SUBORDINATION AND INTERCREDITOR
AGREEMENT
This Subordination and Intercreditor Agreement
(this “Agreement”) is between Blue Moon Energy Partners
LLC, a Florida limited liability company (the “Subordinate
Creditor”), and the holder of the Senior Note (defined below)
signatory hereto (the “Senior Creditor”), and is dated
as of June 4, 2009.
The Senior Creditor desires to purchase from
Steel Vault Corporation, a Delaware corporation (the
“Issuer”), a Secured Convertible Promissory Note to be
issued in the aggregate principal amount of $500,000.00
(collectively, the “Senior Note”), which Senior Note
will be secured by all personal property of the Issuer pursuant to
a Security Agreement entered into on the date hereof.
Subordinate Creditor has previously purchased
from Issuer a Secured Convertible Promissory Note in the principal
amount of $190,000.00 (the “Subordinate Note”), which
Subordinate Note is secured by all personal property of the Issuer
pursuant to a Security Agreement entered into on March 20,
2009.
Subordinate Creditor is an affiliate of the
Issuer and will derive a substantial benefit from the purchase of
the Senior Note by the Senior Creditor.
The Senior Creditor is unwilling to purchase the
Senior Note unless the Subordinate Note is subordinated to the
Senior Note and to all of the Issuer’s obligations thereunder
in the manner hereinafter set forth.
Accordingly, in consideration of the mutual
covenants and agreements set forth below, the parties agree as
follows:
1. Payment Subordination. Upon the
occurrence and during the continuance of any monetary default or
any event of default under the Senior Note, the Subordinate
Creditor will not accept any payment made by the Issuer in respect
of the Subordinate Note until the Senior Note has been fully paid
and satisfied. Senior Creditor will have no right to demand
payments already made to Subordinate Creditor prior to any such
default or event of default. The Subordinate Creditor will not be
deemed to have any knowledge of any such default or event of
default until it receives written notice thereof from the Senior
Creditor.
2. Lien Subordination.
Notwithstanding the terms or provisions of any agreement or
arrangement which any party may now or hereafter have with the
Issuer or any rule of law and irrespective of the time, order or
method or attachment or perfection of any security interest or the
recordation or other filing in any public record of any financing
statement, any lien, encumbrance or security interest in the
collateral granted to the Senior Creditor by the Issuer, whether or
not perfected, or any other right, title or interest of the Senior
Creditor in such collateral now or hereafter held by the Senior
Creditor or Subordinate Creditor, are and will remain at all
times senior to any lien, encumbrance or security interest in
the collateral granted to the Subordinate Creditor by the Issuer,
whether or not perfected, or any other right, title or interest of
the Subordinate Creditor in the collateral now or hereafter held by
the Subordinate Creditor.
3. Priority of Payments. In case of
any assignment by the Issuer for the benefit of its creditors, any
bankruptcy proceedings instituted by or against the Issuer’s
assets, and any dissolution or other winding up of the affairs of
the Issuer or of the Issuer’s business, and in all such cases
respectively, the authorized representatives and owners of the
Issuer and any assignee, trustee in bankruptcy, receiver, and other
person or persons in charge are hereby directed to pay the Senior
Creditor the full amount owed under the Senior Note before making
any payments owed to Subordinate Creditor under the Subordinate
Note.
4. Conversion Right; Effect of
Conversion. The Senior Creditor agrees that nothing herein will
prevent Subordinate Creditor from exercising its conversion rights
under the Subordinate Note. Upon either (a) the conversion of
the Subordinate Note or (b) the conversion of the Senior Note,
this Agreement will terminate.
5 . Covenants of Subordinate
Creditor. The Subordinate Creditor hereby agrees that so long
as any sum remains outstanding on the Subordinate Note:
a. The Subordinate Creditor will
simultaneously send to the Senior Creditor due notice of all
defaults under the Subordinate Note. The Senior Creditor will have
the right, but not the obligation, to cure any such default within
ten (10) days after the expiration of the applicable grace
period permitted to the Issuer under the Subordinate
Note.
b. The Subordinate Creditor will not,
without the prior written consent of the Senior Creditor, take any
Enforcement Action (hereinafter defined). For the purposes of this
Agreement, the term “Enforcement Action” will mean with
respect to the Subordinate Note, (i) the acceleration of all
or any part of the indebtedness evidenced by the Subordinate Note,
(ii)
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