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Exhibit 10.6
 
 
SUBORDINATION AGREEMENT
 
This Subordination Agreement (the “Agreement”) is entered into as of the
21st day of September 2006, by and between DRIVEITAWAY, INC., a Delaware
corporation (the “Company”), ZONE MINING LIMITED, a Nevada corporation (the
“Subordinate Lender”) and TRIDENT GROWTH FUND, L.P., a Delaware limited
partnership (the “Senior Lender”).
 
RECITALS
 
WHEREAS, in connection with a contemplated loan transaction (the “Subordinate
Lender Loan”) between Subordinate Lender and the Company, the Company will
execute, among other documents, a promissory note or notes (the “Notes”) in the
amount of up to $1,000,000, as such Notes may be thereafter amended or modified
in writing or otherwise (the “Subordinate Lender Note”). It is expressly
understood and agreed that all amounts loaned to the Company by the Subordinate
Lender at any time, whether described in the Subordinate Lender Note or the
Subordinate Loan Documents (as defined below) shall be considered part of the
Subordinate Lender Loan for purposes of this Agreement. The Subordinate Lender
Note, the Security Agreement, if any, and any other documents, instruments or
written or oral agreements evidencing or securing payment of the Subordinate
Lender Loan are hereinafter collectively referred to as the “Subordinate Loan
Documents”; and
 
WHEREAS, Subordinate Lender will be the parent company of the Company as a
result of a merger between the Company and ZM Acquisition, Inc., a Delaware
corporation; and
 
WHEREAS, in connection with a certain loan transaction (the “Senior Lender
Loan”) between Senior Lender and Subordinate Lender, Subordinate Lender
executed, among other documents, a 12% Secured Convertible Debenture (the
“Senior Lender Note”) in the stated principal amount of $1,000,000.00, payable
to Senior Lender. The payment of the indebtedness evidenced by the Senior Lender
Loan is secured by, among other things, a Security Agreement from the Company
creating a security interest in certain property of the Company more
particularly described therein (the “Collateral”). The Senior Lender Note and
any other documents, instruments or written agreements evidencing or securing
payment of the Senior Lender Loan are hereinafter collectively referred to as
the “Senior Lender Loan Documents”; and
 
WHEREAS, the Company and Senior Lender propose for the indebtedness evidenced by
the Senior Lender Note to be secured by, among other things, a first lien on and
priority security interest in and to the Collateral. Accordingly, Senior Lender
has required, as a covenant in the Senior Loan Documents, that all obligations,
liens, or rights to the property or assets of the Company, howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent or now
or hereafter existing, or due or to become due, including but not limited to
those created in connection with the Subordinate Lender Loan, to the Subordinate
Lender in connection with the Subordinate Lender Loan or otherwise (the
“Junior Liabilities”) be made subordinate to the liens, security interests, and
rights of the Senior Lender and the Senior Lender Loan, as well as all
obligations of Company, howsoever created, arising or evidenced, whether direct
or indirect, absolute or contingent or now or hereafter existing, or due or to
become due to the Senior Lender (the “Senior Liabilities”), it being expressly
understood and agreed that the term Senior Liabilities, as used in this
Agreement, shall include, without limitation, any and all interest, fees and
penalties accruing on any of the Senior Liabilities, notwithstanding any
provision or rule of law which might restrict the rights of the Senior Lender,
as against Company or anyone else, to collect such interest; and
 
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WHEREAS, Senior Lender and Subordinate Lender desire to enter into this
Agreement to evidence, as more particularly described herein, Subordinate
Lender’s subordination of the Junior Liabilities to the Senior Liabilities;
 
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
 
1. Subordinate Lender hereby expressly subordinates the Junior Liabilities to
the Senior Liabilities and acknowledges and agrees that the Senior Liabilities
shall be superior and prior to the Junior Liabilities. Accordingly, except as
expressly otherwise provided in this Agreement or as the Senior Lender may
otherwise expressly consent in writing, the payment of any Junior Liability
shall be postponed and subordinated to the payment in full of all Senior
Liabilities, and no payments or other distributions whatsoever in respect of any
Junior Liability shall be made, nor shall any property or assets of the Company
be applied to the purchase or other acquisition or retirement of the Junior
Liability.
 
2. Subject to the terms of this Agreement, Subordinate Lender hereby consents,
without the necessity of any other documentation, to the Senior Lender Loan and
acknowledges and agrees that the neither the Senior Lender Loan nor the Senior
Liabilities created thereby constitute a default under the Subordinate Lender
Loan and/or Loan Documents, and if either the Senior Lender Loan or the creation
of the Senior Liabilities does in fact constitute a default thereunder,
Subordinate Lender agrees to amend such Subordinate Loan Documents, as soon as
reasonably practicable, to permit the Senior Lender Loan and Senior Liabilities.
Subordinate Lender further, without the necessity of any other documentation,
acknowledges and agrees to forebear from exercising its rights and remedies
under the Subordinate Loan Documents on account of any existing or future
default under the Subordinate Lender Loan until the termination of this
Agreement.
 
3. The Subordinate Lender hereby subordinates all security interests created
pursuant to any security agreement entered into with the Company and any other
security interest created in connection with the Subordinate Lender Loan in any
manner, to the security interests of the Senior Lender in all of the Collateral
and all other property of the Company, now owned or hereafter acquired by same.
 
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4. In the event of any dissolution, winding up, liquidation, readjustment,
reorganization or other similar proceedings relating to the Company or to its
creditors, as such, or to its property (whether voluntary or involuntary,
partial or complete, and whether in bankruptcy, insolvency or receivership, or
upon an assignment for the benefit of creditors, or any other marshalling of the
assets and liabilities of the Company, or any sale of all or substantially all
of the assets of the Company, or otherwise), the Senior Liabilities shall first
be paid in full before the Subordinate Lender shall be entitled to receive and
to retain any payment or distribution in respect of the Junior Liabilities.
 
5. The Subordinate Lender will mark the Subordinate Loan Documents, its books
and records so as to clearly indicate that the Junior Liability is subordinated
in accordance with the terms of this Agreement. Upon request by Senior Lender,
Subordinate Lender agrees to execute and deliver such additional documents and
instruments and to take such actions as may be reasonably necessary in order to
further evidence and carry out the purposes, goals, and intents of this
Agreement or to correct any error in this Agreement or any documents executed in
connection herewith that was caused by any clerical mistake, computer
malfunction, printing error or similar error.
 
6. The Subordinate Lender hereby waives all diligence in collection or
protection of or realization upon the Senior Liabilities or any security for the
Senior Liabilities. In exercising rights and remedies with respect to the
Collateral, the Senior Lender may enforce the provisions of the Senior Loan
Documents and exercise remedies thereunder and under any other Senior Loan
Documents, all in such order and in such manner as it may determine in its sole
and absolute discretion. Such exercise and enforcement shall include, without
limitation, the rights to sell or otherwise dispose of Collateral, to incur
expenses in connection with such sale or disposition and to exercise all the
rights and remedies of a secured lender under the Uniform Commercial Code of any
applicable jurisdiction and of a secured creditor under bankruptcy or similar
laws of any applicable jurisdiction.
 
7. During the term hereof, the Subordinate Lender will not without the prior
written consent of the Senior Lender: (a) attempt to enforce or collect the
Junior Liability or any rights in respect of the Junior Liability; (b) take any
Collateral or enforce any rights in respect of any Security Agreement; (c) sell,
assign, transfer, pledge, or give a security interest in the Junior Liabilities;
(d) commence, prosecute or participate in any administrative, legal or equitable
action against the Company or in any administrative, legal, or in any
administrative, legal or equitable action that might adversely affect the
Company or its interest; (e) take any lien or security on any of the Company’s
property, real or personal; (f) incur any obligation to or receive any loan
advances, or gifts from the Company; or (g) commence, or join with any other
creditor in commencing, any bankruptcy, reorganization or insolvency proceedings
with respect to the Company.
 
8. As an additional security for the Senior Liabilities, and to secure the
performance of all of the Subordinate Lender’s obligations hereunder,
Subordinate Lender hereby transfers, grants a security interest in, and assigns
to the Senior Lender all of Subordinate Lenders’ rights to any payments or
distributions which might otherwise be due to the Subordinate Lender from the
Company. Senior Lender is hereby irrevocably constituted and appointed the
attorney-in-fact of Subordinate Lender to file any and all proofs of claim (if
Subordinate Lender has not demonstrated to the satisfaction of the Senior
Lender, no later than 20 days prior to the applicable bar date, that such
Subordinate Lender has filed an appropriate claim or proof of claim), financing
statements, and any other documents and to take all other action, either in
Senior Lender’s name, or in the Subordinate Lender’s name, whichever is
necessary to enable Senior Lender to obtain all such payments. The Company
hereby agrees to make such payments, if any, to the Senior Lender.
 
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9. This Agreement and the obligations, rights and benefits of the parties hereto
shall terminate upon the payment in full of the indebtedness evidenced by the
Senior Lender Loan Documents and the Senior Liabilities as a whole.
 
10. The Senior Lender may, from time to time, during the term of this Agreement,
at its sole discretion and without notice to the Subordinate Lender, take any or
all of the following actions: (a) retain or obtain a security interest in any
property to secure any of the Senior Liabilities; (b) retain or obtain the
primary or secondary obligation of any other obligor or obligors with respect to
any of the Senior Liabilities; (c) extend or renew for one or more periods
(whether or not longer than the original period), alter or exchange any of the
Senior Liabilities, or release or compromise any obligation of any nature of any
obligor with respect to any of the Senior Liabilities; and (d) release their
security interest in, or surrender, release or permit any substitution or
exchange for, all or any part of any property securing any of the Senior
Liabilities, or extend or renew for one or more periods (whether or not longer
than the original period) or release, compromise, alter or exchange any
obligations of any nature of any obligor with respect to any such property.
 
11. The Senior Lender may, from time to time, during the term of this Agreement,
without notice to the Subordinate Lender, assign or transfer any or all of the
Senior Liabilities or any interest in the Senior Liabilities as well as this
Agreement; and, notwithstanding any such assignment or transfer or any
subsequent assignment or transfer of the Senior Liabilities, such Senior
Liabilities shall be and remain Senior Liabilities for the purposes of this
Agreement, and every immediate and successive assignee or transferee of any of
the Senior Liabilities or of any interest in the Senior Liabilities shall, to
the extent of the interest of such assignee or transferee in the Senior
Liabilities, be entitled to the benefits of this Agreement to the same extent as
if such assignee or transferee were the Senior Lender, as applicable; provided,
however, that, unless the Senior Lender shall otherwise consent in writing, the
Senior Lender shall have an unimpaired right, prior, and superior to that of any
such assignee or transferee, to enforce this Agreement, for the benefit of the
Senior Lender, as to those of the Senior Liabilities which the Senior Lender has
not assigned or transferred.
 
12. The Senior Lender shall not be prejudiced in its rights under this Agreement
by any act or failure to act of the Company or the Subordinate Lender, or any
noncompliance by the Company or the Subordinate Lender with any agreement or
obligation, regardless of any knowledge thereof which the Senior Lender may have
or with which the Senior Lender may be charged; and no action of the Senior
Lender permitted under this Agreement shall in any way affect or impair the
rights of the Senior Lender and the obligations of the Subordinate Lender under
this Agreement.
 
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13. No delay on the part of the Senior Lender in the exercise of any right or
remedy shall operate as a waiver of such right or remedy, and no single or
partial exercise by the Senior Lender of any right or remedy shall preclude
other or further exercise of such right or remedy or the exercise of any other
right or remedy; nor shall any modification or waiver of any of the provisions
of this Agreement be binding upon the Senior Lender except as expressly set
forth in a writing duly signed and delivered on behalf of the Senior Lender. For
the purposes of this Agreement, Senior Liabilities shall include all obligations
of the Company to the Senior Lender, notwithstanding any right or power of the
Company or anyone else to assert any claim or defense as to the invalidity or
unenforceability of any such obligation, and no such claim or defense shall
affect or impair the agreements and obligations of the Subordinate Lender under
this Agreement.
 
14. Subordinate Lender further agrees that in case Subordinate Lender should
take or receive any security interest in, or lien by way of attachment,
execution, or otherwise on any of the property, real or personal, of the
Company, or should take or join in any other measure or advantage contrary to
this Agreement, at any time prior to the payment in full of all of the Senior
Liabilities, Senior Lender shall be entitled to have the same vacated, dissolved
and set aside by such proceedings or law, or otherwise, as the Senior Lender may
deem appropriate, and this Agreement shall be and constitute full and sufficient
grounds therefore and shall entitle the Senior Lender to become a party to any
proceedings at law, or otherwise, initiated by the Senior Lender or by any other
party, in or by which the Senior Lender deems it appropriate to protect its
interests hereunder. Subordinate Lender agrees that if it violates this
Agreement, it shall be liable to the Senior Lender for all losses and damages
sustained by the Senior Lender by reason of such breach, including Senior
Lender’s attorney’s fees and costs in any such legal action.
 
15. Except as otherwise expressly agreed to herein, if Subordinate Lender shall
receive any payments, security interests, or other rights in any property of the
Company in violation of this Agreement, such payment or property shall be
received by Subordinate Lender in trust for the Senior Lender and shall
subsequently be delivered and transferred to the Senior Lender immediately upon
receipt thereof.

16. This Agreement shall be binding upon the Subordinate Lender and the Company
as well as their respective successors and assigns, and shall inure to the
benefit of Senior Lender and its successors and assigns.

17. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be sent by first class U.S. mail, or by
cable, telex, telegram, facsimile transmission, or by other electronic means or
delivered by hand or by overnight or similar delivery service, fees prepaid, to
the party to whom it is to be given at the address of such party set forth below
or to such other address for notice as such party shall provide in accordance
with the terms of this section. Except as otherwise specifically provided in
this Agreement, notice so given shall, in the case of notice given by certified
mail (or by such comparable method) be deemed to be given and received on the
date of certification (or comparable act) thereof, in the case of notice so
given by overnight delivery service, on the date of actual delivery, and, in the
case of notice so given by cable, telegram, facsimile transmission, telex or
personal delivery, on the date of actual transmission or, as the case may be,
personal delivery. If any communication is sent by e-mail or such other
electronic means, such communication shall be effective upon confirmation
(whether by return e-mail or otherwise) of receipt of such e-mail or electronic
transmission.
 
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If to the Company:
213 W. Institute Place

Suite 408
Chicago, IL 60610
Telephone: (312) 654-8650
Facsimile: (312) 654-8718
Attn: ________________

If to Subordinate Lender:
111 Presidential Boulevard

Suite 165
Bala Cynwyd, PA 19004
Telephone: (610) 771-0680
Facsimile:
Attn: Stephen P. Harrington

If to Senior Lender:Trident Growth Fund, LP
700 Gemini

Houston, Texas 77058
Phone: (281) 488-8484
Facsimile: (281) 488-8404
Attention: Larry St. Martin
 
18. This Agreement shall be construed in accordance with and governed by the
laws of the State of Texas without regard to conflict of laws provisions. Venue
for any action hereunder shall be brought in and shall be proper exclusively in
Dallas County, Texas.
 
19. If any provision or provisions of this Agreement should be held to be
invalid or ineffective, then all other provisions shall continue in full force
and effect to the same extent and in the same manner as though such invalid or
unenforceable provision had never been contained herein to the extent the
remaining provisions further accomplish the goals and intents of this Agreement.
 
[signature page follows]
 
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IN WITNESS WHEREOF, this Subordination Agreement has been made and delivered as
of the first date written above.
 

        SUBORDINATE LENDER:  
   
   
    By:   /s/ Stephen P. Harrington  

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Stephen P. Harrington
President

 

       
SENIOR LENDER:
      Trident Growth Fund, LP   By: Trident Management, LLC, its General
Partner   
   
   
    By:   /s/ Scotty Cook  

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Its: Authorized Member

 
The Company hereby acknowledges receipt of a copy of the foregoing Subordination
Agreement, waives notice of acceptance of the Subordination Agreement by the
Senior Lender, and agrees to be bound by the terms and provisions of the
Subordination Agreement, to make no payments or distributions contrary to the
terms and provisions of the Subordination Agreement, and to do every other act
and thing necessary or appropriate to carry out such terms and provisions.
 

Dated: As of the First Date Written Above               COMPANY              
DRIVEITAWAY, INC.
              By: /s/ David M. Sola      

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