FORBEARANCE AGREEMENT AND SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AGREEMENT

 

THIS FORBEARANCE AGREEMENT AND SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AGREEMENT (the “Agreement”) is made and entered into on this 10th day of July, 2008, to be effective, unless another effective date is otherwise herein specified, as of June 17, 2008, by and among The CIT Group/Business Credit, Inc. (“CIT”), SunTrust Bank (“SunTrust”), Wachovia Bank, N.A. (“Wachovia”), and PNC Bank, National Association (“PNC”) (CIT, SunTrust, Wachovia and PNC being herein collectively referred to as the “Existing Lenders”), The Greinke Personal Living Trust, Frank P. Greinke, an individual residing in Tacoma, Washington, Trustee (“Greinke Trust”) (the Greinke Trust being herein referred to as the “Additional Lender”, and together with the Existing Lenders, being herein collectively referred to as the “Lenders”), CIT as administrative and collateral agent (“Agent”), and United Fuel & Energy Corporation, a Texas corporation (“United”), and Three D Oil Co. of Kilgore, 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”).

 

 

A.  Companies, Lenders and Agent are the present parties to that certain Second Amended and Restated Financing Agreement, dated as of March 27, 2007, originally executed by United, Three D, Existing Lenders and Agent (as amended from time to time, the “Financing Agreement”). Capitalized terms not otherwise defined herein shall have the meanings given such terms in the Financing Agreement.

 

B.  To induce Agent and Lenders to make the loans under the Financing Agreement to Companies, Parent has delivered to Agent that certain Guaranty dated October 5, 2007 (“Guaranty”) guaranteeing payment and performance by Companies of their Obligations.

 

C.  Companies have requested that Agent and Lenders agree and, subject to the terms and conditions of this Agreement, Agent and Lenders have agreed, to amend the Financing Agreement to provide, effective as of the date the conditions hereinafter specified in Section 2 of this Agreement have been satisfied in Agent’s credit judgment or waived by Agent, to provide for Additional Lender becoming a party to and a “Lender” under the Financing Agreement with a Commitment of $5,000,000, which Commitment shall consist entirely of Revolving Loans pursuant to the Revolving Line of Credit Commitment, with the aggregate Revolving Line of Credit Commitments being increased from $80,000,000 to $85,000,000.

 

D.  Companies have failed to comply with the EBITDA financial covenant specified in Section 7.10(c) of the Financing Agreement for the measurement period ending on April 30, 2008, and have informed Agent and Lenders that Companies will fail to comply with the EBITDA financial covenant specified in Section 7.10(c) for the measurement period ending on May 31, 2008, and accordingly Events of Default have occurred and are continuing under Section 10.1(e) of the Financing Agreement (the “Existing Events of Default”).

 

 

E.  By reason of the existence of the Existing Events of Defaults, Agent and Lenders have full legal right to exercise their rights and remedies under the Financing Agreement and the other Loan Documents. Companies have no defenses, offsets or counterclaims to the exercise of such rights and remedies.

 

F.  Companies have requested that Agent and Lenders, for the period from June 17, 2008, until July 18, 2008, forbear from exercising their rights and remedies under the Loan Documents.

 

G.  Agent and Lenders are willing for the period from June 17, 2008 until July 18, 2008, to forbear from exercising their rights and remedies under the Loan Documents, on the terms and conditions set forth herein.

 

 

In consideration of the Recitals and of the mutual promises and covenants contained herein, Agent, Lenders, Companies and Parent agree as follows:

 

1.  Agreement to Forbear. During the period commencing on June 17, 2008 and ending on the earlier to occur of (i) 5:00 p.m. (Dallas, Texas time) on July 18, 2008 and (ii) the date the Agent receives written notice from the Required Lenders to terminate this Agreement after the occurrence of any Forbearance Default (as defined in Section 7 hereof) (the “Forbearance Period”), and subject to the other terms and conditions of this Agreement, each of Agent and each Lender agrees that it will forbear from exercising its rights and remedies under the Loan Documents due to the Existing Events of Default; provided, however, nothing herein shall limit the rights of Agent pursuant to the Financing Agreement to establish reserves or the amount of any reserves. Upon the expiration or termination of the Forbearance Period, Agent’s and Lenders’ forbearance shall automatically terminate and Agent and Lenders shall be entitled to exercise any and all of their rights and remedies under this Agreement and the Loan Documents without further notice. Companies and Parent agree that Agent and Lenders shall have no obligation to extend the Forbearance Period.

 

2.  Conditions Precedent to Effectiveness of Agreement Against Agent and Lenders. This Agreement shall not be effective against Agent and Lenders unless and until each of the following conditions shall have been satisfied in Agent’s credit judgment or waived by Agent:

 

(a)  Agent shall have received this Agreement, duly executed by Companies, Parent and Lenders;

 

(b)  Agent shall have received an agreement among the Lenders as to certain inter-lender issues, in form and substance satisfactory to Agent and Existing Lenders, duly executed by Lenders and duly accepted and agreed to by Companies and Parent (the “Agreement Among Lenders”), the Agreement Among Lenders to be considered to be a Loan Document for purposes of the Financing Agreement;

 

 

(c)  Agent shall have received a Promissory Note in the original principal amount of $5,000,000, duly executed by Companies and payable to the order of the Greinke Trust, to evidence Revolving Loans made by the Greinke Trust;

 

(d)  Agent shall have received such additional documents, instruments and information as Agent may request; and

 

(e)  Agent shall have received evidence satisfactory to Agent that all organizational proceedings taken in connection with the transactions contemplated by this Agreement and all documents, instruments and other legal matters incident thereto shall be satisfactory to Agent.

 

3.  Representations and Warranties. Each of each Company and Parent hereby represents and warrants to Agent and Lenders as follows:

 

(a)  Recitals. The Recitals in this Agreement are true and correct in all material respects.

 

(b)  Incorporation of Representations. All representations and warranties of Companies and Parent in the Loan Documents are incorporated herein in full by this reference and are true and correct in all material respects as of the date hereof.

 

(c)  Organizational Power; Authorization. Each of each Company and Parent has the organizational power, and has been duly authorized by all requisite organizational action, to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly executed and delivered by each Company and by Parent.

 

(d)  Enforceability. This Agreement is the legal, valid and binding obligation of each Company and Parent, enforceable against each Company and Parent in accordance with its terms.

 

(e)  No Violation. Each of each Company’s and Parent’s execution, delivery and performance of this Agreement does not and will not (i) violate any law, rule, regulation or court order to which any Company or Parent is subject; (ii) conflict with or result in a breach of any Company’s or Parent’s Articles or Certificate of Incorporation or Bylaws or any agreement or instrument to which any Company or Parent is party or by which it or its properties are bound, or (iii) result in the creation or imposition of any lien, security interest or encumbrance on any property of any Company or Parent, whether now owned or hereafter acquired.

 

(f)  Obligations Absolute. The obligation of Companies to repay the loans and the other Obligations, together with all interest accrued thereon, is absolute and unconditional, and there exists no right of set off or recoupment, counterclaim or defense of any nature whatsoever to payment of the Obligations.

 

 

(g)  Full Opportunity for Review; No Undue Influence. This Agreement was reviewed by each of each Company and Parent which acknowledges and agrees that it (i) understands fully the terms of this Agreement and the consequences of the issuance hereof; (ii) has been afforded an opportunity to have this Agreement reviewed by, and to discuss this Agreement with, such attorneys and other persons as it may wish; and (iii) has entered into this Agreement of its own free will and accord and without threat or duress. This Agreement and all information furnished to Agent and Lenders is made and furnished in good faith, for value and valuable consideration. This Agreement has not been made or induced by any fraud, duress or undue influence exercised by Agent or Lenders or any other person.

 

(h)  No Other Defaults. Other than the Existing Events of Default, no Event of Default exists under the Financing Agreement or any of the other Loan Documents and each of each Company and Parent is in full compliance with all covenants and agreements contained therein.

 

4.  Ratification of Guaranty. Parent hereby acknowledges and consents to all of the terms and conditions of this Agreement and the Loan Documents and hereby ratifies and confirms the Guaranty for the benefit of Agent and Lenders. Guarantor hereby represents and acknowledges that it has no claims, counterclaims, offsets, credits or defenses to the Loan Documents or the performance of its obligations thereunder. Guarantor agrees that nothing contained in this Agreement or the Loan Documents shall adversely affect any right or remedy of either Agent or Lenders under the Guaranty. Guarantor hereby agrees that with respect to the Guaranty, all references in such Guaranty to the “Obligations” shall include, without limitation, the obligations of Companies to Agent and Lenders under the Financing Agreement, as amended hereby. Guarantor hereby represents and acknowledges that the execution and delivery of this Agreement and the other Loan Documents executed in connection herewith shall in no way change or modify its obligations as a guarantor, debtor, pledgor, assignor, obligor and/or grantor under its Guaranty and each other Loan Document to which it is a party and shall not constitute a waiver by either Agent or any Lender of any of either Agent’s or any Lender’s rights against Guarantor.

 

5.  Additional Agreements.

 

(a)  Interest During Forbearance Period. In consideration for the forbearance provided for in this Agreement, Companies hereby agree with Agent and Lenders that notwithstanding any provision in the Financing Agreement or any other Loan Document to the contrary, during the Forbearance Period all Obligations shall bear interest at the Default Rate of Interest.

 

(b)  Additional Reporting and Information Requirements. In addition to any presently existing reporting and informational requirements set forth in the Financing Agreement, Companies and Parent agree to deliver by July 3, 2008, to Agent, in form and substance satisfactory to Agent, updated monthly projections for calendar year 2008 for Parent and Companies including, without limitation, income statement, balance sheet, Availability projection and Fixed Charge Coverage Ratio financial covenant projections.

 

 

(c)  Additional Lender $5,000,000 Revolving Line of Credit Commitment; Increase in Aggregate Revolving Line of Credit Commitments from $80,000,000 to $85,000,000. Effective as of the date the conditions specified in Section 2 of this Agreement have been satisfied in Agent’s credit judgment or waived by Agent, Additional Lender shall become a party to and a “Lender” under the Financing Agreement with a Commitment of $5,000,000, which Commitment shall consist entirely of Revolving Loans pursuant to the Revolving Line of Credit Commitment and the aggregate Revolving Line of Credit Commitments shall accordingly be increased from $80,000,000 to $85,000,000, and the Lenders shall, through Agent, make such adjustments among themselves as shall be necessary so that after giving effect to such adjustments, the Lenders shall hold Revolving Loans in an amount not greater than their respective Pro Rata Percentages. Additional Lender has no Commitment regarding the Term Loans. The parties hereto agree that Additional Lender becoming a Lender pursuant to the terms and conditions of this Agreement and the Financing Agreement shall in no event be deemed to be a violation of Section 7.13 of the Financing Agreement.

 

(d)  Additional Lender Obligations. Notwithstanding anything to the contrary in the Financing Agreement, the parties hereto agree that as to Additional Lender, the term “Obligations”, including, without limitation, in connection with Obligations which are secured by the Collateral, shall only apply to indebtedness and obligations of the Companies to Additional Lender specifically arising pursuant to the Financing Agreement.

 

(e)  Termination of Additional Lender Commitment. Notwithstanding anything to the contrary in the Financing Agreement, the parties hereto agree that Additional Lender’s $5,000,000 Commitment (consisting entirely of a Revolving Line of Credit Commitment) shall terminate on July 18, 2008, provided that on such date (i) the Existing Events of Default have been waived and (ii) no other Default or Event of Default shall be in existence. If Additional Lender’s Commitment and Revolving Line of Credit Commitment so terminates on July 18, 2008, Additional Lender shall thereafter have no further commitment to make new loans or advances pursuant to Section 3 of the Financing Agreement or to incur new obligations in connection with Letters of Credit Guaranties, but the relevant Commitments of the Existing Lenders, including, without limitation, the respective Revolving Line of Credit Commitment of each Existing Lender, shall remain the same, such that the aggregate Revolving Line of Credit Commitments shall thereafter be permanently reduced from $85,000,000 to $80,000,000.

 

6.  Amendments to Financing Agreement.

 

(a)  Amendment to Section 1 of Financing Agreement; Additional New Definition. Section 1 of the Financing Agreement is hereby amended by adding thereto the following new definition to be inserted in its proper alphabetical order and to read in its entirety as follows:

 

“Sixth Amendment” shall mean that certain Forbearance Agreement and Sixth Amendment to Second Amended and Restated Financing Agreement executed by Agent, Lenders, Companies and Parent.”

 

 

(b)  Amendment to Section 1 of Financing Agreement; Amendment and Restatement of Definition of “Borrowing Base”. Effective as of July 9, 2008, the parties hereto agree that Section 1 of the Financing Agreement is hereby amended by amending and restating the definition of “Borrowing Base” to read in its entirety as follows:

 

“Borrowing Base shall mean, as to Companies, the amount calculated as follows: (a) the lesser of (i) Revolving Line of Credit or (ii) the sum of (A) eighty-five percent (85%) of Companies’ aggregate outstanding Eligible Accounts Receivable and Companies’ aggregate outstanding Eligible Unbilled Card-Lock Customer Accounts; provided, however, that if the then Dilution Percentage is greater than five percent (5.0%), then the rate of advance herein shall be reduced by the percentage points by which the Dilution Percentage exceeds five percent (5.0%), plus (B) the sum of (x) sixty-five percent (65%) of the aggregate value of Companies’ Eligible Inventory, valued at the lower of cost or market, on an average cost basis, plus (y) sixty-five percent (65%) of the aggregate value of Companies’ Eligible Card-Lock Inventory, valued at the lower of cost or market, on an average cost basis, plus (C) the Eligible Equipment Based Amount, plus (D) the lesser of (x) one hundred percent (100%) of the Dollar balance of the Eligible Cash Collateral or (y) $10,000,000, minus (E) the Availability Block, minus (b) any applicable Availability Reserves.”

 

(c)  Amendment to Section 1 of Financing Agreement; Deletion of Definition of “Eligible Life Insurance Policy”. Effective as of July 9, 2008, Section 1 of the Financing Agreement is amended by deleting therefrom the definition of “Eligible Life Insurance Policy”.

 

(d)  Amendment to Section 1 of Financing Agreement; Amendment and Restatement of Definitions of “Commitment” and “Revolving Line of Credit”. Effective as of the date the conditions specified in Section 2 of this Agreement have been satisfied in Agent’s credit judgment or waived by Agent, Section 1 of the Financing Agreement is amended by amending and restating the definitions of “Commitment” and “Revolving Line of Credit” to read in their entirety as follows:

 

“Commitment shall mean, as to any Lender, the amount of the commitment for such Lender set forth on the signature page to the Sixth Amendment or in the Assignment and Transfer Agreement to which such Lender is a party, as such amount may be reduced or increased in accordance with the provisions of Paragraph 13.4(b) of Section 13 or any other applicable provisions of this Financing Agreement.

 

 

Revolving Line of Credit shall mean the aggregate commitment of the Lenders to make loans and advances pursuant to Section 3 and issue Letters of Credit Guaranties to the Companies in the aggregate amount equal to the aggregate Revolving Line of Credit Commitment for each Lender as set forth on the signature page of the Sixth Amendment or in the Assignment and Transfer Agreement to which such Lender is a party, as such amount may be reduced or increased in accordance with the provisions of Paragraph 13.4(b) of Section 13 or any other applicable provision of this Financing Agreement.”

 

(e)  Amendment to Section 3.10 of Financing Agreement. Effective as of July 9, 2008, Section 3.10 of the Financing Agreement is amended by deleting therefrom the present provisions of Section 3.10 and replacing such provisions with “[Reserved]”.

 

7.  Default. Each of the following shall constitute a “Forbearance Default” hereunder:

 

(a)  any representation or warranty of any Company or Parent contained in this Agreement proves to have been false or misleading in any material respect when made or furnished; or

 

(b)  any Company or Parent shall fail to keep or perform any of the covenants or agreements contained herein; or

 

(c)  any Company or Parent shall begin to pay SC Fuels or any Affiliate of SC Fuels for fuel or other goods purchased from SC Fuels or such Affiliate on a quicker basis than such Company or Parent has historically paid SC Fuels or such Affiliate for fuel or such other goods, even if paying on such quicker basis is otherwise consistent with written documentation between such Company or Parent and SC Fuels or such Affiliate of SC Fuels; or

 

(d)  any Company or Parent shall fail to keep or perform any of the covenants or agreements contained in the Financing Agreement or the other Loan Documents (other than an Existing Event of Default); or

 

(e)  the existence of any Event of Default (other than an Existing Event of Default) under the Financing Agreement.

 

8.  Effect and Construction of Agreement. Except as expressly provided herein, the Financing Agreement and the other Loan Documents are hereby ratified and confirmed and shall be and shall remain in full force and effect in accordance with their respective terms, and this Agreement shall not be construed to: (i) impair the validity, perfection or priority of any lien or security interest securing the Obligations; (ii) waive or impair any rights, powers or remedies of Agent and Lenders under the Financing Agreement or the other Loan Documents upon termination of the Forbearance Period; (iii) constitute an agreement by Agent or Lenders or require Agent and Lenders to extend the Forbearance Period, or grant additional forbearance periods, or extend the term of the Financing Agreement or the time for payment of any of the Obligations; or (iv) make any loans or other extensions of credit to Companies after termination of the Forbearance Period. In the event of any inconsistency between the terms of this Agreement and the Loan Documents, this Agreement shall govern. Each of each Company and Parent acknowledges that it has consulted with counsel and with such other experts and advisors as it has deemed necessary in connection with the negotiation, execution and delivery of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring that it be construed against the party causing this Agreement or any part hereof to be drafted.

 

 

9.  Expenses. Companies agree to pay all costs, fees and expenses of Agent and Agent’s attorneys incurred in connection with the negotiation, preparation, administration and enforcement of, and the preservation of any rights under, this Agreement, the Financing Agreement and/or the other Loan Documents, and the transactions and other matters contemplated hereby and thereby, including, but not limited to, the fees, costs and expenses incurred by Agent in the employment of auditors and/or consultants to perform work on Agent’s behalf to audit, appraise, monitor and otherwise review any and all portions of the Collateral.

 

10.  Miscellaneous.

 

(a)  Further Assurances. Each of Company and Parent agrees to execute such other and further documents and instruments as Agent may request to implement the provisions of this Agreement and to perfect and protect the liens and security interests created by the Financing Agreement and the other Loan Documents.

 

(b)  Benefit of Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto, their respective successors and assigns. No other person or entity shall be entitled to claim any right or benefit hereunder, including, without limitation, the status of a third-party beneficiary of this Agreement.

 

(c)  Integration. This Agreement, together with the Financing Agreement and the other Loan Documents, constitutes the entire agreement and understanding among the parties relating to the subject matter hereof, and supersedes all prior proposals, negotiations, agreements and understandings relating to such subject matter. In entering into this Agreement, each of each Company and Parent acknowledges that it is relying on no statement, representation, warranty, covenant or agreement of any kind made by the Agent or any Lender or any employee or agent of the Agent or any Lender, except for the agreements of Agent and Lenders set forth herein.

 

(d)  Severability. The provisions of this Agreement are intended to be severable. If any provisions of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or enforceability without in any manner affecting the validity or enforceability of such provision in any other jurisdiction or the remaining provisions of this Agreement in any jurisdiction.

 

 

(e)  Governing Law. This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Texas, without regard to the choice of law principles of such state.

 

(f)  Counterparts; Telecopied Signatures. This Agreement may be executed in any number of counterparts and by different parties to this Agreement on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto.

 

(g)  Notices. Any notices with respect to this Agreement shall be given in the manner provided for in Section 12.6 of the Financing Agreement.

 

(h)  Survival. All representations, warranties, covenants, agreements, undertakings, waivers and releases of each Company and Parent contained herein shall survive the termination of the Forbearance Period and payment in full of the Obligations.

 

(i)  Amendment. No amendment, modification, rescission, waiver or release of any provision of this Agreement shall be effective unless the same shall be in writing and signed by the parties hereto.

 

(j)  No Limitation on Lender. Nothing in this Agreement shall be deemed in any way to limit or restrict any of Agent’s or any Lender’s rights to seek in a bankruptcy court or any other court of competent jurisdiction, any relief Agent may deem appropriate in the event that a voluntary or involuntary petition under any title of the Bankruptcy Code is filed by or against any Company or Parent.

 

(k)  Material Inducement. Each of each Company and Parent further acknowledges and agrees that the representations, acknowledgments, agreements and warranties in this Agreement have been made by such Company or Parent as a material inducement to Agent and Lenders to enter into this Agreement, that each of Agent and each Lender is relying on such representations and warranties, has changed and will continue to change its position in reliance thereon and that each of Agent and each Lender would not have entered into this Agreement without such representations, acknowledgments, agreements, and warranties.

 

11.  Misrepresentation. Each of each Company and Parent shall indemnify and hold Agent and Lenders harmless from and against any and all losses, damages, costs and expenses (including attorneys’ fees) incurred by Agent or Lenders as a direct or indirect result of (i) any breach of any representation or warranty contained in this Agreement, or (ii) any breach or default under any of the covenants or agreements contained in this Agreement.

 

12.  Ratification of Liens and Security Interest. Each of each Company and Parent hereby acknowledges and agrees that the liens and security interests of the Financing Agreement and the other Loan Documents are valid, subsisting, perfected and enforceable liens and security interests and are superior to all liens and security interests other than those exceptions approved by Lender in writing.

 

 

13.  No Commitment. Each of each Company and Parent agrees that neither Agent nor any Lender has made any commitment or other agreement regarding the Financing Agreement or the other Loan Documents, except as expressly set forth in this Agreement. Each of each Company and Parent warrants and represents that it will not rely on any commitment, further agreement to forbear or other agreement on the part of Agent or Lenders unless such commitment or agreement is in writing and signed by Agent and Lenders.

 

14.  NO COUNTERCLAIMS; RELEASE OF CLAIMS; WAIVER; HOLD HARMLESS. EACH OF EACH COMPANY AND PARENT REPRESENTS AND WARRANTS THAT IT HAS NO SET-OFF, RECOUPMENT, COUNTERCLAIM, DEFENSE, CROSS-COMPLAINT, CLAIM, DEMAND OR OTHER CAUSE OF ACTION OF ANY NATURE WHATSOEVER (TOGETHER, THE “COUNTERCLAIMS”) AGAINST AGENT OR ANY LENDER WHICH ARISE OUT OF THE TRANSACTIONS EVIDENCED BY THE FINANCING AGREEMENT OR THE OTHER LOAN DOCUMENTS, ANY TRANSACTIONS THAT WERE RENEWED OR EXTENDED BY THE FINANCING AGREEMENT OR THE OTHER LOAN DOCUMENTS, ANY OTHER TRANSACTION WITH AGENT OR ANY LENDER, OR WHICH COULD BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ANY COMPANY’S OR PARENT’S LIABILITY TO REPAY THE OBLIGATIONS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM AGENT OR ANY LENDER, IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHANGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE FINANCING AGREEMENT OR THE OTHER LOAN DOCUMENTS, THE NEGOTIATION FOR AND EXECUTION OF THIS AGREEMENT AND ANY SETTLEMENT NEGOTIATIONS. TO THE EXTENT THAT ANY COUNTERCLAIMS MAY EXIST, WHETHER KNOWN OR UNKNOWN, SUCH ARE WAIVED AND HEREBY RELEASED BY EACH COMPANY AND PARENT. FURTHERMORE, EACH OF EACH COMPANY AND PARENT, ON BEHALF OF ITSELF, ITS SUCCESSORS, AGENTS, ATTORNEYS, OFFICERS, DIRECTORS, ASSIGNS AND PERSONNEL AND LEGAL REPRESENTATIVES, DOES HEREBY RELEASE, REMISE, ACQUIT AND FOREVER DISCHARGE AGENT AND EACH LENDER AND AGENT’S AND EACH LENDER’S EMPLOYEES, AGENTS, REPRESENTATIVES, CONSULTANTS, ATTORNEYS, FIDUCIARIES, SERVANTS, OFFICERS, DIRECTORS, PARTNERS, PREDECESSORS, SUCCESSORS AND ASSIGNS, SUBSIDIARY CORPORATIONS, PARENT CORPORATIONS, AND RELATED CORPORATE DIVISIONS (ALL OF THE FOREGOING HEREINAFTER CALLED THE “RELEASED PARTIES”), FROM ANY AND ALL ACTIONS AND CAUSES OF ACTION, JUDGMENTS, EXECUTIONS, SUITS, DEBTS, CLAIMS, DEMANDS, LIABILITIES, OBLIGATIONS, DAMAGES AND EXPENSES OF ANY AND EVERY CHARACTER, KNOWN OR UNKNOWN, DIRECT AND/OR INDIRECT, AT

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written to be effective as of the respective date set forth above.

 

	COMPANIES:
	UNITED FUEL & ENERGY CORPORATION,
	a Texas corporation
	By:	/s/ D. Lyndon James
	Name:	D. Lyndon James
	Title:	Vice President and Chief Financial Officer
	THREE D OIL CO. OF KILGORE, INC.,
	a Texas corporation
	By:	/s/ D. Lyndon James
	Name:	D. Lyndon James
	Title:	Vice President and Chief Financial Officer
	CARDLOCK FUELS SYSTEM, INC.,
	a California corporation
	By:	/s/ D. Lyndon James
	Name:	D. Lyndon James
	Title:	Vice President and Chief Financial Officer
	PARENT:
	UNITED FUEL & ENERGY CORPORATION,
	a Nevada corporation
	By:	/s/ D. Lyndon James
	Name:	D. Lyndon James
	Title:	Vice President and Chief Financial Officer

 

 

	AGENT:
	THE CIT GROUP/BUSINESS CREDIT, INC.,
	as Agent
	By:	/s/ Robyn Pingree
	Name:	Robyn Pingree
	Title:	Vice President
	LENDERS:
	THE CIT GROUP/BUSINESS CREDIT, INC.,
	as a Lender
	By:	/s/ Robyn Pingree
	Name:	Robyn Pingree
	Title:	Vice President

	Amount of Commitment:        $29,099,147.82
	Amount of Revolving Line
	of Credit Commitment:          $26,666,666.67

 

 

 

	SUNTRUST BANK, as a Lender
	By:	/s/ Brian O’Fallon
	Name:	Brian O’Fallon
	Title:	Director

	Amount of Commitment:        $19,399,431.88
	Amount of Revolving Line
	of Credit Commitment:          $17,777,777.78

 

	PNC BANK, NATIONAL ASSOCIATION,
	as a Lender
	By:	/s/ Paul R. Frank
	Name:	Paul R. Frank
	Title:	Vice President
	Amount of Commitment:        $19,399,431.88
	Amount of Revolving Line
	of Credit Commitment:          $17,777,777.78
	WACHOVIA BANK, N.A., as a Lender
	By:	/s/ Thomas P. Floyd
	Name:	Thomas P. Floyd
	Title:	Vice President
	Amount of Commitment:        $19,399,431.88
	Amount of Revolving Line
	of Credit Commitment:          $17,777,777.78
	THE GREINKE PERSONAL LIVING TRUST
	By:	/s/ Frank P. Greinke
		Frank P. Greinke, Trustee
	Amount of Commitment:        $5,000,000.00
	Amount of Revolving Line
	of Credit Commitment:          $5,000,000.00