SUBORDINATION AGREEMENT
Exhibit
4.7
This
Subordination Agreement (this “Subordination
Agreement”)
is
dated [___________, 2008], by and among ___________________, a company organized
under the laws of the _______________, whose address is
_____________________________ (“Second
Lien Investor”),
KY
USA ENERGY, INC., a Kentucky corporation, whose address is 000 Xxxxxxxx Xxxx,
Xxxxxx, Xxxxxxxx 00000 (“Borrower”),
and
NSES 12, LLC, a Delaware limited liability company, whose address is 00 Xxxxx
Xxxxxx, Xxxxxxxx X, Xxxxxxxxxx, Xxxxxxxxxxx 00000 (“Senior
Creditor”).
Background
1. Borrower
and Senior Creditor are parties to the Senior Secured Credit Agreement dated
as
of the date hereof (as amended, supplemented, modified or restated from time
to
time, the “Credit
Agreement”).
Borrower’s obligations to the Senior Creditor under the Credit Agreement are
secured by a senior mortgage lien and first-priority security interest in all
of
the real and personal property of Borrower.
2. A
condition precedent of the Credit Agreement is the subordination of all
obligations owed by Borrower to the Second Lien Investor to the obligations
owed
by Borrower to Senior Creditor under the Credit Agreement and the other Loan
Documents.
3. Capitalized
terms used but not defined in this Subordination Agreement shall have the
meanings set forth in the Credit Agreement.
Agreements
To
comply
with the terms and conditions of the Credit Agreement and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged by the parties, the parties hereto agree as follows:
Subordination
of Obligations.
(a) The
payment and performance of any and all Subordinated Obligations (as defined
below) are expressly subordinated to the Senior Obligations (as defined below),
to the extent and in the manner set forth in this Subordination Agreement and
notwithstanding anything to the contrary in any of the Subordinated Loan
Documents (as defined below), without regard to the date any loan or extension
of credit is made to Borrower.
(b) Definitions.
When
used in this Subordination Agreement, the following terms have the respective
meanings set forth below:
“Liens”
means
any interest in property (real or personal) securing an obligation owed to,
or a
claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, and whether such obligation
or
claim is fixed or contingent, and including but not limited to (a) the lien
or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes or (b) production payments and the like payable out of
oil
and gas properties and the Properties. The term “Lien”
shall
include easements, restrictions, servitudes, permits, conditions, covenants,
exceptions or reservations.
“Senior
Creditor”
means
Lender as defined in the Credit Agreement.
“Senior
Obligations”
means
Obligations as defined in the Credit Agreement.
“Subordinated
Loan Documents”
means
all of the documents evidencing the Subordinated Obligations and any amendment,
modification or extension thereto.
“Subordinated
Obligations”
means
any and all indebtedness, liabilities and obligations of Borrower to the Second
Lien Investor, including but not limited to any loans or other extensions of
credit, any shares, warrants or other equity interests, whether absolute or
contingent, direct or indirect, joint, several or independent, now outstanding
or owing or which may hereafter be existing or incurred, arising by operation
of
law or otherwise, due or to become due, or held or to be held by the Second
Lien
Investor, whether created directly or acquired by assignment, as a
participation, conditionally, as collateral security from another or otherwise,
including indebtedness, obligations and liabilities of Borrower to the Second
Lien Investor as a member of any partnership, syndicate, association or other
group, and whether incurred by Borrower as principal, surety, endorser,
guarantor, accommodation party or otherwise, including, without limiting the
generality of the foregoing, all indebtedness, liabilities and obligations
of
Borrower to the Second Lien Investor arising out of any guaranty agreement,
operating agreement or similar agreement between the Second Lien Investor and
Borrower.
Subordination
of Liens. Regardless of the time or order of attachment or the time, order
or
manner of perfection or the time or order of filing financing statements,
mortgages or other security agreements or documents, and notwithstanding
anything to the contrary in any of the Subordinated Loan Documents, any and
all
Liens on the assets of the Borrower or any other obligor in favor of Senior
Creditor shall in all respects be first and senior Liens to secure payment
of
the Senior Obligations and shall be superior in all respects to any and all
Liens on any assets of the Borrower or any other obligor (to the extent such
obligor also grants a Lien in favor of the Senior Creditor) in favor of the
Second Lien Investor, and the Second Lien Investor hereby subordinates all
of
its Liens to the Liens in favor of Senior Creditor.
Restrictions
on each of the Second Lien Investors.
(c) Except
as
otherwise expressly provided in Section 3(b)
below,
during such time as any Senior Obligations remain unpaid, the Second Lien
Investor will not ask for, demand, xxx for, take, receive or accept from the
Borrower or any obligor, by set off or in any other manner, any payment or
distribution on account of any of the Subordinated Obligations, nor present
any
instrument evidencing any of the Subordinated Obligations for payment (other
than such presentment as may be necessary to prevent discharge of other liable
parties on such instrument).
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(d) Borrower
may, however, pay to the Second Lien Investor, and the Second Lien Investor
may
receive and accept, amounts owed to the Second Lien Investor in respect of
the
Subordinated Obligations (i)
if an
Event of Default does not exist, from cash that Borrower is not otherwise
required under the Credit Agreement to pay to the Senior Creditor in respect
of
any of the Senior Obligations or (ii)
such
amounts are comprised exclusively of cash equity contributed to the Borrower
after the date of this Subordination Agreement, if otherwise permitted by the
Credit Agreement.
(c) The
Second Lien Investor agrees and acknowledges that (i)
it has
received from the Borrower a true and complete copy of each of the Loan
Documents, (ii)
it has
reviewed or had the opportunity to review with its own counsel each of the
Loan
Documents, and (iii)
it
understands and appreciates the effect that the terms and conditions of the
Loan
Documents may have on Borrower’s ability to repay the Subordinated
Obligations.
Prohibition
of All Payments Following an Event of Default. If for any reason any portion
of
the Senior Obligations is not paid when due or is not paid on or before the
maturity thereof, or if there shall occur and be continuing any event which
with
the giving of notice or lapse of time or both would constitute a default or
Event of Default under any instrument or agreement now or hereafter executed
evidencing, in connection with, as security for or providing for the issuance
of
any of the Senior Obligations, then, unless and until such default or Event
of
Default shall have been cured, or unless and until the Senior Obligations shall
be paid in full, the Second Lien Investors may not ask for, xxx for, take,
demand, receive or accept from Borrower or any obligor, by set off or in any
other manner, any payment or distribution on account of the Subordinated
Obligations nor present any instrument evidencing the Subordinated Obligations
for payment (other than such presentment as may be necessary to prevent
discharge of other liable parties on such instrument).
Payments
Cannot Create a Default. The Second Lien Investor will not ask for, demand,
xxx
for, take, receive or accept from Borrower, by set off or in any other manner,
any payment or distribution on account of the Subordinated Obligations, if
the
making of such payment would constitute, or would result in the occurrence
of, a
violation of the provisions of any instrument or agreement evidencing, in
connection with, as security for or providing for the issuance of any Senior
Obligations or would result in the occurrence of any event which with the giving
of notice or lapse of time or both would constitute a default or an Event of
Default under the Credit Agreement or any other Loan Document.
Unauthorized
Receipt of Payment by each of the Second Lien Investors. If the Second Lien
Investor shall receive any payment or distribution on account of the
Subordinated Obligations which the Second Lien Investor is not entitled to
receive under this Subordination Agreement, the Second Lien Investor will hold
any amount so received in trust for Senior Creditor and will promptly (but
in
any event on or before the immediately following Business Day) turn over such
payment to Senior Creditor in the form received by the Second Lien Investor
(together with any necessary endorsement) to be applied against the Senior
Obligations.
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Restrictions
on Actions to Recover Subordinated Obligations. Until the Senior Obligations
are
irrevocably paid in full and the Senior Creditor’s commitment to extend credit
under the Credit Agreement has been irrevocably terminated in writing, the
Second Lien Investor shall not, and shall not solicit any person or entity
to,
commence any action or proceeding against Borrower or any obligor to recover
all
or any part of the Subordinated Obligations or join with any other creditor
in
commencing or maintaining any such action or proceeding, unless Senior Creditor
shall also join, in bringing any case, proceedings or other actions against
Borrower or any obligor under any existing or future law or statute of any
jurisdiction relating to bankruptcy, reorganization, adjustment of debt,
arrangement of debt, assignment for the benefit of creditors, receivership,
liquidation or insolvency (a “Proceeding”);
provided,
however,
that in
the event of any Proceeding, sale of all or substantially all of the assets,
dissolution, liquidation, or any other marshaling of the assets and liabilities
of Borrower or any obligor, the Second Lien Investor may, if the Senior Creditor
shall not have already so requested it to do so as provided in Section
10
below,
file any claim, proof of claim, proof of interest or other instrument of similar
character necessary to preserve the rights of the Second Lien Investor and
the
obligations of Borrower or any obligor, as applicable, in respect of and under
the Subordinated Obligations.
Marshaling
and Rights of Subrogation.
(e) The
Second Lien Investor hereby waives any requirement for marshaling of assets
thereby in connection with any foreclosure of any security interest or any
other
realization upon collateral in respect of the Credit Agreement, or any exercise
of any rights of set-off or otherwise. The Second Lien Investor and Senior
Creditor assume all responsibility for keeping themselves informed as to the
condition (financial or otherwise) of Borrower, the condition of all collateral
securing the repayment of the Senior Obligations and other circumstances and,
except for notices expressly required by this Subordination Agreement, neither
Senior Creditor nor the Second Lien Investor shall have any duty whatsoever
to
obtain, advise or deliver information or documents to the other relative to
such
condition, business, assets and/or operations. The Second Lien Investor agrees
that Senior Creditor owes no fiduciary duty to the Second Lien Investor in
connection with the administration of the Senior Obligations, the Credit
Agreement and the other Loan Documents, and the Second Lien Investor agrees
not
to assert any such claim.
(f) No
payment or distribution to Senior Creditor pursuant to the provisions of this
Subordination Agreement shall entitle the Second Lien Investor to exercise
any
right of subrogation in respect thereof prior to the payment in full of the
Senior Obligations, and the Second Lien Investor agrees that prior to the
satisfaction of all Senior Obligations, it shall not acquire, by subrogation
or
otherwise, any lien, estate, right or other interest in any portion of the
collateral now securing the repayment of the Senior Obligations or the proceeds
therefrom that is or may be prior to, or of equal priority to, any of the Credit
Agreement and the other Loan Documents or the liens, rights, estates and
interests created thereby.
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Effectiveness
in Insolvency Proceedings. This
Subordination Agreement, which the parties hereto expressly acknowledge is
a
“subordination agreement” under Section 510(a) of the Bankruptcy Code,
shall be effective before, during and after the commencement of a Proceeding.
All references in this Subordination Agreement to Borrower shall include
Borrower as a debtor-in-possession and any receiver or trustee for Borrower
in
any Proceeding.
Insolvency
or Bankruptcy by Borrowers. In the event of any Proceeding, the sale of all
or
substantially all of the assets, dissolution, liquidation, or any other
marshaling of the assets and liabilities of Borrower, and unless and until
the
Senior Obligations are irrevocably paid in full:
(g) the
Second Lien Investor will, at Senior Creditor’s request, file any claim, proof
of claim, proof of interest or other instrument of similar character necessary
to enforce the obligations of Borrower in respect of the Subordinated
Obligations;
(h) if
the
Second Lien Investor shall fail to take any action of the type described in
Section 10(a)
above
and as requested by Senior Creditor, Senior Creditor may, as attorney-in-fact
for the Second Lien Investor, take such action on behalf of the Second Lien
Investor;
(i) the
Second Lien Investor hereby appoints the Senior Creditor as such Second Lien
Investor’s agent and grants to the Senior Creditor an irrevocable power of
attorney coupled with an interest, and its proxy, for the purpose of exercising
any and all rights and taking any and all actions available to the Second Lien
Investor in connection with any case by or against Borrower or any obligor
in
any Proceeding, including, without limitation, the right to (i) prove
and vote all claims and to receive and collect all dividends and payments to
which the undersigned would be otherwise entitled, (ii) accept
or reject to the extent to which the Second Lien Investor would be entitled
to
accept or reject, any plan of reorganization, arrangement, extension, or
composition in any such proceedings, and (iii) make
any election under Section 1111(b) of the Bankruptcy Code. In addition, the
Second Lien Investor will execute and deliver to the Senior Creditor such
further powers of attorney, assignments or other instruments as the Senior
Creditor may request in order to enable Senior Creditor to enforce any and
all
claims upon or with respect to any or all Subordinated Obligations and any
of
its other rights hereunder, and to collect and receive any and all payments
or
distributions which may be payable or deliverable at any time upon or with
respect to any Subordinated Obligations; and
(j) no
payment or distribution shall be made on account of any of the Subordinated
Obligations, and the Second Lien Investor will hold in trust for Senior Creditor
and pay over to Senior Creditor, in the form received (with any necessary
endorsements), to be applied to the Senior Obligations, any and all moneys,
dividends, or other assets received in any Proceeding on account of the
Subordinated Obligations; and
(k) the
Second Lien Investors shall not request judicial relief that would hinder,
delay, limit or prohibit the lawful exercise or enforcement of any right or
remedy otherwise available to the Senior Creditor, or oppose or otherwise
contest any request for judicial relief made by the Senior Creditor.
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(l) To
the
extent that the Second Lien Investor has or acquires any rights under
Section 362, 363 or 364 of the Bankruptcy Code with respect to the
Collateral, the Second Lien Investor hereby agrees not to assert such rights
without the prior written consent of the Senior Creditor; provided
that, if
requested by the Senior Creditor, the Second Lien Investor shall seek to
exercise such rights in the manner requested by the Senior Creditor, including
the rights in payments in respect of such rights. Without limiting the
generality of the foregoing sentence, to the extent that Senior Creditor
consents to Borrower’s use of cash collateral under Section 363 of the
Bankruptcy Code or Senior Creditor agrees to provide financing to Borrower
under
Section 364 of the Bankruptcy Code, the Second Lien Investor hereby agrees
not to impede, object to (on grounds of lack of adequate protection, or
otherwise), or otherwise interfere with such use of cash collateral or
financing. The Second Lien Investor specifically agrees that in connection
with
such cash collateral usage or such financing, Borrower (or a trustee appointed
for the estate of Borrower) may grant to the Senior Creditor, for the benefit
of
the Senior Creditor, liens and security interests upon all or any part of the
assets of Borrower, which liens and security interests: (i) shall
secure payments of all Senior Obligations (whether such Senior Obligations
arose
prior to the filing of a Proceeding or thereafter); and (ii) shall
be superior in priority to the liens on and security interests in the assets
of
Borrower held by the Second Lien Investor. The Second Lien Investor (both in
its
capacity as a Second Lien Investor and in its capacity (if any) as a party
which
may be obligated to Borrower or their respective affiliates with respect to
contracts which are part of the Senior Creditor’s Collateral) agrees not to
initiate or prosecute or encourage any other person or entity to initiate or
prosecute any claim, action, objection or other proceeding (A) challenging
the enforceability of the claim of Senior Creditor, (B) challenging the
enforceability of any liens or security interests in any assets securing the
Senior Obligations, or (C) asserting any claims which Borrower may hold
with respect to Senior Creditor. The Second Lien Investor agrees that it will
not object to or oppose a sale or other disposition of any assets securing
the
Senior Obligations (or any portion thereof) free and clear of its security
interests, liens or other claims under Section 363 of the Bankruptcy Code
or any other provision of the Bankruptcy Code (provided that the lien and
security interest of the Second Lien Investor shall attach to the proceeds
of
such sale, and such lien and security interest shall be subject in all respects
to the applicable provisions of this Subordination Agreement) if the Senior
Creditor has consented to such sale or disposition of such assets. The Second
Lien Investor agrees not to assert any right it may have to “adequate
protection” of its interest in the Collateral in any Proceeding and agrees that
it will not seek to have the automatic stay lifted with respect to such
security, without the prior written consent of the Senior Creditor. The Second
Lien Investor waives any claim it may now or hereafter have against the Senior
Creditor in any Proceeding of the application of Section 1111(b)(2) of the
Bankruptcy Code, and/or out of any cash collateral arrangement, or financing
arrangement, or out of any grant of a security interest, under Section 363
or 364 of the Bankruptcy Code, with or by Borrower, as a debtor-in-possession
(or with or by any trustee for the Borrower). The Second Lien Investor agrees
that it will not, in any capacity whatsoever: (a) propose, vote to accept,
or otherwise support confirmation of, a plan of reorganization opposed by the
Senior Creditor, or (b) object to the confirmation of, or otherwise oppose
confirmation of, a plan of reorganization supported by the Senior
Creditor.
6
Senior
Creditor’s Rights. Senior Creditor may, at any
time, and from time to time, without the consent of or notice to the Second
Lien
Investor, without incurring responsibility to the Second Lien Investor and
without impairing or releasing any of Senior Creditor’s rights or any of the
obligations of the Second Lien Investor under this Subordination
Agreement:
(m) Change
the amount, manner, place or terms of payment, or change or extend for any
period the time of payment of, or renew, rearrange or otherwise modify or alter,
the Senior Obligations or any instrument or agreement now or hereafter executed
evidencing, in connection with, as security for or providing for the issuance
of
any of the Senior Obligations in any manner, or enter into or amend in any
manner any other agreement relating to the Senior Obligations (including
provisions restricting or further restricting payments of the Subordinated
Obligations);
(n) Sell,
exchange, release or otherwise deal with all or any part of any property by
whomsoever at any time pledged or mortgaged to secure, howsoever securing,
any
of the Senior Obligations;
(o) Release
any Person liable in any manner for payment or collection of the Senior
Obligations;
(p) Exercise
or refrain from exercising any rights against Borrower or others (including
the
Second Lien Investor); and
(q) Apply
any
sums received by Senior Creditor, by whomsoever paid and however realized,
to
payment of the Senior Obligations in such a manner as Senior Creditor, in its
sole discretion, may deem appropriate.
Documentation
of Subordinated Obligations. The Second Lien Investor shall:
(r) cause
all
Subordinated Obligations to be evidenced by a note, debenture or other
instrument evidencing the Subordinated Obligations,
(s) at
Senior
Creditor’s request, promptly surrender or cause to be surrendered any such note,
debenture, or instrument evidencing the Subordinated Obligations so that a
statement or legend may be entered thereon to the effect that such note,
debenture, or other instrument is subordinated to the Senior Obligations in
favor of Senior Creditor in the manner and to the extent set forth in this
Subordination Agreement,
(t) xxxx
the
books of the Second Lien Investor to show that the Subordinated Obligations
are
subordinated to the Senior Obligations in the manner and to the extent set
forth
in this Subordination Agreement,
(u) cause
all
financial statements of the Second Lien Investor hereafter prepared for delivery
to any person to make specific reference to the provisions of this Subordination
Agreement, and
7
(e) at
Senior
Creditor’s request, promptly provide such documentary evidence as Senior
Creditor may request to confirm the Second Lien Investor’s compliance with the
requirements of this Section 12.
Execution
of Instruments. The Second Lien Investor agrees to execute any and all other
instruments necessary as required by the Senior Creditor to subordinate the
Subordinated Obligations to the Senior Obligations as herein
provided.
Assignment
by each of the Second Lien Investors. The Second Lien Investor will not assign
or transfer (or agree to assign or transfer) to any other Person any claim
the
Second Lien Investor has or may have against Borrower as long as any of the
Senior Obligations remain outstanding, except upon at least ten (10) days
prior written notice to the Senior Creditor and unless such assignment or
transfer (or agreement to make such assignment or transfer) is expressly made
subject to this Subordination Agreement.
Warranties
and Representations. The Second Lien Investor represents and warrants that
(a) the execution, delivery and performance of this Subordination Agreement
by the Second Lien Investor (i) has
been duly authorized by all necessary corporate or company action and
(ii) does
not require the consent or approval of any other Person, (b) neither the
execution nor delivery of this Subordination Agreement nor fulfillment of or
compliance with the terms and provisions hereof will conflict with, or result
in
a breach of the terms, conditions or provisions of, or constitute a default
under, any agreement or instrument (including, without limitation, any of its
formation or governing documents) to which the Second Lien Investor is now
subject, (c) this Subordination Agreement constitutes a legal, valid and
binding obligation of the Second Lien Investor, enforceable against it in
accordance with its terms, and (d) none of the Subordinated Obligations is
or will be subordinated to any other indebtedness of Borrower other than the
Senior Obligations unless otherwise agreed by Senior Creditor.
Waiver
of
Notice of Acceptance. Notice of acceptance of this Subordination Agreement
is
waived, acceptance on the part of Senior Creditor being conclusively presumed
by
its request for this Subordination Agreement and delivery of the same to
it.
Assignment
by Senior Creditor. This Subordination Agreement may be assigned, in whole
or in
part, by Senior Creditor in connection with any assignment or transfer of all
or
any portion of the Senior Obligations.
Section
2. Notices.
All
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be mailed,
faxed or delivered, to the applicable address, or facsimile number set out
below
or to such other address, or facsimile number, as shall be designated by such
party in a notice to the other parties. All such notices and other
communications shall be deemed to be given or made upon the earlier to occur
of
(i) actual
receipt by the relevant party hereto and (ii) (A) if
delivered by hand or by courier, upon delivery; (B) if delivered by mail,
four (4) Business Days after deposit in the mails, postage prepaid; and
(C) if delivered by facsimile, when sent and the sender has received
electronic confirmation of error free receipt. In no event shall a voicemail
message be effective as a notice, communication or confirmation
hereunder.
8
If
to
Senior Creditor:
NSES
12,
LLC
00
Xxxxx
Xxxxxx, Xxxxxxxx X
Xxxxxxxxxx,
Xxxxxxxxxxx 00000
Attention:
Xxxxx
Xxxxxxxx
Telephone: (000)
000-0000 x000
Facsimile:
E-Mail: xxxxxxxxx@xxxxxxxxxxxxxxxx.xxx
If
to
Second Lien Investor:
Attention:
Telephone:
Facsimile:
E-Mail:
If
to the
Borrowers:
KY
USA
Energy, Inc.
000
Xxxxxxxx Xxxx
Xxxxxx,
Xxxxxxxx 00000
Attention:
Telephone:
Facsimile:
Section
3. Governing
Law.
This
Subordination Agreement shall be construed under and governed by the laws of
the
State of New York and applicable federal law.
Severability.
If any provision (or portion of any provision) of this Subordination Agreement
is rendered or declared invalid, illegal or unenforceable by reason of any
existing or subsequently enacted legislation or by a final decision of any
court
of competent jurisdiction, the parties shall promptly meet and negotiate
substitute provisions for those rendered invalid, illegal or unenforceable,
but
all of the remaining provisions will remain in full force and
effect.
Section
4. SUBMISSION
TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) SECOND
LIEN INVESTOR AND BORROWER EACH, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT
COUNSEL, (i) SUBMITS
TO PERSONAL JURISDICTION IN THE STATE OF NEW YORK FOR ANY SUIT, ACTION OR
PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT,
(ii) AGREES
THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION SITTING IN THE STATE OF NEW YORK, (iii) SUBMITS
TO THE JURISDICTION OF SUCH COURTS, AND (iv) TO
THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT THEY WILL NOT BRING ANY ACTION,
SUIT OR PROCEEDING IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE
RIGHT
OF LENDER TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER
FORUM).
9
(b) SECOND
LIEN INVESTOR, BORROWER AND LENDER EACH, BY ACCEPTING THIS AGREEMENT, TO THE
FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY,
WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER
FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING OUT OF, OR IN ANY WAY RELATING TO THIS AGREEMENT OR ANY CONDUCT, ACT
OR
OMISSION OF LENDER, SECOND LIEN INVESTOR OR BORROWER, OR ANY OF THEIR RESPECTIVE
DIRECTORS, OFFICERS, PARTNERS, MEMBERS, MANAGERS, EMPLOYEES, AGENTS OR
ATTORNEYS, OR ANY OTHER PERSON AFFILIATED WITH LENDER, SECOND LIEN INVESTOR
OR
BORROWER, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT
OR
OTHERWISE. SECOND LIEN INVESTOR AND BORROWER EACH HEREBY CONSENTS AND AGREES
TO
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS, IN CONNECTION WITH
ANY
SUIT, ACTION OR PROCEEDING ARISING FROM OR RELATING TO THIS AGREEMENT BY
REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED
TO
SECOND LIEN INVESTOR OR BORROWER, AS APPLICABLE, AT THE ADDRESS SET FORTH
HEREINABOVE.
Counterparts.
This Subordination Agreement may be executed in two or more counterparts, and
it
shall not be necessary that the signatures of all parties be contained together
on any one counterpart of this Subordination Agreement. Each counterpart will
be
deemed an original, but all counterparts taken together will constitute one
and
the same agreement.
Entire
Agreement; Amendment. THIS SUBORDINATION AGREEMENT REFLECTS THE ENTIRE AGREEMENT
OF THE PARTIES WITH RESPECT TO THE MATTERS COVERED BY THIS SUBORDINATION
AGREEMENT AND CANNOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR
SUBSEQUENT ORAL AGREEMENTS AMONG ANY OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL
AGREEMENTS AMONG THE PARTIES. This Subordination Agreement may be amended and
the rights of any party under this Subordination Agreement may be waived only
pursuant to a written agreement signed by each of the parties to this
Subordination Agreement.
[Signatures
Begin on the Following Page]
10
IN
WITNESS WHEREOF, the undersigned have caused this instrument to be executed
by
their duly authorized undersigned officers effective as of the date first set
forth above.
| SECOND LIEN INVESTORS: | ||
| |
|
|
| By: _______________________________________ | ||
| Name:_____________________________________ | ||
| Title:______________________________________ | ||
Signature
Page to the Subordination Agreement
IN
WITNESS WHEREOF, the undersigned have caused this instrument to be executed
by
their duly authorized undersigned officers effective as of the date first set
forth above.
| BORROWERS: | ||
|
KY
USA Energy, Inc.,
a
Kentucky corporation
|
||
| |
|
|
| By: _______________________________________ | ||
| Name:_____________________________________ | ||
| Title:______________________________________ | ||
Signature
Page to the Subordination Agreement
IN
WITNESS WHEREOF, the undersigned have caused this instrument to be executed
by
their duly authorized undersigned officers effective as of the date first set
forth above.
| SENIOR CREDITOR: | ||
|
NSES
12, LLC,
a
Delaware limited liability company
|
||
| |
|
|
| By: _______________________________________ | ||
| Name:_____________________________________ | ||
| Title:______________________________________ | ||
Signature
Page to the Subordination Agreement
