SUBORDINATION AGREEMENT
THIS AGREEMENT, made as of the 22 day of May, 1996 by and among The Bank
of New York (NJ) hereinafter referred to as ("BANK") and Panasonic
Communications & Systems Company, Division of Matsushita Electric Corporation of
America, a corporation organized and existing under the laws of the State of
Delaware (hereinafter referred to as "PANASONIC").
WHEREAS, Panasonic sells various merchandise from time to time to All
Communications, Inc., with its principal place of business located at 1450 Route
22, Suite 103, Mountainside, NJ, 07092, (hereinafter referred to as "Debtor")
for resale; and
WHEREAS, PANASONIC and Debtor are parties to a certain security agreement
dated May 20, 1992, as amended, and as the same may thereafter be amended from
time to time (hereinafter referred to as the "Panasonic Security Agreement");
and
WHEREAS, PANASONIC, under the terms of the Panasonic Security Agreement
acquired a security interest in all inventory of goods and merchandise now held
or hereafter acquired by Debtor bearing the trademarks "PANASONIC", "TECHNICS",
"RAMSA" or "NATIONAL" either singly or in combination with any other word or
words, and all additions or accessions thereto and all proceeds and products of
such inventory, including without limitation, all documents, instruments,
general intangibles, chattel paper, accounts and
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contract rights (such terms having the meanings ascribed by the Uniform
Commercial Code) of Debtor now existing or hereafter arising out of or with
respect to such inventory of goods and merchandise and all proceeds thereof (all
of which are hereinafter collectively referred to as the "Collateral"), and
PANASONIC has duly perfected its security interest in and to the Collateral; and
WHEREAS, Debtor is or may become obligated to BANK for a loan granted to
Debtor pursuant to a certain loan and security agreement dated May 22, 1996 (the
"BANK Agreements") to be used for working capital purposes including the
purchase of additional inventory, and Debtor, as collateral security for all
present and future obligations of Debtor to BANK under the BANK Agreements, has
granted to BANK a security interest in and to, inter alia, the Collateral; and
WHEREAS, in consideration of the foregoing, PANASONIC agrees to BANK
request that BANK's security interest in the Collateral be first and prior to
that of PANASONIC, subject to the terms and conditions more fully set forth
hereinafter.
NOW, THEREFORE, the parties hereby agree as follows:
1. PANASONIC subordinates its security interest in the Collateral to
BANK's perfected security interest in the Collateral to the extent of any monies
loaned by BANK to Debtor pursuant to the BANK Agreements.
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(a) Unless and until Debtor's indebtedness to BANK has been paid in full,
PANASONIC, may not, without the prior written conent of BANK,
commence or prosecute an enforcement; provided, however that the
foregoing shall not prohibit, limit, restrict or otherwise impair the
exercise by PANASONIC of any other rights and remedies (which do not
constitute enforcement) it may now or hereafter have for the payment
or collection of Debtor's indebtedness to PANASONIC, or PANASONIC's
right to file such proofs of claim and other documents as may be
necessary or advisable in order to have PANASONIC's claims allowed in
the case of any receivership, insolvency, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial case or
proceeding affecting Debtor.
2. BANK agrees that if at any time or times hereafter, it notifies Debtor
that it is in default under the BANK Agreements or any other agreements between
Debtor and BANK, BANK will simultaneously give PANASONIC written notice of
Debtor's default.
3. BANK further agrees that if at any time it notifies Debtor that BANK
intends to exercise any rights or remedies it has or may have as a secured
creditor in respect to the Collateral, it will simultaneously notify PANASONIC
in the same manner as such notice is given to Debtor. In addition to the
foregoing notice, if such notice is not given as specified in Paragraph 5, BANK
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shall promptly provide PANASONIC with notice in accordance with Paragraph 5.
4. Except as otherwise set forth in Paragraph 1 hereof, this subordination
of PANASONIC's security interest to BANK's perfected security interest shall not
be deemed to be a waiver nor affect any of PANASONIC'S rights under the
Panasonic Security Agreement except as provided herein.
5. BANK shall have the right, without the consent of PANASONIC, to extend
credit to Debtor, secured by the Assets (or any portion thereof) and otherwise
having the same priority as herein contained, in such amounts and on such terms
as BANK shall from time to time in its sole discretion determine. BANK shall
have no obligation to marshall any assets of Debtor in which the BANK now has or
hereafter may have a security interest before enforcing its rights in respect of
the Assets, and PANASONIC shall have no right hereunder to share or participate
in any proceeds of such other collateral or in any proceeds of any of the Assets
in which Debtor has not granted PANASONIC a security interest.
6. Unless and until Debtor's indebtedness to BANK has been paid in full,
in the event that PANASONIC shall acquire any proceeds or amounts paid in
respect of any of the Assets, PANASONIC shall promptly remit to BANK said
proceeds or amounts and, until so remitted, said proceeds and amounts shall be
held by PANASONIC in trust for BANK and shall not be commingled with any other
funds or other property of PANASONIC or of Debtor in the possession of
PANASONIC.
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7. PANASONIC represents and warrants to BANK that, as of the date hereof,
no default exists with respect to any amounts owing from Debtor to PANASONIC.
8. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, shall not be modified, amended or terminated
orally. In the event PANASONIC sells, transfers and/or assigns its security
interest, prior written notification will be given to BANK and the third party
acquiring the interest that this Subordination Agreement exits.
9. All notices hereunder shall be in writing and sent certified mail,
postage prepaid, return reciept requested or by telegram (with confirmation of
delivery thereof in writing) or personally delivered to the parties as follows:
To Bank: The Bank of New York
385 Rifle Camp Road
West Paterson, NJ 07424
Attn:
To Panasonic: Panasonic Communications & Systems Company
Division of Matsushita Electric
Corporation of America
One Panasonic Way
Secaucus, New Jersey 07094
Attention: National Credit Manager
or to such other address or attention of any party designated in like manner by
such party.
Notice given by personal delivery shall be effective only if and when
received by the party to whom the notice is addressed as evidenced by a receipt
signed by an officer or authorized agent of such party.
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10. This Subordination Agreement is solely for the benefit of the parties
hereto and shall not inure to the benefit of any assignee or successor of BANK
security interest whether by operation of law or otherwise.
11. This Subordination Agreement may be terminated by either party at any
time on thirty days prior written notice, but any such termination shall not
affect either parties' rights hereunder with respect to any security granted or
obligations incurred by Debtor to either party prior to the date of termination.
12. Except as otherwise prohibited in Paragraph 10 hereof, this Agreement
when effective shall be binding upon PANASONIC's and BANK successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
date first above written.
PANASONIC COMMUNICATIONS & SYSTEMS
COMPANY, Division of Matsushita
Electric Corporation of America
By: ROBERT STAGER
______________________________________
Title: GENERAL MANAGER
___________________________________
THE BANK OF NEW YORK (NJ)
By: STEVEN L. WEXLER
______________________________________
Steven L. Wexler
Title: Vice President
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