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EXHIBIT 4.(ii)(c)(15)
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT, DATED AS OF MARCH 25, 1997 (THE
"SUBORDINATION AGREEMENT"), IS MADE BY AND AMONG GREAT AQ STEAMBOAT, LLC (THE
"DEBTOR"), THE DELTA QUEEN STEAMBOAT CO., A DELAWARE CORPORATION, ITS SUCCESSORS
AND ASSIGNS ('DQSB"), AND DQSB II, INC., A DELAWARE CORPORATION, ITS SUCCESSORS
AND ASSIGNS (TOGETHER WITH DQSB, THE "SUBORDINATED CREDITORS"), AND THE UNITED
STATES OF AMERICA, REPRESENTED BY THE SECRETARY OF TRANSPORTATION, ACTING BY AND
THROUGH THE MARITIME ADMINISTRATOR (THE "SECRETARY" OR THE "SENIOR CREDITOR",
AND TOGETHER WITH THE DEBTOR AND THE SUBORDINATED CREDITORS, THE "PARTIES").
W I T N E S S E T H:
WHEREAS, the Debtor is successor to Great AQ Steamboat Co. ("Great
AQ"), the latter of which issued certain Obligations in August 1995, which were
guaranteed by the Secretary pursuant to Title XI of the Merchant Marine Act,
1936 (the "Guarantee");
WHEREAS, in connection with the Guarantee, Great AQ executed that
certain promissory note in favor of the Secretary, as obligee, in the amount of
the Bonds (the "Secretary's Note"), and, pursuant to Endorsement No. 1 to
Secretary's Note, dated as of the date hereof, the Debtor has assumed payment of
the Secretary's Note;
WHEREAS, the Subordinated Creditors are entitled to payment of certain
amounts by the Debtor (the "Distributions") under the terms of the Debtor's LLC
agreement (sometimes hereinafter referred to as the "LLC Agreement" or the
"Subordinated Documents");
WHEREAS, the Debtor has entered into and assumed that certain Security
Agreement, Contract No. MA-13048 (the "Security Agreement"), dated the date
hereof, with the Secretary in connection with the Guarantee; and
WHEREAS, the Debtor has agreed in the Security Agreement to make no
Distributions to its Members except in certain circumstances, and, in
consideration of the Secretary's consent to the restructuring of, and assumption
of the Obligations by the Debtor, and in order to induce the Secretary to
continue the Guarantee of the Obligations as so assumed, the Debtor and the
Subordinated Creditors wish to conform the provisions of the LLC Agreement with
the terms of the Title XI Reserve Fund and Financial Agreement (the "RFFA"),
and, inter alia, to subordinate payment due the Subordinated Creditors under the
LLC Agreement to payment of the Secretary's Note,
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NOW THEREFORE, in consideration of the premises and the mutual
agreements contained herein, and of other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. DEFINITIONS. For purposes of this Subordination Agreement,
capitalized terms used but undefined herein shall have the meanings ascribed to
them in Schedule X to the Security Agreement, and the following terms shall
have the following meanings:
"Senior Debt" means all amounts and other obligations (including,
without limitation, all principal, interest, fees, expenses and indemnities)
now or hereafter owing from the Debtor, its successors and assigns, to the
Senior Creditor, its successors and assigns, including, without limitation, all
amounts owing under the Secretary's Note, or any promissory notes, security
agreements, guaranties or other documents or instruments related thereto
whenever executed.
"Senior Liens" means all liens, mortgages, security interests
and/or other incumbrances of any nature or type, now or hereafter securing, in
whole or in part, any of the Senior Debt.
"Senior Loan Documents" means any agreements, documents, or
instruments now or hereafter evidencing or securing all or any portion of the
Senior Debt, including, without limitation, the Secretary's Note.
"Subordinated Debt" means all amounts and other obligations
(including, without limitation, all principal, interest, fees, expenses and
indemnities) now or hereafter owing from the Debtor, its successors and
assigns, to the Subordinated Creditors, their successors or assigns, under the
LLC Agreement.
"Subordinated Loan Documents" means any agreements, documents, or
instruments now or hereafter evidencing or securing all or any portion of the
Subordinated Debt, including without limitation, the LLC Agreement.
2. CONSENT OF SUBORDINATED CREDITORS. Notwithstanding any of the
terms of the Subordinated Loan Documents, each Subordinated Creditors do
hereby subordinate the Debtor's payment of any Distribution to which it is
entitled under the Subordinated Loan Documents to the Debtor's payment of all
amounts due under the Senior Loan Documents; provided, however, that the Debtor
may pay a Distribution as set forth herein.
3. SUBORDINATION OF SUBORDINATED DEBT. So long as no default, or
event which with notice or the passage of time or both would constitute a
default, has occurred or is continuing under or with respect to the Senior Loan
Documents or the Subordinated Loan Documents, the Debtor may repay the
Subordinated Debt only to the extent the Debtor is permitted to pay dividends
under the terms of the RFFA;
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provided, however, that in no event shall the sum of the payment of the
Subordinated Debt or the Subordinated Notes plus the payment of dividends exceed
the amount specified in Section 13(c)(1) of the RFFA.
4. SUBORDINATED CREDITORS AND LIENS. Subordinated Creditors
hereby agree that so long as the Senior Debt remains outstanding, the
Subordinated Debt shall not be secured by any liens, security interests,
mortgages, hypothecations, or any other type of incumbrance whatsoever.
5. DISTRIBUTIONS UPON DEBTOR INSOLVENCY. (a) Upon (i) any
distribution of assets of Debtor in connection with any dissolution, winding up
or liquidation of the Debtor (whether in bankruptcy, insolvency, or
receivership proceedings, upon an assignment for the benefit of creditors or
otherwise), (ii) any other marshaling of the assets and liabilities of the
Debtor, or (iii) the reorganization of the Debtor (the events in clauses (i),
(ii) and (iii) above hereinafter collectively referred to as "Debtor
Insolvency"), Senior Creditor will first be entitled to receive payment in
full, in accordance with the terms of the Senior Loan Documents, of all sums
owing under or in respect of the Senior Debt before Subordinated Creditors
shall be entitled to receive from the Debtor any payment owing under the
Subordinated Loan Documents or in respect of the Subordinated Debt.
(b) Upon default by the Debtor under any of the Senior Debt or
Senior Loan Documents, or Debtor Insolvency, Senior Creditor is hereby
irrevocably authorized and empowered (in its own name or in the name of
Subordinated Creditors or otherwise), but shall have no obligation, to demand,
xxx for, collect and receive every payment or distribution referred to herein,
and give acquittance for and to file claims and proofs of claim and to take
such other action with respect to the Subordinated Debt as Senior Creditor may
deem necessary or advisable for the exercise or enforcement of any of its
rights or interests hereunder.
(c) To the extent there are any sums owing in respect of the
Senior Debt, Subordinated Creditors shall duly and promptly take such action as
Senior Creditor may reasonably request (i) to collect the Subordinated Debt
for the account of the Senior Creditor and to file appropriate claims or proofs
of claim in respect of the Subordinated Debt; (ii) to execute and deliver to
Senior Creditor such powers of attorney, assignments or other instruments as
Senior Creditor may request in order to enable Senior Creditor to enforce any
and all of the Subordinated Creditors' claims with respect to the Subordinated
Debt, and (iii) to collect and receive any and all payments or distributions
which may be payable or deliverable upon or with respect to the Subordinated
Debt.
6. PAYMENTS RECEIVED CONTRARY TO THIS AGREEMENT. All payments or
distributions upon or with respect to the Subordinated Debt which are received
by Subordinated Creditors contrary to the provisions of this Agreement, shall
be received in trust for the benefit of Senior Creditor, shall be segregated
from other funds and property held by the Subordinated Creditors and shall be
forthwith paid to Senior Creditor in the same form as so received (with any
necessary endorsement) to be
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applied to the payment or prepayment of the Senior Debt in accordance with the
terms of the Senior Loan Documents.
7. DEFAULT AND ENFORCEMENT OF SUBORDINATED DEBT. In the event of
a default with respect to the Senior Debt or the Subordinated Debt, or event
which with notice or the passage of time or both would constitute a default,
has occurred or is continuing under or with respect to the Senior Debt or the
Subordinated Debt, the Debtor shall not repay the Subordinated Debt unless and
until the Senior Debt has been paid in full; provided, however, that in the
event of a default under the Subordinated Debt, the Subordinated Creditors may
seek recourse against the Debtor, but only with the prior written consent of
the Secretary, which shall be granted or withheld in his sole discretion.
8. DEFAULT AND NET WORTH OF DEBTOR. In the event and during the
continuance of any default by the Debtor or the Subordinated Creditors in the
observance or performance of any of the provisions of this Subordination
Agreement, the Subordinated Debt shall forthwith cease to be included in New
Worth, as defined in the RFFA, without any requirement for notice, demand, or
other action by the Secretary.
9. DEBTOR'S REPRESENTATIONS AND WARRANTIES. The Debtor hereby
represents and warrants to the Secretary (a) that the factual statements set
forth in the recitals herein are true and accurate; and (b) that it has made
all Senior Loan Documents available to the Subordinated Creditors.
10. SUBORDINATED CREDITORS' REPRESENTATIONS AND WARRANTIES. The
Subordinated Creditor each hereby represents and warrants to the Secretary (a)
that the factual statements set forth in the recitals herein are true and
accurate; and (b) that it has either reviewed all the Senior Loan Documents or
hereby waives such review.
11. SPECIFIC PERFORMANCE. Subordinated Creditors hereby agree
that Senior Creditor is hereby authorized to demand specific performance of
this Agreement at any time Subordinated Creditors shall have failed to comply
with any of the provisions of this Agreement applicable to it. Subordinated
Creditors hereby irrevocably waive any defense based on the adequacy of a
remedy at law, which might be asserted as a bar to such remedy of specific
performance.
12. ASSIGNMENTS AND OTHER INSTRUMENTS. Subordinated Creditors
agree to execute and deliver to Senior Creditor such assignments or other
instruments as may be requested by Senior Creditor to enable it to enforce its
rights hereunder, and to collect any and all dividends or other payments or
disbursements which may be made at any time on account of all or any of the
Subordinated Debt so long as any Senior Debt remains due and unpaid.
13. REFERENCES TO SUBORDINATION. Upon the request of the
Secretary, Subordinated Creditors (a) shall cause the Subordinated Loan
Documents, and any amendment, renewal or extension thereof, to refer, in form
and substance satisfactory to the Secretary, to the fact that the indebtedness
evidenced by each such instrument is
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subordinated to the Senior Debt under this Subordination Agreement; (b) shall
further xxxx its books of accounts in such a manner as shall be effective to
give proper notice of the effect of this Agreement; and (c) shall, at any time
and from time to time, promptly execute and deliver all additional instruments
and documents, and take all further action, as may be necessary or desirable, in
the opinion of Senior Creditor, to protect any right or interest granted or
purported to be granted by this Agreement and to enable Senior Creditor to
exercise and enforce its rights and remedies hereunder.
14. NO LIABILITY FOR ACTIONS BY SENIOR CREDITOR. The parties
hereto agree that Senior Creditor shall not be liable for any action or
failure to act under or in connection with any of the documents or instruments
creating the Senior Liens or the Senior Debt, it being understood that the
decision of whether and when to act and the manner of proceeding under such
instruments and documents are within the sole discretion of Senior Creditor and
shall not be affected in any manner by the existence of the Subordinated Debt
and the Subordinated Liens. The parties hereto further agree that such
obligations as may be imposed under the documents and instruments creating the
Senior Liens or under the Uniform Commercial Code or other applicable laws
shall run exclusively to the benefit of the Senior Creditor and may be enforced
or waived by the Senior Creditor and not by the Subordianted Creditor.
15. NO DUTY TO INFORM SUBORDINATED CREDITORS. Nothing in this
Agreement shall be construed as imposing on Senior Creditor an obligation to
inform Subordinated Creditors of any defaults arising under the Senior Loan
Documents or to provide Subordinated Creditors with any financial or other
information of which Senior Creditor is or becomes aware with respect to the
Debtor. Without limiting the generality of the foregoing, Senior Creditor
shall not be obligated to provide Subordinated Creditors with a notice that an
event of default has occurred under the Senior Loan Documents.
16. RIGHTS OF SUBROGATION. Subordinated Creditors agree that no
payment or distribution to Senior Creditor pursuant to the provisions of this
Agreement shall entitle Subordinated Creditors to exercise any rights of
subrogation in respect thereof until the Senior Debt has been paid in full.
17. NO ASSIGNMENT OF SUBORDINATED DEBT. Subordinated Creditors
shall not, without Senior Creditor's prior written consent, sell, assign,
pledge, encumber or otherwise dispose of any of the Subordinated Debt, and any
attempt to do so shall be null and void ab initio.
18. OBLIGATIONS HEREUNDER NOT AFFECTED. All rights and interests
of Senior Creditor hereunder, and all agreements and obligations of the
Subordinated Creditors hereunder, shall remain in full force and effect
irrespective of: (a) any lack of validity or enforceability of the Senior Loan
Documents or any other agreement or instrument relating thereto; (b) any change
in the time, manner or place of payment of, or in any other term of, all or any
of the Senior Debt, or any other amendment or waiver of or any consent to the
departure from the Senior Loan Documents; (c) any exchange, release or
nonperfection of any Senior Lien, or any release or amendment or waiver of
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or consent to departure from any guaranty supporting all or any portion of the
Senior Debt; or (d) any other circumstances which might otherwise constitute a
defense available to, or a discharge of the Debtor in respect of the Senior Debt
or Subordinated Creditors in respect of this Agreement. This Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Senior Debt is rescinded or must be otherwise returned
by Senior Creditor upon Debtor Insolvency, all as though such payment had not
been made.
19. WAIVER. Subordinated Creditors and the Debtor hereby waive
promptness, diligence, notice of acceptance and any other notice with respect
to any of the Senior Debt and this Agreement and any requirement that Senior
Creditor protect, secure or insure any security interest or lien or property
subject thereto or exhaust any right or take any action against the Debtor or
any other person or entity or any collateral.
20. MISCELLANEOUS
(a) GOVERNING LAW. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns, and
shall be construed and enforced in accordance with the laws of the District of
Columbia.
(b) SEVERABILITY. If any of the provisions or terms of this Agreement
shall for any reason be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other of the terms hereof, and this
agreement shall be construed as if such unenforceable term had never been
contained herein.
(c) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original Agreement but all of
which together shall constitute one and the same instrument.
(d) HEADINGS. The descriptive headings herein are for convenience only
and shall not affect the meaning or construction of any of the provisions
hereof.
(e) NOTICES. All notices and other communications provided for in
this Agreement shall be in writing or (unless otherwise specified) by telex,
telegram or facsimile transmission and shall be mailed (with first class postage
prepaid, return receipt requested) or sent or delivered to each party at the
address set forth under its name on the signature page hereof, or at such other
address as shall be designated by such party in a written notice to each other
party. Except as otherwise specified, all such notices and communications if
duly given or made shall be effective upon receipt.
(f) CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES. The Subordinated
Creditors hereby irrevocably submit to the jurisdiction of any federal court
sitting in the District of Columbia, in any action or proceeding brought to
enforce or otherwise arising out of or relating to this Agreement, and
irrevocably waives to the fullest extent permitted by law any objection which it
may now or hereafter have to the laying of venue in any such action or
proceeding in such forum and hereby further irrevocably waives any claim that
such forum is an inconvenient forum. The Subordinated Creditors agree
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that a final judgement in any such action or proceeding shall be conclusive and
may be enforced in any other jurisdiction by suit on the judgement or in any
manner provided by law. Nothing herein shall impair the right of Senior
Creditor or the holder of the Senior Loan Documents to bring any action or
proceeding againt Subordinated Creditors or their respective properties in the
courts of any other jurisdiction, and Subordinated Creditors irrevocably submit
to the nonexclusive jurisdiction of the appropriate courts of the jurisdiction
or jurisdictions in which the Subordinated Creditors are incorporated, or
sitting in any place or places where property or an office of Subordinated
Creditors are located.
(g) ENTIRE AGREEMENT; AMENDMENT. This Agreement represents
the entire Agreement between the parties hereto and, except as expressely
provided herein, shall not be affected by reference to any other documents.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but such may be accomplished only by an
instrument in writing signed by the parties hereto.
(h) COSTS OF ENFORCEMENT. Subordinated Creditors agree to
pay to Senior Creditor any and all costs and expenses, including attorney's
fees, incurred by Senior Creditor as a result of Subordinated Creditors'
default hereunder and/or in protecting and/or enforcing the rights of Senior
Creditor under this Agreement whether or not a lawsuit is commenced.
Attorneys' fees, in either case, shall include services rendered at both the
trial and appellate levels, as well as services rendered subsequent to
judgement and obtaining execution thereon. Costs and expenses, including
attorneys' fees, shall be considered as part of the Senior Debt, as that term
is used herein.
(i) CONTINUING AGREEMENT. This Agreement is solely for
the benefit of, and shall be enforceable by the Senior Creditor, and its
successors, transferees and assigns, and no other person or persons shall have
any right, benefit, priority, or interest under, or because of the existence
of, this Agreement. This Agreement is a continuing agreement and shall (a)
remain in full force and effect until the Senior Debt shall have been paid in
full, and (b) be binding on Subordinated Creditors, their respective successors
or assigns. Without limiting the generality of the foregoing, Senior Creditor
may assign or otherwise transfer any other promissory note held by it
evidencing the Senior Debt to any other person or entity, and such other person
or entity shall thereupon become vested with all the rights in respect thereof
granted to Senior Creditor herein.
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IN WITNESS WHEREOF, the parties have duly executed or have caused
this Agreement to be duly executed by their respective signatories hereunto
duly authorized, and have duly caused their seals to be affixed hereto as of
the date and year irst above written.
THE SUBORDINATED CREDITORS
THE DELTA QUEEN STEAMBOAT CO.
BY: /s/ Jordan X. Xxxxx
--------------------------
Name: Jordan X. Xxxxx
Title: Senior Vice President
Address:
Facsimile No.
DQSB II, INC.
BY: /s/ Jordan X. Xxxxx
--------------------------
Name: Jordan X. Xxxxx
Title: Senior Vice President
Address:
Facsimile No.
THE SENIOR CREDITOR
UNITED STATES OF AMERICA
SECRETARY OF TRANSPORTATION
MARITIME ADMINISTRATOR
BY: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Secretary
Address:
Facsimile No.
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THE DEBTOR
GREAT AQ STEAMBOAT, LLC
BY: THE DELTA QUEEN STEAMBOAT CO., A
DELAWARE CORPORATION, A MANAGING
MEMBER
By: /s/ Jordan X. Xxxxx
-------------------------
Name:
Title:
Address:
Facsimile No.
BY: DQSB II, INC., A DELAWARE
CORPORATION, A MANAGING MEMBER
By: /s/ Jordan X. Xxxxx
-------------------------
Name:
Title:
Address:
Facsimile No.
