Document:

exv10w25

Exhibit 10.25

EXECUTION VERSION

JOINDER AND AMENDMENT AGREEMENT

          JOINDER AND AMENDMENT AGREEMENT (this “Agreement”) dated as of March 30, 2010, by and
among NORTEK, INC. (the “Specified U.S. Borrower”), the other Loan Parties party hereto,
the Persons providing the Commitment Increase (as defined in the Credit Agreement referred to
below) party hereto (collectively, the “Commitment Increase Lenders”) and BANK OF AMERICA,
N.A., as Administrative Agent for the Lenders, U.S. L/C Issuer and U.S. Swing Line Lender.

          PRELIMINARY STATEMENTS:

          (1) The Borrowers, the Guarantors, the Lenders, the Administrative Agent and the other parties
thereto have entered into that certain Credit Agreement, dated as of December 17, 2009 (as amended,
restated, amended and restated, supplemented or otherwise modified through the date hereof, the
“Credit Agreement”). Capitalized terms not otherwise defined in this Agreement have the
same meanings as specified in the Credit Agreement.

          (2) The Borrower Agent has requested a Commitment Increase in respect of the U.S. Revolving
Credit Facility in a principal amount of $50,000,000 pursuant to Section 2.16 of the Credit
Agreement. Each Commitment Increase Lender has provided a U.S. Revolving Credit Commitment in the
amount set forth opposite such Commitment Increase Lender’s name on Schedule 2.01 to this
Agreement.

          (3) Pursuant to Sections 2.16(a) and 11.01 of the Credit Agreement, any increase in U.S.
Revolving Credit Commitments pursuant to Section 2.16 of the Credit Agreement shall be effected
pursuant to an amendment to the Credit Agreement, executed by the Loan Parties, the Lenders and
Eligible Assignees providing such increased U.S. Revolving Credit Commitments (and no other
Lenders) and the Administrative Agent (and, in the case of any Eligible Assignee providing any
portion of a Commitment Increase, each U.S. L/C Issuer and U.S. Swing Line Lender). Any such
amendment may, without the consent of any Lenders other than any Lenders providing the increased
U.S. Revolving Credit Commitments, effect such amendments to any Loan Documents as may be necessary
or appropriate, in the reasonable opinion of the Administrative Agent and the Borrowers, to effect
the provisions of Section 2.16 of the Credit Agreement.

          (4) As provided in Section 2.16 of the Credit Agreement, the Loan Parties, the Commitment
Increase Lenders and the Administrative Agent hereby agree to make certain amendments to the Credit
Agreement to effect the Commitment Increase, as hereinafter set forth.

          NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the sufficiency and receipt of all of which is hereby acknowledged, the parties
hereto hereby agree as follows:

          SECTION 1. Amendments to Credit Agreement. Effective as of the Effective Date (as
defined below), Schedule 2.01 of the Credit Agreement is hereby amended and restated in its
entirety as set forth on Schedule 2.01 to this Agreement.

          SECTION 2. Additional Revolving Credit Commitments. Each Commitment Increase Lender
hereby acknowledges that it has provided a U.S. Revolving Credit Commitment in the amount set
forth opposite such Commitment Increase Lender’s name on Schedule 2.01 to this Agreement under the

 

 

caption “U.S. Revolving Credit Commitment”. Each of the Loan Parties and each
Commitment Increase Lender hereby agrees that from and after the Effective Date, each such
Commitment Increase Lender shall be a “U.S. Revolving Credit Lender” for all purposes under the
Credit Agreement and the other Loan Documents.

          SECTION 3. Conditions to Effectiveness. This Agreement shall become effective as of
the date (the “Effective Date”) on which the following conditions have been satisfied or
waived:

     (a) The Administrative Agent shall have received counterparts of this Agreement
executed by the Loan Parties, each Commitment Increase Lender, the U.S. L/C Issuer and the
U.S. Swing Line Lender.

     (b) Immediately before and after giving effect to this Agreement:

     (i) the representations and warranties of each Borrower and each other Loan
Party contained in Article V of the Credit Agreement or any other Loan Document
shall be true and correct in all material respects (or in all respects in the case
of any representations and warranties qualified by materiality) on and as of the
Effective Date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and correct
in all material respects (or in all respects in the case of any representations and
warranties qualified by materiality) as of such earlier date, and except that the
representations and warranties contained in Sections 5.05(a) and (b) of the Credit
Agreement shall be deemed to refer to the most recent statements furnished pursuant
to Sections 6.01(a) and (b) of the Credit Agreement, respectively;

     (ii) no Default or Event of Default shall exist, or would result from, the
effectiveness of this Agreement; and

     (iii) (A) the lesser of (1) the Total Borrowing Base and (2) the Revolving
Credit Facility, exceeds the Outstanding Amount of the Revolving Credit Loans, Swing
Line Loans and L/C Obligations as of the Effective Date, after giving effect to this
Agreement, (B) the lesser of (1) the U.S. Borrowing Base and (2) the U.S. Revolving
Credit Facility, exceeds the Outstanding Amount of the U.S. Revolving Credit Loans,
U.S. Swing Line Loans and U.S. L/C Obligations as of the Effective Date, after
giving effect to this Agreement and (C) the lesser of (1) the Canadian Borrowing
Base and (2) the Canadian Revolving Credit Facility, exceeds the Outstanding Amount
of the Canadian Revolving Credit Loans, Canadian Swing Line Loans and Canadian L/C
Obligations as of the Effective Date, after giving effect to this Agreement.

     (c) The Administrative Agent shall have received a certificate from a Responsible
Officer of the Specified U.S. Borrower, dated as of the Effective Date, certifying as to the
matters set forth in Section 3(b) hereof.

     (d) The Administrative Agent shall have received (i) a favorable opinion of Weil,
Gotshal & Manges LLP, counsel to the Loan Parties, addressed to the Administrative Agent,
the U.S. L/C Issuer, the U.S. Swing Line Lender and the Commitment Increase Lenders with
respect to the enforceability of the transactions under this Agreement and (ii) a
certificate of the Secretary
or Assistant Secretary of each Loan Party dated as of the Effective Date and certifying
that attached thereto is a true and complete copy of resolutions duly adopted by the Board
of Directors (or equivalent body) of such Loan Party authorizing the execution, delivery and
performance of

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this Agreement and that such resolutions have not been modified, rescinded or
amended and are in full force and effect, all in form and substance reasonably satisfactory
to the Administrative Agent.

     (e) The Specified U.S. Borrower shall have paid all fees and expenses of the
Administrative Agent (including all reasonable fees and expenses of counsel to the
Administrative Agent) and the Lenders in connection with this Agreement in accordance with
Section 11.04 of the Credit Agreement.

          SECTION 4. Consent and Affirmation of the Loan Parties. Each Loan Party hereby
consents to the amendments and modifications to the Credit Agreement effected hereby, and confirms
and agrees that, notwithstanding the effectiveness of this Agreement, each Loan Document to which
such Loan Party is a party is, and the obligations of such Loan Party contained in the Credit
Agreement, as amended and modified hereby, or in any other Loan Documents to which it is a party
are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in
all respects, in each case as amended and modified by this Agreement.

          SECTION 5. Reference to and Effect on the Credit Agreement and the Loan Documents.
(a) On and after the effectiveness of this Agreement, each reference in the Credit Agreement to
“this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement,
and each reference in the U.S. Revolving Credit Notes and each of the other Loan Documents to “the
Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement, as amended and modified by this
Agreement.

          (b) The Credit Agreement, the U.S. Revolving Credit Notes and each of the other Loan
Documents, as specifically amended and modified by this Agreement are and shall continue to be in
full force and effect and are hereby in all respects ratified and confirmed. Without limiting the
generality of the foregoing, the Collateral Documents and all of the Collateral described therein
do and shall continue to secure the payment of all Obligations of the Loan Parties under the Loan
Documents to the extent provided in the Collateral Documents.

          (c) The execution, delivery and effectiveness of this Agreement shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of any Lender, any L/C Issuer,
any Swing Line Lender, any Collateral Agent or the Administrative Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan Documents.

          (d) The Loan Parties agree that this Agreement shall be a Loan Document for all purposes of
the Credit Agreement (as specifically amended by this Agreement) and the other Loan Documents.

          (e) Pursuant to Section 2.16(b) of the Credit Agreement, upon the effectiveness of this
Agreement and the increase in the U.S. Revolving Credit Commitments as contemplated hereby, (i)
each U.S. Revolving Credit Lender immediately prior to such increase will automatically and without
further act be deemed to have assigned to each Commitment Increase Lender in respect of such
increase, and each such Commitment Increase Lender will automatically and without further act be
deemed to have assumed, a portion of such U.S. Revolving Credit Lender’s participations under the
Credit Agreement in outstanding U.S. Letters of Credit and U.S. Swing Line Loans such that, after
giving effect to each such deemed assignment and assumption of participations, the percentage of
the aggregate outstanding (A) participations under the Credit Agreement in U.S. Letters of Credit
and (B) participations under the Credit

3

 

Agreement in U.S. Swing Line Loans held by each U.S.
Revolving Credit Lender (including each such Commitment Increase Lender) will equal the percentage
of the aggregate U.S. Revolving Credit Commitments of all U.S. Revolving Credit Lenders represented
by such U.S. Revolving Credit Lender’s U.S. Revolving Credit Commitment and (ii) if, on the
Effective Date, there are any U.S. Revolving Credit Loans outstanding, portions of such U.S.
Revolving Credit Loans shall on the Effective Date be prepaid with the proceeds of additional U.S.
Revolving Credit Loans made by the Commitment Increase Lenders (such that after giving effect to
such prepayment, the percentage of the U.S. Revolving Credit Loans held by each U.S. Revolving
Credit Lender will equal the percentage of the aggregate U.S. Revolving Credit Commitments of all
U.S. Revolving Credit Lenders represented by such U.S. Revolving Credit Lender’s U.S. Revolving
Credit Commitment after giving effect to such Commitment Increase), which prepayment shall be
accompanied by accrued interest on the Loans being prepaid and any other amounts payable to any
Lender in accordance with Section 3.05 of the Credit Agreement.

          SECTION 6. Expenses. The Specified U.S. Borrower agrees that all reasonable and
documented out-of-pocket expenses incurred by the Administrative Agent in connection with the
preparation, execution, delivery and administration, modification and amendment of this Agreement
and the other instruments and documents to be delivered hereunder or in connection herewith
(including, without limitation, the reasonable and documented fees, charges and disbursements of
one counsel for the Administrative Agent) are expenses that the Specified U.S. Borrower is required
to pay or reimburse pursuant to Section 11.04 of the Credit Agreement.

          SECTION 7. Execution in Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute but one
and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement
by telecopier or electronic transmission (e.g., .pdf or .tif file) shall be effective as delivery
of a manually executed counterpart of this Agreement.

          SECTION 8. Miscellaneous. Section and subsection headings appearing herein are
included solely for convenience of reference and are not intended to affect the interpretation of
any provision of this Agreement. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

          SECTION 9. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

[Remainder of Page Intentionally Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above written.

	 	 	 	 	 
	 	NORTEK, INC.,

as the Specified U.S. Borrower and a Guarantor

 	 
	 	By:  	/s/ Edward J. Cooney
 	 
	 	 	Name:  	Edward J. Cooney 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 
	 	VENTROL AIR HANDLING SYSTEMS INC.,

as the Canadian Borrower and a Guarantor

 	 
	 	By:  	/s/ Edward J. Cooney
 	 
	 	 	Name:  	Edward J. Cooney 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 

Signature Page to Joinder and Amendment Agreement

 

 

	 	 	 	 	 
	 	AIGIS MECHTRONICS, INC.

BROAN-MEXICO HOLDINGS, INC.

BROAN-NUTONE LLC

BROAN-NUTONE STORAGE SOLUTIONS LP

CES GROUP, INC.

CES INTERNATIONAL LTD.

CLEANPAK INTERNATIONAL, INC.

ELAN HOME SYSTEMS, L.L.C.

GATES THAT OPEN, LLC 

GEFEN, LLC

GOVERNAIR CORPORATION 

HC
INSTALLATIONS, INC.

HUNTAIR, INC.

INTERNATIONAL ELECTRONICS, LLC

LINEAR LLC

LITE TOUCH, INC. 

MAGENTA RESEARCH LTD.

MAMMOTH-WEBCO, INC.

NILES AUDIO CORPORATION 

NORDYNE LLC

NORDYNE INTERNATIONAL, INC.

NORTEK INTERNATIONAL, INC.

NUTONE LLC

OMNIMOUNT SYSTEMS, INC.

OPERATOR SPECIALTY COMPANY, INC.

PACIFIC ZEPHYR RANGE HOOD INC.

PANAMAX LLC

RANGAIRE GP, INC.

RANGAIRE LP, INC.

SECURE WIRELESS, INC.

SPEAKERCRAFT, LLC

TEMTROL, INC.

XANTECH LLC

ZEPHYR VENTILATION, LLC, as

Borrowers and Guarantors

 	 
	 	By:  	  /s/ Edward J. Cooney
 	 
	 	 	Name:  	Edward J. Cooney 	 
	 	 	Title:  	Vice President & Treasurer

(of entity listed or as an officer of the
managing member, sole member or general partner) 	 
	 

Signature Page to Joinder and Amendment Agreement

 

 

	 	 	 	 	 
	 	BROAN-NUTONE CANADA, INC.

INNERGY TECH, INC.

VENMAR CES, INC.

VENMAR VENTILATION, INC.,

VENMAR VENTILATION (H.D.H.), 

INC. as Guarantors

 	 
	 	By:  	

  /s/ Edward J. Cooney
 	 
	 	 	Name:  	Edward J. Cooney 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 

Signature Page to Joinder and Amendment Agreement

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as Administrative Agent

 	 
	 	By:  	/s/ Robert Anchundia
 	 
	 	 	Name:  	Robert Anchundia 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Joinder and Amendment Agreement

 

 

	 	 	 	 	 
	 	UBS LOAN FINANCE LLC,

as a Commitment Increase Lender

 	 
	 	By:  	/s/ Irja R. Otsa
 	 
	 	 	Name:  	Irja R. Otsa 	 
	 	 	Title:  	Associate Director 	 
	 
	 	 	 
	 	By:  	                                              /s/ Michael Cerniglia
 	 
	 	 	Name:  	Michael Cerniglia 	 
	 	 	Title:  	Director 	 
	 

Signature Page to Joinder and Amendment Agreement

 

 

	 	 	 	 	 
	 	U.S. BANK, NATIONAL ASSOCIATION,

as a Commitment Increase Lender

 	 
	 	By:  	/s/ Jeffrey D. Patton
 	 
	 	 	Name:  	Jeffrey D. Patton 	 
	 	 	Title:  	Assistant Vice President 	 
	 

Signature Page to Joinder and Amendment Agreement

 

 

	 	 	 	 	 
	 	SIEMENS FINANCIAL SERVICES,

as a Commitment Increase Lender

 	 
	 	By:  	/s/ John Finore
 	 
	 	 	Name:  	John Finore 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	                                              /s/ Anthony Casciano
 	 
	 	 	Name:  	Anthony Casciano 	 
	 	 	Title:  	Senior Vice President 	 
	 

Signature Page to Joinder and Amendment Agreement

 

 

	 	 	 	 	 
	 	TD BANK, N.A.,

as a Commitment Increase Lender

 	 
	 	By:  	/s/ Barry A.Kastner
 	 
	 	 	Name:  	Barry A. Kastner 	 
	 	 	Title:  	Senior Vice President 	 
	 

Signature Page to Joinder and Amendment Agreement

 

 

The Commitment Increase Lenders are hereby approved as Eligible Assignees:

	 	 	 	 	 
	BANK OF AMERICA, N.A.

as a U.S. L/C Issuer and a U.S. Swing Line Lender

 	 
	By:  	/s/ Robert Anchundia
 	 
	 	Name:  	Robert Anchundia 	 
	 	Title:  	Vice President 	 
	 

Signature Page to Joinder and Amendment Agreementexv10w53

Exhibit 10.53

COMPROMISE AND SETTLEMENT AGREEMENT

     BE IT KNOWN, that on the dates as indicated before the Notaries Public hereinafter named and
undersigned, personally came and appeared Shell and Meridian, who, for the consideration contained
herein, agree to the following terms and conditions in this compromise and settlement agreement
(“Compromise”).

	I.	 	Definitions

     A. The term “Shell” as used in this Compromise shall mean any entity, firm, corporation,
partnership or organization directly or indirectly controlled by or under direction of Shell Oil
Company. This specifically includes, but is not limited to, Shell Exploration & Production
Company, Shell Louisiana Onshore Properties, Inc., and SWEPI, LP (as successor to Shell Western E&P
Inc.). The term “Shell” shall also include any director, officer, parent, subsidiary, predecessor,
successor, assign, agent, servant, employee, attorneys, and all other persons and entities
representing Shell or acting on Shell’s behalf. For purposes of this paragraph, the term “control”
means the power to direct or cause the direction of the management and policies of such entity,
firm, corporation, partnership or organization, directly or indirectly, whether through the
ownership of voting securities, by contract, or otherwise. Accordingly, when used herein, the term
“Shell” shall mean all of the entities identified in this paragraph and any entity controlled by
Shell.

     B. The term “Meridian” as used in this Compromise shall mean any entity, firm, corporation,
partnership or organization directly or indirectly controlled by or under direction of The Meridian
Resource Corporation. This specifically includes, but is not limited to, Louisiana Onshore
Properties, Inc. (LOPI), LOPI Acquisition Corp., and The Meridian Resource and Exploration Company,
LLC. The term “Meridian” shall also include any director, officer, parent, subsidiary,
predecessor, successor, assign, agent, servant, employee, attorneys, and all other persons and
entities representing Meridian or acting on Meridian’s behalf. For purposes of this paragraph, the
term “control” means the power to direct or cause the direction of the management and policies of
such entity, firm, corporation, partnership or organization, directly or indirectly, whether
through the ownership of voting securities, by contract, or otherwise. Accordingly, when used
herein, the term “Meridian” shall mean all of the entities identified in this paragraph and any
entity controlled by Meridian.

     C. The term “Arbitration” shall mean the arbitration initiated by SWEPI LP (as successor to
Shell Western E&P, Inc.) against The Meridian Resource Corporation in a Notice of Arbitration dated
May 11, 2009.

     D. The “Parties” shall mean Shell and Meridian.

     E. The “Effective Date” of this Compromise is September 1, 2009.

Page 1 of 11

 

     F. The term “Exhibit B Properties” shall mean the wells listed on Exhibit B together with any
flowlines, structures, facilities and equipment associated with such wells.

	II.	 	Background

     Whereas, Shell has made demand for reimbursement of certain costs and expenses pursuant to:
(1) that certain Purchase and Sale Agreement between Shell Western E&P Inc. and The Meridian
Resource Exploration Company dated Effective October 1, 1997 (Gibson/Humphreys and Turtle Bayou
Fields, Terrebonne Parish, Louisiana) (the “PSA”); and, (2) that certain Agreement and Plan of
Merger by and among The Meridian Resource Corporation, LOPI Acquisition Corp., Shell Louisiana
Onshore Properties, Inc., and Louisiana Onshore Properties, Inc. dated March 27, 1998 (the
“Agreement and Plan of Merger”), which two agreements are collectively hereinafter referred to as
the “Agreements.” By virtue of the Agreements, Meridian acquired, among other things, certain oil
and gas producing properties with associated wells, equipment and facilities (the “Properties”).

     Whereas, demands have been made and lawsuits filed with respect to the Properties which have
resulted in the expenditure of money by Shell and agreements to pay additional monies either as
remediation expenditures or cash settlement payments to the owners of the Properties.

     Whereas, Shell and Meridian disagree as to the scope of the indemnity contained in the
Agreements, and the responsibility of Meridian to reimburse Shell for costs already incurred or
which may be incurred in the future.

     Whereas, Shell has invoked and Meridian has responded to an arbitration proceeding involving
many of the items in covered by this agreement (the “Arbitration”).

     Whereas, Meridian has been in negotiations with various entities for the purpose of
consummating a sale or other disposition of Meridian’s assets, or completing an equity transaction
with a third party (the “Corporate Transaction”).

	III.	 	Terms

     A. Meridian

     In consideration of the covenants contained herein, Meridian agrees to the following:

	 	1.	 	Meridian’s obligations pursuant to this Sections III(A)(2) and (3)
and Section V(B) below shall become binding and effective upon either

	 	a.	 	the closing of a Corporate Transaction; or
	 
	 	b.	 	the payment of the Initial Payment and the transfer
of the Savanne Fee Property, as set forth Sections III(A)(2) and (3)
below, with

Page 2 of 11

 

	 	 	 	the prior consent, if contractually-required, of the Agent and the
Required Lenders under The Meridian Amended and Restated Credit Agreement
dated as of December 23, 2004 (as amended).

	 	 	 	Otherwise, unless the Parties agree to extend the Compromise as set forth in
Section III(A)(4) below, this Compromise will terminate and neither Meridian nor
Shell shall be bound by its terms.
	 
	 	2.	 	Meridian will either make or cause to be made a cash payment to Shell
in the amount of $5,000,000.00, payable in five equal, annual payments beginning
on April 1, 2010, or at the closing of the Corporate Transaction, whichever occurs
earlier (the “Initial Payment”). In the event that the closing date occurs before
April 1, 2010, Meridian will notify Shell of the closing date. Subsequent annual
installments will be made on January 4th for each of the following four years
(“Yearly Installments”). Should Meridian fail to timely make any subsequent
annual installment interest shall begin to run on such payment at a rate of 18%,
or the maximum rate allowed by law, whichever is lower, compounded annually
beginning thirty (30) days after said payment was due. Furthermore, Shell shall
be entitled to recover from Meridian its reasonable and necessary attorney’s fees
and costs in any action to recover such payment.
	 
	 	3.	 	At the time of closing of the Corporate Transaction or at the time of
the Initial Payment, whichever is earlier, Meridian will convey good title to the
Savanne Fee Property (as described in Exhibit A hereto), to Shell and in
connection with same will provide any and all information concerning title and
existing environmental conditions or activities on the Savanne Fee Property.
	 
	 	4.	 	In the event that 1) Meridian is unable to close a Corporate
Transaction on or before April 1, 2010, and 2) Meridan fails to make or cause to
be made the Initial Payment and transfer the Savanne Fee Property as set forth in
Sections III(A)(2) and (3) above, this Compromise shall terminate on April 2,
2010, and neither Party shall be obligated pursuant to its terms, unless the
Parties agree in writing to extend the time for Meridian to 1) close a Corporate
Transaction or 2) make or cause to be made the Initial Payment and transfer the
Savanne Fee Property as set forth in Sections III(A)(2) and (3) above. Should the
Parties agree to such an extension, this Compromise will remain in force and
effect as set out in any such extension agreement.
	 
	 	5.	 	Meridian owns and operates the Exhibit B Properties. Meridian
agrees to

	 	a.	 	plug and abandon these wells; and
	 
	 	b.	 	to remove all flowlines, structures, facilities, and
equipment associated with these wells.

	 	6.	 	In addition, Meridian shall remediate any land, to the extent and
only to the extent, that its operation of the Exhibit B Properties has caused
contamination or damage to the environment.
	 
	 	7.	 	Meridian agrees to restore any lands associated with the Exhibit B
Properties consistent with, and not greater than, Meridian’s obligations

Page 3 of 11

 

	 	 	 	pursuant to existing mineral lease or other applicable contractual standard, and
applicable regulatory standards.
	 
	 	8.	 	No action taken or not taken by Meridian pursuant to Sections
III(A)(5) or (6) to restore or remediate any property shall preclude or prejudice
any argument by Meridian pursuant to any informal dispute resolution procedures or
arbitration instituted pursuant to Sections XI and XII of this Compromise that any
or all restoration or remediation undertaken by Meridian was, in fact, the
obligation of Shell pursuant to this Compromise.
	 
	 	9.	 	Meridian will indemnify Shell, only as set forth in Section IV below,
for Claims related to or arising out of the Exhibit B Properties.
	 
	 	10.	 	Notwithstanding any other provision of this Section IIIA, if any
obligations are outstanding under the Meridian Amended and Restated Credit
Agreement dated as of December 23, 2004 (as amended), Meridian shall not pay the
Initial Payment or transfer the Savanne Fee Property as provided herein until the
closing of a Corporate Transaction or with the prior consent of the Agent and the
Required Lenders under such Credit Agreement.

     B. Shell

     In consideration of the covenants contained herein, Shell agrees to the following:

	 	1.	 	Shell’s obligations pursuant to Sections III(B)(3) and V(A) below
shall become binding and effective upon the payment of the Initial Payment and the
transfer of the Savanne Fee Property as set forth Sections IIIA(2) and (3) above.
Otherwise, unless the Parties agree to extend the Compromise as set forth in
Section IIIA(4) above, this Compromise will terminate and neither Meridian nor
Shell shall be bound by its terms.
	 
	 	2.	 	Shell will abate the Arbitration until Meridian makes the Initial
Payment and transfers the Savanne Fee Property, or until this Compromise
terminates.
	 
	 	3.	 	Upon receipt of the Initial Payment and the transfer of the Savanne
Fee Property, Shell will dismiss the Arbitration with prejudice.
Notwithstanding such dismissal, Shell shall retain the right to make any claim for
breach of this Compromise, including but not limited to a claim for indemnity
pursuant to Section IV of this Compromise.
	 
	 	4.	 	Should Shell undertake any restoration or remediation on lands on
which the Exhibit B Properties are contained then no action taken or not taken by
Shell shall preclude or prejudice any argument by Shell pursuant to any informal
dispute resolution procedures or arbitration instituted pursuant to Section XII if
this Compromise that any or all restoration or remediation undertaken by Shell
was, in fact, the obligation of Meridian pursuant to this Compromise.

Page 4 of 11

 

	IV.	 	Indemnity

     To the fullest extent permitted by law, Meridian shall indemnify and hold harmless Shell, its
affiliates, successors and assigns, and the respective officers, directors, employees and agents of
each (the “Shell Indemnified Parties”), only for, and only to the extent that, a Claim or portion
thereof arises, results from, or is caused by the use, operation, lack of maintenance, occupation,
ownership or abandonment of the Exhibit B Properties on or after the Effective Dates of the
Agreements. If contamination on the land on which the Exhibit B Properties are contained arose
prior to the Effective Dates of the Agreements, but spreads after the Effective Dates of the
Agreements, then Meridian shall not owe any indemnity to Shell for Claims relating to such
contamination or damage to the environment unless, and only to the extent that, Meridian’s use of,
or failure to properly maintain, the Exhibit B Properties contributed to such contamination or
damage to the environment. THE FOREGOING OBLIGATION SHALL APPLY REGARDLESS OF THE NEGLIGENCE,
FAULT OR THE STRICT OR STATUTORY LIABILITY OF SHELL INDEMNIFIED PARTIES UNDER ANY LAW (INCLUDING
STATUTORY, REGULATORY AND CASE LAW), REGARDLESS OF WHETHER SUCH LAW WAS IN EXISTENCE AS OF THE
EFFECTIVE DATES OF THE AGREEMENTS. In the event of such a Claim, Shell may select the counsel of
its choice, and Meridian further covenants and agrees to reimburse Shell for reasonable legal and
expert fees and costs incurred in response to any Claim or in defense of any suit(s) or
administrative proceeding(s) brought against Shell Indemnified Parties on account of any such
Claims involving the Exhibit B Properties indemnified hereunder and to pay or discharge the full
amount or obligation of such Claims incurred by, accruing to or imposed on Shell Indemnified
parties resulting from any such Claim(s). Reimbursement of these fees and costs shall be limited
to the percentage of a Claim, if any, which is indemnified hereunder and there will be no
reimbursement of such fees and costs for the percentage of any Claim which is not indemnified
hereunder.

     “Claims” shall mean any and all claims, demands, loss, liability, liens, demands, judgments,
settlements, suits, causes of action, fines and penalties assessed or costs of complying with any
judgments, orders or decrees of courts, administrative tribunals or other governmental entities,
costs and any costs, expenses and fees associated with the investigation, defense and resolution of
the foregoing, including without limitation, reasonable attorney’s fees, expert costs and any cost
or expense of any nature whatsoever incurred to contain, remove, remedy, respond to, clean up, or
abate any environmental impacts or other contamination or pollution of the air, surface water,
sediment, groundwater, land surface or subsurface strata resulting from or related to the
operation, use, maintenance or ownership of the Properties, whether such environmental impacts,
contamination or pollution is located on, within, under or above, or emanates from real property
included in the Properties. Claims may be based on any theory of tort, contract, strict liability,
statutory liability (including without limitation, fines, penalties, obligations or requirements),
property damage, damage to the environment, or damage to natural resources made or any other basis
for liability and shall include, without limitation, any Claims arising, occurring or resulting
from, related to or based on the injury, disease, or death of any persons (including, without
limitation, the indemnifying Party’s employees,

Page 5 of 11

 

agents and representatives) or damage to, loss or destruction of any property, real or personal.

     “Historical or Pending Claims” shall mean Claims asserted or noticed prior to September 1,
2009.

	V.	 	Releases

     A. Shell, for consideration recited herein and subject to the terms indicated does hereby
release, remise and forever discharge Meridian from responsibility for all indemnity claims, past,
present and future, under Section 21 of the PSA and Section 12.1(c) and (d) of the Agreement and
Plan of Merger except for indemnity associated with the properties described in the Exhibit B
Properties, as set forth in Section IV of the Compromise. Shell also releases Meridian for any
Historical or Pending Claims for environmental impacts or contamination relating to the Properties
regardless of whether they are 1) contained within the scope of Section 21 of the PSA and/or
Section 12.1(c) and (d) of the Agreement and Plan of Merger or 2) whether such claims would
otherwise constitute indemnifiable claims pursuant to Section IV of this Compromise.

     B. Meridian, for consideration recited herein and subject to the terms indicated does hereby
release, remise and forever discharge Shell from responsibility for all indemnity claims under
Section 21 of the PSA and Section 12.1(c) and (d) of the Agreement and Plan of Merger. This
release includes any Historical or Pending Claims for environmental impacts or contamination
regardless of whether they are contained within the scope of those sections.

	VI.	 	Assignment of Rights for Properties Not Listed on Exhibit B

     Meridian has assigned or sold those Properties not listed in Exhibit B. To the extent that
the agreements under which those Properties not listed on Exhibit B were sold or assigned contain
obligations on the part of the assignees to conduct decommissioning, abandonment, remediation or
restoration, or provide defense and indemnity, Meridian agrees, to make such rights available to
Shell. Meridian shall cooperate in the enforcement of said rights by (i) at Shell’s request,
assigning such rights to Shell or (ii) pursuing rights against the assignees in Meridian’s name at
Shell’s direction and expense. For all Claims not arising from Exhibit B Properties and not
involving Historical or Pending Claims, Shell shall reimburse Meridian out of any recovery from
such assigned rights in an amount equal to the ratio between any amounts paid by Meridian and Shell
with respect to the Claim. If the parties are unable to agree on the proper ratio, then either
party may invoke the dispute resolution procedures of Section XII of this Compromise. Meridian
agrees to remain contractually obligated to the terms and conditions of this Compromise even though
the Exhibit B Properties have been sold or divested.

Page 6 of 11

 

	VII.	 	Cooperation

     Shell and Meridian agree to reasonably cooperate with respect to Claims relating to the
Properties by providing documents, participating in discovery if necessary, and providing witnesses
for deposition to defend or otherwise address the Claims which may arise with respect to the
Properties in order to resolve those Claims, demands or lawsuits in the most feasible and
economical manner. Nothing in this sub-paragraph shall obligate either party to make any financial
contribution with regard to the Claims. This obligation of cooperation does not prohibit either
party from resolving Claims against it, but such resolution does not eliminate that party’s
obligation to cooperate with the other. Furthermore, as part of this duty to cooperate, Shell and
Meridian agree that neither party will initiate contact with a landowner, regulator, or other third
party and suggest or recommend that environmental-related work needs to be done on any of the
Properties that would be the responsibility of the other party pursuant to this Compromise. If a
landowner or a regulator delivers to either Meridian or Shell a written notification seeking a
response concerning an alleged environmental problem with respect to the Properties, the receiving
party shall notify the other prior to responding.

     If after the Effective Date of this Compromise Meridian discovers contamination on the land on
which the Exhibit B Properties are located that Meridian contends arose prior to the Effective Date
of the Agreements, Meridian shall notify Shell of such contamination within a reasonable time.

	VIII.	 	Business Focal Point.

     Meridian shall appoint its Vice President of Engineering and Operations as a point of contact
for Shell. Such individual shall be empowered to coordinate access by Shell to the Properties to
the extent Meridian still owns any or all of the Properties. Meridian shall allow reasonable
access by Shell to said Properties for the purpose of conducting work of an environmental,
decommissioning, or safety-related nature so long as there is no material interference with
Meridian’s operations. Shell agrees to execute the Agreement for Indemnification and Responsibility
for Damages (the “Indemnification Agreement”) made part of this Compromise as Exhibit C, and to be
the Indemnifying Party as defined in the Indemnification Agreement, in advance of entering upon the
Properties.

	IX.	 	Cooperation With Funded Efforts.

     Meridian agrees as is reasonable, in instances where Shell requests Meridian’s assistance, to
contract directly with contractors to undertake environmental cleanup, decommissioning or
safety-related work on the Properties as directed by, or in conjunction with, Shell so long as
there is no material interference with Meridian’s operations. Shell agrees to pay for all such
costs or expenses within 30 days of receiving

Page 7 of 11

 

any invoice from Meridian for reimbursement of such third-party costs or expenses. Shell
agrees to execute the Indemnification Agreement made part of this Compromise as Exhibit C, and to
be the Indemnifying Party as defined in the Indemnification Agreement, before Meridian will
contract for this work.

	X.	 	Regulatory Compliance

     Meridian acknowledges the existence of certain laws and regulations pursuant to which
governmental authorities may require it to perform work on the Exhibit B Properties. Meridian will
undertake to complete any and all of these activities timely and completely in accordance with
governmental policies, practices, protocols and standards, and will protect and indemnify Shell in
accordance with the above provisions of this Compromise with respect to such governmental action.

	XI.	 	Future Dispute Resolution

     Meridian and Shell adopt the arbitration provisions set out Article 12.5 of the Agreement and
Plan of Merger, which are hereby incorporated by reference, and made applicable to this Compromise.
To the extent that any provisions in this Compromise regarding the recovery or reimbursement of
attorneys’ fees and costs conflict with the provisions of Article 12.5 of the Agreement and Plan of
Merger, the provisions of this Compromise control. As a precursor to binding arbitration, but
without prejudice to the right of either party to invoke same, Meridian and Shell agree to appoint
Business Liaisons who shall be charged with the obligation of sharing information with respect to
the Properties and existing or potential demands, claims or lawsuits by third parties relating to
the Properties, and to resolve any disputes between Meridian and Shell relating to the Properties,
the Agreements or this Compromise. The Business Liaisons shall be designated in Exhibit D, hereto.
In the event of any dispute between Meridian and Shell with regard to the Properties, the
Agreements or this Compromise, the Business Liaisons agree to meet within 5 business days of
receipt of written notice of the dispute by either party. If the dispute cannot be resolved by the
Business Liaisons, either Business liaison shall call for the engagement of the services of a
mutually agreed upon mediator to resolve the dispute. The mediation shall be conducted within 30
business days of the receipt of the written notice of dispute. The parties agree to employ their
best efforts to resolve the dispute by meeting and mediation promptly. In the event that the
dispute is not resolved within 30 business days of the receipt of the written notice of dispute,
then the parties are free to invoke the mandatory arbitration procedure as set forth in the
Agreements.

	XII.	 	Resolution of Future Claims

     In the event that Claims are made against Shell after the Effective Date of this Compromise
with respect to the Exhibit B Properties, the following procedures shall be employed if Shell
contends that all or part of the Claims are indemnified pursuant to this Compromise.

Page 8 of 11

 

	 	1.	 	Shell will provide written notice to Meridian or its successor or assign of
such Claims within 30 days of receipt of those Claims.
	 
	 	2.	 	Shell and Meridian will cooperate in an effort to facilitate the resolution
of such Claims.
	 
	 	3.	 	After final resolution of the underlying Claims, Shell and Meridian will meet
and attempt to reach agreement concerning the percentage, if any, of such Claims that
are covered by the indemnity provisions of this Compromise.. In reaching this
allocation, the parties will not be bound by any responsibility determinations in this
underlying litigation or settlement.
	 
	 	4.	 	If the parties are unable to agree, Shell and/or Meridian shall thereafter
have the right to initiate arbitration under the provisions of this Compromise. In
any such arbitration:

	 	a.	 	The arbitrator will not be bound by any responsibility
determinations in the underlying litigation or settlement;
	 
	 	b.	 	Meridian shall have the right to challenge the reasonableness
and necessity of any amounts spent or obligations undertaken by Shell to
resolve any Claim or satisfy any judgment or governmental order; and
	 
	 	c.	 	Meridian and Shell shall retain the right to contend that
some or all costs and expenses incurred by either party in resolving the
underlying Claims relate to contamination or environmental damage arising
either prior to, or after, the Effective Dates of the Agreements as defined in
Section IV above.

	XIII.	 	Voluntary Agreement

     The Parties acknowledge that each has had an opportunity to consult with its or his respective
attorney concerning the meaning, import, and legal significance of this Compromise, and each has
read this Compromise, as signified by their signatures hereto, and is voluntarily executing the
same for the purposes and consideration herein expressed.

	XIV.	 	Representations and Warranties of Authority

     All Parties represent and warrant (1) that the signatories to this Compromise have full legal
right, power, and authority to execute this Compromise and bind the parties for whom they execute
the Compromise; (2) that they have read the above and foregoing Compromise; and (3) that they are
not relying on any representations not contained herein. The parties further understand that this
Compromise covers and includes every claim of every kind that they have or may have had, contingent
or otherwise, against the other parties. Each Party hereby represents that no one connected with
or representing the other Party has made any representations of any kind either as to the liability
or as to damages in order to induce such party to make this settlement and release, and each Party
hereby states that it is making this settlement and executing this release solely of its/his own
judgment.

Page 9 of 11

 

	XV.	 	No Assignment of Claims

     Each Party represents and warrants that it/he is the full and sole owner of the claims,
demands, actions, or causes of action referred to in this Compromise at the time of the execution
of this Compromise and that it/he has not assigned, transferred or purported to assign or transfer
any of the claims, actions or liabilities released in the paragraph entitled Releases above.

	XVI.	 	Authority of Signatories

     Each of the signatories to this Compromise warrants that he/she is authorized and empowered to
execute this Compromise.

	XVII.	 	Counterparts

     This agreement may be executed simultaneously or in counterpart and those counterparts shall
be construed together as one agreement.

	XVIII.	 	Joint Drafting 

     All parties to this agreement have, with the aid of legal counsel, jointly participated in the
drafting of this agreement and understand and freely agree to the terms and conditions herein.

	XIX.	 	Binding Effect

     This Compromise shall be binding upon and inure to the benefit of the parties hereto and to
their respective representatives, successors and assigns. Meridian agrees to cause any successor
or assign who purchase or acquires a controlling interest in Meridian, if any, assume the
obligations herein and acknowledge that assumption by written agreement, a copy of which shall be
provided to Shell.

	XX.	 	Copies

     It is understood and agreed that this Compromise may be executed in a number of identical
counterparts, each of which shall be deemed an original for all purposes.

	XXI.	 	Headings 

     The headings and subsections of this Compromise are inserted for convenience only and shall
not control or affect the meaning, construction, or effect of this Compromise, or any of its
provisions hereof.

SIGNATURE PAGES FOLLOW

Page 10 of 11

 

Signature Page Compromise and Settlement Agreement

County Of Harris

State of Texas

	 	 	 	 	 
	SO AGREED: 	The Meridian Resource Corporation

 	 
	 	BY: 	 /s/ Paul D. Ching
 	 
	 	 	Title: Chairman, CEO and President 	 
	 	 	 
	 

Subscribed before me, Notary Public, this 11th Day of January, 2010

	 	 	 	 	 
	 	     /s/ Melinda Frew
 	 
	 	Notary Public 	 
	 	 	 
	 

Signature Page Compromise and Settlement Agreement

County Of Harris

State of Texas

	 	 	 	 	 
	SO AGREED: 	Shell Oil Company, SWEPI LP

 	 
	 	BY: 	                                 /s/ B.K. Garrison
 	 
	 	 	Title: Attorney-in-Fact 	 
	 	 	 
	 

Subscribed before me, Notary Public, this 11th Day of January, 2010

	 	 	 	 	 
	 	     /s/ Melinda Frew
 	 
	 	Notary Public 	 
	 	 	 

Page 11 of 11

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