Item 1.01. Entry into a Material Definitive Agreement.
Backstop Commitment Agreement
On May 13,
2020, Hornbeck Offshore Services, Inc. (Hornbeck or the Company), on behalf of itself and certain of its subsidiaries (together with Hornbeck, collectively, the Debtors) entered into a backstop commitment
agreement (the Backstop Commitment Agreement) with certain of the Consenting Unsecured Noteholders, the Consenting First Lien Lenders and the Consenting Second Lien Lenders (collectively, the Backstop Commitment Parties),
whereby each Backstop Commitment Party agreed to backstop the Rights Offering (as defined below) of $100 million of the common stock of the Reorganized Company, par value $0.00001 per share (the New Equity) (or Jones Act Warrants
issued in lieu thereof) in an amount specified therein (collectively, the Backstop Commitments). Pursuant to the Backstop Commitment Agreement, each of the Backstop Commitment Parties agreed to purchase any shares of New Equity (or Jones
Act Warrants issued in lieu thereof) offered but not purchased in the rights offering (the Rights Offering), pursuant to which the Company will offer and sell shares of New Equity (or Jones Act Warrants issued in lieu thereof) to certain
Eligible Holders of Allowed Claims. In exchange for providing the Backstop Commitments, Hornbeck has agreed to pay the Backstop Commitment Parties, subject to approval by the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division
(the Bankruptcy Court), a Backstop Commitment Premium in an aggregate amount equal to five percent of the Rights Offering Amount payable in shares of New Equity (or Jones Act Warrants in lieu thereof) on the Effective Date.
The Backstop Commitment Agreement will be terminable by Hornbeck and/or the Required Commitment Parties upon certain customary events
specified therein, including, among others, i) the termination of the RSA, ii) the mutual written consent of Hornbeck and the Required Commitment Parties by written notice to the other such Party(ies) or iii) either Hornbeck or the Required
Commitment Parties if the Plan Effective Date has not occurred on or prior to the date that is 75 days after the Petition Date.
The
foregoing description of the proposed Backstop Commitment Agreement is only a summary and the Backstop Commitment Agreement is subject in all respects to Bankruptcy Court approval in a form satisfactory to the Backstop Commitment Parties.
Capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Backstop Commitment Agreement.
A copy of the Backstop Commitment Agreement is filed as Exhibit 10.1 hereto and is incorporated herein by reference. The above
description of the Backstop Commitment Agreement is qualified in its entirety by the full text of such exhibit.
DIP Credit Agreement Commitment Letter
On May 13, 2020, the Debtors entered into a commitment letter that contemplates entering into a debtor-in-possession credit agreement on the terms set forth in a Superpriority Debtor-in-Possession Term Loan Agreement (the
DIP Credit Agreement), to be entered into by and among Hornbeck, as Parent Borrower, Hornbeck Offshore Services, LLC, as Co-Borrower, the lenders party thereto (the DIP Lenders), and
Wilmington Trust National Association, as Administrative Agent and Collateral Agent, pursuant to which, subject to Bankruptcy Court approval, the DIP Lenders will agree to provide the Company with loans in an aggregate principal amount not to exceed
$75 million that, among other things, will be used to repay in full $50 million in loans outstanding under that certain Senior Credit Agreement dated as of June 28, 2019 by and among the Company, as Borrower, the obligors signatory
thereto, Wilmington Trust, National Association, as Collateral Agent and Administrative Agent, and the lenders party thereto, as amended, and to finance the ongoing general corporate needs of the Debtors during the course of the chapter 11
proceedings.
Subject to Bankruptcy Court approval, the maturity date of the DIP Credit Agreement will be six months following the
effective date of the DIP Credit Agreement. The DIP Credit Agreement will contain customary events of default, including events related to the chapter 11 proceedings, the occurrence of which could result in the acceleration of the Companys
obligation to repay the outstanding indebtedness under the DIP Credit Agreement. The Companys obligations under the DIP Credit Agreement will be secured by a security interest in, and lien on, substantially all present and after acquired
property (whether tangible, intangible, real, personal or mixed) of the Debtors and will be guaranteed by all of the Companys material subsidiaries.
The foregoing description of the proposed DIP Credit Agreement is only a summary and the DIP Credit Agreement is subject in all respects
to Bankruptcy Court approval in a form satisfactory to the DIP Lenders.
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