EXHIBIT 10.63


 


	
  Wells Fargo Equipment Finance, Inc.

  733 Marquette Avenue, Suite 700

  MAC N9306-070

  Minneapolis, MN 55402

  	
  Intercreditor Agreement

  



 


This
agreement. made as of the 16th day of December. 2002 by and between Wells Fargo
Business Credit, Inc. (“Bank”) and Wells Fargo Equipment Finance, Inc.
(“WFEFI”)


 


WITNESSETH:


 


WHEREAS,
Bank has entered or intends to enter into a revolving credit agreement (the
“Credit Agreement”) with Medtox Diagnostics, Inc. (the “Borrower”) whereby Bank
will provide the Borrower with a committed/conditional working capital line of
credit (the “Revolving Credit Facility”); and


 


WHEREAS,
in connection with the Revolving Credit Facility, the Borrower has or will
grant to Bank a security interest (the “Bank Security Interest”) in the
following property:


 


any and all of Borrower’s inventory, accounts and all other rights to
payment of every type and description and furniture, fixtures, machinery,
equipment, vehicles, prepaid insurance, supplies, patents, patent rights,
copyrights, trademarks, trade names, royalty rights, franchise rights. chattel
paper, license rights, documents, instruments, general intangibles, investment
property, goodwill and any and all other goods, now owned or hereafter acquired
by the Borrower and wherever located, together with all substitutions and
replacements therefore and products and proceeds of any of the foregoing
property and, in the case of all tangible collateral, together with (i) all
accessories, attachments, parts, equipment, accessions and repairs now or
hereafter attached or affixed to or used in connection with any such goods and
(ii) all warehouse receipts, bills of lading and other documents of title now
or hereafter covering such goods (“collectively, the Collateral”); and


 


WHEREAS,
WFEFI intends to provide Borrower with equipment loans or leases in an
aggregate amount of $428,495. 82 (Equipment Transactions:) from time to time
for the purpose of acquiring equipment (“WFEFI Equipment”) and in


connection
with such equipment loans or leases, WFEFI will acquire a security interest
(the “WFEFI Security Interest”) in the Collateral.


 

















 


NOW,
THEREFORE, in consideration of the mutual promises and covenants hereinafter
set forth, and in consideration of the recitals, which are hereby made a part
of this Agreement, it is hereby agreed by the parties that:


 


1. Notwithstanding the actual priority of tile perfected security
interests. liens or other encumbrances of the respective parties, which any
such party would otherwise obtain over and by virtue of a prior filing or
obtaining prior possession of any collateral pledged by the Borrower in
connection with the Revolving Credit Facility, or the Equipment Transactions
(if any such liens are perfected by possession), the priority with respect to
such security interests, liens or other encumbrances will be as follows:


 


(a) As to the WFEFI Equipment the WFEFI
Security Interest shall have priority over the Bank Security Interest and the
Bank Security Interest is hereby expressly subordinated thereto.


 


(b) As to the Collateral (exclusive of the
WFEFI Equipment) the Bank Security Interest shall have priority over the WFEFI
Security Interest and the WFEFI Security Interest is hereby expressly
subordinated thereto.


 


This
paragraph 1 shall give no rights to either WFEFI or Bank as against the other
if and to the extent that its respective security interest in either the
Collateral or the WFEFI Equipment, at the time moneys are collected or received
from the liquidation of either the Collateral or the WFEFI equipment, is (i)
not perfected: (ii) is avoidable under the United States Bankruptcy Code as a
preference or otherwise; or (iii) is junior to the security interest of any
other intervening third party.


 


2. None of the parties hereto will (i) exercise any collection rights
with respect to any of the Collateral in which such party does not have the
first priority security interest; (ii) take possession of, sell or dispose of,
or otherwise deal with such Collateral; or (iii) exercise or enforce any right
or remedy which may be available to such party with respect to such Collateral
upon default, without the prior written consent of the party(ies) holding
senior security interests in such Collateral pursuant to Section 1 above.


 


3. Neither Bank nor WFEFI (i) makes any representation or warranty
concerning the Collateral or the validity, perfection or (except as to the
subordination effected hereby) priority of any security interest therein, or
(ii) shall have any WFBC Intercreditor Agreement.


 


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