Exhibit 10.25.3
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT ("Subordination Agreement") dated April
23, 2004 is by and between CONGRESS FINANCIAL CORPORATION (FLORIDA), a Florida
corporation, in its capacity as agent pursuant to the Senior Creditor Agreements
(as hereinafter defined) acting for and on behalf of the parties thereto as
lenders (in such capacity the "Senior Creditor Agent" as hereinafter further
defined), and KADAMPANATTU CORP., a Delaware corporation ("Junior Creditor" as
hereinafter further defined). Senior Creditors (hereinafter defined) and Junior
Creditor are sometimes individually referred to herein as "Creditor" and
collectively as "Creditors."
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Junior Creditor has entered into two (2) separate Bareboat
Charter Party Agreements (the "Charter Party Agreements" as hereinafter further
defined) with Trailer Bridge Inc., a Delaware corporation ("Debtor" as
hereinafter further defined) pursuant to which Junior Creditor has chartered to
Debtor certain barges;
WHEREAS, Junior Creditor is the record and beneficial owner of all of
the issued and outstanding shares of Series B Preferred Stock of Debtor (the
"Series B Stock");
WHEREAS, Senior Creditors have entered or are about to enter into
financing arrangements with Debtor pursuant to which Senior Creditors may, upon
certain terms and conditions, make loans and provide other financial
accommodations to Debtor secured by substantially all of the assets and
properties of Debtor; and
WHEREAS, in order to induce Senior Creditor to enter into the financing
arrangements with Debtor, Junior Creditor has agreed to the subordination in
right of payment of the existing and future obligations of Debtor to Junior
Creditor to the payment of the existing and future obligations of Debtor to
Senior Creditor and related matters as set forth below;
NOW, THEREFORE, in consideration of the mutual benefits accruing to
Creditors hereunder and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto do hereby agree
as follows:
1. DEFINITIONS
As used above and in this Subordination Agreement, the following terms
shall have the meanings ascribed to them below, and capitalized terms used
herein and not defined herein shall have the meanings ascribed to them in the
Senior Loan Agreement:
1.1 "Agreements" shall mean, collectively, the Senior
Creditor Agreements and the Junior Creditor Agreements.
1.2 "Charter Party Agreements" shall mean the Jax-San Xxxx
Charter Party Agreement and the San Xxxx-Jax Charter Party Agreement, as each
now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
1.3 "Creditors" shall mean, collectively, Senior Creditors
and Junior Creditor and their respective successors and assigns.
1.4 "Debtor" shall mean Trailer Bridge Inc., a Delaware
corporation, and its successors and assigns, including without limitation a
receiver, trustee or debtor-in-possession on behalf of such person or on behalf
of such successor or assign.
1.5 "Deferred Charter Payments" shall mean $1,675 per vessel
per day commencing March 1, 2004, and continuing through December 31, 2004 and
representing the difference between the $10,050 per vessel per day charter hire
under the Charter Party Agreements and the $8,375 per vessel per day required to
be paid in cash.
1.6 "Jax-San Xxxx Charter Party Agreement" shall mean the
Bareboat Charter Party, dated February 1992, between Junior Creditor and Debtor
with respect to the charter hire of the vessel Jax-San Xxxx Bridge, as the same
now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
1.7 "Junior Creditor" shall mean Kadampanattu Corp., a
Delaware corporation, and its successors and assigns.
1.8 "Junior Creditor Agreements" shall mean the (a) Jax-San
Xxxx Charter Party Agreement, (b) San Xxxx-Jax Bridge Charter Party Agreement
(c) the Series B Certificate of Designation, (d) the Junior Note, and (e) all
agreements, documents and instruments at any time executed and/or delivered to,
with or in favor of Junior Creditor in connection therewith or related thereto,
as the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
1.9 "Junior Debt" shall mean all obligations, liabilities
and indebtedness of every kind, nature and description owing by Debtor to Junior
Creditor, including principal, interest, dividends, redemptions, rights, put
rights, charges, fees, premiums, indemnities and expenses, however evidenced,
whether as principal, surety, endorser, guarantor, whether arising under or
evidenced by the Junior Creditor Agreements or otherwise, whether now existing
or hereafter arising, whether arising before, during or after the initial or any
renewal term of the Junior Creditor Agreements or after the commencement of any
case with respect to Debtor under the U.S. Bankruptcy Code or any similar
statute (and including, without limitation, any principal, interest, fees,
costs, expenses and other amounts, whether or not such amounts are allowable in
whole or in part, in any such case or similar proceeding), whether direct or
indirect, absolute or contingent, joint or several, due or not due, primary or
secondary, liquidated or unliquidated, secured or unsecured, and whether arising
directly or howsoever acquired by Junior Creditor.
1.10 "Junior Note" shall mean the Promissory Note, dated
April 23, 2004, issued by Debtor in favor of Junior Creditor in the initial
principal amount of $1,641,386.00, with the principal amount to be increased by
an amount equal to the Deferred Charter Payments after such date, as the same
now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
1.11 "Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, encumbrance
(including, but not limited to,
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easements, rights of way and the like), lien (statutory or other), security
agreement or transfer intended as security, including without limitation, any
conditional sale or other title retention agreement, the interest of a lessor
under a capital lease or any financing lease having substantially the same
economic effect as any of the foregoing.
1.12 "Permitted Payments" shall mean the payments that Debtor
is permitted to make and the Junior Creditor may receive pursuant to Section 2.2
hereof.
1.13 "Person" or "person" shall mean any individual, sole
proprietorship, partnership, corporation (including, without limitation, any
corporation which elects subchapter S status under the Internal Revenue Code of
1986, as amended), limited liability company, limited liability partnership,
business trust, unincorporated association, joint stock company, trust, joint
venture, or other entity or any government or any agency or instrumentality or
political subdivision thereof.
1.14 "San Xxxx-Jax Charter Party Agreement" shall mean the
Bareboat Charter Party, dated February 1992, between Junior Creditor and Debtor
with respect to the charter hire of the vessel San Xxxx-Jax Bridge as the same
now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
1.15 "Senior Creditor Agent" shall mean Congress Financial
Corporation (Florida), a Florida corporation, and its successors and assigns, in
its capacity as agent pursuant to the Senior Creditor Agreements acting for and
on behalf of the other Senior Creditors, and any successor or replacement agent.
1.16 "Senior Creditor Agreements" shall mean, collectively,
the Senior Loan Agreement and all agreements, documents and instruments at any
time executed and/or delivered by Debtor or any other person to, with or in
favor of any Senior Creditor in connection therewith or related thereto, as all
of the foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated, refinanced, replaced or restructured (in whole or
in part and including any agreements with, to or in favor of any other lender or
group of lenders that at any time refinances, replaces or succeeds to all or any
portion of the Senior Debt).
1.17 "Senior Creditors" shall mean, collectively, Senior
Creditor Agent and any other person party to the Senior Creditor Agreements as
lender (and including any other lender or group of lenders that at any time
refinances, replaces or succeeds to all or a portion of the Senior Debt or is
otherwise party to the Senior Creditor Agreements as a lender).
1.18 "Senior Debt" shall mean all obligations, liabilities
and indebtedness of every kind, nature and description owing by Debtor to any
Senior Creditor and/or its affiliates, or participants, including principal,
interest, charges, fees, premiums, indemnities and expenses, however evidenced,
whether as principal, surety, endorser, guarantor or otherwise, whether arising
under the Senior Creditor Agreements, whether now existing or hereafter arising,
whether arising before, during or after the initial or any renewal term of the
Senior Creditor Agreements or after the commencement of any case with respect to
Debtor under the U.S. Bankruptcy Code or any similar statute (and including,
without limitation, any principal, interest, fees, costs, expenses and other
amounts, whether or not such amounts are allowable either in whole or in
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part, in any such case or similar proceeding), whether direct or indirect,
absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, secured or unsecured, and whether arising directly
or howsoever acquired by any Senior Creditor.
1.19 "Senior Loan Agreement" shall mean the Loan and Security
Agreement, dated of even date herewith, by and among Debtor and Senior
Creditors, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated, replaced or restructured (in whole or
in part and including any agreements with, to or in favor of any other lender or
group of lenders that at any time refinances, replaces or succeeds to all or any
portion of the Senior Debt).
1.20 "Series B Certificate of Designation shall mean the
Certificate of Designation of Series B Preferred Stock of Trailer Bridge, Inc.,
as the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
1.21 All terms used herein which are defined in the Uniform
Commercial Code as in effect in the State of Florida, unless otherwise defined
herein shall have the meanings set forth therein. All references to any term in
the plural shall include the singular and all references to any term in the
singular shall include the plural.
2. SUBORDINATION OF JUNIOR DEBT
2.1 Subordination. Except as specifically set forth in
Section 2.2 below, Junior Creditor hereby subordinates its right to payment and
satisfaction of the Junior Debt and the payment thereof, directly or indirectly,
by any means whatsoever, is deferred to the indefeasible payment and
satisfaction in full of all Senior Debt.
2.2 Permitted Payments. Senior Creditor Agent hereby agrees
that, notwithstanding anything to the contrary contained in Section 2.1, Debtor
may make and Junior Creditor may receive and retain:
(a) all regularly scheduled charter hire payments in
respect of charter services rendered to Debtor, as charterer, on or after
April 1, 2004 (excluding the Deferred Charter Payments) under the Charter Party
Agreements in accordance with the terms of the Charter Party Agreements as in
effect on the date hereof;
(b) on or after January 1, 2005, regularly scheduled
payments in respect of the principal amount of the Junior Note and interest
thereon in accordance with the terms of the Junior Note as in effect on the date
hereof, provided, that, as to each such payment, each of the following
conditions is satisfied as determined by Senior Loan Agent: (i) as of the date
of such payment, the Excess Availability for each of the immediately proceeding
thirty (30) consecutive days shall not have been less than $3,000,000.00 and as
of the date of any such payment and after giving effect thereto, the Excess
Availability shall be not less than $3,000,000.00, and (ii) as of the date of
such payment and after giving effect thereto, no Default or Event of Default
shall exist or have occurred and be continuing under any of the Senior Creditor
Agreements;
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(c) on or after January 1, 2005, regularly scheduled
monthly payments in respect of the aggregate amount of Deferred Charter Payments
in an amount not to exceed $30,000.00 per month and otherwise in accordance with
the terms of the Charter Party Agreements as in effect on the date hereof;
provided, that, as to each such payment, each of the following conditions is
satisfied as determined by Senior Loan Agent: (i) as of the date of such
payment, the Excess Availability for each of the immediately proceeding thirty
(30) consecutive days shall not have been less than $3,000,000 and as of the
date of any such payment and after giving effect thereto, the Excess
Availability shall be not less than $3,000,000, and (ii) as of the date of such
payment and after giving effect thereto, no Default or Event of Default shall
exist or have occurred and be continuing under any of the Senior Creditor
Agreements;
(d) regularly scheduled non-cash dividend payments
in respect of the Series B Stock in the form of additional shares of Series B
Stock; and
(e) regularly scheduled dividend payments in respect
of the Series B Stock in accordance with the terms of the Series B Certificate
of Designation as in effect on the date hereof; provided, that, Senior Creditors
shall have given their prior written consent as to any such payment.
2.3 Distributions.
(a) In the event of any distribution, division, or
application, partial or complete, voluntary or involuntary, by operation of law
or otherwise, of all or any part of the assets of Debtor or the proceeds thereof
to the creditors of Debtor or readjustment of the obligations and indebtedness
of Debtor, whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors, marshalling of assets of
Debtor or any other action or proceeding involving the readjustment of all or
any part of indebtedness of Debtor or the application of the assets of Debtor to
the payment or liquidation thereof, or upon the dissolution or other winding up
of Debtor's business, or upon the sale of all or substantially all of Debtor's
assets, then, and in any such event, (i) Senior Creditors shall first receive
indefeasible payment in full in cash of all of the Senior Debt prior to the
payment of all or any part of the Junior Debt, except Permitted Payments under
Section 2.2(a), and (ii) Senior Creditors shall be entitled to receive any
payment or distribution of any kind or character, whether in cash, securities or
other property, which be payable or deliverable in respect of any or all of the
Junior Debt, except Permitted Payments under Section 2.2(a).
(b) In order to enable Senior Creditor Agent to
enforce its rights under Section 2.3(a) above, Senior Creditor Agent is hereby
irrevocably authorized and empowered (in its own name or in the name of Junior
Creditor or otherwise), but shall have no obligation, to enforce claims
comprising any of the Junior Debt by proof of debt, proof of claim, suit or
otherwise and take generally any action which Junior Creditor might otherwise be
entitled to take, as Senior Creditor Agent may deem necessary or advisable for
the enforcement of its rights or interests hereunder.
(c) To the extent necessary for Senior Creditors to
realize the benefits of the subordination of the Junior Debt provided for herein
(including the right to receive any and all payments and distributions which
might otherwise be payable or deliverable with respect
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to the Junior Debt in any proceeding described in Section 2.3(a) or otherwise),
Junior Creditor shall execute and deliver to Senior Creditor Agent such
instruments or documents (together with such assignments or endorsements as
Senior Creditor Agent shall deem necessary), as may be requested by Senior
Creditor Agent.
2.4 Payments Received by Junior Creditor. Except for
payments received by Junior Creditor as provided in Section 2.2 above, should
any payment or distribution or security or instrument or proceeds thereof be
received by the Junior Creditor in respect of the Junior Debt, Junior Creditor
shall receive and hold the same in trust, as trustee, for the benefit of Senior
Creditors, segregated from other funds and property of Junior Creditor and shall
forthwith deliver the same to Senior Creditor Agent (together with any
endorsement or assignment of Junior Creditor where necessary), for application
to any of the Senior Debt. In the event of the failure of Junior Creditor to
make any such endorsement or assignment to Senior Creditor Agent, Senior
Creditor Agent, or any of its officers or employees, are hereby irrevocably
authorized on behalf of Junior Creditor to make the same.
3. ACKNOWLEDGEMENT OF LIENS. Junior Creditor does not and will not
have and will not assert any lien, right of distraint or levy, right of offset,
claim, deduction, counterclaim, security or other interest in any other assets
or properties of Debtor, or in the proceeds and products thereof.
4. JUNIOR CREDITOR AGREEMENTS. The Junior Creditor Agreements are
in full force and effect on this date and there exists no continuing condition
or event which constitutes a default or event of default or which, after notice
or passage of time or both would constitute a default or event of default under
any of the Junior Creditor Agreements. Junior Creditor hereby acknowledges and
consents to the financing arrangements provided by Senior Creditor Agent and
Senior Creditors to Debtor.
5. COVENANTS, REPRESENTATIONS AND WARRANTIES
5.1 Additional Covenants. Junior Creditor and Debtor agree
in favor of Senior Creditors that:
(a) except as specifically set forth in Section 2.2
above, Debtor shall not, directly or indirectly, make and Junior Creditor shall
not, directly or indirectly, accept or receive any payment of principal or
interest or any prepayment or non-mandatory payment or any other payment
pursuant to acceleration or claims of breach or any payment to acquire Junior
Debt or otherwise in respect of any Junior Debt;
(b) so long as Permitted Payments under Section
2.2(a) hereunder are current, after giving effect to all grace periods under the
Charter Party Agreements as in effect on the date hereof, and without limitation
upon the right to cure in favor of Senior Creditor Agent as set forth in Section
6 hereof, notwithstanding any rights or remedies available to it under the
Junior Creditor Agreements, applicable law or otherwise, Junior Creditor shall
not, directly or indirectly, (i) seek to collect from Debtor any of the Junior
Debt or exercise any of its rights or remedies upon a default or event of
default by Debtor under the Junior Creditor Agreements or otherwise, (ii)
commence any action or proceeding against Debtor or its properties under the
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U.S. Bankruptcy Code or any state insolvency law or any similar present or
future statute, law or regulation or any proceedings for voluntary liquidation,
dissolution or other winding up of Debtor's business, or the appointment of any
trustee, receiver or liquidator for Debtor or any part of its properties or any
assignment for the benefit of creditors or any marshalling of assets of Debtor,
(iii) exercise any rights or remedies against any assets or properties of Debtor
or (iv) take any other action against Debtor or its properties
(c) Debtor shall not grant to Junior Creditor and
Junior Creditor shall not acquire any security interest, lien, claim or
encumbrance on any assets or properties of Debtor or any guarantees for any of
the Junior Debt;
(d) Junior Creditor and Debtor shall not amend,
modify, alter or change the terms of any arrangements related to the Junior Debt
in any manner which is or could reasonably be expected to be adverse to the
interests of Debtor or Senior Creditor;
(e) Junior Creditor shall not sell, assign, pledge,
encumber or otherwise dispose of any of the Junior Debt or Series B Stock and
guarantees, if any, or subordinate any of the Junior Debt to any indebtedness of
Debtor other than the Senior Debt. Notwithstanding the preceding sentence,
nothing herein shall restrict assignment or distribution of the Junior Debt or
Series B Stock to, or at the direction of, the Estate of X.X. XxXxxx for
distribution, resolution or settlement thereof, subject in each case to the
provisions of this Subordination Agreement other than the preceding sentence;
(f) Junior Creditor and Debtor shall, at any time or
times upon the request of Senior Creditor Agent, promptly furnish to Senior
Creditor Agent a true, correct and complete statement of the outstanding Junior
Debt; and
(g) Junior Creditor and Debtor shall execute and
deliver to Senior Creditor Agent such additional agreements, documents and
instruments and take such further actions as may be necessary or desirable in
the opinion of Senior Creditor Agent to effectuate the provisions and purposes
of this Subordination Agreement.
5.2 Additional Representations and Warranties. Junior
Creditor and Debtor represent and warrant to Senior Creditors that:
(a) as of the date hereof the total principal amount
of the Junior Note is $1,641,386.00;
(b) Junior Creditor has no security interest, lien,
claim or encumbrance on any assets and properties of Debtor;
(c) as of the date hereof, no default or event of
default, or event which with notice or passage of time or both would constitute
an event of default exists or has occurred under the Junior Creditor Agreements;
(d) Junior Creditor is the exclusive legal and
beneficial owner of all of the Junior Debt and the Series B Stock;
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(e) none of the Junior Debt is subject to any
subordination, except in favor of Senior Creditors; and
(f) this Subordination Agreement has been duly
authorized, executed and delivered by Junior Creditor and constitutes the legal,
valid and binding obligations of Junior Creditor, enforceable in accordance with
its terms.
5.3 Waivers. Notice of acceptance hereof, the making of
loans, advances and extensions of credit or other financial accommodations to,
and the incurring of any expenses by or in respect of, Debtor by any Senior
Creditor, and presentment, demand, protest, notice of protest, notice of
nonpayment or default and all other notices to which Junior Creditor and Debtor
are or may be entitled are hereby waived (except as expressly provided for
herein or as to Debtor, in the Senior Creditor Agreements). Junior Creditor also
waives notice of, and hereby consents to, (a) any amendment, modification,
supplement, renewal, restatement or extensions of time of payment of or increase
or decrease in the amount of any of the Senior Debt or to the Senior Creditor
Agreements or any collateral at any time granted to or held by any Senior
Creditor, (b) the taking, exchange, surrender and releasing of collateral at any
time granted to or held by any Senior Creditor or guarantees now or at any time
held by or available to any Senior Creditor for the Senior Debt or any other
person at any time liable for or in respect of the Senior Debt, (c) the exercise
of, or refraining from the exercise of any rights against Debtor or any other
obligor or any collateral at any time granted to or held by any Senior Creditor,
(d) the settlement, compromise or release of, or the waiver of any default with
respect to, any of the Senior Debt, and/or (e) any Senior Creditor's election,
in any proceeding instituted under the U.S. Bankruptcy Code of the application
of Section 1111(b)(2) of the U.S. Bankruptcy Code. Any of the foregoing shall
not, in any manner, affect the terms hereof or impair the obligations of Junior
Creditor hereunder. All of the Senior Debt shall be deemed to have been made or
incurred in reliance upon this Subordination Agreement.
5.4 Subrogation; Marshalling. Junior Creditor shall not be
subrogated to, or be entitled to any assignment of any Senior Debt or Junior
Debt or of any collateral for or guarantees or evidence of any thereof until all
of the Senior Debt is indefeasibly paid and satisfied in full. Junior Creditor
hereby waives any and all rights to have any collateral or any part thereof
granted to or held by any Senior Creditor marshalled upon any foreclosure or
other disposition of such collateral by any Senior Creditor or Debtor with the
consent of Senior Creditor Agent.
5.5 No Offset. In the event Junior Creditor at any time
incurs any obligation to pay money to Debtor, Junior Creditor hereby irrevocably
agrees that it shall pay such obligation in cash or cash equivalents in
accordance with the terms of the contract governing such obligation and shall
not deduct from or setoff against any amounts owed by the Junior Creditor to
Debtor in connection with any such transaction any amounts the Junior Creditor
claims are due to it with respect to the Junior Debt, except Permitted Payments.
6. NOTICE OF DEFAULT AND OPTION TO CURE
6.1 Senior Creditor Option to Cure. Senior Creditor Agent on
behalf of Senior Creditors shall have the right, but not any obligation, to cure
for the account of Debtor
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any default by Debtor under the Junior Creditor Agreements at any time prior to
the expiration of all applicable cure and notice periods with respect thereto
under the Junior Creditor Agreements, but in no event for a period of less than
sixty (60) days following the receipt by Senior Creditor Agent of notice of such
default by Debtor in accordance with Section 6.2 below. In the event that a
default under the Junior Creditor Agreements shall be cured (it being understood
that cure shall be deemed to have been effected upon payment of such amount as
shall cause a default under the Junior Creditor Agreements no longer to exist),
whether by Senior Creditor Agent for the benefit of Senior Creditors, Debtor or
any other person, or shall be waived or otherwise cease to exist, the rights of
Junior Creditor to take action to enforce its Liens on any of the collateral
securing the Junior Debt or assert any claims or interests therein, or exercise
any other similar remedies with respect thereto or commence any action or
proceeding against Debtor under the U.S. Bankruptcy Code or any state insolvency
law in the event of the failure of Debtor to make any regularly scheduled
payment in respect of the Junior Debt in accordance with the terms of the Junior
Creditor Agreements (as in effect on the date hereof) shall cease until the
occurrence of any other default under the Junior Creditor Agreements. In no
event shall Senior Creditor Agent or Senior Creditors by virtue of the payment
of amounts, or performance of any obligation required to be paid or performed by
Debtor, be deemed to have assumed any obligation of Debtor to Junior Creditor or
any other person.
6.2 Notice of Default. Each Creditor shall give to the other
Creditor concurrently with the giving thereof to Debtor, (a) a copy of any
written notice by such Creditor of either a default or an event of default under
its Agreements or written notice of demand of payment from Debtor, and (b) any
written notice sent by a Creditor to Debtor at any time an event of default
under such Creditors' Agreements exists stating such Creditors' intention to
exercise any of its enforcement rights or remedies, including written notice
pertaining to any foreclosure on any of the collateral securing the Senior Debt
or the Junior Debt or other judicial or non-judicial remedy in respect thereof,
and any legal process served or filed in connection therewith; provided, that,
the failure of any party to give notice as required hereby shall not affect the
relative priorities of Creditors' respective Liens as provided herein or the
validity or effectiveness of any such notice as against Debtor. Debtor hereby
authorizes and consents to each of Creditors sending any such notices.
7. MISCELLANEOUS
7.1 Amendments. Any waiver, permit, consent or approval by
either Creditor of or under any provision, condition or covenant to this
Subordination Agreement must be in writing and shall be effective only to the
extent it is set forth in writing and as to the specific facts or circumstances
covered thereby. Any amendment of this Subordination Agreement must be in
writing and signed by each of the parties to be bound thereby.
7.2 Successors and Assigns.
(a) This Subordination Agreement shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of each of Creditors and its respective successors,
participants and assigns.
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(b) Each Senior Creditor reserves the right to grant
participations in, or otherwise sell, assign, transfer or negotiate all or any
part of, or any interest in, the Senior Debt and the collateral securing same;
provided, that, Junior Creditor shall not be obligated to give any notices to or
otherwise in any manner deal directly with any participant in the Senior Debt
and no participant shall be entitled to any rights or benefits under this
Subordination Agreement except through Senior Creditors. In connection with any
participation or other transfer or assignment, Senior Creditors (i) may disclose
to such assignee, participant or other transferee or assignee all documents and
information which Senior Creditors now or hereafter may have relating to the
Senior Debt or any collateral and (ii) shall disclose to such participant or
other transferee or assignee the existence and terms and conditions of this
Subordination Agreement.
(c) In connection with any assignment or transfer of
any or all of the Senior Debt, or any or all rights of Senior Creditors in the
property of Debtor (other than pursuant to a participation) at any time prior to
the full repayment of the Junior Debt (whether at, before or after maturity of
the Junior Debt), Junior Creditor agrees to execute and deliver an agreement
containing terms substantially identical to those contained herein in favor of
any such assignee or transferee and, in addition, will execute and deliver an
agreement containing terms substantially identical to those contained herein in
favor of any third person who succeeds to or replaces any or all of Senior
Creditors' financing of Debtor, whether such successor financing or replacement
occurs by transfer, assignment, "takeout" or any other means.
7.3 Insolvency. This Subordination Agreement shall be
applicable both before and after the filing of any petition by or against Debtor
under the U.S. Bankruptcy Code and all converted or succeeding cases in respect
thereof, and all references herein to Debtor shall be deemed to apply to a
trustee for such Debtor and such Debtor as debtor-in-possession. The relative
rights of Senior Creditors and Junior Creditor to repayment of the Senior Debt
and the Junior Debt, respectively, and in or to any distributions from or in
respect of Debtor or any proceeds of Debtor's property and assets, shall
continue after the filing thereof on the same basis as prior to the date of the
petition, subject to any court order approving the financing of, or use of cash
collateral by, Debtor as debtor-in-possession.
7.4 Bankruptcy Filing. If Debtor shall become subject to a
proceeding under the U.S. Bankruptcy Code and if Senior Creditor Agent desires
to permit the use of cash collateral or to provide financing to Debtor under
either Section 363 or Section 364 of the U.S. Bankruptcy Code, Junior Creditor
agrees as follows: (a) adequate notice to Junior Creditor shall have been
provided for such financing or use of cash collateral if Junior Creditor
receives notice two (2) business days prior to the entry of the order approving
such financing or use of cash collateral and (b) no objection will be raised by
Junior Creditor to any such use of cash collateral or financing. For purposes of
this Section, notice of a proposed financing or use of cash collateral shall be
deemed given when given in the manner prescribed by Section 7.5 hereof to Junior
Creditor.
7.5 Notices. All notices, requests and demands to or upon
the respective parties hereto shall be in writing and shall be deemed to have
been duly given or made: if delivered in person, immediately upon delivery; if
by telex, telegram or facsimile transmission, immediately upon sending and upon
confirmation of receipt; if by nationally recognized overnight courier service
with instructions to deliver the next business day, one (1) business day
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after sending; and if mailed by certified mail, return receipt requested, five
(5) days after mailing. All notices, requests and demands are to be given or
made to the respective parties at their addresses set forth below (or to such
other addresses as either party may designate by notice in accordance with the
provisions of this Section:
If to Junior Creditor: Kadampanattu Corp.
000 X. 00xx Xxxxxx, Xxxxx 00X
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esquire
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Senior Creditors Congress Financial Corporation (Florida), as Agent
000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Portfolio Manager - Trailer Bridge
Telephone No.: 000-000-0000
Telecopy No.: 000-000-0000
Either Creditor may change the address(es) to which all notices,
requests and other communications are to be sent by giving written notice of
such address change to the other Creditor in conformity with this Section 7.5,
but such change shall not be effective until notice of such change has been
received by the other Creditor.
7.6 Counterparts. This Subordination Agreement may be
executed in any number of counterparts, each of which shall be an original with
the same force and effect as if the signatures thereto and hereto were upon the
same instrument. This Subordination Agreement may be delivered by telecopier
with the same force and effect if it were a manually executed and delivered
counterpart.
7.7 Governing Law. The validity, interpretation and
enforcement of this Subordination Agreement and any dispute arising out o the
relationship among the parties hereto, whether in contract, tort, equity or
otherwise shall be governed by the internal laws of the State of Florida,
without regard to principals of conflicts of laws, but excluding any rule of law
that would cause the application of the law of any jurisdiction other than the
laws of the State of Florida.
7.8 Consent to Jurisdiction; Waiver of Jury Trial. Each of
the parties hereto hereby irrevocably consents to the non-exclusive jurisdiction
of the Circuit Court of Dade County, Florida and the United States District
Court for the Southern District of Florida, whichever Senior Creditor Agent may
elect, and waives trial by jury in any action or proceeding with respect to this
Subordination Agreement.
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7.9 Complete Agreement. This written Subordination Agreement
is intended by the parties as a final expression of their agreement and is
intended as a complete statement of the terms and conditions of their agreement.
7.10 No Third Parties Benefited. Except as expressly provided
in Section 6.2, this Subordination Agreement is solely for the benefit of the
Creditors and their respective successors, participants and assigns, and no
other person shall have any right, benefit, priority or interest under, or
because of the existence of, this Subordination Agreement.
7.11 Disclosures, Non-Reliance. Each Creditor has the means
to, and shall in the future remain, fully informed as to the financial condition
and other affairs of Debtor and no Creditor shall have any obligation or duty to
disclose any such information to any other Creditor. Except as expressly set
forth in this Subordination Agreement, the parties hereto have not otherwise
made to each other nor do they hereby make to each other any warranties, express
or implied, nor do they assume any liability to each other with respect to: (a)
the enforceability, validity, value or collectability of any of the Junior Debt
or the Senior Debt or any collateral or guarantee which may have been granted to
any of them in connection therewith, (b) Debtor's title to or right to any of
its assets and properties or (c) any other matter except as expressly set forth
in this Subordination Agreement.
7.12 Term. This Subordination Agreement is a continuing
agreement and shall remain in full force and effect until the indefeasible
satisfaction in full of all Senior Debt and the termination of the financing
arrangements between Senior Creditors and Debtor.
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IN WITNESS WHEREOF, the parties have caused this Subordination
Agreement to be duly executed as of the day and year first above written.
KADAMPANATTU CORP.
By: Xxxx X. XxXxxx
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Title: President
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CONGRESS FINANCIAL CORPORATION
(FLORIDA), AS AGENT
By: /s/ Xxxxx Xxxxxx
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Title: First Vice President
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The undersigned hereby acknowledges and agrees to the foregoing terms
and provisions. By its signature below, the undersigned agrees that it will,
together with its successors and assigns, be bound by the provisions hereof.
The undersigned acknowledges and agrees that: (i) although it may sign
this Subordination Agreement, it is not a party hereto and does not and will not
receive any right, benefit, priority or interest under or because of the
existence of the foregoing Subordination Agreement, (ii) in the event of a
breach by either the undersigned or Junior Creditor of any of the terms and
provisions contained in the foregoing Subordination Agreement, such a breach
shall constitute an "Event of Default" as defined in and under the Senior
Creditor Agreements and (iii) it will execute and deliver such additional
documents and take such additional action as may be necessary or desirable in
the opinion of any Senior Creditor to effectuate the provisions and purposes of
the foregoing Subordination Agreement.
TRAILER BRIDGE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
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Title: Executive Vice President
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