exv10w4



 






Exhibit 10.4




 




AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT


AMONG


HORIZON OFFSHORE, INC.


AND


THE INITIAL HOLDERS LISTED ON

THE SIGNATURE PAGES HEREOF


Dated as of December 19, 2005



 





 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 1.

	 	Definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	SECTION 2.

	 	Registration of Securities by the Company
	 	 	5	 
	 
	 	 	 	 	 	 
	SECTION 3.

	 	Registration Expenses
	 	 	13	 
	 
	 	 	 	 	 	 
	SECTION 4.

	 	Conditions to Registration
	 	 	15	 
	 
	 	 	 	 	 	 
	SECTION 5.

	 	Indemnification
	 	 	15	 
	 
	 	 	 	 	 	 
	SECTION 6.

	 	Exchange Act Registration; Rule 144 Reporting
	 	 	18	 
	 
	 	 	 	 	 	 
	SECTION 7.

	 	Limitation on Registration Rights of Others
	 	 	19	 
	 
	 	 	 	 	 	 
	SECTION 8.

	 	Mergers, etc.
	 	 	20	 
	 
	 	 	 	 	 	 
	SECTION 9.

	 	Notices, etc.
	 	 	20	 
	 
	 	 	 	 	 	 
	SECTION 10.

	 	Entire Agreement
	 	 	21	 
	 
	 	 	 	 	 	 
	SECTION 11.

	 	Amendments; Waivers and Further Agreements
	 	 	21	 
	 
	 	 	 	 	 	 
	SECTION 12.

	 	Assignment; Successors and Assigns
	 	 	22	 
	 
	 	 	 	 	 	 
	SECTION 13.

	 	Severability
	 	 	22	 
	 
	 	 	 	 	 	 
	SECTION 14.

	 	Counterparts
	 	 	22	 
	 
	 	 	 	 	 	 
	SECTION 15.

	 	Gender; Usage
	 	 	22	 
	 
	 	 	 	 	 	 
	SECTION 16.

	 	Governing Law
	 	 	22	 
	 
	 	 	 	 	 	 
	SECTION 17.

	 	Survival
	 	 	22	 
	 
	 	 	 	 	 	 
	SECTION 18.

	 	Expenses
	 	 	23	 
	 
	 	 	 	 	 	 
	SECTION 19.

	 	Specific Performance
	 	 	23	 







 









 








REGISTRATION RIGHTS AGREEMENT




     THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and
effective as of December 19, 2005, by and among HORIZON OFFSHORE, INC., a Delaware corporation (the
“Company”), and the initial holders listed on the signature pages hereof (collectively, the
“Initial Holders”).



W I T N E S S E T H:




RECITALS.




     A. On March 31, 2005, the Company and the Initial Holders entered that certain
recapitalization letter agreement (the “Recap Letter Agreement”) pursuant to which the
Company agreed to issue to the Holders 60 million shares of Common Stock and one million shares of
Series B Preferred Stock in exchange for $84,972,823 aggregate principal amount of the Company’s
16% and 18% Subordinated Secured Notes due March 31, 2007 and all of the outstanding shares of the
Company’s Series A Redeemable Participating Preferred Stock, par value $1.00 per share, and other
additional consideration as provided in the Recap Letter Agreement (the “Exchange
Transaction”);



     B. As a condition precedent to the consummation of the Exchange Transaction, the Company and
the Initial Holders have entered into that certain Registration Rights Agreement (the “Initial
Agreement”), dated April 30, 2005, and effective as of the date of the date of the consummation
of the Exchange Transaction (the “Effective Date”);



     C. The Company has agreed to exchange up to $13.2 million aggregate principal amount of its
outstanding 8% Subordinated Secured Notes due March 31, 2010 (“Subordinated Notes”) for
Subordinated Convertible Notes due March 31, 2010 (“Subordinated Convertible Notes”) and
Common Stock;



     D. Concurrently, the Company is selling shares of its Common Stock as described herein in a
private placement with proceeds to the Company of approximately $20 million (the “Private
Placement”).



     E. In order to induce the holders of the Subordinated Notes to exchange their Subordinated
Notes for Subordinated Convertible Notes, the Company desires to amend and restate the Initial
Agreement to provide for the registration of the Subordinated Note Conversion Shares (as defined
below) issuable upon conversion of the Subordinated Convertible Notes.



     NOW, THEREFORE, in consideration of the recitals, and the mutual covenants hereinafter set
forth, the parties, intending to be legally bound, hereby agree as follows:



                         SECTION 1. Definitions.



          (a) Defined Terms. The following terms (whether or not underscored) when used in this
Agreement, including its preamble and recitals, shall, except where the context

 









 








otherwise requires, have the following meanings (such meanings to be equally applicable to the
singular and plural forms thereof):




     “Agreement” means this Registration Rights Agreement as in effect on the date hereof
and as hereafter amended, supplemented, restated or otherwise modified.



     “Available Securities” is defined in Section 2(b).



     “Business Day” means any day which is neither a Saturday, a Sunday nor a legal holiday
on which banks are authorized or required to be closed in New York, New York.



     “Common Stock” means the Common Stock, par value $.00001 per share, of the Company.



     “Company” is defined in the preamble to this Agreement.



     “Conversion Share Registration Period” is defined in Section 2(a).



     “Conversion Share Shelf Registration” is defined in Section 2(a).



     “Conversion Shares” means the shares of Common Stock or any other securities which a
Holder may acquire upon conversion of Series B Preferred Shares, together with any other securities
which a Holder may acquire on account of any Conversion Shares whether upon the making or paying of
any dividend or other distribution on Conversion Shares, upon any split up of Conversion Shares,
upon a recapitalization, merger, consolidation, share exchange, reorganization or other transaction
or series of related transactions in which Conversion Shares are changed into or exchanged for
securities of another corporation, upon exercise of any preemptive right (or the exercise or
conversion of any security which such Holder may acquire in connection with the exercise of any
preemptive right) with respect to any Conversion Shares or otherwise.



     “Effective Date” is defined in the Recitals.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time.



     “Exchange Transaction” is defined in the Recitals.



     “Holders” means, collectively, the registered holders (including, initially, the
Initial Holders), from time to time, of Securities. Whenever the phrase “Holder of Registrable
Securities” or any similar phrase is used herein, it shall also include any holders of the Series B
Preferred Shares and the Subordinated Convertible Notes.



     “Indemnified Person” is defined in Section 5(a).



     “Indemnifying Person” is defined in Section 5(c).



     “Initial Agreement” is defined in the Recitals.



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     “Initial Holders” is defined in the preamble to this Agreement.



     “Initial Registration Period” is defined in Section 2(a).



     “Initial Request” is defined in Section 2(a).



     “Initial Requesting Holders” is defined in Section 2(a).



     “Initial Shares” means the 60,000,000 shares of Common Stock issued to the Initial
Holders in the Exchange Transaction, together with any other securities which a Holder may acquire
on account of any Initial Shares whether upon the making or paying of any dividend or other
distribution on Initial Shares, upon any split up of Initial Shares, upon a recapitalization,
merger, consolidation, share exchange, reorganization or other transaction or series of related
transactions in which Initial Shares are changed into or exchanged for securities of another
corporation, upon exercise of any preemptive right (or the exercise or conversion of any security
which such Holder may acquire in connection with the exercise of any preemptive right) with respect
to any Initial Shares or otherwise.



     “Initial Shelf Registration” is defined in Section 2(a).



     “NASD” means the National Association of Securities Dealers, Inc.



     “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.



     “Private Placement Shares” shall mean the shares of Common Stock sold in the Private
Placement.



     “Prospectus” means each prospectus included as part of any Registration Statement, as
amended or supplemented, including each preliminary prospectus and all material incorporated by
reference in such prospectus.



     “Recap Letter Agreement” is defined in the Recitals.



     “Registrable Securities” means the Shares, but excluding (i) Shares that have been
disposed of under a Registration Statement or any other effective registration statement, including
in a transaction contemplated by Section 8, and (ii) Shares sold pursuant to Rule 144 under the
Securities Act. A Person is deemed to be a holder of Registrable Securities whenever such Person
owns Registrable Securities or has the right to acquire such Registrable Securities whether or not
such acquisition has actually been effected and disregarding any legal or contractual restrictions
upon the exercise of such right.



     “Registration Expenses” is defined in Section 3(c).



     “Registration Period” means the Conversion Share Registration Period or the Initial
Registration Period.



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     “Registration Request” is defined in Section 2(b).



     “Registration Statement” means any registration statement of the Company which covers
Registrable Securities pursuant to Section 2 of this Agreement, including the Prospectus,
amendments (including post-effective amendments) and supplements to such registration statement and
Prospectus and all exhibits and all material incorporated by reference in such registration
statement.



     “Required Holders” means the Holders of Registrable Securities representing (or Series
B Preferred Shares and Subordinated Convertible Notes which when fully converted would represent)
at least two-thirds of the voting power of all Shares (assuming all Series B Preferred Shares and
Subordinated Convertible Notes had been fully converted into Conversion Shares and Subordinated
Note Conversion Shares, respectively).



     “SEC” means the United States Securities and Exchange Commission.



     “Secondary Request” is defined in Section 2(a).



     “Securities” means, collectively, the Series B Preferred Shares, the Subordinated
Convertible Notes, and the Registrable Securities.



     “Securities Act” means the Securities Act of 1933, as amended from time to time.



     “Series B Preferred Shares” means the 1,000,000 shares of Series B Preferred Stock
issued to the Initial Holders in the Exchange Transaction, together with any other securities which
a Holder may acquire on account of any Series B Preferred Shares whether upon the making or paying
of any dividend or other distribution on Series B Preferred Shares, upon any split up of Series B
Preferred Shares, upon a recapitalization, merger, consolidation, share exchange, reorganization or
other transaction or series of related transactions in which Series B Preferred Shares are changed
into or exchanged for securities of another corporation, upon exercise of any preemptive right (or
the exercise or conversion of any security which such Holder may acquire in connection with the
exercise of any preemptive right) with respect to any Series B Preferred Shares or otherwise.



     “Series B Preferred Stock” means the Series B Mandatorily Convertible Redeemable
Preferred Stock, par value $1.00 per share, of the Company.



     “Shares” means the Initial Shares, the Conversion Shares, the Private Placement Shares
and the Subordinated Note Conversion Shares.



     “Shelf Registration” is defined in Section 2(a).



     “Specified Registrable Securities” is defined in Section 2(a).



     “Stock” means any capital stock of the Company.



     “Subordinated Convertible Notes” is defined in the Recitals.



4









 





     “Subordinated Note Conversion Shares” means the shares of Common Stock or any other
securities which a Holder may acquire upon exchange of Subordinated Notes or conversion of
Subordinated Convertible Notes, together with any other securities which a Holder may acquire on
account of any Subordinated Note Conversion Shares whether upon the making or paying of any
dividend or other distribution on Subordinated Note Conversion Shares, upon any split up of
Subordinated Note Conversion Shares, upon a recapitalization, merger, consolidation, share
exchange, reorganization or other transaction or series of related transactions in which
Subordinated Note Conversion Shares are changed into or exchanged for securities of another
corporation, upon exercise of any preemptive right (or the exercise or conversion of any security
which such Holder may acquire in connection with the exercise of any preemptive right) with respect
to any Subordinated Note Conversion Shares or otherwise.



     “Subordinated Notes” is defined in the Recitals.



     “Subsequent Registration Period” is defined in Section 2(c)(iv).



     “Subsequent Shelf Registration” is defined in Section 2(c)(iv).



          (b) Cross-References; Headings. Unless otherwise specified, references in this
Agreement to any Article or Section are references to such Article or Section of this Agreement,
and unless otherwise specified, references in any Article, Section or definition to any clause are
references to such clause of such Section, Article or definition. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. The term “or” shall have the inclusive meaning of the term
“and/or.”




                         SECTION 2. Registration of Securities by the Company.



          (a) Shelf Registration. As expeditiously as practicable after the Effective Date, but
in no event later than 60 days thereafter, the Company will file a “shelf” registration statement
on Form S-1 or S-3 (or on any other form for general registration of securities) unless the use of
a different form has been agreed upon in writing by the Company and the Required Holders for an
offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (or any
similar rule that may be adopted by the SEC) covering the Registrable Securities that are Initial
Shares (the “Initial Shelf Registration”).




     The Company shall use its best efforts to have the Initial Shelf Registration declared
effective no later than 120 days after the Initial Shelf Registration is filed with the SEC and to
keep the Initial Shelf Registration continuously effective until such date that all Initial Shares
have been sold pursuant to the Initial Shelf Registration (such period hereinafter referred to as
the “Initial Registration Period”).



     As expeditiously as practicable after the conversion of the Series B Preferred Stock into the
Conversion Shares, but in no event later than 30 days thereafter, the Company will file a “shelf”
registration statement on Form S-1 or S-3 (or on any other form for the general registration of
securities) unless the use of a different form has been agreed upon in writing by the Company and
the Required Holders for an offering to be made on a continuous basis pursuant to Rule 415 under
the Securities Act (or any similar rule that may be adopted by the



5









 




SEC) covering all Registrable Securities that are Conversion Shares, Subordinated Note
Conversion Shares and Private Placement Shares (a “Conversion Share Shelf Registration” and
the Conversion Share Shelf Registration and the Initial Shelf Registration are hereinafter referred
to as a “Shelf Registration”). The Company shall use its best efforts to have the
Conversion Share Shelf Registration declared effective no later than 120 days after such Conversion
Share Shelf Registration is filed with the SEC and to keep it continuously effective until such
date that all Conversion Shares, Subordinated Note Conversion Shares and Private Placement Shares
have been sold pursuant to the Conversion Share Shelf Registration (such period hereinafter
referred to as a “Conversion Share Registration Period”). The Company shall not include or
permit any other party to include any securities other than Registrable Securities in any Shelf
Registration without the written consent of the Required Holders.




     If any Registrable Securities are to be sold in a firm commitment underwritten offering and if
the managing underwriter or underwriters shall advise the Company and the holders of such
Registrable Securities in writing that in their opinion the amount of Registrable Securities
requested to be included in such registration exceeds the amount of securities which can be
included in such offering without materially adversely affecting the success of such offering,
there shall be included in such firm commitment underwritten offering the amount of Registrable
Securities which in the opinion of such underwriter or underwriters can be sold, and such
Registrable Securities shall be allocated pro rata among the holders of such
Registrable Securities on the basis of the amount of Registrable Securities requested to be
included in such registration statement by such holders and the amount of Registrable Securities
which in the opinion of such underwriter or underwriters can be sold. If any Registrable
Securities covered by a Shelf Registration are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will administer the offering
will be selected by the Company and shall be reasonably acceptable to holders of a majority of such
Registrable Securities included in such offering.



     The Company agrees to supplement or make amendments to each Shelf Registration, if required by
the registration form utilized by the Company for such Shelf Registration or by the instructions
applicable to such registration form or by the Securities Act or the rules and regulations
thereunder or if reasonably requested by the holders of (or any underwriter for) a majority in
aggregate amount of Registrable Securities to which such Shelf Registration relates, and the
Company agrees to furnish to such holders copies of any such supplement or amendment prior to its
being used or filed with the SEC.



     If the Company has filed a “shelf” Registration Statement on Form S-1 (or on any other form
for the general registration of securities) pursuant to this Section 2(a) because Form S-3 was not
available for use by the Company at the time of such filing, the Company shall undertake to cause
the Registration Statement for the Shelf Registration to be on Form S-3 as soon as such form is
available for use by the Company to register the Registrable Securities for an offering to be made
on a continuous basis pursuant to Rule 415 under the Securities Act (including by filing a
post-effective amendment on Form S-3 to the then existing Shelf Registration), and, to the extent
the Company seeks to cause the Registration Statement for the Shelf Registration to be on Form S-3
by filing a new Shelf Registration, the Company shall maintain the effectiveness of the Shelf
Registration then in effect until such time as such Shelf Registration on Form S-3 has been
declared effective by the SEC.



6









 





          (b) Piggyback Registration. If at any time or from time to time the Company shall
propose to file on its behalf or on behalf of any of its security holders a registration statement
under the Securities Act on Form S-1 or S-3 (or on any other form for the general registration of
securities) with respect to any shares of Common Stock (other than pursuant to Section 2(a)), the
Company shall in each case:





               (i) promptly give written notice to each Holder at least thirty (30) days before the
anticipated filing date, indicating the proposed offering price and describing the plan of
distribution;




               (ii) include in such registration (and any related qualification under blue sky or
other state securities laws or other compliance) and, at the request of any Holder, in any
underwriting involved therein, all the Registrable Securities specified by any Holder or
Holders of Registrable Securities (the “Specified Registrable Securities”) in a
written request (the “Registration Request”) delivered to the Company within twenty
(20) days after receipt of such written notice from the Company; and




               (iii) if such offering is proposed to be underwritten, use its best efforts to cause
the managing underwriter(s) of such proposed underwritten offering to permit the Specified
Registrable Securities to be included in the Registration Statement for such offering on the
same terms and conditions as any similar securities of the Company included therein.


Notwithstanding the foregoing, if the managing underwriter(s) of such an underwritten offering
advise(s) the Holders of Specified Registrable Securities in writing that marketing considerations
require a limitation on the securities, other than the securities the Company intends to sell, to
be included in any Registration Statement filed under this Section 2(b) to a certain number of
shares (the “Available Securities”), then the Company shall in such case be obligated to
such Holders only with respect to such number of Available Securities. The limitation on the
number of Specified Registrable Securities will be imposed pro rata (based upon the ratio of the
number of shares of Specified Registrable Securities which the managing underwriter(s) propose(s)
to include at the anticipated offering price to the number of Specified Registrable Securities
requested to be included in such registration by each Holder) among all Holders of Specified
Registrable Securities.




     Each Registration Request shall set forth the number or amount of Specified Registrable
Securities. Except as provided by Section 2(a), notwithstanding any other provision of this
Agreement to the contrary, neither the delivery of any notice by the Company pursuant to this
Section 2(b)(i) nor of any Registration Request by any Holder pursuant to this Section 2(b)(ii)
shall in any way obligate the Company to file a Registration Statement and, notwithstanding such
filing, the Company may, at any time prior to the effective date thereof, in its sole discretion,
determine not to offer the securities to which the Registration Statement relates without liability
to any of the Holders. No registration of Registrable Securities effected under this Section 2(b)
shall relieve the Company of its obligation to effect the registration of Registrable Securities
pursuant to Section 2(a).



7









 





          (c) Registration Procedures. If and when the Company shall be required by the
provisions of this Section 2 to effect the registration of Registrable Securities under the
Securities Act, the Company will use its best efforts to effect such registration to permit the
sale of such Registrable Securities in accordance with the intended method or methods of
disposition thereof and in accordance with Section 2(a) or 2(b), as applicable, and pursuant
thereto the Company will, as expeditiously as possible:





               (i) before filing with the SEC a Registration Statement or Prospectus or any amendments
or supplements thereto, furnish to the Holders of the Registrable Securities covered by such
Registration Statement and the underwriter(s), if any, copies of all such documents proposed
to be filed, which documents will be made available, on a timely basis, for review by such
Holders and underwriters;




               (ii) prepare and, as expeditiously as possible but in any event within the applicable
periods specified in Section 2(a), file with the SEC a Registration Statement and Prospectus
covering such Registrable Securities; prepare and file such amendments and post-effective
amendments to any Registration Statement, and such supplements to the Prospectus, as may be
reasonably requested by any Holder of Registrable Securities or the managing underwriter(s),
if any, or as may be required by the Securities Act, the Exchange Act or by the rules,
regulations or instructions applicable to the registration form utilized by the Company or
as may otherwise be necessary to cause such Registration Statement to become effective or to
keep such Registration Statement effective until such time as all of the Registrable
Securities covered by such Registration Statement have been disposed of in accordance with
the intended method or methods of disposition set forth in such Registration Statement or
Prospectus; and cause the Prospectus as so supplemented to be filed pursuant to Rule 424 (or
any successor rule) under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the intended method
or methods of disposition by the Holders thereof set forth in such Registration Statement or
Prospectus;




               (iii) promptly notify the selling Holders of Registrable Securities and the managing
underwriter(s), if any, and if requested by any such Person, confirm such advice in writing:




             (a) of the filing of the Prospectus or any supplement to the Prospectus
and of the effectiveness of any Registration Statement and/or any
post-effective amendment,




             (b) of any request by the SEC for amendments or supplements to such
Registration Statement or the Prospectus or for additional information,




             (c) of the issuance by the SEC of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose,



8









 






             (d) of the Company’s becoming aware at any time that the
representations and warranties of the Company contemplated by Section
2(c)(xiv)(a) have ceased to be true and correct,




             (e) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities for sale
in any jurisdiction or the initiation or threat of any proceeding for such
purpose, and




             (f) of the existence of any fact which, to the knowledge of the
Company, results in the Registration Statement, the Prospectus or any
document incorporated therein by reference containing an untrue statement of
material fact or omitting to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,




               (iv) make every reasonable effort to obtain the withdrawal of any order suspending the
effectiveness of any Registration Statement, and if such withdrawal is not obtained within
30 days of the suspension of the effectiveness of such Registration Statement, the Company
shall (A) as expeditiously as practicable cause to be filed an additional “shelf”
registration statement pursuant to Rule 415 under the Securities Act (and/or any similar
rule that may be adopted by the SEC) with respect to the Registrable Securities registered
under such Registration Statement (the “Subsequent Shelf Registration”), and (B) use
its best efforts to have the Subsequent Shelf Registration declared effective as soon as
practicable after such filing and to keep the Subsequent Shelf Registration continuously
effective until such date that all Registrable Securities registered thereunder have been
sold pursuant to the Subsequent Shelf Registration (as used herein the term
“Registration Statement” and “Shelf Registration” includes any Subsequent
Shelf Registrations);




               (v) make every reasonable effort to obtain any qualification referred to in Section
2(c)(iii)(e) at the earliest possible moment;




               (vi) if reasonably requested by the managing underwriter(s) or the Required Holders of
the Registrable Securities being sold in connection with an underwritten offering,
immediately incorporate in a supplement to the Prospectus or post-effective amendment to the
Registration Statement such information as the managing underwriter(s) or the Required
Holders of the Registrable Securities being sold reasonably request to have included therein
relating to the plan of distribution with respect to such Registrable Securities, including,
without limitation, information with respect to the amount of Registrable Securities being
sold to such underwriters, the purchase price being paid therefor by such underwriters and
any other terms of the underwritten offering of the Registrable Securities to be sold in
such offering; and make all required filings of such supplement to the Prospectus or post
effective amendment to the Registration Statement as soon as notified of the matters to be
incorporated in such supplement to the Prospectus or post-effective amendment to the
Registration Statement;



9









 






               (vii) at the request of any selling Holder of Registrable Securities, furnish to such
selling Holder of Registrable Securities and the managing underwriter(s), if any, without
charge, at least one signed copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, all documents incorporated
therein by reference and all exhibits thereto (including those incorporated by reference);




               (viii) deliver to each selling Holder of Registrable Securities and the managing
underwriter(s), if any, without charge, as many copies of the Registration Statement, each
Prospectus (including each preliminary prospectus) and any amendment or supplement thereto
(in each case including all exhibits), as such Persons may reasonably request, together with
all documents incorporated by reference in such Registration Statement or Prospectus, and
such other documents as such selling Holder may reasonably request in order to facilitate
the disposition of its Registrable Securities covered by such Registration Statement; the
Company consents to the use of each Prospectus and any supplement thereto by each of the
selling Holders of Registrable Securities and the managing underwriter(s), if any, in
connection with the offering and sale of the Registrable Securities covered by each
Prospectus or any amendment or supplement thereto;




               (ix) prior to any public offering of Registrable Securities, register or qualify or
reasonably cooperate with the selling Holders of Registrable Securities, the managing
underwriter(s), if any, and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the securities or
blue sky laws of such jurisdictions as any selling Holder or managing underwriter(s)
reasonably request(s), to keep such registration or qualification in effect for so long as
such registration remains in effect, and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable Securities
covered by the Registration Statement, except that the Company shall not be required to
register or qualify such Registrable Securities under such other securities or blue sky laws
if it is required to (A) qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not otherwise be required to qualify but for the requirements
of this paragraph (viii), (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction;




               (x) cooperate with the selling Holders of Registrable Securities and the managing
underwriter(s), if any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any legends restricting the
transfer thereof; and enable such Registrable Securities to be in such denominations and
registered in such names as the managing underwriters may request at least two Business Days
prior to any sale of Registrable Securities to the underwriters;




               (xi) use its best efforts to cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such United States, state and
local governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof or the underwriters, if any, to consummate the disposition of such
Registrable Securities;



10









 






               (xii) if any fact contemplated by Section 2(c)(iii)(b) or Section 2(c)(iii)(f) above
shall exist, promptly notify each Holder on whose behalf Registrable Securities have been
registered and promptly prepare and furnish to such Holders a supplement or post-effective
amendment to the Registration Statement or the related Prospectus or any document
incorporated therein by reference and promptly file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities, neither the
Registration Statement nor the Prospectus will contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make
the statements therein not misleading; provided; however, that if the Company shall
furnish to the Requesting Holders a certificate signed by the Company’s Chairman of the
Board stating that in his good faith judgment such actions would be detrimental or otherwise
disadvantageous to the Company or its stockholders, the Company may delay such actions for
as short a period as reasonably necessary to remove such detrimental condition, not to
exceed 30 days in any instance.




               (xiii) cause all Registrable Securities covered by the Registration Statement to be (A)
listed on each securities exchange on which securities of the same class are then listed or
(B) admitted for trading in any inter-dealer quotation system on which securities of the
same class are then traded;




               (xiv) not later than the effective date of the applicable Registration Statement,
provide a CUSIP number for all Registrable Securities covered by the Registration Statement
and provide the applicable transfer agent with printed certificates for such Registrable
Securities which are in a form eligible for deposit with The Depository Trust Company;




               (xv) enter into customary agreements (including underwriting agreements) and take all
other reasonable actions in order to expedite or facilitate the disposition of such
Registrable Securities; and in such connection, except as otherwise provided:




             (a) in an underwritten offering, make such representations and
warranties to the Holders selling such Registrable Securities and the
underwriters, in form, substance and scope as are customarily made by
issuers to selling securityholders and underwriters in similar underwritten
offerings;




             (b) obtain opinions of counsel to the Company and updates thereof
addressed to each selling Holder and the underwriters, if any, covering the
matters customarily covered in opinions requested in similar underwritten
offerings and such other matters as may be reasonably requested by such
Holders and underwriters, which counsel and opinions shall be reasonably
satisfactory (in form, scope and substance) to the managing underwriters, if
any, and the Required Holders of the Registrable Securities being sold;



11









 






             (c) in connection with any underwritten offering, obtain so called
“cold comfort” letters and updates thereof from the Company’s independent
certified public accountants addressed to the selling Holders of Registrable
Securities and the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in “cold comfort” letters
to underwriters in connection with similar underwritten offerings;




             (d) if an underwriting agreement is entered into, cause the same to
include indemnification and contribution provisions and procedures
substantially similar to those set forth in Section 5, subject to revisions
the underwriters shall reasonably request, with respect to all parties to be
indemnified pursuant to said Section 5; and




             (e) deliver such documents and certificates as may reasonably be
requested by the Required Holders of the Registrable Securities being sold,
or the managing underwriter(s), if any, to evidence compliance with this
paragraph (xiv) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company;




the foregoing to be done upon each closing under any underwriting or similar agreement as
and to the extent required thereunder and from time to time as may reasonably be requested
by any selling Holder of Registrable Securities in connection with the disposition of
Registrable Securities pursuant to such Registration Statement, all in a manner consistent
with customary industry practice;




               (xvi) upon execution and delivery of such confidentiality agreements as the Company may
reasonably request, make available to the Holders of the Registrable Securities being sold,
any underwriter participating in any disposition pursuant to such Registration Statement,
and any attorney or accountant retained by such Holders or underwriter, all financial and
other records, pertinent corporate documents and properties of the Company, and cause the
Company’s officers, directors and employees to supply all information reasonably requested
by any such Holder, underwriter, attorney or accountant in connection with the registration,
at such time or times as the Person requesting such information shall reasonably determine;




               (xvii) otherwise use its best efforts to comply with the Securities Act, the Exchange
Act, all applicable rules and regulations of the SEC and all applicable state blue sky and
other securities laws, rules and regulations, and make generally available to its security
holders an earnings statement satisfying the provisions of Section 11(a) of the Securities
Act, as soon as practicable, but in no event later than thirty (30) days after the end of
the 12 calendar month period commencing after the effective date of the Registration
Statement;




               (xviii) cooperate and assist in any filings required to be made with the NASD and in
the performance of any due diligence investigation by any underwriter; and



12









 






               (xix) prior to the filing of any document which is being prepared for incorporation by
reference into the Registration Statement or the Prospectus (other than a Registration
Statement or Prospectus relating to a “shelf” offering) , upon receipt of such
confidentiality agreements as the Company may reasonably request, provide copies of such
document to counsel to the selling Holders of Registrable Securities, and to the managing
underwriter(s), if any, and make the Company’s representatives available for discussion of
such document.



          (d) Restrictions on Public Sale by Holder of Registrable Securities. If any of the
Registrable Securities registered pursuant to a Shelf Registration are to be sold in a firm
commitment underwritten offering, each holder of Registrable Securities whose Registrable
Securities are covered by the Shelf Registration filed pursuant to Section 2(a) and who has been
given the opportunity (subject to the fifth paragraph of Section 2(a)) to participate in such
offering at least 10 Business Days in advance of the commencement of such offering agrees, if
requested by the managing underwriter or underwriters in such underwritten offering, not to effect
any public sale or distribution of any of the Company’s securities, including a sale pursuant to
Rule 144 under the Securities Act (except as part of such offering) during the 10-day period prior
to, and during the 60-day period beginning on, the closing date of such offering made pursuant to
such Shelf Registration, to the extent timely notified in writing by the Company or the managing
underwriter or underwriters. In addition, if any registration of Common Stock to be sold on the
behalf of the Company shall be in connection with an underwritten public offering and is subject to
Section 2(b) (and the Company has complied with Section 2(b) in respect thereof) and such
registration is approved by the Required Holders, any Holder of Registrable Securities representing
more than 5% of the outstanding Common Stock shall (i) not effect any public sale or distribution
of any of the Company’s securities, including a sale pursuant to Rule 144 under the Securities Act
(except as part of such offering) during the 10-day period prior to, and during the 90-day period
beginning on, the closing date of the sale of the Common Stock pursuant to an effective
registration statement, to the extent timely notified in writing by the Company or the managing
underwriter or underwriters of such underwritten public offering, and (ii) execute a “lock-up”
letter with any of such underwriters agreeing to not effect any such public sale or distribution.




          (e) Restrictions on Registration by the Company and Others. If any of the Registrable
Securities registered pursuant to a Shelf Registration are to be sold in a firm commitment
underwritten offering, during the 10-day period prior to, and during the 90-day period beginning
on, the closing date of such offering, the Company will not effect any other registration of its
Common Stock (or any securities convertible into or exchangeable or exercisable for its Common
Stock), whether for its own account or that of any other security holder.




                         SECTION 3. Registration Expenses.



          (a) All expenses incident to the Company’s performance of or compliance with its obligations
under this Agreement (excluding underwriting discounts, selling commissions and brokerage fees,
which will be paid by the selling Holders) will be paid by the Company, regardless of whether
Registrable Securities are sold pursuant to any Registration Statement, including, without
limitation:




13









 









               (i) all registration, filing and listing fees;




               (ii) fees and expenses of compliance with securities or blue sky laws (including,
without limitation, the fees and disbursements of counsel for the underwriters, if any, or
selling Holders in connection with blue sky and state securities qualifications of
Registrable Securities and determination of their eligibility for investment under the laws
of such jurisdictions as the managing underwriter(s), if any, or the Required Holders of the
Registrable Securities covered by such Registration Statement may reasonably designate);




               (iii) printing (including, without limitation, expenses of printing or engraving
certificates for the Registrable Securities in a form eligible for deposit with The
Depository Trust Company and of printing prospectuses), word processing, duplicating,
messenger, telephone and delivery expenses;




               (iv) fees and disbursements of counsel for the Company and, subject to Section
3(b), counsel for the selling Holders of the Registrable Securities;




               (v) fees and disbursements of all independent certified public accountants of the
Company or any other Persons for which financial statements are required or otherwise
included in such Registration Statement (including, without limitation, the expenses of any
special audit and, in connection with any underwritten offering, “cold comfort” letters
required by or incident to such performance);




               (vi) fees and expenses of other Persons (including special experts) retained by the
Company; and




               (vii) fees and expenses associated with any NASD filing required to be made in
connection with any Registration Statement.



     The Company will, in any event, pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or accounting duties), the
expense of any annual audit, the fees and expenses incurred in connection with the listing of the
securities to be registered on each securities exchange on which securities of the same class are
then listed or the admission for trading of the securities to be registered in each inter-dealer
quotation system on which securities of the same class are then traded, and rating agency fees.



          (b) In connection with each Registration Statement required hereunder, the Company will
reimburse the Holders of Registrable Securities being registered pursuant to such Registration
Statement for the reasonable fees and disbursements of not more than one counsel at any one time
(or more than one counsel if a conflict exists among such Holders in the exercise of the reasonable
judgment of counsel for such Holders and the Company) chosen by the Required Holders of the
Registrable Securities being sold; the expense of any additional counsel for the Holders shall be
paid by the Holders.




          (c) The term “Registration Expenses” shall mean the expenses payable by the Company
pursuant to the provisions of this Section 3.




14









 








                         SECTION 4. Conditions to Registration.



     Each Holder’s right to have Registrable Securities included in any Registration Statement
filed by the Company in accordance with the provisions of Section 2 shall be subject to the
following conditions:



          (a) The Holders on whose behalf such Registrable Securities are to be included shall be
required to furnish the Company in a timely manner with all information and undertakings required
by the applicable rules and regulations of the SEC or applicable state blue sky and other
securities laws, rules or regulations concerning the proposed method or methods of disposition of
such securities, the identity of and compensation to be paid to any proposed underwriters to be
employed in connection therewith, and such other information or undertakings as may be reasonably
required by the Company properly to prepare and file such Registration Statement in accordance with
applicable provisions of the Securities Act and to register and qualify such Registrable Securities
for offer and sale under all applicable state blue sky and other securities laws, rules or
regulations;




          (b) If any such Holder desires to sell and distribute Registrable Securities over a period of
time, or from time to time, at then prevailing market prices, then any such Holder shall execute
and deliver to the Company such written undertakings as the Company and its counsel may reasonably
require in order to assure full compliance with relevant provisions of the Securities Act and the
Exchange Act and all applicable state blue sky and other securities laws, rules or regulations;




          (c) In the case of any registration requested pursuant to the provisions of Section 2(b), the
offering price for any Registrable Securities to be so registered shall be no less than for any
securities of the same class then to be registered for sale for the account of the Company or other
security holders, unless such Registrable Securities are to be offered from time to time based on
the prevailing market price; and




          (d) In the case of any underwritten offering on behalf of the Holders of Registrable
Securities, such Holders will enter into such agreements (including underwriting agreements and
lock-up agreements) as the managing underwriters shall reasonably request and as are customary in
similar circumstances, provided, however, that no such agreements shall require any Holder
to make any representations or warranties to, or agreements with, the Company or the underwriters
other than representations, warranties or agreements regarding such Holder, the ownership of such
Holder’s Registrable Securities and such Holder’s intended method of distribution.




                         SECTION 5. Indemnification.



          (a) Indemnification by the Company. In the event of the registration of any
Registrable Securities under the Securities Act pursuant to the provisions hereof, the Company will
indemnify and hold harmless each seller of such Registrable Securities, its partners, directors,
officers, employees and agents, each underwriter, broker and dealer, if any, who participates in
the offering or sale of such securities, and each other Person, if any, who controls such seller or
any such underwriter, broker or dealer within the meaning of either Section 15 of

15









 








the Securities Act or Section 20 of the Exchange Act (each such Person being hereinafter
sometimes referred to as an “Indemnified Person,” provided, however, that for
purposes of clauses (b), (c) and (d) of this Section 5, “Indemnified Person” shall also
include the Company, its partners, directors, officers, employees and agents, and each other
Person, if any, who controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act) from and against any losses, claims, damages, liabilities or
expenses, joint or several, to which such Indemnified Person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained or incorporated by reference in any
Registration Statement or Prospectus or any amendment or supplement thereto or any document
incorporated by reference therein, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each such Indemnified Person for any legal or
other expenses reasonably incurred by such Indemnified Person in connection with investigating or
defending any such loss, claim, damage, liability, expense or action; provided,
however, that the Company will not be liable in any such case to the extent that any such
loss, claim, damage, liability, expense or action (i) arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made or incorporated by
reference in the Registration Statement or Prospectus or any amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the Company by such
Indemnified Person specifically stating it is for use in preparation thereof or (ii) arises out of
the use of any Prospectus by an Indemnified Party after the Company has provided such Indemnified
Party with the notice and supplement referred to in Section 2(c)(xi) if such Prospectus is the
subject of such notice. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Person and shall survive the transfer of
such Registrable Securities by such seller.




          (b) Indemnification by Holders of Registrable Securities. In the event of the
registration of any Registrable Securities under the Securities Act pursuant to the provisions
hereof, each Holder on whose behalf such Registrable Securities shall have been registered will
indemnify and hold harmless each and every Indemnified Person against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Indemnified Person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained or incorporated by reference in
any Registration Statement or Prospectus or any amendment or supplement thereto or any document
incorporated by reference therein, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or alleged untrue statement or omission
or alleged omission has been made or incorporated therein in reliance upon and in conformity with
written information furnished to the Company by such Holder specifically stating that it is for use
in preparation thereof, and will reimburse each such Indemnified Person for any legal or other
expenses reasonably incurred by such Indemnified Person in connection with investigating or
defending any such loss, claim, damage, liability, expense or action; provided,
however, that the liability of each Holder hereunder shall be limited

16









 








to the proceeds received by such Holder from the sale of Registrable Securities covered by
such Registration Statement.




          (c) Procedure. Promptly after receipt by an Indemnified Person of notice of the
commencement of any action (including any governmental investigation or inquiry), such Indemnified
Person will, if such Indemnified Person intends to make a claim in respect thereof against the
party agreeing to indemnify such Indemnified Person pursuant to paragraph (a) or (b) hereof (each
such Person being hereinafter referred to as an “Indemnifying Person”), give written notice
to such Indemnifying Person of the commencement thereof, but the omission so to notify the
Indemnifying Person shall not relieve the Indemnifying Person from any of its obligations pursuant
to the provisions of this Section 5 except to the extent that the Indemnifying Person is actually
prejudiced by such failure to give notice. In case any such action is brought against any
Indemnified Person and it notifies an Indemnifying Person of the commencement thereof, the
Indemnifying Person shall be entitled to participate in, and to the extent that it may wish,
jointly with any other Indemnifying Person similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Person, and after notice from the Indemnifying
Person to such Indemnified Person, the Indemnifying Person shall not, except as hereinafter
provided, be responsible for any legal or other expenses subsequently incurred by such Indemnified
Person in connection with the defense thereof. No Indemnifying Person will consent to entry of any
judgment or enter into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Person of a release from all liability in
respect of such claim or litigation.




     Such Indemnified Person shall have the right to employ separate counsel in any such action and
to participate in the defense thereof, but the fees and expenses of such counsel shall be the
expense of such Indemnified Person unless (i) the Indemnifying Person has agreed to pay such fees
and expenses or (ii) the Indemnifying Person shall have failed to assume the defense of such action
or proceeding or has failed to employ counsel reasonably satisfactory to such Indemnified Person in
any such action or proceeding or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both such Indemnified Person and the Indemnifying Person
and such Indemnified Person shall have been advised by counsel that representation of both parties
by the same counsel would be inappropriate due to actual or potential material differing interests
between them (in which case, if such Indemnified Person notifies the Indemnifying Person in writing
that it elects to employ separate counsel at the expense of the Indemnifying Person, the
Indemnifying Person shall not have the right to assume the defense of such action or proceeding on
behalf of such Indemnified Person). The Indemnifying Person shall not be liable for any settlement
of any such action or proceeding effected without its written consent, which consent shall not
unreasonably be withheld, delayed or conditioned, but if settled with its written consent, or if
there is a final judgment for the plaintiff in any such action or proceeding, the Indemnifying
Person agrees to indemnify and hold harmless such Indemnified Persons from and against any loss or
liability by reason of such settlement or judgment.



          (d) Contribution. To the extent that the indemnification provided for in this Section
5 is unavailable to a party that would have been an Indemnified Person under this Section 5 in
respect of any losses, claims, damages, liabilities or expenses (or actions in respect thereof)
referred to herein, then each party that would have been an Indemnifying Person

17









 








thereunder shall, in lieu of indemnifying such Indemnified Person, contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Person on the one hand and the Indemnified Person on the other
in connection with the statement or omission which resulted in such losses, claims, damages,
liabilities or expenses (or actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission of a material fact relates to information supplied by the Indemnifying Person or the
Indemnified Person and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses referred to above shall
be deemed to include, subject to the limitations set forth in Section 5(c), any legal or other fees
or expenses reasonably incurred by such party in connection with the investigation or defense of
any action or claim. The Company and each Holder of Registrable Securities agrees that it would
not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation which does not take account of the equitable
considerations referred to in this Section 5. Notwithstanding the provisions of this Section 5(d),
no Holder of Registrable Securities shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities sold by it exceeds the amount
of any damages which such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.




     No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.



     Indemnification or, if appropriate, contribution, similar to that specified in the preceding
provisions of this Section 5 (with appropriate modifications) shall be given by the Company and
each seller of Registrable Securities with respect to any required registration or other
qualification of such securities under any federal or state law or regulation or governmental
authority other than the Securities Act.



     In the event of any underwritten offering of Registrable Securities under the Securities Act
pursuant to the provisions of Section 2, the Company and each Holder on whose behalf such
Registrable Securities shall have been registered agree to enter into an underwriting agreement, in
customary form, with the underwriters, which underwriting agreement may contain additional
provisions with respect to indemnification and contribution in lieu thereof.



                         SECTION 6. Exchange Act Registration; Rule 144 Reporting.



     The Company covenants and agrees that until such time as the Holders no longer hold any
Registrable Securities it will:



          (a) if required by law, maintain an effective registration statement (containing such
information and documents as the SEC shall specify) with respect to the Common Stock of the Company
under Section 12(g) of the Exchange Act;




18









 








          (b) make and keep public information available, as those terms are understood and defined in
Rule 144 under the Securities Act, even if the Company subsequently ceases to be subject to the
reporting requirements of the Exchange Act;




          (c) file with the SEC in a timely manner all reports and documents required of the Company
under the Securities Act and the Exchange Act;




          (d) furnish to any Holder promptly upon request (i) a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 (and any similar or successor rules) and
of the Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly
report of the Company and (iii) such other reports and documents of the Company and other
information in the possession of or reasonably obtainable by the Company as such Holder may
reasonably request in availing itself of any rule or regulation of the SEC allowing such Holder to
sell any such securities without registration; and




          (e) take such further action as any Holder of Registrable Securities may from time to time
reasonably request to enable such Holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the SEC.




     The Company represents and warrants that such registration statement or any information,
document or report filed with the SEC in connection therewith or any information so made public
shall not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements contained therein not misleading.
The Company agrees to indemnify and hold harmless (or to the extent the same is not enforceable,
make contribution to) the Holders, their partners, officers, directors, employees and agents, each
broker, dealer or underwriter (within the meaning of the Securities Act) acting for any Holder in
connection with any offering or sale by such Holder of Registrable Securities or any Person
controlling (within the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act) such Holder and any such broker, dealer or underwriter from and against any and all
losses, claims, damages, liabilities or expenses (or actions in respect thereof) arising out of or
resulting from any breach of the foregoing representation or warranty, all on terms and conditions
comparable to those set forth in Section 5.



                         SECTION 7. Limitation on Registration Rights of Others.



     The Company represents and warrants that it has not granted to any Person the right to request
or require the Company to register any securities issued by the Company. The Company covenants and
agrees that after the date hereof, so long as any Holder holds any Securities, the Company will
not, directly or indirectly, grant to any Person or agree to or otherwise become obligated in
respect of (a) any registration rights of securities of the Company upon the demand of any Person
(including any shelf registration) without the prior written consent of the Required Holders; or
(b) rights of registration in the nature or substantially in the nature of those set forth in
Section 2 unless such rights are expressly subject and subordinated to the rights of registration
of the Holders pursuant to Section 2 hereof on terms reasonably satisfactory to the Required
Holders.



19









 





                         SECTION 8. Mergers, etc.



     In addition to any other restrictions on mergers, consolidations and reorganizations contained
in the certificate of incorporation, bylaws or agreements of the Company, the Company covenants and
agrees that it shall not, directly or indirectly, enter into any merger, consolidation or
reorganization in which the Company shall not be the surviving corporation and in which the Holders
shall not have had the right to receive cash for all their Registrable Securities, unless the
surviving corporation shall, prior to such merger, consolidation or reorganization, agree in a
writing satisfactory in form, scope and substance to the Required Holders to assume the obligations
of the Company under this Agreement, and for such purpose references hereunder to “Registrable
Securities” shall be deemed to include the securities which such Holders would be entitled to
receive in exchange for Registrable Securities pursuant to any such merger, consolidation or
reorganization.



     If, and as often as, there are any changes in the Securities by way of stock split, stock
dividend, combination or classification, or through merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustments shall be made in the provisions
hereof as may be required, so that the rights and privileges granted hereby shall continue with
respect to the Securities as so changed.



                         SECTION 9. Notices, etc.



     All notices, consents, approvals, agreements and other communications provided hereunder shall
be in writing or by telex or telecopy and shall be sufficiently given to the Initial Holders, the
Holders or the Company if addressed or delivered to them:



	 	 	 
	If to the Initial Holders:

	 	To the address listed underneath such Initial Holder’s name in the signature pages hereof.
	 
	 	 
	with copies to:

	 	Akin Gump Strauss Hauer & Feld LLP

1111 Louisiana Street, 44th Floor

Houston, TX 77002

Attention: James L. Rice III, Esq.

Telecopier No.: (713) 236-0822
	 
	 	 
	If to any other Holder:

	 	At its last known address appearing on the books of the Company maintained for such purpose.
	 
	 	 
	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






20









 






	 	 	 
	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: (i) at the time delivered by
hand, if personally delivered, (ii) when received, if deposited in the mail, postage prepaid, (iii)
when transmission is verified, if telecopied, and (iv) on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.




                         SECTION 10. Entire Agreement.



     The parties hereto agree that this Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior agreements and
understandings between them as to such subject matter; and there are no restrictions, agreements,
arrangements, oral or written, between any or all of the parties relating to the subject matter
hereof which are not fully expressed or referred to herein or therein.



                         SECTION 11. Amendments; Waivers and Further Agreements.



     This Agreement may not be amended nor shall any waiver, change, modification, consent or
discharge be effected except by an instrument in writing executed by or on behalf of the party or
parties against whom enforcement of any amendment, waiver, change, modification, consent or
discharge is sought; provided, however, that any waiver sought from the Holders of
any provision of this Agreement which affects the Holders generally, and any action required to be
taken by the Holders as a group pursuant to this Agreement, shall be given or taken by the Required
Holders, and any such waiver or action so given or taken shall be binding on all Holders. No
failure or delay by any party in exercising any right or remedy hereunder shall operate as a waiver
thereof, and a waiver of a particular right or remedy on one occasion shall not be deemed a waiver
of any other right or remedy or a waiver of the same right or remedy on any subsequent occasion.



     Any waiver of any terms or conditions of this Agreement shall not operate as a waiver of any
other breach of such terms or conditions or any other term or condition, nor shall any failure to
enforce any provision hereof operate as a waiver of such provision or of any other provision
hereof; provided, however, that no such written waiver, unless it by its own terms
explicitly provides to the contrary, shall be construed to effect a continuing waiver of the
provision being waived and no such waiver in any instance shall constitute a waiver in any other
instance or for any other purpose or impair the right of the party against whom such waiver is
claimed in all other instances or for all other purposes to require full compliance with such
provision. Each of the parties hereto agrees to execute all such further instruments and documents
and to take all such further action as the other parties may reasonably require in order to
effectuate the terms and purposes of this Agreement.



21









 





                         SECTION 12. Assignment; Successors and Assigns.



     This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, executors, legal representatives, successors and permitted assigns,
including, without limitation, any Holders from time to time of the Registrable Securities.
Anything in this Agreement to the contrary notwithstanding, the term “Holders” as used in this
Agreement shall be deemed to include the registered Holders from time to time of the Series B
Preferred Shares.



                         SECTION 13. Severability.



     If any provision of this Agreement shall be held or deemed to be, or shall in fact be,
invalid, inoperative or unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because any provision conflicts with any
constitution, statute, rule or public policy, or for any other reason, such circumstance shall not
have the effect of rendering the provision or provisions in question invalid, inoperative or
unenforceable in any other jurisdiction or in any other case or circumstance or of rendering any
other provision or provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such constitution, statute,
rule or public policy, but this Agreement shall be reformed and construed in any such jurisdiction
or case as if such invalid, inoperative or unenforceable provision had never been contained herein
and such provision reformed so that it would be valid, operative and enforceable to the maximum
extent permitted in such jurisdiction or in such case.



                         SECTION 14. Counterparts.



     This Agreement may be executed in two or more counterparts (each of which need not be executed
by each of the parties), each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument, and in pleading or proving any provision of this Agreement,
it shall not be necessary to produce more than one such counterpart.



                         SECTION 15. Gender; Usage.



     Whenever used herein the singular number shall include the plural, the plural shall include
the singular, and the use of any gender shall include all genders. The words “hereof,” “herein”
and “hereunder,” and words of similar import, when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.



                         SECTION 16. Governing Law.



     THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK OTHER THAN THE CONFLICTS OF LAWS PRINCIPLES THEREOF.



                         SECTION 17. Survival.



     The indemnification and contribution provisions of Section 5 shall survive, notwithstanding
the fact that any Shares shall cease to be Registrable Securities.



22









 





                         SECTION 18. Expenses.



     Supplementing the provisions of Section 5, the Company shall be obligated to pay to the
Holders, on demand, all costs and expenses (including, without limitation, court costs and
attorneys’ fees and expenses and interest to the extent permitted by applicable law on overdue
amounts) paid or incurred in collecting any sums due from, or enforcing any other obligations of,
the Company.



                         SECTION 19. Specific Performance.



     The Company recognizes that the rights of the Holders under this Agreement are unique and,
accordingly, the Holders shall, in addition to such other remedies as may be available to any of
them at law or in equity, have the right to enforce their rights hereunder by actions for
injunctive relief and specific performance to the extent permitted by law. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by reason of a breach by
it of the provisions of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate. This Agreement is not intended to
limit or abridge any rights of the Holders which may exist apart from this Agreement.



23









 





     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized as of the day and year first above written.



	 	 	 	 	 
	 	 	HORIZON OFFSHORE, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name:

     Title:
	 
	 	 	 	 
	 	 	INITIAL HOLDERS:
	 
	 	 	 	 
	 	 	ELLIOTT ASSOCIATES, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Elliott Capital Advisors, L.P.,
as General Partner
	 
	 	 	 	 
	 

	 	By:
	 	Braxton Associates, Inc.,
as General Partner
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name:

      Title:






	 	 	 	 	 
	 

	 	Address:
	 	712 Fifth Avenue

36th Floor

New York, New York 10019






	 	 	 	 	 
	 	 	ELLIOTT INTERNATIONAL, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Elliott International Capital Advisors Inc.,
as Attorney-in-Fact
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name:

      Title:






	 	 	 	 	 
	 

	 	Address:
	 	712 Fifth Avenue

36th Floor

New York, New York 10019






24









 






	 	 	 	 	 
	 	 	FALCON MEZZANINE PARTNERS, LP
	 
	 	 	 	 
	 

	 	By:
	 	Falcon Mezzanine Investments, LLC, its

General Partner
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name:

      Title:






	 	 	 	 	 
	 

	 	Address:


Telecopier No.:
	 	60 Kendrick Street

Needham, Massachusetts 02494

(781) 247-7299






25









 






	 	 	 	 	 
	 	 	D. E. SHAW LAMINAR PORTFOLIOS, L.L.C.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	     Name:

     Title:






	 	 	 	 	 
	 

	 	Address:
	 	120 West 45th St.

New York, New York 10036






26









 






	 	 	 	 	 
	 	 	 
	 	 	 Name: Kevin G. Douglas,

      in his individual capacity






	 	 	 	 	 
	 

	 	Address:
	 	1101 5th Ave., Suite 360

San Rafael, CA 94901






27









 






	 	 	 	 	 
	 	 	 
	 

	 	Name:
	 	Michelle M. Douglas,
	 

	 	 	 	     in her individual capacity
	 
	 	 	 	 
	 

	 	Address:
	 	1101 5th Ave., Suite 360
	 

	 	 	 	San Rafael, CA 94901






28









 






	 	 	 	 	 
	 	 	 
	 

	 	Name:
	 	Lloyd I. Miller,
	 

	 	 	 	      in his individual capacity
	 
	 	 	 	 
	 

	 	Address:
	 	4550 Gordon Drive
	 

	 	 	 	Naples, FL 34102






29









 






	 	 	 	 	 
	 	 	SACC PARTNERS, LP
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 

	 	 	 	     Name: Tom Kelleher

     Title: General Partner
	 
	 	 	 	 
	 

	 	Address:
	 	11150 Santa Monica Blvd., Suite 750
	 

	 	 	 	Los Angeles, CA 90025






30









 






	 	 	 	 	 
	 	 	KEVIN G. DOUGLAS AND MICHELLE M. DOUGLAS, JTWROS
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 

	 	 	 	      Name: Kevin Douglas

      in his capacity as joint tenant with right
of survivorship
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 

	 	 	 	      Name: Michelle Douglas

     in her capacity as joint tenant with right
of survivorship
	 
	 	 	 	 
	 

	 	Address:
	 	1101 5th Ave., Suite 360
	 

	 	 	 	San Rafael, CA 94901






31









 






	 	 	 	 	 
	 	 	DOUGLAS FAMILY TRUST
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 

	 	 	 	     Name: James E. Douglas Jr.

     Title: Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 

	 	 	 	     Name: Jean A. Douglas

     Title: Trustee
	 
	 	 	 	 
	 

	 	Address:
	 	1101 5th Ave., Suite 360
	 

	 	 	 	San Rafael, CA 94901






32









 






	 	 	 	 	 
	 	 	JAMES DOUGLAS AND JEAN DOUGLAS IRREVOCABLE

DESCENDANT’S TRUST
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 

	 	 	 	      Name: Kevin Douglas

     Title: Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 

	 	 	 	      Name: Michelle Douglas

      Title: Trustee
	 
	 	 	 	 
	 

	 	Address:
	 	1101 5th Ave., Suite 360
	 

	 	 	 	San Rafael, CA 94901






33









 






	 	 	 	 	 
	 	 	B. RILEY & CO. RETIREMENT TRUST
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 

	 	 	 	      Name: Bryant Riley

      Title: Trustee
	 
	 	 	 	 
	 

	 	Address:
	 	11150 Santa Monica Blvd., Suite 750
	 

	 	 	 	Los Angeles, CA 90025






34









 






	 	 	 	 	 
	 	 	B. RILEY & CO., INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name: Bryant Riley

      Title: Chairman
	 
	 	 	 	 
	 

	 	Address:
	 	11150 Santa Monica Blvd., Suite 750
	 

	 	 	 	Los Angeles, CA 90025






35









 






	 	 	 	 	 
	 	 	L. MILLER III GST dtd 12/31/91
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name: Lloyd I. Miller

     Title: Trustee
	 
	 	 	 	 
	 

	 	Address:
	 	4550 Gordon Drive
	 

	 	 	 	Naples, FL 34102






36









 






	 	 	 	 	 
	 	 	MILFAM, LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name: Lloyd I. Miller

      Title: General Partner
	 
	 	 	 	 
	 

	 	Address:
	 	4550 Gordon Drive
	 

	 	 	 	Naples, FL 34102






37









 






	 	 	 	 	 
	 	 	CATHERINE C. MILLER IRREV TR DTD 3/26/91
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	     Name: Lloyd I. Miller

      Title: Trustee
	 
	 	 	 	 
	 

	 	Address:
	 	4550 Gordon Drive
	 

	 	 	 	Naples, FL 34102






38









 






	 	 	 	 	 
	 	 	ALEXANDRA B. MILLER
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name: Lloyd I. Miller

     Title: Custodian FL/UTMA
	 
	 	 	 	 
	 

	 	Address:
	 	4550 Gordon Drive
	 

	 	 	 	Naples, FL 34102






39









 






	 	 	 	 	 
	 	 	LLOYD I. MILLER
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name: Lloyd I. Miller

      in his individual capacity
	 
	 	 	 	 
	 

	 	Address:
	 	4550 Gordon Drive
	 

	 	 	 	Naples, FL 34102






40









 






	 	 	 	 	 
	 	 	LLOYD I. MILLER TRUST A-4
	 
	 	 	 	 
	 	 	By: PNC Bank
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name: Alan Goldman

      Title: Trustee
	 
	 	 	 	 
	 

	 	Address:
	 	4550 Gordon Drive
	 

	 	 	 	Naples, FL 34102






41









 






	 	 	 	 	 
	 	 	MILGRAT II — STAR
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name:

      Title:
	 
	 	 	 	 
	 

	 	Address:
	 	4550 Gordon Drive
	 

	 	 	 	Naples, FL 34102






42









 






	 	 	 	 	 
	 	 	MARLI B. MILLER
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name:

      Title:
	 
	 	 	 	 
	 

	 	Address:
	 	4550 Gordon Drive
	 

	 	 	 	Naples, FL 34102






43









 






	 	 	 	 	 
	 	 	MILFAM I, L.P.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name: Lloyd I. Miller

      Title: Limited Partner
	 
	 	 	 	 
	 

	 	Address:
	 	4550 Gordon Drive
	 

	 	 	 	Naples, FL 34102






44









 






	 	 	 	 	 
	 	 	MILFAM II, L.P.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name: Lloyd I. Miller

      Title: Limited Partner
	 
	 	 	 	 
	 

	 	Address:
	 	4550 Gordon Drive
	 

	 	 	 	Naples, FL 34102






45









 






	 	 	 	 	 
	 	 	HIGHLAND CRUSADER OFFSHORE PARTNERS
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	     Name:Kurt Plummer

      Title: General Partner
	 
	 	 	 	 
	 

	 	Address:
	 	13455 Noel Road, Suite 1300

Dallas, TX 75240






46









 






	 	 	 	 	 
	 	 	HEDGEHOG CAPITAL
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name:

      Title:
	 
	 	 	 	 
	 

	 	Address:
	 	1117 East Putnam Avenue, Suite 320
Riverside, CT 06878






47









 






	 	 	 	 	 
	 	 	THE CONUS FUND, L.P.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name:

     Title:
	 
	 	 	 	 
	 

	 	Address:
	 	1 Rockefeller Plaza, 18th Floor

New York, New York 10020






48









 






	 	 	 	 	 
	 	 	THE CONUS FUND (QP), L.P.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name:

      Title:
	 
	 	 	 	 
	 

	 	Address:
	 	1 Rockefeller Plaza, 18th Floor

New York, New York 10020






49









 






	 	 	 	 	 
	 	 	EAST HUDSON INC. (BVI)
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name:

      Title:
	 
	 	 	 	 
	 

	 	Address:
	 	1 Rockefeller Plaza, 18th Floor

New York, New York 10020






50









 






	 	 	 	 	 
	 	 	THE CONUS FUND OFFSHORE LIMITED
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name:

      Title:
	 
	 	 	 	 
	 

	 	Address:
	 	1 Rockefeller Plaza, 18th Floor

New York, New York 10020






51









 






	 	 	 	 	 
	 	 	RICHARD RILEY
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Name:

      Title:
	 
	 	 	 	 
	 

	 	Address:
	 	133 Shoreclifff Road,

Corona del Mar, CA 92625






52









 






	 	 	 	 	 
	 	 	LANGLEY PARTNERS, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Langley Capital, LLC, as General Partner
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	     Name:
	 

	 	 	 	     Title:
	 
	 	 	 	 
	 

	 	Address:
	 	535 Madison Avenue, 7th Floor

New York, NY 10022






53









 






	 	 	 	 	 
	 	 	BRYANT AND CARLEEN RILEY
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Bryant Riley

in his capacity as joint tenant with right of
survivorship
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Carleen Riley

in her capacity as joint tenant with right of
survivorship
	 
	 	 	 	 
	 

	 	Address:
	 	12710 Marlboro Street

Brentwood, CA 90049






54









 






	 	 	 	 	 
	 	 	MANCHESTER SECURITIES CORP.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	     Name:
	 

	 	 	 	      Title:
	 
	 	 	 	 
	 

	 	Address:
	 	712 Fifth Avenue

36th Floor

New York, NY 10019






55









 






	 	 	 	 	 
	 	 	RIMROCK HIGH INCOME PLUS (MASTER) FUND
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 

	 	Address:	 	 







56