Execution Copy
THIRD AMENDMENT TO FORBEARANCE
AND AMENDMENT AGREEMENT
THIS THIRD AMENDMENT TO FORBEARANCE
AND AMENDMENT AGREEMENT (the “ Amendment ”) is
made as of October 20, 2009, by and among THE MERIDIAN RESOURCE
CORPORATION, a Texas corporation (the “ Borrower
”), the undersigned Guarantors (the “ Guarantors
”), the several banks, financial institutions and other
entities from time to time parties to the Credit Agreement (as
defined below) (collectively, the “ Lenders ”),
and FORTIS CAPITAL CORP. (“ Fortis ” or the
“ Administrative Agent ”), as administrative
agent for the Lenders.
R E C I T A L S
:
WHEREAS, the Borrower, Fortis as
Administrative Agent, and the Lenders have entered into an Amended
and Restated Credit Agreement dated as of December 23, 2004, as
amended by that certain First Amendment to Credit Agreement dated
as of February 25, 2008, further amended by that certain Second
Amendment to Credit Agreement dated as of December 19, 2008, and
further amended by the Forbearance Agreement (defined below) (as so
amended, the “ Credit Agreement ”);
WHEREAS, the Borrower, the
Guarantors, Fortis, as Administrative Agent, and the Lenders have
entered into that certain Forbearance and Amendment Agreement dated
as of September 3, 2009 (as amended, the “ Forbearance
Agreement ”);
WHEREAS, the Borrower has requested
that the Administrative Agent and Lenders extend the time for
performance by the Borrower of certain conditions subsequent
required under the Forbearance Agreement and the Administrative
Agent and Lenders 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 the
Administrative Agent, the Lenders, the Borrower 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 and the Credit
Agreement.
2. Amendments to the Forbearance
Agreement . The Borrower, the Guarantors, the
Administrative Agent and the Lenders agree that the Forbearance
Agreement will be amended as follows:
(a) Conditions Subsequent . Section 10(a) of the
Forbearance Agreement is amended to replace the date “October
20, 2009” contained therein with the date
“November 15, 2009.”
(b) Conditions Subsequent . Section 10(b) of the
Forbearance Agreement is amended to replace the date “October
30, 2009” contained therein with the date “November 15,
2009.”
3. Conditions to Amendments . The amendments contained in
Section 2 hereof are subject to the conditions set forth
below. Failure to comply with these conditions will be
deemed to be a Forbearance Default under Section 11 of the
Forbearance Agreement.
(a) Immediately upon receipt thereof, the Borrower
shall provide to the Administrative Agent and the Lenders copies of
all information provided by any third party acceptable to the
Lenders (an “ Offering Party ”) that proposes to
enter into a Borrower Merger Agreement, a Capital Infusion
Agreement or a Purchase and Sale Agreement with the Borrower (a
“ Proposed Transaction ”) that is submitted to
the Borrower to demonstrate to the Borrower’s satisfaction
such Offering Party’s ability to consummate a Proposed
Transaction;
(b) Immediately upon receipt thereof, the Borrower
shall provide to the Administrative Agent and the Lenders copies of
any term sheet or other documents provided by any Offering Party,
which term sheet or other documents shall be subject to the
approval of the Administrative Agent and the Lenders, that contain
preliminary terms and conditions surrounding such Offering
Party’s ability to raise equity and/or obtain financing in
order to consummate such Proposed Transaction and to accomplish a
restructuring/refinancing of the Credit Agreement.
(c) On or before November 15, 2009, an Offering
Party shall have presented to the Administrative Agent and the
Lenders a detailed restructuring/refinancing plan, subject to the
approval of the Administrative Agent and the Lenders, whereby the
Proposed Transaction contemplated by the Offering Party will result
in the restructuring or refinancing of all of the Borrower’s
Obligations under the Credit Agreement, subject only to the closing
of such transaction. Such plan shall contain detailed
information surrounding the Offering Party’s ability to raise
equity and/or obtain financing in order to consummate such Proposed
Transaction and detailed information surrounding the
Borrower’s and the Offering Party’s timetable and
agenda for consummating such Proposed Transaction and for
restructuring/refinancing the Credit Agreement.
(d) The Borrower shall have received a proposal from
an Offering Party to enter into an agreement for a Proposed
Transaction by November 15, 2009 and such proposal shall not have
been withdrawn or terminated by such Offering Party.
4. Covenants .
(a) The Borrower shall conduct a weekly conference
call with the Administrative Agent, starting October 19, 2009, for
the purpose of updating the Administrative Agent as to the status
of all pending transactions.
(b) In consideration of the agreements set forth
herein, the Lenders shall be entitled to an amendment fee of 0.25%
of the aggregate outstanding Obligations of the Borrower as of the
date of this Amendment payable to the Administrative Agent for
the
ratable benefit of such Lenders. Such
amendment fee shall be fully earned as of the date of this
Amendment, but shall be payable on November 15, 2009.
5. Borrowing Base Redeterminations
. Notwithstanding present
Section 4.9 of the Credit Agreement, the Borrowing Base
shall be redetermined on a quarterly basis as of January 31, April
30, July 31 and October 31, commencing January 31, 2010, and the
procedure set forth in Section 4.9 of the Credit Agreement
shall apply to such quarterly redeterminations. For the
avoidance of doubt, (i) the Borrower shall be required to provide
Reserve Reports (for the calendar quarters ended September 30,
December 31, March 31 and June 30) and a related certificate of a
Responsible Officer pursuant to Section 4.9(b) of the Credit
Agreement prior to December 15, March 15, June 15 and September 15,
commencing December 15, 2009 (for the calendar quarter ended
September 30) with respect to the January 31, 2010 redetermination
and (ii) the revised Borrowing Base redetermination requirements
contained in this Section 5 shall survive the expiration or
termination of the Forbearance Agreement.
6. Ratifications, Representations and
Warranties .
(a) Ratification of Loan Documents and
Liens . Except
as expressly modified and superseded by this Amendment, the terms
and provisions of the Loan Documents are ratified and confirmed and
shall continue in full force and effect. Each Credit
Party, the Administrative Agent and Lenders agree that the Loan
Documents shall continue to be legal, valid, binding and
enforceable in accordance with their respective
terms. Each Credit Party further expressly acknowledges
and agrees that the Lenders have a valid, non-avoidable,
enforceable and perfected security interest in and lien against
each item of collateral described in the Security Documents, and
that such security interest and lien secures the payment
Obligations and the performance of all other obligations of the
Borrower under the Loan Documents.
(b) General Representations and
Warranties . Each Credit Party hereby jointly
and severally represents and warrants to the Administrative Agent
and Lenders that (i) the execution, delivery and performance of
this Amendment has been duly authorized by all requisite
organizational action on the part of such Credit Party and will not
violate the constituent organizational documents of such Credit
Party, contravene any contractual restriction, any law, rule or
regulation or court or administrative decree or order binding on or
affecting such Credit Party or result in, or require the creation
or imposition of any lien, security interest or encumbrance on any
of the properties of such Credit Party; (ii) this Amendment has
been duly executed and delivered by each Credit Party and is the
legal, valid and binding obligation of each Credit Party,
enforceable in accordance with its terms; (iii) subject to the
existence of the Designated Events of Default, the representations
and warranties contained in the Credit Agreement and any Loan
Document 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; (iv) except for the Designated Events of Default,
no Default or Event of Default under the Credit Agreement has
occurred and is continuing; (v) except for the Designated Events of
Default, such Credit Party is in full compliance with all covenants
and agre
