Exhibit 10.1

 

 

 

EIGHTH AMENDMENT TO LOAN AGREEMENT AND FORBEARANCE AGREEMENT

 

THIS EIGHTH AMENDMENT TO LOAN AGREEMENT AND FORBEARANCE AGREEMENT (this
“Agreement”) is made and entered into as of February 20, 2015 (the “Effective
Date”), by and among TRANSCOASTAL PARTNERS, LLC, a Texas limited liability
company, TRANSCOASTAL CORPORATION, a Texas corporation, and TRANSCOASTAL
CORPORATION, a Delaware corporation (collectively, the “Borrower”), the
Guarantors party hereto, the Lenders party hereto, Dalton Lott (the “Junior
Lender”), the shareholders party hereto (the “Shareholders”), and MELODY
BUSINESS FINANCE, LLC (“Melody”), as administrative agent (in such capacity, the
“Agent”).

 

PRELIMINARY STATEMENT

 

WHEREAS, Borrower, the lenders from time to time party thereto (the “Lenders”),
and Agent (as successor, by purchase and assignment, to Green Bank), are parties
to that certain Loan Agreement, dated as of May 19, 2011 (as amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”);

 

WHEREAS, Borrower has acknowledged that certain Events of Default have occurred
and are continuing under the Loan Agreement;

 

WHEREAS, due to the existence and continuation of the Designated Events of
Default (as defined below), Agent and Lenders are entitled to exercise rights
and remedies available to them related to such Designated Events of Default,
including, without limitation, the right to declare the loan described in the
Loan Agreement due and payable, to collect such indebtedness, to make demand
upon Borrower and the other Loan Parties and to exercise the legal rights and
remedies available to them pursuant to the terms of the Loan Agreement and the
other Loan Documents;

 

WHEREAS, Borrower has asked Agent and Lenders to temporarily forbear from
exercising their rights and remedies under the Loan Agreement and the other Loan
Documents with respect to the Designated Events of Default and to make certain
amendments to the Loan Agreement;

 

WHEREAS, upon the terms and conditions contained herein, Agent and Lenders
(acting by and through the Agent) are prepared to temporarily forbear from the
exercise of the additional rights and remedies otherwise available to them at
law, in equity or by agreement as a result of the Designated Events of Default,
without waiving any of such rights and to make certain amendments to the Loan
Agreement;

 

WHEREAS, the forbearance by Agent and Lenders from the current exercise of their
rights and remedies as provided for in this Agreement, and the amendments set
forth herein, shall result in direct and tangible benefits to Borrower;

 

WHEREAS, Agent and Lenders are willing to grant such forbearance and authorize
Agent;

 

 
 

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WHEREAS, the parties hereto desire to evidence (i) such amendments to the Loan
Agreement and (ii) their understanding with respect to performance by Borrower
during the Forbearance Period (as hereinafter defined) of certain covenants and
other undertakings and agreements made by Borrower.

 

NOW, THEREFORE, in consideration of the foregoing premises and the agreements
and undertakings contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

 

AGREEMENT

 

1.             Definitions. Unless otherwise specifically defined herein, each
term used herein which is defined in the Loan Agreement shall have the meaning
assigned to such term in the Loan Agreement.

 

“Closing Fee” has the meaning set forth in Section 5(a) hereto.

 

“Different Restructuring” has the meaning set forth in the Term Sheet.

 

“Junior Loan” has the meaning set forth in Section 7(a) hereto.

 

“Restructuring” has the meaning set forth in the Term Sheet.

 

“Shareholders” means each of (i) Stuart G. Hagler, (ii) David J. May and (iii)
W.A. Westmoreland.

 

“Term Sheet” means the “Term Sheet” attached hereto and incorporated herein as
Exhibit A.

 

2.             Amendments to Loan Agreement.

 

(a)     Section 1.1 of the Loan Agreement is hereby amended by amending and
replacing the following definitions, in alphabetical order, as follows:

 

“Contract Rate” means in-kind interest at a rate per annum equal to 15%, which
interest shall be paid by adding an amount equal to such unpaid interest to the
then outstanding principal amount of the Loans (interest so paid, “PIK
Interest”).”

 

“Default Rate” means the lesser of (a) the Maximum Rate and (b) the Contract
Rate plus six percent (6%).”

 

(b)     Section 1.1 of the Loan Agreement is hereby amended by adding the
following new definitions, in alphabetical order, as follows:

 

“Interest Payment Date” see Section 2.4.

 

“PIK Interest” see definition of “Contract Rate” in Section 1.1.

 

 
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(c)     Section 2.4 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:

 

“2.4 Amortization. Interest on the unpaid principal balance of the Notes shall
be due and payable monthly, in arrears, as it accrues on the first day of each
month commencing the first day of June, 2011 (the “Interest Payment Date”), and
continuing on the first day of each month thereafter. The Principal Debt then
outstanding, plus accrued but unpaid interest then outstanding, shall be due and
payable on the Maturity Date. In addition, principal payments may be required
from time to time in accordance with the Borrowing Base reduction schedule set
forth in Section 3.5 hereof. Administrative Agent is authorized to debit any
Borrower’s operating account on the date payment is due for all Obligations,
including without limitation, all payments of principal and interest due under
the Note (and Borrowers shall be deemed to have requested a Loan for such
purpose irrespective of satisfaction of conditions precedent thereto or whether
any Event of Default or Potential Default then exists). The Borrowers shall
deliver written notice to the Administrative Agent at least 5 Business Days
prior to each Interest Payment Date setting forth a calculation of the PIK
Interest to be paid on such Interest Payment Date. The Agent shall have the
right to review and adjust any such calculations.”

 

3.             Acknowledgments by Borrower. Borrower acknowledges and agrees as
follows:

 

(a)     Accuracy of Preliminary Statement. The recitals made in the Preliminary
Statement hereof are accurate and are a part of this Agreement.

 

(b)     Existing Events of Default. The following Events of Default
(collectively the “Existing Events of Default”) have occurred and are continuing
under the Loan Agreement:

 

i.     Borrower incurred indebtedness under that certain loan agreement dated
June 30, 2014, between Borrower and Dalton Lott, an individual, as further
evidenced by that certain promissory note dated as of even date therewith in the
original principal amount of $1,500,000 made by Borrower and payable to the
order of Dalton Lott, in violation of Section 8.9 of the Loan Agreement, which
constitutes an Event of Default under Section 10.3 of the Loan Agreement.

 

ii.     Borrower failed to maintain a debt service coverage ratio of at least
1.25 to 1.00 as of the end of the fiscal quarter ended September 30, 2014, as
required by Section 8.3(b) of the Loan Agreement, which constitutes an Event of
Default under Section 10.3 of the Loan Agreement;

 

iii.     Borrower failed to make principal payments on November 1, 2014,
December 1, 2014, January 1, 2015 and February 1, 2015, as required by Section
3.6 of the Loan Agreement, which constitutes an Event of Default under Section
10.1 of the Loan Agreement; and

 

 
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iv.     Borrower failed to cause all payments of production proceeds from the
Mortgaged Properties to be deposited into the Cash Collateral Account, as
required by Section 4.7 of the Loan Agreement, which constitutes an Event of
Default under Section 10.1 of the Loan Agreement.

 

v.     None of the Guarantors have accounts at Green Bank

 

(c)     Anticipated Events of Default. Borrower anticipates that the following
Events of Default have either occurred or will occur during the Forbearance
Period (collectively the “Anticipated Events of Default,” and together with the
Existing Events of Default, the “Designated Events of Default”):

 

i.     Borrower will fail to make any interest payments on the Loans as required
by Section 2.4 of the Loan Agreement, which will constitute Events of Default
under Section 10.1 of the Loan Agreement;

 

ii.     Borrower will fail to make principal payments, as required by Section
3.6 of the Loan Agreement, which will constitute Events of Default under section
10.1 of the Loan Agreement;

 

iii.     Borrower will fail to maintain a debt service coverage of at least 1.25
to 1.00, as required by Section 8.3(b) of the Loan Agreement, which will
constitute an Event of Default under Section 10.3 of the Loan Agreement; and

 

iv.     Borrower will fail to make principal prepayments triggered by the next
Determination Date, as required by Section 3.5 of the Loan Agreement, which will
constitute an Event of Default under Section 10.1 of the Loan Agreement.

 

(d)     Acknowledgment of Default. Prior to the date hereof: (i) the Existing
Events of Default exist under the Loan Agreement (and Borrower waives all notice
requirements related to such Existing Events of Defaults, as well as any grace
periods applicable to the cure of such Existing Events of Default); (ii) the
Existing Events of Default are continuing; and (iii) as of the date hereof, no
waiver by Agent or Lenders with respect to the Existing Events of Default or
their respective rights and remedies with respect thereto is in effect;

 

(e)     Acknowledgment of Right to Accelerate. That (i) on and as of the
Effective Date, Agent and Lenders have the right upon termination of the
Forbearance Period (as hereinafter defined) to accelerate and declare the
Obligations to be immediately due and payable and to make demand upon Borrower
and/or any or all of the Guarantors for the payment in full of all such
Obligations; (ii) such acceleration and demand for payment, if made, would be in
all respects adequate and proper; and (iii) Borrower waives any and all further
notice, presentment, notice of dishonor or demand with respect to the
Obligations;

 

 
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(f)     Acknowledgment of Indebtedness. That (i) as of the date hereof, Borrower
is indebted to Agent and Lenders in the principal amount of $15,785,437.50 under
the Loan Agreement; (ii) all such amounts remain outstanding and unpaid without
setoff, counterclaim or defenses; and (iii) all such amounts are subject to
increase, decrease or other adjustment as a result of any and all interest, fees
and other charges including, without limitation, attorneys’ fees and costs of
collection to the extent that such amounts are payable to Agent and/or Lenders
under the Loan Documents (such amounts, “Fees and Expenses”);

 

(g)     Acknowledgement of Binding Effect of Documents. That (i) each of the
Loan Documents to which it is a party has been duly executed and delivered to
Agent, and each is in full force and effect as of the date hereof; (ii) its
agreements and obligations contained in the Loan Documents and in this Agreement
constitute its legal, valid and binding obligations, enforceable against it in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally or by equitable
principles relating to enforceability, and it has no valid defense to the
enforcement of such obligations; and (iii) Agent and Lenders are and shall be
entitled to the rights, remedies and benefits provided for them in the Loan
Documents and applicable law;

 

(h)     Acknowledgement of Liens. That Agent on behalf of Lenders has and shall
continue to have valid, enforceable, first-priority and perfected Liens (subject
to certain Permitted Liens) in the Collateral heretofore granted by the Loan
Parties to the Agent (for the benefit of the Secured Parties) pursuant to the
Loan Documents;

 

(i)     Acknowledgment that Liabilities Continue in Full Force and Effect. That
the Obligations of Borrower and Guarantors to Agent and Lenders, except as
expressly modified herein, remain in full force and effect, and shall not be
released, impaired, diminished or in any other way modified or amended as a
result of the execution and delivery of this Agreement or by the agreements and
undertakings of the parties contained herein; and

 

(j)     Generally as to this Agreement. That (i) it has the legal power and
authority to execute and deliver this Agreement; (ii) the officer executing this
Agreement on its behalf has been duly authorized to execute and deliver the same
and bind it with respect to the provisions hereof; (iii) its execution and
delivery hereof and its performance and observance of the provisions hereof do
not (a) violate or conflict with (I) any of its organizational documents or (II)
any law applicable thereto or (b) result in a breach of any provision of or
constitute a default under any other agreement, instrument or document binding
upon or enforceable against it, in the case of clauses (a)(I) and (b), in any
material respect; (iv) except with respect to the Designated Events of Default,
no Default or Event of Default exists under the Loan Agreement, nor will any
occur as a result of the execution and delivery of this Agreement or by the
performance or observance of any provision hereof; (v) it is not aware of any
claim or offset against, or defense or counterclaim to, any of its obligations
or liabilities under the Loan Agreement or any other Loan Document; and (vi)
this Agreement and each document executed in connection herewith constitute its
valid and binding obligations in every respect, enforceable against it 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.

 

 
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4.             Forbearance by Agent and Lenders.

 

(a)     Forbearance Period. At the request of Borrower, Agent and Lenders agree
to forbear from the exercise of their rights and remedies, whether at law, in
equity, by agreement or otherwise, available to Agent and/or Lenders as a result
of the Designated Events of Default, as of the Effective Date until the earliest
to occur of the following: (i) the occurrence of any Event of Default under any
of the Loan Documents (other than the Designated Events of Default); and (ii)
April 6, 2015 (the period beginning on the Effective Date and terminating on the
earliest of such dates (in each case subject to extension by the Agent in its
sole discretion) being hereinafter referred to as the “Forbearance Period”).

 

(b)     Termination of Forbearance Period. Upon the termination of the
Forbearance Period pursuant to any of clauses (i) through (ii) of paragraph (a)
above, all forbearances, deferrals and indulgences granted by Agent and Lenders
in paragraph (a) above shall immediately terminate and Agent and Lenders shall
thereupon have, and shall be entitled to exercise, any and all rights and
remedies which Agent and Lenders may have upon the occurrence of an Event of
Default, including, without limitation, the Designated Events of Default, and
the Obligations shall become immediately due and payable.

 

(c)     Forbearance Period Interest. Borrower acknowledges and agrees that Agent
and Lenders hereby are accruing interest at the default rate described in
Section 1.1 of the Loan Agreement to the extent of interest accrued during the
period from the occurrence of the earliest to occur of the Designated Events of
Default (including, without limitation, during the period from the Effective
Date through and including the expiration or termination of the Forbearance
Period) against the Loans and all other Obligations.

 

(d)     Acknowledgements regarding Forbearance. Other than the Term Sheet,
Borrower acknowledges that neither Agent nor Lenders have made any assurances
concerning (i) any possibility of an extension of the Forbearance Period; (ii)
the manner in which or whether the Designated Events of Default may be resolved;
or (iii) any additional forbearance, waiver, restructuring or other
accommodations. Borrower agrees that the running of all statutes of limitation
and the doctrine of laches applicable to all claims or causes of action that
Agent or Lenders may be entitled to take or bring in order to enforce their
rights and remedies against Borrower are, to the fullest extent permitted by
law, tolled and suspended during the Forbearance Period.

 

(e)     Acknowledgement regarding Agent’s Inspection Rights. Borrower
acknowledges and confirms its obligations and the rights of the Agent under
Section 7.9 of the Loan Agreement.

 

 
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(f)     General Cooperation from Borrower’s Boards and Advisors. Subject to
privilege and other confidentiality requirements, Borrower shall, and shall
cause its officers, directors, employees and advisors to, cooperate fully with
Agent (acting at the direction of the Lenders) and its designees in furnishing
information available to Borrower as and when requested by Agent or its
designees regarding the Collateral (as defined in the Security Agreement) or
Borrower’s financial affairs, finances, financial condition, business and
operations. At the reasonable request of Agent, subject to privilege and other
confidentiality requirements, the chief executive officer and the chief
financial officer of Borrower and such other officers, directors, employees and
advisors of Borrower requested by Agent or its designees, shall make themselves
available to discuss any matters regarding the Collateral or Borrower’s
financial affairs, financial condition, business and operations, all upon
reasonable notice during normal business hours, and shall direct and authorize
all such persons and entities to fully disclose to Agent and its designees all
information requested by Agent or its designees regarding the foregoing.

 

5.             Agreement to Complete the Restructuring.

 

(a)     Subject to the terms and conditions of this Agreement and through the
end of the Forebearance Period, Borrower agrees to use its best efforts to
complete the Restructuring. In the event that Borrower (i) fails to use its best
efforts to complete the Restructuring, (ii) encourages, solicits, initiates,
facilitates, or continues discussions regarding a Different Restructuring,
(iii) enters into discussions or negotiations with, or provides any information
to, any person concerning a possible Different Restructuring, (iv) enters into
an agreement or other instrument (whether or not binding) regarding a Different
Restructuring, or (v) refuses to consummate the Restructuring without a material
change to the Term Sheet, and the Restructuring is not consummated, Borrower
shall pay to the Agent, a non-refundable closing fee in an amount equal to
$2,000,000 (“Closing Fee”) payable in immediately available funds and pay all
reasonable professional fees and expenses of Agent and its counsel (Willkie Farr
& Gallagher LLP).

 

(b)     Subject to the terms and conditions of this Agreement and through the
90th day following the date hereof, each Shareholder agrees to use its best
efforts to complete the Restructuring in the manner described in Exhibit A. In
the event that any Shareholder (i) fails to use its best efforts to complete the
Restructuring, (ii) encourages, solicits, initiates, facilitates, or continues
discussions regarding a Different Restructuring, (iii) enters into discussions
or negotiations with, or provides any information to, any person concerning a
possible Different Restructuring, (iv) enters into an agreement or other
instrument (whether or not binding) regarding a Different Restructuring, or
(v) refuses to consummate the Restructuring without a material change to the
Term Sheet, and the Restructuring is not consummated, the Shareholders shall pay
to the Agent, the Closing Fee and pay all reasonable professional fees and
expenses of Agent and its counsel, to the extent such Closing Fee and
professional fees and expenses of Agent are not paid by Borrower.

 

6.             Junior Lender’s Obligation to Support the Restructuring.

 

(a)     Junior Lender agrees to exchange its $1,500,000 loan to the Borrower for
Loans of an equal amount under the Loan Agreement (or any replacement thereof
under the Restructuring).

 

 
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(b)     Junior Lender agrees to provide, on the date that the Restructuring is
consummated, $500,000 in common equity to the Borrower in a manner non-dilutive
to the 51% equity share held by Melody and the 15% equity share reserved for the
Borrower’s management.

 

7.             Direction and Indemnification. Each of the Lenders hereto:

 

(a)     confirms that it is a beneficial holder of Loans in the amount set forth
on its signature page to this Agreement;

 

(b)     exercises its rights pursuant to Section 14.4 of the Loan Agreement and
directs the Agent to execute and deliver this Agreement and take the actions
contemplated herein; and

 

(c)     agrees with the other Lenders signatory hereto (and such Lenders
successors and assigns), to indemnify and hold harmless, in an amount equal to
its pro rata share (based on its respective principal amounts of its outstanding
Loans as a proportion of the total outstanding Loans of the Lenders party
hereto), the Agent and each other Agent-related Person, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever that may at any
time be imposed on, incurred by or asserting against such Agent or Agent-related
Person in any way relating to or arising out of, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing (the
foregoing to be in addition to any rights of compensation or indemnification
granted to the Agent pursuant to the Loan Documents); provided that no Lender
shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent’s or Agent-related
Person’s gross negligence or willful misconduct; provided, further, that no
action taken or refrained from in accordance with the directions or consent of
the Lenders shall be deemed to constitute gross negligence or willful misconduct
for purposes of this Section.

 

8.             Conditions Precedent. Prior to or simultaneous with closing, and
as a condition to closing, of the Restructuring:

 

(a)     Agent shall have received this Agreement duly executed by Borrower,
Guarantors, Agent and the Lenders;

 

(b)     No Potential Event of Default or Event of Default shall exist except the
Designated Events of Default;

 

 
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(c)     The Borrower shall form a wholly-owned Subsidiary and shall cause all of
its oil and gas assets to be contributed to such Subsidiary pursuant to
assignment and conveyance instruments acceptable to, and approved in writing by,
Agent. The Borrower shall pledge the equity of such Subsidiary to the Agent as
Collateral for the Obligations. In addition, such Subsidiary shall guarantee the
Obligations and pledge substantially all its assets as Collateral in accordance
with the Security Documents; and

 

(d)     Borrower shall have paid all professional fees and expenses of Agent and
its counsel (Willkie Farr & Gallagher LLP), and Borrower’s counsel (Carrington,
Coleman, Sloman & Blumenthal, L.L.P.) that have been invoiced prior to the
Restructuring Date.

 

9.           Representations and Warranties. Borrower hereby represents and
warrants that, as of the date hereof: (a) except with respect to the
representations and warranties in the Loan Agreement that may be untrue or
incorrect as a result of the occurrence or existence of one or more of the
Designated Events of Default, the representations and warranties contained in
the Loan Agreement are true and correct in all material respects as of such 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 representations and warranties shall have been true and correct
in all material respects as of such earlier date); (b) other than the Designated
Events of Default, no Default or Event of Default has occurred and is
continuing, (c) the execution delivery and performance of this Amendment are
within the corporate power and authority of such Loan Party and have been duly
authorized by all necessary corporate action and proceedings; (d) this Agreement
and the other Loan Documents each constitute the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, subject to (i) the effects of bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or other similar
laws affecting creditors’ rights generally, (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), and (iii) implied covenants of good faith and fair dealing;
(e) there are no consents, authorizations or approvals by any Governmental
Authority or third party required in connection with the execution, delivery,
and performance by each Loan Party of this Agreement or the other Loan
Documents, or the enforceability of this Agreement or the other Loan Documents;
and (f) Borrower has not incurred any liability, contingent or otherwise, for
broker’s or finders’ fees relating to the transactions contemplated by this
Agreement for which Agent, any Lender or any of their respective Affiliates
shall have any responsibility.

 

10.         Reaffirmation. Borrower and each Guarantor (a) represents and
warrants that it has no defenses to the enforcement of any Loan Document to
which it is a party, (b) reaffirms the terms of and its obligations (and the
security interests granted by it) under each Loan Document to which it is a
party, and agrees that each such Loan Document will continue in full force and
effect to secure the Obligations as the same may be amended, supplemented or
otherwise modified heretofore, hereby and from time to time hereafter, and such
other amounts in accordance with the terms of such Loan Document, and (c)
acknowledges, represents, warrants and agrees that the liens and security
interests granted by it pursuant to the Security Documents are valid and
subsisting and create a security interest to secure the Obligations.

 

 
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11.          Consent of Guarantors. Each Guarantor hereby consents, acknowledges
and agrees to the terms of this Agreement and hereby confirms, reaffirms and
ratifies in all respects the Guaranty Agreement to which it is a party
(including without limitation the continuation of such Guarantor’s payment and
performance obligations thereunder upon and after the effectiveness of this
Agreement), as amended or restated, and the enforceability of such Guaranty
Agreement against such Guarantor in accordance with its terms.

 

12.          Reservation of Rights. Borrower acknowledges and agrees that Agent
and Lenders (a) have not acquiesced to any noncompliance by Borrower with the
exact terms of the Loan Agreement relating to any Event of Default (other than
the temporary forbearance regarding the Designated Events of Default), (b)
except as otherwise provided for in this Agreement, intend to strictly enforce
the terms of the Loan Agreement and the other Loan Documents, in the exercise of
their sole and absolute discretion, and (c) hereby reserve all rights, powers
and remedies under the Loan Agreement and the other Loan Documents with respect
to the Designated Events of Default (upon termination of the Forbearance Period)
and any other noncompliance with the terms of the Loan Agreement or any of the
other Loan Documents.

 

13.          Receipt and Application of Payments. Borrower acknowledges and
agrees that Agent and Lenders shall be entitled during the Forbearance Period to
accept such payments and proceeds as are remitted to it pursuant to any
provision of the Loan Documents or this Agreement, that Agent and Lenders shall
be entitled to apply any and all such proceeds and payments against the
liabilities and Obligations owed by Borrower to Lenders in such order of
application as set forth in the Loan Documents, and that the acceptance by Agent
or Lenders of any such proceeds and payments as are remitted to it pursuant to
the Loan Documents or this Agreement or otherwise shall in no way affect or
impair the status of the indebtedness owed to Lenders by Borrower or be deemed
to be a waiver of any Events of Default or any acquiescence therein.

 

14.          RELEASE. BORROWER, THE OTHER LOAN PARTIES, AND THEIR AFFILIATES ON
BEHALF OF THEMSELVES AND THEIR RELATED PARTIES, HEREBY ACKNOWLEDGES AND AGREES
THAT IT DOES NOT HAVE ANY DEFENSES, COUNTERCLAIMS, OFFSETS, CROSS-COMPLAINTS,
CLAIMS OR DEMANDS OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO
REDUCE OR ELIMINATE ALL OR ANY PART OF THE LIABILITY OF BORROWER TO REPAY
LENDERS AS PROVIDED IN THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR TO SEEK
AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM AGENT OR ANY LENDER
PARTY HERETO. BORROWER, THE OTHER LOAN PARTIES, AND THEIR AFFILIATES ON BEHALF
OF THEMSELVES AND THEIR RELATED PARTIES HEREBY VOLUNTARILY AND KNOWINGLY
RELEASES AND FOREVER DISCHARGES AGENT, LENDERS PARTY HERETO AND AGENT'S AND EACH
LENDER PARTY HERETO'S PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS,
FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, OR
EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT
LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS
AGREEMENT IS FULLY EXECUTED, WHICH ANY OF BORROWER, THE OTHER LOAN PARTIES, AND
THEIR AFFILIATES OR THEIR RELATED PARTIES MAY NOW OR HEREAFTER HAVE AGAINST
AGENT OR ANY LENDER PARTY HERETO IN THEIR CAPACITIES AS SUCH, AND AGENT'S OR ANY
LENDER PARTY HERETO'S PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS,
IF ANY, IN THEIR CAPACITIES AS SUCH, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS
ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE,
INCLUDING, WITHOUT LIMITATION, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER
THIS AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION AND EXECUTION OF THIS
AGREEMENT.

 

 
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15.          Miscellaneous.

 

(a)     Entire Agreement. This Agreement reflects the entire understanding of
the parties with respect to the subject matter herein contained and supersedes
any prior agreements, whether written or oral, in regard thereto.

 

(b)     Full Force and Effect. Except as expressly modified herein during the
Forbearance Period, all terms of the Loan Agreement and the Loan Documents shall
be and shall remain in full force and effect and shall constitute the legal,
valid, binding and enforceable obligations of Borrower.

 

(c)     No Waiver. This Agreement is not intended to operate as, and shall not
be construed as, a waiver of any Event of Default, whether known to Agent or
Lenders or unknown, as to which all rights of Agent and Lenders shall remain
reserved.

 

(d)     Loan Document. This is a Loan Document for the purposes and provisions
of the other Loan Documents. Without limiting the foregoing, any breach of
representations, warranties, and covenants under this Agreement shall be a
Default or Event of Default, as applicable, under the Loan Agreement.

 

(e)     Governing Law. This Agreement shall be governed by, and shall be
construed in accordance with, the laws of the State of New York and all
applicable laws of the United States of America.

 

(f)     WAIVER OF RIGHT TO JURY TRIAL. BORROWER WAIVES TRIAL BY JURY AND
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY A JUDGE OF A COURT OF COMPETENT JURISDICTION.

 

(g)     Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be an original and all of which, taken together, shall
constitute but one and the same agreement among the parties. Any party hereto
may execute and deliver a counterpart of this Agreement by delivering by
facsimile or other electronic transmission a signature page of this Agreement
signed by such party, and any such facsimile or other electronic signature shall
be treated in all respects as having the same effect as an original signature.

 

 
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(h)     No Novation. This Agreement is given as an amendment and modification
of, and not as payment of, the indebtedness of Borrower and each Guarantor under
the Notes, the Loan Agreement and the other Loan Documents and is not intended
to constitute a novation of the Notes, the Loan Agreement or any of the other
Loan Documents. All of the indebtedness liabilities and obligations owing by
Borrower and each Guarantor under the Notes, the Loan Agreement and the other
Loan Documents shall continue.

 

(i)     Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of Borrower, each Guarantor, Agent, and each Lender and their
respective successors, assigns and legal representatives; provided, however,
neither Borrower nor any Guarantor, without the prior consent of the Agent, may
assign any of its rights, powers, duties or obligations hereunder.

 

(j)     Expenses. Without limiting the provision of Section 12.1 of the Loan
Agreement, Borrower and Guarantors agree to pay all out of pocket expenses
(including without limitation reasonable fees and expenses of any counsel,
financial advisor, industry advisor and agent for Agent or any Lender) incurred
before or after the date hereof by Agent, any Lender and their respective
Affiliates in connection with the preparation, negotiation, execution, delivery
and administration of this Agreement and the Loan Documents.

 

(k)     Captions. The captions to the Sections and paragraphs of this Agreement
are for the convenience of the parties only, and are not a part of this
Agreement.

 

(l)     Time of the Essence. Time is of the essence under this Agreement.

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.

 

 

 

BORROWER

 

TRANSCOASTAL CORPORATION, as Borrower

 

 

 

By:                                                                               
Name:                                                                          
Its:                                                                 
              

 

 

 

 

 

 

[Signature Page to Eighth Amendment to Loan Agreement and Forbearance Agreement]

 

 

--------------------------------------------------------------------------------

 

 

 

 

SHAREHOLDERS

 

 

 

By:                                                                               
Name: Stuart G. Hagler

 

 

 

By:                                                                               
Name: David J. May

 

 

 

By:                                                                               
Name: W.A. Westmoreland

 

 

 

 

 

[Signature Page to Eighth Amendment to Loan Agreement and Forbearance Agreement]

 

 

--------------------------------------------------------------------------------

 

 

 

AGENT

 

MELODY BUSINESS FINANCE, LLC, as Agent

 

 

 

By:                                                                               
Name:                                                                          
Its:                          
                                                     

 

 

 

LENDER

 

MELODY BUSINESS FINANCE, LLC, as Lender

 

 

 

By:                                                                               
Name:                                                                          
Its:                                 
                                              

 

 

 

 

 

[Signature Page to Eighth Amendment to Loan Agreement and Forbearance Agreement]

 

 

--------------------------------------------------------------------------------

 

 

JUNIOR LENDER

 

 

 

                                                                                     
Name: Dalton Lott

 

 

[Signature Page to Eighth Amendment to Loan Agreement and Forbearance Agreement]

 

 

--------------------------------------------------------------------------------

 

 

Acknowledged and agreed:

 

TRANSCOASTAL PARTNERS, LLC, as Loan Party

 

By:                                                                               
Name:                                                                          
Its:                                                                                

 

 

 

 

 

 

[Signature Page to Eighth Amendment to Loan Agreement and Forbearance Agreement]

 

 

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Ratification of Guaranties

 

Each of the undersigned, as guarantors of the obligations under one or more
Guaranty Agreements (each, as amended, restated and amended and restated,
“Guaranty Agreement”), hereby (a) consents and agrees to this Forbearance
Agreement, including without limitation, the terms and provisions of Sections
10, 11, 14, 15(h), 15(i) and 15(j) thereof, and (b) confirms and agrees that is
Guaranty Agreement, as amended or restated prior to or concurrently with the
execution of this Agreement, is and shall continue to be in full force and
effect and is ratified and confirmed in all respects, except that, on and after
the Effective Date, each reference in any Guaranty Agreement to the “Loan
Agreement,” “thereunder,” “thereof,” “therein” or any other expression of like
import referring to the Loan Agreement shall mean and be a reference to the Loan
Agreement as modified by the Agreement.

 

 

 

 

 

By:                                                                               
Name: Stuart G. Hagler

 

 

 

By:                                                                               
Name: David J. May

 

 

 

By:                                                                               
Name: W.A. Westmoreland

 

CORETERRA OPERATING, LLC

 

By:                                                                               
Name: Stuart G. Hagler

Title: Manager

 

 

 

[Signature Page to Eighth Amendment to Loan Agreement and Forbearance Agreement]

 

 

--------------------------------------------------------------------------------

 

 

Consent of Spouse

 

The undersigned, being the spouse of Stuart G. Hagler, in order to induce the
Administrative Agent and Lenders to forbear from the current exercise of their
rights and remedies provided for in the Agreement, based, in part, on the
foregoing Ratification of Guaranties, hereby consents to the foregoing
Ratification of Guaranties and agrees that all assets listed on any financial
statement of Stuart G. Hagler submitted to the Agent from time to time are
subject to his liability under the Guaranty Agreement (as defined therein).
Without limitation of the foregoing, by execution of this consent, the
undersigned acknowledges that it understands the contents of the Ratification of
Guaranties (and the Guaranty Agreement) and is aware that, by the provisions
thereof, all assets of Stuart G. Hagler, including any community interest, are
subject to the Stuart G. Hagler’s liability under the Guaranty Agreement.

 

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has
executed this Consent of Spouse on the date and year first above written.

 

 

 

By:
                                                                              
Name: Jennifer Hagler

 

 

 

--------------------------------------------------------------------------------

 

 

Consent of Spouse

 

The undersigned, being the spouse of David A. May, in order to induce the
Administrative Agent and Lenders to forbear from the current exercise of their
rights and remedies provided for in the Agreement, based, in part, on the
foregoing Ratification of Guaranties, hereby consents to the foregoing
Ratification of Guaranties and agrees that all assets listed on any financial
statement of David A. May submitted to the Agent from time to time are subject
to his liability under the Guaranty Agreement (as defined therein). Without
limitation of the foregoing, by execution of this consent, the undersigned
acknowledges that it understands the contents of the Ratification of Guaranties
(and the Guaranty Agreement) and is aware that, by the provisions thereof, all
assets of David A. May, including any community interest, are subject to the
David A. May’s liability under the Guaranty Agreement.

 

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has
executed this Consent of Spouse on the date and year first above written.

 

 

 

By:                                                                             
               
Name: Roseanne May

 

 

 

--------------------------------------------------------------------------------

 

 

Consent of Spouse

 

The undersigned, being the spouse of W.A. Westmoreland, in order to induce the
Administrative Agent and Lenders to forbear from the current exercise of their
rights and remedies provided for in the Agreement, based, in part, on the
foregoing Ratification of Guaranties, hereby consents to the foregoing
Ratification of Guaranties and agrees that all assets listed on any financial
statement of W.A. Westmoreland submitted to the Agent from time to time are
subject to his liability under the Guaranty Agreement (as defined therein).
Without limitation of the foregoing, by execution of this consent, the
undersigned acknowledges that it understands the contents of the Ratification of
Guaranties (and the Guaranty Agreement) and is aware that, by the provisions
thereof, all assets of W.A. Westmoreland, including any community interest, are
subject to the W.A. Westmoreland’s liability under the Guaranty Agreement.

 

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has
executed this Consent of Spouse on the date and year first above written.

 

 

 

By:
                                                                               
Name: Keri L. Westmoreland