodollar Loans and (b) all Affected Loans which would otherwise be made
by such Lender shall be made instead as ABR Loans (and, if such Lender so
requests by notice to the Borrowers and the Administrative Agent, all Affected
Loans of such Lender then outstanding shall be automatically converted into ABR
Loans on the date specified by such Lender in such notice) and, to the extent
that Affected Loans are so made as (or converted into) ABR Loans, all payments
of principal which would otherwise be applied to such Lender’s Affected Loans
shall be applied instead to its ABR Loans.

 

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ARTICLE VI

Conditions Precedent

Section 6.01 Effective Date. The obligations of the Lenders to make Loans shall
not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 12.02 or the last paragraph of
this Section 6.01):

(a) All reasonable and documented pre- and post-petition fees, charges and
expenses (limited to Davis Polk & Wardwell LLP, Creel, García-Cuéllar, Aiza y
Enriquez, S.C., Pinheiro Neto Advogados, Blank Rome LLP, Porter Hedges LLP,
Thompson Hine LLP, Ducera Partners LLC and special and local counsel to Lenders
in all applicable jurisdictions), and all other amounts due and payable on or
prior to the Interim Order Entry Date, required to be paid to the Administrative
Agent and Lenders on or before the Effective Date shall have been paid. All
reasonable and documented fees, charges and expenses of Milbank LLP, Seward &
Kissel LLP and Cole Schotz P.C. that are required to be paid pursuant to the
Restructuring Support Agreement or the Backstop and Direct Investment Agreement
(as defined in the Restructuring Support Agreement) on or before the Effective
Date shall have been paid.

(b) The Administrative Agent and Lenders shall have received a certificate of
the secretary, assistant secretary or a responsible officer with similar
responsibilities of the Borrowers and each Loan Party, or in the event that such
Loan Party is a limited partnership, of such person’s general partner, setting
forth: (i) resolutions of its board of directors, members or partners with
respect to the authorization of such Loan Parties to execute and deliver the
Loan Documents to which it is a party and to enter into the transactions
contemplated in those documents; (ii) the officers of such Loan Party (y) who
are authorized to sign the Loan Documents to which such Loan Party is a party
and (z) who will, until replaced by another officer or officers duly authorized
for that purpose, act as its representative for the purposes of signing
documents and giving notices and other communications in connection with the
Credit Agreement and the transactions contemplated hereby; (iii) specimen
signatures of such authorized officers and (iv) the organizational documents of
such Loan Parties, certified as being true and complete. The Administrative
Agent may conclusively rely on such certificate until the Administrative Agent
receives notice in writing from the Parent Borrower to the contrary.

(c) The Administrative Agent and Lenders shall have received certificates for
each Loan Party from the appropriate state agencies with respect to the
existence, qualification and good standing of the Borrowers and each Loan Party
from their jurisdiction of organization.

(d) The Administrative Agent and Lenders shall have received a closing
certificate which shall substantially be in the form of Exhibit D to this
Agreement, duly and properly executed by a responsible officer and dated as of
the Effective Date.

(e) The Administrative Agent and Lenders shall have received duly executed and
delivered counterparts (in such numbers as may be requested by the
Administrative Agent) of this Agreement and the other Loan Documents to be
executed and delivered on or prior to such date, from each party hereto or
thereto, as applicable, signed on behalf of such party.

(f) The Administrative Agent and the Lenders shall have received copies of duly
executed Notes payable to each Lender that has requested a Note in a principal
amount equal to its respective Commitment dated as of the date hereof.

(g) The Administrative Agent and the Lenders shall have received from each party
thereto duly executed counterparts (in such number as may be requested by the
Administrative Agent) of the Security Instruments (as such term is defined in
this Agreement), other than the Security Instruments listed on Schedule 8.17. In
connection with the execution and

 

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delivery of the Security Instruments (other than the Security Instruments listed
on Schedule 8.17 and the Maritime Mortgages on Vessels listed on Schedule 8.14
which are documented under the U.S. flag or registered under the Vanuatu flag),
the Required Lenders shall have received reasonably satisfactory evidence that
such Security Instruments create perfected Liens, subject only to Permitted
Liens. In connection with the execution and delivery of the Maritime Mortgages
on Vessels listed on Schedule 8.14 which are documented under the U.S. flag or
registered under the Vanuatu flag, the Required Lenders shall have received
confirmation from counsel to the Borrowers that the Maritime Mortgages on such
Vessels have been duly filed for recordation with the U.S. Coast Guard’s
National Vessel Documentation Center or the Office of the Deputy Commissioner of
Maritime Affairs of the Republic of Vanuatu at the Port of New York, New York,
as applicable, and that upon recordation such Maritime Mortgages will create
perfected first preferred mortgages on such Vessels in accordance with
applicable laws, subject only to Permitted Maritime Liens.

(h) The Administrative Agent and Lenders shall have received (i) an opinion of
Kirkland & Ellis LLP, special counsel to the Borrowers and the other Loan
Parties, (ii) an opinion of Kincaid Mendes Vianna Advogados, special Brazilian
counsel to the Borrowers and the other Loan Parties, (iii) an opinion of Garza
Tello & Asociados, special Mexican counsel to the Borrowers and the other Loan
Parties, (iv) an opinion of Jones Walker LLP, special U.S. and Vanuatu maritime
counsel to the Borrowers and the other Loan Parties and (v) an opinion of local
counsel to the Borrower with respect to each Real Property Interests Mortgage,
each in form and substance reasonably satisfactory to the Administrative Agent
and the Required Lenders; provided, that to the extent any such opinions relate
to Security Instruments that are listed on Schedule 8.17, such opinions shall be
provided concurrently with the delivery of such Security Instruments.

(i) The Administrative Agent and the Lenders shall have received a certificate
of insurance coverage of the Parent Borrower evidencing that the Parent Borrower
and the subsidiaries are carrying insurance in accordance with the Credit
Agreement.

(j) The Administrative Agent and the Lenders shall have received (i) appropriate
Abstracts of Title for the Vessels documented under the U.S. flag from the
National Vessel Documentation Center of the U.S. Coast Guard, and
(ii) Certificates of Ownership and Encumbrance for the Vessels registered under
the Vanuatu flag, reflecting no Liens of record (other than in favor of the
agents under the Prepetition First Lien Term Loan Agreement and Prepetition
Second Lien Term Loan Agreement) encumbering such Vessel Collateral under U.S.
law or Vanuatu law, as the case may be, other than those being released prior to
the Effective Date or Liens permitted by Section 9.03.

(k) [Reserved].

(l) [Reserved].

(m) The Administrative Agent and the Lenders shall have received a certificate
of a responsible officer of the Borrowers certifying that the Borrowers have
received all consents and approvals required pursuant to the Credit Agreement.

 

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(n) With respect to each Real Property Interests Mortgage of Material Real
Property Interests consisting of a leasehold or a sub-leasehold interest, the
Parent Borrower shall have used commercially reasonable efforts to obtain a Real
Property Interests SNDA.

(o) The Administrative Agent and the Lenders shall have received, in addition to
those referenced in (j) above, appropriate UCC search results or relevant search
certificates as they have reasonably requested.

(p) The Bankruptcy Court shall have entered the Interim Order, which Interim
Order (i) shall have been entered on the docket of the Bankruptcy Court and
(ii) shall be in full force and effect and shall not have been vacated, stayed,
reversed, modified or amended in any respect without the prior written consent
of the Required Lenders, and the Loan Parties and their Subsidiaries shall be in
compliance with the Interim Order.

(q) The Administrative Agent and Lenders shall have received evidence that the
Prepetition ABL Credit Agreement concurrently with the Effective Date is being
terminated and all liens securing obligations under the Prepetition ABL Credit
Agreement concurrently with the Effective Date are being released (the
“Prepetition ABL Credit Agreement Refinancing”).

(r) The Administrative Agent and Lenders shall have received all documentation
and other information required by bank regulatory authorities under applicable
“know your customer” and anti-money-laundering rules and regulations, including
the PATRIOT Act, and, if the Borrowers qualify as a “legal entity customer”
under the Beneficial Ownership Regulation, a Beneficial Ownership Certification
in respect of the Borrowers that has been requested by the Administrative Agent
in writing at least three (3) business days prior to the Effective Date.

(s) The Petition Date shall have occurred, and each of the Borrowers and the
other Loan Parties shall be a debtor and a debtor-in-possession under the
Chapter 11 Cases.

(t) The Administrative Agent and the Lenders shall have received and accepted a
copy of the Initial Budget.

(u) (i) The Lenders shall have received advanced drafts of the First Day Orders
(including, without limitation, any order approving significant or outside the
ordinary course of business transactions entered on (or prior to) the Effective
Date and a cash management order), in each case, in form and substance
satisfactory to the Required Lenders and (ii) all First Day orders intended to
be entered by the Bankruptcy Court at or immediately after the Debtors’ “first
day” hearing shall have been entered by the Bankruptcy Court, shall be
acceptable to the Required Lenders, shall be in full force and effect, shall not
have been vacated or reversed, shall not be subject to a stay and shall not have
been modified or amended other than as acceptable to the Required Lenders.

Notwithstanding the foregoing, to the extent that any of the items described in
Sections 6.01(i), 6.01(j) and 6.01(n) shall not have been received by the
Administrative Agent notwithstanding the Borrowers’ use of its commercially
reasonable efforts to provide the same, delivery of such items shall not
constitute a condition effectiveness of this Agreement and the obligations of
each Lender to make Loans hereunder, and the Borrowers shall, instead, cause
such items to be delivered to the Administrative Agent not later than sixty
(60) days following the Effective Date (or such later date as the Administrative
Agent shall agree in its discretion.

 

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Section 6.02 Delayed Draw Loans Availability Date. The obligations of the
Lenders to make Delayed Draw Loans shall not become effective until the date on
which the following conditions have been satisfied (or waived in accordance with
Section 12.02):

(a) The conditions set forth in Section 6.01 shall have been satisfied (or
waived in accordance with Section 12.02, other than any conditions that are
permitted to be satisfied following the making of the Initial Draw Loans) (the
funding of the Initial Draw Loans shall be conclusive evidence that such
conditions have been satisfied or waived, other than any conditions that are
permitted to be satisfied following the making of the Initial Draw Loans).

(b) The entry of the Final Order shall have occurred and the Final Order shall
be in full force and effect and shall not have been vacated or reversed, shall
not be subject to any stay, and shall not have been modified or amended without
the consent of the Required Lenders, and the Loan Parties and their subsidiaries
shall be in compliance with the Final Order in all material respects.

Section 6.03 Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing (including the loans to be made on the Effective
Date, but excluding any conversion or continuation pursuant to Section 2.03), is
subject to the satisfaction of the following conditions:

(a) At the time of and immediately after giving effect to such Borrowing, no
Default shall have occurred and be continuing or would result therefrom.

(b) The representations and warranties of the Borrowers and the Guarantors set
forth in this Agreement and in the other Loan Documents shall be true and
correct in all material respects on and as of the date of such Borrowing, except
to the extent any such representations and warranties are expressly limited to
an earlier date (in which case such representations and warranties shall be true
and correct on and as of such earlier date); provided, that any representation
and warranty that is qualified as to “materiality,” “Material Adverse Effect” or
similar language shall be true and correct in all respects on such respective
dates.

(c) The receipt by the Administrative Agent of a Borrowing Request in accordance
with Section 2.02.

(d) No injunction, writ, restraining order, or other order of any nature
restricting or prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any Governmental Authority against
the Borrowers, Agents or any Lender.

(e) All pleadings related to procedures for approval of significant or outside
the ordinary course of business transactions, including, without limitation,
asset sale procedures, regardless of when filed or entered, are, in each case,
reasonably satisfactory in form and substance to the Required Lenders (it being
understood that any transaction that provides for the termination of the
Commitments and the indefeasible repayment in full in cash of the obligations
under the Loan Documents upon consummation thereof is reasonably satisfactory in
form and substance to the Required Lenders), unless this condition is waived by
the Required Lenders or the Administrative Agent (with the consent of the
Required Lenders).

 

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(f) The Restructuring Support Agreement shall be in full force and effect.

(g) The Cases of any of the Debtors shall have not been dismissed or converted
to cases under Chapter 7 of the Bankruptcy Code.

(h) No trustee, receiver or examiner having expanded powers (beyond those set
forth under Sections 1106(a)(3) and (4) of the Bankruptcy Code) under Bankruptcy
Code section 1104 (other than a fee examiner) shall have been appointed or
designated with respect to the Loan Parties’ business, properties or assets.

Each Borrowing Request shall be deemed to constitute a representation and
warranty by the Borrowers on the date thereof as to the matters specified in
Section 6.03(a), (b) and (d).

ARTICLE VII

Representations and Warranties

Each Borrower represents and warrants to the Administrative Agent and each
Lender that:

Section 7.01 Organization; Powers. Each Loan Party (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization and, subject in the case of each Loan Party that is a Debtor, to
the entry of the Orders and the terms thereof, has all requisite corporate or
limited liability company power and authority, and all material governmental
licenses, authorizations, consents and approvals necessary, to own its Property
and to carry on its business as now conducted, and (b) is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required, except where failure to have such power, authority,
licenses, authorizations, consents, approvals and qualifications could not
reasonably be expected to have a Material Adverse Effect.

Section 7.02 Authority; Enforceability. Subject in the case of each Loan Party
that is a Debtor, to the entry of the Orders and the terms thereof, the
Transactions are within each Borrower’s and each Guarantor’s limited liability
company, corporate or partnership powers and have been duly authorized by all
necessary limited liability company or corporate and, if required, member, or
shareholder action. Subject in the case of each Loan Party that is a Debtor, to
the entry of the Orders and the terms thereof, each Loan Document to which such
Borrower or a Guarantor is a party has been duly executed and delivered by such
Borrower or such Guarantor and constitutes a legal, valid and binding obligation
of such Borrower and such Guarantor, as applicable, enforceable in accordance
with its terms, subject to applicable Bankruptcy Law, laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

Section 7.03 Approvals; No Conflicts. Subject in the case of each Loan Party
that is a Debtor, to the entry of the Orders and the terms thereof, the
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority or any other
third Person (including members, partners or shareholders of the Borrowers, the
Guarantors or any other Person), nor is any such consent, approval,
registration, filing or other

 

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action necessary for the validity or enforceability of any Loan Document or the
consummation of the transactions contemplated thereby, except such as have been
obtained or made and are in full force and effect other than the recording and
filing of the Security Instruments as required thereby or by this Agreement,
(b) will not violate (i) any applicable law or regulation, (ii) the
Organizational Documents of the Borrowers, the Guarantors or any Restricted
Subsidiary of the Parent Borrower or (iii) any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument evidencing Material Debt (other than the
Prepetition Indebtedness) binding upon the Borrowers or any Restricted
Subsidiary of the Parent Borrower or their Properties, or give rise to a right
thereunder to require any material payment to be made by the Borrowers or such
Restricted Subsidiary of the Parent Borrower and (d) will not result in the
creation or imposition of any Lien on any Property of the Borrowers or any
Restricted Subsidiary of the Parent Borrower (other than the Liens created by
the Loan Documents or Liens created under the Orders).

Section 7.04 Financial Statements; No Material Adverse Change.

(a) The Parent Borrower has heretofore made publicly available its consolidated
balance sheet and statements of income, stockholders equity and cash flows
(i) as of and for the fiscal year ended December 31, 2018, reported on by
Ernst & Young LLP, independent public accountants, and (ii) as of and for the
fiscal quarter and the portion of the fiscal year ended March 31, 2019, June 30,
2019 and September 30, 2019, certified by a Responsible Officer. Such financial
statements present fairly, in all material respects, the financial position and
results of operations and cash flows of the Parent Borrower and its Consolidated
Subsidiaries as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of certain footnotes in
the case of the unaudited quarterly financial statements.

(b) Since the Petition Date, there has been no event, development or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.

(c) None of the Parent Borrower or any of its Restricted Subsidiaries has any
material Funded Debt or any contingent liabilities, off-balance sheet
liabilities or partnerships, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except for those arising with respect to the Transactions and those
arising under the Prepetition Indebtedness.

Section 7.05 Litigation.

(a) Except as set forth on Schedule 7.05 and except with respect to the Cases,
there are no actions, suits, investigations or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Parent Borrower, threatened against or affecting the Parent Borrower or any of
its Restricted Subsidiaries or any of their Properties (i) as to which there is
a reasonable possibility of an adverse determination that could reasonably be
expected to have a Material Adverse Effect, (ii) that involve any Loan Document
or the Transactions or (iii) that otherwise constitutes a significant action,
suit, investigation or proceeding pending or, to the knowledge of the Parent
Borrower, threatened.

 

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(b) Since the Effective Date, there has been no change in the status of the
matters disclosed in Schedule 7.05 that has resulted in, or could reasonably be
expected to have, Material Adverse Effect.

Section 7.06 Environmental Matters. Except as could not be reasonably expected
to have a Material Adverse Effect (or with respect to (c), (d) and (e) below,
where the failure to take such actions could not be reasonably expected to have
a Material Adverse Effect):

(a) Neither any Property of the Parent Borrower or any of its Restricted
Subsidiaries nor any operations conducted by the Parent Borrower or any of its
Restricted Subsidiaries violate or has violated any Environmental Laws.

(b) Neither any Property of the Parent Borrower or any of its Restricted
Subsidiaries nor the operations conducted or conditions existing thereon or, to
the knowledge of the Parent Borrower, any prior owner or operator of such
Property or operation or conditions, are subject to any existing, pending or
threatened action, suit, investigation, inquiry or proceeding by or before any
court or Governmental Authority or to any remedial obligations or other
liabilities under Environmental Laws.

(c) All notices, permits, licenses, exemptions, approvals or similar
authorizations, if any, required to be obtained or filed in connection with the
operation or use of any and all Property of the Parent Borrower and each of its
Restricted Subsidiaries, including, without limitation, past or present
treatment, storage, disposal or release of a Hazardous Material into the
environment, have been duly obtained or filed, and the Parent Borrower and each
of its Restricted Subsidiaries are in compliance with the terms and conditions
of all such notices, permits, licenses and similar authorizations.

(d) All Hazardous Material, if any, generated or otherwise handled by the Parent
Borrower or any of its Restricted Subsidiaries or by any other Person at any and
all Property of the Parent Borrower or any of its Restricted Subsidiaries, has
been transported, treated and disposed of in accordance with Environmental Laws
and so as not to pose an imminent and substantial endangerment to public health
or welfare or the environment or give rise to liability under Environmental Law,
and, to the knowledge of the Parent Borrower, all such transport carriers and
treatment and disposal facilities have been and are operating in compliance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment, and are not the
subject of any existing, pending or threatened action, investigation or inquiry
by any Governmental Authority pursuant to any Environmental Laws.

(e) The Parent Borrower has no knowledge that any Hazardous Materials are now
located on or in the Vessels or the Real Property Interests, or that any other
Person has ever caused or permitted any Hazardous Materials to be placed, held,
located or disposed of on, the Vessels or any part thereof or the Real Property
Interests, except for such Hazardous Materials that may have been placed, held,
or located on the Vessels or the Real Property Interests in accordance with and
otherwise not in violation of or in a manner reasonably likely to give rise to
liability under Environmental Laws.

 

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(f) To the extent applicable under OPA, all Property of the Parent Borrower and
each of its Restricted Subsidiaries currently satisfies all requirements imposed
by OPA and, except as set forth on Schedule 7.06(f), the Parent Borrower does
not have any reason to believe that such Property, to the extent subject to OPA,
will not be able to maintain compliance with OPA requirements during the term of
this Agreement.

(g) To the knowledge of the Parent Borrower, there has been no exposure of any
Person or Property to any Hazardous Materials in connection with any Property or
operation of the Parent Borrower or any Subsidiary that could reasonably be
expected to form the basis of a claim for damages or compensation.

Section 7.07 Compliance with the Laws and Agreements; No Defaults.

(a) The Parent Borrower and each of its Restricted Subsidiaries is in compliance
with all Governmental Requirements applicable to it or its Property and all
agreements and other instruments binding upon it or its Property (other than, in
the case of a Debtor, any Prepetition Indebtedness permitted under the Loan
Documents), except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, and
possesses all licenses, permits, franchises, exemptions, approvals and other
governmental authorizations necessary for the ownership of its Property and the
conduct of its business, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

(b) Neither the Parent Borrower nor any of its Restricted Subsidiaries is in
default nor has any event or circumstance occurred which, but for the expiration
of any applicable grace period or the giving of notice, or both, would
constitute a default under, or would require the Parent Borrower or any of its
Restricted Subsidiaries to Redeem or make any offer to Redeem under any
indenture, note, credit agreement or instrument pursuant to which any Material
Debt is outstanding or by which the Parent Borrower or any such Restricted
Subsidiary or any of their Properties is bound (other than, in the case of a
Debtor, any Prepetition Indebtedness permitted under the Loan Documents).

(c) No Default has occurred and is continuing.

Section 7.08 Investment Company Act. Neither the Parent Borrower nor any of its
Restricted Subsidiaries is an “investment company” or a company “controlled” by
an “investment company,” within the meaning of, or subject to regulation under,
the Investment Company Act of 1940, as amended.

Section 7.09 Anti-Terrorism Laws and Sanctions.

(a) No Loan Party nor any Subsidiary of any Loan Party nor, to the knowledge of
the Parent Borrower, any director, officer, agent or employee of any Loan Party
or any Subsidiary of any Loan Party is in violation of any Anti-Terrorism Law or
Sanctions or engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in any Anti-Terrorism Law or Sanctions.

 

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(b) No Loan Party nor any Subsidiary of any Loan Party nor, to the knowledge of
the Parent Borrower, any director, officer, agent or employee of any Loan Party
or any Subsidiary of any Loan Party acting or benefiting in any capacity in
connection with the Loans, the Transactions or the other transactions hereunder,
is a Sanctioned Person.

(c) No Loan Party nor any Subsidiary of any Loan Party nor, to the knowledge of
the Parent Borrower, any director, officer, agent or employee of any Loan Party
conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Sanctioned Person.

(d) The Parent Borrower has implemented and maintains in effect policies and
procedures designed to promote and achieve compliance by the Parent Borrower and
its Subsidiaries and their respective directors, officers, agents and employees
with Sanctions and Anti-Terrorism Laws in all respects.

Section 7.10 Taxes. Subject to Bankruptcy Law, the terms of the applicable
Orders and any required approval by the Bankruptcy Court, each of the Parent
Borrower and its Restricted Subsidiaries has timely filed (including any
available extension) or caused to be filed all Tax returns and reports required
to have been filed and has paid or caused to be paid all Taxes required to have
been paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Parent Borrower or such Restricted
Subsidiary, as applicable, has set aside on its books adequate accruals in
accordance with GAAP (to the extent such accrual may be set up under GAAP) or
(b) to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect. The charges and accruals on the books of
the Parent Borrower and its Restricted Subsidiaries in respect of Taxes and
other governmental charges are, in the reasonable opinion of the Parent
Borrower, adequate.

Section 7.11 ERISA.

(a) The Parent Borrower, its Restricted Subsidiaries and each ERISA Affiliate
have complied in all material respects with ERISA and, where applicable, the
Code regarding each Benefit Plan.

(b) Each Benefit Plan is, and has been, maintained in substantial compliance
with ERISA and, where applicable, the Code.

(c) No act, omission or transaction has occurred which could result in
imposition on the Parent Borrower, any of its Restricted Subsidiaries or any
ERISA Affiliate (whether directly or indirectly) of (i) either a material civil
penalty assessed pursuant to subsections (c), (i), (l) or (m) of Section 502 of
ERISA or a tax imposed pursuant to Chapter 43 of Subtitle D of the Code or
(ii) material breach of fiduciary duty liability damages under Section 409 of
ERISA.

(d) No Benefit Plan (other than a defined contribution plan) or any trust
created under any such Benefit Plan has been terminated since September 2, 1974.
No liability to the PBGC (other than for the payment of current premiums which
are not past due) by the Parent Borrower, any of its Restricted Subsidiaries or
any ERISA Affiliate has been or is expected by the Parent Borrower, any such
Restricted Subsidiary or any ERISA Affiliate to be incurred with respect to any
Benefit Plan. No ERISA Event has occurred or is reasonably expected to occur.

 

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(e) Full payment when due has been made of all material amounts which the Parent
Borrower, its Restricted Subsidiaries or any ERISA Affiliate is required under
the terms of each Benefit Plan or applicable law to have been paid as
contributions to such Benefit Plan, and no waived funding deficiency (as defined
in Section 302 of ERISA and Section 412 of the Code), which could reasonably be
expected to have a Material Adverse Effect, exists with respect to any Benefit
Plan. The actuarial present value of the benefit liabilities under each Benefit
Plan which is subject to Title IV of ERISA does not, as of the end of the Parent
Borrower’s most recently ended fiscal year, exceed the current value of the
assets (computed on a plan termination basis in accordance with Title IV of
ERISA) of such Benefit Plan allocable to such benefit liabilities by a material
amount, and the sum of such excesses for all such Benefit Plans is not material.
The term “actuarial present value of the benefit liabilities” shall have the
meaning specified in Section 4041 of ERISA.

(f) None of the Parent Borrower, its Restricted Subsidiaries or any ERISA
Affiliate sponsors, maintains, or contributes to an employee welfare benefit
plan, as defined in Section 3(1) of ERISA, including, without limitation, any
such plan maintained to provide benefits to former employees of such entities,
that may not be terminated by the Parent Borrower, any of its Restricted
Subsidiaries or any ERISA Affiliate in its sole discretion at any time without
any material liability.

(g) None of the Parent Borrower, its Restricted Subsidiaries or any ERISA
Affiliate is required to contribute to, or has any other absolute or contingent
liability in respect of, any Multiemployer Plan that, when taken together with
all other such contribution obligations and liabilities, has resulted in, or
could reasonably be expected to have, a Material Adverse Effect.

Section 7.12 Disclosure; No Material Misstatements. None of the written reports,
financial statements, certificates or other written information (other than the
Projections, as defined below, other forward-looking information and information
of a general economic or industry specific nature) furnished or otherwise made
available by or on behalf of the Borrowers or any Restricted Subsidiary of the
Parent Borrower to the Administrative Agent or any of its Affiliates in
connection with the negotiation or performance of this Agreement or any other
Loan Document (as modified or supplemented by other information so furnished or
made available) when considered as a whole contains any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
materially misleading as of the date such information is furnished or made
available. All financial projections concerning the Parent Borrower and its
Restricted Subsidiaries, that have been furnished or otherwise made available by
or on behalf of the Parent Borrower to the Administrative Agent, the Lenders or
any of their respective Affiliates in connection with the negotiation or
performance of this Agreement or any other Loan Document, including the
projections set forth in any Budget (the “Projections”), have been prepared in
good faith based upon assumptions believed by the Parent Borrower to be
reasonable at the time made available to such Persons, it being understood that
actual results may vary materially from the Projections. For the avoidance of
doubt, it is understood that the Administrative Agent shall have no duty to
examine or investigate any written reports, financial statements, certificates
or other written information delivered by the Parent Borrower pursuant to this
Article VII.

 

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Section 7.13 Insurance. The Parent Borrower has, and has caused its Restricted
Subsidiaries to have, (a) all insurance policies sufficient for the compliance
by each of them with all material Governmental Requirements, all material
agreements and all other Loan Documents (including, but not limited to, the
Maritime Mortgages) and (b) insurance coverage in at least amounts and against
such risk (including, without limitation, public liability) that are reasonably
consistent with other companies in the industry performing the same or a similar
business for the assets and operations of the Parent Borrower and its Restricted
Subsidiaries. Within the time periods required herein (as may be extended by the
Required Lenders in their reasonable discretion), the Administrative Agent or
the Collateral Agent, as the case may be, have been named in a manner such that
they are afforded the stature of additional insureds in respect of such
liability insurance policies and the Administrative Agent or the Collateral
Agent, as the case may be, has been named as loss payee with respect to Vessel
Collateral loss insurance.

Section 7.14 Subsidiaries. As of the Effective Date, except as set forth on
Schedule 7.14, the Parent Borrower has no Subsidiaries. The owner and percentage
of ownership of each Subsidiary as of the Effective Date is set forth on such
schedule.

Section 7.15 Location of Business and Offices. As of the Effective Date, the
Parent Borrower’s and each Subsidiary’s jurisdiction of organization, name as
listed in the public records of its jurisdiction of organization, organizational
identification number in its jurisdiction of organization, and the location of
its principal place of business and chief executive office is stated on Schedule
7.15.

Section 7.16 Properties; Titles, Etc.

(a) Each Loan Party has title to, or valid leasehold interests in, or rights to
use all its real and personal property material to its business, except for
limitations under that certain Second Amended and Restated Trade Name and
Trademark License Agreement dated September 28, 2012, by and between HFR, LLC
and Hornbeck Offshore Operators, LLC, and for defects which would not reasonably
be expected to have a Material Adverse Effect, free and clear of Liens, except
(i) Liens pursuant to the Loan Documents and the Prepetition Secured
Indebtedness and (ii) Permitted Liens. The relevant Loan Parties have good title
to all of the Vessel Collateral, free and clear of all Liens except (i) Liens
pursuant to the Loan Documents and the Prepetition Secured Indebtedness and
(ii) Permitted Liens of the type permitted under clause (k) of the definition
thereof. Set forth on Schedule 8.14 hereto is a complete and accurate list of
all Vessels owned by any Loan Party or any Restricted Subsidiary thereof as of
the Effective Date, including the name, record owner, official number, I.M.O.
number (if any), jurisdiction of registration and flag of each such Vessel, and,
except as set forth on Schedule 7.16, all Vessel Collateral is duly documented
in the name of the applicable Loan Party as shipowner under the laws and flag of
the United States and eligible and qualified to operate in the coastwise trade
of the United States or, in the case of Non-U.S.-flagged Vessels, is duly
registered in the name of the applicable Loan Party as shipowner under the laws
and flag of the applicable flag jurisdiction. Each Loan Party that owns Vessel
Collateral (i) if such Vessel Collateral is one or more Vessels documented under
the laws and flag of the United States, (x) is a citizen of the United States
within the meaning of 46 U.S.C. § 50501, eligible and qualified to own and
operate vessels in the coastwise trade of the United States and (y) operates
such Vessels in compliance with 46 U.S.C. Chapter 551; or (ii) if such Vessel
Collateral is one or more Vessels registered under the laws and flag of another
flag jurisdiction,

 

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(x) is eligible to own and operate Vessels under the laws of such flag
jurisdiction and under the cabotage laws and other laws of each jurisdiction in
which such Vessel Collateral trades, and (y) operates such Vessel Collateral in
compliance in all material respects with the applicable cabotage laws and other
laws of each jurisdiction in which such Vessel Collateral trades.

(b) Except as otherwise permitted under the Loan Documents including the last
sentence of Section 6.01, this Section 7.16(b), Section 8.17 and Schedule 8.17,
all filings and other actions on behalf of the Parent Borrower or, as
applicable, any Restricted Subsidiary of the Parent Borrower necessary or
desirable to perfect and protect the security interest in the Vessel Collateral
created under the Security Instruments have been duly made or taken (or
arrangements reasonably satisfactory to the Required Lenders with respect
thereto have been made, including in accordance with Section 8.17 and Schedule
8.17) and such security interests are in full force and effect (or, as
contemplated in Section 8.17 and Schedule 8.17 will be in full force and
effect), and the Security Instruments create (or, as contemplated in
Section 8.17 and Schedule 8.17 will create) create in favor of the Collateral
Agent or trustee/mortgagee, as the case may be, for the benefit of the Secured
Parties a valid and, together with such filings, recordations and other actions,
when effected, a perfected first preferred or first priority security interest
in the Vessel Collateral, securing the payment of the Indebtedness, subject only
to Permitted Maritime Liens. To the extent that the Vessel Collateral is
registered under the laws and flag of the United States, the Maritime Mortgages,
executed and delivered, create in favor of the Collateral Agent, as
trustee/mortgagee, a legal, valid, and enforceable first preferred mortgage lien
over the whole of the Vessel Collateral therein named and when duly recorded
shall constitute a perfected first “preferred mortgage” within the meaning of
Section 31301(6)(B) of Title 46 of the United States Code, entitled to the
benefits accorded a first preferred mortgage on a vessel registered under the
laws and flag of the United States, subject only to Permitted Maritime Liens.

(c) Except as otherwise permitted under the Loan Documents including the last
sentence of Section 6.01, this Section 7.16(c), Section 8.17 and Schedule 8.17,
all filings and other actions set forth in the definition of Real Property
Interests Collateral Requirements on behalf of the Parent Borrower or, as
applicable, any Restricted Subsidiary of the Parent Borrower to perfect and
protect the security interest in the Material Real Property Interests created
under the Security Instruments have been duly made or taken (or arrangements
reasonably satisfactory to the Required Lenders with respect thereto have been
made, including in accordance with Section 8.17 and Schedule 8.17) and such
security interests are in full force and effect (or, as contemplated in
Section 8.17 and Schedule 8.17 will be in full force and effect), and the
Security Instruments create (or, as contemplated in Section 8.17 and Schedule
8.17 will create) in favor of the Collateral Agent or mortgagee, as the case may
be, for the benefit of the Secured Parties a valid and, together with such
filings, recordations and other actions, when effected, perfected first priority
security interest in the Material Real Property Interests securing the payment
of the Indebtedness.

(d) All of the material Properties of the Parent Borrower and its Restricted
Subsidiaries which are reasonably necessary for the operation of their
businesses (other than Stacked Vessels) are in good working condition, ordinary
wear and tear excepted, and are maintained in accordance with reasonable
commercial business standards, except (i) as set forth in Schedule 7.16 or
(ii) where the failure to be in such condition or maintain such Property could
not reasonably be expected to have a Material Adverse Effect.

 

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(e) The Parent Borrower and each of its Restricted Subsidiaries owns, or is
licensed to use, all trademarks and tradenames (subject to the limitations
therein set forth in that certain Second Amended and Restated Trade Name and
Trademark License Agreement dated September 28, 2012, by and between HFR, LLC
and Hornbeck Offshore Operators, LLC), copyrights, patents and other
Intellectual Property material to its business, and the use thereof by the
Parent Borrower and such Restricted Subsidiaries does not infringe upon the
rights of any other Person, except for any such infringements that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. The Parent Borrower and its Restricted Subsidiaries either own
or have valid licenses or other rights to use all databases, and other technical
information used in their businesses as presently conducted, subject to the
limitations contained in the agreements governing the use of the same, which
limitations are customary for companies engaged in its line of business, with
such exceptions as could not reasonably be expected to have a Material Adverse
Effect.

(f) As of the Effective Date, Schedule 8.14(a)(i)(x) sets forth a true and
complete list of all Material Real Property Interests owned in fee and valid
leasehold interests held by the Parent Borrower and each of its Restricted
Subsidiaries.

Section 7.17 Hedging Obligations. As of the Effective Date, Schedule 7.17 sets
forth a true and complete list of all Hedging Obligations of the Parent Borrower
and each of its Restricted Subsidiaries, the material terms thereof (including
the type, term, effective date, termination date and notional amounts or
volumes), the net mark to market value thereof, all credit support agreements
relating thereto (including any margin required or supplied) and the
counterparty to each such agreement.

Section 7.18 Use of Proceeds. The proceeds of the Loans shall be used solely
(i) to effect the Prepetition ABL Credit Agreement Refinancing, (ii) to pay the
fees, costs and expenses required to be paid in connection with the transactions
contemplated hereby and the Cases, (iii) to finance the working capital needs,
capital improvements and general corporate purposes of the Borrowers and the
other Loan Parties following the commencement of the Cases, in each case, in
accordance with the Budget delivered from time to time pursuant to this
Agreement, including the Budget Variance, and not in contravention of any
Governmental Requirement, (iv) to pay payments in respect of Adequate Protection
(as defined in the Interim Order or Final Order, as applicable) as authorized by
the Bankruptcy Court in the applicable Order and (v) to pay obligations arising
from or related to the Carve Out, in each case and not in violation of this
Agreement or the other Loan Documents; provided, however, that the amounts
described in the foregoing clause (ii) may be paid by the Borrowers regardless
of whether such costs and expenses are in accordance with the Budget (and any
such payment shall be deemed permissible under this Section 7.18, but shall be
subject to Section 9.14). The Parent Borrower and each of its Restricted
Subsidiaries is not engaged principally, or as one of its important activities,
in the business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying margin stock (within the meaning
of Regulation T, U or X of the Board). No part of the proceeds of the Loans will
be used for any purpose which violates the provisions of Regulations T, U or X
of the Board.

Section 7.19 [Reserved].

 

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Section 7.20 Anti-Corruption Laws. No Loan Party nor any Subsidiary of any Loan
Party nor, to the knowledge of the Parent Borrower, any director, officer, agent
or employee of any Loan Party or any Subsidiary of any Loan Party is aware of or
has taken any action, directly or indirectly, that would result in a violation
by such persons of the FCPA or any other applicable anti-corruption laws of any
jurisdiction, domestic or foreign, including, without limitation, making use of
the mails or any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or authorization or approval of
the payment of any money, or other Property, gift, promise to give or
authorization of the giving of anything of value, directly or indirectly, to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office in contravention of the FCPA or any other applicable anti-corruption
laws. Each Loan Party and its Subsidiaries has conducted their businesses in
compliance with applicable anti-corruption laws and the FCPA in all material
respects and will maintain policies and procedures designed to promote and
achieve compliance with such laws and with the representation and warranty
contained herein. No Borrowing, use of proceeds or other transaction
contemplated by this Agreement will violate the FCPA or any other applicable
anti-corruption laws or applicable Sanctions.

Section 7.21 EEA Financial Institution. No Loan Party, nor any of its
Subsidiaries, is an EEA Financial Institution.

Section 7.22 Bankruptcy Matters

(a) The Cases were commenced on the Petition Date in accordance with applicable
laws, and proper notice thereof has been or will be given of (i) the motion
seeking approval of the Loan Documents, the Interim Order and the Final Order,
(ii) the hearing for the entry of the Interim Order and (iii) the hearing for
the entry of the Final Order.

(b) The Loan Parties are in compliance with the terms and conditions of the
Orders. The Interim Order (with respect to the period prior to the entry of the
Final Order) or the Final Order (from after the date the Final Order is
entered), is in full force and effect and has not been vacated or reversed, is
not subject to a stay and has not been modified or amended other than as
acceptable to the Required Lenders.

(c) After the entry of the Interim Order, pursuant to and to the extent
permitted in the Order, (i) in respect of each of the Loan Parties that are
Debtors, the Indebtedness will constitute allowed joint and several
superpriority administrative expense claims in each of the Cases pursuant to
Section 364(c)(1) of the Bankruptcy Code, having priority over any and all other
administrative expenses and claims of any kind or nature whatsoever, specified
in or ordered pursuant to section 105, 326, 327, 328, 330, 331, 361, 362, 363,
364, 365, 503, 506, 507(a), 507(b), 546, 552, 726, 1113 or 1114 or any other
provisions of the Bankruptcy Code, subject only to the Carve Out (the
“Superpriority Claims”) and (ii) in respect of any Property owned by a Debtor
other than Excluded Assets, to the maximum extent permitted by law, the
Indebtedness will be secured by a valid, binding, continuing, enforceable,
fully-perfected Lien on all of the Collateral pursuant to sections 364(c)(2),
(c)(3) and (d), subject only to the Permitted Priority Liens and the Carve Out
(and subject to any post-closing periods provided for in Section 8.17 and
Schedule 8.17).

 

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(d) The entry of the Orders is effective to create in favor of the Collateral
Agent, for the benefit of the Secured Parties, in respect of each Loan Party
that is a Debtor, the Superpriority Claims and, to the maximum extent permitted
by law, Liens described in this Section 7.22, without the necessity of the
execution of mortgages, security agreements, pledge agreements, financing
statements or other agreements or documents.

(e) Notwithstanding the provisions of section 362 of the Bankruptcy Code, and
subject to the applicable provisions of the Interim Order or the Final Order, as
the case may be, upon the Termination Date (whether by acceleration or
otherwise) of any of the Indebtedness, the Agents and the Lenders shall be
entitled to terminate Commitments and, subject to any prior notice requirements
under the Orders in respect of the Collateral, to enforce the remedies provided
for hereunder or under applicable laws, without further notice, motion or
application to, hearing before, or order from the Bankruptcy Court.

ARTICLE VIII

Affirmative Covenants

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents shall have been paid in full, the Borrowers
covenant and agree with the Administrative Agent and the Lenders on behalf of
the Loan Parties that:

Section 8.01 Financial Statements. The Parent Borrower will furnish or cause to
be furnished to the Administrative Agent, for distribution to each Lender, each
of the following:

(a) Quarterly Reports – as soon as available and in any event within sixty
(60) days following the last day of the applicable fiscal quarter (commencing
with the fiscal quarter ended March 31, 2020), the consolidated balance sheet of
the Parent Borrower as of the end of such quarter, the consolidated statements
of operations of the Parent Borrower for such quarter and for the period from
the beginning of the fiscal year through such quarter, and the consolidated
statements of cash flows of the Parent Borrower for the period from the
beginning of the fiscal year through such quarter (along with data for each
business segment for such periods, if applicable), setting forth in each case in
comparative form the corresponding figures for the corresponding period of the
preceding fiscal year, certified by the chief financial officer of the Parent
Borrower as presenting fairly in all material respects the financial condition,
results of operations and changes in cash flows of the Parent Borrower in
accordance with GAAP (subject only to normal year-end audit adjustments and the
absence of footnotes), together with a customary management’s discussion and
analysis of financial condition and the results of operations with respect to
such fiscal quarter and, in the case of the second and third fiscal quarters,
the period from the beginning of such fiscal year to the end of such fiscal
quarter.

(b) [reserved].

(c) [reserved].

(d) Other Information – Promptly upon the request of the Administrative Agent,
any Lender or the Financial Advisor, the Parent Borrower shall deliver to such
Person such additional information regarding the business, legal, financial or
corporate affairs of any Loan Party or any Subsidiary or the Collateral
(including information concerning construction of new Vessels), or compliance
with the terms of the Loan Documents, as such Person may from time to time
reasonably request.

 

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All financial information contained in the information referred to above (other
than in clause (d)) shall conform to GAAP applied on a consistent basis, except
only for such changes in accounting principles or practice with which the
independent certified public accountants concur. The information required to be
delivered pursuant to Section 8.01(a) above shall be deemed to have been
delivered if such information, or one or more annual or quarterly reports
containing such information, shall be available on the website of the SEC at
www.sec.gov or on the Parent Borrower’s website at www.hornbeckoffshore.com.
Delivery of such reports, information and documents to the Administrative Agent
is for informational purposes only and the Administrative Agent’s receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the Parent
Borrower’s compliance with any of its covenants hereunder.

Section 8.02 Certificates of Compliance; Etc. Concurrently with the delivery of
quarterly financial statements pursuant to Section 8.01(a), the Parent Borrower
will furnish to the Administrative Agent a certificate of a Responsible Officer
stating that there is no Default or Event of Default at such time.

Section 8.03 Taxes and Other Liens. Subject to Bankruptcy Law, the terms of the
applicable Order and any required approval by the Bankruptcy Court, the Parent
Borrower, the Co-Borrower and the Guarantors will pay and discharge promptly
when due all Taxes imposed upon the Parent Borrower, the Co-Borrower or any
Guarantor or upon its income or upon any of its Property as well as all claims
of any kind (including claims for labor, materials, supplies and rent) which, if
unpaid, might become a Lien (other than Permitted Liens) upon any or all of its
Property; provided, that the Parent Borrower, the Co-Borrower and the Guarantors
shall not be required to pay any such Tax if the amount, applicability or
validity thereof shall concurrently be contested in good faith by appropriate
proceedings diligently conducted and if the contesting party shall have set up
accruals therefor adequate under GAAP.

Section 8.04 Existence; Compliance; Litigation. Except to the extent any change
therein is otherwise permitted hereunder, the Parent Borrower, the Co-Borrower
and each Guarantor will maintain its limited liability company or corporate
existence and rights. Subject to Bankruptcy Law, the terms of the applicable
Order and any required approval by the Bankruptcy Court, the Parent Borrower,
the Co-Borrower and the Guarantors will observe and comply with all valid laws,
statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions,
rules, regulations, certificates, franchises, permits, licenses, authorizations,
directions and requirements of Governmental Authority, including Governmental
Requirements and Environmental Laws, unless any such failure to observe and
comply would not reasonably be expected to have a Material Adverse Effect. Other
than with respect to matters before the Bankruptcy Court, the Parent Borrower,
the Co-Borrower and the Guarantors will not agree, authorize or consent to or
enter into any settlement, resolution or compromise of any material litigation,
material arbitration or other material dispute with any Person without the prior
written consent of the Required Lenders.

 

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Section 8.05 Further Assurances. Subject to Section 8.17 and Schedule 8.17, the
Parent Borrower, the Co-Borrower and the Guarantors will promptly upon the
reasonable request of the Administrative Agent take or cause to be taken any
actions required to grant, attach or perfect any Lien securing the Indebtedness,
or cure or cause to be cured any defects in the creation, execution and delivery
of any of the Liens on or security interests in the Collateral, in each case,
whether pursuant to the Orders or the Loan Documents. Subject to Section 8.17
and Schedule 8.17, the Parent Borrower, the Co-Borrower and the Guarantors will,
at their expense, promptly upon the reasonable request of the Administrative
Agent execute and deliver, or cause to be executed and delivered, to the
Administrative Agent and/or the Collateral Agent all such other and further
documents, agreements and instruments (including without limitation Mortgages in
recordable form with respect to any Material Real Property Interests as soon as
reasonably practicable following such request but in any event within forty-five
(45) days following such request, including any ancillary deliverables described
in Section 8.14 (provided that the Parent Borrower, the Co-Borrower and the
Guarantors (i) shall have no obligation to deliver any Real Property Interests
Mortgage except with respect to any Material Real Property Interests and
(ii) shall only be required to use commercially reasonable efforts to obtain a
Real Property Interests Mortgage with respect to the Material Real Property
Interests described in clause (ii) of the definition thereof), further security
agreements, financing statements, continuation statements, and assignments of
accounts and contract rights, except for Excluded Assets (as defined in the
Guaranty and Collateral Agreement)) in compliance with or accomplishment of the
covenants and agreements of the Parent Borrower, the Co-Borrower and the
Guarantors in the Loan Documents or to further evidence and more fully describe
the Vessel Collateral and/or Material Real Property Interests, including any
renewals, additions, substitutions, replacements or accessions to the Vessel
Collateral and/or Material Real Property Interests, or to correct any omissions
in the Security Instruments, or more fully state the security obligations set
out herein or in any of the Security Instruments, or to perfect, protect or
preserve any Liens created pursuant to any of the Security Instruments, or to
make any recordings, to file any notices, or obtain any consents, or take any
other actions required or as may be reasonably necessary or appropriate in
connection with the transactions contemplated by this Agreement. It is
understood that any requests made by the Administrative Agent and/or the
Collateral Agent pursuant to this Section 8.05 shall be upon written direction
from the Required Lenders.

Section 8.06 Performance of Obligations. The Borrowers will repay the Loans in
accordance with this Agreement. The Borrowers and the Guarantors will do and
perform every act required of the Borrowers and the Guarantors, by the Loan
Documents at the time or times and in the manner specified.

Section 8.07 Use of Proceeds. The Borrowers shall use the proceeds of the Loans
only for the purposes specified in Section 7.18. In addition, the Borrowers will
not request any Borrowing and the Borrowers shall not use, and shall procure
that its Subsidiaries and its or their respective directors, officers, employees
and agents shall not use, the proceeds of any Borrowing (a) in furtherance of an
offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of the FCPA or any
other applicable anti-corruption law, (b) for the purpose of funding, financing
or facilitating any activities, business or transaction of or with any
Sanctioned Person, or in any Sanctioned Country or (c) in any manner that would
result in the violation of any Sanctions applicable to any party hereto.

 

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Section 8.08 Insurance.

(a) Each Loan Party shall maintain with financially sound and reputable
insurance companies not Affiliates of the Parent Borrower insurance with respect
to its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or a similar business of such
types and in such amounts (after giving effect to any self-insurance compatible
with the following standards) as are customarily carried under similar
circumstances by such other Persons, and, with respect to the Vessel Collateral,
as required to be maintained under the terms of the Maritime Mortgages, and the
Loan Parties shall cause (within the time period required herein, as may be
extended by the Required Lenders in their reasonable discretion): (i) the
Collateral Agent to be named as loss payee, for the ratable benefit of the
Secured Parties, as to the Vessel Collateral, including, as trustee/mortgagee,
in accordance with the Maritime Mortgages and the Assignment of Insurances;
(ii) the Collateral Agent, as agent for the Secured Parties, to be named as an
additional insured, with a waiver of rights of subrogation, under any marine and
war-risk insurance policy and any protection and indemnity policy; (iii) to the
extent applicable, each entry in a protection and indemnity club with respect to
Vessel Collateral to note the interest of the Collateral Agent, as agent for the
Secured Parties; (iv) the Collateral Agent, as agent for the Secured Parties, to
be named as an additional insured, with a waiver of rights of subrogation, under
the comprehensive general liability insurance and (v) the Collateral Agent, as
agent for the Secured Parties, to be named as an alternate employer, with a
waiver of rights of subrogation, under the statutory workers’ compensation
insurance and longshoreman and harbor workers’ act coverage policies. Each Loan
Party that is an owner of any Vessel shall comply in all material respects with
all insurance policies in respect of the Vessels and upon notice of
non-compliance will take such steps necessary under the terms of such insurance
to come into compliance. Each Loan Party that owns Vessel Collateral shall
assign to the Collateral Agent, including as trustee/mortgagee, for the benefit
of the Secured Parties, pursuant to an Assignment of Insurances, all of such
Loan Party’s right, title, and interest in and to each policy and contract of
insurance, and under all entries in any protection and indemnity or war risks
association or club, relating to the Vessel Collateral that it owns. The Loan
Parties agree that mortgagee’s interest insurance and mortgagee’s interest
additional perils (pollution) insurance risks covering the Vessel Collateral may
be placed directly by the Collateral Agent, including as trustee/mortgagee, for
the benefit of the Secured Parties, at the cost of the Loan Parties, who will
reimburse the Collateral Agent for the cost thereof; provided, however, that the
Collateral Agent shall only have the right to place such insurance if the Loan
Parties fail to do so within forty-five (45) days following the Effective Date.
Upon the reasonable request of the Administrative Agent, the Loan Parties agree
(A) to provide, or cause to be provided, to the Administrative Agent originals
or certified copies of such policies of insurance or certificates with respect
thereto and (B) to provide, or cause to be provided, to the Administrative Agent
reports on each existing policy of insurance with respect to the Vessel
Collateral showing such information as the Administrative Agent may reasonably
request, including without limitation the following: (1) the name of the
insurer; (2) the risks insured; (3) the amount of the policy; (4) the Vessel
Collateral and other Property insured; (5) the then current value on the basis
of which insurance has been obtained and the manner of determining that value;
and (6) the expiration date of the policy.

 

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(b) The Real Property Interests shall be insured against loss or damage and the
Loan Parties shall cause (within forty-five (45) days following the Effective
Date) the Collateral Agent to be named as loss payee, for the ratable benefit of
the Secured Parties, as to the Real Property Interests, including, as
trustee/mortgagee, and the Collateral Agent, as agent for the Secured Parties,
to be named as an additional insured, with a waiver of rights of subrogation,
under comprehensive general liability insurance, statutory workers’ compensation
insurance and longshoreman and harbor workers’ act coverage policies.

(c) The Borrowers and the Guarantors agree to notify the Administrative Agent in
writing within fifteen (15) days of any Event of Loss involving Vessel
Collateral, whether or not such Event of Loss is covered by insurance. The
Borrowers further agree to promptly notify their insurance company and to submit
an appropriate claim and proof of claim to the insurance company in respect of
any Event of Loss. As to the Vessel Collateral, the Borrowers and the Guarantors
hereby irrevocably appoint the Collateral Agent as their agent and
attorney-in-fact, each such agency being coupled with an interest, to make,
settle and adjust claims under such policy or policies of insurance (regardless
of whether a settlement or adjustment of a claim is an Event of Default) and to
endorse the name of the Borrowers and the Guarantors on any check or other item
of payment for the proceeds thereof; provided, however, that the Collateral
Agent agrees that it will not exercise any rights under the power of attorney
provided in this Section 8.08(c) unless one or more Events of Default exist
under this Agreement.

Section 8.09 Accounts and Records. The Borrowers and the Guarantors will keep
books of record and accounts in which true and correct entries will be made as
to all material matters of all dealings or transactions in relation to the
respective business and activities, sufficient to permit reporting in accordance
with GAAP, consistently applied.

Section 8.10 Right of Inspection. The Borrowers and the Guarantors will permit
any officer, employee or agent of the Collateral Agent (acting upon written
direction from the Required Lenders) or any Lender to visit and inspect the Real
Property Interests and the Vessel Collateral subject to applicable safety rules
and procedures, at such reasonable times and on reasonable notice and without
hindrance or delay and as often as the Administrative Agent (acting upon the
written direction from the Required Lenders) may reasonably desire.
Notwithstanding the foregoing, except following an Event of Default that has
occurred and is continuing, the Collateral Agent (acting upon written direction
from the Required Lenders) shall not visit or inspect the Real Property
Interests and the Vessel Collateral more frequently than twice a year,
individually or as a group, and then at their own expense, except that the
Borrowers will be responsible for such expense following the occurrence and
during the continuance of an Event of Default; provided, that any such visits or
inspections shall occur when the applicable Vessel is shoreside at a location
involved in the ordinary course of providing its services under its then
applicable charter or other vessel service contract.

Section 8.11 Maintenance of Properties.

(a) The Borrowers and the Guarantors shall maintain and preserve all of their
respective Properties (and any Property leased by or consigned to any of them or
held under title retention or conditional sales contracts) other than Vessels
(which for the avoidance of doubt are covered by the next sentence) that are
used or useful in the conduct of their respective business in the ordinary
course in good working order and condition at all times, ordinary wear and tear
excepted, and make all repairs, replacements, additions, betterments and
improvements to such Properties (other than Vessels) to the extent necessary so
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expected to have a Material Adverse Effect. Except during any period that a
Vessel is undergoing repairs or maintenance or is a Stacked Vessel, the
Borrowers and the Guarantors shall: (i) at all times maintain and preserve, or
cause to be maintained and preserved, each Vessel in good running order and
repair, so that such Vessel shall be, insofar as due diligence can make it so,
tight, staunch, and sufficiently tackled, equipped and seaworthy and in good
condition, ordinary wear and tear excepted, and fit for its intended service,
and make all needful and proper repairs, renewals, betterments and improvements
necessary to keep such Vessel well maintained and in seaworthy condition, to the
extent necessary so that any failure will not reasonably be expected to have a
Material Adverse Effect; (ii) at all times maintain each Vessel in class with
the American Bureau of Shipping or another classification society that is a
member of the International Association of Classification Societies and promptly
take steps to remove or remedy or satisfy any exception, condition or
recommendation of the Vessel’s classification society affecting class, to the
extent necessary so that any failure will not reasonably be expected to have a
Material Adverse Effect; (iii) have on board each Vessel, when required by
applicable Governmental Requirements, valid certificates required thereby to the
extent necessary so that any failure will not reasonably be expected to have a
Material Adverse Effect; (iv) furnish annually to the Collateral Agent a copy of
any certificate of class that has been updated for any Vessel since the
Effective Date; and (v) furnish annually upon request by the Collateral Agent, a
confirmation of class certificate from the American Bureau of Shipping or
another classification society that is a member of the International Association
of Classification Societies showing that such classification has been
maintained.

(b) (i) Each Loan Party that owns or operates, or will own or operate, Vessel
Collateral will not transfer or change the flag or documentation or registration
of such Vessel Collateral without: (x) except for reflagging transactions
described on Schedule 8.11(b), the prior written consent of the Required Lenders
requested no fewer than ten (10) Business Days (or such shorter period as the
Required Lenders shall agree in their sole discretion) before the requested date
of such transfer or change; and (y) to the extent so approved by the Required
Lenders, promptly (and in the case of transferring or changing the flag or
registration to a foreign jurisdiction (other than Liberia, the Marshall
Islands, Panama or Vanuatu, which shall be done promptly) or to ownership by a
foreign Subsidiary, within sixty (60) days) satisfying all applicable Vessel
Collateral Requirements for such Vessel Collateral and executing and delivering
(or causing to be executed and delivered) all such additional documents,
agreements or other instruments and/or taking (or causing to be taken) all such
actions (including the making of any recordings or filings) as are deemed
necessary or desirable by the Collateral Agent to perfect, protect and preserve
the security interest in favor of the Collateral Agent or trustee/mortgagee
(acting on behalf of the Collateral Agent), as the case may be, for the benefit
of the Secured Parties in such Vessel Collateral granted pursuant to the
applicable Maritime Mortgage (or, if a Maritime Mortgage may not be granted, to
provide an alternative security interest or other collateral reasonably
acceptable to the Collateral Agent and the Required Lenders (in or with respect
to such Vessel Collateral under the laws of the applicable foreign-flag
jurisdiction in which such Vessel Collateral is being registered); it being
understood and agreed that, without limiting the foregoing, in order for such
alternative security interest to be reasonably acceptable to the Collateral
Agent and the Required Lenders, the Collateral Agent and the Lenders shall have
received an opinion of counsel in the appropriate jurisdiction in form and
substance reasonably satisfactory to the Collateral Agent and the Required
Lenders (as to the creation, validity and perfection of such alternative
security interest).

 

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(ii) Notwithstanding anything in the Loan Documents to the contrary, in the
event of a change of the flag or documentation or registration of Vessel
Collateral permitted under this Section 8.11(b), the Investment made in
connection with such a transaction may be structured as a Foreign Vessel
Reflagging Transaction. A “Foreign Vessel Reflagging Transaction” is defined as
one or more Investments by the Parent Borrower or a Restricted Subsidiary of
cash in one or more Subsidiaries, the proceeds of which will be used by a
Restricted Subsidiary to purchase Vessel Collateral from a Loan Party, the net
effect of which is that (x) the Vessel Collateral subject to such Foreign Vessel
Reflagging Transaction shall continue to be Vessel Collateral (and the
requirements under Section 8.11(b)(i) shall apply to such Vessel Collateral and
Foreign Vessel Reflagging Transaction) and (y) such cash is substantially
contemporaneously returned to the Parent Borrower or the Restricted Subsidiary
making the initial Investment, in each case, in order to facilitate a change to
the flag or documentation or registration of any Vessel Collateral (so long as
such Investments constitute Permitted Investments or Investments not restricted
by Section 9.01). After giving full effect to any Foreign Vessel Reflagging
Transaction where the cash-transfer transaction steps occur substantially
simultaneously, a receipt by any Subsidiary of such cash and the existence of
any intercompany loan receivable created by the further loaning of such funds by
such Subsidiary to another Subsidiary shall not in itself trigger a requirement
to provide additional Collateral or to enter into any additional Loan Documents.

Section 8.12 Notice of Certain Events. (a) The Parent Borrower shall promptly
notify the Administrative Agent in writing if the Parent Borrower learns of the
occurrence of:

(A) any event which constitutes a Default, together with a detailed statement by
a Responsible Officer of the Parent Borrower as to the nature of the Default and
the steps being taken to cure the effect of such Default;

(B) any action, suit, investigation or proceeding by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Parent
Borrower, threatened against or affecting the Parent Borrower or any of its
Restricted Subsidiaries or any of their Properties (i) as to which there is a
reasonable possibility of an adverse determination that could reasonably be
expected to have a Material Adverse Effect or (ii) that involves any Loan
Document or the Transactions; or

(C) any development that has resulted in, or could reasonably be expected to
result in, a Material Adverse Effect.

(b) The Parent Borrower shall promptly notify the Administrative Agent in
writing of any change in organizational jurisdiction, location of the principal
place of business or the office where records concerning accounts and contract
rights are kept, or any change in the federal taxpayer identification number or
organizational identification number of the Parent Borrower or any other Loan
Party.

 

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Section 8.13 ERISA Information and Compliance. The Parent Borrower will furnish
to the Administrative Agent (i) as soon as is administratively practicable
following a request from the Required Lenders copies of each annual or other
report filed with the United States Secretary of Labor or the PBGC, copies of
each annual and other report with respect to any Benefit Plan sponsored or
maintained by the Parent Borrower, any of its Restricted Subsidiaries, or any
ERISA Affiliate and (ii) as soon as is administratively practicable upon
becoming aware of the occurrence of any (A) ERISA Event or (B) “prohibited
transaction,” as such term is defined in Section 4975 of the Code, in connection
with any Benefit Plan sponsored or maintained by the Parent Borrower, any of its
Restricted Subsidiaries or any ERISA Affiliate that could reasonably be expected
to have a Material Adverse Effect, a written notice signed by a Responsible
Officer of the Parent Borrower specifying the nature thereof, what action the
Parent Borrower is taking or proposes to take with respect thereto, and, when
known, any action taken by the Internal Revenue Service with respect thereto.
The Parent Borrower will comply with all of the applicable funding and other
requirements of ERISA as such requirements relate to the Benefit Plans of the
Parent Borrower or any of its Restricted Subsidiaries.

Section 8.14 Security.

(a) The Indebtedness shall be secured by the following:

(i) (x) the “DIP Collateral” (as defined in the Orders), (y) the Vessels listed
on Schedule 8.14, any Vessels (if any) described in Section 8.14(a)(iii), and
any Real Property Interests, and (z) any Property and rights of the Loan Parties
described in the Guaranty and Collateral Agreement or any other Security
Instrument and excepting, as provided in the Guaranty and Collateral Agreement,
Excluded Assets (or the equivalent term under any other Security Instrument),
unless such Collateral has been released in accordance with Section 11.11 in
connection with transactions permitted under the Loan Documents, which, to the
maximum extent permitted by law, shall be perfected pursuant to the Orders
(subject to any exceptions or limitations contained therein or herein) and, in
all other cases, shall be subject to the time periods for perfection as provided
herein, in the Orders or in the Guaranty and Collateral Agreement;

(ii) not later than thirty (30) days (or such longer period as the Required
Lenders shall agree in their reasonable discretion) following the formation or
acquisition of any Restricted Subsidiary of the Parent Borrower which results in
Parent Borrower having (x) Domestic Subsidiaries (other than the Co-Borrower and
the then existing Guarantors that are Domestic Subsidiaries) with assets of
$5,000,000 or more in the aggregate or (y) Foreign Subsidiaries (other than the
then existing Guarantors that are Foreign Subsidiaries) with assets of
$20,000,000 or more in the aggregate, then such Restricted Subsidiary or
Restricted Subsidiaries (other than Excluded Subsidiaries) as are satisfactory
to the Required Lenders (such that, as applicable, (x) such Restricted
Subsidiaries that are Domestic Subsidiaries not guarantying the Indebtedness
have assets of less than $5,000,000 in the aggregate or (y) such Restricted
Subsidiaries that are Foreign Subsidiaries not guarantying the Indebtedness have
assets of less than $20,000,000 in the aggregate) shall (x) guaranty the payment
and performance of the Indebtedness by executing and delivering in favor of the
Agents, for the ratable benefit of the Secured Parties, a joinder to the
Guaranty and Collateral Agreement or a guaranty agreement comparable to the
Guaranty and Collateral Agreement but in form and substance satisfactory to the
Agents and the Required Lenders and (y) secure such guaranty by executing and
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Parties, (A) a joinder to the Guaranty and Collateral Agreement or a personal
property agreement comparable to the Guaranty and Collateral Agreement but in
form and substance reasonably satisfactory to the Agents and the Required
Lenders, (B) upon the request of the Collateral Agent, a Maritime Mortgage over
any Vessel owned by such Restricted Subsidiary in a manner consistent with
clause (iii) below, and (C) upon the request of the Collateral Agent, a Mortgage
of any Material Real Property Interest owned by such Restricted Subsidiary (and
shall satisfy the Real Property Interests Collateral Requirements);

(iii) substantially contemporaneously with the acquisition (including by way of
construction) (and in the case of an acquisition of a foreign-flag Vessel or
Vessels, or an acquisition of a foreign-flag Vessel or Vessels by any Restricted
Subsidiary, within thirty (30) days for any Vessel registered under either the
Liberia, Marshall Islands, Panama or Vanuatu flags and sixty (60) days for a
Vessel registered under any other foreign flag, following the acquisition)
(including by way of construction) by the Parent Borrower or any of its
Restricted Subsidiaries of any Vessel or Vessels, (x) the Parent Borrower or
such Restricted Subsidiary shall (i) grant a Maritime Mortgage (in the
applicable form) on such Vessel in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, which shall constitute a legal, valid,
enforceable and, when duly filed and recorded or registered, perfected first
preferred or first priority mortgage on the whole of the Vessel Collateral named
therein under the laws of the applicable flag jurisdiction in which such Vessel
is registered, subject only to Permitted Maritime Liens, (ii) grant first
priority security interests (or the foreign equivalent) in all Property owned by
such Restricted Subsidiary relating to such Vessel, subject to Permitted Liens,
and (iii) otherwise comply with the applicable Vessel Collateral Requirements
(including the entry into an Assignment of Insurances) with respect to such
Vessel (unless waived by the Collateral Agent acting at the direction of the
Required Lenders) (it being understood that such Liens shall be in addition to
those granted on Vessels and related Property pursuant to the Orders); provided,
that notwithstanding anything to the contrary in Section 8.14(a)(ii), if the
Restricted Subsidiary that has acquired any such Vessel that is required to
become Collateral is not already a Guarantor, such Restricted Subsidiary of the
Parent Borrower shall become a Guarantor; and

(iv) within sixty (60) days (or such longer period as the Administrative Agent
may agree) following the acquisition by the Parent Borrower or any of its
Restricted Subsidiaries of any Property that is not a Vessel,
(x) notwithstanding that the Lien on and security interest in such Property
automatically attaches to such property upon the acquisition thereof pursuant to
the Orders and the Loan Documents with the priority of perfection required
thereunder, upon the reasonable request of the Collateral Agent, the Parent
Borrower shall execute and deliver, or cause its applicable Restricted
Subsidiary to execute and deliver, to the Administrative Agent and/or the
Collateral Agent all such further documents, agreements and instruments
(including without limitation further security agreements, Mortgages (together
with, if requested, a lender’s title insurance policy, survey and other
documents reasonably requested by the Collateral Agent), financing statements,
continuation statements, and assignments of accounts and contract rights)
necessary or desirable to cause such Property to be subject to a security
interest in favor of the Collateral Agent with the priority and perfection
required thereunder and (y)

 

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notwithstanding anything to the contrary in Section 8.14(a)(ii), if the
Restricted Subsidiary that has acquired such Property is not already a
Guarantor, such Restricted Subsidiary shall become a Guarantor; provided, that,
without limiting the effect of the Guaranty and Collateral Agreement, with
respect to Real Property Interests, none of the Parent Borrower nor its
Restricted Subsidiaries shall be required by this Agreement or the other Loan
Documents to take any action other than the Real Property Interests Collateral
Requirements with respect to Material Real Property Interests;

(b) Notwithstanding the foregoing, the Borrowers shall only be required to use
commercially reasonable efforts with respect to obtaining any subordination,
non-disturbance and attornment agreement, with respect to any Mortgage over any
Material Real Property Interests consisting of a leasehold interest.

(c) Notwithstanding anything to the contrary herein, each Federally Regulated
Lender waives and releases any and all liens, security interests or the rights
it may have in and to any Federally Regulated Lender Excluded Property and
reserves all rights as a Secured Party with respect to all Collateral, other
than Federally Regulated Lender Excluded Property.

Section 8.15 Sanctions, Anti-Corruption Laws and Anti-Terrorism Laws. The Parent
Borrower shall maintain in effect the policies and procedures with respect to
Sanctions and Anti-Terrorism Laws specified in Section 7.09(d) and the
anti-corruption laws specified in Section 7.20.

Section 8.16 [Reserved].

Section 8.17 Post-Closing Undertakings. Within the time periods specified on
Schedule 8.17 (or such later date to which the Required Lenders (with written
notice to the Administrative Agent) consent), comply with the provisions set
forth in Schedule 8.17.

Section 8.18 [Reserved].

Section 8.19 Case Milestones. Each Loan Party shall ensure that each of the
milestones set forth below (the “Case Milestones”) is achieved in accordance
with the applicable timing referred to below (or such later dates as approved in
writing by the Required Lenders or the Administrative Agent (with the consent of
the Required Lenders)):

(a) no later than three (3) Business Days following the Petition Date, the
Bankruptcy Court shall have entered the Interim Order;

(b) no later than thirty (30) calendar days following the Petition Date, the
Bankruptcy Court shall have entered the Final Order;

(c) no later than forty (40) calendar days following the Petition Date, a
hearing on confirmation of the Acceptable Plan shall have been heard by the
Bankruptcy Court;

(d) no later than forty-five (45) calendar days following the Petition Date, the
Bankruptcy Court shall have entered the Acceptable Confirmation Order; and

 

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(e) no later than the earliest of (a) thirty-five (35) calendar days after the
Confirmation Date and (b) seventy-five (75) calendar days after the Petition
Date, the Plan Effective Date shall have occurred; provided, however, in the
event that prior to such date all of the conditions to the Plan Effective Date
have been satisfied or, with respect to such conditions that can only be
satisfied on the Plan Effective Date, are capable of being satisfied, except
that the Company Parties have not received all such required regulatory and
competition act consents or approvals, or waiting periods thereof have not
expired, under any applicable jurisdiction, that the Required Lenders consent to
an automatic extension of this Case Milestone regarding the Plan Effective Date
until the earlier of (x) ninety (90) calendar days after the date on which all
of the conditions to the Plan Effective Date have been satisfied or, with
respect to such conditions that can only be satisfied on the Plan Effective
Date, are capable of being satisfied, except that the Company Parties have not
received all such required regulatory and competition act consents or approvals,
or waiting periods thereof have not expired, under any applicable jurisdiction
and (y) five (5) Business Days after the date on which all such required
regulatory and competition act consents and approvals are received and the
waiting periods thereof have expired; provided, further, however, that in each
case, the dates set forth above may be extended with the consent of the Required
Lenders. Notwithstanding the foregoing, so long as the Company Parties are not
otherwise in breach of their obligations hereunder and have used reasonable best
efforts to comply with the Case Milestones, in the event that any of the events
set forth above cannot occur by the corresponding date set forth above as a
result of circumstances beyond the control of the Company Parties relating to
the virus known as COVID-19, such date shall be deemed extended solely to the
extent of the delay resulting from such circumstances; provided that in no event
shall (i) any one Case Milestone and (ii) the extension for all Case Milestones
in this Section 8.19 be extended for longer than ten (10) Business Days in the
aggregate without the consent of the Required Lenders.

Section 8.20 Bankruptcy Covenants.

(a) (i) The Loan Parties shall cause all proposed First Day Orders, “second day”
orders and all other orders establishing procedures for administration of the
Cases or approving significant or outside the ordinary course of business
transactions submitted to the Bankruptcy Court to be in accordance with and
permitted by the terms of this Agreement and reasonably acceptable to the
Required Lenders in all respects.

(ii) The Loan Parties and their Subsidiaries shall comply (i) in all material
respects, after entry thereof, with all of the requirements and obligations set
forth in the Orders and the cash management order, as each such order is amended
and in effect from time to time in accordance with this Agreement, (ii) in all
material respects, after entry thereof, with each order of the type referred to
in clause (b) of the definition of “Approved Bankruptcy Court Order”, as each
such order is amended and in effect in accordance with this Agreement
(including, for the avoidance of doubt, the requirements set forth in clause
(b) of the definition of “Approved Bankruptcy Court Order”) and (iii) in all
material respects, after entry thereof, with the orders (to the extent not
covered by subclause (i) or (ii) above) approving the Debtors’ “first day” and
“second day” relief and any pleadings seeking to establish procedures for
administration of the Cases or approving significant or outside the ordinary
course of business transactions and all obtained in the Cases, as each such
order is amended and in effect in accordance with this Agreement (including, for
the avoidance of doubt, the requirements set forth in clause (c) of the
definition of “Approved Bankruptcy Court Order”).

 

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(b) The Loan Parties shall provide at least five (5) Business Days’ (or such
shorter notice reasonably acceptable to the Required Lenders) prior written
notice to the Lenders or their counsel prior to any filing of a motion for
assumption or rejection of any Loan Party’s or any other Subsidiary’s material
contracts pursuant to Section 365 of the Bankruptcy Code and no such contract or
lease shall be assumed or rejected, if such assumption or rejection would be
materially adverse to the interests of the Secured Parties.

(c) The Loan Parties shall deliver or cause to be delivered to the Required
Lenders or their counsel for review and comment:

(i) as soon as reasonably practicable in advance of (but in no event later than
two (2) Business Days prior to) any filing with the Bankruptcy Court or
delivering to any statutory committee appointed in the Cases or the United
States Trustee (the “U.S. Trustee”), as the case may be, the Final Order and all
other pleadings, proposed orders, and other documents related to or impacting
the Loans or the Prepetition Secured Indebtedness (including, without
limitation, the Loan Documents, the Prepetition Secured Credit Agreement, the
Collateral and the Liens thereon, the Superpriority Claims (including the
priority of such Liens or Superpriority Claims), any other financing or use of
cash collateral, any sale or other disposition of Collateral outside the
ordinary course, cash management, adequate protection, any Chapter 11 Plan
and/or any disclosure statement or supplemental document related thereto); and

(ii) by the earlier of (y) two (2) Business Days prior to being filed (and if
impracticable, then as soon as possible and in no event later than as promptly
as practicable before being filed) on behalf of any of the Debtors with the
Bankruptcy Court and (z) at the same time as such documents are provided by any
of the Debtors to any statutory committee appointed in the Cases or the U.S.
Trustee, all other notices, filings, motions, pleadings or other information
concerning the financial condition of the Borrowers or any of their Subsidiaries
or any request to approve any compromise and settlement of claims or for relief
under Section 363, 365, 1113 or 1114 of the Bankruptcy Code or Section 9019 of
the Federal Rules of Bankruptcy Procedure or any other request for material
relief.

(d) The Loan Parties shall provide (i) if not otherwise provided by the
Bankruptcy Court’s electronic docketing system, copies to the Administrative
Agent of all pleadings, motions, applications, judicial information, financial
information and other documents filed by or on behalf of the Loan Parties with
the Bankruptcy Court or filed with respect to any Loan Document, (ii) reporting
and financial information distributed by or on behalf of the Loan Parties to the
Consenting Secured Lenders (as defined in the Restructuring Support Agreement)
or any statutory committee appointed in the Cases and (iii) such other reports
and information as the Required Lenders may, from time to time, reasonably
request.

 

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(e) In connection with the Cases, the Loan Parties shall give the proper notice
for (i) the motions seeking approval of the Loan Documents and the Orders and
(ii) the hearings for the approval of the Orders. The Borrowers and the other
Loan Parties shall give, on a timely basis as specified in the Orders, all
notices required to be given to all parties specified in the Orders.

(f) The Loan Parties shall use best efforts to obtain the Final Order.

(g) Each Loan Party shall promptly deliver or cause to be delivered to the
Financial Advisor (and the Financial Advisor shall be entitled to deliver such
information to any Lender or Agent subject to the confidentiality requirements
herein) copies of any term sheets, proposals, or presentations from any party,
related to (i) the restructuring of the Loan Parties, or (ii) a material sale of
assets of one or all of the Loan Parties, subject to any existing
confidentiality and other obligations owed by such Loan Party to such party
furnishing such term sheets, proposals or presentations, including with respect
to the sharing of any such information with third parties.

Section 8.21 Budget and Variance Reports.

(a) On or before Thursday, June 11, 2020 and each fourth Thursday thereafter,
the Parent Borrower shall deliver to the Financial Advisor (and the Financial
Advisor shall be entitled to deliver such information to any Lender or Agent) a
Budget, which shall be in substantially the same form and detail of the Initial
Budget, and accompanied by (1) a certificate signed by the chief financial
officer of the Parent Borrower to the effect that such budget has been prepared
in good faith based upon assumptions which the Parent Borrower believes to be
reasonable in light of the conditions existing at the time of delivery and
(2) such supporting documentation as reasonably requested by the Financial
Advisor or the Required Lenders.

(b) Each Budget delivered pursuant to Section 8.21(a) or any proposed amendment
or supplement to the Budget delivered by the Parent Borrower to the Financial
Advisor (and the Financial Advisor shall be entitled to deliver such information
to any Lender or Agent) shall replace, amend or supplement, as the case may be,
the prior Budget hereunder only to the extent that the Required Lenders
affirmatively consent (which consent may be documented pursuant to email) to
such replacement, amendment or supplement.

(c) Beginning on Thursday, June 4, 2020 and each second Thursday thereafter, the
Parent Borrower shall deliver to the Financial Advisor (and the Financial
Advisor shall be entitled to deliver such information to any Lender or Agent) a
Variance Report. Concurrently with delivery of each Variance Report, the chief
financial officer of the Parent Borrower shall deliver an Officer’s Certificate
certifying that the Variance Report demonstrates compliance with Section 9.14.

(d) On Thursday, May 28, 2020 and each Thursday thereafter, the Parent Borrower
shall deliver to the Financial Advisor (and the Financial Advisor shall be
entitled to deliver such information to any Lender or Agent) a Weekly Variance
Report in a form reasonably approved by the Financial Advisor.

Section 8.22 Conference Calls. Unless waived by the Financial Advisor, the
Borrowers will participate in one conference call with the Financial Advisor per
calendar month (commencing in May 2020), at such mutually convenient dates and
times to be proposed by the Financial Advisor that are reasonably acceptable to
the Borrowers upon no less than five (5) Business Days’ prior notice, and will
cause available senior members of management, the Loan Party Financial Advisor,

 

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and, to the extent appropriate, any other investment bankers of the Parent
Borrower and its Restricted Subsidiaries, as applicable or as requested by the
Financial Advisor, to participate in such calls solely for the purpose of
discussing the status of the financial, collateral, and operational condition,
businesses, liabilities, assets, and prospects of the Parent Borrower and its
Restricted Subsidiaries and any strategic transaction efforts. Once the time and
date for the conference call has been selected, any Lender or Agent may
participate in such conference call. Any information disclosed pursuant to such
conference calls (even if disclosed verbally) shall be subject to the
confidentiality restrictions contained herein.

ARTICLE IX

Negative Covenants

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents shall have been paid in full, the Borrowers
covenant and agree with the Administrative Agent and the Lenders on behalf of
the Loan Parties that:

Section 9.01 Restricted Payments. (a) The Parent Borrower shall not, and shall
not permit any of its Restricted Subsidiaries to, directly or indirectly,
(i) declare or pay any dividend or make any other payment or distribution on
account of the Parent Borrower’s or any of its Restricted Subsidiaries’ Equity
Interests (including, without limitation, any such payment in connection with
any merger or consolidation involving Parent Borrower) or to the direct or
indirect holders of Parent Borrower’s Equity Interests in their capacity as such
(other than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of Parent Borrower); (ii) Redeem (including, without
limitation, in connection with any merger or consolidation involving the
Borrower) any Equity Interests of the Parent Borrower or any direct or indirect
parent of the Parent Borrower; (iii) other than the Prepetition ABL Credit
Agreement Refinancing, repay or prepay (x) any Prepetition Indebtedness or
(y) any other Material Debt (other than the Indebtedness); or (iv) make any
Restricted Investment (all such payments and other actions set forth in clauses
(i) through (iv) above being collectively referred to as “Restricted Payments”).

(b) The foregoing provisions will not prohibit any of the following:

(i) the payment of any dividend within sixty (60) days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Agreement;

(ii) [reserved];

(iii) [reserved];

(iv) the payment of any dividend or distribution (other than with Vessel
Collateral or Specified Equity Interests or the proceeds thereof) by a
Restricted Subsidiary of the Parent Borrower to the Parent Borrower or any of
its other Restricted Subsidiaries, and if such Restricted Subsidiary is not a
Wholly-Owned Restricted Subsidiary, to minority holders of the Equity Interests
of such Restricted Subsidiary so long as the Parent Borrower or another
Restricted Subsidiary receives at least its pro rata share of such dividend or
distribution;

 

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(v) [reserved];

(vi) the acquisition of Equity Interests by the Parent Borrower in connection
with the exercise of stock options or stock appreciation rights by way of
cashless exercise or in connection with the satisfaction of withholding tax
obligations;

(vii) in connection with an acquisition by the Parent Borrower or by any of its
Restricted Subsidiaries, the return to the Parent Borrower or any of its
Restricted Subsidiaries of Equity Interests of the Parent Borrower or any of its
Restricted Subsidiaries constituting a portion of the purchase price
consideration in settlement of indemnification claims;

(viii) the purchase by the Parent Borrower of fractional shares of Equity
Interests of the Parent Borrower arising out of stock dividends, splits or
combinations or business combinations;

(ix) [reserved];

(x) [reserved];

(xi) [reserved];

(xii) [reserved];

(xiii) [reserved];

(xiv) [reserved]; and

(xv) redemption of any Equity Interests of the Parent Borrower from Aliens (as
defined in the Certificate of Incorporation) who acquired the same to the extent
contemplated under Article 12, Section 4 of the Certificate of Incorporation.

The amount of all Restricted Payments (other than cash) shall be the Fair Market
Value on the date that asset(s) or securities are proposed to be paid,
transferred or issued by the Parent Borrower or such Restricted Subsidiary, as
the case may be, pursuant to the Restricted Payment, except that the Fair Market
Value of any non-cash dividend made within sixty (60) days after the date of
declaration shall be determined as of such declaration date. The Fair Market
Value of any non-cash Restricted Payment shall be determined in the manner
contemplated by the definition of the term “Fair Market Value,” and the results
of such determination shall be evidenced by an Officer’s Certificate delivered
to the Administrative Agent.

Section 9.02 Incurrence of Debt and Issuance of Disqualified Stock.

(a) The Parent Borrower shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, “incur” or an “incurrence”) any Debt and the
Parent Borrower shall not issue any Disqualified Stock and shall not permit any
of its Restricted Subsidiaries to issue any Disqualified Stock.

 

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(b) The foregoing provisions shall not apply to the incurrence by the Parent
Borrower or any of its Restricted Subsidiaries of any of the following:

(i) [reserved];

(ii) Prepetition Indebtedness;

(iii) Hedging Obligations;

(iv) Indebtedness under this Agreement and the other Loan Documents;

(v) intercompany Debt between or among the Parent Borrower and any of its
Restricted Subsidiaries; provided, that (1) if a Borrower is the obligor on such
Debt and the obligee is not the other Borrower or a Guarantor, such Debt must be
expressly subordinated to the prior payment in full in cash of all obligations
with respect to the Loans and (2) if a Guarantor is the obligor on such Debt and
the obligee is neither a Borrower nor a Guarantor, such Debt must be expressly
subordinated to the prior payment in full in cash of all obligations of such
Guarantor with respect to its Loan Guarantee and (3)(i) any subsequent issuance
or transfer of Equity Interests that results in any such Debt being held by a
Person other than the Parent Borrower or a Restricted Subsidiary of the Parent
Borrower, or (ii) any sale or other transfer of any such Debt to a Person that
is neither the Parent Borrower nor a Restricted Subsidiary of the Parent
Borrower, shall be deemed, in each case, to constitute an incurrence of such
Debt by the Parent Borrower or such Restricted Subsidiary, as the case may be,
as of the date of such issuance, sale or other transfer that is not permitted by
this clause (v);

(vi) Debt in respect of bid, performance or surety bonds issued for the account
of the Parent Borrower or any Restricted Subsidiary thereof, including
guarantees or obligations of the Parent Borrower or any Restricted Subsidiary
thereof with respect to letters of credit or bank guarantees supporting such
bid, performance or surety obligations (in each case other than for an
obligation for money borrowed) or other forms of security or credit enhancement
supporting performance obligations under trade or custom obligations,
third-party maritime claims or service contracts, in each case, in the ordinary
course of business and in an aggregate amount not to exceed $2,500,000

(vii) the guarantee (A) by the Parent Borrower of Debt of any of its Restricted
Subsidiaries that was permitted to be incurred by another provision of this
Section 9.02 or (B) by any Restricted Subsidiary of the Parent Borrower of Debt
of the Parent Borrower or another Restricted Subsidiary of the Parent Borrower
that was permitted to be incurred by another provision of this Section 9.02;

 

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(viii) the incurrence by any Loan Party of Debt represented by Capital Lease
Obligations, operating leases or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase price or
cost of design, construction or installation of property, plant or equipment
used in the business of the Loan Parties and their Subsidiaries, in an aggregate
principal amount incurred pursuant to this clause (viii) not to exceed
$5,000,000 at any time outstanding;

(ix) existing leasehold interests comprising any part of the Real Property
Interests and, subject to any Real Property Interests Mortgage, any renewals,
extensions, modifications, or renegotiations thereof and any additional leases,
rights of use or of passage comprising any part of the Real Property Interests
necessary for the operation or expansion of the Borrowers’ business, whether or
not any such leasehold interests, renewals, extensions, modifications or
renegotiations or such additional leases, rights of use or of passage are
capital leases or operating leases;

(x) Debt in respect of credit cards or purchase cards for purchases, in each
case, in the ordinary course of business and in an aggregate amount outstanding
not to exceed $600,000 at any time; and

(xi) other Debt not otherwise permitted pursuant to this Section 9.02(b) in the
aggregate at any one time outstanding not to exceed $750,000 so long as such
Debt is not Debt for borrowed money or indebtedness evidenced by bonds,
indentures, notes, term loans or similar instruments.

(c) The Borrowers shall not, and shall not permit any Guarantor to, directly or
indirectly, incur any Debt which by its terms (or by the terms of any agreement
governing such Debt) is subordinated to any other Debt of the Parent Borrower,
the Co-Borrower or of such Guarantor, as the case may be, unless such Debt is
also by its terms (or by the terms of any agreement governing such Debt) made
expressly subordinate to the Loans or the Loan Guarantee of such Guarantor, as
the case may be, to the same extent and in the same manner as such Debt is
subordinated pursuant to subordination provisions that are most favorable to the
holders of any other Debt of the Parent Borrower, the Co-Borrower or of such
Guarantor, as the case may be; provided, however, that no Debt shall be deemed
to be contractually subordinated in right of payment to any other Debt solely by
virtue of being unsecured.

(d) Accrual of interest or dividends, the accretion of accreted value, the
accretion or amortization of original issue discount and the payment of interest
or dividends in the form of additional Debt or Disqualified Stock will not be
deemed to be an incurrence of Debt or Disqualified Stock for purposes of this
covenant.

Section 9.03 Liens. The Parent Borrower shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur or assume
any Lien on any of their respective Property, except Permitted Liens.

Section 9.04 Merger or Consolidation. No Borrower or Restricted Subsidiary shall
consolidate or merge with or into (whether or not such Borrower or Restricted
Subsidiary is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its Properties in one
or more related transactions to, another Person, except that: (i) any Guarantor
may consolidate or merge with or into any other Loan Party (as long as the
applicable Borrower is the surviving person in the case of any merger or
consolidation involving a Borrower) and (ii) any Restricted Subsidiary that is
not a Guarantor may consolidate or merge with or into any other Restricted
Subsidiary that is not a Guarantor.

 

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Section 9.05 [Reserved].

Section 9.06 Transactions with Affiliates. The Parent Borrower shall not, and
shall not permit any of its Restricted Subsidiaries to, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its Property to, or
purchase any Property from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an “Affiliate Transaction”),
unless (a) such Affiliate Transaction is on terms that are no less favorable to
the Parent Borrower or its relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the Parent Borrower or such
Restricted Subsidiary with an unrelated Person or, if there is no such
comparable transaction, on terms that are fair and reasonable to the Parent
Borrower or such Restricted Subsidiary, and (b) the Parent Borrower delivers to
the Administrative Agent (i) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess of
$2,500,000, a resolution of the Board of Directors of the Parent Borrower set
forth in a certificate of a Responsible Officer certifying that such Affiliate
Transaction complies with clause (a) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of
Directors and (ii) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$5,000,000, an opinion as to the fairness to the Parent Borrower or the relevant
Subsidiary of such Affiliate Transaction from a financial point of view issued
by an accounting, appraisal or investment banking firm that is, in the judgment
of the Board of Directors, qualified to render such opinion and is independent
with respect to the Parent Borrower, provided, that such opinion will not be
required with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving either (i) shipyard contracts that are awarded
following a competitive bidding process and approved by a majority of the
disinterested members of the Board of Directors or (ii) an Affiliate in which an
unrelated third person owns Voting Stock in excess of that owned by the Parent
Borrower or any of its Restricted Subsidiaries; provided, however, that the
following shall be deemed not to be Affiliate Transactions:

(A) any employment agreement or other employee compensation plan or arrangement
entered into by the Parent Borrower or any of its Restricted Subsidiaries in the
ordinary course of business of the Parent Borrower or such Restricted
Subsidiary;

(B) transactions between or among the Loan Parties;

(C) Permitted Investments and Restricted Payments that are permitted by the
provisions of Section 9.01 of this Agreement;

(D) [reserved];

(E) indemnities of officers, directors and employees of the Parent Borrower or
any of its Restricted Subsidiaries permitted by bylaw or statutory provisions;

 

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(F) maintenance in the ordinary course of business of customary benefit programs
or arrangements for officers, directors and employees of the Parent Borrower or
any of its Restricted Subsidiaries, including without limitation vacation plans,
health and life insurance plans, deferred compensation plans, retirement or
savings plans and similar plans;

(G) registration rights or similar agreements with officers, directors or
significant shareholders of the Parent Borrower or any of its Restricted
Subsidiaries;

(H) issuance of Equity Interests (other than Disqualified Stock) by the Parent
Borrower;

(I) the payment of reasonable and customary regular fees to directors of the
Parent Borrower or any of its Restricted Subsidiaries who are not employees of
the Borrowers or any Affiliate;

(J) [reserved];

(K) time charter, bareboat charter or management agreements, leases, subleases,
intellectual property licenses, rights of use or passage related to Vessels or
the Real Property Interests between the Parent Borrower or any of its Restricted
Subsidiaries and a Joint Venture or a Restricted Subsidiary that is not a Loan
Party made on terms generally consistent with terms available in an arms-length
transaction with an unrelated third party; and

(L) transactions (i) identified on Schedule 9.06(L) and (ii) any other
transaction with an Affiliate that (x) is approved by the Board of Directors and
(y) is substantially similar to any transaction described in Schedule 9.06(L).

Section 9.07 Burdensome Restrictions. The Parent Borrower shall not, and shall
not permit any of its Restricted Subsidiaries to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary of the Parent Borrower
to do any of the following: (a)(i) pay dividends or make any other distributions
to the Parent Borrower or any of its Restricted Subsidiaries on its Equity
Interests or (ii) pay any Debt owed to the Parent Borrower or any of its
Restricted Subsidiaries (it being understood that the priority of any preferred
stock in receiving dividends or liquidating distributions prior to dividends or
liquidating distributions being paid on common stock shall not be deemed a
restriction on the ability to pay dividends or make any other distributions on
Equity Interests); (b) make loans or advances to the Parent Borrower or any of
its Restricted Subsidiaries or (c) transfer any of its properties or assets to
the Parent Borrower or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of:

(1) the Prepetition Indebtedness,

(2) this Agreement and the Security Instruments,

(3) applicable law,

(4) any instrument governing Debt or Equity Interests of a Person acquired by
the Parent Borrower or any of its Restricted Subsidiaries as in effect at the
time of such acquisition (except to the extent such Debt was incurred in
connection with or in contemplation of such acquisition), which encumbrance or
restriction is not applicable to any Person or the assets of any Person, other
than the Person, or the assets of the Person, so acquired, provided, that in the
case of Debt, such Debt was permitted by the terms of this Agreement to be
incurred,

 

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(5) by reason of customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practices,

(6) by reason of customary provisions restricting the transfer of copyrighted or
patented materials consistent with industry practice,

(7) purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (c) above on
the property so acquired,

(8) customary provisions in any agreement creating any Hedging Obligations
permitted under this Agreement,

(9) [reserved],

(10) provisions with respect to the disposition or distribution of assets in
joint venture agreements, asset sale agreements, stock sale agreements and other
similar agreements,

(11) those contracts, agreements or understandings that will govern Permitted
Investments and

(12) restrictions pursuant to the Orders and the First Day Orders.

Section 9.08 Asset Sales. The Parent Borrower shall not, and shall not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale, other than
(x) an Event of Loss or (y) any sale, lease, conveyance or other disposition of
Property of any Debtor pursuant to any order of the Bankruptcy Court, in form
and substance reasonably satisfactory to the Administrative Agent and the
Required Lenders, permitting de minimis asset dispositions without further order
of the Bankruptcy Court, so long as the proceeds thereof are applied in
accordance with Section 3.04(c), if applicable.

Section 9.09 [Reserved].

Section 9.10 [Reserved].

Section 9.11 [Reserved].

Section 9.12 Additional Bankruptcy Matters. No Loan Party shall, and no Loan
Party shall permit any of its Subsidiaries to, without the Required Lenders’
prior written consent, do any of the following:

(a) assert, join, investigate, support or prosecute any claim or cause of action
against any of the Secured Parties (in their capacities as such), unless such
claim or cause of action is in connection with the enforcement of the Loan
Documents against any of the Agents or Lenders;

 

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(b) subject to the terms of the Orders and subject to Article 7, object to,
contest, delay, prevent or interfere with in any material manner the exercise of
rights and remedies by the Agents or the Lenders with respect to the Collateral
following the occurrence of an Event of Default, including without limitation a
motion or petition by any Agent or Lender to lift an applicable stay of
proceedings to do the foregoing (provided, that any Loan Party may contest or
dispute any such motion or petition solely to the extent permitted under the
terms of the Orders); or

(c) except as expressly provided or permitted hereunder (including, without
limitation, to the extent authorized pursuant to any order of the Bankruptcy
Court complying with the terms of this Agreement) or, with the prior consent of
the Required Lenders, as provided pursuant to any other Approved Bankruptcy
Court Order, make any payment or distribution to any non-Debtor affiliate or
insider outside of the ordinary course of business.

Section 9.13 Use of Proceeds. No Collateral, proceeds of the Loans, any portion
of the Carve Out or any other amounts may be used directly or indirectly by any
of the Loan Parties, any statutory committee appointed in the Cases or any
trustee or other estate representative appointed in the Cases (or any successor
case) or any other person or entity (or to pay any professional fees,
disbursements, costs or expenses incurred in connection therewith): (a) to seek
authorization to obtain liens or security interests that are senior to, or on a
parity with, the Liens securing the Indebtedness or the Liens securing the
Prepetition Secured Indebtedness; or (b) to investigate (including by way of
examinations or discovery proceedings), prepare, assert, join, commence, support
or prosecute any action for any claim, counter-claim, action, proceeding,
application, motion, objection, defense, or other contested matter seeking any
order, judgment, determination or similar relief against, or adverse to the
interests of, in any capacity, against the Agents, the Lenders, the Prepetition
Secured Parties and each of their respective officers, directors, controlling
persons, employees, agents, attorneys, affiliates, assigns, or successors of
each of the foregoing, with respect to any transaction, occurrence, omission,
action or other matter (including formal discovery proceedings in anticipation
thereof), including, without limitation, (i) any claims or causes of action
arising under chapter 5 of the Bankruptcy Code; (ii) any so-called “lender
liability” claims and causes of action; (iii) any action with respect to the
validity, enforceability, priority and extent of, or asserting any defense,
counterclaim, or offset to, the Indebtedness, the Liens granted under the Loan
Documents, the Loan Documents, the Prepetition Secured Credit Agreement or the
Prepetition Secured Indebtedness; (iv) any action seeking to invalidate, modify,
set aside, avoid or subordinate, in whole or in part, the Indebtedness or the
Prepetition Secured Indebtedness; (v) any action seeking to modify any of the
rights, remedies, priorities, privileges, protections and benefits granted to
either (A) the Administrative Agent or the Lenders hereunder or under any of the
Loan Documents, or (B) the Prepetition Secured Parties under any of the
Prepetition Secured Credit Documents (in each case, including, without
limitation, claims, proceedings or actions that might prevent, hinder or delay
any of the Agents’ or the Lenders’ assertions, enforcements, realizations or
remedies on or against the Collateral in accordance with the applicable Loan
Documents and the Orders); or (vi) except as set forth in the applicable Order
with respect to any Stay Relief Motion (as defined in such Order), objecting to,
contesting, or interfering with, in any way, the Agents’ and the Lenders’
enforcement or realization upon any of the Collateral once an Event of Default
has occurred; provided, however, that no more than $50,000 in the aggregate of
the Collateral, proceeds from the Borrowings or any other amounts, may be used
by the Creditors’ Committee (as defined in such Order) to investigate claims
and/or liens of the Prepetition Secured Parties under the Prepetition Secured
Credit Documents.

 

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Section 9.14 Budget Variance Covenant. With respect to any Variance Testing
Period, the Loan Parties shall not permit (in each case tested on the date on
which the Parent Borrower delivers a Variance Report pursuant to
Section 8.21(c)):

(a) the negative variance (as compared to the Budget) of the aggregate cash
receipts of the Parent Borrower and its consolidated Restricted Subsidiaries for
such Variance Testing Period to exceed (x) solely with respect to the first
Variance Testing Period, 20.0% and (y) with respect to each Variance Testing
Period thereafter, 15.0%;

(b) the positive variance (as compared to the Budget) of aggregate operating
disbursements (excluding professional fees and expenses) made by the Parent
Borrower and its consolidated Restricted Subsidiaries during such Variance
Testing Period to exceed (x) solely with respect to the first Variance Testing
Period, 20.0% and (y) with respect to each Variance Testing Period thereafter,
15.0%;

(c) the positive variance (as compared to the Budget) of professional fees and
expenses of the Loan Party Financial Advisor paid by the Debtors during such
Variance Testing Period to exceed 15.0%; and

(d) the positive variance (as compared to the Budget) of professional fees and
expenses of Kirkland & Ellis LLP paid by the Debtors during such Variance
Testing Period to exceed 15.0%.

The permitted variances set forth above shall be referred to herein as the
“Budget Variances”.

ARTICLE X

Events of Default; Remedies

Section 10.01 Events of Default. One or more of the following events shall
constitute an “Event of Default”:

(a) the Borrowers shall fail to pay any principal of any Loan when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof, by acceleration or otherwise; and (other than a
payment due on the Maturity Date) such failure is not cured within three
(3) Business Days after the applicable due date.

(b) the Borrowers shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in Section 10.01(a)) payable
under any Loan Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three (3) Business Days.

(c) any representation or warranty made or deemed made pursuant to Section 6.03
by or on behalf of the Parent Borrower, the Co-Borrower or any Guarantor in or
in connection with any Loan Document or any amendment or modification of any
Loan Document or waiver under such Loan Document, or in any report, certificate,
financial statement or other document furnished pursuant to any Loan Document or
any amendment or modification thereof or waiver thereunder, shall prove to have
been incorrect in any material adverse respect when made or deemed made pursuant
to Section 6.03.

 

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(d) the Parent Borrower, the Co-Borrower or any Guarantor shall fail to observe
or perform any covenant, condition or agreement contained in Section 8.04 (with
respect to the existence of the Borrowers), Section 8.07, Section 8.12, 8.17,
8.18, 8.19, 8.20, 8.21 (and, in the case of Section 8.21 only, such failure
shall continue unremedied for a period of three (3) Business Days from the date
of such failure) or 8.22 or in Article IX.

(e) the Parent Borrower, the Co-Borrower or any Guarantor shall fail to observe
or perform any covenant, condition or agreement contained in this Agreement
(other than those specified in Section 10.01(a), Section 10.01(b) or
Section 10.01(d)) or any other Loan Document, and such failure shall continue
unremedied for a period of thirty (30) days after the earlier to occur of
(i) written notice thereof from the Administrative Agent to the Borrowers (which
notice will be given at the written request of the Required Lenders) or (ii) the
chief executive officer or the chief financial officer (or a person holding a
similar title) of the Parent Borrower, the Co-Borrower or any Guarantor
otherwise becoming aware of such default.

(f) the Parent Borrower, the Co-Borrower or any Guarantor shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Debt, when and as the same shall become due and payable;
provided, that this clause (f) shall not apply, in the case of any Debtor, to
any Prepetition Indebtedness.

(g) any event or condition occurs that results in any Material Debt (other than
any Prepetition Indebtedness) becoming due prior to its scheduled maturity or
that enables or permits (after the giving of notice, the lapse of time or both)
the holder or holders of such Material Debt (other than any Prepetition
Indebtedness) or any trustee or administrative agent on its or their behalf to
cause such Material Debt (other than any Prepetition Indebtedness)to become due,
or to require the redemption thereof or any offer to redeem to be made in
respect thereof, prior to its scheduled maturity or require the Borrowers or any
Guarantor being required to make an offer in respect thereof.

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of any Subsidiary of the Parent Borrower that is not a Debtor or its
debts, or of a substantial part of its assets, under any federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Subsidiary of the Parent Borrower that
is not a Debtor or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for sixty (60) days or an
order or decree approving or ordering any of the foregoing shall be entered.

(i) Any Loan Party or any Subsidiary of the Parent Borrower shall

(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
other than the Cases with respect to the Loan Parties that are Debtors;

 

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(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in Section 10.01(h);

(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Parent Borrower, the
Co-Borrower or any Guarantor or for a substantial part of its assets;

(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding;

(v) make a general assignment for the benefit of creditors; or

(vi) take any action for the purpose of effecting any of the foregoing.

(j) one or more judgments for the payment of money in an aggregate amount in
excess of $5,000,000 (to the extent not covered by independent third party
insurance provided by insurers of the highest claims paying rating or financial
strength as to which the insurer does not dispute coverage and is not subject to
an insolvency proceeding) shall be rendered against the Parent Borrower, the
Co-Borrower or any other Debtor (which, in the case of the Debtors only, arose
following the Petition Date) or any combination thereof and the same shall
remain undischarged (or the Borrowers and the other Debtors shall not have
provided for its discharge) for a period of sixty (60) consecutive days during
which execution shall not be effectively stayed and, if stayed pending appeal,
for such longer period during such appeal while providing such accruals as may
be required by GAAP.

(k) any material provision of the Loan Documents, after delivery thereof, shall
for any reason, except to the extent permitted by the terms thereof, cease to be
in full force and effect and valid, binding and enforceable in accordance with
their terms against the Parent Borrower, the Co-Borrower or any Guarantor or
shall be repudiated by any of them, or cease to create a valid and perfected
Lien of the priority required thereby or by the Orders on any material part of
the collateral purported to be covered thereby, (except to the extent permitted
by the terms of this Agreement, or the Parent Borrower, the Co-Borrower or any
Guarantor shall so state in writing) and such invalidity, lack of binding effect
or priority is not cured within ten (10) days after the earliest to occur of
(x) notice from the Administrative Agent (as directed by the Required Lenders)
concerning its belief that a material provision is not valid and binding or
asserting the lack of priority of a Lien, or (y) the chief executive officer or
chief financial officer of the Borrowers otherwise becomes aware that any
material provision is not valid and binding or that a Lien lacks the intended
priority.

(l) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred, has
resulted in, or could reasonably be expected to result in, liability of the
Borrowers and any Guarantor in an aggregate amount that could reasonably be
expected to have a Material Adverse Effect.

(m) a Change in Control shall have occurred.

 

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(n) there occurs any of the following:

(i) the entry of an order dismissing any of the Cases or converting any of the
Cases to a case under chapter 7 of the Bankruptcy Code, or any filing by any
Loan Party (or any affiliate thereof) of a motion or other pleading seeking
entry of such an order;

(ii) a trustee, a responsible officer or an examiner having expanded powers
(beyond those set forth under Sections 1106(a)(3) and (4) of the Bankruptcy
Code) under Bankruptcy Code section 1104 (other than a fee examiner), or any
similar person is appointed or elected in the any of the Cases, any Loan Party
(or any affiliate thereof) applies for, consents to, or fails to contest in, any
such appointment, or the Bankruptcy Court shall have entered an order providing
for such appointment, in each case without the prior written consent of the
Required Lenders;

(iii) the entry of an order or the filing by any Loan Party (or any affiliate
thereof) of an application, motion or other pleading seeking entry of an order
staying, reversing, amending, supplementing, vacating or otherwise modifying the
Interim Order, the Final Order, any Loan Documents, any document relating to the
Prepetition Secured Indebtedness or any of the transactions contemplated in any
of the foregoing, or any of the Borrowers or any of its Affiliates shall apply
for authority to do so, without the prior written consent of the Required
Lenders, or the Interim Order or Final Order shall cease to be in full force and
effect;

(iv) (A) the entry of an order in any of the Cases denying or terminating use of
cash collateral by the Loan Parties that are Debtors; (B) the termination of the
right of any Loan Party that is a Debtor to use any cash collateral under the
Interim Order or the Final Order, and in either case the Debtors have not
otherwise obtained authorization to use cash collateral with the prior written
consent of the Administrative Agent and the Required Lenders; or (C) any other
event that terminates the Loan Parties’ right to use cash collateral;

(v) the entry of an order in any of the Cases granting relief from any stay of
proceeding (including, without limitation, the automatic stay) so as to allow a
third party to proceed against any assets of the Debtors having an aggregate
value of $1,000,000 or to permit other actions that would have a material
adverse effect on the Debtors or their estates;

(vi) any of the Loan Parties or any of their Subsidiaries, or any person
claiming by or through any of the Loan Parties or their Subsidiaries, shall
obtain court authorization to commence, or shall commence, join in, assist,
support or otherwise participate as an adverse party in any motion practice,
suit or other proceeding against (x) the Administrative Agent or the Lenders or
(y) the lenders or agents under any of the Prepetition Secured Credit
Agreements;

(vii) the entry of a final non-appealable order in the Cases charging any of the
Collateral under Section 506(c), Section 552 or any other section of the
Bankruptcy Code against the Lenders or the Prepetition Secured Lenders or the
commencement of any other action or the filing of any motion or other pleading
by the Loan Parties that challenges the rights and remedies of the Agents, the
Lenders or the Prepetition Secured Parties under the Loan Documents, the
Prepetition Secured Credit Agreements and related documents or the Orders or
that is inconsistent with the Loan Documents;

 

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(viii) the entry of an order in any of the Cases granting, or the filing of a
motion by the Loan Parties seeking, authority to use cash collateral (other than
with the prior written consent of the Required Lenders) or to obtain financing
under Section 364 of the Bankruptcy Code (other than the Orders);

(ix) without the written consent of the Required Lenders, the entry of an order
in any of the Cases granting adequate protection to any other person (which, for
the avoidance of doubt, shall not apply to any payments made pursuant to any
Order or any First Day Order reasonably acceptable to the Required Lenders);

(x) termination or expiration of any exclusivity period for any Loan Party to
file or solicit acceptances for an Acceptable Plan;

(xi) the making of any Prepetition Payments other than (A) as permitted by the
Interim Order, the Final Order or the Restructuring Support Agreement and (B) as
permitted by any Acceptable Bankruptcy Court Order and consistent with the
Budget (subject to the Budget Variance), but in the case of clauses (A) and (B)
in amounts not in excess of the amounts set forth for such payments in the
Budget (subject to the Budget Variance);

(xii) an order of the Bankruptcy Court granting, other than in respect of this
Agreement and the Carve Out, any claim entitled to superpriority administrative
expense claim status in the Cases pursuant to Section 364(c)(1) of the
Bankruptcy Code pari passu with or senior to the claims of the Administrative
Agent and the Lenders or the Prepetition Secured Parties, or the filing by any
Loan Party (or any of its affiliates) of a motion or application seeking entry
of such an order;

(xiii) the failure to satisfy any of the Case Milestones in accordance with the
terms relating to such Case Milestones (unless waived or extended with the
consent of the Required Lenders in accordance with the terms hereof);

(xiv) other than with respect to the Carve Out and the Liens permitted to have
such priority under the Loan Documents and the Orders, any Loan Party shall
create or incur, or the Bankruptcy Court enters an order granting, any Lien
which is pari passu with or senior to any Liens under the Loan Documents or the
Liens securing the Prepetition Secured Indebtedness;

(xv) noncompliance in any material respect (including any noncompliance with any
material term) by any Loan Party or any of its Subsidiaries with the terms of
the Interim Order or the Final Order (provided that, to the extent such term is
also reflected in this Agreement or another Loan Document, and noncompliance
therewith is subject to a grace period otherwise provided for herein, such
failure shall be subject to such grace period);

 

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(xvi) any motion, supplement, amendment or other document relating to the
Orders, this Agreement, the Prepetition Secured Credit Agreements or the
transactions contemplated in any of the foregoing that is not in form and
substance satisfactory to the Required Lenders is filed by any Loan Party or
entered by the Bankruptcy Court;

(xvii) the termination of the Restructuring Support Agreement;

(xviii) the filing of a motion, pleading or proceeding by any of the Borrowers
or any of their Affiliates which could reasonably be expected to result in a
material impairment of the rights or interests of the Lenders or a determination
by a court with respect to a motion, pleading or proceeding brought by another
party which results in a material impairment of the rights or interests of the
Lenders;

(xix) the filing of a Chapter 11 Plan that is not an Acceptable Plan;

(xx) any sale of, or the filing by any Loan Party seeking authority to sell, any
Collateral pursuant to Section 363 of the Bankruptcy Code (except for sales or
other dispositions expressly permitted hereunder);

(xxi) any Loan Party (or any of its affiliates) shall file a motion, without the
Required Lenders’ written consent, seeking authority to sell all or
substantially all of its assets in a transaction that is not approved by the
Required Lenders;

(xxii) any Loan Document shall cease to be effective or shall be contested by
the Borrowers or any of their Affiliates; or

(xxiii) the filing or support of any pleading by any Loan Party (or any of its
Subsidiaries) seeking, or otherwise consenting to, any of the matters set forth
in clauses (i) through (xxii) above or which could otherwise be reasonably
expected to result in the occurrence of an Event of Default and such application
is not contested in good faith by the Debtors or any other material subsidiaries
and the relief requested is granted in an order that is not stayed pending
appeal.

Section 10.02 Remedies.

(a) In the case of an Event of Default, at any time thereafter during the
continuance of such Event of Default, but subject to the Orders, the
Administrative Agent may, and at the written request of the Required Lenders
(which, in the case of an Event of Default pursuant to Section 10.01(n)(xvii)
resulting from termination of the Restructuring Support Agreement as a result of
a default thereunder by any Lender, may not include such Lender) shall, by
notice to the Borrowers, take either or both of the following actions, at the
same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees, premiums and
other obligations of the Borrowers accrued hereunder and under the other Loan
Documents, shall become due and payable immediately, without presentment,
demand, protest, notice of intent to accelerate, notice of

 

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acceleration or other notice of any kind, all of which are hereby waived by the
Borrowers; provided, that with respect to the enforcement of Liens or other
remedies with respect to the Collateral of the Debtors, the Administrative Agent
shall provide the Borrowers at least three (3) Business Days’ notice prior to
the taking of such action; provided, that during such period, any party in
interest shall be entitled to seek an emergency hearing with the Bankruptcy
Court solely to the extent permitted under the Orders.

(b) In the case of the occurrence of an Event of Default, the Administrative
Agent (acting at the direction of the Required Lenders) will have all other
rights and remedies available under the Loan Documents or at law and equity.

(c) All proceeds realized from the liquidation or other disposition of
Collateral or otherwise received after maturity of the Loans, whether by
acceleration or otherwise, shall be applied:

(i) first, to payment or reimbursement of that portion of the Indebtedness
constituting fees, expenses and indemnities (including legal fees and expenses)
payable to the Administrative Agent in its capacity as such;

(ii) second, pro rata to payment or reimbursement of that portion of the
Indebtedness constituting fees, expenses and indemnities payable to the Lenders;

(iii) third, pro rata to payment of accrued interest on the Loans;

(iv) fourth, pro rata to payment of principal outstanding on the Loans;

(v) fifth, pro rata to any other Indebtedness; and

(vi) sixth, any excess, after all of the Indebtedness shall have been
indefeasibly paid in full in cash, shall be paid to the Borrowers or as
otherwise required by any Governmental Requirement.

ARTICLE XI

The Agents

Section 11.01 Appointment; Powers. Each of the Lenders hereby appoints
Wilmington Trust as its Administrative Agent and the Collateral Agent (including
as trustee/mortgagee under the Maritime Mortgages and Real Property Interests
Mortgages). Each Lender authorizes the Agents to take such actions on its behalf
and to exercise such powers as are delegated to such Agent by the terms hereof
and the other Loan Documents.

Section 11.02 Duties and Obligations of the Agents. The Agents shall have no
duties or obligations except those expressly set forth in the Loan Documents.
Without limiting the generality of the foregoing, (a) no Agent shall be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing (the use of the term “Administrative Agent”,
“Collateral Agent” or “Agent” herein and in the other Loan Documents with
reference to the Administrative Agent or the Collateral Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law; rather, such

 

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term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties), (b) no Agent shall have any duty to take any discretionary action or
exercise any discretionary powers, except as provided in Section 11.03, and
(c) except as expressly set forth herein, no Agent shall have a duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Parent Borrower or any of its Subsidiaries that is communicated
to or obtained by such Agent or any of its Affiliates in any capacity. The
Agents shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to a responsible officer of such Agent by the
Parent Borrower, the Co-Borrower or a Lender, and shall not be responsible for
or have any duty to ascertain or inquire into:

(i) any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document;

(ii) the contents of any certificate, report or other document delivered
hereunder or under any other Loan Document or in connection herewith or
therewith;

(iii) the performance or observance of any of the covenants, agreements or other
terms or conditions set forth herein or in any other Loan Document;

(iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or
document;

(v) the satisfaction of any condition set forth in Article VI or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to such Agent or as to those conditions precedent expressly required
to be to such Agent’s satisfaction;

(vi) the existence, value, perfection or priority of any collateral security or
the financial or other condition of the Parent Borrower and its Subsidiaries or

(vii) any failure by the Parent Borrower, the Co-Borrower or any other Person
(other than itself) to perform any of its obligations hereunder or under any
other Loan Document or the performance or observance of any covenants,
agreements or other terms or conditions set forth herein or therein.

For purposes of determining compliance with the conditions specified in Article
VI, each Lender shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless an
Agent shall have received written notice from such Lender prior to the proposed
Effective Date specifying its objection thereto.

Section 11.03 Action by Agents. Each Agent shall have no duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that such Agent is required to exercise in writing as directed by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 12.02) and in all cases each
Agent shall be fully justified in failing or refusing to act hereunder or under
any other Loan Documents unless it shall (a) receive written instructions from
the Required Lenders (or such other

 

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number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 12.02) specifying the action to be taken
and (b) be indemnified to its satisfaction by the Lenders against any and all
liability claims, losses, fees and expenses which may be incurred by it by
reason of taking or continuing to take any such action. The instructions as
aforesaid and any action taken or failure to act pursuant thereto by an Agent
shall be binding on all of the Lenders. If a Default has occurred and is
continuing, then an Agent shall take such action with respect to such Default as
shall be directed by the requisite Lenders in the written instructions (with
indemnities satisfactory to it) described in this Section 11.03; provided, that
unless and until such Agent shall have received such directions, such Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default as it shall deem advisable in the interests
of the Lenders. In no event, however, shall an Agent be required to take any
action which exposes such Agent to a risk of personal liability or which is
contrary to this Agreement, the Loan Documents or applicable law. If a Default
has occurred and is continuing, no Agent shall have any obligation to perform
any act in respect thereof. Each Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 12.02), and otherwise such Agent shall
not be liable for any action taken or not taken by it hereunder or under any
other Loan Document or under any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith including
its own ordinary negligence, except for its own gross negligence or willful
misconduct.

Section 11.04 Reliance by Agents. Each Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. Each
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon, except in the case of gross negligence or willful
misconduct by such Agent and each of the Borrowers, the Guarantors, and the
Lenders hereby waives the right to dispute such Agent’s record of such statement
absent manifest error. The Agent shall be entitled to request written
instructions from the Borrower, the Guarantors, the Lenders and the other Loan
Parties, and shall have no responsibility or liability for any losses or damages
of any nature that may arise from any action taken or not taken by the Agent in
accordance with such written direction. Each Agent may consult with legal
counsel (who may be counsel for the Borrowers), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts. Each Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof permitted hereunder shall have been filed with
such Agent.

Section 11.05 Sub-Agents. Each Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-Agents
appointed by such Agent. Each Agent and any such sub-Agent may perform any and
all its duties and exercise its rights and powers through their respective
Related Parties. The exculpatory provisions of the preceding Sections of this
Article XI shall apply to any such sub-Agent and to the Related Parties of such
Agent and any such sub-Agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as such Agent.

 

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Section 11.06 Resignation or Removal of Agents. Subject to the appointment and
acceptance of a successor Agent, including as the case may be, the Collateral
Agent, as trustee/mortgagee under the Maritime Mortgages and Real Property
Interests Mortgages, as provided in this Section 11.06, each Agent may resign at
any time by notifying the Lenders and the Borrowers, and such Agent may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right, in
consultation with the Borrowers, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent gives notice of its
resignation or removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders and at the expense of the Borrowers, appoint a successor
Agent, or an Affiliate of any such Lender as approved by the Required Lenders or
if no such successor shall be appointed by the retiring Agent as aforesaid, the
Required Lenders shall thereafter perform all of the duties of the retiring
Agent hereunder (and the retiring Agent shall be discharged from its duties and
obligations hereunder) until such appointment by the Required Lenders is made
and accepted. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrowers to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrowers and such
successor. After an Agent’s resignation hereunder, the provisions of this
Article XI and Section 12.03 shall continue in effect for the benefit of such
retiring Agent, its sub-Agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as Agent. The institution acting as Collateral Agent shall always also act as
trustee/mortgagee under the Maritime Mortgages and Real Property Interests
Mortgages.

Section 11.07 Agents as Lenders. Each Lender serving as an Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not an Agent, and such Lender and
its Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Parent Borrower or any of its Subsidiaries or
other Affiliates as if it were not an Agent hereunder.

Section 11.08 Funds held by Agents. The Agents shall have no responsibility for
interest or income on any funds held by it hereunder and any funds so held shall
be held uninvested pending distribution thereof.

Section 11.09 No Reliance. Each Lender acknowledges that it has, independently
and without reliance upon any Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and each other Loan Document
to which it is a party. Each Lender also acknowledges that it will,
independently and without reliance upon any Agent or any other Lender and based
on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document, any related
agreement or any document furnished hereunder or thereunder. No Agent shall be
required to keep itself informed as to the performance or observance by the
Parent Borrower or any of its Subsidiaries of this Agreement, the Loan Documents
or any other document referred to or provided for herein or to inspect the
Property or books of the Parent Borrower or its Subsidiaries. Except for
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and information expressly required to be furnished to the Lenders by an Agent
hereunder, no Agent shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the affairs, financial condition
or business of the Borrowers (or any of their Affiliates) which may come into
the possession of such Agent or any of its Affiliates. Each party hereto will
consult with its own legal counsel to the extent that it deems necessary in
connection with the Loan Documents and the matters contemplated therein.

Section 11.10 Agents May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to the Borrowers,
the Guarantors or any of their Subsidiaries, each Agent (irrespective of whether
the principal of any Loan shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether an Agent shall have made
any demand on the Borrowers or the Guarantors) shall be entitled and empowered,
by intervention in such proceeding or otherwise:

(a) to file a proof-of-claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Indebtedness that are
owing and unpaid and to file such other documents as may be necessary and
directed by the Required Lenders in order to have the claims of the Lenders and
the Agents (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Agents and their respective
agents and counsel and all other amounts due the Lenders and the Agents under
Section 12.03) allowed in such judicial proceeding;

(b) to collect and receive any monies or other Property payable or deliverable
on any such claims and to distribute the same; and

(c) and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized and
directed by each Lender to make such payments to the Agents and, in the event
that the Agents shall consent to the making of such payments directly to the
Lenders, to pay to the Agents any amount due for the reasonable compensation,
expenses, disbursements and advances of the Agents and their agents and counsel,
and any other amounts due the Agents under Section 12.03.

Nothing contained herein shall be deemed to authorize any Agent to authorize or
consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the
Indebtedness or the rights of any Lender or to authorize any Agent to vote in
respect of the claim of any Lender in any such proceeding.

Section 11.11 Authority of the Agents to Release Collateral, Liens and
Guarantors. Each Lender hereby authorizes the Collateral Agent to release any
Collateral that is permitted to be sold or released and to release any Guarantor
pursuant to the terms of the Loan Documents. Each Lender hereby authorizes the
Collateral Agent to execute and deliver to the Borrowers, at the Borrowers’ sole
cost and expense, any and all releases of Liens, termination statements,
assignments or other documents reasonably requested by the Borrowers in
connection with any sale or other disposition of Property to the extent such
sale or other disposition is authorized by the terms of the Loan Documents and
complies with Section 9.14 of the Guaranty and Collateral Agreement, as
evidenced in an Officer’s Certificate delivered to the Collateral Agent.

 

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Notwithstanding the foregoing, it is understood and agreed that the Liens on any
Collateral securing the Indebtedness shall not be released (x) upon a sale,
transfer or other disposition of such Collateral to any Person that is, or that
is required to be, in each case at the time of such sale, transfer or other
disposition, a Loan Party (but disregarding the grace period provided for in
Section 8.14(a)(ii)) or (y) if such Collateral is Vessel Collateral, if the
transferee is a Restricted Subsidiary of the Parent Borrower; provided, however,
that in connection with a Foreign Vessel Reflagging Transaction included on
Schedule 8.11(b) and which otherwise is permitted under this Agreement, if the
Person to whom such Collateral is being transferred grants a new Lien on such
Collateral in favor of the Collateral Agent, for the benefit of the Secured
Parties that is comparable, in the good faith determination of the Required
Lenders, in scope, validity and perfection to the existing Lien, then the
Collateral Agent shall release such Collateral. Upon the request of the
Borrowers, in connection with any transaction otherwise permitted hereunder, the
Administrative Agent and/or the Collateral Agent is authorized to release
Collateral that is disposed of (other than to a Person that is, or that is
required to be, in each case at the time of such sale, transfer or other
disposition, a Loan Party (but disregarding the grace period provided for in
Section 8.14(a)(ii)) or whose owner ceases to be a Restricted Subsidiary of the
Parent Borrower) and any Guarantor that ceases to be a Restricted Subsidiary of
the Parent Borrower or otherwise ceases to be required to be a Guarantor under
the Loan Documents.

Section 11.12 Merger, Conversion or Consolidation of Agents. Any corporation
into which the Agents may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Agents shall be a party, or any corporation
succeeding to the corporate trust and loan agency business of the Agents, shall
be the successor of the Agents hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.

Section 11.13 Loan Parties’ Advisors. Notwithstanding the provisions of this
Agreement or any of the Loan Documents, none of the Loan Parties’ financial
advisors or investment bankers shall have any powers, rights, duties,
responsibilities or liabilities with respect to this Agreement and the other
Loan Documents.

ARTICLE XII

Miscellaneous

Section 12.01 Notices.

(a) Except in the case of notices and other communications expressly permitted
to be given by telephone (and subject to Section 12.01(b)), all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

(i) if to the Borrowers (or either of them), to it at:

Hornbeck Offshore Services, Inc.

Hornbeck Offshore Services, LLC

103 Northpark Blvd., Suite 300

 

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Covington, LA 70433

Attention: James O. Harp, Jr., Executive Vice President and Chief Financial
Officer

Email: james.harp@hornbeckoffshore.com

with a copy to:

Hornbeck Offshore Services, Inc.

Hornbeck Offshore Services, LLC

103 Northpark Blvd., Suite 300

Covington, LA 70433

Attention: Samuel A. Giberga, Executive Vice President, General Counsel and
Chief Compliance Officer

Email: samuel.giberga@hornbeckoffshore.com

(ii) if to the Administrative Agent, to it at

Wilmington Trust, National Association

Suite 1290, 50 South Sixth Street

Minneapolis, MN 55402

Attention: Nikki Kroll, Assistant Vice President

Email: nkroll@wilmingtontrust.com

(iii) if to Collateral Agent, to it at:

Wilmington Trust, National Association

Suite 1290, 50 South Sixth Street

Minneapolis, MN 55402

Attention: Nikki Kroll, Assistant Vice President

Email: nkroll@wilmingtontrust.com

(iv) if to any other Lender, to it at its address (or telecopy number) set forth
on its signature page hereto, as the same may be updated from time to time by
written notice to the Administrative Agent and the Borrowers.

(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided, that the foregoing shall not apply to notices
pursuant to Articles II, III, IV and V unless otherwise agreed by the
Administrative Agent and the applicable Lender. Notices and other communications
to the Borrowers may be delivered or furnished by electronic communications;
provided, that unless receipt of such electronic communication is acknowledged
by the Borrowers, such communication is followed by telephonic and hard copy
communication as well. The Administrative Agent may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided, that approval of
such procedures may be limited to particular notices or communications.

 

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(c) Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

Section 12.02 Waivers; Amendments.

(a) No failure on the part of the Administrative Agent or any Lender to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
power or privilege, or any abandonment or discontinuance of steps to enforce
such right, power or privilege, under any of the Loan Documents shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power
or privilege under any of the Loan Documents preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies of the Administrative Agent and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or any other Loan Document or consent to any departure by the
Parent Borrower, the Co-Borrower or any other Loan Party therefrom shall in any
event be effective unless the same shall be permitted by Section 12.02(b), and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any other Lender may
have had notice or knowledge of such Default at the time.

(b) Neither this Agreement nor any provision hereof nor any Security Instrument
nor any provision thereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the Borrowers and the
Required Lenders or by the Borrowers and the Administrative Agent with the
consent of the Required Lenders; provided, that no such agreement shall

(i) increase the Commitment of any Lender without the written consent of such
Lender,

(ii) reduce the principal amount of any Loan or reduce the rate of interest
thereon, or reduce any fees payable hereunder, or reduce any other Indebtedness
hereunder or under any other Loan Document, without the written consent of each
Lender affected thereby,

(iii) postpone the scheduled date of payment or prepayment of the principal
amount of any Loan, or any interest thereon, or any fees payable hereunder, or
any other Indebtedness hereunder or under any other Loan Document, or reduce the
amount of, waive or excuse any such payment, or postpone or extend the Maturity
Date without the written consent of each Lender affected thereby,

(iv) change Section 4.01(b) or Section 4.01(c) in a manner that would alter the
pro rata sharing of payments required thereby, without the written consent of
each Lender,

 

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(v) release all or substantially all of the collateral or all or substantially
all of the value of the guarantees of the Indebtedness made by the Guarantors
without the written consent of each Lender, or

(vi) change any of the provisions of this Section 12.02(b) or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
under any other Loan Documents or make any determination or grant any consent
hereunder or any other Loan Documents, without the written consent of each
Lender,

provided, further, that no such agreement shall amend, modify or otherwise
affect the rights or duties of any Agent hereunder or under any other Loan
Document without the prior written consent of such Agent. Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have any right to
approve or disapprove any amendment, waiver or consent hereunder, except that
the Commitment of such Lender may not be increased or extended without the
consent of such Lender.

(c) Notwithstanding anything to the contrary contained in this Section 12.02,
the Administrative Agent may, with the written consent of the Borrowers and the
Required Lenders only, amend, modify or supplement this Agreement or any of the
other Loan Documents to correct any clerical errors or cure any ambiguity,
omission, mistake, defect or inconsistency so long as such correction is not
adverse to the Lenders as certified in an Officer’s Certificate.

Section 12.03 Expenses, Indemnity; Damage Waiver.

(a) The Borrowers shall pay (i) all reasonable and documented out-of-pocket fees
and expenses incurred by the Agents and the Lenders and their respective
Affiliates, including, without limitation, the reasonable and documented fees,
charges and disbursements of (a) one financial advisor for the Lenders (which,
as of the Effective Date, is Ducera Partners LLC) and (b) counsel for the Agents
and the Lenders (limited to Davis Polk & Wardwell LLP, Blank Rome LLP, Creel,
García-Cuéllar, Aiza y Enriquez, S.C., Pinheiro Neto Advogados, Porter Hedges
LLP, Thompson Hine LLP, Ducera Partners LLC and special and local counsel to the
Lenders in all applicable jurisdictions retained by the Administrative Agent
and/or the Lenders, taken as a whole) and special counsel for each relevant
specialty (which, as of the Effective Date in the case of U.S. maritime law, is
Blank Rome LLP) (and, in the case of an actual conflict of interest, where the
party affected by such conflict, informs the Borrowers of such conflict and
thereafter retains its own counsel, of another firm of counsel for each such
affected person), (ii) all reasonable and documented travel, photocopy, mailing,
courier, telephone and other similar expenses, in connection with the
preparation, negotiation, execution, delivery and administration (both before
and after the execution hereof and including advice of counsel to the Agents
and/or the Lenders as to the rights and duties of the Administrative Agent and
the Lenders with respect thereto) of this Agreement and the other Loan Documents
and any amendments, modifications or waivers of or consents related to the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (iii) all costs, expenses, Taxes,
assessments, paralegal services, notary fees, language translation fees and
other charges incurred by any Agent or any Lender in connection with any filing,
registration, recording or perfection of any security interest contemplated by
this Agreement or any Security Instrument or any other document referred to

 

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therein, and (iv) all out-of-pocket fees and expenses incurred by any Agent or
any Lender, including the fees, charges and disbursements of any counsel for any
Agent or any Lender (but limited to one primary counsel for each of (x) the
Agents and their respective Affiliates, collectively and (y) the Lenders and
their respective Affiliates, collectively, and in each case, if necessary, one
local counsel in each relevant jurisdiction (which may include a single special
counsel acting in multiple jurisdictions) and special counsel for each relevant
specialty (and, in the case of an actual conflict of interest, where the party
affected by such conflict, informs the Borrowers of such conflict and thereafter
retains its own counsel, of another firm of counsel for each such affected
person)), in connection with the enforcement or protection of its rights in
connection with this Agreement or any other Loan Document, including its rights
under this Section 12.03, and including, without limitation, all such
out-of-pocket expenses incurred during any workout or restructuring in respect
of such Loans.

(b) THE BORROWERS SHALL, AND SHALL CAUSE THE OTHER LOAN PARTIES TO, JOINT AND
SEVERALLY INDEMNIFY THE ADMINISTRATIVE AGENT AND EACH LENDER, AND EACH RELATED
PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN
“INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL
LOSSES, CLAIMS, DAMAGES, LIABILITIES, FEES AND RELATED EXPENSES, INCLUDING THE
FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY
OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A
RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE
PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF
THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (ii) THE FAILURE
OF THE PARENT BORROWER OR ANY SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY LOAN
DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT,
(iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR
COVENANT OF ANY LOAN PARTY SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY
INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH,
(iv) ANY LOAN OR THE USE OF THE PROCEEDS THEREFROM, (v) ANY OTHER ASPECT OF THE
LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS OF THE PARENT BORROWER AND
ITS SUBSIDIARIES BY THE PARENT BORROWER AND ITS SUBSIDIARIES, (vii) ANY
ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED
PURSUANT TO THE SECURITY INSTRUMENTS, (viii) ANY ENVIRONMENTAL LIABILITY
RELATING TO THE PARENT BORROWER OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES,
INCLUDING WITHOUT LIMITATION, THE PRESENCE, GENERATION, STORAGE, RELEASE,
THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR
TREATMENT OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS MATERIALS ON ANY
OF THEIR PROPERTIES, (ix) THE BREACH OR NON-COMPLIANCE BY THE PARENT BORROWER OR
ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE PARENT BORROWER OR
ANY SUBSIDIARY, (x) THE PAST OWNERSHIP BY THE

 

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PARENT BORROWER OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON
ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME,
COULD RESULT IN PRESENT LIABILITY, (xi) THE PRESENCE, USE, RELEASE, STORAGE,
TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR
TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF OIL, OIL AND GAS WASTES, SOLID WASTES
OR HAZARDOUS MATERIALS ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE
PARENT BORROWER OR ANY SUBSIDIARY OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE
OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE PARENT
BORROWER OR ANY SUBSIDIARY, (xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY
TO THE PARENT BORROWER OR ANY SUBSIDIARY, (xiii) ANY OTHER ENVIRONMENTAL, HEALTH
OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL
OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED, THAT ANY OF THE ABOVE
INDEMNITIES (EXCEPT FOR ANY INDEMNITIES REGARDING ENVIRONMENTAL LAW) SHALL NOT,
AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM (X) THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR (Y) ANY DISPUTE
SOLELY AMONG INDEMNITEES (OTHER THAN ANY CLAIMS AGAINST AN INDEMNITEE IN ITS
CAPACITY OR IN FULFILLING ITS ROLE AS AN AGENT OR ARRANGER OR ANY SIMILAR ROLE
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT AND OTHER THAN ANY CLAIMS ARISING OUT
OF ANY ACT OR OMISSION OF THE PARENT BORROWER OR ANY OF ITS SUBSIDIARIES). This
Section 12.03(b) shall not apply with respect to Taxes other than any Taxes that
represent losses, claims or damages arising out of any non-Tax claim.

(c) To the extent any Agent is not joint and severally reimbursed and/or
indemnified by the Borrowers and/or the other Loan Parties in accordance with
the provisions of this Agreement, the Lenders will reimburse and indemnify such
Agent, joint and severally, for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by such Agent in connection with or arising out of
any act or omission of such Agent related to its duties hereunder or under any
other Loan Document or the performance thereof or in any way relating to or
arising out of this Agreement or any other Loan Document; provided, that no
Lender, Borrower or other Loan Party shall be liable for any of such
liabilities, obligations,

 

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losses, damages, penalties, claims, actions, judgments, suits, costs, expenses
or disbursements resulting from such Agent’s gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision). In the case of any investigation, litigation or
proceeding giving rise to any claim for indemnification hereunder, this
Section 12.03 applies whether any such investigation, litigation or proceeding
is brought by any Lender or any other Person.

(d) To the extent permitted by applicable law, no Loan Party hereto shall
assert, and each Loan Party hereto hereby waives, any claim against each other,
on any theory of liability, for special, indirect, consequential, incidental or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby or thereby, the Transactions,
any Loan or the use of the proceeds thereof; provided, that the foregoing shall
not limit the Borrower’s, the Lenders’ or the other Loan Parties’
indemnification obligations pursuant to Section 12.03(b) to the extent such
damages are included in any such claim that is entitled to such indemnification.

(e) All amounts due under this Section 12.03 shall be payable not later than ten
(10) days after written demand therefor. This Section 12.03 shall not apply with
respect to Taxes other than any Taxes that represent losses, claims, damages,
etc. arising from any non-Tax claim.

Section 12.04 Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that (i) except as expressly permitted by Section 9.04,
no Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by such Borrower without such consent shall be null and
void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section 12.04. Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in Section 12.04(c)) and,
to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees (other than a Disqualified Lender)
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitments or the Loans at the time owing to it)
pursuant to an Assignment and Assumption Agreement substantially in the form of
Exhibit G (an “Assignment”) with the prior written consent of the Administrative
Agent and the Borrowers (in each case, such consent not to be unreasonably
withheld); provided that (x) no such consent of the Borrowers shall be required
if an Event of Default under Section 10.01(a) or (b) has occurred and is
continuing and (y) no such consent of the Administrative Agent or the Borrowers
shall be required if such assignment is to a Lender, an Affiliate of a Lender,
an Approved Lender or an Approved Fund.

 

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(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender,
an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Loans, the amount of the Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment is
delivered to the Administrative Agent) shall not be less than $1,000,000, unless
the Administrative Agent otherwise consents; provided, that simultaneous
assignments to affiliated funds may be aggregated;

(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement
(provided that the foregoing shall not prohibit any assignment of Loan, separate
from Commitments, or any assignment of Commitments, separate from Loans);

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment, together with a processing and recordation
fee of $3,500; provided, that (x) the Administrative Agent may, elect to waive
or reduce such processing and recordation fee in the case of any assignment and
(y) simultaneous assignments to affiliated funds shall be deemed to constitute a
single assignment for purposes of the foregoing;

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and

(E) notwithstanding anything to the contrary herein, no assignments shall be
made to (1) a Defaulting Lender or any of its Subsidiaries or Affiliates,
(2) the Parent Borrower or any of its Subsidiaries or (3) any Lender if such
Lender would request reimbursement for Indemnified Taxes pursuant to
Section 5.03 or cannot comply with the requirements of Section 5.03(g).

(iii) Subject to Section 12.04(b)(iv) and the acceptance and recording thereof,
from and after the effective date specified in each Assignment the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment, be released from its obligations under
this Agreement (and, in the case of an Assignment covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Section 5.01, Section 5.02, Section 5.03 and Section 12.03 with respect to facts
and circumstances occurring prior to the Effective Date). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 12.04 shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with Section 12.04(c)(i).

 

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(iv) The Administrative Agent, acting for this purpose as an administrative
agent of the Borrowers, shall maintain at one of its offices a copy of each
Assignment delivered to it and a register for the recordation of the names,
addresses and telecopy number of the Lenders, and the Commitment of, and
principal amount (and stated interest) of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive absent manifest error, and the Borrowers, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrowers and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire
and applicable required tax forms (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in Section 12.04(b)
and any written consent to such assignment required by Section 12.04(b), the
Administrative Agent shall accept such Assignment and record the information
contained therein in the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register after meeting the
requirements provided in this Section 12.04(b). The parties hereto agree and
intend that the obligations under this Agreement shall be treated as being in
“registered form” for the purposes of the Code (including Code Sections 163(f),
871(h)(2) and 8831(c)(2)), and the Register and Participant Register shall be
maintained in accordance with such intention.

(c) (i) Any Lender may, without the consent of the Borrowers or the
Administrative Agent, sell participations to one or more Lenders or other
entities (a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided, that (A) such Lender’s obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrowers, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided, that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the proviso to Section 12.02 that affects
such Participant. In addition such agreement must provide that the Participant
be bound by the provisions of Section 12.03. Subject to Section 12.04(c)(ii),
the Borrowers agree that each Participant shall be entitled to the benefits of
Sections 5.01, 5.02 and 5.03 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 12.04(b). To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 12.08 as though it were a Lender; provided, such Participant agrees to
be subject to Section 4.01(c) as though it were a Lender.

 

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(ii) A Participant shall not be entitled to receive any greater payment under
Section 5.02 or Section 5.03 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrowers’
prior written consent or to extent such entitlement to receive a greater payment
results from a Change in Law that occurs after the Participant acquired the
applicable participation. A Participant shall not be entitled to the benefits of
Section 5.03 unless such Participant agrees to comply with Section 5.03(g) as
though it were a Lender (it being understood that the documentation shall be
delivered to the participating Lender).

(iii) Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrowers, maintain a register on which
it enters the name and address of each Participant and the principal amounts
(and stated interest) of each Participant’s interest in the Loans or other
obligations under the Loan Documents (the “Participant Register”); provided,
that no Lender shall have any obligation to disclose all or any portion of the
Participant Register (including the identity of any Participant or any
information relating to a Participant’s interest in any commitments, loans,
letters of credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.

(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including, without limitation, any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section 12.04(d) shall not apply
to any such pledge or assignment of a security interest; provided, that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

(e) Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided, that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver that affects such Participant. Each
Lender that sells a participation agrees, at the Borrowers’ request and expense,
to use reasonable efforts to cooperate with the Borrowers to effectuate the
provisions of Section 2.06 with respect to any Participant. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 12.08 as though it were a Lender; provided, that such Participant agrees
to be subject to Section 4.01 as though it were a Lender.

(f) Notwithstanding anything in this Agreement to the contrary, in no event
shall any Lender or Participant assign any portion of or sell any participations
in its rights and obligations under this Agreement to any Disqualified Lender.
This prohibition shall be included in any documentation effecting an assignment
of any interest herein or in any Loans and any attempted assignment in violation
of this provision shall be void ab initio.

 

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Section 12.05 Survival; Revival; Reinstatement.

(a) All covenants, agreements, representations and warranties made by the
Borrowers herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and so
long as the Commitments have not expired or terminated. The provisions of
Sections 3.05, 5.01, 5.02, 5.03 and 12.03 and Article XI shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the resignation or
removal of any Agent, the expiration or termination of the Commitments or the
termination of this Agreement, any other Loan Document or any provision hereof
or thereof.

(b) To the extent that any payments on the Indebtedness or proceeds of any
Collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any Debtor Relief Law, common law or
equitable cause, then to such extent, the Indebtedness so satisfied shall be
revived and continue as if such payment or proceeds had not been received and
the Administrative Agent’s and the Lenders’ Liens, rights, powers and remedies
under this Agreement and each Loan Document shall continue in full force and
effect. In such event, each Loan Document shall be automatically reinstated and
the Borrowers shall take such action as may be reasonably requested by the
Administrative Agent (as directed by the Required Lenders) to effect such
reinstatement.

Section 12.06 Counterparts; Integration; Effectiveness; Orders Control.

(a) This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. The
exchange of copies of this Agreement and of signature pages by facsimile or PDF
transmission shall constitute effective execution and delivery of this Agreement
as to the parties hereto and may be used in lieu of the original Agreement and
signature pages for all purposes.

(b) This Agreement, the other Loan Documents and any separate letter agreements
with respect to fees payable to the Administrative Agent or the Lenders
constitute the entire contract among the parties relating to the subject matter
hereof and thereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof and
thereof.

 

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(c) Except as provided in Section 6.01, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be as effective as
delivery of a manually executed counterpart of this Agreement.

(d) To the extent that any specific provision hereof is inconsistent with any of
the Orders, the Interim Order or Final Order (as applicable) shall control.

Section 12.07 Severability. Any provision of this Agreement or any other Loan
Document held to be invalid, illegal or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof or thereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

Section 12.08 Right of Setoff. Subject to the Orders and the proviso to
Section 10.02(a), if an Event of Default shall have occurred and be continuing,
each Lender and each of their respective Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by applicable law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender or any such
Affiliate to or for the credit or the account of the Borrowers or any other Loan
Party against any and all of the obligations of the Borrowers or such Loan Party
now or hereafter existing under this Agreement or any other Loan Document to
such Lender or their respective Affiliates, irrespective of whether or not such
Lender or Affiliate shall have made any demand under this Agreement or any other
Loan Document and although such obligations of the Borrowers or such Loan Party
may be contingent or unmatured or are owed to a branch, office or Affiliate of
such Lender different from the branch, office or Affiliate holding such deposit
or obligated on such indebtedness. The rights of each Lender and their
respective Affiliates under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender or their respective
Affiliates may have. Each Lender agrees to notify the Borrowers and the
Administrative Agent promptly after any such setoff and application; provided,
that the failure to give such notice shall not affect the validity of such
setoff and application.

Section 12.09 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL.

(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND (TO THE EXTENT
APPLICABLE) THE BANKRUPTCY CODE.

 

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(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO ANY LOAN DOCUMENT SHALL BE
BROUGHT EXCLUSIVELY IN THE BANKRUPTCY COURT AND, IF THE BANKRUPTCY COURT DOES
NOT HAVE (OR ABSTAINS FROM) JURISDICTION, THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH PARTY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS; PROVIDED, THAT NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO PRECLUDE (I) ANY AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS UNDER THE LOAN DOCUMENTS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE ADMINISTRATIVE AGENT OR
THE COLLATERAL AGENT OR (II) ANY PARTY FROM BRINGING ANY LEGAL ACTION OR
PROCEEDING IN ANY JURISDICTION FOR THE RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT. EACH PARTY HEREBY AGREES THAT A FINAL JUDGMENT IN ANY SUCH LEGAL
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.

(c) EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (ii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR
ADMINISTRATIVE AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER, AND (iii) ACKNOWLEDGES THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION 12.09.

Section 12.10 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

Section 12.11 Confidentiality. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed.

(a) to its and its Affiliates’ directors, officers, employees and Administrative
Agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential),

 

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(b) to the extent requested by any regulatory authority,

(c) to the extent required by applicable laws or regulations or by any subpoena
or similar legal process,

(d) to any other party to this Agreement or any other Loan Document,

(e) in connection with the exercise of any remedies hereunder or under any other
Loan Document or any suit, action or proceeding relating to this Agreement or
any other Loan Document or the enforcement of rights hereunder or thereunder,

(f) subject to an agreement containing provisions substantially the same as
those of this Section 12.11, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any Hedging Obligation relating to the Parent Borrower or the
Co-Borrower, as applicable, and its obligations,

(g) with the consent of the Borrowers or

(h) to the extent such Information (i) becomes publicly available other than as
a result of a breach of this Section 12.11 or (ii) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrowers.

For the purposes of this Section 12.11, “Information” means all information
received from the Parent Borrower or any Subsidiary relating to the Borrowers or
any Subsidiary and their businesses, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by the Parent Borrower or a Subsidiary; provided, that in
the case of information received from the Parent Borrower or any Subsidiary
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section 12.11 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

Section 12.12 Interest Rate Limitation. It is the intention of the parties
hereto that each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Lender under laws applicable to it (including the laws of the United States of
America and the State of New York or any other jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in any of the Loan Documents or any agreement entered into in connection with or
as security for the Loans, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under law applicable to any Lender that
is contracted for, taken, reserved, charged or received by such Lender under any
of the Loan Documents or agreements or otherwise in connection with the Loans
shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be canceled automatically and if
theretofore paid shall be credited by such Lender on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by such Lender to the

 

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Borrowers); and (ii) in the event that the maturity of the Loans is accelerated
by reason of an election of the holder thereof resulting from any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to any Lender may never include more than the maximum amount
allowed by such applicable law, and excess interest, if any, provided for in
this Agreement or otherwise shall be canceled automatically by such Lender as of
the date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Lender on the principal amount of the Indebtedness (or, to the
extent that the principal amount of the Indebtedness shall have been or would
thereby be paid in full, refunded by such Lender to the Borrowers). All sums
paid or agreed to be paid to any Lender for the use, forbearance or detention of
sums due hereunder shall, to the extent permitted by law applicable to such
Lender, be amortized, prorated, allocated and spread throughout the stated term
of the Loans evidenced by the Notes until payment in full so that the rate or
amount of interest on account of any Loans hereunder does not exceed the maximum
amount allowed by such applicable law. If at any time and from time to time
(i) the amount of interest payable to any Lender on any date shall be computed
at the Highest Lawful Rate applicable to such Lender pursuant to this
Section 12.12 and (ii) in respect of any subsequent interest computation period
the amount of interest otherwise payable to such Lender would be less than the
amount of interest payable to such Lender computed at the Highest Lawful Rate
applicable to such Lender, then the amount of interest payable to such Lender in
respect of such subsequent interest computation period shall continue to be
computed at the Highest Lawful Rate applicable to such Lender until the total
amount of interest payable to such Lender shall equal the total amount of
interest which would have been payable to such Lender if the total amount of
interest had been computed without giving effect to this Section 12.12.

Section 12.13 No Third Party Beneficiaries. This Agreement, the other Loan
Documents, and the agreement of the Lenders to make Loans hereunder are solely
for the benefit of the Borrowers, the Guarantors and, unless expressly stated or
referred to herein, no other Person (including, without limitation, any
Subsidiary of the Borrowers, any Subsidiary of the Guarantors, any obligor,
contractor, subcontractor, supplier or materialsman) shall have any rights,
claims, remedies or privileges hereunder or under any other Loan Document
against the Administrative Agent or any Lender for any reason whatsoever. There
are no third party beneficiaries other than the Guarantors or as otherwise
expressly stated or referred to herein.

Section 12.14 Electronic Communications.

(a) The Borrowers hereby agree that, unless otherwise requested by the
Administrative Agent, each will provide to the Administrative Agent all
information, documents and other materials that it is obligated to furnish to
the Administrative Agent pursuant to the Loan Documents, including, without
limitation, all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to a request for a new, or a conversion of an
existing, Borrowing or other extension of credit (including any election of an
interest rate or interest period relating thereto), (ii) relates to the payment
of any principal or other amount due under this Agreement prior to the scheduled
date therefor, (iii) provides notice of any Default or Event of Default under
this Agreement, (iv) is required to be delivered to satisfy any condition
precedent to the effectiveness of this Agreement and/or any Borrowing or other
extension of credit hereunder or (v) initiates or responds to legal process (all
such non-excluded information being referred to herein collectively as the

 

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“Communications”) by transmitting the Communications in an electronic/soft
medium (provided, such Communications contain any required signatures) in a
format acceptable to the Administrative Agent, to such e-mail address designated
by the Administrative Agent from time to time. Each of the Agents and the
Lenders hereby agrees that, unless otherwise requested by the Borrowers, to the
extent such Agent or Lender delivers or furnishes any communication hereunder to
the Loan Parties by electronic communications, unless receipt of such electronic
communication is acknowledged by the Borrowers, such Agent or Lender will
provide such notice or communication by telephone and hard copy communication as
well.

(b) Each party hereto agrees that the Administrative Agent may make the
Communications available to the Lenders by posting the Communications on
IntraLinks or another relevant website, if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent) (the “Platform”). Nothing in this
Section 12.14 shall prejudice the right of the Administrative Agent to make the
Communications available to the Lenders in any other manner specified in the
Loan Documents.

(c) The Parent Borrower hereby acknowledges that certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
nonpublic information with respect to the Borrowers or their securities) (each,
a “Public Lender”). The Parent Borrower hereby agrees that (i) Communications
that may not be made available to Public Lenders shall be clearly and
conspicuously marked “PRIVATE” which, at a minimum, shall mean that the word
“PRIVATE” shall appear prominently on the first page thereof, (ii) by not
marking Communications “PRIVATE,” the Parent Borrower shall be deemed to have
authorized the Administrative Agent and the Lenders to treat such Communications
as either publicly available information or not material information (although
it may be sensitive and proprietary) with respect to the Parent Borrower or its
securities for purposes of United States federal and state securities laws,
(iii) all Communications not marked “PRIVATE” are permitted to be made available
through a portion of the Platform designated “Public Lender,” and (iv) the
Administrative Agent shall be entitled to treat any Communications that are
marked “PRIVATE” as being suitable only for posting on a portion of the Platform
not designated “Public Lender.”

(d) Each Lender agrees that e-mail notice to it (at the address provided
pursuant to the next sentence and deemed delivered as provided in the next
paragraph) specifying that Communications have been posted to the Platform shall
constitute effective delivery of such Communications to such Lender for purposes
of the Loan Documents. Each Lender agrees (i) to notify the Administrative Agent
in writing (including by electronic communication) from time to time to ensure
that the Administrative Agent has on record an effective e-mail address for such
Lender to which the foregoing notice may be sent by electronic transmission and
(ii) that the foregoing notice may be sent to such e-mail address.

(e) Each party hereto agrees that any electronic communication referred to in
this Section 12.14 shall be deemed delivered upon the posting of a record of
such communication (properly addressed to such party at the e-mail address
provided to the Administrative Agent) as “sent” in the e-mail system of the
sending party or, in the case of any such communication to the Administrative
Agent, upon the posting of a record of such communication as “received” in the
e-mail system of the Administrative Agent; provided, that if such communication
is not so received by the Administrative Agent during the normal business hours
of the Administrative Agent, such communication shall be deemed delivered at the
opening of business on the next Business Day for the Administrative Agent.

 

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(f) Each party hereto acknowledges that (i) the distribution of material through
an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (ii) the
Communications and the Platform are provided “as is” and “as available,” (iii)
none of the Administrative Agents, their affiliates nor any of their respective
officers, directors, employees, Administrative Agents, advisors or
representatives (collectively, the “Administrative Agent Parties”) warrants the
adequacy, accuracy or completeness of the Communications or the Platform, and
each Administrative Agent Party expressly disclaims liability for errors or
omissions in any Communications or the Platform, and (iv) no warranty of any
kind, express, implied or statutory, including, without limitation, any warranty
of merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by any
Administrative Agent Party in connection with any Communications or the
Platform.

Section 12.15 USA Patriot Act Notice. Each Lender and the Administrative Agent
hereby notifies the Borrowers that pursuant to the requirements of the USA
PATRIOT Act, it is required to obtain, verify and record information that
identifies the Borrowers, which information includes the names and addresses of
each of the Borrowers and other information that will allow such Lender to
identify the Borrowers in accordance with the USA PATRIOT Act. The Borrowers
hereby each agree that it will provide each Lender and the Administrative Agent
with such information as they may request in order to satisfy the requirement of
the USA PATRIOT Act.

Section 12.16 Acknowledgement and Consent to Bail-In Action. Notwithstanding any
other term of any Loan Document or any other agreement, arrangement or
understanding between the parties hereto, each party hereto acknowledges and
accepts any liability of any Affected Financial Institution arising under any
Loan Document may be subject to the write-down and conversion powers of the
applicable Resolution Authority and agrees and consents to, and acknowledges and
agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by the applicable
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an Affected Financial Institution;

(b) the effects of any Bail-In Action in relation to any such liability,
including, if applicable (i) a reduction, in full or in part, or cancellation of
any such liability; (ii) a conversion of all, or part of, any such liability
into shares or other instruments of ownership in such Affected Financial
Institution, its parent undertaking, or a bridge institution that may be issued
to it or otherwise conferred on it, and that such shares or other instruments of
ownership will be accepted by it in lieu of any rights with respect to any such
liability under any Loan Document; and (iii) a variation of the terms of such
liability in connection with the exercise of the write-down and conversion
powers of the applicable Resolution Authority.

Section 12.17 [Reserved].

 

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Section 12.18 Force Majeure. In no event shall the Agents be responsible or
liable for any failure or delay in the performance of its obligations hereunder
arising out of or caused by, directly or indirectly, forces beyond its control,
including, without limitation, pandemics, public emergencies, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software or hardware)
services; it being understood that the Agents shall use reasonable efforts that
are consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.

Section 12.19 Joint and Several Liability; Etc.

(a) The Borrowers shall have joint and several liability in respect of all
Indebtedness hereunder without regard to any defense (other than the defense of
payment), setoff or counterclaim which may at any time be available to or be
asserted by any other Loan Party against the Lenders, or by any other
circumstance whatsoever (with or without notice to or knowledge of the
Borrowers) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrowers’ liability hereunder, in bankruptcy or in
any other instance, and such Indebtedness of the Borrowers shall not be
conditioned or contingent upon the pursuit by the Lenders or any other person at
any time of any right or remedy against the Borrowers or against any other
person which may be or become liable in respect of all or any part of the
Indebtedness or against any Collateral or guarantee therefor or right of offset
with respect thereto. The Borrowers hereby acknowledge that this Agreement is
the independent and several obligation of each Borrower (regardless of which
Borrower shall have delivered a Borrowing Request) and may be enforced against
each Borrower separately, whether or not enforcement of any right or remedy
hereunder has been sought against any other Borrower. Each Borrower hereby
expressly waives, with respect to any of the Loans made to any other Borrower
hereunder and any of the amounts owing hereunder by such other Loan Parties in
respect of such Loans, diligence, presentment, demand of payment, protest and
all notices whatsoever, and any requirement that the Administrative Agent or any
Lender exhaust any right, power or remedy or proceed against such other Loan
Parties under this Agreement or any other Loan Document or any other agreement
or instrument referred to herein or against any other person under any other
guarantee of, or security for, any of such amounts owing hereunder.

(b) Without in any way affecting or limiting Section 12.19(a), (x) the
Co-Borrower hereby agrees that all actions required or permitted to be taken
hereunder by the Borrowers may be taken by the Parent Borrower on behalf of the
Co-Borrower, and any such action so taken by the Parent Borrower shall be
binding on the Co-Borrower and (y) the Parent Borrower hereby agrees that all
actions required or permitted to be taken hereunder by the Borrowers may be
taken by the Co-Borrower on behalf of the Parent Borrower, and any such action
so taken by the Co-Borrower shall be binding on the Parent Borrower.

[SIGNATURES BEGIN NEXT PAGE]

 

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The parties hereto have caused this Superpriority Debtor-In-Possession Term Loan
Agreement to be duly executed as of the day and year first above written.

 

PARENT BORROWER:   HORNBECK OFFSHORE SERVICES, INC.     By:  

/s/ James O. Harp, Jr.

     

Name:  James O. Harp, Jr.

     

Title:   Executive Vice President and

     

Chief Financial Officer

CO-BORROWER:   HORNBECK OFFSHORE SERVICES, LLC     By:  

/s/ James O. Harp, Jr.

     

Name:  James O. Harp, Jr.

     

Title:   Executive Vice President and

     

Chief Financial Officer

Signature Page – Superpriority Debtor-In-Possession Term Loan Agreement

Hornbeck Offshore Services, Inc.

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ADMINISTRATIVE AGENT:     WILMINGTON TRUST, NATIONAL ASSOCIATION     By:  

/s/ Nicole Kroll

     

Name:  Nicole Kroll

     

Title:   Assistant Vice President

 

 

Signature Page – Superpriority Debtor-In-Possession Term Loan Agreement

Hornbeck Offshore Services, Inc.

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COLLATERAL AGENT:     WILMINGTON TRUST, NATIONAL ASSOCIATION     By:  

/s/ Nicole Kroll

     

Name:  Nicole Kroll

     

Title:   Assistant Vice President

 

 

Signature Page – Superpriority Debtor-In-Possession Term Loan Agreement

Hornbeck Offshore Services, Inc.