Exhibit 10.1

Execution Version

$260,000,000

HORNBECK OFFSHORE SERVICES, INC.

1.500% Convertible Senior Notes due 2019

Purchase Agreement

August 7, 2012

Barclays Capital Inc.

J.P. Morgan Securities LLC

Wells Fargo Securities, LLC

As Representatives of the several

        Initial Purchasers named in Schedule I attached hereto,

c/o Barclays Capital Inc.

745 Seventh Avenue

New York, New York 10019

Ladies and Gentlemen:

Hornbeck Offshore Services, Inc., a Delaware corporation (the “Company”),
proposes to issue and sell to the several initial purchasers listed in Schedule
1 hereto (the “Initial Purchasers”), for whom you are acting as representatives
(the “Representatives”), $260,000,000 principal amount of its 1.500% Convertible
Senior Notes due 2019 (the “Firm Securities”). The Company also proposes to
issue and sell to the Initial Purchasers, not more than an additional
$40,000,000 of its 1.500% Convertible Senior Notes due 2019 (the “Additional
Securities”) if and to the extent that the Initial Purchasers shall have
determined to exercise the right to purchase such additional 1.500% Convertible
Senior Notes due 2019 granted to the Initial Purchasers in Section 1(b) hereof.
The Firm Securities, the Additional Securities and the Guarantees (defined
below) are hereinafter collectively referred to as the “Securities.” The
Securities will be convertible into cash, shares of the Company’s common stock,
par value $0.01 per share (the “Common Stock”) or a combination of cash and
shares of Common Stock, at the Company’s election (any such shares of Common
Stock issuable upon the conversion of the Securities, collectively, the
“Underlying Common Stock”), as set forth in the Offering Memorandum. The
Securities will be issued pursuant to an Indenture to be dated as of August 13,
2012 (the “Indenture”) among the Company, the guarantors listed in Schedule 2
hereto (the “Guarantors”) and Wells Fargo Bank, National Association, as trustee
(the “Trustee”), and will be guaranteed on an unsecured senior basis by each of
the Guarantors (the “Guarantees”).

The Securities will be sold to the Initial Purchasers without being registered
under the Securities Act of 1933, as amended (the “Securities Act”), in reliance
upon an exemption therefrom. The Company and the Guarantors have prepared a
preliminary offering memorandum dated August 6, 2012 (the “Preliminary Offering
Memorandum”) and will prepare an offering memorandum dated the date hereof (the
“Offering

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Memorandum”) setting forth information concerning the Company and the
Securities. Copies of the Preliminary Offering Memorandum have been, and copies
of the Offering Memorandum will be, delivered by the Company to the Initial
Purchasers pursuant to the terms of this Agreement. The Company hereby confirms
that it has authorized the use of the Preliminary Offering Memorandum, the other
Time of Sale Information (as defined below) and the Offering Memorandum in
connection with the offering and resale of the Securities by the Initial
Purchasers in the manner contemplated by this Agreement. Capitalized terms used
but not defined herein shall have the meanings given to such terms in the
Preliminary Offering Memorandum. References herein to the Preliminary Offering
Memorandum, the Time of Sale Information and the Offering Memorandum shall be
deemed to refer to and include any document incorporated by reference therein.

At or prior to the time when sales of the Securities were first made (the “Time
of Sale”), the following information shall have been prepared (collectively, the
“Time of Sale Information”): the Preliminary Offering Memorandum, as
supplemented and amended by the written communications listed on Annex A hereto.

The Company hereby confirms its agreement with the several Initial Purchasers
concerning the purchase and resale of the Securities, as follows:

1. Purchase and Resale of the Securities.

(a) The Company agrees to issue and sell the Firm Securities to the several
Initial Purchasers as provided in this Agreement, and each Initial Purchaser, on
the basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees, severally and not jointly,
to purchase from the Company the respective principal amount of Firm Securities
set forth opposite such Initial Purchaser’s name in Schedule 1 hereto at a price
equal to 97.25% of the principal amount thereof plus accrued interest, if any,
from August 13, 2012 to the Closing Date. The Company will not be obligated to
deliver any of the Securities except upon payment for all the Securities to be
purchased as provided herein.

(b) In addition, the Company hereby agrees, on the basis of the representations
and warranties, covenants and agreements of the Initial Purchasers contained
herein and subject to all the terms and conditions set forth herein, in order to
cover sales in excess of the Firm Securities, to issue and sell to the Initial
Purchasers the Additional Securities, and the Initial Purchasers shall have the
right to purchase, severally and not jointly, up to $40,000,000 aggregate
principal amount of Additional Securities at the purchase price referred to in
the preceding paragraph. The Representatives may exercise this right on behalf
of the Initial Purchasers in whole or from time to time in part by giving
written notice not later than 30 days after the date of this Agreement. Any
exercise notice shall specify the principal amount of Additional Securities to
be purchased by the Initial Purchasers and the date on which such Additional
Securities are to be

 

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purchased. Unless otherwise agreed to by the Company, each purchase date must be
at least one business day after the written notice is given and may not be
earlier than the closing date for the Firm Securities nor later than ten
business days after the date of such notice. On each day, if any, that
Additional Securities are to be purchased (an “Option Closing Date”), each
Initial Purchaser agrees, severally and not jointly, to purchase the principal
amount of Additional Securities (subject to such adjustments to eliminate
fractional Securities as you may determine) that bears the same proportion to
the total principal amount of Additional Securities to be purchased on such
Option Closing Date as the principal amount of Firm Securities set forth in
Schedule I opposite the name of such Initial Purchaser bears to the total
principal amount of Firm Securities; provided, however, that the Initial
Purchasers may not exercise their option to purchase Additional Securities in
whole or in part, unless (i) the delivery of any Additional Securities occurs
within 12 calendar days or less after the delivery of the Firm Securities, and
the other requirements under Treasury Regulation Section 1.1275-1(f)(1) are met;
(ii) neither the Firm Securities nor the Additional Securities are treated as
having been issued with more than a de minimis amount of original issue discount
for U.S. federal income tax purposes (as defined in Section 1273 of the Code and
the Treasury regulations promulgated thereunder); or (iii) the Firm Securities
are publicly traded (within the meaning of Treasury Regulation
Section 1.1273-2(f)) and either (a) the Additional Securities are treated as
having been issued with no more than a de minimis amount of original issue
discount for U.S. federal income tax purposes (determined without the
application of Treasury Regulation Section 1.1275-2(k)) or (b) on the Pricing
Date (as defined below), the yield of the Firm Securities (based on their then
fair market value) is not more than 110% of the yield of such Firm Securities on
their issue date as defined in Treasury Regulation Section 1.1273-2(a)(2) (or
110% of the coupon rate, if the Firm Securities are treated as having been
issued with no more than a de minimis amount of original issue discount for U.S.
federal income tax purposes). The “Pricing Date” shall mean the earlier of
(i) the date on which the price of the Additional Securities is established and
(ii) the later of (A) seven calendar days before the date on which the price of
the Additional Securities is established and (B) the date on which the Company’s
intention to issue the Additional Securities is publicly announced through one
or more media (the date of such public announcement may be the same as the
Closing Date but not earlier than the Closing Date nor later than ten business
days after the date of the exercise notice discussed above).

(c) The Company understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set forth in the Time of Sale Information.
Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:

(i) it is a qualified institutional buyer within the meaning of Rule 144A under
the Securities Act (a “QIB”) and an accredited investor within the meaning of
Rule 501(a) under the Securities Act;

 

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(ii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D under the Securities Act (“Regulation D”) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act; and

(iii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Securities as part of their initial offering
except within the United States to persons whom it reasonably believes to be
QIBs in transactions pursuant to Rule 144A under the Securities Act (“Rule
144A”) and in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of the Securities is aware that
(1) such sale is being made in reliance on Rule 144A, (2) the Securities have
not been and, except as described in the Time of Sale Information, will not be
registered under the Securities Act and (3) the Securities may not be offered,
sold or otherwise transferred except as described in the Time of Sale
Information.

(d) Each Initial Purchaser acknowledges and agrees that the Company and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Sections 6(f) and 6(g), counsel for the Company and counsel for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers, and compliance by the Initial Purchasers
with their agreements, contained in paragraph (c) above, and each Initial
Purchaser hereby consents to such reliance.

(e) The Company acknowledges and agrees that the Initial Purchasers may offer
and sell Securities to or through any affiliate of an Initial Purchaser and that
any such affiliate may offer and sell Securities purchased by it to or through
any Initial Purchaser so long as (i) such offers and sales are consistent with
Section 1(c) and (ii) the Initial Purchasers remain liable for the actions or
omission of any such authorized affiliate to the same extent as if such actions
or omissions were performed by the Initial Purchaser.

(f) The Company and the Guarantors acknowledge and agree that the Initial
Purchasers are acting solely in the capacity of an arm’s length contractual
counterparty to the Company and the Guarantors with respect to the offering of
Securities contemplated hereby (including in connection with determining the
terms of the offering) and not as financial advisors or fiduciaries to, or
agents of, the Company, the Guarantors or any other person. Additionally,
neither the Representatives nor any other Initial Purchaser is advising the
Company, the Guarantors or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company and the
Guarantors shall consult with their own advisors concerning such matters and
shall be responsible for making their own independent investigation and
appraisal of the transactions contemplated hereby, and neither the
Representatives nor any other Initial

 

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Purchaser shall have any responsibility or liability to the Company or the
Guarantors with respect thereto. Any review by the Representatives or any
Initial Purchaser of the Company, the Guarantors, and the transactions
contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Representatives or such Initial
Purchaser, as the case may be, and shall not be on behalf of the Company, the
Guarantors or any other person.

2. Payment and Delivery.

(a) Payment for and delivery of the Securities will be made at the offices of
Vinson & Elkins LLP, First City Tower, 1001 Fannin, Suite 2500, Houston, Texas
77002-6760, at 10:00 A.M., New York City time, on August 13, 2012, or at such
other time or place on the same or such other date, not later than the fifth
business day thereafter, as the Representatives and the Company may agree upon
in writing. The time and date of such payment and delivery is referred to herein
as the “Closing Date”.

Payment for any Additional Securities shall be made to the Company against
delivery of such Additional Securities for the respective accounts of the
several Initial Purchasers at 10:00 A.M., New York City time, on the Option
Closing Date.

(b) Payment for the Securities shall be made by wire transfer in immediately
available funds to the account(s) specified by the Company to the
Representatives against delivery to the Trustee as custodian for The Depository
Trust Company, for the account of the Initial Purchasers, of one or more global
notes representing the Securities (collectively, the “Global Note”), with any
transfer taxes payable in connection with the sale of the Securities to the
Initial Purchasers duly paid by the Company. The Global Note will be made
available for inspection by the Representatives not later than 1:00 P.M., New
York City time, on the business day prior to the Closing Date or the Option
Closing Date, as the case may be.

3. Representations and Warranties of the Company and the Guarantors. The Company
and the Guarantors jointly and severally represent and warrant to each Initial
Purchaser that:

(a) Preliminary Offering Memorandum, Time of Sale Information and Offering
Memorandum. The Preliminary Offering Memorandum, as of its date, did not, the
Time of Sale Information, at the Time of Sale, did not, and at the Closing Date,
will not, and the Offering Memorandum, in the form first used by the Initial
Purchasers to confirm sales of the Securities and as of the Closing Date, will
not, contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company and the Guarantors make no representation or warranty with respect to
any statements or omissions made in reliance upon and in conformity with

 

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information relating to any Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representatives expressly for use
in the Preliminary Offering Memorandum, the Time of Sale Information or the
Offering Memorandum.

(b) Additional Written Communications. The Company (including its agents and
representatives, other than the Initial Purchasers in their capacity as such)
has not prepared, made, used, authorized, approved or referred to and will not
prepare, make, use, authorize, approve or refer to any written communication
that constitutes an offer to sell or solicitation of an offer to buy the
Securities (each such communication by the Company or its agents and
representatives (other than a communication referred to in clauses (i), (ii) and
(iii) below) an “Issuer Written Communication”) other than (i) the Preliminary
Offering Memorandum, (ii) the Offering Memorandum, (iii) the documents listed on
Annex A hereto, including a term sheet substantially in the form of Annex B
hereto, which constitute part of the Time of Sale Information, and (iv) any
electronic road show or other written communications, in each case used in
accordance with Section 4(c). Each such Issuer Written Communication, when taken
together with the Time of Sale Information, did not, and at the Closing Date
will not, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any statements or
omissions made in each such Issuer Written Communication in reliance upon and in
conformity with information relating to any Initial Purchaser furnished to the
Company in writing by such Initial Purchaser through the Representatives
expressly for use in any Issuer Written Communication.

(c) Incorporated Documents. The documents incorporated by reference in each of
the Time of Sale Information and the Offering Memorandum, when filed with the
Securities and Exchange Commission (the “Commission”), conformed or will
conform, as the case may be, in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder, and did
not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

(d) Financial Statements. The financial statements, and the related notes
thereto, of the Company included or incorporated by reference in the Time of
Sale Information and the Offering Memorandum present fairly, in all material
respects, the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of their
operations and the changes in their consolidated cash flows for the periods
specified; and said financial statements have been prepared in conformity with
United States generally accepted accounting principles and practices applied on
a consistent basis, except as described in the notes to such financial
statements; and the

 

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other financial and statistical information and any other financial data
included or incorporated by reference in the Time of Sale Information and the
Offering Memorandum present fairly, in all material respects, the information
purported to be shown thereby at the respective dates or for the respective
periods to which they apply and, to the extent that such information is set
forth in or has been derived from the financial statements and accounting books
and records of the Company, have been prepared on a basis consistent with such
financial statements and the books and records of the Company. The interactive
data in eXtensbile Business Reporting Language included or incorporated by
reference in the Offering Memorandum and the Time of Sale Information fairly
presents the information called for in all material respects and has been
prepared in accordance with the Commission’s rules and guidelines applicable
thereto.

(e) No Material Adverse Change. None of the Company, the Guarantors, or any of
their subsidiaries has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Time of Sale Information
any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Time of Sale Information and the Offering
Memorandum; and, since the respective dates as of which information is given in
the Time of Sale Information and the Offering Memorandum, there has not been any
material change in the capital stock, material increase in long-term debt or any
material decreases in consolidated net current assets or stockholders’ equity of
the Company, the Guarantors, or any of their subsidiaries or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, current or future
consolidated financial position, stockholders’ equity or results of operations
of the Company and its subsidiaries taken as a whole (a “Material Adverse
Effect”);

(f) Organization and Good Standing. Each of the Company and the Guarantors has
been duly incorporated as a corporation or formed as a limited liability company
and is validly existing as a corporation or limited liability company in good
standing under the laws of the State of Delaware, with the corporate or limited
liability company power and authority to own its properties and conduct its
business as described in the Time of Sale Information and the Offering
Memorandum, and has been duly qualified as a foreign corporation or limited
liability company for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except where the
failure to be so qualified or in good standing in any such jurisdiction would
not have a material adverse effect on the ability of the Company and its
subsidiaries taken as a whole to own or lease their properties or conduct their
businesses as described in the Time of Sale Information and the Offering
Memorandum;

 

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(g) Capitalization. The Company had, at the date indicated in the Time of Sale
Information and the Offering Memorandum, a duly authorized, issued and
outstanding capitalization as set forth in the Time of Sale Information and the
Offering Memorandum under the caption “Capitalization”; all of the issued shares
of capital stock of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable; such authorized capital stock of the
Company conforms as to legal matters in all material respects to the description
thereof contained in the Time of Sale Information and the Offering Memorandum;
all of the equity interests in each subsidiary of the Company, have been duly
and validly authorized and issued and are fully paid and non-assessable and are
owned directly or indirectly by the Company, free and clear of any lien, charge,
encumbrance, security interest, restriction on voting or transfer or any other
claim of any third party;

(h) The Indenture. The Indenture has been duly authorized by the Company and the
Guarantors and, when duly executed and delivered by the Company and the
Guarantors (assuming the authorization, execution and delivery by the Trustee),
will constitute a valid and legally binding instrument of the Company and the
Guarantors, enforceable against the Company and the Guarantors in accordance
with its terms, subject as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, fraudulent conveyance, moratorium, reorganization and laws of general
applicability relating to or affecting creditors’ rights and general equity
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law); the Indenture conforms, in all material respects to the
requirements of the Trust Indenture Act of 1939, as amended (the “Trust
Indenture Act”), and the rules and regulations of the Commission applicable to
an indenture that is qualified thereunder; and the Indenture conforms, in all
material respects, to the description thereof in the Time of Sale Information
and the Offering Memorandum;

(i) The Securities. The Securities (except the Guarantees) have been duly
authorized by the Company and, when issued and delivered as provided in this
Agreement and duly authenticated pursuant to the Indenture, will be duly
executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits provided by
the Indenture, enforceable against the Company in accordance with their terms,
subject as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, moratorium, reorganization and laws of general
applicability relating to or affecting creditors’ rights and general equity
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law); and the Securities (except the Guarantees) will conform,
in all material respects, to the descriptions thereof in the Time of Sale
Information and the Offering Memorandum;

(j) The Guarantees. The Guarantees have been duly authorized by the Guarantors,
and, when issued and delivered as provided in this Agreement and duly
authenticated pursuant to the Indenture will be duly executed, authenticated,
issued and delivered and will constitute valid and legally binding obligations
of the Guarantors entitled to the benefits provided by the Indenture

 

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enforceable against the Guarantors in accordance with their terms, subject as to
enforcement, to bankruptcy, insolvency, fraudulent transfer, fraudulent
conveyance, moratorium, reorganization and laws of general applicability
relating to or affecting creditors’ rights and general equity principles
(regardless of whether enforceability is considered in a proceeding in equity or
at law); and the Guarantees will conform, in all material respects, to the
descriptions thereof in the Time of Sale Information and the Offering
Memorandum;

(k) Underlying Common Stock. Upon issuance and delivery of the Securities in
accordance with the Agreement and the Indenture, the Securities (except the
Guarantees) will be convertible at the option of the holder thereof into cash,
the Underlying Common Stock, or a combination of cash and the Underlying Common
Stock, at the Company’s election, in accordance with the terms of the Securities
(except the Guarantees); the Underlying Common Stock reserved for issuance upon
conversion of the Securities (except the Guarantees) has been duly and validly
authorized and reserved by the Company and, when issued upon conversion of the
Securities (except the Guarantees) in accordance with the terms of the
Securities (except the Guarantees), will be validly issued, fully paid and
nonassessable, and the issuance of the Underlying Common Stock will not be
subject to any preemptive or similar rights. The Underlying Common Stock will
conform to the description thereof in each of the Time of Sale Information and
the Offering Memorandum;

(l) Purchase Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors;

(m) Legal Summaries. The statements set forth in the Time of Sale Information
and the Offering Memorandum under the captions “Description of Notes” and
“Description of Capital Stock” and “United States federal income and estate tax
considerations,” insofar as they constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present, in all material
respects, the information called for with respect to such legal matters,
documents or proceedings;

(n) No Violation. None of the Company, the Guarantors, or any of their
subsidiaries is in violation of its certificate of incorporation or certificate
of formation, or its bylaws or limited liability company agreement (or other
organizational documents), or in default in the performance or observance of any
obligation, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, other than such
defaults that individually or in the aggregate would not have a Material Adverse
Effect;

(o) No Conflicts. The issue and sale of the Securities (including the
Guarantees), the issuance of the Underlying Common Stock upon conversion of the
Securities and the compliance by the Company and the Guarantors with all of

 

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the provisions of the Securities, the Guarantees, the Indenture and this
Agreement and the consummation of the transactions herein and therein
contemplated (A) will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, except such conflict, breach
or violation as would not have a Material Adverse Effect, (B) will not result in
any violation of the provisions of the Certificate of Incorporation or bylaws of
the Company or the certificate of formation or limited liability company
agreement of any significant subsidiary, and (C) will not result in the
violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties, except such violations as would not
have a Material Adverse Effect;

(p) No Consents Required. Except as disclosed in the Time of Sale Information
and the Offering Memorandum, no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Securities (including the
Guarantees), the issuance of the Underlying Common Stock upon the conversion of
the Securities or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except for such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Initial Purchasers in the manner
contemplated by this Agreement, the Time of Sale Information and the Offering
Memorandum, the listing of the Underlying Common Stock on the New York Stock
Exchange and except for such consents the failure to obtain would not have a
Material Adverse Effect;

(q) Legal Proceedings. Except as set forth in the Time of Sale Information and
the Offering Memorandum, there are no legal or governmental proceedings pending
to which the Company, the Guarantors, or any of their subsidiaries is a party or
of which any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and, to the
best of the Company’s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;

(r) Independent Accountants. Ernst & Young LLP, who have certified the audited
consolidated financial statements of the Company and its subsidiaries, are
independent public accountants as required under the Securities Act and the
rules and regulations of the Commission thereunder and the rules and regulations
of the Public Company Accounting Oversight Board;

 

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(s) Title to Personal Property. The Company and its subsidiaries own no material
real property (other than leasehold interests); the Company and its subsidiaries
have good title to (i) all barges, tugs, tankers, offshore supply vessels,
multi-purpose supply vessels, anchor-handling towing supply vessels and other
vessels (collectively, “Vessels”) owned by them and (ii) all other personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Time of Sale Information and the
Offering Memorandum or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and except for the leases at HOS
Port, LLC, none of the real property and building space held under lease by the
Company and its subsidiaries are material to the Company and its subsidiaries
taken as a whole and, should their existing leases (except for such HOS Port LLC
leases) expire or terminate, the cost to secure new facilities would not result
in a Material Adverse Effect;

(t) Intellectual Property. The Company and its subsidiaries own or possess
adequate licenses or other rights to use all trademarks, service marks, trade
names and know-how necessary to conduct the businesses now or proposed to be
operated by them as described in the Time of Sale Information and the Offering
Memorandum, and neither the Company nor any of its subsidiaries has received any
notice of conflict with (or knows of any such conflict with) asserted rights of
others with respect to any trademarks, service marks, trade names or know-how
which, if such assertion of conflict were sustained, would individually or in
the aggregate have a Material Adverse Effect;

(u) No Undisclosed Relationships. No relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries, on the one hand, and
the directors, officers, stockholders or other affiliates of the Company or any
of its subsidiaries, on the other, that would be required by the Securities Act
to be described in a registration statement to be filed with the Commission and
that is not so described in each of the Time of Sale Information and the
Offering Memorandum.

(v) Investment Company Act. The Company and the Guarantors are not and, after
giving effect to the offering and sale of the Securities and the application of
the proceeds thereof as described in the Time of Sale Information and the
Offering Memorandum, will not be required to register as an “investment company”
as such term is defined in the Investment Company Act of 1940, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
“Investment Company Act”);

(w) Taxes. The Company and its subsidiaries have filed all necessary federal,
state, local and foreign income and franchise tax returns or have timely
requested extensions thereof and, other than taxes that are currently being
contested in good faith and for which adequate reserves have been provided, have
paid all taxes shown as due thereon or made adequate accruals or

 

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provision therefor, except to the extent such failures to pay or to file as
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and other than tax deficiencies which the Company or
any subsidiary is contesting in good faith and for which the Company or such
subsidiary has provided adequate accruals, there is no tax deficiency that has
been asserted against the Company or any subsidiary that would individually or
in the aggregate have a Material Adverse Effect;

(x) Licenses and Permits. The Company and its significant subsidiaries possess
all licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and have made all declarations and filings with, all
federal, state, local or foreign and other governmental authorities, the
American Bureau of Shipping and all courts and other tribunals, including
without limitation under any applicable Environmental Laws (as defined below),
currently required or necessary to own or lease, as the case may be, and to
operate their properties and to carry on their business as now and proposed to
be conducted as set forth in the Time of Sale Information and the Offering
Memorandum (“Permits”), except where the failure to obtain such Permits would
not individually or in the aggregate have a Material Adverse Effect; the Company
and its subsidiaries have fulfilled and performed all of their obligations with
respect to such Permits and no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or results in
any other material impairment of the rights of the holder of any such Permit,
except where the failure to perform such obligations or the occurrence of such
event would not have a Material Adverse Effect; and neither the Company nor any
of its subsidiaries has received any notice of any proceeding relating to
revocation or modification of any such Permit, except as described in the Time
of Sale Information and the Offering Memorandum and except where such revocation
or modification would not individually or in the aggregate have a Material
Adverse Effect;

(y) No Labor Disputes. There is no strike, labor dispute, slowdown or work
stoppage with the employees of the Company or any of its subsidiaries which is
pending or, to the best of the Company’s knowledge, threatened; neither the
Company nor any of its subsidiaries is a party to or has any obligation under
any collective bargaining agreement or other labor union contract, white paper
or side agreement with any labor union or organization; except as described in
the Time of Sale Information and the Offering Memorandum, to the best of the
Company’s knowledge, no collective bargaining organizing activities are taking
place with respect to the Company or any of its subsidiaries; and the Company
has a policy on drug and alcohol abuse applicable to each of the Vessels that
meets or exceeds the standards contained in the current edition of the Oil
Companies International Marine Forum Guidelines for the Control of Drugs and
Alcohol Onboard Ship;

 

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(z) Compliance With Environmental Laws. Except as described in the Time of Sale
Information and the Offering Memorandum (or any amendment or supplement thereto)
or as would not individually or in the aggregate have a Material Adverse Effect
(A) the Company and its subsidiaries are in compliance with and not subject to
any known liability under applicable Environmental Laws (as defined below),
(B) the Company and its subsidiaries have made all filings and provided all
notices required under any applicable Environmental Laws, and have, and are in
compliance with, all Permits required under any applicable Environmental Laws
and each of them is in full force and effect, (C) there is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request for information
pending or, to the best of the Company’s knowledge, threatened against the
Company or its subsidiaries under any Environmental Law, (D) no lien, charge,
encumbrance or restriction has been recorded under any Environmental Law with
respect to any assets, facility or property owned, operated, leased or
controlled by the Company or any of its subsidiaries, (E) neither the Company
nor any of its subsidiaries has received written notice that it has been
identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(“CERCLA”), or any comparable state law, (F) no property or facility of the
Company or any of its subsidiaries is (i) listed or, to the best of the
Company’s knowledge, proposed for listing on the National Priorities List under
CERCLA or (ii) listed in the Comprehensive Environmental Response, Compensation,
Liability Information System List promulgated pursuant to CERCLA, or on any
comparable list maintained by any state or local governmental authority having
jurisdiction and (G) each Vessel complies with the Federal Water Pollution
Control Act, as amended, and has secured and carries on board a current U.S.
Coast Guard Certificate of Financial Responsibility (Water Pollution);

For purposes of this Agreement, “Environmental Laws” means all applicable
federal treaties and all applicable federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or protection
of public health and safety or the environment, including, without limitation,
laws relating to (i) emissions, discharges, releases or threatened releases of
Hazardous Materials (as defined below) into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata), (ii) the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of Hazardous Materials, and
(iii) underground and above ground storage tanks and related piping, and
emissions, discharges, releases or threatened releases therefrom. For purposes
of this Agreement, “Hazardous Materials” means any pollutant, contaminant,
substance, chemical or material that is listed, classified or regulated as a
hazardous substance, hazardous waste or hazardous material, as defined in any
applicable Environmental Law, to the extent any of the foregoing are present in
a quantity or concentration regulated pursuant to an applicable Environmental
Law;

(aa) Compliance With ERISA. Neither the Company nor any of its subsidiaries has
any liability for any prohibited transaction or funding deficiency or any
complete or partial withdrawal liability with respect to any pension, profit

 

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sharing, 401(k) plan or other plan which is subject to the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), to which the Company or any
of its subsidiaries makes or ever has made a contribution and in which any
employee of the Company or any of its subsidiaries is or has ever been a
participant, except for such liabilities which would not individually or in the
aggregate have a Material Adverse Effect; and with respect to such plans, the
Company and each of its subsidiaries are in compliance in all material respects
with all applicable provisions of ERISA;

(bb) Disclosure Controls. The Company maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) of the Exchange Act) that
comply with the requirements of the Exchange Act; such disclosure controls and
procedures have been designed to ensure that material information relating to
the Company and its subsidiaries is made known to the Company’s principal
executive officer and principal financial executive officer by others within
those entities; and such disclosure controls and procedures are effective;

(cc) Accounting Controls. Company maintains a system of internal control over
financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange
Act) that complies with the requirements of the Exchange Act and has been
designed by the Company’s principal executive officer and principal financial
officer, or under their supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; the Company’s internal control over financial reporting
is effective, and the Company is not aware of any material weaknesses in its
internal control over financial reporting.

(dd) Internal Controls. Since the date of the latest audited financial
statements included or incorporated by reference in the Offering Memorandum and
the Time of Sale Information, there has been no change in the Company’s internal
control over financial reporting that has materially and adversely affected, or
is reasonably likely to materially and adversely affect, the Company’s internal
control over financial reporting.

(ee) Insurance. The Company and its subsidiaries carry insurance in such amounts
and covering such risks as in their determination is adequate for the conduct of
their business or the value of their properties.

(ff) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor,
to the best knowledge of the Company and each of the Guarantors, any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the Foreign

 

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Corrupt Practices Act of 1977; or (iv) made any other unlawful payment from
corporate funds, whether as a bribe, rebate, payoff, influence payment, kickback
or otherwise.

(gg) Compliance with Money Laundering Laws. The operations of the Company and
its subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.

(hh) Compliance with OFAC. None of the Company, any of its subsidiaries or, to
the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury (“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering of the Securities hereunder, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.

(ii) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against any of them or any
Initial Purchaser for a brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Securities.

(jj) Rule 144A Eligibility. When the Securities are issued and delivered
pursuant to this Agreement, no Securities will be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities which are listed on
a national securities exchange registered under Section 6 of the Exchange Act,
or quoted in a U.S. automated inter-dealer quotation system; the Securities
satisfy the requirements set forth in Rule 144A(d)(3) under the Securities Act.

(kk) No Integration. Neither the Company, the Guarantors, nor any affiliate (as
defined in Rule 501(b) of Regulation D) of the Company or the Guarantors has
directly, or through any agent, sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Securities
or the Underlying Common Stock in a manner that would require the registration
under the Securities Act of the offering contemplated by the Time of Sale
Information and the Offering Memorandum.

 

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(ll) No General Solicitation or Directed Selling Efforts. None of the Company,
the Guarantors, any affiliate of the Company or any person acting on its or
their behalf (other than the Initial Purchasers for whom we make no
representation) has offered or sold the Securities or the Underlying Common
Stock by means of any general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act.

(mm) Securities Law Exemptions. Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 1(b) and their
compliance with their agreements set forth therein, it is not necessary, in
connection with the issuance and sale of the Securities to the Initial
Purchasers and the offer, resale and delivery of the Securities by the Initial
Purchasers in the manner contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act.

(nn) No Stabilization. Prior to the date hereof, neither the Company nor any of
its affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company in
connection with the offering of the Securities.

(oo) Margin Rules. None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of the
Securities) will violate or result in a violation of Section 7 of the Exchange
Act, or any regulation promulgated thereunder, including, without limitation,
Regulations T, U, and X of the Board of Governors of the Federal Reserve System.

(pp) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in any of the Time of Sale Information or the Offering Memorandum
has been made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.

(qq) Statistical and Market Data. To the best of the Company’s and the
Guarantors’ knowledge, the statistical and market related data included in the
Time of Sale Information and the Offering Memorandum are based on or derived
from sources which are reliable and accurate in all material respects.

(rr) Sarbanes-Oxley Act. There is and has been no failure on the part of the
Company or any of the Company’s directors or officers, in their capacities as
such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley
Act”), including Section 402 related to loans and Sections 302 and 906 related
to certifications.

 

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4. Further Agreements of the Company and the Guarantors. The Company and each of
the Guarantors jointly and severally covenant and agree with each Initial
Purchaser that:

(a) Delivery of Copies. The Company will deliver, without charge, to the Initial
Purchasers as many copies of the Preliminary Offering Memorandum, any other Time
of Sale Information, any Issuer Written Communication and the Offering
Memorandum (including all amendments and supplements thereto) as the
Representatives may reasonably request.

(b) Offering Memorandum, Amendments or Supplements. Before finalizing the
Offering Memorandum or making or distributing any amendment or supplement to any
of the Time of Sale Information or the Offering Memorandum or, except as
otherwise required by law with respect to any filing on Form 10-K, Form 10-Q or
Form 8-K that is not related to the Securities, filing with the Commission any
document that will be incorporated by reference therein, the Company will
furnish to the Representatives and counsel for the Initial Purchasers a copy of
the proposed Offering Memorandum or such amendment or supplement or document to
be incorporated by reference therein for review, and will not distribute any
such proposed Offering Memorandum, amendment or supplement or file, except as
required by law with respect to any filing on Form 10-K, Form 10-Q or Form 8-K
that is not related to the Securities, any such document with the Commission to
which the Representatives reasonably object.

(c) Additional Written Communications. Before making, preparing, using,
authorizing, approving or referring to any Issuer Written Communication, the
Company will furnish to the Representatives and counsel for the Initial
Purchasers a copy of such written communication for review and will not make,
prepare, use, authorize, approve or refer to any such written communication to
which the Representatives reasonably objects.

(d) Notice to the Representatives. The Company will advise the Representatives
promptly, and, if requested by the Representatives, confirm such advice in
writing (including, without limitation, via email or similar means of electronic
communication), (i) of the issuance by any governmental or regulatory authority
of any order preventing or suspending the use of any of the Time of Sale
Information, any Issuer Written Communication or the Offering Memorandum or the
initiation or threatening of any proceeding for that purpose; (ii) of the
occurrence of any event at any time prior to the completion of the initial
offering of the Securities as a result of which any of the Time of Sale
Information, any Issuer Written Communication or the Offering Memorandum as then
amended or supplemented would include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances existing when such Time of Sale Information,
Issuer

 

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Written Communication or the Offering Memorandum is delivered to a purchaser,
not misleading; and (iii) of the receipt by the Company of any notice with
respect to any suspension of the qualification of the Securities for offer and
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and the Company will use its reasonable best efforts to prevent
the issuance of any such order preventing or suspending the use of any of the
Time of Sale Information, any Issuer Written Communication or the Offering
Memorandum or suspending any such qualification of the Securities and, if any
such order is issued, will use its reasonable best efforts to obtain as soon as
possible the withdrawal thereof.

(e) Time of Sale Information. If at any time prior to the Closing Date (i) any
event shall occur or condition shall exist as a result of which any of the Time
of Sale Information as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (ii) it is necessary to amend or
supplement any of the Time of Sale Information to comply with law, the Company
will immediately notify the Initial Purchasers thereof and forthwith prepare
and, subject to paragraph (b) above, furnish to the Initial Purchasers such
amendments or supplements to any of the Time of Sale Information (or any
document to be filed with the Commission and incorporated by reference therein)
as may be necessary so that the statements in any of the Time of Sale
Information as so amended or supplemented will not, in light of the
circumstances under which they were made, be misleading or so that any of the
Time of Sale Information will comply with law.

(f) Ongoing Compliance of the Offering Memorandum. If at any time prior to the
completion of the initial offering of the Securities (i) any event shall occur
or condition shall exist as a result of which the Offering Memorandum as then
amended or supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Offering Memorandum
is delivered to a purchaser, not misleading or (ii) it is necessary to amend or
supplement the Offering Memorandum to comply with law, the Company will
immediately notify the Initial Purchasers thereof and forthwith prepare and,
subject to paragraph (b) above, furnish to the Initial Purchasers such
amendments or supplements to the Offering Memorandum (or any document to be
filed with the Commission and incorporated by reference therein) as may be
necessary so that the statements in the Offering Memorandum as so amended or
supplemented (including such document to be incorporated by reference therein)
will not, in the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, be misleading or so that the Offering
Memorandum will comply with law.

 

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(g) Blue Sky Compliance. The Company will use its reasonable best efforts to
qualify the Securities and the Underlying Common Stock for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Representatives
shall reasonably request and will use its reasonable best efforts to continue
such qualifications in effect so long as required for the offering and resale of
the Securities; provided that neither the Company nor any of the Guarantors
shall be required to (i) qualify as a foreign corporation or other entity or as
a dealer in securities in any such jurisdiction where it would not otherwise be
required to so qualify, (ii) file any general consent to service of process in
any such jurisdiction or (iii) subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.

(h) Lock-up Period. For a period commencing on the date hereof and ending on the
90th day after the date of the Offering Memorandum (the “Lock-Up Period”), the
Company agrees not to, directly or indirectly (1) offer for sale, sell, pledge
or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any shares of Common Stock or securities convertible
into or exchangeable for Common Stock (other than the shares of Common Stock
issued pursuant to an employee stock purchase plan, or any employee benefit
plans, qualified stock option plans or other director or employee compensation
plans existing on the date hereof or pursuant to currently outstanding options,
warrants or rights not issued under one of those plans), or sell or grant
options, rights or warrants with respect to any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other than the
grant of options pursuant to option plans existing on the date hereof),
(2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, (3) file or cause to be filed a registration
statement, including any amendments, with respect to the registration of any
shares of Common Stock or securities convertible, exercisable or exchangeable
into Common Stock or any other securities of the Company (other than any
registration statement on Form S-8) or (4) publicly disclose the intention to do
any of the foregoing, in each case without the prior written consent of Barclays
Capital Inc. and J.P. Morgan Securities LLC, on behalf of the Initial
Purchasers, and to cause each officer, director and stockholder of the Company
set forth on Schedule 3 hereto to furnish to the Representatives, on or before
August 13, 2012, a letter or letters, substantially in the form of Annex E
hereto (the “Lock-Up Agreements”); provided, however, that the foregoing shall
not apply to (A) the sale of the Securities under this Agreement or the issuance
of the Underlying Common Stock and (B)(i) Common Stock call option transactions
with Barclays Bank PLC and/or other Initial Purchasers or their respective
affiliates pursuant to the confirmation letters dated August 7, 2012 and
(ii) warrant transactions with Barclays Bank PLC and/or other Initial Purchasers
or their respective affiliates pursuant to the confirmation letters dated
August 7, 2012.

 

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(i) Conversion Price. Between the date hereof and the Closing Date (both dates
included), the Company will not do any act or thing which, had the Firm
Securities then been in issue, would result in an adjustment to the conversion
price of the Firm Securities.

(j) Use of Proceeds. The Company will apply the net proceeds from the sale of
the Securities as described in each of the Time of Sale Information and the
Offering Memorandum under the heading “Use of proceeds”.

(k) Supplying Information. So long as any of the Securities or the Underlying
Common Stock are outstanding and are “restricted securities” within the meaning
of Rule 144(a)(3) under the Securities Act, the Company will, furnish at its
expense to the Initial Purchasers, and, upon request, to the holders of the
Securities or the Underlying Common Stock and prospective purchasers of the
Securities or the Underlying Common Stock the information required by Rule
144A(d)(4) under the Securities Act (if any).

(l) DTC. The Company will assist the Initial Purchasers in arranging for the
Securities to be eligible for clearance and settlement through The Depository
Trust Company (“DTC”).

(m) No Resales by the Company. The Company will not, and will not permit any of
its affiliates (as defined in Rule 144 under the Securities Act) to, resell any
of the Securities that have been acquired by any of them, except for Securities
purchased by the Company or any of its affiliates and resold in a transaction
registered under the Securities Act.

(n) No Integration. Neither the Company nor any of its affiliates (as defined in
Rule 501(b) of Regulation D) will, directly or through any agent, sell, offer
for sale, solicit offers to buy or otherwise negotiate in respect of, any
security (as defined in the Securities Act), that is or will be integrated with
the sale of the Securities or the Underlying Common Stock in a manner that would
require registration of the Securities or the Underlying Common Stock under the
Securities Act.

(o) No General Solicitation or Directed Selling Efforts. None of the Company or
any of its affiliates or any other person acting on its or their behalf (other
than the Initial Purchasers, as to which no covenant is given) will solicit
offers for, or offer or sell, the Securities or the Underlying Common Stock by
means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.

(p) No Stabilization. Neither the Company nor any of the Guarantors will take,
directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities.

 

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(q) Reserve. The Company agrees to reserve and keep available at all times, free
of preemptive rights, a sufficient amount of Underlying Common Stock to enable
the Company to satisfy any obligations to issue Underlying Common Stock upon
conversion of the Securities (other than the Guarantees).

(r) Common Stock Listing. The Company agrees to use its reasonable best efforts
to list, subject to notice of issuance, the Underlying Common Stock issuable
upon conversion of the Securities (other than the Guarantees) on the New York
Stock Exchange, and to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a register for the Underlying
Common Stock.

5. Certain Agreements of the Initial Purchasers. Each Initial Purchaser hereby
represents and agrees that it has not and will not use, authorize use of, refer
to, or participate in the planning for use of, any written communication that
constitutes an offer to sell or the solicitation of an offer to buy the
Securities other than (i) the Time of Sale Information and the Offering
Memorandum, (ii) a written communication that contains no “issuer information”
(as defined in Rule 433(h)(2) under the Securities Act) that was not included
(including through incorporation by reference) in the Time of Sale Information
or the Offering Memorandum, (iii) any written communication listed on Annex A or
prepared pursuant to Section 4(c) above (including any electronic road show),
(iv) any written communication prepared by such Initial Purchaser and approved
by the Company in advance in writing or (v) any written communication relating
to or that contains the terms of the Securities and/or other information that
was included (including through incorporation by reference) in the Time of Sale
Information or the Offering Memorandum.

6. Conditions of Initial Purchasers’ Obligations. The obligation of each Initial
Purchaser to purchase Securities on the Closing Date as provided herein is
subject to the performance by the Company and each of the Guarantors of their
respective covenants and other obligations hereunder and to the following
additional conditions:

(a) Representations and Warranties. The representations and warranties of the
Company and the Guarantors contained herein shall be true and correct on the
date hereof and on and as of the Closing Date and any Option Closing Date; and
the statements of the Company, the Guarantors and their respective officers made
in any certificates delivered pursuant to this Agreement shall be true and
correct on and as of the Closing Date and any Option Closing Date.

(b) No Downgrade. Subsequent to the earlier of (A) the Time of Sale and (B) the
execution and delivery of this Agreement, (i) no downgrading shall have occurred
in the rating accorded the Securities or any other debt securities or preferred
stock issued or guaranteed by the Company or any of its subsidiaries by any
“nationally recognized statistical rating organization”, as such term is defined
under Section 3(a)(62) of the Exchange Act; and (ii) no such organization shall
have publicly announced that it has under surveillance or

 

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review, or has changed its outlook with respect to, its rating of the Securities
or of any other debt securities or preferred stock issued or guaranteed by the
Company or any of its subsidiaries (other than an announcement with positive
implications of a possible upgrading).

(c) No Material Adverse Change. No event or condition of a type described in
Section 3(e) hereof shall have occurred or shall exist, which event or condition
is not described in each of the Time of Sale Information (excluding any
amendment or supplement thereto) and the Offering Memorandum (excluding any
amendment or supplement thereto) the effect of which in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement, the Time of Sale Information and the Offering
Memorandum.

(d) Officer’s Certificate. The Representatives shall have received on and as of
the Closing Date and any Option Closing Date a certificate of an executive
officer of the Company and of each Guarantor who has specific knowledge of the
Company’s or such Guarantor’s financial matters and is satisfactory to the
Representatives (i) confirming that such officer has carefully reviewed the Time
of Sale Information and the Offering Memorandum and, to the best knowledge of
such officer, the representations set forth in Sections 3(a) and 3(b) hereof are
true and correct, (ii) confirming that the other representations and warranties
of the Company and the Guarantors in this Agreement are true and correct and
that the Company and the Guarantors have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied hereunder at
or prior to the Closing Date and (iii) to the effect set forth in paragraphs
(b) and (c) above.

(e) Comfort Letters. On the date of this Agreement and on the Closing Date and
any Option Closing Date, Ernst & Young LLP shall have furnished to the
Representatives, at the request of the Company, letters, dated the respective
dates of delivery thereof and addressed to the Initial Purchasers, in form and
substance reasonably satisfactory to the Representatives, containing statements
and information of the type customarily included in accountants’ “comfort
letters” to underwriters with respect to the financial statements and certain
financial information contained or incorporated by reference in each of the Time
of Sale Information and the Offering Memorandum; provided that the letter
delivered on the Closing Date and any Option Closing Date shall use a “cut-off”
date no more than three business days prior to the Closing Date and any Option
Closing Date, as the case may be.

(f) Opinion of Counsel for the Company. Winstead PC, counsel for the Company,
shall have furnished to the Representatives, at the request of the Company,
their written opinion, dated the Closing Date and any Option Closing Date and
addressed to the Initial Purchasers, in form and substance reasonably
satisfactory to the Representatives, to the effect set forth in Annex C hereto.

 

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(g) Opinion of Special Counsel for the Company. Latham and Watkins LLP, special
counsel for the Company, shall have furnished to the Representatives, at the
request of the Company, their written opinion, dated the Closing Date and any
Option Closing Date and addressed to the Initial Purchasers, in form and
substance reasonably satisfactory to the Representatives, to the effect set
forth in Annex D hereto.

(h) Opinion of Counsel for the Initial Purchasers. The Representatives shall
have received on and as of the Closing Date and any Option Closing Date an
opinion of Vinson & Elkins LLP, counsel for the Initial Purchasers, with respect
to such matters as the Representatives may reasonably request, and such counsel
shall have received such documents and information as they may reasonably
request to enable them to pass upon such matters.

(i) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date or any Option Closing Date, prevent the issuance or sale
of the Securities (other than the Guarantees) or the issuance of the Guarantees;
and no injunction or order of any federal, state or foreign court shall have
been issued that would, as of the Closing Date or any Option Closing Date,
prevent the issuance or sale of the Securities (other than the Guarantees) or
the issuance of the Guarantees.

(j) Good Standing. The Representatives shall have received on and as of the
Closing Date and any Option Closing Date satisfactory evidence of the good
standing of the Company and the Guarantors in their respective jurisdictions of
organization and their good standing in such other jurisdictions as the
Representatives may reasonably request, in each case in writing or any standard
form of telecommunication, from the appropriate governmental authorities of such
jurisdictions.

(k) DTC. The Securities shall be eligible for clearance and settlement through
DTC.

(l) Listing. The Company shall have used its reasonable best efforts to have the
Underlying Common Stock issuable upon conversion of the Securities duly listed,
subject to notice of issuance, on the New York Stock Exchange.

(m) Lock-up Agreements. The Lock-Up Agreements between the Representatives and
the officers, directors and stockholders of the Company set forth on Schedule 3,
delivered to the Representatives on or before August 13, 2012, shall be in full
force and effect on the Closing Date and the Option Closing Date, as the case
may be.

 

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(n) Additional Documents. On or prior to the Closing Date and any Option Closing
Date, the Company and the Guarantors shall have furnished to the Representatives
such further certificates and documents as the Representatives may reasonably
request.

The several obligations of the Initial Purchasers to purchase Additional
Securities hereunder are subject to the delivery to the Representatives on the
applicable Option Closing Date of such documents as the Representatives may
reasonably request with respect to the good standing of the Company, the due
authorization and issuance of the Additional Securities to be sold on such
Option Closing Date and other matters related to the issuance of such Additional
Securities.

All opinions, letters, certificates and evidence mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.

7. Indemnification and Contribution.

(a) Indemnification of the Initial Purchasers. The Company and each of the
Guarantors jointly and severally agree to indemnify and hold harmless each
Initial Purchaser, its affiliates, directors and officers and each person, if
any, who controls such Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation,
reasonable legal fees and other expenses incurred in connection with any suit,
action or proceeding or any claim asserted, as such fees and expenses are
incurred), joint or several, that arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum, any of the other Time of Sale Information, any
Issuer Written Communication or the Offering Memorandum (or any amendment or
supplement thereto) or any omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, in each case
except insofar as such losses, claims, damages or liabilities arise out of, or
are based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to any Initial Purchaser furnished to the Company in writing by such Initial
Purchaser through the Representatives expressly for use therein.

(b) Indemnification of the Company. Each Initial Purchaser agrees, severally and
not jointly, to indemnify and hold harmless the Company, each of the Guarantors,
each of their respective directors and officers and each person, if any, who
controls the Company or any of the Guarantors within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the indemnity set forth in paragraph (a) above, but only with respect to any
losses, claims, damages or liabilities that arise out of, or are based upon,

 

24

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any untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to such Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through
the Representatives expressly for use in the Preliminary Offering Memorandum,
any of the other Time of Sale Information, any Issuer Written Communication or
the Offering Memorandum (or any amendment or supplement thereto), it being
understood and agreed that the only such information consists of the following:
the fourth and ninth paragraphs under the caption “Plan of Distribution” in the
Offering Memorandum.

(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the “Indemnified
Person”) shall promptly notify the person against whom such indemnification may
be sought (the “Indemnifying Person”) in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under paragraph (a) or (b) above except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided, further, that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have to
an Indemnified Person otherwise than under paragraph (a) or (b) above. If any
such proceeding shall be brought or asserted against an Indemnified Person and
it shall have notified the Indemnifying Person thereof, the Indemnifying Person
shall retain counsel reasonably satisfactory to the Indemnified Person (who
shall not, without the consent of the Indemnified Person, be counsel to the
Indemnifying Person) to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 7 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such
proceeding and shall pay the fees and expenses of such counsel related to such
proceeding, as incurred. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
contrary; (ii) the Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified Person; (iii) the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it that are different from or in addition to those
available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood and agreed that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for

 

25

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any Initial Purchaser, its affiliates, directors and officers and any control
persons of such Initial Purchaser shall be designated in writing by the
Representatives and any such separate firm for the Company, the Guarantors,
their respective directors and officers and any control persons of the Company
and the Guarantors shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. No Indemnifying Person shall, without the
written consent of the Indemnified Person, effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.

(d) Contribution. If the indemnification provided for in paragraphs (a) or
(b) above is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Initial Purchasers on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and the
Guarantors on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantors on the one hand and
the Initial Purchasers on the other shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses) received by the
Company from the sale of the Securities and the total discounts and commissions
received by the Initial Purchasers in connection therewith, as provided in this
Agreement, bear to the aggregate offering price of the Securities. The relative
fault of the Company and the Guarantors on the one hand and the Initial
Purchasers on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or any Guarantor or by the Initial Purchasers and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

 

26

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(e) Limitation on Liability. The Company, the Guarantors and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall an Initial Purchaser be required to contribute any
amount in excess of the amount by which the total discounts and commissions
received by such Initial Purchaser with respect to the offering of the
Securities exceeds the amount of any damages that such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers’ obligations to contribute
pursuant to this Section 7 are several in proportion to their respective
purchase obligations hereunder and not joint.

(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies that may otherwise be
available to any Indemnified Person at law or in equity.

8. Termination. This Agreement may be terminated in the sole discretion of the
Representatives, by notice to the Company, if after the execution and delivery
of this Agreement and on or prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on the New York Stock Exchange
or the over-the-counter market; (ii) trading of any securities issued or
guaranteed by the Company or any of the Guarantors shall have been suspended on
any exchange or in any over-the-counter market; (iii) a general moratorium on
commercial banking activities shall have been declared by federal or New York
State authorities; or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis,
either within or outside the United States, that, in the judgment of the
Representatives after consultation with the Company, is material and adverse and
makes it impracticable or inadvisable to proceed with the offering, sale or
delivery, of the Securities on the terms and in the manner contemplated by this
Agreement, the Time of Sale Information and the Offering Memorandum.

9. Defaulting Initial Purchaser.

(a) If, on the Closing Date or the Option Closing Date, as the case may be, any
Initial Purchaser defaults on its obligation to purchase the Securities that it
has agreed to purchase hereunder, the non-defaulting Initial Purchasers may in
their discretion arrange for the purchase of such Securities by other persons

 

27

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satisfactory to the Company on the terms contained in this Agreement. If, within
36 hours after any such default by any Initial Purchaser, the non-defaulting
Initial Purchasers do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of 36 hours within which to
procure other persons satisfactory to the non-defaulting Initial Purchasers to
purchase such Securities on such terms. If other persons become obligated or
agree to purchase the Securities of a defaulting Initial Purchaser, either the
non-defaulting Initial Purchasers or the Company may postpone the Closing Date
or the Option Closing Date, as the case may be, for up to five full business
days in order to effect any changes that in the opinion of counsel for the
Company or counsel for the Initial Purchasers may be necessary in the Time of
Sale Information, the Offering Memorandum or in any other document or
arrangement, and the Company agrees to promptly prepare any amendment or
supplement to the Time of Sale Information or the Offering Memorandum that
effects any such changes. As used in this Agreement, the term “Initial
Purchaser” includes, for all purposes of this Agreement unless the context
otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to
this Section 9, purchases Securities that a defaulting Initial Purchaser agreed
but failed to purchase.

(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph
(a) above, the aggregate principal amount of such Securities that remains
unpurchased does not exceed one-tenth of the aggregate principal amount of all
the Securities to be purchased on such date, then the Company shall have the
right to require each non-defaulting Initial Purchaser to purchase the principal
amount of Securities that such Initial Purchaser agreed to purchase hereunder on
such date plus such Initial Purchaser’s pro rata share (based on the principal
amount of Securities that such Initial Purchaser agreed to purchase hereunder on
such date) of the Securities of such defaulting Initial Purchaser or Initial
Purchasers for which such arrangements have not been made.

(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph
(a) above, the aggregate principal amount of such Securities that remains
unpurchased exceeds one-tenth of the aggregate principal amount of all the
Securities to be purchased on such date, or if the Company shall not exercise
the right described in paragraph (b) above, then this Agreement or, with respect
to the Option Closing Date, the obligation of the Initial Purchasers to purchase
Additional Securities on the Option Closing Date, as the case may be, shall
terminate without liability on the part of the non-defaulting Initial
Purchasers. Any termination of this Agreement pursuant to this Section 9 shall
be without liability on the part of the Company or the Guarantors, except that
the Company and each of the Guarantors will continue to be liable for the
payment of expenses as set forth in Section 10 hereof and except that the
provisions of Section 7 hereof shall not terminate and shall remain in effect.

 

28

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(d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any
liability it may have to the Company, the Guarantors or any non-defaulting
Initial Purchaser for damages caused by its default.

10. Payment of Expenses.

(a) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company and each of the
Guarantors jointly and severally agree to pay or cause to be paid all costs and
expenses incident to the performance of their respective obligations hereunder,
including without limitation, (i) the costs incident to the authorization,
issuance, sale, preparation and delivery of the Securities and any taxes payable
in that connection; (ii) the costs incident to the preparation and printing of
the Preliminary Offering Memorandum, any other Time of Sale Information, any
Issuer Written Communication and the Offering Memorandum (including any
amendment or supplement thereto) and the distribution thereof; (iii) the costs
of reproducing and distributing this Agreement, the Indenture and the Global
Notes; (iv) the fees and expenses of the Company’s and the Guarantors’ counsel
and independent accountants; (v) the fees and expenses incurred in connection
with the registration or qualification and determination of eligibility for
investment of the Securities or the Underlying Common Stock under the laws of
such jurisdictions as the Representatives may designate and the preparation,
printing and distribution of a Blue Sky Memorandum (including the related fees
and expenses of counsel for the Initial Purchasers); (vi) any fees charged by
rating agencies for rating the Securities; (vii) the fees and expenses of the
Trustee and any paying agent (including related fees and expenses of any counsel
to such parties); (viii) all expenses and application fees incurred in
connection with the approval of the Securities for book-entry transfer by DTC;
(ix) all fees and expenses in connection with the listing of the Underlying
Common Stock on the New York Stock Exchange, and (x) all expenses incurred by
the Company in connection with any “road show” presentation to potential
investors.

(b) If (i) this Agreement is terminated pursuant to Section 8(ii), (ii) the
Company for any reason fails to tender the Securities for delivery to the
Initial Purchasers or (iii) the Initial Purchasers decline to purchase the
Securities for any reason permitted under this Agreement (other than pursuant to
Section 8(i), (iii), or (iv)), the Company and each of the Guarantors jointly
and severally agrees to reimburse the Initial Purchasers for all out-of-pocket
costs and expenses (including the reasonable fees and expenses of their counsel)
reasonably incurred by the Initial Purchasers in connection with this Agreement
and the offering contemplated hereby.

11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and any controlling persons referred to herein, and the affiliates,
officers and directors of each Initial Purchaser referred to in Section 7
hereof. Nothing in this Agreement is intended or shall be construed to give any
other person any legal or equitable right,

 

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remedy or claim under or in respect of this Agreement or any provision contained
herein. No purchaser of Securities from any Initial Purchaser shall be deemed to
be a successor merely by reason of such purchase.

12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantors and
the Initial Purchasers contained in this Agreement or made by or on behalf of
the Company, the Guarantors or the Initial Purchasers pursuant to this Agreement
or any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination or completion of this Agreement or any investigation made by
or on behalf of the Company, the Guarantors or the Initial Purchasers.

13. Certain Defined Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the term “affiliate” has the meaning set forth in
Rule 405 under the Securities Act; (b) the term “business day” means any day
other than a day on which banks are permitted or required to be closed in New
York City; (c) the term “Exchange Act” means the Securities Exchange Act of
1934, as amended; (d) the term “subsidiary” has the meaning set forth in Rule
405 under the Securities Act; (e) the term “significant subsidiary” has the
meaning set forth in Rule 3-05 of Regulation S-X under the Securities Act; and
(f) the term “written communication” has the meaning set forth in Rule 405 under
the Securities Act.

14. Miscellaneous.

(a) Authority of the Representatives. Any action by the Initial Purchasers
hereunder may be taken by Barclays Capital Inc. on behalf of the Initial
Purchasers, and any such action taken by Barclays Capital Inc. shall be binding
upon the Initial Purchasers.

(b) Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication:

(i) if to the Representatives, shall be delivered or sent by hand delivery,
mail, telex, overnight courier or facsimile transmission to Barclays Capital
Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Syndicate
Registration, J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York
10179 (Fax: (212) 622-8358) Attention: Equity Syndicate Desk, and Wells Fargo
Securities, LLC, 375 Park Avenue, New York, New York 10152, Attention: Equity
Syndicate Department (Fax: (212) 214-5918), with a copy to Vinson & Elkins LLP,
First City Tower, 1001 Fannin Street, Suite 2500, Houston, Texas 77002-6760,
Attention: T. Mark Kelly (Fax: (713) 615-5531), and with a copy, in the case of
any notice pursuant to Section 8(c), to the Director of Litigation, Office of
the General Counsel, Barclays Capital Inc., 745 Seventh Ave., New York, New York
10019;

 

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(ii) if to the Company and the Guarantors, shall be delivered or sent by hand
delivery, mail, telex, overnight courier or facsimile transmission to Hornbeck
Offshore Services, Inc., 103 Northpark Boulevard, Suite 300, Covington,
Louisiana 70433 (fax: (985) 727-2006); Attention: Sam Giberga, General Counsel.

(c) Governing Law. This Agreement and any claim, controversy or dispute arising
under or related to this Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

(d) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.

(e) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.

(f) Headings. The headings herein are included for convenience of reference only
and are not intended to be part of, or to affect the meaning or interpretation
of, this Agreement.

 

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If the foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided below.

 

Very truly yours, HORNBECK OFFSHORE SERVICES, INC. By   /s/ James O. Harp, Jr.  

James O. Harp, Jr.

Executive Vice President and

Chief Financial Officer

 

Guarantors: Energy Services Puerto Rico, LLC Hornbeck Offshore Services, LLC
Hornbeck Offshore Transportation, LLC Hornbeck Offshore Operators, LLC HOS-IV,
LLC Hornbeck Offshore Trinidad & Tobago, LLC HOS Port, LLC By   /s/ James O.
Harp, Jr.  

James O. Harp, Jr.

Executive Vice President and

Chief Financial Officer

 

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Accepted: August 7, 2012 BARCLAYS CAPITAL INC. By   /s/ Paul Robinson   J.P.
MORGAN SECURITIES LLC By   /s/ Jason Wood   WELLS FARGO SECURITIES, LLC By   /s/
Jay Buckman  

 

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Schedule 1

 

Initial Purchaser    Principal Amount  

Barclays Capital Inc.

   $ 104,000,000   

J.P. Morgan Securities LLC

     104,000,000   

Wells Fargo Securities, LLC

     52,000,000   

Total

   $ 260,000,000   

 

Schedule 1

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Schedule 2

List of Guarantors

Energy Services Puerto Rico, LLC, a Delaware limited liability company

Hornbeck Offshore Services, LLC, a Delaware limited liability company

Hornbeck Offshore Transportation, LLC, a Delaware limited liability company

Hornbeck Offshore Operators, LLC, a Delaware limited liability company

HOS-IV, LLC, a Delaware limited liability company

Hornbeck Offshore Trinidad & Tobago, LLC, a Delaware limited liability company

HOS Port, LLC, a Delaware limited liability company

 

Schedule 2

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Schedule 3

Parties to Lock-up Agreements

Todd M. Hornbeck

James O. Harp, Jr.

Carl G. Annessa

Samuel A. Giberga

John S. Cook

Larry D. Hornbeck

Bruce W. Hunt

Steven W. Krablin

Patricia B. Melcher

Bernie W. Stewart

John T. Rynd

Kevin Omar Meyers

William Herbert Hunt Trust Estate

Troy Hornbeck

Nicholas L. Swyka, Jr.

 

Schedule 3

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ANNEX A

a. Additional Time of Sale Information

1. Term sheet containing the terms of the securities, substantially in the form
of Annex B.

 

Annex A

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ANNEX B

Final

August 7, 2012

LOGO [g396950g14v90.jpg]

Hornbeck Offshore Services, Inc.

Pricing Term Sheet

Pricing Term Sheet, dated August 7, 2012

to Preliminary Offering Memorandum dated August 6, 2012

Strictly Confidential

 

Issuer:

   Hornbeck Offshore Services, Inc.

Ticker / Exchange for Common Stock:

   HOS/ NYSE

Notes:

   1.500% Convertible Senior Notes due 2019

Distribution:

   Rule 144A without registration rights

Issue Price:

   100%, plus accrued interest from August 13, 2012

Aggregate Principal Amount Offered:

   $260 million ($300 million if the initial purchasers’ option to purchase
additional notes is exercised in full)

Interest Rate:

   1.500% per annum, payable semi-annually

Conversion Premium:

   37.5%

Initial Conversion Price:

   Approximately $53.85 per share of common stock

Initial Conversion Rate:

   18.5718 shares of common stock per $1,000 aggregate principal amount of notes

Interest Payment Dates:

   March 1 and September 1, beginning March 1, 2013

Record Dates:

   February 15 and August 15

Maturity:

   September 1, 2019

Guarantees:

   The notes will be fully and unconditionally guaranteed on a senior unsecured
basis by the Company’s domestic significant subsidiaries, which are the same
subsidiaries that are guarantors of the Company’s revolving credit facility and
its outstanding senior notes. The liability of each guarantor under its
respective subsidiary

 

Annex B Page 1

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

   guarantee will be limited as necessary to the amount, if any, which would not
have rendered such guarantor “insolvent” (as such term is defined under federal
bankruptcy law and in the debtor and creditor law of New York state) or, under
certain circumstances, left it with unreasonably small capital. The guarantee
will be subject to release in connection with any sale or other disposition of
all or substantially all of the assets of that guarantor (including by way of
merger or consolidation, in accordance with the provisions of the indenture), in
connection with any sale of all of the capital stock of a guarantor, in
accordance with the provisions of the indenture, or upon the release of its
guarantee of all other indebtedness of the Company’s or any of the domestic
subsidiaries.

Last Reported Sale Price on August 7, 2012:

   $39.16

Use of Proceeds:

  

The Company estimates that the net proceeds from the offering will be
approximately $251.9 million (or approximately $290.8 million if the initial
purchasers exercise their option to purchase additional notes in full), after
deducting initial purchaser discounts and fees and expenses of the offering. In
addition, the Company expects to receive proceeds from the sale of warrants
described under “Description of the Convertible Note Hedge and Warrant
Transactions” in the Preliminary Offering Memorandum. The Company intends to
apply a portion of the net proceeds from the sale of the notes and the proceeds
from the sale of the warrants to fund the cost of the convertible note hedge
transactions entered into between the Company and certain of the initial
purchasers or their affiliates (in this capacity, the “option counterparties”).

 

The Company expects to apply the remaining $230.4 million of the net proceeds,
along with other available sources of cash, to retire the 1.625% convertible
notes in November 2013, when such convertible notes are first subject to
repurchase by the Company at the option of holders, or redemption at the
Company’s option, or for general corporate purposes, which may include
retirement of other debt or funding for the acquisition, construction or
retrofit of vessels. Until the net proceeds are used for such purposes, we may
deposit them in interest-bearing accounts or invest them in short-term
marketable securities.

 

If the initial purchasers exercise their option to purchase additional notes in
full, the aggregate net proceeds from this offering will be approximately $290.8
million. If the initial purchasers exercise their option to purchase additional
notes, the Company intends to use a portion of the net proceeds from the sale of
the additional notes to pay for additional convertible note hedge transactions,
to be partially offset by the sale of additional warrants, in each case to with
the option counterparties. Remaining net proceeds will be used, along with other
available sources of cash, to retire the 1.625% convertible notes and for
general corporate purposes, including retirement of other debt or funding for
the acquisition, construction or retrofit of vessels.

Trade Date:

   August 8, 2012

 

Annex B Page 2

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Closing Date:

   August 13, 2012

CUSIP Number:

   440543 AM8

ISIN:

   US440543AM89

Joint Book-Running Managers:

   Barclays Capital Inc. J.P. Morgan Securities LLC Wells Fargo Securities, LLC

Listing:

   None

Convertible Note Hedge and Warrant Transactions:

  

The convertible note hedge transactions cover, subject to customary
anti-dilution adjustments, the aggregate number of shares of the Company’s
common stock underlying the notes. The warrants sold to the option
counterparties under the warrant transactions relate to, subject to customary
anti-dilution adjustments, the same number of shares of the Company’s common
stock. The strike price of the convertible note hedge transactions will
initially correspond to the Initial Conversion Price and is subject, with
certain exceptions, to the adjustments applicable to the conversion price of the
notes. The strike price of the warrants will initially equal $68.53 and is
subject to customary anti-dilution adjustments.

Adjustment to Common Stock Delivered Upon a Conversion Upon a Fundamental
Change:

   The following table sets forth the number of additional shares to be added to
the conversion rate per $1,000 principal amount of notes in connection with a
fundamental change as defined in the Preliminary Offering Memorandum for each
stock price and effective date set forth below, subject to adjustments as
provided in the Preliminary Offering Memorandum:

Stock Price

Effective Date    $39.16      $40.00      $45.00      $50.00      $55.00     
$60.00      $65.00      $70.00      $80.00      $90.00      $100.00      $120.00
     $140.00  

August 13, 2012

     6.9644         6.6953         5.3506         4.3423         3.5679        
2.9628         2.4813         2.0931         1.5152         1.1157        
0.8309         0.4685         0.2627   

September 1, 2013

     6.9644         6.6397         5.2558         4.2249         3.4391        
2.8295         2.3482         1.9632         1.3964         1.0105        
0.7396         0.4018         0.2157   

September 1, 2014

     6.9644         6.5623         5.1333         4.0775         3.2799        
2.6668         2.1875         1.8077         1.2567         0.8890        
0.6359         0.3288         0.1659   

September 1, 2015

     6.9644         6.4615         4.9746         3.8875         3.0758        
2.4597         1.9845         1.6132         1.0853         0.7429        
0.5138         0.2468         0.1130   

September 1, 2016

     6.9644         6.3608         4.7878         3.6537         2.8207        
2.2000         1.7306         1.3715         0.8768         0.5700        
0.3739         0.1592         0.0609   

September 1, 2017

     6.9644         6.2554         4.5455         3.3364         2.4710        
1.8450         1.3876         1.0503         0.6115         0.3613        
0.2144         0.0714         0.0161   

September 1, 2018

     6.9644         6.1242         4.1569         2.8075         1.8883        
1.2663         0.8478         0.5672         0.2541         0.1137        
0.0495         0.0043         0.0000   

September 1, 2019

     6.9644         6.4282         3.6504         1.4282         0.0000        
0.0000         0.0000         0.0000         0.0000         0.0000        
0.0000         0.0000         0.0000   

The exact stock price and effective date may not be set forth on the table, in
which case:

 

  •  

if the stock price is between two stock price amounts in the table or the
effective date is between two effective dates in the table, the number of
additional shares will be determined by a straight-line interpolation between
the number of additional shares set forth for the higher and lower stock price
amounts and the two dates, as applicable, based on a 365-day year;

 

  •  

if the stock price is greater than $140.00 per share (subject to adjustment),
the conversion rate will not be increased; and

 

  •  

if the stock price is less than $39.16 per share (subject to adjustment), the
conversion rate will not be increased.

 

Annex B Page 3

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Notwithstanding the foregoing, in no event will the total number of the
Company’s common stock issuable upon conversion exceed 25.5362 per $1,000
principal amount of the notes, subject to adjustments in the same manner as the
conversion rate as set forth under “Description of Notes—Conversion Rate
Adjustments” in the Preliminary Offering Memorandum.

Additional Information

Capitalization Information:

After giving effect to the Company’s use of approximately $21.5 million of the
net proceeds from the notes offering to pay the cost of the convertible note
hedge transactions described above (after such cost is partially offset by the
proceeds to the Company from the sale of the warrant transactions described
above), as of June 30, 2012:

 

  •  

the as-adjusted amount of “Cash and cash equivalents” in the table set forth in
the “Capitalization” section of the Preliminary Offering Memorandum would have
been $621,951;

 

  •  

the as-adjusted amount of “Additional paid-in capital” in such table would have
been $630,620,

 

  •  

the as-adjusted amount of “Total stockholders’ equity” in such table would have
been $1,072,191, and

 

  •  

the as-adjusted “Total capitalization” in such table would have been $2,184,572,

in each case, determined in the manner described in such “Capitalization”
section of the Preliminary Offering Memorandum.

This communication is intended for the sole use of the person to whom it is
provided by the sender.

Purchasers should rely only on the information contained or incorporated by
reference in the Preliminary Offering Memorandum, as supplemented by this final
pricing term sheet, in making an investment decision with respect to the notes.
A copy of the Preliminary Offering Memorandum can be obtained by contacting your
Barclays Capital Inc. sales representative.

This communication shall not constitute an offer to sell or the solicitation of
an offer to buy securities, nor shall there be any sale of these securities, in
any state in which such solicitation or sale would be unlawful prior to
registration or qualification of these securities under the laws of any such
state.

The notes and the common stock issuable upon conversion of the Notes have not
been registered under the Securities Act of 1933, as amended (the “Securities
Act”), or any other state securities laws. Unless they are registered, the notes
and any common stock issuable upon conversion of the notes may be offered only
in transactions exempt from or not subject to registration under the Securities
Act or any other state securities laws. Accordingly, the notes are only being
offered to “qualified institutional buyers” (as defined in Rule 144A under the
Securities Act).

ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO
THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES
WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA
BLOOMBERG OR ANOTHER EMAIL SYSTEM.

 

Annex B Page 4

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ANNEX C

Form of Opinion of Counsel for the Company and the Guarantors

(i) Each of the Company and the Guarantors has been duly incorporated as a
corporation or formed as a limited liability company and is validly existing as
a corporation or limited liability company in good standing under the laws of
the State of Delaware, with corporate or limited liability company power and
authority to own its properties and conduct its business as described in the
Time of Sale Information;

(ii) the Company has an authorized capitalization as set forth in the Time of
Sale Information, and all of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable;

(iii) each of the Company and the Guarantors has been duly qualified as a
foreign corporation or limited liability company for the transaction of business
and is in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified or in good standing
in any such jurisdiction would not have a Material Adverse Effect;

(iv) each Subsidiary (as defined in the Indenture) of the Company (other than
the Guarantors) has been duly formed as a limited liability company or other
foreign entity and is validly existing as a limited liability company or other
foreign entity in good standing under the laws of its jurisdiction of formation
except to the extent that the failure to be so formed, validly existing or in
good standing would not have a Material Adverse Effect on the Company; and all
of the issued and outstanding membership or other equity interests of each such
Subsidiary of the Company (including the Guarantors) have been duly authorized
and validly issued, are fully paid and nonassessable, and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims except to the extent as will not have a Material Adverse Effect on the
Company;

(v) to such counsel’s knowledge and other than as set forth in the Time of Sale
Information, there are no legal or governmental proceedings pending to which the
Company, the Guarantors, or any of their subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and, to such
counsel’s knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;

(vi) this Agreement has been duly authorized, executed and delivered by each of
the Company and the Guarantors;

(vii) the Firm Securities have been duly authorized, executed, issued and
delivered by the Company and constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Indenture, enforceable
against the

 

Annex C – Page 1

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Company in accordance with their terms, except as limited by bankruptcy,
insolvency, fraudulent conveyance, fraudulent transfer, moratorium,
reorganization and other similar laws of general application affecting the
rights and remedies of creditors and by general principles of equity (regardless
of whether enforceability is considered in a proceeding in equity or at law);

(viii) the Guarantees have been duly authorized, executed, issued and delivered
by the Guarantors and constitute valid and legally binding obligations of the
Guarantors entitled to the benefits provided by the Indenture, enforceable
against the Guarantors in accordance with their terms, except as limited by
bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, moratorium,
reorganization and other similar laws of general application affecting the
rights and remedies of creditors and by general principles of equity (regardless
of whether enforceability is considered in a proceeding in equity or at law);

(ix) the Underlying Common Stock reserved for issuance upon conversion of the
Firm Securities has been duly authorized and reserved and, when issued upon
conversion of the Firm Securities in accordance with the terms of the Firm
Securities, will be validly issued, fully paid and non-assessable and the
issuance of the Underlying Common Stock will not be subject to any preemptive or
similar rights under the Company’s Certificate of Incorporation or Bylaws or
under the Delaware General Corporation Law; and the Underlying Common Stock
conforms in all material respects to the descriptions thereof in the Time of
Sale Information and the Final Memorandum;

(x) the Indenture has been duly authorized, executed and delivered by the
Company and the Guarantors, and constitutes a valid and legally binding
instrument of the Company and the Guarantors, enforceable against the Company
and the Guarantors in accordance with its terms, except as limited by
bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, moratorium,
reorganization and other similar laws of general application affecting the
rights and remedies of creditors and by general principles of equity (regardless
of whether enforceability is considered in a proceeding in equity or at law);

(xi) no consent, approval, authorization, order, registration or qualification
of or with any court or governmental agency or body is required for the issue
and sale of the Firm Securities, the issuance of the Underlying Common Stock
upon the conversion of the Firm Securities or the consummation by the Company
and the Guarantors of the transactions contemplated by this Agreement or the
Indenture, except such as have been obtained and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Firm Securities by the Initial Purchasers and except where failure to obtain
such consent, approval, authorization, order, registration or qualification
would not have a Material Adverse Effect; provided, however, that
notwithstanding anything herein to the contrary, such counsel need express no
opinion in this subparagraph (xi) as to compliance with the registration
provisions of the Securities Act in relation to the Securities;

 

Annex C – Page 2

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(xii) no registration of the Firm Securities or the Underlying Common Stock
related to the Firm Securities under the Securities Act, and no qualification of
an indenture under the Trust Indenture Act with respect thereto, is required for
the issuance and sale of the Firm Securities to the Initial Purchasers and the
offer, resale and delivery of the Firm Securities by the Initial Purchasers in
the manner contemplated by this Agreement and the Time of Sale Information;

(xiii) none of the Company, the Guarantors or any of their subsidiaries is and,
after giving effect to the offering and sale of the Firm Securities and the
application of the proceeds thereof as described in the Time of Sale
Information, will be required to register as an “investment company” as defined
in the Investment Company Act;

(xiv) when the Firm Securities are issued and delivered pursuant to this
Agreement, none of the Firm Securities will be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities of the Company that
are listed on a national securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a United States automated inter-dealer
quotation system;

(xv) the statements set forth in the Time of Sale Information and the Offering
Memorandum under the captions “Description of Capital Stock,” insofar as they
purport to describe or summarize certain provisions of the Underlying Common
Stock related to the Firm Securities, “United States Federal Income and Estate
Tax Considerations,” insofar as they purport to describe the legal matters,
documents or proceedings referred to therein and under the caption “Plan of
Distribution”, insofar as they purport to describe the provisions of this
Agreement, fairly present, in all material respects, the information called for
with respect to such legal matters, documents or proceedings;

(xvi) the issue and sale of the Firm Securities, the issuance of the Underlying
Common Stock related to the Firm Securities upon conversion of the Firm
Securities and the compliance by the Company and the Guarantors with all of the
provisions of the Firm Securities, the Indenture and this Agreement with respect
to the Firm Securities and the consummation of the transactions contemplated
herein and therein will not (a) conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument which is attached or incorporated by reference as an exhibit to the
Company’s annual report on Form 10-K for the year ended December 31, 2011 (the
“Annual Report”), the quarterly reports on Form 10-Q for the quarters ended
March 31, 2012 and June 30, 2012, or any Item 1.01 of any Form 8-K filed
subsequent to the Annual Report, (b) result in any violation of the provisions
of the Certificate of Incorporation or Bylaws of the Company or the certificate
of formation or limited liability company agreement of any Guarantor, or
(c) result in a violation of, to the knowledge of such counsel, any order of any
court or governmental agency or body having jurisdiction over the Company, the
Guarantors or any of their subsidiaries or any of their properties (except that
such counsel need express no opinion with respect to compliance with the
anti-fraud or similar provisions of any law, rule or regulation), except in the
case of clauses (a) and (c) for such breaches or violations that could not
reasonably be expected to have a Material Adverse Effect or that could violate
public policy relating thereto.

 

Annex C – Page 3

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Because the primary purpose of such counsel’s engagement was not to establish
factual matters and many of the statements in the Time of Sale Information, the
Offering Memorandum and any amendment or supplement thereto, are wholly or
partially nonlegal in character, such counsel may state that such counsel has
not independently verified and is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained therein (except for the applicable descriptions referenced in
paragraphs (i), (ii), (v), (xi) and (xv)). Such counsel shall also state that
they have participated in conferences with representatives of the Company and
with representatives of its independent accountants and representatives of the
Initial Purchasers and their counsel, at which conferences the contents of the
Time of Sale Information and the Offering Memorandum and any amendment and
supplement thereto and related matters were discussed. On the basis of the
foregoing, such counsel hereby confirms that nothing has come to the attention
of such counsel to cause such counsel to believe (except with respect to the
financial statements and related schedules and the financial data derived
therefrom, including the notes and schedules thereto and the auditor’s report
thereon or any other financial or accounting data contained or incorporated by
reference in, or excluded from, the Time of Sale Information or the Offering
Memorandum as to which such counsel need express no belief) that the Time of
Sale Information, at the Time of Sale (which such counsel may assume to be the
date of this Agreement), contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
that the Offering Memorandum or any amendment or supplement thereto, as of its
date and the Closing Date, contained or contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (other than, in each case, the financial statements and related
schedules and the financial data derived therefrom, including the notes and the
schedules thereto and the auditor’s report thereon or any other financial or
accounting data contained or incorporated by reference therein, as to which such
counsel need express no belief).

In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and the Guarantors and
public officials that are furnished to the Initial Purchasers.

The opinion of Winstead PC described above shall be rendered to the Initial
Purchasers at the request of the Company and shall so state therein.

 

Annex C – Page 4

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ANNEX D

Form of Opinion of Special Counsel for the Company and the Guarantors

Latham and Watkins LLP, special counsel for the Company, shall have furnished to
the Initial Purchasers their written opinion, dated the Closing Date and any
Option Closing Date, in form and substance satisfactory to the Initial
Purchasers, to the effect that the statements set forth in the Time of Sale
Information and the Offering Memorandum under the caption “Description of
Notes,” insofar as they purport to describe or summarize certain provisions of
the Securities and the Indenture, are accurate descriptions or summaries in all
material respects.

 

Annex D

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ANNEX E

LOCK-UP LETTER AGREEMENT

Barclays Capital Inc.

J.P. Morgan Securities LLC

Wells Fargo Securities, LLC

As Representatives of the several

Initial Purchasers named in Schedule 1,

c/o Barclays Capital Inc.

745 Seventh Avenue

New York, New York 10019

Ladies and Gentlemen:

The undersigned understands that you and certain other firms (the “Initial
Purchasers”) propose to enter into a Purchase Agreement (the “Purchase
Agreement”) providing for the purchase by the Initial Purchasers of convertible
senior notes (the “Securities”) of Hornbeck Offshore Services, Inc., a Delaware
corporation (the “Company”) and that the Initial Purchasers propose to reoffer
the Securities (the “Offering.” The Securities will be convertible into cash and
shares of the Company’s common stock, par value $0.01 per share (the “Common
Stock”).

In consideration of the execution of the Purchase Agreement by the Initial
Purchasers, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Barclays
Capital Inc. and J.P. Morgan Securities LLC, on behalf of the Initial
Purchasers, the undersigned will not, directly or indirectly, (1) offer for
sale, sell, pledge, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock
(including, without limitation, shares of Common Stock that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common Stock
that may be issued upon exercise of any options or warrants) or securities
convertible into or exercisable or exchangeable for Common Stock, (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, (3) make any demand for or exercise any right or cause to be filed a
registration statement, including any amendments thereto, with respect to the
registration of any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock or any other securities of the
Company or (4) publicly disclose the intention to do any of the foregoing, for a
period commencing on the date hereof and ending on the 90th day after the date
of the Offering Memorandum relating to the Offering (such 90-day period, the
“Lock-Up

 

Annex E – Page 2

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Period”). The foregoing sentence shall not apply to (a) sales, pledges or
disposals of shares of Common Stock that were acquired by the undersigned in the
open market after the date of the Offering Memorandum, provided that no filing
under the Securities Exchange Act of 1934, as amended, shall be required or
shall be voluntarily made in connection with any such sale, pledge or
disposition (other than a filing on a Form 5, Schedule 13D or Schedule 13G (or
13D-A or 13G-A) made after the expiration of the 90-day period referred to
above), (b) bona fide gifts, sales or other dispositions of shares of any class
of the Company’s capital stock, in each case that are made exclusively between
and among the undersigned or members of the undersigned’s family, or affiliates
of the undersigned, including its partners (if a partnership) or members (if a
limited liability company); provided that it shall be a condition to any such
transfer that (i) the transferee/donee agrees to be bound by the terms of the
lock-up letter agreement (including, without limitation, the restrictions set
forth in the preceding sentence) to the same extent as if the transferee/donee
were a party hereto, (ii) no filing by any party (donor, donee, transferor or
transferee) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), shall be required or shall be voluntarily made in connection with such
transfer or distribution (other than a filing on a Form 5, Schedule 13D or
Schedule 13G (or 13D-A or 13G-A) made after the expiration of the 90-day period
referred to above), and (iii) each party (donor, donee, transferor or
transferee) shall not be required by law (including without limitation the
disclosure requirements of the Securities Act of 1933, as amended, and the
Exchange Act) to make, and shall agree to not voluntarily make, any public
announcement of the transfer or disposition, (c) transfers or sales of Common
Stock pursuant to a plan complying with Rule 10b5-1 of the Regulations of the
Securities Exchange Act of 1934, as amended, that has been entered into by the
undersigned prior to the date of this Lock-Up Letter Agreement or (d) transfers,
sales or disposals of shares of Common Stock that were issued in connection with
the exercise of stock options expiring on March 13, 2013, whether pursuant to a
10b5-1 plan entered into after the date hereof or otherwise.

In furtherance of the foregoing, the Company and its transfer agent are hereby
authorized to decline to make any transfer of securities if such transfer would
constitute a violation or breach of this Lock-Up Letter Agreement.

It is understood that, if the Company notifies the Initial Purchasers that it
does not intend to proceed with the Offering, if the Purchase Agreement does not
become effective, or if the Purchase Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Securities, the undersigned will be released
from its obligations under this Lock-Up Letter Agreement.

The undersigned understands that the Company and the Initial Purchasers will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.

Whether or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made pursuant to a
Purchase Agreement, the terms of which are subject to negotiation between the
Company and the Initial Purchasers.

 

Annex E – Page 3

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[Signature page follows]

 

Annex E – Page 4

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The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this Lock-Up Letter Agreement and that, upon
request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.

 

Very truly yours, By:     Name:   Title:  

Dated:                                                                      

 

Annex E – Page 5