EXHIBIT 10.4
 
 
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
 
This Non-Competition and Non-Solicitation Agreement (this “Agreement”) dated as
of December 13, 2012, but effective as of the Closing Date (as defined below),
is by and among Energy Resource Technology GOM, Inc., a Delaware
corporation  (“ERT”), CKB Petroleum, Inc., a Texas corporation (“CKB” and
together with ERT, the “Protected Parties”), and Johnny Edwards, President and a
director of each of ERT and CKB and a resident of Montgomery County, Texas (the
“Restricted Party”).  The Protected Parties and the Restricted Party are
sometimes each individually referred to herein as a “Party” and collectively
referred to herein as the “Parties”.
 
RECITALS
 
WHEREAS, ERT is a direct wholly owned subsidiary of Helix Energy Solutions
Group, Inc., a Minnesota corporation (“Helix”), and CKB is a direct wholly owned
subsidiary of ERT;
 
WHEREAS, the Restricted Party is an employee of Helix whose duties and
responsibilities include serving as President and director of each of ERT and
CKB;
 
WHEREAS, as of the date hereof, Talos Production LLC, a Delaware limited
liability company (“Talos”), has agreed to buy from Helix, and Helix has agreed
to sell to Talos, all of the equity interest in ERT, subject to the terms and
conditions of that certain Equity Purchase Agreement by and between Talos and
Helix dated as of the date hereof (as the same may be amended, together with the
exhibits and schedules thereto and the documents and instruments to be delivered
pursuant thereto, the “Purchase Agreement”);
 
WHEREAS, the Protected Parties own certain oil and gas assets located on, under
or within the Territory and other lands described on Exhibit A attached hereto;
 
WHEREAS, upon the consummation of the transactions contemplated by the Purchase
Agreement (the “Closing Date”), the Restricted Party is resigning as President
and director of each of ERT and CKB;
 
WHEREAS, as a material inducement to Talos to enter into the Purchase Agreement
and consummate the transactions contemplated thereunder, Talos requires that the
Restricted Party agrees not to compete with or against the Protected Parties or
any of their Affiliates in the Restricted Business in the Territory for the
Restricted Period; and
 
WHEREAS, the Restricted Party and Helix will derive substantial direct and
indirect benefit from the transactions contemplated by the Purchase Agreement,
including an amendment to the Restricted Party’s Employment Agreement, dated May
11, 2011, between Restricted Party and Helix (the “Restricted Party Employment
Agreement”), which amendment is executed contemporaneously with the execution of
the Purchase Agreement, and modifies the Restricted Party Employment Agreement
so that a change of control of ERT constitutes a change of control under the
Restricted Party Employment Agreement.
 
 
 

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NOW, THEREFORE, in consideration of the foregoing, the premises, and the mutual
covenants and agreements set forth below, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
 
ARTICLE I
 
DEFINITIONS
 
1.1 Certain Defined Restricted Periods.  As used in this Agreement:
 
1.1.1 “Affiliate” shall mean, as to the Person specified, (a) any Person
controlling, controlled by or under common control with such specified Person or
(b) a Person in which the Restricted Party is an officer, director, employee,
manager, advisor, consultant or broker.  The concept of control, controlling or
controlled as used in the aforesaid context means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of another, whether through the ownership of voting securities, by
contract or otherwise. For the avoidance of doubt, (i) ERT and CKB shall be
considered Affiliates of Talos after the Closing Date, and (ii) ERT, CKB and
Talos shall not be considered an Affiliate of the Restricted Party after the
Closing Date.
 
1.1.2 “Person” shall mean any governmental authority or any individual, firm,
partnership, corporation, association, joint venture, trust, unincorporated
organization or other entity or organization.
 
1.1.1  “Restricted Business” means the business of owning, acquiring (either
directly or indirectly), disposing (including any option or commitment to
acquire in the future), exploring for, producing or operating oil and gas and
associated mineral properties, or interests, including working interests,
mineral interests, royalty and overriding royalty interests, production
payments, net profits or similar interests, in oil, gas and associated minerals
in the Territory.
 
1.1.2 “Territory” means the following Outer Continental Shelf leasing blocks in
the Gulf of Mexico and those blocks that have one or more boundaries or corners
that touch any one or more of the following blocks: Green Canyon Blocks 236,
237, 238, 281 and 282; Garden Banks Blocks 462, 463, 506, 507, 625, 667, 668 and
669; South Marsh Island Blocks 107, 130 and 131; High Island Blocks A556 and
A557; South Timbalier Blocks 63 and 86 N/2; Vermilion Blocks 314 and 331; Eugene
Island Block 302; and Ship Shoal Blocks 222, 223, 224 and 225.
 
1.1.3  “Restricted Period” means the period beginning at the Closing Date and
ending twelve months after the Closing Date.
 
ARTICLE II
 
NON-COMPETITION
 
2.1 Covenant Not to Compete.  During the Restricted Period, the Restricted Party
shall not, and shall not permit any of his Affiliates to, directly or
indirectly, (a) engage in the Restricted Business in the Territory, (b) have an
equity interest in any Person that engages directly or indirectly in the
Restricted Business in the Territory or (c) intentionally interfere in
 
 
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any material respect with the business relationships (whether formed prior to or
after the date of this Agreement) between either Protected Party, on the one
hand, and customers or suppliers of either Protected Party, on the other hand.
Notwithstanding the foregoing, the Restricted Party and his Affiliates may own,
directly or indirectly, solely as an investment, securities of any Person traded
on any national securities exchange if the Restricted Party or his Affiliate, as
applicable, is not a controlling Person of, or a member of a group that
controls, such Person and does not, directly or indirectly, own five (5%) or
more of any class of securities of such Person.
 
ARTICLE III
 
NON-SOLICITATION
 
3.1 Non-Solicitation.  During the Restricted Period, the Restricted Party shall
not, and shall not permit any of his Affiliates to, directly or indirectly, hire
or solicit any employee of either Protected Party or encourage any such employee
to leave such employment or hire any such employee who has left such employment;
provided, that nothing in this Section 3.1 shall prevent the Restricted Party or
any of his Affiliates from hiring (a) any employee whose employment has been
terminated by either Protected Party, (b) after 180 days from the date of
termination of employment, any employee whose employment has, to the knowledge
of the Restricted Party, been terminated by the employee or (c) any employee who
responds to a general solicitation for employment by the Restricted Party or any
of his Affiliates.
 
3.2 Non-Interference.  During the Restricted Period, the Restricted Party shall
not, and shall not permit any of his Affiliates to, directly or indirectly,
solicit or entice, or attempt to solicit or entice, any clients or customers of
either Protected Party or potential clients or customers of either Protected
Party for purposes of diverting their business or services from either Protected
Party.
 
ARTICLE IV
 
RELIEF
 
4.1 Restrictions Reasonable.  The Restricted Party agrees that the limitations
as to time, geographic area and scope of activity to be restrained contained in
this Agreement are fair and reasonable and are not greater than necessary to
protect the legitimate interests of the Protected Parties and Talos. In the
event that any covenant contained in this Agreement should ever be adjudicated
to exceed the time, geographic, product or service, or other limitations
permitted by applicable law in any jurisdiction, then any court is expressly
empowered to reform such covenant to the maximum time, geographic, product or
service, or other limitations permitted by applicable law in such jurisdiction.
The covenants contained in this Agreement and each provision hereof are
severable and distinct covenants and provisions. The invalidity or
unenforceability of any such covenant or provision as written shall not
invalidate or render unenforceable the remaining covenants or provisions hereof,
and any such invalidity or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such covenant or provision in any other
jurisdiction.
 
 
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4.2 Injunctive Relief.  The Restricted Party agrees that a breach or threatened
breach of this Agreement would give rise to irreparable harm to the Protected
Parties and Talos, for which monetary damages would not be an adequate remedy
and hereby agrees that in the event of a breach or a threatened breach by the
Restricted Party of any such obligations, the Protected Parties shall, in
addition to any and all other rights and remedies that may be available to it in
respect of such breach, be entitled to equitable relief, including a temporary
restraining order, an injunction, specific performance and any other relief that
may be available from a court of competent jurisdiction (without any requirement
to post bond).
 
ARTICLE V
 
GENERAL RESTRICTED PERIODS
 
5.1 Acknowledgement.
 
5.1.1 The Restricted Party agrees that this Agreement, including the rights,
covenants, restrictions and remedies set forth in ARTICLE II, ARTICLE III and
ARTICLE IV above, (a) are ancillary to and part of the consummation of the
transactions described in the Purchase Agreement, (b) contain reasonable
limitations as to time, geographical area and scope of activity, (c) do not
impose a greater restraint than is necessary to protect the goodwill and other
business interests of the Protected Parties and (d) comply with and are
enforceable as of the date hereof under Section 15.50 et. seq. of the Texas
Business and Commerce Code.  The Restricted Party agrees and acknowledges that
on and after the Closing Date he will derive substantial direct and indirect
benefit from the transaction contemplated by the Purchase Agreement and such
benefit is sufficient consideration to support the covenants herein.
 
5.1.2 The Restricted Party explicitly warrants and represents to the Protected
Parties that the Restricted Party is incurring the obligations of the covenants
in this Agreement as an inducement to Talos to enter into the Purchase Agreement
and as an essential element of Talos’s agreement to acquire the Protected
Parties and pay the purchase price for the Protected Parties, and Talos would
not have done so but for the agreement by the Restricted Party to comply with
the terms and provisions hereof.
 
5.1.3 The Restricted Party understands and acknowledges that Talos has made
substantial investments to acquire the Protected Parties, including its business
interests, goodwill and confidential information.  The Restricted Party agrees
that such investments are worthy of protection and that Talos’s need for the
protection afforded by this Agreement is greater than any hardship the
Restricted Party might experience by complying with its terms. 
 
5.2 Governing Law.  Without regard to principles of conflicts of law, this
Agreement shall be construed, interpreted and enforced in accordance with and
governed by the laws of the State of Texas applicable to contracts made and to
be performed entirely within such state.
 
5.3 Forum.  THE PARTIES AGREE THAT THIS AGREEMENT CONSTITUTES A “MAJOR
TRANSACTION” AS DEFINED BY SECTION 15.020 OF THE TEXAS CIVIL PRACTICE AND
REMEDIES CODE.  THE PARTIES ALSO AGREE, PURSUANT TO SECTION 15.020 OF THE TEXAS
CIVIL PRACTICE AND REMEDIES CODE, THAT ANY
 
 
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LAWSUIT INVOLVING THIS AGREEMENT BROUGHT BY EITHER PARTY WILL BE BROUGHT ONLY IN
HARRIS COUNTY, TEXAS, WHETHER SUCH LAWSUIT BE BROUGHT IN FEDERAL OR STATE
COURT.  THE PARTIES MUTUALLY CONSENT TO THE JURISDICTION OF THE FEDERAL AND
STATE COURTS IN HARRIS COUNTY, TEXAS, AND AGREE THAT ANY ACTION, SUIT, OR
PROCEEDING CONCERNING, RELATED TO, OR ARISING OUT OF THIS AGREEMENT AND/OR THE
NEGOTIATION OF THIS AGREEMENT WILL BE BROUGHT ONLY IN A FEDERAL OR STATE COURT
IN HARRIS COUNTY, TEXAS.  THE PARTIES AGREE THAT THEY WILL NOT RAISE ANY DEFENSE
OR OBJECTION OR FILE ANY MOTION BASED ON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE, INCONVENIENCE OF THE FORUM, OR THE LIKE IN ANY CASE FILED IN A FEDERAL OR
STATE COURT IN HARRIS COUNTY, TEXAS.  THIS AGREEMENT IS MADE AND PARTIALLY
PERFORMABLE IN HARRIS COUNTY, TEXAS, AND VENUE WILL BE IN HARRIS COUNTY, TEXAS.
 
5.4 Waiver of Jury Trial.  EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY
IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY TRANSACTION
AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN AND AGREES
TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.
 
5.5 Non-Circumvention.  Neither the Restricted Party nor any Affiliate of the
Restricted Party shall enter into any agreement, contract, or arrangement with
any Affiliate or third party with respect to the Territory or take any other
action or enter into or cause an Affiliate to enter into any alternative
transaction with the purpose of circumventing the intent and obligations of the
Parties hereunder.
 
5.6 Entire Agreement.  This Agreement constitutes the entire understanding among
the Parties with respect to the subject matter hereof, superseding all written
or oral negotiations and discussions, and prior agreements and understandings
relating to such subject matter.
 
5.7 Binding Effect.  This Agreement shall be binding upon, and shall inure to
the benefit of, the Parties, and their respective successors, assigns and heirs.
 
5.8 Notices.  All notices and other communications required under this Agreement
shall (unless otherwise specifically provided herein) be in writing and be
delivered personally, by recognized commercial courier or delivery service which
provides a receipt, by telecopier (with receipt acknowledged), or by registered
or certified mail (postage prepaid), at the following addresses:
 
If to the Restricted Party:
 
Johnny Edwards
42 East Bay Blvd
The Woodlands, TX  77380
Telephone (mobile): (281) 414-2299
 
 
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If to the Protected Parties:
 
Energy Resource Technology GOM LLC
c/o Talos Energy LLC
1600 Smith St., Suite 5000
Houston, Texas  77002-7380
Attention:  Timothy S. Duncan
Telecopy No.:  (713) 351-4100
 
5.9 Amendments and Waivers.  Except for waivers specifically provided for in
this Agreement, this Agreement may not be modified or amended nor any rights
hereunder waived except by an instrument in writing signed by all Parties that
specifically references this Agreement, states that it is intended to modify or
amend this Agreement or waive a right hereunder and specifies the provision(s)
to be modified, amended or waived.  No waiver of, or consent to a change in, any
provisions of this Agreement shall be deemed or shall constitute a waiver of, or
consent to a change in, other provisions hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
 
5.10 Attorney's Fees.  If any suit or other action is brought with respect to
the interpretation or enforcement of this Agreement, the prevailing Party shall
be entitled to receive, among other remedies, reimbursement for its reasonable
costs and expenses, including, without limitation, reasonable attorneys’ fees.
 
5.11 Counterpart Execution.  This Agreement may be executed in counterparts, all
of which are identical and all of which constitute one and the same
instrument.  It shall not be necessary for the Protected Parties and the
Restricted Party to sign the same counterpart.  Facsimile copies of signatures
shall constitute original signatures for all purposes of this Agreement and any
enforcement hereof.
 
5.12 Termination of this Agreement.  Notwithstanding anything to the contrary
contained herein, if the Purchase Agreement is terminated for any reason
whatsoever prior to the Closing Date, this Agreement will never become effective
and shall automatically become null and void and of no force and effect; as
such, neither the Protected Parties nor the Restricted Party shall have any
liabilities, rights duties or obligations to the other (or its successors and
assigns) under or in connection with this Agreement.
 
5.13 Interpretation.  In this Agreement (a) captions are for convenience only
and shall not be considered a part of, or affect the construction or
interpretation of, any provision of this Agreement; (b) references to the
singular includes the plural, and vice versa; (c) reference to any Article or
Section means an Article or Section of this Agreement; (d) unless expressly
provided to the contrary, "hereunder", "hereof", "herein" and words of similar
import are references to this Agreement as a whole and not any particular
Section or other provision of this Agreement; and (e) "include" and "including"
shall mean include or including without limiting the generality of the
description preceding such Restricted Period.
 
[Signature page to follow]
 
 
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IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement
as of the date set forth above.
 
 
                                   RESTRICTED PARTY:
 

     
 
/s/ Johnny Edwards     Johnny Edwards        

 
                                   PROTECTED PARTIES:
 

  Energy Resource Technology GOM, Inc.          
 
By:
/s/ Anthony Tripodo     Name: Anthony Tripodo     Title: Vice President and
Treasurer  

 
 

  CKB Petroleum, Inc.          
 
By:
/s/ Anthony Tripodo     Name: Anthony Tripodo     Title: Vice President and
Treasurer  

 
 
 

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