VOTING AGREEMENT
EXHIBIT
2
This
VOTING AGREEMENT (the “Agreement”),
dated
as of this 21st
day of
April, 2006 (the “Effective
Date”),
is
entered into by and among Falcon Seaboard Investment Company, L.P. (the
“Falcon
Seaboard”),
and
Xxxxxx X. Xxxxx and Xxxxxxx
XxXxxxxx
(the
“Stockholders”).
WITNESSETH:
WHEREAS,
Falcon Seaboard and United Fuel & Energy Corporation, a Nevada corporation
(“UFE”)
have
entered into a Subscription Agreement of even date herewith (the “Subscription
Agreement”),
pursuant to which Falcon Seaboard has agreed, upon the terms and subject to
the
conditions set forth therein, to purchase shares of Convertible Preferred Stock,
par value $0.001 per share, of UFE (the “Preferred
Stock”);
WHEREAS,
as of the date hereof, the Stockholders are the record owners of the number
of
shares (the “Shares”)
of
common stock, par value $0.001 per share, of UFE (“Common
Stock”)
set
forth on Schedule I attached hereto; and
WHEREAS,
as a condition to its willingness to enter into the Subscription Agreement,
Falcon Seaboard has required that the Stockholders agree, and the Stockholders
are willing to agree, to the matters set forth herein.
NOW,
THEREFORE,
in
consideration of the foregoing and the agreements set forth below, the parties
hereto agree as follows:
1. Voting
of Shares.
1.1. Voting
Agreement.
Each of
the Stockholders hereby agrees to vote (or cause to be voted) all of the Shares
(and any and all securities issued or issuable in respect thereof) which such
Stockholder is entitled to vote (or to provide his written consent thereto),
at
any annual, special or other meeting of the stockholders of UFE, and at any
adjournment or adjournments thereof, or pursuant to any consent in lieu of
a
meeting or otherwise:
(a) in
favor
of electing one member designated by Falcon Seaboard to the UFE board of
directors; and
(b) against
(or to otherwise withhold votes from) any nominees for election to the UFE
board
of directors to whom Falcon Seaboard has notified the Stockholders that it
reasonably objects.
2. Notification
of Director Nominees.
The
Stockholders hereby agree to promptly notify Falcon Seaboard of the names of
all
nominees to the UFE board of directors of which they are aware.
3. Representations
and Warranties of the Stockholders.
Each
Stockholder represents and warrants to Falcon Seaboard as follows in each case
as of the date hereof:
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3.1. Binding
Agreement.
Such
Stockholder has the capacity to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. Such Stockholder has duly
and
validly executed and delivered this Agreement and this Agreement constitutes
a
legal, valid and binding obligation of such Stockholder, enforceable against
such Stockholder 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).
3.2. No
Conflict.
Neither
the execution and delivery of this Agreement, nor the compliance with any of
the
provisions hereof in each case by such Stockholder (a) requires any consent,
approval, authorization or permit of, registration, declaration or filing
(except for filings under the Securities Exchange Act of 1934, as amended)
with,
or notification to, any governmental entity, (b) results in a default (or an
event which, with notice or lapse of time or both, would become a default)
or
give 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 Shares, (c) requires any material consent, authorization or approval
of any person other than a governmental entity which has not been obtained,
or
(d) violates or conflicts with any order, writ, injunction, decree or law
applicable to such Stockholder or the Shares.
3.3. Ownership
of Shares.
The
Stockholder is the record owners of the Shares set forth opposite his name
on
Schedule I hereto, free and clear of any security interests, liens, charges,
encumbrances, options or restriction on the right to vote the Shares. The
Stockholder holds exclusive power to vote the Shares, subject to the limitations
set forth in Section 1 of this Agreement. The Shares represent all of the shares
of capital stock of UFE owned by the Stockholders.
4. Transfer;
Additional Shares.
4.1. Transfers
Permitted.
The
Stockholder may sell, transfer, assign, pledge, or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, assignment or other disposition of, the Shares
or
any interest contained therein, free from obligations on the transferee,
assignee, or pledgee under this Agreement. Notwithstanding the foregoing, the
following Shares shall remain subject to this Agreement: (i) any Shares of
a
Stockholder transferred to an Affiliate (as defined below) of the Stockholder;
(ii) any Shares of a Stockholder transferred to one or more members of a
Stockholder’s family, or to a trust, family limited partnership or other such
entity for estate planning purposes; (iii) any Shares of a Stockholder that
become controlled by a guardian of the Stockholder; and (iv) any Shares of
a
Stockholder that are pledged or assigned as security for a loan unless and
until
the pledgee/assignee’s lien and security interest is foreclosed upon (or a
transfer is effected in lieu of foreclosure), all in accordance with applicable
law. For purposes of this Agreement, the term “Affiliate” shall mean a person or
entity that controls, is controlled by, or is under common control with, a
Stockholder.
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4.2. Additional
Shares.
In the
event (i) of any stock dividend, stock split, recapitalization,
reclassification, combination or exchange of shares of capital stock of UFE
on,
of or affecting the Shares or (ii) a Stockholder becomes the record owner
of any additional shares of UFE Common Stock or other securities entitling
the
holder thereof to vote or give consent with respect to the matters set forth
in
Section 1 hereof, then the terms of this Agreement shall apply to the shares
of
capital stock or other securities of UFE held by the Stockholder immediately
following the effectiveness of the events described in clause (i) or a
Stockholder becoming the record owner thereof, as described in clause (ii),
as
though they were Shares hereunder.
5. Specific
Enforcement.
The
parties hereto agree that irreparable damage would occur in the event that
any
of the provisions of this Agreement were not performed in accordance with the
terms hereof or were otherwise breached and that each party shall be entitled
to
seek specific performance of the terms hereof, in addition to any other remedy
which may be available at law or in equity.
6. Term
and Termination.
6.1. Term.
This
Agreement shall expire on the earlier of (a) the 10th
anniversary of the Effective Date (subject to renewal for successive five year
terms upon mutual agreement of the parties), or (b) the date Falcon Seaboard
ceases to own the lesser of (x) at least 5% of the outstanding shares of Common
Stock (including securities of UFE that are convertible into shares of Common
Stock) or (y) 1,000,000 shares of Common Stock (or securities of UFE that are
convertible into at least 1,000,000 shares of Common Stock).
6.2. Early
Termination with Respect to Xxxxxx X. Xxxxx.
Only
with respect to Xxxxxx X. Xxxxx (and any transferees of such Shares described
in
clauses (i) through (iv) in Section 4.1 above), this Agreement shall terminate
prior to its expiration set forth in Section 6.1 above on the earlier of (i)
the
agreement of the parties hereto to terminate this Agreement, or (ii) the date
Xx. Xxxxx ceases to own at least 1,000,000 shares of Common Stock.
6.3. Early
Termination with Respect to Xxxxxxx XxXxxxxx.
Only
with respect to the Shares owned by Xxxxxxx XxXxxxxx (and any transferees of
such Shares described in clauses (i) through (iv) in Section 4.1 above), this
Agreement shall terminate prior to its expiration set forth in Section 6.1
above
on the earlier of (i) the agreement of the parties hereto to terminate this
Agreement, (ii) the date of Xx. XxXxxxxx’x death; (iii) the date Xx. XxXxxxxx
ceases to own at least 200,000 shares of Common Stock; or (iv) the date Xx.
XxXxxxxx ceases to serve as an officer and director of UFE.
7. Notices.
All
notices and other communications hereunder shall be in writing and shall be
deemed given upon (a) transmitter’s confirmation of a receipt of a facsimile
transmission, (b) confirmed delivery by a standard overnight carrier or
when
delivered by hand or (c) the expiration of five business days after the day
when
mailed by certified or registered mail, postage prepaid, addressed at the
following addresses (or at such other address for a party as shall be specified
by like notice):
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If
to
Falcon Seaboard, to:
000
X.
Xxxx Xxx Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Fax:
(000) 000-0000
with
a
copy to (which shall not constitute notice):
Shannon,
Martin, Xxxxxxxxxxx & Xxxxxxxx, P.C.
2400
Two
Houston Center
000
Xxxxxx Xxxxxx
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxxxx X. Xxxxxxx, Xx.
Fax:
(000) 000-0000
If
to the
Stockholders, to:
Xxxxxx
X.
Xxxxx
c/o
United Fuel & Energy Corporation
000
X.
Xxxxxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Fax:
(000) 000-0000
and
Xxxxxxx
XxXxxxxx
c/o
United Fuel & Energy Corporation
000
X.
Xxxxxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Fax:
(000) 000-0000
with
a
copy to (which shall not constitute notice):
Akin,
Gump, Strauss, Xxxxx & Xxxx L.L.P.
000
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, Xxxxx 00000
Attention:
Xxxxxxx Xxxxxxxx
Fax:
(000) 000-0000
8. Entire
Agreement.
This
Agreement constitutes the entire agreement and supersedes all other prior
agreements and understandings, both written and oral, among the parties, or
any
of them, with respect to the subject matter hereof.
9. Consideration.
This
Agreement is granted in consideration of the execution and delivery of the
Subscription Agreement by Falcon Seaboard.
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10. Amendment.
This
Agreement may not be modified, amended, altered or supplemented except upon
the
execution and delivery of a written agreement executed by the parties
hereto.
11. Successors
and Assigns.
This
Agreement shall not be assigned by operation of law or otherwise without the
prior written consent of the other parties hereto. This Agreement will be
binding upon, inure to the benefit of and be enforceable by each party and
such
party’s respective heirs, beneficiaries, executors, representatives and
permitted assigns.
12. 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 together shall constitute one and
the
same instrument.
13. Governing
Law.
This
Agreement shall be governed in all respects, including validity, interpretation
and effect, by the laws of the State of Nevada (without giving effect to the
provisions thereof relating to conflicts of law).
14. Severability.
Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
15. Headings.
The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.
16. Stockholder
Capacity.
Neither
of the Stockholders nor any designee of the Stockholders who is or becomes
during the term hereof a director or officer of UFE makes any agreement or
understanding herein in his capacity as such director or officer. The
Stockholder signs solely in his or her capacity as the record holder and
beneficial owner of the Stockholder’s Shares and nothing herein shall limit or
affect any actions taken by the Stockholder or any designee of the Stockholder
in his or her capacity as an officer or director of UFE. As used herein, the
term “record owner” or “record holder” shall mean ownership of Shares directly
or through a nominee.
[signature
page follows]
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IN
WITNESS WHEREOF,
this
Agreement has been duly executed and delivered by each Stockholder and a duly
authorized officer of Falcon Seaboard on the Effective Date.
| FALCON SEABOARD: | ||
| Falcon Seaboard Investment Company, L.P. | ||
| |
|
|
| By: | /s/ Xxxx Xxxxxxxx | |
|
Name: E.H. (Gene) Xxxxxxxx |
||
| Title: Vice-President Finance & Treasurer | ||
| STOCKHOLDERS: | ||
| /s/ Xxxxxx X. Xxxxx | ||
|
XXXXXX X. XXXXX |
||
| /s/ Xxxxxxx XxXxxxxx | ||
|
XXXXXXX XXXXXXXX |
||
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SCHEDULE
I TO
|
Name
of Stockholder
|
Number
of Shares
|
|
Xxxxxx
X. Xxxxx
|
7,035,000
|
|
Xxxxxxx
XxXxxxxx
|
475,733
|
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