Exhibit 10.1

 

Execution Version

 

THIS RESTRUCTURING SUPPORT AGREEMENT IS NOT AN OFFER OR ACCEPTANCE WITH RESPECT
TO ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN WITHIN
THE MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE. ANY SUCH OFFER OR
SOLICITATION WILL COMPLY WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS
OF THE BANKRUPTCY CODE. Nothing contained in thIS RESTRUCTURING SUPPORT
AGREEMENT shall be an admission of fact or liability OR, UNTIL THE OCCURRENCE OF
THE AGREEMENT EFFECTIVE DATE ON THE TERMS DESCRIBED HEREIN, DEEMED BINDING ON
ANY OF THE PARTIES HERETO.

 

RESTRUCTURING SUPPORT AGREEMENT

 

This RESTRUCTURING SUPPORT AGREEMENT (including all exhibits, annexes, and
schedules attached hereto in accordance with Section ‎16.02 hereof, this
“Agreement”) is made and entered into as of April 10, 2020 (the “Execution
Date”), by and among the following parties, severally and not jointly, and each
in the capacity set forth on its signature page to this Agreement (each of the
following described in sub-clauses (‎i) through (v) of this preamble,
collectively, the “Parties”):1

 

i. Hornbeck Offshore Services, Inc. (the “Company” or “Hornbeck”), a corporation
duly organized and existing under the laws of the State of Delaware, and each of
its subsidiaries party hereto and any successors thereto (collectively with the
Company, the “Company Parties”);

 

ii. the undersigned holders, or the undersigned managers, beneficial holders,
general partners or investment advisors of holders (but only in their respective
capacities as the managers, beneficial holders, general partners or investment
advisors of such holders), of ABL Claims that have executed and delivered
counterpart signature pages to this Agreement, a Joinder, or a Transfer
Agreement to the Notice Parties (such holders (or the managers, beneficial
holders, general partners or investment advisors acting on behalf of such
holders) in this clause (ii), collectively with their permitted assigns and any
subsequent holder of ABL Claims that becomes party hereto in accordance with the
terms hereof, the “Consenting ABL Lenders”);

 

iii. the undersigned holders, or the undersigned managers, beneficial holders,
general partners or investment advisors of holders (but only in their respective
capacities as the managers, beneficial holders, general partners or investment
advisors of such holders), of First Lien Claims that have executed and delivered
counterpart signature pages to this Agreement, a Joinder, or a Transfer
Agreement to the Notice Parties (such holders (or the managers, beneficial
holders, general partners or investment advisors acting on behalf of such
holders) in this clause (iii), collectively with their permitted assigns and any
subsequent holder of First Lien

 

 

1 Capitalized terms used but not defined in the preamble and recitals to this
Agreement have the meanings ascribed to them in ‎Section 1.

 

 

 

 

  Claims that becomes party hereto in accordance with the terms hereof, the
“Consenting First Lien Lenders”);

 

iv. the undersigned holders, or the undersigned managers, beneficial holders,
general partners or investment advisors of holders (but only in their respective
capacities as the managers, beneficial holders, general partners or investment
advisors of such holders), of Second Lien Claims that have executed and
delivered counterpart signature pages to this Agreement, a Joinder, or a
Transfer Agreement to the Notice Parties (such holders (or the managers,
beneficial holders, general partners or investment advisors acting on behalf of
such holders) in this clause (iv), collectively with their permitted assigns and
any subsequent holder of Second Lien Claims that becomes party hereto in
accordance with the terms hereof, the “Consenting Second Lien Lenders” and
together with the Consenting ABL Lenders and the Consenting First Lien Lenders,
the “Consenting Secured Lenders”); and

 

v. the undersigned holders, or the undersigned managers, beneficial holders,
general partners or investment advisors of holders (but only in their respective
capacities as the managers, beneficial holders, general partners or investment
advisors of such holders), of Unsecured Notes Claims (such holders (or the
managers, beneficial holders, general partners or investment advisors acting on
behalf of such holders) in this clause (v), collectively with their permitted
assigns and any subsequent holder of Unsecured Notes Claims that becomes party
hereto in accordance with the terms hereof, the “Consenting Unsecured
Noteholders” and collectively, with the Consenting Secured Lenders, the
“Consenting Creditors”).2

 

RECITALS

 

WHEREAS, the Company Parties and the Consenting Creditors have in good faith and
at arms’ length negotiated or been apprised of certain restructuring and
recapitalization transactions with respect to the Company Parties’ capital
structure on the terms: (a) set forth in this Agreement and (b) as specified in
that certain Restructuring Term Sheet, attached as Exhibit A hereto (the
“Restructuring Term Sheet” and, such transactions as described in and
implemented in accordance with the terms of this Agreement and the Restructuring
Term Sheet, the “Restructuring Transactions”);

 

WHEREAS, the Company Parties intend to implement the Restructuring Transactions
by commencing voluntary cases under chapter 11 of the Bankruptcy Code in the
Bankruptcy Court (the cases commenced, the “Chapter 11 Cases”);

 

WHEREAS, subject to the terms of this Agreement, the Parties have agreed to take
certain actions in support of the Restructuring Transactions; and

 

 

2 References herein to a percentage of holders of Claims refer to the percentage
of the total outstanding principal amount of the applicable Claims held by such
Claim holder.

 

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WHEREAS, the Parties desire to express their mutual support and commitment in
respect of the Restructuring Transactions, including with respect to the
consummation of the Plan on the terms and conditions contained in this Agreement
and the Restructuring Term Sheet.

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each Party, severally and not jointly, intending
to be legally bound hereby, agrees as follows:

 

AGREEMENT

 

Section 1.             Definitions and Interpretation.

 

1.01.       Definitions. The following terms shall have the following
definitions:

 

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

 

“2020 Notes Indenture” means that certain indenture dated as of March 16, 2012,
as may be amended, restated, or otherwise supplemented from time to time, for
the 2020 Notes by and among Hornbeck, each of the guarantors party thereto, and
the 2020 Notes Indenture Trustee.

 

“2020 Notes Indenture Trustee” means Wilmington Trust, National Association,
acting through such of its affiliates or branches as it may designate, in its
capacity as indenture trustee under the 2020 Notes Indenture, or any indenture
trustee as permitted by the terms set forth in the 2020 Notes Indenture.

 

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

 

“2021 Notes Indenture” means that certain indenture dated as of March 28, 2013,
as may be amended, restated, or otherwise supplemented from time to time, for
the 2021 Notes by and among Hornbeck, the guarantors party thereto, and the 2021
Notes Indenture Trustee.

 

“2021 Notes Indenture Trustee” means Wilmington Trust, National Association,
acting through such of its affiliates or branches as it may designate, in its
capacity as indenture trustee under the 2021 Notes Indenture, or any indenture
trustee as permitted by the terms set forth in the 2021 Notes Indenture.

 

“ABL Agent” means Wilmington Trust, National Association, acting through such of
its affiliates or branches as it may designate, as collateral agent and
administrative agent to the ABL Credit Agreement, or any administrative agent as
permitted by the terms set forth in the ABL Credit Agreement.

 

“ABL Agent Representatives” means Thompson Hine LLP, and any local counsel to
the ABL Agent.

 

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“ABL Credit Agreement” means the Senior Credit Agreement, dated as of June 28,
2019, amended by that certain First Amendment, dated as of January 17, 2020,
among the Company, each of the guarantors from time to time party thereto, each
of the lenders, and the ABL Agent, and amended by that certain Second Amendment,
dated as of February 29, 2020, among the Company, each of the guarantors from
time to time party thereto, and the ABL Agent, as amended, restated,
supplemented or otherwise modified from time to time, among the Company, each of
the guarantors from time to time party thereto, each of the lenders from time to
time party thereto, and the ABL Agent.

 

“ABL Claims” means any Claim derived from, based upon, or arising under the ABL
Credit Agreement.

 

“ABL Documents” means, collectively, the ABL Credit Agreement and any security
documents and any other collateral, guarantee, and ancillary documents,
including any applicable forbearance agreement, executed in connection with the
ABL Credit Agreement.

 

“ABL Forbearance Agreement” means that certain forbearance agreement attached
hereto as Exhibit E.1.

 

“ABL Lenders” means the lenders from time to time party to the ABL Credit
Agreement.

 

“ABL Lender Representatives” means Brown Rudnick LLP, and any local counsel to
the ABL Agent.

 

“Affiliate” means, with respect to any person, any other person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition, “control” (including, with its
correlative meanings, “controlled by” and “under common control with”) shall
mean, with respect to any Person, (x) the possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership, limited liability company or
other ownership interests, by contract or otherwise) of such Person or (y)
solely with respect to Affiliates of Consenting Creditors, the investment or
voting discretion or control with respect to discretionary accounts of such
Person.

 

“Agent” means any agent, collateral agent, or other agent or similar entity
under the ABL Credit Agreement, First Lien Credit Agreement, Second Lien Credit
Agreement, or DIP Credit Agreement.

 

“Agents/Trustees” means, collectively, each of the Agents and the Unsecured
Notes Indenture Trustees.

 

“Agreement” has the meaning set forth in the preamble to this Agreement and, for
the avoidance of doubt, includes all the exhibits, annexes, and schedules hereto
in accordance with Section ‎16.02 of this Agreement.

 

4  

 

 

“Agreement Effective Date” means the date on which the conditions set forth in
‎Section 2 of this Agreement have been satisfied or waived by the appropriate
Party or Parties in accordance with this Agreement.

 

“Agreement Effective Period” means, with respect to a Party, the period from the
Agreement Effective Date to the Termination Date applicable to that Party.

 

“Alternative Restructuring Proposal” means any inquiry, proposal, offer, bid,
term sheet, discussion, or agreement with respect to a sale, disposition,
new-money investment, restructuring, reorganization, merger, amalgamation,
acquisition, consolidation, dissolution, debt investment, equity investment,
repurchase, refinancing, extension or repayment of a material portion of the
Company’s or any Company Party’s funded debt (in each case, outside of the
ordinary course of business), liquidation, tender offer, recapitalization, plan
of reorganization, share exchange, business combination, or similar transaction
involving any one or more Company Parties or the debt, equity, or other
interests in any one or more Company Parties that is an alternative to one or
more of the Restructuring Transactions.

 

“Backstop and Direct Investment Agreement” means that certain backstop and
investment agreement that will govern certain matters related to the Equity
Rights Offering.

 

“Bankruptcy Code” means Title 11 of the United States Code, 11 U.S.C. §§
101–1532, as amended.

 

“Bankruptcy Court” means the United States Bankruptcy Court for the District of
Southern District of Texas presiding over the Chapter 11 Cases.

 

“Business Day” means any day other than a Saturday, Sunday, or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state of New York.

 

“Causes of Action” means any claims, interests, damages, remedies, causes of
action, demands, rights, actions, suits, obligations, liabilities, accounts,
defenses, offsets, powers, privileges, licenses, Liens, indemnities, guaranties,
and franchises of any kind or character whatsoever, whether known or unknown,
foreseen or unforeseen, existing or hereinafter arising, contingent or
non-contingent, liquidated or unliquidated, secured or unsecured, assertable,
directly or derivatively, matured or unmatured, suspected or unsuspected, in
contract, tort, law, equity, or otherwise. Causes of Action also include: (a)
all rights of setoff, counterclaim, or recoupment and claims under contracts or
for breaches of duties imposed by law; (b) the right to object to or otherwise
contest Claims or Interests; (c) claims pursuant to sections 362, 510, 542, 543,
544 through 550, or 553 of the Bankruptcy Code; (d) such claims and defenses as
fraud, mistake, duress, and usury, and any other defenses set forth in section
558 of the Bankruptcy Code; and (e) any state or foreign law fraudulent transfer
or similar claim.

 

“Chapter 11 Cases” has the meaning set forth in the recitals to this Agreement.

 

“Claim” has the meaning ascribed to it in section 101(5) of the Bankruptcy Code.

 

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“Company” has the meaning set forth in the preamble hereto.

 

“Company Claims/Interests” means any Claim against, or Interest in, a Company
Party, including the ABL Claims, First Lien Claims, the Second Lien Claims, and
the Unsecured Notes Claims.

 

“Company Counsel” means Kirkland and Ellis LLP.

 

“Company Parties” has the meaning set forth in the preamble hereto.

 

“Competitor” means a competitor of the Company, Company Party or any of their
Affiliates in the business of providing the services of offshore supply vessels,
or offshore service vessels (including, without limitation, crew boats, fast
supply vessels, multi-purpose support vessels, flotels, services to Military
Sealift Command, construction vessels, anchor handling towing supply vessels,
tugs, double hulled tank barges and double hulled tankers or other complementary
offshore marine vessels) or any other marine vessel business, including any
logistics services related thereto or any ancillary, complementary or related
line of business, which competitor is identified on a written list provided on
behalf of the Consenting Creditors to the Company via email on the date hereof.

 

“Confidentiality Agreement” means an executed confidentiality agreement or
nondisclosure agreement, including, but not limited to, with respect to the
issuance of a “cleansing letter” or other public disclosure of material
non-public information agreement, in connection with any proposed Restructuring
Transactions.

 

“Confirmation” means entry of the Confirmation Order by the Bankruptcy Court on
the docket of the Chapter 11 Cases.

 

“Confirmation Date” means the date on which the Bankruptcy Court enters the
Confirmation Order on the docket of the Chapter 11 Cases within the meaning of
Bankruptcy Rules 5003 and 9021.

 

“Confirmation Order” means the order of the Bankruptcy Court confirming the
Plan.

 

“Consenting ABL Lenders” has the meaning set forth in the preamble to this
Agreement.

 

“Consenting Creditor Fees and Expenses” means the reasonable and documented fees
and expenses on the efforts to implement the Restructuring Transactions and not
previously paid by, or on behalf of, the Company Parties, of (i) the Consenting
Creditor Representatives and (ii) Thompson Hine LLP, as counsel to Wilmington
Trust, N.A., in its capacity as ABL Agent, First Lien Agent, Second Lien Agent
and DIP Agent; in each case, in accordance with the engagement letters of such
consultant or professional (which, in the case of advisors other than counsel,
shall be signed by or reasonably acceptable to the Company Parties), including,
without limitation, any restructuring or completion fees contemplated therein,
and in each case, without further order of, or application to, the Bankruptcy
Court by such consultant or professionals.

 

6  

 

 

“Consenting Creditors” has the meaning set forth in the preamble to this
Agreement.

 

“Consenting Creditor Representatives” means the ABL Lender Representatives,
Secured Lender Group Representatives, and Noteholder Committee Representatives.

 

“Consenting First Lien Lenders” has the meaning set forth in the preamble to
this Agreement.

 

“Consenting Second Lien Lenders” has the meaning set forth in the preamble to
this Agreement.

 

“Consenting Secured Lenders” has the meaning set forth in the preamble to this
Agreement.

 

“Consenting Unsecured Noteholders” has the meaning set forth in the preamble to
this Agreement.

 

“Debtors” means Hornbeck and its Affiliates that file chapter 11 petitions.

 

“Definitive Documents” means the documents set forth in Section ‎3.01 of this
Agreement.

 

“DIP Agent” means Wilmington Trust, National Association, acting through such of
its affiliates or branches as it may designate, as collateral agent and
administrative agent to the DIP Credit Agreement, or any administrative agent as
permitted by the terms set forth in the DIP Credit Agreement.

 

“DIP Claims” means any Claim against the Debtors arising under, derived from, or
based upon the DIP Facility or the DIP Credit Agreement.

 

“DIP Commitments” has the meaning ascribed to the term Commitments in the DIP
Credit Agreement, provided, however, that each DIP Commitment Party shall be
permitted to allocate their respective funding obligation with respect to the
DIP Commitments to any Affiliate designee, and the rights and obligations with
respect to such DIP Commitments shall be calculated accordingly.

 

“DIP Commitment Party” means the parties that commit severally, and not jointly,
to fund the DIP Facility.

 

“DIP Credit Agreement” means that certain credit agreement evidencing the DIP
Facility in accordance with the terms and conditions of, and subject in all
respects to the DIP Facility Term Sheet and the DIP Order.

 

“DIP Documents” means all Loan Documents, as defined in the DIP Credit
Agreement.

 

“DIP Facility” means the $75 million debtor-in-possession term loan facility to
be provided to the Company Parties in accordance with the terms and conditions
of, and subject in all respects to, the DIP Facility Term Sheet and the DIP
Order.

 

7  

 

 

“DIP Facility Term Sheet” means the term sheet setting forth the terms and
conditions of the DIP Facility, attached as Exhibit B hereto.

 

“DIP Motion” means the motion filed by the Debtors seeking entry of an interim
and final DIP Order.

 

“DIP Order” means the interim or final, as applicable, order of the Bankruptcy
Court setting forth the terms of debtor-in-possession financing and use of cash
collateral, which shall be consistent with the DIP Facility Term Sheet and shall
provide for the payment of the fees and expenses of the Consenting Unsecured
Noteholders subject to and in accordance with Section 16.21.

 

“Disclosure Statement” means the related disclosure statement with respect to
the Plan.

 

“Entity” shall have the meaning set forth in section 101(15) of the Bankruptcy
Code.

 

“Equity Rights Offering” means the rights offering of New Equity to be issued by
Reorganized Hornbeck in exchange for $100 million in cash on the terms and
conditions set forth in the Restructuring Term Sheet and the Equity Rights
Offering Documents.

 

“Equity Rights Offering Documents” means collectively, the Backstop and Direct
Investment Agreement and any and all other agreements, documents, and
instruments delivered or entered into in connection with the Equity Rights
Offering, including the Equity Rights Offering Procedures.

 

“Equity Rights Offering Procedures” means those certain rights offering
procedures with respect to the Equity Rights Offering, which rights offering
procedures shall be set forth in the Equity Rights Offering Documents.

 

“Execution Date” has the meaning set forth in the preamble to this Agreement.

 

“Exit Facility” means the post-petition financing facility on the conditions set
forth in the Exit Facility Documents.

 

“Exit Facility Documents” means the agreements and related documents governing
the Exit Facility.

 

“First Day Pleadings” means the first-day pleadings that the Company Parties
determine are necessary or desirable to file.

 

“First Lien Agent” means Wilmington Trust, National Association, as
administrative agent and collateral agent under the First Lien Credit Agreement,
or any successor administrative agent or collateral agent as permitted by the
terms set forth in the First Lien Credit Agreement.

 

“First Lien Lenders” means, collectively, the banks, financial institutions, and
other lenders party to the First Lien Credit Agreement from time to time, each
solely in their capacity as such.

 

8  

 

 

“First Lien Loan Documents” means, collectively, the First Lien Credit Agreement
and any security documents and any other collateral, guarantee, and ancillary
documents, including any applicable forbearance agreement, executed in
connection with the First Lien Credit Agreement.

 

“First Lien Loans” means loans outstanding under the First Lien Credit
Agreement.

 

“First Lien Agent Representatives” means Thompson Hine LLP, and any local
counsel to the First Lien Agent.

 

“First Lien Credit Agreement” means that certain term loan credit agreement,
dated as of June 15, 2017, amended by that certain First Amendment dated as of
March 26, 2018, by and among the Company, Hornbeck Offshore Services LLC as
co-borrower, the lenders party thereto and Wilmington Trust, National
Association, as administrative agent and collateral agent for the lenders party
thereto, and amended by that Second Amendment, dated as of June 28, 2019, by and
among the Company, Hornbeck Offshore Services LLC as co-borrower, the lenders
party thereto and Wilmington Trust National Association, as administrative agent
and collateral agent for the lenders party thereto, and amended by the Increase
Joinder No. 1A, dated as of March 1, 2019, Increase Joinder No. 1B, dated as of
March 1, 2019, and Increase Joinder No. 1C, dated as of March 1, 2019, and
amended by that certain Third Amendment dated as of February 6, 2020, by and
among the Company, Hornbeck Offshore Services LLC as co-borrower, the lenders
party thereto and Wilmington Trust, National Association, as administrative and
collateral agent for the lenders party thereto as amended, restated,
supplemented or otherwise modified from time to time, among Hornbeck, Hornbeck
Offshore Services LLC as co-borrower, the lenders party thereto and Wilmington
Trust, National Association, as administrative agent and collateral agent for
the lenders party thereto.

 

“First Lien Claims” means any Claims against any Debtor derived from, based
upon, or arising under the First Lien Credit Agreement.

 

“First Lien Forbearance Agreement” means that certain forbearance agreement
attached hereto as Exhibit E.2.

 

“Forbearance Agreements” means the ABL Forbearance Agreement, First Lien
Forbearance Agreement, Second Lien Forbearance Agreement, and Unsecured Notes
Forbearance Agreement.

 

“Governing Body” means, with respect to any Entity, the board of directors,
board of managers, manager, general partner, investment committee, special
committee, or such similar governing body of an Entity (including the board of
directors of Hornbeck).

 

“Interest” means, collectively, the shares (or any class thereof), common stock,
preferred stock, limited liability company interests, and any other equity,
ownership, or profits interests of any Company Party, and options, warrants,
rights, or other securities or agreements to acquire or subscribe for, or which
are convertible into the shares (or any class thereof) of, common stock,
preferred stock, limited liability company interests, or other equity,
ownership, or profits

 

9  

 

 

interests of any Company Party (in each case whether or not arising under or in
connection with any employment agreement).

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended,
supplemented, or modified from time to time.

 

“Joinder” means a joinder to this Agreement substantially in the form attached
hereto as Exhibit C.

 

“Law” means any federal, state, local, or foreign law (including common law),
statute, code, ordinance, rule, regulation, order, ruling, or judgment, in each
case, that is validly adopted, promulgated, issued, or entered by a governmental
authority of competent jurisdiction (including the Bankruptcy Court).

 

“Management Incentive Plan” means the Management Incentive Plan to be
implemented with respect to Reorganized Hornbeck (and/or its subsidiaries) on
and after the effective date of the Plan, for distributions of the New Equity to
its participants on terms and conditions reasonably acceptable to the Company
Parties and the Required Consenting Creditors.

 

“Milestones” means the milestones set forth in ‎Section 4 of this Agreement.

 

“New Equity” means the common stock, limited liability company membership units,
or functional equivalent thereof of Reorganized Hornbeck to be issued on the
Plan Effective Date subject to the terms and conditions set forth in the
Restructuring Term Sheet and the New Stockholders Agreement.

 

“New Corporate Governance Documents” means the form of certificate or articles
of incorporation, bylaws, limited liability company agreement, partnership
agreement, and such other applicable formation, organizational and governance
documents (if any) of Reorganized Hornbeck, the material terms of each of which
shall be included in the Plan Supplement.

 

“New Stockholders Agreement” means that certain shareholders agreement that will
govern certain matters related to the governance of Reorganized Hornbeck and the
New Equity, the material terms of which shall be included in the Plan
Supplement.

 

“New Warrants” means the warrants to purchase New Equity of Reorganized Hornbeck
to be issued on the Plan Effective Date subject to the terms and conditions set
forth in the Restructuring Term Sheet, the New Warrant Agreement and the New
Stockholders Agreement.

 

“New Warrant Agreement” means that certain warrant agreement that will govern
the New Warrants to be entered into by Reorganized Hornbeck and a warrant agent
reasonably satisfactory to satisfactory to the Company Parties and the Required
Consenting Unsecured Noteholders, the material terms of which shall be included
in the Plan Supplement.

 

“Non-Debtor Loan Party” means any Obligor (as defined in the ABL Credit
Agreement), Loan Party (as defined in each of the First Lien Credit Agreement
and Second Lien

 

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Credit Agreement), or Guarantor (as defined in the Unsecured Notes Indentures)
in each case, that is not a Debtor.

 

“Noteholder Committee” means the group or committee of the Consenting
Noteholders represented by Milbank LLP.

 

“Noteholder Committee Representatives” means Milbank LLP, Seward & Kissel LLP,
Paul, Weiss, Rifkind, Wharton & Garrison LLP, any local counsel to the
Noteholder Committee, and Moelis & Company.

 

“Notice Parties” has the meaning given to it in Section ‎16.11 of this
Agreement.

 

“Parties” has the meaning set forth in the preamble to this Agreement.

 

“Permitted Transferee” means each transferee of any Company Claims/Interests who
meets the requirements of Section ‎10.01 of this Agreement.

 

“Petition Date” means the first date any of the Company Parties commences a
Chapter 11 Case.

 

“Plan” means the Debtors’ joint plan of reorganization that will effectuate the
Restructuring Transactions on the terms and conditions set forth in this
Agreement and the Restructuring Term Sheet.

 

“Plan Effective Date” means the occurrence of the effective date of the Plan
according to its terms.

 

“Plan Supplement” means the compilation of documents and forms of documents,
agreements, schedules, and exhibits to the Plan to be filed by the Debtors with
the Bankruptcy Court.

 

“Qualified Marketmaker” means an entity that (a) holds itself out to the public
or the applicable private markets as standing ready in the ordinary course of
business to purchase from customers and sell to customers Company
Claims/Interests (or enter with customers into long and short positions in
Company Claims/Interests), in its capacity as a dealer or market maker in
Company Claims/Interests and (b) is, in fact, regularly in the business of
making a market in claims against issuers or borrowers (including debt
securities or other debt).

 

“Related Party” means, with respect to any person or Entity, each of, and in
each case in its capacity as such, current and former directors, managers,
officers, investment committee members, special or other committee members,
members of any Governing Body, equity holders (regardless of whether such
interests are held directly or indirectly), affiliated investment funds or
investment vehicles, managed accounts or funds, predecessors, participants,
successors, assigns, subsidiaries, affiliates, partners, limited partners,
general partners, principals, members, management companies, fund advisors or
managers, employees, agents, trustees, advisory board members, financial
advisors, attorneys (including any other attorneys or professionals retained by
any current or former director or manager in his or her capacity as director or
manager of an

 

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Entity), accountants, investment bankers, consultants, representatives, and
other professionals and advisors of such person or Entity, and any such person’s
or Entity’s respective heirs, executors, estates, and nominees.

 

“Releases” means the releases contained in ‎Section 9 of this Agreement.

 

“Releasing Parties” means, collectively, each Releasing Company Party and each
Releasing Consenting Creditor Party.

 

“Released Claim” has the meaning ascribed to such term in Section ‎9.01.

 

“Releasing Company Party” means each of the Company Parties and, to the maximum
extent permitted by Law, each of their respective Affiliates and Related
Parties.

 

“Releasing Consenting Creditor Parties” means, each of, and in each case in its
capacity as such: (a) the Consenting Creditors; (b) the Agents/Trustees; (c) and
to the maximum extent permitted by Law, each current and former Affiliate of
each Entity in clause (a) through the following clause (d); and (d) to the
maximum extent permitted by Law, each Related Party of each Entity in clause (a)
through this clause (d).

 

“Reorganized Debtor” means a Debtor, or any successor or assign thereto, by
merger, consolidation, reorganization, or otherwise, in the form of a
corporation, limited liability company, partnership, or other form, as the case
may be, on and after the Plan Effective Date, including Reorganized Hornbeck.

 

“Reorganized Hornbeck” means either (a) Hornbeck, or any successor or assign
thereto, by merger, consolidation, reorganization, or otherwise, in the form of
a corporation, limited liability company, partnership, or other form, as the
case may be, on and after the Plan Effective Date, or (b) a new corporation,
limited liability company, or partnership that may be formed to, among other
things, directly or indirectly acquire substantially all of the assets and/or
stock of the Debtors and issue the New Equity and the New Warrants to be
distributed pursuant to the Plan.

 

“Reorganized Hornbeck Board” means the board of directors (or other applicable
Governing Body) of the Reorganized Hornbeck.

 

“Required Consenting Creditors” means the Required Consenting ABL Lenders, the
Required Consenting First Lien Lenders, the Required Consenting Second Lien
Lenders and the Required Consenting Unsecured Noteholders.

 

“Required Consenting ABL Lenders” means, as of the relevant date, Consenting ABL
Lenders holding greater than 50% of the aggregate outstanding principal amount
of ABL Loans that are held by all Consenting ABL Lenders.

 

“Required Consenting First Lien Lenders” means, as of the relevant date,
Consenting First Lien Lenders (including at least two Consenting First Lien
Lenders that are not Affiliates of

 

12  

 

 

one another) holding greater than 50% of the aggregate outstanding principal
amount of First Lien Loans that are held by all Consenting First Lien Lenders.

 

“Required Consenting Second Lien Lenders” means, as of the relevant date,
Consenting Second Lien Lenders holding greater than 50% of the aggregate
outstanding principal amount of Second Lien Loans that are held by all
Consenting Second Lien Lenders; provided that, for any matter that has a
material, adverse and disproportionate effect on the economic interests of
holders of Second Lien Claims, the Required Consenting Second Lien Lenders shall
mean, as of the relevant date, Consenting Second Lien Lenders (including at
least three Consenting Second Lien Lenders that are not Affiliates of one
another) holding not less than 66.67% of the aggregate outstanding principal
amount of Second Lien Claims that are held by all Consenting Second Lien
Lenders.

 

“Required Consenting Unsecured Noteholders” means, as of the relevant date,
Consenting Unsecured Noteholders holding greater than 50% of the aggregate
outstanding principal amount of Unsecured Notes that are held by all Consenting
Unsecured Noteholders; provided that, for any matter that has a material,
adverse and disproportionate effect on the economic interests of holders of
Unsecured Notes Claims, the Required Consenting Unsecured Noteholders shall
mean, as of the relevant date, Consenting Unsecured Noteholders (including at
least three Consenting Unsecured Noteholders that are not Affiliates of one
another) holding not less than 66.67% of the aggregate outstanding principal
amount of Unsecured Notes Claims that are held by all Consenting Unsecured
Noteholders.

 

“Required DIP Facility Lenders” means Required Lenders, as defined in the DIP
Credit Agreement.

 

“Restricted Period” means the period commencing as of the date each Consenting
Creditor, as applicable, executes this Agreement until the Termination Date, as
to such Consenting Creditor.

 

“Restructuring Term Sheet” has the meaning set forth in the recitals to this
Agreement.

 

“Restructuring Transactions” has the meaning set forth in the recitals to this
Agreement.

 

“Second Lien Lenders” means the lenders from time to time party to the Second
Lien Credit Agreement.

 

“Second Lien Agent” means Wilmington Trust, National Association, as
administrative agent and collateral agent under the Second Lien Credit
Agreement, or any successor administrative agent or collateral agent as
permitted by the terms set forth in the Second Lien Credit Agreement.

 

“Second Lien Agent Representatives” means Thompson Hine LLP, and any local
counsel to the Second Lien Agent.

 

13  

 

 

“Second Lien Credit Agreement” means the Second Lien Credit Agreement, dated as
of February 7, 2019, as amended, restated, supplemented or otherwise modified
from time to time, among the Company, Hornbeck Offshore Services, LLC as
co-borrower, each of the lenders from time to time party thereto, Wilmington
Trust, National Association, as administrative agent and collateral agent for
the lenders party thereto.

 

“Second Lien Claims” means any Claims derived from, based upon, or arising under
the Second Lien Credit Agreement.

 

“Second Lien Documents” means, collectively, the Second Lien Credit Agreement
and any security documents and any other collateral, guarantee, and ancillary
documents, including any applicable forbearance agreement, executed in
connection with the Second Lien Credit Agreement.

 

“Second Lien Forbearance Agreement” means that certain forbearance agreement
attached hereto as Exhibit E.3.

 

“Secured Lender Group” means the ad hoc group of Consenting Secured Lenders
represented by Davis Polk & Wardwell LLP.

 

“Secured Lender Group Representatives” means Davis Polk & Wardwell LLP, Ducera
Partners LLC, Porter Hedges LLP, Creel, García-Cuéllar, Aiza y Enriquez, S.C.,
Blank Rome LLP and any other local and special counsel to the Secured Lender
Group.

 

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

 

“Solicitation Materials” means all solicitation materials with respect to the
Plan, including the Disclosure Statement and related ballots.

 

“Taxes” means any and all U.S. federal, state or local, or foreign, income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever (including any assessment, duty, fee or
other charge in the nature of or in lieu of any such tax) and any interest,
penalty, or addition thereto, whether disputed or not, imposed on the Company
Parties resulting from the Restructuring Transactions.

 

“Termination Date” means the date on which termination of this Agreement as to a
Party is effective in accordance with Section ‎14.01, ‎14.02, ‎14.03 or 14.04 of
this Agreement, as applicable.

 

“Termination Event” are the events set forth in Section 14 of this Agreement.

 

“Transfer” has the meaning set forth in ‎Section 10.

 

14  

 

 

“Transfer Agreement” means an executed form of the transfer agreement providing,
among other things, that a transferee is bound by the terms of this Agreement
and substantially in the form attached as Exhibit D hereto.

 

“Unsecured Notes Claims” means any Claim derived from, based upon, or arising
under the Unsecured Notes Indentures.

 

“Unsecured Notes Forbearance Agreement” means that certain forbearance agreement
attached hereto as Exhibit E.4.

 

“Unsecured Notes Indentures” means the 2020 Notes Indenture and the 2021 Notes
Indenture.

 

“Unsecured Notes Indenture Trustees” means the 2020 Notes Indenture Trustee and
the 2021 Notes Indenture Trustee.

 

“Unsecured Notes Indenture Trustees Representatives” means Stroock & Stroock &
Lavan LLP, and any local counsel to the Indenture Trustees Representatives.

 

1.02.       Interpretation. For purposes of this Agreement:

 

(a)           capitalized terms used herein and not otherwise defined herein
shall have the meaning ascribed thereto in the Restructuring Term Sheet;

 

(b)          in the appropriate context, each term, whether stated in the
singular or the plural, shall include both the singular and the plural, and
pronouns stated in the masculine, feminine, or neuter gender shall include the
masculine, feminine, and the neuter gender;

 

(c)           capitalized terms defined only in the plural or singular form
shall nonetheless have their defined meanings when used in the opposite form;

 

(d)          unless otherwise specified, any reference herein to a contract,
lease, instrument, release, indenture, or other agreement or document being in a
particular form or on particular terms and conditions means that such document
shall be substantially in such form or substantially on such terms and
conditions;

 

(e)          unless otherwise specified, any reference herein to an existing
document, schedule, or exhibit shall mean such document, schedule, or exhibit,
as it may have been or may be amended, restated, supplemented, or otherwise
modified from time to time; provided that any capitalized terms herein which are
defined with reference to another agreement, are defined with reference to such
other agreement as of the date of this Agreement, without giving effect to any
termination of such other agreement or amendments to such capitalized terms in
any such other agreement following the date hereof;

 

(f)           unless otherwise specified, all references herein to “Sections”
are references to Sections of this Agreement;

 

15  

 

 

(g)          the words “herein,” “hereof,” and “hereto” refer to this Agreement
in its entirety rather than to any particular portion of this Agreement;

 

(h)           captions and headings to Sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the
interpretation of this Agreement;

 

(i)            references to “shareholders,” “stockholders,” “directors,” and/or
“officers” shall also include “members” and/or “managers,” as applicable, as
such terms are defined under the applicable limited liability company Laws;

 

(j)            the use of “include” or “including” is without limitation,
whether stated or not; and

 

(k)          the word “or” shall not be exclusive.

 

Section 2.             Effectiveness of this Agreement. This Agreement shall
become effective and binding upon each of the Parties at 12:00 a.m., prevailing
Eastern Time on the date on which all of the following conditions have been
satisfied or waived in accordance with this Agreement:

 

(a)          each of the Company Parties shall have executed and delivered
counterpart signature pages of this Agreement to the Notice Parties;

 

(b)          the following shall have executed and delivered counterpart
signature pages of this Agreement to the Company Parties:

 

(i)          holders of 100% of the aggregate principal amount of loans
outstanding under the ABL Credit Agreement, inclusive of validly executed but
unsettled trades;

 

(ii)         holders of at least 66.67% of the aggregate principal amount of
loans outstanding under the First Lien Credit Agreement, inclusive of validly
executed but unsettled trades;

 

(iii)       holders of at least 66.67% of the aggregate principal amount of
loans outstanding under the Second Lien Credit Agreement, inclusive of validly
executed but unsettled trades; and

 

(iv)       holders of at least 66.7% of the aggregate principal amount of
outstanding Unsecured Notes, inclusive of validly executed but unsettled trades;

 

provided, that signature pages executed by Consenting Creditors shall be
delivered to the Company Parties in an unredacted form; provided, further, that
the Company Parties and the advisors to the Company Parties shall not disclose
the unredacted signature pages and shall keep such unredacted signature pages in
strict confidence, except as may be required by law.

 

Section 3.             Definitive Documents.

 

3.01.       The transactions contemplated herein will be implemented pursuant to
various agreements and related documentation (including any amendments,
supplements or

 

16  

 

 

modifications thereof approved in accordance with the terms of this Agreement,
the “Definitive Documents”), in each case on substantially the same terms and
otherwise consistent in all material respects with the Restructuring Term Sheet,
this Agreement and the Plan. The Definitive Documents governing the
Restructuring Transactions shall consist of the following: (A) the Plan and the
Plan Supplement (and all exhibits, ballots, solicitation procedures, and other
documents and instruments related thereto), including any “Definitive
Documentation” as defined therein and not explicitly so defined herein; (B) the
Confirmation Order; (C) the DIP Order, the DIP Credit Agreement and the other
DIP Documents, and related documentation; (D) the Disclosure Statement; (E) the
order of the Bankruptcy Court approving the Disclosure Statement and the other
Solicitation Materials; (F) the First Day Pleadings and all orders sought
pursuant thereto; (G) any and all documentation required to implement, issue,
and distribute the New Equity and the New Warrants; (H) the Equity Rights
Offering Documents; (I) the Exit Facility Documents; (J) the New Corporate
Governance Documents; (K) the New Stockholders Agreement; (L) the New Warrant
Agreement; (M) the Management Incentive Plan; (N) documentation regarding the
treatment of the Hornbeck Family Assets (as defined in the Restructuring Term
Sheet), if any and (O) any and all other documentation necessary to effectuate
the Restructuring Transactions or that is contemplated by the Plan. For the
avoidance of doubt, the definition of Definitive Documents includes any summary
of material terms thereof, which summary shall be subject to the consents set
forth in Section 3.02 of this Agreement.

 

3.02.       The Definitive Documents not executed or in a form attached to this
Agreement as of the Execution Date including all exhibits, annexes, schedules,
amendments and supplements relating to such Definitive Documents, are subject to
negotiation and shall, upon completion, contain terms, conditions,
representations, warranties, and covenants consistent with this Agreement,
including, for the avoidance of doubt, the Restructuring Term Sheet, as it may
be modified, amended, or supplemented in accordance with ‎Section 15 of this
Agreement. Further, the Definitive Documents not executed or in a form attached
to this Agreement as of the Execution Date including all exhibits, annexes,
schedules, amendments and supplements relating to such Definitive Documents
shall otherwise be in form and substance satisfactory to the Company Parties and
the Required Consenting Creditors.

 

Section 4.             Milestones. The following Milestones shall apply to this
Agreement unless extended or waived in writing (which may be by email) by the
Company Parties and the Required Consenting Creditors:

 

(a)          no later than April 16, 2020, the Company Parties shall commence
solicitation of the Plan in accordance with section 1126(b) of the Bankruptcy
Code;3

 

(b)          no later than April 20, 2020, the Company Parties shall commence
the Chapter 11 Cases;

 

 

3 The Plan shall include Definitive Documents (which may be, for the avoidance
of doubt, a summary of the material terms thereof in accordance with Section 3
hereof) with respect to the Equity Rights Offering Documents, the Exit Facility
Documents, the New Corporate Governance Documents, the New Stockholders
Agreement, the Management Incentive Plan and documentation regarding the
treatment of the Hornbeck Family Assets (as defined in the Restructuring Term
Sheet), if any. The Parties shall negotiate in good faith on the terms of
post-Plan Effective Date management agreements, which shall be agreed by the
Plan Effective Date.

 

17  

 

 

(c)          on the Petition Date, the Debtors shall file with the Bankruptcy
Court the DIP Motion (including the proposed DIP Order), the Plan, the
Disclosure Statement and a motion seeking approval of, and scheduling a combined
hearing on, the Plan and Disclosure Statement;

 

(d)          no later than 3 Business Days following the Petition Date, the
Bankruptcy Court shall have entered an interim DIP Order;

 

(e)          no later than 30 calendar days following the Petition Date, the
Bankruptcy Court shall have entered the final DIP Order;

 

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

 

(g)          no later than 45 calendar days following the Petition Date, the
Bankruptcy Court shall have entered the Confirmation Order; and

 

(h)          no later than the earliest of (i) 21 calendar days after the
Confirmation Date, and (ii) 75 calendar days following the Petition Date, the
Plan Effective Date shall have occurred;

 

provided, however, in each case, the dates set forth above may be extended with
the consent of the Required Consenting Creditors and Required DIP Facility
Lenders. Notwithstanding the foregoing, so long as the Company Parties are not
otherwise in breach of their obligations hereunder and have used reasonable best
efforts to comply with the Milestones, in the event that any of the events set
forth above cannot occur by the corresponding date set forth above as a result
of circumstances beyond the control of the Parties relating to the virus known
as COVID-19, such date shall be deemed extended solely to the extent of the
delay resulting from such circumstances; provided that in no event shall (i) any
one Milestone and (ii) the extension for all Milestones in this Section 4 be
extended for longer than 10 Business Days in the aggregate without the consent
of the Required Consenting Creditors and the Required DIP Facility Lenders.

 

Section 5.             Commitments of the Consenting Creditors.

 

5.01.       General Commitments, Forbearances, and Waivers.

 

(a)          During the Agreement Effective Period, each Consenting Creditor,
severally, and not jointly, agrees in respect of all of its Company
Claims/Interests pursuant to this Agreement to:

 

(i)         support the Restructuring Transactions and exercise each and every
Company Claim/Interest and any powers or rights available to it (including in
any board, stockholders’, or creditors’ meeting or in any process requiring
voting or approval to which they are legally entitled to participate) in each
case in favor of any matter requiring approval to the extent necessary to
implement the Restructuring Transactions and not change or withdraw (or cause to
be changed or withdrawn) any such vote, subject to Section 14.05 hereof;

 

18  

 

 

(ii)         support and not object to, take any action contrary to or otherwise
challenge, directly or indirectly, in any respect, the Releases;

 

(iii)       not, and not direct any other person to, exercise any right or
remedy for the enforcement, collection, or recovery of any Company
Claims/Interests;

 

(iv)       give any notice, order, instruction, or direction to the applicable
Agents/Trustees necessary to give effect to the Restructuring Transactions;
provided, that nothing herein shall require any Consenting Creditors to
indemnify the applicable Agents/Trustees or incur any liability or out-of-pocket
costs in connection with giving any such, order, instruction or direction;

 

(v)        negotiate in good faith and use commercially reasonable efforts to
execute and implement the Definitive Documents to which it is required to be a
party or for which its approval or consent is required;

 

(vi)       provide promptly upon request by the Debtors or their advisors the
aggregate principal amount of each of such Consenting Creditor’s Claims against
the Debtors, on an issuance-by-issuance basis as of the date of such request;
and

 

(vii)      not authorize, agree, resolve or consent to actions in contravention
of any of the foregoing.

 

(b)          During the Agreement Effective Period, each Consenting Creditor,
severally, and not jointly, agrees in respect of all of its Company
Claims/Interests pursuant to this Agreement that it shall not directly or
indirectly, and shall not direct any other Entity to:

 

(i)         (x) object to, delay, impede or take any other action to interfere,
directly or indirectly, in any respect with the approval, acceptance or
implementation of the Restructuring Transactions, including the DIP Facility; or
(y) encourage any person or entity (including, without limitation, any
Consenting Creditor, the ABL Agent or any ABL Lender, the First Lien Agent or
any First Lien Lender, the Second Lien Agent or any Second Lien Lender, the
Unsecured Notes Indenture Trustee or any Unsecured Noteholder) to do any of the
foregoing;

 

(ii)         take any other actions in contravention of this Agreement, the
Restructuring Term Sheet, or the Definitive Documents, or to the material
detriment of the Restructuring Transaction;

 

(iii)       file any motion, pleading, or other document with the Bankruptcy
Court or any other court (including any modifications or amendments thereof)
that, in whole or in part, is materially inconsistent with the approval of this
Agreement, the Restructuring Term Sheet, the Plan or the Restructuring
Transactions;

 

(iv)       initiate, or cause to be initiated on its behalf, any litigation or
proceeding of any kind with respect to the Chapter 11 Cases, this Agreement, or
the other Restructuring Transactions contemplated herein against the Company
Parties or the other Parties other than to

 

19  

 

 

enforce this Agreement or any Definitive Document or as otherwise permitted
under this Agreement;

 

(v)        object to, delay, impede, or take any other action to interfere with
the Company Parties’ ownership and possession of their assets, wherever located,
or interfere with the automatic stay arising under section 362 of the Bankruptcy
Code;

 

(vi)       object to or commence any legal proceeding challenging the adequate
protection granted or proposed to be granted to the holders of the First Lien
Claims, Second Lien Claims and ABL Claims under the DIP Order;

 

(vii)      object to or commence any legal proceeding challenging the liens or
claims (including the priority thereof) granted or proposed to be granted to the
DIP Commitment Parties under the DIP Order; or

 

(viii)     directly or indirectly, through any Person, seek, solicit, propose,
support, assist, engage in negotiations in connection with or participate in the
formulation, preparation, filing, or prosecution of any Alternative
Restructuring Proposal or object to or take any other action that would
reasonably be expected to prevent, interfere with, delay, or impede the
solicitation, approval of the Disclosure Statement, or the confirmation and
consummation of the Plan and the Restructuring Transactions; provided that
nothing in this clause ‎(viii) shall affect any rights of the Consenting
Creditors set forth in Sections 8.01 and 8.02.

 

(c)          During the Agreement Effective Period, each Consenting Creditor,
severally, and not jointly, agrees in respect of all of its Company
Claims/Interests pursuant to this Agreement not to exercise any right or remedy
for the enforcement, collection, or recovery of any obligation arising under the
ABL Credit Agreement, First Lien Credit Agreement, the Second Lien Credit
Agreement, or the Unsecured Notes Indentures against any direct or indirect
subsidiary of Hornbeck that is a Non-Debtor Loan Party.

 

5.02.       Commitments with Respect to Chapter 11 Cases.

 

(a)          During the Agreement Effective Period, each Consenting Creditor
that is entitled to vote to accept or reject the Plan pursuant to its terms,
severally, and not jointly, agrees that it shall, subject to receipt by such
Consenting Creditor of the Solicitation Materials:

 

(i)         vote each of its Company Claims/Interests to accept the Plan by
delivering its duly executed and completed ballot accepting the Plan by the
applicable voting deadline following the commencement of the solicitation of the
Plan and its actual receipt of the Solicitation Materials and the ballot;

 

(ii)        not object to the Plan;

 

(iii)       consent to and, if applicable, not opt out of, the releases set
forth in the Plan; and

 

20  

 

 

(iv)       except as expressly set forth in this Agreement and subject to
Section 14.05, not change, withdraw, amend, or revoke (or cause to be changed,
withdrawn, amended, or revoked) any vote or election referred to in clauses
(a)(i) and (iii) above.

 

(b)           During the Agreement Effective Period, each Consenting Creditor,
in respect of each of its Company Claims/Interests, severally, and not jointly,
will support, and will not directly or indirectly object to, delay, impede, or
take any other action to interfere with any motion or other pleading or document
filed by a Company Party in the Bankruptcy Court that is consistent with this
Agreement.

 

5.03.       Forbearance Agreements..

 

(a)          Each Consenting ABL Lender party to the ABL Forbearance Agreement,
by signing this Agreement, agrees to extend the Termination Event (as defined in
the ABL Forbearance Agreement) set forth in section 2(a)(xv) thereof until the
earlier of (i) the Termination Date and (ii) Petition Date.

 

(b)          Each Consenting First Lien Lender party to the First Lien
Forbearance Agreement, by signing this Agreement, agrees to extend the
Termination Event (as defined in the First Lien Forbearance Agreement) set forth
in section 2(a)(xv) thereof until the earlier of (i) the Termination Date and
(ii) Petition Date.

 

(c)          Each Consenting Second Lien Lender party to the Second Lien
Forbearance Agreement, by signing this Agreement, agrees to extend the
Termination Event (as defined in the Second Lien Forbearance Agreement) set
forth in section 2(a)(xv) thereof until the earlier of (i) the Termination Date
and (ii) Petition Date.

 

(d)          Each Consenting Noteholder party to the Unsecured Notes Forbearance
Agreement, by signing this Agreement, agrees to extend the Forbearance Period
(as defined in the Unsecured Notes Forbearance Agreement) until the earlier of
(i) the Termination Date and (ii) Petition Date.

 

(e)           Notwithstanding anything herein to the contrary, all parties’
respective rights under the Forbearance Agreements are reserved.

 

Section 6.             Additional Provisions Regarding the Consenting Creditors’
Commitments.

 

Notwithstanding anything contained in this Agreement, nothing in this Agreement
shall: (i) be construed to prohibit any Consenting Creditor from appearing as a
party in interest in any matter to be adjudicated in the Chapter 11 Cases, so
long as such appearance and the positions advocated in connection therewith are
not inconsistent with this Agreement and are not for the purpose of delaying,
interfering, impeding, or taking any other action to delay, interfere or impede,
directly or indirectly, the Restructuring Transactions; (ii) affect the ability
of any Consenting Creditor to consult with any other Consenting Creditor, the
Company Parties, or any other party in interest in the Chapter 11 Cases
(including any official committee and the United States Trustee) so as long as
such consultation and any communications in connection therewith are not
inconsistent with this Agreement and are not for the purpose of delaying,
interfering,

 

21  

 

 

impeding, or taking any other action to delay, interfere, or impede, directly or
indirectly, the Restructuring Transactions; (iii) impair or waive the rights of
any Consenting Creditor to assert or raise any objection permitted under this
Agreement in connection with the Restructuring Transactions; (iv) prevent any
Consenting Creditor from enforcing this Agreement or contesting whether any
matter, fact, or thing is a breach of, or is inconsistent with, this Agreement;
and (v) obligate a Consenting Creditor to deliver a vote to support the Plan or
prohibit a Consenting Creditor from withdrawing such vote, in each case from and
after the Termination Date as to such Consenting Creditor (other than a
Termination Date as a result of the occurrence of the Plan Effective Date). For
the avoidance of doubt, upon the Termination Date as to a Consenting Creditor
(other than a Termination Date as a result of the occurrence of the Plan
Effective Date), such Consenting Creditor’s vote shall automatically be deemed
void ab initio and such Consenting Creditor shall have a reasonable opportunity
to cast a vote.

 

Section 7.             Commitments of the Company Parties.

 

7.01.       Affirmative Commitments. During the Agreement Effective Period, the
Company Parties shall agree to and shall cause each of their respective
subsidiaries to:

 

(a)          support and take all steps reasonably necessary and desirable,
including those steps reasonably requested by the Required Consenting Creditors,
to consummate, and facilitate the consummation of, the Restructuring
Transactions in accordance with this Agreement within the time frames
contemplated under this Agreement, including: (i) launching the Equity Rights
Offering; (ii) commencing the Chapter 11 Cases and completing and filing of the
Plan, Disclosure Statement and the other Definitive Documents, which documents
shall contain terms and conditions consistent in all material respects with the
Restructuring Term Sheet and this Agreement within the timeframes contemplated
herein; (iii) using commercially reasonable efforts to obtain orders of the
Bankruptcy Court approving the Disclosure Statement and confirming the Plan
within the timeframes contemplated herein; and (iv) not taking any action that
is inconsistent with, or is intended or could reasonably be expected to
interfere with, delay or impede, approval of any Definitive Document or
consummation of the Restructuring Transactions;

 

(b)          to the extent any legal or structural impediment arises that would
prevent, hinder, or delay the consummation of the Restructuring Transactions
contemplated herein, support and take all steps reasonably necessary and
desirable to address and resolve any such impediment;

 

(c)          subject to the terms of the Backstop and Direct Investment
Agreement, which in the case of any inconsistency with this Agreement shall
govern (except in the case of any inconsistency with ‎Section 8 of this
Agreement, in which case, ‎Section 8 of this Agreement shall govern) use
commercially reasonable efforts to obtain any and all required regulatory and/or
third-party approvals for the Restructuring Transactions;

 

(d)           negotiate in good faith and use commercially reasonable efforts to
execute and deliver the Definitive Documents and any other required agreements
to effectuate and consummate the Restructuring Transactions;

 

22  

 

 

(e)          provide the Consenting Creditor Representatives a reasonable
opportunity (which, to the extent reasonably practicable, shall be no less than
two (2) Business Days) to review draft copies of all pleadings, motions,
declarations, supporting exhibits, and proposed orders (including without
limitation the First Day Pleadings and all “second day” pleadings) and any other
documents that the Company Parties intend to file with the Bankruptcy Court if
such document concerns any Consenting Creditor, or its rights or recoveries (or
any financial or other analysis in respect thereof) in respect of its Claims
against the Company, or the ability of any of the Company Parties to implement
and consummate the Restructuring Transactions and shall consult with such
parties in good faith regarding the form and substance any such proposed
document;

 

(f)          actively oppose and object to the efforts of any person seeking to
object to, delay, impede, or take any other action to interfere with the
acceptance, implementation, or consummation of the Restructuring Transactions
(including, if applicable, the filing of timely filed objections or written
responses) to the extent such opposition or objection is reasonably necessary or
desirable to facilitate implementation of the Restructuring Transactions;

 

(g)          consult and negotiate in good faith with the Consenting Creditors
and the Consenting Creditor Representatives regarding the execution of
Definitive Documents and the implementation of the Restructuring Transactions
and not modify the Plan or any other Definitive Document, in whole or in part,
in a manner that is inconsistent with this Agreement or not in form or substance
acceptable to the Required Consenting Creditors;

 

(h)          upon reasonable request of any of the Consenting Creditors,
reasonably promptly inform the Consenting Creditor Representatives of: (i) the
material business and financial (including liquidity) performance of the Company
Parties; (ii) the status and progress of the Restructuring Transactions,
including progress in relation to the negotiations of the Definitive Documents;
and (iii) the status of obtaining any necessary or desirable authorizations
(including any consents) from each Consenting Creditor, any competent judicial
body, governmental authority, banking, taxation, supervisory, or regulatory body
or any stock exchange;

 

(i)            inform the Consenting Creditor Representatives reasonably
promptly after becoming aware of: (i) any matter or circumstance which they
know, or believe is likely, to be a material impediment to the implementation or
consummation of the Restructuring Transactions; (ii) any notice of any
commencement of any material involuntary insolvency proceedings, legal suit for
payment of debt or securement of security from or by any person in respect of
any Company Party; (iii) a material breach of this Agreement (including a breach
by any Company Party); and (iv) any representation or statement made or deemed
to be made by them under this Agreement which is or proves to have been
incorrect or misleading in any material respect when made or deemed to be made;

 

(j)            use commercially reasonable efforts to maintain their good
standing under the Laws of the state or other jurisdiction in which they are
incorporated or organized;

 

(k)          use commercially reasonable efforts to seek additional support for
the Restructuring Transactions from their other material stakeholders to the
extent reasonably prudent;

 

23  

 

 

(l)            operate the business of the Company Parties in the ordinary
course in manner that is consistent with this Agreement; and

 

(m)         notify the Required Consenting Creditors immediately in writing of
any breach of its obligations under this Agreement.

 

7.02.       Negative Commitments. During the Agreement Effective Period, each of
the Company Parties shall not directly or indirectly, and shall not directly or
indirectly encourage any other Entity to:

 

(a)          object to, delay, impede, or take any other action or inaction that
could interfere with or prevent acceptance, approval, implementation, or
consummation of the Restructuring Transactions, including, for the avoidance of
doubt, making, supporting, or not objecting to, any filings with the Bankruptcy
Court, any agency, or any regulatory agency, including the Securities and
Exchange Commission or the Internal Revenue Service, or by entering into any
agreement or making or supporting any filing, press release, press report, or
comparable public statement, with respect to any proposal other than the
Restructuring Transactions;

 

(b)          take any action that is inconsistent in any material respect with,
or is intended or could reasonably be expected to frustrate or impede approval,
implementation and consummation of the Restructuring Transactions;

 

(c)          except as agreed by the Required Consenting Creditors, modify the
Plan, in whole or in part, in a manner that is not consistent with this
Agreement in all material respects;

 

(d)          except as agreed by the Required Consenting Creditors, file any
pleading, motion, declaration, supporting exhibit or Definitive Document with
the Bankruptcy Court or any other court (including any modifications or
amendments thereof) that, in whole or in part, is not materially consistent with
this Agreement, the Plan, or other Definitive Documents, or that could
reasonably be expected to frustrate or impede confirmation of the Plan or
implementation and consummation of the Restructuring Transactions, is
inconsistent with the Restructuring Term Sheet, or which is otherwise in
substance not reasonably satisfactory to the Required Consenting Creditors;

 

(e)          without the consent of the Required Consenting Creditors, such
consent not to be unreasonably withheld, transfer any asset or right of any
Company Party or any asset or right used in the business of the Company Parties
to any person or entity outside the ordinary course of business;

 

(f)            take, or fail to take, any action that would cause a change to
the tax status of any Company Party; or

 

(g)          engage in any merger, consolidation, material disposition, material
acquisition, investment, dividend, incurrence of indebtedness or other similar
transaction outside of the ordinary course of business other than the
transactions contemplated herein.

 

24  

 

 

Section 8.             Additional Provisions Regarding Company Parties’
Commitments.

 

8.01.       Notwithstanding anything to the contrary in this Agreement, nothing
in this Agreement shall require a Company Party (including in its capacity as a
Debtor) or the Governing Body of a Company Party, or its directors, managers,
and officers, to take any action or to refrain from taking any action to the
extent such person or persons determines, based on the advice of counsel, that
taking or failing to take such action (including, without limitation, the
termination of this Agreement under Section ‎14.02) would be inconsistent with
applicable Law or its or their fiduciary obligations under applicable Law. The
Company Parties shall give prompt written notice to the Consenting Creditors of
any determination made in accordance with this Section ‎8.01. This Section ‎8.01
shall not impede any Party’s right to terminate this Agreement pursuant to
Section 14 of this Agreement, including on account of any action or inaction the
Company Party or a Governing Body of a Company Party may take pursuant to this
Section 8.01.

 

8.02.       Notwithstanding anything to the contrary in this Agreement, but
subject to the terms of Section 8.01, each Company Party and their respective
directors, officers, employees, investment bankers, attorneys, accountants,
consultants, and other advisors or representatives, shall have the right to
receive and discuss and/or analyze Alternative Restructuring Proposals, but none
of the Company Parties shall request or authorize any of the foregoing to
solicit an Alternative Restructuring Proposal, offer, indication of interest or
inquiry for one or more Alternative Restructuring Proposals; provided, that if
any Company Party, receives an unsolicited Alternative Restructuring Proposal,
then such Company Party shall (A) within one business day of receiving such
proposal, provide counsel to the Consenting Creditors with all documentation
received in connection with such Alternative Restructuring Proposal, which shall
be subject to professional eyes only unless otherwise authorized by the Company;
(B) provide counsel to the Consenting Creditors with regular updates as to the
status and progress of such Alternative Restructuring Proposal; (C) respond
promptly to reasonable information requests and questions from counsel to the
Consenting Creditors relating to such Alternative Restructuring Proposal; and
(D) if any Company Party decides, in the exercise of its fiduciary duties, to
pursue an Alternative Restructuring Proposal in accordance with Section 8.01,
the Company Parties shall give prompt written notice (with email being
sufficient) to the Consenting Creditors.

 

8.03.       Nothing in this Agreement shall: (a) impair or waive the rights of
any Company Party to assert or raise any objection permitted under this
Agreement in connection with the Restructuring Transactions; or (b) prevent any
Company Party from enforcing this Agreement or contesting whether any matter,
fact, or thing is a breach of, or is inconsistent with, this Agreement.

 

Section 9.             Mutual Releases.

 

9.01.        Releases.

 

Except as expressly set forth in this Agreement, effective on the Plan Effective
Date, in exchange for good and valuable consideration:

 

25  

 

 

(a)          each Releasing Consenting Creditor Party forever and irrevocably
releases, absolves, acquits, waives and discharges each Releasing Company Party
from and against all claims, counterclaims, controversies, proceedings, suits,
orders, judgments, demands, rights, obligations, liens, actions, and causes of
action of any kind or character, whether known or unknown, contingent or
non-contingent, derivative or otherwise, whether in law or in equity, whether
sounding in tort or in contract, arising out of or in connection with or
otherwise, existing as of the Plan Effective Date relating to the refinancing
and restructuring transactions (including but not limited to any decisions made
or not made by the Company’s board of directors and management in relation
thereto) occurring prior to the Plan Effective Date or based on or relating to,
or in any manner arising from, in whole or in part, the Company Parties
(including the management, ownership or operation thereof), their capital
structure, the purchase, sale, or rescission of any security of the Company
Parties, the subject matter of, or the transactions or events giving rise to,
any Claim or Interest that is treated in the Plan, the business or contractual
arrangements between any Company Party and any Releasing Party, the transactions
implementing, the terms of and any other circumstance relating to the First Lien
Credit Agreement, the Second Lien Credit Agreement, the ABL Credit Agreement,
the Unsecured Notes Indentures, the assertion or enforcement of rights and
remedies against the Company Parties’ out-of-court restructuring efforts,
intercompany transactions between or among a Company Party and another Company
Party, the formulation, preparation, dissemination, negotiation, or filing of
this Agreement, the Definitive Documents, or any Restructuring Transaction,
contract, instrument, release, or other agreement or document created or entered
into in connection with this Agreement or the Definitive Documents, the pursuit
of consummation, the administration and implementation of the Restructuring
Transaction, or upon any other act or omission, transaction, agreement, event,
or other occurrence related to the Company Parties (collectively, the “Released
Claims”) that each such Releasing Consenting Creditor Party ever had, may have
or hereafter can, may or shall have against or with respect to such Releasing
Company Party, and from all damages, indemnities and obligations of any kind or
character whatsoever related thereto, including any Released Claim such
Releasing Consenting Creditor does not know or suspect to exist in its favor as
of the Plan Effective Date which if known by it, might affect its decision, and
agrees and covenants not to assert or prosecute, or assist or otherwise aid any
other Person in the assertion or prosecution, against such Releasing Company
Party of the Released Claims; provided that no Releasing Consenting Creditor
Party shall be deemed to have released any Person from (a) any obligation
arising under or pursuant to this Agreement or the Definitive Documents or (b)
any claim or Cause of Action related to an act or omission that is determined in
a Final Order by a court of competent jurisdiction to have constituted actual
fraud, willful misconduct, gross negligence or bad faith;

 

(b)          each Releasing Company Party forever and irrevocably releases,
absolves, acquits, waives and discharges each Releasing Consenting Creditor
Party from and against all Released Claims that such Releasing Company Party
ever had, may have or hereafter can, may or shall have against or with respect
to such Releasing Consenting Creditor Party, and from all damages, indemnities
and obligations of any kind or character whatsoever related thereto, including
any Released Claim which such Releasing Company Party does not know or suspect
to exist in its favor as of the Plan Effective Date, which if known by it, might
affect its decision, and agrees and covenants not to assert or prosecute, or
assist or otherwise aid any other Person in the assertion or prosecution,
against such Releasing Consenting Creditor Party of the Released

 

26  

 

 

Claims; provided that no Releasing Company Party shall be deemed to have
released any Person from (a) any obligation arising under or pursuant to this
Agreement or the Definitive Documents or (b) any claim or Cause of Action
related to an act or omission that is determined in a Final Order by a court of
competent jurisdiction to have constituted actual fraud, willful misconduct,
gross negligence or bad faith; and

 

(c)          each Releasing Consenting Creditor Party forever and irrevocably
releases, absolves, acquits, waives and discharges every other Releasing
Consenting Creditor Party from and against all Released Claims that such
Releasing Company Party ever had, may have or hereafter can, may or shall have
against or with respect to such Releasing Consenting Creditor Party, and from
all damages, indemnities and obligations of any kind or character whatsoever
related thereto, including any Released Claim which such Releasing Company Party
does not know or suspect to exist in its favor as of the Plan Effective Date,
which if known by it, might affect its decision, and agrees and covenants not to
assert or prosecute, or assist or otherwise aid any other Person in the
assertion or prosecution, against such Releasing Consenting Creditor Party of
the Released Claims; provided that no Releasing Consenting Creditor Party shall
be deemed to have released any Person from (a) any obligation arising under or
pursuant to this Agreement or the Definitive Documents or (b) any claim or Cause
of Action related to an act or omission that is determined in a Final Order by a
court of competent jurisdiction to have constituted actual fraud, willful
misconduct, gross negligence or bad faith.

 

9.02.       No Additional Representations and Warranties. Each of the Parties
agrees and acknowledges that, except as expressly provided in this Agreement and
the Definitive Documents:

 

(a)          no other Party, in any capacity, has warranted or otherwise made,
and it has not received or relied on, any representations concerning any
Released Claim (including any representation concerning the existence,
nonexistence, validity or invalidity of any Released Claim). Notwithstanding the
foregoing, nothing contained in this Agreement is intended to impair or
otherwise derogate from any of the representations, warranties, or covenants
expressly set forth in this Agreement or any of the Definitive Documents;

 

(b)          it knowingly and voluntarily waives and relinquishes the
provisions, rights, and benefits of the California Civil Code section 1542
(which provides as follows: SECTION 1542. GENERAL RELEASE. A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND
THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.) and all similar federal or state
laws, rights, rules, or legal principles of any other jurisdiction that may be
applicable herein, and any rights it may have to invoke the provisions of any
such law now or in the future with respect to the Released Claims, and that this
is an essential term of the Restructuring Transactions; and

 

27  

 

 

(c)          it intends to fully, finally, and forever settle and release all
matters and all claims relating thereto, which exist, or might have existed
(whether or not previously or currently asserted in any action) relating to the
Released Claims.

 

9.03.       Notwithstanding anything to the contrary herein, nothing in the
Release shall release, waive, modify, discharge, limit or impair (i) any rights,
terms, obligations, or remedies arising under any document, instrument or
agreement executed to implement the Restructuring Transactions, (ii) any
post-Plan Effective Date obligations or actions of any person, (iii) any right
of any Company Released Party to indemnification or exculpation existing under
applicable law (whether now existing or existing under prior applicable law) or
the organizational documents of any Company Released Party or (iv) any Claims or
“Obligations” under the First Lien Credit Agreement, the Second Lien Credit
Agreement, the ABL Credit Agreement, the DIP Credit Agreement, the Unsecured
Notes Indentures or any documents related thereto (in each case, except as may
be expressly modified by the Plan).

 

Section 10.           Transfer of Interests and Securities.

 

10.01.     During the Restricted Period, each Consenting Creditor agrees that it
shall not sell, transfer, assign or otherwise dispose of, or grant, issue or
sell any option, right to acquire, participation or other interest in (each, a
“Transfer”) any of its Company’s Claims, as applicable, unless such Consenting
Creditor delivers to the Notice Parties for the benefit of the other Parties a
Joinder or a Transfer Agreement in the form attached hereto as Exhibit C and
Exhibit D, respectively, signed by the transferee (unless such transferee is
already a Consenting Creditor and in such case no Joinder or Transfer Agreement
shall be required). No Consenting Creditor may create or utilize any Affiliate
to acquire any of the Company’s Claim without first causing such Affiliate to
deliver to the Company Parties a Joinder or a Transfer Agreement.

 

10.02.     Upon compliance with the requirements of Section ‎10.01 (x) the
transferee shall be deemed to constitute a Consenting Creditor for all purposes
of this Agreement, and (y) the transferor shall be deemed to relinquish its
rights and be released from its obligations under this Agreement (other than any
liability for its breach or non-performance of any of its obligations hereunder
prior to such Transfer), in each case to the extent of such Transfer.

 

10.03.     Any Transfer that does not comply with the foregoing, including, for
the avoidance of doubt, the transferee having made the representations and
warranties in the Transfer Agreement, shall be deemed void ab initio.

 

10.04.     An Unsecured Noteholder may either (x) permit its prime broker to
hold Unsecured Notes as part of a custodian arrangement or (y) pledge notes in
connection with any Unsecured Noteholder’s regular course debt financing
arrangements, provided that in each case such Unsecured Noteholder retains all
of its rights to tender such Unsecured Notes in the Restructuring Transactions
and its voting rights with respect to such Unsecured Notes prior to the
occurrence of a Termination Event that has not been duly waived in accordance
with the terms hereof;

 

10.05.     Notwithstanding Section ‎10.01, a Qualified Marketmaker that acquires
any Company Claims/Interests with the purpose and intent of acting as a
Qualified Marketmaker for

 

28  

 

 

such Company Claims/Interests shall not be required to execute and deliver a
Joinder or a Transfer Agreement in respect of such Company Claims/Interests if
(i) such Qualified Marketmaker subsequently transfers such Company
Claims/Interests (by purchase, sale, assignment, participation, or otherwise)
within ten (10) Business Days of its acquisition to a transferee that is an
entity that is not an affiliate, affiliated fund, or affiliated entity with a
common investment advisor; (ii) the transferee otherwise is a Permitted
Transferee under ‎Section 10; and (iii) the Transfer otherwise is a permitted
transfer under ‎Section 10. To the extent that a Consenting Creditor is acting
in its capacity as a Qualified Marketmaker, it may Transfer (by purchase, sale,
assignment, participation, or otherwise) any right, title, or interests in
Company Claims/Interests that the Qualified Marketmaker acquires from a holder
of the Company Claims/Interests who is not a Consenting Creditor without the
requirement that the transferee be a Permitted Transferee.

 

10.06.     Notwithstanding anything to the contrary in this ‎Section 10, the
restrictions on Transfer set forth in this ‎Section 10 shall not apply to the
grant of any liens or encumbrances on any claims and interests in favor of a
bank or broker-dealer holding custody of such claims and interests in the
ordinary course of business and which lien or encumbrance is released upon the
Transfer of such claims and interests.

 

10.07.     This ‎Section 10 shall not impose any obligation on any Company Party
to issue any “cleansing letter” or otherwise publicly disclose information for
the purpose of enabling a Consenting Creditor to Transfer any of its Company
Claims/Interests. Notwithstanding anything to the contrary herein, to the extent
a Company Party and another Party have entered into a Confidentiality Agreement,
the terms of such Confidentiality Agreement shall continue to apply and remain
in full force and effect according to its terms, and this Agreement does not
supersede any rights or obligations otherwise arising under such Confidentiality
Agreements.

 

10.08.     This Agreement shall in no way be construed to preclude any
Consenting Creditor from acquiring additional Company Claims/Interests,
provided, that any such additional Company Claims/Interests shall automatically
be deemed to be subject to the terms of this Agreement.

 

Section 11.           Representations and Warranties of Consenting Creditors.
Each Consenting Creditor, severally, and not jointly, represents and warrants
that, as of the date such Consenting Creditor executes and delivers this
Agreement and the Agreement Effective Date:

 

(a)          subject to any limitations set forth in such Consenting Creditor’s
signature page listing of owned securities, such Consenting Creditor (i) is the
beneficial owner of, or is the nominee, investment manager, or advisor for one
or more beneficial holders of, the principal amount of the ABL Claims, First
Lien Claims, Second Lien Claims and Unsecured Notes, as applicable, set forth on
its signature page hereto, and (ii) has voting power or authority or discretion
with respect to such ABL Claims, First Lien Claims, Second Lien Claims and
Unsecured Notes, including, without limitation, to vote, exchange, assign, and
transfer such claims subject to applicable law;

 

(b)          other than as permitted pursuant to Section 10.06, such Consenting
Creditor holds its Claims free and clear of any claim, option, voting
restriction, right of first refusal, or other

 

29  

 

 

limitation on disposition or encumbrances of any kind that would adversely
affect such Consenting Creditor’s performance of its obligations in this
Agreement at the time such obligations are required to be performed; and

 

(c)          such Consenting Creditor is not a Competitor of any Company Party,
an Affiliate of a Competitor or a significant shareholder4 of a Competitor.

 

Section 12.           Representations of the Company Parties. Each of the
Company Parties (including, as applicable, in their capacity as Debtors and
Reorganized Debtors) represents, warrants and covenants, jointly and severally,
that, as of the date hereof and the Agreement Effective Date:

 

(a)          each Company Party has been duly formed or organized, is validly
existing in good standing under the laws of its jurisdiction of incorporation or
organization and has the power and authority to carry on its business as
presently conducted and to own, lease and operate its properties;

 

(b)          each Company Party is duly qualified and is in good standing under
the law of its jurisdiction of incorporation, and is authorized to do business
in each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure to be
so qualified would not reasonably be expected to have a material adverse effect
on the business, prospects, financial condition or results of operations of such
Company Party;

 

(c)          this Agreement is, and each of the other Definitive Documents prior
to its execution and delivery will be, duly authorized;

 

(d)          with respect to each Definitive Document that is a contract to
which a Company Party is a party and assuming due authorization, execution and
delivery of such Definitive Document by the other parties to such Definitive
Document, such Definitive Document, when executed and delivered by the
applicable Company Party, will constitute a legal, valid, binding instrument
enforceable against such Company Party in accordance with its terms, subject, as
to enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent transfer, fraudulent conveyance or other
similar laws affecting creditors’ rights generally from time to time in effect
and to general principles of equity, whether in a proceeding at law or in
equity;

 

(e)          except as would not materially adversely affect consummation of the
transactions contemplated by this Agreement and the Definitive Documents, there
are no legal, regulatory or governmental proceedings pending or, to the
knowledge of the Company, threatened to which any Company Party is or could be a
party or to which any of their respective property is or could be subject; and

 

(f)          each Company Party that owns a vessel documented under the laws and
flag of the United States is a citizen of the United States qualified to own and
operate its vessels in the

 

 

4 For the avoidance of doubt, significant shareholder shall mean any holder
owning more than ten percent in a Competitor.

 

30  

 

 

United States coastwise trade under the statutory laws and regulations and
general maritime laws of the United States of America.

 

Section 13.          Mutual Representations, Warranties, and Covenants. Each of
the Parties, severally, and not jointly, represents, warrants, and covenants to
each other Party, as of the date such Party executes and delivers this Agreement
and as of the Plan Effective Date:

 

(a)          such Party has all requisite corporate, partnership, limited
liability company, or similar authority to enter into this Agreement and carry
out the Restructuring Transactions contemplated hereby and perform its
obligations contemplated hereunder; and the execution and delivery of this
Agreement and the performance of such Party’s obligations hereunder have been
duly authorized by all necessary corporate, partnership, limited liability
company, or other similar action on its part;

 

(b)          the execution, delivery, and performance by such Party of this
Agreement does not and will not (i) violate (A) any provision of law, rule, or
regulation applicable to such Party or any of its subsidiaries or (B) such
Party’s charter or bylaws (or other similar organizational and governing
documents) or those of any of its subsidiaries or (ii) except as contemplated
herein, conflict with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under any material contractual obligation to
which such Party or any of its subsidiaries is a party;

 

(c)          this Agreement is the legally valid and binding obligation of such
Party, enforceable against such Party in accordance with its terms, subject as
to enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent transfer, fraudulent conveyance or other
similar laws affecting creditors’ rights generally from time to time in effect
and to general principles of equity, whether in a proceeding at law or in
equity;

 

(d)          except as expressly provided in this Agreement, the Plan, and the
Bankruptcy Code, no consent or approval is required by any other person or
entity in order for it to effectuate the Restructuring Transactions contemplated
by, and perform its respective obligations under, this Agreement;

 

(e)          except as expressly provided by this Agreement and the DIP
Documents, it is not party to any restructuring or similar agreements or
arrangements with the other Parties to this Agreement that have not been
disclosed to all Parties to this Agreement;

 

(f)            to the extent a Party is a Released Party, such Party has not
assigned, conveyed, sold, hypothecated or otherwise transferred all, any part of
or any interest in any Cause of Action that would be a Released Claim hereunder;
and

 

(g)          each Consenting Creditor agrees not to become a Competitor of any
Company Party or a significant shareholder of a Competitor.

 

31  

 

 

Section 14.          Termination Events.

 

14.01.     Consenting Creditor Termination Events. This Agreement may be
terminated with respect to the Consenting ABL Lenders by the Required Consenting
ABL Lenders, with respect to the Consenting First Lien Lenders, by the Required
Consenting First Lien Lenders, with respect to the Consenting Second Lien
Lenders, by the Required Consenting Second Lien Lenders and, with respect to the
Consenting Unsecured Noteholders, by the Required Unsecured Noteholders, by the
delivery to the Company Parties of a written notice in accordance with Section
16.11 hereof upon the occurrence of any of the following events, unless waived:

 

(a)          the breach in any material respect by a Company Party of any of the
representations, warranties, or covenants of the Company Parties set forth in
this Agreement or any Definitive Document, which remains uncured for five (5)
Business Days after such terminating Consenting Creditors transmit a written
notice in accordance with Section ‎‎16.11 hereof detailing any such breach;

 

(b)          the breach in any material respect by any Consenting ABL Lender,
Consenting First Lien Lender, Consenting Second Lien Lender or Consenting
Unsecured Noteholder, of any of the representations, warranties, or covenants of
any such parties set forth in this Agreement, which remains uncured for five (5)
Business Days after such terminating Consenting Creditors transmit a written
notice in accordance with Section ‎‎16.11 hereof detailing any such breach;
provided, that such terminating Consenting Creditors have not committed such
breach;

 

(c)          the amendment or modification of this Agreement or any of the
Definitive Documents without the consent of the Required Consenting Creditors;

 

(d)          any of the Company Parties files or otherwise makes public any of
the Definitive Documents (including and modification or amendments thereto) (i)
in a form that is materially inconsistent with this Agreement and (ii) without
the consent of the applicable Required Consenting Creditors in accordance with
this Agreement, which occurrence remains uncured (to the extent curable) for
five (5) Business Days after such terminating Consenting Creditor transmits a
written notice in accordance with Section 16.11;

 

(e)          the Company Parties (i) withdraw the Plan, (ii) publicly announce
their intention not to support the Restructuring Transactions, (iii) provide
notice to counsel to the Consenting Creditors pursuant to Section ‎8.01 or ‎8.02
or (iv) publicly announce, or execute a definitive written agreement with
respect, to an Alternative Restructuring Proposal;

 

(f)          any of the Parties (i) files any motion seeking to avoid, disallow,
subordinate, or recharacterize any First Lien Claims, Second Lien Claims, ABL
Claims, Unsecured Note Claims, lien, or interest held by any Consenting Creditor
arising under or relating to the First Lien Credit Agreement, Second Lien Credit
Agreement, ABL Credit Agreement or the Unsecured Notes Indentures or (ii) shall
have supported any application, adversary proceeding, or cause of action
referred to in the immediately preceding clause (i) filed by a third party, or
consents to the standing of any such third party to bring such application,
adversary proceeding, or cause of action;

 

32  

 

 

(g)          the issuance by any governmental authority, including any
regulatory authority or court of competent jurisdiction, of any final,
non-appealable ruling, judgment, or order that (i) enjoins the consummation of
the Restructuring Transactions and (ii) remains in effect for ten (10) Business
Days; provided that this termination right may not be exercised by any Party
that sought or requested such ruling or order in contravention of any obligation
set out in this Agreement;

 

(h)          the Bankruptcy Court enters an order denying confirmation of the
Plan and such order remains in effect for seven (7) Business Days after entry of
such order;

 

(i)            any of the orders approving, the Disclosure Statement, the Plan,
or the Definitive Documents are reversed, dismissed, stayed, vacated or
reconsidered or modified or amended without the consent of the Required
Consenting Creditors;

 

(j)            any court of competent jurisdiction has entered a judgment or
order declaring this Agreement or any Definitive Document to be unenforceable;

 

(k)          the entry of an order by the Bankruptcy Court, or the filing of a
motion or application by any Company Party seeking an order (without the prior
written consent of the Required Consenting Creditors), (i) converting one or
more of the Chapter 11 Cases of a Company Party to a case under chapter 7 of the
Bankruptcy Code, (ii) appointing an examiner with expanded powers beyond those
set forth in sections 1106(a)(3) and (4) of the Bankruptcy Code or a trustee in
one or more of the Chapter 11 Cases of a Company Party, or (iii) rejecting this
Agreement;

 

(l)            if any Company Party (i) voluntarily commences any case or files
any petition seeking bankruptcy, winding up, dissolution, liquidation,
administration, moratorium, receivership, reorganization or other relief under
any federal, state or foreign bankruptcy, insolvency, administrative
receivership or similar law now or hereafter in effect, except as contemplated
by this Agreement, (ii) consents to the institution of, or fails to contest in a
timely and appropriate manner, any involuntary proceeding or petition described
in the preceding subsection (i), (iii) applies for or consents to the
appointment of a receiver, administrator, administrative receiver, trustee,
custodian, sequestrator, conservator or similar official with respect to any
Company Party or for a substantial part of such Company Party’s assets, (iv)
makes a general assignment or arrangement for the benefit of creditors, or (v)
takes any corporate action for the purpose of authorizing any of the foregoing;

 

(m)         the failure to meet a Milestone, which has not been waived or
extended in a manner consistent with this Agreement, unless such failure is the
result of any act, omission, or delay on the part of the terminating Consenting
Creditor in violation of its obligations under this Agreement;

 

(n)          the Backstop and Direct Investment Agreement is terminated in
accordance with its terms;

 

33  

 

 

(o)          the Debtors enter into any commitment or agreement to receive or
obtain debtor in possession financing, cash collateral usage, exit financing
and/or other financing arrangements, other than as expressly contemplated in the
DIP Documents;

 

(p)          the Debtors’ use of cash collateral or the DIP Facility has been
validly terminated (or, in the case of the DIP Facility, accelerated) in
accordance with the DIP Orders and the DIP Documents;

 

(q)          the breach in any material respect by a Company Party of any of the
representations, warranties, or covenants of the Company Parties set forth in
any Forbearance Agreement which remains uncured for five (5) Business Days after
such terminating Consenting Creditors transmit a written notice in accordance
with Section 16.11 hereof detailing any such breach; or

 

(r)          the termination of any of the Forbearance Agreements other than as
a result of the commencement of the Chapter 11 Cases.

 

14.02.     Company Party Termination Events. Any Company Party may terminate
this Agreement as to all Parties upon a written notice delivered to the
Consenting Creditors in accordance with Section ‎16.11 hereof upon the
occurrence of the following events:

 

(a)          the breach in any material respect by one or more of the Consenting
Creditors of any provision set forth in this Agreement that remains uncured for
a period of five (5) Business Days after the receipt by such Consenting Creditor
of notice of such breach;

 

(b)          the Governing Body of any Company Party determines, after
consulting with counsel, (i) that proceeding with any of the Restructuring
Transactions would be inconsistent with the exercise of its fiduciary duties or
applicable Law or (ii) in the exercise of its fiduciary duties, to pursue an
Alternative Restructuring Proposal;

 

(c)          the issuance by any governmental authority, including any
regulatory authority or court of competent jurisdiction, of any final,
non-appealable ruling, judgment or order that (i) enjoins the consummation of a
material portion of the Restructuring Transactions and (ii) remains in effect
for fifteen (15) Business Days after such terminating Company Party transmits a
written notice in accordance with Section ‎16.11 hereof detailing any such
issuance; provided that this termination right shall not apply to or be
exercised by any Company Party that sought or requested such ruling or order in
contravention of any obligation or restriction set out in this Agreement; or

 

(d)          the Bankruptcy Court enters an order denying confirmation of the
Plan and such order remains in effect for seven (7) Business Days after entry of
such order.

 

14.03.     Mutual Termination. This Agreement, and the obligations of all
Parties hereunder, may be terminated by mutual written agreement among all of
the following: (a) the Required Consenting Creditors; and (b) each Company
Party.

 

34  

 

 

14.04.     Automatic Termination. This Agreement shall terminate automatically
without any further required action or notice upon the occurrence of any of the
following events:

 

(a)          the occurrence of Plan Effective Date; or

 

(b)          the commencement of an involuntary case under the Bankruptcy Code
against any of the Company Parties unless such case is withdrawn, dismissed or
converted to a voluntary case, including the Chapter 11 Cases, which shall have
been commenced, in each case within 10 business days.

 

14.05.     Effect of Termination. Effective as of the Termination Date, this
Agreement shall terminate and shall be of no further force and effect, subject
to section 16.22 hereof, and no Party shall have any continuing liability or
obligation to any other Party under this Agreement (including, without
limitation, any commitment with respect to the DIP Facility) and shall have the
rights and remedies that it would have had, had it not entered into this
Agreement, and shall be entitled to take all actions, whether with respect to
the Restructuring Transactions or otherwise, that it would have been entitled to
take had it not entered into this Agreement; provided, however, that no
termination shall relieve any Party from liability for its breach or
non-performance of any of its obligations hereunder prior to the Termination
Date. Upon the occurrence of a Termination Date prior to the Confirmation Order
being entered by a Bankruptcy Court, any and all consents or ballots tendered by
the Consenting Creditors subject to such termination before a Termination Date
shall automatically be deemed, for all purposes, to be null and void from the
first instance and shall not be considered or otherwise used in any manner by
the Parties in connection with the Restructuring Transactions and this Agreement
or otherwise; and such Consenting Creditors may file a notice of change of vote
with the Bankruptcy Court; provided that such notice must be provided as soon as
reasonably practicable following the Termination Date with respect to such
Consenting Creditor. Nothing in this Agreement shall be construed as prohibiting
a Company Party or any of the Consenting Creditors from contesting whether any
such termination is in accordance with its terms or to seek enforcement of any
rights under this Agreement that arose or existed before a Termination Date.
Except as expressly provided in this Agreement, nothing herein is intended to,
or does, in any manner waive, limit, impair, or restrict (a) any right of any
Company Party or the ability of any Company Party to protect and reserve its
rights (including rights under this Agreement), remedies, and interests,
including its claims against any Consenting Creditor, and (b) any right of any
Consenting Creditor, or the ability of any Consenting Creditor, to protect and
preserve its rights (including rights under this Agreement), remedies, and
interests, including its claims against any Company Party or Consenting
Creditor. No purported termination of this Agreement shall be effective under
this Section 14.05 or otherwise if the Party seeking to terminate this Agreement
is in material breach of this Agreement, except a termination pursuant to
Section ‎14.02(a) or Section ‎14.02(d). Nothing in this Section 14.05 shall
restrict any Company Party’s right to terminate this Agreement in accordance
with Section ‎14.02(a).

 

35  

 

 

Section 15.          Amendments and Waivers.

 

(a)          This Agreement may not be modified, amended, or supplemented, and
no condition or requirement of this Agreement may be waived, in any manner
except in accordance with this ‎Section 15.

 

(b)          This Agreement may be modified, amended, or supplemented, or a
condition or requirement of this Agreement may be waived, by written consent
(which may be by email) of (i) each Company Party; and (ii) the Required
Consenting Creditors; provided, however, that if the proposed modification,
amendment, waiver, or supplement has a material, disproportionate, and adverse
effect on any of the Company Claims/Interests, the DIP Commitments, or the DIP
Claims held by a Consenting Creditor as compared to (A) in the case of a
Consenting ABL Lender, the other Consenting ABL Lenders, (B) in the case of a
Consenting First Lien Lenders, the other Consenting First Lien Lenders, (C) in
the case of a Consenting Second Lien Lender, the other Consenting Second Lien
Lenders and (D) in the case of a Consenting Unsecured Noteholder, the other
Consenting Unsecured Noteholders, then the consent of such affected Consenting
Creditor shall also be required to effectuate such modification, amendment,
waiver or supplement, provided, further that any modification, amendment, waiver
or supplement to this ‎Section 15 shall require the prior written consent of
each of the Parties.

 

(c)          Any proposed modification, amendment, waiver, or supplement that
does not comply with this ‎Section 15 shall be ineffective and void ab initio.

 

(d)          The waiver by any Party of a breach of any provision of this
Agreement shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent breach. No failure on the
part of any Party to exercise, and no delay in exercising, any right, power, or
remedy under this Agreement shall operate as a waiver of any such right, power,
or remedy or any provision of this Agreement, nor shall any single or partial
exercise of such right, power, or remedy by such Party preclude any other or
further exercise of such right, power, or remedy or the exercise of any other
right, power, or remedy. All remedies under this Agreement are cumulative and
are not exclusive of any other remedies provided by Law.

 

Section 16.          Miscellaneous.

 

16.01.     Acknowledgement. Notwithstanding any other provision herein, this
Agreement is not and shall not be deemed to be an offer with respect to any
securities or solicitation of votes for the acceptance of a plan of
reorganization for purposes of Sections 1125 and 1126 of the Bankruptcy Code or
otherwise. Any such offer or solicitation will be made only in compliance with
all applicable securities Laws, provisions of the Bankruptcy Code, and/or other
applicable Law.

 

16.02.     Exhibits Incorporated by Reference; Conflicts. Each of the exhibits,
annexes, signatures pages, and schedules attached hereto is expressly
incorporated herein and made a part of this Agreement, and all references to
this Agreement shall include such exhibits, annexes, and schedules. In the event
of any inconsistency between this Agreement (without reference to the exhibits,
annexes, and schedules hereto) and the exhibits, annexes, and schedules hereto,
this

 

36  

 

 

Agreement (without reference to the exhibits, annexes, and schedules thereto)
shall govern; provided that, in the event of any inconsistency between this
Agreement and the Restructuring Term Sheet, the Restructuring Term Sheet shall
govern until such time as the Definitive Documents have been negotiated and
agreed in accordance with the consent rights hereunder, at which time, the terms
and conditions set forth in the Definitive Documents, to the extent intended to
supersede the Restructuring Term Sheet, shall govern.

 

16.03.     Entire Agreement. This Agreement, including all exhibits, schedules
and annexes hereto, constitutes the entire agreement of the Company Parties and
the Consenting Creditors with respect to the subject matter of this Agreement,
and supersedes all other prior negotiations, agreements and understandings,
whether written or oral, among the Parties with respect to the subject matter of
this Agreement, other than the Confidentiality Agreements which remain
unaltered.

 

16.04.     Counterparts. This Agreement may be executed in one or more
counterparts, each of which, when so executed, shall constitute the same
instrument and the counterparts may bedelivered personally or by electronic mail
in portable document format (.pdf).

 

16.05.     Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to such
state’s choice of law provisions which would require the application of the law
of any other jurisdiction. Each of the Parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of New York and of the United States of America in each case
located in New York County; provided that, after the Petition Date, the Parties
hereto irrevocably and unconditionally consent to submit to the exclusive
jurisdiction of the Bankruptcy Court, for any action arising out of or relating
to this Agreement or the Term Sheet and the transactions contemplated hereby and
thereby (and agrees not to commence any action relating hereto or thereto except
in such courts), and (a) waives any objection to laying venue in any such action
or proceeding in such courts, (b) waives any objections that such court is an
inconvenient forum or does not have jurisdiction over any Party hereto and (c)
further agrees that service of any process, summons, notice or document by U.S.
registered mail to its address set forth in Section ‎16.11 shall be effective
service of process for any action brought against it in any such court.

 

16.06.     Trial by Jury Waiver. EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

16.07.     Rules of Construction. This Agreement is the product of negotiations
among the Company Parties and the Consenting Creditors, and in the enforcement
or interpretation hereof, is to be interpreted in a neutral manner, and any
presumption with regard to interpretation for or against any Party by reason of
that Party having drafted or caused to be drafted this Agreement, or any portion
hereof, shall not be effective in regard to the interpretation hereof. The
Company Parties and the Consenting Creditors were each represented by counsel
during the negotiations and drafting of this Agreement and continue to be
represented by counsel.

 

37  

 

 

16.08.     Headings. The headings of the sections, paragraphs and subsections of
this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.

 

16.09.     Further Assurances. Subject to the other terms of this Agreement, the
Parties agree to execute and deliver such other instruments and perform such
acts, in addition to the matters herein specified, as may be reasonably
appropriate or necessary, or as may be required by order of the Bankruptcy
Court, from time to time, to effectuate the Restructuring Transactions, as
applicable.

 

16.10.     Successors and Assigns; Third Parties. This Agreement is intended to
bind and inure to the benefit of the Parties and their respective successors and
permitted assigns, as applicable. Unless expressly stated or referred to herein,
there are no third party beneficiaries under this Agreement, and the rights or
obligations of any Party under this Agreement may not be assigned, delegated, or
transferred to any other person or entity.

 

16.11.     Notices. All notices hereunder shall be deemed given if in writing
and delivered, by electronic mail, courier, or registered or certified mail
(return receipt requested), to the following parties (the “Notice Parties”) at
the following addresses:

 

(a) if to any of the Company Parties:

 

Hornbeck Offshore Services, Inc. 

103 Northpark Boulevard, Suite 300 

Covington, Louisiana 70433 

Attn: Samuel Giberga
Email: samuel.giberga@hornbeckoffshore.com

  

with a copy to (which shall not constitute notice):

  

Kirkland & Ellis LLP 

609 Main Street 

Houston, Texas 77002 

Attn: Ryan Blaine Bennett 

Email: Rbennett@kirkland.com 

 

(b) if to a Consenting ABL Lender, to:

 

Brown Rudnick LLP 

One Financial Center 

Boston, MA 02111 

Attention: Tia C. Wallach 

Email Address: TWallach@brownrudnick.com

 

(c) if to a Consenting Secured Lender, to:

 

Davis Polk & Wardwell LLP 

450 Lexington Avenue

 

38  

 

 

New York, New York 10017 

Attention: Damian S. Schaible, Darren S. Klein, and Stephanie Massman 

Email address:  damian.schaible@davispolk.com 

darren.klein@davispolk.com 

stephanie.massman@davispolk.com 

  

(d) if to a Consenting Unsecured Noteholder, to:

 

Milbank LLP 

55 Hudson Yards 

New York, New York 10001-2163 

Attention: Gerard Uzzi, Brett Goldblatt, James Ball 

Email: guzzi@milbank.com 

bgoldblatt@milbank.com 

jball@milbank.com

 

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

 

16.12.     Independent Due Diligence and Decision Making. Each Consenting
Creditor hereby confirms that its decision to execute this Agreement has been
based upon its independent investigation of the operations, businesses,
financial and other conditions, and prospects of the Company Parties.

 

16.13.     Enforceability of Agreement. Each of the Parties to the extent
enforceable waives any right to assert that the exercise of termination rights
under this Agreement is subject to the automatic stay provisions of the
Bankruptcy Code, and expressly stipulates and consents hereunder to the
prospective modification of the automatic stay provisions of the Bankruptcy Code
for purposes of exercising termination rights under this Agreement, to the
extent the Bankruptcy Court determines that such relief is required.

 

16.14.     Waiver. If the Restructuring Transactions are not consummated, or if
this Agreement is terminated for any reason, the Parties fully reserve any and
all of their rights. Pursuant to Federal Rule of Evidence 408 and any other
applicable rules of evidence, this Agreement and all negotiations relating
hereto shall not be admissible into evidence in any proceeding other than a
proceeding to enforce its terms or the payment of damages to which a Party may
be entitled under this Agreement.

 

16.15.     Specific Performance. It is understood and agreed by the Parties that
money damages would be an insufficient remedy for any breach of this Agreement
by any Party, and each non-breaching Party shall be entitled to specific
performance and injunctive or other equitable relief (without the posting of any
bond and without proof of actual damages) as a remedy of any such breach,
including an order of the Bankruptcy Court or other court of competent
jurisdiction requiring any Party to comply promptly with any of its obligations
hereunder.

 

16.16.     Several Obligations; No Liability. Notwithstanding anything to the
contrary in this Agreement, the Parties agree that (a) the representations and
warranties of each Consenting

 

39  

 

 

Creditor made in this Agreement are being made on a several, and not joint,
basis, (b) the obligations of each Consenting Creditor under this Agreement are
several, and not joint, obligations of each of them and (c) no Consenting
Creditor shall have any liability for the breach of any representation,
warranty, covenant, commitment, or obligation by any other Consenting Creditor.
Nothing in this Agreement requires any Consenting Creditor to advance capital to
any Company Party or incur any material liability.

 

16.17.     Severability and Construction. If any provision of this Agreement
shall be held by a court of competent jurisdiction to be illegal, invalid, or
unenforceable, the remaining provisions shall remain in full force and effect if
essential terms and conditions of this Agreement for each Party remain valid,
binding, and enforceable.

 

16.18.     Remedies Cumulative. All rights, powers, and remedies provided under
this Agreement or otherwise available in respect hereof at Law or in equity
shall be cumulative and not alternative, and the exercise of any right, power,
or remedy thereof by any Party shall not preclude the simultaneous or later
exercise of any other such right, power, or remedy by such Party.

 

16.19.     Capacities of Consenting Creditors. Each Consenting Creditor has
entered into this agreement on account of all Company Claims/Interests that it
holds (directly or through discretionary accounts that it manages or advises)
and, except where otherwise specified in this Agreement, shall take or refrain
from taking all actions that it is obligated to take or refrain from taking
under this Agreement with respect to all such Company Claims/Interests.

 

16.20.     Email Consents. Where a written consent, acceptance, approval, or
waiver is required pursuant to or contemplated by this Agreement, pursuant to
Section ‎3.02, ‎Section 15, or otherwise, including a written approval by the
Company Parties or the Required Consenting Creditors, such written consent,
acceptance, approval, or waiver shall be deemed to have occurred if, by
agreement between counsel to the Parties submitting and receiving such consent,
acceptance, approval, or waiver, it is conveyed in writing (including electronic
mail) between each such counsel without representations or warranties of any
kind on behalf of such counsel.

 

16.21.     Fees and Expenses.

 

(i)         On the Agreement Effective Date, the Company Parties shall promptly
pay in cash to Milbank LLP an amount equal to $4,000,000 for fees and expenses
of Milbank LLP accrued prior to the Agreement Effective Date in representing
certain Consenting Unsecured Noteholders.

 

(ii)        The Company Parties shall promptly pay in cash as and when invoiced
the reasonable and documented fees and expenses of Milbank LLP, incurred from
the Agreement Effective Date through the termination of this Agreement with
respect to the Consenting Unsecured Noteholders, in accordance with its
engagement letter executed with the Noteholder Committee Representatives.

 

(iii)       The Company Parties shall promptly pay in cash the Consenting
Creditor Fees and Expenses attributable to the Secured Lender Group
Representatives, the ABL Lender

 

40  

 

 

Representatives and Thompson Hine LLP, as counsel to the ABL Agent, the First
Lien Agent, the Second Lien Agent and the DIP Agent in accordance with the ABL
Documents, the First Lien Loan Documents and, once entered, the DIP Orders.

 

(iv)       The Company Parties shall promptly pay in cash all Consenting
Creditor Fees and Expenses not provided for in clause (i), (ii) or (iii) above
upon the Plan Effective Date; provided that this Agreement has not been
terminated and remains in full force and effect with respect to the Consenting
Unsecured Noteholders as of such date (other than with respect to the
termination occurring as a result of Section 14.04(a) hereof).

 

(v)        For the avoidance of doubt, the Company Parties shall have no
obligation hereunder to pay the fees and expenses set forth above to the extent
holders of at least 66.7% of the aggregate principal amount of outstanding
Unsecured Notes, inclusive of validly executed but unsettled trades, are not
parties to this Agreement.

 

16.22.     Survival. Notwithstanding (a) any Transfer of any Company
Claims/Interests in accordance with Section 10 or (b) the termination of this
Agreement in accordance with its terms, the agreements and obligations of the
Parties in Section 14.05 and ‎Section 16 shall, subject to the following
sentence, survive such Transfer and/or termination and shall continue in full
force and effect for the benefit of the Parties in accordance with the terms
hereof and thereof. Notwithstanding the termination of this Agreement pursuant
to Section 14.04(a) of this Agreement, ‎Section 9 shall survive such termination
and shall continue in full force and effect for the benefit of the Parties in
accordance with the terms hereof. For the avoidance of doubt, the Parties
acknowledge and agree that if this Agreement is terminated, ‎Section 9 shall not
survive such termination (other than a termination in accordance with Section
14.04(a) of this Agreement), and any and all Releases shall be fully revoked and
deemed null and void ab initio and of no force and effect.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day
and year first above written.

 

41  

 

 

Company Parties’ Signature Page to
the Restructuring Support Agreement

 

Hornbeck Offshore Services, Inc.

 

By:  /s/ James O. Harp, Jr.       Name: James O. Harp, Jr.       Title:
  Executive Vice President and Chief Financial Officer

  

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

 

Hornbeck Offshore International, LLC

 

HOI Holding, LLC

 

HOS Holding, LLC

 

By:  /s/ James O. Harp, Jr.       Name: James O. Harp, Jr.       Title:
  Executive Vice President and Chief Financial Officer

 

Signature Page to Restructuring Support Agreement

 

Hornbeck Offshore Services, Inc. 

 

 

 

 

Hornbeck Offshore Navegacao Ltda

 

By:  /s/ Robert T. Gang       Name: Robert T. Gang       Title:   Associate
Director

 

 

 

 

Hornbeck Offshore Services de Mexico, S. DE R.L. DE C.V.

 

HOS de Mexico, S. DE R.L. DE C.V.

 

HOS de Mexico II, S. DE R.L. DE C.V.

 

By:  /s/ Samuel A. Giberga       Name: Samuel A. Giberga       Title:   Vice
President

 

 

 

Consenting Creditor Signature Page to
the Restructuring Support Agreement

 

[CONSENTING CREDITOR]       Name:   Title:  

 

Address:

 

E-mail address(es):

 

Aggregate Principal Amounts Beneficially Owned or Managed on Account of: ABL
Loans   First Lien Term Loans   Second Lien Term Loans   Unsecured Notes  

 

 

 

 

EXHIBIT A

 

Restructuring Term Sheet

 

 

 

 

 

 

HORNBECK OFFSHORE SERVICES INC.

 

Restructuring Term Sheet 

APRIL 10, 2020

   

 

 

This term sheet (the “Term Sheet”) summarizes certain terms and conditions (and
does not purport to summarize all of the terms and conditions) of the proposed
restructuring described below (the “Restructuring”). This Term Sheet is
presented for discussion purposes only, does not constitute a commitment to
provide, accept, or consent to any financing or otherwise create any implied or
express legally binding or enforceable obligation on any party (or any
affiliates of a party), at law or in equity, to negotiate or enter into
definitive documentation related to the Restructuring or to negotiate in good
faith or otherwise. Capitalized terms used but not defined herein have the
meanings ascribed to such terms in the Restructuring Support Agreement to which
this Term Sheet is attached as Exhibit A (the “Restructuring Support
Agreement”).

 

This Term Sheet does not constitute (nor shall it be construed as) an offer to
sell or buy, or the solicitation of an offer to sell or buy any securities OR A
SOLICITATION OR ACCEPTANCE OF A CHAPTER 11 PLAN WITHIN THE MEANING OF SECTION
1125 of THE BANKRUPTCY CODE (as defined below), it being understood that any
such offer or solicitation will be made only in compliance with applicable law.

 

Without limiting the generality of the foregoing, this Term Sheet and the
undertakings contemplated herein are subject in all respects to the negotiation,
execution and delivery of definitive documentation in form and substance
consistent with this Term Sheet and otherwise acceptable to the Company and the
Consenting Creditors as well as the satisfactory completion of due diligence
(including, without limitation, with respect to the tax implications of the
Restructuring).

 

This Term Sheet is provided as part of a settlement proposal in furtherance of
settlement discussions and is entitled to protection from any use or disclosure
to any party or person pursuant to Federal Rule of Evidence 408 and any
applicable statutes, doctrines or rules protecting the use or disclosure of
confidential information and information exchanged in the context of settlement
discussions.

  

Financing Sources

 

DIP Facility Size

●     $75 million DIP Facility

○     $50 million to repay ABL Claims upon interim DIP Order

○     Remaining $25 million funded upon final DIP Order

DIP Lenders

●     $56.25 million funded by certain members of the Secured Lender Group
represented by Davis Polk & Wardwell LLP

●     $18.75 million funded by certain members of the Unsecured Noteholder
Committee represented by Milbank LLP

Rate

●     L + 12.50% on entire DIP Facility

●     1.00% LIBOR floor

Fees

●     2.50% upfront fee on entire DIP Facility

●     1.00% exit fee on entire DIP Facility, payable in cash upon any
prepayment, repayment or refinancing of the DIP Facility (including through the
conversion of the DIP Facility to any “exit” financing, including without
limitation the DIP Exit Facility referred to below)

 

 

 

 

  Collateral

●     Super-priority lien on substantially all the assets

●     Release of restricted cash, subject to and concurrently with the repayment
of all ABL Claims

Tenor

 

●     6 months

 

Treatment of DIP Claims

●     Cash in excess of $100 million at exit to repay DIP Claims

●     Any DIP Claims not repaid in cash to be refinanced by third-party capital
on terms to be agreed; provided that, if the Company is unable to secure
sufficient third-party capital, any remaining portion of the DIP Claims not
otherwise paid in cash (including from the proceeds of such third-party capital)
to be rolled/refinanced by DIP Facility lenders under a new exit facility
(the “DIP Exit Facility”) on mutually agreeable terms to be determined prior to
the launch of solicitation on the Plan, including:

○     Tenor: <6 years

○     Rate: TBD

○     Secured by first priority lien on substantially all assets

○     Callable at par at all times

○     No financial maintenance covenant other than a minimum liquidity covenant
to be agreed and not to exceed $25 million

●     If the DIP Facility lenders are required to refinance/roll any portion of
the DIP Claims into the DIP Exit Facility, such lenders shall receive a premium
equal to 3.0% of the amount rolled/refinanced by such DIP Facility Lenders,
payable in New Equity (subject to dilution by New Warrants and MIP) (the “DIP
Exit Backstop Premium”)

●     Debt carve out in the DIP Exit Facility to provide capacity for a new
credit facility in an amount not to exceed $65 million (the “Specified Credit
Facility”) on the following terms and otherwise on terms to be mutually agreed:

○     Existing creditors not required to commit to provide the Specified Credit
Facility

○     Use of proceeds limited to finishing the construction of HOS Warhorse and
HOS Wild Horse

○     Secured solely by liens on HOS Warhorse and HOS Wild Horse (and other
assets related thereto) (in each case subject to preexisting liens of the
shipyard (the “Specified Lien”))

○     Lenders under the DIP Exit Facility to have (i) a second priority lien on
HOS Warhorse and HOS Wild Horse (subject to the Specified Lien) and (ii) a first
priority lien on the equity interests of the entity that owns HOS Warhorse and
HOS Wild Horse (which entity cannot hold any other assets, other than assets
related to such vessels to be agreed, and which equity interests shall otherwise
be subject to a negative pledge) (or, if such pledge is not permitted under the
terms of the Specified Credit Facility after the Company’s use of reasonable
best efforts to permit such pledge, a first priority pledge of the direct parent
company of the entity that owns HOS Warhorse and HOS Wild Horse and, in which
case, the lenders under the Specified Credit Facility shall be permitted to hold
a lien on the equity interests of the entity that owns HOS Warhorse and HOS Wild
Horse)

○    Entry into the Specified Credit Facility shall be subject to a pro forma
liquidity test to be mutually agreed and leverage levels and other conditions
under both Exit Facilities to be mutually agreed prior to the launch of
solicitation on the Plan

Equity Rights Offerings

●     $100 million Equity Rights Offering for 70% of the New Equity (subject to
dilution by DIP Exit Backstop Premium, Backstop Commitment Premium, New
Warrants, and MIP) 

○     $75 million backstopped by certain members of the Unsecured Noteholder
Committee represented by Milbank LLP

○     $25 million backstopped by certain members of the Secured Lender Group

  

 

 

 

 

represented by Davis Polk & Wardwell LLP

●     Backstop commitment premium equal to 5.0% of backstop commitments payable
in New Equity (subject to dilution by New Warrants and MIP) (the “Backstop
Commitment Premium”)

Treatment of Claims

ABL Claims Treatment

 

●      Paid in full with proceeds from the DIP Facility

 

First Lien Claims Treatment

●     21.5% of the First Lien Claims1 to be equitized into 24.6% of New Equity
(subject to dilution by DIP Exit Backstop Premium, Backstop Commitment Premium,
New Warrants and MIP)

●     78.5% of the First Lien Claims to be rolled into a new second lien exit
facility at par (“Prepetition Exit Facility” and, together with the DIP Exit
Facility, the “Exit Facilities”) on mutually agreeable terms, including:

○      Maturity: March 31, 2026

○      Rate:

■     First two years: 1.0% cash and 9.5% PIK / 9.25% cash

■     Third year: 2.5% cash and 9.0% PIK / 10.25% cash

■     Thereafter: 10.25% payable solely in cash, with a step-down to 8.25% if
the total leverage ratio is less than 3.00:1.00.

■     No financial maintenance covenant other than a minimum liquidity covenant
to be agreed and not to exceed $25 million

○     Secured by a second priority lien on substantially all assets

○     Callable at par at all times

○     Debt carve out to provide capacity for the Specified Credit Facility on
the terms and subject to the conditions set forth above, with the lenders under
the Prepetition Exit Facility to have liens on HOS Warhorse, HOS Wild Horse and
related assets and related equity pledges, in each case subordinate to the liens
of the DIP Exit Facility

●     Post-petition interest to accrue at default rate and be paid in-kind
during Chapter 11 Cases

●     Claims in respect of the Redemption Fee under the First Lien Facility
Lender Fee Letter dated June 15, 2017 to be payable upon prepayment, repayment,
repricing, refinancing (including any effective refinancing through any
amendment) or acceleration of the loans under the Prepetition Exit Facility

●     Rights to participate in up to TBD% of the Equity Rights Offering (with
holders of First Lien Claims and Second Lien Claims having combined rights to
participate in 25% of the Equity Rights Offering)

Second Lien Claims Treatment

●     100% of the Second Lien Claims to be equitized into 5.1% of the New Equity
(subject to dilution by DIP Exit Backstop Premium, Backstop Commitment Premium,
New Warrants, and MIP)

●     7-year New Warrants for 1.5% of the New Equity at $621.2 million
enterprise value strike

●     Rights to participate in up to TBD% of the Equity Rights Offering (with
holders of First Lien Claims and Second Lien Claims having combined rights to
participate in 25% of

 

 

1 First Lien Claims include accrued and unpaid interest and other amounts due
under the First Lien Credit Agreement (or under any security agreement,
mortgage, guarantee agreement or promissory note entered into in connection
therewith) and not otherwise paid as agreed adequate protection during Chapter
11 Cases; provided that the Redemption Fee shall receive the treatment specified
herein.

 

 

 

 

 

the Equity Rights Offering)

Unsecured Notes Claims Treatment

●    100% of the Unsecured Notes Claims to be equitized into 0.3% of the New
Equity (subject to dilution by DIP Exit Backstop Premium, Backstop Commitment
Premium, New Warrants, and MIP)

●     7-year New Warrants for 8.5% of the New Equity at $621.22 million
enterprise value strike

●     Rights to participate in up to 75% of the Equity Rights Offering

GUC Treatment ●      TBD, with trade assumed to be unimpaired Equity Treatment
●      Canceled and discharged Other Terms of the Restructuring MIP ●      TBD
on mutually agreeable terms, prior to the launch of solicitation on the Plan
Governance ●      TBD on mutually agreeable terms, prior to the launch of
solicitation on the Plan Company Structure ●      Private Plan Releases ●     
Customary release, indemnification, exculpation, and discharge provisions
Securities Law ●      Treatment of Claims and Equity Rights Offering to be
adjusted as necessary in accordance with U.S. Securities Law Jones Act ●     The
Company shall preserve its Jones’ Act eligibility under the Restructuring,
including with respect to the distribution of New Equity as provided herein, in
a manner to be agreed   Tax Matters ●     The terms of the Plan and the
Restructuring contemplated by this Term Sheet shall be structured to preserve
favorable tax attributes of the Debtors to the extent practicable Hornbeck
Family Assets ●     Treatment of Trademark and associated rights to Hornbeck
name and icon, ongoing consulting services of Larry Hornbeck, and Hornbeck
Family Ranch Facility Use Agreement (collectively “Hornbeck Family Assets”) TBD
on mutually agreeable terms prior to the launch of solicitation on the Plan  

   

 

2 New Warrant strike based on sum of pre-petition ABL Claims, First Lien Claims,
and Second Lien Claims, plus $100 million Equity Rights Offering.

 

 

EXHIBIT B

 

DIP Facility Term Sheet

 

 

 

 

 

 

HORNBECK OFFSHORE SERVICES INC.

 

Debtor-in-possession Facility Term Sheet  
APRIL 10, 2020  

 

 

 

This term sheet (the “DIP Facility Term Sheet”) summarizes certain terms and
conditions (and does not purport to summarize all of the terms and conditions)
of a potential superpriority secured debtor-in-possession term loan credit
facility (the “DIP Facility”) to be provided to the DIP Facility Borrowers (as
defined herein), each in its capacity as a debtor and debtor in possession
(together with their affiliated debtors, the “Debtors”), in connection with
their respective cases (along with the cases of their affiliated debtors, the
“Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code
(the “Bankruptcy Code”). The DIP Term Loan Facility will be subject to the
approval of, and consummated in the Chapter 11 Cases in, the United States
Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”), in
accordance with the DIP Orders and the DIP Documents. Capitalized terms used but
not defined herein have the meanings ascribed to such terms in the Restructuring
Support Agreement to which this DIP Facility Term Sheet is attached as Exhibit B
(the “Restructuring Support Agreement”).

 

Without limiting the generality of the foregoing, this DIP Facility Term Sheet
and the undertakings contemplated herein are subject in all respects to the
negotiation, execution and delivery of definitive documentation in form and
substance consistent with this DIP Facility Term Sheet and otherwise acceptable
to the Company and the DIP Lenders as well as the satisfactory completion of due
diligence.

 

This DIP Facility Term Sheet is presented for discussion purposes only, does not
constitute a commitment to provide, accept, or consent to any financing or
otherwise create any implied or express legally binding or enforceable
obligation on any party (or any affiliates of a party), at law or in equity, to
negotiate or enter into definitive documentation related to the DIP Facility or
to negotiate in good faith or otherwise. This DIP Facility Term Sheet is
provided as part of a settlement proposal in furtherance of settlement
discussions and is entitled to protection from any use or disclosure to any
party or person pursuant to Federal Rule of Evidence 408 and any applicable
statutes, doctrines or rules protecting the use or disclosure of confidential
information and information exchanged in the context of settlement discussions.

 

DIP Facility

 

Borrowers ●     Hornbeck Offshore Services, Inc. and Hornbeck Offshore Services,
LLC (the “DIP Facility Borrowers”) Guarantors ●      All subsidiaries of the DIP
Facility Borrowers that are guarantors under that certain First Lien Term Loan
Agreement, dated as of June 15, 2017, among the DIP Facility Borrowers,
Wilmington Trust, National Association, as agent, and the lenders party thereto
(the “Prepetition First Lien Term Loan Agreement”) and any other subsidiary of
Hornbeck Offshore Services, Inc. that is a debtor in the Chapter 11 Cases (as
defined below) (collectively, with the DIP Facility Borrowers, the “Loan
Parties”) Agent ●      Wilmington Trust, National Association Lenders ●     
Certain Consenting Secured Lenders (to provide 75% of the DIP Facility) and
certain Consenting Unsecured Noteholders (to provide 25% of the DIP Facility),
and, in each case,

 

 

 

 

  funds and other entities affiliated with the foregoing Amount & Type ●      A
superpriority senior secured debtor-in-possession term loan credit facility (the
“DIP Facility”) comprised of new money loans in an aggregate principal amount
not to exceed $75 million Tenor ●      6 months Use of Proceeds

●     The proceeds of the DIP Facility shall be used:

○     To repay in full that certain Senior Credit Agreement, dated as of June
28, 2019, among the DIP Facility Borrowers (the “Prepetition ABL Credit
Agreement”), the agent party thereto and the lenders party thereto, to be
effected upon entry of the “interim DIP order” in respect of the Chapter 11
Cases

○     Upon entry of the “final DIP order” in respect of the Chapter 11 Cases:

■     To pay certain costs, fees and expenses related to the Chapter 11 Cases

■     To pay certain adequate protection payments related to the Chapter 11
Cases

■     To fund certain working capital needs of the Debtors during the Chapter 11
Cases

Interest Rate ●      LIBOR plus 12.50%, with a 1.00% LIBOR “floor” Fees

●     Upfront fee of 2.50%

●     Exit fee of 1.00%

Amortization ●      None DIP Collateral ●      Substantially all present and
after acquired property (whether tangible, intangible, real, personal or mixed)
of the Loan Parties Priority of DIP Collateral ●      Superpriority priming
liens on all encumbered assets and a first lien on all unencumbered assets,
subject to customary exceptions and prior permitted liens under the prepetition
debt facilities, as well as post-closing undertakings with respect to HOS Port,
LLC, Brazil and Mexico. Adequate Protection ●      The secured parties under the
Prepetition First Lien Term Loan Agreement, the secured parties under the
Prepetition Second Lien Term Loan Agreement and the DIP Facility Borrowers shall
be entitled to receive usual and customary adequate protection for any
diminution in value arising from (a) the sale, lease or use by the Debtors of
prepetition collateral in respect of such prepetition indebtedness, including
cash collateral, (b)  the priming of their security interests and liens in the
prepetition collateral in respect of such prepetition indebtedness and (c) the
imposition of the automatic stay pursuant to section 362 of title 11 of the
United States Code Milestones ●      Consistent with the Milestones set forth in
the Restructuring Support Agreement Carve Out ●      See Annex A

 

 

 

 

Conditions Precedent to Closing and Funding ●     Usual and customary for
financings of this type Mandatory and Voluntary Prepayments ●      Usual and
customary for financings of this type Representations and Warranties ●     
Usual and customary for financings of this type Financial Reporting Requirements
●      Usual and customary for financings of this type, including financial
statement reporting, budget reporting and budget variance reporting.  Budget
variance reporting to be provided every two weeks. Liquidity reporting
(including receipts/disbursements and opening/ending cash) to be provided every
week Financial Covenants

●     Usual and customary for financings of this type, including a budget
variance covenant. Budget variance covenant to be tested every two weeks as
follows:

○    Cash Receipts/Disbursements: 20% for initial two week period; thereafter,
15% for each four week period immediately preceding the testing date

○    Professional Fees (Kirkland & Ellis LLP): 15% for each two week period

○    Professional Fees (Portage Point Partners): 15% for each two week period

Other Covenants ●      Other affirmative and negative covenants usual and
customary for financings of this type Events of Default ●      Usual and
customary for financings of this type Voting ●      Usual and customary for
financings of this type Counsel to DIP Lenders ●      Davis Polk & Wardwell LLP,
Creel, García-Cuéllar, Aiza y Enriquez, S.C., Blank Rome LLP, Porter Hedges LLP
and each other special and local counsel in all applicable jurisdictions Counsel
to DIP Agent ●      Thompson Hine LLP

 

 

 

 

Annex A

 

Carve-out

 

1.               Carve Out.

 

(a)          Carve Out.  As used in this Interim Order, the “Carve Out” means
the sum of (i) all fees required to be paid to the Clerk of the Court and to the
Office of the U.S. Trustee under section 1930(a) of title 28 of the United
States Code plus interest at the statutory rate (without regard to the Carve Out
Trigger Notice (as defined herein)); (ii) all reasonable fees and expenses up to
$100,000 incurred by a trustee under section 726(b) of the Bankruptcy Code
(without regard to Carve Out Trigger Notice); (iii) all unpaid fees and
expenses, to the extent allowed by interim order, procedural order, or final
order of the Court or otherwise at any time (the “Allowed Professional Fees”),
incurred by persons or firms retained by the Debtors pursuant to section 327,
328 or 363 of the Bankruptcy Code and a Creditors’ Committee (if appointed)
pursuant to section 328 or 1103 of the Bankruptcy Code (collectively, the
“Professional Persons”) at any time before or on the first business day
following delivery of a Carve Out Trigger Notice, whether allowed by the Court
prior to or after the delivery of a Carve Out Trigger Notice; and (iv) Allowed
Professional Fees of Professional Persons in an aggregate amount not to exceed
$3.5 million incurred after the first business day following delivery of a Carve
Out Trigger Notice (the “Post-Carve Out Trigger Notice Cap”).  For purposes of
the foregoing, “Carve Out Trigger Notice” shall mean a written notice delivered
by email (or other electronic means) by the Applicable Agent3 to the Debtors,
their lead restructuring counsel, the U.S. Trustee and counsel to the Creditors’
Committee, which notice may be delivered following the occurrence and during the
continuation of an Event of Default and, with respect to a Carve Out Trigger
Notice delivered by the DIP Agent, acceleration of the DIP Obligations under the
DIP Facility and, with respect to a Carve Out Trigger Notice delivered by the
Cash Collateral Agent, the termination of the use of Cash Collateral, stating
that the Post-Carve Out Trigger Notice Cap has been invoked. 

 

 

3

The “Applicable Agent” shall mean (a) at all times while there are any
outstanding Commitments (as defined in the DIPCredit Agreement) or DIP
Obligations, the DIP Agent (acting at the direction of the Required DIP Lenders)
and (b) at all other times, (i) the Prepetition 1L Term Agent (acting at the
direction of Required 1L Term Lenders) and (ii) until the ABL Satisfaction Date,
the Prepetition ABL Agent (acting at the direction of the Required Lenders (as
defined in the Prepetition ABL Credit Agreement, the “Required ABL Lenders”))
(collectively (i) and (ii), as applicable, the “Cash Collateral Agent”). The
“Applicable Required Lenders” shall mean, as applicable, the Required DIP
Lenders, the Required 1L Term Lenders and the Required ABL Lenders.

 

 

 

 

 

 

(b)           Delivery of Weekly Fee Statements. Not later than 7:00 p.m. New
York time on the third business day of each week starting with the first full
calendar week following entry of this Interim Order, each Professional Person
shall deliver to the Debtors a statement setting forth a good-faith estimate of
the amount of fees and expenses (collectively, “Estimated Fees and Expenses”)
incurred during the preceding week by such Professional Person (through Saturday
of such week, the “Calculation Date”), along with a good-faith estimate of the
cumulative total amount of unreimbursed fees and expenses incurred through the
applicable Calculation Date and a statement of the amount of such fees and
expenses that have been paid to date by the Debtors (each such statement, a
“Weekly Statement”); provided, that within one business day of the Termination
Declaration Date (as defined below), each Professional Person shall deliver one
additional statement (the “Final Statement”) setting forth a good-faith estimate
of the amount of fees and expenses incurred during the period commencing on the
calendar day after the most recent Calculation Date for which a Weekly Statement
has been delivered and concluding on the Termination Declaration Date. If any
Professional Person fails to deliver a Weekly Statement within three calendar
days after such Weekly Statement is due, such Professional Person’s entitlement
(if any) to any funds in the Carve Out Reserves (as defined below) with respect
to the aggregate unpaid amount of Allowed Professional Fees for the applicable
period(s) for which such Professional Person failed to deliver a Weekly
Statement covering such period shall be limited to the aggregate unpaid amount
of Allowed Professional Fees included in the Approved Budget for such period for
such Professional Person; provided, that such Professional Person shall be
entitled to be paid any unpaid amount of Allowed Professional Fees in excess of
Allowed Professional Fees included in the Approved Budget for such period for
such Professional Person from a reserve to be funded by the Debtors from all
cash on hand as of such date and any available cash thereafter held by any
Debtor pursuant to paragraph 5(c) below. The requirements of this paragraph 5(b)
shall not apply to Guggenheim Securities, LLC.

 

(c)           Carve Out Reserves.  On the day on which a Carve Out Trigger
Notice is delivered to the Debtors with a copy to counsel to the Creditors’
Committee (the “Termination Declaration Date”), the Carve Out Trigger Notice
shall constitute a demand to the Debtors to utilize all cash on hand as of such
date and any available cash thereafter held by any Debtor to fund a reserve in
an amount equal to the then unpaid amounts of the Allowed Professional Fees. 
The Debtors shall deposit and hold such amounts in a segregated account at the
DIP Agent in

 

 

 

 

trust to pay such then unpaid Allowed Professional Fees (the “Pre-Carve Out
Trigger Notice Reserve”) prior to any and all other claims.  On the Termination
Declaration Date, after funding the Pre-Carve Out Trigger Notice Reserve, the
Debtors shall utilize all remaining cash on hand as of such date and any
available cash thereafter held by any Debtor to fund a reserve in an amount
equal to the Post-Carve Out Trigger Notice Cap. The Debtors shall deposit and
hold such amounts in a segregated account at the Applicable Agent in trust to
pay such Allowed Professional Fees benefiting from the Post-Carve Out Trigger
Notice Cap (the “Post-Carve Out Trigger Notice Reserve” and, together with the
Pre-Carve Out Trigger Notice Reserve, the “Carve Out Reserves”) prior to any and
all other claims. 

 

(d)           All funds in the Pre-Carve Out Trigger Notice Reserve shall be
used first to pay the obligations set forth in clauses (a)(i) through
(a)(iii) of the definition of Carve Out set forth above (the “Pre-Carve Out
Amounts”), but not, for the avoidance of doubt, the Post-Carve Out Trigger
Notice Cap, until paid in full, and then, to the extent the Pre-Carve Out
Trigger Notice Reserve has not been reduced to zero, to pay the DIP Agent for
the benefit of the DIP Secured Parties, unless the DIP Obligations have been
indefeasibly paid in full, in cash, and all Commitments (as defined in the DIP
Credit Agreement) have been terminated, in which case any such excess shall be
paid to the Prepetition Secured Parties in accordance with their rights and
priorities. 

 

(e)          All funds in the Post-Carve Out Trigger Notice Reserve shall be
used first to pay the obligations set forth in clause (iv) of the definition of
Carve Out set forth above (the “Post-Carve Out Amounts”), and then, to the
extent the Post-Carve Out Trigger Notice Reserve has not been reduced to zero,
to pay the DIP Agent for the benefit of the DIP Secured Parties, unless the DIP
Obligations have been indefeasibly paid in full, in cash, and all Commitments
have been terminated, in which case any such excess shall be paid to the
Prepetition Secured Parties in accordance with their rights and priorities. 

 

(f)            Notwithstanding anything to the contrary in the DIP Documents, or
this Interim Order, if either of the Carve Out Reserves is not funded in full in
the amounts set forth in this paragraph 1, then any excess funds in one of the
Carve Out Reserves following the payment of the Pre-Carve Out Amounts and
Post-Carve Out Amounts, respectively (subject to the limits contained in the
Post-Carve Out Trigger Notice Cap), shall be used to fund the other Carve Out
Reserve, up to the applicable amount set forth in subparagraph 5(b), prior to
making any payments to the DIP Agent or the Prepetition Secured Parties, as
applicable.

 

 

 

 

(g)           Notwithstanding anything to the contrary in the DIP Documents or
this Interim Order, following delivery of a Carve Out Trigger Notice, the DIP
Agent and the Prepetition 1L Term Agent shall not sweep or foreclose on cash
(including cash received as a result of the sale or other disposition of any
assets) of the Debtors until the Carve Out Reserves have been fully funded, but
shall have a security interest in any residual interest in the Carve Out
Reserves, with any excess paid in accordance with subparagraphs 5(c) and 5(d). 

 

(h)           Further, notwithstanding anything to the contrary in this Interim
Order, (i) the failure of the Carve Out Reserves to satisfy in full the Allowed
Professional Fees shall not affect the priority of the Carve Out and (ii) in no
way shall any Approved Budget, Carve Out, Post-Carve Out Trigger Notice Cap,
Carve Out Reserves or any of the foregoing be construed as a cap or limitation
on the amount of the Allowed Professional Fees due and payable by the Debtors. 
For the avoidance of doubt and notwithstanding anything to the contrary in this
Interim Order, the DIP Documents or in any Prepetition Debt Documents, the Carve
Out shall be senior to all liens and claims securing the DIP Facility, the
Adequate Protection Liens, the 507(b) Claims (as defined herein) and any and all
other forms of adequate protection, liens or claims securing the DIP Obligations
or the Prepetition Secured Debt.

 

(i)            Payment of Allowed Professional Fees Prior to the Termination
Declaration Date.  Any payment or reimbursement made prior to the occurrence of
the Termination Declaration Date in respect of any Allowed Professional Fees
shall not reduce the Carve Out.

 

(j)            [Reserved].

 

(k)           No Direct Obligation To Pay Allowed Professional Fees.  None of
the DIP Agent, the DIP Lenders or the Prepetition Secured Parties shall be
responsible for the payment or reimbursement of any fees or disbursements of any
Professional Person incurred in connection with the Chapter 11 Cases or any
Successor Cases under any chapter of the Bankruptcy Code.  Nothing in this
Interim Order or otherwise shall be construed to obligate the DIP Agent, the DIP
Lenders or the Prepetition Secured Parties, in any way, to pay compensation to,
or to reimburse expenses of, any Professional Person or to guarantee that the
Debtors have sufficient funds to pay such compensation or reimbursement.

 

 

(l)           Payment of Carve Out On or After the Termination Declaration
Date.  Any payment or reimbursement made on or after the occurrence of the
Termination Declaration Date in respect of any Allowed Professional Fees shall
permanently reduce the Carve Out on a dollar-for-dollar basis.

 

 

 

EXHIBIT C

 

Form of Joinder

 

JOINDER TO RESTRUCTURING SUPPORT AGREEMENT

 

This Joinder to the Restructuring Support Agreement, dated as of April 10, 2020
(as amended, supplemented, or otherwise modified from time to time, the
“Agreement”), by and among the Parties is executed and delivered, on behalf of
itself and any of its Affiliates, by ________________________________ (the
“Joinder Party”) as of ______________, 2020. Each capitalized term used herein
but not otherwise defined shall have the meaning set forth in the Agreement.

 

1.                 Agreement To Be Bound. The Joinder Party hereby agrees to be
bound by all of the terms of the Agreement, a copy of which is attached to this
Joinder as Annex [●] (as the same has been or may be hereafter amended,
restated, or otherwise modified from time to time in accordance with the
provisions thereof). The Joinder Party shall hereafter be deemed to be a
“Consenting Lender” under the Agreement with respect to any Claim/Interest,
against Hornbeck held by such Joinder Party, including with respect to any and
all First Lien Claims, Second Lien Claims, ABL Claims, or Unsecured Notes Claims
acquired subsequent to the date hereof by such Joinder Party.

 

2.                 Representations and Warranties. The Joinder Party hereby
makes the representations and warranties of the Consenting Creditors set forth
in the Agreement to each other Party to the Agreement.

 

3.                 Governing Law. This Joinder shall be governed by, and
construed in accordance with, the internal laws of the State of New York,
without regard to any conflict of laws provisions which would require the
application of the law of any other jurisdiction.

 

Date Executed:

 

[CONSENTING CREDITOR]       [INSERT ENTITY NAME]           Name:   Title:      
Address:
E-mail address(es):  

  

Aggregate Principal Amounts Beneficially Owned or Managed on Account of: ABL
Loans   First Lien Term Loans   Second Lien Term Loans   Unsecured Notes  

 

 

 

EXHIBIT D

Form of Transfer Agreement

 

TRANSFER AGREEMENT UNDER RESTRUCTURING SUPPORT AGREEMENT

 

The undersigned (“Transferee”), on behalf of itself and any of its Affiliates,
hereby acknowledges that it has read and understands the Restructuring Support
Agreement, dated as of April 10, 2020 (the “Agreement”),4 by and among Hornbeck
Offshore Services, Inc. (“Hornbeck”) and the Company Parties bound thereto and
the Consenting Creditors, including the transferor to the Transferee of any
Company Claims/Interests (each such transferor, a “Transferor”). Each
capitalized term used herein but not otherwise defined shall have the meaning
set forth in the Agreement.

 

1.           Agreement To Be Bound. The Transferee hereby agrees to be bound by
(a) all of the terms of the Agreement, a copy of which is attached to this
Transfer Agreement as Annex [●] (as the same has been or may be hereafter
amended, restated, or otherwise modified from time to time in accordance with
the provisions thereof), and (b) the agreements and obligations of the
Transferor of the [First Lien Claims, Second Lien Claims, ABL Claims, or
Unsecured Notes Claims] to be acquired in connection with the execution of this
Transfer Agreement, including the agreement to be bound by the vote of the
Transferor if such vote was cast before the effectiveness of the Transfer
discussed herein. The Transferee shall hereafter be deemed to be a “Consenting
Creditor” under the Agreement with respect to any and all Claims against
Hornbeck held by such Transferee including with respect to any and all First
Lien Claims, Second Lien Claims, ABL Claims, or Unsecured Notes Claims acquired
subsequent to the date hereof by such Transferee.

 

2.            Representations and Warranties.

 

The Transferee hereby makes the representations and warranties of the Consenting
Creditors set forth in the Agreement to each other Party to the Agreement.

 

3.           Governing Law.

 

This Transfer Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York, without regard to any conflict of
laws provisions which would require the application of the law of any other
jurisdiction.

 

Date Executed:

 

[CONSENTING CREDITOR]

 

[INSERT ENTITY NAME]

 

 

Name:

Title:

 

 

4 Capitalized terms not used but not otherwise defined herein shall have the
meanings ascribed to such terms in the Agreement.

 

 

 

 

Address:

 

E-mail address(es):

 

Aggregate Amounts Beneficially Owned or Managed on Account of: First Lien Term
Loans   Second Lien Term Loans   ABL Loans   Unsecured Notes  

 

 

 

EXHIBIT E

Forbearance Agreements

 

 

 

 

Execution Version

 

AMENDED AND RESTATED FORBEARANCE AGREEMENT

 

This Amended and Restated Forbearance Agreement (this “Agreement”) entered into
as of March 31, 2020, is by and among Hornbeck Offshore Services, Inc., a
Delaware corporation (the “Borrower”), the Lenders (hereinafter defined) party
hereto (the “Specified Lenders”) constituting the “Required Lenders” under the
Credit Agreement (as defined below), the guarantors party to the Credit
Agreement (the “Guarantors”) and Wilmington Trust, National Association, as
administrative agent and collateral agent for the Lenders (“Wilmington Trust”
and, in such capacity, the “ABL Agent”) and amends and restates in its entirety
the Forbearance Agreement in respect of the Credit Agreement entered into on
March 2, 2020 (the “Existing ABL Forbearance Agreement”), by and among the
Borrower, the Guarantors and lenders under the Credit Agreement party thereto.

 

WHEREAS, the Borrower, the Guarantors, the lenders from time to time party
thereto (the “Lenders”) and the ABL Agent are parties to the Senior Credit
Agreement, dated as of June 28, 2019 (as amended, restated, amended and
restated, supplemented or otherwise modified prior to the date hereof, the
“Credit Agreement”);

 

WHEREAS, the Borrower, the guarantors party thereto from time to time (the “2020
Notes Guarantors”) and Wilmington Trust are parties to that certain Indenture,
dated as of March 16, 2012 (as amended, restated, amended and restated,
supplemented or otherwise modified prior to the date hereof, the “2020 Notes
Indenture”), under which certain 5.875% Senior Notes due 2020 were issued (the
“2020 Notes”);

 

WHEREAS, the principal amount of outstanding 2020 Notes is due in full on April
1, 2020 (or if such day is not a Business Day (as defined in the 2020 Notes
Indenture), on the next succeeding Business Day) (the “2020 Notes Principal
Payment”), and the Borrower anticipates not making such 2020 Notes Principal
Payment on such date (the “2020 Notes Payment Non-Compliance”);

 

WHEREAS, the Borrower, the guarantors party thereto from time to time (the “2021
Notes Guarantors”) and Wilmington Trust are parties to that certain Indenture,
dated as of March 28, 2013 (as amended, restated, amended and restated,
supplemented or otherwise modified prior to the date hereof, the “2021 Notes
Indenture”), under which certain 5.000% Senior Notes due 2021 were issued (the
“2021 Notes” and, together with the 2020 Notes, the “Notes”);

 

WHEREAS, an interest payment on the 2021 Notes in the amount of $11,250,000 was
due on March 1, 2020 (or if such day was not a Business Day (as defined in the
2021 Notes Indenture), on the next succeeding Business Day) (the “2021 Notes
Interest Payment” and, together with the 2020 Notes Principal Payment,
individually or collectively as the context requires, the “Specified Payments”),
and the Borrower did not make such 2021 Notes Interest Payment on such date (the
“2021 Notes Payment Non-Compliance”);

 

WHEREAS, pursuant to Section 11.1(e) of the Credit Agreement, if the Borrower or
any Guarantor fails to make any payment (whether of principal or interest and
regardless of amount) of any Material Indebtedness, when and as the same shall
become due and payable (including either Specified Payment), an Event of Default
will result;

 

 

 

 

WHEREAS, pursuant to Section 10.1.2(a) and Section 10.1.2(c) of the Credit
Agreement, if the Borrower fails to deliver all annual financial statements and
other information that would be required to be contained in a filing with SEC on
Form 10-K in respect of the fiscal year ending December 31, 2019 and the related
Compliance Certificate, an Event of Default will result (the “Reporting
Non-Compliance”);

 

WHEREAS, HOS WELLMAX Services, LLC will commence a voluntary case under Chapter
11 of Title 11 of the United States Code in the Bankruptcy Court for the
Southern District of Texas (such proceeding, the “Specified Bankruptcy
Proceeding”) (such non-compliance, the “Bankruptcy Non-Compliance”; the
Bankruptcy Non-Compliance, together with the 2020 Notes Payment Non-Compliance,
the 2021 Notes Payment Non-Compliance and the Reporting Non-Compliance,
collectively, the “Non-Compliance”);

 

WHEREAS, pursuant to Section 11.1(h)(i) of the Credit Agreement, if the Borrower
or any Guarantor voluntarily commences any proceeding or files any petition
seeking liquidation, reorganization or other relief under any federal, state or
foreign bankruptcy, insolvency, receivership or similar law, an Event of Default
will result;

 

WHEREAS, the Borrower and the Guarantors have requested that the ABL Agent and
the Specified Lenders temporarily forbear, solely by reason of (1) an Event of
Default under Section 11.1(h)(i) of the Credit Agreement arising on account of
the Bankruptcy Non-Compliance, (2) an Event of Default arising on account of the
Reporting Non-Compliance and (3) a cross-default under (x) Section 11.1(e) of
the Credit Agreement arising on account of the 2020 Notes Payment Non-Compliance
and the 2021 Notes Payment Non-Compliance and (y) Section 11.1(f) of the Credit
Agreement arising on account of (a) any cross-defaults in respect of the 2020
Notes Payment Non-Compliance, the 2021 Notes Payment Non-Compliance and the
Bankruptcy Non-Compliance or (b) any cross-defaults in respect of the Reporting
Non-Compliance (but, in the case of this clause (y), except to the extent that
the events described in this clause (y) (other than the 2020 Notes Payment
Non-Compliance) has resulted in the holders of any other applicable Debt
actually having accelerated or required that such other Debt become immediately
redeemed or repurchased (or offered to be redeemed or repurchased) prior to its
maturity) (the Events of Default described in the preceding clauses (1), (2) and
(3), collectively, the “Designated Event of Default”) from exercising ABL Rights
and Remedies (as defined below) from the date hereof until the Termination Date
(as defined below);

 

WHEREAS, absent the entry into this Agreement, by reason of the Designated Event
of Default, the Borrower acknowledges that the ABL Agent and the Required
Lenders would be authorized to exercise all rights and remedies available to
them under the Credit Agreement and the other Loan Documents and applicable law
or in equity or otherwise (all such rights and remedies, collectively, “ABL
Rights and Remedies”);

 

WHEREAS, on March 2, 2020, the Borrower entered into a forbearance agreement
(the “Existing First Lien Forbearance Agreement”) with the “Administrative
Agent”, the “Collateral Agent” and those certain “Lenders” party thereto
constituting the “Required Lenders”, in each case under and as defined in that
certain First Lien Term Loan Agreement, dated as of June 15, 2017 (as amended,
restated, amended and restated, supplemented or otherwise modified prior to

 

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the date hereof, the “First Lien Term Loan Agreement”), among the Borrower, the
lenders from time to time party thereto, and Wilmington Trust, as administrative
agent and collateral agent;

 

WHEREAS, on or prior to the date hereof, the Borrower, the “Administrative
Agent”, the “Collateral Agent” and those certain “Lenders” party thereto
constituting the “Required Lenders” (in each case under and as defined in the
First Lien Term Loan Agreement) amended and restated the Existing First Lien
Forbearance Agreement (as so amended and restated, the “First Lien Forbearance
Agreement”), a true and complete copy of which is attached hereto as Exhibit A;

 

WHEREAS, on March 2, 2020, the Borrower entered into a forbearance agreement
(the “Existing Second Lien Forbearance Agreement”) with the “Administrative
Agent”, the “Collateral Agent” and those certain “Lenders” party thereto
constituting the “Required Lenders”, in each case under and as defined in that
certain Second Lien Term Loan Agreement, dated as of February 7, 2019 (as
amended, restated, amended and restated, supplemented or otherwise modified
through the date hereof, the “Second Lien Term Loan Agreement”), among the
Borrower, the lenders from time to time party thereto, and the administrative
agent and collateral agent party thereto;

 

WHEREAS, on or prior to the date hereof, the Borrower, the “Administrative
Agent”, the “Collateral Agent” and those certain “Lenders” party thereto
constituting the “Required Lenders” (in each case under and as defined in the
Second Lien Term Loan Agreement) amended and restated the Existing Second Lien
Forbearance Agreement (as so amended and restated, the “Second Lien Forbearance
Agreement”), a true and complete copy of which is attached hereto as Exhibit B;

 

WHEREAS, on or prior to the date hereof, the Borrower and the 2020 Note
Guarantors have entered into a forbearance agreement with the trustee under the
2020 Notes Indenture and the “Holders” (as defined in the 2020 Notes Indenture)
of more than 75% in principal of the then outstanding 2020 Notes, a true and
complete copy of which is attached hereto as Exhibit C (the “2020 Notes
Forbearance Agreement”);

 

WHEREAS, on or prior to the date hereof, the Borrower and the 2021 Note
Guarantors have entered into a forbearance agreement with the trustee under the
2021 Notes Indenture and the “Holders” (as defined in the 2021 Notes Indenture)
of more than 75% in principal of the then outstanding 2021 Notes, a true and
complete copy of which is attached hereto as Exhibit D (the “2021 Notes
Forbearance Agreement”);

 

WHEREAS, the Borrower will continue to negotiate and document the terms of a
mutually agreeable restructuring transaction (the agreement documenting such
restructuring transaction, the “Restructuring Support Agreement”) with and among
the Lenders, the Obligors, and such other parties as may be appropriate and
acceptable to the foregoing; and

 

WHEREAS, on account of this Agreement and subject to the terms and conditions
set forth herein, until the Termination Date, the ABL Agent and the Specified
Lenders have agreed to forbear from their rights to exercise any ABL Rights and
Remedies arising as a result of the Designated Event of Default.

 

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NOW THEREFORE, in consideration of the premises and the mutual covenants,
representations and warranties contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

AGREEMENT

 

Section 1.          Defined Terms. Unless otherwise defined in this Agreement,
each capitalized term used in this Agreement has the meaning given such term in
the Credit Agreement. As used in this Agreement, each of the terms defined in
the opening paragraph and the WHEREAS provisions above shall have the meanings
assigned to such terms therein. Article, Section, Schedule, and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified. The words “hereof”, “herein”, and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. The term “including” means “including, without limitation”. Paragraph
headings have been inserted in this Agreement as a matter of convenience for
reference only and it is agreed that such paragraph headings are not a part of
this Agreement and shall not be used in the interpretation of any provision of
this Agreement.

 

Section 2.          Acknowledgement and Forbearance.

 

(a)       In reliance upon the representations, warranties and covenants of the
Obligors contained in this Agreement, and subject to the terms and conditions of
this Agreement, the ABL Agent and the Specified Lenders hereby agree that, from
and after the date hereof until the earliest occurrence of any Termination Event
(as defined below), the ABL Agent and the Specified Lenders shall not exercise
any ABL Rights and Remedies arising as a result of the Designated Event of
Default and the Borrower shall be permitted to convert or continue any Loan as a
Loan bearing interest at the LIBO Rate. Furthermore, the ABL Agent and Specified
Lenders hereby expressly waive any notice requirement arising under the Loan
Documents on account of the Designated Event of Default. As used in this
Agreement, the occurrence of any one or more of the following events shall
constitute a “Termination Event” (the earliest date on which any Termination
Event occurs shall be referred to herein as the “Termination Date”; and the
period from the date hereof until the Termination Date, the “Forbearance
Period”):

 

(i)

           the occurrence of any Event of Default that is not the Designated
Event of Default (which, for the avoidance of doubt, shall include, without
limiting the scope of any such other Events of Default, (x) other than with
respect to the 2020 Notes, the holder or holders of any Material Indebtedness or
any trustee or administrative agent on its or their behalf causing such Material
Indebtedness to become due, or requiring the redemption thereof or requiring any
offer to redeem to be made in respect thereof, prior to its scheduled maturity
or requiring the Borrower or any Guarantor to make an offer in respect thereof
in each case on account of any Non-Compliance or any cross-default in respect
thereof and (y) other than with respect to the Bankruptcy Non-Compliance, the
occurrence of any Event of Default under Section 11.1(g) or (h) of the Credit
Agreement or the

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occurrence of any event described in Section 11.1(g) or (h) that would cause an
Event of Default to occur under Section 11.1(g) or (h) but for any applicable
automatic stay order);

 

(ii)           any holder or holders of any Material Indebtedness or any trustee
or administrative agent on its or their behalf (x) institutes any proceeding
seeking collection of any amounts outstanding under such Material Indebtedness
or (y) exercises any rights and remedies available to them under such Material
Indebtedness or applicable law or in equity or otherwise (including, without
limitation, by commencing an involuntary proceeding or filing an involuntary
petition seeking (a) liquidation, reorganization or other relief in respect of
the Borrower or any Subsidiary thereof or its debts, or of a substantial part of
its assets, under any federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (b) the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary thereof; provided, that, the Parent Borrower
agrees to notify the Specified Lenders immediately upon the filing of any such
proceeding or petition);

 

(iii)           any Obligor repudiates or asserts a defense in writing to any
obligation or liability under this Agreement, the Credit Agreement or any other
Loan Document or makes or pursues a claim in writing against the ABL Agent or
any Lender in connection with this Agreement, the Credit Agreement or any other
Loan Document;

 

(iv)           any representation or warranty made or deemed made by or on
behalf of the Borrower or any Guarantor in or in connection with this Agreement
shall prove to have been incorrect in any material adverse respect when made or
deemed made;

 

(v)           the Obligors shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement;

 

(vi)           (x) the occurrence of a “Termination Event” under and as defined
in the First Lien Forbearance Agreement, (y) the First Lien Forbearance
Agreement for any reason ceases to be in full force and effect and valid,
binding and enforceable in accordance with the terms thereof against the parties
party thereto or (z) the First Lien Forbearance Agreement is amended, modified
or supplemented in any material respect, or any provision thereof is waived,
except for any such amendment, modification, supplement or waiver consistent
with any similar amendment, modification, supplement or waiver of this
Agreement;

 

(vii)           (x) the occurrence of a “Termination Event” under and as defined
in the Second Lien Forbearance Agreement, (y) the Second Lien Forbearance
Agreement for any reason ceases to be in full force and effect and valid,
binding and enforceable in accordance with the terms thereof against the parties
party

 

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thereto or (z) the Second Lien Forbearance Agreement is amended, modified or
supplemented in any material respect, or any provision thereof is waived, except
for any such amendment, modification, supplement or waiver consistent with any
similar amendment, modification, supplement or waiver of this Agreement;

 

(viii)           (x) the occurrence of an “Event of Termination” under and as
defined in the 2020 Notes Forbearance Agreement, (y) the 2020 Notes Forbearance
Agreement for any reason ceases to be in full force and effect and valid,
binding and enforceable in accordance with the terms thereof against the parties
party thereto or (z) the 2020 Notes Forbearance Agreement is amended, modified
or supplemented in any material respect, or any provision thereof is waived,
except for any such amendment, modification, supplement or waiver consistent
with any similar amendment, modification, supplement or waiver of this
Agreement;

 

(ix)           (x) the occurrence of an “Event of Termination” under and as
defined in the 2021 Notes Forbearance Agreement, (y) the 2021 Notes Forbearance
Agreement for any reason ceases to be in full force and effect and valid,
binding and enforceable in accordance with the terms thereof against the parties
party thereto or (z) the 2021 Notes Forbearance Agreement is amended, modified
or supplemented in any material respect, or any provision thereof is waived,
except for any such amendment, modification, supplement or waiver consistent
with any similar amendment, modification, supplement or waiver of this
Agreement;

 

(x)           a Restructuring Support Agreement among the Borrower, the other
Obligors and Lenders (acting in their sole discretion) holding two-thirds in
principal of outstanding Loans has not become effective by April 8, 2020;
provided that, the event described in this clause (x) shall constitute a
Termination Event only if the Specified Lenders holding a majority in principal
of Loans held by all Specified Lenders send a written notice to the Borrower
specifying that such event is a Termination Event;

 

(xi)           (x) any class of creditors terminates the Restructuring Support
Agreement pursuant to the terms thereof, (y) the Restructuring Support Agreement
for any reason ceases to be in full force and effect and valid, binding and
enforceable in accordance with the terms thereof against the parties party
thereto or (z) the Restructuring Support Agreement is amended, modified or
supplemented in any material respect, or any provision thereof is waived, except
for any such amendment, modification, supplement or waiver that is made in
accordance with the terms of the Restructuring Support Agreement or consented to
in writing by the Specified Lenders holding a majority in principal of Loans
held by all Specified Lenders;

 

(xii)           (x) the Specified Bankruptcy Proceeding is converted or
dismissed, or a Chapter 11 trustee or examiner with expanded powers is appointed
or (y) any pleading or other document is filed or any other action is taken by
the Borrower or any Subsidiary thereof (including HOS WELLMAX Services, LLC) in
the

 

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Specified Bankruptcy Proceeding without the prior written consent of the
Required Lenders;

 

(xiii)           the Borrower or any Subsidiary thereof makes any payment of
principal of, or interest on, the Notes, or takes any step to redeem any of the
Notes;

 

(xiv)           the Borrower notifies any Specified Lender or its
representatives in writing that it has terminated discussions regarding a
potential restructuring or recapitalization transaction with respect to the
Borrower; or

 

(xv)           11:59 p.m. New York time on April 20, 2020; provided, further,
that the Termination Event described in this clause (xv) shall further extend to
11:59 p.m. New York time on any date agreed to by the Required Lenders (in their
sole discretion) and the Borrower (which such extension may be documented by
email).

 

Notwithstanding anything contained herein to the contrary, the parties hereto
reserve all rights and defenses in respect of the Non-Compliance and any cure in
respect thereof.

 

(b)       Each Obligor hereby acknowledges and agrees that upon the occurrence
of a Termination Event, (i) the relief provided under this Agreement (including,
without limitation, under Sections 2(a) hereof) shall immediately and
automatically terminate, (ii) subject to the immediately preceding sentence, the
Designated Event of Default shall continue to constitute an Event of Default and
(iii) the ABL Agent and the Lenders shall have the right to exercise the ABL
Rights and Remedies as a result of the Designated Event of Default. Each Obligor
hereby further acknowledges and agrees that from and after the Termination Date,
the ABL Agent and the Specified Lenders shall be under no obligation of any kind
whatsoever to forbear from exercising any rights or remedies on account of the
Designated Event of Default.

 

(c)       Furthermore, the ABL Agent and the Specified Lenders expressly reserve
all ABL Rights and Remedies with respect to any Event of Default now existing or
hereafter arising under the Credit Agreement or any of the other Loan Documents
and, upon the occurrence of a Termination Event, the Designated Event of
Default, including without limitation (x) the right to declare the Commitments
to be terminated, (y) the right to demand immediate full payment of all
Obligations owing under the Credit Agreement and the other Loan Documents and
(z) the right to repossess and take other action with respect to any or all
Collateral, including the liquidation thereof pursuant to the security interest
granted under the Guaranty and Security Agreement or any other Security
Document.

 

Section 3.          Conditions to Effectiveness. This Agreement shall become
effective as of the first date (the “Effective Date”) on which each of the
following conditions shall have been satisfied:

 

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(a)       the ABL Agent shall have received a countersigned signature page of
this Agreement duly executed by the Borrower, the Guarantors, the Specified
Lenders constituting the Required Lenders and the ABL Agent;

 

(b)       the First Lien Forbearance Agreement shall have been executed and
delivered by all parties party thereto substantially concurrently with the
execution and delivery of this Agreement, and shall be in full force and effect
in accordance with the terms thereof;

 

(c)       the Second Lien Forbearance Agreement shall have been executed and
delivered by all parties party thereto substantially concurrently with the
execution and delivery of this Agreement, and shall be in full force and effect
in accordance with the terms thereof;

 

(d)       the 2020 Notes Forbearance Agreement shall have been executed and
delivered by all parties party thereto substantially concurrently with the
execution and delivery of this Agreement, and shall be in full force and effect
in accordance with the terms thereof; and

 

(e)       the 2021 Notes Forbearance Agreement shall have been executed and
delivered by all parties party thereto substantially concurrently with the
execution and delivery of this Agreement, and shall be in full force and effect
in accordance with the terms thereof.

 

Section 4.          Representations and Warranties. Each Obligor hereby
represents and warrants that, as of the date hereof after giving effect to this
Agreement:

 

(a)       the execution, delivery and performance by such Obligor of this
Agreement have been duly authorized by all necessary limited liability company
or corporate and, if required, member, or shareholder action, and do not and
will not violate the Organizational Documents of such Obligor or any Restricted
Subsidiary of the Borrower;

 

(b)       this Agreement has been duly executed and delivered by such Obligor
and constitutes a legal, valid and binding obligation of such Obligor
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law;

 

(c)       the representations and warranties of the Obligors contained in the
Credit Agreement (other than Sections 9.1.7(b) or 9.1.7(c) of the Credit
Agreement) are true and correct in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) on and as of the Effective Date, except that any representation and
warranty which by its terms is made as of a specified date shall be true and
correct only as of such specified date; provided that, notwithstanding the
foregoing, the Obligors make no representation and warranty with respect to
Section 9.1.17 of the Credit Agreement solely insofar as such representations
and warranties relate to the Non-Compliance; and

 

(d)       except for the Designated Event of Default, no Default or Event of
Default has occurred and is continuing.

 

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Section 5.          Agreements.

 

(a)       Borrower acknowledges and agrees that (i) on the date hereof all
outstanding Obligations are payable in accordance with their terms and the
Borrower and the Guarantors each hereby waive any defense, offset, counterclaim
or recoupment with respect thereto and (ii) on the date hereof the aggregate
principal amount of Loans outstanding is $50,000,000.00.

 

(b)       The ABL Agent and the Specified Lenders hereby expressly reserve all
of their rights, remedies, and claims under the Loan Documents. Except as
expressly provided in this Agreement in respect of the Designated Event of
Default, nothing in this Agreement shall constitute a waiver or relinquishment
of (i) any Default or Event of Default under any of the Loan Documents, (ii) any
of the agreements, terms or conditions contained in any of the Loan Documents,
(iii) any rights or remedies of any Secured Party with respect to the Loan
Documents, or (iv) the rights of any Secured Party to collect the full amounts
owing to them under the Loan Documents.

 

(c)       The Borrower and each Guarantor do hereby adopt, ratify, and confirm
the Credit Agreement and acknowledge and agree that the Credit Agreement is and
remains in full force and effect, and the Borrower and Guarantors acknowledge
and agree that their respective liabilities and obligations under the Credit
Agreement, the other Loan Documents, and the Obligations, are not impaired in
any respect by this Agreement.

 

(d)       During the Forbearance Period, the Borrower and Guarantors covenant to
the ABL Agent and the Lenders that they shall not, nor shall they permit any of
their Restricted Subsidiaries to, directly or indirectly engage in any
transactions, make any payments or transfers or take any action (or forbear from
taking any action), in each case outside the ordinary course of business, except
as expressly permitted hereunder. Without limiting the generality of the
foregoing and whether or not any transaction, payment, transfer or other action
is done in the ordinary course of business, during the Forbearance Period the
Borrower and the Guarantors shall not, nor shall they permit any of their
Restricted Subsidiaries to, directly or indirectly:

 

(i)           make any Investment in reliance on clause (e) or clause (h) of the
definition of “Permitted Investments” in the Credit Agreement;

 

(ii)           designate any Restricted Subsidiary as an Unrestricted
Subsidiary;

 

(iii)           take any action or engage in any transaction with respect to
which the taking of such action or the engagement in such transaction is
conditioned under the Credit Agreement on there being no Default or Event of
Default existing; or

 

(iv)           incur or assume, directly or indirectly, any Debt, other than
Debt incurred in the ordinary course (and permitted by the Credit Agreement) and
not in respect of borrowed money or representing Capital Lease Obligations,
without the consent of the Specified Lenders.

 

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(e)       During the Forbearance Period, the Borrower agrees to provide Brown
Rudnick LLP copies of the following documents (via email to the attention of
Andreas P. Andromalos (aandromalos@brownrudnick.com) and Tia C. Wallach
(twallach@brownrudnick.com)) as promptly as practicable upon the entry into such
documents, the provision of such documents to third-parties or the receipt of
such documents from third-parties, as applicable: (i) any amendment, supplement
or modification, or any waiver in respect of, the 2020 Notes Indenture, the 2021
Notes Indenture, the First Lien Term Loan Agreement, the Second Lien Term Loan
Agreement, the First Lien Forbearance Agreement, the Second Lien Forbearance
Agreement, the 2020 Notes Forbearance Agreement or the 2021 Notes Forbearance
Agreement, (ii) any notice of default, notice of or other documentation in
respect of the exercise of rights or remedies, or any similar notice or
documentation, in each case delivered by or to the Borrower or any Subsidiary
thereof in respect of the 2020 Notes Indenture, the 2021 Notes Indenture, the
First Lien Term Loan Agreement or the Second Lien Term Loan Agreement or (iii)
any pleading or other document filed in the Specified Bankruptcy Proceeding.

 

(f)       During the Forbearance Period, each Obligor agrees (i) to provide the
Specified Lenders (or their designees) with access to inspect such Obligor’s
financial records or Properties during normal business hours and at the
Borrower’s expense, but without regard to any limitations on the frequency of
visits contained in the Credit Agreement and at the expense of the Borrower,
(ii) promptly to provide such customary financial and other information
regarding the Obligors and their respective businesses and operations that the
Specified Lenders may reasonably request to the extent (w) such information is
readily available to an Obligor, (x) such information is not subject to
attorney/client privilege, (y) such information does not constitute trade
secrets and (z) the provision of such information is not prohibited by law or by
the legally binding confidentiality obligations of any Obligor to a third party
(other than another Obligor); provided that the applicable Obligor shall use
commercially reasonable efforts to obtain the consent of any such third party to
provide such information to the Specified Lenders on a confidential basis and
use commercially reasonable efforts to communicate, to the extent permitted, the
applicable information in a way that would not risk waiver of such privilege or
violate the applicable obligation and (iii) to provide the Specified Lenders
with access to senior officers of the Borrower and such of their other
representatives, as appropriate, in relation to any of the foregoing.

 

(g)       The Borrower agrees to pay, within three Business Days following
receipt of an invoice therefor, all out-of-pocket fees and expenses incurred by
the ABL Agent and the Lenders and their respective Affiliates, including,
without limitation, (1) the fees, charges and disbursements of one financial
advisor for the Lenders and of counsel for the ABL Agent and the Lenders (but
limited, in the case of counsel, to one primary counsel for each of (x) the ABL
Agent and its Affiliates, collectively and (y) the Lenders and their respective
Affiliates, collectively, and in each case, if necessary, one local counsel in
each relevant jurisdiction (which may include a single special counsel acting in
multiple jurisdictions) and special counsel for each relevant specialty (and, in
the case of an actual conflict of interest, where the party affected by such
conflict, informs the Borrower of such conflict and thereafter retains its own
counsel, of another firm of counsel for each such affected person)) and (2)
travel, photocopy, mailing, courier, telephone and other similar expenses, in,
each case, in connection with (i) the preparation, negotiation, execution,
delivery and administration (both before and after the

 

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execution hereof and including advice of counsel to the ABL Agent and/or the
Lenders as to the rights and duties of the ABL Agent and the Lenders with
respect thereto) of this Agreement, the Existing ABL Forbearance Agreement, the
Credit Agreement and the other Loan Documents and any amendments, modifications
or waivers of or consents related to the provisions hereof or thereof (whether
or not the transactions contemplated hereby or thereby shall be consummated) or
(ii) the enforcement or protection of the ABL Agent’s or the Lenders’ rights in
connection with this Agreement, the Existing ABL Forbearance Agreement, the
Credit Agreement or any other Loan Document, including, without limitation, all
out-of-pocket expenses incurred during any workout or restructuring in respect
of the Obligors or the Loans.

 

Section 6.          Reaffirmation of Loan Documents. Each Obligor hereby
ratifies, confirms, acknowledges and agrees that its obligations under the
Guaranty and Security Agreement and each other Loan Document to which it is
party are in full force and effect, and each Obligor hereby ratifies and
reaffirms its grant of liens on or security interests in their properties
pursuant to such Loan Documents as security for the Obligations and the
Guaranteed Obligations (as defined in the Guaranty and Security Agreement), as
applicable and confirms and agrees that such liens and security interests secure
all of the Obligations and Guaranteed Obligations (as defined in the Guaranty
and Security Agreement), as applicable, including any additional Debt hereafter
arising or incurred pursuant to or in connection with the Credit Agreement or
any other Loan Document. Each Guarantor hereby ratifies, confirms, acknowledges
and agrees that it continues to unconditionally and irrevocably guarantee the
full and punctual payment, when due, whether at stated maturity or earlier by
acceleration or otherwise, all of the Guaranteed Obligations (as defined in the
Guaranty and Security Agreement), and its execution and delivery of this
Agreement does not indicate or establish an approval or consent requirement by
such Guarantor under the Guaranty and Security Agreement, in connection with the
execution and delivery of amendments, consents or waivers to the Credit
Agreement, the Notes or any of the other Loan Documents.

 

Section 7.          Governing Law; Waiver of Jury Trial; Other Miscellaneous
Provisions

 

THIS AGREEMENT AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL
LAWS RELATING TO NATIONAL BANKS. EACH PARTY HEREBY (i) IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE EXISTING ABL
FORBEARANCE AGREEMENT, AND FOR ANY COUNTERCLAIM HEREIN OR THEREIN; (ii)
CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR ABL AGENT OR COUNSEL
FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT
SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, AND (iii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 7. The provisions of
Sections 14.6 and 14.15.1 of the Credit Agreement are hereby incorporated herein
mutatis mutandis.

 

73  

 

 

Section 8.          Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Transmission by
facsimile or pdf. of an executed counterpart of this Agreement shall be deemed
to constitute due and sufficient delivery of such counterpart.

 

Section 9.          Release. In consideration of, among other things, the
forbearance provided for herein, the Borrower and each other Obligor (on its own
behalf and on behalf of its respective Subsidiaries) forever waives, releases
and discharges any and all claims (including, without limitation, cross-claims,
counterclaims, rights of setoff and recoupment), causes of action, demands,
suits, costs, expenses and damages that it now has, of whatsoever nature and
kind, whether known or unknown, whether now existing, whether arising at law or
in equity, against the ABL Agent and/or any Lender (in their respective
capacities as such) and any of their respective subsidiaries and affiliates, and
each of their respective successors, assigns, officers, directors, employees,
agents, attorneys and other advisors or representatives (collectively, the
“Released Parties”); provided that in each case such claim is based in whole or
in part on facts, events or conditions, whether known or unknown, existing on or
prior to the date hereof and which arise out of or are related to the Credit
Agreement, this Agreement, the Existing ABL Forbearance Agreement, the other
Loan Documents, the Obligations, the Guaranteed Obligations (as defined in the
Guaranty and Security Agreement) or the Collateral (collectively, the “Released
Claims”). The Borrower and the other Obligors further agree to refrain from
commencing, instituting or prosecuting, or supporting any Person that commences,
institutes, or prosecutes, any lawsuit, action or other proceeding against any
and all Released Parties with respect to any and all Released Claims.

 

Section 10.          Effects of this Agreement; Amendments. From and after the
Effective Date, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein”, or words of like import, and each reference to
the Credit Agreement in any other Loan Document shall be deemed a reference to
the Credit Agreement, as interpreted in accordance with the terms of this
Agreement. This Agreement shall constitute a “Loan Document” for all purposes of
the Credit Agreement and the other Loan Documents. All references herein to
“this Agreement,” “herein,” “hereunder” or words of similar import, shall in
each case, be deemed to be references to the Existing ABL Forbearance Agreement
as amended and restated by this Agreement. This Agreement may not be amended
except pursuant to an agreement or agreements in writing entered into by each of
the parties party hereto.

 

Section 11.          Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted pursuant to the Credit Agreement. During the
Forbearance Period, no Specified Lender shall transfer or assign its rights
under the Credit Agreement or this Agreement absent the written agreement of the
transferee or assignee to be bound by the terms of this Agreement, but no
Specified Lender shall be further limited in its transfer or assignment rights
other than as provided in the Credit Agreement.

 

Section 12.          Invalidity. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such

 

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invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof or thereof; and
the invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

 

Section 13.          ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

 

Section 14.           Agent Direction. The Specified Lenders hereby direct the
ABL Agent to execute this Agreement. pursuant to Section 12.1.4 of the Credit
Agreement. The ABL Agent shall conclusively rely on this direction in connection
with its execution of this Agreement.

 

[Signature Pages Follow]

 

75  

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
Effective Date.

 

  BORROWER:       HORNBECK OFFSHORE SERVICES, INC.         By: /s/ James O.
Harp, Jr.     James O. Harp, Jr.     Executive Vice President and Chief    
Financial Officer

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc. 

 

 

 

 

  GUARANTORS:         HORNBECK OFFSHORE SERVICES, LLC         By: /s/ James O.
Harp, Jr.     James O. Harp, Jr.     Executive Vice President and Chief    
Financial Officer         HORNBECK OFFSHORE OPERATORS, LLC, as a Guarantor      
  By: /s/ James O. Harp, Jr.     James O. Harp, Jr.     Executive Vice President
and Chief     Financial Officer         HOS PORT, LLC, as a Guarantor        
By: /s/ James O. Harp, Jr.     James O. Harp, Jr.     Executive Vice President
and Chief     Financial Officer

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc. 

 

 

 

 

  HORNBECK OFFSHORE SERVICES DE MEXICO, S. DE R.L. DE C.V, as a Guarantor      
  By: /s/ Samuel A. Giberga     Samuel A. Giberga     Vice President

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc. 

 

 

 

 

  HORNBECK OFFSHORE NAVEGACAO, LTDA., as a Guarantor         By: /s/ Robert
Thomas Gang     Robert Thomas Gang     Administrator

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc. 

 

 

 

 

  ADMINISTRATIVE AGENT/CERTAIN LENDERS:         WILMINGTON TRUST, NATIONAL
ASSOCIATION,   as Administrative Agent and Collateral Agent         By: /s/
Nicole Kroll     Nicole Kroll     Assistant Vice President

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc. 

 

 

 

[Lender Signature Pages are on file with the ABL Agent]

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc. 

 

 

 

Exhibit A

 

[See attached.]

 

 

 

 

Exhibit B

 

[See attached.]

 

 

 

 

 

Exhibit C

 

[See attached.]

 

 

 

Exhibit D

 

[See attached.]

 

 

 

 

Execution Version

 

AMENDED AND RESTATED FORBEARANCE AGREEMENT

 

This Amended and Restated Forbearance Agreement (this “Agreement”) entered into
as of March 31, 2020, is by and among Hornbeck Offshore Services, Inc., a
Delaware corporation (the “Borrower”), the Lenders (hereinafter defined) party
hereto (the “Specified Lenders”) constituting the “Required Lenders” under the
Credit Agreement (as defined below), the guarantors party to the Credit
Agreement (the “Guarantors”) and Wilmington Trust, National Association, as
administrative agent and collateral agent for the Lenders (“Wilmington Trust”
and, in such capacity, the “ABL Agent”) and amends and restates in its entirety
the Forbearance Agreement in respect of the Credit Agreement entered into on
March 2, 2020 (the “Existing ABL Forbearance Agreement”), by and among the
Borrower, the Guarantors and lenders under the Credit Agreement party thereto.

 

WHEREAS, the Borrower, the Guarantors, the lenders from time to time party
thereto (the “Lenders”) and the ABL Agent are parties to the Senior Credit
Agreement, dated as of June 28, 2019 (as amended, restated, amended and
restated, supplemented or otherwise modified prior to the date hereof, the
“Credit Agreement”);

 

WHEREAS, the Borrower, the guarantors party thereto from time to time (the “2020
Notes Guarantors”) and Wilmington Trust are parties to that certain Indenture,
dated as of March 16, 2012 (as amended, restated, amended and restated,
supplemented or otherwise modified prior to the date hereof, the “2020 Notes
Indenture”), under which certain 5.875% Senior Notes due 2020 were issued (the
“2020 Notes”);

 

WHEREAS, the principal amount of outstanding 2020 Notes is due in full on April
1, 2020 (or if such day is not a Business Day (as defined in the 2020 Notes
Indenture), on the next succeeding Business Day) (the “2020 Notes Principal
Payment”), and the Borrower anticipates not making such 2020 Notes Principal
Payment on such date (the “2020 Notes Payment Non-Compliance”);

 

WHEREAS, the Borrower, the guarantors party thereto from time to time (the “2021
Notes Guarantors”) and Wilmington Trust are parties to that certain Indenture,
dated as of March 28, 2013 (as amended, restated, amended and restated,
supplemented or otherwise modified prior to the date hereof, the “2021 Notes
Indenture”), under which certain 5.000% Senior Notes due 2021 were issued (the
“2021 Notes” and, together with the 2020 Notes, the “Notes”);

 

WHEREAS, an interest payment on the 2021 Notes in the amount of $11,250,000 was
due on March 1, 2020 (or if such day was not a Business Day (as defined in the
2021 Notes Indenture), on the next succeeding Business Day) (the “2021 Notes
Interest Payment” and, together with the 2020 Notes Principal Payment,
individually or collectively as the context requires, the “Specified Payments”),
and the Borrower did not make such 2021 Notes Interest Payment on such date (the
“2021 Notes Payment Non-Compliance”);

 

WHEREAS, pursuant to Section 11.1(e) of the Credit Agreement, if the Borrower or
any Guarantor fails to make any payment (whether of principal or interest and
regardless of amount) of any Material Indebtedness, when and as the same shall
become due and payable (including either Specified Payment), an Event of Default
will result;

 

 

 

 

WHEREAS, pursuant to Section 10.1.2(a) and Section 10.1.2(c) of the Credit
Agreement, if the Borrower fails to deliver all annual financial statements and
other information that would be required to be contained in a filing with SEC on
Form 10-K in respect of the fiscal year ending December 31, 2019 and the related
Compliance Certificate, an Event of Default will result (the “Reporting
Non-Compliance”);

 

WHEREAS, HOS WELLMAX Services, LLC will commence a voluntary case under Chapter
11 of Title 11 of the United States Code in the Bankruptcy Court for the
Southern District of Texas (such proceeding, the “Specified Bankruptcy
Proceeding”) (such non-compliance, the “Bankruptcy Non-Compliance”; the
Bankruptcy Non-Compliance, together with the 2020 Notes Payment Non-Compliance,
the 2021 Notes Payment Non-Compliance and the Reporting Non-Compliance,
collectively, the “Non-Compliance”);

 

WHEREAS, pursuant to Section 11.1(h)(i) of the Credit Agreement, if the Borrower
or any Guarantor voluntarily commences any proceeding or files any petition
seeking liquidation, reorganization or other relief under any federal, state or
foreign bankruptcy, insolvency, receivership or similar law, an Event of Default
will result;

 

WHEREAS, the Borrower and the Guarantors have requested that the ABL Agent and
the Specified Lenders temporarily forbear, solely by reason of (1) an Event of
Default under Section 11.1(h)(i) of the Credit Agreement arising on account of
the Bankruptcy Non-Compliance, (2) an Event of Default arising on account of the
Reporting Non-Compliance and (3) a cross-default under (x) Section 11.1(e) of
the Credit Agreement arising on account of the 2020 Notes Payment Non-Compliance
and the 2021 Notes Payment Non-Compliance and (y) Section 11.1(f) of the Credit
Agreement arising on account of (a) any cross-defaults in respect of the 2020
Notes Payment Non-Compliance, the 2021 Notes Payment Non-Compliance and the
Bankruptcy Non-Compliance or (b) any cross-defaults in respect of the Reporting
Non-Compliance (but, in the case of this clause (y), except to the extent that
the events described in this clause (y) (other than the 2020 Notes Payment
Non-Compliance) has resulted in the holders of any other applicable Debt
actually having accelerated or required that such other Debt become immediately
redeemed or repurchased (or offered to be redeemed or repurchased) prior to its
maturity) (the Events of Default described in the preceding clauses (1), (2) and
(3), collectively, the “Designated Event of Default”) from exercising ABL Rights
and Remedies (as defined below) from the date hereof until the Termination Date
(as defined below);

 

WHEREAS, absent the entry into this Agreement, by reason of the Designated Event
of Default, the Borrower acknowledges that the ABL Agent and the Required
Lenders would be authorized to exercise all rights and remedies available to
them under the Credit Agreement and the other Loan Documents and applicable law
or in equity or otherwise (all such rights and remedies, collectively, “ABL
Rights and Remedies”);

 

WHEREAS, on March 2, 2020, the Borrower entered into a forbearance agreement
(the “Existing First Lien Forbearance Agreement”) with the “Administrative
Agent”, the “Collateral Agent” and those certain “Lenders” party thereto
constituting the “Required Lenders”, in each case under and as defined in that
certain First Lien Term Loan Agreement, dated as of June 15, 2017 (as amended,
restated, amended and restated, supplemented or otherwise modified prior to

 

87  

 

 

the date hereof, the “First Lien Term Loan Agreement”), among the Borrower, the
lenders from time to time party thereto, and Wilmington Trust, as administrative
agent and collateral agent;

 

WHEREAS, on or prior to the date hereof, the Borrower, the “Administrative
Agent”, the “Collateral Agent” and those certain “Lenders” party thereto
constituting the “Required Lenders” (in each case under and as defined in the
First Lien Term Loan Agreement) amended and restated the Existing First Lien
Forbearance Agreement (as so amended and restated, the “First Lien Forbearance
Agreement”), a true and complete copy of which is attached hereto as Exhibit A;

 

WHEREAS, on March 2, 2020, the Borrower entered into a forbearance agreement
(the “Existing Second Lien Forbearance Agreement”) with the “Administrative
Agent”, the “Collateral Agent” and those certain “Lenders” party thereto
constituting the “Required Lenders”, in each case under and as defined in that
certain Second Lien Term Loan Agreement, dated as of February 7, 2019 (as
amended, restated, amended and restated, supplemented or otherwise modified
through the date hereof, the “Second Lien Term Loan Agreement”), among the
Borrower, the lenders from time to time party thereto, and the administrative
agent and collateral agent party thereto;

 

WHEREAS, on or prior to the date hereof, the Borrower, the “Administrative
Agent”, the “Collateral Agent” and those certain “Lenders” party thereto
constituting the “Required Lenders” (in each case under and as defined in the
Second Lien Term Loan Agreement) amended and restated the Existing Second Lien
Forbearance Agreement (as so amended and restated, the “Second Lien Forbearance
Agreement”), a true and complete copy of which is attached hereto as Exhibit B;

 

WHEREAS, on or prior to the date hereof, the Borrower and the 2020 Note
Guarantors have entered into a forbearance agreement with the trustee under the
2020 Notes Indenture and the “Holders” (as defined in the 2020 Notes Indenture)
of more than 75% in principal of the then outstanding 2020 Notes, a true and
complete copy of which is attached hereto as Exhibit C (the “2020 Notes
Forbearance Agreement”);

 

WHEREAS, on or prior to the date hereof, the Borrower and the 2021 Note
Guarantors have entered into a forbearance agreement with the trustee under the
2021 Notes Indenture and the “Holders” (as defined in the 2021 Notes Indenture)
of more than 75% in principal of the then outstanding 2021 Notes, a true and
complete copy of which is attached hereto as Exhibit D (the “2021 Notes
Forbearance Agreement”);

 

WHEREAS, the Borrower will continue to negotiate and document the terms of a
mutually agreeable restructuring transaction (the agreement documenting such
restructuring transaction, the “Restructuring Support Agreement”) with and among
the Lenders, the Obligors, and such other parties as may be appropriate and
acceptable to the foregoing; and

 

WHEREAS, on account of this Agreement and subject to the terms and conditions
set forth herein, until the Termination Date, the ABL Agent and the Specified
Lenders have agreed to forbear from their rights to exercise any ABL Rights and
Remedies arising as a result of the Designated Event of Default.

 

88  

 

 

NOW THEREFORE, in consideration of the premises and the mutual covenants,
representations and warranties contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

AGREEMENT

 

Section 1.          Defined Terms. Unless otherwise defined in this Agreement,
each capitalized term used in this Agreement has the meaning given such term in
the Credit Agreement. As used in this Agreement, each of the terms defined in
the opening paragraph and the WHEREAS provisions above shall have the meanings
assigned to such terms therein. Article, Section, Schedule, and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified. The words “hereof”, “herein”, and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. The term “including” means “including, without limitation”. Paragraph
headings have been inserted in this Agreement as a matter of convenience for
reference only and it is agreed that such paragraph headings are not a part of
this Agreement and shall not be used in the interpretation of any provision of
this Agreement.

 

Section 2.          Acknowledgement and Forbearance.

 

(a)       In reliance upon the representations, warranties and covenants of the
Obligors contained in this Agreement, and subject to the terms and conditions of
this Agreement, the ABL Agent and the Specified Lenders hereby agree that, from
and after the date hereof until the earliest occurrence of any Termination Event
(as defined below), the ABL Agent and the Specified Lenders shall not exercise
any ABL Rights and Remedies arising as a result of the Designated Event of
Default and the Borrower shall be permitted to convert or continue any Loan as a
Loan bearing interest at the LIBO Rate. Furthermore, the ABL Agent and Specified
Lenders hereby expressly waive any notice requirement arising under the Loan
Documents on account of the Designated Event of Default. As used in this
Agreement, the occurrence of any one or more of the following events shall
constitute a “Termination Event” (the earliest date on which any Termination
Event occurs shall be referred to herein as the “Termination Date”; and the
period from the date hereof until the Termination Date, the “Forbearance
Period”):

 

(i)           the occurrence of any Event of Default that is not the Designated
Event of Default (which, for the avoidance of doubt, shall include, without
limiting the scope of any such other Events of Default, (x) other than with
respect to the 2020 Notes, the holder or holders of any Material Indebtedness or
any trustee or administrative agent on its or their behalf causing such Material
Indebtedness to become due, or requiring the redemption thereof or requiring any
offer to redeem to be made in respect thereof, prior to its scheduled maturity
or requiring the Borrower or any Guarantor to make an offer in respect thereof
in each case on account of any Non-Compliance or any cross-default in respect
thereof and (y) other than with respect to the Bankruptcy Non-Compliance, the
occurrence of any Event of Default under Section 11.1(g) or (h) of the Credit
Agreement or the

 

89  

 

 

occurrence of any event described in Section 11.1(g) or (h) that would cause an
Event of Default to occur under Section 11.1(g) or (h) but for any applicable
automatic stay order);

 

(ii)           any holder or holders of any Material Indebtedness or any trustee
or administrative agent on its or their behalf (x) institutes any proceeding
seeking collection of any amounts outstanding under such Material Indebtedness
or (y) exercises any rights and remedies available to them under such Material
Indebtedness or applicable law or in equity or otherwise (including, without
limitation, by commencing an involuntary proceeding or filing an involuntary
petition seeking (a) liquidation, reorganization or other relief in respect of
the Borrower or any Subsidiary thereof or its debts, or of a substantial part of
its assets, under any federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (b) the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary thereof; provided, that, the Parent Borrower
agrees to notify the Specified Lenders immediately upon the filing of any such
proceeding or petition);

 

(iii)           any Obligor repudiates or asserts a defense in writing to any
obligation or liability under this Agreement, the Credit Agreement or any other
Loan Document or makes or pursues a claim in writing against the ABL Agent or
any Lender in connection with this Agreement, the Credit Agreement or any other
Loan Document;

 

(iv)           any representation or warranty made or deemed made by or on
behalf of the Borrower or any Guarantor in or in connection with this Agreement
shall prove to have been incorrect in any material adverse respect when made or
deemed made;

 

(v)           the Obligors shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement;

 

(vi)           (x) the occurrence of a “Termination Event” under and as defined
in the First Lien Forbearance Agreement, (y) the First Lien Forbearance
Agreement for any reason ceases to be in full force and effect and valid,
binding and enforceable in accordance with the terms thereof against the parties
party thereto or (z) the First Lien Forbearance Agreement is amended, modified
or supplemented in any material respect, or any provision thereof is waived,
except for any such amendment, modification, supplement or waiver consistent
with any similar amendment, modification, supplement or waiver of this
Agreement;

 

(vii)           (x) the occurrence of a “Termination Event” under and as defined
in the Second Lien Forbearance Agreement, (y) the Second Lien Forbearance
Agreement for any reason ceases to be in full force and effect and valid,
binding and enforceable in accordance with the terms thereof against the parties
party

 

90  

 

 

thereto or (z) the Second Lien Forbearance Agreement is amended, modified or
supplemented in any material respect, or any provision thereof is waived, except
for any such amendment, modification, supplement or waiver consistent with any
similar amendment, modification, supplement or waiver of this Agreement;

 

(viii)           (x) the occurrence of an “Event of Termination” under and as
defined in the 2020 Notes Forbearance Agreement, (y) the 2020 Notes Forbearance
Agreement for any reason ceases to be in full force and effect and valid,
binding and enforceable in accordance with the terms thereof against the parties
party thereto or (z) the 2020 Notes Forbearance Agreement is amended, modified
or supplemented in any material respect, or any provision thereof is waived,
except for any such amendment, modification, supplement or waiver consistent
with any similar amendment, modification, supplement or waiver of this
Agreement;

 

(ix)           (x) the occurrence of an “Event of Termination” under and as
defined in the 2021 Notes Forbearance Agreement, (y) the 2021 Notes Forbearance
Agreement for any reason ceases to be in full force and effect and valid,
binding and enforceable in accordance with the terms thereof against the parties
party thereto or (z) the 2021 Notes Forbearance Agreement is amended, modified
or supplemented in any material respect, or any provision thereof is waived,
except for any such amendment, modification, supplement or waiver consistent
with any similar amendment, modification, supplement or waiver of this
Agreement;

 

(x)           a Restructuring Support Agreement among the Borrower, the other
Obligors and Lenders (acting in their sole discretion) holding two-thirds in
principal of outstanding Loans has not become effective by April 8, 2020;
provided that, the event described in this clause (x) shall constitute a
Termination Event only if the Specified Lenders holding a majority in principal
of Loans held by all Specified Lenders send a written notice to the Borrower
specifying that such event is a Termination Event;

 

(xi)           (x) any class of creditors terminates the Restructuring Support
Agreement pursuant to the terms thereof, (y) the Restructuring Support Agreement
for any reason ceases to be in full force and effect and valid, binding and
enforceable in accordance with the terms thereof against the parties party
thereto or (z) the Restructuring Support Agreement is amended, modified or
supplemented in any material respect, or any provision thereof is waived, except
for any such amendment, modification, supplement or waiver that is made in
accordance with the terms of the Restructuring Support Agreement or consented to
in writing by the Specified Lenders holding a majority in principal of Loans
held by all Specified Lenders;

 

(xii)           (x) the Specified Bankruptcy Proceeding is converted or
dismissed, or a Chapter 11 trustee or examiner with expanded powers is appointed
or (y) any pleading or other document is filed or any other action is taken by
the Borrower or any Subsidiary thereof (including HOS WELLMAX Services, LLC) in
the

 

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Specified Bankruptcy Proceeding without the prior written consent of the
Required Lenders;

 

(xiii)           the Borrower or any Subsidiary thereof makes any payment of
principal of, or interest on, the Notes, or takes any step to redeem any of the
Notes;

 

(xiv)           the Borrower notifies any Specified Lender or its
representatives in writing that it has terminated discussions regarding a
potential restructuring or recapitalization transaction with respect to the
Borrower; or

 

(xv)           11:59 p.m. New York time on April 20, 2020; provided, further,
that the Termination Event described in this clause (xv) shall further extend to
11:59 p.m. New York time on any date agreed to by the Required Lenders (in their
sole discretion) and the Borrower (which such extension may be documented by
email).

 

Notwithstanding anything contained herein to the contrary, the parties hereto
reserve all rights and defenses in respect of the Non-Compliance and any cure in
respect thereof.

 

(b)       Each Obligor hereby acknowledges and agrees that upon the occurrence
of a Termination Event, (i) the relief provided under this Agreement (including,
without limitation, under Sections 2(a) hereof) shall immediately and
automatically terminate, (ii) subject to the immediately preceding sentence, the
Designated Event of Default shall continue to constitute an Event of Default and
(iii) the ABL Agent and the Lenders shall have the right to exercise the ABL
Rights and Remedies as a result of the Designated Event of Default. Each Obligor
hereby further acknowledges and agrees that from and after the Termination Date,
the ABL Agent and the Specified Lenders shall be under no obligation of any kind
whatsoever to forbear from exercising any rights or remedies on account of the
Designated Event of Default.

 

(c)       Furthermore, the ABL Agent and the Specified Lenders expressly reserve
all ABL Rights and Remedies with respect to any Event of Default now existing or
hereafter arising under the Credit Agreement or any of the other Loan Documents
and, upon the occurrence of a Termination Event, the Designated Event of
Default, including without limitation (x) the right to declare the Commitments
to be terminated, (y) the right to demand immediate full payment of all
Obligations owing under the Credit Agreement and the other Loan Documents and
(z) the right to repossess and take other action with respect to any or all
Collateral, including the liquidation thereof pursuant to the security interest
granted under the Guaranty and Security Agreement or any other Security
Document.

 

Section 3.          Conditions to Effectiveness. This Agreement shall become
effective as of the first date (the “Effective Date”) on which each of the
following conditions shall have been satisfied:

 

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(a)       the ABL Agent shall have received a countersigned signature page of
this Agreement duly executed by the Borrower, the Guarantors, the Specified
Lenders constituting the Required Lenders and the ABL Agent;

 

(b)       the First Lien Forbearance Agreement shall have been executed and
delivered by all parties party thereto substantially concurrently with the
execution and delivery of this Agreement, and shall be in full force and effect
in accordance with the terms thereof;

 

(c)       the Second Lien Forbearance Agreement shall have been executed and
delivered by all parties party thereto substantially concurrently with the
execution and delivery of this Agreement, and shall be in full force and effect
in accordance with the terms thereof;

 

(d)       the 2020 Notes Forbearance Agreement shall have been executed and
delivered by all parties party thereto substantially concurrently with the
execution and delivery of this Agreement, and shall be in full force and effect
in accordance with the terms thereof; and

 

(e)       the 2021 Notes Forbearance Agreement shall have been executed and
delivered by all parties party thereto substantially concurrently with the
execution and delivery of this Agreement, and shall be in full force and effect
in accordance with the terms thereof.

 

Section 4.          Representations and Warranties. Each Obligor hereby
represents and warrants that, as of the date hereof after giving effect to this
Agreement:

 

(a)       the execution, delivery and performance by such Obligor of this
Agreement have been duly authorized by all necessary limited liability company
or corporate and, if required, member, or shareholder action, and do not and
will not violate the Organizational Documents of such Obligor or any Restricted
Subsidiary of the Borrower;

 

(b)       this Agreement has been duly executed and delivered by such Obligor
and constitutes a legal, valid and binding obligation of such Obligor
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law;

 

(c)       the representations and warranties of the Obligors contained in the
Credit Agreement (other than Sections 9.1.7(b) or 9.1.7(c) of the Credit
Agreement) are true and correct in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) on and as of the Effective Date, except that any representation and
warranty which by its terms is made as of a specified date shall be true and
correct only as of such specified date; provided that, notwithstanding the
foregoing, the Obligors make no representation and warranty with respect to
Section 9.1.17 of the Credit Agreement solely insofar as such representations
and warranties relate to the Non-Compliance; and

 

(d)       except for the Designated Event of Default, no Default or Event of
Default has occurred and is continuing.

 

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Section 5.          Agreements.

 

(a)       Borrower acknowledges and agrees that (i) on the date hereof all
outstanding Obligations are payable in accordance with their terms and the
Borrower and the Guarantors each hereby waive any defense, offset, counterclaim
or recoupment with respect thereto and (ii) on the date hereof the aggregate
principal amount of Loans outstanding is $50,000,000.00.

 

(b)       The ABL Agent and the Specified Lenders hereby expressly reserve all
of their rights, remedies, and claims under the Loan Documents. Except as
expressly provided in this Agreement in respect of the Designated Event of
Default, nothing in this Agreement shall constitute a waiver or relinquishment
of (i) any Default or Event of Default under any of the Loan Documents, (ii) any
of the agreements, terms or conditions contained in any of the Loan Documents,
(iii) any rights or remedies of any Secured Party with respect to the Loan
Documents, or (iv) the rights of any Secured Party to collect the full amounts
owing to them under the Loan Documents.

 

(c)       The Borrower and each Guarantor do hereby adopt, ratify, and confirm
the Credit Agreement and acknowledge and agree that the Credit Agreement is and
remains in full force and effect, and the Borrower and Guarantors acknowledge
and agree that their respective liabilities and obligations under the Credit
Agreement, the other Loan Documents, and the Obligations, are not impaired in
any respect by this Agreement.

 

(d)       During the Forbearance Period, the Borrower and Guarantors covenant to
the ABL Agent and the Lenders that they shall not, nor shall they permit any of
their Restricted Subsidiaries to, directly or indirectly engage in any
transactions, make any payments or transfers or take any action (or forbear from
taking any action), in each case outside the ordinary course of business, except
as expressly permitted hereunder. Without limiting the generality of the
foregoing and whether or not any transaction, payment, transfer or other action
is done in the ordinary course of business, during the Forbearance Period the
Borrower and the Guarantors shall not, nor shall they permit any of their
Restricted Subsidiaries to, directly or indirectly:

 

(i)           make any Investment in reliance on clause (e) or clause (h) of the
definition of “Permitted Investments” in the Credit Agreement;

 

(ii)           designate any Restricted Subsidiary as an Unrestricted
Subsidiary;

 

(iii)           take any action or engage in any transaction with respect to
which the taking of such action or the engagement in such transaction is
conditioned under the Credit Agreement on there being no Default or Event of
Default existing; or

 

(iv)           incur or assume, directly or indirectly, any Debt, other than
Debt incurred in the ordinary course (and permitted by the Credit Agreement) and
not in respect of borrowed money or representing Capital Lease Obligations,
without the consent of the Specified Lenders.

 

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(e)       During the Forbearance Period, the Borrower agrees to provide Brown
Rudnick LLP copies of the following documents (via email to the attention of
Andreas P. Andromalos (aandromalos@brownrudnick.com) and Tia C. Wallach
(twallach@brownrudnick.com)) as promptly as practicable upon the entry into such
documents, the provision of such documents to third-parties or the receipt of
such documents from third-parties, as applicable: (i) any amendment, supplement
or modification, or any waiver in respect of, the 2020 Notes Indenture, the 2021
Notes Indenture, the First Lien Term Loan Agreement, the Second Lien Term Loan
Agreement, the First Lien Forbearance Agreement, the Second Lien Forbearance
Agreement, the 2020 Notes Forbearance Agreement or the 2021 Notes Forbearance
Agreement, (ii) any notice of default, notice of or other documentation in
respect of the exercise of rights or remedies, or any similar notice or
documentation, in each case delivered by or to the Borrower or any Subsidiary
thereof in respect of the 2020 Notes Indenture, the 2021 Notes Indenture, the
First Lien Term Loan Agreement or the Second Lien Term Loan Agreement or (iii)
any pleading or other document filed in the Specified Bankruptcy Proceeding.

 

(f)       During the Forbearance Period, each Obligor agrees (i) to provide the
Specified Lenders (or their designees) with access to inspect such Obligor’s
financial records or Properties during normal business hours and at the
Borrower’s expense, but without regard to any limitations on the frequency of
visits contained in the Credit Agreement and at the expense of the Borrower,
(ii) promptly to provide such customary financial and other information
regarding the Obligors and their respective businesses and operations that the
Specified Lenders may reasonably request to the extent (w) such information is
readily available to an Obligor, (x) such information is not subject to
attorney/client privilege, (y) such information does not constitute trade
secrets and (z) the provision of such information is not prohibited by law or by
the legally binding confidentiality obligations of any Obligor to a third party
(other than another Obligor); provided that the applicable Obligor shall use
commercially reasonable efforts to obtain the consent of any such third party to
provide such information to the Specified Lenders on a confidential basis and
use commercially reasonable efforts to communicate, to the extent permitted, the
applicable information in a way that would not risk waiver of such privilege or
violate the applicable obligation and (iii) to provide the Specified Lenders
with access to senior officers of the Borrower and such of their other
representatives, as appropriate, in relation to any of the foregoing.

 

(g)       The Borrower agrees to pay, within three Business Days following
receipt of an invoice therefor, all out-of-pocket fees and expenses incurred by
the ABL Agent and the Lenders and their respective Affiliates, including,
without limitation, (1) the fees, charges and disbursements of one financial
advisor for the Lenders and of counsel for the ABL Agent and the Lenders (but
limited, in the case of counsel, to one primary counsel for each of (x) the ABL
Agent and its Affiliates, collectively and (y) the Lenders and their respective
Affiliates, collectively, and in each case, if necessary, one local counsel in
each relevant jurisdiction (which may include a single special counsel acting in
multiple jurisdictions) and special counsel for each relevant specialty (and, in
the case of an actual conflict of interest, where the party affected by such
conflict, informs the Borrower of such conflict and thereafter retains its own
counsel, of another firm of counsel for each such affected person)) and (2)
travel, photocopy, mailing, courier, telephone and other similar expenses, in,
each case, in connection with (i) the preparation, negotiation, execution,
delivery and administration (both before and after the

 

95  

 

 

execution hereof and including advice of counsel to the ABL Agent and/or the
Lenders as to the rights and duties of the ABL Agent and the Lenders with
respect thereto) of this Agreement, the Existing ABL Forbearance Agreement, the
Credit Agreement and the other Loan Documents and any amendments, modifications
or waivers of or consents related to the provisions hereof or thereof (whether
or not the transactions contemplated hereby or thereby shall be consummated) or
(ii) the enforcement or protection of the ABL Agent’s or the Lenders’ rights in
connection with this Agreement, the Existing ABL Forbearance Agreement, the
Credit Agreement or any other Loan Document, including, without limitation, all
out-of-pocket expenses incurred during any workout or restructuring in respect
of the Obligors or the Loans.

 

Section 6.          Reaffirmation of Loan Documents. Each Obligor hereby
ratifies, confirms, acknowledges and agrees that its obligations under the
Guaranty and Security Agreement and each other Loan Document to which it is
party are in full force and effect, and each Obligor hereby ratifies and
reaffirms its grant of liens on or security interests in their properties
pursuant to such Loan Documents as security for the Obligations and the
Guaranteed Obligations (as defined in the Guaranty and Security Agreement), as
applicable and confirms and agrees that such liens and security interests secure
all of the Obligations and Guaranteed Obligations (as defined in the Guaranty
and Security Agreement), as applicable, including any additional Debt hereafter
arising or incurred pursuant to or in connection with the Credit Agreement or
any other Loan Document. Each Guarantor hereby ratifies, confirms, acknowledges
and agrees that it continues to unconditionally and irrevocably guarantee the
full and punctual payment, when due, whether at stated maturity or earlier by
acceleration or otherwise, all of the Guaranteed Obligations (as defined in the
Guaranty and Security Agreement), and its execution and delivery of this
Agreement does not indicate or establish an approval or consent requirement by
such Guarantor under the Guaranty and Security Agreement, in connection with the
execution and delivery of amendments, consents or waivers to the Credit
Agreement, the Notes or any of the other Loan Documents.

 

Section 7.          Governing Law; Waiver of Jury Trial; Other Miscellaneous
Provisions

 

THIS AGREEMENT AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL
LAWS RELATING TO NATIONAL BANKS. EACH PARTY HEREBY (i) IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE EXISTING ABL
FORBEARANCE AGREEMENT, AND FOR ANY COUNTERCLAIM HEREIN OR THEREIN; (ii)
CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR ABL AGENT OR COUNSEL
FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT
SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, AND (iii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 7. The provisions of
Sections 14.6 and 14.15.1 of the Credit Agreement are hereby incorporated herein
mutatis mutandis.

 

96  

 

 

Section 8.          Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Transmission by
facsimile or pdf. of an executed counterpart of this Agreement shall be deemed
to constitute due and sufficient delivery of such counterpart.

 

Section 9.          Release. In consideration of, among other things, the
forbearance provided for herein, the Borrower and each other Obligor (on its own
behalf and on behalf of its respective Subsidiaries) forever waives, releases
and discharges any and all claims (including, without limitation, cross-claims,
counterclaims, rights of setoff and recoupment), causes of action, demands,
suits, costs, expenses and damages that it now has, of whatsoever nature and
kind, whether known or unknown, whether now existing, whether arising at law or
in equity, against the ABL Agent and/or any Lender (in their respective
capacities as such) and any of their respective subsidiaries and affiliates, and
each of their respective successors, assigns, officers, directors, employees,
agents, attorneys and other advisors or representatives (collectively, the
“Released Parties”); provided that in each case such claim is based in whole or
in part on facts, events or conditions, whether known or unknown, existing on or
prior to the date hereof and which arise out of or are related to the Credit
Agreement, this Agreement, the Existing ABL Forbearance Agreement, the other
Loan Documents, the Obligations, the Guaranteed Obligations (as defined in the
Guaranty and Security Agreement) or the Collateral (collectively, the “Released
Claims”). The Borrower and the other Obligors further agree to refrain from
commencing, instituting or prosecuting, or supporting any Person that commences,
institutes, or prosecutes, any lawsuit, action or other proceeding against any
and all Released Parties with respect to any and all Released Claims.

 

Section 10.          Effects of this Agreement; Amendments. From and after the
Effective Date, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein”, or words of like import, and each reference to
the Credit Agreement in any other Loan Document shall be deemed a reference to
the Credit Agreement, as interpreted in accordance with the terms of this
Agreement. This Agreement shall constitute a “Loan Document” for all purposes of
the Credit Agreement and the other Loan Documents. All references herein to
“this Agreement,” “herein,” “hereunder” or words of similar import, shall in
each case, be deemed to be references to the Existing ABL Forbearance Agreement
as amended and restated by this Agreement. This Agreement may not be amended
except pursuant to an agreement or agreements in writing entered into by each of
the parties party hereto.

 

Section 11.          Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted pursuant to the Credit Agreement. During the
Forbearance Period, no Specified Lender shall transfer or assign its rights
under the Credit Agreement or this Agreement absent the written agreement of the
transferee or assignee to be bound by the terms of this Agreement, but no
Specified Lender shall be further limited in its transfer or assignment rights
other than as provided in the Credit Agreement.

 

Section 12.          Invalidity. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such

 

97  

 

 

invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof or thereof; and
the invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

 

Section 13.          ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

 

Section 14.           Agent Direction. The Specified Lenders hereby direct the
ABL Agent to execute this Agreement. pursuant to Section 12.1.4 of the Credit
Agreement. The ABL Agent shall conclusively rely on this direction in connection
with its execution of this Agreement.

 

[Signature Pages Follow]

 

98  

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
Effective Date.

 

  BORROWER:         HORNBECK OFFSHORE SERVICES, INC.         By: /s/ James O.
Harp, Jr.     James O. Harp, Jr.     Executive Vice President and Chief    
Financial Officer

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

 

  GUARANTORS:         HORNBECK OFFSHORE SERVICES, LLC         By: /s/ James O.
Harp, Jr.     James O. Harp, Jr.     Executive Vice President and Chief    
Financial Officer         HORNBECK OFFSHORE OPERATORS, LLC, as a Guarantor      
  By: /s/ James O. Harp, Jr.     James O. Harp, Jr.     Executive Vice President
and Chief     Financial Officer         HOS PORT, LLC, as a Guarantor        
By: /s/ James O. Harp, Jr.     James O. Harp, Jr.     Executive Vice President
and Chief     Financial Officer

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

 

  HORNBECK OFFSHORE SERVICES DE   MEXICO, S. DE R.L. DE C.V, as a   Guarantor  
      By: /s/ Samuel A. Giberga     Samuel A. Giberga     Vice President

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

 

  HORNBECK OFFSHORE NAVEGACAO,   LTDA., as a Guarantor         By: /s/ Robert
Thomas Gang     Robert Thomas Gang     Administrator

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

 

  ADMINISTRATIVE AGENT/CERTAIN LENDERS:         WILMINGTON TRUST, NATIONAL
ASSOCIATION,   as Administrative Agent and Collateral Agent         By: /s/
Nicole Kroll     Nicole Kroll     Assistant Vice President

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

[Lender Signature Pages are on file with the ABL Agent]

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

 

Exhibit A

 

[See attached.]

 

 

 

 

Exhibit B

 

[See attached.]

 

 

 

 

Exhibit C

 

[See attached.]

 

 

 

 

Exhibit D

 

[See attached.]

 

 

 

 

Execution Version

 

AMENDED AND RESTATED FORBEARANCE AGREEMENT

 

This Amended and Restated Forbearance Agreement (this “Agreement”) entered into
as of March 31, 2020, is by and among Hornbeck Offshore Services, Inc., a
Delaware corporation (the “Parent Borrower”), Hornbeck Offshore Services, LLC, a
Delaware limited liability company (the “Co-Borrower”, and, together with the
Parent Borrower, the “Borrowers” and each a “Borrower”), the lenders party
hereto (the “Specified Lenders”) constituting the “Required Lenders” under the
Credit Agreement (as defined below), the guarantors party to the Credit
Agreement (the “Guarantors”), and Wilmington Trust, National Association, as
administrative agent and collateral agent for the Lenders (“Wilmington Trust”
and, in such capacity, the “Second Lien Agent”), and amends and restates in its
entirety the Forbearance Agreement in respect of the Credit Agreement entered
into on March 2, 2020 (the “Existing Second Lien Forbearance Agreement”), by and
among the Borrowers, the Guarantors, the lenders under the Credit Agreement
party thereto, and the Second Lien Agent.

 

WHEREAS, the Borrowers, the lenders from time to time party thereto (the
“Lenders”) and the Second Lien Agent are parties to the Second Lien Term Loan
Agreement, dated as of February 7, 2019 (as amended, restated, amended and
restated, supplemented or otherwise modified prior to the date hereof, the
“Credit Agreement”);

 

WHEREAS, the Parent Borrower, the guarantors party thereto from time to time
(the “2020 Notes Guarantors”) and Wilmington Trust are parties to that certain
Indenture, dated as of March 16, 2012 (as amended, restated, amended and
restated, supplemented or otherwise modified prior to the date hereof, the “2020
Notes Indenture”), under which certain 5.875% Senior Notes due 2020 were issued
(the “2020 Notes”);

 

WHEREAS, the principal amount of outstanding 2020 Notes is due in full on April
1, 2020 (or if such day is not a Business Day (as defined in the 2020 Notes
Indenture), on the next succeeding Business Day) (the “2020 Notes Principal
Payment”), and the Parent Borrower anticipates not making such 2020 Notes
Principal Payment on such date (the “2020 Notes Payment Non-Compliance”);

 

WHEREAS, the Parent Borrower, the guarantors party thereto from time to time
(the “2021 Notes Guarantors”) and Wilmington Trust are parties to that certain
Indenture, dated as of March 28, 2013 (as amended, restated, amended and
restated, supplemented or otherwise modified prior to the date hereof, the “2021
Notes Indenture”), under which certain 5.000% Senior Notes due 2021 were issued
(the “2021 Notes” and, together with the 2020 Notes, the “Notes”);

 

WHEREAS, an interest payment on the 2021 Notes in the amount of $11,250,000 was
due on March 1, 2020 (or if such day was not a Business Day (as defined in the
2021 Notes Indenture), on the next succeeding Business Day) (the “2021 Notes
Interest Payment” and, together with the 2020 Notes Principal Payment,
individually or collectively as the context requires, the “Specified Payments”),
and the Parent Borrower did not make such 2021 Notes Interest Payment on such
date (the “2021 Notes Payment Non-Compliance”);

 

 

 

 

WHEREAS, pursuant to Section 10.01(f) of the Credit Agreement, if the Borrowers
fail to make any payment (whether of principal or interest and regardless of
amount) of any Material Indebtedness, when and as the same shall become due and
payable (including either Specified Payment), an Event of Default will result;

 

WHEREAS, pursuant to Section 8.01 of the Credit Agreement, if the Borrowers fail
to deliver audited financial statements in respect of the fiscal year ending
December 31, 2019 (including, without limitation, audited consolidated balance
sheet, audited consolidated statement of income, audited consolidated statement
of stockholder’s equity and an audit opinion from a certified public accountant)
and related certificates of compliance, an Event of Default will result (the
“Reporting Non-Compliance”);

 

WHEREAS, HOS WELLMAX Services, LLC will commence a voluntary case under Chapter
11 of Title 11 of the United States Code in the Bankruptcy Court for the
Southern District of Texas (such proceeding, the “Specified Bankruptcy
Proceeding”) (such non-compliance, the “Bankruptcy Non-Compliance”; the
Bankruptcy Non-Compliance, together with the 2020 Notes Payment Non-Compliance,
the 2021 Notes Payment Non-Compliance and the Reporting Non-Compliance,
collectively, the “Non-Compliance”);

 

WHEREAS, pursuant to Section 10.01(i)(i) of the Credit Agreement, if any
Borrower or Guarantor voluntarily commences any proceeding or files any petition
seeking liquidation, reorganization or other relief under any federal, state or
foreign bankruptcy, insolvency, receivership or similar law, an Event of Default
will result;

 

WHEREAS, the Borrowers and the Guarantors have requested that the Second Lien
Agent and the Specified Lenders temporarily forbear, solely by reason of (1) an
Event of Default under Section 10.01(i)(i) of the Credit Agreement arising on
account of the Bankruptcy Non-Compliance, (2) an Event of Default arising on
account of the Reporting Non-Compliance and (3) cross-default under (x) Section
10.01(f) of the Credit Agreement arising on account of the 2020 Notes Payment
Non-Compliance and the 2021 Notes Payment Non-Compliance and (y) Section
10.01(g) of the Credit Agreement arising on account of (a) any cross-defaults in
respect of the 2020 Notes Payment Non-Compliance, the 2021 Notes Payment
Non-Compliance and the Bankruptcy Non-Compliance or (b) any cross-defaults in
respect of the Reporting Non-Compliance (but, in the case of this clause (y),
except to the extent that the events described in this clause (y) (other than
the 2020 Notes Payment Non-Compliance) has resulted in the holders of any other
applicable Debt actually having accelerated or required that such other Debt
become immediately redeemed or repurchased (or offered to be redeemed or
repurchased) prior to its maturity) (the Events of Default described in the
preceding clauses (1), (2) and (3), collectively, the “Designated Event of
Default”) from exercising Second Lien Rights and Remedies (as defined below)
from the date hereof until the Termination Date (as defined below);

 

WHEREAS, absent the entry into this Agreement, by reason of the Designated Event
of Default, the Borrowers acknowledge that the Second Lien Agent and the
Required Lenders would be authorized to exercise all rights and remedies
available to them under the Credit Agreement and the other Loan Documents and
applicable law or in equity or otherwise (all such rights and remedies,
collectively, “Second Lien Rights and Remedies”);

 

110  

 

 

WHEREAS, on March 2, 2020, the Borrowers entered into a forbearance agreement
(the “Existing First Lien Forbearance Agreement”) with the “Administrative
Agent”, the “Collateral Agent” and those certain “Lenders” party thereto
constituting the “Required Lenders”, in each case under and as defined in that
certain First Lien Term Loan Agreement, dated as of June 15, 2017 (as amended,
restated, amended and restated, supplemented or otherwise modified prior to the
date hereof, the “First Lien Term Loan Agreement”), among the Borrowers, the
lenders from time to time party thereto, and Wilmington Trust, as administrative
agent and collateral agent;

 

WHEREAS, on or prior to the date hereof, the Borrowers, the “Administrative
Agent”, the “Collateral Agent” and those certain “Lenders” party thereto
constituting the “Required Lenders” (in each case under and as defined in the
First Lien Term Loan Agreement) amended and restated the Existing First Lien
Forbearance Agreement (as so amended and restated, the “First Lien Forbearance
Agreement”), a true and complete copy of which is attached hereto as Exhibit A;

 

WHEREAS, on March 2, 2020, the Borrowers entered into a forbearance agreement
(the “Existing ABL Forbearance Agreement”) with the “Required Lenders” under and
as defined in that certain Senior Credit Agreement, dated as of June 28, 2019
(as amended, restated, amended and restated, supplemented or otherwise modified
through the date hereof, the “ABL Credit Agreement”), among the Parent Borrower,
the lenders from time to time party thereto, and the administrative agent and
collateral agent party thereto;

 

WHEREAS, on or prior to the date hereof, the Borrowers, the “Administrative
Agent”, the “Collateral Agent” and those certain “Lenders” party thereto
constituting the “Required Lenders” (in each case under and as defined in the
ABL Credit Agreement) amended and restated the Existing ABL Forbearance
Agreement (as so amended and restated, the “ABL Forbearance Agreement”), a true
and complete copy of which is attached hereto as Exhibit B;

 

WHEREAS, on or prior to the date hereof, the Parent Borrower and the 2020 Note
Guarantors have entered into a forbearance agreement with the trustee under the
2020 Notes Indenture and the “Holders” (as defined in the 2020 Notes Indenture)
of more than 75% in principal of the then outstanding 2020 Notes, a true and
complete copy of which is attached hereto as Exhibit C (the “2020 Notes
Forbearance Agreement”);

 

WHEREAS, on or prior to the date hereof, the Parent Borrower and the 2021 Note
Guarantors have entered into a forbearance agreement with the trustee under the
2021 Notes Indenture and the “Holders” (as defined in the 2021 Notes Indenture)
of more than 75% in principal of the then outstanding 2021 Notes, a true and
complete copy of which is attached hereto as Exhibit D (the “2021 Notes
Forbearance Agreement”);

 

WHEREAS, the Parent Borrower will continue to negotiate and document the terms
of a mutually agreeable restructuring transaction (the agreement documenting
such restructuring transaction, the “Restructuring Support Agreement”) with and
among the Lenders, the Loan Parties, and such other parties as may be
appropriate and acceptable to the foregoing; and

 

WHEREAS, on account of this Agreement and subject to the terms and conditions
set forth herein, until the Termination Date, the Second Lien Agent and the
Specified Lenders have

 

111  

 

 

agreed to forbear from their rights to exercise any Second Lien Rights and
Remedies arising as a result of the Designated Event of Default.

 

NOW THEREFORE, in consideration of the premises and the mutual covenants,
representations and warranties contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

AGREEMENT

 

Section 1. Defined Terms. Unless otherwise defined in this Agreement, each
capitalized term used in this Agreement has the meaning given such term in the
Credit Agreement. As used in this Agreement, each of the terms defined in the
opening paragraph and the WHEREAS provisions above shall have the meanings
assigned to such terms therein. Article, Section, Schedule, and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified. The words “hereof”, “herein”, and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. The term “including” means “including, without limitation”. Paragraph
headings have been inserted in this Agreement as a matter of convenience for
reference only and it is agreed that such paragraph headings are not a part of
this Agreement and shall not be used in the interpretation of any provision of
this Agreement.

 

Section 2. Acknowledgement and Forbearance.

 

(a)       In reliance upon the representations, warranties and covenants of the
Loan Parties contained in this Agreement, and subject to the terms and
conditions of this Agreement, the Second Lien Agent and the Specified Lenders
hereby agree that, from and after the date hereof until the earliest occurrence
of any Termination Event (as defined below), the Second Lien Agent and the
Specified Lenders shall not exercise any Second Lien Rights and Remedies arising
as a result of the Designated Event of Default. Furthermore, the Second Lien
Agent and Specified Lenders hereby expressly waive any notice requirement
arising under the Loan Documents on account of the Designated Event of Default.
As used in this Agreement, the occurrence of any one or more of the following
events shall constitute a “Termination Event” (the earliest date on which any
Termination Event occurs shall be referred to herein as the “Termination Date”;
and the period from the date hereof until the Termination Date, the “Forbearance
Period”):

 

(i) the occurrence of any Event of Default that is not the Designated Event of
Default (which, for the avoidance of doubt, shall include, without limiting the
scope of any such other Events of Default, (x) other than with respect to the
2020 Notes, the holder or holders of any Material Indebtedness or any trustee or
administrative agent on its or their behalf causing such Material Indebtedness
to become due, or requiring the redemption thereof or requiring any offer to
redeem to be made in respect thereof, prior to its scheduled maturity or
requiring any Borrower or any Guarantor to make an offer in respect thereof in
each case on

 

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account of any Non-Compliance or any cross-default in respect thereof and (y)
other than with respect to the Bankruptcy Non-Compliance, the occurrence of any
Event of Default under Section 10.01(h) or (i) of the Credit Agreement) or the
occurrence of any event described in Section 10.01(h) or (i) that would cause an
Event of Default to occur under Section 10.01(h) or (i) but for any applicable
automatic stay order;

 

(ii) any holder or holders of any Material Indebtedness or any trustee or
administrative agent on its or their behalf (x) institutes any proceeding
seeking collection of any amounts outstanding under such Material Indebtedness
or (y) exercises any rights and remedies available to them under such Material
Indebtedness or applicable law or in equity or otherwise (including, without
limitation, by commencing an involuntary proceeding or filing an involuntary
petition seeking (a) liquidation, reorganization or other relief in respect of
the Parent Borrower or any Subsidiary thereof or its debts, or of a substantial
part of its assets, under any federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (b) the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Parent Borrower or any Subsidiary thereof; provided, that, the Parent
Borrower agrees to notify the Specified Lenders immediately upon the filing of
any such proceeding or petition);

 

(iii) any Loan Party repudiates or asserts a defense in writing to any
obligation or liability under this Agreement, the Credit Agreement or any other
Loan Document or makes or pursues a claim in writing against the Second Lien
Agent or any Lender in connection with this Agreement, the Credit Agreement or
any other Loan Document;

 

(iv) any representation or warranty made or deemed made by or on behalf of the
Parent Borrower, the Co-Borrower or any Guarantor in or in connection with this
Agreement shall prove to have been incorrect in any material adverse respect
when made or deemed made;

 

(v) the Loan Parties shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement;

 

(vi) (x) the occurrence of a “Termination Event” under and as defined in the
First Lien Forbearance Agreement, (y) the First Lien Forbearance Agreement for
any reason ceases to be in full force and effect and valid, binding and
enforceable in accordance with the terms thereof against the parties party
thereto or (z) the First Lien Forbearance Agreement is amended, modified or
supplemented in any material respect, or any provision thereof is waived, except
for any such amendment, modification, supplement or waiver consistent with any
amendment, modification, supplement or waiver of this Agreement;

 

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(vii) (x) the occurrence of a “Termination Event” under and as defined in the
ABL Forbearance Agreement, (y) ABL Forbearance Agreement for any reason ceases
to be in full force and effect and valid, binding and enforceable in accordance
with the terms thereof against the parties party thereto or (z) the ABL
Forbearance Agreement is amended, modified or supplemented in any material
respect, or any provision thereof is waived, except for any such amendment,
modification, supplement or waiver consistent with any similar amendment,
modification, supplement or waiver of this Agreement;

 

(viii) (x) the occurrence of an “Event of Termination” under and as defined in
the 2020 Notes Forbearance Agreement, (y) the 2020 Notes Forbearance Agreement
for any reason ceases to be in full force and effect and valid, binding and
enforceable in accordance with the terms thereof against the parties party
thereto or (z) the 2020 Notes Forbearance Agreement is amended, modified or
supplemented in any material respect, or any provision thereof is waived, except
for any such amendment, modification, supplement or waiver consistent with any
similar amendment, modification, supplement or waiver of this Agreement;

 

(ix) (x) the occurrence of an “Event of Termination” under and as defined in the
2021 Notes Forbearance Agreement, (y) the 2021 Notes Forbearance Agreement for
any reason ceases to be in full force and effect and valid, binding and
enforceable in accordance with the terms thereof against the parties party
thereto or (z) the 2021 Notes Forbearance Agreement is amended, modified or
supplemented in any material respect, or any provision thereof is waived, except
for any such amendment, modification, supplement or waiver consistent with any
similar amendment, modification, supplement or waiver of this Agreement;

 

(x) a Restructuring Support Agreement among the Borrowers, the other Loan
Parties and Lenders (acting in their sole discretion) holding two-thirds in
principal of outstanding Loans has not become effective by April 8, 2020;
provided that, the event described in this clause (x) shall constitute a
Termination Event only if the Specified Lenders holding a majority in principal
of Loans held by all Specified Lenders send a written notice to the Parent
Borrower specifying that such event is a Termination Event;

 

(xi) (x) any class of creditors terminates the Restructuring Support Agreement
pursuant to the terms thereof, (y) the Restructuring Support Agreement for any
reason ceases to be in full force and effect and valid, binding and enforceable
in accordance with the terms thereof against the parties party thereto or (z)
the Restructuring Support Agreement is amended, modified or supplemented in any
material respect, or any provision thereof is waived, except for any such
amendment, modification, supplement or waiver that is made in accordance with
the terms of the Restructuring Support Agreement or consented to in writing by
the Specified Lenders holding a majority in principal of Loans held by all
Specified Lenders;

 

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(xii) (x) the Specified Bankruptcy Proceeding is converted or dismissed, or a
Chapter 11 trustee or examiner with expanded powers is appointed or (y) any
pleading or other document is filed or any other action is taken by the
Borrowers or any Subsidiary thereof (including HOS WELLMAX Services, LLC) in the
Specified Bankruptcy Proceeding without the prior written consent of the
Required Lenders;

 

(xiii) the Parent Borrower or any Subsidiary thereof makes any payment of
principal of, or interest on, the Notes, or takes any step to redeem any of the
Notes;

 

(xiv) the Parent Borrower notifies any Specified Lender or its representatives
in writing that it has terminated discussions regarding a potential
restructuring or recapitalization transaction with respect to the Parent
Borrower; or

 

(xv) 11:59 p.m. New York time on April 20, 2020; provided, further, that the
Termination Event described in this clause (xv) shall further extend to 11:59
p.m. New York time on any date agreed to by the Required Lenders (in their sole
discretion) and the Borrowers (which such extension may be documented by email).

 

Notwithstanding anything contained herein to the contrary, the parties hereto
reserve all rights and defenses in respect of the Non-Compliance and any cure in
respect thereof.

 

(b)       Each Loan Party hereby acknowledges and agrees that upon the
occurrence of a Termination Event, (i) the relief provided under this Agreement
(including, without limitation, under Sections 2(a) hereof) shall immediately
and automatically terminate, (ii) subject to the immediately preceding sentence,
the Designated Event of Default shall continue to constitute an Event of Default
and (iii) the Second Lien Agent and the Lenders shall have the right to exercise
the Second Lien Rights and Remedies as a result of the Designated Event of
Default. Each Loan Party hereby further acknowledges and agrees that from and
after the Termination Date, the Second Lien Agent and the Specified Lenders
shall be under no obligation of any kind whatsoever to forbear from exercising
any rights or remedies on account of the Designated Event of Default.

 

(c)       Furthermore, the Second Lien Agent and the Specified Lenders expressly
reserve all Second Lien Rights and Remedies with respect to any Event of Default
now existing or hereafter arising under the Credit Agreement or any of the other
Loan Documents and, upon the occurrence of a Termination Event, the Designated
Event of Default, including without limitation (x) the right to declare the
Commitments to be terminated, (y) the right to demand immediate full payment of
all Indebtedness owing under the Credit Agreement and the other Loan Documents
and (z) the right to repossess and take other action with respect to any or all
Collateral, including the liquidation thereof pursuant to the security interest
granted under the Guaranty and Collateral Agreement or any other Security
Instruments.

 

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Section 3.      Conditions to Effectiveness. This Agreement shall become
effective as of the first date (the “Effective Date”) on which each of the
following conditions shall have been satisfied:

 

(a)       the Administrative Agent shall have received a countersigned signature
page of this Agreement duly executed by the Borrowers, the Guarantors, the
Specified Lenders constituting the Required Lenders and the Second Lien Agent;

 

(b)       the First Lien Forbearance Agreement shall have been executed and
delivered by all parties party thereto substantially concurrently with the
execution and delivery of this Agreement, and shall be in full force and effect
in accordance with the terms thereof;

 

(c)       the ABL Forbearance Agreement shall have been executed and delivered
by all parties party thereto substantially concurrently with the execution and
delivery of this Agreement, and shall be in full force and effect in accordance
with the terms thereof;

 

(d)       the 2020 Notes Forbearance Agreement shall have been executed and
delivered by all parties party thereto substantially concurrently with the
execution and delivery of this Agreement, and shall be in full force and effect
in accordance with the terms thereof; and

 

(e)       the 2021 Notes Forbearance Agreement shall have been executed and
delivered by all parties party thereto substantially concurrently with the
execution and delivery of this Agreement, and shall be in full force and effect
in accordance with the terms thereof.

 

Section 4. Representations and Warranties. Each Loan Party hereby represents and
warrants that, as of the date hereof after giving effect to this Agreement:

 

(a)       the execution, delivery and performance by such Loan Party of this
Agreement have been duly authorized by all necessary limited liability company
or corporate and, if required, member, or shareholder action, and do not and
will not violate the Organizational Documents of such Loan Party or any
Restricted Subsidiary of the Parent Borrower.

 

(b)       this Agreement has been duly executed and delivered by such Loan Party
and constitutes a legal, valid and binding obligation of such Loan Party
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

 

(c)       the representations and warranties of the Loan Parties contained in
the Credit Agreement (other than Sections 7.04(b) or 7.19 of the Credit
Agreement) are true and correct in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) on and as of the Effective Date, except that any representation and
warranty which by its terms is made as of a specified date shall be true and
correct only as of such specified date; provided that, notwithstanding the
foregoing, the Loan Parties make no representation and

 

116  

 

 

warranty with respect to Sections 7.07(b) or 7.07(c) of the Credit Agreement
solely insofar as such representations and warranties relate to the
Non-Compliance; and

 

(d)       except for the Designated Event of Default, no Default or Event of
Default has occurred and is continuing.

 

Section 5.      Agreements.

 

(a)       Borrowers acknowledge and agree that (i) on the date hereof all
outstanding Obligations (as defined in the Guaranty and Collateral Agreement)
are payable in accordance with their terms and the Borrowers and the Guarantors
each hereby waive any defense, offset, counterclaim or recoupment with respect
thereto and (ii) on the date hereof the aggregate principal amount of Loans
outstanding is $121,234,650.00.

 

(b)       The Second Lien Agent and the Specified Lenders hereby expressly
reserve all of their rights, remedies, and claims under the Loan Documents.
Except as expressly provided in this Agreement in respect of the Designated
Event of Default, nothing in this Agreement shall constitute a waiver or
relinquishment of (i) any Default or Event of Default under any of the Loan
Documents, (ii) any of the agreements, terms or conditions contained in any of
the Loan Documents, (iii) any rights or remedies of any Secured Party with
respect to the Loan Documents, or (iv) the rights of any Secured Party to
collect the full amounts owing to them under the Loan Documents.

 

(c)       The Borrowers and each Guarantor do hereby adopt, ratify, and confirm
the Credit Agreement and acknowledge and agree that the Credit Agreement is and
remains in full force and effect, and the Borrowers and Guarantors acknowledge
and agree that their respective liabilities and obligations under the Credit
Agreement, the other Loan Documents, and the Obligations, are not impaired in
any respect by this Agreement.

 

(d)       During the Forbearance Period, the Borrowers and Guarantors covenant
to the Second Lien Agent and the Lenders that they shall not, nor shall they
permit any of their Restricted Subsidiaries to, directly or indirectly engage in
any transactions, make any payments or transfers or take any action (or forbear
from taking any action), in each case outside the ordinary course of business,
except as expressly permitted hereunder. Without limiting the generality of the
foregoing and whether or not any transaction, payment, transfer or other action
is done in the ordinary course of business, during the Forbearance Period the
Borrowers and the Guarantors shall not, nor shall they permit any of their
Restricted Subsidiaries to, directly or indirectly:

 

(i) make any Investment in reliance on clause (e) or clause (h) of the
definition of “Permitted Investments” in the Credit Agreement;

 

(ii) designate any Restricted Subsidiary as an Unrestricted Subsidiary;

 

(iii) take any action or engage in any transaction with respect to which the
taking of such action or the engagement in such transaction is conditioned under
the Credit Agreement on there being no Default or Event of Default existing; or

 

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(iv) incur or assume, directly or indirectly, any Debt, other than Debt incurred
in the ordinary course (and permitted by the Credit Agreement) and not in
respect of borrowed money or representing Capital Lease Obligations, without the
consent of the Specified Lenders.

 

(e)       During the Forbearance Period, the Borrowers agree to provide Davis
Polk & Wardwell LLP copies of the following documents (via email to the
attention of Damian S. Schaible (damian.schaible@davispolk.com), Kenneth J.
Steinberg (kenneth.steinberg@davispolk.com) and Darren S. Klein
(darren.klein@davispolk.com)) as promptly as practicable upon the entry into
such documents, the provision of such documents to third-parties or the receipt
of such documents from third-parties, as applicable: (i) any amendment,
supplement or modification, or any waiver in respect of, the 2020 Notes
Indenture, the 2021 Notes Indenture, the First Lien Term Loan Agreement, the ABL
Credit Agreement, the First Lien Forbearance Agreement, the ABL Forbearance
Agreement, the 2020 Notes Forbearance Agreement or the 2021 Notes Forbearance
Agreement, (ii) any notice of default, notice of or other documentation in
respect of the exercise of rights or remedies, or any similar notice or
documentation, in each case delivered by or to any Borrower or any Subsidiary
thereof in respect of the 2020 Notes Indenture, the 2021 Notes Indenture, the
First Lien Term Loan Agreement or the ABL Credit Agreement or (iii) any pleading
or other document filed in the Specified Bankruptcy Proceeding.

 

(f)       During the Forbearance Period, each Loan Party agrees (i) to provide
the Specified Lenders (or their designees) with access to inspect such Loan
Party’s financial records, properties and Vessel Collateral during normal
business hours and at the Borrowers’ expense, but without regard to any
limitations on the frequency of visits contained in the Credit Agreement and at
the expense of the Borrower; provided that such inspection shall be during
normal business hours and inspections with respect to Vessel Collateral shall
occur when the applicable Vessel is shoreside at a location involved in the
ordinary course of providing its services under its then applicable charter or
other vessel service contract, (ii) promptly to provide such customary financial
and other information regarding the Loan Parties and their respective businesses
and operations (including information with respect to Vessel Collateral) that
the Specified Lenders may reasonably request to the extent (w) such information
is readily available to a Loan Party, (x) such information is not subject to
attorney/client privilege, (y) such information does not constitute trade
secrets and (z) the provision of such information is not prohibited by law or by
the legally binding confidentiality obligations of any Loan Party to a third
party (other than another Loan Party); provided that the applicable Loan Party
shall use commercially reasonable efforts to obtain the consent of any such
third party to provide such information to the Specified Lenders on a
confidential basis and use commercially reasonable efforts to communicate, to
the extent permitted, the applicable information in a way that would not risk
waiver of such privilege or violate the applicable obligation and (iii) to
provide the Specified Lenders with access to senior officers of the Borrowers
and such if their representatives, as appropriate, in relation to any of the
foregoing.

 

(g)       The Borrowers agree to pay, within three Business Days following
receipt of an invoice therefor, all out-of-pocket fees and expenses incurred by
the Agents and the Lenders and their respective Affiliates, including, without
limitation, (1) the fees, charges and disbursements

 

118  

 

 

of one financial advisor for the Lenders and of counsel for the Agents and the
Lenders (but limited, in the case of counsel, to one primary counsel for each of
(x) the Agents and their respective Affiliates, collectively and (y) the Lenders
and their respective Affiliates, collectively, and in each case, if necessary,
one local counsel in each relevant jurisdiction (which may include a single
special counsel acting in multiple jurisdictions) and special counsel for each
relevant specialty (and, in the case of an actual conflict of interest, where
the party affected by such conflict, informs the Borrowers of such conflict and
thereafter retains its own counsel, of another firm of counsel for each such
affected person)) and (2) travel, photocopy, mailing, courier, telephone and
other similar expenses, in, each case, in connection with (i) the preparation,
negotiation, execution, delivery and administration (both before and after the
execution hereof and including advice of counsel to the Agents and/or the
Lenders as to the rights and duties of the Administrative Agent and the Lenders
with respect thereto) of this Agreement, the Existing Second Lien Forbearance
Agreement, the Credit Agreement and the other Loan Documents and any amendments,
modifications or waivers of or consents related to the provisions hereof or
thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated) or (ii) the enforcement or protection of the Agents’ or the
Lenders’ rights in connection with this Agreement, the Existing Second Lien
Forbearance Agreement, the Credit Agreement or any other Loan Document,
including, without limitation, all out-of-pocket expenses incurred during any
workout or restructuring in respect of the Loan Parties or the Loans.

 

Section 6.    Reaffirmation of Loan Documents. Each Loan Party hereby ratifies,
confirms, acknowledges and agrees that its obligations under the Guaranty and
Collateral Agreement and each other Loan Document to which it is party are in
full force and effect, and each Loan Party hereby ratifies and reaffirms its
grant of liens on or security interests in their properties pursuant to such
Loan Documents as security for the Obligations (as defined in the Guaranty and
Collateral Agreement) and confirms and agrees that such liens and security
interests secure all of the Obligations (as defined in the Guaranty and
Collateral Agreement), including any additional Indebtedness hereafter arising
or incurred pursuant to or in connection with the Credit Agreement or any other
Loan Document. Each Guarantor hereby ratifies, confirms, acknowledges and agrees
that it continues to unconditionally and irrevocably guarantee the full and
punctual payment, when due, whether at stated maturity or earlier by
acceleration or otherwise, all of the Obligations (as defined in the Guaranty
and Collateral Agreement), and its execution and delivery of this Agreement does
not indicate or establish an approval or consent requirement by such Guarantor
under the Guaranty and Collateral Agreement, in connection with the execution
and delivery of amendments, consents or waivers to the Credit Agreement, the
Notes or any of the other Loan Documents.

 

Section 7.      Governing Law; Waiver of Jury Trial; Other Miscellaneous
Provisions

 

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK. EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE EXISTING SECOND LIEN
FORBEARANCE AGREEMENT, AND FOR ANY COUNTERCLAIM HEREIN OR THEREIN; (ii)
CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR ADMINISTRATIVE

 

119  

 

 

AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER, AND (iii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 7.
The provisions of Sections 12.09(b) and 12.13 of the Credit Agreement are hereby
incorporated herein mutatis mutandis.

 

Section 8.      Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Transmission by facsimile
or pdf. of an executed counterpart of this Agreement shall be deemed to
constitute due and sufficient delivery of such counterpart.

 

Section 9.      Release. In consideration of, among other things, the
forbearance provided for herein, each Borrower and each other Loan Party (on its
own behalf and on behalf of its respective Subsidiaries) forever waives,
releases and discharges any and all claims (including, without limitation,
cross-claims, counterclaims, rights of setoff and recoupment), causes of action,
demands, suits, costs, expenses and damages that it now has, of whatsoever
nature and kind, whether known or unknown, whether now existing, whether arising
at law or in equity, against the Second Lien Agent and/or any Lender (in their
respective capacities as such) and any of their respective subsidiaries and
affiliates, and each of their respective successors, assigns, officers,
directors, employees, agents, attorneys and other advisors or representatives
(collectively, the “Released Parties”); provided that in each case such claim is
based in whole or in part on facts, events or conditions, whether known or
unknown, existing on or prior to the date hereof and which arise out of or are
related to the Credit Agreement, this Agreement, the Existing Second Lien
Forbearance Agreement, the other Loan Documents, the Obligations (as defined in
the Guaranty and Collateral Agreement) or the Collateral (collectively, the
“Released Claims”). The Borrowers and the other Loan Parties further agree to
refrain from commencing, instituting or prosecuting, or supporting any Person
that commences, institutes, or prosecutes, any lawsuit, action or other
proceeding against any and all Released Parties with respect to any and all
Released Claims.

 

Section 10.      Effects of this Agreement; Amendments. From and after the
Effective Date, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein”, or words of like import, and each reference to
the Credit Agreement in any other Loan Document shall be deemed a reference to
the Credit Agreement, as interpreted in accordance with the terms of this
Agreement. This Agreement shall constitute a “Loan Document” for all purposes of
the Credit Agreement and the other Loan Documents. All references herein to
“this Agreement,” “herein,” “hereunder” or words of similar import, shall in
each case, be deemed to be references to the Existing Second Lien Forbearance
Agreement as amended and restated by this Agreement. This Agreement may not be
amended except pursuant to an agreement or agreements in writing entered into by
each of the parties party hereto.

 

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Section 11.     Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted pursuant to the Credit Agreement. During the Forbearance
Period, no Specified Lender shall transfer or assign its rights under the Credit
Agreement or this Agreement absent the written agreement of the transferee or
assignee to be bound by the terms of this Agreement, but no Specified Lender
shall be further limited in its transfer or assignment rights other than as
provided in the Credit Agreement.

 

Section 12.    Invalidity. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof or thereof; and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

Section 13.     ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

Section 14.      Agent Direction. The Specified Lenders hereby direct the Second
Lien Agent to execute this Agreement pursuant to Section 11.03 of the Credit
Agreement. The Second Lien Agent shall conclusively rely on this direction in
connection with its execution of this Agreement.

 

[Signature Pages Follow]

 

121  

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
Effective Date.

        PARENT BORROWER:       HORNBECK OFFSHORE SERVICES, INC.         By: /s/
James O. Harp, Jr.     James O. Harp, Jr.     Executive Vice President and Chief
    Financial Officer

        CO-BORROWER:       HORNBECK OFFSHORE SERVICES, LLC         By: /s/ James
O. Harp, Jr.     James O. Harp, Jr.     Executive Vice President and Chief    
Financial Officer

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

        GUARANTORS:       HORNBECK OFFSHORE TRANSPORTATION, LLC,
as a Guarantor         By: /s/ James O. Harp, Jr.     James O. Harp, Jr.    
Executive Vice President and Chief     Financial Officer

        HOS-IV, LLC, as a Guarantor         By: /s/ James O. Harp, Jr.     James
O. Harp, Jr.     Executive Vice President and Chief     Financial Officer

        HORNBECK OFFSHORE TRINIDAD & TOBAGO, LLC, as a Guarantor         By: /s/
James O. Harp, Jr.     James O. Harp, Jr.     Executive Vice President and Chief
    Financial Officer

        HORNBECK OFFSHORE OPERATORS, LLC, as a Guarantor         By: /s/ James
O. Harp, Jr.     James O. Harp, Jr.     Executive Vice President and Chief    
Financial Officer

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

 

        ENERGY SERVICES PUERTO RICO, LLC as a Guarantor         By: /s/ James O.
Harp, Jr.     James O. Harp, Jr.     Executive Vice President and Chief    
Financial Officer

        HORNBECK OFFSHORE INTERNATIONAL, LLC, as a Guarantor         By: /s/
James O. Harp, Jr.     James O. Harp, Jr.     Executive Vice President and Chief
    Financial Officer

 

        HOS PORT, LLC, as a Guarantor         By: /s/ James O. Harp, Jr.    
James O. Harp, Jr.     Executive Vice President and Chief     Financial Officer

        HOS HOLDING, LLC, as a Guarantor         By: /s/ James O. Harp, Jr.    
James O. Harp, Jr.     Executive Vice President and Chief     Financial Officer

        HOi HOLDING, LLC, as a Guarantor         By: /s/ James O. Harp, Jr.    
James O. Harp, Jr.     Executive Vice President and Chief     Financial Officer

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

 

        Hornbeck Offshore Services de Mexico, S. DE R.L. DE C.V, as a Guarantor
        By: /s/ Samuel A. Giberga     Samuel A. Giberga     Vice President

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

        Hornbeck Offshore Navegacao, Ltda., as a Guarantor         By: /s/
Robert Thomas Gang     Robert Thomas Gang     Administrator

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

        ADMINISTRATIVE AGENT/CERTAIN LENDERS:       WILMINGTON TRUST, NATIONAL
ASSOCIATION,
as Administrative Agent and Collateral Agent         By: /s/ Nicole Kroll    
Nicole Kroll     Assistant Vice President

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

 

[Lender Signature Pages are on file with the Second Lien Agent]

 

Signature Page to Forbearance Agreement
Hornbeck Offshore Services, Inc.

 

 

 

 

Exhibit A

 

[See attached.]

 

 

 

 

Exhibit B

 

[See attached.]

 

 

 

 

Exhibit C

 

[See attached.]

 

 

 

 

Exhibit D

 

[See attached.]

 

 

 

 

Execution Version

 

FORBEARANCE AGREEMENT

 

This FORBEARANCE AGREEMENT (this “Agreement”), dated as of March 31, 2020 (the
“Agreement Effective Date”), is by and among Hornbeck Offshore Services, Inc.
(the “Issuer”), and each of its subsidiaries party hereto and any successors
thereto (the “Subsidiary Guarantors” and, together with the Issuer, the
“Obligors”) and the undersigned holders, or the managers, beneficial holders,
general partners or investment advisors of such holders (together with any party
that executes a Forbearance Joinder Agreement (the form of which is attached
hereto as Exhibit A) after the date hereof, (the “Supporting Holders”) of the
Issuer’s (i) 5.875% Senior Notes due 2020 (the “2020 Notes”) and (ii) 5.000%
Senior Notes due 2021 (the “2021 Notes” and, together with the 2020 Notes,
collectively, the “Notes”)).

 

WHEREAS, the Issuer, the Subsidiary Guarantors and Wilmington Trust, National
Association, as Trustee (in either or both such capacities, the “Trustee”), are
parties to (i) that certain Indenture, dated as of March 16, 2012 (as amended,
restated, supplemented or otherwise modified from time to time, the “2020
Indenture”) under which the 2020 Notes were issued and (ii) that certain
Indenture, dated as of March 28, 2013 (as amended, restated, supplemented or
otherwise modified from time to time, the “2021 Indenture” and, together with
the 2020 Indenture, the “Notes Indentures”) under which the 2021 Notes were
issued;

 

WHEREAS, the current principal amount outstanding of the (i) 2020 Notes is
$224.6 million and interest payments on the Notes are due semiannually, on April
1 and October 1 and (ii) 2021 Notes is $450.0 million and interest payments on
the Notes are due semiannually, on March 1 and September 1;

 

WHEREAS, $224.6 million in principal amount outstanding under the 2020 Notes and
an interest payment on the 2020 Notes pursuant to the 2020 Indenture is due on
April 1, 2020 at the maturity of the 2020 Notes (the “2020 Notes Payments”), and
the Issuer anticipates not making such 2020 Notes Payments;

 

WHEREAS, an interest payment on the 2021 Notes in the amount of $11,250,000 was
due on March 1, 2020 (the “2021 Notes Interest Payment”) and the Issuer did not
make such payment;

 

WHEREAS, at such time as the Issuer’s nonpayment of the 2020 Notes Payments in
respect of principal amounts due, the same will become an Event of Default
pursuant to Section 6.01(b) of the 2020 Indenture (including any additional
Default or Event of Default that may result under the 2020 Indenture as a result
of any cross default, cross event of default, cross acceleration or similar
provisions triggered between the 2020 Indenture and any other mortgage,
indenture, agreement or instrument under which there may be issues or by which
there may be secured or evidenced any indebtedness for money borrowed by the
Issuer or any of its subsidiaries as a result of such nonpayment (collectively,
the “2020 Specified Default”));

 

WHEREAS, at such time as the voluntary commencement of a case and filing a
petition for bankruptcy of HOS WELLMAX Services, LLC, an indirect wholly owned
subsidiary of the Issuer, in the Bankruptcy Court of the Southern District of
Texas, the same may become an Event of Default pursuant to Section 6.01(h) of
each of the 2020 Indenture and the 2021 Indenture (including any additional
Default or Event of Default that may result under either of the Notes Indentures
as a result of any cross default, cross event of default, cross acceleration or
similar provisions triggered between either of the Notes Indentures and any
other mortgage, indenture, agreement or instrument under which there may be
issues or by which there may be secured or evidenced any indebtedness for money
borrowed by the Issuer or any of its subsidiaries as a result of such voluntary
commencement and filing, (collectively,

 

 

 

the “Filing Default”));

 

WHEREAS, in the course of negotiating a Potential Transaction (defined below),
the Issuer expects that it will not comply with Section 4.03 (Reports) and
Section 4.04 (Compliance Certificate) of each Notes Indenture, the failure to
comply with which will cause a Default under each of the respective Notes
Indentures and which, if uncured during the applicable grace periods set forth
in each of the respective Notes Indentures, will become an Event of Default
pursuant to Section 6.01(d) of each Notes Indenture (including any additional
Default or Event of Default that may result under either of the Notes Indentures
as a result of any cross default, cross event of default, cross acceleration or
similar provisions triggered between either of the Notes Indentures and any
other mortgage, indenture, agreement or instrument under which there may be
issues or by which there may be secured or evidenced any indebtedness for money
borrowed by the Issuer or any of its subsidiaries as a result of such failure to
comply, (collectively, the “Reporting Default”));

 

WHEREAS, at such time as the Issuer may incur additional indebtedness by
electing to pay interest on its First Lien Term Loan Agreement, dated as of June
15, 2017, by and among the Company, Wilmington Trust, National Association and
the other parties signatory thereto (as amended or supplemented from time to
time) in kind pursuant to Section 3.02(f) thereof, the same will become a
Default and, if uncured during the grace periods set forth in each of the Notes
Indentures, will become an Event of Default pursuant to Section 6.01(d) of each
of the respective Notes Indentures (including any additional Default or Event of
Default that may result under either of the Notes Indentures as a result of any
cross default, cross event of default, cross acceleration or similar provisions
triggered between either of the Notes Indentures and any other mortgage,
indenture, agreement or instrument under which there may be issues or by which
there may be secured or evidenced any indebtedness for money borrowed by the
Issuer or any of its subsidiaries as a result of such payment of interest in
kind (collectively, the “PIK Payment Default”));

 

WHEREAS, at such time as the Issuer’s nonpayment on the 2021 Notes Interest
Payment will have continued for a period of thirty (30) days, the same will
become an Event of Default pursuant to Section 6.01(a) of the 2021 Indenture
(including any additional Default or Event of Default that may result under the
2021 Indenture as a result of any cross default, cross event of default, cross
acceleration or similar provisions triggered between the 2021 Indenture and any
other mortgage, indenture, agreement or instrument under which there may be
issues or by which there may be secured or evidenced any indebtedness for money
borrowed by the Issuer or any of its subsidiaries as a result of such nonpayment
(collectively, the “2021 Specified Default” and, together with the 2020
Specified Default, the Filing Default, the Reporting Default and the PIK Payment
Default, the “Specified Defaults”));

 

WHEREAS, the Issuer is exploring a potential restructuring or recapitalization
transaction (a “Potential Transaction”); and

 

 WHEREAS, to facilitate discussions in respect of a Potential Transaction, the
Obligors have requested that each of the Supporting Holders agree to temporarily
forbear in the exercise of their rights to accelerate the maturity of the Notes,
declare all amounts under the Notes and the Notes Indentures immediately due and
payable, and exercise any other rights and remedies available under the Notes
Indentures (collectively, the “Rights and Remedies”) solely to the extent
arising from the occurrence and continuation of the Specified Defaults, subject
to the terms and conditions of this Agreement.

 

2  

 

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

SECTION I. ACKNOWLEDGMENTS

 

1.01 Interpretive Matters.

 

(a) Unless the context of this Agreement clearly requires otherwise, references
to the plural include the singular, references to the singular include the
plural, and the term “including” is not limiting. The words “hereof,” “herein,”
“hereby,” “hereunder,” and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Section, subsection and clause references herein are to this Agreement unless
otherwise specified.

 

(b) The term “person” as used in this Agreement shall be broadly interpreted to
include, without limitation, any individual, corporation, company, partnership
or other entity.

 

(c) Any capitalized term used herein and not otherwise defined herein has the
respective meaning given to such term in the applicable Notes Indenture.

 

1.02 Acknowledgment and Agreement. Each of the Obligors hereby acknowledges and
agrees, upon execution and delivery of this Agreement, subject to the terms set
forth herein, that:

 

(a) The recital of facts set forth in this Agreement is true and correct in all
material respects;

 

(b) The 2020 Notes Payment, together with all other outstanding Obligations
under the 2020 Indenture, including interest, fees, expenses and other charges,
are validly owing and, solely with respect to such amounts and any other
outstanding Obligations under the 2020 Indenture owing to Supporting Holders
that are not Affiliated Parties, are not subject to any right of offset,
deduction, claim, or counterclaim in favor of any Obligor;

 

(c) The 2021 Notes Interest Payment, together with all other outstanding
Obligations under the 2021 Indenture, including interest, fees, expenses and
other charges, are validly owing and, solely with respect to such amounts and
any other outstanding Obligations under the 2021 Indenture owing to Supporting
Holders that are not Affiliated Parties, are not subject to any right of offset,
deduction, claim, or counterclaim in favor of any Obligor;

 

(d) The 2020 Specified Default (i) is anticipated to occur, (ii) will constitute
an Event of Default under the 2020 Indenture without the need for any notice to
the Obligors, and (iii) if not cured by the Obligors, to the extent curable, as
a consequence thereof, and subject to and but for the terms of this Agreement
upon becoming an Event of Default, the Holders and the Trustee will be free to
exercise the Rights and Remedies in accordance with the terms of the 2020
Indenture;

 

(e) The 2021 Specified Default (i) has occurred and is continuing, (ii) will
constitute an Event of Default under the 2021 Indenture without the need for any
notice to the Obligors, and (iii) has not been cured by the Obligors, and as a
consequence thereof, and subject to and but for the terms of this Agreement upon
becoming an Event of Default, the Holders and the Trustee are free to exercise
the Rights and Remedies in accordance with the terms of the 2021 Indenture;

 

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(f) The Filing Default will constitute an Event of Default under the 2020
Indenture and the 2021 Indenture without the need for any notice to the
Obligors, and as a consequence thereof, and subject to and but for the terms of
this Agreement upon becoming an Event of Default, the Holders and the Trustees
under the Notes Indentures are free to exercise the Rights and Remedies in
accordance with the terms of each applicable Notes Indenture;

 

(g) The Reporting Default (i) is anticipated to occur and (ii) may constitute an
Event of Default under 2020 Indenture and the 2021 Indenture without the need
for any notice to the Obligors after the applicable grace periods have run, and
(iii) if not cured by the Obligors, to the extent curable, as a consequence
thereof, and subject to and but for the terms of this Agreement upon becoming an
Event of Default, the Holders and the Trustee are free to exercise the Rights
and Remedies in accordance with the terms of each applicable Notes Indenture;

 

(h) The PIK Payment Default (i) may occur, (ii) would constitute an Event of
Default under the 2020 Indenture and the 2021 Indenture without the need for any
notice to the Obligors after the applicable grace periods have run, and (iii) if
not cured by the Obligors, to the extent curable, as a consequence thereof, and
subject to and but for the terms of this Agreement upon becoming an Event of
Default, the Holders and the Trustee will be free to exercise the Rights and
Remedies in accordance with the terms of each applicable Notes Indenture;

 

(i) Each Obligor hereby ratifies and affirms each Notes Indenture and the
Obligations owing thereunder and acknowledges that such Notes Indenture is and,
after giving effect to this Agreement, shall remain unchanged and in full force
and effect. Each Obligor agrees that each Notes Indenture constitutes valid and
binding obligations and agreements of each of the Obligors enforceable against
each Obligor in accordance with their respective terms;

 

(j) Subject to the terms of this Agreement, the Supporting Holders have not
waived, released or compromised, and do not hereby waive, release or compromise,
any events, occurrences, acts, or omissions that may constitute or give rise to
any defaults, Defaults or Events of Default, including, without limitation, the
Specified Defaults, that existed or may have existed, or may presently exist, or
may arise in the future, nor does any Supporting Holder waive any Rights and
Remedies;

 

(k) The execution and delivery of this Agreement shall not, except as otherwise
set forth herein: (i) constitute an extension, modification, or waiver of any
aspect of the Notes Indentures; (ii) extend the maturity of the Notes or the due
date of any payment of any amount(s) due thereunder or payable in connection
therewith; (iii) give rise to any obligation on the part of the Supporting
Holders to extend, modify or waive any term or condition of the Notes; (iv)
establish any course of dealing with respect to the Notes; or (v) give rise to
any defenses or counterclaims to the right of the Supporting Holders to compel
payment of the Notes or any amounts(s) due thereunder or payable in connection
therewith or otherwise enforce their rights and remedies set forth in the Notes
Indentures; and

 

(l) Except as expressly provided herein, the Supporting Holders’ agreement to
forbear in the exercise of their Rights and Remedies solely as to the Specified
Defaults, and to perform as provided herein, in each case to the extent
permitted by the applicable Notes Indenture, shall not invalidate, impair,
negate or otherwise affect the Trustee’s or Supporting Holders’ ability to
exercise their Rights and Remedies under such Notes Indenture or otherwise.

 

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SECTION II. FORBEARANCE

 

2.01 Forbearance. In consideration of, and in reliance upon the representations,
warranties, agreements and covenants of the Obligors set forth herein, during
the Forbearance Period (as defined below), each Supporting Holder (severally and
not jointly) hereby agrees that during the Forbearance Period (as defined below)
it will forbear from exercising any of the Rights and Remedies under the Notes
Indentures or applicable law solely with respect to the Specified Defaults (the
“Forbearance”). For the avoidance of doubt, during the Forbearance Period only,
each Supporting Holder agrees that such Supporting Holder (individually or
collectively) will not deliver any notice or instruction to the Trustee
directing the Trustee to exercise any of the Rights and Remedies with respect to
any of the Specified Defaults.

 

2.02 Trustee Action.

 

(a) The Supporting Holders shall, pursuant to Section 6.05 of each of the Notes
Indentures, direct the Trustee not to take any action with respect to the 2020
Notes or the 2021 Notes under the respective Notes Indentures as a result of any
of the Specified Defaults during the Forbearance Period

 

(b) In the event that the Trustee takes any action to declare the 2020 Notes or
the 2021 Notes immediately due and payable, or the 2020 Notes or 2021 Notes
otherwise become immediately due and payable, pursuant to Section 6.02 of the
2020 Indenture or Section 6.02 of the 2021 Indenture, as applicable, during the
Forbearance Period solely due to the Filing Default, the 2020 Specified
Defaults, the 2021 Specified Default, the Reporting Default or the PIK Payment
Default, as applicable, each Supporting Holder agrees to rescind and cancel such
acceleration to the fullest extent permitted under the 2020 Indenture or the
2021 Indenture, as applicable.

 

2.03 Limitation on Transfers of Notes. During the Forbearance Period, each of
the Supporting Holders hereby agrees not to sell, assign, pledge, lend,
hypothecate, transfer or otherwise dispose of (each, a “Transfer”) any ownership
(including beneficial ownership) of Notes (or any rights in respect thereof,
including but not limited to the right to vote, consent, waive or forbear) held
by such Supporting Holder as of the date hereof except to a party who (i) is
already a Supporting Holder party to this Agreement, (ii) as of the date hereof,
was, and as of the date of transfer, continues to be an entity that controls, is
controlled by or is under common control with the transferor or for which such
Supporting Holder acts as investment manager, advisor or subadvisor, provided,
however, that such entity shall automatically be subject to the terms of this
Agreement and deemed a party hereto, or (iii) prior to or contemporaneously with
such Transfer, agrees in writing with the transferor for the intended third
party benefit of the Issuer and the Subsidiary Guarantors to be bound by all of
the terms of this Agreement with respect to the relevant Notes being transferred
to such purchaser (and with respect to any and all Notes it already may hold
prior to such Transfer) by executing a Forbearance Joinder Agreement
substantially in the form of Exhibit A hereto, and delivering an executed copy
thereof, within three (3) Business Days of closing of such Transfer, to counsel
to the Issuer. Any Transfer made in violation of this Section 2.03 shall be void
ab initio, and the Issuer shall have the right to enforce the voiding of any
such Transfer. This Agreement shall in no way be construed to preclude any
Supporting Holder from acquiring additional Notes to the extent permitted by
applicable law. However, such Supporting Holder shall, automatically and without
further action, remain subject to this Agreement with respect to any Notes so
acquired. Notwithstanding the foregoing, an entity that holds itself out to the
public or applicable private markets as standing ready in the ordinary course of
business to purchase from customers and sell to customers claims

5  

 

 

against the Issuer, in its capacity as a dealer or market maker in claims
against the Issuer and is, in fact, regularly in the business of making a market
in claims against the Issuer (including debt securities or other debt) (a
“Qualified Marketmaker”), acting solely in its capacity as such, that acquires
any Notes subject to this Agreement shall not be required to execute a
Forbearance Joinder Agreement or otherwise agree to be bound by the terms and
conditions set forth in this Agreement if, and only if: (i) such Qualified
Marketmaker sells or assigns such Notes within five (5) Business Days of its
acquisition; and (ii) the purchaser or assignee of such Notes is a Supporting
Holder or an entity that executes and provides a Forbearance Joinder Agreement
in accordance with the terms set forth in this Section 2.03. To the extent,
however, a Qualified Marketmaker, acting solely in its capacity as such,
acquires Notes from an entity who is not a Supporting Holder (collectively,
“Qualified Unrestricted Claims”), such Qualified Marketmaker may Transfer any
right, title or interest in such Qualified Unrestricted Claims without the
requirement that the transferee execute a Forbearance Joinder Agreement. Any
such Qualified Marketmaker that is a Supporting Holder shall otherwise be
subject to the terms and conditions of this Agreement with respect to Qualified
Unrestricted Claims pending the completion of any such Transfer.

 

2.04 Forbearance Period. The Forbearance shall commence on the Agreement
Effective Date and continue until the earlier of (a) April 20, 2020 at 11:59
p.m. New York City time (or such later date that all of the Supporting Holders
agree in writing) and (b) the date on which any Event of Termination (as defined
below) shall have occurred (the earlier of (a) and (b), the “Termination Date”
and the period commencing on the Agreement Effective Date and ending on the
Termination Date, the “Forbearance Period”). From and after the Termination
Date, the Forbearance shall immediately and automatically terminate and have no
further force or effect, and each of the Supporting Holders shall be released
from any and all obligations and agreements under this Agreement and shall be
entitled to exercise any of the Rights and Remedies as if the forbearance under
this Agreement had never existed, and all of the Rights and Remedies under the
Notes Indentures and in law and in equity shall be available without restriction
or modification.

 

2.05 Limited Forbearance. The Forbearance is limited in nature and nothing
contained herein is intended, or shall be deemed or construed (i) to impair the
ability of the Supporting Holders or the Trustee to exercise any of the Rights
and Remedies during the Forbearance Period for Defaults or Events of Default
other than the Specified Defaults, (ii) to constitute a waiver of the Specified
Defaults or any future Defaults or Events of Default or compliance with any term
or provision of the Notes Indentures or applicable law, other than as expressly
set forth in this Section II or (iii) to establish a custom or course of dealing
between the Obligors, on the one hand, and any Supporting Holder, on the other
hand.

 

2.06 Further Acknowledgements

 

(a)       The Obligors understand and accept the temporary nature of the
Forbearance provided hereby and that the Supporting Holders have given no
assurances that they will extend such Forbearance or provide further waivers or
amendments to the Notes Indentures.

 

(b)       Nothing in this Agreement constitutes a legal obligation to
participate in any Potential Transaction or to execute any related documents and
no such legal obligation shall arise except pursuant to mutually agreeable
executed definitive documentation.

 

(c)       Notwithstanding anything to the contrary in this Agreement, each
Obligor and Supporting Holder recognizes, acknowledges and agrees that (i) this
Agreement binds only the desk or business unit of a Supporting Holder that
executes this Agreement and shall not be binding on any other desk, business

 

6  

 

 

unit or Affiliated Party of the Supporting Holder, unless such desk, business
unit or Affiliated Party of the Supporting Holder separately becomes a party
hereto or otherwise acquires Notes subject to this Agreement as a result of a
transfer in accordance with Section 2.03 of this Agreement and (ii) nothing in
this Agreement shall cause any desk or business unit of a Supporting Holder to
cause any Affiliated Party to support, execute or otherwise take any action (or
forbear from tracking any action) with respect to Notes held by such Affiliated
Party.

 

SECTION III. EVENTS OF TERMINATION

 

3.01 Events of Termination. The Forbearance Period shall terminate immediately
following notice of termination by the Supporting Holders that hold a majority
of the aggregate principal amount of the Notes (taken as a single class) held by
all of the Supporting Holders at such time (the “Requisite Supporting Holders”)
to the Issuer if any of the following events shall occur (each, an “Event of
Termination”):

 

(a) the failure of any Obligor to comply with any term, condition or covenant
set forth in this Agreement, including, without limitation, the covenants in
Section IV of this Agreement;

 

(b) other than the Specified Defaults and any potential Default or Event of
Default under either Notes Indenture resulting from any actions or events giving
rise to any of the Specified Defaults, there occurs any Default or Event of
Default under any Notes Indenture that is not cured within any applicable grace
period;

 

(c) other than in connection with the Filing Default, a case under title 11 of
the United States Code or any similar reorganization, liquidation, insolvency,
or receivership proceeding under applicable law is commenced by any Obligor;

 

(d) the Issuer notifies any Supporting Holder or its representatives in writing
that it has terminated discussions regarding a Potential Transaction; or

 

(e) the Issuer cures (i) the 2020 Specified Default by making the 2020 Notes
Payments and (ii) the 2021 Specified Default by making the 2021 Interest
Payment, and in each case pays any default interest or late penalties, and no
other Default or Event of Default has occurred and remains uncured at the time
the Issuer cures such Specified Defaults.

 

SECTION IV. OTHER AGREEMENTS

 

        4.01 Accrued Interest. The Obligors agree that during the Forbearance
Period, interest on all outstanding Obligations, including the unpaid principal
amount of the 2020 Notes, the 2021 Notes, the 2020 Notes Payments and the 2021
Notes Interest Payment, shall continue to accrue in accordance with the terms of
the Indenture.

 

7  

 

 

4.02 Negative Covenant. Prior to the entry into any support agreement in
connection with a Potential Transaction, the Obligors covenant that during the
Forbearance Period, each of the Obligors shall not incur (as defined in the
Notes Indentures), directly or indirectly, other than in connection with the PIK
Payment Default, any Indebtedness (as defined in the Notes Indentures), other
than Indebtedness incurred in the ordinary course and not in respect of borrowed
money, without the consent Requisite Supporting Holders.

 

4.03 Ordinary Course Operation of the Businesses. During the Forbearance Period,
each of the Obligors shall operate their businesses in the ordinary course of
business and shall only make payments in the ordinary course of business. For
the avoidance of doubt, the Obligors shall not make any principal payment on, or
redeem, repurchase, defease or otherwise acquire, retire, or exchange for value,
in each case prior to any scheduled repayment or scheduled maturity, any
third-party Indebtedness other than Indebtedness incurred in the ordinary course
and not in respect of borrowed money without the consent of the Requisite
Supporting Holders.

 

4.04 Release. Each Obligor (for itself and its Subsidiaries and controlled
Affiliates and the successors, assigns, heirs and representatives of each
Obligor) (collectively, the “Releasors”) does hereby fully, finally,
unconditionally and irrevocably release, waive and forever discharge each
Supporting Holder (other than any Supporting Holder that is an Affiliated
Party), together with its Affiliates, directors, officers, employees, attorneys,
financial advisors and consultants (each solely in its capacity as such) (each a
“Released Party”, and collectively, the “Released Parties”), from any and all
debts, claims, allegations, obligations, damages, costs, attorneys’ fees, suits,
demands, liabilities, actions, proceedings and causes of action, in each case,
whether known or unknown, contingent or fixed, direct or indirect, and of
whatever nature or description, and whether in law or in equity, under contract,
tort, statute or otherwise, which any Releasor has heretofore had against any
Released Party by reason of any act, omission or thing whatsoever done or
omitted to be done, in each case, on or prior to the date hereof directly
arising out of, connected with or related to this Agreement or the Notes
Indentures, or any act, event or transaction related or attendant thereto, or
the agreements of any Supporting Holder (other than any Supporting Holder that
is an Affiliated Party) contained herein or therein. Each Obligor represents and
warrants that it has no knowledge of any claim by any Releasor against any
Released Party or of any facts or acts or omissions of any Released Party which
on the date hereof would be the basis of a claim, in each case directly arising
out of, connected with or related to this Agreement or the Notes Indentures or
the agreements of any Supporting Holder (other than a Supporting Holder that is
an Affiliated Party), by any Releasor against any Released Party which would not
be released hereby.

 

“Affiliated Party” shall mean (i) any Affiliate of the Obligors or any direct or
indirect parent company of the Obligors, (ii) any director, officer, agent or
employee of any such Affiliate and (iii) any entity or person for which any such
Affiliate acts as investment advisor or manager of discretionary accounts.

 

4.05 Tolling. During the Forbearance Period, the Obligors hereby agree to toll
and suspend the running of the applicable statutes of limitations, laches, or
other doctrines relating to the passage of time with respect to any and all
debts, claims, allegations, obligations, damages, costs, attorneys’ fees, suits,
demands, liabilities, actions, proceedings and causes of action, in each case,
whether known or unknown, contingent or fixed, direct or indirect, and of
whatever nature or description, and whether in law or in equity, under contract,
tort, statute or otherwise, which any Supporting Holder (or group thereof) has
heretofore had or now or hereafter can, shall or may have against any of the
Obligors, respective

 

8  

 

Affiliates (other than any Supporting Holder that is an Affiliated Party), and
each of the directors, officers, members, employees, agents, attorneys,
financial advisors and consultants of each of the foregoing.

 

4.06 Notices. The Issuer hereby agrees to notify the Supporting Holders
reasonably promptly in writing (which may be done by email to Milbank) of (a)
any failure by any of the Obligors to comply with their obligations set forth in
this Agreement, (b) the occurrence of (i) any Event of Termination or (ii) any
other event which could reasonably be expected to have a material adverse effect
on the Obligors or their businesses or assets during the Forbearance Period, or
(c) service of a complaint upon an Obligor by a person commencing a material
action against such Obligor. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
e-mail), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given when delivered by hand, or when sent by e-mail or facsimile
transmission, answer back received, or on the first business day after delivery
to any overnight delivery service, freight prepaid, or three (3) Business Days
after being sent by certified or registered mail, return receipt requested,
postage prepaid, and addressed as follows, or to such other address as may be
hereafter notified by the respective parties hereto:

  

If to any Supporting Holder,     then to: The address of such Directing Holder  
as set forth on the signature page   of this Agreement         with a copy to:  
      Milbank LLP   2029 Century Park East, 33rd Floor   Los Angeles, CA 90067  
Attention: Gerard Uzzi     James Ball     Brett Goldblatt   Email:
GUzzi@milbank.com     JBall@milbank.com BGoldblatt@milbank.com

 

SECTION V. REPRESENTATIONS AND WARRANTIES

 

In consideration of the foregoing agreements, the Obligors jointly and severally
hereby represent and warrant to each Supporting Holder, and each Supporting
Holder severally but not jointly hereby represents and warrants to the Obligors,
as follows:

 

5.01 Such party is duly organized, validly existing and is not in violation in
any respect of any term of its charter, bylaws or other constitutive documents,
and the execution, delivery and performance of this Agreement are within such
party’s power and have been duly authorized by all necessary action.

 

5.02 This Agreement constitutes a valid and legally binding agreement,
enforceable against such party in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally affecting

 

9  

 

 

creditors’ rights and by equitable principles (regardless of whether enforcement
is sought in equity or law).

 

5.03 No consent or authorization of, filing with, notice to or other act by or
in respect of, any governmental or regulatory authority or any other person is
required in connection with such party’s entry into, and performance of, this
Agreement, except for consents, authorizations, filings and notices which have
been obtained or made and are in full force and effect or which are immaterial
in nature; and the entry into and performance of this Agreement by such party
does and will not conflict with, or result in the default under, any material
agreement or document of such party, its constituent documents or any applicable
law, regulation or court order, consent or ruling.

 

5.04 Each Supporting Holder represents and warrants that, as of the date hereof,
it beneficially holds, or advises or manages for a beneficial holder, the
aggregate principal amount of Notes set forth on the signature page attached
hereto, and to that extent it advises or acts as a manager for any beneficial
holder, it has the authority to enter into this Agreement on behalf of such
beneficial holder and that this Agreement is a valid and legally binding
agreement, enforceable against that holder and such party.

 

5.05 Each of the Obligors represents and warrants that, as of the date hereof,
no Default or Event of Default has occurred and is continuing or is expected to
occur during the Forbearance Period other than the Specified Defaults.

 

5.06 The parties to this Agreement acknowledge that nothing in this Agreement,
including the presentation of drafts from one party to another, constitutes the
making of an offer to sell or the solicitation of an offer to buy securities or
loans of any kind or the solicitation of a consent or waiver of any rights under
any of the Notes Indentures and the entry into this Agreement shall not
constitute, directly or indirectly, an incurrence, a refinancing, an extension
or a modification in any way of any debt or a recapitalization or restructuring
in any way of the obligations of the Obligors.

 

5.07 The Supporting Holders have not made any assurances concerning (a) the
manner in which or whether the Specified Defaults may be resolved or (b) any
additional forbearance, waiver, restructuring or other accommodations.

 

SECTION VI. RATIFICATION OF EXISTING AGREEMENTS

 

6.01 The Obligors and the Supporting Holders hereby acknowledge and agree that,
(a) the relationships between the Obligors and the Supporting Holders are
governed by the Notes Indentures, this Agreement and other agreements that may
be executed by the Obligors and the Supporting Holders from time to time, (b) no
fiduciary duty or special relationship is or will be created by any discussions
regarding any possible amendment, waiver or forbearance, (c) the rights and
obligations of the Supporting Holders under this Agreement are several and not
joint and no Supporting Holder shall be liable or responsible for obligations of
any other Supporting Holder, (d) no Supporting Holder has made to any Obligor,
and no Obligor has made to any Supporting Holder, any promise, commitment or
representation of any kind or character with respect to any forbearance or other
matter as of the date of this Agreement other than as set forth in this
Agreement, (e) this Agreement has no effect or bearing on any rights or remedies
the Supporting Holders may have available under the Notes Indentures other than
as explicitly provided for herein, (f) no person has any obligation to engage in
discussions with any other person after the date hereof regarding any further
forbearance and (g) no Supporting Holder and no Obligor has any obligation under
any circumstances to amend, waive, supplement or otherwise modify the terms of
the

10  

 

 

Notes Indentures, offer any discounted payoff of the Notes, refinance or
exchange the Notes, vote or refrain from voting or otherwise acting with respect
to its Notes, extend the forbearance period, grant any other forbearance, agree
to any amendment, supplement, waiver or other modification or any Potential
Transaction, enter into any definitive documentation in connection with a
Potential Transaction, or extend any other accommodation, financial or
otherwise, to any Obligor or any of its Affiliates.

 

SECTION VII. MISCELLANEOUS

 

7.01 More Favorable Agreements. If the Issuer has entered into or at any time on
or after the date hereof enter into a forbearance or similar agreement with
respect to the Notes with any other holder of the Notes that is not a Supporting
Holder that contains terms more favorable to the noteholders party thereto than
those contained in this Agreement (each such agreement, a “More Favorable
Agreement”), such terms of such More Favorable Agreement shall automatically be
incorporated herein unless all of the Supporting Holders, in their sole
discretion, elect not to include any such terms. The Issuer shall (a) promptly
notify the Supporting Holders of its entry into a More Favorable Agreement and
(b) promptly provide a copy, with customary redactions, of such More Favorable
Agreement to the Supporting Holders.

 

7.02 Counterparts. This Agreement may be executed and delivered in any number of
counterparts with the same effect as if the signatures on each counterpart were
upon the same instrument. Any counterpart delivered by facsimile or by other
electronic method of transmission shall be deemed an original signature thereto.

 

7.03 Several Obligations; No Liability. Notwithstanding anything to the contrary
in this Agreement, the parties hereto agree that (a) the representations and
warranties of each Supporting Holder made in this Agreement are being made on a
several, and not joint, basis, (b) the obligations of each Supporting Holder
under this Agreement are several obligations of each of them and (c) no
Supporting Holder shall have any liability for the breach of any representation,
warranty, covenant, commitment, or obligation by any other Supporting Holder.
Nothing in this Agreement requires any Supporting Holder to advance capital to
the Issuer or any Subsidiary Guarantor or incur any material liability.

 

7.04 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without application of any
choice of law provisions that would require the application of the law of
another jurisdiction. Each party hereto hereby irrevocably and unconditionally
consents to submit to the non-exclusive jurisdiction of the federal and state
courts in the Borough of Manhattan, City of New York for any action, suit, or
proceeding arising out of or relating to this Agreement and the transactions
contemplated by this Agreement. Each party hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit,
or proceeding arising out of this Agreement in any such court and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit, or proceeding brought in any such court
has been brought in an inconvenient forum.

 

7.05 Successors and Assigns. This Agreement shall be binding upon each of the
Issuer, the Subsidiary Guarantors, the Supporting Holders and their respective
successors and assigns, and shall inure to the benefit of each such person and
their permitted successors and assigns.

 

7.06 Additional Parties. Without in any way limiting the provisions hereof,
additional holders or

 

11  

 

 

beneficial owners of Notes may elect to become parties to this Agreement by
executing and delivering to the Issuer a Forbearance Joinder Agreement
substantially in the form of Exhibit A hereto. Such additional holder or
beneficial owner of Notes shall become a Supporting Holder under this Agreement
in accordance with the terms of this Agreement.

 

7.07 Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.

 

7.08 Integration. This Agreement and any agreements referred to herein contain
the entire understanding of the parties hereto with regard to the subject matter
contained herein. Except as otherwise provided herein, this Agreement supersedes
all prior or contemporaneous negotiations, promises, covenants, agreements and
representations of every nature whatsoever with respect to the matters referred
to in this Agreement, all of which have become merged and finally integrated
into this Agreement. Each of the parties hereto understands that in the event of
any subsequent litigation, controversy or dispute concerning any of the terms,
conditions or provisions of this Agreement, no party shall be entitled to offer
or introduce into evidence any oral promises or oral agreements between the
parties relating to the subject matter of this Agreement not included or
referred to herein and not reflected by a writing included or referred to
herein.

 

7.09 Jury Trial Waiver. The Issuer, the Subsidiary Guarantors and the Supporting
Holders, by acceptance of this Agreement, mutually hereby knowingly, voluntarily
and intentionally waive the right to a trial by jury in respect of any
litigation based herein, arising out of, under or in connection with this
Agreement and the Notes Indentures or any other documents contemplated to be
executed in connection herewith, or any course of conduct, course of dealings,
statements (whether verbal or written) or actions of any party, including,
without limitation, any course of conduct, course of dealings, statements or
actions of any Supporting Holder relating to the administration of the Notes or
enforcement of the Notes Indentures arising out of tort, strict liability,
contract or any other law, and agree that no party will seek to consolidate any
such action with any other action in which a jury trial cannot be or has not
been waived.

 

7.10 Amendment. This Agreement may only be amended or modified in writing by the
Issuer, the Subsidiary Guarantors and each Supporting Holder.

 

7.11 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect, and any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable, in each
case, so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party hereto. Upon any such determination of invalidity, the Parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

 

[Remainder of Page Intentionally Left Blank]

 

12  

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

  ISSUER:       HORNBECK OFFSHORE SERVICES, INC.       By: /s/ James O. Harp,
Jr.   Name:  James O. Harp, Jr.   Title:    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   HORNBECK OFFSHORE INTERNATIONAL, LLC   HOI
HOLDING, LLC   HOS HOLDING, LLC         By: /s/ James O. Harp, Jr.  
Name:  James O. Harp, Jr.     Title:    Executive Vice President and Chief
Financial Officer

 

[Signature Page to Forbearance Agreement (2020 and 2021 Notes)]

 

 

 

 

  HORNBECK OFFSHORE NAVEGACAO LTDA       By: /s/ Robert T. Gang   Name:  Robert
T. Gang   Title:    Administrator

 

[Signature Page to Forbearance Agreement (2020 and 2021 Notes)]

 

 

 

 

  HORNBECK OFFSHORE SERVICES DE MEXICO, S. DE R.L. DE C.V.       By: /s/ Samuel
A. Giberga   Name:  Samuel A. Giberga   Title:    Vice President

 

[Signature Page to Forbearance Agreement (2020 and 2021 Notes)]

 

 

 

 

 

  SUPPORTING HOLDERS       [SUPPORTING HOLDER]       By:     Name:   Title:     
    Principal Amount of 2020 Notes held:               Principal Amount of 2021
Notes held:        

 

[Signature Page to Forbearance Agreement (2020 and 2021 Notes)]

 

 

 

 

Exhibit A

 

FORM OF FORBEARANCE JOINDER AGREEMENT

 

[●], 2020

 

Hornbeck Offshore Services, Inc.
[          ]
Attention: [          ]

RE: Forbearance Agreement

 

Ladies and Gentlemen:

 

Reference is made to the Forbearance Agreement dated as of                     ,
2020 entered into between the Issuer, the Subsidiary Guarantors, and the
Supporting Holders party thereto (such Forbearance Agreement, as in effect on
the date hereof and as it may hereafter be amended, supplemented or otherwise
modified from time to time, together with this Forbearance Joinder Agreement,
being the “Forbearance Agreement”). Any capitalized terms not defined in this
Forbearance Joinder Agreement have the meanings given to them in the Forbearance
Agreement.

 

SECTION I. Joining Obligations Under the Forbearance Agreement. The undersigned
(the “Joining Noteholder”) hereby agrees, as of the date first above written, to
join and to be bound as a Supporting Holder by all of the terms and conditions
of the Forbearance Agreement, to the same extent as each of the other Supporting
Holders thereunder. The undersigned further agrees, as of the date first above
written, that each reference in the Forbearance Agreement to a “Supporting
Holder” shall also mean and be a reference to the undersigned, including the
making of each representation and warranty set forth in Section 5 of the
Forbearance Agreement.

 

SECTION II. Execution and Delivery. Delivery of an executed counterpart of a
signature page to this Forbearance Joinder Agreement by telecopier or in .PDF or
similar format by email shall be effective as delivery of an original executed
counterpart of this Forbearance Joinder Agreement. For the avoidance of doubt,
the Obligors do not need to separately execute this Forbearance Joinder
Agreement but are nevertheless bound by the terms of the Forbearance Agreement
with respect to the Joining Noteholder as if such Joining Noteholder were a
party to the Forbearance Agreement.

 

SECTION III. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. The parties
hereto hereby agree that Sections 7.04 and 7.09 of the Forbearance Agreement
shall apply to this Forbearance Joinder Agreement.

 

[Signature Page Follows]

 

 

 

 

Very truly yours,

[●] 

      By:     Name   Title:       Noteholder’s principal amount of 2020 Notes:
$__________       Noteholder’s principal amount of 2021 Notes: $__________

 

[Signature Page to Joinder Forbearance Agreement]