Document:

ex10-5.htm

Exhibit 10.5

 

SUBORDINATION AGREEMENT

 

This Subordination Agreement (this “Agreement”) is entered into as of July 2, 2010, by and among Daniel Mendes (the “Subordinated Creditor”), DRS Inc., a Nevada corporation (the “Company”) and G2 International, Inc., a Texas Corporation (the “Senior Lender”).

 

WHEREAS, the Company has issued a Secured Promissory Note in favor of the Senior Lender dated of even date herewith (as the same may be amended, supplemented or otherwise modified from time to time, the “Senior Note”) pursuant to which, among other things, Senior Lender has agreed, subject to the terms and conditions set forth in the Senior Note, to make certain loans to the Company and all of the Company’s obligations to Senior Lender under the Senior Note are secured by a first-priority security interest in all of the Company’s right, title and interest in and to the receivables described in Exhibit A hereto, which may be amended from time to time to reflect the receivables securing the Senior Note (the “Collateral”); and

 

WHEREAS, in extending or continuing to extend credit to the Company under the Senior Note, Senior Lender is relying on the subordination and agreements relating to the Collateral set forth in this Agreement.

 

NOW, THEREFORE, in order to induce Senior Lender to consummate the transactions contemplated by the Senior Note, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto hereby agree as follows:

 

1.           Subordination. Subordinated Creditor hereby subordinates, and, until the indebtedness owing by the Company to the Senior Lender is paid in full, agrees not to exercise any rights or remedies with respect to, any and all liens, security interests, claims, demands, causes of action, actions, and other rights, however arising, including, without limitation, the right to levy, distrain, sue, execute, or sell or other indebtedness of the Company to the Subordinated Creditor, which Subordinated Creditor now has or may hereafter acquire (the “Subordinated Indebtedness”), with respect to any Collateral now or hereafter designated (regardless of whether such Collateral is now owned or hereafter acquired by the Company), including without limitation, all additions, replacements, and substitutions therefor, and all proceeds thereof.

 

2.           No Waiver; Amendments.  No delay, failure or discontinuance of Senior Lender in exercising any right, power or remedy hereunder or under any other document, instrument or agreement related to the Senior Lender's security interest in the Collateral shall affect such right, power or remedy; nor shall any single or partial exercise of any such right, power or remedy preclude, waive or otherwise affect the further exercise thereof or the exercise of any other right, power or remedy.  The rights, powers and remedies of Senior Lender hereunder are cumulative and not exclusive.  Any waiver, permit, consent or approval of any kind by Senior Lender of any breach of or default under this Agreement, or any such waiver of any provisions or conditions hereof, must be in writing and shall be effective only to the extent set forth in such writing.  This Agreement may be amended or modified only in writing signed by all parties hereto.

 

3.           Notices. All notices, requests and demands given to or made upon the parties hereto must be in writing and shall be deemed to have been given or made when personally delivered or two (2) days after any of the same are deposited in the U.S. mail, first class and postage prepaid, sent to the address set forth above in this case of Senior Lender and below after the signature of each party, or to such other address as may be designated by written notice to Senior Lender and all parties.

 

4.           Governing Law; Successors, and Assigns. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, and shall be binding upon and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns of the parties.

 

  

  

  

In witness whereof, the parties hereto have executed this Agreement as of the date first written above.

 

	  	
Senior Lender:

 

 

	  	
G2 International, Inc.

	  	
a Texas corporatoin

 

 

	  	
By: /s/ Gust Kepler

	  	
Gust Kepler, President

 

 

	  	
Address:

	
13155 Noel Rd.

	  	  	
Suite #1810 Dallas, Tx. 75254

	  	
Telephone:

	
(972) 726-9203

	  	
Fax:

	
(972) 726-7749

 

	  	
Company:

	  
	  	  	  
	  	
DRS Inc,

	  
	  	
a Nevada corporatoin

	  	  	  
	  	
By: /s/ Daniel Mendes

	  	
Daniel Mendes, President

 

 

	  	
Address:

	
8245 SE 36th St.

	  	  	
Mercer Island, WA 98040

	  	
Telephone:

	
(206) 920-9104

	  	
Telecopy:

	
_____________________

	  	  	  
	  	  	  
	  	
Subordinated Lender:

	  	  	  
	  	
/s/ Daniel Mendes

	  	
Daniel Mendes, Individually

 

 

	  	
Address:

	
8245 SE 36th St.

	  	  	
Mercer Island, WA 98040

	  	
Telephone:

	
(206) 920-9104

	  	
Telecopy:

	
_____________________

 

 

  

 

 

  

  

  

  

EXHIBIT A

Description of Collateral

 

INVOICE

 

	
DRS INC.

	  	
Invoice #

	
P.O. BOX 726

	  	
4205

	
Bothell, WA 98041

	  	  
	  	
Date

	
Due Date

	  	
6/25/2010

	
9/20/2010

 

 

	
Customer Information

 

	 	  	  
	
Camwest The Woodlands West

	 	  	  
	
9720 NE 120th Place, Suite 100

	 	
Phone #

	
Fax#

	
Kirkland, WA 98034

	 	
425-742-6000

	
425-742-3333

 

 

	
Service

	
Date

	
P.O.

	
Address

	
Quantity

	
Price

	
Amount

	
Drywall Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	
6/25/2010

	
095-017-12-100

	
Woodlands#17 17024 NE 120th St. Redmond

 

 

 

 

 

 

	
10,999

	
0.74 

9.50%

	
8,139,26T 

773.23

	
Thank you for your business.

	  	  	  	
Balance Due

	
$8,912.49

 

	 	 	 	 	

Payments/Credits

	

$0.00

 

	  	
Web Site

	 	
E-mail

	  	  	
 

	
 

	  	
www.drywallrecycle.com

	 	
info@drywallrecycle.com

	  	  	  	  

 

  

  

  

 

INVOICE

 

	
DRS INC.

	  	
Invoice #

	
P.O. BOX 726

	  	
4202

	
Bothell, WA 98041

	  	  
	  	
Date

	
Due Date

	  	
6/25/2010

	
9/20/2010

 

 

	
Customer Information

 

	 	  	  
	
Camwest The Woodlands West

	 	  	  
	
9720 NE 120th Place, Suite 100

	 	
Phone #

	
Fax#

	
Kirkland, WA 98034

	 	
425-742-6000

	
425-742-3333

 

 

	
Service

	
Date

	
P.O.

	
Address

	
Quantity

	
Price

	
Amount

	
Drywall Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	
6/25/2010

	
095-010-12-100

	

Woodlands#10 16916 NE 120th St, Redmond

 

 

 

 

 

 

 

	
11,848

	
0.74 

9.50%

	
8,767.52T

832.91

	
Thank you for your business.

	  	  	  	
Balance Due

	
$9,600.43

 

	 	 	 	 	

Payments/Credits

	

$0.00

 

	  	
Web Site

	 	
E-mail

	  	  	
 

	
 

	  	
www.drywallrecycle.com

	 	
info@drywallrecycle.com

	  	  	  	  

 

  

  

  

 

INVOICE

 

	
DRS INC.

	  	
Invoice #

	
P.O. BOX 726

	  	
4201

	
Bothell, WA 98041

	  	  
	  	
Date

	
Due Date

	  	
6/25/2010

	
9/16/2010

 

 

	
Customer Information

 

	 	  	  
	
Camwest Hazelwood

	 	  	  
	
9720 NE 120th Place, Suite 100

	 	
Phone #

	
Fax#

	
Kirkland, WA 98034

	 	
425-742-6000

	
425-742-3333

 

 

	
Service

	
Date

	
P.O.

	
Address

	
Quantity

	
Price

	
Amount

	
Drywall Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	
6/22/2010

	
104-061-12-100

	

Woodlands#161 11568 178th PL NE, Redmond

 

 

 

 

 

 

 

	
9,125

	
0.74 

9.50%

	
6,752.50T

641.49

	
Thank you for your business.

	  	  	  	
Balance Due

	
$7,393.99

 

	 	 	 	 	

Payments/Credits

	

$0.00

 

	  	
Web Site

	 	
E-mail

	  	  	
 

	
 

	  	
www.drywallrecycle.com

	 	
info@drywallrecycle.com

	  	  	  	  

 

 

  

  

  

INVOICE

 

	
DRS INC.

	  	
Invoice #

	
P.O. BOX 726

	  	
4189

	
Bothell, WA 98041

	  	  
	  	
Date

	
Due Date

	  	
6/25/2010

	
9/2/2010

 

 

	
Customer Information

 

	 	  	  
	
Camwest Hazelwood

	 	  	  
	
9720 NE 120th Place, Suite 100

	 	
Phone #

	
Fax#

	
Kirkland, WA 98034

	 	
425-742-6000

	
425-742-3333

 

 

	
Service

	
Date

	
P.O.

	
Address

	
Quantity

	
Price

	
Amount

	
Drywall Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	
6/10/2010

	
104-02-12-100

	

Hazelwood#2 11427 177th PL NE, Redmond

 

 

 

 

 

 

 

	
9,271

	
0.74 

9.50%

	
6,860.54T

651.75

	
Thank you for your business.

	  	  	  	
Balance Due

	
$7,512.29

 

	 	 	 	 	

Payments/Credits

	

$0.00

 

	  	
Web Site

	 	
E-mail

	  	  	
 

	
 

	  	
www.drywallrecycle.com

	 	
info@drywallrecycle.com

	  	  	  	  

 

  

  

  

INVOICE

 

	
DRS INC.

	  	
Invoice #

	
P.O. BOX 726

	  	
4187

	
Bothell, WA 98041

	  	  
	  	
Date

	
Due Date

	  	
6/25/2010

	
9/2/2010

 

 

	
Customer Information

 

	 	  	  
	
Camwest Hazelwood

	 	  	  
	
9720 NE 120th Place, Suite 100

	 	
Phone #

	
Fax#

	
Kirkland, WA 98034

	 	
425-742-6000

	
425-742-3333

 

 

	
Service

	
Date

	
P.O.

	
Address

	
Quantity

	
Price

	
Amount

	
Drywall Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	
6/9/2010

	
104-072-12-100

	

Hazelwood#72 11441 178th PL NE, Redmond

 

 

 

 

 

 

 

	
9,271

	
0.74 

9.50%

	
6,860.54T

651.79

	
Thank you for your business.

	  	  	  	
Balance Due

	
$7,512.29

 

	 	 	 	 	

Payments/Credits

	

$0.00

 

	  	
Web Site

	 	
E-mail

	  	  	
 

	
 

	  	
www.drywallrecycle.com

	 	
info@drywallrecycle.comex10-6.htm

Exhibit 10.6

 

PROMISSORY NOTE

 

	
Borrower:

	
DRS Inc. of 12900 NE 180th ST #200 - Bothell, WA (individually and collectively the "Borrower")

 

	
Lender:

	
Daniel Mendes 

8245 SE 36th St. 

Mercer Island, WA 98040

 

Principal Amount:                                                                           $40,000.00

 

	
1.

	
FOR VALUE RECEIVED, The Borrower promises to pay to Daniel Mendes at such address as may be provided in writing to the Borrower, the principal sum of forty thousand ($40,000.00) USD, with no interest payable.

 

	
2. 

	
This Note will be repaid in full on or before due date of May 1, 2010.

 

	
3.

	
At any time while not in default under this Note, the Borrower may pay the outstanding balance then owing under this Note to Daniel Mendes without further bonus or penalty.

 

	
4.

	
Notwithstanding anything to the contrary in this Note, if the Borrower defaults in the performance of any obligation under this Note, then Daniel Mendes may declare the principal amount owing under this Note at that time to be immediately due and payable.

 

	
5.

	
If the Borrower defaults in payment as required under this Note or after demand for ten (10) days, the Security will be immediately provided to Daniel Mendes and Daniel Mendes is granted all rights of repossession as a secured party.

 

	
6.

	
This Note will be construed in accordance with and governed by the laws of the State of Washington.

 

	
7.

	
If any term, covenant, condition or provision of this Note is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Note will in no way be affected, impaired or invalidated as a result.

 

	
8.

	
All costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by Daniel Mendes in enforcing this Note as a result of any default by the Borrower, will be added to the principal then outstanding and will immediately be paid by the Borrower.

 

	
9.

	
This Note will enure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Borrower and Daniel Mendes. The Borrower waives presentment for payment, notice of non-payment, protest and notice of protest.

 

 

  

  

  

 

	
10.

	
This Note is secured by the following security (the 'Security'): This loan will be secured by DRS Inc. receivables up to the amount of the loan. DRS Inc. average receivables are roughly 350-450K at any given time.

 

	
11.

	
The Borrower grants to Daniel Mendes a security interest in the Security until this Note is paid in full. Daniel Mendes will be listed as a lender on the title of the Security whether or not Daniel Mendes elects to perfect the security interest in the Security.

 

 

 

IN WITNESS WHEREOF the parties have duly affixed their signatures under seal on this 14th day of April, 2009.

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