SECOND AMENDED AND RESTATED LIMITED GUARANTY
 
THIS SECOND AMENDED AND RESTATED LIMITED GUARANTY is made as of the ___ day of
November, 2005, by and among EDDINS-WALCHER COMPANY, a Texas corporation
(“Eddins”) and THREE D OIL CO. OF KILGORE, INC., a Texas corporation (“Three D;”
together with Eddins, individually a “Company” and collectively, the
“Companies”), THE CIT GROUP/BUSINESS CREDIT, INC. (“CIT”) as administrative and
collateral agent (“Agent”) for the Lenders (as hereinafter defined) party to the
Financing Agreement (as hereinafter defined), and THOMAS E. KELLY, an individual
residing at 4401 Cardina Lane, Midland, Texas 79707 (“Guarantor”).
 
RECITALS
 
A.  Reference is made (a) to that certain Amended and Restated and Financing
Agreement, dated April 8, 2005, by and among the Companies, Agent and CIT as a
Lender and SunTrust Bank as a Lender (collectively, “Lenders”) (as amended,
restated, modified or supplemented and in effect from time to time, the
“Financing Agreement”), and to the other Loan Documents, and (b) to that certain
Amended and Restated Limited Guaranty, executed in November of 2004 by
Guarantor, in favor of CIT, in connection with the payment of the Obligations
(as defined in the Financing Agreement) (the “Existing Limited Guaranty”) (the
Existing Limited Guaranty itself being in renewal, extension, amendment and
restatement, but not in novation, of the provisions of that certain Limited
Guaranty, dated October 10, 2003, executed by Guarantor, in favor of CIT).
 
B.  Guarantor and Agent, on behalf of itself and the Lenders, now desire to
amend and restate the Existing Limited Guaranty and the provisions of this
Second Amended and Restated Limited Guaranty are in renewal, extension,
amendment, and restatement, but not in novation, of the provisions of the
Existing Limited Guaranty (the Existing Limited Guaranty, as amended and
restated by this Second Amended and Restated Limited Guaranty, being hereinafter
referred to as the “Agreement”).
 
C.  Guarantor confirms and affirms he requested that Agent and Lenders extend
the Revolving Loans to the Companies pursuant to the terms of the Financing
Agreement and the other Loan Documents, and that the obligations of Agent and
Lenders to execute and deliver the Loan Documents and to make the Revolving
Loans to the Companies were conditioned on, and continue to be conditioned on,
among other things, the execution of this Agreement.
 
D.  Guarantor acknowledges and confirms that (a) Guarantor has benefitted and
will continue to benefit from the execution, delivery and performance by Agent
and Lenders of the Financing Agreement and the other Loan Documents and the
making of advances and/or funding of the Revolving Loans to the Companies, (b)
the Revolving Loans by Agent and Lenders have constituted and will continue to
constitute valuable consideration to Guarantor, (c) this Agreement was intended
and continues to be intended to be an inducement to Agent and Lenders to
execute, deliver and perform the Financing Agreement and the other Loan
Documents and to fund the Revolving Loans; and (d) Agent and Lenders have relied
and will continue to rely upon this Agreement in making advances and/or funding
the Revolving Loans to the Companies.
 

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Accordingly, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and as an inducement for Agent and Lenders to
enter into the Loan Documents, the parties hereto, intending to be legally
bound, do hereby agree as follows:
 
SECTION 1 
DEFINITIONS
 
1.1.  Definitions. Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Financing Agreement or, to the
extent the same are used or defined therein, the meanings provided in Article 9
of the UCC in effect on the date hereof. Whenever the context so requires, each
reference to gender includes the masculine and feminine, the singular number
includes the plural and vice versa. This Agreement shall mean such agreement as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced, from time to time. Unless otherwise
specified, all accounting terms not defined in the Loan Documents shall have the
meanings given to such terms in and shall be interpreted in accordance with
GAAP. References in this Agreement to any Person shall include such Person and
its successors and permitted assigns.
 
1.2.  Defined Terms. In this Agreement, the following terms shall mean as
follows:
 
“Default” shall mean any event, fact, circumstance or condition that, with the
giving of applicable notice or passage of time or both, would constitute, be or
result in an Event of Default hereunder or under any Loan Document.
 
“Event of Default” shall mean the occurrence of any event set forth in
Section 5.
 
“Loan Collateral” shall mean the Collateral as defined in the Loan Documents.
 
SECTION 2
LIMITED GUARANTY
 
2.1.  Guaranty of Obligations. Subject to the last sentence of this Section 2.1,
Guarantor hereby unconditionally and absolutely guarantees the prompt and
punctual payment and performance of the Revolving Loans, all amounts from time
to time payable by the Companies in connection with the Revolving Loans
(including without limitation, all principal, interest, and all other monetary
obligations, including reasonable attorneys fees, costs, expenses and
indemnities, whether primary, secondary, contingent, fixed or otherwise in
connection with the Revolving Loans) and all other Obligations and terms,
covenants and agreements of the Loan Documents and obligations to Agent and
Lenders hereunder and under the Loan Documents, in any case whether according to
the present terms hereof and thereof, at any earlier or accelerated date or
pursuant to any extension of time or to any change therein now or at any time
hereafter made or granted (the obligations so guaranteed shall be collectively
referred to herein as the “Guaranteed Obligations”). The Guaranteed Obligations
includes in all cases, all such obligations that arise after the filing of a
bankruptcy petition with respect to the Companies and/or Guarantor and all such
obligations that will become payable but for the operation of (i) the automatic
stay under Section 362(a) of the Bankruptcy Code, (ii) Section 502(b) of the
Bankruptcy Code, or (iii) Section 506(b) of the Bankruptcy Code, including, but
not limited to, interest, fees and expenses accruing with respect to the
Obligations after the filing of a bankruptcy petition, whether or not allowed or
allowable as a claim in the bankruptcy proceeding. Notwithstanding any other
provision of any Loan Document or this Agreement, Agent’s right to seek any
payment from Guarantor on account of the Guaranteed Obligations shall be limited
to, and shall not under any circumstances exceed $2,000,000, and Guarantor shall
not be liable for any deficiency in excess of $2,000,000.
 

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2.2.  Binding Effect.
 
(a)  Subject to the last sentence of Section 2.1, this guaranty is a continuing
guarantee of prompt and punctual payment of the Guaranteed Obligations, whether
at stated maturity, by acceleration or otherwise, and not merely a guaranty of
collection. Guarantor agrees that Guarantor’s obligations hereunder are absolute
and unconditional, independent of the obligations of the Companies or any other
Person, and shall be binding upon Guarantor and Guarantor’s successors and
assigns, and are irrevocable without regard to the genuineness, validity,
legality or enforceability of the Revolving Loans or Obligations or the lack of
power or authority of the Companies to enter into any Loan Document or any
substitution, release or exchange of any other guaranty of or any security for
any of the Guaranteed Obligations or any other circumstances (other than payment
or performance) which might otherwise constitute a legal or equitable discharge
of a surety or guarantor and shall not be subject to any right of set-off or
counterclaim and are in no way conditioned upon any attempt to enforce
performance or compliance by the Companies or any other event or contingency.
 
(b)  Guarantor agrees that, if at any time all or any part of any payment
previously applied by Agent or Lenders to any Guaranteed Obligation must be
returned by Agent or Lenders for any reason, whether by court order,
administrative order, or settlement, Guarantor, subject to the limitations of
Section 2.1, remains liable for the full amount returned as if such amount had
never been received by Agent or Lenders, notwithstanding any termination of this
Agreement or any Loan Document or the cancellation of this Agreement or any Loan
Document or any other agreement evidencing the Guaranteed Obligations.
 
(c)  Guarantor expressly waives any defenses or benefits available to Guarantor
as a result of the exercise by Agent or Lenders of nonjudicial or judicial
remedies against the Companies, Guarantor or any Loan Collateral, and further
expressly waives any defenses or benefits arising out of or against any Loan
Collateral. Without limiting the generality of the foregoing, neither Agent nor
Lenders shall be required to make any demand on any other guarantor of the
Guaranteed Obligations or otherwise pursue or exhaust their remedies against the
Companies, Loan Collateral, any other guarantor of the Guaranteed Obligations or
any other Person before enforcing their rights and remedies against Guarantor
hereunder, and any one or more successive and/or concurrent actions may be
brought against Guarantor in the same action brought against the Companies or
any other Person or in separate actions, as often as Agent or Lenders may deem
advisable, in their sole discretion. The obligations of Guarantor hereunder and
under the Loan Documents shall not in any way be affected by any action or
inaction of Agent or Lenders, which action or inaction is hereby consented and
agreed to by Guarantor, or by the partial or complete unenforceability or
invalidity of any other guaranty, pledge, assignment or Lien for any of the
Guaranteed Obligations or of the value, genuineness, validity or enforceability
of the Loan Collateral or any of the Guaranteed Obligations or Loan Documents.
 

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2.3.  Defenses of the Companies Waived. The Loan Documents remain fully
enforceable irrespective of any defenses which any Company or Guarantor may
assert under any Loan Document, including, but not limited to, failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury (other than prior indefeasible
payment in full in cash of the Guaranteed Obligations by the Companies).
 
2.4.  Liability of Guarantor. Guarantor agrees that each of Agent and each
Lender shall have the full right and power, in its sole discretion and without
any notice to or consent from Guarantor and without affecting or discharging, in
whole or in part, the liability of Guarantor under this Agreement or any Loan
Document, to deal in any manner with the Guaranteed Obligations, Loan Collateral
and any security or guaranties therefor. Without limiting the generality of the
foregoing, the occurrence of any one or more of the following shall not affect
Guarantor’s obligations hereunder or under the Loan Documents: (a) new
agreements or obligations of the Companies with or to Agent or Lenders or
increases, amendments, extensions, modification, renewals or waivers of default
as to any existing or future agreements or obligations of the Companies or third
parties with or to Agent or Lenders or extensions of credit by Agent or Lenders
to the Companies; (b) adjustments, compromises or releases of any obligations to
or of the Companies, Guarantor or other Persons, or exchanges, releases of sales
of any security or collateral of the Companies, Guarantor or other Persons; (c)
errors, omissions, invalidity or unenforceability of any Loan Document or this
Agreement; (d) reorganization, extensions, moratoria or other relief granted to
the Companies pursuant to any law presently in force or hereafter enacted; (e)
interruptions in the business relations between Agent or Lenders and the
Companies; (f) the release or exchange, in whole or in part, of any other
guaranty of the Guaranteed Obligations or any security or collateral therefor or
any action or inaction by Agent or Lenders with respect thereto; (g) the failure
of any Person to sign any similar guaranty; (h) subsequent reorganization,
merger or consolidation of the Companies or any other change in its structure,
nature, personnel or location; or (i) any impairment, modification, change,
release or limitation of the liability of the Companies, any other guarantor of
the Guaranteed Obligations or any other Person or their respective estates in
bankruptcy resulting from the operation of any present or future provision of
the bankruptcy laws or other similar statute, or from the decision of any court.
 
2.5.  Event of Default. If an Event of Default shall occur and be continuing,
Agent or any assignee thereof shall be entitled to receive hereunder from
Guarantor, upon demand therefor, all of the Guaranteed Obligations, subject to
the last sentence of Section 2.1.
 
2.6.  Subordination of Certain Rights. Upon payment by Guarantor of any sums to
Agent and Lenders, all rights of Guarantor against the Companies arising as a
result thereof by way of subrogation, contribution, reimbursement, indemnity or
otherwise shall in all respects be subordinate and junior in right of payment to
the prior indefeasible payment in full in cash and performance of all the
remaining Guaranteed Obligations. If any amount shall erroneously be paid to
Guarantor for any reason, such amount shall be held in trust for the benefit of
Agent and Lenders and shall forthwith be paid to Agent to be credited against
the Obligations, whether matured or unmatured, in accordance with the terms of
the Loan Documents. Guarantor shall have no right of subrogation whatsoever with
respect to the Guaranteed Obligations or to any collateral therefor until the
Guaranteed Obligations have been irrevocably and indefeasibly paid in full in
cash and performed in full and the Financing Agreement and this Agreement have
been terminated.
 

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2.7.  Savings Clause.
 
(a)  It is the intent of Guarantor and Agent and Lenders that, subject to the
last sentence of Section 2.1, Guarantor’s maximum obligations hereunder shall be
up to, but not in excess of, the maximum amount which would not otherwise cause
the Guaranteed Obligations to be avoidable or unenforceable against Guarantor
under (i) Section 548 of the Bankruptcy Code (in any case commenced by or
against Guarantor within one (1) year from the date on which any of the
Guaranteed Obligations are incurred), (ii) any state fraudulent transfer or
fraudulent conveyance act or statute applied in any case or proceeding by virtue
of Section 544 of the Bankruptcy Code, or (iii) any law, statute or regulation
other than the Bankruptcy Code (including, without limitation, any receivership,
readjustment of debt, dissolution, liquidation or similar debtor relief laws),
without limitation, any state fraudulent transfer or fraudulent conveyance act
or statute applied in any case or proceeding commenced by or against Guarantor
in any case or proceeding of any nature. (The substantive laws under which the
possible avoidance or unenforceability of the Guaranteed Obligations shall be
determined in any such case or proceeding shall be referred to herein as the
“Avoidance Provisions”).
 
(b)  To the extent set forth in subsections (i), (ii), and (iii) of Section
2.7(a) above, but only to the extent that the Guaranteed Obligations would
otherwise be subject to avoidance under the Avoidance Provisions, if Guarantor
is not deemed to have received valuable consideration or reasonably equivalent
value for the Guaranteed Obligations, or if the Guaranteed Obligations would
render Guarantor insolvent, or cause Guarantor to have incurred debts beyond
Guarantor’s ability to pay such debts as they mature, in each case as of the
time any of the Guaranteed Obligations are deemed to have been incurred under
the Avoidance Provisions and after giving effect to the contribution by
Guarantor, the maximum Guaranteed Obligations for which Guarantor shall be
liable hereunder shall be reduced to that amount which, after giving effect
thereto, would not cause the Guaranteed Obligations, as so reduced, to be
subject to avoidance under the Avoidance Provisions. This section is intended
solely to preserve the rights of Agent and Lenders, and neither Guarantor nor
any other Person shall have any right or claim under this section against Agent
or Lenders that would not otherwise be available to such person under the
Avoidance Provisions.
 
SECTION 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
 
Guarantor hereby represents and warrants to Agent and Lenders as of the date
hereof (which representations and warranties shall survive the execution and
delivery of this Agreement and the making of the Revolving Loans under the
Financing Agreement) as follows:
 
3.1.  [Intentionally Omitted]
 

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3.2.  Authorization. Guarantor is an individual citizen of the United States
residing at the address set forth in the first paragraph of this Agreement and
has full legal capacity and requisite power, right and authority to consummate
the transactions contemplated under this Agreement and the other Loan Documents
to which Guarantor is a party and is not under any legal restriction, limitation
or disability that would prevent Guarantor from entering into and performing
under this Agreement. The execution, delivery and performance by Guarantor of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary actions on the part of
Guarantor and pursuant to all necessary consents required therefor. This
Agreement has been duly executed and delivered by Guarantor and constitutes the
legal, valid and binding obligation of Guarantor, enforceable against Guarantor
in accordance with its terms, subject to the effect of any applicable
bankruptcy, moratorium, insolvency, reorganization or other similar law
affecting the enforceability of creditors’ rights generally and to the effect of
general principles of equity which may limit the availability of equitable
remedies (whether in a proceeding at law or in equity). No approval, consent,
authorization of, filing registration or qualification with, or other action by,
Guarantor or any other Person or governmental authority is or will be necessary
to permit the valid execution, delivery and performance of this Agreement by
Guarantor.
 
3.3.  No Conflicts. The execution, delivery and performance by Guarantor of this
Agreement do not and will not (1) conflict with or violate any provision of any
applicable law, statute, rule, regulation, ordinance, license or tariff or any
judgment, decree or order of any court or other governmental authority binding
on or applicable to Guarantor or any of Guarantor’s properties or assets; (2)
conflict with, result in a breach of, constitute a default of or an event of
default under, or an event, fact, condition or circumstance which, with notice
or passage of time, or both, would constitute or result in a conflict, breach,
default or event of default under, require any consent not obtained under, or
result in or require the acceleration of any indebtedness pursuant to, any
indenture, agreement or other instrument to which Guarantor is a party or by
which Guarantor, or any of Guarantor’s properties or assets are bound or
subject; (3) if applicable, conflict with or violate any provision of the
certificate of incorporation or formation, by-laws, limited liability company
agreement or similar documents of Guarantor; or (4) result in the creation or
imposition of any Lien of any nature whatsoever upon any of the properties or
assets of Guarantor.
 
3.4.  Non-Subordination. The obligations of Guarantor under this Agreement are
not subordinated in any way to any other obligation of Guarantor or to the
rights of any other Person, and Guarantor is not a party to or bound by any
other agreement, document or instrument that otherwise relates to the Guaranteed
Obligations.
 
3.5.  Litigation and Compliance; Other Agreements.
 
(a)  Guarantor is not in default or breach of the performance, observance or
fulfillment of any obligation, covenant or condition contained in any agreement,
document or instrument to which Guarantor is a party or by which Guarantor or
any of Guarantor’s properties or assets is or are bound or subject, which
default or breach, if not remedied within any applicable grace period or cure
period, could reasonably be expected to have or result in a material adverse
effect. There is no action, suit, proceeding or investigation pending or, to
Guarantor’s knowledge, threatened before or by any court, arbitrator or
governmental authority (1) against or affecting the Loan Collateral, Guarantor,
any entity whose securities constitute the Loan Collateral, this Agreement or
the transactions contemplated hereby, or (2) that questions or could reasonably
be expected to prevent the validity of this Agreement or any Loan Document or
the right or ability of Guarantor or the Companies to execute or deliver this
Agreement or any Loan Document or to consummate the transactions contemplated
hereby or thereby.
 

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(b)  Guarantor is not (i) a party to any judgment, order or decree or any
agreement, document or instrument, or subject to any restriction, which would
materially adversely affect its ability to execute and deliver, or perform
under, this Agreement, or (ii) in default in the performance, observance or
fulfillment of any obligation, covenant or condition contained in any agreement,
document or instrument to which Guarantor is a party or to which any of
Guarantor’s properties or assets are subject, which default, if not remedied
within any applicable grace or cure period, could reasonably be expected to have
or be a material adverse effect, nor is there any event, fact, condition or
circumstance which, with notice or passage of time or both, would constitute or
result in a conflict, breach, default or event of default under, any of the
foregoing which, if not remedied within any applicable grace or cure period
could reasonably be expected to have or be a material adverse effect.
 
3.6.  Truthful Disclosure. The representations and warranties made by Guarantor
in this Agreement do not and will not contain any untrue statement of material
fact or omit to state any fact necessary to make the statements herein and
therein not materially misleading, and there is no fact known to Guarantor which
Guarantor has not disclosed to Agent and Lenders in writing which could
reasonably be expected to have or result in a material adverse effect.
 
3.7.  Covenants.
 
(a)  Guarantor shall not (i) cause or permit to be done, or enter into or make
or become a party to any agreement, arrangement or commitment to do or cause to
be done, any of the things prohibited by this Agreement or that would breach
this Agreement, or (ii) enter into or make or become a party to any agreement,
document or instrument or arrangement that conflicts with this Agreement or that
would prevent Guarantor from complying herewith and/or performing hereunder.
 
(b)  Guarantor hereby agrees to take or cause to be taken promptly such further
actions, obtain such consents and approvals and duly execute and deliver or
cause to be executed and delivered such further agreements, assignments,
instructions or documents Agent may request with respect to or in order to fully
effectuate the purposes, terms and conditions of this Agreement and the
consummation of the transactions contemplated hereby, whether before, at or
after the performance and/or consummation of such transactions or the occurrence
of a Default or Event of Default. Without limiting the foregoing, upon the
exercise by Agent or any of its Affiliates or agents of any right or remedy
which requires any consent, approval or registration with, consent,
qualification or authorization by, any Person, Guarantor shall execute and
deliver, or cause the execution and delivery of, all applications, certificates,
instruments and other documents that Agent or its Affiliate or agents may be
required to obtain for such consent, approval, registration, qualification or
authorization. Guarantor hereby appoints Agent, its attorney-in-fact (without
requiring Agent to act as such), with full power of substitution, which
appointment as attorney-in-fact is irrevocable and coupled with an interest, to
take all such actions, whether in the name of Agent, or Guarantor, as Agent may
consider necessary or desirable with respect to the foregoing (to the extent
Guarantor fails to so execute and/or file any of the foregoing within two (2)
Business Days of Agent’s request or the time when Guarantor is otherwise
obligated to do so).
 

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(c)  If Guarantor is an individual, Guarantor shall deliver to Agent upon
execution of this Agreement or, if Guarantor is not currently married, within
thirty (30) days after Guarantor marries, a Spousal Acknowledgment and
Stipulation in the form attached as Exhibit A hereto executed by Guarantor’s
spouse.
 
(d)  Guarantor shall promptly, and in any event within twenty (20) Business Days
thereafter, notify Agent of any change of his residence address.
 
3.8.  Provisions of Financing Agreement. Guarantor acknowledges and confirms
receipt of the Loan Documents and hereby acknowledges all terms and provisions
of the Loan Documents, the creation of the Obligations and the granting of
security interests by the Companies, including, without limitation, the rights
of Lenders to assign and participate any part of the Revolving Loans pursuant to
the Financing Agreement.
 
3.9.  No Third Party Beneficiary. No rights are intended to be created under
this Agreement for the benefit of any third party donee, creditor or incidental
beneficiary of Guarantor.
 
SECTION 4
EVENTS OF DEFAULT
 
The occurrence of any one or more of the following shall constitute an “Event of
Default:” under this Agreement (a) Guarantor shall be in violation, breach or
default of, or shall fail to perform, observe or comply with any covenant,
obligation or agreement set forth in, this Agreement or any other Loan Document
to which Guarantor is a party and such failure shall not be cured within the
applicable period, if any; (b) any representation, statement or warranty made or
deemed made by Guarantor in this Agreement shall not be true and correct in all
material respects or shall have been false or misleading in any material respect
on the date when made or deemed to have been made (except to the extent already
qualified by materiality, in which case it shall be true and correct in all
respects and shall not be false or misleading in any respect) except those made
as of a specific date; (c) any Event of Default (as defined in the Financing
Agreement) shall occur and be continuing past any cure period and shall not have
been waived in writing; or (d) if prior to termination of this Agreement
pursuant to Section 7.11 hereof, this Agreement shall cease to be in full force
and effect.
 
SECTION 5
MISCELLANEOUS
 
5.1.  No Waiver of Defaults; Waiver.
 
(a)  No course of action or dealing, renewal, waiver, release or extension of
any provision of any Loan Document or this Agreement, or single or partial
exercise of any such provision, or delay, failure or omission on Agent’s or any
Lender’s part in enforcing any such provision shall affect the liability of
Guarantor or operate as a waiver of such provision or preclude any other or
further exercise of such provision. No waiver by Agent or Lenders of any one or
more defaults by any other party in the performance of any of the provisions of
any Loan Document or this Agreement shall operate or be construed as a waiver of
any future default, whether of a like or different nature, and each such waiver
shall be limited solely to the express terms and provisions of such waiver.
 

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(b)  Notwithstanding any other provision of any Loan Document or this Agreement,
by completing the closing of the Financing Agreement and/or making of advances
and/or funding the Revolving Loans, neither Agent nor any Lender waives any
breach of any representation or warranty under any Loan Document or this
Agreement, and all of Agent’s and Lenders’ claims and rights resulting therefrom
are specifically reserved. Except as expressly provided for herein, Guarantor
hereby waives setoff, counterclaim, demand, presentment, protest, all defenses
with respect to any and all instruments and all notices and demands of any
description (including, without limitation, notice of acceptance hereof, notice
of any Loan made, credit extended, collateral received or delivered) and the
pleading of any statute of limitations as a defense to any demand under any Loan
Document, it being the intention that Guarantor shall remain liable under this
Agreement and the Loan Documents until the full amount of all Guaranteed
Obligations shall have been indefeasibly paid in cash and performed and
satisfied in full and the Financing Agreement terminated, notwithstanding any
act, omission or anything else which might otherwise operate as a legal or
equitable discharge of Guarantor. Guarantor hereby waives any and all defenses
and counterclaims Guarantor may have or could interpose in any action or
procedure brought by Agent or Lenders to obtain an order of court recognizing
the assignment of, or Lien of Agent, in and to, any Loan Collateral.
 
5.2.  Entire Agreement. This Agreement and the other Loan Documents to which
Guarantor is a party constitute the entire agreement between Guarantor and Agent
and Lenders with respect to the subject matter hereof and thereof, and supersede
all prior agreements and understandings, if any, relating to the subject matter
hereof or thereof. Any promises, representations, warranties or guarantees not
herein contained and hereinafter made shall have no force and effect unless in
writing signed by the parties hereto. Each party hereto acknowledges that it has
been advised by counsel in connection with the negotiation and execution of this
Agreement and is not relying upon oral representations or statements
inconsistent with the terms and provisions hereof.
 
5.3.  Amendment. No provision of this Agreement may be changed, modified,
amended, restated, waived, supplemented, discharged, canceled or terminated
orally or by any course of dealing or in any other manner other than by a
written agreement signed by Agent and Guarantor. Guarantor acknowledges that
Guarantor has been advised by counsel in connection with the negotiation and
execution of this Agreement and is not relying upon oral representations or
statements inconsistent with the terms and provisions hereof.
 
5.4.  Notices. Any notice or request under this Agreement shall be given to any
party hereto at such party’s address set forth beneath its signature on the
signature page hereto, or at such other address as such party may hereafter
specify in a notice given in the manner required under this Section 5.4. Any
such notice or request shall be given only by, and shall be deemed to have been
received upon (each, a “Receipt”): (a) registered or certified mail, return
receipt requested, on the date on which such received as indicated in such
return receipt, (b) delivery by a nationally recognized overnight courier, one
(1) Business Day after deposit with such courier, or (c) facsimile or electronic
transmission, in each case upon telephone or further electronic communication
from the recipient acknowledging receipt (whether automatic or manual from
recipient), as applicable.
 

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5.5.  Governing Law; Jurisdiction; Construction. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Texas without giving effect to its choice of law provisions. Any judicial
proceeding against Guarantor with respect to any of the Guaranteed Obligations
or this Agreement may be brought in any federal or state court of competent
jurisdiction located in the State of Texas. By execution and delivery of this
Agreement, Guarantor (a) accepts the non-exclusive jurisdiction of the aforesaid
courts and irrevocably agrees to be bound by any judgment rendered thereby, (b)
waives personal service of process, (c) agrees that service of process upon
Guarantor may be made by certified or registered mail, return receipt requested,
pursuant to Section 5.4 hereof, and (d) waives any objection to jurisdiction and
venue of any action instituted hereunder and agrees not to assert any defense
based on lack of jurisdiction, venue, convenience or forum non conveniens.
Nothing shall affect the right of Agent to serve process in any manner permitted
by law or shall limit the right of Agent to bring proceedings against Guarantor
in the courts of any other jurisdiction having jurisdiction. Any judicial
proceedings against Agent or Lenders involving, directly or indirectly, the
Guaranteed Obligations, Loan Collateral or this Agreement shall be brought only
in a federal or state court located in the State of Texas. Guarantor
acknowledges that Guarantor participated in the negotiation and drafting of this
Agreement and that, accordingly, Guarantor shall not move or petition a court
construing this Agreement to construe it more stringently against one party than
against any other.
 
5.6.  Severability; Captions; Counterparts; Facsimile Signature. If any
provision of this Agreement is adjudicated to be invalid under applicable laws
or regulations, such provision shall be inapplicable to the extent of such
invalidity without affecting the validity or enforceability of the remainder of
this Agreement which shall be given effect so far as possible. The captions in
this Agreement are intended for convenience and reference only and shall not
affect the meaning or interpretation of this Agreement. This Agreement may be
executed in one or more counterparts (which taken together, as applicable, shall
constitute one and the same instrument) and by facsimile transmission, which
facsimile signatures shall be considered original executed counterparts. Each
party to this Agreement agrees that it will be bound by its own facsimile
signature and that it accepts the facsimile signature of each other party.
 
5.7.  Successors and Assigns. This Agreement (a) shall inure to the benefit of,
and may be enforced by, Agent and all future holders of the Obligations, any of
the Guaranteed Obligations or any of the Loan Collateral and each of their
respective successors and permitted assigns, and (b) shall be binding upon and
enforceable against Guarantor and Guarantor’s permitted heirs, administrators,
executors, successors and assigns. Guarantor shall not assign, delegate or
transfer this Agreement or any of its rights or obligations thereunder without
the prior written consent of Agent. Nothing contained in this Agreement or any
other Loan Document shall be construed as a delegation to Agent of Guarantor’s
duty of performance. GUARANTOR ACKNOWLEDGES AND AGREES THAT AGENT OR LENDERS AT
ANY TIME AND FROM TIME TO TIME MAY SELL, ASSIGN OR GRANT PARTICIPATING INTERESTS
IN OR TRANSFER ALL OR ANY PART OF ITS RIGHTS OR OBLIGATIONS UNDER THIS
AGREEMENT, THE OBLIGATIONS, THE LOAN COLLATERAL AND/OR THE LOAN DOCUMENTS TO ONE
OR MORE TRANSFEREES IN EACH CASE ON THE TERMS AND CONDITIONS PROVIDED IN THE
FINANCING AGREEMENT. The term “Agent” or “Lender” in this Agreement includes
successors and assigns, each of which shall thereunder have all rights and
benefits of Agent or Lender, as the case may be. Each successor and assign shall
have all of the rights and benefits with respect to the Guaranteed Obligations,
Loan Collateral, this Agreement and/or Loan Documents held by it as fully as if
the original holder thereof. Notwithstanding any other provision of this
Agreement or any Loan Document, each Agent and each Lender may disclose to any
successor or assign all information, reports, financial statements, certificates
and documents obtained under any provision of this Agreement.
 

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5.8.  Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION ARISING HEREUNDER OR
IN ANY WAY CONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF THE PARTIES WITH
RESPECT HERETO OR THE TRANSACTIONS CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. EACH
PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENTS OF THE PARTIES TO THE WAIVER OF THEIR RESPECTIVE RIGHTS
TO TRIAL BY JURY.
 
5.9.  Survival. It is the express intention and agreement of the parties hereto
that all covenants, representations, warranties and waivers and indemnities made
by Guarantor herein shall survive the execution, delivery and termination of
this Agreement until all Obligations are performed in full and indefeasibly paid
in full in cash and the Loan Documents are terminated.
 
5.10.  Expenses. Guarantor shall pay to Agent and its Affiliates all costs and
expenses incurred by Agent and/or its Affiliates, including, without limitation,
documentation and diligence fees and expenses, all search, audit, appraisal,
recording, professional and filing fees and expenses and all other out-of-pocket
charges and expenses (including, without limitation, UCC and judgment and tax
lien searches and UCC filings and fees for post-closing UCC and judgment and tax
lien searches and wire transfer fees and audit expenses), and reasonable
attorneys’ fees and expenses (a) in any effort to enforce this Agreement against
Guarantor, (b) in defending or prosecuting any actions, claims or proceedings by
or against Guarantor arising out of or relating to this Agreement, (c) arising
in any way out of the taking or refraining from taking by Agent of any action
requested by Guarantor, and/or (d) in connection with any modification,
restatement, supplement, amendment, waiver or extension of this Agreement and/or
any related agreement, document or instrument requested by Guarantor. If Agent
or any of its Affiliates uses in-house counsel for any of the foregoing,
Guarantor expressly agrees that its obligations hereunder include reasonable
charges for such work commensurate with the fees that would otherwise be charged
by outside legal counsel selected by Agent or such Affiliate in its sole
discretion for the work performed.
 
5.11.  Termination. This Agreement shall continue in full force and effect until
full performance and indefeasible payment in full in cash of all Guaranteed
Obligations and termination of the Loan Documents. Notwithstanding any other
provision of this Agreement or any Loan Document, no termination of this
Agreement shall affect Agent’s or Lenders’ rights or any of the Guaranteed
Obligations existing as of the effective date of such termination until the
Guaranteed Obligations have been fully performed and indefeasibly paid in cash
in full; provided, however, Agent, on behalf of itself and the Lenders, hereby
agrees to release Guarantor from its obligations under this Agreement on the
first day after December 31, 2006, that each of the following is true:
 

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(a)  The Average Daily Availability (as defined in the Financing Agreement) for
the Companies shall have been at least $3,500,000 for the three immediately
preceding consecutive calendar months; and
 
(b)  No Default or Event of Default exists under the Financing Agreement.
 
5.12.  Confidentiality and Publicity.
 
(a)  Guarantor agrees, and agrees to cause each of his Affiliates, (i) except to
the extent required by applicable laws or regulations (in which case Guarantor
shall, and shall cause his Affiliates to, request and use his best efforts to
obtain confidential treatment of such information to the extent permitted by
applicable law), not to transmit or disclose any provision of this Agreement or
any other Loan Document to any Person (except as permitted in the Financing
Agreement) without Agent’s prior written consent, and (ii) to inform all Persons
of the confidential nature of this Agreement and the Loan Documents and to
direct them not to disclose the same to any other Person and to require each of
them to be bound by these provisions. Agent reserve the right to review and
approve all materials that Guarantor or any of his Affiliates prepares that
contain Agent’s or any Lender’s name or describe or refer to any Loan Document,
any of the terms thereof or any of the transactions contemplated thereby.
Guarantor shall not, and shall not permit any of his Affiliates to, use Agent’s
or any Lender’s name (or the name of any of its Affiliates) in connection with
any of his business operations, except as permitted in the Financing Agreement.
Nothing contained in any Loan Document is intended to permit or authorize
Guarantor or any of his Affiliates to contract on behalf of Agent or any Lender.
 
(b)  Each party covenants for itself and its directors and officers that it will
use due care to prevent its officers, directors, employees, members, managers,
stockholders, controlling persons, affiliates, agents, lenders, advisors
(including, without limitation, attorneys, accountants, consultants, bankers and
financial advisors) from (x) disclosing any non-public information of any other
party to Persons other than to its officers, directors, employees, members,
managers, stockholders, controlling persons, affiliates, agents, advisors
(including, without limitation, attorneys, accountants, consultants, bankers and
financial advisors), or (y) using non-public information in any manner that
would constitute a violation of federal or state securities laws; provided,
however, that a party may disclose or deliver any non-public information of
another party should such first party be advised by its counsel that such
disclosure or delivery is required by law, regulation or judicial or
administrative order. For purposes of this subparagraph, “due care” means at
least the same level of care that such party would use to protect the
confidentiality of its own sensitive or proprietary information, and this
obligation shall survive termination of this Agreement.
 

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5.13.  Approvals and Duties. Unless expressly provided herein to the contrary,
any approval, consent, waiver or satisfaction of Agent or Lenders with respect
to any matter that is subject of any Loan Document may be granted or withheld by
Lenders or Agent, in its sole and absolute discretion.
 
5.14.  Amendment and Restatement of Existing Limited Guaranty. The provisions of
this Second Amended and Restated Limited Guaranty are in renewal, extension,
amendment, and restatement, but not in novation, of the provisions of the
Existing Limited Guaranty.
 

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IN WITNESS WHEREOF, each of the parties hereto has duly executed this Second
Amended and Restated Limited Guaranty as of the date first written above.

 
/s/ Thomas E. Kelly
Thomas E. Kelly
 
4401 Cardina Lane
Midland, Texas 79707
Telephone: (432) 686-0139
Fax: (432) 571-8099
Social Security Number
if an individual: ###-##-####

THE CIT GROUP/BUSINESS CREDIT, INC., Agent

By:  /s/ Alan Schnacke  
Alan Schnacke, Vice President
 
Two Lincoln Centre
5420 LBJ Freeway, Suite 200
Dallas, Texas 75240
Fax No.: (972) 455-1690

Sworn to and subscribed before me this 11th day of November, 2005, by Thomas E.
Kelly, who personally appeared before me, is personally known to me or produced
his/her driver’s license as identification and did take an oath.
 
Notary: /s/ Susanne M. Mundy
Print Name: Suzanne M. Mundy 
Notary Public, State of Texas 
My Commission Expires: 7/18/2006 
 
[NOTARIAL SEAL]
 

 
 

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Acknowledged and Agreed to as of November 11, 2005:

EDDINS-WALCHER COMPANY
 
By: /s/ Charles McArthur
Name:  Charles McArthur
Title:  CEO
 
 
THREE D OIL CO. OF KILGORE, INC.
 
By: /s/ Charles McArthur
Name: Charles McArthur
Title:  CEO

 

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EXHIBIT A
 
Spousal Acknowledgement and Stipulation
 
The undersigned hereby acknowledges and stipulates that (i) he/she is the spouse
of Thomas E. Kelly, who is the Guarantor party to that certain Second Amended
and Restated Limited Guaranty dated as of November ___, 2005, by and between
such Guarantor listed therein as a party thereto and THE CIT GROUP/BUSINESS
CREDIT INC., a New York corporation, as Agent for itself and the other Lenders,
(ii) all property, jointly owned by Guarantor and the undersigned, whether as
tenants in common, tenants in the entirety or joint tenants or as community
property, and whether now owned or hereafter acquired (whether subject to the
sole management of Guarantor or the undersigned or their joint management), is
subject to, and may be used for, the payment and performance of Guarantor’s
obligations under the above-referenced Second Amended and Restated Limited
Guaranty.
 
This Acknowledgement and Stipulation constitutes an instrument executed under
seal, entered into as of November ___, 2005.
 

  SPOUSE       
                                                                          Name:
                                                                                  
         

 
Sworn to and subscribed before me this _____ day of November, 2005 by
____________________, who personally appeared before me, is personally known to
me or produced his or her driver’s license as identification and did take an
oath.
 

 
Notary:                                                                                   
  Print
Name:                                                                             
  Notary Public, State of                                                       
  My Commission Expires:                                                       
  [NOTARIAL SEAL]    

 
 
 

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