Execution Version
(revised)
THIS FORBEARANCE
AGREEMENT (this “ Agreement ”) is made as of
September 3, 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 ”).
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, as of the
date hereof certain Events of Default (as defined in the Credit
Agreement, defined below) set forth in Appendix I to the Bank
Group Forbearance Agreement (as defined below) (the “
Credit Agreement Events of Default ”) have occurred
and are continuing, or are anticipated to occur, under that certain
Amended and Restated Credit Agreement dated as of December 23,
2004, by and among Meridian, as borrower, FCC, as administrative
agent, and the lenders party thereto, as amended by that certain
First Amendment to Credit Agreement dated as of February 25,
2008, and further amended by that certain Second Amendment to
Credit Agreement dated as of December 19, 2008 (as so amended, the
“ Credit Agreement ”);
WHEREAS, Meridian
and each Guarantor acknowledges and agrees that, certain Events of
Default under the Master Agreement set forth in Schedule I
hereto (the “ Designated Events of Default ”)
have occurred as a result of the Credit Agreement Events of Default
and FEMT is entitled to designate an Early Termination Date (as
defined in the Master Agreement) and to terminate and close out
transactions under the Master Agreement, and seek immediate payment
in full of the obligations (if any) of Meridian thereunder, and to
exercise any other rights and remedies it may have under the Master
Agreement; and
WHEREAS, Meridian
has requested that FEMT forbear from terminating and closing out
transactions under the Master Agreement, from taking any present
action to collect payment in full of the obligations (if any) of
Meridian thereunder, and from exercising any other of its rights
and remedies under the Master Agreement as a result of the
Designated Events of Default, and FEMT has agreed to so forbear
under the terms and conditions set forth in this
Agreement.
NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound,
each of Meridian, the Guarantors, FCC, and FEMT agree as
follows:
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(a) Certain
Capitalized Terms . Capitalized terms defined in the Recitals
section of this Agreement are incorporated herein by this reference
and are used herein as so defined. Capitalized terms used and not
defined in this Agreement (including in the Recitals section of
this Agreement) shall have the meanings assigned to such terms in
the Credit Agreement.
(b) Additional
Definitions . As used herein, the following terms shall have
the respective meanings given to them below:
“ Bank
Group Forbearance Agreement ” means that certain
Forbearance and Amendment Agreement dated September 3, 2009,
by and among Meridian, the Guarantors party thereto, the Lenders
party thereto, and FCC, as administrative agent for such
Lenders.
“
Designated Events of Default ” has the meaning first
set forth above.
“ Event
of Default ” has the meaning assigned to it in the Master
Agreement.
“
Guarantee ” has the meaning assigned to it in Section
4(c) of this Agreement.
“ Hedge
Forbearance Default ” means each of the occurrences set
forth in Section 6 of this Agreement.
“ Hedge
Forbearance Period ” has the meaning assigned to it in
Section 2(a) of this Agreement.
“
Potential Event of Default ” has the meaning assigned
to it in the Master Agreement.
“
Released Parties ” has the meaning assigned to it in
Section 7(k) of this Agreement.
2.
Agreement to Forbear .
(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) 5:00 p.m. (Central Time) on the earlier to occur of
(x) the date which is 91 days immediately after the
consummation of the Orion Transaction (as such term is defined in
the Bank Group Forbearance Agreement), or
(y) November 30, 2009, subject to
Section 2(b) hereof; or (ii) the date that any
Hedge Forbearance Default occurs, and subject to the other terms
and conditions 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.
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Upon the
expiration or termination of the Hedge Forbearance Period:
(x) such forbearance by FEMT shall automatically terminate,
and (y) FEMT shall be entitled to exercise any and all of its
rights remedies under this Agreement and the Master Agreement
without further notice.
(b) Extension
of Forbearance . Upon the extension of the Forbearance Period
(as such term is defined in the Bank Group Forbearance Agreement)
from time to time pursuant to the terms of the Bank Group
Forb
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