FORBEARANCE AGREEMENT AND SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AGREEMENT
FORBEARANCE
AGREEMENT
AND
SIXTH AMENDMENT TO
SECOND
AMENDED AND
RESTATED
FINANCING AGREEMENT
THIS
FORBEARANCE AGREEMENT AND SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED
FINANCING AGREEMENT
(the
“Agreement”)
is
made and entered into on this 10th day of July, 2008, to be effective, unless
another effective date is otherwise herein specified, as of June 17, 2008,
by and among The CIT Group/Business Credit, Inc. (“CIT”),
SunTrust Bank (“SunTrust”),
Wachovia Bank, N.A. (“Wachovia”),
and
PNC Bank, National Association (“PNC”)
(CIT,
SunTrust, Wachovia and PNC being herein collectively referred to as the
“Existing
Lenders”),
The
Greinke Personal Living Trust, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual residing in
Tacoma, Washington, Trustee (“Greinke
Trust”)
(the
Greinke Trust being herein referred to as the “Additional
Lender”,
and
together with the Existing Lenders, being herein collectively referred to
as the
“Lenders”),
CIT
as administrative and collateral agent (“Agent”),
and
United Fuel & Energy Corporation, a Texas corporation (“United”),
and
Three D Oil Co. of ▇▇▇▇▇▇▇, Inc., a Texas corporation (“Three D”),
and
Cardlock Fuels System, Inc., a California corporation (“Cardlock”)
(United, Three D and Cardlock being herein individually referred to as a
“Company”
and
collectively referred to as the “Companies”),
and
United Fuel & Energy Corporation, a Nevada corporation (“Parent”).
RECITALS
A. Companies,
Lenders and Agent are the present parties to that certain Second Amended
and
Restated Financing Agreement, dated as of March 27, 2007, originally
executed by United, Three D, Existing Lenders and Agent (as amended from
time to time, the “Financing
Agreement”).
Capitalized terms not otherwise defined herein shall have the meanings given
such terms in the Financing Agreement.
B. To
induce
Agent and Lenders to make the loans under the Financing Agreement to Companies,
Parent has delivered to Agent that certain Guaranty dated October 5, 2007
(“Guaranty”)
guaranteeing payment and performance by Companies of their
Obligations.
C. Companies
have requested that Agent and Lenders agree and, subject to the terms and
conditions of this Agreement, Agent and Lenders have agreed, to amend the
Financing Agreement to provide, effective as of the date the conditions
hereinafter specified in Section 2
of this
Agreement have been satisfied in Agent’s credit judgment or waived by Agent, to
provide for Additional Lender becoming a party to and a “Lender” under the
Financing Agreement with a Commitment of $5,000,000, which Commitment shall
consist entirely of Revolving Loans pursuant to the Revolving Line of Credit
Commitment, with the aggregate Revolving Line of Credit Commitments being
increased from $80,000,000 to $85,000,000.
D. Companies
have failed to comply with the EBITDA financial covenant specified in
Section 7.10(c)
of the
Financing Agreement for the measurement period ending on April 30, 2008,
and have informed Agent and Lenders that Companies will fail to comply with
the
EBITDA financial covenant specified in Section
7.10(c)
for the
measurement period ending on May 31, 2008, and accordingly Events of
Default have occurred and are continuing under Section 10.1(e)
of the
Financing Agreement (the “Existing
Events of Default”).
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E. By
reason
of the existence of the Existing Events of Defaults, Agent and Lenders have
full
legal right to exercise their rights and remedies under the Financing Agreement
and the other Loan Documents. Companies have no defenses, offsets or
counterclaims to the exercise of such rights and remedies.
F. Companies
have requested that Agent and Lenders, for the period from June 17, 2008,
until July 18, 2008, forbear from exercising their rights and remedies
under the Loan Documents.
G. Agent
and
Lenders are willing for the period from June 17, 2008 until July 18,
2008, to forbear from exercising their rights and remedies under the Loan
Documents, on the terms and conditions set forth herein.
AGREEMENT
In
consideration of the Recitals and of the mutual promises and covenants contained
herein, Agent, Lenders, Companies and Parent agree as follows:
1. Agreement
to Forbear.
During
the period commencing on June 17, 2008 and ending on the earlier to occur
of (i) 5:00 p.m. (Dallas, Texas time) on July 18, 2008 and (ii) the
date the Agent receives written notice from the Required Lenders to terminate
this Agreement after the occurrence of any Forbearance Default (as defined
in
Section
7
hereof)
(the “Forbearance
Period”),
and
subject to the other terms and conditions of this Agreement, each of Agent
and
each Lender agrees that it will forbear from exercising its rights and remedies
under the Loan Documents due to the Existing Events of Default; provided,
however,
nothing
herein shall limit the rights of Agent pursuant to the Financing Agreement
to
establish reserves or the amount of any reserves. Upon the expiration or
termination of the Forbearance Period, Agent’s and Lenders’ forbearance shall
automatically terminate and Agent and Lenders shall be entitled to exercise
any
and all of their rights and remedies under this Agreement and the Loan Documents
without further notice. Companies and Parent agree that Agent and Lenders
shall
have no obligation to extend the Forbearance Period.
2. Conditions
Precedent to Effectiveness of Agreement Against Agent and
Lenders.
This
Agreement shall not be effective against Agent and Lenders unless and until
each
of the following conditions shall have been satisfied in Agent’s credit judgment
or waived by Agent:
(a) Agent
shall have received this Agreement, duly executed by Companies, Parent and
Lenders;
(b) Agent
shall have received an agreement among the Lenders as to certain inter-lender
issues, in form and substance satisfactory to Agent and Existing Lenders,
duly
executed by Lenders and duly accepted and agreed to by Companies and Parent
(the
“Agreement
Among Lenders”),
the
Agreement Among Lenders to be considered to be a Loan Document for purposes
of
the Financing Agreement;
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(c) Agent
shall have received a Promissory Note in the original principal amount of
$5,000,000, duly executed by Companies and payable to the order of the Greinke
Trust, to evidence Revolving Loans made by the Greinke Trust;
(d) Agent
shall have received such additional documents, instruments and information
as
Agent may request; and
(e) Agent
shall have received evidence satisfactory to Agent that all organizational
proceedings taken in connection with the transactions contemplated by this
Agreement and all documents, instruments and other legal matters incident
thereto shall be satisfactory to Agent.
3. Representations
and Warranties.
Each of
each Company and Parent hereby represents and warrants to Agent and Lenders
as
follows:
(a) Recitals.
The
Recitals in this Agreement are true and correct in all material
respects.
(b) Incorporation
of Representations.
All
representations and warranties of Companies and Parent in the Loan Documents
are
incorporated herein in full by this reference and are true and correct in
all
material respects as of the date hereof.
(c) Organizational
Power; Authorization.
Each of
each Company and Parent has the organizational power, and has been duly
authorized by all requisite organizational action, to execute and deliver
this
Agreement and to perform its obligations hereunder. This Agreement has been
duly
executed and delivered by each Company and by Parent.
(d) Enforceability.
This
Agreement is the legal, valid and binding obligation of each Company and
Parent,
enforceable against each Company and Parent in accordance with its
terms.
(e) No
Violation.
Each of
each Company’s and Parent’s execution, delivery and performance of this
Agreement does not and will not (i) violate any law, rule, regulation or
court order to which any Company or Parent is subject; (ii) conflict with
or result in a breach of any Company’s or Parent’s Articles or Certificate of
Incorporation or Bylaws or any agreement or instrument to which any Company
or
Parent is party or by which it or its properties are bound, or (iii) result
in the creation or imposition of any lien, security interest or encumbrance
on
any property of any Company or Parent, whether now owned or hereafter
acquired.
(f) Obligations
Absolute.
The
obligation of Companies to repay the loans and the other Obligations, together
with all interest accrued thereon, is absolute and unconditional, and there
exists no right of set off or recoupment, counterclaim or defense of any
nature
whatsoever to payment of the Obligations.
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(g) Full
Opportunity for Review; No Undue Influence.
This
Agreement was reviewed by each of each Company and Parent which acknowledges
and
agrees that it (i) understands fully the terms of this Agreement and the
consequences of the issuance hereof; (ii) has been afforded an opportunity
to have this Agreement reviewed by, and to discuss this Agreement with, such
attorneys and other persons as it may wish; and (iii) has entered into this
Agreement of its own free will and accord and without threat or duress. This
Agreement and all information furnished to Agent and Lenders is made and
furnished in good faith, for value and valuable consideration. This Agreement
has not been made or induced by any fraud, duress or undue influence exercised
by Agent or Lenders or any other person.
(h) No
Other Defaults.
Other
than the Existing Events of Default, no Event of Default exists under the
Financing Agreement or any of the other Loan Documents and each of each Company
and Parent is in full compliance with all covenants and agreements contained
therein.
4. Ratification
of Guaranty.
Parent
hereby acknowledges and consents to all of the terms and conditions of this
Agreement and the Loan Documents and hereby ratifies and confirms the Guaranty
for the benefit of Agent and Lenders. Guarantor hereby represents and
acknowledges that it has no claims, counterclaims, offsets, credits or defenses
to the Loan Documents or the performance of its obligations thereunder.
Guarantor agrees that nothing contained in this Agreement or the Loan Documents
shall adversely affect any right or remedy of either Agent or Lenders under
the
Guaranty. Guarantor hereby agrees that with respect to the Guaranty, all
references in such Guaranty to the “Obligations” shall include, without
limitation, the obligations of Companies to Agent and Lenders under the
Financing Agreement, as amended hereby. Guarantor hereby represents and
acknowledges that the execution and delivery of this Agreement and the other
Loan Documents executed in connection herewith shall in no way change or
modify
its obligations as a guarantor, debtor, pledgor, assignor, obligor and/or
grantor under its Guaranty and each other Loan Document to which it is a
party
and shall not constitute a waiver by either Agent or any Lender of any of
either
Agent’s or any Lender’s rights against Guarantor.
5. Additional
Agreements.
(a) Interest
During Forbearance
Period.
In
consideration for the forbearance provided for in this Agreement, Companies
hereby agree with Agent and Lenders that notwithstanding any provision in
the
Financing Agreement or any other Loan Document to the contrary, during the
Forbearance Period all Obligations shall bear interest at the Default Rate
of
Interest.
(b) Additional
Reporting and Information Requirements.
In
addition to any presently existing reporting and informational requirements
set
forth in the Financing Agreement, Companies and Parent agree to deliver by
July 3, 2008, to Agent, in form and substance satisfactory to Agent,
updated monthly projections for calendar year 2008 for Parent and Companies
including, without limitation, income statement, balance sheet, Availability
projection and Fixed Charge Coverage Ratio financial covenant
projections.
15
(c) Additional
Lender $5,000,000 Revolving Line of Credit Commitment; Increase in Aggregate
Revolving Line of Credit Commitments from $80,000,000 to
$85,000,000.
Effective as of the date the conditions specified in Section
2
of this
Agreement have been satisfied in Agent’s credit judgment or waived by Agent,
Additional Lender shall become a party to and a “Lender” under the Financing
Agreement with a Commitment of $5,000,000, which Commitment shall consist
entirely of Revolving Loans pursuant to the Revolving Line of Credit Commitment
and the aggregate Revolving Line of Credit Commitments shall accordingly
be
increased from $80,000,000 to $85,000,000, and the Lenders shall, through
Agent,
make such adjustments among themselves as shall be necessary so that after
giving effect to such adjustments, the Lenders shall hold Revolving Loans
in an
amount not greater than their respective Pro Rata Percentages. Additional
Lender
has no Commitment regarding the Term Loans. The parties hereto agree that
Additional Lender becoming a Lender pursuant to the terms and conditions
of this
Agreement and the Financing Agreement shall in no event be deemed to be a
violation of Section 7.13
of the
Financing Agreement.
(d) Additional
Lender Obligations.
Notwithstanding anything to the contrary in the Financing Agreement, the
parties
hereto agree that as to Additional Lender, the term “Obligations”, including,
without limitation, in connection with Obligations which are secured by the
Collateral, shall only apply to indebtedness and obligations of the Companies
to
Additional Lender specifically arising pursuant to the Financing
Agreement.
(e) Termination
of Additional Lender Commitment.
Notwithstanding anything to the contrary in the Financing Agreement, the
parties
hereto agree that Additional Lender’s $5,000,000 Commitment (consisting entirely
of a Revolving Line of Credit Commitment) shall terminate on July 18, 2008,
provided that on such date (i) the Existing Events of Default have been
waived and (ii) no other Default or Event of Default shall be in existence.
If
Additional Lender’s Commitment and Revolving Line of Credit Commitment so
terminates on July 18, 2008, Additional Lender shall thereafter have no
further commitment to make new loans or advances pursuant to Section 3
of the
Financing Agreement or to incur new obligations in connection with Letters
of
Credit Guaranties, but the relevant Commitments of the Existing Lenders,
including, without limitation, the respective Revolving Line of Credit
Commitment of each Existing Lender, shall remain the same, such that the
aggregate Revolving Line of Credit Commitments shall thereafter be permanently
reduced from $85,000,000 to $80,000,000.
6. Amendments
to Financing Agreement.
(a) Amendment
to Section 1 of Financing Agreement; Additional New Definition.
Section
1
of the
Financing Agreement is hereby amended by adding thereto the following new
definition to be inserted in its proper alphabetical order and to read in
its
entirety as follows:
“Sixth
Amendment”
shall
mean that certain Forbearance Agreement and Sixth Amendment to Second Amended
and Restated Financing Agreement executed by Agent, Lenders, Companies and
Parent.”
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(b) Amendment
to Section 1 of Financing Agreement; Amendment and Restatement of Definition
of
“Borrowing Base”.
Effective as of July 9, 2008, the parties hereto agree that Section
1
of the
Financing Agreement is hereby amended by amending and restating the definition
of “Borrowing Base” to read in its entirety as follows:
“Borrowing
Base
shall
mean, as to Companies, the amount calculated as follows: (a) the
lesser of
(i)
Revolving Line of Credit or (ii) the
sum of
(A)
eighty-five percent (85%) of Companies’ aggregate outstanding Eligible Accounts
Receivable and Companies’ aggregate outstanding Eligible Unbilled Card-Lock
Customer Accounts; provided,
however,
that if
the then Dilution Percentage is greater than five percent (5.0%), then the
rate
of advance herein shall be reduced by the percentage points by which the
Dilution Percentage exceeds five percent (5.0%), plus
(B)
the
sum of
(x)
sixty-five percent (65%) of the aggregate value of Companies’ Eligible
Inventory, valued at the lower of cost or market, on an average cost basis,
plus
(y)
sixty-five percent (65%) of the aggregate value of Companies’ Eligible Card-Lock
Inventory, valued at the lower of cost or market, on an average cost basis,
plus
(C) the
Eligible Equipment Based Amount, plus
(D) the
lesser of
(x) one
hundred percent (100%) of the Dollar balance of the Eligible Cash Collateral
or
(y) $10,000,000, minus
(E) the Availability Block, minus
(b) any
applicable Availability Reserves.”
(c) Amendment
to Section 1 of Financing Agreement; Deletion of Definition of “Eligible Life
Insurance Policy”.
Effective as of July 9, 2008, Section
1
of the
Financing Agreement is amended by deleting therefrom the definition of “Eligible
Life Insurance Policy”.
(d) Amendment
to Section 1 of Financing Agreement; Amendment and Restatement of Definitions
of
“Commitment” and “Revolving Line of Credit”.
Effective as of the date the conditions specified in Section
2
of this
Agreement have been satisfied in Agent’s credit judgment or waived by Agent,
Section
1
of the
Financing Agreement is amended by amending and restating the definitions
of
“Commitment” and “Revolving Line of Credit” to read in their entirety as
follows:
“Commitment
shall
mean, as to any Lender, the amount of the commitment for such Lender set
forth
on the signature page to the Sixth Amendment or in the Assignment and Transfer
Agreement to which such Lender is a party, as such amount may be reduced
or
increased in accordance with the provisions of Paragraph
13.4(b)
of
Section 13
or any
other applicable provisions of this Financing Agreement.
17
Revolving
Line of Credit
shall
mean the aggregate commitment of the Lenders to make loans and advances pursuant
to Section 3
and
issue Letters of Credit Guaranties to the Companies in the aggregate amount
equal to the aggregate Revolving Line of Credit Commitment for each Lender
as
set forth on the signature page of the Sixth Amendment or in the Assignment
and
Transfer Agreement to which such Lender is a party, as such amount may be
reduced or increased in accordance with the provisions of Paragraph 13.4(b)
of
Section 13
or any
other applicable provision of this Financing Agreement.”
(e) Amendment
to Section 3.10 of Financing Agreement.
Effective as of July 9, 2008, Section
3.10
of the
Financing Agreement is amended by deleting therefrom the present provisions
of
Section 3.10
and
replacing such provisions with “[Reserved]”.
7. Default.
Each of
the following shall constitute a “Forbearance
Default”
hereunder:
(a) any
representation or warranty of any Company or Parent contained in this Agreement
proves to have been false or misleading in any material respect when made
or
furnished; or
(b) any
Company or Parent shall fail to keep or perform any of the covenants or
agreements contained herein; or
(c) any
Company or Parent shall begin to pay SC Fuels or any Affiliate of SC Fuels
for
fuel or other goods purchased from SC Fuels or such Affiliate on a quicker
basis
than such Company or Parent has historically paid SC Fuels or such Affiliate
for
fuel or such other goods, even if paying on such quicker basis is otherwise
consistent with written documentation between such Company or Parent and
SC
Fuels or such Affiliate of SC Fuels; or
(d) any
Company or Parent shall fail to keep or perform any of the covenants or
agreements contained in the Financing Agreement or the other Loan Documents
(other than an Existing Event of Default); or
(e) the
existence of any Event of Default (other than an Existing Event of Default)
under the Financing Agreement.
8. Effect
and Construction of Agreement.
Except
as expressly provided herein, the Financing Agreement and the other Loan
Documents are hereby ratified and confirmed and shall be and shall remain
in
full force and effect in accordance with their respective terms, and this
Agreement shall not be construed to: (i) impair the validity, perfection or
priority of any lien or security interest securing the Obligations;
(ii) waive or impair any rights, powers or remedies of Agent and Lenders
under the Financing Agreement or the other Loan Documents upon termination
of
the Forbearance Period; (iii) constitute an agreement by Agent or Lenders
or require Agent and Lenders to extend the Forbearance Period, or grant
additional forbearance periods, or extend the term of the Financing Agreement
or
the time for payment of any of the Obligations; or (iv) make any loans or
other extensions of credit to Companies after termination of the Forbearance
Period. In the event of any inconsistency between the terms of this Agreement
and the Loan Documents, this Agreement shall govern. Each of each Company
and
Parent acknowledges that it has consulted with counsel and with such other
experts and advisors as it has deemed necessary in connection with the
negotiation, execution and delivery of this Agreement. This Agreement shall
be
construed without regard to any presumption or rule requiring that it be
construed against the party causing this Agreement or any part hereof to
be
drafted.
18
9. Expenses.
Companies agree to pay all costs, fees and expenses of Agent and Agent’s
attorneys incurred in connection with the negotiation, preparation,
administration and enforcement of, and the preservation of any rights under,
this Agreement, the Financing Agreement and/or the other Loan Documents,
and the
transactions and other matters contemplated hereby and thereby, including,
but
not limited to, the fees, costs and expenses incurred by Agent in the employment
of auditors and/or consultants to perform work on Agent’s behalf to audit,
appraise, monitor and otherwise review any and all portions of the
Collateral.
10. Miscellaneous.
(a) Further
Assurances.
Each of
Company and Parent agrees to execute such other and further documents and
instruments as Agent may request to implement the provisions of this Agreement
and to perfect and protect the liens and security interests created by the
Financing Agreement and the other Loan Documents.
(b) Benefit
of Agreement.
This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto, their respective successors and assigns. No other
person
or entity shall be entitled to claim any right or benefit hereunder, including,
without limitation, the status of a third-party beneficiary of this
Agreement.
(c) Integration.
This
Agreement, together with the Financing Agreement and the other Loan Documents,
constitutes the entire agreement and understanding among the parties relating
to
the subject matter hereof, and supersedes all prior proposals, negotiations,
agreements and understandings relating to such subject matter. In entering
into
this Agreement, each of each Company and Parent acknowledges that it is relying
on no statement, representation, warranty, covenant or agreement of any kind
made by the Agent or any Lender or any employee or agent of the Agent or
any
Lender, except for the agreements of Agent and Lenders set forth
herein.
(d) Severability.
The
provisions of this Agreement are intended to be severable. If any provisions
of
this Agreement shall be held invalid or unenforceable in whole or in part
in any
jurisdiction, such provision shall, as to such jurisdiction, be ineffective
to
the extent of such invalidity or enforceability without in any manner affecting
the validity or enforceability of such provision in any other jurisdiction
or
the remaining provisions of this Agreement in any jurisdiction.
19
(e) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the internal
substantive laws of the State of Texas, without regard to the choice of law
principles of such state.
(f) Counterparts;
Telecopied Signatures.
This
Agreement may be executed in any number of counterparts and by different
parties
to this Agreement on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute one
and
the same agreement. Any signature delivered by a party by facsimile transmission
shall be deemed to be an original signature hereto.
(g) Notices.
Any
notices with respect to this Agreement shall be given in the manner provided
for
in Section 12.6
of the
Financing Agreement.
(h) Survival.
All
representations, warranties, covenants, agreements, undertakings, waivers
and
releases of each Company and Parent contained herein shall survive the
termination of the Forbearance Period and payment in full of the
Obligations.
(i) Amendment.
No
amendment, modification, rescission, waiver or release of any provision of
this
Agreement shall be effective unless the same shall be in writing and signed
by
the parties hereto.
(j) No
Limitation on Lender.
Nothing
in this Agreement shall be deemed in any way to limit or restrict any of
Agent’s
or any Lender’s rights to seek in a bankruptcy court or any other court of
competent jurisdiction, any relief Agent may deem appropriate in the event
that
a voluntary or involuntary petition under any title of the Bankruptcy Code
is
filed by or against any Company or Parent.
(k) Material
Inducement.
Each of
each Company and Parent further acknowledges and agrees that the
representations, acknowledgments, agreements and warranties in this Agreement
have been made by such Company or Parent as a material inducement to Agent
and
Lenders to enter into this Agreement, that each of Agent and each Lender
is
relying on such representations and warranties, has changed and will continue
to
change its position in reliance thereon and that each of Agent and each Lender
would not have entered into this Agreement without such representations,
acknowledgments, agreements, and warranties.
11. Misrepresentation.
Each of
each Company and Parent shall indemnify and hold Agent and Lenders harmless
from
and against any and all losses, damages, costs and expenses (including
attorneys’ fees) incurred by Agent or Lenders as a direct or indirect result of
(i) any breach of any representation or warranty contained in this Agreement,
or
(ii) any breach or default under any of the covenants or agreements contained
in
this Agreement.
12. Ratification
of Liens and Security Interest.
Each of
each Company and Parent hereby acknowledges and agrees that the liens and
security interests of the Financing Agreement and the other Loan Documents
are
valid, subsisting, perfected and enforceable liens and security interests
and
are superior to all liens and security interests other than those exceptions
approved by Lender in writing.
20
13. No
Commitment.
Each of
each Company and Parent agrees that neither Agent nor any Lender has made
any
commitment or other agreement regarding the Financing Agreement or the other
Loan Documents, except as expressly set forth in this Agreement. Each of
each
Company and Parent warrants and represents that it will not rely on any
commitment, further agreement to forbear or other agreement on the part of
Agent
or Lenders unless such commitment or agreement is in writing and signed by
Agent
and Lenders.
14. NO
COUNTERCLAIMS; RELEASE OF CLAIMS; WAIVER; HOLD HARMLESS.
EACH OF EACH COMPANY AND PARENT REPRESENTS AND WARRANTS THAT IT HAS NO SET-OFF,
RECOUPMENT, COUNTERCLAIM, DEFENSE, CROSS-COMPLAINT, CLAIM, DEMAND OR OTHER
CAUSE
OF ACTION OF ANY NATURE WHATSOEVER (TOGETHER, THE “COUNTERCLAIMS”)
AGAINST AGENT OR ANY LENDER WHICH ARISE OUT OF THE TRANSACTIONS EVIDENCED
BY THE
FINANCING AGREEMENT OR THE OTHER LOAN DOCUMENTS, ANY TRANSACTIONS THAT WERE
RENEWED OR EXTENDED BY THE FINANCING AGREEMENT OR THE OTHER LOAN DOCUMENTS,
ANY
OTHER TRANSACTION WITH AGENT OR ANY LENDER, OR WHICH COULD BE ASSERTED TO
REDUCE
OR ELIMINATE ALL OR ANY PART OF ANY COMPANY’S OR PARENT’S LIABILITY TO REPAY THE
OBLIGATIONS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE
FROM
AGENT OR ANY LENDER, IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF
CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION, ANY CONTRACTING FOR, CHANGING, TAKING, RESERVING, COLLECTING
OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE
EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE FINANCING AGREEMENT OR THE
OTHER
LOAN DOCUMENTS, THE NEGOTIATION FOR AND EXECUTION OF THIS AGREEMENT AND ANY
SETTLEMENT NEGOTIATIONS. TO THE EXTENT THAT ANY COUNTERCLAIMS MAY EXIST,
WHETHER
KNOWN OR UNKNOWN, SUCH ARE WAIVED AND HEREBY RELEASED BY EACH COMPANY AND
PARENT. FURTHERMORE, EACH OF EACH COMPANY AND PARENT, ON BEHALF OF ITSELF,
ITS
SUCCESSORS, AGENTS, ATTORNEYS, OFFICERS, DIRECTORS, ASSIGNS AND PERSONNEL
AND
LEGAL REPRESENTATIVES, DOES HEREBY RELEASE, REMISE, ACQUIT AND FOREVER DISCHARGE
AGENT AND EACH LENDER AND AGENT’S AND EACH LENDER’S EMPLOYEES, AGENTS,
REPRESENTATIVES, CONSULTANTS, ATTORNEYS, FIDUCIARIES, SERVANTS, OFFICERS,
DIRECTORS, PARTNERS, PREDECESSORS, SUCCESSORS AND ASSIGNS, SUBSIDIARY
CORPORATIONS, PARENT CORPORATIONS, AND RELATED CORPORATE DIVISIONS (ALL OF
THE
FOREGOING HEREINAFTER CALLED THE “RELEASED
PARTIES”),
FROM ANY AND ALL ACTIONS AND CAUSES OF ACTION, JUDGMENTS, EXECUTIONS, SUITS,
DEBTS, CLAIMS, DEMANDS, LIABILITIES, OBLIGATIONS, DAMAGES AND EXPENSES OF
ANY
AND EVERY CHARACTER, KNOWN OR UNKNOWN, DIRECT AND/OR INDIRECT, AT
21
LAW
OR IN EQUITY, OF WHATSOEVER KIND OR NATURE, WHETHER HERETOFORE OR HEREAFTER
ARISING, FOR OR BECAUSE OF ANY MATTER OR THINGS DONE, OMITTED OR SUFFERED
TO BE
DONE BY ANY OF THE RELEASED PARTIES PRIOR TO AND INCLUDING THE DATE OF EXECUTION
HEREOF, AND IN ANY WAY DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN ANY WAY
CONNECTED TO THIS AGREEMENT, THE FINANCING AGREEMENT OR THE OTHER LOAN
DOCUMENTS, IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT,
TORT,
VIOLATION OF LAW OR REGULATIONS OR OTHERWISE, INCLUDING BUT NOT LIMITED TO,
ANY
CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST
IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS
AND
REMEDIES UNDER THE FINANCING AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
THE
NEGOTIATION FOR AND EXECUTION OF THIS AGREEMENT, OR ANY SETTLEMENT NEGOTIATIONS
(ALL OF THE FOREGOING HEREINAFTER CALLED THE “RELEASED
MATTERS”);
AND EACH OF EACH COMPANY AND PARENT HEREBY COVENANTS AND AGREES NEVER TO
INSTITUTE ANY ACTION OR SUIT AT LAW OR IN EQUITY, NOR INSTITUTE, PROSECUTE,
OR
IN ANY WAY AID IN THE INSTITUTION OR PROSECUTION OF, ANY CLAIM, ACTION OR
CAUSE
OF ACTION, RIGHTS TO RECOVER DEBTS OR DEMANDS OF ANY NATURE AGAINST ANY OF
THE
RELEASED PARTIES ARISING OUT OF OR RELATED TO AGENT’S OR ANY LENDER’S ACTIONS,
OMISSIONS, STATEMENTS, REQUESTS OR DEMANDS IN ADMINISTERING, ENFORCING,
MONITORING, COLLECTING OR ATTEMPTING TO COLLECT, THE OBLIGATIONS, INDEBTEDNESS
AND OTHER OBLIGATIONS OF COMPANIES AND PARENT TO AGENT AND LENDERS. EACH
OF EACH
COMPANY AND PARENT AGREES TO INDEMNIFY AND HOLD AGENT AND EACH LENDER HARMLESS
FROM ANY AND ALL COUNTERCLAIMS THAT ANY COMPANY OR PARENT OR ANY OTHER PERSON
OR
ENTITY CLAIMING BY, THROUGH, OR UNDER ANY COMPANY OR PARENT MAY AT ANY TIME
ASSERT AGAINST AGENT OR ANY LENDER. EACH OF EACH COMPANY AND PARENT ACKNOWLEDGES
THAT THE AGREEMENTS IN THIS PARAGRAPH ARE INTENDED TO BE IN FULL SATISFACTION
OF
ALL OR ANY ALLEGED INJURIES OR DAMAGES TO EACH OF EACH COMPANY AND PARENT,
ITS
SUCCESSORS, AGENTS, ATTORNEYS, OFFICERS, DIRECTORS, ASSIGNS AND PERSONAL
AND
LEGAL REPRESENTATIVES ARISING IN CONNECTION WITH THE RELEASED MATTERS. EACH
OF
EACH COMPANY AND PARENT REPRESENTS AND WARRANTS TO AGENT AND LENDERS THAT
IT HAS
NOT PURPORTED TO TRANSFER, ASSIGN OR OTHERWISE CONVEY ANY RIGHT, TITLE OR
INTEREST OF SUCH COMPANY OR PARENT IN ANY RELEASED MATTER TO ANY OTHER PERSON
AND THAT THE FOREGOING CONSTITUTES A FULL AND COMPLETE RELEASE OF EACH OF
EACH
COMPANY’S AND PARENT’S CLAIMS WITH RESPECT TO ALL RELEASED MATTERS. THE
PROVISIONS OF THIS SECTION
14
AND THE REPRESENTATIONS, WARRANTIES, RELEASES, WAIVERS,
REMISES, ACQUITTANCES, DISCHARGES, COVENANTS, AGREEMENTS
AND
22
INDEMNIFICATIONS
CONTAINED HEREIN (A) CONSTITUTE A MATERIAL CONSIDERATION FOR AND INDUCEMENT
TO
AGENT AND EACH LENDER ENTERING INTO THIS AGREEMENT, (B) DO NOT CONSTITUTE
AN
ADMISSION OF OR BASIS FOR ESTABLISHING ANY DUTY, OBLIGATION OR LIABILITY
OF
AGENT OR ANY LENDER TO ANY COMPANY OR PARENT OR ANY OTHER PERSON, (C) DO
NOT
CONSTITUTE AN ADMISSION OF OR BASIS FOR ESTABLISHING ANY LIABILITY, WRONGDOING,
OR VIOLATION OF ANY OBLIGATION, DUTY OR AGREEMENT OF AGENT OR ANY LENDER
TO ANY
COMPANY OR PARENT OR ANY OTHER PERSON, AND (D) SHALL NOT BE USED AS EVIDENCE
AGAINST AGENT OR ANY LENDER BY ANY COMPANY OR PARENT OR ANY OTHER PERSON
FOR ANY
PURPOSE.
23
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and
year first above written to be effective as of the respective date set forth
above.
|
COMPANIES:
|
||
|
UNITED
FUEL & ENERGY CORPORATION,
|
||
|
a
Texas corporation
|
||
|
By:
|
/s/
D. ▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Name:
|
D.
▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Title:
|
Vice
President and Chief Financial Officer
|
|
|
THREE
D OIL CO. OF ▇▇▇▇▇▇▇, INC.,
|
||
|
a
Texas corporation
|
||
|
By:
|
/s/
D. ▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Name:
|
D.
▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Title:
|
Vice
President and Chief Financial Officer
|
|
|
CARDLOCK
FUELS SYSTEM, INC.,
|
||
|
a
California corporation
|
||
|
By:
|
/s/
D. ▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Name:
|
D.
▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Title:
|
Vice
President and Chief Financial Officer
|
|
|
PARENT:
|
||
|
UNITED
FUEL & ENERGY CORPORATION,
|
||
|
a
Nevada corporation
|
||
|
By:
|
/s/
D. ▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Name:
|
D.
▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Title:
|
Vice
President and Chief Financial
Officer
|
|
|
AGENT:
|
||
|
THE
CIT GROUP/BUSINESS CREDIT, INC.,
|
||
|
as
Agent
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
|
Title:
|
Vice
President
|
|
|
LENDERS:
|
||
|
THE
CIT GROUP/BUSINESS CREDIT, INC.,
|
||
|
as
a Lender
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇
▇▇▇▇▇▇▇
|
|
|
Title:
|
Vice
President
|
|
|
Amount
of Commitment: $29,099,147.82
|
||
|
Amount
of Revolving Line
|
||
|
of
Credit Commitment: $26,666,666.67
|
||
|
|
SUNTRUST
BANK, as a Lender
|
|
|
By:
|
/s/
▇▇▇▇▇ ▇’▇▇▇▇▇▇
|
|
|
|
Name:
|
▇▇▇▇▇
▇’▇▇▇▇▇▇
|
|
Title:
|
Director
|
|
|
Amount
of Commitment: $19,399,431.88
|
||
|
Amount
of Revolving Line
|
||
|
of
Credit Commitment: $17,777,777.78
|
||
|
PNC
BANK, NATIONAL ASSOCIATION,
|
||
|
as
a Lender
|
||
|
By:
|
/s/
▇▇▇▇ ▇. ▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇
▇. ▇▇▇▇▇
|
|
|
Title:
|
Vice
President
|
|
|
Amount
of Commitment: $19,399,431.88
|
||
|
Amount
of Revolving Line
|
||
|
of
Credit Commitment: $17,777,777.78
|
||
|
WACHOVIA
BANK, N.A., as a Lender
|
||
|
By:
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|
|
Name:
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇
|
|
|
Title:
|
Vice
President
|
|
|
Amount
of Commitment: $19,399,431.88
|
||
|
Amount
of Revolving Line
|
||
|
of
Credit Commitment: $17,777,777.78
|
||
|
THE
GREINKE PERSONAL LIVING TRUST
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Trustee
|
|
|
Amount
of Commitment: $5,000,000.00
|
||
|
Amount
of Revolving Line
|
||
|
of
Credit Commitment: $5,000,000.00
|
||