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Exhibit 10.4
 
SUBORDINATION AGREEMENT
 
THIS SUBORDINATION AGREEMENT (this "Agreement"), dated as of February 12, 2010
is among BLACKWATER NEW ORLEANS, L.L.C. ("Borrower"), BLACKWATER MIDSTREAM CORP.
("Midstream"), and JPMORGAN CHASE BANK, N.A.. ("Bank"), who agree as follows:
 
RECITALS
 
A.           Borrower and Bank have entered into that certain Credit Agreement
dated as of December 23, 2008 (as it may from time to time be amended, modified
or supplemented, the "Credit Agreement"), pursuant to which the Bank agreed to
make credit facilities available to Borrower upon and subject to the terms and
conditions thereof.
 
B.           Midstream has heretofore loaned Borrower $3,000,000 (the
"Subordinated Advance"), which loan proceeds were derived from a subordinated
debt issuance of Midstream (the "Subordinated Advance").
 
C..           As a condition to increasing the Credit Facilities, Bank requires
that Borrower subordinate the Subordinated Advance to all indebtedness of
Borrower to Bank, now existing and hereafter arising, including the Credit
Facilities.
 
AGREEMENT
 
1.              Subordination. The parties hereto agree as follows:
 
(a)           Midstream hereby subordinates the Subordinated Advance to the
payment and performance in full of all indebtedness of the Borrower to the Bank,
now existing and hereafter arising.
 
(b)           Midstream and Borrower agree that they will not amend the terms of
the Subordinated Advance in any respect without the consent of the Bank.
 
(c)           Midstream and Borrower agree that so long as any indebtedness of
the Borrower to the Bank pursuant to the Credit Agreement is outstanding, the
Borrower will not make and Midstream will not receive any payments of principal
on the Subordinated Advance. So long as no Event of Default (as defined in the
Credit Agreement) exists, Borrower may pay and Midstream may receive payments of
interest on the Subordinated Advance, but following the occurrence and during
the continuance of an Event of Default, Borrower will not make and Midstream
will not receive any payments of interest on the Subordinated Advance.
 
(d)           Borrower and Midstream represent that the Subordinated Advance is
unsecured as of the date of this Agreement and agree that Borrower will not
grant (and Midstream will not accept) a security interest in or pledge of any
assets of the Borrower as security for the Subordinated Advance.
 
2.           Continuance of Agreement. This Agreement shall continue until the
payment in full of the indebtedness of the Borrower to the Bank.
 
3.           WAIVER OF JURY TRIAL. BORROWER, MIDSTREAM AND BANK HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH, THE BORROWER, MIDSTREAM AND
BANK MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS AGREEMENT.
IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY
JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS. THIS
WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER, MIDSTREAM AND
BANK, AND BORROWER, MIDSTREAM AND BANK HEREBY REPRESENT THAT NO REPRESENTATIONS
OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF
TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. BORROWER, MIDSTREAM
AND BANK FURTHER REPRESENT THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL.

 
 

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4.           Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by Borrower, Midstream or the Bank
therefrom shall in any event be effective unless the same shall be in writing
and signed by Borrower, Midstream and the Bank, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
 
5.           Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be deemed to be
effective and all of which when taken together shall constitute one and the same
instrument. Delivery by any party of telecopied copies of executed counterparts
shall constitute delivery hereof by such party.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
 
 

BORROWER:
BLACKWATER NEW ORLEANS, L.L.C.
 
By:  Blackwater Midstream Corp., its Manager
 
       By:  /s/ Dale Chatagnier                          
               Name:  Dale Chatagnier
              Title:  Secretary
        MIDSTREAM:
BLACKWATERMIDSTREAM, CORP.
 
By:  /s/ Dale Chatagnier                          
        Name:  Dale Chatagnier
        Title:  Secretary
    LENDER:
JPMORGAN CHASE BANK, N.A.
 
By:  /s/ William C. Richard                                     
        Name:  William C. Richard
        Title:  SVP

 
 
 

 
 

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