Document:

exv10w3

 

EXHIBIT 10.3

October 29, 2004

The Investors Signatory Hereto

Ladies and Gentlemen:

     Horizon Offshore, Inc. (the “Company”) and the other signatories hereto
(collectively, the “Investors”), in consideration of the mutual agreements and
covenants of the parties hereto, hereby agree as follows:

     1. The Company shall use its reasonable best efforts, and shall cause each
of its subsidiaries to use their respective reasonable best efforts, to
consummate, as soon as practicable, each of the transactions (the “Proposed
Transactions”) set forth in the term sheet attached hereto (the “Term Sheet”)
to execute and deliver all such agreements, instruments and other documents
that may be necessary or advisable in order to give effect to the Proposed
Transactions and to take all such other actions as may be necessary or
advisable in connection therewith.

     2. Subject to paragraph 6 below, each of the Investors shall take such
actions and use its good faith efforts to negotiate, execute and deliver such
documents as reasonably may be required of it in order to consummate, as soon
as practicable, each of the Proposed Transactions, including, without
limitation, in the event the Rights Offering does not result in net proceeds to
the Company of at least $65,000,000, to consummate the Sub-Debt Exchange as
contemplated by the Term Sheet.

     3. The Company shall file all such information, documents and other
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and applicable to a U.S. company
subject to such sections, within such time limits and periods provided
therefor.

     4. The Company will, and will cause each of its subsidiaries to, provide
the Investors and their respective counsel, agents and other representatives
reasonable access to the facilities, books and records of the Company and its
subsidiaries, and will cause the officers, directors, employees, accountants,
counsel, advisors and other agents and representatives (collectively,
“Representatives”) of the Company and its subsidiaries to cooperate with the
Investors and their respective counsel, agents and other representatives in
connection with the Investors’ due diligence investigation of the Company and
the assets, contracts, liabilities, operations, records and other aspects of
the business of the Company and its subsidiaries.

     5. The Company will be responsible for and bear all fees, out of pocket
costs and expenses of the Investors incurred in connection with the negotiation
of the Proposed Transactions and the preparation and execution of definitive
documentation in connection therewith (including the reasonable fees and out of
pocket expenses of each Investor’s counsel), regardless of whether the Proposed
Transactions are consummated, and the Company will promptly pay the same upon
receipt of documentation with respect thereto.

1

 

     6. Notwithstanding any term to the contrary contained in this letter
agreement or in the Term Sheet, the agreements and covenants of the Investors
set forth herein and in the Term Sheet are conditioned upon (i) there not
occurring any event, series of events, or the failure of the occurrence of any
event after the Effective Date (as defined in Paragraph 10 below), which,
singularly or in the aggregate, could be expected to have a material adverse
effect on the condition (financial or otherwise), properties, assets,
liabilities, rights, obligations, operations, business or prospects of the
Company and its subsidiaries, taken as a whole; (ii) neither the Company nor
any of its subsidiaries filing a petition of bankruptcy or reorganization under
the United States Bankruptcy Code or any similar foreign law, nor the filing of
any involuntary proceeding against the Company or any of its subsidiaries
thereunder; (iii) giving pro forma effect to the Rights Offering and the
Sub-Debt Exchange described in the Term Sheet, the capitalization of the
Company, including maturity of its senior debt, shall be acceptable to the
Investors; (iv) participation on a pro rata basis of holders of 100% of the
Company’s 16% and 18% subordinated secured notes in the Sub-Debt Exchange
standby commitment described in the Term Sheet; and (v) execution and delivery
of mutually acceptable definitive documentation required to implement the
Proposed Transactions, with representations, warranties, covenants, indemnities
and conditions precedent customary for transactions of this nature.

     7. The Company agrees to, and will cause each of its subsidiaries to,
indemnify, defend and hold harmless each Investor, each partner, member,
shareholder and affiliate of each Investor and each of its and their respective
Representatives (each, an “Indemnified Party”) from and against any and all
claims, actions, damages, losses, liabilities, costs and expenses (including,
without limitation, fees and disbursements of counsel), that may be incurred
by, asserted or awarded against or imposed upon any Indemnified Party, in each
case arising out of or in connection with or relating to any investigation,
litigation or proceeding or the preparation of any defense with respect
thereto, arising out of or in connection with or relating to this letter
agreement, the Term Sheet or the Proposed Transactions, whether or not such
investigation, litigation or proceeding is brought by the Company, any of its
subsidiaries, shareholders or creditors, an Indemnified Party or any other
person, or an Indemnified Party is otherwise a party thereto and whether or not
the Proposed Transactions are consummated, except to the extent such claim,
action, damage, loss, liability, cost or expense is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s gross negligence or willful misconduct. IT IS
THE INTENT OF THE PARTIES HERETO THAT EACH INDEMNIFIED PARTY BE INDEMNIFIED FOR
ITS ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE. The Company further agrees that
no Indemnified Party shall have any liability (whether direct or indirect, in
contract, tort or otherwise) to the Company or any of its subsidiaries,
shareholders or creditors for or in connection with this letter agreement, the
Term Sheet or the Proposed Transactions or other actions contemplated hereby,
except to the extent such liability is expressly set forth in a definitive
agreement to which such Indemnified Party is bound or is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s gross negligence or willful misconduct. In no
event, however, shall any Indemnified Party be liable on any theory of
liability for any special, indirect, consequential or punitive damages.

     8. This letter agreement may not be amended or waived except by an
instrument in writing signed by the Company and each Investor. This letter
agreement may be executed in any number of counterparts, no one of which need
be signed by all parties but each of which shall be an original, and all of
which, when taken together, shall constitute one agreement. Delivery of an

2

 

executed signature page of this letter agreement by facsimile transmission
shall be effective as delivery of a manually executed counterpart hereof. This
letter agreement, together with the Term Sheet, is the only agreement that has
been entered into among the parties hereto with respect to the Proposed
Transactions and sets forth the entire understanding of the parties hereto with
respect thereto.

     9. The Company and each Investor hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this letter
agreement, the Term Sheet or the Proposed Transactions or the actions of the
Company, any Investor or any of its respective Representatives in the
negotiation, performance or enforcement hereof.

     10. This letter agreement was executed October 29, 2004 effective November
 4, 2004 (the “Effective Date”).

     11. This letter agreement shall be construed in accordance with, and this
letter agreement and all matters arising out of or relating in any way
whatsoever to it (whether in contract, tort or otherwise) shall be governed by
the laws of the State of New York.

[Signature pages to follow]

3

 

     Please confirm that the foregoing is our mutual understanding by signing
and returning to the Company an executed counterpart of this letter agreement.

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	HORIZON OFFSHORE, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ DAVID W. SHARP
	

	 	 	 	
 
	

	 	Name:	 	David W. Sharp
	

	 	Title:	 	Executive Vice President

[Recapitalization Letter]

4

 

Acknowledged and agreed to this 29th day of October, 2004:

	 	 	 
	ELLIOTT ASSOCIATES, L.P.
	 
	 	 
	By:

	 	Elliott Capital Advisors, L.P.,
	

	 	as General Partner
	 
	 	 
	By:

	 	Braxton Associates, Inc.,
	

	 	as General Partner
	 
	 	 
	By:
	 	/s/  ELLIOT GREENBERG
	

	 	
 
	

	 	Elliot Greenberg
	

	 	Vice President
	 
	 	 
	ELLIOTT INTERNATIONAL, L.P.
	 
	 	 
	By:

	 	Elliott International Capital Advisors Inc.,
	

	 	as Attorney-in-Fact
	 
	 	 
	By:
	 	/s/  ELLIOT GREENBERG
	

	 	
 
	

	 	Elliot Greenberg
	

	 	Vice President

[Recapitalization Letter]

5

 

	 	 	 
	FALCON MEZZANINE PARTNERS, LP
	 
	 	 
	By:

	 	Falcon Mezzanine Investments, LLC, its
	

	 	General Partner
	 
	 	 
	By:
	 	/s/  ERIC Y. ROGOFF
	

	 	
 
	Name:
	 	 Vice
President
	Title:
	 	 Eric
Y. Rogoff

[Recapitalization Letter]

6

 

	 	 	 	 	 
	 	SACC PARTNERS, LP

 	 
	 	By:  	/s/ Tom Kelleher 	 
	 	 	Tom Kelleher 	 
	 	 	General Partner 	 
	 

[Recapitalization Letter]

7

 

	 	 	 	 	 
	 	B. RILEY & CO. PROFIT SHARING, INC.

 	 
	 	By:  	/s/  Bryant Riley 	 
	 	 	Bryant Riley 	 
	 	 	Trustee 	 
	 

[Recapitalization Letter]

8

 

	 	 	 	 	 
	 	B. RILEY & CO., INC.

 	 
	 	By:  	/s/ Bryant Riley 	 
	 	 	Bryant Riley 	 
	 	 	Chairman 	 
	 

[Recapitalization Letter]

9

 

	 	 	 	 	 
	 	L. MILLER III GST dtd 12/31/91

 	 
	 	By:  	/s/ Lloyd
I. Miller	 
	 	 	Lloyd I. Miller 	 
	 	 	Trustee 	 
	 

[Recapitalization Letter]

10

 

	 	 	 	 	 
	 	MILFAM, LLC

 	 
	 	By:  	/s/ Lloyd
I. Miller	 
	 	 	Lloyd I. Miller 	 
	 	 	General Partner 	 
	 

[Recapitalization Letter]

11

 

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

 	 
	 	By:  	/s/ Lloyd I. Miller	 
	 	 	Lloyd I. Miller 	 
	 	 	Trustee 	 
	 

[Recapitalization Letter]

12

 

	 	 	 	 	 
	 	ALEXANDRA B. MILLER

 	 
	 	By:  	/s/ Lloyd
I. Miller	 
	 	 	Lloyd I. Miller 	 
	 	 	Custodian FL/UTMA 	 
	 

[Recapitalization Letter]

13

 

LLOYD I. MILLER

/s/ Lloyd I. Miller

[Recapitalization Letter]

14

 

	 	 	 	 	 
	 	LLOYD I. MILLER TRUST A-4

By: PNC Bank

 	 
	 	By:	 /s/ Alan Goldman	 
	 	 	Alan Goldman 	 
	 	 	Trustee 	 
	 

[Recapitalization Letter]

15

 

	 	 	 	 	 
	 	MILFAM I, L.P.

 	 
	 	By:  	/s/
Lloyd I. Miller	 
	 	 	Lloyd I. Miller 	 
	 	 	Limited Partner 	 
	 

[Recapitalization Letter]

16

 

	 	 	 	 	 
	 	MILFAM II, L.P.

 	 
	 	By:  	/s/ Lloyd I. Miller	 
	 	 	Lloyd I. Miller 	 
	 	 	Limited Partner 	 
	 

[Recapitalization Letter]

17

 

	 	 	 	 	 
	 	MILGRAT II PREMIUM

 	 
	 	By:  	/s/ Lloyd I. Miller	 
	 	 	Lloyd I. Miller 	 
	 	 	Trustee 	 
	 

[Recapitalization Letter]

18

 

RICHARD RILEY

/s/ Richard Riley

[Recapitalization Letter]

19

 

BRYANT RILEY

/s/ Bryant Riley

Bryant Riley, joint tenant
with right of survivorship

[Recapitalization Letter]

20

 

CARLEEN RILEY

/s/ Carleen Riley

Carleen Riley, joint tenant with right of survivorship

[Recapitalization Letter]

21exv10w4

 

Exhibit 10.4

AMENDMENT NO. 2

TO

EMPLOYMENT AND NON-COMPETITION AGREEMENT

BETWEEN

HORIZON OFFSHORE, INC. AND J. LOUIS FRANK

     This Amendment No. 2 to Employment and Non-Competition Agreement between
Horizon Offshore, Inc. (the “Company”) and J. Louis Frank (the “Employee”)
dated May 31, 2002, as amended on September 3, 2004 (the “Amendment No. 2”), is
dated as of November 4, 2004.

     In mutual consideration of supporting a proposed recapitalization of the
Company, the Company and Employee agree as follows:

     1. The Employment and Non-Competition Agreement between Horizon Offshore,
Inc. and J. Louis Frank dated May 31, 2002, as amended on September 3, 2004,
shall hereinafter be referred to as the “Employment Agreement.”

     2. Section 5(d) of the Employment Agreement shall be amended in its
entirety to read as follows:

“5(d) As used herein, “For Good Cause” shall mean
breach of any provision of this Agreement by the
Company and failure to remedy such breach within
thirty (30) days of written notice; failure of the
Employee to be elected to the Board or to be elected
by the Board as its Chairman, Emeritus or the
relocation of the Employee’s place of employment
outside the Houston Metropolitan area.”

     3. Except as specifically set forth above all other terms, conditions,
rights, obligations and duties of the Employment Agreement shall remain in full
force and effect.

     4. This Amendment No. 2 shall be governed by and interpreted in accordance
with the laws of the State of Texas.

     IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 as of
the date hereinabove.

	 	 	 	 	 
	 	HORIZON OFFSHORE, INC.

 	 
	 	By:  	/s/ Bill J. Lam 	 
	 	 	Bill J. Lam 	 
	 	 	President 	 
	 

	 	 	 	 	 
	 	EMPLOYEE

 	 
	 		/s/ J. Louis Frank 	 
	 	 	J. Louis Frank

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}]]