EXHIBIT 10.88
SUBORDINATION AGREEMENT
This Agreement. dated as of May 11, 2000 is made between and among Peaches
Entertainment Corp. ("Peaches"), URT Industries, Inc. ("URT"), and Allan Wolk
Individual Retirement Account Rollover, each with an address at 1180 East
Hallandale Beach Boulevard, Hallandale, Florida 33009. URT and Wolk are
hereinafter collectively sometimes referred to as the "Creditors".
WHEREAS, pursuant to a Mortgage with Assignment of Rents, Security
Agreement and Fixture Filing, dated as of January 27, 1997, between PEC and URT,
Peaches has previously granted to URT a mortgage with respect to certain
improved real property owned by Peaches in Mobile, Alabama (the "Mobile Store")
in order to secure certain indebtedness referred to in such instrument which is
owed by Peaches to URT (the "Indebtedness to URT"); and
WHEREAS, pursuant to a Mortgage dated May 11, 2000, Peaches has also
granted to Wolk a mortgage with respect to the Mobile Store in order to secure
certain indebtedness which is owed by Peaches to Wolk (the "Indebtedness to
Wolk");
WHEREAS, the Creditors desire to agree as to the relative priority of their
respective claims and interests with respect to both payment of the
above-referenced indebtedness to them (the "Obligations") and the security
interests granted to them by Peaches securing the Obligations.
NOW, THEREFORE, in consideration of the premises and the agreements set
forth herein below, the parties agree as follows:
1. Peaches and the Creditors agree that, solely during any period in which
an event of default exists under any instrument documenting the Indebtedness to
Wolk, including any instrument amending such indebtedness, whether now or
hereafter executed (any such event of default being an "Event of
Subordination"), Peaches shall not make to URT, and URT shall not accept from
Peaches, any payment on account of the Indebtedness to URT. The parties agree
that the subordination of the Indebtedness to URT as set forth in the preceding
sentence (the "URT Subordination"): (a) shall be triggered only upon the
occurrence of an Event of Subordination, and (b) shall continue only so long as
such Event of Subordination exists (the "Default Period"), shall terminate upon
the curing or termination of such Event of Subordination, and shall not affect
in any way (or require any return or disgorgement, in whole or in part, of) any
payment by Peaches to URT on account of the Indebtedness to URT that is made
prior to or after any Default Period.
2. URT agrees that: (a) it shall not knowingly accept or receive from
Peaches any payment made by Peaches in contravention of the URT Subordination,
and (b) should it, whether inadvertently or otherwise, accept or receive any
such payment from Peaches in contravention of
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the URT Subordination, then, unless the payment default by Peaches has been
cured or the Indebtedness to Wolk has been paid in full, such payment shall be
held in trust by URT and URT shall pay to Wolk the lesser (the "Returned URT
Payments") of: (i) the amount accepted or received by URT in contravention of
the URT Subordination, and (ii) the aggregate amount of all payments that are
due or past due under the Indebtedness to Wolk. The payment to Wolk of the
Returned URT Payments, as set forth above, shall be the sole remedy of Wolk
against URT for any breach of the URT Subordination. The Obligation of Peaches
to URT shall be increased by the full amount of all Returned URT Payments, and
the indebtedness of Peaches to Wolk shall be decreased by the full amount of the
Returned URT Payments paid to Wolk.
3. The URT Subordination shall be applicable solely to the Indebtedness to
URT, as such term is defined on the first page hereof, and any and all renewals,
enlargements and modifications thereof, and not to any other obligations of
Peaches to URT.
4. Payments in contravention of the URT Subordination may be made by
Peaches to URT only with the express written approval of Wolk.
5. This Subordination Agreement shall terminate on the date that the
Indebtedness to Wolk is paid in full (the "Debt Payment Date"); provided,
however, that if Wolk is required to repay or disgorge any payment received on
account of the Indebtedness to Wolk, this Subordination Agreement shall be
automatically reinstated by the parties hereto. This Subordination Agreement may
be terminated prior to the Debt Payment Date only by written notice received by
URT from Wolk.
6. Except as otherwise specifically provided herein, priority shall be
determined in accordance with applicable law.
7. This Agreement is solely for the benefit of the Creditors and their
successors or assigns and no other person or persons shall have any right,
benefit, priority or interest under, or because of the existence of, this
Agreement. Nothing contained in this Agreement is intended to affect or limit,
in any way whatsoever, any security interest (or any other interest, lien or
claim) that any of the Creditors may otherwise have in any or all of the assets
of Peaches, insofar as the rights of Peaches and third parties are concerned.
The Creditors specifically reserve any and all of their respective rights,
security interests, other interests, liens and claims, and rights to assert any
of the same, as against Peaches and any third parties.
8. Each notice or other communication given hereunder or in connection
herewith shall be in writing and shall be sent by first class certified mail,
postage prepaid, return receipt requested.
Notices shall be addressed as follows:
Peaches Entertainment Corp. URT Industries, Inc.
1180 East Hallandale Beach Blvd. 1180 East Hallandale Beach Blvd.
Hallandale, Florida 33009 Hallandale, Florida 33009
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Allan Wolk Individual Retirement Account Rollover
c/o Allan Wolk
1180 East Hallandale Beach Blvd.
Hallandale, Florida 33009
or, in each case, at such other address as a party wishing to change its address
for notices may specify from time to time by notice hereunder to the other
parties hereto.
9. The parties to this Subordination Agreement hereby irrevocably waive
trial by jury in any court in connection with this Subordination Agreement, and
each hereby certifies that no representative of any other party has expressly or
impliedly represented that such other party might not enforce this jury waiver.
10. Each of the several executed counterparts of this Agreement shall be an
original. All such counterparts shall together constitute one and the same
instrument. This Agreement may be amended only by a writing signed by all of the
Creditors.
11. This Subordination Agreement shell be governed by and construed in
accordance with the laws of the State of Florida in all respects, including,
without limitation, matters of construction, validity and performance, and the
undersigned consent to service of process on the undersigned at that address of
the undersigned appearing hereinabove by certified mail, return receipt
requested (if possible), and such service shall be deemed to be complete five
(5) days after the same shall have been so mailed. The undersigned further
consent and submit to the jurisdiction of the courts (state and federal) of the
State of Florida in connection with any lawsuit relating hereto. In addition,
the undersigned hereby irrevocably waive, to the fullest extent they may
effectively do so, the defense of an inconvenient forum to the maintenance of
any such lawsuit in any jurisdiction.
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IN WITNESS WHEREOF, the parties have hereby executed and delivered this
Subordination Agreement on the day and year first set forth above.
Peaches Entertainment Corp.
By: /s/ Brian Wolk
-------------------------------------
Name: Brian Wolk
Title: Executive Vice President
URT Industries Inc., a Florida corporation
By: /s/ Brian Wolk
-------------------------------------
Name: Brian Wolk
Title: Executive Vice President
Allan Wolk Individual Retirement Account Rollover
By: /s/ Allan Wolk
-------------------------------------
Name: Allan Wolk
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STATE OF FLORIDA )
) :
BROWARD COUNTY )
I, the undersigned authority, a Notary Public in and for said County, in
said State, hereby certify that Brian Wolk, an Executive Vice President of
Peaches Entertainment Corp , a Florida corporation, whose name is signed to the
foregoing instrument, and who is known to me, acknowledged before me on this day
that, being informed of the contents of the said instrument, he, as such officer
and with full authority, executed the same voluntarily as of the day the same
bears date.
GIVEN under my hand and seal, this 11th day of May, 2000
/s/ Beatriz Rodriguez
--------------------------------
Notary Public
My commission expires:
[NOTARIAL SEAL]
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STATE OF FLORIDA )
) :
BROWARD COUNTY )
I, the undersigned authority, a Notary Public in and for said County, in
said State, hereby certify that Brian Wolk, an Executive Vice President of URT
Industries Inc., a Florida corporation, whose name is signed to the foregoing
instrument, and who is known to me, acknowledged before me on this day that,
being informed of the contents of the said instrument, he, as such officer and
with full authority, executed the same voluntarily as of the day the same bears
date.
GIVEN under my hand and seal, this 11th day of May, 2000
/s/ Beatriz Rodriguez
--------------------------------
Notary Public
My commission expires:
[NOTARIAL SEAL]
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STATE OF FLORIDA )
) :
BROWARD COUNTY )
I, the undersigned, a Notary Public in and for said County in said State,
hereby certify that Allan Wolk, whose name is signed to the foregoing
instrument, and who is known to me, acknowledged before me on this day that,
being informed of the contents of the said instrument, he executed the same
voluntarily on the day the same bears date.
GIVEN under my hand and seal, this 11th day of May, 2000
/s/ Beatriz Rodriguez
--------------------------------
Notary Public
My commission expires:
[NOTARIAL SEAL]
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