EXHIBIT 10.4
XX Xxxxxx
AGREEMENT OF SUBORDINATION AND ASSIGNMENT
In order to induce THE CHASE MANHATTAN BANK (herein after called the
"Bank"), from time to time to extend credit or other financial accommodations to
Vizacom, Inc. (the "Debtor") or to others upon the Debtor's obligations, or to
acquire obligations, (direct or indirect) of the Debtor, or to have become
obligated to the Bank in any manner, and in consideration of advances, loans,
discounts, extensions of credit or renewals heretofore or hereafter of notes or
other instruments for payment of money and any security agreements relative
thereto, or conditional contracts of sale, chattel mortgages, leases or other
liens or security agreements heretofore or hereafter made by the Debtor, or an
interest or participation therein, and for other good and valuable
consideration, Xxxxx X. Xxxxx (the "Creditor"), and who, if two or more in
number, shall be jointly and severally bound hereunder, hereby agrees that all
claims and demands, and all interest accrued or that may hereafter accrue
thereon which the Creditor now has or may hereafter have or acquire against the
Debtor (the "Claims") are subordinated to the prior payment and satisfaction in
full of all Obligations (as hereafter defined) and are not to be payable, and
that no payment on account thereof, nor any security therefor, shall be
received, accepted or retained by the Creditor unless and until the Debtor has
paid and satisfied in full all of its obligations and liabilities to the Bank
(including all interest accrued or to accrue thereon up to the date of full
payment thereof) of every kind and nature whatsoever, whether represented by
negotiable instruments or other writings, whether direct or indirect, absolute
or contingent, due or not due, secured or unsecured, original, renewed, modified
or extended, now in existence or hereafter incurred, originally contracted with
the Bank, or with another or others and assigned or transferred to or otherwise
acquired by the Bank or in which the Bank may acquire a participation, and
whether contracted by the Debtor alone or jointly and/or severally with another
or others (all of which are hereinafter referred to as "Obligations"). The
Debtor agrees not to make payment of, or give any security for, the Claims to
the Creditor. Until a default in Obligations, or any of them, or until written
notice from the Bank to the Debtor, the Debtor may pay and the Creditor may
receive, accept and retain, interest on the Claims.
The Creditor waives any and all notice of the acceptance of this
subordination and of the creation or accrual of any the Obligations or of any
renewals or extensions thereof from time to time, or of the reliance of the Bank
upon this agreement.
The Creditor hereby consents that the liability of the Debtor or of any
party for or upon the Obligations, may, from time to time, in whole or in part,
be renewed, extended, modified, accelerated, compromised, settled or released by
the Bank and that any collateral security and liens for the Obligations may,
from time to time, in whole or in part, be exchanged, sold, released or
surrendered by the Bank, as it may deem advisable, all without impairing the
subordination contained in this agreement or any notice to or assent from the
Creditor.
Exhibit 10.4
The Creditor does further hereby transfer and assign all right, title and
interest in and to, and grant a security interest in, the Claims to the Bank,
together with any collateral security at any time held or received therefore, as
collateral security for the Obligations. The Creditor hereby irrevocably
authorizes and empowers the Bank in the Creditor's place and stead to demand,
xxx for, collect, compromise, receive (by way of dividends or otherwise) and
take any and all legal proceedings for the recovery on account of the Claims
and, regardless of the amount of the Obligations and whether or not a default
exists, to file proofs of claim for the full amount of the Claims against the
Debtor or the Debtor's property in any statutory or non-statutory proceeding
affecting the Debtor or Claims or any other proceeding and to vote the full
amount of the Claims: (a) for or against any proposal or resolution; (b) for a
trustee or trustees or for a Committee of Creditors; or (c) for the acceptance
or rejection of any proposed arrangement, plan of reorganization, wage earners'
plan, composition, settlement or extension and to receive and collect, for
application on account of the Obligations (including interest accruing
subsequent to the date of filing by or against the Debtor of a petition under
any provisions of the federal bankruptcy laws or any state insolvency laws), any
and all payments or distributions and give acquittance therefor in the name of
the Bank or the Creditor. Should any payment or distribution or collateral
security or proceeds of any collateral security be received or collected by the
Creditor for or on account of the Claims, prior to the satisfaction of all the
Obligations, The Creditor will forthwith deliver same to the Bank in precisely
the form received (except for the Creditor's endorsement where necessary), for
application on account of the Obligations, and the Creditor agrees that, until
so delivered, same shall be deemed received by the Creditor as agent for the
Bank and shall be held in trust by the Creditor as property of the Bank. In the
event of the failure of the Creditor to endorse any instrument for the payment
of money so received by the Creditor payable to the Creditor's order, the Bank
or any officer or employee thereof is hereby irrevocably constituted and
appointed attorney in fact for the Creditor, with full power to make any such
endorsement and with full power of substitution.
The Creditor represents and warrants to the Bank that the Creditor is
solvent and has not granted any security interest in nor made any prior transfer
or assignment of the Claims and the Creditor will not grant a security interest
therein or make any transfer or assignment thereof (except to the Bank) unless
and until the Debtor has paid and satisfied the Obligations.
The Creditor and the Debtor represent to the Bank that the Debtor now owes
the Creditor the principal sum of $ 147,560 on the Claims without counterclaim,
defense or offset and that the indebtedness is not represented by any
instruments or other writings, except such instruments or other writings, if
any, as have been endorsed and/or assigned and delivered by the Creditor to the
Bank simultaneously with the execution of this agreement. The Creditor and the
Debtor further agree that at no time hereafter will any part of the indebtedness
be represented by any instruments or other writings, except such instruments or
other writings, if any, as the Bank shall request to be executed and delivered
to the Bank, or, if payable to the Creditor, shall be endorsed and/or assigned
by the Creditor and delivered to the Bank. In the event that any Claim is not
evidenced by a negotiable instrument, the Creditor hereby agrees that it will
obtain an instrument or document from the Debtor evidencing such claim. The
Creditor further agrees that in the event the Debtor shall at any time hereafter
become otherwise indebted to the Creditor, contingently or otherwise, the
Creditor will require such indebtedness to be evidenced by an instrument or
document signed by the Debtor, and the Creditor will immediately assign, or
endorse without recourse, and deliver to the Bank each and every such instrument
or document, or, at the request of the Bank, in the alternative, will cause any
such instrument or document to indicate that it is subject to this agreement,
and any such instrument or document shall thereupon
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constitute a Claim to which the provisions of this agreement shall also apply.
In the event that such indebtedness is not evidenced by an instrument or
document, it shall nevertheless be deemed subordinated and assigned by virtue of
this agreement. In the event of the failure to endorse any such instrument or
other writing evidencing such Claim, the Creditor farther agrees that, if
payable to the Creditor or to the Creditor's order, the Bank or any officer or
employee thereof is hereby irrevocably constituted and appointed attorney in
fact for the Creditor with full power to make any such endorsement.
The Creditor and the Debtor agree that if, after the satisfaction of all of
the Obligations and prior to the termination of this agreement as hereinafter
provided, the Debtor thereafter becomes liable to the Bank on account of any
additional Obligations, the Bank may presume that the Claims have not been paid
or reduced, nor has the Creditor received any security therefor, and this
agreement of subordination and assignment shall thereupon become immediately
effective with respect to any Claims then in existence or thereafter created
without the necessity of any further act, agreement or writing by or between the
Creditor or the Debtor or the Bank, the intent being that this be a continuing
agreement of subordination and assignment. Additionally, should the Creditor
have received any payment or security on account of the Claims at any time after
the satisfaction by the Debtor of all of the Obligations and before the
termination of this agreement as hereinafter provided, the Creditor will notify
the Bank, in writing, of the receipt thereof. In the event that the Creditor
fails so to notify the Bank and additional Obligations are thereafter created,
the Creditor agrees that if a default occurs with respect to the payment or
performance of any of the terms of such additional Obligations, the Creditor
will immediately pay to the Bank an amount equivalent to any such payment or the
value of such security received.
This agreement shall continue in full force and effect notwithstanding the
death or incapacity of the Creditor (or if it be a partnership, the dissolution
thereof or increase, decrease or change in the partners) and shall be binding
upon the Creditor or the Creditor's estate and the personal representatives,
heirs and successors of the Creditor and the Bank may continue to act in
reliance upon this agreement until actual receipt by the Bank, at the office
where the Debtor's account shall then be maintained, of written notice from the
Creditor, or, in the event of the Creditor's death, from the legal
representative or representatives of such deceased Creditor, of the termination
of this agreement. The Creditor or the Creditor's estate shall nevertheless
remain bound hereunder with respect to Obligations of the Debtor created or
arising theretofore, and with respect to such Obligations and any renewals,
extensions or liabilities arising out of same, this agreement shall continue in
full force and effect and the Bank shall have all of the rights herein provided
for as if no such termination had occurred.
The Debtor hereby agrees that it will render to the Bank upon demand, from
time to time, a statement of the account of the Creditor with the Debtor, that
the Bank shall have access, from time to time, to its books in order that the
Bank may make full and free examination of the state of the accounts of the
Creditor with the Debtor (with the right to make copies thereof) and that it
will duly comply with and perform each and every term of this agreement on its
part required to be performed. The Debtor and the Creditor agree that their
books and records will appropriately show that the Claims are subject to this
agreement of subordination and assignment.
In the event of a breach by either Debtor or the Creditor in the
performance of any of the terms of this agreement, all of the Obligations shall,
without notice or demand, become
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immediately due and payable. Upon the happening of any such event, and at any
time thereafter, the Bank shall have, in addition to all other rights and
remedies, the remedies of a secured party under the New York Uniform Commercial
Code as in effect from time to time.
The Bank, the Creditor and the Debtor, in any litigation (whether or not
arising out of or relating to the Claims or any of the matters contained in this
agreement) in which the Bank and the Creditor and/or the Debtor shall be adverse
parties, WAIVE TRIAL BY JURY and the Creditor and the Debtor in addition waive
the right to interpose any defense based upon any Statute of Limitations or any
claim of laches and any set-off or counterclaim of any nature or description.The
Creditor and the Debtor agree that whenever an attorney (who may be an employee
of the Bank) is used to collect or enforce Claims or to enforce, declare or
adjudicate any rights or obligations under this agreement, whether by suit or by
any other means whatsoever, reasonable attorneys' fees shall be payable by each
The Creditor or the Debtor against whom this agreement or any obligation or
right hereunder is sought to be enforced, declared or adjudicated.
The term "Bank" as used throughout this agreement shall be deemed to
include The Chase Manhattan Bank and all its branches, departments and
divisions, any individual, partnership or corporation acting as nominee or agent
for the Bank, any corporation, the stock of which is owned or controlled
directly or indirectly by The Chase Manhattan Bank, and any endorsees,
successors or assignees of the Bank. The term "Debtor" or the term "Creditor" as
used throughout this agreement shall include the individual or individuals,
association, partnership or corporation named herein as Debtor or Creditor and
(a) any successor individual or individuals, association, partnership or
corporation to which all or substantially all of the business or assets of
either of them shall have been transferred, (b) in case of a partnership Debtor
or Creditor, any general or limited partnership which shall have been created by
reason of, or continued after, dissolution, the admission of any new partner or
partners therein, or the death, resignation or other withdrawal of any partner,
and (c) in the case of a corporate Debtor or the Creditor, any other corporation
into or with which either the Debtor or the Creditor shall have been merged,
consolidated, reorganized or absorbed.
No waiver shall be deemed to be made by the Bank of any of its rights
hereunder unless same shall be in writing, and each waiver, if any, shall be a
waiver only with respect to the specific instance involved, nor shall same
establish a course of conduct.
This agreement may not be changed orally and no executory agreement shall
be effective to change or modify or to discharge, in whole or in part, this
agreement unless such executory agreement is in writing and is signed by the
Bank.
The Creditor hereby authorizes the Bank to sign and file financing
statements at any time with respect to any Claims without the signature of the
Creditor. The Creditor will, however, at any time on request of the Bank, sign
financing statements, trust receipts, security agreements or other agreements
with respect to any of the Claims. Upon the Creditor's failure to do so the Bank
is authorized as the agent of the Creditor to sign any such instrument. The
Creditor agrees to pay all filing fees and to reimburse the Bank for all costs
and expenses of any kind incurred in any way in connection with the Claims.
Any notice to the Bank shall be deemed effective only if sent to and
received at the branch, division or department of the Bank conducting the
transaction or transactions hereunder. Any notice to the Creditor or the Debtor
shall be deemed sufficient if sent to the Creditor or the
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Debtor at the last known address of the Creditor or the Debtor, as the case may
be, appearing on the records of the Bank.
Any provision hereof which may prove unenforceable under any law shall not
affect the validity of any other provision hereof. This agreement shall be
binding upon the undersigned and the heirs, executors, administrators, legal
representatives, successors and assigns of the undersigned and shall be governed
by and construed in accordance with the laws of the State of New York.
The Bank is hereby authorized to fill in any blank space in this agreement
and to date this agreement as of the date when the loan, credit or other
financial accommodation is made or extended and to correct any patent errors
therein.
Notwithstanding the foregoing, the Creditor's obligations shall be
terminated and this agreement shall be of no further force and effect upon the
later to occur of (i) repayment in full by PWR Systems, Inc. of principal and
accrued interest under its promissory note dated April 13, 2001 in the amount of
$600,000 (and any refinancing(s) thereof) payable to The Chase Manhattan Bank
and (ii) December 31, 2001.
IN WITNESS WHEREOF, each of the undersigned has caused this agreement to be
duly executed this 13th day of April, 2001.
Vizacom, Inc. Xxxxx X. Xxxxx
/S/Xxxxxxx XxXxxxxx (L.S.) /S/Xxxxx X. Xxxxx (L.S.)
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Debtor Individual Creditor
By: /S/Xxxxxxx XxXxxxxx 00 Xxxxxxx Xx. Xxxx Xxxxx, XX 00000
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(Member of Firm) (Office) Address
By:
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(Member of Firm) (Office)
0000 Xxxxxxx Xxx Xxx, Xxxxxxx XX 00000
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Address
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