FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AGREEMENT
EXHIBIT
10.1
FOURTH
AMENDMENT TO SECOND AMENDED
AND
RESTATED FINANCING AGREEMENT
THIS
FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING
AGREEMENT
(“this
Agreement”)
entered into on this 28th day of March, 2008, to be effective, unless another
effective date is otherwise herein specified, as of March 7, 2008, is 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
“Lenders”),
CIT
as administrative and collateral agent (“Agent”),
United Fuel & Energy Corporation, a Texas corporation (“United”),
Three
D Oil Co. of ▇▇▇▇▇▇▇, Inc., a Texas corporation (“Three
D”)
and
Cardlock Fuels Systems, 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,
Agent and Lenders 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, Lenders and Agent, as amended from time to
time, including, without limitation, as amended by that certain Forbearance
Agreement and Third Amendment to Second Amended and Restated Financing
Agreement, dated December 28, 2007, executed by Companies, Agent, and
Parent (the “Forbearance
Agreement”)
(as
amended from time to time, the “Financing
Agreement”).
B. Pursuant
to the terms and conditions of this Agreement, each of Companies, Agent and
Lenders are willing to amend the Financing Agreement, and certain of the other
Loan Documents.
NOW,
THEREFORE,
in
consideration of the premises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties, intending to be legally bound, agree as follows, as hereinafter set
forth:
ARTICLE
I
Definitions
1.01 Capitalized
terms used in this Agreement are defined in the Financing Agreement, as amended
hereby, unless otherwise stated.
ARTICLE
II
Agreements
2.01 Amendment
to Section 1 of Financing Agreement; Amendment and Restatement of
Definition of “Acquisition Term Loan Line of Credit”.
Section 1
of the
Financing
Agreement is hereby amended by amending and restating the definition of
“Acquisition Term Loan Line of Credit” to read in its entirety as
follows:
“Acquisition
Term Loan Line of Credit
shall
mean the aggregate commitment of the Lenders to make after the Closing Date
Acquisition Term Loan to Companies in an aggregate principal amount of up to
$4,193,513.50 pursuant to Paragraph 4.3
of
Section 4
of this
Financing Agreement. The parties hereto agree that as of the date of execution
of the Fourth Amendment, $2,990,425.00 in Acquisition Term Loans have been
made
and that $1,203,088.50 is the remaining amount of Acquisition Term Loans
available in connection with the Acquisition Term Loan Line of
Credit.”
2.02 Amendment
to Section 1 of Financing Agreement; Amendment to Definition of “Adjustment
Date”.
The
definition of “Adjustment Date” is amended and restated to read in its entirety
as follows:
“Adjustment
Date
shall
mean (a) initially, the Initial Adjustment Date, and (b) thereafter,
the first day of each thereafter occurring May, August, November and
February; provided,
however,
that if
the financial statements of Companies to be delivered to Agent pursuant to
Paragraph
7.8(c)
of
Section 7
hereof
for the month ending as of the last day of the Fiscal Quarter immediately
preceding such first day of such calendar month (for example, as to May 1,
2009, the financial statements to be delivered pursuant to Paragraph 7.8(c)
of
Section 7
hereof
for the month ending March 31, 2009) have not been delivered by the due
date for such financial statements, such ‘Adjustment Date’ shall instead be the
tenth day after delivery to Agent of such financial statements.”
2.03 Amendment
to Section 1 of Financing Agreement; Amendment to Definition of “Applicable
Base Rate Margin”.
The
definition of “Applicable Base Rate Margin” is amended and restated to read in
its entirety as follows:
“Applicable
Base Rate Margin
means,
with respect to any amount outstanding under the Revolving Loans or the Term
Loans, as the case may be, which are Base Rate Loans, the rate of interest
per
annum determined as set forth below:
(a) as
to
the amount of Revolving Loans outstanding on any day:
(i) during
the period beginning March 7, 2008 and continuing until the Initial
Adjustment Date - 0.75%; and
(ii) thereafter,
on each Adjustment Date (beginning on the Initial Adjustment Date) and
continuing until the next Adjustment Date, the applicable percent per annum
set
forth in the pricing table below opposite the relevant Fixed Charge Coverage
Ratio calculated as of the last
day
of the relevant Fiscal Quarter for the four Fiscal Quarter period ending on
such
day:
2
|
APPLICABLE
BASE RATE
MARGIN
PRICING TABLE
|
||
|
Fixed
Charge
Coverage
Ratio
|
Applicable
Base
Rate
Margin
|
|
| (A) |
Greater
than or equal to 2.00 to 1.00
|
(A)
0.00%
|
| (B) |
Less
than 2.00 to 1.00, but equal to or greater than 1.50 to
1.00
|
(B)
0.25%
|
| (C) |
Less
than 1.50 to 1.00
|
(C)
0.50%
|
All
adjustments to the Applicable Base Rate Margin shall be implemented by the
Agent
based on the financial statements and related officer’s certificate for the
relevant period delivered by the Companies to the Agent pursuant to Paragraph
7.8(c)
of
Section 7
hereof,
and shall take effect retroactively on the Adjustment Date immediately
succeeding the date of the Agent’s receipt of such financial statements.
Notwithstanding the foregoing: (a) no reduction in Applicable Base Rate
Margin shall occur on an Adjustment Date if a Default or an Event of Default
shall have occurred and be continuing on such Adjustment Date or the date of
the
Agent’s receipt of the financial statements on which such reduction is to be
based; and (b) if the Companies fail to deliver the financial statements on
which any reduction in applicable margins is to be based within ten (10) days
of
the due date for such items set forth in Paragraph
7.8(c)
of
Section 7,
then
effective as of the due date for such financial statements, the Applicable
Base
Rate Margin shall increase to the highest margin set forth in the table above
until the following Adjustment Date. Without limitation of any other provision
of this Financing Agreement or any other remedy available to Agent or Lenders
under any of the Loan Documents, if, as a result of any restatement of or other
adjustment to the financial statements delivered by the Companies to the Agent
pursuant to Paragraph
7.8(c)
of
Section 7
hereof
or for any other reason, the Agent determines that (y) the Fixed Charge
Coverage Ratio as calculated by the Companies as of any applicable date was
inaccurate by more than 0.04 (for example, the Fixed Charge Coverage Ratio
is
initially reported as 1.50 to 1.00, but as corrected is 1.459 to 1.00) (a
‘Material
Adjustment’)
and
(z) a proper calculation of the Fixed Charge Coverage Ratio would have
resulted in a different Applicable Base Rate Margin for any period, then in
the
event of a Material Adjustment (but not if a Material Adjustment has not
occurred) (i) if the proper calculation of the Fixed Charge Coverage Ratio
would have resulted in a higher Applicable Base Rate Margin for such period,
the
Companies shall automatically and retroactively be obligated to pay to the
Agent
promptly on demand by the Agent, an amount equal to the excess of the amount
of
interest and fees that should have been paid for such period over the amount
of
interest and fees actually paid for such period; and (ii) if the proper
calculation of the Fixed Charge Coverage Ratio would have resulted in a lower
Applicable Base Rate Margin for such period, the Agent shall have no obligation
to repay any interest or fees to the Companies; provided that if, as a result
of
any Material Adjustment a proper calculation of the Fixed Charge Coverage Ratio
would have resulted in a higher Applicable Base Rate Margin for one or more
periods and a lower Applicable Base Rate Margin for one or more other periods
(due to the shifting of income or expenses from one period to another period
or
any similar reason), then the amount payable by the Companies pursuant to clause
(i) above shall be based upon the excess, if any, of the amount of interest
and
fees that should have been paid for all applicable periods over the amount
of
interest and fees paid for all such periods.
3
(b) as
to
the amount of Term Loans outstanding on any day:
(i) March 7,
2008, until the Initial Adjustment Date - 1.00%; and
(ii) thereafter,
0.75%.”
2.04 Amendment
to Section 1 of Financing Agreement; Amendment to Definition of “Applicable
LIBOR Margin”.
The
definition of “Applicable LIBOR Margin” contained in Section 1
of the
Financing Agreement is amended and restated to read in its entirety as
follows:
“Applicable
LIBOR Margin
means,
on any specific date, with respect to any amount outstanding under the Revolving
Loans or Term Loans, as the case may be, which are LIBOR Loans, the rate of
interest per annum determined as set forth below:
(a) as
to
the amount of Revolver Loans outstanding on any day:
(i) (A) during
the period beginning on March 7, 2008, until the Initial Adjustment Date -
3.00%; and
(ii) thereafter,
on each Adjustment Date (beginning on the Initial Adjustment Date) and
continuing until the next Adjustment Date, the applicable percent per annum
set
forth in the pricing table below opposite the relevant Fixed Charge Coverage
Ratio calculated as of the last day of the relevant Fiscal Quarter for the
four
Fiscal Quarter period ending on such day:
4
|
APPLICABLE
LIBOR MARGIN
PRICING
TABLE
|
||
|
Fixed
Charge Coverage Ratio
|
Applicable
LIBOR Margin
|
|
| (A) |
Greater
than or equal to 2.00 to 1.00
|
(A)
2.00%
|
| (B) |
Less
than 2.00 to 1.00, but equal to or greater than 1.50 to
1.00
|
(B)
2.25%
|
| (C) |
Less
than 1.50 to 1.00, but equal to or greater than 1.25 to
1.00
|
(C)
2.50%
|
| (D) |
Less
than 1.25 to 1.00
|
(D)
2.75%
|
All
adjustments to the Applicable LIBOR Margin shall be implemented by the Agent
based on the financial statements and related officer’s certificate for the
relevant period delivered by the Companies to the Agent pursuant to Paragraph
7.8(c)
of
Section 7
hereof,
and shall take effect on the Adjustment Date immediately succeeding the date
of
the Agent’s receipt of such financial statements. Notwithstanding the foregoing:
(a) no reduction in Applicable Margins shall occur on an Adjustment Date if
a Default or an Event of Default shall have occurred and be continuing on such
Adjustment Date or the date of the Agent’s receipt of the financial statements
on which such reduction is to be based; and (b) if the Companies fail to
deliver the financial statements on which any reduction in applicable margins
is
to be based within ten (10) days of the due date for such items set forth in
Paragraph
7.8(c)
of
Section 7,
then
effective as of the due date for such financial statements, the Applicable
LIBOR
Margin shall increase to the highest margin set forth in the table above until
the following Adjustment Date. Without limitation of any other provision of
this
Financing Agreement or any other remedy available to Agent or Lenders under
any
of the Loan Documents, if, as a result of any restatement of or other adjustment
to the financial statements delivered by the Companies to the Agent pursuant
to
Paragraph
7.8(c)
of
Section 7
hereof
or for any other reason, the Agent determines that (y) the Fixed Charge
Coverage Ratio as calculated by the Companies as of any applicable date was
inaccurate and such inaccuracy constitutes a Material Adjustment and (z) a
proper calculation of the Fixed Charge Coverage Ratio would have resulted in
a
different Applicable LIBOR Margin for any period, then in the event of a
Material Adjustment (but not if a Material Adjustment has not occurred)
(i) if the proper calculation of the Fixed Charge Coverage Ratio would have
resulted in a higher Applicable LIBOR Margin for such period, the Companies
shall automatically and retroactively be obligated to pay to the Agent promptly
on demand by the Agent, an amount equal to the excess of the amount of interest
and fees that should have been paid for such period over the amount of interest
and fees actually paid for such period; and (ii) if the proper calculation
of the Fixed Charge Coverage Ratio would have resulted in a lower Applicable
LIBOR Margin for such period, the Agent shall have no obligation to repay any
interest or fees to the Companies; provided that if, as a result of any Material
Adjustment a proper calculation of the Fixed Charge Coverage Ratio would have
resulted in a higher Applicable LIBOR Margin for one or more periods and a
lower
Applicable LIBOR Margin for one or more other periods (due to the shifting
of
income or expenses from one period to another period or any similar reason),
then the amount payable by the Companies pursuant to clause (i) above shall
be
based upon the excess, if any, of the amount of interest and fees that should
have been paid for all applicable periods over the amount of interest and fees
paid for all such periods.
5
(b) as
to
the amount of Term Loans outstanding on any day:
(i) March 7,
2008, until the Initial Adjustment Date - 3.50%; and
(ii) thereafter,
3.25%.”
2.05 Amendment
to Section 1 of Financing Agreement; Amendment and Restatement of
Definition of “Borrowing Base”.
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) as
long as the Revolving Line of Credit is $80,000,000 or less, the lesser
of
(i) the Revolving Line of Credit or (ii) the
amount calculated as follows:
(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) one
hundred percent (100%) of the aggregate Eligible Cash Surrender Value of
Eligible Life Insurance Policy, plus
(E) the
lesser of
(x) one
hundred percent (100%) of the Dollar balance of the Eligible Cash Collateral
or
(y) $10,000,000, minus
(F) the Availability Block, minus
(G) any
applicable Availability Reserves; or
6
(b) as
long as the Revolving Line of Credit is greater than $80,000,000, (i) the
lesser of
(A) the Revolving Line of Credit or (B) the
amount calculated as follows:
(u)
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
(v)
the
sum of
(I)
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
(II)
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
(w) the
Eligible Equipment Based Amount, plus
(x) one
hundred percent (100%) of the aggregate Eligible Cash Surrender Value of
Eligible Life Insurance Policy, plus
(y) the
lesser of
(I) one
hundred percent (100%) of the Dollar balance of the Eligible Cash Collateral
or
(II) $10,000,000, minus
(z) the Availability Block, minus
(ii) any applicable Availability Reserves.”
2.06 Amendment
to Section 1 of Financing Agreement; Amendment and Restatement of
Definition of “Commitment”. Section 1
of the
Financing Agreement is hereby amended by amending and restating the definition
of “Commitment” to read in its 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 Fourth 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.”
2.07 Amendment
to Section 1 of Financing Agreement; Addition of New
Definitions”. Section 1
of the
Financing Agreement is hereby amended by adding thereto the following new
definitions to be inserted in their proper alphabetical order and to read in
its
entirety as follows:
“Availability
Block
shall
mean the amount indicated below, during the time period indicated
below:
|
Period
|
Amount
|
||||
| (i) |
March 7,
2008 until First Availability Block Adjustment Date
|
(i) |
$7,500,000
|
||
|
|
|||||
| (ii) |
First
Availability Block Adjustment Date until Second Availability Block
Adjustment Date
|
(ii) |
5,000,000
|
||
|
|
|||||
| (iii) |
Second
Availability Block Adjustment Date until Third Availability Block
Adjustment Date
|
(iii) |
$2,500,000
|
||
| (iv) |
Third
Availability Block Adjustment Date and thereafter
|
(iv) |
$0.00
|
||
7
First
Availability Block Adjustment Date
shall
mean the tenth day after delivery to Agent pursuant to Paragraph 7.8(c)
of
Section 7
hereof
of the financial statements of the Companies for any month ending on or after
May 31, 2008, if such financial statements demonstrate to the sole
satisfaction of Agent that Companies’ Fixed Charge Coverage Ratio for the four
calendar month period ending on such day is greater than 1:00 to
1:00.
Fourth
Amendment
shall
mean that certain Fourth Amendment to Second Amended and Restated Financing
Agreement executed by Agent, Lenders, Companies and Parent.
Second
Availability Block Adjustment Date
shall
mean the tenth day after delivery to Agent pursuant to Paragraph 7.8(c)
of
Section 7
hereof
of the financial statements of the Companies for any month ending after the
First Availability Block Adjustment Date if such financial statements
demonstrate to the sole satisfaction of Agent that Companies’ Fixed Charge
Coverage Ratio for the eight calendar month period ending on such date is
greater than 1.00 to 1.00.
Third
Availability Block Adjustment Date
shall
mean the tenth day after delivery to Agent pursuant to Paragraph 7.8(c)
of
Section 7
hereof
of the financial statements of the Companies for any month ending after the
Second Availability Block Adjustment Date if such financial statements
demonstrate to the sole satisfaction of Agent that Companies’ Fixed Charge
Coverage Ratio for the twelve calendar month period ending on such day is
greater than 1.00 to 1.00.”
2.08 Amendment
to Section 1 of the Financing Agreement; Amendment and Restatement of
Definition of “Initial Adjustment Date”.
The
definition of “Initial Adjustment Date” contained in Section 1
of the
Financing Agreement is hereby amended and restated to read in its entirety
as
follows:
“Initial
Adjustment Date
shall
mean the tenth day after delivery for the first time to Agent pursuant to
Paragraph
7.8(c)
of
Section 7
hereof
of the financial statements of the Companies for any month ending on or after
September 30, 2008, if such financial statements demonstrate to the sole
satisfaction of Agent that Companies’ Fixed Charge Coverage Ratio for the six
calendar month period ending on such day is greater than 1.00 to
1.00.”
8
2.09 Amendment
to Section 1 of Financing Agreement; Amendment and Restatement of
Definition of “Line of Credit”. Section 1
of the
Financing Agreement is hereby amended by amending and restating the definition
of “Line of Credit” to read in its entirety as follows:
“Line
of Credit
shall
mean the aggregate commitment of the Lenders in an amount equal to $89,000,000
to (a) make Revolving Loans pursuant to Section 3
of this
Financing Agreement, (ii) assist Companies in opening Letters of Credit
pursuant to Section 5
of this
Financing Agreement and (iii) make the Term Loans pursuant to Section 4
of this
Financing Agreement.”
2.10 Amendment
to Section 1 of Financing Agreement; Amendment and Restatement of
Definition of “Revolving Line of Credit”. Section 1
of the
Financing Agreement is hereby amended by amending and restating the definition
of “Revolving Line of Credit” to read in its entirely as follows:
“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
of
$80,000,000.”
2.11 Amendment
to Section 1 of Financing Agreement; Deletion of Definitions of
“Forbearance Default”, “Forbearance Period” and “Temporary Line Increase
Period”. Section 1
of the
Financing Agreement is hereby amended by deleting therefrom the definitions
of
“Forbearance Default”, “Forbearance Period” and “Temporary Line Increase
Period”.
2.12 Amendment
to Section 3.1 of the Financing Agreement; Addition of a New Paragraph
(c). Section
3.1
of the
Financing Agreement is hereby amended by adding thereto a new Paragraph
(c),
to read
in its entirety as follows:
“(c) Increases
in Revolving Line of Credit.
Companies shall have the right from time to time following the date of execution
of the Fourth Amendment upon not less than fifteen (15) Business Days’ prior
written notice to Agent to request an increase in the then Revolving Line of
Credit (with a corresponding increase in the Line of Credit) in incremental
amounts equal to $5,000,000 from existing Lenders and/or new lenders acceptable
to Agent; provided that (i) no Default or Event of Default shall have
occurred and be continuing at the time such request is made or at the time
such
increase is to become effective, (ii) Agent shall be in possession of a
field exam in form and substance and of a date acceptable to Agent and Required
Lenders, (iii) the aggregate commitments of Lenders (including any new
lenders) as to the Revolving Line of Credit shall in no event exceed
$125,000,000, (iv) Companies shall have paid to Lenders that agree to
increase their commitment as to the Revolving Line of Credit or such new lenders
a fee in an amount to be mutually agreed on by Companies and such Lenders or
new
lenders with respect to the amount of the requested increase, (v) Companies
shall have delivered to Agent an amendment to this Agreement reflecting the
requested increase, (vi) Companies shall have duly executed and delivered
to Lenders that agree to increase their commitment as to the Revolving Line
of
Credit Promissory Notes or such new lenders, if requested by such Lenders or
such new lenders, in the amount of the requested increase, (vii) if
requested by Agent, Companies shall have delivered to Agent, such opinions
and
authority documentation as Agent may require, with respect to the due
authorization, execution and delivery and enforceability of such amendment
to
this Financing Agreement and such additional Promissory Notes, and
(viii) the interest rate with respect to all Revolving Loans shall be the
same. Each Company acknowledges and agrees that no Lender shall be under any
obligation to increase its commitment as to the Revolving Line of Credit
hereunder.”
9
2.13 Amendment
and Restatement of Section 7.10 of the Financing
Agreement. Section
7.10
of the
Financing Agreement is hereby amended and restated to read in its entirety
as
follows:
“7.10 Until
termination of the Financing Agreement and payment and satisfaction in full
of
all Obligations hereunder, the Companies, on a consolidated basis,
shall:
(a) Maintain
as of the last day of each calendar month indicated below for the number of
calendar months indicated below, a Fixed Charge Coverage Ratio for such period
of not less than the ratio indicated below:
|
(i)
|
Four
calendar month period ending August 31, 2008
|
(i)
|
0.85
to 1.00
|
|
|
(ii)
|
Four
calendar month period ending on September 30, 2008 and
October 31, 2008
|
(ii)
|
0.90
to 1.00
|
|
|
(iii)
|
Four
calendar month period ending on November 30, 2008
|
(iii)
|
1.00
to 1.00
|
|
|
(iv)
|
Five
calendar month period ending on December 31, 2008
|
(iv)
|
1.00
to 1.00
|
|
|
(v)
|
Six
calendar month period ending on January 31, 2009
|
(v)
|
1.05
to 1.00
|
|
|
(vi)
|
Seven
calendar month period ending on February 28, 2009
|
(vi)
|
1.05
to 1.00
|
|
|
(vii)
|
Eight
calendar month period ending on March 31, 2009
|
(vii)
|
1.05
to 1.00
|
|
|
(viii)
|
Nine
calendar month period ending on April 30, 2009
|
(viii)
|
1.05
to 1.00
|
|
|
(ix)
|
Ten
calendar month period ending on May 31, 2009
|
(ix)
|
1.05
to 1.00
|
|
|
(x)
|
Eleven
calendar month period ending on June 30, 2009
|
(x)
|
1.05
to 1.00
|
|
|
(xi)
|
Twelve
calendar month period ending on July 31, 2009, and on the last day of
each succeeding calendar month
|
(xi)
|
1.05
to 1.00
|
10
(b) without
the prior written consent of the Agent and the Required Lenders, the Companies
will not:
(i) enter
into any Operating Lease if after giving effect thereto the aggregate
obligations with respect to Operating Leases of the Companies during any Fiscal
Year would exceed $3,000,000.00; or
(ii) contract
for, purchase, make expenditures for, lease pursuant to a Capital Lease or
otherwise incur obligations with respect to Unfinanced Capital Expenditures
(whether subject to a security interest or otherwise) during any Fiscal Year
in
the aggregate amount in excess of $5,000,000.00.
(c) Maintain
EBITDA of not less than the amount set forth below for the time period set
forth
below:
|
Period
|
Minimum
EBITDA
|
|||
|
(i)
|
Two
calendar month period ending on February 29, 2008
|
(i) |
$1,275,000
|
|
|
|
||||
|
(ii)
|
Three
calendar month period ending on ▇▇▇▇▇ ▇▇, ▇▇▇▇
|
(▇▇) |
$1,725,000
|
|
|
|
||||
|
(iii)
|
Four
calendar month period ending on April 30, 2008
|
(iii) |
$2,675,000
|
|
|
|
||||
|
(iv)
|
Five
calendar month period ending on May 31, 2008
|
(iv) |
$3,500,000
|
|
|
|
||||
|
(v)
|
Six
calendar month period ending on June 30, 2008
|
(v) |
$4,375,000
|
|
|
|
||||
|
(vi)
|
Seven
calendar month period ending on July 31, 2008
|
(vi) |
$5,675,000”
|
11
2.14 Additional
Agreement.
Companies hereby agree that by April 30, 2008, Cardlock will be in full
compliance with the provisions of Sections
3.4(a)
and
3.4(b)
of the
Financing Agreement regarding Depository Accounts, Blocked Accounts, deposit
of
proceeds of Collateral into Depository Accounts and Blocked Accounts, and
Blocked Account Agreements, including, without limitation, establishing and
maintaining Blocked Accounts satisfactory to Agent, depositing into such Blocked
Accounts all proceeds of Collateral received by Cardlock and all amounts on
deposit in deposit accounts used by Cardlock at each of its locations (as
further provided in Section 3.4(a)
of the
Financing Agreement), and delivering to Agent executed Blocked Account
Agreements in form and substance satisfactory to Agent. Failure by Cardlock
to
be in full compliance with such provisions of Sections
3.4(a)
and
3.4(b)
of the
Financing Agreement by April 30, 2008, shall constitute an immediate Event
of Default.
2.15 Amendment
to Amended and Restated Revolving Credit Notes.
(a) Each
Amended and Restated Revolving Credit Note, dated October 30, 2007,
executed by Companies, and respectively payable to Wachovia, SunTrust and PNC,
is hereby amended as follows:
|
(i)
|
Each
reference to the dollar amount “$15,555,555.56” shall be deemed to be a
reference to the dollar amount
“$17,777,777.78”.
|
|
(ii)
|
Each
reference to the phrase “FIFTEEN MILLION FIVE HUNDRED FIFTY-FIVE THOUSAND
FIVE HUNDRED FIFTY-FIVE AND 56/100 DOLLARS” shall be deemed to be a
reference to the phrase “SEVENTEEN MILLION SEVEN HUNDRED SEVENTY-SEVEN
THOUSAND SEVEN HUNDRED SEVENTY-SEVEN AND 78/100THS DOLLARS”.
|
(b) The
Amended and Restated Revolving Credit Note, dated October 30, 2007,
executed by Companies and payable to the order of CIT, is hereby amended as
follows:
|
(i)
|
Each
reference to the dollar amount “$23,333,333.32” shall be deemed to be a
reference to the dollar amount “$26,666,666.66”.
|
|
(ii)
|
Each
reference to the phrase “TWENTY THREE MILLION THREE HUNDRED THIRTY-THREE
THOUSAND THREE HUNDRED THIRTY-THREE AND 32/100THS DOLLARS” shall be deemed
to be a reference to the phrase “TWENTY-SIX MILLION SIX HUNDRED SIXTY-SIX
THOUSAND SIX HUNDRED SIXTY-SIX AND 66/100THS
DOLLARS”.
|
12
2.16 Amendment
to Amended and Restated Swingline Note.
The
Amended and Restated Swingline Note, dated October 20, 2007, executed by
Companies and payable to the order of CIT, is hereby amended as
follows:
(a) The
first
two references to the dollar amount of $7,000,000” shall be deemed to be
references to the dollar amount “$8,000,000.”
(b) Each
reference to the phrase “SEVEN MILLION DOLLARS AND NO CENTS” shall be deemed to
be a reference to the phrase “EIGHT MILLION DOLLARS AND NO CENTS.”
2.17 Fees.
In
consideration for the agreements set forth herein, Companies shall pay to Agent,
for the pro rata benefit of Lenders, an amendment fee of $50,000, which fee
(i) shall be deemed fully earned on the date of execution of this
Agreement, (ii) shall be non-refundable, and (iii) shall be due and
payable in full on the date of execution of this Agreement.
ARTICLE
III
Waiver
3.01 Waiver.
The
Lenders hereby waive (i) (a) the Existing Events of Default (as
defined in the Forbearance Agreement), and (b) the failure of Companies to
comply with the Fixed Charge Coverage Ratio financial covenant set forth in
Section
7.10(a)
of the
Financing Agreement for the testing period ending on February 29, 2008 (as
such Section
7.10(a)
read
prior to the amendment thereof contained in this Amendment), and (c) the
failure of Companies to comply with the requirement set forth in Section 2.08
of that
certain Second Amendment to Second Amended and Restated Financing Agreement
and
Other Loan Documents, dated October 5, 2007, executed by Companies, Agent
and certain Lenders as “Required Lenders,” that Companies deliver to Agent
within the time period therein specified the documentation relating to the
Blocked Accounts required to be executed by Cardlock, and any continuing failure
of Cardlock prior to April 30, 2008, to be in full compliance with the
provisions of Sections
3.4(a)
and
3.4(b)
of the
Financing Agreement regarding Depository Accounts, Blocked Accounts, deposit
of
proceeds of Collateral into Depository Accounts and Blocked Accounts, and
Blocked Account Agreements; (ii) any Event of Default arising out of any
breach described under clause
(i)
of this
Section
3.01;
and
(iii) any Event of Default caused by failures to satisfy conditions
precedent set forth in Section 2
of the
Financing Agreement (including conditions precedent to any further borrowing
under the Financing Agreement) resulting from any breach described in
clause
(i)
of this
Section
3.01.
3.02 No
Other Waivers.
Except
as expressly set forth in Section
3.01
above,
nothing contained herein shall be construed as a waiver by Agent or any Lender
of any covenant or provision of the Financing Agreement, or any other Loan
Document or any other contract or instrument between any Company and/or Parent
and Agent and/or any Lender, and neither Agent’s nor any Lender’s failure at any
time or times hereafter to require strict performance by any Company and/or
Parent of any provision thereof shall waive, affect or diminish any right of
Agent or any Lender thereafter to demand strict compliance therewith. Each
of
Agent and each Lender hereby reserves all rights granted under the Financing
Agreement, and each other Loan Document and any other contract or instrument
between any Company and/or Parent and Agent and/or any Lender.
13
ARTICLE
IV
Conditions
Precedent
4.01 Conditions
to Effectiveness.
The
effectiveness of this Agreement is subject to the satisfaction of the following
conditions precedent, unless specifically waived in writing by
Agent:
(a) Agent
shall have received all of the following, each in form and substance
satisfactory to Agent (each of which shall be deemed to be a “Loan
Document”
for
purposes of the Financing Agreement):
(i) This
Agreement, duly executed by Companies, Parent and Lenders; and
(ii) An
amendment to the Fee Letter; and
(iii) Such
additional documents, instruments and information as Agent may
request.
(b) The
representations and warranties contained herein and in the Financing Agreement,
and the other Loan Documents, as each is amended hereby, shall be true and
correct as of the date hereof, as if made on the date hereof.
(c) No
Default or Event of Default shall have occurred and be continuing, unless such
Event of Default has been otherwise specifically waived in writing by Agent
and
Lenders.
(d) All
corporate 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 and its legal counsel.
(e) Agent
shall have received payment, in immediately available funds, of the fee
described in Section
2.17
hereof.
(f) Agent
shall have received payment, in immediately available funds, of (i) all
Additional Interest (as defined in the Forbearance Agreement) which has accrued
since March 1, 2008, and remains unpaid, (ii) any portion of the
Temporary Line Increase Fee (as defined in the Forbearance Agreement) which
remains unpaid, and (iii) all other unpaid amounts payable by Companies
pursuant to the Forbearance Agreement.
ARTICLE
V
Ratifications,
Representations and Warranties
5.01 Ratifications.
The
terms and provisions set forth in this Agreement shall modify and supersede
all
inconsistent terms and provisions set forth in the Financing Agreement and
the
other Loan Documents, and, except as expressly modified and superseded by this
Agreement, the terms and provisions of the Financing Agreement and the other
Loan Documents are ratified and confirmed and shall continue in full force
and
effect. Each of the parties hereto agrees that the Financing Agreement and
the
other Loan Documents, as amended hereby, shall continue to be legal, valid,
binding and enforceable in accordance with their respective terms.
14
5.02 Representations
and Warranties.
Each of
each Company and Parent hereby represents and warrants to Agent and each Lender
that (a) the execution, delivery and performance of this Agreement and any
and
all other Loan Documents executed and/or delivered in connection herewith have
been authorized by all requisite corporate action on the part of each of each
Company and Parent and will not violate the Articles of Incorporation or Bylaws
of any Company or Parent; (b) the representations and warranties contained
in
the Financing Agreement, as amended hereby, and any other Loan Document are
true
and correct on and as of the date hereof and on and as of the date of execution
hereof as though made on and as of each such date; and (c) no Default or Event
of Default under the Financing Agreement, as amended hereby, has occurred and
is
continuing, unless such Default or Event of Default has been specifically waived
in writing by Agent and each Lender. Each of each Company and Parent hereby
represents and warrants to Agent and each Lender that it is in full compliance
with all covenants and agreements contained in the Financing Agreement, and
the
other Loan Documents, as amended hereby.
ARTICLE
VI
Miscellaneous
Provisions
6.01 Survival
of Representations and Warranties.
All
representations and warranties made in the Financing Agreement or any other
Loan
Document, including, without limitation, any document furnished in connection
with this Agreement, shall survive the execution and delivery of this Agreement
and the other Loan Documents, and no investigation by Agent or any Lender or
any
closing shall affect the representations and warranties or the right of Agent
or
any Lender to rely upon them.
6.02 Reference
to Financing Agreement.
Each of
the Financing Agreement and the other Loan Documents and any and all other
agreements, documents or instruments now or hereafter executed and delivered
pursuant to the terms hereof or pursuant to the terms of the Financing
Agreement, as amended hereby, is hereby amended so that any reference in the
Financing Agreement and such other Loan Documents to the Financing Agreement
shall mean a reference to the Financing Agreement as amended
hereby.
6.03 Expenses
of Agent.
Each of
each Company and Parent agrees to pay on demand all costs and expenses incurred
by Agent in connection with the preparation, negotiation and execution of this
Agreement and the other Loan Documents executed pursuant hereto, and any and
all
amendments, modifications, and supplements thereto, including, without
limitation, the costs and fees of Agent’s legal counsel, and all costs and
expenses incurred by Agent in connection with the enforcement or preservation
of
any rights under the Financing Agreement, as amended hereby, or any other Loan
Document, including, without limitation, the costs and fees of Agent’s legal
counsel.
15
6.04 Severability.
Any
provision of this Agreement held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the remainder of this
Amendment and the effect thereof shall be confined to the provision so held
to
be invalid or unenforceable.
6.05 Successors
and Assigns.
This
Agreement is binding upon and shall inure to the benefit of the parties hereto
and their respective successors and assigns, except neither any Company nor
Parent may assign or transfer any of its rights or obligations hereunder without
the prior written consent of Agent and each Lender.
6.06 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which when so
executed shall be deemed to be an original, but all of which when taken together
shall constitute one and the same instrument.
6.07 Effect
of Waiver.
No
consent or waiver, express or implied, by Agent or any Lender to or for any
breach of or deviation from any covenant or condition by any Company or Parent
shall be deemed a consent to or waiver of any other breach of the same or any
other covenant, condition or duty.
6.08 Headings.
The
headings, captions, and arrangements used in this Agreement are for convenience
only and shall not affect the interpretation of this Agreement
6.09 Applicable
Law.
THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT HERETO SHALL
BE
DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY
AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.
6.10 Final
Agreement.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE
NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
16
6.11 Release.
EACH OF EACH COMPANY AND PARENT HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE “OBLIGATIONS” OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF
ANY KIND OR NATURE FROM AGENT OR ANY LENDER. EACH OF EACH COMPANY AND PARENT
HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES EACH OF AGENT
AND EACH LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS,
FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS,
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 EXECUTED, WHICH ANY COMPANY OR PARENT MAY NOW OR HEREAFTER HAVE
AGAINST AGENT OR ANY LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS
AND
ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF
CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING
FROM
ANY “LOANS”, INCLUDING, WITHOUT LIMITATION, 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 OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION
OF THIS AGREEMENT.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
17
Executed
on this 28th day of March, 2008, to be effective as of the respective date
indicated above.
|
COMPANIES:
UNITED
FUEL & ENERGY CORPORATION,
a
Texas corporation
By:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
Chief Executive Officer
THREE
D OIL CO. OF ▇▇▇▇▇▇▇, INC.,
a
Texas corporation
By:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
Chief Executive Officer
CARDLOCK
FUELS SYSTEM, INC.,
a
California corporation
By:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
Chief Executive Officer
|
|
PARENT:
UNITED
FUEL & ENERGY CORPORATION,
a
Nevada corporation
By:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
Chief Executive 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:
$29,666,666.66
|
|
SUNTRUST
BANK,
as
a Lender
By:
/s/ ▇▇▇▇▇ ▇. ▇’▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇’▇▇▇▇▇▇
Title:
Director
Amount
of Commitment:
$19,777,777.78
WACHOVIA
BANK, N.A.,
as
a Lender
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Vice President
Amount
of Commitment:
$19,777,777.78
PNC
BANK NATIONAL ASSOCIATION,
as
a Lender
By:
/s/ ▇▇▇ ▇▇▇▇▇▇▇
Name:
▇▇▇ ▇▇▇▇▇▇▇
Title:
Vice President
Amount
of Commitment:
$19,777,777.78
|