EXHIBIT 10.14
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT ("Subordination Agreement") dated as of
November 15, 1999 is by and among Congress Financial Corporation, a Delaware
corporation, in its individual capacity ("Congress") and in its capacity as
administrative agent and collateral agent ("Agent") for the financial
institutions parties to the Loan Agreement (as hereinafter defined) as lenders,
The CIT Group/Business Credit, Inc., a New York corporation, in its individual
capacity and in its capacity as co-agent for such lenders ("CIT") and The Renco
Group, Inc., a New York corporation ("Junior Creditor" as hereinafter further
defined). Senior Creditors (as hereinafter further defined) and Junior Creditor
are sometimes individually referred to herein as "Creditor" and collectively as
"Creditors."
W I T N E S S E T H:
WHEREAS, Junior Creditor has made or may make a loan or provide other
financial accommodations to Lodestar Energy, Inc., a Delaware corporation
("Debtor" as hereinafter further defined), which loans or other financial
accommodations are and shall be unsecured; and
WHEREAS, Senior Creditors have entered into financing arrangements with
Debtor, pursuant to which Senior Creditors may, upon certain terms and
conditions, make loans and provide other financial accommodations to Debtor
secured by certain assets and properties of Debtor; and
WHEREAS, in order to induce Senior Creditors to continue the financing
arrangements with Debtor, Junior Creditor has agreed to the subordination in
right of payment of certain existing and future obligations of Debtor to Junior
Creditors to the payment of the existing and future obligations of Debtor to
Senior Creditors and related matters as set forth below;
NOW THEREFORE, in consideration of the mutual benefits accruing to
Creditors hereunder and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto do hereby agree
as follows:
1. DEFINITIONS
As used above and in this Subordination Agreement, the following terms
shall have the meanings ascribed to them below:
1.1 "AGENT" shall mean Congress Financial Corporation, a Delaware
corporation in its capacity as administrative agent and collateral agent for the
other Senior Creditors.
1.2 "CIT" shall mean The CIT Group/Business Credit, Inc., a New York
corporation, in its individual capacity and in its capacity as co-agent for the
other Senior Creditors, and its successors and assigns.
1.3 "CREDITORS" shall mean, collectively, Senior Creditors and Junior
Creditor and their respective successors and assigns.
1.4 "DEBTOR" shall mean Lodestar Energy, Inc., a Delaware corporation
and its successors and assigns, including, without limitation, a receiver,
trustee or debtor-in-possession on behalf of such person or on behalf of any
such successor or assign.
1.5 "GUARANTOR" shall mean Lodestar Holdings, Inc., a Delaware
corporation and its successors and assigns.
1.6 "JUNIOR CREDITOR" shall mean The Renco Group, Inc., a New York
corporation, and its successors and assigns.
1.7 "JUNIOR DEBT" shall mean all obligations, liabilities and
indebtedness of every kind, nature and description owing by Debtor to Junior
Creditor pursuant to or in connection with the loans to be made by Junior
Creditor to Debtor pursuant to a request by Agent under the Subordinated Loan
Letter Agreement, including principal, interest, charges, fees, premiums,
indemnities and expenses, however evidenced, whether now existing or hereafter
arising, and whether arising after the commencement of any case with respect to
Debtor under the U.S. Bankruptcy Code or any similar statute (and including,
without limitation, any principal, interest, fees, costs, expenses and other
amounts, whether or not such amounts are allowable in whole or in part, in any
such case
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or similar proceeding), whether direct or indirect, absolute or contingent,
joint or several, due or not due, primary or secondary, liquidated or
unliquidated, secured or unsecured, and whether arising directly or howsoever
acquired by Junior Creditor.
1.8 "PERSON" or "PERSON" shall mean any individual, sole
proprietorship, partnership, corporation (including, without limitation, any
corporation which elects subchapter S status under the Internal Revenue Code of
1986, as amended), limited liability company, limited liability partnership,
business trust, unincorporated association, joint stock company, trust, joint
venture, or other entity or any government or any agency or instrumentality or
political subdivision thereof.
1.9 "SENIOR CREDITORS" shall mean Agent, CIT and the financial
institutions from time to time parties to the Senior Creditor Agreements as
lenders and the successors and assigns (and including any other lender or group
of lenders that at any time refinances, replaces or succeeds to all or any
portion of the Senior Debt or is otherwise party to the Senior Creditor
Agreements) of each of the foregoing.
1.10 "SENIOR CREDITOR AGREEMENTS" shall mean, collectively, the
Amended and Restated Loan and Security Agreement, dated May 15, 1998, by and
among Senior Creditors, Debtor and Guarantor and all agreements, documents and
instruments at any time executed and/or delivered by Debtor or any other person
to, with or in favor of Senior Creditor in connection therewith or related
thereto, as all of the foregoing now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated, refinanced, replaced or
restructured (in whole or in part and including any agreements with, to or in
favor of any other lender or group of lenders that at any time refinances,
replaces or succeeds to all or any portion of the Senior Debt).
1.11 "SENIOR DEBT" shall mean all obligations, liabilities and
indebtedness of every kind, nature and description owing by Debtor to Senior
Creditors and/or their affiliates, or participants, including principal,
interest, charges, fees, premiums, indemnities and expenses, however evidenced,
whether as principal, surety, endorser, guarantor or otherwise, arising under
the Senior Creditor Agreements, whether now existing or hereafter arising,
whether arising before, during or after the initial or any renewal term of the
Senior Creditor Agreements or after the commencement of any case with respect to
Debtor under the U.S. Bankruptcy Code or any similar statute (and including,
without limitation, any principal, interest, fees, costs, expenses and other
amounts, whether or not such amounts are allowable either in whole or in part,
in any such case or similar proceeding), whether direct or indirect, absolute or
contingent, joint or several, due or not due, primary or secondary, liquidated
or unliquidated, secured or unsecured, and whether arising directly or howsoever
acquired by any Senior Creditor.
1.12 "SUBORDINATED LOAN LETTER AGREEMENT" shall mean the letter
agreement, dated on or about the date hereof, by and among Junior Creditor,
Guarantor, Debtor, Agent and CIT, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
1.13 All terms used herein which are defined in the Uniform Commercial
Code as in effect in the State of New York, unless otherwise defined herein
shall have the meanings set forth therein. All references to any term in the
plural shall include the singular and all references to any term in the singular
shall include the plural.
2. SUBORDINATION OF JUNIOR DEBT
2.1 SUBORDINATION. Except as specifically set forth in Section 2.2
below, Junior Creditor hereby subordinates its right to payment and satisfaction
of the Junior Debt and the payment thereof, directly or indirectly, by any means
whatsoever, is deferred, to the final payment and satisfaction in full of all
Senior Debt.
2.2 PERMITTED PAYMENTS. Senior Creditors hereby agree that,
notwithstanding anything to the contrary contained in Section 2.1, Debtor may
make and Junior Creditor may receive and retain payments in respect of the
Junior Debt so long as the following conditions are satisfied (or as permitted
in accordance with Section 3(b) of the Subordinated Loan Letter Agreement), as
reasonably determined by Agent:
(a) as of the date of any such payment and after giving effect
thereto, the Excess Revolving Credit Availability (as such term is defined in
the Loan Agreement) shall not be less than $12,000,000 and for each of the
thirty (30) consecutive days immediately prior to any such payment, Excess
Revolving Credit Availability shall not have been less than $12,000,000; and
(b) as of the date of any such payment and after giving effect
thereto, no Event of Default or act, condition or event which with notice or
passage of time or both would constitute an Event of Default shall exist or have
occurred and be continuing.
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2.3 DISTRIBUTIONS.
(a) In the event of any distribution, division, or
application, partial or complete, voluntary or involuntary, by operation of law
or otherwise, of all or any part of the assets of Debtor or the proceeds thereof
to the creditors of Debtor or readjustment of the obligations and indebtedness
of Debtor, whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors, marshalling of assets of
Debtor or any other action or proceeding involving the readjustment of all or
any part of indebtedness of Debtor or the application of the assets of Debtor to
the payment or liquidation thereof, or upon the dissolution or other winding up
of Debtor's business, or upon the sale of all or substantially all of Debtor's
assets, then, and in any such event, (i) Senior Creditors shall first receive
final payment in full in cash of all of the Senior Debt prior to the payment of
all or any part of the Junior Debt, and (ii) Senior Creditors shall be entitled
to receive any payment or distribution of any kind or character, whether in
cash, securities or other property, which shall be payable or deliverable in
respect of any or all of the Junior Debt.
(b) In order to enable Agent to enforce the rights of Senior
Creditors under Section 2.3(a) above, Agent is hereby irrevocably authorized and
empowered (in its own name or in the name of Senior Creditors or Junior Creditor
or otherwise), but shall have no obligation, to enforce claims comprising any of
the Junior Debt by proof of debt, proof of claim, suit or otherwise and take
generally any action which Junior Creditor might otherwise be entitled to take,
as Agent may deem necessary or advisable for the enforcement of its rights or
interests hereunder, for the benefit of Senior Creditors, if in the
determination of Agent, Junior Creditor has not taken such actions or is not
diligently pursuing the same.
(c) To the extent reasonably necessary for Senior Creditors to
realize the benefits of the subordination of the Junior Debt provided for herein
(including the right to receive any and all payments and distributions which
might otherwise be payable or deliverable with respect to the Junior Debt in any
proceeding described in Section 2.3(a) or otherwise), Junior Creditor shall
execute and deliver to Agent such instruments or documents (together with such
assignments or endorsements as Agent shall deem necessary), as may be requested
by Agent.
2.4 PAYMENTS RECEIVED BY JUNIOR CREDITOR. Except for payments received
by Junior Creditor as provided in Section 2.2 above, should any payment or
distribution or security or instrument or proceeds thereof be received by the
Junior Creditor in respect of the Junior Debt, Junior Creditor shall receive and
hold the same in trust, as trustee, for the benefit of Senior Creditors,
segregated from other funds and property of Junior Creditor and shall forthwith
deliver the same to Agent for the benefit of Senior Creditors (together with any
endorsement or assignment of Junior Creditor where necessary), for application
to any of the Senior Debt. In the event of the failure of Junior Creditor to
make any such endorsement or assignment to Agent, Agent, or any of its officers
or employees, are hereby irrevocably authorized on behalf of Junior Creditor to
make the same.
2.5 INSTRUMENT LEGEND AND NOTATION. Any instrument at any time
evidencing the Junior Debt, or any portion thereof, shall be permanently marked
on its face with a legend conspicuously indicating that payment thereof is
subordinate in right of payment to the Senior Debt and subject to the terms and
conditions of this Subordination Agreement, and (a) after being so marked
certified copies thereof shall be delivered to Agent and (b) the original of any
such instrument shall be immediately delivered to Agent upon Agent's request, at
any time on or after the occurrence of an event of default under the Senior
Creditor Agreements. In the event any legend or endorsement is omitted, Agent,
or any of its officers or employees, are hereby irrevocably authorized on behalf
of Junior Creditor to make the same. No specific legend, further assignment or
endorsement or delivery of notes, guarantees or instruments shall be necessary
to subject any Junior Debt to the subordination thereof contained in this
Agreement.
3. COVENANTS, REPRESENTATIONS AND WARRANTIES
3.1 ADDITIONAL COVENANTS. Junior Creditor and Debtor agree in favor of
Senior Creditors that:
(a) except as specifically set forth in Section 2.2 above,
Debtor shall not, directly or indirectly, make and Junior Creditor shall not,
directly or indirectly, accept or receive any payment or any prepayment or
non-mandatory payment or any payment pursuant to acceleration or claims of
breach or any payment to acquire Junior Debt or otherwise in respect of any
Junior Debt;
(b) notwithstanding any rights or remedies available to it
under its agreements, applicable law or otherwise, Junior Creditor shall not,
directly or indirectly, (i) seek to collect from Debtor any of the Junior Debt
or (ii) commence any action
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or proceeding against Debtor or its properties under the U.S. Bankruptcy Code or
any state insolvency law or any similar present or future statute, law or
regulation or any proceedings for voluntary liquidation, dissolution or other
winding up of Debtor's business, or the appointment of any trustee, receiver or
liquidator for Debtor or any part of its properties or any assignment for the
benefit of creditors or any marshalling of assets of Debtor or (iii) take any
other action against Debtor or its properties;
(c) Debtor shall not grant to Junior Creditor and Junior
Creditor shall not acquire any security interest, lien, claim or encumbrance on
any assets or properties of Debtor or any guarantees for any of the Junior Debt;
(d) the terms and conditions of the Junior Debt shall be
acceptable in all respects to Agent;
(e) Junior Creditor and Debtor shall not directly or
indirectly amend, modify, alter or change in any terms of the Junior Debt or any
other provisions of any agreement, document or instruments to the extent such
provision governs or affects the Junior Debt without the prior written consent
of Agent;
(f) Junior Creditor shall not sell, assign, pledge, encumber
or otherwise dispose of any of the Junior Debt and guarantees, if any, or
subordinate any of the Junior Debt to any indebtedness of Debtor other than the
Senior Debt;
(g) Junior Creditor and Debtor shall, at any time or times
upon the request of Agent, promptly furnish to Agent a true, correct and
complete statement of the outstanding Junior Debt; and
(h) Junior Creditor and Debtor shall execute and deliver to
Agent such additional agreements, documents and instruments and take such
further actions as may be reasonably necessary or desirable in the opinion of
Agent to effectuate the provisions and purposes of this Subordination Agreement
for the benefit of Senior Creditors.
3.2 ADDITIONAL REPRESENTATIONS AND WARRANTIES. Junior Creditor and
Debtor represent and warrant to Senior Creditors that:
(a) Junior Creditor has no security interest, lien or
encumbrance on any assets and properties of Debtor and the Junior Debt is
unsecured;
(b) Junior Creditor is the exclusive legal and beneficial
owner of all of the Junior Debt;
(c) none of the Junior Debt is subject to any lien, security
interest, financing statements, subordination, assignment or other claim, except
in favor of Agent for the benefit of Senior Creditors; and
(d) this Subordination Agreement constitutes the legal, valid
and binding obligations of Junior Creditor, enforceable in accordance with its
terms except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights and (ii) the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3.3 WAIVERS. Notice of acceptance hereof, the making of loans,
advances and extensions of credit or other financial accommodations to, and the
incurring of any expenses by or in respect of, Debtor by Senior Creditors, and
presentment, demand, protest, notice of protest, notice of nonpayment or default
and all other notices to which Junior Creditor and Debtor are or may be entitled
are hereby waived (except as expressly provided for herein, in the Subordinated
Loan Letter Agreement or as to Debtor, in the Senior Creditor Agreements).
Junior Creditor also waives notice of, and hereby consents to, (a) any
amendment, modification, supplement, renewal, restatement or extensions of time
of payment of or increase or decrease in the amount of any of the Senior Debt or
to the Senior Creditor Agreements or any collateral at any time granted to or
held by Agent for the benefit of Senior Creditors, (b) the taking, exchange,
surrender and releasing of collateral at any time granted to or held by Agent
for the benefit of Senior Creditors or guarantees now or at any time held by or
available to Agent for the benefit of Senior Creditors for the Senior Debt or
any other person at any time liable for or in respect of the Senior Debt, (c)
the exercise of, or refraining from the exercise of any rights against Debtor or
any other obligor or any collateral at any time granted to or held by Agent for
the benefit of Senior Creditors, (d) the settlement, compromise or release of,
or the waiver of any default with respect to, any of the Senior Debt, and/or (e)
Agent's election, in any proceeding instituted under the U.S. Bankruptcy Code of
the application of Section 1111(b)(2) of the U.S. Bankruptcy Code. Any of the
foregoing shall not, in any manner, affect the terms hereof or impair the
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obligations of Junior Creditor hereunder. All of the Senior Debt shall be deemed
to have been made or incurred in reliance upon this Subordination Agreement.
3.4 SUBROGATION; MARSHALLING. Junior Creditor shall not be subrogated
to, or be entitled to any assignment of any Senior Debt or Junior Debt or of any
collateral for or guarantees or evidence of any thereof until all of the Senior
Debt is paid and satisfied in full. Junior Creditor hereby waives any and all
rights to have any collateral or any part thereof granted to or held by Agent
for the benefit of Senior Creditors marshalled upon any foreclosure or other
disposition of such collateral by Agent for the benefit of Senior Creditors or
Debtor with the consent of Senior Creditors.
3.5 NO OFFSET. In the event Junior Creditor at any time incurs any
obligation to pay money to Debtor, Junior Creditor hereby irrevocably agrees
that it shall pay such obligation in cash or cash equivalents in accordance with
the terms of the contract governing such obligation and shall not deduct from or
setoff against any amounts owed by the Junior Creditor to Debtor in connection
with any such transaction any amounts the Junior Creditor claims are due to it
with respect to the Junior Debt.
4. MISCELLANEOUS
4.1 AMENDMENTS. Any waiver, permit, consent or approval by any
Creditor of or under any provision, condition or covenant to this Subordination
Agreement must be in writing and shall be effective only to the extent it is set
forth in writing and as to the specific facts or circumstances covered thereby.
Any amendment of this Subordination Agreement must be in writing and signed by
each of the parties to be bound thereby.
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4.2 SUCCESSORS AND ASSIGNS.
(a) This Subordination Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of each of Creditors and its respective successors, participants and
assigns.
(b) Senior Creditors reserve the right to grant participations
in, or otherwise sell, assign, transfer or negotiate all or any part of, or any
interest in, the Senior Debt and the collateral securing same; PROVIDED, THAT,
Junior Creditor shall not be obligated to give any notices to or otherwise in
any manner deal directly with any participant in the Senior Debt and no
participant shall be entitled to any rights or benefits under this Subordination
Agreement except through Senior Creditors. In connection with any participation
or other transfer or assignment, Senior Creditors (i) may disclose to such
assignee, participant or other transferee or assignee all documents and
information which Senior Creditors now or hereafter may have relating to the
Senior Debt or any collateral and (ii) shall disclose to such participant or
other transferee or assignee the existence and terms and conditions of this
Subordination Agreement.
(c) In connection with any assignment or transfer of any or
all of the Senior Debt, or any or all rights of Agent in the property of Debtor
(other than pursuant to a participation), Junior Creditor agrees to execute and
deliver an agreement containing terms substantially identical to those contained
herein in favor of any such assignee or transferee and, in addition, will
execute and deliver an agreement containing terms substantially identical to
those contained herein in favor of any third person who succeeds to or replaces
any or all of Senior Creditors' financing of Debtor, whether such successor
financing or replacement occurs by transfer, assignment, "takeout" or any other
means.
4.3 INSOLVENCY. This Subordination Agreement shall be applicable both
before and after the filing of any petition by or against Debtor under the U.S.
Bankruptcy Code and all converted or succeeding cases in respect thereof, and
all references herein to Debtor shall be deemed to apply to a trustee for Debtor
and Debtor as debtor-in-possession. The relative rights of Senior Creditors and
Junior Creditors to repayment of the Senior Debt and the Junior Debt,
respectively, and in or to any distributions from or in respect of Debtor or any
proceeds of Debtor's property and assets, shall continue after the filing
thereof on the same basis as prior to the date of the petition, subject to any
court order approving the financing of, or use of cash collateral by, Debtor as
debtor-in-possession.
4.4 BANKRUPTCY FINANCING. If Debtor shall become subject to a
proceeding under the U.S. Bankruptcy Code and if Senior Creditors desire to
permit the use of cash collateral or to provide financing to Debtor under either
Section 363 or Section 364 of the U.S. Bankruptcy Code, Junior Creditor agrees
as follows: (a) adequate notice to Junior Creditor shall have been provided for
such financing or use of cash collateral if Junior Creditor receives notice five
(5) business days prior to the entry of the order approving such financing or
use of cash collateral and (b) no objection will be raised by Junior Creditor to
any such use of cash collateral or financing. For purposes of this Section,
notice of a proposed financing or use of cash collateral shall be deemed given
when given in the manner prescribed by Section 4.5 hereof to Junior Creditor.
4.5 NOTICES. All notices, requests and demands to or upon the
respective parties hereto shall be in writing and shall be deemed to have been
duly given or made: if delivered in person, immediately upon delivery; if by
telex, telegram or facsimile transmission, immediately upon sending and upon
confirmation of receipt; if by nationally recognized overnight courier service
with instructions to deliver the next business day, one (1) business day after
sending; and if mailed by certified mail, return receipt requested, five (5)
days after mailing. All notices, requests and demands are to be given or made to
the respective parties at their addresses set forth below (or to such other
addresses as either party may designate by notice in accordance with the
provisions of this Section:
To Agent: Congress Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
To Junior Creditor: The Renco Group, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxx X. Xxxxxxx
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Either Creditor may change the address(es) to which all notices, requests and
other communications are to be sent by giving written notice of such address
change to the other Creditor in conformity with this Section 4.5, but such
change shall not be effective until notice of such change has been received by
the other Creditor.
4.6 COUNTERPARTS. This Subordination Agreement may be executed in any
number of counterparts, each of which shall be an original with the same force
and effect as if the signatures thereto and hereto were upon the same
instrument.
4.7 GOVERNING LAW. The validity, construction and effect of this
Subordination Agreement shall be governed by the laws of the State of New York
(without giving effect to principles of conflicts of law).
4.8 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. Each of the parties
hereto hereby irrevocably consents to the non-exclusive jurisdiction of the
Supreme Court of the State of New York in New York County and the United States
District Court for the Southern District of New York and waives trial by jury in
any action or proceeding with respect to this Subordination Agreement.
4.9 COMPLETE AGREEMENT. This written Subordination Agreement is
intended by the parties as a final expression of their agreement and is intended
as a complete statement of the terms and conditions of their agreement.
4.10 NO THIRD PARTIES BENEFITED. Except as expressly provided in
Section 4.2, this Subordination Agreement is solely for the benefit of the
Creditors and their respective successors, participants and assigns, and no
other person shall have any right, benefit, priority or interest under, or
because of the existence of, this Subordination Agreement.
4.11 DISCLOSURES, NON-RELIANCE. Each Creditor has the means to, and
shall in the future remain, fully informed as to the financial condition and
other affairs of Debtor and no Creditor shall have any obligation or duty to
disclose any such information to any other Creditor. Except as expressly set
forth in this Subordination Agreement, the parties hereto have not otherwise
made to each other nor do they hereby make to each other any warranties, express
or implied, nor do they assume any liability to each other with respect to: (a)
the enforceability, validity, value or collectability of any of the Junior Debt
or the Senior Debt or any collateral or guarantee which may have been granted to
any of them in connection therewith, (b) Debtor's title to or right to any of
its assets and properties or (c) any other matter except as expressly set forth
in this Subordination Agreement.
4.12 TERM. This Subordination Agreement is a continuing agreement and
shall remain in full force and effect until the final payment and satisfaction
in full of all Senior Debt and the termination of the financing arrangements
between Senior Creditors and Debtor.
IN WITNESS WHEREOF, the parties have caused this Subordination
Agreement to be duly executed as of the day and year first above written.
CONGRESS FINANCIAL CORPORATION,
for itself and as Agent
By: /s/ Xxxxxx Xxxxxx
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Title: /s/ Assistant Vice President
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[SIGNATURES CONTINUED ON NEXT PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
THE CIT GROUP/BUSINESS CREDIT, INC.,
for itself and as Co-Agent
By: /s/ Xxxxxxxxxxx Xxxx
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Title: /s/ Assistant Vice President
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THE RENCO GROUP, INC.
By: /s/ Xxxxx Xxx
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Title: /s/ Vice President
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The undersigned hereby acknowledges and agrees to the foregoing terms
and provisions. By its signature below, the undersigned agrees that it will,
together with its successors and assigns, be bound by the provisions hereof.
The undersigned acknowledges and agrees that: (i) although it may sign
this Subordination Agreement, it is not a party hereto and does not and will not
receive any right, benefit, priority or interest under or because of the
existence of the foregoing Subordination Agreement, (ii) in the event of a
breach by either of the undersigned or Junior Creditor of any of the terms and
provisions contained in the foregoing Subordination Agreement, such a breach
shall constitute an "Event of Default" as defined in and under the Senior
Creditor Agreements and (iii) it will execute and deliver such additional
documents and take such additional action as may be necessary or desirable in
the opinion of any Creditor to effectuate the provisions and purposes of the
foregoing Subordination Agreement.
LODESTAR ENERGY, INC.
By: /s/ Xxxxx Xxx
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Title: /s/ Vice President
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