SUBORDINATION AGREEMENT
Lender: Xxxxxxx X. Xxxxxxx
Creditor: Capital Partners, Ltd., a Florida corporation
Debtor: Mercury Waste Solutions, Inc.
Date: January 22, 1997
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
appearing below opposite the signature of the Creditor; and
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. Notwithstanding any other agreement to the contrary including but
not limited to the Intercreditor Agreement between Mercury Waste Solutions,
Inc., Lender and U.S. Environmental, Incorporated dated January 4, 1996, the
payment of all Debtor's indebtedness 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.
2. The Creditor will not demand, receive or accept any principal
payment from the Debtor in respect of the Subordinated Indebtedness except for
principal payments (but not prepayments) in accordance with the term of the
Subordinated Indebtedness, the Creditor will not demand, receive or accept any
principal or interest payment from the Debtor in respect of the Subordinated
Indebtedness if at the time of payment the Debtor is in default in any respect
on any of its then existing Lender Indebtedness.
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. Regardless of any priority otherwise available to the undersigned by
law or by agreement, any security interest which Creditor may now hold or may at
any time hereafter acquire in any personal or real property of Debtor,
including, without limitation, inventory, receivables, documents of title,
equipment, fixtures, general intangibles and equity securities of Debtor,
together, in each case, with all proceeds thereof (the "Collateral"), is, shall
be and shall remain fully subordinate for all purposes to any security interest
now held or at any time hereafter granted to or acquired by Lender in any
portion or all of the Collateral.
5. The Creditor will not (a) commence any action or proceeding against
the Debtor to recover all or any part of the unpaid principal amount of the
Subordinated Indebtedness, (b) exercise collection rights as to any Collateral,
take possession of or sell or dispose of any Collateral or exercise or enforce
any other right or remedy available to the Creditor upon default against the
Collateral, or (c) 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.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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 responsi bility 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 matter 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.
11. 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.
12. 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 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.
13. 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.
Dated: January 22, 1997 Capital Partners, Ltd.
By
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Xxxx Xxxxxx, its President
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Xxxxxxx X. Xxxxxxx
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.
Mercury Waste Solutions, Inc.
By
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Its
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