Exhibit 10.15
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT, made and entered into this 17th day of
April, 2000, by and between GUILDMASTER, INC., hereinafter called Client; XXXXX
X. XXXXXXX, hereinafter called Creditor; and GE CAPITAL COMMERCIAL SERVICES,
INC., a North Carolina corporation, hereinafter called Factor.
WITNESSETH:
WHEREAS, Client has requested Factor to factor accounts receivable
owing to or from Client or to accept Client as a credit risk or extend credit or
other financial accommodation to or for the account or benefit of Client, but
Factor is unwilling to do so unless it first receives certain assurances from
Creditor and Client; and
WHEREAS, in order to induce Factor at its sole discretion to extend
credit or other financial accommodation to or for the account or benefit of
Client, or to factor accounts receivable owing to or from Client or to accept
Client as a credit risk, and to grant such renewals or extensions thereof as
Factor may deem advisable, Creditor and Client are willing to grant Factor such
assurances;
NOW, THEREFORE, for and in consideration of the premises and of the
covenants hereinafter contained and other valuable considerations, the parties
hereto agree as follows:
1. Representations. Creditor and Client warrant and represent that:
(a) As of the date hereof the total indebtedness owed by the
Client to Creditor is $910,539.67. Indebtedness, as used herein shall mean all
present and future indebtedness of Client to Creditor directly or indirectly
incurred from time to time, of whatever nature and howsoever arising, absolute
or contingent, including but not limited to, any negotiable instruments
evidencing the same, all debts, demands, claims, rights, causes of action,
liabilities or other obligations of any kind now existing or hereafter arising.
(b) In the event there are (or may hereafter be) such
instruments evidencing the Indebtedness, such instruments shall at the option of
Factor be either delivered to Factor or the instruments shall be endorsed as
follows: A Subject to that certain agreement of subordination executed by
GuildMaster, Inc., as Client, and Xxxxx X. Xxxxxxx, as Creditor, and GE Capital
Commercial Services, Inc. on the 17th day of April, 2000.
(c) The Indebtedness or any interest therein or any collateral
or security therefore has not been assigned or transferred to any person, firm
or corporation; nor will the Indebtedness or any interest therein or any
collateral or security therefore be transferred or assigned, in whole or in
part, without the prior written consent of Factor.
2. Subordination. The Creditor hereby subordinates the Indebtedness and
all security therefore to the payment and performance of any and all debts,
obligations and liabilities of the Client now or hereafter owed to Factor,
whether absolute or contingent, due or to become due, now existing or hereafter
arising, and whether direct or acquired by transfer, assignment or otherwise.
The Client shall not pay and the Creditor will not accept payment of or assert
or seek to enforce or collect or foreclose against the Client, without the prior
written consent of Factor, the Indebtedness or any collateral or security
therefore, unless and until Factor shall have been paid in full on all debts,
obligations and liabilities of any nature whatever that may be due from the
Client. The Creditor will hold in trust and immediately pay to Factor in the
same form of payment received, for application upon amounts owing or hereafter
owing Factor from the Client, any amounts the Client pays to the Creditor on the
Indebtedness. If the Creditor in violation of this agreement, commences or
participates in, directly or indirectly, any suit, action or proceeding against
Client, or attempts in any way to enforce or collect or foreclose the
Indebtedness or any collateral therefore, the Client may interpose as
a defense the making of this agreement, and Factor shall be allowed to intervene
or interpose such defense, and thus be entitled to restrain such actions by the
Creditor.
3. Assignment. As additional collateral for all debts, obligations and
liabilities of the Client now or hereafter owed to Factor, now existing or
hereafter arising, absolute or contingent, and whether direct or acquired by
transfer, assignment or otherwise, the Creditor hereby assigns and transfers to
Factor the Indebtedness and any and all collateral or security therefore. The
Creditor irrevocably authorizes Factor to collect, receive, enforce and accept
any and all sums or distributions of any kind that may become due and payable in
respect of the Indebtedness and to do any and all things with the same power and
authority that the Creditor might or could have done with respect to the
Indebtedness if this agreement had not been executed, including but not limited
to, the making, filing and proving of claims therefore in any bankruptcy,
receivership, reorganization, or dissolution proceedings or otherwise. The net
amount received by Factor from the Indebtedness shall be applied to the payment
of all amounts due and to become due from the Client to Factor, and the excess,
if any, shall be returned to Creditor. The Client and Creditor agree to execute,
upon request of Factor, any and all documents, instruments and assurances
necessary or appropriate to effectuate the intent of this assignment.
4. Continuance of Agreement. This agreement and obligations of the
Client and the Creditor and the rights and privileges of Factor hereunder shall
continue until payment in full of all claims of Factor notwithstanding any
action or nonaction to Factor with respect thereto or any collateral therefore
and any guaranties thereof. It is agreed that Factor may at any time in its
discretion renew or extend any debts, liabilities or obligations of the Client,
waive or release any collateral or security therefore, and make compromises and
settlements with the Client and all other persons without notice to or further
assent from the Creditor or Client and without in any way affecting the rights
of Factor hereunder.
5. Benefit. This agreement shall be binding upon the Creditor and
Client, and their respective heirs, personal representatives, successors and
assigns, and shall inure to the benefit of Factor, and its successors and
assigns.
IN WITNESS WHEREOF, the parties have executed this agreement on the
date first above written.
GUILDMASTER, INC.
(Client)
By: /s/ Xxx Xxxxx
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Title: President
/s/ XXXXX X. XXXXXXX
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XXXXX X. XXXXXXX, Creditor
GE CAPITAL COMMERCIAL SERVICES, INC.
By: /s/
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Title: Vice President
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