TERM NOTE
Exhibit
4.2
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US
$10,000,000
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________________,
2008
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FOR
VALUE
RECEIVED, the undersigned, KY USA ENERGY, INC., a Kentucky corporation (the
“Borrower”),
HEREBY PROMISES TO PAY in accordance with the Credit Agreement referred to
below, to the order of NSES 12, LLC, a Delaware limited liability company (the
“Lender”),
the
principal sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000), or so much
thereof as may be advanced to the Borrower from time to time in immediately
available funds, together with interest on the unpaid principal balance of
this
Term Note (this “Note”)
from
time to time outstanding at the rate per annum and in the manner set forth
in
the Credit Agreement (herein defined); provided
that in
no event shall interest on this Note ever be charged, paid, taken or received
at
a rate greater than the highest lawful rate. Interest on the principal balance
outstanding from time to time under this Note shall be calculated in accordance
with the Credit Agreement and shall be due and payable as set forth in the
Credit Agreement. Additionally, in the event of prepayment of the principal
balance of this Note in whole or in part, accrued interest on the principal
portion prepaid shall also be due and payable at the time of prepayment. Accrued
interest on any principal balance outstanding hereunder post-maturity (whether
brought about by acceleration or otherwise) shall be due and payable on demand.
The final maturity of this Note, unless demanded or accelerated earlier, shall
be as set forth in the Credit Agreement, at which time all principal and accrued
interest then unpaid shall be due and payable in full.
This
Note
is a Term Note as referred to in, and is subject to and is entitled to the
benefits of, that certain Senior Secured Credit Agreement dated as of
______________, 2008, by and between Borrower and Lender (as amended,
supplemented or modified from time to time, the “Credit
Agreement”).
All
capitalized terms used herein and not otherwise defined herein shall have the
meanings given thereto in the Credit Agreement. The Credit Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events. If this Note shall be collected
by
legal proceedings or through a bankruptcy court, or shall be placed in the
hands
of an attorney for collection after default or maturity (regardless of how
maturity is brought about), the Borrower agrees to pay all costs of collection,
including reasonable attorneys’ fees.
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It
is the
intention of the Borrower and the Lender to comply with applicable state and
federal usury laws now or hereafter enacted. Accordingly, and notwithstanding
any provision to the contrary herein or in any Security Document or in any
other
document related thereto, in no event shall this Note, any Security Document
or
any other document related thereto require payment or permit the collection
of
interest in excess of the maximum amount permitted by such laws. If, for any
reason whatsoever, the interest paid or received on this Note during its full
term produces a rate which exceeds the highest lawful rate applicable to the
holder, the holder of this Note shall refund to the Borrower or, at the holder’s
option, credit against the principal of this Note such portion of said interest
as shall be necessary to cause the interest paid on this Note to produce a
rate
equal to the highest lawful rate. All sums paid or agreed to be paid to the
holder of this Note for the use, forbearance or detention of the indebtedness
evidenced hereby shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread in equal parts throughout the full term of this
Note, so that the interest rate is uniform throughout the full term of this
Note.
Interest
shall be calculated on the unpaid principal balance of this Note from time
to
time outstanding from the date of each Advance of principal to the date of
repayment in full of such Advance pursuant to the terms of the Credit
Agreement.
The
Borrower hereby authorizes the Lender to enter into Xxxxxx’s records the date
and principal amount of each Advance, and the rate of interest payable thereon,
which shall be binding on the Borrower absent manifest error; provided
that the
failure of the Lender to make any such record entry shall not affect the
obligation of the Borrower to repay each Advance and to pay interest accrued
thereon and other sums payable hereunder.
The
Borrower waives notice (including, but not limited to, notice of protest, notice
of dishonor, notice of intent to accelerate, notice of acceleration) of
presentment for payment and protest and any other notice of any kind except
as
specifically required by the Credit Agreement. No failure to exercise, and
no
delay in exercising any rights hereunder on the part of the holder hereof shall
operate as a waiver of such rights. The Borrower agrees that its liability
on or
with respect to this Note shall not be affected by any release of or change
in
any security at any time existing or by any failure to perfect or maintain
perfection of any lien against or security interest in any such security or
the
partial or complete unenforceability of any guaranty or other surety obligation,
in each case in whole or in part, with or without notice and before or after
maturity.
BORROWER
HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE,
ANY
OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN BORROWER AND LENDER RELATING
TO
THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR
THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN XXXXXX AND BORROWER. THE SCOPE
OF
THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT
MAY
BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.)
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY
OR
IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
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THE
OBLIGATIONS OF BORROWER UNDER THIS NOTE ARE TO BE PERFORMED IN THE STATE OF
NEW
YORK AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS PRINCIPLES OF
CONFLICTS OF LAWS.
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Remainder of this Page was Intentionally Left Blank]
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IN
WITNESS WHEREOF, Xxxxxxxx has executed this Note as of the date first above
written.
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KY
USA Energy, Inc., a Kentucky corporation
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By:
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Name:
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Title:
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[Signature
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