Document:

blackwater_ex1004.htm

    
      
        

      
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.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

       

      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: 
  SVPblackwater_ex1005.htm

    
      

    
Exhibit 10.5

    
      	
              

            	
                     Non-Revolving Line of Credit
      Note

            
	 
      	
              $2,150,000.00

            
	
              Due:  February
      12, 2011

            	
                       Date:
      February 12, 2010

            

    

     

    Promise to Pay. On or before
February 12, 2011, for value received, Blackwater New Orleans, L.L.C. (the
"Borrower") promises to pay to JPMorgan Chase Bank, N.A., whose address is 201
St. Charles Avenue, New Orleans, LA 70170 (the "Bank") or order, in lawful money
of the United States of America, the sum of Two Million One Hundred Fifty
Thousand and 00/100 Dollars ($2,150,000.00) or so much thereof as may be
advanced and outstanding, plus interest on the unpaid principal balance computed
on the basis of the actual number of days elapsed in a year of 360 days at the
rate of 2.00% per annum (the "Applicable Margin") above the CB Floating Rate
(the interest rate of this Note on any day is referred to herein as the "Note
Rate"), and at the rate of 3.00% per annum above the Note Rate, at the Bank's
option, upon the occurrence of any default under this Note, whether or not the
Bank elects to accelerate the maturity of this Note, from the date such
increased rate is imposed by the Bank.  Any advances repaid may not be
reborrowed.

     

    In no
event shall the interest rate exceed the maximum rate allowed by law. Any
interest payment that would for any reason be unlawful under applicable law
shall be applied to principal.

     

    The
Borrower will pay this sum in consecutive monthly installments of interest only,
commencing February 28, 2010, and continuing on the last day of each calendar
month thereafter. In addition, commencing April 30, 2010, and continuing on the
last day of each calendar month thereafter, the Borrower shall pay principal
installments of Thirty-Five Thousand and 00/100 Dollars ($35,000.00). All unpaid
principal and accrued and unpaid interest is finally due and payable on February
12, 2011.

     

    The
Borrower shall make all payments on this Note and the other Related Documents,
without setoff, deduction, or counterclaim, to the Bank at the Bank's address
above or at such other place as the Bank may designate in writing. If any
payment of principal or interest on this Note shall become due on a day that is
not a Business Day, the payment will be made on the next succeeding Business
Day. Payments shall be allocated among principal, interest and fees at the
discretion of the Bank unless otherwise agreed or required by applicable law.
Acceptance by the Bank of any payment that is less than the payment due at that
time shall not constitute a waiver of the Bank's right to receive payment in
full at that time or any other time.

     

    Authorization for Direct
Payments (ACH Debits). To effectuate
any payment due under this Note or under any other Related Documents, the
Borrower hereby authorizes the Bank to initiate debit entries to Account Number
790342273 at the Bank and to debit the same to such account. This authorization
to initiate debit entries shall remain in full force and effect until the Bank
has received written notification of its termination in such time and in such
manner as to afford the Bank a reasonable opportunity to act on it. The Borrower
represents that the Borrower is and will be the owner of all funds in such
account. The Borrower acknowledges: (1) that such debit entries may cause an
overdraft of such account which may result in the Bank's refusal to honor items
drawn on such account until adequate deposits are made to such account: (2) that
the Bank is under no duty or obligation to initiate any debit entry for any
purpose; and (3) that if a debit is not made because the above- referenced
account does not have a sufficient available balance, or otherwise, the payment
may be late or past due.

     

    Late Fee. Any principal or
interest which is not paid within 10 days after its due date (whether as stated,
by acceleration or otherwise) shall be subject to a late payment charge of five
percent (5.00%) of the total payment due, in addition to the payment of
interest, up to the maximum amount of One Thousand Five Hundred and 00/100
Dollars ($1,500.00) per late charge. The Borrower agrees to pay and stipulates
that five percent (5.00%) of the total payment due is a reasonable amount for a
late payment charge. The Borrower shall pay the late payment charge upon demand
by the Bank or, if billed, within the time specified.

     

    Purpose of Loan. The Borrower
acknowledges and agrees that this Note evidences a loan for a business,
commercial, agricultural or similar commercial enterprise purpose, and that no
advance shall be used for any personal, family or household purpose. The
proceeds of the loan shall be used only for the Borrower's construction of 3
storage tanks and the reconstruction of a dock located at 660 Labauve Dr..
Westwego, LA.

     

    General Definitions. As used
in this Note, the following terms have the following respective
meanings:

     

    
      
        	
                1.

              	
                "Adjusted One Month LIBOR Rate"
      means, for any day, the sum of (i) 2.50% per annum plus (ii) the
      quotient of (a) the interest rate determined by the Bank by reference to
      the Page to be the rate at approximately 11:00 a.m. London time, on such
      date or, if such date is not a Business Day. on the immediately preceding
      Business Day for dollar deposits with a maturity equal to one (1) month,
      divided by (b) one minus the Reserve Requirement (expressed as a decimal)
      applicable to dollar deposits in the London interbank market with a
      maturity equal to one (1)
month.

              

      

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    
      	
              2.

            	
              "Affiliate"
      means any Person which, directly or indirectly, Controls or is
      Controlled by or under common Control with, another Person, and any
      director or officer thereof. The Bank is under no circumstances to be
      deemed an Affiliate of the Borrower or any of its
      Subsidiaries.

            

    

    

    
      
        	
                3.

              	
                "Business Day” means (i)
      with respect to the Adjusted One Month LIBOR Rate, a day (other than a
      Saturday or Sunday) on which banks generally are open in Louisiana and/or
      New York for the conduct of substantially all of their commercial lending
      activities and on which dealings in United States dollars are carried on
      in the London interbank market and (ii) for all other purposes, a day
      other than a Saturday, Sunday or any other day on which national banking
      associations are authorized to be
closed.

              

      

    

     

    
      
        	
                4.

              	
                "CB
      Floating Rate" means the Prime Rate: provided that the CB
      Floating Rate shall, on any day, not be less than the Adjusted One Month
      LIBOR Rate. The CB Floating Rate is a variable rate and any change in the
      CB Floating Rate due to any change in the Prime Rate or the Adjusted One
      Month LIBOR Rate is effective from and including the effective date of
      such change in the Prime Rate or the Adjusted One Month LIBOR Rate,
      respectively.

              

      

    

     

    
      
        	
                5.

              	
                "Collateral"
      means all Property, now or in the future subject to any Lien in
      favor of the Bank, securing or intending to secure, any of the
      Liabilities.

              

      

    

     

    
      
        	
                6.

              	
                "Control"
      as used with respect to any Person, means the power to direct or
      cause the direction of, the management and policies of that Person,
      directly or indirectly, whether through the ownership of Equity Interests,
      by contract, or otherwise. "Controlling" and "Controlled" have meanings
      correlative thereto.

              

      

    

     

    
      
        	
                7.

              	
                "Equity
      Interests" means shares of capital stock, partnership interests,
      membership interests in a limited liability company, beneficial interests
      in a trust or other equity ownership interests in a Person, and any
      warrants, options or other rights entitling the holder thereof to purchase
      or acquire any such equity
interest.

              

      

    

     

    
      
        	
                8.

              	
                "GAAP" means generally
      accepted accounting principles in effect from time to time in the United
      States of America, consistently
applied.

              

      

    

     

    
      
        	
                9.

              	
                "Liabilities"
      means all debts, obligations, and liabilities of every kind and
      character of the Borrower, whether individual, joint and several
      (solidary), contingent or otherwise, now or hereafter existing in favor of
      the Bank. including without limitation, all liabilities, interest, costs
      and fees, arising under or from any note. open account, overdraft, credit
      card, lease, Rate Management Transaction, letter of credit application,
      endorsement, surety agreement, guaranty. acceptance, foreign exchange
      contract or depository service contract, whether payable to the Bank or to
      a third party and subsequently acquired by the Bank, any monetary
      obligations (including interest) incurred or accrued during the pendency
      of any bankruptcy, insolvency, receivership or other similar proceedings,
      regardless of whether allowed or allowable in such proceeding, and all
      renewals, extensions, modifications, consolidations, rearrangements.
      restatements, replacements or substitutions of any of the
      foregoing.

              

      

    

     

    
      
        	
                10.

              	
                "Lien"
      means any mortgage, deed of trust, pledge, charge. encumbrance,
      security interest, collateral assignment or other lien or restriction of
      any kind.

              

      

    

     

    
      
        	
                11.

              	
                "Obligor"
      means any Borrower, guarantor, surety, co-signer, endorser, general
      partner or other Person who may now or in the future be obligated to pay
      any of the Liabilities.

              

      

    

     

    
      
        	
                12.

              	
                "Page"
      means Reuters Screen LIBOR01, formerly known as Page 3750 of the
      Moneyline Telerate Service (together with any successor or substitute, the
      "Service") or any successor or substitute page of the Service providing
      rate quotations comparable to those currently provided on such page of the
      Service, as determined by the Bank from time to time for purposes of
      providing quotations of interest rates applicable to dollar deposits in
      the London interbank market.

              

      

    

     

    
      
        	
                13.

              	
                "Person"
      means any individual, corporation, partnership, limited liability
      company, joint venture, joint stock association. association, bank,
      business trust, trust, unincorporated organization, any foreign
      governmental authority, the United States of America. any state of the
      United States and any political subdivision of any of the foregoing or any
      other form of entity.

              

      

    

     

    
      
        	
                14.

              	
                "Pledgor"
      means any Person providing
Collateral.

              

      

    

     

    
      
        	
                15.

              	
                "Prime
      Rate" means the rate of interest per annum announced from time to
      time by the Bank as its prime rate. The Prime Rate is a variable rate and
      each change in the Prime Rate is effective from and including the date the
      change is announced as being effective. THE PRIME RATE IS A REFERENCE RATE
      AND MAY NOT BE THE BANK'S LOWEST
RATE.

              

      

    

     

    
      
        	
                16.

              	
                "Property"
      means any interest in any kind of property or asset, whether real,
      personal or mixed, tangible or
intangible.

              

      

    

     

    
      
        	
                17.

              	
                "Rate
      Management Transaction" means any transaction (including an
      agreement with respect thereto) that is a rate swap, basis swap, forward
      rate transaction, commodity swap. commodity option, equity or equity index
      swap, equity or equity index option, bond option, interest rate option,
      foreign exchange transaction. cap transaction, floor transaction, collar
      transaction, forward transaction, currency swap transaction,
      cross-currency rate swap transaction, currency option, derivative
      transaction or any other similar transaction (including any option with
      respect to any of these transactions) or any combination thereof, whether
      linked to one or more interest rates, foreign currencies, commodity
      prices, equity prices or other financial
  measures.

              

      

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    

     

    
      
        	
                18.

              	
                "Regulation D" means
      Regulation D of the Board of Governors of the Federal Reserve System as
      from time to time in effect and any successor thereto or other regulation
      or official interpretation of said Board of Governors relating to reserve
      requirements applicable to member banks of the Federal Reserve
      System.

              

      

    

     

    
      
        	
                19.

              	
                "Reserve Requirement"
      means the maximum aggregate reserve requirement (including all basic,
      supplemental, marginal and other reserves) which is imposed under
      Regulation D.

              

      

    

     

    
      
        	
                20.

              	
                "Related Documents"
      means this Note, all loan agreements, credit agreements, reimbursement
      agreements, security agreements, mortgages. deeds of trust, pledge
      agreements, assignments, guaranties, and any other instrument or document
      executed in connection with this Note or in connection with any of the
      Liabilities.

              

      

    

     

    
      
        	
                21.

              	
                "Subsidiary" means. as
      to any particular Person (the "parent"), a Person the accounts of which
      would be consolidated with those of the parent in the parent's
      consolidated financial statements if such financial statements were
      prepared in accordance with GAAP as of the date of determination, as well
      as any other Person of which fifty percent (50%) or more of the Equity
      Interests is at the time of determination directly or indirectly owned,
      Controlled or held, by the parent or by a Person or Persons Controlled by
      the parent, either alone or together with the
  parent.

              

      

    

     

    Bank's Right of Setoff. The
Borrower grants to the Bank a security interest in the Deposits, and the Bank is
authorized to setoff and apply, all Deposits, Securities and Other Property, and
Bank Debt against any and all Liabilities. This right of setoff may be exercised
at any time and from time to time after the occurrence of any default, without
prior notice to or demand on the Borrower and regardless of whether any
Liabilities are contingent, unmatured or unliquidated. In this paragraph: (a)
the term "Deposits" means any and all accounts and deposits of the Borrower
(whether general, special, time, demand, provisional or final) at any time held
by the Bank (including all Deposits held jointly with another, but excluding any
IRA or Keogh Deposits, or any trust Deposits in which a security interest would
be prohibited by law); (b) the term "Securities and Other Property" means any
and all securities and other personal property of the Borrower in
the custody, possession or control of the Bank, JPMorgan Chase & Co. or
their respective Subsidiaries and Affiliates (other than Property held by the
Bank in a fiduciary capacity); and (c) the term "Bank Debt" means all
indebtedness at any time owing by the Bank, to or for the credit or account of
the Borrower and any claim of the Borrower (whether individual, joint and
several (solidary) or otherwise) against the Bank now or hereafter
existing.

     

    Representations by Borrower.
The Borrower represents and warrants that each of the following is and will
remain true and correct until the later of maturity or the date on which all
Liabilities evidenced by this Note are paid in full: (a) the execution and
delivery of this Note and the performance of the obligations it imposes do not
violate any law, conflict with any agreement by which it is bound, or require
the consent or approval of any other Person; (b) this Note is a valid and
binding agreement of the Borrower, enforceable according to its terms, except as
may be limited by bankruptcy, insolvency or other laws affecting the enforcement
of creditor's rights generally and by general principles of equity; (c) all
balance sheets, profit and loss statements, other financial statements and
applications for credit furnished to the Bank in connection with the Liabilities
are accurate and fairly reflect the financial condition of the Persons to which
they apply on their effective dates, including contingent liabilities of every
type, which financial condition has not materially and adversely changed since
those dates; and, if the Borrower is not a natural Person: (i) it is duty
organized, validly existing and in good standing under the laws of the state
where it is organized and in good standing in each state where it is doing
business; and (ii) the execution and delivery of this Note and the performance
of the obligations it imposes (A) are within its powers and have been duly
authorized by all necessary action of its governing body, and (B) do not
contravene the terms of its articles of incorporation or organization, its
by-laws, regulations or any partnership, operating or other agreement governing
its organization and affairs.

     

    Events of
Default/Acceleration. If any of the following events occurs, this Note
shall become due immediately, without notice, at the Bank's option:

     

    
      
        	
                1.

              	
                Any
      Obligor fails to pay when due any of the Liabilities or any other debt to
      any Person, or any amount payable with respect to any of the Liabilities,
      or under this Note, any other Related Document, or any agreement or
      instrument evidencing other debt to any
Person.

              

      

    

    
      
        	
                2.

              	
                Any
      Obligor or any Pledgor: (a) fails to observe or perform or otherwise
      violates any other term, covenant, condition or agreement of any of the
      Related Documents; (b) makes any materially incorrect or misleading
      representation. warranty, or certificate to the Bank; (c) makes any
      materially incorrect or misleading representation in any financial
      statement or other information delivered to the Bank; or (d) defaults
      under the terms of any agreement or instrument relating to any debt for
      borrowed money (other than the debt evidenced by the Related Documents)
      and the effect of such default will allow the creditor to declare the debt
      due before its stated
maturity.

              

      

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    
      
        	
                3.

              	
                In
      the event (a) there is a default under the terms of any Related Document.
      (b) any Obligor terminates or revokes or purports to terminate or revoke
      its guaranty or any Obligor's guaranty becomes unenforceable in whole or
      in part, (c) any Obligor fails to perform promptly under its guaranty, or
      (d) any Obligor fails to comply with, or perform under any agreement, now
      or hereafter in effect, between the Obligor and the Bank, or any Affiliate
      of the Bank or their respective successors and
  assigns.

              

      

    

    
      
        	
                4.

              	
                There
      is any loss, theft, damage, or destruction of any Collateral not covered
      by insurance.

              

      

    

    
      
        	
                5.

              	
                Any
      event occurs that would permit the Pension Benefit Guaranty Corporation to
      terminate any employee benefit plan of any Obligor or any Subsidiary of
      any Obligor.

              

      

    

    
      	
              6.

            	
              Any
      Obligor or any of its Subsidiaries or any Pledgor: (a) becomes insolvent
      or unable to pay its debts as they become due; (b) makes an assignment for
      the benefit of creditors; (c) consents to the appointment of a custodian,
      receiver, or trustee for itself or for a substantial part of its Property;
      (d) commences any proceeding under any bankruptcy, reorganization,
      liquidation, insolvency or similar laws; (e) conceals or removes any of
      its Property. with intent to hinder. delay or defraud any of its
      creditors; (0 makes or permits a transfer of any of its Property, which
      may be fraudulent under any bankruptcy, fraudulent conveyance or similar
      law; or (g) makes a transfer of any of its Property to or for the benefit
      of a creditor at a time when other creditors similarly situated have not
      been paid.

            

    

    
      	
              7.

            	
              A
      custodian, receiver, or trustee is appointed for any Obligor or any of its
      Subsidiaries or any Pledgor or for a substantial part of their respective
      Property.

            

    

    
      
        	
                8.

              	
                 Any
      Obligor or any of its Subsidiaries, without the Bank's written consent:
      (a) liquidates or is
      dissolved; (b) merges or consolidates with any other Person; (c)
      leases, sells or otherwise conveys a material part of its assets or
      business outside the ordinary course of its business; (d) leases,
      purchases, or otherwise acquires a material part of the assets of any
      other Person, except in the ordinary course of its business; or (e) agrees
      to do any of the foregoing; provided, however, that any Subsidiary of an
      Obligor may merge or consolidate with any other Subsidiary of that
      Obligor, or with the Obligor, so long as the Obligor is the
      survivor.

              

      

    

    
      	
              9.

            	
              Proceedings
      are commenced under any bankruptcy, reorganization, liquidation, or
      similar laws against any Obligor or any of its Subsidiaries or any Pledgor
      and remain undismissed for thirty (30) days after commencement; or any
      Obligor or any of its Subsidiaries or any Pledgor consents to the
      commencement of those proceedings.

            

    

    
      	
              10.

            	
              Any
      judgment is entered against any Obligor or any of its Subsidiaries, or any
      attachment, seizure, sequestration, levy, or garnishment is issued against
      any Property of any Obligor or any of its Subsidiaries or of any Pledgor
      or any Collateral.

            

    

    
      
        	
                11.

              	
                Any
      individual Obligor or Pledgor dies, or a guardian or conservator is
      appointed for any individual Obligor or Pledgor or all or any portion of
      their respective Property, or the
Collateral.

              

      

    

    
      
        	
                12.

              	
                Any
      material
      adverse change occurs
      in: (a) the reputation, Property, financial
      condition, business, assets, affairs, prospects, liabilities, or
      operations of any Obligor or any of its Subsidiaries; (b) any Obligor's or
      Pledgor's ability to perform its obligations under the Related Documents;
      or (c) the Collateral.

              

      

    

     

    Remedies. If this Note is not
paid at maturity, whether by acceleration or otherwise, the Bank shall have all
of the rights and remedies provided by any law or agreement, in equity or
otherwise. The Bank is authorized to cause all or any part of the Collateral to
be transferred to or registered in its name or in the name of any other Person,
with or without designating the capacity of that nominee. Without limiting any
other available remedy. the Borrower is liable for any deficiency remaining
after disposition of any Collateral. The Borrower is liable to the Bank for all
reasonable costs and expenses of every kind incurred (or charged by internal
allocation) in connection with the negotiation_ preparation, execution, filing,
recording, modification, supplementing and waiver of this Note or the other
Related Documents and the making, servicing and collection of this Note or the
other Related Documents and any other amounts owed under this Note or the other
Related Documents, including without limitation reasonable attorneys' fees and
court costs. These costs and expenses include without limitation any costs or
expenses incurred by the Bank in any bankruptcy, reorganization, insolvency or
other similar proceeding.

     

    Waivers. Each Obligor waives: (a) to the extent
not prohibited by law, all rights and benefits under any laws or statutes
regarding sureties, as may
be amended; (b) any right to receive notice of the following matters before the
Bank enforces any of its rights: (i) the Bank's acceptance of this Note. (ii)
any credit that the Bank extends to the Borrower, (iii) the Borrower's default,
(iv) any demand, diligence, presentment, dishonor and protest, or (v) any action
that the Bank takes regarding the Borrower, anyone else, any Collateral, or any
of the Liabilities, that it might be entitled to by law, under any other
agreement. in equity or otherwise; (c) any right to require the Bank to proceed against the
Borrower, any other Obligor, or any Collateral, or pursue any remedy in the
Bank's power to pursue; (d) any defense based on any claim that
any endorser's or other Obligor's obligations exceed or are more burdensome than
those of the Borrower; (e)
the benefit of any statute of limitations affecting liability of any endorser or
other Obligor or the enforcement hereof; (f) any defense arising by reason of any
disability or other defense of the Borrower or by reason of the cessation from
any cause whatsoever
(other than payment in full) of the obligation of the Borrower for the
Liabilities; and (g) any defense based on or arising out of any defense that the Borrower
may have to the payment or performance of the Liabilities or any portion
thereof. Each Obligor consents to any extension or
postponement of time of its payment without limit as to the number or period, to
any substitution, exchange
or release of all or any part of the Collateral, to the addition of any other
Person, and to the release or discharge of, or suspension of any rights and remedies
against, any Obligor. The Bank may waive or delay enforcing any of its rights
without losing them. Any waiver affects only the specific terms and time period
stated in the waiver. No modification or waiver of any provision of this Note is effective unless it is in writing and signed by the Person against whom
it is being
enforced.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    Cooperation.
The Borrower agrees to
fully cooperate with the Bank and not to delay, impede or otherwise interfere
with the efforts of the
Bank to secure payment from the Collateral including actions, proceedings,
motions, orders, agreements or other matters relating to relief from automatic stay, abandonment of
Property, use of cash
Collateral and sale of the Collateral free and clear of all Liens.

     

    Rights of Subrogation. Each
Obligor waives and agrees not to enforce any rights of subrogation, contribution
or indemnification that it may have against the Borrower, any other Obligor, or
the Collateral, until the Borrower and such Obligor have fully performed all
their obligations to the Bank, even if those obligations are not covered by this
Note.

     

    Reinstatement. The Borrower
agrees that to the extent any payment or transfer is received by the Bank in
connection with the Liabilities evidenced by this Note, and all or any part of
the payment or transfer is subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be transferred or repaid by the Bank
or transferred or paid over to a trustee, receiver or any other Person, whether
under any bankruptcy act or otherwise (any of those payments or transfers is
hereinafter referred to as a "Preferential Payment"), then this Note shall
continue to be effective or shall be reinstated, as the case may be, even if all
those Liabilities have been paid in full and whether or
not the Bank is in possession of this Note, or whether the Note has been marked
paid, released or canceled, or returned to the Borrower and, to the extent of
the payment, repayment or other transfer by the Bank, the Liabilities or part
intended to be satisfied by the Preferential Payment shall be revived and
continued in full force and effect as if the Preferential Payment had not been
made.

     

    Governing Law and Venue. This
Note shall be governed by and construed in accordance with the laws of the State
of Louisiana (without giving effect to its laws of conflicts). The Borrower
agrees that any legal action or proceeding with respect to any of its
obligations under this Note may be brought by the Bank in any state or federal
court located in the State of Louisiana, as the Bank in its sole discretion may
elect. By the execution and delivery of this Note, the Borrower submits to and
accepts. for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of those courts. The Borrower
waives any claim that the State of Louisiana is not a convenient forum or the
proper venue for any such suit, action or proceeding.

     

    Inability to Determine Interest Rate.
If the Bank determines on any day that quotations of interest rates for
the relevant deposits referred to in the definition of Adjusted One Month LIBOR
Rate are not being provided for purposes of determining the interest rate on the
Note on any day, then the principal balance of this Note shall bear interest at
the Prime Rate plus the Applicable Margin until the Bank determines that
quotations of interest rates for the relevant deposits referred to in the
definition of Adjusted One Month LIBOR Rate are being provided.

     

    Miscellaneous. If more than
one Borrower executes this Note: (i) each Borrower is liable jointly and
severally (solidarily) for the Liabilities evidenced by this Note: (ii) the term
"Borrower" means any one or more of them; and (iii) the receipt of value by any
one of them constitutes the receipt of value by the others. This Note binds the
Borrower and its successors, and benefits the Bank, its successors and assigns.
Any reference to the Bank includes any holder of this Note. This Note is subject
to that certain Credit Agreement by and between the Borrower and the Bank, dated
December 23, 2008, and all amendments, restatements and replacements thereof
(the "Credit Agreement") to which reference is hereby made for a more complete
statement of the terms and conditions under which the loan evidenced hereby is
made and is to be repaid. The terms and provisions of the Credit Agreement are
hereby incorporated and made a part hereof by this reference thereto with the
same force and effect as if set forth at length herein. No reference to the
Credit Agreement and no provisions of this Note or the Credit Agreement shall
alter or impair the absolute and unconditional obligation of the Borrower to pay
the principal and interest on this Note as herein prescribed. Capitalized terms
not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement. Section headings are for convenience of reference only and
do not affect the interpretation of this Note. Any notices and demands under or
related to this Note shall be in writing and delivered to the intended party at
its address stated herein, and if to the Bank, at its main office if no other
address of the Bank is specified herein, by one of the following means: (a) by
hand; (b) by a nationally recognized overnight courier service; or (c) by
certified mail. postage prepaid, with return receipt requested. Notice shall be
deemed given: (a) upon receipt if delivered by hand; (b) on the Delivery Day
after the day of deposit with a nationally recognized courier service: or (c) on
the third Delivery Day after the notice is deposited in the mail. "Delivery Day"
means a day other than a Saturday, a Sunday, or any other day on which national
banking associations are authorized to be closed. Any party may change its
address for purposes of the receipt of notices and demands by giving notice of
such change in the manner provided in this provision. This Note and the other
Related Documents embody the entire agreement between the Borrower and the Bank
regarding the terms of the loan evidenced by this Note and supersede all oral
statements and prior writings relating to that loan. No delay on the part of the
Bank in the exercise of any right or remedy waives that right or remedy. No
single or partial exercise by the Bank of any right or remedy precludes any
other future exercise of it or the exercise of any other right or remedy. No
waiver or indulgence by the Bank of any default is effective unless it is in
writing and signed by the Bank, nor shall a waiver on one occasion bar or waive
that right on any future occasion. The rights of the Bank under this Note and
the other Related Documents are in addition to other rights (including without
limitation, other rights of setoff) the Bank may have contractually, by law, in
equity or otherwise, all of which are cumulative and hereby retained by the
Bank. If any provision of this Note cannot be enforced, the remaining portions
of this Note shall continue in effect. The Borrower agrees that the Bank may
provide any information or knowledge the Bank may have about the Borrower or
about any matter relating to this Note or the Related Documents to JPMorgan
Chase & Co., or any of its Subsidiaries or Affiliates or their successors,
or to any one or more purchasers or potential purchasers of this Note or the
Related Documents. The Borrower agrees that the Bank may at any time sell,
assign or transfer one or more interests or participations in all or any part of
its rights and obligations in this Note to one or more purchasers whether or not
related to the Bank.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    

     

    Government Regulation. The
Borrower shall not (a) be or become subject at any time to any law, regulation,
or list of any government agency (including, without
limitation, the U.S. Office of Foreign
Asset Control list) that prohibits or limits the Bank from making any advance or
extension of credit to the Borrower or from otherwise conducting business with
the Borrower, or (b) fail to provide documentary and other evidence of the
Borrower's identity as may be requested by the Bank at any time to enable the
Bank to verify the Borrower's identity or to comply with any applicable law or
regulation, including. without limitation, Section 326 of the USA Patriot Act of
2001, 3I U.S.C. Section 5318.

     

    USA PATRIOT ACT
Notification.  The following notification is provided to the
Borrower pursuant to Section 326 of the USA Patriot Act of 2001,31 U.S.C.
Section 5318:

     

    Important Information About
Procedures for Opening a New Account. To help the government fight the
funding of terrorism and money laundering activities, Federal law requires all
financial institutions to obtain, verify, and record information that identifies
each Person that opens an account, including any deposit account, treasury
management account, loan, other extension of credit, or other financial services
product. What this means for the Borrower: When the Borrower opens an account,
if the Borrower is an individual, the Bank will ask for the Borrower's name,
taxpayer identification number, residential address, date of birth, and other
information that will allow the Bank to identify the Borrower. and if the
Borrower is not an individual, the Bank will ask for the Borrower's name,
taxpayer identification number, business address, and other information that
will allow the Bank to identify
the Borrower. The Bank may also
ask, if the
Borrower is an individual, to see
the Borrower's driver's
license or other identifying documents, and if the Borrower is not an
individual, to see the Borrower's legal organizational documents or other
identifying documents.

     

    WAIVER OF
SPECIAL DAMAGES. THE BORROWER WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR RECOVER FROM THE BANK IN ANY
LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES.

     

    JURY
WAIVER. THE BORROWER AND THE BANK (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT, OR
OTHERWISE) BETWEEN THE BORROWER AND THE BANK ARISING OUT OF OR IN ANY WAY
RELATED TO THIS NOTE OR THE OTHER RELATED DOCUMENTS. THIS PROVISION IS A
MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING EVIDENCED BY THIS
NOTE.

    

     

    
      	 	BORROWER:
	 
      	 
      
	
              Address:     660
      Labauve Drive

            	
              BLACKWATER
      NEW ORLEANS, L.L.C.

            
	
                                   
      Westwego, LA  70094

            	 
      
	 
      	
              By:     Blackwater
      Midstream Corp., Manager

            
	 
      	 
      
	 
      	 
      
	 
      	
              By: 
      /s/ Dale
      Chatagnier                                        
      

            
	 
      	
              Name:  Dale
      Chatagnier

            
	 
      	
              Title:    Secretary

            

    

    

    
      
         

      

      
        6

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