GUARANTY
Exhibit 10.2
GUARANTY, dated as of March ___, 2006, made by HORIZON OFFSHORE, INC., a Delaware corporation
(the “Guarantor”) in favor of THE CIT GROUP/EQUIPMENT FINANCING, INC., a corporation organized and
existing under the laws of the State of Delaware, as Agent for the Lenders described below (the
“Agent”).
WHEREAS, Horizon Vessels, Inc., a Delaware corporation (the “Borrower”), wishes to borrow up
to USD 78,798,178.00 (the “Loan”) from the Lenders pursuant to the terms of the Loan Agreement
dated of even date herewith (as the same may be amended, supplemented or otherwise modified from
time to time, the “Loan Agreement”) among the Borrower, the Lenders named therein (the “Lenders”)
and the Agent; and
WHEREAS, the Borrower is a wholly owned subsidiary of the Guarantor and it is to the corporate
benefit of the Guarantor that the Borrower obtain the Loan; and
WHEREAS, the Loan will be evidenced by the promissory note of the Borrower in favor of the
Agent (as the same may be amended, supplemented as otherwise modified from time to time, the
“Note”); and
WHEREAS, in order to induce the Lenders to make the Loan, the Guarantor is prepared to
guarantee the payment by the Borrower of its obligations under the Loan Agreement, the Note and the
other Loan Documents (as defined in the Loan Agreement); and
WHEREAS, the Lenders are prepared to make the Loan in consideration, among other things, of
such guaranty by the Guarantor;
NOW, THEREFORE, in consideration of the premises, the Guarantor hereby agrees as follows:
Section 1. Guaranty. As independent and additional security for the Loan, the
Guarantor hereby unconditionally and irrevocably guarantees the payment by the Borrower of all
amounts due and to become due from the Borrower under the Loan Agreement, the Note and the other
Loan Documents (the “Obligations”) and agrees to pay any and all expenses incurred by the Agent in
enforcing any of its or the Lenders’ respective rights under this Guaranty and pursuant to the
Obligations..
Section 2. Guaranty Absolute.
(a) The Guarantor hereby guarantees that the Obligations will be paid strictly in
accordance with the terms of the Loan Agreement, the Note and the other Loan Documents (as
applicable), regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Lenders or the Agent with
respect thereto. The liability of the Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of the Loan Agreement, the Note any
other Loan Document or any other agreement or instrument entered into between the
Borrower, the Lenders, the Agent or the Guarantor;
(ii) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or any
consent to departure from the Loan Agreement, the Note or any other Loan Document;
(iii) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Borrower in respect of the Obligations or the
Guarantor in respect of this Guaranty.
(b) This Guaranty shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Obligations is rescinded or must otherwise be
returned by the Lenders or the Agent upon the insolvency, bankruptcy or reorganization of
the Borrower or otherwise, all as though such payment had not been made.
Section 3. Waiver. The Guarantor hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Obligations and this Guaranty and any
requirement that the Agent or the Lenders or any other person exhaust any right or take any action
against the Borrower, any other Guarantor of any of the Obligations or any other person or entity
or any collateral. This is a guaranty of payment and performance and not of collection only.
Section 4. Subrogation. The Guarantor will not exercise any rights which it may
acquire by way of subrogation under this Guaranty, by any payment made hereunder or otherwise,
until all the Obligations shall have been paid in full. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when all the Obligations shall not have
been paid in full, such amount shall be forthwith paid to the Agent to be credited and applied
against the Obligations. If (i) the Guarantor shall make payment to the Agent, of all or any part
of the Obligations and (ii) all the Obligations shall be paid in full, the Agent will, at the
Guarantor’s request, execute and deliver to the Guarantor appropriate documents, without recourse
and without representation or warranty, transferring to the Guarantor any and all rights the Agent,
may have against the Borrower or necessary to evidence the transfer by subrogation to the Guarantor
of any interest in the Obligations resulting from such payment by the Guarantor.
Section 5. Payments Free and Clear of Taxes, Etc.
(a) All sums payable by the Guarantor under this Guaranty, whether of principal,
interest, fees or otherwise, shall be paid in full without set-off or counterclaim and in
such amounts as may be necessary in order that all such payments (after deduction or
withholding for or on account of any present or future taxes, levies, imposts, duties or
other charges of whatsoever nature imposed by any Governmental Agency or taxing authority
thereof, other than any income tax or franchise tax or other tax or fee on or measured by
the gross receipts or net income of the Lenders or the Agent; collectively the “Taxes”)
shall not be less than the amounts otherwise specified to be paid under this Guaranty.
(b) A certificate as to any additional amounts payable to the Lenders under this
Section 5 submitted to the Guarantor by the Agent shall show in reasonable detail the amount
payable and the calculations used to determine in good faith such amount and shall be deemed
prima facie correct.
(c) With respect to each deduction or withholding for or on account of any Taxes, the
Guarantor shall promptly furnish to the Lenders such certificates, receipts and other
documents as may be required (in the reasonable judgment of each Lender) to establish any
income tax credit to which any of the Lenders may be entitled.
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Section 6. APPLICABLE LAW AND JURISDICTION. THIS GUARANTY (INCLUDING, BUT NOT LIMITED
TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, OTHER THAN CONFLICT OF LAWS RULES THEREOF. ANY LEGAL ACTION OR
PROCEEDING AGAINST THE GUARANTOR WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK, THE U.S. FEDERAL COURTS IN SUCH STATE, SITTING IN THE COUNTY OF NEW YORK, OR IN
THE COURTS OF ANY OTHER JURISDICTION WHERE SUCH ACTION OR PROCEEDING MAY BE PROPERLY BROUGHT.
Section 7. Representations and Warranties. The Guarantor hereby represents and
warrants to the Agent as follows:
(a) It is a corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation duly qualified to do business wherever its
business or ownership of property requires it to be so qualified.
(b) The execution, delivery and performance by the Guarantor of this Guaranty and any
other documents contemplated herein and the completion of all other transactions herein
contemplated are within the Guarantor’s authority, are in furtherance of the Guarantor’s
purposes, have been duly authorized by all necessary action and will not contravene any
applicable law or regulation nor violate the Guarantor’s Articles of Incorporation or
By-Laws nor any agreement binding on the Guarantor nor any applicable law or regulation or
order or decree of any governmental authority or agency of the State of Texas, the State of
New York or the United States of America.
(c) This Guaranty is supported by adequate and sufficient consideration, has been
validly signed by or on behalf of the Guarantor and represents the valid and binding
obligation of the Guarantor, enforceable in accordance with its terms and will not result in
the Guarantor’s liabilities (including the maximum amount of liabilities that may be
reasonably expected to result from all contingent liabilities and giving effect to rights of
contribution and subrogation) exceeding the fair market value of its assets. The
enforceability of this Guaranty, however, is subject to all applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the rights of creditors
generally and to general equity principles.
(d) The legality, validity, enforceability or admissibility of this Guaranty are not
subject to or conditional upon this Guaranty being filed, recorded or enrolled with any
governmental authority or agency or stamped with any stamp, duty or similar transaction tax
of the State of Texas, the United States of America or the State of New York.
(e) There are no pending, or to the best of the Guarantor’s knowledge, any threatened
actions or proceedings affecting the Guarantor before any court, governmental agency or
arbitrator in any country, which may materially adversely affect the financial condition or
operations of the Guarantor.
Section 8. The Loan Agreement and the Note. The Guarantor hereby acknowledges receipt
of the Loan Documents in execution form and hereby consents and agrees to each Loan Document and to
all the terms and provisions thereof.
Section 9. Amendments, Etc. No amendment or waiver of any provision of this Guaranty
nor consent to any departure by the Guarantor therefrom shall in any event be effective unless the
same shall
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be in writing and signed by the Agent, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 10. Notices. All notices, requests and demands shall be in writing (including
telecopier transmission) given to or made upon the respective parties hereto as follows:
In the case of the Guarantor at:
Horizon Offshore, Inc.
0000 XxxxXxxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
0000 XxxxXxxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
In the case of the Agent, at:
The CIT Group/Equipment Financing, Inc., as Agent
0000 Xxxx Xxxxxxxxxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopier: (000) 000-0000
0000 Xxxx Xxxxxxxxxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopier: (000) 000-0000
or in other manner as any party hereto shall designate by written notice to the other parties
hereto. All notices shall be effective upon delivery or three (3) days after being deposited in
the United States mail with postage prepaid certified, return receipt requested in a correctly
addressed wrapper, or upon receipt if delivered to Federal Express or similar courier company or
transmitted by telefax during normal business hours, except that all notices, requests and demands
to the Agent shall not be effective until received by the Agent. All notices, demands, requests,
communications and other documents delivered hereunder or under the Loan Documents, unless
submitted in the English language, shall be accompanied by certified English translation thereof.
Section 11. No Waiver; Remedies. No failure on the part of the Agent or the Lenders
to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 12. Continuing Guaranty. This Guaranty is a continuing guaranty and shall (i)
remain in full force and effect until payment in full of the Obligations and payment in full of all
other amounts due under this Guaranty, (ii) be binding upon the Guarantor, its successors or
assigns, as the case may be, and (iii) inure to the benefit of and be enforceable by the Agent and
its respective successors, transferees and assigns, provided, however, that the
Guarantor may not transfer its obligations under this Guaranty or any part of it without the prior
written consent of the Agent.
Section 13. Capitalized Terms. All capitalized terms used in this Guaranty which are
not defined herein shall have the meanings given to them in the Loan Agreement.
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IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this Guaranty, as of the
date first above written.
| HORIZON OFFSHORE, INC. | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
