Document:

ex10_01.htm

    
      

    

    
      Exhibit
10.01

      

      SECOND AMENDMENT
TO

      CREDIT AGREEMENT
AND

      AMENDMENT TO REVOLVING
CREDIT NOTE

      

      

      THIS
SECOND AMENDMENT TO CREDIT AGREEMENT AND AMENDMENT TO REVOLVING CREDIT NOTE
("Second Amendment") is made and entered into as of the 14th day of April, 2008,
by and among GOLDEN ROAD MOTOR INN, INC., a Nevada corporation (the "Borrower")
and MONARCH CASINO & RESORT, INC., a Nevada corporation ("Guarantor"), WELLS
FARGO BANK, National Association, as the lender (the "Lender"), WELLS FARGO
BANK, National Association, as the swingline lender (herein in such capacity,
together with its successors and assigns, the "Swingline Lender"), WELLS FARGO
BANK, National Association, as the issuer of letters of credit (in such
capacity, together with its successors and assigns, the "L/C Issuer"), and WELLS
FARGO BANK, National Association, as administrative and collateral agent for the
Lenders, Swingline Lender and L/C Issuer (herein, in such capacity, called the
"Agent Bank" and, together with the Lenders, Swingline Lender and L/C Issuer,
collectively referred to as the "Banks").

      

      R_E_C_I_T_A_L_S:

      

      WHEREAS:

       

      A.           Borrower,
Guarantor and the Banks therein named entered into a Credit Agreement dated as
of February 20, 2004 (the "Original Credit Agreement") for the purpose of
establishing a revolving line of credit in the initial principal amount of Fifty
Million Dollars ($50,000,000.00), including a subfacility for the funding of
swingline advances up to the maximum aggregate amount of Two Million Five
Hundred Thousand Dollars ($2,500,000.00) at any time outstanding and a
subfacility for the issuance of letters of credit up to the maximum aggregate
amount of Two Million Five Hundred Thousand Dollars
($2,500,000.00).  Concurrently with the execution of the Original
Credit Agreement, Borrower executed and delivered the Revolving Credit Note in
the original principal sum of Fifty Million Dollars ($50,000,000.00) payable to
the order of Agent Bank on behalf of the Lenders (the "Existing Revolving Credit
Note").

       

      B.           Borrower,
Guarantor and the Banks therein named entered into a First Amendment to Credit
Agreement dated as of February 8, 2007 (the "First Amendment" and together
with the Original Credit Agreement, collectively, the "Existing Credit
Agreement") for the purpose of, amongst other modifications, decreasing the
Aggregate Commitment from Fifty Million Dollars ($50,000,000.00) to Five Million
Dollars ($5,000,000.00).

       

      C.           For
the purpose of this Second Amendment, all capitalized words and terms not
otherwise defined herein shall have the respective meanings and be construed
herein as provided in Section 1.01 of the Existing Credit Agreement and any
reference to a provision of the Existing Credit Agreement shall be deemed to
incorporate that provision as a part hereof, in the same manner and with the
same effect as if the same were fully set forth herein.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      D.          Borrower
desires to: (i) amend the Existing Credit Agreement for the purpose of
increasing the Aggregate Commitment from its present level of Five Million
Dollars ($5,000,000.00) to Fifty Million Dollars ($50,000,000.00), and (ii)
amend the Existing Credit Agreement and Existing Revolving Credit Note for the
purpose of extending the Maturity Date from February 23, 2009 to
April 18, 2009.

       

      E.           Subject
to the terms, provisions and conditions hereinafter set forth, Lender has agreed
to the amendments, revisions and modifications set forth in this Second
Amendment.

       

      NOW,
THEREFORE, in consideration of the foregoing and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree to the amendments and modifications to the Existing
Credit Agreement as specifically hereinafter provided as follows:

      1.           Definitions.  As
of the Second Amendment Effective Date, Section 1.01 of the Existing Credit
Agreement entitled "Definitions" shall be and is hereby amended to include the
following definitions.  Those terms which are currently defined by
Section 1.01 of the Existing Credit Agreement and which are also defined
below shall be superseded and restated by the applicable definition set
forth below:

       

      "Aggregate
Commitment" shall mean, as of the Second Amendment Effective Date, reference to
the aggregate amount committed by Lender for advance to or on behalf of the
Borrower as Borrowings under the Credit Facility up to the maximum principal
amount of Fifty Million Dollars ($50,000,000.00), as may be reduced from time to
time by (i) Voluntary Permanent Reductions and/or (ii) Mandatory
Commitment Reductions.

      

      "Aggregate
Commitment Reduction Schedule" shall mean the Aggregate Commitment Reduction
Schedule marked "Schedule 2.01(c)", affixed to the Second Amendment and by this
reference incorporated herein and made a part hereof, which revised
Schedule 2.01(c) shall fully supersede and restate Schedule 2.01(c)
attached to the Existing Credit Agreement.

      

      "Credit
Agreement" shall mean the Existing Credit Agreement as amended by the Second
Amendment, together with all Schedules, Exhibits and other attachments thereto,
as it may be further amended, modified, extended, renewed or restated from time
to time.

      

      "Existing
Credit Agreement" shall have the meaning set forth in Recital Paragraph A
of the Second Amendment.

      

      "Existing
Revolving Credit Note" shall have the meaning set forth in Recital
Paragraph A of the Second Amendment.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      "Maturity
Date" shall mean April 18, 2009.

      

      "Revolving
Credit Note" shall mean the Existing Revolving Credit Note as amended by this
Second Amendment.

      

      "Schedule
of Lenders' Proportions in Credit Facility" shall mean, as of the Second
Amendment Effective Date, the Schedule of Lenders' Proportions in Credit
Facility, a copy of which is marked "Schedule 2.01(a)", affixed to the
Second Amendment and by this reference incorporated herein and made a part
hereof, setting forth the respective Syndication Interest and maximum amount to
be funded under the Credit Facility by Lender, as the same may be amended,
modified or restated from time to time in connection with an Assignment and
Assumption Agreement, which revised Schedule 2.01(a) shall fully restate
and supersede Schedule 2.01(a) attached to the Existing Credit
Agreement.

      

      "Second
Amendment" shall have the meaning set forth in the Preamble of the Second
Amendment to Credit Agreement.

      

      "Second
Amendment Effective Date" shall mean the date upon which each of the conditions
precedent set forth in Paragraph 6 of the Second Amendment has been fully
satisfied.

       

      2.           Extension of Maturity
Date.  As of the Second Amendment Effective Date, the
definition of "Maturity Date", as set forth in the Existing Credit Agreement and
Existing Revolving Credit Note, shall be and is hereby modified as set forth in
the definition of Maturity Date contained in the Second Amendment.

       

      3.           Commitment
Increase.  From and after the Second Amendment Effective Date,
the Aggregate Commitment shall be and is hereby increased to Fifty Million
Dollars ($50,000,000.00).

       

      4.           Restatement of
Section 2.01(a).  As of the Second Amendment Effective
Date, Section 2.01(a) of the Existing Credit Agreement shall be and is
hereby fully amended and restated in its entirety as follows:

       

      "a.           Subject
to the conditions and upon the terms hereinafter set forth and in accordance
with the terms and provisions of the Revolving Credit Note, on and after the
Second Amendment Effective Date Lenders severally agree in the proportions set
forth on the Schedule of Lenders' Proportions in Credit Facility to lend and
advance Borrowings to Borrower, up to the Aggregate Commitment in the amount of
Fifty Million Dollars ($50,000,000.00), in such amounts as Borrower may request
by Notice of Borrowing duly executed by an Authorized Officer and delivered to
Agent Bank from time to time as provided in Section 2.03.  All
outstanding principal and accrued and unpaid interest shall be fully paid on the
Maturity Date."

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      5.           On
and after the Second Amendment Effective Date the definitions of "Aggregate
Commitment", "Aggregate Commitment Reduction Schedule", "Maturity Date",
"Revolving Credit Note", and "Schedule of Lenders' Proportions in Credit
Facility" shall be deemed fully amended and restated by the definitions set
forth in the Second Amendment.

       

      6.           Conditions Precedent to
Second Amendment Effective Date.  The occurrence of the Second
Amendment Effective Date is subject to Agent Bank having received the following
documents and payments, in each case in a form and substance reasonably
satisfactory to Agent Bank, and the occurrence of each other condition precedent
set forth below on or before April 18, 2008:

       

      Due
execution by Borrower and Banks of two (2) duplicate originals of this Second
Amendment;

       

      1.1.1.    Payment by
Borrower to Agent Bank for the account of the Lender of a non-refundable fee
(the "Amendment Fee") in the amount of Fifty Thousand Dollars
($50,000.00);

       

      1.1.2.    Reimbursement
to Agent Bank by Borrower for all reasonable fees and out-of-pocket expenses
incurred by Agent Bank in connection with the Second Amendment, but not limited
to, reasonable attorneys' fees of Henderson & Morgan, LLC and all other like
expenses remaining unpaid as of the Second Amendment Effective Date;
and

       

      1.1.3.    Such other
documents, instruments or conditions as may be reasonably required by Agent
Bank.

       

      7.           Representations of
Borrower.  Borrower hereby represents to the Banks, which
representations shall survive the Second Amendment Effective Date and be deemed
incorporated into Article IV of the Credit Agreement, that:

       

      The
representations and warranties contained in Article IV of the Existing Credit
Agreement and contained in each of the other Loan Documents (other than
representations and warranties which expressly speak only as of a different
date, which shall be true and correct in all material respects as of such date)
are true and correct on and as of the Second Amendment Effective Date in all
material respects as though such representations and warranties had been made on
and as of the Second Amendment Effective Date, except to the extent that such
representations and warranties are not true and correct as a result of a change
which is permitted by the Credit Agreement or by any other Loan Document or
which has been otherwise consented to by Agent Bank or, where applicable, the
Requisite Lenders;

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      1.1.4.    Since the
date of the most recent financial statements referred to in Section 5.08 of the
Existing Credit Agreement, no Material Adverse Change has occurred and no event
or circumstance which could reasonably be expected to result in a Material
Adverse Change has occurred;

       

      1.1.5.    No event has
occurred and is continuing which constitutes a Default or Event of Default under
the terms of the Credit Agreement; and

       

      1.1.6.    The
execution, delivery and performance of this Second Amendment has been duly
authorized by all necessary action of Borrower and this Second Amendment
constitutes the valid, binding and enforceable obligation of
Borrower.

       

      8.           Consent to Second Amendment
and Affirmation and Ratification of Guaranty.  Guarantor joins
in the execution of this Second Amendment for the purpose of evidencing its
consent to the terms, covenants, provisions and conditions herein contained for
the purpose of ratifying and affirming its obligations under the Guaranty for
the guaranty of the full and prompt payment and performance of all Indebtedness
and Obligations under the Credit Facility, as modified and amended under this
Second Amendment.

       

      9.           Incorporation by
Reference.  This Second Amendment shall be and is hereby
incorporated in and forms a part of the Existing Credit Agreement.

       

      10.         Governing
Law.  This Second Amendment to Credit Agreement shall be
governed by the internal laws of the State of Nevada without reference to
conflicts of laws principles.

       

      11.         Counterparts.  This
Second Amendment may be executed in any number of separate counterparts with the
same effect as if the signatures hereto and hereby were upon the same
instrument.  All such counterparts shall together constitute one and
the same document.

       

      12.         Continuance of Terms and
Provisions.  All of the terms and provisions of the Credit
Agreement shall remain unchanged except as specifically modified
herein.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      13.         Replacement Schedules
Attached.  The following replacement Schedules are attached
hereto and incorporated herein and made a part of the Credit Agreement as
follows:

       

      Schedule
2.01(a) -    Schedule of Lenders'
Proportions in Credit Facility as of Second Amendment Effective
Date

       

      Schedule
2.01(c) -    Aggregate Commitment
Reduction Schedule

       

      

      

      Schedule
2.01(a)

      SCHEDULE OF LENDERS'
PROPORTIONS IN CREDIT FACILITY

      AS OF SECOND AMENDMENT
EFFECTIVE DATE

      

      

      

      
        	
                NAME
      OF LENDER

              	
                MAXIMUM
      AMOUNT OF PRINCIPAL

              	
                PROPORTIONATE
      SYNDICATION INTEREST IN CREDIT FACILITY

              
	
                Wells
      Fargo Bank, National Association

              	
                $50,000,000.00

              	
                100.0%

              

      

      

      

      Schedule
2.01(c)

      AGGREGATE COMMITMENT
REDUCTION SCHEDULE

      AS OF SECOND AMENEMDN
EFFECTIVE DATE

      

      

      
        	
                REDUCTION
      DATE

              	
                SCHEDULED
      REDUCTION

              
	
                Second
      Amendment Effective Date

              	
                -0-

              
	
                April
      18, 2009

                (Maturity
      Date)

              	
                Entire
      unpaid principal balance

              

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the parties hereto have caused this Second Amendment to Credit
Agreement to be executed as of the day and year first above
written.

      

      
        	 
      	
                BORROWER:

              
	 
      	 
      	 
      
	 
      	
                GOLDEN
      ROAD MOTOR INN, INC.,

              
	 
      	
                a
      Nevada corporation

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By

              	
                /s/ John
      Farahi

              
	 
      	 
      	
                John
      Farahi,

              
	 
      	 
      	
                Chief
      Executive Officer

              
	 
      	 
      	 
      
	 
      	
                MCRI:

              
	 
      	 
      	 
      
	 
      	
                MONARCH
      CASINO & RESORT, INC.,

              
	 
      	
                a
      Nevada corporation

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By

              	
                /s/ John
      Farahi

              
	 
      	 
      	
                John
      Farahi,

              
	 
      	 
      	
                Chief
      Executive Officer

              

      

      

      
        	 
      	
                BANKS:

              
	 
      	 
      	 
      
	 
      	
                WELLS
      FARGO BANK,

              
	 
      	
                National
      Association,

              
	 
      	
                Agent
      Bank, Lender, Swingline Lender

              
	 
      	
                and
      L/C Issuer

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By

              	
                /s/ Stephen
      Buntin

              
	 
      	 
      	
                Stephen
      Buntin,

              
	 
      	 
      	
                Senior
      Vice President

              

      

       

    

     

    7Exhibit
        10.1

       

      PROMISSORY
        NOTE

    

    

    
      	$5,000,000.00	 	
              April 14,
                2008

            
	 	 	
              Tacoma,
                Washington

            

    

     

     

    FOR
      VALUE RECEIVED,
      UNITED FUEL & ENERGY CORPORATION, a Nevada corporation located at 405
      Marienfeld, Suite 300, Midland, Texas 79701 (“Maker”),
      hereby
      promises to pay to the order of the Greinke Personal Living Trust, Frank P.
      Greinke, Trustee,
      an
      individual residing at P.O. Box 1258, Tacoma, Washington 98401-1258 (together
      with his successors, representatives, heirs, and permitted assigns, “Holder”),
      on or
      before May 14th,
      2008
      and in accordance with the terms hereinafter provided, the lesser of (i) Five
      Million Dollars ($5,000,000.00), and (ii) the unpaid principal amount of all
      advances (each, an “Advance”,
      and
      collectively, the “Advances”)
      made by
      Holder to Maker pursuant to this Note, together with interest on the unpaid
      principal balance from time to time outstanding at the rate per annum equal
      to:
      (i) with respect to the unpaid principal amount of all Advances outstanding
      for
      30 days or less, the one-month London interbank offered rate (“LIBOR”)
      in
      effect on the date of this Note plus three and one-half percent (3.50%), simple
      interest; and (ii) with respect to the unpaid principal amount of all Advances
      outstanding for more than 30 days, LIBOR in effect on the 30th
      day
      following the date of the Advance plus eight and one-half percent (8.50%),
      simple interest. Maker acknowledges and agrees that Holder shall not be
      obligated to make any Advance to Maker under this Note and, to the extent Holder
      makes an Advance under this Note, Holder shall not be obligated to make any
      additional Advances. In the event Holder makes one or more Advances under this
      Note, Holder is hereby authorized to record the amount and date of each such
      Advance, and the information so recorded shall be conclusive and binding upon
      Maker in the absence of manifest error.

     

    All
      payments under or pursuant to this Note shall be made in United States Dollars
      by wire transfer in immediately available funds to an account designated by
      Holder in writing to Maker. 

     

    1. Payment.

     

    1.1 Payment
      of Principal and Interest.
      All
      principal and accrued but unpaid interest on this Note shall be payable in
      cash
      upon the demand of the Holder
      provided
      to Maker with at least one (1) business day prior written notice.

     

    1.2 Interest
      Upon Default.
      Upon
      the occurrence of an Event of Default (as defined in Section
      2.1),
      then,
      to the extent permitted by law, Maker will pay interest to Holder, payable
      on
      demand, on the outstanding principal balance of this Note from the date of
      the
      Event of Default until such Event of Default is cured at the rate of the lesser
      of (i) LIBOR in effect on the date of the Event of Default plus eight and
      one-half percent (8.5%) per annum, and (ii) the maximum applicable legal rate
      per annum. 

     

    1.3 Payment
      on Non-Business Days.
      Whenever any payment to be made shall be due on a Saturday, Sunday or a public
      holiday under the laws of the State of California, such payment may be due
      on
      the next succeeding business day.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.4 Transfer.
      This
      Note may be transferred or sold, subject to the provisions of Section
      4.8
      of this
      Note, or pledged, hypothecated or otherwise granted as security by
      Holder.

     

    1.5 Replacement.
      Upon
      receipt of a duly executed, notarized and unsecured written statement from
      Holder with respect to the loss, theft or destruction of this Note (or any
      replacement hereof), and without requiring an indemnity bond or other security,
      or, in the case of a mutilation of this Note, upon surrender and cancellation
      of
      such Note, Maker shall issue a new Note, of like tenor and amount, in lieu
      of
      such lost, stolen, destroyed or mutilated Note.

     

    2. Events
      of Default; Remedies.

     

    2.1 Events
      of Default.
      The
      occurrence of any of the following events shall be an “Event
      of Default”
      under
      this Note:

     

    (a) Maker
      shall fail to make any payment of principal or interest in cash on the date
      such
      principal or interest payment is due hereunder; or

     

    (b) default
      shall be made in the performance or observance by Maker of any material
      covenant, condition or agreement contained in this Note (other than as set
      forth
      in this clause (b) of this Section
      2.1)
      and
      such default is not fully cured within ten (10) business days after the
      occurrence thereof; or

     

    (c) any
      material representation or warranty made by Maker herein shall prove to have
      been false or incorrect or breached in a material respect on the date as of
      which made; or

     

    (d) Maker
      shall (i) apply for or consent to the appointment of, or the taking of
      possession by, a receiver, custodian, trustee or liquidator of all or a
      substantial part of his property or assets, (ii) commence a voluntary case
      under
      the United States Bankruptcy Code (as now or hereafter in effect) or under
      the
      comparable laws of any jurisdiction (foreign or domestic), (iii) file a petition
      seeking to take advantage of any bankruptcy, insolvency, moratorium,
      reorganization or other similar law affecting the enforcement of creditors’
rights generally, or (iv) take any action under the laws of any jurisdiction
      (foreign or domestic) analogous to any of the foregoing.

     

    2.2 Remedies
      Upon An Event of Default.
      If an
      Event of Default shall have occurred and shall be continuing, Holder may at
      any
      time at its option (a) declare the entire unpaid principal balance of this
      Note,
      together with all interest accrued hereon, due and payable, and thereupon,
      the
      same shall be accelerated and so due and payable, without presentment, demand,
      protest, or notice, all of which are hereby expressly unconditionally and
      irrevocably waived by Maker; provided,
      however,
      that
      upon the occurrence of an Event of Default described in Section
      2.1(d),
      the
      outstanding principal balance and accrued interest hereunder shall be
      automatically due and payable, or (b) exercise or otherwise enforce any one
      or
      more of Holder’s rights, powers, privileges, remedies and interests under this
      Note or applicable law. No course of delay on the part of Holder shall operate
      as a waiver thereof or otherwise prejudice the right of Holder. No remedy
      conferred hereby shall be exclusive of any other remedy referred to herein
      or
      now or hereafter available at law, in equity, by statute or
      otherwise.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    3. Prepayment.
      Maker
      may prepay this Note in whole or in part at any time; provided,
      however,
      that
      any such prepayment will be applied first to the payment of expenses due under
      this Note, if any, second to interest accrued on this Note and third, if the
      amount of prepayment exceeds the amount of all such expenses and accrued
      interest, to the payment of principal of this Note.

     

    4. Miscellaneous.

     

    4.1 Notices.
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon hand
      delivery, telecopy or facsimile at the address or number designated in the
      first
      paragraph of this Note (if delivered on a business day during normal business
      hours where such notice is to be received), or the first business day following
      such delivery (if delivered other than on a business day during normal business
      hours where such notice is to be received), or (b) on the second business day
      following the date of mailing by express courier service, fully prepaid,
      addressed to such address, or upon actual receipt of such mailing, whichever
      shall first occur. 

     

    4.2 Governing
      Law.
      This
      Note shall be governed by and construed in accordance with the internal laws
      of
      the State of California, without giving effect to the choice of law provisions.
      This Note shall not be interpreted or construed with any presumption against
      the
      party causing this Note to be drafted. 

     

    4.3 Headings.
      Section
      headings in this Note are included herein for purposes of convenience of
      reference only and shall not constitute a part of this Note for any other
      purpose.

     

    4.4 Remedies,
      Characterizations, Other Obligations, Breaches and Injunctive
      Relief.
      The
      remedies provided in this Note shall be cumulative and in addition to all other
      remedies available under this Note, at law or in equity (including, without
      limitation, a decree of specific performance and/or other injunctive relief),
      no
      remedy contained herein shall be deemed a waiver of compliance with the
      provisions giving rise to such remedy and nothing herein shall limit a Holder’s
      right to pursue actual damages for any failure by Maker to comply with the
      terms
      of this Note. Amounts set forth or provided for herein with respect to payments
      shall be the amounts to be received by Holder thereof and shall not, except
      as
      expressly provided herein, be subject to any other obligation of Maker (or
      the
      performance thereof). Maker acknowledges that a breach by it of its obligations
      hereunder will cause irreparable and material harm to Holder and that the remedy
      at law for any such breach may be inadequate. Therefore, Maker agrees that,
      in
      the event of any such breach or threatened breach, Holder shall be entitled,
      in
      addition to all other available rights and remedies, at law or in equity, to
      seek and obtain such equitable relief, including but not limited to an
      injunction restraining any such breach or threatened breach, without the
      necessity of showing economic loss and without any bond or other security being
      required. 

     

    4.5 Enforcement
      Expenses.
      Maker
      agrees to pay all costs and expenses of enforcement of this Note, including,
      without limitation, reasonable attorneys’ fees and expenses incurred by Holder
      in connection with enforcement of Holder’s rights under this Note.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    4.6 Binding
      Effect.
      The
      obligations of Maker and Holder set forth herein shall be binding upon the
      successors, assigns, heirs, administrators and transferees of each such
      party.

     

    4.7 Amendments.
      This
      Note may not be modified or amended in any manner except in writing executed
      by
      Maker and Holder.

     

    4.8 Transfer
      of this Note.
      With
      respect to any offer, sale or other disposition of this Note, Holder will give
      written notice to Maker prior thereto, describing briefly the manner
      thereof.

     

    4.9 Consent
      to Jurisdiction.
      Each of
      Maker and Holder (i) hereby irrevocably submits to the exclusive jurisdiction
      of
      the United States District Court sitting in the Central District of California,
      Southern Division, and the courts of the State of California located in Orange
      County for the purposes of any suit, action or proceeding arising out of or
      relating to this Note and (ii) hereby waives, and agrees not to assert in any
      such suit, action or proceeding, any claim that it is not personally subject
      to
      the jurisdiction of such court, that the suit, action or proceeding is brought
      in an inconvenient forum or that the venue of the suit, action or proceeding
      is
      improper. Each of Maker and Holder consents to process being served in any
      such
      suit, action or proceeding by mailing a copy thereof via certified mail, return
      receipt requested, to such party at the address in effect for notices to it
      under this Note and agrees that such service shall constitute good and
      sufficient service of process and notice thereof. Nothing in this Section
      4.9
      shall
      affect or limit any right to serve process in any other manner permitted by
      law.

     

    4.10 Failure
      or Indulgence Not Waiver.
      No
      failure or delay on the part of Holder in the exercise of any power, right
      or
      privilege hereunder shall operate as a waiver thereof, nor shall any single
      or
      partial exercise of any such power, right or privilege preclude other or further
      exercise thereof or of any other right, power or privilege.

     

    4.11 Maker
      Waivers.
      Except
      as otherwise specifically provided herein, Maker and all others that may become
      liable for all or any part of the obligations evidenced by this Note, hereby
      waive presentment, demand, notice of nonpayment, protest and all other demands
      and notices in connection with the delivery, acceptance, performance and
      enforcement of this Note, and do hereby consent to any number of renewals or
      extensions of the time or payment hereof and agree that any such renewals or
      extensions may be made without notice to any such persons and without affecting
      their liability herein and do further consent to the release of any person
      liable hereon, all without affecting the liability of the other persons, firms
      or Maker liable for the payment of this Note, AND TO
      THE
      EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, DO HEREBY WAIVE,
      AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
      OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
      CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR PASSED UPON THIS
      NOTE
      OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND
      WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE. 
      No delay
      or omission on the part of Holder in exercising its rights under this Note,
      or
      course of conduct relating hereto, shall operate as a waiver of such rights
      or
      any other right of Holder, nor shall any waiver by Holder of any such right
      or
      rights on any one occasion be deemed a waiver of the same right or rights on
      any
      future occasion.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, Maker has executed this Note as of the day and year first
      above
      written.

     

    
      	 	 	 
	 	
              UNITED
                FUEL & ENERGY CORPORATION,

            
	 	a Nevada corporation
	 
 	 
 	 
 
	 	By:  	/s/ Charles
              McArthur
	 	
              

              Charles
                McArthur, Chief Executive Officer 

            

    

     

     

    
      
         

      

      
        5

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