THIRD AMENDMENT TO FORBEARANCE AGREEMENT
Exhibit 10.3
THIRD AMENDMENT TO FORBEARANCE AGREEMENT
THIS THIRD AMENDMENT TO FORBEARANCE AGREEMENT (the “Amendment”) is made as of December
16, 2009, by and among FORTIS CAPITAL CORP., a Connecticut corporation (“FCC”), FORTIS
ENERGY MARKETING & TRADING GP, a Delaware general partnership (formerly known as Fortis Energy LLC,
a Delaware limited liability company, “FEMT”), THE MERIDIAN RESOURCE CORPORATION, a Texas
corporation (“Meridian”), and the undersigned Guarantors (the “Guarantors”).
R E C I T A L S:
WHEREAS, Meridian and FEMT have entered into (i) that certain ISDA 2002 Master Agreement, (ii)
that certain Schedule to the ISDA Master Agreement, and (iii) that certain ISDA Credit Support
Annex to the Schedule to the 2002 ISDA Master Agreement, each dated as of October 28, 2004
(together with all Confirmations (as defined therein), annexes, schedules, and exhibits thereto, as
amended, restated, supplemented, extended, or otherwise modified from time to time, collectively,
the “Master Agreement”);
WHEREAS, Meridian, the Guarantors, FCC, and FEMT have entered into that certain Forbearance
Agreement dated as of September 3, 2009 (the “Forbearance Agreement”) pertaining to the
Master Agreement;
WHEREAS, Meridian has requested that FCC and FEMT extend the Forbearance Period under the
Forbearance Agreement, and FCC and FEMT have agreed to do so under the terms and conditions set
forth in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound, each of FCC, FEMT, Meridian and the
Guarantors agree as follows:
1. Definitions. Capitalized terms defined in the Recitals section of this Amendment
are incorporated herein by this reference and are used herein as so defined. Capitalized terms
used and not defined in this Amendment (including in the Recitals section of this Amendment) shall
have the meanings assigned to such terms in the Forbearance Agreement.
2. Amendments to the Forbearance Agreement. Meridian, the Guarantors, FCC and FEMT
agree that the Forbearance Agreement will be amended as follows:
(a) Hedge Forbearance Period. The first sentence of Section 2(a) is
amended to read as follows:
“(a) Forbearance. During the period (the “Hedge
Forbearance Period”) commencing on the Effective Date (as defined below)
and ending on the earlier to occur of: (i) the end of the Forbearance Period
under the Bank Group Forbearance Agreement; or (ii) the date that any Hedge
Forbearance Default occurs, and subject to the other terms and conditions
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of this Agreement, FEMT hereby agrees that it will forbear from
exercising any and all of its rights or remedies under the Master Agreement
arising as a result of a Designated Event of Default, in consideration of
Meridian’s and each Guarantor’s agreements, covenants, releases, and waivers
contained in this Agreement.”
3. Ratifications, Representations and Warranties.
(a) Ratification of Master Agreement. Except as expressly modified and
superseded by this Agreement, the terms and provisions of the Master Agreement hereby are
ratified and confirmed and shall continue in full force and effect. Meridian and FEMT agree
that the Master Agreement shall continue to be legal, valid, binding, and enforceable in
accordance with its terms. Meridian and each Guarantor further expressly acknowledges and
agrees that FEMT and FCC have a valid, non-avoidable, enforceable, and perfected security
interest in and lien against each item of collateral described in the Master Agreement, and
that such security interest and lien secures the payment obligations (if any) and the
performance of all other obligations of Meridian under the Master Agreement.
(b) General Representations and Warranties. Meridian and each Guarantor hereby
jointly and severally represent and warrant to FEMT and FCC that (i) the execution,
delivery, and performance of this Agreement has been duly authorized by all requisite
organizational action on the part of such party and will not violate the constituent
organizational documents of such party, contravene any contractual restriction, any law,
rule, or regulation or court or administrative decree or order binding on or affecting such
party or result in, or require the creation or imposition of any lien, security interest, or
encumbrance on any of the properties of such party; (ii) this Agreement has been duly
executed and delivered by each party and is the legal, valid, and binding obligation of each
party, enforceable in accordance with its terms; (iii) other than with respect to the
Designated Events of Default, (1) the representations and warranties contained in the Master
Agreement are true and correct on and as of the date hereof and on and as of the date of
execution hereof as though made on and as of each such date, (2) no Event of Default or
Potential Event of Default under the Master Agreement has occurred and is continuing, and
(3) Meridian is in full compliance with all covenants and agreements contained in the Master
Agreement; and (iv) absent the effectiveness of this Agreement, FEMT is entitled to exercise
immediately its rights and remedies under the Master Agreement.
(c) Ratification of Guarantees. Each of the Guarantors hereby acknowledges and
consents to all of the terms and conditions of this Agreement and hereby ratifies and
confirms its respective guarantee under the Guarantee dated as of August 13, 2002, as
amended by that certain Amendment and Confirmation of Guarantee dated as of December 23,
2004 (as so amended, the “Guarantee”) for the benefit of FEMT and FCC. Each
Guarantor hereby represents and acknowledges that the execution and delivery of this
Agreement shall in no way change or modify its obligations as a guarantor under the
Guarantee and shall not constitute a waiver by FEMT or FCC of any of its rights against such
Guarantor.
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4. Conditions Precedent. This Amendment shall become effective (the “Effective
Date”) upon receipt by FCC and FEMT of an executed copy of this Amendment.
5. Miscellaneous Provisions.
(a) Survival of Representations and Warranties. All representations and
warranties made in the Master Agreement shall survive the execution and delivery of this
Agreement, and no investigation by FEMT or FCC or any closing shall affect such
representations and warranties or the right of FEMT and FCC to rely upon them.
(b) Limitation on Relationship between Parties. Nothing contained in this
Agreement, the Master Agreement, or any instrument, document, or agreement delivered in
connection herewith or therewith shall be deemed or construed to create a fiduciary
relationship between the parties hereto.
(c) Expenses of FEMT and FCC. Meridian agrees to pay on demand all reasonable
costs and out-of-pocket expenses incurred by FEMT and FCC in connection with the
preparation, negotiation, execution, and enforcement of this Agreement and any and all
amendments, modifications, and supplements hereto, including, without limitation, the
reasonable costs and fees of FEMT’s and FCC’s legal counsel, and all costs and expenses
incurred by FEMT in connection with the enforcement or preservation of any rights under the
Master Agreement.
(d) Severability. Any provision of this Agreement held by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of
this Agreement and the effect thereof shall be confined to the provision so held to be
invalid or unenforceable.
(e) Successors and Assigns; Third Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns, except that neither Meridian nor any Guarantor may assign or transfer any of
its rights or obligations under this Agreement without the prior written consent of FEMT and
FCC, and no other person shall have any right, benefit or interest under or because of the
existence of this Agreement.
(f) Amendments; Interpretation. No amendment or modification of any provision
of this Agreement shall be effective without the written agreement of the parties hereto,
and no waiver of any provision of this Agreement or consent to any departure by Meridian or
any Guarantor therefrom, shall in any event be effective without the written consent of FEMT
and FCC. Any waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.
(g) Counterparts. This Agreement may be executed by one or more of the parties
hereto in any number of separate counterparts, each of which when so executed shall be
deemed to be an original, but all of which when taken together shall constitute one and the
same instrument, and all signature pages transmitted by electronic transmission shall be
considered as original executed counterparts. Each party to this
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Agreement agrees that it will be bound by its own facsimile or electronic signature and
that it accepts the facsimile or electronic signatures of each other party.
(h) Headings. The headings, captions, and arrangements used in this Agreement
are for convenience only and shall not affect the interpretation of this Agreement.
(i) Further Assurances. Meridian and each Guarantor agrees to execute such
other and further documents and instruments as FEMT or FCC may request to implement the
provisions of this Agreement and to perfect and protect the liens and security interests
created by the Master Agreement.
(j) Applicable Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(k) Release. MERIDIAN AND EACH GUARANTOR HEREBY ACKNOWLEDGES THAT IT HAS NO
DEFENSE, RECOUPMENT, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM, OR DEMAND OF ANY KIND OR
NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL, OR ANY PART OF ITS
LIABILITY TO REPAY ITS OBLIGATIONS (IF ANY) ARISING UNDER THE MASTER AGREEMENT OR TO SEEK
AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM FEMT OR FCC WITH RESPECT THERETO.
MERIDIAN AND EACH GUARANTOR HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES
FEMT, FCC, AND THEIR RESPECTIVE PREDECESSORS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
ATTORNEYS, ACCOUNTANTS, CONSULTANTS, REPRESENTATIVES, OWNERS, AFFILIATES, SUCCESSORS,
TRANSFEREES AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”), FROM ALL POSSIBLE
CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES
WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED,
CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR
BEFORE THE DATE THIS AGREEMENT IS EXECUTED, WHICH MERIDIAN OR SUCH GUARANTOR MAY NOW OR
HEREAFTER HAVE AGAINST ANY RELEASED PARTY, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH
CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND
ARISING FROM OR ARISING IN CONNECTION WITH ANY “LOANS”, INCLUDING, WITHOUT LIMITATION, ANY
CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF
THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE MASTER
AGREEMENT, AND/OR NEGOTIATION OF, OR EXECUTION OF, THIS AGREEMENT. IT IS AGREED THAT
THE SCOPE OF THIS RELEASE UNDER THIS PARAGRAPH
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SHALL INCLUDE ALL CLAIMS, DEMANDS, OR CAUSES OF ACTION ARISING IN WHOLE OR PART
FROM THE NEGLIGENCE OR STRICT LIABILITY OF FEMT, FCC, OR ANY OTHER RELEASED PARTY.
MERIDIAN AND EACH GUARANTOR HEREBY COVENANTS AND AGREES NEVER TO INSTITUTE ANY ACTION OR
SUIT AT LAW OR IN EQUITY, NOR INSTITUTE, PROSECUTE, OR IN ANY WAY AID IN THE INSTITUTION OR
PROSECUTION OF, ANY CLAIM, ACTION, OR CAUSE OF ACTION TO RECOVER DEBTS OR DEMANDS OF ANY
NATURE AGAINST ANY OF THE RELEASED PARTIES ARISING OUT OF OR RELATED TO A RELEASED PARTY’S
ACTIONS, OMISSIONS, STATEMENTS, REQUESTS, OR DEMANDS IN ADMINISTERING, ENFORCING,
MONITORING, COLLECTING, OR ATTEMPTING TO COLLECT, THE OBLIGATIONS, INDEBTEDNESS, AND OTHER
OBLIGATIONS OF MERIDIAN OR ANY GUARANTOR TO A RELEASED PARTY. MERIDIAN AND EACH GUARANTOR
AGREES TO INDEMNIFY AND HOLD FEMT AND FCC HARMLESS FROM ANY AND ALL MATTERS RELEASED
PURSUANT TO THIS PARAGRAPH. MERIDIAN AND EACH GUARANTOR ACKNOWLEDGES THAT THE AGREEMENTS IN
THIS PARAGRAPH ARE INTENDED TO BE IN FULL SATISFACTION OF ALL OR ANY ALLEGED INJURIES OR
DAMAGES TO MERIDIAN AND SUCH GUARANTOR, THEIR RESPECTIVE SUCCESSORS, AGENTS, ATTORNEYS,
OFFICERS, DIRECTORS, ASSIGNS AND PERSONAL AND LEGAL REPRESENTATIVES ARISING IN CONNECTION
WITH SUCH MATTERS RELEASED PURSUANT TO THE OTHER PROVISIONS OF THIS PARAGRAPH. MERIDIAN AND
EACH GUARANTOR REPRESENTS AND WARRANTS TO FEMT AND FCC THAT IT HAS NOT PURPORTED TO
TRANSFER, ASSIGN, OR OTHERWISE CONVEY ANY OF ITS RIGHT, TITLE, OR INTEREST IN ANY RELEASED
MATTER TO ANY OTHER PERSON AND THAT THE FOREGOING CONSTITUTES A FULL AND COMPLETE RELEASE OF
MERIDIAN’S AND SUCH GUARANTOR’S CLAIMS WITH RESPECT TO ALL SUCH MATTERS. THE PROVISIONS OF
THIS SECTION 7(k) AND THE REPRESENTATIONS, WARRANTIES, RELEASES, WAIVERS, REMISES,
ACQUITTANCES, DISCHARGES, COVENANTS, AGREEMENTS, AND INDEMNIFICATIONS CONTAINED HEREIN (A)
CONSTITUTE A MATERIAL CONSIDERATION FOR AND INDUCEMENT TO FEMT AND FCC ENTERING INTO THIS
AGREEMENT, (B) DO NOT CONSTITUTE AN ADMISSION OF OR BASIS FOR ESTABLISHING ANY DUTY,
OBLIGATION, OR LIABILITY OF FEMT OR FCC TO MERIDIAN OR ANY GUARANTOR OR ANY OTHER PERSON,
(C) DO NOT CONSTITUTE AN ADMISSION OF OR BASIS FOR ESTABLISHING ANY LIABILITY, WRONGDOING,
OR VIOLATION OF ANY OBLIGATION, DUTY, OR AGREEMENT OF FEMT OR FCC TO MERIDIAN OR ANY
GUARANTOR OR ANY OTHER PERSON, AND (D) SHALL NOT BE USED AS EVIDENCE AGAINST FEMT OR FCC BY
MERIDIAN OR ANY GUARANTOR ANY OTHER PERSON FOR ANY PURPOSE.
(l) Waiver of Jury Trial. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY
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DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN FEMT OR FCC AND
MERIDIAN AND THE GUARANTORS OR ANY OF THEIR RESPECTIVE AFFILIATES ARISING OUT OF, CONNECTED
WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN THIS
AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.
(m) Submission to Jurisdiction. Meridian and each Guarantor agrees that all
disputes among it and FEMT or FCC arising out of, connected with, related to, or incidental
to the relationship established between them in this Agreement, whether arising in contract,
tort, equity, or otherwise, shall be resolved only by the courts of the State of New York,
the Federal courts sitting therein, and appellate court from any thereof. Meridian and each
Guarantor waives in all disputes any objection that any of them may have to the location of
the court considering the dispute which court shall have been chosen in accordance with the
foregoing.
(n) Loan Documents. This Agreement shall constitute a Loan Document (as
defined in the Credit Agreement).
(o) Final Agreement. THE MASTER AGREEMENT REPRESENTS THE ENTIRE EXPRESSION OF
THE PARTIES WITH RESPECT TO THE SUBJECT MATTER THEREOF ON THE DATE THIS AGREEMENT IS
EXECUTED. THE MASTER AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE, OR AMENDMENT
OF ANY PROVISION OF THIS AGREEMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY
EACH PARTY HERETO.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of
the day and year first written above.
| THE MERIDIAN RESOURCE CORPORATION |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | Vice President | |||
| FORTIS CAPITAL CORP. |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | Director | |||
| By: | /s/ Xxxxx Xxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxx | |||
| Title: | Director | |||
| FORTIS ENERGY MARKETING & TRADING GP |
||||
| By: | /s/ Xxxx X. XxXxxxxx | |||
| Name: | Xxxx X. XxXxxxxx | |||
| Title: | Chief Operating Officer | |||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Managing Director | |||
ACKNOWLEDGED AND AGREED:
| GUARANTORS: CAIRN ENERGY USA, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | Vice President | |||
| THE MERIDIAN RESOURCE & EXPLORATION LLC |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | Vice President | |||
| THE MERIDIAN PRODUCTION CORPORATION |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | Vice President | |||
| THE MERIDIAN RESOURCE CORPORATION |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | Vice President | |||
| FBB ANADARKO CORP. |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | Vice President | |||
| TE TMR CORP. |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | Vice President | |||
| SUNDANCE ACQUISITION CORPORATION |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | Vice President | |||
| LOUISIANA ONSHORE PROPERTIES LLC |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | Vice President | |||
| TMR DRILLING CORPORATION |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | Vice President | |||
| TMR EQUIPMENT CORPORATION |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | Vice President | |||
