exv10w1



 






Exhibit 10.1




EXCHANGE AGREEMENT




     This EXCHANGE AGREEMENT, dated as of December      , 2005, by and among                     
(collectively, the “Holders”) and HORIZON OFFSHORE, INC., a Delaware corporation (the
“Company”).



W I T N E S S E T H




     WHEREAS, pursuant to the Amended and Restated Purchase Agreements, dated as of April 30, 2005,
by and among the Company, the guarantors set forth therein, the Holders, and the other holders set
forth therein (the “Note Agreement”), the Holders hold in the aggregate $                     in
principal amount of the Company’s 8% Subordinated Secured Notes due March 31, 2010 (“8%
Notes”);



     WHEREAS, the Holders and the Company desire that each of the Holders exchange the principal
amount of their 8% Notes in the amount set forth beneath their names on the signature pages to this
Agreement for an equal principal amount of the Company’s Subordinated Convertible Notes due March
31, 2010 in the Form of Exhibit A attached hereto (“Convertible Notes”); and



     WHEREAS, the Holders and the Company desire that the Company and the Holders enter into an
Amended and Restated Registration Rights Agreement, in the Form of Exhibit B hereto (the
“Registration Rights Agreement”) with respect to the shares of the Company’s common stock,
par value $0.00001 per share (“Common Stock”) issuable upon conversion of the Convertible
Notes.



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



ARTICLE I

Exchange of 8% Notes for Convertible Notes




     Section 1.1 (a) Subject to the terms and provisions of this Agreement, each of the Holders
hereby agrees to exchange the principal amount of its 8% Notes for the Convertible Notes set forth
below its name on the signature pages to this Agreement and, at the Closing (as defined below),
will deliver to the Company, the 8% Notes of Holders.



               (b) Subject to the terms and provisions of this Agreement, the Company hereby agrees to
exchange the Convertible Notes for the 8% Notes of Holders and, at the Closing, will deliver to
the Holders, Convertible Notes in an aggregate principal amount equal to the principal amount of
the 8% Notes being exchanged.



               (c) The closing of the exchange of the 8% Notes for the Convertible Notes (the “Closing”)
shall take place at the offices of the Company or at such other place as is mutually agreeable, at
10:00 a.m., local time on: (x) the date on which the last to be fulfilled or waived of the
conditions set forth in Article V hereof and applicable to the Closing shall be fulfilled or
waived in accordance herewith, or (y) such



 









 




other time and place and/or on such other date as the Holders and the Company may agree. The
date on which the Closing occurs is referred to herein as the “Closing Date”.




ARTICLE II

Defined Terms




     Section 2.1 Defined Terms. The following terms (whether or not underscored) when used
in this Agreement, shall, except where the context otherwise requires, have the following meanings:



     “Approval” means each and every approval, consent, filing and registration by or with
any Person, including, without limitation, Governmental Authorities, necessary to authorize or
permit the execution, delivery or performance of this Agreement and the Convertible Notes, for the
validity or enforceability hereof or thereof, or for the consummation of the transactions
contemplated by this Agreement.



     “Contractual Obligation” means, relative to any Person, any provision of any security
issued by such Person or of any Instrument or undertaking to which such Person is a party or by
which it or any of its property is bound.



     “Environment” means soil, surface waters, ground waters, land, streams, sediments,
surface or subsurface strata and ambient air.



     “Environmental Laws” means all federal, state and local laws or regulations, codes,
common law, consent agreements, orders, decrees, judgments or injunctions issued, promulgated,
approved or entered thereunder relating to pollution or protection of the Environment, natural
resource or occupational health and safety.



     “Environmental Liabilities and Costs” means all liabilities, obligations,
responsibilities, remedial actions, losses, damages, punitive damages, consequential damages,
treble damages, costs and expenses (including all reasonable fees, disbursements and expenses of
counsel, expert and consulting fees and costs of investigation and feasibility studies), fines,
penalties, settlement costs, sanctions and interest incurred as a result of any claim or demand,
by any Person, whether based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute, any Environmental Law, permit, order, variance or agreement with a
Governmental Authority or other Person, arising from or related to the administration of any
Environmental Law or arising from environmental, health or safety conditions or a release or
threatened release resulting from the past, present or future operations of the Company or any of
its Subsidiaries or affecting any of their properties, or any release or threatened release for
which the Company or any of its Subsidiaries is otherwise responsible under any Environmental Law.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended,



     “GAAP” means generally accepted accounting principles in effect from time to time in
the United States.



 









 





     “Governmental Authority” means any nation or government, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.



     “Instrument” means any contract, agreement, letter of credit, indenture, mortgage,
deed, certificate of title, document or writing (whether by formal agreement, letter or otherwise)
under which any obligation is evidenced, assumed or undertaken, any Lien (or right or interest
therein) is granted or perfected, or any property (or right or interest therein) is conveyed.



     “Lien” means any mortgage, pledge, hypothecation, assignment, charge, deposit
arrangement, encumbrance, lien (statutory or other), adverse claim or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, any financing lease involving substantially
the same economic effect as any of the foregoing and the filing of any financing statement under
the UCC or comparable law of any jurisdiction).



     “Material Adverse Change” means a material adverse change in (a) the condition
(financial or otherwise), operations, performance, business, properties or prospects of the Company
and its Subsidiaries taken as a whole; or (b) the rights and remedies of the Holders under this
Agreement or the Convertible Notes; or (c) the ability of the Company to repay the Convertible
Notes, or of the Company to perform its obligations under; or (d) the legality, validity or
enforceability of the Transaction Documents.



     “Organic Document” means, relative to any Person, its articles or certificate of
incorporation or certificate of limited partnership or organization, its bylaws, partnership or
operating agreement or other organizational documents, and all stockholders agreements, voting
trusts and similar arrangements applicable to any of its Stock or partnership interests or other
ownership interests.



     “Person” means any natural person, corporation, partnership, limited liability
company, firm, association, government, governmental agency or any other entity, whether acting in
an individual, fiduciary or other capacity.



     “Requirements of Law” means, as to any Person, the Organic Documents of such Person,
and all federal, state and local laws, rules, regulations, orders, decrees or other determinations
of an arbitrator, court or other Governmental Authority, including, without limitation, all
disclosure and other requirements of ERISA, the requirements of Environmental Laws and any permits
under Environmental Laws, the requirements of the Occupational Safety and Health Administration, in
each case applicable to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.



     “Securities Act” means the Securities Act of 1933, as amended from time to time, and
the rules and regulations of the Commission thereunder.



     “Subsidiary” means, with respect to any Person, (1) any corporation of which the
outstanding Stock having a least a majority of the votes entitled (without regard to the



 









 




occurrence of any contingency) to be cast in the election of directors under ordinary
circumstances shall at the time be owned, directly or indirectly, by such Person; or (2) any other
Person of which at least a majority of the voting interest under ordinary circumstances is at the
time, directly or indirectly, owned by such Person. Except as otherwise indicated herein,
references to Subsidiaries shall refer to Subsidiaries of the Company.




     “UCC” means the Uniform Commercial Code of any applicable jurisdiction, as in effect
from time to time.



ARTICLE III

Representations of the Company




     The Company represents and warrants to each Holder, as of the date hereof, as follows:



     Section 3.1 Organization and Warranties of the Company. Each of the Company and its
Subsidiaries (i) is validly organized and existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, (ii) is duly qualified to do business and is in
good standing in each jurisdiction where the failure to so qualify could result in a Material
Adverse Change, and (iii) has full power and authority, and holds all governmental licenses,
permits, registrations and other approvals required under all Requirements of Law, to own and hold
under lease its property and to conduct its business as conducted prior to the date hereof and as
contemplated to be conducted subsequent to the date hereof, except where the failure to hold any
such licenses, permits, registrations and other approvals could not result in a Material Adverse
Change. The Company has full power and authority to enter into and perform its obligations under
this Agreement, the Convertible Notes and the Registration Rights Agreement (the “Transaction
Documents”).



     Section 3.2 Due Authorization. The execution and delivery by the Company of the
Transaction Documents and the incurrence and performance by the Company of its respective
obligations under the Transaction Documents have been duly authorized by all necessary corporate
action, do not require any Approval (except those Approvals already obtained), do not and will not
conflict with, result in any violation of, or constitute any default under, any provision of any
Organic Document or Contractual Obligation of the Company or any law or governmental regulation or
court decree or order, and will not result in or require the creation or imposition of any Lien on
the Company’s properties pursuant to the provisions of any Contractual Obligation of the Company.



     Section 3.3 Validity, etc. The Transaction Documents constitute the legal, valid and
binding obligations of the Company, enforceable in accordance with its terms subject, as to
enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting rights of creditors generally and to the effect of general principles of equity.



 









 





     Section 3.4 Issuance of Common Stock. The shares of Common Stock issuable upon
conversion of the Convertible Notes (the “Shares”) have been duly authorized and will be, upon
issuance in accordance with the terms of the Convertible Notes, duly and validly authorized, fully
paid and non-assesssable, free and clear of any Liens (other than restrictions upon resale imposed
by U.S. and state securities laws).



ARTICLE IV

Representations of the Holders




     Each Holder represents and warrants to the Company, as of the date hereof, as follows:



     Section 4.1 (a) It owns its 8% Note, legally and beneficially, free of any Liens (other than
restrictions on resale imposed by U.S. or state securities law).



               (a) It (i) is knowledgeable, sophisticated and experienced in making, and is qualified to
make, decisions with respect to investments in securities representing an investment decision like
that involved in the acquisition of the Convertible Note and Shares, and has requested, received,
reviewed and considered all information it deems relevant in making an informed decision to
acquire the Convertible Note and the Shares; (ii) is acquiring the Convertible Note in the
ordinary course of its business and for its own account for with no intention of distributing
either the Convertible Note, Shares or any portion thereof or any arrangement or understanding
with any other persons regarding the distribution of the Convertible Note or Shares, in violation
of applicable securities laws; (iii) will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or
take a pledge of) the Convertible Note and Shares except in compliance with the Securities Act and
any applicable state securities laws; (iv) or its representatives, if any, have been furnished
with, or have had access to, all materials relating to the business, finances and operations of
the Company (including all reports filed with the Securities and Exchange Commission) and
materials relating to the offer and sale of the Convertible Note which have been requested by such
Holder; such Holder, or its representatives, if any, have been afforded the opportunity to ask
questions of the Company; provided, however, neither such inquiries nor any other due diligence
investigations conducted by such Holder, or its representatives, if any, shall modify, amend or
affect such Holder’s right to rely on the Company’s representations and warranties contained in
Article III above; and (v) understands that its investment in the Convertible Note involves a
significant degree of risk, including a risk of total loss of its investment, and it is fully
aware of and understands all the risks related to its acquisition of the Convertible Note and
Shares.



               (b) It understands that the Convertible Notes are being offered in transactions not involving
any public offering within the meaning of the Securities Act, that the Convertible Notes have not
been and will not be registered under the Securities Act



 









 





               (c) It is an “accredited investor” (as defined in Rule 501(a) of Regulation D promulgated by
the Commission under the Securities Act;



               (d) It acknowledges that the Company will rely upon the truth and accuracy of the foregoing
acknowledgements, representations and agreements and it agrees that if any of the
acknowledgements, representations or agreements such Holder is deemed to have made in connection
with its acquisition of the Convertible Note is no longer accurate, it shall promptly notify the
Company.



ARTICLE V

Conditions to Closings




     Section 5.1 Conditions Precedent to the Obligation of the Company to issue the Convertible
Notes in exchange for the 8% Notes. The obligation hereunder of the Company to issue the
Convertible Notes to the Holders at the Closing (unless otherwise specified) is subject to the
satisfaction, at or before the Closing, of each of the applicable conditions set forth below.
These conditions are for the Company’s sole benefit and may be waived by the Company at any time in
its sole discretion.



               (a) Accuracy of the Holders’ Representations and Warranties. The representations and
warranties of each Holder will be true and correct as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties as of an earlier date,
which will be true and correct as of such date).



               (b) No Injunction. No statute, rule, regulation, executive, judicial or administrative
order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by
any court or governmental authority of competent jurisdiction which prohibits the consummation of
any of the transactions contemplated by this Agreement.



               (c) Registration Rights Agreement. The Holders shall have executed and delivered the
Registration Rights Agreement.



     Section 5.2 Conditions Precedent to the Obligation of the Holders to Exchange the 8% Notes
for Convertible Notes. The obligation hereunder of each Holder to exchange its 8% Note for a
Convertible Note at the Closing (unless otherwise specified) is subject to the satisfaction, at or
before the Closing, of each of the applicable conditions set forth below. These conditions are for
each Holder’s benefit and may be waived by each Holder at any time in its sole discretion.



               (a) Accuracy of the Company’s Representations and Warranties. The representations and
warranties of the Company shall be true and correct as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties as of an earlier date,
which shall be true and correct as of such date).



 









 





               (b) Performance by the Company. The Company shall have performed all agreements and
satisfied all conditions required to be performed or satisfied by the Company at or prior to the
Closing.



               (c) No Injunction. No statute, rule, regulation, executive, judicial or administrative
order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by
any court or governmental authority of competent jurisdiction which prohibits the consummation of
any of the transactions contemplated by this Agreement.



               (d) Registration Rights Agreement. The Company shall have executed and delivered the
Registration Rights Agreement.



               (e) Conversion of other 8% Notes. Other holders of 8% Notes shall have exchanged, or shall
concurrently exchange a principal amount thereof, which, when added the principal amount being
exchanged hereunder, shall equal $8 million principal amount of 8% Notes, for Convertible Notes.



               (f) Equity Sale. The Company shall have completed or shall concurrently be effecting, a
private placement sale of Common Stock, at a per share price of not less than $0.38, for aggregate
gross proceeds of not less than $20 million.



ARTICLE VI

COVENANTS




     The Company agrees with each Holder that, for as long as the Convertible Notes are
outstanding, it will comply with the following obligations:



     Section 6.1 Information. The Company will furnish to the Noteholders and to
prospective investors, upon their request, the information required to be delivered pursuant to
Rule 144(d) under the Securities Act.



     Section 6.2 Payment of Obligations. The Company will pay and discharge, as the same
shall become due and payable, all lawful taxes, assessments and charges or levies made upon it or
its property or assets, by any governmental body, agency or official, except where any of such
items may be diligently contested in good faith by appropriate proceedings, and the Company shall
have set aside on its books, if required under GAAP, reserves for the liabilities related to such
items, or such items could not result in a Material Adverse Change.



     Section 6.3 Corporate Existence; Mergers. The Company shall at all times maintain its
corporate existence. In addition, the Company shall not, without prior written consent of the
holders of a majority-in-principal amount of Convertible Notes, dissolve or otherwise dispose of
all or substantially all of its assets, in one transaction or a series of transactions, or
consolidate with or merge into another Person, unless:



               (a) in case the Company shall consolidate with or merge into another Person or convey,
transfer or lease all or substantially all of its properties and



 









 




assets to any Person, the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer, or which leases, all or
substantially all of the properties and assets of the Company shall expressly assume, by an
amendment or accession hereto, the due and punctual payment of the principal on all the
Convertible Notes and performance or observance of every covenant of this Agreement and the
Convertible Notes on the part of the Company to be performed or observed; and




               (b) immediately after giving effect to such transaction, no event of default under the
Convertible Notes, and no event which, after notice or lapse of time or both, would become an
event of default under the Convertible Notes, shall have happened and be continuing.



     Section 6.4 Compliance with Law. The Company shall comply with and satisfy all
applicable requirements of Governmental Authorities, except where the failure to do so could not
result in a Material Adverse Change.



ARTICLE VII

MISCELLANEOUS




     Section 7.1 Waivers, Amendments, etc.



               (a) The provisions of this Agreement may from time to time be amended, modified or waived, if
such amendment, modification or waiver is in writing and, (x) in the case of an amendment or
modification, is consented to by the Company and the Holders and (y) in the case of a waiver of
any obligation of the Company or compliance with any prohibition contained in this Agreement, is
consented to by the Holders.



     Section 7.2 Notices. All notices hereunder shall be in writing or by telecopy
(confirmed in writing) and shall be sufficiently given to the Holders, or the Company if addressed
or delivered to them at the following addresses:



	 	 	 
	If to the Holders:

	 	To the address set forth beneath their name on the signature
	 

	 	pages to this Agreement
	 
	 	 
	 

	 	with copies to:
	 
	 	 
	If to the Company:

	 	Horizon Offshore, Inc.
	 
	 	 
	 

	 	2500 CityWest Boulevard, Suite 2200
	 

	 	Houston, Texas 77042
	 

	 	Attention: Executive Vice President and Chief Financial
	 

	 	Officer
	 

	 	Telecopier No.: (713) 361-2677
	 
	 	 
	with copies to:

	 	Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P.






 









 






	 	 	 
	 

	 	201 St. Charles Avenue, Suite 5100
	 

	 	New Orleans, Louisiana 70170
	 

	 	Attention: William B. Masters, Esq.
	 

	 	Telecopier No.: (504) 582-8012





or at such other address as any party may designate to any other party by written notice. All such
notices and communications shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; when received, if deposited in the mail postage prepaid; when transmission
is verified, if telecopied; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.




     Section 7.3 Indemnification. In consideration of the execution and delivery of this
Agreement by the Holder, the Company hereby indemnifies, exonerates and holds the Holder, each of
its successors and assigns, each of its officers, directors, employees, attorneys and agents of
each Holder and each of their respective successors and assigns (each, a “Holder Party” and
collectively, the “Holder Parties”) free and harmless from and against any and all actions, causes
of action, suits, losses, costs, liabilities (including, but not limited to, under the Securities
Act, the Exchange Act, or any other federal or state statutory law or regulation, and Environmental
Liabilities and Costs), damages and expenses (irrespective of whether such Holder Party is a party
to the action for which indemnification hereunder is sought), including reasonable attorneys’ fees
and disbursements (the “Indemnified Liabilities”), incurred by the Holder Parties or any of them or
asserted or awarded against the Holder Parties or any of them as a result of, or arising out of, or
relating to:



               (a) any transaction financed in whole or in part, directly or indirectly, with the proceeds
from the original issuances of the 8% Notes;



               (b) the use of any of the proceeds from the original issuances of the 8% Notes by the Company
for any other purpose;



               (c) the making of any claim by any investment banking firm, broker or third party that it is
entitled to compensation from any Holder in connection with this Agreement (other than investment
banking firms and brokers retained by any Holder);



               (d) the entering into and performance of this Agreement by any of the Holder Parties (other
than the breach by such Holder Party of this Agreement);



               (e) any investigation, litigation, or proceeding related to this Agreement;



               (f) the existence of any contaminant, in, under, on or otherwise affecting any property
owned, used, operated, or leased by the Company or any Subsidiary in the past, present, or future
or any surrounding areas affected by such property, regardless of whether the existence of the
contaminant is related to the past, present or future operations of the Company and the
Subsidiaries, or their predecessors



 









 




in interest or any other Person; any Environmental Liabilities and Costs related to any
property owned, used, operated, or leased by the Company or any Subsidiary in the past, present or
future; any Environmental Liabilities and Costs related to the past, present or future operations
of the Company or any Subsidiary; any alleged violations of any Environmental Law related to any
property owned, used, operated, or leased by the Company or any Subsidiary in the past, present or
future; any alleged violations of any Environmental Law related to the past, present or future
operations of the Company or any Subsidiary; the performance of any remedial action that is
related to any property owned, used, operated or leased by the Company or any Subsidiary in the
past, present or future; the performance of any remedial action that is related to the past,
present or future operations of the Company or any Subsidiary; and the imposition of any Lien on
any property affected by this Agreement arising from any Environmental Liabilities or Costs; or




               (g) any claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Holder (or any of their respective officers, directors, employees or agents) is
a party thereto;


except for any such Indemnified Liabilities arising for the account of a particular
Holder Party by reason of the relevant Holder Party’s bad faith, gross negligence, willful
misconduct or breach of this Agreement as determined by a final and nonappealable decision of a
court of competent jurisdiction. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Company hereby agrees, to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. The foregoing indemnity shall remain operative and in full force and effect
notwithstanding the consummation of the transactions contemplated hereunder, the repayment of any
of the Convertible Notes, the invalidity or unenforceability of any term or provision of this
Agreement, or any investigation made by or on behalf of any Holder. Promptly after receipt by any
Holder Party of notice of commencement of any claim, investigation, litigation or proceeding such
Holder Party will, if a claim in respect thereof is to be made against the Company under this
Section 7.3, deliver to the Company written notice of such commencement thereof, provided
that the failure to give such notice shall not relieve the Company of their obligations under this
Section 7.3 except to the extent the Company is actually prejudiced by such failure. The
Company shall have the right to participate in the defense thereof (including participation in
discussions regarding such defense) at their own expense, but only to the extent such participation
would not, in the opinion of counsel to the Holder Party, result in a waiver of the attorney-client
privilege of such Holder Party. If an indemnification claim in respect of any claim,
investigation, litigation or proceeding is to be made against any Company under this Section
7.3 by any Holder Party, such Holder Party shall not settle or compromise any such claim,
investigation, litigation or proceeding without the prior consent of the Company (which consent
shall not be unreasonably withheld or delayed) so long as the Company has provided evidence
reasonably satisfactory to such Holder Party that the Company has the financial ability to satisfy
the maximum amount for which such Holder Party may be found liable in connection with such claim,
investigation, litigation or proceeding.




 









 








     Section 7.4 Survival. The obligations of the Company under Section 7.3 shall
in each case survive the payment or permitted transfer of any Convertible Notes, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes and the termination of this
Agreement. The representations and warranties made by the Company in this Agreement shall survive
the execution and deliver of this Agreement, the purchase or transfer of any Convertible Notes or
portion thereof or interest therein, and may be relied upon by any subsequent Holder, regardless of
any investigation made at any time by or on behalf of any Holder.



     Section 7.5 Severability. Any provision of the Transaction Documents which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions of
the Transaction Documents or affecting the validity or enforceability of such provision in any
other jurisdiction.



     Section 7.6 Headings. The various Headings of this Agreement or the Convertible Notes
are inserted for convenience only and shall not affect the meaning or interpretation of this
Agreement or the Convertible Notes or any provisions hereof or thereof.



     Section 7.7 Counterparts, Effectiveness, etc. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.



     Section 7.8 Governing Law; Entire Agreement. THIS AGREEMENT AND THE CONVERTIBLE NOTES
SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK. This Transaction Documents constitute the entire understanding among the parties hereto
with respect to the subject matter hereof and supersede any prior agreements, written or oral, with
respect thereto.




               (a) The Company hereby agrees that any legal action or proceeding against it with respect to
this Transaction Documents may be brought in the courts of the State of New York or of the United
States of America for the Southern District of New York as any Holder may elect, and, by execution
and delivery hereof, it accepts and consents for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts and agrees that such jurisdiction
shall be exclusive, unless waived by the Holders in writing, with respect to any action or
proceeding brought by it against such Holders. The Company hereby irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or proceeding by the
mailing of the copies thereof by certified mail, return receipt requested, postage prepaid, to it
at its address set forth herein, such service to become effective upon the earlier of (i) the date
10 calendar days after such mailing and (ii) any earlier date permitted by applicable law. The
Company hereby agrees that Sections 5-1401 and 5-1402 of the General Obligations Law of the State
of New York shall apply to this Agreement and waives any right to stay or to dismiss any action or
proceeding brought before said courts on the basis of forum non conveniens. Nothing herein shall



 









 




affect the right of any Holder to bring proceedings against the Company in the courts of any
other jurisdiction or to serve process in any other manner permitted by applicable law.





               (b) The Company, hereby irrevocably designates, appoints and empowers CT Corporation System,
whose present address is 111 Eighth Avenue, New York, New York 10011, as its authorized agent to
receive, for and on its behalf and its property, service of process in the State of New York when
and as such legal actions or proceedings may be brought in the courts of the State of New York or
of the United States of America sitting in New York, and such service of process shall be deemed
complete upon the date of delivery thereof to such agent whether or not such agent gives notice
thereof to such Company, or upon the earliest of any other date permitted by applicable law. It
is understood that a copy of said process served on such agent will as soon as practicable be
forwarded to the Company at its address set forth in Section 6.2, but its failure to
receive such copy shall not affect in any way the service of said process on said agent as such
agent of the Company. The Company agrees that it will at all times continuously maintain an agent
to receive service of process in the State of New York on behalf of itself and its properties and
in the event that, for any reason, the agent named above or its successor shall no longer serve as
its agent to receive service of process in the State of New York on its behalf, it shall promptly
appoint a successor so to serve and shall advise the Holders thereof (and shall furnish to the
Holders the consent of any successor agent so to act).



     Section 7.9 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and assigns; provided,
however, that the Company may not assign or transfer its rights or obligations hereunder without
the prior written consent of all Holders.



     Section 7.10 Other Transactions. Nothing contained herein shall preclude any Holder
from engaging in any transaction, in addition to those contemplated by this Transaction with the
Company or any of its Subsidiaries and Affiliates that is not otherwise expressly prohibited under
this Agreement.



     Section 7.11 Confidentiality. The Holders shall hold all non-public, proprietary or
confidential information obtained pursuant to the requirements of this Agreement in accordance with
their customary procedures for handling confidential information of this nature and in accordance
with safe and sound banking practices; however, the Holders may make disclosure of any such
information to its examiners, Affiliates, outside auditors, counsel, consultants, appraisers and
other professional advisors in connection with this Agreement or as required by or any proposed
transferee in connection with the contemplated transfer of any Convertible Notes or as required or
requested by any Governmental Authority or representative thereof or in connection with the
enforcement hereof or related document or pursuant to legal process. In no event shall any Holder
be obligated or required to return any materials furnished to it by or on behalf of the Company.



 









 





     Section 7.12 Waiver of Jury Trial, etc. EACH OF THE HOLDERS AND THE COMPANY HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT AND THE NOTES, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OF SUCH HOLDERS OR COMPANY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR SUCH
HOLDERS ENTERING INTO THIS AGREEMENT.



     Section 7.13 Limitation of Liability. None of the Holders, the Company nor any
Affiliates thereof shall have any liability with respect to, and each of the Holders and the
Company hereby waive, release and agree not to sue upon, any claim for any special, indirect,
punitive, exemplary or consequential damages suffered by such Person in connection with, arising
out of, or in any way related to this Agreement, the transactions contemplated herein, or any act,
omission or event occurring in connection therewith.



*   *   *   *   *




[Signature Page Follows]




 









 








     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date and year first above written.



	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	HORIZON OFFSHORE, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	HOLDERS:
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title: