Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Amendment to Forbearance Agreement and Amendment to Credit Agreement
As previously disclosed, on November 6, 2015, Hercules Offshore, Inc. (the Company or the Borrower) entered into a
Credit Agreement (the Credit Agreement) among the Company, as borrower, its subsidiaries party thereto, as guarantors, Jefferies Finance LLC, as administrative agent and as collateral agent (in such capacities, the Agent),
and the financial institutions party thereto, as lenders (the Lenders).
As also previously disclosed, on April 18, 2016, the
Company and certain of its subsidiaries (the Loan Parties) entered into a Forbearance Agreement and First Amendment to the Credit Agreement (the Forbearance Agreement), with the Agent for itself and certain Lenders designated
therein.
On April 28, 2016, the Loan Parties entered into Amendment No. 1 to Forbearance Agreement and First Amendment to Credit
Agreement (Amendment No. 1) with the Agent and certain Lenders designated therein, which amends the Forbearance Agreement.
Pursuant to Amendment No. 1, the Required Lenders have agreed to extend the Forbearance Period so that such period will continue until the
earliest to occur of: (i) the termination of the Forbearance Period as a result of any Forbearance Default; (ii) 11:59 p.m. (New York City time) on May 31, 2016; and (iii) 11:59 p.m. (New York City time) on the second Business Day following the
Required Lenders delivery of written notice (which notice shall be effective only if delivered after 11:59 p.m. (New York City time) on May 4, 2016) to the Borrower (with a copy to the Administrative Agent and the Collateral Agent) in
accordance with
Section 10.01(a)
of the Credit Agreement terminating the Forbearance Period;
provided
,
however
, that any notice given pursuant to the foregoing clause (iii) shall be revoked upon the Required Lenders
delivery of written notice (which notice of revocation shall be effective only if delivered prior to 11:59 p.m. (New York City time) on the second Business Day following the delivery of the notice given pursuant to the foregoing clause (iii)) to the
Borrower (with a copy to the Administrative Agent and the Collateral Agent) in accordance with
Section 10.01(a)
of the Credit Agreement (the Forbearance Period). Pursuant to the Forbearance Agreement (as amended by Amendment No.
1), the Required Lenders agreed during the Forbearance Period, to forbear from exercising their rights and remedies (if any) under the Credit Agreement with respect to the alleged failure by the Borrower to comply with certain specified affirmative
covenants under the Credit Agreement. The Borrower believes that defenses may exist with respect to the alleged Default and Event of Default and has reserved all rights with respect thereto. Capitalized terms used in this Current Report on Form 8-K
and not otherwise defined herein have the meanings given to such terms in the Credit Agreement, as amended by the Forbearance Agreement and Amendment No. 1.
Under the Forbearance Agreement and Amendment No. 1, the Lenders forbearance is subject to certain conditions as described therein and
in the Credit Agreement as amended thereby.
The foregoing description of Amendment No. 1 is qualified in its entirety by reference to
Amendment No. 1, attached hereto as Exhibit 10.1, and incorporated herein by reference. The other material terms of the Forbearance Agreement described in this Item 2.03 are qualified in their entirety by the Forbearance Agreement previously
filed as Exhibit 10.1 to the Companys Current Report on Form 8-K filed on April 21, 2016, which is incorporated herein by reference.