DEBT SUBORDINATION AGREEMENT
Exhibit
10.26
For
valuable consideration, receipt whereof is hereby acknowledged, and in
consideration of all loans, advances, discounts, renewals or extensions now or
hereafter made, given or continued by TD BANK, N.A., a banking corporation
organized under the laws of the United States of America, with a place of
business at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx, and a mailing address of X.X.
Xxx 0000, Xxxxxxxx, Xxxxx 00000-0000 (hereinafter called the "Bank") to or for
the account of FLOTATION TECHNOLOGIES, INC. (hereinafter called the "Borrower"),
the Borrower and DEEP DOWN, INC. (hereinafter the “Parent Company”) agree with
the Bank as follows:
1. The
Borrower and the Parent Company represent to the Bank that the Borrower now owes
the Parent Company no indebtedness, with the exception of accounts payable and
similar obligations generated in the ordinary course of business between the
Borrower and Parent Company (“Accounts”) and the sum of $23,928,648.98 to be
shown on the balance sheet of the Borrower as a long term liability (“Long Term
Debt”). The Long Term Debt is not represented by any notes or other
negotiable instruments. At no time hereafter will any part of the
Long Term Debt be represented by any notes or other negotiable
instruments. The Parent Company does not expect and will not demand
or accept repayment of the Long Term Debt until all indebtedness of the Borrower
to the Bank is paid in full and is no longer committed (i.e. paid and
canceled).
2. The
term “Junior Debt” shall include the Long Term Debt and all other indebtedness
of the Borrower to the Parent Company now existing or hereafter arising, except
for Accounts. The Parent Company hereby postpones and subordinates
the Junior Debt, and any and all security given for the Junior Debt, to all
indebtedness of the Borrower to the Bank, whether direct or indirect, absolute
or contingent, howsoever created or evidenced, all whether now existing or
hereafter arising, and any extensions, renewals or modifications thereof, the
interest thereon, costs and expenses of administration enforcement and
collection thereof and of enforcement of this Agreement, including, without
limitation, reasonable attorneys' fees, and all other sums payable with respect
thereto (the "Senior Debt"), and all security given for the Senior
Debt. The Parent Company agrees that, without the prior written
consent of Bank, no payment of or on account of the Junior Debt shall be made,
or any security given for the Junior Debt, unless and until all Senior Debt has
been paid in full and is no longer committed (i.e. paid and canceled), and
further agrees not to demand, receive or accept any such payment or security,
either from the Borrower or any endorsers or guarantors of any note or
obligation of Borrower to the Parent Company.
3. The
Parent Company shall not assign, transfer, hypothecate or dispose of all or any
part of the Junior Debt, without the prior consent of Bank. The Bank
shall not be prejudiced in its right to enforce this subordination by any act or
failure to act on the part of the Borrower.
4. Bank
may from time to time enter into such agreements with Borrower as Bank may deem
proper regarding the Senior Debt without notice to the Parent Company, and no
action which the Bank, or the Borrower with the consent of the Bank, may take or
refrain from taking with respect to the Senior Debt, or any collateral held for
the Senior Debt, or any agreement or agreements (including guarantees) in
connection therewith, shall affect or impair this agreement or the obligations
of the Parent Company hereunder.
5. The
Bank's delay in or failure to exercise any right or remedy shall not be deemed a
waiver of any obligation of the undersigned or right of the Bank, and all of the
Bank's rights and remedies shall be cumulative. This Agreement may be modified,
and any of the Bank's rights hereunder waived, only by agreement in writing
signed by the Bank. Upon default in the performance or observance of any of the
covenants, warranties or other terms and conditions of this Agreement by the
Parent Company, the Bank may, at its option, declare all or any part of the
Senior Debt to be immediately due and payable, or pursue any other remedies it
may have against the Parent Company.
6. This
Agreement shall inure to the benefit of the Bank's successors and assigns and
bind the successors and assigns of the Borrower and the Parent
Company.
7. Notice
of acceptance by Bank of this agreement is hereby waived by the Parent Company,
and this Agreement and all of the terms and provisions hereof shall immediately
be binding upon the Parent Company from the date of execution
hereof.
8. This
agreement shall be construed and governed by the laws of the State of
Maine.
IN
WITNESS WHEREOF, the parties have caused this instrument to be executed by their
respective duly authorized officers as of the 13th day of
February, 2009.
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WITNESS:
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____________________________
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By:________________________
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Its
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WITNESS:
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FLOTATION
TECHNOLOGIES, INC.
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____________________________
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By:________________________
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Its
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WITNESS:
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TD
BANK, N.A.
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____________________________
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By:________________________
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Its
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