Exhibit 10(c)
SUBORDINATION AGREEMENT
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This agreement (the Agreement") is entered into this 6th day of May,
1997, by and between THIRD COAST CAPITAL, LLC and its assigns, as Lessor, and
SILICON VALLEY BANK, as Creditor, in connection with a lease of equipment by
Lessor to SANDBOX ENTERTAINMENT CORPORATION, as Lessee.
WHEREAS, Lessor and Lessee intend to enter into one or more Lease
Rental Agreements (hereinafter the 'Leases"), wherein Lessee Will lease certain
equipment from Lessor;
WHEREAS, Creditor acknowledges that it is the intent of the parties to
the Leases and this Agreement that Lessor is the owner of and holds clear title
to the equipment under the Leases; and
WHEREAS, Lessor will not enter into the Lease with Lessee without
Creditor's agreement to subordinate its interest in the Equipment to the
interest of Lessor;
NOW, THEREFORE, the parties hereby agree as follows:
(1) The above recitals are incorporated into this Agreement.
(2)(a) For so long as Lessor is the owner of or holds an interest in the
equipment under the Leases, any equipment described in the attached
Schedule 'A' (the "Equipment"), wherever located, shall not to be
subject to Creditor's security interest.
(2)(b) Notwithstanding the terms of Paragraph (2)(a), to the extent that the
Leases are ever determined by judicial action to be security interests
in favor of Lessor, then Creditor hereby subordinates its interest in
the Equipment to the interest of Lessor, and Lessor's security interest
in the Equipment shall be senior to Creditor's security interest in the
Equipment. While Creditor has a subordinate security interest in the
Equipment, Creditor shall not take any action in relation to or
affecting the Equipment, until such time as all of Lessee's obligations
to Lessor with respect to such Equipment, whether existing now or
hereafter, are satisfied in full.
(3) Creditor authorizes Lessor, from time to time, without notice or demand
and without diminishing Creditor's subordination and obligations under
this Agreement, to compromise, renew, alter, extend, accelerate or
otherwise change the terms of the Leases, including time, method and
application of payment.
(4)(a) The priorities specified in this Agreement shall be applicable
irrespective of the time or order of attachment or perfection of any
security interest or the time or order of filing of any financing
statements or other documents, or the giving of any notices of purchase
money security interests or other notices or possession of any
collateral or any statutes, rules or law, or court decisions to the
contraryNotwithstanding the foregoing, in the event the Leases are
determined by judicial action to be security interests in favor of
Lessor, the subordinations and priorities specified in this Agreement
are expressly conditioned upon the nonavoidability and perfection of
Lessor's security interest in the Equipment, and if the Lessor's
security interest in the Equipment is not perfected or is avoidable,
for any reason, then the subordinations and relative priority provided
for in this Agreement shall not be effective as to the particular
equipment which is the subject of the unperfected or avoidable security
interest.
(b) This Agreement is solely for the benefit of Lessor and Creditor (and
their respective successors and assigns), and specifically, is not
entered into for the benefit of Lessee or any third party. In the event
of any litigation between the Lessor and Creditor based upon or arising
out of this Agreement, the prevailing party shall be entitled to
recover all of its costs and expenses, including, without limitation,
reasonable attorneys fees, from the non-prevailing party. LESSOR AND
CREDITOR EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS
AGREEMENT. This Agreement shall be construed in accordance with, and
governed by, the laws of the State of California.
(5) This Agreement may be executed in one or more counterparts which
together shall constitute one document. Each such counterpart shall be
deemed to be an original when so executed and delivered to the other
party to this Agreement.
This Agreement shall remain in force as long as Lessee has any
remaining obligations to Lessor under any Leases.
LESSOR CREDITOR
THIRD COAST CAPITAL, LLC SILICON VALLEY BANK
By: /s/ Miroslav Anic By: /s/ Xxxxxxx X. Xxxxxxxxx
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Title: Miroslan Anic Title: Vice President
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Date: 5/6/97 Date: 5/6/97
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Above is acknowledged and agreed:
LESSEE
SANDBOX ENTERTAINMENT CORPORATION
By: /s/ Xxxx Xxxxxxxx
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Title: Chief Financial Officer
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Date: 5/6/97
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