EXHIBIT 7(d)
SALES AGENCY AGREEMENT
As of May 30, 2006
XXXXXXX XXXXX & ASSOCIATES, INC.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Dear Sir or Madam:
This agreement (the "Agreement") sets forth the terms and conditions upon
which Falcon Mezzanine Partners, LP (the "Selling Stockholder") has engaged
Xxxxxxx Xxxxx & Associates, Inc. (the "Sales Agent") to serve as the Selling
Stockholder's exclusive agent with respect to the placement of up to 2,975,576
shares (the "Shares") of common stock, $0.00001 par value per share, of Horizon
Offshore, Inc. (the "Company") currently held by the Selling Stockholder.
The Selling Stockholder and the Sales Agent agree as follows:
1. Agreement to Act as Sales Agent. On the basis of the representations,
warranties, covenants and agreements herein contained, but subject to the terms
and conditions herein set forth, the Selling Stockholder agrees to sell through
the Sales Agent, as exclusive Sales Agent, and the Sales Agent agrees to sell,
as Sales Agent for the Selling Stockholder, on a reasonable efforts basis, up to
2,975,576 shares of common stock (the "Maximum Amount") on the terms set forth
herein. The execution of this Agreement by the parties hereto does not
constitute a guarantee that the Sales Agent will be able to complete any sales
of the Shares, nor shall this Agreement be construed to require the Sales Agent
to purchase any Shares for its own account.
2. Delivery. The Shares, up to the Maximum Amount, may be sold in a single
transaction, multiple transactions, or otherwise as agreed to between the
Selling Stockholder and the Sales Agent. The sales prices for the Shares will be
determined by negotiations between the Sales Agent and potential buyers and then
presented to the Selling Stockholder. The Selling Stockholder shall have sole
discretion to accept or decline each offer by a potential buyer to acquire all
or any portion of the Shares. The Selling Stockholder agrees to sell such Shares
up to the Maximum Amount through the Sales Agent. As compensation for its
services hereunder, the Sales Agent shall receive a commission of 6.5% of the
gross price of the Shares sold. After deducting the above-referenced
commissions, the Sales Agent shall remit the net proceeds to the Selling
Stockholder for such Shares (the "Net Proceeds").
The Selling Stockholder or the Sales Agent may, upon notice to the other
party hereto by telephone (confirmed promptly by telecopy), suspend the Sales
Agent's efforts hereunder with respect to any unsold Shares; provided, however,
that such suspension or termination shall not affect or impair the parties'
respective obligations with respect to Shares sold hereunder prior to the giving
of such notice.
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Unless otherwise agreed, settlement for sales of Shares will occur on the
third business day following the date on which such sales are made (each a
"Closing Date"). The amount of proceeds for such sales to be delivered to the
Selling Stockholder against the receipt of the Shares sold shall be the Net
Proceeds in respect of such sales. If the Selling Stockholder shall default on
its obligation to deliver Shares on any Closing Date, the Selling Stockholder
shall, in addition to the provisions of Section 3.6 below, (a) hold the Sales
Agent harmless against any loss, claim or damage arising from or as a result of
such default by the Selling Stockholder and (b) pay the Sales Agent any
commission to which it would otherwise be entitled absent such default.
3. Representations and Warranties of the Selling Stockholder. The Selling
Stockholder represents and warrants and covenants to the Sales Agent that:
3.1 Due Execution and Delivery. The Selling Stockholder has full
power and authority to enter into this Agreement and to carry out all the terms
and provisions hereof to be carried out by it. All authorizations and consents
necessary for the execution and delivery by the Selling Stockholder of this
Agreement have been given. This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder and constitutes a valid and
binding agreement of the Selling Stockholder and is enforceable against the
Selling Stockholder in accordance with the terms hereof, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws now
or hereafter in effect relating to or affecting creditors' rights generally or
by general principles of equity relating to the availability of remedies.
3.2 Good Title. The Selling Stockholder, at the time of delivery
hereunder, will have (a) good and marketable title to the Shares to be sold by
such Selling Stockholder hereunder, free and clear of all encumbrances, and (b)
full legal right and power, and all authorizations and approvals required by
law, to sell, transfer and deliver the Shares to any potential buyer and to make
the representations, warranties, covenants and agreements made by such Selling
Stockholder herein.
3.3 Consents. No consent, approval, authorization or order of, or
any filing or declaration with, any governmental body is required for the
consummation by the Selling Stockholder of the transactions on its part
contemplated herein.
3.4 Registration Statement. The Company has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-3 (File No. 333-127640) (the "Resale Registration Statement"), which
has become effective for the registration under the Securities Act of 1933, as
amended (the "Securities Act") of the Shares. As of the date of this Agreement
and as of the date of any transaction executed pursuant to this Agreement, the
Selling Stockholder has, or will have, no knowledge that the Resale Registration
Statement is subject to any stop order or any similar proceeding by the
Commission.
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3.5 Material Adverse Information. The sale of the Shares proposed to
be sold by such Selling Stockholder is not prompted by the Selling Stockholder's
knowledge of any material adverse information concerning the Company or the
Shares. 1.1 The Company has not disclosed to the Selling Stockholder information
that would constitute material non-public information other than the existence
of the transaction contemplated hereby.
3.6 Failure to Deliver Certificates. In addition to any other rights
available to the Sales Agent, if, with respect to each transaction effected
pursuant to this Agreement, the Selling Stockholder fails to deliver the Shares
to the Sales Agent by the Delivery Date (as defined below), and if after the
Delivery Date the Sales Agent purchases (in an open market transaction or
otherwise) shares of the Company's common stock to deliver in satisfaction of
any transaction effected pursuant to this Agreement, then the Selling
Stockholder shall immediately pay in cash to the Sales Agent (in addition to any
remedies available to or elected by the Sales Agent) the amount by which (a) the
Sales Agent's total purchase price (including brokerage commissions, if any) for
the shares of the Company's common stock so purchased exceeds (b) the total
purchase price for the Shares sold by the Selling Stockholder in the transaction
for which the Selling Stockholder failed to make timely delivery (which amount
shall be paid as liquidated damages and not as a penalty). "Delivery Date" shall
mean the second trading day after Shares have been sold in a transaction
pursuant to this Agreement.
3.7 Affiliate. The Selling Stockholder is not an "affiliate" of the
Company as such term is defined in paragraph (a)(1) of Rule 144 ("Rule 144")
promulgated under the Securities Act of 1933, as amended and has not been an
affiliate during the preceding three months.
3.8 [RESERVED].
3.9 [RESERVED].
3.10 No Stabilization or Manipulation. The Selling Stockholder has
not taken and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be expected to
cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
4. Indemnification. (a) The Selling Stockholder agrees to indemnify and
hold harmless the Sales Agent, the directors, officers, employees and agents of
the Sales Agent and each person, if any, who controls the Sales Agent within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, liabilities, expenses and damages
(including, but not limited to, any and all investigative, legal and other
expenses reasonably incurred in connection with, and any and all amounts paid in
settlement of, any action, suit or proceeding between any of the indemnified
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parties and any indemnifying parties or between any indemnified party and any
third party, or otherwise, or any claim asserted), as and when incurred, to
which the Sales Agent, or any such person, may become subject under the
Securities Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on (i) any untrue
statement or alleged untrue statement of a material fact contained in or
material omission in the Resale Registration Statement, or any prospectus
constituting a part thereof, (ii) any breach of any representation, warranty,
covenant or agreement made by the Selling Stockholder herein or (iii) the
engagement of the Sales Agent pursuant to, and the performance by the Sales
Agent of the services contemplated by, this Agreement; provided that this
indemnity agreement shall not apply to the extent that such loss, claim,
liability, expense or damage is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from the bad faith, willful
misconduct or gross negligence of the Sales Agent. This indemnity agreement will
be in addition to any liability that the Selling Stockholder might otherwise
have.
(b) If the Sales Agent proposes to assert the right to be
indemnified under this Section 4, the Sales Agent will, promptly after receipt
of notice of commencement of any action against such Sales Agent in respect of
which a claim is to be made against the Selling Stockholder under this Section
4, notify the Selling Stockholder of the commencement of such action, enclosing
a copy of all papers served, but the omission so to notify the Selling
Stockholder will not relieve the Selling Stockholder from (i) any liability that
it might have to any indemnified party otherwise than under this Section 4 and
(ii) any liability that it may have to any indemnified party under the foregoing
provision of this Section 4 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the Selling
Stockholder. If any such action is brought against any indemnified party and it
notifies the Selling Stockholder of its commencement, the Selling Stockholder
will be entitled to participate in and, to the extent that it elects, by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, to assume
the defense of the action, with counsel satisfactory to the indemnified party,
and after notice from the Selling Stockholder to the indemnified party of its
election to assume the defense, the Selling Stockholder will not be liable to
the indemnified party for any legal or other expenses except as provided below
and except for the reasonable costs of investigation subsequently incurred by
the indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the Selling Stockholder, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the Selling Stockholder, (3) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the Selling Stockholder (in
which case the Selling Stockholder will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the
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Selling Stockholder has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the Selling Stockholder. It
is understood that the Selling Stockholder shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees, disbursements and other charges of more than one separate firm
admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party within 30 calendar days of receipt
of a written request for reimbursement (which shall include reasonably detailed
documentation supporting such fees, disbursements or other charges). The Selling
Stockholder will not be liable for any settlement of any action or claim
affected without its written consent (which consent will not be unreasonably
withheld). The Selling Stockholder shall not, without the prior written consent
of each indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding relating to
the matters contemplated by this Section 4 (whether or not any indemnified party
is a party thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding.
(c) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 4 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Selling Stockholder, the Selling
Stockholder will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted) to which the Selling Stockholder and
the Sales Agent may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Selling Stockholder on the one
hand and the Sales Agent on the other. The relative benefits received by the
Selling Stockholder on the one hand and the Sales Agent on the other hand shall
be deemed to be the same proportion as the total net proceeds from the sale of
Shares (before deducting expenses) received by the Selling Stockholder bear to
the total compensation (before deducting expenses) received by the Sales Agent
from the sale of Shares on behalf of the Selling Stockholder. If, but only if,
the allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Selling Stockholder, on
the one hand, and the Sales Agent, on the other hand, as well as any other
relevant equitable considerations. The Selling Stockholder and the Sales Agent
agree that it would not be just and equitable if contributions pursuant to this
Section 4(c) were to be determined by pro rata allocation or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage or action in respect
thereof, referred to above in this Section 4(c) shall be deemed to
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include, for the purpose of this Section 4(c), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the foregoing provisions
of this Section 4(c), the Sales Agent shall not be required to contribute any
amount in excess of the commissions received by it under the Agreement, and no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 4(c), any person who controls a party to this Agreement within the
meaning of the Securities Act and any officers, directors, employees or agents
of the Sales Agent, will have the same rights to contribution as that party. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for contribution
may be made under this Section 4(c), will notify any such party or parties from
whom contribution may be sought, but the omission so to notify will not relieve
that party or parties from whom contribution may be sought from any other
obligation it or they may have under this Section 4(c). Except for a settlement
entered into pursuant to the last sentence of Section 4(b) hereof, no party will
be liable for contribution with respect to any action or claim settled without
its written consent (which consent will not be unreasonably withheld).
5. Termination. This agreement shall expire on June 12, 2006 unless
extended by mutual written consent of both parties.
6. Conditions Precedent to Sale. Each sale of Shares pursuant to this
Agreement shall be subject to:
(a) The Resale Registration Statement shall have become effective
and no stop order suspending the effectiveness of the Resale Registration
Statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Selling Stockholder, threatened by
the Commission;
(b) The Resale Registration Statement or prospectus constituting a
part thereof, or any amendment or supplement thereto, shall not contain an
untrue statement of fact that in the Sales Agent's opinion is material, or omits
to state a fact that in the Sales Agent's reasonable opinion is material and is
required to be stated therein or is necessary to make the statements therein not
misleading; and
(c) The Selling Stockholder shall have furnished to the Sales Agent
such appropriate further information, certificates and documents as the Sales
Agent may reasonably request.
7. Notices. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Selling Stockholder, at the office of the Selling
Stockholder, Falcon Mezzanine Partners, LP, 21
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Custom Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx
X. Xxxxxxx Xx. fax (000) 000-0000 or (b) if to the Sales Agent, at the office of
Xxxxxxx Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx
00000, Attention: Xxxxxxx Xxxxxxx, fax (000) 000-0000. Any such notice shall be
effective only upon receipt. Any notice under Section 7 may be made by facsimile
or telephone, but if so made shall be subsequently confirmed in writing.
8. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Selling Stockholder set forth
in this Agreement or made by or on its behalf pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Selling Stockholder, any of its officers or directors, the
Sales Agent or any controlling person referred to in Section 4 hereof and (ii)
delivery of and payment for the Shares. The respective agreements, covenants,
indemnities and other statements set forth in the last paragraph of Section 2,
Section 3.6, Section 4, Section 9 and Section 11 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
9. Successors. This Agreement shall inure to the benefit of and shall be
binding upon the Sales Agent, the Selling Stockholder and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that the
indemnification contained in Section 4 of this Agreement shall also be for the
benefit of the directors, officers, employees and agents of the Sales Agent and
any person or persons who control the Sales Agent within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act.
10. Applicable Law. The validity and interpretations of this Agreement,
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
11. Consent to Jurisdiction. The Selling Stockholder irrevocably consents
to the jurisdiction of the courts of the State of New York and of any federal
court located in such State in connection with any action or proceeding arising
out of, or relating to, this Agreement, any document or instrument delivered
pursuant to, in connection with, or simultaneously with this Agreement, or a
breach of this Agreement or any such document or instrument. In any such action
or proceeding, the Selling Stockholder waives personal service of any summons,
complaint, or other process and agrees that service thereof may be made in
accordance with Section 7. Within 30 days after such service, or such other time
as may be mutually agreed
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upon in writing by the attorneys for the parties to such action or proceeding,
the Selling Stockholder shall appear or answer such summons, complaint, or other
process. Should the Selling Stockholder fail to appear or answer within such
30-day period or such extended period, as the case may be, the Selling
Stockholder shall be deemed in default and judgment may be entered against the
Selling Stockholder for the amount as demanded in any summons, complaint, or
other process so served. The Selling Stockholder hereby irrevocably appoints
Xxxxxx Xxxxxx & Xxxxxxx LLP, counsel to the Selling Stockholder, as the Selling
Stockholder's agent to receive service of process in any action against the
Selling Stockholder in any federal or state court of the State of New York
arising out of this offering.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures
shall be deemed original signatures.
13. Entire Agreement. This Agreement constitutes the entire understanding
between the parties hereto as to the matters covered hereby and supersedes all
prior understandings, written or oral, relating to such subject matter.
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Each party hereby indicates its agreement to the foregoing by executing
this Agreement in the space provided below.
Very truly yours,
SELLING STOCKHOLDER
FALCON MEZZANINE PARTNERS, LP
By: Falcon Mezzanine Investments, LLC
As General Partner
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Confirmed as of the date first
above mentioned:
XXXXXXX XXXXX & ASSOCIATES, INC.
By: /s/ Xxx Xxxxx
-------------------------
Name: Xxx Xxxxx
Title: Managing Director