DEBT SUBORDINATION AGREEMENT
Exhibit
10.8
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Lender:
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M&I
Business Credit, LLC
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Creditor:
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Xxxxxxx
Xxxxxxx
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Debtor:
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Nature
Vision, LLC
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Date:
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November
8, 2007
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WHEREAS,
the Debtor is now or hereafter may be indebted to the Lender on account of
loans
or other extensions of credit or financial accommodations from the Lender
to
Debtor, or to any other person under the guaranty or endorsement of the Debtor
(all indebtedness of every type and description which the Debtor may now
or at
any time hereafter owe to the Lender, whether such indebtedness now exists
or is
hereafter created or incurred, whether such indebtedness is fixed or contingent,
liquidated or unliquidated, is hereinafter collectively referred to as “Lender
Indebtedness”); and
WHEREAS,
the Debtor is also indebted to the Creditor in the sum of $1,000,000 evidenced
by Demand Promissory Note, which is attached hereto as Exhibit A;
WHEREAS,
the Lender is unwilling to continue the existing Lender Indebtedness or to
make
future loans or to continue to extend financial accommodations unless the
Creditor executes this Debt Subordination Agreement;
NOW,
THEREFORE, in consideration of the promises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
Creditor does hereby agree with Lender as follows:
1. The
payment of all Debtor’s indebtedness to the Creditor of every type and
description whether now existing or hereafter created or incurred, all such
indebtedness being hereinafter collectively referred to as the “Subordinated
Indebtedness” is hereby expressly subordinated to the extent and in the manner
hereinafter set forth to the payment in full of all the Lender
Indebtedness. Regardless of any priority otherwise available to
Creditor by law or by agreement, any security interest, lien, claim or right
(the “Lien”) Creditor may now hold or hereafter acquire in any collateral now or
hereafter securing payment of Lender Indebtedness (the “Collateral”) shall be
and remain fully subordinated for all purposes to the Lien Lender now holds
or
hereafter acquires in the Collateral.
2. Until
all the Lender indebtedness has been paid in full, without the Lender’s prior
written consent, the Creditor will not demand, receive or accept any payment
whatsoever from the Debtor in respect of the Subordinated Indebtedness if
any of
the following circumstances exist or events occur: (a) at the time of
payment the Debtor is in default in any respect on any of the Debtor’s then
existing Lender Indebtedness, (b) the payment to the Creditor creates a default
in any respect on any of the Debtor’s then existing Lender Indebtedness, (c) the
payment to the Creditor increases the Debtor’s then existing Lender Indebtedness
in excess of collateral eligible for advance under then existing standard
criteria and formulae, or (d) the Debtor has insufficient funds available
to
operate its business and pay its debts in the ordinary course either before
the
payment to the Creditor or as a result thereof.
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3. In
the event that the Creditor shall receive any payment on the Subordinated
Indebtedness which the Creditor is not entitled to receive under the provisions
of the foregoing Paragraph 2, the Creditor will hold the amount so received
in
trust for the Lender and will forthwith turn over such payment to the Lender
in
the form received (except for the endorsement of the Creditor where necessary)
for application on the then existing Lender Indebtedness (whether due or
not
due), in such manner of application as the Lender may deem
appropriate. In the event of the failure of the Creditor to make any
endorsement required under this Subordination Agreement, the Lender, or any
of
its officers or employees on behalf of the Lender, is hereby irrevocably
appointed as attorney-in-fact for the Creditor to make the same in the
Creditor’s name.
4. The
Creditor will not commence any action or proceeding against the Debtor to
recover all or any part of the unpaid principal amount of the Subordinated
Indebtedness, exercise or enforce any right or remedy against the Debtor
or its
property, or join with any creditor (unless the Lender shall so join) in
bringing any proceedings against the Debtor under any bankruptcy,
reorganization, readjustment of debt, arrangement of debt, receivership,
liquidation or insolvency law or statute of the federal or any state government,
unless and until the Lender Indebtedness has been paid in full.
5. In
the event of any receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization or arrangement with creditors, whether
or
not pursuant to bankruptcy laws, the sale of all or substantially all of
the
assets, dissolution, liquidation or any other marshalling of the assets or
liabilities of the Debtor, the Creditor will file all claims, proofs of claim
or
other instruments of similar character necessary to enforce the obligations
of
the Debtor in respect of the Subordinated Indebtedness and will hold in trust
for the Lender and promptly pay over to the Lender in the form received (except
for the endorsement of the Creditor where necessary) for application on the
then
existing Lender Indebtedness, any and all moneys, dividends or other assets
received in any such proceedings on account of the Subordinated
Indebtedness, unless and until Lender Indebtedness has been paid in
full. In the event that the Creditor shall fail to take any such
action, the Lender, as attorney-in-fact for the Creditor, may take such action
on behalf of the Creditor. The Creditor hereby irrevocably appoints
the Lender, or any of its officers or employees on behalf of the Lender,
as the
attorney-in-fact for the Creditor with the right (but not the duty) to demand,
xxx for, collect and receive any and all such moneys, dividends or other
assets
and give acquittance therefor and to file any claim, proof of claim or other
instrument of similar character, and to take such other proceedings in the
Lender’s own name or in the name of the Creditor as the Lender may deem
necessary or advisable for the enforcement of the agreements contained herein;
and the Creditor will execute and deliver to the Lender such other and further
powers of attorney or instruments as the Lender may request in order to
accomplish the foregoing.
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6. The
Creditor will cause all notes, bonds, debentures or other instruments evidencing
the Subordinated Indebtedness or any part thereof to contain a specific
statement thereon to the effect that the indebtedness thereby evidenced is
subject to the provisions of this Subordination Agreement. At the
request of the Lender, the Creditor will deposit with the Lender all of the
notes, bonds, debentures or other instruments evidencing the Subordinated
Indebtedness or any part thereof, which notes, debentures or other instruments
may be held by the Lender so long as there remains outstanding any Lender
Indebtedness and until this Subordination Agreement is terminated as hereinafter
provided. Without the prior written consent of the Lender, the
Creditor will not assign, transfer or pledge to others any of the Subordinated
Indebtedness or agree to a discharge or forgiveness of the same so long as
there
remains outstanding any Lender Indebtedness and until this Subordination
Agreement is terminated as hereinafter provided.
7. None
of the provisions of this Subordination Agreement shall be deemed or construed
to constitute a commitment or an obligation on the part of the Lender to
make
any future loans or other extensions of credit or financial accommodation
to the
Debtor or any other person.
8. This
Subordination Agreement shall constitute a continuing agreement of
subordination, and the Lender may continue, without notice to or consent
by the
Creditor, to make loans and extend other credit or financial accommodation
to or
for the account of the Debtor in reliance upon this Subordination Agreement
until written notice of revocation of this Subordination Agreement shall
have
been received by the Lender from the Creditor. Any such notice of
revocation shall not affect this Subordination Agreement in relation to any
Lender Indebtedness then existing or created thereafter pursuant to any previous
commitment of the Lender to the Debtor, or any extensions or renewals of
any such Lender Indebtedness, and as to all such Lender Indebtedness and
extensions or renewals thereof, this Subordination Agreement shall continue
effective until the same have been fully paid with interest. If there
be more than one signer of this Subordination Agreement, any such notice
of
revocation shall be effective only as to the one giving such notice of
revocation. For purposes of this Subordination Agreement, the Lender
Indebtedness shall not be deemed to be paid in full if the Lender shall have
established a line of credit in favor of the Debtor, whether or not the Lender
shall have any obligation to make any advances or issue guaranties or letters
of
credit or make other financial accommodations thereunder, or if the Debtor
shall
have guaranteed the repayment of advances or other financial accommodations
under such a line of credit in favor of another person.
9. The
Lender may, at any time, and from time to time, either before or after any
such
notice of revocation, without the consent of or notice to the Creditor, without
incurring responsibility to the Creditor, and without impairing or releasing
any
of its rights or any of the obligations of the Creditor
hereunder: (a) change the interest rate or change the amount of
payment or extend the time of payment or renew or otherwise alter the terms
of
any Lender Indebtedness or any instrument evidencing the same in any manner;
(b)
sell, exchange, release or otherwise deal with all or any part of any property
at any time securing payment of the Lender Indebtedness or any part thereof;
(c)
release anyone liable in any manner for the payment or collection of the
Lender
Indebtedness or any part thereof; (d) exercise or refrain from exercising
any
right against the Debtor or others (including the Creditor); and (e) apply
any
sums received by the Lender, by whomsoever paid and however realized, to
Lender
Indebtedness in such manner as the Lender shall deem appropriate.
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10. No
waiver shall be deemed to be made by the Lender of any of its rights hereunder
unless the same shall be in writing signed on behalf of the Lender, and each
such waiver, if any, shall be a waiver only with respect to the specific
matter
or matters to which the waiver relates and shall in no way impair the rights
of
the Lender or the obligations of the Creditor to the Lender in any other
respect
at any other time.
11. This
Subordination Agreement and every part hereof shall be binding upon the Creditor
and upon the heirs, legal representatives, successors and assigns of the
Creditor and of each of them, respectively (in case this Subordination Agreement
be signed by more than one signer), from and after the date of its execution
and
delivery to the Lender irrespective of whether this or any similar agreement
is
executed by any other creditor of the Debtor. This Subordination
Agreement is enforceable by the Lender and each of its participants, successors
and assigns. Notice of acceptance by the Lender of this Subordination
Agreement or of reliance by the Lender upon the subordination herein contained
is hereby waived by the Creditor.
12. If
more than one Creditor shall sign this Subordination Agreement, then the
covenants, promises and agreements herein contained shall be construed to
be the
several promises, covenants and agreements of each of those
signers.
IN
WITNESS WHEREOF, the Creditor has executed this Subordination Agreement as
of
the day and year first above written.
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/S/
Xxxxxxx Xxxxxxx
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Xxxxxxx
Xxxxxxx
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The
undersigned, being the Debtor referred to in the foregoing Subordination
Agreement, hereby acknowledges receipt of a copy thereof and agrees to all
of
the terms and provisions thereof, and agrees to and with the Lender named
therein that the undersigned will make no payment of the Subordinated
Indebtedness therein described or consent to or participate in any act whatever
which payment or act is in violation of any of the provisions of said
Subordination Agreement. The undersigned hereby authorizes the
Lender, without notice to the undersigned, to declare all of the Lender
Indebtedness to be due and payable forthwith upon any violation of the
undersigned of any of the provisions of the said Subordination
Agreement.
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NATURE
VISION, LLC
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By
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/S/ Xxxxxxx X. Xxxxxx | |
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Its
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Chief Executive Officer | |
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