INTERCREDITOR AND SUBORDINATION AGREEMENT

 

                                                                 Exhibit 10.25.2

 

                    INTERCREDITOR AND SUBORDINATION AGREEMENT

                    -----------------------------------------

 

         THIS INTERCREDITOR AND 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 TRANSPORTATION RECEIVABLES 1992,

LLC, a Delaware limited liability company ("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 financing arrangements with

Trailer Bridge Inc., a Delaware corporation ("Debtor" as hereinafter further

defined) pursuant to which Junior Creditor has provided financial accommodations

to Debtor secured by the assets of Debtor described on Exhibit A hereto (the

"Junior Creditor Collateral");

 

         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      "Common Vehicle Collateral" shall mean the motor

vehicles listed on Schedule 1 to Exhibit A hereto.

 

                1.3      "Creditors" shall mean, collectively, Senior Creditors

and Junior Creditor and their respective successors and assigns.

 

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                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      "Junior Creditor" shall mean Transportation Receivables

1992, LLC, a Delaware limited liability company, and its successors and assigns.

 

                1.6      "Junior Creditor Agreements" shall mean the Subordinated

Note and 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.

 

                1.7      "Junior Debt" shall mean all obligations, liabilities

and indebtedness of every kind, nature and description owing by Debtor to Junior

Creditor, including principal, interest, 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.

 

                1.8      "Lien" shall mean any mortgage, deed of trust, pledge,

hypothecation, assignment, deposit arrangement, security interest, encumbrance

(including, but not limited to, 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.

 

                1.9      "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.

 

                1.10     "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.

 

                1.11     "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

 

 

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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).

 

                1.12     "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).

 

                1.13     "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 or otherwise, 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 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.

 

                1.14     "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

ortion of the Senior Debt).

 

                1.15     "Subordinated Note" shall mean the Consolidated

Promissory Note, dated May 23, 2002, as restated as of the date hereof, issued

by Debtor payable to Junior Creditor in the original principal amount of

$5,000,000, as the same now exists or may hereafter be amended, modified,

supplemented, extended, renewed, restated or replaced.

 

                1.16     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.

 

 

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                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 regularly scheduled cash

interest payments in respect of the Junior Debt in accordance with the terms of

the Subordinated Note as in effect on the date hereof, provided, that, as to

each such cash payment, each of the following conditions is satisfied as

determined by Senior Loan Agent: (a) as of the date of such payment of interest,

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 (b) as of the date of such payment of interest

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.

 

                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, except with respect to the proceeds of the

Junior Creditor Collateral (which shall be solely for the benefit of the Junior

Creditor), (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, 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.

 

                        (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 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.

 

 

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                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.

 

                2.5       Instrument Legend and Notation. Any instrument at any

time evidencing the Junior Debt, or any portion thereof, shall be permanently

marked on its face with a legend conspicuously indicating that payment thereof

is subordinate in right of payment to the Senior Debt and subject to the terms

and conditions of this Subordination Agreement, and the original of any such

instrument shall be immediately delivered to Senior Creditor Agent upon Senior

Creditor Agent's request, at any time on or after the occurrence of an Event of

Default under the Senior Creditor Agreements. In the event any legend or

endorsement is omitted, Senior Creditor Agent, or any of its officers or

employees, are hereby irrevocably authorized on behalf of Junior Creditor to

make the same. No specific legend, further assignment or endorsement or delivery

of notes, guarantees or instruments shall be necessary to subject any Junior

Debt to the subordination thereof contained in this Agreement.

 

                2.6      Standstill Provision. Notwithstanding anything to the

contrary contained in Section 5.1(b) of this Subordination Agreement, Junior

Creditor shall have the right to take action to enforce its Liens in respect of

any Junior Creditor Collateral 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) and for so long

as such event of default is continuing, commencing one hundred and eighty (180)

days after the date of the receipt by Senior Creditor Agent of written notice

from Junior Creditor of the declaration by Junior Creditor of such a default

under the Junior Creditor Agreements and the written demand by Junior Creditor

for the immediate payment of all of the Junior Debt under the Junior Creditor

Agreements, so long as Senior Creditor Agent on behalf of Senior Creditors is

not diligently pursuing in good faith the exercise of its enforcement rights or

remedies against Debtor and/or any collateral that secures the Senior Debt

(including, without limitation, commencement and prosecution of any action to

foreclose on its Liens on all or any portion of the collateral that secures the

Senior Debt, any material reduction of the amount of loans or financial

accommodations otherwise available to Debtor, entering into a forebearance

agreement or similar arrangement with Debtor, any action to take possession of,

or dispose of, all or any portion of the collateral that secures the Senior

Debt, or commencement of any legal proceedings or actions against or with

respect to Debtor or all or any portion of the collateral that secures the

Senior Debt).

 

                2.7      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 during

the one hundred and eighty (180) day period provided for in Section 2.7 above.

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 under Section 2.6 above 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.

 

                2.8      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 requir