SECOND AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AGREEMENT AND OTHER LOAN DOCUMENTS
EXHIBIT
10.3
SECOND
AMENDMENT
TO SECOND AMENDED AND RESTATED
FINANCING
AGREEMENT AND OTHER LOAN DOCUMENTS
THIS
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AGREEMENT AND OTHER
LOAN DOCUMENTS
(“this
Agreement”)
entered into on this 5th day of October, 2007, 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”),
SunTrust Bank (“SunTrust”),
and
Wachovia Bank, N.A. (“Wachovia”),
as
Required Lenders, CIT as administrative and collateral agent (“Agent”),
and
United Fuel & Energy Corporation, a Texas corporation (“United”),
and
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. United,
Three D, Agent, Required Lenders and PNC Bank National Association
(“PNC”,
with
PNC and Required Lenders being hereinafter referred to as “Lenders”)
entered into that certain Second Amended and Restated Financing Agreement,
dated
as of March 27, 2007, together with all riders, addenda, exhibits and other
documents relating thereto (collectively, as amended from time to time, the
“Financing
Agreement”).
B. Companies
and Parent have requested that Agent and Required Lenders consent to the
acquisition by Parent from Xxxxx X. Xxxxxxx, as Trustee under the Greinke
Business Living Trust, dated April 20, 1999 (the “Greinke
Trust”)
of all
the issued and outstanding capital stock of Cardlock for a purchase price
of
$36,961,915, such purchase price to be payable in the 24,641,276 shares of
Parent’s common stock, par value $0.001 per share, the acquisition to be
consummated on the terms specified in that certain Mutual Stock Purchase
Agreement, dated September 14, 2007, executed by Parent, Cardlock,
Xxxxx X. Xxxxxxx and Greinke Trust which has been supplied to Agent without
exhibits or schedules (the “Cardlock
Stock Purchase Agreement”)
(the
“Cardlock
Transaction”).
C. Pursuant
to the terms and conditions of this Agreement, (i) Agent and Required
Lenders are willing to consent to the consummation of the Cardlock Transaction,
and (ii) each of Companies, Agent and Required Lenders are willing to amend
the Financing Agreement as hereinafter set forth, including, without limitation,
to amend the Financing Agreement to make Cardlock a party to and a co-borrower
under the Financing Agreement and to make Cardlock a joint and several
co-obligor for payment of the Obligations, and (iii) each of the parties
hereto are willing to agree to certain other agreements, all 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 Consent
to Cardlock Transaction.
Subject
to the satisfaction of the conditions precedent specified in Article IV
of this
Agreement, each of Agent and Required Lenders hereby agrees to the consummation
of the Cardlock Transaction. The foregoing consent is strictly limited to
the
consummation of the Cardlock Transaction as described in the Recitals to
this
Agreement and such consent shall not apply to or constitute a consent to
any
future transaction involving Companies or Parent and shall in no way constitute
any course of dealing or other basis for altering any obligation of any Company
or Parent or any right, privilege or remedy of Agent or any Lender.
2.02 References
to “Company” and “Companies” in Financing Agreement.
Effective as of the date of execution of this Agreement, all references in
the
Financing Agreement to “Company” and “Companies” in the Financing Agreement
shall be deemed to include references to Cardlock, as well as to United and
Three D.
2.03 Grant
by Cardlock of Security Interest in Collateral.
Cardlock
hereby agrees that by becoming a party to the Financing Agreement, it is
subject
to all the provisions of the Financing Agreement, including, without limitation,
the grant of a continuing security interest in, and lien upon, all of its
right,
title and interest in all of its property, whether now owned or existing
or
hereafter created, acquired or arising and wheresoever located, as specified
in
Section 6.1
of the
Financing Agreement. In accordance therewith, in order to secure the prompt
payment and performance of the Obligations, Cardlock hereby grants to Agent,
for
the benefit of Lenders, a continuing security interest in, and general lien
upon, all of its right, title and interest in all of its property, whether
now
owned or existing or hereafter created, acquired or arising and wheresoever
located, including, without limitation, all of its:
| (a) |
Accounts;
|
| (b) |
Inventory;
|
| (c) |
General
Intangibles;
|
| (d) |
Documents
of Title;
|
| (e) |
Real
Estate;
|
| (f) |
Other
Collateral; and
|
| (g) |
Equipment.
|
2
The
Companies hereby agree and acknowledge that no asset of Cardlock shall be
considered for inclusion in the Borrowing Base until: (i) Agent determines,
in
its sole discretion, that Agent has a first priority and fully perfected
security interest in such asset and such asset is otherwise “eligible” for
inclusion in the Borrowing Base pursuant to the terms, conditions and provisions
of the Financing Agreement; (ii) Agent receives evidence satisfactory to
Agent, in its sole discretion, that Agent has been named as mortgagee, loss
payee and additional insured on all property of Cardlock and liability insurance
policies of Cardlock pursuant to issued endorsements in form and substance
satisfactory to Agent; and (iii) Agent determines, in its sole discretion,
that
payments from account debtors of Cardlock are being paid into the Blocked
Accounts in a manner and pursuant to documentation satisfactory to
Agent.
2.04 Amendments
to Existing Promissory Notes.
Cardlock
hereby agrees that by becoming a party to the Financing Agreement, Cardlock
is
now jointly and severally liable, along with United and Three D, for
payment and performance of all Obligations pursuant to the terms and provisions
of the Financing Agreement and the other Loan Documents, including, without
limitation, the provisions of Section
15
of the
Financing Agreement. Cardlock hereby agrees that it is accordingly jointly
and
severally liable with the other Companies for payment of the indebtedness
evidenced by the Promissory Notes. Therefore, each of the parties hereto
agrees
that Cardlock shall hereafter be considered to be a maker of each existing
Promissory Note and that each reference in each existing Promissory Note
to
“Company” or “Companies” shall hereafter be deemed to also refer to
Cardlock.
2.05 Amendment
to Schedule 7(1) to Financing Agreement.
Effective as of the date hereof, Schedule 7(1)
to
Financing Agreement (Company Information) is hereby deleted in its entirety
and
replaced with Schedule 7(1)
attached
hereto.
2.06 Amendment
to Schedule 7(15)(g) to Financing Agreement.
Effective as of the date hereof, Schedule 7(15)(g)
to
Financing Agreement (Real Property Owned and Leased/Collateral Locations)
is
hereby deleted in its entirety and replaced with Schedule 7(15)(g)
attached
hereto.
2.07 Amendment
to Schedule 7(15)(q) to Financing Agreement.
Effective as of the date hereof, Schedule 7(15)(q)
to
Financing Agreement (Subsidiaries) is hereby deleted in its entirety and
replaced with Schedule 7(15)(q)
attached
hereto.
2.08 Additional
Agreements.
Companies hereby agree (i) to deliver to Agent within thirty (30) days of
the
date hereof amended and restated Promissory Notes, duly executed by each
Company, whereby the existing Promissory Notes are amended and restated to
reflect each Company as maker and to reflect the respective unpaid principal
amount of such Promissory Note, (ii) to deliver to Agent within thirty (30)
days
of the date hereof, such documentation executed by Cardlock regarding the
Blocked Accounts as shall be required by Agent, in form and substance
satisfactory to Agent, and (iii) to use their best efforts to get the existing
lessors of Cardlock to disclaim any interest in fuel or other inventory of
Cardlock that may from time to time be in any tanks leased to Cardlock or
otherwise located upon or related to any improvements leased to
Cardlock.
3
ARTICLE
III
Limited
Waiver to Cardlock Transaction
3.01 No
Waivers.
Subject
to the satisfaction of the conditions precedent specified in Article IV of
this
Agreement and in addition to the provisions of Section 2.01
of this
Agreement, each of Agent and each Required Lender hereby waives the covenants
in
the Financing Agreement to the extent such covenants would be deemed violated
solely due to the consummation of the Cardlock Transaction. Nothing contained
herein shall be construed as a waiver by Agent or any Lender of any covenant
or
provision of the Loan 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 Loan 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;
(ii) Stock
Pledge Agreement covering all shares of capital stock in Cardlock now or
hereafter owned by Parent, duly executed by Parent, substantially in the
form of
Annex I
attached
hereto; together with the original stock certificates evidencing such capital
stock; together with an undated stock power for each such certificate, executed
in blank by Parent;
(iii) Guaranty
as to all indebtedness of Companies to Agent and Lenders, duly executed by
Parent, substantially in the form of Annex II
attached
hereto;
(iv) Subordination
Agreement subordinating payment of all indebtedness of Companies to Parent
to
prior payment in full of the Obligations, duly executed by Parent, substantially
in the form of Annex III
attached
hereto; and
(v) Such
additional documents, instruments and information as Agent may
request.
4
(b) Agent
shall also have received all of the following additional information and
documentation, each in form and substance satisfactory to Agent:
(i) Evidence
that the Cardlock Transaction has been consummated consistent with the
description of the Cardlock Transaction contained in the Recitals to this
Agreement, together with copies of all documents, agreements, materials and
certificates executed or issued in connection with the Cardlock Transaction,
including, without limitation, the Cardlock Stock Purchase Agreement, including
all exhibits and schedules thereto; and
(ii) If
needed, evidence that Parent and Companies have obtained the consent of Sterling
Bank to the Cardlock Transaction;
(c) 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;
(d) 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
Required Lenders; and
(e) 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.
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 Required
Lender. Each Company 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.
5
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
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]
7
Executed
on this 5th day of October, 2007, to be effective as of the respective date
indicated above.
|
UNITED
FUEL & ENERGY CORPORATION,
|
||
|
a
Texas corporation
|
||
|
By:
|
/s/
Xxxxx X. Page
|
|
|
Name:
|
Xxxxx
X. Page
|
|
|
Title:
|
Vice
President and Chief Financial Officer
|
|
|
THREE
D OIL CO. OF XXXXXXX, INC.,
|
||
|
a
Texas corporation
|
||
|
By:
|
/s/
Xxxxx X. Page
|
|
|
Name:
|
Xxxxx
X. Page
|
|
|
Title:
|
Vice President and Chief Financial Officer | |
|
CARDLOCK
FUELS SYSTEM, INC.,
|
||
|
a
California corporation
|
||
|
By:
|
/s/
Xxxxx X. Page
|
|
|
Name:
|
Xxxxx
X. Page
|
|
|
Title:
|
Vice
President and Chief Financial Officer
|
|
|
UNITED
FUEL & ENERGY CORPORATION,
|
||
|
a
Nevada corporation
|
||
|
By:
|
/s/
Xxxxx X. Page
|
|
|
Name:
|
Xxxxx
X. Page
|
|
|
Title:
|
Vice
President and Chief Financial
Officer
|
|
|
ACCEPTED
at Dallas, Texas, this 5th day of October, 2007, to be effective
as of the
respective date indicated above.
|
||
|
THE
CIT GROUP/BUSINESS CREDIT, INC.,
|
||
|
as
Agent and Lender
|
||
|
By:
|
/s/
Xxxx X. Schancke
|
|
|
Name:
|
Xxxx
X. Xxxxxxxx
|
|
|
Title:
|
Vice
President
|
|
|
SUNTRUST
BANK,
|
||
|
as
Lender
|
||
|
By:
|
/s/
Xxxxx X. X’Xxxxxx
|
|
|
Name:
|
Xxxxx
X. X’Xxxxxx
|
|
|
Title
|
:
Director
|
|
|
WACHOVIA
BANK, N.A.,
|
||
|
as
Lender
|
||
|
By:
|
/s/
Xxxxxx X. Xxxxx
|
|
|
Name:
|
Xxxxxx
X. Xxxxx
|
|
|
Title:
|
Vice
President
|
|
