SEVENTH AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AGREEMENT
SEVENTH
AMENDMENT TO SECOND AMENDED
AND
RESTATED FINANCING AGREEMENT
THIS
SEVENTH AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING
AGREEMENT
(“this
Agreement”)
entered into on this 8th day of August, 2008, to be effective, unless another
effective date is otherwise herein specified, as of the date hereof, is by
and
among The CIT Group/Business Credit, Inc. (“CIT”),
Wachovia Bank, N.A. (“Wachovia”),
PNC
Bank National Association (“PNC”),
and
SunTrust Bank (“SunTrust”,
together with CIT, Wachovia, and PNC, the ‘Required
Lenders”),
CIT
as administrative and collateral agent (“Agent”),
United Fuel & Energy Corporation, a Texas corporation (“United”),
Three
D Oil Co. of Xxxxxxx, 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,
Agent, Required Lenders, and The Greinke Personal Living Trust (“Greinke
Trust,
together with Required Lenders being hereinafter referred to as “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, Required Lenders, SunTrust and Agent, as amended from time to
time, including, without limitation, as amended by that certain Forbearance
Agreement and Sixth Amendment to Second Amended and Restated Financing
Agreement, dated July 10, 2008, executed by Companies, Agent, and Parent
(the “Sixth
Amendment”)
(as
amended from time to time, the “Financing
Agreement”).
B. Pursuant
to the terms and conditions of this Agreement, each of Companies, Agent and
Required Lenders are willing to amend the Financing Agreement as hereinafter
set
forth.
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
Definitions of “Adjustment Date”, “Applicable Base Rate Margin”, “Applicable
LIBOR Margin,” and “Initial Adjustment Date”.
Section
1
of the
Financing Agreement is amended by amending and restating the definitions of
“Adjustment Date”, “Applicable Base Rate Margin”, “Applicable LIBOR Margin,” and
“Initial Adjustment Date” to read in their entirety as follows:
“Adjustment
Date
shall
mean (a) initially, the Initial Adjustment Date, and (b) thereafter,
the first day of each thereafter occurring November, February, May and August;
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.
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) during
the period beginning the date of execution of the Seventh Amendment until the
Initial Adjustment Date:
(i) as to the amount of Revolving Loans outstanding on any day, 1.25%; and
(ii) as to the amount of Term Loans outstanding on any day, 1.50%;
and
(b) 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 six calendar month
period ending on such day:
|
APPLICABLE
BASE RATE
MARGIN
PRICING TABLE
|
|||
|
Fixed
Charge
Coverage
Ratio
|
Applicable
Base
Rate
Margin
for
Revolving Loans
|
Applicable
Base
Rate
Margin
for
Term Loans
|
|
| (i) |
Greater
than or equal to 2.00 to 1.00
|
(i) 0.50%
|
(i) 0.75%
|
| (ii) |
Less
than 2.00 to 1.00, but equal to or greater than 1.50 to
1.00
|
(ii) 0.75%
|
(ii) 1.00%
|
| (iii) |
Less
than 1.50 to 1.00, but equal to or greater than 1.25 to
1.00
|
(iii) 1.00%
|
(iii) 1.25%
|
| (iv) |
Less
than 1.25 to 1.00, but equal to or greater than 1.00 to
1.00
|
(iv) 1.00%
|
(iv) 1.25%
|
| (v) |
Less
than 1.00 to 1.00, but equal to or greater than 0.85 to
1.00
|
(v) 1.25%
|
(v) 1.50%
|
| (vi) |
Less
than 0.85 to 1.00
|
(vi) 1.25%
|
(vi) 1.50%
|
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.
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) during
the period beginning the date of execution of the Seventh Amendment until the
Initial Adjustment Date:
(i) as to the amount of Revolving Loans outstanding on any day, 4.00%; and
(ii) as to the amount of Term Loans outstanding on any day, 4.25%;
and
(b) 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 six calendar month
period ending on such day:
|
APPLICABLE
LIBOR MARGIN
PRICING
TABLE
|
|||
|
Fixed
Charge Coverage Ratio
|
Applicable
LIBOR Margin for Revolving Loans
|
Applicable
LIBOR Margin for Term Loans
|
|
|
|
|||
| (i) |
Greater
than or equal to 2.00 to 1.00
|
(i) 2.50%
|
(i) 2.75%
|
| (ii) |
Less
than 2.00 to 1.00, but equal to or greater than 1.50 to
1.00
|
(ii) 2.75%
|
(ii) 3.00%
|
| (iii) |
Less
than 1.50 to 1.00, but equal to or greater than 1.25 to
1.00
|
(iii) 3.00%
|
(iii) 3.25%
|
| (iv) |
Less
than 1.25 to 1.00, but equal to or greater than 1.00 to
1.00
|
(iv) 3.25%
|
(iv) 3.50%
|
| (v) |
Less
than 1.00 to 1.00, but equal to or greater than 0.85 to
1.00
|
(v) 3.50%
|
(iv) 3.75%
|
| (vi) |
Less
than 0.85 to 1.00
|
(vi) 4.00%
|
(v) 4.25%
|
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.
Availability
Block
shall
mean the amount indicated below, during the time period indicated
below:
|
Period
|
Amount
|
|
| (i) |
March 7,
2008 until Availability Block Adjustment Date
|
(i) $7,500,000
|
| (ii) |
Availability
Block Adjustment Date and thereafter
|
(ii) 3,750,000
|
Initial
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 the month ending on
June 30, 2008.”
2.02 Amendment
to Section 1 of Financing Agreement; Deletion of Definitions of “First
Availability Block Adjustment Date”, “Second Availability Block Adjustment
Date,” and “Third Availability Block Adjustment Date.” Section 1
of
Financing Agreement is amended by deleting therefrom the definitions of “First
Availability Block Adjustment Date”, “Second Availability Block Adjustment
Date”, and “Third Availability Block Adjustment Date.”
2.03 Amendment
to Section 1 of Financing Agreement; Addition of Definition of “Availability
Block Adjustment Date.”
Section
1
of the
Financing Agreement is amended by adding thereto a new definition, “Availability
Block Adjustment Date”, to be inserted in its proper alphabetical order and to
read in its entirety as follows.
“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
July 31, 2009, if such financial statements, together with financial
statements previously delivered to Agent pursuant to Paragraph 7.8(c)
of
Section 7
hereof,
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, and that Companies’ Fixed Charge Coverage Ratio for the six
calendar month period ending on the last day of each of the preceding 11
calendar months was greater than 1.00 to 1.00.”
2.04 Amendment
to Section 1 of Financing Agreement; Addition of Definition of “Seventh
Amendment”.
Section 1
of
Financing Agreement is amended by adding thereto a new definition, “Seventh
Amendment”, to be inserted in its proper alphabetical order and to read in its
entirety as follows:
“Seventh
Amendment
shall
mean that certain Seventh Amendment to Second Amended and Restated Financing
Agreement executed by certain Lenders, Companies and Parent.”
2.05 Amendment
and Restatement of Section 7.10 of the Financing
Agreement.
Effective June 29, 2008, Section 7.10
of the
Financing Agreement is 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 beginning with June 30, 2009, for
the six calendar month period ending on such date, a Fixed Charge Coverage
Ratio
for such period of not less than 1.00 to 1.00.
(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 $3,000,000.00.
(c) Maintain
EBITDA of not less than the amount set forth below for the six calendar month
period ending on the date set forth below:
|
Date
|
Minimum
EBITDA -
Assuming
No Sale
of
Propane Division
has
occurred
|
||
| (i) |
June 30,
2008
|
(i) |
$1,162,000
|
| (ii) |
July
31, 2008
|
(ii) |
$455,000
|
| (iii) |
August
31, 2008
|
(iii) |
$475,000
|
| (iv) |
September
30, 2008
|
(iv) |
$505,000
|
| (v) |
October
31, 2008
|
(v) |
$1,207,000
|
| (vi) |
November
30, 2008
|
(vi) |
$2,078,000
|
| (vii) |
December
31, 2008
|
(vii) |
$2,804,000
|
| (viii) |
January
31, 2009
|
(viii) |
$3,529,000
|
| (ix) |
February
28, 2009
|
(ix) |
$4,065,000
|
| (x) |
March
31, 2009
|
(x) |
$4,451,000
|
| (xi) |
April
30, 2009
|
(xi) |
$4,649,000
|
| (xii) |
May 31,
2009
|
(xii) |
$4,736,000
|
There
shall be no minimum EBITDA financial covenant after the six calendar month
period ending on May 31, 2009. Notwithstanding the foregoing, if the
Propane Division is sold (it being understood that there shall be no requirement
or expectation that Lenders will consent to such sale) the minimum EBITDA
requirement for each relevant six calendar month period shall be increased
as
follows: (x) the minimum EBITDA requirement for the six calendar month
period ending on the last day of the first calendar month subsequent to the
calendar month in which the Propane Division is sold shall be increased by
$49,000, and (y) thereafter, the minimum EBITDA requirement for the
relevant six calendar month period ending on the last day of each subsequent
calendar month shall be increased by the product of $49,000 times the number
of
calendar months subsequent to the calendar month in which the Propane Division
is sold, but in no event shall the minimum EBITDA requirement for any such
six
calendar month period be increased by more than $294,000. The following example
illustrates this provision: On
October 25, 2008, the Propane Division is sold. The minimum EBITDA
requirement would thereafter be as follows:
(A) October 31, 2008, $1,207,000; (B) November 30, 2008,
$2,127,000; (C) December 31, 2008, $2,902,000;
(D) January 31, 2009, $3,676,000; (E) February 28, 2009,
$4,261,000; (F) March 31, 2009, $4,696,000; (G) April 30,
2009, $4,943,000; and (H) May 31, 2009, $5,030,000.”
2.06 Additional
Agreements.
Notwithstanding any provision to the contrary in the Financing Agreement or
any
other Loan Document:
(a) Termination
of Commitment of Greinke Trust.
Greinke
Trust’s $5,000,000 Commitment (consisting entirely of a Revolving Line of Credit
Commitment, except that Greinke Trust’s commitment thereunder is solely to make
the Revolving Loans referred to in Paragraph 3.1(a)
of
Section
3
of the
Financing Agreement and to make settlements pursuant to Paragraph 3.1(b)
of
Section
3
of the
Financing Agreement, such that Greinke Trust shall not and does not participate
in the Letter of Credit Guaranty or other commitments of Lenders as to Letters
of Credit provided for in Section 5
of the
Financing Agreement) shall terminate on the first day that each of the following
occurs: (i) no Default or Event of Default shall be in existence,
(ii) Excess Availability (as defined below) shall be equal to or greater
than $10,000,000, and (iii) the Fixed Charge Coverage Ratio calculated as of
the
last day of the most recent Fiscal Quarter for the six calendar month period
ending on such day is at least 1.00 to 1.00. “Excess Availability” shall mean
the amount by which the Borrowing Base exceeds the sum of the aggregate amount
of all outstanding Revolving Loans, plus the aggregate undrawn amount of all
outstanding Letters of Credit, and shall be calculated on any specific date
after giving effect to all loans, advances and extensions of credit to be made
on such day and the payoff of Greinke Trust’s $5,000,000 Commitment and making
current all of the Companies’ debts, obligations and payables in accordance with
their usual business practices. If Greinke Trust’s Commitment and Revolving Line
of Credit Commitment so terminates, Greinke Trust shall thereafter have no
further commitment to make new loans or advances pursuant to Section 3
of the
Financing Agreement, but the relevant Commitments of the other Lenders,
including without limitation, the respective Revolving Line of Credit Commitment
of each other 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. This Section 2.06(a)
shall
replace in its entirety Section 5(e)
of the
Sixth Amendment.
(b) Equipment
and Real Estate Appraisal.
Companies agree and acknowledge that Agent shall hereafter, at the expense
of
Companies, retain an appraiser reasonably satisfactory to both Agent and
Companies (though if Agent and Companies are not able to timely agree on such
an
appraiser, Agent shall be entitled to retain an appraiser selected by Agent
in
its good faith discretion) to conduct by December 31, 2008, an appraisal, in
form and substance satisfactory to Agent in the exercise of its good faith
credit judgment, of such of the Real Estate and Equipment of Companies which
is
not part of Borrowing Base in order to compare the appraised value of such
Real
Estate and Equipment to the aggregate outstanding principal balance of the
Term
Loans, and to the extent such appraised value is less than the aggregate
outstanding principal of the Term Loans, upon demand by Agent, Companies shall
make a prepayment of principal on the Term Loans equal to the amount by which
the aggregate outstanding principal amount of the Term Loans is in excess of
such appraised value within ten (10) Business Days following the Companies’
receipt of the final appraisal report, and failure by Companies to make such
prepayment in such time period shall constitute an Event of
Default.
(c) Payments
to SC Fuels and Affiliates of SC Fuels.
(i)
Each of each Company and Parent agrees that it shall not 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 the standard payment terms currently found
in
the written documentation existing on the date hereof between such Company
or
Parent and SC Fuels or such Affiliate of SC Fuels, though in no event may such
standard payment terms be less than 30 days, and (ii) Companies agree that
hereafter on the first Business Day of each calendar week, Companies shall
supply a written report to Agent summarizing for the prior week the amount
of
such payments made to SC Fuels and the Affiliates of SC Fuels and the average
payment terms of such payments. Companies agree and acknowledge that any
violation of this Section 2.06(c)
shall
constitute an Event of Default.
(d) Third
Party Consultant.
Companies agree that if by October 31, 2008, the balance of Accounts more
than 90 days past due is greater than five percent (5.00%) of the total balance
of all Accounts and/or the aggregate amount of Accounts greater than 90 days
past due is equal to or greater than $4,500,000, Companies will within 30 days
thereafter retain, at the cost of Companies, a third party consultant acceptable
to Required Lenders, with the scope of employment, duties and contemplated
areas
of analysis of such third party consultant to be acceptable to Required Lenders,
and failure by Companies to so retain, at Companies cost, such third party
consultant in accordance with such requirements shall constitute an Event of
Default, provided,
however,
that
the failure to achieve the balance of Accounts specified in this Section
2.06(d)
shall
not constitute an Event of Default.
(e) Additional
Reporting and Informational Requirements.
In
addition to and not in limitation of any existing reporting and informational
requirements set forth in the Financing Agreement, Companies agree (i) to
deliver to Agent, on the third Business Day of each calendar week, beginning
on
August 20, 2008, in form and substance satisfactory to Agent, reports which
shall include: (u)(1) employee headcount as of the end of the previous calendar
week, (2) days sales outstanding on accounts receivable as of the end of the
previous calendar week, and (3) total cash receipts and total cash disbursements
for the previous calendar week, (v) a description of the gallons of fuel
sold by Companies during the preceding week and the margin per gallon,
(w) aging spreads as to Accounts, (x) a summary of credits/collections
on past due Accounts, (y) an analysis of the Account balances of the
customers of Companies with the ten largest past due Account balances, including
a description of the status of collection efforts regarding such past due
Accounts and a forecast as to the percentage of such past due Accounts Companies
anticipate collecting in the near future, and (z) the written report as to
payments made for the preceding week to SC Fuels and Affiliates of SC Fuels
described in Section
2.06(c)
above,
and (ii) to deliver to Agent on a monthly basis, at the same time as other
required monthly reports, reports in form and substance satisfactory to Agent,
which shall include: (v) in the relevant income statement a breakdown by
SBU (for example, propane, fuels, lubricants, cardlock and Arizona) of sales
and
cost of goods sold, (w) a volume report in gallons of sales by SBU,
(x) in the relevant balance sheet, specific items respectively describing
(1) the aggregate outstanding principal amount of all outstanding Revolving
Loans, (2) the aggregate principal amount of all outstanding Term Loans, and
(3)
the aggregate principal amount of other outstanding Indebtedness of Companies
to
any Person other than Agent or Required Lenders, breaking out by specific Person
such other Indebtedness, (y) a summary by Companies’ management regarding
Companies’ performance shown under the major line items of the Companies’
consolidated income statement (and specifically excluding the Companies’
consolidated balance sheet) and an explanation of any positive or negative
variance from budget of Companies’ performance shown under the major line items
of the Companies’ consolidated income statement of more than the greater of 5%
of the budgeted amount or $25,000.00, and (z) a compliance certificate.
Failure by Companies to provide by the relevant date any such report or
information shall constitute an Event of Default.
(f) EBITDA.
The
parties hereto agree that to the extent the increase in the bad debt allowance
for past due Accounts shown on the financial statements of Parent, Companies
and
their subsidiaries as of June 30, 2008, is equal to or less than
$3,200,000, for purposes of calculation of EBITDA, such increase in the bad
debt
allowance shall be considered to be an extraordinary item not to be included
in
the calculation of EBITDA; provided,
however,
to the
extent such increase in the bad debt allowance for past due Accounts is in
excess of $3,200,000, for purposes of calculation of EBITDA such excess amount
shall not be considered an extraordinary item and such excess shall be included
in the calculation of EBITDA.
2.07 Fees.
In
consideration for the agreements set forth herein, Companies shall pay to Agent
an amendment fee of $200,000, 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 paid in four equal monthly installments of $50,000 each, the
first such installment to be due and payable on the date of execution of this
Agreement, with each successive monthly installment to be due and payable on
the
same day of each of the three succeeding calendar months; provided,
however,
if not
already paid in full, the unpaid amount of this fee shall become due and payable
upon the earlier to occur of termination of the Financing Agreement or
acceleration of the Obligations.
ARTICLE
III
Limited
Waiver
3.01 Limited
Waiver.
Required Lenders hereby waive (i) the Existing Events of Default (as
defined in the Sixth Amendment), (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 otherwise 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.
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 Required Lenders, and
acknowledged and agreed to by Greinke Trust; and
(ii) 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 first
$50,000 installment of the fee described in Section 2.07
hereof.
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.
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.
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.
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]
EXECUTED
ON THIS 8th
day of August, 2008, to be effective as of the respective date indicated
above.
|
COMPANIES:
|
||
|
UNITED
FUEL & ENERGY CORPORATION,
a
Texas corporation
|
||
|
By:
|
/s/
D. Xxxxxx Xxxxx
|
|
|
Name:
|
D.
Xxxxxx Xxxxx
|
|
|
Title:
|
V.P.,
CFO, and Secretary
|
|
|
THREE
D OIL CO. OF XXXXXXX, INC.,
|
||
|
a
Texas corporation
|
||
|
By:
|
/s/
D. Xxxxxx Xxxxx
|
|
|
Name:
|
D.
Xxxxxx Xxxxx
|
|
|
Title:
|
V.P.,
CFO, and Secretary
|
|
|
CARDLOCK
FUELS SYSTEM, INC.,
|
||
|
a
California corporation
|
||
|
By:
|
/s/
D. Xxxxxx Xxxxx
|
|
|
Name:
|
D.
Xxxxxx Xxxxx
|
|
|
Title:
|
V.P.,
CFO, and Secretary
|
|
|
PARENT:
|
||
|
UNITED
FUEL & ENERGY CORPORATION,
|
||
|
a
Nevada corporation
|
||
|
By:
|
/s/
D. Xxxxxx Xxxxx
|
|
|
Name:
|
D.
Xxxxxx Xxxxx
|
|
|
Title:
|
V.P.,
CFO, and Secretary
|
|
|
AGENT:
|
||
|
THE
CIT GROUP/BUSINESS CREDIT, INC.,
|
||
|
as
Agent
|
||
|
By:
|
/s/
Xxxxx Xxxxxxx
|
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
|
Title:
|
Vice
President
|
|
|
REQUIRED
LENDERS:
|
||
|
THE
CIT GROUP/BUSINESS CREDIT, INC.,
|
||
|
as
a Lender
|
||
|
By:
|
/s/
Xxxxx Xxxxxxx
|
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
|
Title:
|
Vice
President
|
|
|
WACHOVIA
BANK, N.A.,
|
||
|
as
a Lender
|
||
|
By:
|
/s/
Xxxxxx X. Xxxxx
|
|
|
Name:
|
Xxxxxx
X. Xxxxx
|
|
|
Title:
|
Vice
President
|
|
|
PNC
BANK NATIONAL ASSOCIATION,
|
||
|
as
a Lender
|
||
|
By:
|
/s/
Xxx Xxxxxxx
|
|
|
Name:
|
Xxx
Xxxxxxx
|
|
|
Title:
|
Vice
President
|
|
|
SUNTRUST
BANK, as a Lender
|
||
|
By:
|
/s/
Xxxxx X. X’Xxxxxx
|
|
|
Name:
|
Xxxxx
X. X’Xxxxxx
|
|
|
Title:
|
Director
|
|
|
Acknowledged
and Agreed to this
|
||
|
8th
day of August, 2008.
|
||
|
THE
GREINKE PERSONAL LIVING TRUST
|
||
|
|
||
|
By:
|
/s/ Xxxxx X. Xxxxxxx |
|
|
Xxxxx
X. Xxxxxxx, Trustee
|
|
|
