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Vista International Technologies, Inc. 10-Q [vista_10q-093011.htm]
Exhibit 10.6
 
 
SUBORDINATION AGREEMENT

This SUBORDINATION AGREEMENT (the “Agreement”) made as of September 19, 2011, by
and among Richard C. Strain, an individual residing at 15 Loockerman Avenue,
Poughkeepsie, New York  12601 (the “Senior Creditor”), Vista International
Technologies, Inc., a Delaware corporation with its principal place of business
at 88 Inverness Circle East, N-103, Englewood, CO 80112 (the “Borrower”) and
Timothy D. Ruddy, an individual residing at 3885 Vale View Lane, Mead, Colorado
80542 (the “Junior Creditor”).

In consideration of Senior Creditor granting a loan to Borrower, the parties
hereto agree as follows:

Section 1.                      Subordination.  Junior Creditor hereby
subordinates any and all security interests of the Junior Creditor in any of the
Borrower’s personal property and assets (the “Assets”, as more fully described
on Schedule A of the Security Agreement between Borrower and Senior Creditor,
dated September 16, 2011), and any and all indebtedness now or hereafter
incurred by Borrower to the Junior Creditor (the “Junior Indebtedness”), in
favor of such loan and any other indebtedness, present or future, of Borrower to
Senior Creditor and all extensions or renewals thereof (the “Senior
Indebtedness”).  The Junior Creditor hereby agrees that the priorities specified
herein are applicable regardless of any statement in any agreement to the
contrary, or the time or order of perfection of any applicable security
interest, or the time of filing of financing statements.

Section 2.                      Payments on Subordinated Debt.  In furtherance
of such subordination, it is agreed that until Senior Indebtedness has been
paid, no payments, in cash or any other property, by setoff or any other means,
shall be made by Borrower or received by the Junior Creditor on account of the
principal or interest on Junior Indebtedness, without Senior Creditor’s prior
written consent, except Senior Creditor hereby consents to payment by Borrower
to Junior Creditor in an amount equal to $50,000.00 at the closing of the sale
described in that certain Real Estate Sales Contract between Borrower and Brown
Family Lewisville Railroad Family First, L.P., dated February 14, 2011; that
Borrower’s books and records and any evidence of the Junior Indebtedness shall
be appropriately marked and endorsed to indicate this subordination; and that
upon any liquidation or dissolution involving any distribution to Borrower’s
creditors any amount which the Junior Creditor would be entitled to receive, to
the extent necessary to meet any deficiency in the payment in full of the loans
of the Senior Creditor shall be received by the Junior Creditor in trust for the
Senior Creditor and shall forthwith be paid over to it.

Section 3.                      Enforcement of Indebtedness.  The Junior
Creditor will not (i) make any demand for payment of or take any action to
accelerate any Junior Indebtedness, (ii) seek to collect payment of, or enforce
any right or remedies against the Borrower related to or supporting any of the
Junior Indebtedness, (iii) commence or join with any other creditor in
commending any action against the Borrower arising from or relating to the
Junior Indebtedness.
 
 
 

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Section 4.                      Indemnity.  The Junior Creditor hereby
indemnifies Senior Creditor from and against any and all claims, losses, damages
and liabilities arising from, relating to or in connection with this Agreement
and its enforcement.

Section 5.                      Validity.  This Agreement is the legal, valid
and binding obligation of each of the parties hereto and their respective
successors and assigns, and shall inure to the benefit of the parties hereto and
their respective successors and assigns, except that that the Junior Creditor
and the Borrower shall not assign each of their respective rights hereunder
without the prior written consent of the Senior Creditor.

Section 5.                      Amendments.  No amendment or waiver of any
provision of this Agreement shall in any event be effective unless the same
shall be in writing and signed, as applicable, by the parties hereto, and such
amendment or waiver shall be effective only in the specific instance and for the
specific purpose for which given.

Section 6.                      Further Assurances.  The Junior Creditor hereby
agrees that from time to time, the Junior Creditor will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that Senior Creditor may request, in order to
protect the right or interest, including the subordination, granted by the
Junior Creditor pursuant to this Agreement.

Section 7.                      Waiver of Notices.  The Junior Creditor hereby
waives all notices, demands and protests, and all other formalities of every
kind in connection with the enforcement of the obligations of the Junior
Creditor under this Agreement.

Section 8.                      Governing Law.  This Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
regard to its conflict of law principles.

Section 9.                      Corrective Filings.  Junior Creditor shall
cooperate in making any corrective UCC filings reasonably requested by Senior
Creditor to reflect Senior Creditor’s first priority lien in the Assets.
 
 
 

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IN WITNESS WHEREOF, the parties hereto have each duly executed and delivered
this Subordination Agreement as of the date first written above.

 

    VISTA INTERNATIONAL TECHNOLOGIES, INC.                 /s/ Bradley A. Ripps
      By: Bradley A. Ripps       Title: Interim CEO                        
/s/ Timothy D. Ruddy
     
Timothy D. Ruddy
                                 
Richard C. Strain
 

 
 

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