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EXHIBIT 10.19
SUBORDINATION AGREEMENT
DATED: February 25, 2000
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TO: Transcap Trade Finance
000 X. Xxxxxx Xxxx.
Xxxxxxxxxx, XX 00000
Gentlemen:
To induce you to grant financial assistance to BAY AREA MULTIMEDIA, INC., a
California corporation ("Borrower"), under that certain Master Purchase Order
Assignment Agreement of even date herewith, Borrower and Xxx Xxxxx (the
"Creditor"), to whom Borrower is now indebted in the sum of One Million Dollars
($1,000,000), and who will be benefited by the granting of such financial
assistance to Borrower, hereby agree with each other and with you as follows:
1. All existing indebtedness, as well as all future indebtedness, of
Borrower to Creditor, including principal, interest accrued and to accrue
thereon, costs and attorneys' fees recovered thereon in case Creditor shall be
obligated at any time to bring suit thereon, or any part thereof, is and shall
be subordinated to all existing, as well as all future indebtedness of Borrower
to you, including principal, interest accrued and to accrue thereon, and costs
and attorneys' fees recovered thereon, in case you are obligated at any time to
bring suit thereon, all such indebtedness of Borrower to you to be at all times
superior in right to all such indebtedness of Borrower to Creditor.
2. Borrower will not, at any time when such indebtedness is owing to you,
make any payment upon any such indebtedness owing to Creditor, or make any
distribution to Creditor in any form whatsoever, except upon your prior written
consent. If any distribution is made to Creditor in any form whatsoever in
violation of the terms of this agreement, Creditor shall receive the same in
trust for your benefit and shall forthwith remit it to you in the form received
together with such documents as may be necessary to effectively transfer the
same to you.
3. At your request, Creditor shall exhibit to you any original promissory
note or other original evidence of the indebtedness or any part thereof marked
with a conspicuous legend which reads substantially as follows:
"This instrument is subordinated to certain present or future obligations
owing from the maker to Transcap Trade Finance and its assigns."
4. If Borrower shall make a general assignment for the benefit of
creditors or if any proceeding or other action under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors or seeking
appointment of a receiver, trustee, custodian or similar official for
Borrower or any part of Borrower's assets shall be commenced by or against
Borrower, this agreement shall remain in full force and effect and shall
constitute an assignment by Creditor to you of any dividends
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or other amounts payable to Creditor from assets of Borrower, provided, that any
excess of such dividends or other amounts after payment in full of Borrower's
indebtedness to you shall be paid to Creditor.
5. Nothing in this agreement shall be construed as requiring you to grant
any financial assistance or as limiting or precluding you from the exercise of
your own judgment and discretion as to amount and time of payment in extending
accommodations to Borrower, and Creditor hereby consents to and waives notice of
any extension or renewal by you of Borrower's obligations to you.
6. This agreement shall remain in full force and effect until all of
Borrower's obligations to you have been fully satisfied.
7. This agreement shall extend to and bind the respective heirs, personal
representatives, successors and assigns of the parties hereto, and the aforesaid
covenants of Borrower and Creditor respecting subordination of the claim or
claims of Creditor in your favor shall extend to, include and be enforceable by
any transferee or endorsee to whom you may transfer any claim or claims to which
this subordination agreement shall apply.
8. This agreement shall be governed by and construed in accordance with
the laws of the State of Illinois.
9. This agreement may be signed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.
BAY AREA MULTIMEDIA, INC.
By: /s/ XXX XXXXX
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Xxx Xxxxx, President
/s/ XXX XXXXX
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Xxx Xxxxx, individually
Accepted and agreed to this
25 day of February, 2000.
TRANSCAP TRADE FINANCE
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
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TITLE: Senior Credit Manager
Transcap Associates, Inc. G.P.
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