STOCKHOLDERS AGREEMENT
This
STOCKHOLDERS AGREEMENT (this “Agreement”)
is
entered into this 5th day
of
October, 2007 by and among UNITED FUEL & ENERGY CORPORATION, a Nevada
corporation (the “Company”),
XXXXX
X. XXXXXXX (“Greinke”),
XXXXX
X. XXXXXXX, AS TRUSTEE UNDER THE GREINKE BUSINESS LIVING TRUST DATED APRIL
20,
1999 (“Trust”),
XXXXXX
X. XXXXX (“Xxxxx”),
FALCON
SEABOARD INVESTMENT COMPANY, L.P. (“Falcon
Seaboard”)
and
XXXXXXX XxXXXXXX (“XxXxxxxx”)
.
W
I T N E
S S E T H:
WHEREAS,
the Company, Greinke, Trust and Cardlock Fuels System, Inc., a California
corporation (“CFS”),
have
entered into a Mutual Stock Purchase Agreement dated September 14, 2007 (the
“Purchase
Agreement”),
pursuant to which the parties thereto have agreed, upon the terms and subject
to
the conditions set forth therein, for the Company to acquire all of the
outstanding capital stock of CFS from Trust in exchange for the Company’s
issuance to Trust of 26,641,276 shares
of
the Company’s Common Stock;
WHEREAS,
upon receipt of the shares of Common Stock upon consummation of the transactions
contemplated by the Purchase Agreement, Trust will become a significant
stockholder of the Company;
WHEREAS,
as a condition to its willingness to enter into the Purchase Agreement, the
Company has required that Greinke and Trust agree, and to induce the Company
to
enter into the Purchase Agreement, each of Greinke and Trust is willing to
agree
to certain arrangements and understandings respecting Trust’s contemplated share
ownership in the Company and certain other matters as set forth in this
Agreement; and
WHEREAS,
as a condition to their willingness to enter into the Purchase Agreement,
Greinke and Trust have required that Xxxxx, Falcon Seaboard and XxXxxxxx
agree,
and to induce Greinke and Trust to enter into the Purchase Agreement, each
of
Xxxxx, Falcon Seaboard and XxXxxxxx is willing to agree to certain arrangements
and understandings respecting their respective share ownership in the
Company.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, the
Company, Greinke, Trust, Xxxxx, Falcon Seaboard and XxXxxxxx hereby agree
as
follows:
ARTICLE
1
CERTAIN
DEFINITIONS
Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed
to
such terms in the Purchase Agreement. In addition, the following terms, as
used
in this Agreement, shall have the respective meanings set forth in this Article
1:
“Beneficial
owner”
or
“beneficially
owned”
or
“beneficial
ownership”
shall
have the meaning assigned to such term in Rule 13d-3 under the Exchange
Act.
“Board”
or
“Board
of Directors”
means
the board of directors of the Company, as constituted from time to
time.
“Common
Stock”
means
the common stock of the Company, par value $0.001 per share.
“Effective
Time”
means
the time at which the Purchase Agreement is consummated.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, or any successor federal
statute, as in effect from time to time.
“Governmental
Entity”
means
any government or any agency, bureau, board, commission, court, department,
official, political subdivision, tribunal or other instrumentality of any
government, whether federal, state or local, domestic or foreign.
“Person”
means
any natural person, firm, individual, business trust, trust, association,
corporation, partnership, joint venture, company, unincorporated entity or
Governmental Entity.
“Voting
Securities”
means
the Common Stock and any other securities of the Company or its successors
that
are entitled by their terms to vote generally in the election of directors
of
the Company or its successors and all options, rights, warrants and other
securities convertible into, or exercisable or exchangeable for, any shares
of
the Common Stock or other securities possessing such voting rights.
ARTICLE
2
VOTING
AGREEMENTS
Section
2.1 Greinke
and Trust Voting Agreement.
From
the
Effective Time and ending on the first anniversary of the Effective Time,
each
of Greinke and Trust hereby agrees to vote (or cause to be voted) all of
the
Voting Securities which Greinke and Trust is entitled to vote (or to provide
his
written consent thereto), at any annual, special or other meeting of the
stockholders of Company, and at any adjournment or adjournments thereof,
or
pursuant to any consent in lieu of a meeting or otherwise:
(i) against
any action or proposal to remove any member of the Board of Directors in
office
at the Effective Time;
(ii) for
any
action or proposal to reelect the members of the Board of Directors in office
at
the Effective Time at any annual meeting of the stockholders of the Company;
and
2
(iii) in
accordance with the written recommendations of XxXxxxxx; provided,
however,
that if
the provisions of this subsection (iii) conflict with the provisions of
subsection (i) or subsection (ii) with respect to a particular action or
proposal, the provisions of subsection (i) or subsection (ii) shall
control.
Section
2.2. Xxxxx,
Falcon Seaboard and XxXxxxxx Voting Agreement.
From
the
Effective Time and ending on the first anniversary of the Effective Time,
each
of Xxxxx, Falcon Seaboard and XxXxxxxx hereby agrees to vote (or cause to
be
voted) all of the Voting Securities which Xxxxx, Falcon Seaboard and XxXxxxxx
is
entitled to vote (or to provide his written consent thereto), at any annual,
special or other meeting of the stockholders of Company, and at any adjournment
or adjournments thereof, or pursuant to any consent in lieu of a meeting
or
otherwise, in such a manner as to ensure that Greinke is appointed or elected
a
member of the Board of Directors; provided,
however,
that
Kelly’s and XxXxxxxx’x agreement under this Section 2.2 is contingent on Falcon
Seaboard not objecting to the election of Greinke to the Board of Directors.
From the Effective Time and ending on the first anniversary of the Effective
Time, Falcon Seaboard hereby agrees not to object to Greinke’s election as a
member of the Board of Directors so as to prevent Messrs. Xxxxx and XxXxxxxx
from voting (or causing to be voted) all of the Voting Securities which they
are
entitled to vote in favor of the election of Greinke as a member of the Board
of
Directors pursuant to the terms of that certain Voting Agreement dated as
of
April 21, 2006 by and among Falcon Seaboard, Xxxxx and XxXxxxxx.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
Section
3.1. Representations
and Warranties of Greinke and Trust.
(a)
Binding
Agreement.
Each of
Greinke and Trust represents and warrants as follows: (i) Greinke and Trust
has
the capacity to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; and (ii) Greinke and Trust has duly and
validly executed and delivered this Agreement and this Agreement constitutes
a
legal, valid, and binding obligation of Greinke and Trust, enforceable against
Greinke and Trust in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting creditors’ rights generally and by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law).
(b)
No
Conflict.
Each of
Greinke and Trust represents and warrants that neither the execution and
delivery of this Agreement, nor the compliance with any of the provisions
hereof
in each case by Greinke or Trust (i) requires any consent, approval,
authorization or permit of, registration, declaration, or filing with, or
notification to, any Governmental Entity (except for filings or notifications
under the Exchange Act), (ii) results in a default (or an event which, with
notice or lapse of time or both, will result in a default) or gives rise
to any
right of termination by any third party, cancellation, amendment, or
acceleration under any material contract, agreement, instrument, commitment,
arrangement, or understanding, or results in the creation of a security
interest, lien, charge, encumbrance, equity, or claim with respect to any
of the
securities of CFS beneficially owned by Greinke or Trust, (iii) requires
any
material consent, authorization, or approval of any person other than a
Governmental Entity which has not been obtained, or (iv) violates or conflicts
with any order, writ, injunction, decree or law applicable to Greinke or
Trust
or the securities of the Company beneficially owned by Greinke or
Trust.
3
Section
3.2. Representations
and Warranties of Xxxxx, Falcon Seaboard and XxXxxxxx.
(a)
Binding
Agreement.
Each of
Xxxxx, Falcon Seaboard and XxXxxxxx represents and warrants as to himself
or
itself that: (i) he or it has the capacity to execute and deliver this Agreement
and to consummate the transactions contemplated hereby; and (ii) he or it
has
duly and validly executed and delivered this Agreement and this Agreement
constitutes a legal, valid, and binding obligation, enforceable against him
or
it in accordance with its terms, except as such enforceability may be limited
by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors’ rights generally and by general equitable principles
(regardless of whether enforceability is considered in a proceeding in equity
or
at law).
(b) No
Conflict.
Each of
Xxxxx, Falcon Seaboard and XxXxxxxx represents and warrants as to himself
or
itself that neither the execution and delivery of this Agreement, nor the
compliance with any of the provisions hereof by himself or itself (i)
requires any consent, approval, authorization or permit of, registration,
declaration, or filing with, or notification to, any Governmental Entity
(except
for filings or notifications under the Exchange Act), or (ii) violates or
conflicts with any agreement, order, writ, injunction, decree or law applicable
to him or it or the securities of the Company beneficially owned by him or
it;
provided,
however,
that in
the case of Xxxxx and XxXxxxxx, the voting agreement provided under Section
2.3(b) hereof may conflict with the terms of that certain Voting Agreement
dated
as of April 21, 2006 by and among Falcon Seaboard, Xxxxx and XxXxxxxx in
the
event that Falcon Seaboard notifies Xxxxx and XxXxxxxx that it objects to
the
election of Greinke to the Board of Directors in violation of Falcon Seaboard’s
agreement pursuant to Section
2.2
hereof.
ARTICLE
4
MISCELLANEOUS
Section
4.1. Termination.
This
Agreement shall terminate upon the earlier to occur of the following: (i)
one
(1) year following the Effective Time, or (ii) the termination of the Purchase
Agreement prior to consummation of the transactions contemplated thereby.
Section
4.2. Survival.
The
representations and warranties herein contained shall survive indefinitely
following the termination of this Agreement, subject to applicable statutes
of
limitation, if any; provided, however, that no representations and warranties
shall survive the termination of this Agreement pursuant to Section
4.1(ii).
Section
4.3. Specific
Enforcement.
The
parties hereto agree that if any of the provisions of this Agreement were
not
performed in accordance with their specific terms or were otherwise breached,
irreparable damage would occur and it would be extremely impracticable and
difficult to measure damages. Accordingly, in addition to any other rights
and
remedies to which the parties may be entitled by law or equity, each party
shall
be entitled to seek specific performance of the terms hereof. Further, the
parties hereto expressly waive (a) the defense that a remedy in damages will
be
adequate and (b) any requirement, in an action for specific performance,
for the
posting of a bond.
4
Section
4.4. No
Waiver.
The
parties hereby agree that no failure or delay by a party to this Agreement,
in
exercising any right, power or privilege hereunder will operate as a waiver
thereof, nor will a single or partial exercise thereof preclude any other
or
further exercise thereof or the exercise of any right, power or privilege
hereunder.
Section
4.5. Governing
Law.
This
Agreement shall be governed and construed in all respects in accordance with
the
laws of the State of Nevada (without giving effect to the provisions thereof
relating to conflicts of law).
Section
4.6. Successors
and Assigns.
Except
as otherwise provided herein, the provisions hereof shall inure to the benefit
of and be binding upon, the successors, permitted assigns, heirs, executors
and
administrators of the parties hereto.
Section
4.7. Entire
Agreement; Amendment.
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to
the
subject matter hereof, and no party shall be liable or bound to any other
party
in any manner by any warranties, representations, or covenants except as
specifically set forth herein or therein. Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged
or
terminated other than by a written instrument signed by the party against
whom
enforcement of any such amendment, waiver, discharge, or termination is sought.
Section
4.8. Notices.
Unless
otherwise provided, any notice, request, demand or other communication required
or permitted under this Agreement shall be given in writing and shall be
deemed
effectively given upon personal delivery to the party to be notified, or
when
sent by telex or telecopier (with receipt confirmed), or one business day
following deposit with overnight courier or three business days following
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed as follows (or at such other address as a party
may designate by notice to the other):
If
to the Company:
United
Fuel & Energy Corporation
000
Xxxxxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxxxxx XxXxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
5
With
a copy to (which shall not constitute notice):
Akin
Gump
Xxxxxxx Xxxxx & Xxxx LLP
000
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, Xxxxx 00000
Attention:
Will Xxxxxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If
to Greinke:
Xxxxx
X.
Xxxxxxx
X.X.
Xxx
0000
Xxxxxx,
Xxxxxxxxxx 00000-0000
With
a copy to (which shall not constitute notice):
Xxxxxx
X.
Xxxxxx
General
Counsel
X.X.
Xxx
0000
Xxxxxx,
Xxxxxxxxxx 00000-0000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
And
Xxxxx
& Xxxxxx, LLP
Attn:
Xxxxx X. Xxxxxxx
000
Xxxxx
Xxxx., 00xx
Xxxxx
Xxxxx
Xxxx, Xxxxxxxxxx 00000-0000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Section
4.9. Assignment.
Without
the prior written consent of the other parties hereto, no party hereto may
assign this Agreement or any of its rights or obligations hereunder, in whole
or
in part, by operation of law or otherwise except that the Company may, without
the prior written consent of the other parties, assign this Agreement upon
a
merger, consolidation, “combination” as defined in Section 78.416 of the Nevada
Revised Statutes as in effect on the date hereof, compulsory share exchange,
recapitalization or other similar transaction, provided that holders of the
capital stock of the Company or the surviving entity immediately prior to
such
transaction hold at least a majority of the capital stock of the Company
or the
surviving entity immediately after such transaction.
Section
4.10. Severability.
Whenever
possible, each provision or portion of any provision of this Agreement will
be
interpreted in such manner as to be effective and valid under applicable
law but
if any provision or portion of any provision of this Agreement is held to
be
invalid, illegal or unenforceable in any respect under any applicable law
or
rule in any jurisdiction, such invalidity, illegality or unenforceability
will
not affect any other provision or portion of any provision in such jurisdiction,
and this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision or portion of any
provision had never been contained herein.
6
Section
4.11. Electronic
Signatures.
Delivery
of a copy of this Agreement bearing an original signature by facsimile
transmission (whether directly from one facsimile device to another by means
of
a dial-up connection or whether mediated by the worldwide web), by electronic
mail in “portable document format” (“.pdf”) form, or by any other electronic
means intended to preserve the original graphic and pictorial appearance
of a
document, will have the same effect as physical delivery of the paper document
bearing the original signature. “Originally signed” or “original signature”
means or refers to a signature that has not been mechanically or electronically
reproduced.
Section
4.13. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed to be an original, but all of which, taken together, shall constitute
one
and the same Agreement.
Section
4.14. Stockholder Capacity.
Neither
Xxxxxxx, Xxxxx nor XxXxxxxx makes any agreement or understanding herein in
their
capacities as directors or officers of the Company. Nothing herein will limit
or
affect any actions taken by Xxxxxxx, Xxxxx or XxXxxxxx in their capacities
as
officers or directors of the Company or any of its Subsidiaries to comply
with
their fiduciary obligations as officers or directors of the
Company.
7
IN
WITNESS WHEREOF,
the
parties have caused this Stockholders Agreement to be duly executed as of
the
day and year first above written.
|
UNITED
FUEL & ENERGY CORPORATION
|
|||
|
By:
|
/s/
Xxxxxxx XxXxxxxx
|
||
|
|
Xxxxxxx
XxXxxxxx
|
||
|
|
President
and Chief Executive Officer
|
||
|
XXXXX
X. XXXXXXX, AS TRUSTEE UNDER THE GREINKE BUSINESS LIVING TRUST
DATED APRIL
20, 1999
|
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|
/s/
Xxxxx X. Xxxxxxx
|
|||
|
XXXXX
X. XXXXXXX, TRUSTEE
|
|||
|
/s/
Xxxxx X. Xxxxxxx
|
|||
|
XXXXX
X. XXXXXXX
|
|||
|
/s/
Xxxxxxx XxXxxxxx
|
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|
XXXXXXX
XXXXXXXX
|
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|
/s/
Xxxxxx X. Xxxxx
|
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|
XXXXXX
X. XXXXX
|
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|
XXXXXX
SEABOARD INVESTMENT COMPANY, L.P.
|
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|
By:
|
/s/
Xxxx Xxxxxxxx
|
||
|
|
Name:
E. H. (Gene) Xxxxxxxx
|
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|
|
Title:
Authorized Representative
|
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8
