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                                                                   EXHIBIT 10.1


                     FIRST AMENDMENT TO FINANCING AGREEMENT


                           FIRST AMENDMENT, dated as of November 28, 2001 (this
"Amendment"), to the SECOND AMENDED AND RESTATED CREDIT Agreement, dated as
of May 31, 2001 (the "Financing Agreement"), by and among PEN HOLDINGS, INC., a
Tennessee corporation (the "Borrower"), the financial institutions from time to
time party thereto (the "Lenders"), ABLECO FINANCE LLC, as collateral agent for
the Lenders (in such capacity, the "Collateral Agent"), and FOOTHILL CAPITAL
CORPORATION, as administrative agent for the Lenders (in such capacity, the
"Administrative Agent"; together with the Collateral Agent, each an "Agent" and
collectively, the "Agents").


                                    RECITALS

                           The Borrower, the Lenders and the Agents are parties
to the Financing Agreement, pursuant to which the Lenders agreed, subject to
the terms and conditions thereof, to extend to the Borrower credit consisting
of a term loan facility in an aggregate principal amount not to exceed
$32,000,000 and a revolving loan facility in an aggregate principal amount not
to exceed $15,000,000.

                           Notwithstanding the occurrence on or before August
31, 2001 and the continuance during the period from such date through the date
hereof of one or more Events of Default, and, accordingly, the fact that the
Lenders may at any time exercise any or all of their remedies under the Loan
Documents and the fact that the Lenders at no time since August 31, 2001 have
had any obligation to make any Revolving Loan or Term Loan under the Financing
Agreement, pursuant to the request of the Borrower, (i) the Revolving Loan
Lenders made Revolving Loans to the Borrower on or about September 18, 2001 in
the aggregate principal amount of $2,800,000, pursuant to the Financing
Agreement and a letter dated September 18, 2001 from the Collateral Agent to
the Borrower, (ii) the Lenders and the Agents agreed to the Borrower's use of
cash collateral as set forth in the letter agreement, dated as of September 28,
2001 (the "Cash Collateral Letter"), between the Collateral Agent, acting on
behalf of the Lenders and the Agents, and the Borrower and (iii) the Lenders,
on November 5, 2001, (A) made additional Revolving Loans to the Borrower in the
aggregate principal amount of $2,450,000 in accordance with the Financing
Agreement, (B) made a new term loan to the Borrower in the aggregate principal
amount of $3,000,000, the proceeds of which were used by the Borrower to
simultaneously pay the Bridge Fee (as defined below) and (C) agreed with the
Borrower in principle to certain amendments to the Financing Agreement, in each
case pursuant to a letter agreement, dated as of October 19, 2001 (the
"Amendment Letter"), between the Collateral Agent, acting on behalf of the
Lenders and the Agents, and the Borrower.

                           The Borrower has now requested (i) the Lenders to
extend the forbearance period that is described in the Amendment Letter and
(ii) the Revolving Loan Lenders to agree to make further Revolving Loans to the
Borrower from time to time in an aggregate principal


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amount not to exceed $8,357,152 at any one time outstanding. The Borrower has
also asked the Lenders to agree to certain amendments to the financial
covenants and certain other provisions of the Financing Agreement. The Lenders
are willing to agree to the requested forbearance, and to the requested
amendments, but only upon the terms and subject to the conditions set forth
herein.

                           Accordingly, in consideration of the premises and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:

                  A.       Definitions.

                           All capitalized terms used herein and not otherwise
defined herein are used herein as defined in the Financing Agreement.

                  B.       Forbearance.

                           Pursuant to the request of the Borrower, the Lenders
hereby agree to forbear, during the period from the date hereof through the
earlier of (i) the Final Maturity Date and (ii) the occurrence of a Potential
Default or Event of Default, from exercising their remedies under the Loan
Documents with respect to (a) any Event of Default referred to in the Cash
Collateral Letter and (b) any Event of Default that would otherwise occur under
Section 8.01(c) or 8.01(e) of the Financing Agreement by reason of the
Borrower's delivering to the Agents and the Lenders financial statements (1)
covering the period from May 1, 2001 through September 30, 2001 that
erroneously reported a $3,215,000 gain rather than a loss of $670,000 upon the
sale of certain coal reserves during such period and (2) covering the period
from September 1, 2001 through September 30, 2001 that failed (A) to disclose
the existence of a letter of intent pursuant to which Marine Terminals agreed
to sell to a third party its interest in a partnership that owns an
international marine terminal in Louisiana and (B) to reflect a loss of
$11,444,000 as a result of the adjustment, in such amount and as required by
GAAP, in the carrying value of such partnership interest due to the execution
of such letter of intent for such transaction.

                  C.       Amendments.

                           1.       Existing Defined Terms.

                                    (a)      The definition of the term
"Commitments" in Section 1.01 of the Financing Agreement is hereby amended in
its entirety to read as follows:

                           "Commitments" means, with respect to each Lender,
                           such Lender's Revolving Credit Commitment, Term Loan
                           A Commitment and Term Loan B Commitment.

                                    (b)      Each of the following defined
terms is hereby deleted in its entirety:

                           "Consolidated Adjusted Current Liabilities"
                           "Consolidated Current Assets"
                           "Consolidated Net Worth"


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                           "Consolidated Senior Debt to EBITDA Ratio"
                           "Consolidated Working Capital"
                           "Term Loan"
                           "Term Loan Borrowing Base"
                           "Term Loan Commitment"
                           "Term Loan Lender"
                           "Total Term Loan Commitment"

                                    (c)      The definition of the term "Final
Maturity Date" in Section 1.01 of the Financing Agreement is hereby amended in
its entirety to read as follows:

                           "Final Maturity Date" means January 28, 2002 (unless
                           extended pursuant to Section 2.03(a)), or such
                           earlier date on which any Loan shall become due and
                           payable, in whole or in part, in accordance with the
                           terms of this Agreement and the other Loan
                           Documents.

                                    (d)      The definition of the term "Pro
Rata Share" in Section 1.01 of the Financing Agreement is hereby amended by (i)
deleting the terms "Term Loan", "Term Loan Commitment and "Total Term Loan
Commitment" in paragraph (b) thereof and substituting in lieu thereof "Term
Loan A", "Term Loan A Commitment" and "Total Term Loan A Commitment",
respectively, (ii) deleting the word "and" at the end of paragraph (b) thereof,
(iii) redesignating existing paragraph (c) therein as new paragraph (d), and
(iv) adding after paragraph (b) the following new paragraph (c):

                           (c)      with respect to a Lender's obligation to
                           make the Term Loan B and receive payments of
                           interest, fees, and principal with respect thereto,
                           the percentage obtained by dividing (i) such
                           Lender's Term Loan B Commitment by (ii) the Total
                           Term Loan B Commitment; provided that, if the Term
                           Loan B Commitments have been reduced to zero, the
                           numerator shall be the aggregate unpaid principal
                           amount of such Lender's Term Loan B and the
                           denominator shall be the aggregate unpaid principal
                           amount of the Term Loan B; and

                                    (e)      The definition of the term
"Revolving Loan Borrowing Base" in Section 1.01 of the Financing Agreement is
hereby amended by (i) redesignating clause (ii)(B) thereof as clause (ii)(C)
and (ii) adding immediately after clause (ii)(A) thereof, the following new
clause (ii)(B):

                                    (B)      the Liquidity Reserve plus.

                                    (f)      The definition of the term "Term
Loan Obligations" in Section 1.01 of the Financing Agreement is hereby amended
in its entirety to read as follows:

                                    "Term Loan Obligations" means the Term Loan
                           A Obligations and the Term Loan B Obligations.

                                    (g)      The definition of the term "Total
Commitment" in Section 1.01 of the Financing Agreement is hereby amended in its
entirety to read as follows:


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                                    "Total Commitment" means the sum of the
                           Total Revolving Credit Commitment, the Total Term
                           Loan A Commitment and the Total Term Loan B
                           Commitment.

                           2.       New Defined Terms. The following defined
terms are hereby added in appropriate alphabetical order to Section 1.01 of the
Financing Agreement.

                                            "Bridge Fee" means a fee payable by
                           the Borrower to the Administrative Agent, for the
                           ratable benefit of the Lenders, in the amount of
                           $3,000,000, which shall have been earned and due and
                           payable on the First Amendment Effective Date and
                           paid from the proceeds of the Term Loan B by
                           charging the Borrower's Loan Account in accordance
                           with Section 2.01(b)(iii) herein.

                                            "Cash Collateral Letter" means the
                           letter agreement, dated as of September 28, 2001,
                           between the Collateral Agent, acting on behalf of
                           the Lenders and the Agents, and the Borrower.

                                            "Consolidated Net Operating Cash
                           Flow" means, for any period, an amount equal to net
                           operating cash flow, as determined by subtracting
                           from the total receipts for such period the total
                           expenditures for such period, in each case for the
                           revenue and expense items set forth in the Revised
                           Projections, for the Borrower and its Consolidated
                           Subsidiaries, determined in accordance with GAAP for
                           such period.

                                            "First Amendment" means First
                           Amendment, dated as of November 28, 2001, to the
                           Financing Agreement, among the Borrower, the Lenders
                           and the Agents.

                                            "First Amendment Effective Date"
                           means November 5, 2001, upon satisfaction in full of
                           all of the conditions set forth in Section D of the
                           First Amendment.

                                            "Liquidity Reserve" means a reserve
                           equal to the difference between (a) Availability and
                           (b) $8,357,152.

                                            "Revised Projections" means the
                           projected financial information entitled "Pen
                           Holdings Inc. 26 Week Cash Flow Projection Beginning
                           October 12, 2001," provided by the Borrower to the
                           Lenders prior to the First Amendment Effective Date,
                           a copy of which is attached as Annex IV to the First
                           Amendment.

                                            "Term Loan A" means a term loan
                           made by a Lender to the Borrower pursuant to Section
                           2.01(b)(ii).

                                            "Term Loan A Commitment" means, as
                           to any Lender, the obligation of such Lender to make
                           a Term Loan A to the Borrower in a principal amount
                           not to exceed the amount set forth opposite such


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                           Lender's name under the heading Term Loan A
                           Commitment on Schedule 1.01(A) hereto, as the same
                           may be terminated or reduced in accordance with the
                           terms of this Agreement.

                                            "Term Loan A Lender" means a Lender
                           with a Term Loan A Commitment.

                                            "Term Loan A Obligations" means any
                           Obligations with respect to the Term Loans A
                           (including the principal thereof, the interest
                           thereon, and the fees and expenses specifically
                           related thereto).

                                            "Term Loan B" means a term loan
                           made by a Lender to the Borrower pursuant to Section
                           2.01(b)(iii).

                                            "Term Loan B Commitment" means, as
                           to any Lender, the obligation of such Lender to make
                           a Term Loan B to the Borrower in a principal amount
                           not to exceed the amount set forth opposite such
                           Lender's name under the heading Term Loan B
                           Commitment on Schedule 1.01(A) hereto, as the same
                           may be terminated or reduced in accordance with the
                           terms of this Agreement.

                                            "Term Loan B Lender" means a Lender
                           with a Term Loan B Commitment.

                                            "Term Loan B Obligations" means
                           any Obligations with respect to the Term Loans B
                           (including, without limitation, the principal
                           thereof, the interest thereon (including capitalized
                           interest), and the fees and expenses specifically
                           related thereto).

                                            "Term Loans" means, collectively,
                           the Term Loan A and the Term Loan B.

                                            "Total Term Loan A Commitment"
                           means the sum of the amounts of the Lenders' Term
                           Loan A Commitments.

                                            "Total Term Loan B Commitment"
                           means the sum of the amounts of the Lenders' Term
                           Loan B Commitments.

                           3.       Existing Loans; Commitments.

                                    (a)      Clause (i) of the second sentence
of Section 2.01(a) of the Financing Agreement is hereby amended by deleting the
word "Commitments" and inserting the words "Revolving Credit Commitments and
Term Loan A Commitments" in lieu thereof.

                                    (b)      Clause (ii) of the second sentence
of Section 2.01(a) of the Financing Agreement is hereby amended by deleting the
words "Term Loan" and inserting the words "Term Loan A" in lieu thereof.


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                                    (c)      Section 2.01(b) of the Financing
Agreement is hereby amended by (i) deleting the word "and" at the end of clause
(i) thereof, (ii) deleting clause (ii) thereof and inserting the following in
lieu thereof:

                                    (ii)     each Term Loan A Lender severally
                           agrees to make a Term Loan A within three (3)
                           Business Days after the Closing Date, in an
                           aggregate principal amount not to exceed the amount
                           of such Lender's Term Loan A Commitment; and

, and (iii) adding the following new clause (iii) at the end thereof:

                                    (iii)    each Term Loan B Lender severally
                           agrees to make a Term Loan B on the First Amendment
                           Effective Date, in an aggregate principal amount not
                           to exceed the amount of such Lender's Term Loan B
                           Commitment. The Term Loan B shall be charged to the
                           Borrower's Loan Account on the First Amendment
                           Effective Date.

                                    (d)      Section 2.01(c) of the Financing
Agreement is hereby amended by deleting the first sentence thereof and
inserting the following in lieu thereof:

                                    (c)      Notwithstanding the foregoing
                           provisions of this Section 2.01, the aggregate
                           principal amount of Revolving Loans outstanding at
                           any time to the Borrower shall not exceed the lowest
                           of (A) the Total Revolving Credit Commitment, (B)
                           the then current Revolving Loan Borrowing Base and
                           (C) $8,357,152.

                                    (e)      Section 2.01(d) of the Financing
Agreement is hereby deleted in its entirety and the following inserted in lieu
thereof:

                                    (d)      Notwithstanding the foregoing
                           provisions of this Section 2.01, (i) the aggregate
                           principal amount of the Term Loans A made shall not
                           exceed the Total Term Loan A Commitment and (ii) the
                           aggregate principal amount of the Term Loans B made
                           shall not exceed the Total Term Loan B Commitment.
                           Any principal amount of a Term Loan which is repaid
                           or prepaid may not be reborrowed.

                           4.       Making the Loans.

                                    (a)      Clause (ii) of the second sentence
of Section 2.02(a) of the Financing Agreement is hereby amended by deleting the
term "Term Loan" and inserting the term "Term Loan A" in lieu thereof.

                                    (b)      Clause (iv) of the second sentence
of Section 2.02(a) of the Financing Agreement is hereby amended by (i) deleting
the term "Term Loan" and inserting the term "Term Loan A" in lieu thereof, and
(ii) inserting the following before the period at the end thereof:


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                           , and with respect to the Term Loan B, must be the
                           First Amendment Effective Date.

                                    (c)      Section 2.02(c)(i) of the
Financing Agreement is hereby amended by deleting the phrase "and the Total
Term Loan Commitment" and inserting ", the Total Term Loan A Commitment and the
Total Term Loan B Commitment" in lieu thereof.

                           5.       Repayment of Loans; Evidence of Debt.
Section 2.03 of the Financing Agreement is hereby amended by (i) deleting
paragraph (a) thereof and inserting the following in lieu thereof:

                                    (a)      The aggregate outstanding
                           principal of all Loans shall be due and payable on
                           the Final Maturity Date, provided that the Final
                           Maturity Date shall be extended to April 12, 2002 if
                           (i) no Potential Default or Event of Default except
                           for the Events of Default referred to in the Cash
                           Collateral Letter shall occur and (ii) prior to
                           January 28, 2002, the Borrower or its financial
                           advisor has delivered to the Lenders (A) a letter of
                           intent, in form and substance satisfactory to the
                           Lenders in their reasonable discretion and executed
                           by the Borrower and a third party satisfactory to
                           the Lenders in their reasonable discretion, pursuant
                           to which such third party has agreed to acquire all
                           or substantially all of the business and assets of
                           the Borrower and its Consolidated Subsidiaries (by
                           merger, stock sale or asset sale or a combination of
                           the foregoing) pursuant to terms (including, without
                           limitation, the purchase price and the closing
                           conditions) satisfactory to the Lenders in their
                           reasonable discretion and in any case providing for
                           the payment in full of all the Obligations no later
                           than April 12, 2002 or (B) a definitive binding
                           purchase agreement executed by the Borrower and a
                           third party reasonably satisfactory to the Lenders
                           pursuant to which such third party has agreed to
                           acquire all or substantially all of the business and
                           assets of the Borrower and its Consolidated
                           Subsidiaries (by merger, stock sale or asset sale or
                           a combination of the foregoing) pursuant to terms
                           that provide that all of the Obligations are to be
                           repaid in full no later than April 12, 2002 and that
                           neither the Borrower nor the third party's
                           obligations to close such acquisition is subject to
                           any condition that is within the control of either
                           such Person or anyone controlled by either such
                           Person (other than the delivery of customary closing
                           certificates and customary closing documents).

, (ii) deleting paragraph (b) in its entirety and (iii) redesignating existing
paragraphs (c), (d), (e) and (f) therein as new paragraphs (b), (c), (d) and
(e), respectively.

                           6.       Interest.

                                    (a)      Section 2.04(b) of the Financing
Agreement is hereby amended in its entirety to read as follows:


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                                    "(b)     Term Loan A. The Term Loan A shall
                           bear interest on the principal amount thereof from
                           time to time outstanding, from the date of such Loan
                           until such principal amount becomes due, at a rate
                           per annum equal to the Reference Rate plus the
                           Applicable Term Loan Margin."

                                    (b)      Section 2.04 of the Financing
Agreement is hereby amended by (i) redesignating existing paragraphs (c), (d)
and (e) therein as new paragraphs (d), (e) and (f), respectively, and (ii)
adding after paragraph (b) thereof, the following new paragraph (c):

                                    (c)      Term Loan B. The Term Loan B shall
                           bear interest on the principal amount thereof from
                           time to time outstanding, from the date of such Loan
                           until such principal amount becomes due, at a rate
                           per annum equal to the Reference Rate plus the
                           Applicable Term Loan Margin plus 4%.

                                    (c)      Section 2.04(d) of the Financing
Agreement is hereby amended in its entirety to read as follows:

                                    (e)      Interest Payment. Interest on each
                           Revolving Loan, the Term Loan A and the Term Loan B
                           shall be payable monthly, in arrears, on the first
                           day of each month, commencing on the first day of
                           the month following the month in which such Loan is
                           made and at maturity (whether upon demand, by
                           acceleration or otherwise). Interest at the
                           Post-Default Rate shall be payable on demand. The
                           Borrower hereby authorizes the Administrative Agent
                           to, and the Administrative Agent may, from time to
                           time, charge the Loan Account pursuant to Section
                           3.02 with the amount of any interest payment due
                           hereunder.

                           7.       Reduction of Commitment; Prepayment of
Loans.

                                    (a)      Section 2.05(a) of the Financing
Agreement is hereby amended by (i) deleting clause (ii) thereof and inserting
the following in lieu thereof:

                           (ii)     Term Loan A Commitments. The Term Loan A
                           Commitments shall terminate upon the making by the
                           Lenders of the Term Loan A to the Borrower in
                           accordance with Section 2.01(b)(ii).

and (ii) adding the following new clause (iii) at the end thereof:

                           (iii)    Term Loan B Commitments. The Term Loan B
                           Commitments shall terminate upon the making by the
                           Lenders of the Term Loan B to the Borrower in
                           accordance with Section 2.01(b)(iii).

                                    (b)      Section 2.05(b) of the Financing
Agreement is hereby amended by (i) deleting clause (ii) thereof and inserting
the following in lieu thereof:


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                           (ii)     Term Loan A. The Borrower may prepay,
                           without penalty or premium, the principal of the
                           Term Loan A, in whole, upon at least thirty (30)
                           days' prior written notice to the Administrative
                           Agent, or in part, upon at least five (5) Business
                           Days' prior written notice to the Administrative
                           Agent. Each prepayment made pursuant to this clause
                           (b)(ii) shall be accompanied by the payment of
                           accrued interest to the date of such payment on the
                           amount prepaid.

, and (ii) adding the following new clause (iii) at the end thereof:

                           (iii)    Term Loan B. The Borrower may prepay,
                           without penalty or premium, the principal of the
                           Term Loan B in full, provided that (A) the
                           prepayment made pursuant to this clause (b)(iii)
                           shall (x) only be made concurrently with the
                           termination of the Revolving Credit Commitments and
                           the payment in full of the Obligations and (y) be
                           accompanied by the payment of accrued interest to
                           the date of such payment on the amount prepaid, and
                           (B) if such prepayment is made on or prior to
                           January 28, 2002 in accordance with clause (A)
                           above, then the principal amount of the Term Loan B
                           shall be forgiven as of the date of such prepayment
                           so that the principal amount of the Term Loan B to
                           be paid on such date of prepayment shall be
                           $2,000,000, plus the then accrued interest on the
                           Term Loan B (determined without giving effect to
                           such reduction).

                                    (c)      Section 2.05(c)(ii) of the
Financing Agreement is hereby amended in its entirety to read as follows:

                           (ii)     The Borrower will immediately prepay the
                           outstanding principal amount of the Term Loans in
                           the event that the Total Revolving Credit Commitment
                           is terminated for any reason.

                                    (d)      Section 2.05(c)(iv) of the
Financing Agreement is hereby amended by deleting the clause "Term Loans (or,
if the Term Loans have been paid in full, the Revolving Loans)" and inserting
the clause "Term Loan B (or, if the Term Loan B has been paid in full, the Term
Loan A, or if the Term Loan A has been paid in full, the Revolving Loans)" in
lieu thereof.

                                    (e)      Section 2.05(c)(v) of the
Financing Agreement is hereby amended in its entirety to read as follows:

                                             (v)      Immediately upon any
                           Disposition or the sale of any Property by the
                           Borrower, any Surety or any Consolidated Subsidiary
                           pursuant to Section 7.08, the Borrower shall prepay
                           the outstanding principal amount of the Term Loan B
                           (or, if the Term Loan B has been paid in full, the
                           Term Loan A, or if the Term Loan A has been paid in
                           full, the Revolving Loans) in an amount equal to
                           100% of the Net Available Proceeds received by such
                           Person in connection with such Disposition or 100%
                           of the net proceeds received by such Person in
                           connection with such


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                           sale, as applicable. Nothing contained in this
                           subsection (v) shall permit the Borrower or any of
                           its Consolidated Subsidiaries to make a Disposition
                           of any Property other than in accordance with
                           Section 7.08. Upon any Disposition in accordance
                           with Section 7.08(iii) or (iv) of (A) the Borrower's
                           equity interest in Marine Terminals or any of Marine
                           Terminals' assets or properties (including without
                           limitation any sale of its interest in the
                           partnership that owns an international marine
                           terminal in Louisiana and any release of its
                           interest in funds held in escrow with respect to
                           funding payments of principal of and interest on
                           bonds issued in connection with such terminal) or
                           (B) the Borrower's interest in the office building
                           located at 5110 Maryland Way, Brentwood, Tennessee,
                           the Borrower shall apply the Net Available Proceeds
                           from such Disposition, concurrently with the receipt
                           thereof, (x) first, to prepay the outstanding
                           principal amount of the Revolving Loans in an amount
                           equal to 100% of such Net Available Proceeds in
                           connection with such sale and (y) second, if the
                           Revolving Loans have been paid in full, to fund
                           working capital and capital expenditures in
                           accordance with the Revised Projections, provided
                           that (1) the Borrower has commenced and is taking
                           good faith actions satisfactory to the Lenders in
                           their reasonable discretion to enter into a
                           transaction specified in Section 2.03(a) and (2) no
                           Potential Default or Event of Default except for the
                           Events of Default referred to in the Cash Collateral
                           Letter has occurred.

                                    (f)      The first sentence of Section
2.05(c)(vi) of the Financing Agreement is hereby amended by deleting the clause
"Term Loans (or, if the Term Loans have been paid in full, the Revolving
Loans)" and inserting the clause "Term Loan B (or, if the Term Loan B has been
paid in full, the Term Loan A, or if the Term Loan A has been paid in full, the
Revolving Loans)" in lieu thereof.

                                    (g)      Section 2.05(c)(vii) of the
Financing Agreement is hereby amended by deleting the clause "Term Loans (or,
if the Term Loans have been paid in full, the Revolving Loans)" and inserting
the clause "Term Loan B (or, if the Term Loan B has been paid in full, the Term
Loan A, or if the Term Loan A has been paid in full, the Revolving Loans)" in
lieu thereof.

                                    (h)      Section 2.05(c)(viii) of the
Financing Agreement is hereby amended by deleting the clause "Term Loans (or,
if the Term Loans have been paid in full, the Revolving Loans)" and inserting
the clause "Term Loan B (or, if the Term Loan B has been paid in full, the Term
Loan A, or if the Term Loan A has been paid in full, the Revolving Loans)" in
lieu thereof.

                                    (i)      Section 2.05(d) of the Financing
Agreement is hereby amended in its entirety to read as follows:

                                            (d)       Application of Payments.
                           Each prepayment pursuant to subsections (c)(iv),
                           (c)(v), (c)(vi), (c)(vii) and (c)(viii) above


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                           shall be applied, first, to the Term Loan B, second,
                           to the Term Loan A, and third to the Revolving
                           Loans.

                           8.       Capitalization of Interest. Section 3.02(a)
of the Financing Agreement is hereby amended by adding at the end of the first
sentence thereof the following:

                           ; provided, however, that interest on the Term Loan
                           B that is due on each monthly interest payment date
                           shall be capitalized and added on such date to the
                           principal amount of the Term Loan B unless an Event
                           of Default or Potential Default shall have occurred
                           and then be continuing.

                           9.       Apportionment of Payments.

                                    (a)      Section 3.04(b) of the Financing
Agreement is hereby amended in its entirety to read as follows:

                           After the occurrence and during the continuance of
                           an Event of Default, the Administrative Agent may,
                           and upon the direction of the Required Lenders
                           shall, apply all payments in respect of any
                           Obligations and all proceeds of the Collateral,
                           subject to the provisions of this Agreement, (i)
                           first, ratably to pay the Obligations in respect of
                           any fees, expense reimbursements, indemnities and
                           other amounts then due to the Agents until paid in
                           full; (ii) second, ratably to pay the Term Loan B
                           Obligations in respect of any fees and indemnities
                           then due to the Term Loan B Lenders until paid in
                           full; (iii) third, ratably to pay interest due in
                           respect of the Term Loan B until paid in full; (iv)
                           fourth, ratably to pay principal of the Term Loan B
                           until paid in full; (v) fifth, ratably to pay the
                           Term Loan A Obligations in respect of any fees and
                           indemnities then due to the Term Loan A Lenders
                           until paid in full; (vi) sixth, ratably to pay
                           interest due in respect of the Term Loan A until
                           paid in full; (vii) seventh, ratably to pay
                           principal of the Term Loan A until paid in full,
                           (viii) eighth, ratably to pay the Revolving Loan
                           Obligations in respect of any fees and indemnitees
                           then due to the Revolving Loan Lenders until paid in
                           full; (ix) ninth, ratably to pay interest due in
                           respect of the Revolving Loans and Agent Advances
                           and until paid in full; (x) tenth, ratably to pay
                           principal of the Revolving Loans and Agent Advances
                           until paid in full, and (xi) eleventh, to the
                           ratable payment of all other Obligations then due
                           and payable.

                                    (b)      Section 3.04(c) of the Financing
Agreement is hereby amended by deleting the term "Term Loan" and inserting the
term "Term Loans" in lieu thereof.

                           10.      Reporting and Information Requirements.
Section 6.01 of the Financing Agreement is hereby amended by (i) redesignating
existing paragraph (o) thereof as new paragraph (p) and (ii) adding immediately
after paragraph (n) thereof the following new paragraph (o):


                                     -11-
<PAGE>


                                            (o)       Weekly Certificate. As
                           soon as available and in any event within three (3)
                           Business Days after the end of each week (beginning
                           with the week ending November 30, 2001), the
                           Borrower will furnish to the Agents and the Lenders
                           a certificate, substantially in the form of Exhibit
                           F, setting forth (i) the Consolidated Net Operating
                           Cash Flow and (ii) the number of tons of coal
                           produced by the Borrower and its Consolidated
                           Subsidiaries excluding the coal produced from the
                           Elk Horn reserves by Persons for their own account
                           pursuant to leases between the Borrower or any of
                           its Consolidated Subsidiaries as lessor and any such
                           Person as lessee, in each case for the period
                           commencing October 13, 2001 through the close of
                           business on the Friday of such week, supported by
                           schedules showing the derivation thereof and
                           containing such detail and information as either
                           Agent may reasonably request from time to time.

                           11.      Use of Proceeds. Section 6.10 of the
Financing Agreement is hereby amended in its entirety to read as follows:

                           6.10     Use of Proceeds

                                             (a)      Revolving Loans. The
                           Borrower shall use the proceeds of the Revolving
                           Loans made pursuant to Section 2.01(b)(i) solely to
                           fund capital expenditures and other expenses of the
                           Borrower and the Eligible Subsidiaries in respective
                           amounts not to exceed the respective amounts set
                           forth therefor under the heading Expenditures in the
                           Revised Projections ; provided, however, that in the
                           event that Net Operating Cash Flow for any period
                           set forth in the Revised Projections exceeds the
                           amount set forth therein for such period, the excess
                           shall be used for (i) working capital of the
                           Borrower and its Eligible Subsidiaries and (ii) upon
                           request therefor made by the Borrower in writing
                           delivered to Agents and approved by the Agents in
                           their reasonable discretion, capital expenditures of
                           the Borrower and its Eligible Subsidiaries.

                                             (b)      Term Loan A. The
                           Borrower shall use the proceeds of the Term Loan A
                           made pursuant to Section 2.01(b)(ii) for any and all
                           of the following purposes: (i) for general working
                           capital or general corporate purposes of the
                           Borrower and the Eligible Subsidiaries, (ii) for
                           capital expenditures of the Borrower and the
                           Eligible Subsidiaries, provided that prior to using
                           any such proceeds for any such capital expenditure
                           with respect to the Fork Creek operations of the
                           Borrower and its Consolidated Subsidiaries, the
                           Borrower shall have delivered to the Agents a
                           capital expenditure and improvement plan, in
                           reasonable detail, and the Agents shall be satisfied
                           with such plan, (iii) for Qualified Acquisitions up
                           to the aggregate amount of $250,000 in any fiscal
                           year of the Borrower, and (iv) to relend proceeds to
                           Eligible Subsidiaries as permitted by Section
                           7.04(b), subject to the terms and conditions
                           contained in this Section 6.10. Any re-lending by
                           the Borrower of proceeds of the Term Loan A to an
                           Eligible Subsidiary shall not be in


                                     -12-
<PAGE>


                           amounts which would cause any Eligible Subsidiary to
                           not be able to make the representation set forth in
                           Section 4.28, after giving effect to the relending
                           of any such proceeds.

                                             (c)      Term Loan B. The Borrower
                           shall use the proceeds of the Term Loan B made
                           pursuant to Section 2.01(b)(iii) solely to pay to
                           the Administrative Agent, for the ratable benefit of
                           the Lenders, the Bridge Fee.

                                             (d)      Limits on Use. In no
                           event shall the proceeds of the Revolving Loans or
                           the Term Loan A be used (i) for the purchase of coal
                           inventory produced outside of the United States,
                           (ii), except as permitted in paragraph (e) below,
                           for any purposes other than to support the coal
                           related businesses of the Borrower and the Eligible
                           Subsidiaries or (iii) for capital expenditures,
                           except as permitted in Section 7.13.

                                             (e)      Relending Proceeds.
                           Notwithstanding anything to the contrary contained
                           herein, the Borrower may relend proceeds of the
                           Revolving Loans and the Term Loan A to Marine
                           Terminals for the general working capital and
                           general corporate purposes of such Eligible
                           Subsidiary only up to the aggregate amount of
                           $250,000.

                           12.      Consultants. Article VI of the Financing
Agreement is hereby amended by adding a new Section 6.27 to read in its
entirety as follows:

                           6.27     Consultants. The Borrower shall, no later
                           than November 9, 2001, retain at the Borrower's
                           expense, a mining/operational consultant that is
                           mutually acceptable to both the Borrower and the
                           Lenders. The scope of the engagement shall include
                           but not be limited to monitoring daily operations
                           and reporting requirements and shall be acceptable
                           to both the Borrower and the Lenders. The Lenders
                           hereby agree that five such acceptable consultants
                           are Behre Dolbear & Company, Weir International
                           Mining Consultants, JT Boyd, Metals Strategies,
                           Inc., and Marshall Miller & Associates.

                           13.      Dispositions of Assets. Section 7.08 of the
Financing Agreement is hereby amended by (i) redesignating clause (iii) as
clause (v) and (ii) inserting immediately following clause (ii) the following:

                           , (iii) the sale for not less than the fair market
                           value thereof of (A) the Borrower's interest in
                           Marine Terminals or (B) Marine Terminals' interest
                           in the partnership that owns an international marine
                           terminal in Louisiana, in each case on terms that
                           take into account the ownership and application or
                           release, as the case may be, of funds held in escrow
                           with respect to funding payments of principal of and
                           interest on bonds issued in connection with such
                           terminal provided that the Net Available Proceeds of
                           such Disposition are paid to the Collateral Agent
                           for the benefit of the


                                     -13-
<PAGE>


                           Lenders in accordance with Section 2.05(c)(v) or
                           (iv) the sale to a Person that is not an Affiliate
                           of the Borrower or any of its Subsidiaries for cash
                           in an amount not less than the fair market value
                           thereof of the Borrower's interest in the office
                           building located at 5110 Maryland Way, Brentwood,
                           Tennessee, provided that the Net Available Proceeds
                           of such Disposition are paid to the Collateral Agent
                           for the benefit of the Lenders in accordance with
                           Section 2.05(c)(v)

                           14.      Capital Expenditures. Section 7.13 of the
Financing Agreement is hereby amended in its entirety to read as follows:

                           Without the prior written consent of the Lenders,
                           the Borrower shall not, and shall not permit any of
                           its Consolidated Subsidiaries to, make or commit to
                           make any expenditure (including, without limitation,
                           Capitalized Lease Obligations) that in accordance
                           with GAAP would be debited to fixed asset accounts
                           on a consolidated balance sheet of the Borrower and
                           its Consolidated Subsidiaries during such period in
                           respect of the acquisition, construction,
                           improvement, replacement or betterment of land,
                           buildings, machinery, equipment or of any other
                           fixed assets or leaseholds during such period,
                           except for such expenditures in amounts not to
                           exceed the respective amounts set forth therefor in
                           the Revised Projections.

                           15.      Financial Maintenance Covenants. Section
7.16 of the Financing Agreement is hereby amended in its entirety to read as
follows:

                                    7.16     Financial Maintenance Covenants.
The Borrower shall not:

                                             (a)      Consolidated Debt to
                                    EBITDA Ratio. Permit the Consolidated Debt
                                    to EBITDA Ratio on September 30, 2001 for
                                    the period from June 1, 2001 through
                                    September 30, 2001 to be greater than 6.7
                                    to 1.

                                             (b)      Consolidated EBITDA.
                                    Permit Consolidated EBITDA for any period
                                    set forth below to be less than the amount
                                    set forth opposite such period below:


<TABLE>
<CAPTION>
                                   PERIOD                                               MINIMUM EBITDA
                                   ------                                               --------------

                                   <S>                                                  <C>
                                   June 1, 2001 through June 30, 2001                   $380,000
                                   June 1, 2001 through July 31, 2001                   $2,200,000
                                   June 1, 2001 through August 31, 2001                 $5,160,000
                                   June 1, 2001 through September 30, 2001              $7,540,000
</TABLE>

                                             (c)      Minimum Tons Sold.
                                    Permit the number of tons of coal sold by
                                    the Borrower and its Consolidated
                                    Subsidiaries for any period set forth below
                                    to be less than the amount set forth
                                    opposite such period below:


                                     -14-
<PAGE>


<TABLE>
<CAPTION>
                                   PERIOD                                               MINIMUM TONS SOLD
                                   ------                                               -----------------

                                   <S>                                                  <C>
                                   June 1, 2001 through June 30, 2001                           510,000
                                   June 1, 2001 through July 31, 2001                           930,000
                                   June 1, 2001 through August 31, 2001                       1,450,000
                                   June 1, 2001 through September 30, 2001                    1,950,000
</TABLE>

                                             (d)      Consolidated Net
                                    Operating Cash Flow. Permit Consolidated
                                    Net Operating Cash Flow for any period set
                                    forth below to be less than the amount set
                                    forth opposite such period below:


<TABLE>
<CAPTION>
                                                                                                 MINIMUM
                                                                                                 CONSOLIDATED NET
                                   CUMULATIVE PERIOD FROM OCTOBER 13, 2001 THROUGH:              OPERATING CASH FLOW
                                   -----------------------------------------------               -------------------

                                   <S>                                                           <C>
                                   October 26, 2001                                              $1,763,876
                                   November 30, 2001                                             $(4,821,050)
                                   December 28, 2001                                             $(3,308,881)
                                   January 25, 2002                                              $(2,463,704)
</TABLE>

                                    and if the Final Maturity Date is extended
                                    in accordance with Section 2.03(a):


<TABLE>
                                   <S>                                                           <C>
                                   February 22, 2002                                             $(11,837,258)
                                   March 29, 2002                                                $(12,741,574)
                                   April 12, 2002                                                $(15,369,140)
</TABLE>

                                             (e)      Minimum Tons Produced.
                                    Permit the number of tons of coal produced
                                    by the Borrower and its Consolidated
                                    Subsidiaries excluding coal produced from
                                    the Elk Horn reserves by Persons for their
                                    own account pursuant to leases between the
                                    Borrower or any of its Consolidated
                                    Subsidiaries as lessor and any such Person
                                    as lessee, for any period set forth below
                                    to be less than the amount set forth
                                    opposite such period below:


                                     -15-
<PAGE>


<TABLE>
<CAPTION>
                                                                                                 MINIMUM
                                                                                                 TONS
                                   CUMULATIVE PERIOD FROM OCTOBER 13, 2001 THROUGH:              PRODUCED
                                   -----------------------------------------------               --------

                                   <S>                                                           <C>
                                   October 26, 2001                                              162,957
                                   November 30, 2001                                             563,533
                                   December 28, 2001                                             915,363
                                   January 25, 2002                                              1,294,987
</TABLE>

                                    and if the Final Maturity Date is extended
                                    in accordance with Section 2.03(a):

<TABLE>
                                   <S>                                                           <C>
                                   February 22, 2002                                             1,682,121
                                   March 29, 2002                                                2,182,495
                                   April 12, 2002                                                2,379,867
</TABLE>

                                             (f)      Revolving Loan Borrowing
                                    Base. Permit the Revolving Loan Borrowing
                                    Base on each date set forth below to be
                                    less than the amount set forth opposite
                                    such date:


<TABLE>
<CAPTION>

                                                                                        REVOLVING LOAN
                                   DATE                                                 BORROWING BASE
                                   ----                                                 --------------

                                   <S>                                                  <C>
                                   October 19, 2001                                     $11,692,415
                                   October 26, 2001                                     $9,847,045
                                   November 2, 2001                                     $11,663,171
                                   November 9, 2001                                     $12,505,663
                                   November 16, 2001                                    $11,081,353
                                   November 23, 2001                                    $10,843,335
                                   November 30, 2001                                    $10,905,325
                                   December 7, 2001                                     $11,561,940
                                   December 14, 2001                                    $12,750,000
                                   December 21, 2001                                    $12,721,569
                                   December 28, 2001                                    $11,233,059
                                   January 4, 2002                                      $12,292,802
                                   January 11, 2002                                     $12,732,890
                                   January 18, 2002                                     $11,894,444
                                   January 25, 2002                                     $11,610,271
</TABLE>

                                    and if the Final Maturity Date is extended
                                    in accordance with Section 2.03(a):


                                     -16-
<PAGE>


<TABLE>
                                   <S>                                                  <C>
                                   February 1, 2002                                     $12,750,000
                                   February 8, 2002                                     $12,750,000
                                   February 15, 2002                                    $12,493,188
                                   February 22, 2002                                    $12,741,799
                                   March 1, 2002                                        $12,471,527
                                   March 8, 2002                                        $12,420,989
                                   March 15, 2002                                       $12,393,413
                                   March 22, 2002                                       $12,750,000
                                   March 29, 2002                                       $12,691,048
                                   April 5, 2002                                        $12,750,000
                                   April 12, 2002                                       $12,750,000
</TABLE>

                           16.      Notices, Etc. Section 11.01 of the
Financing Agreement is hereby amended by deleting any reference to Schulte Roth
& Zabel LLP as a Person to receive copies of notices sent to the Administrative
Agent.

                           17.      Amendments. Section 11.02(a)(vii) of the
Financing Agreement is hereby amended by (a) deleting the comma after the term
"'Eligible Accounts Receivable'", (b) inserting the word "or" immediately
before the term "'Revolving Loan Borrowing Base'" and (c) deleting the phrase
"or 'Term Loan Borrowing Base'".

                           18.      Schedules. Schedule 1.01(A) to the
Financing Agreement is hereby amended in its entirety to read as set forth on
Annex I attached to this Amendment.

                           19.      Exhibits. (a) Exhibit D to the Financing
Agreement is hereby amended in its entirety to read as set forth on Annex II
attached to the Amendment.

                           (b)      Exhibit F to the Financing Agreement is
hereby added to the Financing Agreement to read as set forth on Annex III
attached to this Amendment.

                           D.       Conditions to Effectiveness. The
forbearance set forth in Section B and the amendments set forth in paragraphs 1
through 19 of Section C, of this Amendment shall become effective as of
November 5, 2001 (the "Amendment Effective Date") upon satisfaction in full of
the following conditions precedent:

                           (a)      The representations and warranties
contained in this Amendment, Article VII of the Financing Agreement and the
other Loan Documents shall be correct in all material respects on and as of the
date of this Amendment as though made on and as of such date (except where such
representations and warranties relate to an earlier date in which case such
representations and warranties shall be true and correct as of such earlier
date); no Potential Default or Event of Default shall have occurred and be
continuing on the date of this Amendment (other than the Events of Default
referred to in the Cash Collateral Letter), or result from this Amendment
becoming effective in accordance with its terms.

                           (b)      The Collateral Agent shall have received
(i) counterparts of this Amendment that bear the signatures of each of the
Borrower and the Lenders and (ii) counterparts of an Acknowledgment and
Consent, in the form of Annex V to this Amendment, that bear the signature of
each Surety.


                                     -17-
<PAGE>


                           (c)      All legal matters incident to this
Amendment shall be satisfactory to the Agents and their counsel.

                           (d)      The Administrative Agent shall have
received, for the ratable benefit of the Lenders, a bridge fee (the "Bridge
Fee") in an aggregate amount equal to $3,000,000, which shall have been deemed
to be fully earned and due and payable as of the Amendment Effective Date and
paid on such date from the proceeds of the Term Loan B (as defined in the
Financing Agreement, as amended by this Amendment) by charging the Borrower's
Loan Account in accordance with Section 2.01(b)(iii) of the Financing
Agreement, as amended hereby.

                           E.       Representations and Warranties.

                                    The Borrower represents and warrants to the
Lenders as follows:

                           (a)      The Borrower (i) is duly organized, validly
existing and in good standing under the laws of the state of its organization
and (ii) has all requisite power, authority and legal right to execute, deliver
and perform this Amendment and to perform the Financing Agreement, as amended
hereby.

                           (b)      The execution, delivery and performance by
the Borrower of this Amendment and the performance by the Borrower of the
Financing Agreement, as amended hereby (i) have been duly authorized by all
necessary action, (ii) do not and will not violate or create a default under
such Borrower's organizational documents, any applicable law or any contractual
restriction binding on or otherwise affecting the Borrower or any of the
Borrower's properties, and (iii) except as provided in the Loan Documents, do
not and will not result in or require the creation of any Lien, upon or with
respect to the Borrower's property.

                           (c)      No authorization or approval or other
action by, and no notice to or filing with, any Official Body is required in
connection with the due execution, delivery and performance by the Borrower of
this Amendment or the performance by the Borrower of the Financing Agreement,
as amended hereby.

                           (d)      This Amendment and the Financing Agreement,
as amended hereby, constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their terms
except to the extent the enforceability thereof may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect affecting generally the enforcement of creditors'
rights and remedies and by general principles of equity.

                           (e)      The representations and warranties
contained in Article IV of the Financing Agreement are correct on and as of the
date hereof as though made on and as of the date hereof (except to the extent
such representations and warranties expressly relate to an earlier date), and
no Potential Default or Event of Default has occurred and is continuing on and
as of the date hereof, other than those referred to in the Cash Collateral
Letter.

                           F.       Continued Effectiveness of Financing
Agreement.


                                     -18-
<PAGE>


                           The Borrower hereby (a) confirms and agrees that
each Loan Document to which it is a party is, and shall continue to be, in full
force and effect and is hereby ratified and confirmed in all respects except
that on and after the Amendment Effective Date all references in any such Loan
Document to "the Financing Agreement", the "Agreement", "hereto", "hereof",
"hereunder", "thereto", "thereof", "thereunder" or words of like import
referring to the Financing Agreement shall mean the Financing Agreement as
amended by this Amendment, and (b) confirms and agrees that to the extent that
any such Loan Document purports to assign or pledge to the Collateral Agent for
the ratable benefit of the Lenders, or to grant to the Collateral Agent for the
ratable benefit of the Lenders a security interest in or Lien on, any
collateral as security for the Obligations of the Borrower, or any of its
Consolidated subsidiaries or any surety from time to time existing in respect
of the Financing Agreement and the Loan Documents, such pledge, assignment
and/or grant of the security interest or Lien is hereby ratified and confirmed
in all respects.

                           G.       Miscellaneous

                           (a)      This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of this Amendment by telefacsimile shall be equally as
effective as delivery of an original executed counterpart of this Amendment.

                           (b)      Section and paragraph headings herein are
included for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose.

                           (c)      This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.

                           (d)      Borrower will pay on demand all reasonable
fees, costs and expenses of the Agents and the Lenders in connection with the
preparation, execution and delivery of this Amendment or otherwise payable
under the Financing Agreement, including, without limitation, reasonable fees
disbursements and other charges of Schulte Roth & Zabel LLP, counsel to the
Agents.

                           (e)      Upon the Amendment Effective Date, this
Amendment shall supersede the Amendment Letter, which thereupon shall have no
further force or effect.


                                     -19-
<PAGE>


                           IN WITNESS WHEREOF, the parties hereto have caused
this Amendment, to be executed by their respective officers thereunto duly
authorized as of the day and year first above written.


                                          BORROWER:

                                          PEN HOLDINGS, INC.

                                          By: /s/ William E. Beckner
                                             -------------------------------
                                             Name: William E. Beckner
                                             Title: President


                                          COLLATERAL AGENT AND LENDER:

                                          ABLECO FINANCE LLC

                                          By: /s/ Kevin Genda
                                             -------------------------------
                                             Name: Kevin Genda
                                             Title: S.V.P./Chief Credit Officer


                                          ADMINISTRATIVE AGENT AND LENDER:

                                          FOOTHILL CAPITAL CORPORATION

                                          By: /s/ Stephen Schwartz
                                             -------------------------------
                                             Name: Stephen Schwartz
                                             Title: Vice President


                                          LENDER:

                                          REGIMENT CAPITAL II, L.P.

                                          By:  Regiment Capital
                                               Management, L.L.C.,
                                               its General Partner

                                               By:  Regiment Capital
                                                    Advisors, L.L.C.,
                                                    its Manager

                                                    By: /s/ Timothy S. Peterson
                                                       -------------------------
                                                       Name: Timothy S. Peterson
                                                       Title: President


                                     -20-