Document:

exv10w1

 

Exhibit 10.1

INCREASE JOINDER

     This INCREASE JOINDER, dated as of April 28, 2008 (the “Increase Joinder”), is made
pursuant to the Credit Agreement referred to below (capitalized terms used herein which are not
defined herein and which are defined in such Credit Agreement shall have the same meanings as
therein defined), among HERCULES OFFSHORE, INC. (the “Borrower”), the Subsidiary
Guarantors, each Incremental Revolving Lender (as defined below), and UBS AG, STAMFORD BRANCH, as
Administrative Agent for the Lenders.

W I T N E S S E T H:

     WHEREAS, the Borrower, the Subsidiary Guarantors, the Lenders from time to time party thereto,
UBS Loan Finance LLC, as Swingline Lender, and UBS AG, Stamford Branch, as Issuing Bank and as
Administrative Agent for the Lenders, are parties to the certain Credit Agreement, dated as of July
11, 2007 (as amended, amended and restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”);

     WHEREAS, pursuant to Section 2.19 of the Credit Agreement, the Borrower proposed to the
Administrative Agent on March 20, 2008, to increase the Revolving Commitments from $150,000,000 to
$250,000,000 (such increase, the “Incremental Revolving Commitment”); and

     WHEREAS, the financial institutions signatory hereto under the caption “Existing Incremental
Revolving Lender” (each, an “Existing Incremental Revolving Lender”) and the financial
institutions signatory hereto under the caption “New Incremental Revolving Lender” (each, a
“New Incremental Revolving Lender”, and, together
with each Existing Incremental Revolving Lender, the “Incremental Revolving Lenders”) are willing to provide a portion
of the Incremental Revolving Commitment; 

     NOW, THEREFORE, the Incremental Revolving Lenders are willing to extend such credit to
Borrower, on the terms and subject to the conditions set forth herein and in the Credit Agreement,
and, accordingly, the parties hereto agree as follows:

     SECTION 1. Commitments. (a) Each of the Incremental Revolving Lenders agrees that it
is ready, willing and able to (i) in the case of each Existing Incremental Revolving Lender, commit
to the amount of such Existing Incremental Revolving Lender’s Incremental Revolving Commitment set
forth opposite such Existing Incremental Revolving Lender’s name below (and confirms the amount of
its aggregate Revolving Commitment set forth next to its Incremental Revolving Commitment) and (ii)
in the case of any New Incremental Revolving Lender, become a “Lender” under the Credit Agreement
and commit to the amount of such New Incremental Revolving Lender’s Incremental Revolving
Commitment and Revolving Commitment set forth opposite such New Incremental Revolving Lender’s name
below.

 

 

	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	 	 	 
	Name of	 	Incremental Revolving	 	 	Amount of Revolving	 
	Institution	 	Commitment	 	 	Commitment	 
	UBS Loan Finance LLC
	 	$	13,300,000	 	 	$	33,300,000	 
	Amegy Bank
National Association
	 	$	10,000,000	 	 	$	30,000,000	 
	Bank of America, N.A.
	 	$	25,000,000	 	 	$	25,000,000	 
	Capital One, NA
	 	$	15,000,000	 	 	$	15,000,000	 
	Comerica Bank
	 	$	10,000,000	 	 	$	25,000,000	 
	Deutsche Bank Trust Company
	 	$	6,700,000	 	 	$	16,700,000	 
	Encore Bank, N.A.
	 	$	5,000,000	 	 	$	5,000,000	 
	Fortis Capital Corp.
	 	$	5,000,000	 	 	$	10,000,000	 
	Goldman Sachs Bank USA
	 	$	10,000,000	 	 	$	10,000,000	 

     Each New Incremental Revolving Lender (i) represents and warrants that (A) it has full power
and authority, and has taken all action necessary, to execute and deliver this Increase Joinder and
to consummate the transactions contemplated hereby and to become a Lender under the Credit
Agreement, (B) from and after the Revolving Commitment Increase Effective Date, it shall be bound
by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of its
Incremental Revolving Commitment, shall have the obligations of a Lender thereunder, (C) it is
sophisticated with respect to decisions to acquire assets and assume obligations of the type
represented by its Incremental Revolving Commitment and either it, or the Person exercising
discretion in making its decision to assume its Incremental Revolving Commitment, is experienced in
acquiring assets (and assuming obligations) of such type, (D) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements delivered pursuant to
Section 5.01 thereof, and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Increase Joinder and to acquire (and assume
the obligations relating to) its Incremental Revolving Commitment, on the basis of which it has
made such analysis and decision independently and without reliance on the Administrative Agent or
any other Lender, (E) delivered to the Administrative Agent an Administrative Questionnaire in the
form of Exhibit A to the Credit Agreement, (F) if it is a Foreign Lender, delivered to the
Administrative Agent any documentation required to be delivered by it pursuant to Section 2.15 of
the Credit Agreement, duly completed and executed by it; and (ii) agrees that (A) it will,
independently and without reliance on the Administrative Agent or any other Lender, and based on
such documents and

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information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents, and (B) it will perform in
accordance with their terms all of the obligations that by the terms of the Loan Documents are
required to be performed by it as a Lender.

     (b) As provided in Section 2.19(d) of the Credit Agreement, each Revolving Lender having a
Revolving Commitment prior to the Revolving Commitment Increase Effective Date (as defined in
Section 2 below) that is not committing to its Pro Rata Percentage of the Incremental
Revolving Commitment (each, an “Assigning Lender”) hereby assigns, as of the Revolving
Commitment Increase Effective Date (subject to satisfaction of the conditions precedent set forth
in Section 4 hereof), to the Incremental Revolving Lenders that are not Assigning Lenders
(each, an “Assignee Lender”), and the Assignee Lenders hereby purchase from each Assigning
Lender (subject to satisfaction of the conditions precedent set forth in Section 4 hereof),
at the principal amount thereof, such interests in the Revolving Loans (if any) and participation
interests in LC Exposure and Swingline Loans outstanding on such Revolving Commitment Increase
Effective Date as shall be necessary in order that, after giving effect to all such assignments and
purchases, such Revolving Loans (if any) and participation interests in LC Exposure and Swingline
Loans will be held by Assigning Lenders and Assignee Lenders ratably in accordance with their
Revolving Commitments after giving effect to such increased Revolving Commitments (such interests
of an Assigning Lender, such Assigning Lender’s “Assigned Interest”).

     From and after the Revolving Commitment Increase Effective Date, the Administrative Agent
shall make all payments in respect of the Assigned Interests (including payments of principal,
interest, fees and other amounts) to the Assigning Lenders for amounts that have accrued to but
excluding the Revolving Commitment Increase Effective Date and to the Assignee Lenders for amounts
that have accrued from and after the Revolving Commitment Increase Effective Date.

     Each Assigning Lender (i) represents and warrants that (A) it is the legal and beneficial
owner of its Assigned Interest, (B) the Assigned Interest is free and clear of any lien,
encumbrance or other adverse claim and (C) it has full power and authority, and has taken all
action necessary, to execute and deliver this agreement and to consummate the assignment of its
Assigned Interests contemplated hereby; and (ii) assumes no responsibility with respect to (A) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (B) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (C) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other person obligated in
respect of any Loan Document or (D) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other person of any of their respective obligations under any
Loan Document.

     SECTION 2. Effective Date. The Increase Effective Date for the Incremental Revolving
Commitment (the “Revolving Commitment Increase Effective Date”) shall be the date on which
the conditions precedent set forth in Section 4 hereto have been satisfied, as noticed by
the Administrative Agent to the Revolving Lenders and the Borrower.

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     SECTION 3. Representations and Warranties. Each Loan Party hereby represents and
warrants to the Administrative Agent and each Lender (including each Incremental Revolving Lender)
as of the date hereof and as of the Revolving Commitment Increase Effective Date as follows:

          (a) Each of the representations and warranties made by any Loan Party and set forth herein or
in the Credit Agreement or any other Loan Document is true and correct in all material respects
(except that any representation and warranty that is qualified as to “materiality” or “Material
Adverse Effect” shall be true and correct in all respects) on and as of the date hereof and as of
the Revolving Commitment Increase Effective Date with the same effect as though made on and as of
such date, except to the extent such representations and warranties expressly relate to an earlier
date (in which case such representation shall be true and correct as of such date).

          (b) No Default has occurred and is continuing, or would result from the Incremental Revolving
Commitment or the borrowings, if any, to be made on the Revolving Commitment Increase Effective
Date.

          (c) This Increase Joinder has been duly executed and delivered by each Loan Party and
constitutes a legal, valid and binding obligation of such Loan Party, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors’ rights generally and subject to general principles of equity, regardless
of whether considered in a proceeding in equity or at law.

          (d) Execution and delivery by the Loan Parties of this Increase Joinder, and consummation of
the transactions contemplated hereby, (i) do not require any consent or approval of, registration
or filing with, or any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect, (ii) will not violate the Organizational
Documents of any Company, (iii) will not violate any Requirement of Law, (iv) will not violate or
result in a default or require any consent or approval under any indenture, agreement or other
instrument binding upon any Company or its property, or give rise to a right thereunder to require
any payment to be made by any Company, except for violations, defaults or the creation of such
rights that could not reasonably be expected to result in a Material Adverse Effect, and (v) will
not result in the creation or imposition of any Lien on any property of any Company, except Liens
created by the Loan Documents and Permitted Liens.

          (e) After giving pro forma effect to the borrowings, if any, to be made on the Revolving
Commitment Increase Effective Date and to any change in Consolidated EBITDA and any increase of
Indebtedness resulting from the consummation of any Permitted Acquisition concurrently with such
borrowings, as of December 31, 2007 (the date of the most recent financial statements delivered
pursuant to Section 5.01(a) or (b) of the Credit Agreement), the Borrower is in compliance with
each of the covenants set forth in Section 6.10 of the Credit Agreement.

          (f) The Incremental Revolving Commitment of each Incremental Revolving Lender constitutes a
Revolving Commitment under the Credit Agreement, and each Revolving Loan or other extension of
credit with respect to such Incremental Revolving Commitment,

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together with such Incremental Revolving Commitment, shall be entitled to all the benefits
afforded by the Credit Agreement and the other Loan Documents and shall, without limiting the
foregoing, benefit equally and ratably from the Guarantees and security interests created by the
Security Documents.

     SECTION 4. Conditions Precedent. The effectiveness of each Incremental Revolving
Lender’s Incremental Revolving Commitment shall be subject to, and to the satisfaction of, in each
case on or prior to April 30, 2008, each of the conditions precedent set forth below:

          (a) The Administrative Agent shall have received:

          (i) a certificate of the secretary or assistant secretary of each Loan Party dated the
Revolving Commitment Increase Effective Date, certifying (A) that attached thereto is a true
and complete copy of resolutions duly adopted by the Board of Directors of such Loan Party
authorizing the execution, delivery and performance of this Increase Joinder and, in the
case of Borrower, the extensions of credit permitted as a result thereof, and that such
resolutions have not been modified, rescinded or amended and are in full force and effect
and (B) as to the incumbency and specimen signature of each officer executing any Loan
Document or any other document delivered in connection herewith on behalf of such Loan Party
(together with a certificate of another officer as to the incumbency and specimen signature
of the secretary or assistant secretary executing the certificate in this subclause
(i)); and

          (ii) a certificate as to the good standing of each Loan Party (in so-called “long-form”
if available) as of a recent date prior to the Revolving Commitment Increase Effective Date
from the Secretary of State of the State in which such Loan Party is organized and, if
applicable, from the Texas Secretary of State (or other applicable Governmental Authority).

          (b) The Administrative Agent and the Incremental Revolving Lenders shall be reasonably
satisfied that the Borrower and its Subsidiaries shall be in compliance in all material respects
with all material Requirements of Law, including Regulations T, U and X of the Board, and shall
have received satisfactory evidence of such compliance reasonably requested by them.

          (c) The representations and warranties set forth in Section 3 hereof shall be true and
correct.

          (d) The Administrative Agent shall have received the favorable written opinions of (a) Baker
Botts L.L.P., special counsel for the Loan Parties, and (b) Seward & Kissel, special Liberian
counsel, in each case (i) dated the Revolving Increase Commitment Effective Date, (ii) addressed to
the Administrative Agent and each Incremental Revolving Lender, and (iii) covering (A) the
applicable customary matters set forth in Exhibit M to the Credit Agreement relating to this
Increase Joinder, the Credit Agreement and the other Loan Documents (other than the matters
relating to the perfection and priority of security interests) and (B) the matters referred to in
Section 3(f) hereof.

          (e) The Administrative Agent shall have received a certificate (the “Revolving Commitment
Increase Effective Date Certificate”), in a form agreed to between the

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Administrative Agent and the Borrower, which Revolving Commitment Increase Effective Date
Certificate shall be dated the date that the conditions precedent set forth in this Section
4 are satisfied.

          (f) If any Revolving Loans are outstanding immediately prior to the Revolving Commitment
Increase Effective Date, each Assignee Lender shall have paid to the Administrative Agent (for the
benefit of the Assigning Lenders) 100% of the principal amount of the Revolving Loans being
assigned to it in connection with the adjustment of Revolving Loans pursuant to Section 2.19(d) of
the Credit Agreement and Section 1(b) hereof.

          (g) If any Revolving Loans are outstanding immediately prior to the Revolving Commitment
Increase Effective Date, the Borrower shall have made all payments required pursuant to Section
2.13 of the Credit Agreement (“Breakage Payments”) in connection with any adjustment of
Revolving Loans pursuant to Section 2.19(d) of the Credit Agreement and Section 1(b)
hereof.

          (h) The Administrative Agent shall have received (i) (A) for its account all fees payable to
it with respect to the Incremental Revolving Commitment and (B) for the account of the Incremental
Revolving Lenders all fees payable to them with respect to the Incremental Revolving Commitment and
(ii) all other amounts due and payable on or prior to the Revolving Commitment Increase Effective
Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
(including the legal fees and expenses of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel
to the Administrative Agent) required to be reimbursed or paid by Borrower hereunder or under any
other Loan Document or agreement relating to the Incremental Revolving Commitment.

     SECTION 5. Miscellaneous. (a) This Increase Joinder is a Loan Document (except for
purposes of Section 10.02(b) of the Credit Agreement) executed pursuant to the Credit Agreement and
shall be construed, administered and applied in accordance with all of the terms and provisions of
the Credit Agreement. For the avoidance of doubt, all references in the Loan Documents to
Revolving Loans shall be deemed, unless the context otherwise requires, to include references to
Revolving Loans made pursuant to the Incremental Revolving Commitments added pursuant to this
Increase Joinder. Except as modified hereby, all of the terms, conditions and other provisions of
the Credit Agreement and the other Loan Documents shall remain unchanged and shall continue to be,
and shall remain, in full force and effect in accordance with their respective terms.

          (b) All notices, requests and demands to or upon the respective parties hereto shall be given
in the manner, and become effective, as set forth in Section 10.01 of the Credit Agreement, except
that, with respect to each undersigned New Incremental Revolving Lender, all such notices, requests
and demands shall be delivered to the address set forth opposite such Incremental Revolving
Lender’s name on Schedule I attached hereto.

          (c) This Increase Joinder shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. No amendment, modification, supplement,
termination or waiver of or to any provision of this Increase Joinder shall be effective unless the
same shall be in writing and signed by the party or parties hereto against

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whom enforcement of such amendment, modification, supplement, termination or waiver is sought.

          (d) This Increase Joinder may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. Delivery of an executed counterpart of a signature
page of this Increase Joinder by telecopier or electronic transmission (PDF format) shall be
effective delivery of a manually executed counterpart of this Increase Joinder.

          (e) Section headings in this Increase Joinder are for convenience of reference only, are not
part of this Increase Joinder and shall not affect the construction of, or be taken into
consideration in interpreting, this Increase Joinder.

          (f) This Increase Joinder shall be construed in accordance with and governed by the law of the
State of New York, without regard to conflicts of law principles that would require the application
of the laws of another jurisdiction.

[Signature pages follow.]

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     IN WITNESS WHEREOF, the parties hereto have caused this Increase Joinder to be duly executed
and delivered by their proper and duly authorized officers as of the day and year first above
written.

	 	 	 	 	 
	 	HERCULES OFFSHORE, INC.

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Sr. Vice President, General Counsel,

Chief Compliance Officer, and Secretary 	 
	 

	 	 	 	 	 
	 	HERCULES DRILLING COMPANY, LLC

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Secretary 	 
	 

	 	 	 	 	 
	 	HERCULES LIFTBOAT COMPANY, LLC

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Secretary 	 
	 

	 	 	 	 	 
	 	HERCULES OFFSHORE SERVICES LLC

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Secretary 	 
	 

	 	 	 	 	 
	 	THE OFFSHORE DRILLING COMPANY

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

 

 

	 	 	 	 	 
	 	TODCO MEXICO INC.

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	TODCO MANAGEMENT SERVICES, INC.

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	CLIFFS DRILLING COMPANY

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	TODCO AMERICAS INC.

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	TODCO INTERNATIONAL INC.

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	CLIFFS DRILLING TRINIDAD L.L.C.

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

 

 

	 	 	 	 	 
	 	DELTA TOWING HOLDINGS, LLC

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	DELTA TOWING, LLC

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	THE ONSHORE DRILLING COMPANY

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	THE HERCULES OFFSHORE DRILLING COMPANY LLC

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	UBS AG, STAMFORD BRANCH,

as Administrative Agent and Issuing Bank

 	 
	 	By:  	/s/ David B. Julie
 	 
	 	 	Name:  	David B. Julie 	 
	 	 	Title:  	Associate Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	         /s/ Mary E. Evans
 	 
	 	 	Name:  	Mary E. Evans 	 
	 	 	Title:  	Associate Director 	 
	 

 

 

	 	 	 	 	 
	 	ASSIGNING LENDERS:

CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as a Revolving Lender

 	 
	 	By:  	/s/ Vanessa Gomez
 	 
	 	 	Name:  	Vanessa Gomez 	 
	 	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                         /s/ Morenikeji Ajayi
 	 
	 	 	Name:  	Morenikeji Ajayi 	 
	 	 	Title:  	Associate 	 
	 

	 	 	 	 	 
	 	JEFFERIES FINANCE LLC, as a Revolving Lender

 	 
	 	By:  	/s/ Carl A. Toriello
 	 
	 	 	Name:  	Carl A. Toriello 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as
a Revolving Lender and Issuing Bank

 	 
	 	By:  	/s/ Thomas E. Okamoto
 	 
	 	 	Name:  	Thomas E. Okamoto 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	MIZUHO CORPORATE BANK, LTD., as a
Revolving Lender

 	 
	 	By:  	/s/ Leon Mo
 	 
	 	 	Name:  	Leon Mo 	 
	 	 	Title:  	Senior Vice President 	 
	 

 

 

	 	 	 	 	 
	 	NATIXIS, as a Revolving Lender

 	 
	 	By:  	/s/ Carlos Quinteros
 	 
	 	 	Name:  	Carlos Quinteros 	 
	 	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                 /s/ Louis P. Laville, III
 	 
	 	 	Name:  	Louis P. Laville, III 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	NORDEA BANK NORGE ASA, GRAND
CAYMAN BRANCH, as a Revolving Lender

 	 
	 	By:  	/s/ Hans Chr. Kjelsrud
 	 
	 	 	Name:  	Hans Chr. Kjelsrud 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    /s/ Martin Kahm
 	 
	 	 	Name:  	Martin Kahm 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	TRUSTMARK NATIONAL BANK, as a
Revolving Lender

 	 
	 	By:  	/s/ L. J. Perenyi
 	 
	 	 	Name:  	L. J. Perenyi 	 
	 	 	Title:  	Vice President 	 
	 

 

 

	 	 	 	 	 
	 	UNITED OVERSEAS BANK LIMITED, NEW
YORK AGENCY, as a Revolving Lender

 	 
	 	By:  	/s/ George Lim
 	 
	 	 	Name:  	George Lim 	 
	 	 	Title:  	SVP & GM 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                           /s/ Mario Sheng
 	 
	 	 	Name:  	Mario Sheng 	 
	 	 	Title:  	AVP 	 
	 

	 	 	 	 	 
	 	EXISTING INCREMENTAL REVOLVING LENDERS:

UBS LOAN FINANCE LLC

 	 
	 	By:  	/s/ David B. Julie
 	 
	 	 	Name:  	David B. Julie 	 
	 	 	Title:  	Associate Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                   /s/ Mary E. Evans
 	 
	 	 	Name:  	Mary E. Evans 	 
	 	 	Title:  	Associate Director 	 
	 

	 	 	 	 	 
	 	AMEGY BANK NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ C. Ross Bartley
 	 
	 	 	Name:  	C. Ross Bartley 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	COMERICA BANK

 	 
	 	By:  	/s/ Gary Culbertson
 	 
	 	 	Name:  	Gary Culbertson 	 
	 	 	Title:  	Vice President 	 
	 

 

 

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY

 	 
	 	By:  	/s/ David J. Bell
 	 
	 	 	Name:  	David J. Bell 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                  /s/ Erin Morrissey
 	 
	 	 	Name:  	Erin Morrissey 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	FORTIS CAPITAL CORP.

 	 
	 	By:  	/s/ Svein Engh
 	 
	 	 	Name:  	Svein Engh 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                    /s/ Joseph Maxwell
 	 
	 	 	Name:  	Joseph Maxwell 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	NEW INCREMENTAL REVOLVING LENDERS:

CAPITAL ONE, NA

 	 
	 	By:  	/s/ Don Backer
 	 
	 	 	Name:  	Don Backer 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	GOLDMAN SACHS BANK USA

 	 
	 	By:  	/s/ William Yarbenet
 	 
	 	 	Name:  	William Yarbenet 	 
	 	 	Title:  	Vice President 	 
	 

 

 

	 	 	 	 	 
	 	ENCORE BANK, N.A.

 	 
	 	By:  	/s/ J. David Webster
 	 
	 	 	Name:  	J. David Webster 	 
	 	 	Title:  	SVP 	 
	 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Jay Salltza
 	 
	 	 	Name:  	Jay Salltza 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 
	 	ACKNOWLEDGED BY:

UBS LOAN FINANCE LLC,

as Swingline Lender

 	 
	By:  	/s/ David B. Julie
 	 
	 	Name:  	David B. Julie 	 
	 	Title:  	Associate Director 	 
	 

	 	 	 	 
	 	 	 
	By:  	    /s/ Mary E. Evans
 	 
	 	Name:  	Mary E. Evans 	 
	 	Title:  	Associate Director 	 
	 

 

 

Schedule I

Notice Information for New Incremental Revolving Lenders

	1.	 	Bank of America, N.A.

Bank of America Plaza

901 Main Street

Dallas, TX 75202

Attn: Taelitha Mejoy Bonds-Harris

Tel: (214) 209-3645

Fax: (214) 290-9644

Email: taelitha.m.harris@bankofamerica.com

	2.	 	Capital One, NA

5718 Westheimer, Suite 600

Houston, TX 77057

Attn: Maria Keeling

Tel: (713) 435-7460

Fax: (713) 706-5499

Email: maria.keeling@capitalonebank.com

	3.	 	Encore Bank, N.A.

9 Greenway Plaza, Suite 1000

Houston, TX 77046

Attn: Joyce Bostic

Tel: (713) 787-3119

Fax: (713) 267-7777

Email: jbostic@encorebank.com

	4.	 	Goldman Sachs Bank USA

30 Hudson Street, 17th Floor

Jersey City, NY 07302

Attn: Muhammad Khan

Tel: (212) 357-4350

Fax: (917) 977-3966

Email: muhammad.khan@gs.comexv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this “Agreement”) by and between The Meridian Resource
Corporation, a Texas corporation (referred to herein as the “Company”) and Joseph A. Reeves
(the “Employee”), dated effective as of the beginning of the day on 29th day of
April, 2008.

W I T N E S S E T H:

     WHEREAS, the Employee and the Company desire to have the Employee continue employment with the
Company during the Term (as hereafter defined);

     WHEREAS, the Employee and the Company desire to set forth the terms and conditions of the
Employee’s employment with the Company; and

     WHEREAS, pursuant to that certain Termination Agreement between the Company and the Employee
dated April 29, 2008 (the “Termination Agreement”) the Employee and the Company have agreed to
terminate, effective as the beginning of the day on April, 29, 2008, the existing Employment
Agreement dated August 18, 1993;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

AGREEMENTS

     1. Employment Period. Subject to the terms and conditions herein, the Company hereby
agrees to continue the Employee in his employment as Chief Executive Officer, and the Employee
hereby agrees to remain in the employment of the Company for the period commencing on the Effective
Date and ending on December 29, 2008 (the “Term”).

     2. Terms of Employment.

          (a) Positions and Duties. During the Term, the Employee’s position (including status,
offices, and reporting requirements), authority, duties and responsibilities shall remain
commensurate in all material respects with those held, exercised and assigned as of the Effective
Date and the Employee’s services shall be performed at Employer’s current location or only at any
other main office or location of Company within thirty (30) miles from such location.

     During the Term, and excluding any periods of vacation and sick leave to which the Employee is
entitled, the Employee agrees to devote reasonable attention and time to the business and affairs
of the Company, to discharge the responsibilities assigned to the Employee hereunder and to perform
faithfully and efficiently such responsibilities. Further, the Employee shall serve, when elected,
as a director of the Company, as a director or officer of any subsidiary of the Company, as a
member of any committee of any such Board of Directors to which he may be appointed, and the
Employee shall perform such other duties commensurate with his office, as the Board of Directors
may from time to time assign. During the Term it shall not be a violation of this Agreement for the
Employee to (i) serve on corporate, civic or charitable boards or

 

 

committees, (ii) deliver lectures and fulfill speaking engagements or (iii) manage personal
investments for so long as such activities do not materially interfere with the performance of the
Employee’s responsibilities in accordance with this Agreement; provided that such civic services,
volunteer work or lectures shall not interfere with Employee’s duties to the Company, as set forth
in this Agreement, and that Employee shall maintain his or her obligations of confidentiality as
set forth in this Agreement at all times during any such civic services, volunteer work or speaking
engagements. It is expressly understood and agreed that to the extent that any such activities have
been conducted by the Employee prior to the Effective Date, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the performance of the Employee’s
responsibilities to the Company.

          (b) Compensation.

               (i) Base Salary. During the Term, the Employee shall receive an annual base salary
(“Base Salary”) of SIX HUNDRED THOUSAND AND NO/100 UNITED STATES DOLLARS ($600,000.00),
which shall be payable in equal semi-monthly installments.

               (ii) Incentive, Saving and Retirement Plans. In addition to Base Salary, the Employee
shall be entitled to participate during the Term in all incentive, savings and retirement plans,
practices, policies and programs applicable to other similar key employees of the Company that are
in effect from time to time.

               (iii) Welfare Benefit Plans. During the Term, the Employee and/or the Employee’s
family, as the case may be, shall be eligible for participation in and shall receive all benefits
under any welfare benefit plans, practices, policies and programs provided by the Company (if any)
to other similarly situated key employees, including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life, accidental death and travel
accident insurance plans and programs.

               (iv) Expenses. During the Term, the Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Employee in accordance with the policies,
practices and procedures of the Company in effect, from time to time, for Employee.

               (v) Fringe Benefits. During the Term, the Employee shall be entitled to fringe
benefits, including payment of automobile expenses and payment of any professional dues and dues
for social club memberships, in accordance with plans, practices, programs and policies of the
Company in effect, from time to time, for the Employee.

               (vi) Office and Support Staff. During the Term, the Employee shall be entitled to an
office or offices of a size and with furnishings and other appointments, and to secretarial and
other assistance, at least equal to that provided to the Employee by the Company as of the
Effective Date.

               (vii) Vacation. During the 2008 calendar year, the Employee shall be entitled to paid
vacation of six (6) weeks.

 

 

     3. Termination.

          (a) Provision for. This Agreement may only be terminated prior to the end of the Term
by the Company or the Employee only in accordance with the terms of Sections 3, 4, 5 and 6 hereof.

          (b) Notice of Termination. Any termination by the Company or by the Employee for any
reason other than death shall be communicated by Notice of Termination to the other party hereto
given in accordance with the notice provisions contained in this Agreement. For purposes of this
Agreement, a “Notice of_Termination” means a written notice which specifies the termination
date.

          (c) Date of Termination. “Date of Termination” means the date of receipt of
the Notice of Termination or any later date specified therein, as the case may be; provided
however, that (i) if the Employee’s employment is terminated by the Company, the Date of
Termination shall be the date on which the Company notifies the Employee of such termination except
for termination for “Good Cause” (as hereinafter defined) (ii) if the Employee’s employment is
terminated by reason of Good Cause the Date shall be the earliest of (i) date of the conviction,
adjudication or judgment by the court of competent jurisdiction, or (ii) last day of the term of
this Agreement and (iii) if the Employee’s employment is terminated by reason of death, the Date of
Termination shall be the date of death of the Employee.

     4. Obligation of the Company upon Termination (Except Due to Death, Disability or Good
Cause). If after the date of the Agreement, the Company shall breach any agreement providing
for or respecting the employment of the Employee or if during the Term, the Company shall terminate
the Employee’s employment for any reason other than for death or Good Cause, or if during the Term,
the Employee shall terminate his Employment for “Good Reason” (as defined below), then the Company
shall pay or cause to be paid to the Employee the aggregate of the following amounts:

     A. Within 30 days following the Date of Termination the Company shall pay or cause to
be paid to the Employee, in cash, (i) the Employee’s earned but unpaid Base Salary through
the Date of Termination for periods through but not following the Employee’s Separation From
Service (the “Accrued Salary”) and (ii) the Employees accrued vacation pay, to the
extent not theretofore paid (the sum of the amounts described in clauses (i) and (ii) shall
be hereinafter referred to as the “Accrued Obligations”).

     B. The Company shall pay or cause to be paid to the Employee, in cash, the Employee’s
current Base Salary for the remainder of the Term for periods following the Employee’s
Separation From Service on the date of his Separation From Service if he is not a Specified
Employee on the date of his Separation From Service or on the date that is six months
following the date of his Separation From Service if he is a Specified Employee on the date
of his Separation From Service. For purposes of this Agreement, the terms “Separation
From Service” and “Specified Employee” shall have the meanings ascribed to those
terms in Section 409A. For purposes of this Agreement “Section 409A” means section
409A of the Internal Revenue Code of 1986, as amended (the “Code”) and

 

 

the rules and regulations promulgated thereunder by the Department of Treasury and the
Internal Revenue Service.

     C. For the remainder of the Term and until October 31, 2010 or such longer period as
any plan, program, practice or policy may provide, the Company shall continue benefits to
the Employee and/or the Employee’s family at least equal to those which would have been
provided to them in accordance with the plans, programs, practices and policies described in
Section 2(b)(iii) and (v) of this Agreement if the Employee’s employment had not been
terminated , including health insurance and life insurance, in accordance with the plans,
practices, programs or policies of the Company in effect prior to the Termination Date, and
for purposes of eligibility for retiree benefits pursuant to such plans, practices, programs
and policies, the Employee shall be considered to have remained employed until the end of
the Term and to have retired on the last day of such period. If the dental, accident,
health insurance or other benefits specified in this Section 4.C are taxable to the
Employee, the following provisions shall apply to the reimbursement or provision of such
benefits. The Employee shall be eligible for reimbursement for covered welfare expenses, or
for the provision of such benefits on an in-kind basis, during the period commencing on the
expiration of the Term and ending on October 31, 2010. The amount of such welfare benefits
eligible for reimbursement or the in-kind benefits to be provided under this Section 4.C
during the Employee’s taxable year shall not affect the expenses eligible for reimbursement,
or the in-kind benefits to be provided, in any other taxable year (with the exception of
applicable lifetime maximums applicable to medical expenses or medical benefits described in
section 105(b) of the Code). The Company shall reimburse an eligible welfare benefit
expense that is not a nontaxable insured benefit on or before the last day of the Employee’s
taxable year following the taxable year in which the expense was incurred. The Employee’s
right to reimbursement or direct provision of benefits under this Section 4.C is not subject
to liquidation or exchange for another benefit.

For purposes of this Agreement, “Good Reason” means:

               (i) if there is a change in the nature of the scope of functions, powers, authorities, duties
or responsibilities as set forth in Section 2(a) of this Agreement, which change is not remedied by
the Company within thirty (30) days after receipt of notice thereof given by the Employee;

               (ii) any failure by the Company to comply with any of the provisions of Section 2(b) of this
Agreement, which is not remedied by the Company within thirty (30) days after receipt of notice
thereof given by the Employee;

               (iii) the Company’s requiring the Employee to be based at any office or location other than
that described in Section 2(a) hereof, except for travel reasonably required in the performance of
the Employee’s responsibilities;

               (iv) any purported termination by the Company of the Employee’s employment except for “Good
Cause” (hereinafter defined) or Death; or

 

 

               (v) any failures by the Company to comply with and satisfy Section 12 of this Agreement.

     5. Obligation of the Company upon Termination Due to Death, or Disability. If the
Employee shall die or become Disabled (as defined below) during the Term, then the Company shall
pay or cause to be paid to the Employee’s estate the aggregate of the following amounts:

     A. Within 30 days following the date of the death of the Employee, the Company shall
pay or cause to be paid to the Employee’s estate, in cash, the Accrued Obligations.

     B. Within 30 days following the date of the death of the employee or the Employee
becoming Disabled, the Company shall pay or cause to be paid to the Employee and/or the
Employee’s estate, in cash, the Employee’s current Base Salary for the remainder of the Term
for periods following the date of the Employee’s death.

     C. For the remainder of the Term and until October 31, 2010 or such longer period as
any plan, program, practice or policy may provide, the Company shall continue benefits to
the Employee’s family at least equal to those which would have been provided to them in
accordance with the plans, programs, practices and policies described in Section 2(b)(iii)
and (v) of this Agreement if the Employee’s employment had not been terminated, including
health insurance and life insurance, in accordance with the plans, practices, programs or
policies of the Company in effect prior to the Termination Date, and for purposes of
eligibility for retiree benefits pursuant to such plans, practices, programs and policies,
the Employee shall be considered to have remained employed until the end of the Term and to
have retired on the last day of such period. If the dental, accident, health insurance or
other benefits specified in this Section 5.C are taxable to the Employee’s family, the
following provisions shall apply to the reimbursement or provision of such benefits. The
Employee’s family shall be eligible for reimbursement for covered welfare expenses, or for
the provision of such benefits on an in-kind basis, during the period commencing on the
expiration of the Term and ending on October 31, 2010. The amount of such welfare benefits
eligible for reimbursement or the in-kind benefits to be provided under this Section 5.C
during the taxable of the Employee’s family shall not affect the expenses eligible for
reimbursement, or the in-kind benefits to be provided, in any other taxable year (with the
exception of applicable lifetime maximums applicable to medical expenses or medical benefits
described in section 105(b) of the Code). The Company shall reimburse an eligible welfare
benefit expense that is not a nontaxable insured benefit on or before the last day of the
taxable year of the Employee’s family following the taxable year in which the expense was
incurred. The right of the Employee’s family to reimbursement or direct provision of
benefits under this Section 5.C is not subject to liquidation or exchange for another
benefit.

     D. For purpose of this Agreement, the term Disabled shall have the meaning ascribed to
that term in Section 409A.

 

 

     6. Obligation of the Company Upon Termination For Good Cause.

     If the Employee’s employment is terminated by the Company for Good Cause, this Agreement shall
terminate without further obligations to the Employee, except as set out in this Section
and under this Agreement as it does not conflict with this Section, other than for the payment of
the Accrued Obligations. The Company shall pay the Accrued Obligations to the Employee, as
applicable, in a cash lump sum within thirty (30) days of the Date of Termination. For purposes
of this Agreement, “Good Cause” means:

          (i) The Employee has been convicted of a felony by a court of competent jurisdiction and such
conviction is no longer subject to direct appeal.

          (ii) The Employee has been adjudicated by a court of competent jurisdiction to be mentally
incompetent which mental incompetency directly affects his ability to serve, Employer, and such
adjudication is no longer subject to direct appeal.

          (iii) A court of competent jurisdiction has rendered a judgment that the Employee has
committed acts of fraud or willful malfeasance that has materially damaged the Company and such
determinations is no longer subject to direct appeal.

     7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Employee’s continuing or future participation in any benefit, bonus, incentive or other plans,
programs, policies or practices, provided by the Company and for which the Employee may qualify,
nor shall anything herein limit or otherwise affect such rights as the Employee may have under any
stock option or warrant or other agreements with the Company. Amounts which are vested benefits or
which the Employee is otherwise entitled to receive under any plan, policy, practice or program of
the Company at or subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program.

     8. Full Settlement. The Company’s obligation to make or cause to be made the payments
provided for in this Agreement and otherwise to perform its obligation hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Employee or others. In no event shall the Employee be obligated to
seek other employment or take other action by way of mitigation of the amounts payable to the
Employee under any of the provisions of this Agreement.

     9. Legal Fees. The Company agrees to pay, or cause to be paid, to the full extent
permitted by law, all legal fees and expenses which the Employee may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the Company or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any guarantee of
performance thereof. Such payments under this Section 9 shall be made within ten (10) business
days after the delivery of the Employee’s written request for the payment accompanied by such
evidence of fees and expenses incurred as the Company may reasonably require. In any event the
Company shall pay the Employee such legal fees and expenses by the last day of the Employee’s
taxable year following the taxable year in which the Employee incurred such legal fees and
expenses. The legal fees or expenses that are subject to reimbursement pursuant to this Section 9
shall not be limited as a result of when the fees or expenses are incurred. The amount

 

 

of legal fees or expenses that is eligible for reimbursement pursuant to this Section 9 during
a given taxable year of the Employee shall not affect the amount of expenses eligible for
reimbursement in any other taxable year of the Employee. The right to reimbursement pursuant to
this Section 9 is not subject to liquidation or exchange for another benefit.

     10. Disputed Payments and Refusals to Pay. If the Company fails to make a payment
under this Agreement in whole or in part as of the payment date specified in this Agreement, either
intentionally or unintentionally, other than with the express or implied consent of the Employee,
the Company shall owe the Employee interest on the delayed payment at the applicable Federal rate
provided for in section 7872(f)(2)(A) of the Code if the Employee (i) accepts the portion (if any)
of the payment that the Company is willing to make (unless such acceptance will result in a
relinquishment of the claim to all or part of the remaining amount) and (ii) makes prompt and
reasonable good faith efforts to collect the remaining portion of the payment. Any such interest
payments shall become due and payable effective as of the applicable payment date(s) specified in
Section 4, Section 5 or Section 6 with respect to the delinquent payment(s) due under Section 4,
Section 5 or Section 6.

     11. Confidential Information. The Employee shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or data relating to the
Company which shall have been obtained by the Employee during the Employee’s employment with the
Company and which shall not be or become public knowledge (other than by acts by the Employee or
his representatives in violation of this Agreement). After termination of the Employee’s
employment with the Company, the Employee shall not, without written consent of the Company,
communicate or divulge any such information, knowledge or data to anyone other than the Company and
those designated by it. In no event shall an asserted violation of the provisions of this Section
constitute a basis for deferring or withholding any amounts otherwise payable to the Employee under
this Agreement.

     12. Assignment and Binding Effect. This Agreement is personal to the Employee and
without the prior written consent of the Company shall not be assignable by the Employee otherwise
than by will or the laws of descent and distribution. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by each party hereto and each party’s respective
successors, heirs, assigns and legal representatives.

     13. Successor. The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation, or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, “Company” shall mean the Company as
hereinbefore defined and any successor to its business and/or assets.

     14. During the term of any NPI assignment, Employee agrees that he shall not directly or
indirectly, by, through, or on behalf of himself or others, acquire any mineral interest within the
geographical boundaries of such NPI assignment.

     15. Law Governing. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas. This Agreement was executed in Houston,

 

 

Harris County, Texas and performance of this Agreement will be made in such place. The state
and federal courts within Harris County, Texas shall have exclusive jurisdiction over any dispute
arising in connection with this Agreement. The parties hereby submit to the jurisdiction of the
courts within Harris County, Texas solely for this purpose.

     16. Notices. All notices and other communications hereunder shall be in writing and
shall be personally given by hand delivery to the other party or sent by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

			
	          If to the Employee:	           	
 

 

 

			
	          If to the Company:	           	The Meridian Resource Corporation

1401 Enclave Parkway, Suite 300

Houston, Texas 77077

Attention:                                             

or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee, or
if mailed, on the seventh (7th) day following the day on which it was deposited in the
Unites States mail.

     17. Severability. If any provision of this Agreement is held to be illegal, invalid,
or unenforceable under present or future laws effective during the term hereof, such provision
shall be fully servable and this Agreement and each separate provision hereof shall be construed
and enforced as if such illegal, invalid, or unenforceable provisions had never comprised a part of
this Agreement, and the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid, unenforceable provision or by its
severance from this Agreement.

     18. Headings. The headings of the paragraphs of this Agreement have been inserted for
convenience of reference only and shall not be construed or interpreted to restrict or modify any
of the terms or provisions hereof.

     19. Remedies. With respect to each and every breach, violation, or threatened breach
or violation by the Employee or the Company of any of the covenants set forth herein, the Company
and the Employee, in addition to all other remedies available at law or in equity, including
specific performance of the provisions hereof, shall be entitled to enjoin the commencement or
continuance thereof and may apply for entry of an injunction.

     20. No Waiver. The failure to enforce at any time any of the provisions of this
Agreement or to require at any time performance by the other party of any of the provisions hereof
shall in no way be construed to be a waiver of such provisions or to affect the validity of this
Agreement, or any part hereof, or the right of either party thereafter to enforce each and every
such provision of this Agreement in accordance with the terms of this Agreement.

 

 

     21. Counterparts. This Agreement may be executed un two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

     22. Consulting Agreement. Following the expiration of the Term, from December 30, 2008
until April 30, 2009, the Employee shall be make himself available to consult with the Company from
time to time as reasonably requested by the Company. The parties intend that the Employee’s level
of services rendered to the Company following the Term shall permanently decrease to a level that
is no more than 20 percent of the average level of services performed by the Employee over the
36-month period immediately preceding December 30, 2008. The parties shall enter into a consulting
agreement (the “Consulting Agreement”) which shall contains terms substantially identical
to the terms specified in clauses (i), (iv) and (vi) of Section 2(b). The Consulting Agreement is
attached hereto as Exhibit A.

     23. Entire Agreement.

          (a) This Agreement, the Termination Agreement, and the Consulting Agreement embody the entire
agreement and understanding between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, whether written or oral, relating to the
subject matter hereof, unless expressly provided otherwise herein and except for (1) the Employee’s
rights in and under all stock options and warrants currently held by the Employee, (2) the
Employee’s right, granted pursuant to the NPI Agreement (as defined in the Termination Agreement),
in various oil and gas properties in which Company or its affiliates also holds an interest, (3)
the Employee’s right to participate in future prospects as previously authorized by the Board of
Directors of Employer, which right is set forth in that certain Participation Agreement dated
effective January 1, 1992 between Company and the Employee, (4) all rights of the Employee under
any other existing employee benefit plans established and adopted for employees of Company in
general, (5) all rights of the Employee to indemnity under all indemnification provided by Company
or any third parties and (6) other similar arrangements of Company and all agreements with respect
to the foregoing.

          (b) No amendment or modification of this Agreement, unless expressly provided otherwise
herein, shall be valid unless made in writing and signed by each of the parties whose rights,
duties, or obligations hereunder would in any way be affected by any amendment or modification.

          (c) No representations, inducements, or agreements have been made to induce either the
Employee or Company to enter into this Agreement which are not expressly set forth herein. This
Agreement is the sole source of rights and duties as between Company and the Employee relating to
the subject matter of this Agreement, except as expressly provided herein.

     IN WITNESS WHEREOF, the Employee has hereunto set his hand and, pursuant to the authorization
from its Board of Directors, the Company has caused these presents to be executed in its name on
its behalf, all as of the day and year first above written.

 

 

	 	 	 	 	 
	 	EMPLOYEE
 	 
	 	/s/ Joseph A. Reeves, Jr. 	 
	 	 	 
	 	 	 
	 
	 	THE MERIDIAN RESOURCE
CORPORATION, a Texas corporation
 	 
	 	By:  	/s/ Lloyd V. DeLano 	 
	 	 	Lloyd V. Delano 	 
	 	 	Senior Vice President 	 
	 

 

 

Exhibit A

CONSULTING AGREEMENT

     THIS CONSULTING AGREEMENT (this “Agreement”) by and between The Meridian Resource
Corporation, a Texas corporation (referred to herein as the “Company”) and Joseph A. Reeves
(the “Consultant”), dated effective as of the beginning of the day on 30th day
of December, 2008.

W I T N E S S E T H:

     WHEREAS, the Company desires to retain the consulting services of the Consultant; and

     WHEREAS, the Consultant and the Company desire to set forth the terms and conditions of the
Consultant’s consulting arrangement with the Company;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

AGREEMENTS

     1. Consulting Period. The Company and the Consultant hereby agree that the
Consultant shall provide consulting services to the Company for the period commencing on December
30, 2008 and ending on April 30, 2009 (the “Consulting Period”).

     2. Terms of Consulting Arrangement.

          (a) Duties. During the Consulting Period, the Consultant shall be make himself
available to consult with the Company from time to time as reasonably requested by the Company. The
parties intend that following December 29, 2008, the Consultant’s level of services rendered to the
Company shall permanently decrease to a level that is no more than 20 percent of the average level
of services performed by the Consultant over the 36-month period immediately preceding December
30, 2008. The Company agrees that the amount and the scheduling of the services provided by the
Consultant under this Agreement shall be such that the services do not interfere with the
Consultant’s schedule or his obligations to any subsequent employer.

          (b) Services. The Consultant’s services may include, but are not limited to: (a) advising the
Company regarding the Company’s operations; (b) advising and assisting the board of Directors with
respect to the Company’s planning processes, including preparing the annual budgets; (c) acting as
liaison when requested between the Company and those persons, entities and agencies having a direct
working relationship with the Company; (d) advising the Company with respect to national, state and
community issues which impact, affect or influence, or which may impact, affect or influence the
Company and its various programs; (e) coordinating and designing programs to enhance the image and
operations of the Company; (f) the coordination and implementation of internal controls and
advising the Company regarding the establishment and design of such controls; (g) the preparation
and submission to the Board of Directors of such

 

 

reports and data on Company operations as the Consultant deems appropriate; (h) advising the
Board of Directors regarding the performance of various administrative functions on behalf of the
Board of Directors; (i) advising the Board of Directors regarding the hiring, managing, training,
promoting and evaluating of Company personnel and consultants; (j) training and orientation of new
Directors; and (k) such other functions as are normally performed by independent Consultants that
provide services to similar companies. The Consultant shall provide the services contemplated by
this Agreement to the Company to the best of his ability in a prompt, diligent and competent manner
at such times as are mutually convenient for the Company and the Consultant and shall devote such
time to the performance of such services as shall be mutually agreed to by the Company and the
Consultant from time to time.

          (c) Location. The parties agree that the Consultant’s services shall be performed at
Consultant’s current location or only at any other main office or location of Company within thirty
(30) miles from such location.

          (d) Compensation.

               (i) Consulting Fees. During the Consulting Period, the Consultant shall receive
monthly remuneration of FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00), which shall be payable in
equal semi-monthly installments.

               (ii) Expenses. During the Consulting Period, the Consultant shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by the Consultant in accordance
with the policies, practices and procedures of the Company.

               (iii) Office and Support Staff. During the Consulting Period, the Consultant shall be
entitled to an office or offices of a size and with furnishings and other appointments, and to
secretarial and other assistance, at least equal to that provided to the Consultant as of the
December 29, 2008. In addition, Consultant shall continue to receive, during the Consulting
Period, the benefits set forth in Section (ii) (iii) & (v) of Section 2(b) of the New Employment
Agreement dated as of April 29, 2008.

     3. Status of Consultant. The parties agree that during the Consulting Period the
Consultant shall serve as an independent contractor rather than as an employee of the Company. The
Consultant shall pay when due all local, state and federal taxes applicable to the Consultant’s
performance of work hereunder.

     4. Full Settlement. The Company’s obligation to make or cause to be made the
payments provided for in this Agreement and otherwise to perform its obligation hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Consultant or others.

     5. Confidential Information. The Consultant shall hold in a fiduciary capacity for
the benefit of the Company all secret or confidential information, knowledge or data relating to
the Company which shall have been obtained by the Consultant during the Consulting Period and which
shall not be or become public knowledge (other than by acts by the Consultant or his
representatives in violation of this Agreement). After expiration of the Consulting Period, the
Consultant shall not, without written consent of the Company, communicate or divulge any such

 

 

information, knowledge or data to anyone other than the Company and those designated by it. In
no event shall an asserted violation of the provisions of this Section constitute a basis for
deferring or withholding any amounts otherwise payable to the Consultant under this Agreement.
“Confidential Information” as used in this Agreement is means all disclosures and information, data
and knowledge contained in any documents (whether geological, geophysical, economic, financial or
management, and whether in the form of maps, charts, logs, seismographs, interpretations,
calculations, summaries, opinions or other written or charted means) which are related, directly or
indirectly, to the prospect or to the exploration potential of the geographical area, and which
have previously hereto or during the Term hereof delivered or disclosed to or known by the
Consultant.

     6. Assignment and Binding Effect. This Agreement is personal to the Consultant and
without the prior written consent of the Company shall not be assignable by the Consultant. This
Agreement shall be binding upon and shall inure to the benefit of and be enforceable by each party
hereto and each party’s respective successors, heirs, assigns and legal representatives.

     7. Successor. The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation, or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, “Company” shall mean the Company as
hereinbefore defined and any successor to its business and/or assets.

     8. Law Governing. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas without. This Agreement was executed in Houston, Harris
County, Texas and at least partial performance of this Agreement will be made in such place.

     9. Notices. All notices and other communications pertaining to this Agreement shall
be in writing and shall be personally given by hand delivery to the other party or sent by
registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

			
	          If to the Consultant:	           	
 

 

 

			
	          If to the Company:   	           	The Meridian Resource Corporation

1401 Enclave Parkway, Suite 300

Houston, Texas 77077

Attention:                                             

or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee, or
if mailed, postage prepaid, on the seventh (7th) day following the day on which it was
deposited in the Unites States mail.

     10. Severability. If any provision of this Agreement is held to be illegal, invalid,
or unenforceable under present or future laws effective during the term hereof, such provision shall

 

 

be fully servable and this Agreement and each separate provision hereof shall be construed and
enforced as if such illegal, invalid, or unenforceable provisions had never comprised a part of
this Agreement, and the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid, unenforceable provision or by its
severance from this Agreement.

     11. Headings. The headings of the paragraphs of this Agreement have been inserted for
convenience of reference only and shall not be construed or interpreted to restrict or modify any
of the terms or provisions hereof.

     12. Remedies. With respect to each and every breach, violation, or threatened breach
or violation by the Consultant or the Company of any of the covenants set forth herein, the Company
and the Consultant, in addition to all other remedies available at law or in equity, including
specific performance of the provisions hereof, shall be entitled to enjoin the commencement or
continuance thereof and may apply for entry of an injunction.

     13. No Waiver. The failure to enforce at any time any of the provisions of this
Agreement or to require at any time performance by the other party of any of the provisions hereof
shall in no way be construed to be a waiver of such provisions or to affect the validity of this
Agreement, or any part hereof, or the right of either party thereafter to enforce each and every
such provision of this Agreement in accordance with the terms of this Agreement.

     14. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all of which together shall constitute but one and
the same instrument.

     IN WITNESS WHEREOF, the Consultant has hereunto set his hand and, pursuant to the
authorization from its Board of Directors, the Company has caused these presents to be executed in
its name on its behalf, all as of the day and year first above written.

	 	 	 	 	 
	 	CONSULTANT

 	 
	 	 	 
	 	 	 
	 	 	 
	 
	 	THE MERIDIAN RESOURCE
CORPORATION, a Texas corporation
 	 
	 	By:

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