(

)

DEBT

Our debt at

June 30, 2017

and

December

31,

2016

consisted of the following:

	June 30, 2017		December 31, 2016
	(In thousands)
Senior Notes Due 2022	$	-	$	429,640
Multicurrency Facility Agreement		72,000		49,000
Norwegian Facility Agreement		45,156		11,157
Debtor in possession financing component of Amended and Restated Norwegian Facility		17,000		-
		134,156		489,797
Debt Premium		-		423
Debt Issuance Costs Associated with the Senior Notes		-		(6,894	)
Total	$	134,156	$	483,326

As described further in this Note

the Senior Notes in the aggregate principal amount of

$429.6

million have been reclassified as liabilities subject to compromise.

The following is a summary of scheduled debt maturities by year:

Year		Debt Maturity
		(In thousands)
	2017		-
	2018		-
	2019		134,156
	2020		-
	2021		-
	Thereafter		-
	Total	$	134,156

Our consolidated financial statements as of and for the

three

and

six

months ended

June 30, 2017

have been prepared assuming we will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities in the normal course of business for the

twelve

-month period following the date of the consolidated financial statements. However, for the reasons described in Note

indebtedness with the stated maturities as summarized above is classified as a current liability at

June 30, 2017

and at

December 31, 2016.

Senior Notes Due

2022

March

and

December 2012,

we issued

$500.0

million aggregate principal amount of

6.375%

Senior Notes due

2022.

Interest on the Senior Notes is payable semi-annually on

March

and

September

15.

On and after

March

15,

2017,

may

redeem some or all of the Senior Notes at the redemption prices (expressed as percentages of principal amount) equal to

103.188%

for the

twelve

-month period beginning

March

15,

2017,

102.125%

for the

twelve

-month period beginning

March

15,

2018,

101.063%

for the

twelve

-month period beginning

March

15,

2019

and

100.000%

beginning

March

15,

2020

and thereafter, plus accrued and unpaid interest to the redemption date.

In conjunction with the Senior Notes offering, we incurred a total of

$12.7

million in debt issuance costs, of which

$6.7

million remained unamortized at

March 31, 2017.

We also sold the Senior Notes at a premium, of which

$0.4

million remained unamortized at

March 31, 2017.

As of

March 31, 2017,

based on negotiations that were underway with holders of our Senior Notes, it became evident that the restructuring of our capital structure would

not

include a restructuring of the Senior Notes, and that the Senior Notes, as demand obligations, would

not

be repaid under the terms of the Senior Note indentures in the ordinary course of business. As a result, on

March 31, 2017,

we accelerated the amortization of the debt premium and debt issuance costs, fully amortizing such amounts as of

March 31, 2017.

December 2015,

we repurchased in the open market

$1.0

million face value of the Senior Notes leaving

$499.0

million aggregate principal amount of the Senior Notes outstanding at

December 31, 2015.

In the

first

quarter of

2016,

we repurchased in the open market

$20.0

million face value of Senior Notes leaving

$479.0

million aggregate principal amount outstanding at

March 31, 2016.

We recorded a gain totaling approximately

$10.1

million upon the repurchase of Senior Notes in the

first

quarter of

2016,

which gain is included in other income and expense in our consolidated statements of operations. In the year ended

December 31, 2016,

we repurchased in the open market a total of

$69.4

million face value of the Senior Notes and recorded gains totaling approximately

$35.9

million. The open market repurchases reduced the aggregate principal amount of Senior Notes outstanding to

$429.6

million.

We did

not

pay the

$13.7

million interest payment due

March 15, 2017

on our Senior Notes. Our failure to pay this amount on

April 14, 2017

within the

-day grace period to make such payment resulted in an event of default under the indenture governing the Senior Notes, resulting in a cross-default under the Multicurrency Facility Agreement and the Norwegian Facility Agreement. On

April 14, 2017,

we entered into a forbearance agreement with certain beneficial owners and/or investment advisors or managers of discretionary accounts for the holders or beneficial owners, or the Holders, of in excess of

50%

of the aggregate principal amount of Senior Notes outstanding, pursuant to which each Holder agreed during the “Forbearance Period,” subject to certain conditions,

not

to enforce any of the rights and remedies available to the Holders or the trustee under the indenture or the Senior Notes, solely with respect to our failure to make the interest payment due on

March 15, 2017

on the Senior Notes. The “Forbearance Period” was subsequently extended until the earlier of

May 12, 2017

and the occurrence of any of the specified early termination events described therein.

Subsequently, on

May 17, 2017,

as described in more detail in Notes

and

we filed for protection under Chapter

of the Bankruptcy Code in the Bankruptcy Court to pursue the Plan.

The commencement of the Bankruptcy Case constitutes an event of default that accelerated the Debtor’s obligations under the Indenture, dated as of

March 12, 2012,

by and between the Debtor, as issuer, and U.S. Bank National Association, as trustee, with respect to the Senior Notes. Any efforts to enforce such payment obligations under the Senior Notes were automatically stayed as a result of the filing of the Petition and the holders’ rights of enforcement in respect of the Senior Notes are subject to the applicable provisions of the Bankruptcy Code. In conjunction with the filing of the Petition, we entered into the RSA with the Noteholders holding approximately

50%

of the aggregate outstanding principal amount of the Senior Notes. The RSA contemplates that, among other things, we will commence the Rights Offering. We have also entered into the Backstop Commitment Agreement with the Noteholders, pursuant to which the Commitment Parties agree to backstop the Rights Offering. The RSA and the Backstop Commitment Agreement are more fully described in Note

As a result of filing the Petition and entering into the RSA, we have reclassified the amounts outstanding under the Senior Notes, including all interest accrued through the date of the Petition, to liabilities subject to compromise.

Liabilities subject to compromise are included in our unaudited condensed consolidated balance sheet in the amount of

$448.1

million, consisting of the Senior Notes in the amount of

$429.6

million and accrued interest through the date of the Bankruptcy Case filing in the amount of

$18.5

million.

Multicurrency Facility Agreement

We are party to the Multicurrency Facility Agreement, which has a scheduled maturity date of

September 26, 2019

and commits the lenders to provide revolving loans of up to

$100.0

million at any

one

time outstanding, subject to certain terms and conditions set forth in the Multicurrency Facility Agreement, and contains a sublimit of

$25.0

million for swingline loans and a sublimit of

$5.0

million for the issuance of letters of credit. Revolving loans drawn under the Multicurrency Facility Agreement and denominated in U.S. Dollars accrue interest at the London Interbank Offered Rate, or LIBOR, plus an applicable margin which

may

range from

2.75%

4.00%,

while swingline loans drawn under the Multicurrency Facility Agreement accrue interest at the alternate base rate. The applicable margin is determined by reference to the capitalization ratio calculated as of the last day of the most recent fiscal quarter. The applicable interest rate for overdue amounts increases by an additional

2.00%.

The fee for unused commitments is

1.25%

per annum. We are subject to certain financial and other covenants and other obligations under the Multicurrency Facility Agreement. Please see Note

our consolidated financial statements included in Part II, Item

of our Annual Report on Form

-K for the year ended

December 31, 2016

for additional information regarding the obligations under our Multicurrency Facility Agreement. On

March 8, 2017,

we entered into an agreement with the Agent under our Multicurrency Facility Agreement pursuant to which the lenders extended additional revolving loans in the aggregate principal amount of

$10.0

million on

March 8, 2017.

The agreement prohibits us from requesting any additional loans under the Multicurrency Facility Agreement without the prior written consent of the Agent (acting upon the instruction of all the lenders following unanimous consent).

The report from our independent registered public accounting firm on our consolidated financial statements for the year ended

December 31, 2016

included an uncertainty paragraph arising from the substantial doubt about our ability to continue as a going concern. Our failure to deliver an unqualified audit opinion from our auditors that is

not

subject to a going concern or like qualification or exception constituted an event of default under the Multicurrency Facility Agreement, allowing the lenders thereunder to cancel their commitments, accelerate the indebtedness thereunder and exercise remedies with respect to the collateral securing the Multicurrency Facility Agreement, likewise causing a cross-default under the Norwegian Facility Agreement absent a waiver or forbearance from the lenders under the Multicurrency Facility Agreement. In addition, the commencement of the Bankruptcy Case constituted an event of default under the Multicurrency Facility Agreement.

March 14, 2017,

we entered into a support agreement with the Agent in which the lenders agreed to waive certain existing or anticipated defaults or events of default under the Multicurrency Facility Agreement and forbear from exercising rights or remedies under the related finance documents as a result therefrom for a limited support period. We subsequently entered into agreements with the Agent extending such support period as of

April 14, 2017,

April 28, 2017

and

May 12, 2017.

May 19, 2017,

GulfMark Americas and GulfMark Management entered into a forbearance agreement with the Agent pursuant to which the Agent agreed to waive the defaults and events of default specified therein and to forbear from exercising any rights or remedies under the Multicurrency Facility Agreement as a result of any such defaults and events of default for a limited period and to rescind, on a retrospective basis, during such period the provision in the Multicurrency Facility Agreement that results in an automatic acceleration of the outstanding obligations, termination of the lending commitments and a requirement to cash-collateralize letters of credit in connection with the event of default arising as a result of the Debtor’s filing of the Petition. Such forbearance agreement was subsequently extended as of

May 31, 2017

and

June 16, 2017.

June 26, 2017,

GulfMark Americas and GulfMark Management entered into the RBS Forbearance Agreement with the Agent relating to the Multicurrency Facility Agreement. Pursuant to the RBS Forbearance Agreement, the Agent agreed to waive the defaults and events of default specified in the RBS Forbearance Agreement and to forbear from exercising any rights or remedies under the Multicurrency Facility Agreement as a result of any such defaults and events of default specified in the RBS Forbearance Agreement until the earlier of (

) the occurrence of any of the early termination events specified in the RBS Forbearance Agreement, (y) the effectiveness of the Plan (including all exhibits and schedules thereto, and as amended, modified or supplemented solely in accordance with the RBS Forbearance Agreement) and (z)

September 4, 2017.

In addition, the Agent agreed in the RBS Forbearance Agreement that during such period the provision in the Multicurrency Facility Agreement that would result in an automatic acceleration of the outstanding obligations, termination of the lending commitments and a requirement to cash-collateralize letters of credit as specified in the RBS Forbearance Agreement shall

not

apply.

We had unamortized fees paid to the arrangers, the Agent and the security trustee totaling

$2.3

million at

March 31, 2017,

which fees were amortized into interest cost on a straight-line basis over the life of the Multicurrency Facility Agreement.

As of

March 31, 2017,

based on negotiations that were underway with the lenders, it became evident that the restructuring of our capital structure would

not

include a restructuring of the Multicurrency Facility Agreement

, and that the Multicurrency Facility Agreement

, as a demand obligation, would

not

be repaid under the terms of the Multicurrency Facility Agreement

in the ordinary course of business. As a result, on

March 31, 2017,

we accelerated the amortization of debt issuance costs, fully amortizing such amounts as of

March 31, 2017.

The Multicurrency Facility Agreement is secured by

vessels owned by GulfMark Americas. The collateral that secures the loans under the Multicurrency Facility Agreement

may

also secure all of GulfMark Americas’ obligations under any hedging agreements between GulfMark Americas and any lender or other hedge counterparty to the Multicurrency Facility Agreement.

The Debtor unconditionally guaranteed all existing and future indebtedness and liabilities of GulfMark Americas arising under the Multicurrency Facility Agreement and other related loan documents. Such guarantee

may

also cover obligations of GulfMark Americas arising under any hedging arrangements. At

June 30, 2017,

we had

$72.0

million borrowed and outstanding under the Multicurrency Facility Agreement and the weighted average interest rate on our outstanding borrowings under the Multicurrency Facility Agreement was

5.13%.

Norwegian Facility Agreement

Under the Amended and Restated Norwegian Facility, the Norwegian Lender has agreed to provide certain loans up to an aggregate principal amount equal to the sum of

$55.0

million and NOK

210.0

million (or approximately

$25.6

million at

June 30, 2017)

at any

one

time outstanding, subject to certain terms and conditions. The Amended and Restated Norwegian Facility has a scheduled maturity date on the earlier of

August 18, 2017 (

subject to extension in accordance with certain conditions specified therein) and the occurrence of any of the specified early maturity events, including the Effective Date of the Plan. Loans under the Amended and Restated Norwegian Facility accrue interest at the Norwegian Interbank Offered Rate, or NIBOR, or, if the loan is denominated in U.S. Dollars, LIBOR plus

8.00%.

During the continuance of an event of default, upon notice by the agent under the Amended and Restated Norwegian Facility, the applicable interest rate increases by an additional

2.00%.

The fee for unused commitments is

5.00%

per annum. We are subject to certain financial and other covenants and other obligations under the Amended and Restated Norwegian Facility.

The Amended and Restated Norwegian Facility is secured by

vessels owned by the UK Guarantor and by

six

vessels owned by Rederi. The collateral that secures the loans under the Amended and Restated Norwegian Facility

may

also secure all of Rederi’s obligations under any hedging agreements between Rederi and the Norwegian Lender or other hedge counterparty to the Amended and Restated Norwegian Facility.

We unconditionally guaranteed all existing and future indebtedness and liabilities of Rederi arising under the Amended and Restated Norwegian Facility and other related loan documents. Such guarantee

may

also cover obligations of Rederi arising under any hedging arrangements described above. At

June 30, 2017,

we had

$62.2

million borrowed and outstanding under the Amended and Restated Norwegian Facility and the weighted average interest rate on our outstanding borrowings was

5.86%.

We had unamortized fees paid to the arrangers, the agent and the security trustee totaling

$1.1

million at

March 31, 2017,

which fees were being amortized into interest cost on a straight-line basis over the life of the Norwegian Facility Agreement.

As of

March 31, 2017,

based on negotiations that were underway with the lenders, it became evident that the restructuring of our capital structure would

not

include a restructuring of the Norwegian Facility Agreement

, and that the Norwegian Facility Agreement

, as a demand obligation, would

not

be repaid under the terms of the Norwegian Facility Agreement

in the ordinary course of business. As a result, on

March 31, 2017,

we accelerated the amortization of debt issuance costs, fully amortizing such amounts as of

March 31, 2017.

April 14, 2017,

we entered into a support agreement with the Norwegian Lender relating to the Norwegian Facility Agreement pursuant to which the Norwegian Lender agreed to abstain from exercising any rights or remedies under the Norwegian Facility Agreement as a result of certain specified defaults or events of default for a limited support period. We subsequently entered into agreements with the Norwegian Lender extending such support period as of

April 28, 2017

and

May 12, 2017.

The commencement of the Bankruptcy Case constituted an event of default under the Norwegian Facility Agreement.

In order to provide funds to Rederi for purposes of making loans to the Debtor under the Intercompany DIP Agreement, on

May 18, 2017,

Rederi entered into the DNB Second Amendment and Restatement Agreement. Pursuant to the DNB Second Amendment and Restatement Agreement, the parties amended and restated the Norwegian Facility Agreement. Pursuant to the Amended and Restated Norwegian Facility, the Norwegian Lender agreed to make the

$35

million Term Loan Facility available to Rederi. To secure the Term Loan Facility, the Norwegian Lender, the UK Guarantor and the UK Parent agreed to place mortgages in favor of the Norwegian Lender on certain additional, previously unencumbered vessels owned by Rederi and certain other subsidiaries of the Debtor. In addition, the UK Parent and the Norwegian Parent pledged their shares in the UK Guarantor and Rederi, respectively, to the Norwegian Lender