Common use of Subordination of Debt Clause in Contracts

Subordination of Debt. (a) Debtors may pay, and Junior Creditors may retain, Permitted Payments (as defined below) with respect to the Junior Debt, provided that following the commencement of an Enforcement Action and for so long as an Enforcement Action remains ongoing, Junior Creditors shall be entitled to no Permitted Payments until the Senior Creditor Repayment shall have occurred, other than Permitted Payments described in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall have occurred, no Junior Creditor will ask for, demand, xxx for, take or receive from any Debtor, by setoff or in any other manner, the whole or any part of the Junior Debt which does not constitute a Permitted Payment, including, without limitation, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant to the terms and conditions hereof and which contain the subordination legend required hereby), or the taking of any security for any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender). (b) Subject to the terms of Section 2(a) above, unless and until the Senior Creditor Repayment shall have occurred, in the event that any Junior Creditor shall receive any cash payment or distribution with respect to the Junior Debt which does not constitute a Permitted Payment, then, in such event, such payment or distribution (other than a Permitted Payment described in Section 2(c)(i)) shall be deemed to have been paid to such Junior Creditor in trust for the benefit of Senior Creditor and shall be immediately paid over to Senior Creditor in the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) to the extent necessary to pay the Senior Debt after giving effect to any concurrent payment to Senior Creditor from other sources. (c) As used herein, the term “Permitted Payment” shall mean any of the following:

Subordination of Debt. Creditor hereby subordinates payment by the Borrower of any and all indebtedness, liabilities, guarantees and other obligations of the Borrower to such Creditor under that certain Promissory Note dated as of April 1, 2016 in the initial principal amount of US$2,000,000.00 (a) Debtors may paythe “Subordinated Debt”), and Junior Creditors may retain, Permitted Payments (as defined below) with respect to the Junior payment to Lender, in full in cash, of all indebtedness, liabilities, guarantees and other obligations of the Borrower to Lender under that certain Senior Convertible Promissory Note (the “Senior Note”) dated on or about June 2016 in the initial principal amount of US$750,000.00 (the “Senior Debt, provided that following the commencement of an Enforcement Action and for so long as an Enforcement Action remains ongoing, Junior Creditors shall be entitled to no Permitted Payments until the Senior Creditor Repayment shall have occurred, other than Permitted Payments described in Section 2(c)(i”). Unless and until all of the Senior Debt has been indefeasibly paid in full, in cash (after the passage of any relevant preference period) and all obligations of the Lender to make loans or extend other financial accommodations to the Borrower have terminated, Creditor Repayment shall have occurredagrees not to do any of the following, no Junior Creditor will directly or indirectly: ask forfor or accept payment of all or any part of the Subordinated Debt, in cash or other property or by set-off or in any other manner, demand, xxx for, take accelerate the maturity of, or receive from otherwise enforce any Debtor, by setoff or in any other manner, the whole or any part of the Junior Debt which does not constitute a Permitted PaymentSubordinated Debt, including, without limitation, the taking enforce any guaranty of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant to of the terms and conditions hereof and which contain the subordination legend required hereby)Subordinated Debt, or the taking of take any security for any of the Junior Debt (other than security interests in the Collateral pursuant Subordinated Debt, exercise any rights or remedies with respect to the Subordinated Debenture Documents in effect on Debt, judicially or non-judicially (including without limitation the date hereof unless permitted by Section 8 hereofcommencement of any bankruptcy or insolvency proceeding against the Borrower), and while an Enforcement Action is outstandingor attempt to do any of the foregoing. Notwithstanding anything in this Section 1 to the contrary, the holders Creditor and Borrower may amend the documentation of the Junior Subordinated Debt will not accept to (i) decrease the interest rate under the Subordinated Debt; or (ii) extend the maturity date applicable to the Subordinated Debt. Creditor further agrees that upon any Permitted Payments (distribution of the assets or readjustment of the indebtedness of the Borrower, Lender shall be entitled to receive payment in full in cash of all of the Senior Debt prior to the payment of all or any part of the Subordinated Debt. Creditor shall endorse all notes and other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over written evidence of the Subordinated Debt with a statement that they are subordinated to the Senior Lender). (b) Subject Debt pursuant to the terms of Section 2(a) above, unless and until the Senior Creditor Repayment shall have occurred, in the event that any Junior Creditor shall receive any cash payment or distribution with respect to the Junior Debt which does not constitute a Permitted Payment, thenthis agreement, in such eventform as Lender shall require, and Creditor will exhibit copies of such payment or distribution (notes and other than a Permitted Payment described in Section 2(c)(i)) written evidence of the Subordinated Debt to Lender so that Lender can confirm that such endorsement has been made, but this Subordination Agreement shall be deemed fully effective, even if no such endorsement is made. Any amounts received by any Creditor contrary to have been paid to such Junior Creditor the provisions of this Section shall be held in trust by such Creditor for the benefit of Senior Creditor Lender and shall forthwith be immediately paid over to Senior Creditor in the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) Lender to be applied to the extent necessary to pay Lender debt in such order as Lender in its sole discretion shall determine, without limiting any other right of Lender hereunder or otherwise and without otherwise affecting the Senior Debt after giving effect to any concurrent payment to Senior Creditor from other sourcesliability of such Creditor. (c) As used herein, the term “Permitted Payment” shall mean any of the following:

Subordination of Debt. Creditor hereby subordinates payment by the Borrower of any and all indebtedness, liabilities, guarantees and other obligations of the Borrower to Creditor, now existing or hereafter arising * (a) Debtors may paycollectively, the "Subordinated Debt"), to the payment to Greyrock, in full in cash, of all indebtedness, liabilities, guarantees and Junior Creditors may retainother obligations of the Borrower to Greyrock, Permitted Payments (as defined below) now existing or hereafter arising, including without limitation any interest accruing after the commencement of any bankruptcy, arrangement, or reorganization proceeding with respect to Borrower (whether or not such interest is recoverable from the Junior Borrower or allowable or provable in any such proceeding) (collectively, the "Greyrock Debt, provided that following the commencement of an Enforcement Action and for so long as an Enforcement Action remains ongoing, Junior Creditors shall be entitled to no Permitted Payments until the Senior Creditor Repayment shall have occurred, other than Permitted Payments described in Section 2(c)(i"). Unless Creditor represents and until warrants that the Senior Subordinated Debt ** the following: *Under the Promissory Note referred to below and all extensions, renewals and modifications thereof **consists of That certain Promissory Note dated December 31, 1998 in the original principal amount of $12,000,000, which has a present unpaid principal balance of $12,000,000. Creditor Repayment shall have occurred, no Junior Creditor will agrees not to ask for, demand, xxx sue for, take or receive from alx xr any Debtorpart of the Subordinated Debt nor any security therefor, unless and until all of the Greyrock Debt has been paid and performed in full, in cash. Creditor further agrees that upon any distribution of the assets or readjustment of the indebtedness of the Borrower whether by setoff reason of liquidation, composition, bankruptcy, arrangement, receivership, assignment for the benefit of creditors or in any other manneraction or proceeding involving the readjustment of all or any of the Subordinated Debt, or the whole application of the assets of the Borrower to the payment or liquidation thereof, Greyrock shall be entitled to receive payment in full in cash of all of the Greyrock Debt prior to the payment of all or any part of the Junior Subordinated Debt, and in order to enable Greyrock to enforce its rights hereunder in any such action or proceeding, Greyrock is hereby irrevocably authorized and empowered in its sole discretion (but without any obligation on its part) to make and present for and on behalf of Creditor such proofs of claim against the Borrower on account of the Subordinated Debt as Greyrock may deem expedient or proper and to vote such proofs of claim in any such proceeding and to receive and collect any and all dividends or other payments or disbursements made thereon in whatever form the same may be paid or issued and to apply same on account of the Greyrock Debt. Creditor further agrees to execute and deliver to Greyrock such assignments or other instruments as may be required by Greyrock in order to enable Greyrock to enforce any and all such claims and to collect any and all dividends or other payments or disbursements which does not constitute may be made at any time on account of all and any of the Subordinated Debt. Creditor shall endorse all notes and other written evidence of the Subordinated Debt with a Permitted Payment, including, without limitation, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which statement that they are subordinated to the Greyrock Debt pursuant to the terms and conditions hereof and which contain the subordination legend required hereby), or the taking of any security for any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender). (b) Subject to the terms of Section 2(a) above, unless and until the Senior Creditor Repayment shall have occurred, in the event that any Junior Creditor shall receive any cash payment or distribution with respect to the Junior Debt which does not constitute a Permitted Payment, thenthis agreement, in such eventform as Greyrock shall require, and Creditor will exhibit the originals of such payment or distribution (notes and other than a Permitted Payment described in Section 2(c)(i)) written evidence of the Subordinated Debt to Greyrock so that Greyrock can confirm that such endorsement has been made, but this Subordination Agreement shall be deemed fully effective, even if no such endorsement is made. Any amounts received by Creditor contrary to have been paid to such Junior Creditor the provisions of this Section shall be held in trust by Creditor for the benefit of Senior Creditor Greyrock and shall forthwith be immediately paid over to Senior Creditor in the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) Greyrock to be applied to the extent necessary to pay Greyrock debt in such order as Greyrock in its sole discretion shall determine, without limiting any other right of Greyrock hereunder or otherwise and without otherwise affecting the Senior Debt after giving effect to any concurrent payment to Senior Creditor from other sourcesliability of Creditor. (c) As used herein, the term “Permitted Payment” shall mean any of the following:

Subordination of Debt. Creditor hereby subordinates payment by the Borrower of and and all indebtedness, liabilities, guarantees and other obligations of the Borrower to Creditor, now existing or hereafter arising (acollectively, the "Subordinated Debt"), to the payment to Coast, in full in cash, of all indebtedness, liabilities, guarantees and other obligations of the Borrower to Coast, now existing or hereafter arising (including without limitation any interest, charges and other sums accruing after the filing of a petition by or against Borrower under the Bankruptcy Code) Debtors may pay(the "Coast Debt"). Creditor represents and warrants that the Subordinated Debt includes without limitation the following: THAT CERTAIN CONVERTIBLE SUBORDINATED DEBENTURE DUE FEBRUARY 6, 2003 IN THE ORIGINAL PRINCIPAL AMOUNT OF $_______________, WHICH HAS A PRESENT UNPAID PRINCIPAL BALANCE OF $_______________ THE "DEBENTURE"). Creditor represents and warrants that it has not transferred or assigned the Subordinated Debt or given any other subordination agreement in respect thereof, and Junior Creditors may retain, Permitted Payments (as defined below) with respect that it will not do so without prior written notice to the Junior Debt, provided that following the commencement of an Enforcement Action Coast and for so long as an Enforcement Action remains ongoing, Junior Creditors shall be entitled without making such transfer or assignment or subordination expressly subject to no Permitted Payments until the Senior this Agreement. Creditor Repayment shall have occurred, other than Permitted Payments described in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall have occurred, no Junior Creditor will agrees not to ask for, demand, xxx for, take or receive from any Debtor, by setoff or in any other manner, the whole all or any part of the Junior Subordinated Debt which does not constitute a Permitted Payment, including, without limitation, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant to the terms and conditions hereof and which contain the subordination legend required hereby), or the taking of nor any security for any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender). (b) Subject to the terms of Section 2(a) above, therefor unless and until all of the Senior Creditor Repayment shall have occurredCoast Debt has been paid and performed in full, in the cash; provided that, so long as no Event of Default and no event that which, with notice or passage of time or both, would constitute an Event of Default under any Junior Creditor shall receive any cash payment present or distribution with respect future document, instrument or agreement evidencing, securing or relating to the Junior Debt which does not constitute a Permitted PaymentCoast Debt, then, in such event, such payment or distribution (other than a Permitted Payment described in Section 2(c)(i)) shall be deemed to have been paid to such Junior Creditor in trust for the benefit of Senior Creditor both before and shall be immediately paid over to Senior Creditor in the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) to the extent necessary to pay the Senior Debt after giving effect to any concurrent the following payments. Subordinated Creditor may accept payment to Senior Creditor from other sources. (c) As used herein, the term “Permitted Payment” shall mean any of the followingfollowing amounts on the Subordinated Debt:

Subordination of Debt. (a) Debtors may payThe Subordinated Lender and the Company covenant and agree that the obligations of the Company with respect to any payment of principal, and Junior Creditors may retain, Permitted Payments (as defined below) interest or other amounts payable with respect to the Junior Subordinated Debt are and shall be subordinate, to the extent and in the manner hereinafter set forth, for right of payment and subject to the prior payment or provision for payment in full of all principal, interest or other amounts payable with respect to the Senior Debt, and all amendments, renewals, extensions and refundings of the Senior Debt; provided however that following the commencement of an Enforcement Action and for so as long as an Enforcement Action remains ongoingnone of the events described in Section 1(b) or 1(c) have occurred, Junior Creditors the Subordinated Lender shall be entitled to no Permitted Payments until receive and retain all regularly scheduled payments of principal of an interest on the Senior Creditor Repayment Subordinated Debt (but the Subordinated Lender shall have occurrednot accept, other than Permitted Payments described in Section 2(c)(i). Unless and until nor shall the Senior Creditor Repayment shall have occurredcompany make any prepayment on the Subordinated Debt, no Junior Creditor will ask fornor accelerate the payment schedule under the Subordinated Debt, demand, xxx for, take or receive from any Debtor, by setoff or in any other manner, without the whole or any part prior written consent of the Junior Debt which does not constitute a Permitted Payment, including, without limitation, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant to the terms and conditions hereof and which contain the subordination legend required hereby), or the taking of any security for any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender). It is a condition precedent to the effectiveness of this Agreement that the Subordinated Lender receive the sum of $4,000,000.00, from the Company in accordance with agreements between the Company and Subordinated Lender of event dater hereof. (b) Subject Upon the maturity of the Senior Debt be demand for payment of the Senior Debt, termination of the Credit Agreement or otherwise, all principal thereof interest due thereon shall first be paid in full, or such payment duly provided for in cash or a manner satisfactory to the terms holder of Section 2(a) above, unless and until the Senior Creditor Repayment shall have occurredDebt, in before any payment is made on account of the principal of or interest on the Subordinated Debt. (c) Upon the happening of an event that any Junior Creditor shall receive any cash payment or distribution of default with respect to the Junior Senior Debt, as such event of default is defined in the Credit Agreement, permitting the holder of the Senior Debt which does not constitute a Permitted Paymentto accelerate maturity thereof, then, until (1) such event of default shall have been cured or waived or shall have ceased to exist, or (2) 180 days shall have passed since the date of the event of default shall be made to the Subordinated Lender with respect to the principal of or interest on the Subordinated Debt. (d) In the event that, contrary to the provisions of Sections 1(b) or 1(c) hereof, any payment or distribution of assets of the Company of any character, whether in such eventcash, securities or other property, is received by the Subordinated Lender before the Senior Debt is paid in full, such payment or distribution (other than a Permitted Payment described in Section 2(c)(i)) shall will be deemed to have been paid to such Junior Creditor held in trust for the benefit of Senior Creditor of, and shall will be immediately paid over to Senior Creditor in or delivered to, the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) to the extent necessary to pay holder of the Senior Debt (or its duly authorized representative) until Senior Debt has been paid in full, after giving effect to any the concurrent payment or distribution (or provision therefor) to Senior Creditor from other sources. (c) As used herein, the term “Permitted Payment” shall mean any holder of the following:Senior Debt. Under no circumstances, however, shall the Subordinated Lender be obligated to turn over any scheduled principal or interest payment on the Subordinated Debt that is received by the Subordinated Lender as permitted by Section 1(a) and prior to the occurrence of the earliest event specified in Sections 1(b) or 1

Subordination of Debt. Subordinating Creditor hereby subordinates payment by the Borrower of any and all indebtedness, liabilities, guarantees and other obligations of the Borrower to Subordinating Creditor, now existing or hereafter arising (a) Debtors may paycollectively, the "Subordinated Debt"), to the payment to Silicon, in full in cash, of all Silicon Debt, and Junior Creditors may retain, Permitted Payments (as defined below) with respect Subordinating Creditor agrees not to the Junior Debt, provided that following the commencement of an Enforcement Action and for so long as an Enforcement Action remains ongoing, Junior Creditors shall be entitled to no Permitted Payments until the Senior Creditor Repayment shall have occurred, other than Permitted Payments described in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall have occurred, no Junior Creditor will ask for, demand, xxx for, take or receive from any Debtor, by setoff or in any other manner, the whole all or any part of the Junior Subordinated Debt nor any security therefor unless and until all of the Silicon Debt has been paid and performed in full, in cash; provided that, so long as all financial covenants of the Borrower to Silicon are met both before and immediately after giving effect to the following payments, and so long as no default or event of default has occurred under any document, instrument or agreement evidencing, securing or relating to the Silicon Debt both before and after giving effect to the following payments and provided that the Term Loan Extension Conditions set forth in Section 5.1 of the Schedule to the Loan and Security Agreement between Silicon and the Borrower dated June 2, 1992 have been met, Subordinated Creditor may accept payment of the following amounts on the Subordinated Debt: Payment in accordance with the terms of the Subordinated Debt (but without the effect of rights of acceleration on default or other events) Subordinating Creditor further agrees that upon any distribution of the assets or readjustment of the indebtedess of the Borrower whether by reason of liquidation, composition, bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other action or proceeding involving the readjustment of all or any of the Subordinating Debt, or the application of the assets of the Borrower to the payment or liquidation thereof, Silicon shall be entitled to receive payment in full of all of the Silicon Debt prior to the payment of all or any part of the Subordinated Debt, and in order to enable Silicon to enforce its rights hereunder in any such action or proceeding, Silicon is hereby irrevocably authorized and empowered in its discretion (but without any obligation on its part) to make and present for and on behalf of Subordinating Creditor such proofs of claim against the Borrower on account of the Subordinated Debt as Silicon may deem expedient or proper and to vote such proofs of claim in any such proceeding and to receive and collect any and all dividends or other payments or disbursements made thereon in whatever form the same may be paid or issued and to apply same on account of the Silicon Debt. Subordinating Creditor further agrees to execute and deliver to Silicon such assignments or other instruments as may be required by Silicon in order to enable Silicon to enforce any and all such claims and to collect any and all dividends or other payments or disbursements which does not constitute may be made at any time on account of all and any of the Subordinated Debt, Subordinating Creditor shall endorse all notes and other written evidence of the Subordinated Debt with a Permitted Payment, including, without limitation, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which statement that they are subordinated to the Silicon Debt pursuant to the terms and conditions hereof and which contain the subordination legend required hereby), or the taking of any security for any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender). (b) Subject to the terms of Section 2(a) above, unless and until the Senior Creditor Repayment shall have occurred, in the event that any Junior Creditor shall receive any cash payment or distribution with respect to the Junior Debt which does not constitute a Permitted Payment, thenthis agreement, in such eventform as Silicon shall require, and Subordinating Creditor will exhibit the originals of such payment or distribution (notes and other than a Permitted Payment described in Section 2(c)(i)) written evidence of the Subordinated Debt to Silicon so that Silicon can confirm that such endorsement has been made, but this Subordination Agreement shall be deemed to have been paid to fully effective, even if no such Junior Creditor in trust for the benefit of Senior Creditor and shall be immediately paid over to Senior Creditor in the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) to the extent necessary to pay the Senior Debt after giving effect to any concurrent payment to Senior Creditor from other sourcesendorsement is made. (c) As used herein, the term “Permitted Payment” shall mean any of the following:

Subordination of Debt. (a) Debtors may payUpon a Default, the Guarantor hereby subordinates the payment of principal, interest, and Junior Creditors may retain, Permitted Payments (as defined below) with respect any other amounts due on any current or future indebtedness owed by the Borrower to the Junior Guarantor (the “Company Debt, provided that following ”) to the commencement of an Enforcement Action and for so long as an Enforcement Action remains ongoing, Junior Creditors shall be entitled to no Permitted Payments until the Senior Creditor Repayment shall have occurred, other than Permitted Payments described prior payment in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall have occurred, no Junior Creditor will ask for, demand, xxx for, take or receive from any Debtor, by setoff or in any other manner, the whole or any part full of the Junior Guarantor’s Obligations and agrees that all of the right and interest of the Guarantor in the Company Debt which does not constitute a Permitted Payment, including, without limitation, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant shall at all times be subordinate to the terms right and conditions hereof and which contain the subordination legend required hereby), or the taking of any security for any interest of the Junior Debt (other than security interests Lender in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender)Guarantor’s Obligations. (b) Subject to Upon a Default, the terms Guarantor will not demand or accept, and the Borrower will not offer or make, directly or indirectly, by setoff, redemption, or otherwise, any payment on any part of Section 2(a) above, unless and the Company Debt until the Senior Creditor Repayment shall have occurred, in full amount of the event that any Junior Creditor shall receive any cash payment or distribution with respect to the Junior Debt which does not constitute a Permitted Payment, then, in such event, such payment or distribution (other than a Permitted Payment described in Section 2(c)(i)) shall be deemed to have Guarantor’s Obligations has been paid to such Junior Creditor in trust for the benefit of Senior Creditor and shall be immediately paid over to Senior Creditor in the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) to the extent necessary to pay the Senior Debt after giving effect to any concurrent payment to Senior Creditor from other sourcesLender in cash. (c) As used hereinAny payment of Company Debt received by the Guarantor that is prohibited under this Agreement shall be held by the Guarantor in trust for the Lender. If the Guarantor fails to endorse any such payment where necessary or appropriate, the term “Permitted Payment” shall mean Guarantor hereby irrevocably appoints the Lender as attorney-in-fact for the Guarantor, with full power to make any such endorsement and with full power of substitution. (d) Until the full amount of the Guarantor’s Obligations has been received in cash by the Lender, the Guarantor, without the prior written consent of the Lender, will not (i) accelerate the maturity of any of the following:Company Debt other than in the ordinary course of business operations, (ii) exercise any rights or remedies or take any action to collect or enforce any of the Company Debt other than in the ordinary course of business operations, (iii) join with any other creditors of the Borrower in filing any petition commencing any action described in Section 7(e) against or in respect of the Borrower, (iv) sell, assign, transfer, or otherwise dispose of any part of the Company Debt, (v) amend or modify any instrument or agreement evidencing, creating, or executed in connection with any part of the Company Debt other than in the ordinary course of business operations, or (vi) create additional Company Debt other than in the ordinary course of business operations. (e) The Guarantor shall maintain proper books and records concerning the Company Debt and shall permit the Lender to inspect and photocopy those books and records or any instrument evidencing or creating any of the Company Debt.

Subordination of Debt. Purchaser contemplates a loan from Comerica Bank - Texas to acquire certain financing which shall be necessary for closing hereunder. The following terms of subordination are required by Comerica Bank - Texas as a condition to its loan to Purchaser: (a) Debtors may payThe payment of all indebtedness now or at any time hereafter owing by Purchaser to Sellers, of whatever nature and however arising, shall be subject, subordinate, and Junior Creditors may retain, Permitted Payments (as defined below) with respect inferior to the Junior Debtprior payment of all indebtedness now or hereafter owing by Purchaser to Comerica Bank - Texas, provided whether now existing or hereafter arising ("Senior Indebtedness"). Provided, however, that following the commencement of an Enforcement Action and for so long as an Enforcement Action remains ongoing, Junior Creditors shall be entitled to no Permitted Payments until the Senior Creditor Repayment shall have there has not occurred, other than Permitted Payments described in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall have occurredor will not occur as a result of such a payment, no Junior Creditor will ask foran Event of Default, demand, xxx for, take or receive from any Debtor, by setoff or in any other manner, the whole or any part of the Junior Debt which there does not constitute a Permitted Paymentcondition which, includingwith lapse of time or notice, without limitationwill constitute an Event of Default under the Credit Agreement dated December 1, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant to the terms 1995, as amended, between Purchaser and conditions hereof and which contain the subordination legend required hereby)Comerica Bank - Texas, or the taking of under any security for any instrument executed and delivered to secure indebtedness owing by Purchaser to Comerica Bank - Texas, Purchaser may pay to Sellers from the income realized by it from its business and operations such amount or amounts as may be required to discharge the indebtedness of the Junior Debt (other than security interests in the Collateral pursuant Purchaser to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender)said Sellers. (b) Subject Until the payment in full of the Senior Indebtedness, Sellers will not receive, accept, or collect any sum or asset for application on the indebtedness owing by Purchaser to the terms of Section 2(aSellers, except as provided in subparagraph (a) above, unless and until the Senior Creditor Repayment shall have occurred, in the event that any Junior Creditor shall receive any cash payment or distribution with respect to the Junior Debt which does not constitute a Permitted Payment, then, in such event, such payment or distribution (other than a Permitted Payment described in Section 2(c)(i)) shall be deemed to have been paid to such Junior Creditor in trust for the benefit of Senior Creditor and shall be immediately paid over to Senior Creditor in the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) to the extent necessary to pay the Senior Debt after giving effect to any concurrent payment to Senior Creditor from other sources. (d) In the event of any proceedings pursuant to any debtor relief laws involving Purchaser, said Sellers will at the request of the holder of the Senior Indebtedness file any claims, proof of claims, or other instruments of similar character and do and perform such other acts and things as are necessary and proper to enforce the obligations of Purchaser to said Sellers and will receive, hold, and remit pursuant to subparagraph (c) As used hereinabove any and all sums, the term “Permitted Payment” shall mean any assets, or dividends received in such proceedings on account of the following:indebtedness of Purchaser to Sellers.

Subordination of Debt. (a) Debtors may payThe Subordinated Lender and the Company covenant and agree that the obligations of the Company with respect to any payment of principal, and Junior Creditors may retain, Permitted Payments (as defined below) interest or other amounts payable with respect to the Junior Subordinated Debt are and shall be subordinate, to the extent and in the manner hereinafter set forth, for right of payment and subject to the prior payment or provision for payment in full of all principal, interest or other amounts payable with respect to the Senior Debt, and all amendments, renewals, extensions and refundings of the Senior Debt; provided however that following the commencement of an Enforcement Action and for so as long as an Enforcement Action remains ongoingnone of the events described in Sections 1(b) or 1(c) have occurred, Junior Creditors the Subordinated Lender shall be entitled to no Permitted Payments until receive and retain all regularly scheduled payments of interest (up to a maximum interest rate of fifteen percent) on the Senior Creditor Repayment Subordinated Debt (but the Subordinated Lender shall have occurrednot accept, other than Permitted Payments described in Section 2(c)(i). Unless and until nor shall the Senior Creditor Repayment shall have occurredCompany make, no Junior Creditor will ask forany prepayment on the Subordinated Debt, demandnor amend the payment schedule or the interest rate under the Subordinated Debt, xxx for, take or receive from any Debtor, by setoff or in any other manner, without the whole or any part prior written consent of the Junior Debt which does not constitute a Permitted Payment, including, without limitation, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant to the terms and conditions hereof and which contain the subordination legend required hereby), or the taking of any security for any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender). (b) Subject Upon the maturity of the Senior Debt by lapse of time, demand, acceleration or otherwise (including without limitation upon any assignment, transfer or sale of all or substantially all of the Company's business), all principal thereof and interest due thereon shall first be paid in full, or 2 such payment duly provided for in cash or in a manner satisfactory to the terms holder of Section 2(a) above, unless and until the Senior Creditor Repayment Debt, before any payment is made on account of the principal of or interest on the Subordinated Debt. (c) Whether or not Senior Debt is due, upon receipt by the Subordinated Lender and the Company of written notice from Senior Lender that no payment may be made by the Company to the Subordinated Lender, the Subordinated Lender shall have occurrednot accept, and the Company shall not make, any payment of principal or interest of Subordinated Debt. The determination to so notify the Company and the Subordinated Lender shall be in Senior Lender's sole and absolute discretion. (d) In the event that that, contrary to the provisions of Sections 1(b) or 1(c) hereof, any Junior Creditor shall receive any cash payment or distribution with respect to of assets of the Junior Company of any character, whether in cash, securities or other property, is received by the Subordinated Lender before the Senior Debt which does not constitute a Permitted Payment, then, is paid in such eventfull, such payment or distribution (other than a Permitted Payment described in Section 2(c)(i)) shall will be deemed to have been paid to such Junior Creditor held in trust for the benefit of Senior Creditor of, and shall will be immediately paid over to Senior Creditor in or delivered to, the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) to the extent necessary to pay holder of the Senior Debt (or its duly authorized representative) until the Senior Debt has been paid in full, after giving effect to any the concurrent payment or distribution (or provision therefor) to Senior Creditor from other sources. (c) As used herein, the term “Permitted Payment” shall mean any holder of the following:Senior Debt. Under no circumstances, however, shall the Subordinated Lender be obligated to turn over any scheduled interest payment on the Subordinated Debt that is received by the Subordinated Lender pursuant to Section 1(a) and prior to the occurrence of the earliest event specified in Sections 1(b) or 1

Subordination of Debt. (a) Debtors may pay, and Junior Creditors may retain, Permitted Payments (as defined below) with respect to the Junior Debt, provided that following the commencement of an Enforcement Action and for so long as an Enforcement Action remains ongoing, Junior Creditors shall be entitled to no Permitted Payments until the Senior Creditor Repayment shall have occurred, other than Permitted Payments described in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall have occurred, no Junior Creditor will ask for, demand, xxx sxx for, take or receive from any Debtor, by setoff or in any other manner, the whole or any part of the Junior Debt which does not constitute a Permitted Payment, including, without limitation, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant to the terms and conditions hereof and which contain the subordination legend required hereby), or the taking of any security for any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender). (b) Subject to the terms of Section 2(a) above, unless and until the Senior Creditor Repayment shall have occurred, in the event that any Junior Creditor shall receive any cash payment or distribution with respect to the Junior Debt which does not constitute a Permitted Payment, then, in such event, such payment or distribution (other than a Permitted Payment described in Section 2(c)(i)) shall be deemed to have been paid to such Junior Creditor in trust for the benefit of Senior Creditor and shall be immediately paid over to Senior Creditor in the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) to the extent necessary to pay the Senior Debt after giving effect to any concurrent payment to Senior Creditor from other sources. (c) As used herein, the term “Permitted Payment” shall mean any of the following:

Subordination of Debt. Creditor hereby subordinates payment by the Borrower of any and all indebtedness, liabilities, guarantees and other obligations of the Borrower to Creditor, now existing or hereafter arising (a) Debtors may paycollectively, the "Subordinated Debt"), to the payment to Silicon, in full in cash, of all Silicon Debt, and Junior Creditors may retain, Permitted Payments (as defined below) with respect Creditor agrees not to the Junior Debt, provided that following the commencement of an Enforcement Action and for so long as an Enforcement Action remains ongoing, Junior Creditors shall be entitled to no Permitted Payments until the Senior Creditor Repayment shall have occurred, other than Permitted Payments described in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall have occurred, no Junior Creditor will ask for, demand, xxx sue for, take or receive from any Debtor, by setoff or in any other manner, the whole all or any part of the Junior Subordinated Debt which does not constitute a Permitted Paymentnor xxx security therefor unless and until all of the Silicon Debt has been paid and performed in full, includingin cash; provided that, without limitationso long as no default or event of default has occurred under any document instrument or agreement evidencing, securing or relating to the Silicon Debt, both before and after giving effect to the following payments, Creditor may accept payment of the following amounts on the Subordinated Debt: Regularly scheduled payments of principal and interest as set forth in the Notes (as defined below). [Besides amounts due under the Notes, what other amounts may be due under the Borrower/Creditor Loan Agreement? Silicon needs to better understand this before being able to agree to it, if at all.] Creditor represents and warrants that the amount of Subordinated Debt outstanding on the date hereof is the following amount: $_________________ [describe Notes] (collectively, the taking "Notes") and that Creditor has not executed any other subordination agreements with respect to such debt or the Collateral or the Borrower. Creditor agrees that upon any distribution of the assets or readjustment of the indebtedness of the Borrower whether by reason of liquidation, composition, bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any negotiable other action or proceeding involving the readjustment of all or any of the Subordinated Debt, or the application of the assets of the Borrower to the payment or liquidation thereof, Silicon shall be entitled to receive payment in full in cash of all of the Silicon Debt prior to the payment of all or any part of the Subordinated Debt, and in order to enable Silicon to enforce its rights hereunder in any such action or proceeding, Silicon is hereby irrevocably authorized and empowered in its discretion (but without any obligation on its part) to make and present for and on behalf of Creditor such proofs of claim against the Borrower on account of the Subordinated Debt* as Silicon may deem expedient or proper and** to vote such proofs of claim in any such proceeding and to receive and collect any and all dividends or other payments or disbursements made thereon in whatever form the same may be paid or issued and to apply same on account of the Silicon Debt. Creditor further agrees to execute and deliver to Silicon such assignments or other instruments evidencing as may be required by Silicon in order to enable Silicon to enforce any and all such amounts (claims and to collect any and all dividends or other than debentures now payments or hereafter issued in connection disbursements which may be made at any time on account of all and any of the Subordinated Debt. Creditor shall endorse all notes and other written evidence of the Subordinated Debt with Junior Debt which a statement that they are subordinated to the Silicon Debt pursuant to the terms and conditions hereof and which contain the subordination legend required hereby), or the taking of any security for any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender). (b) Subject to the terms of Section 2(a) above, unless and until the Senior Creditor Repayment shall have occurred, in the event that any Junior Creditor shall receive any cash payment or distribution with respect to the Junior Debt which does not constitute a Permitted Payment, thenthis agreement, in such eventform as Silicon shall require, and SILICON VALLEY BANK SUBORDINATION AGREEMENT ------------------------------------------------------------------------------- ***Creditor will exhibit the originals of such payment or distribution (notes and other than a Permitted Payment described in Section 2(c)(i)) written evidence of the Subordinated Debt to Silicon so that Silicon can confirm that such endorsement has been made, but this Subordination Agreement shall be deemed to have been paid to fully effective, even if no such Junior Creditor in trust for the benefit of Senior Creditor and shall be immediately paid over to Senior Creditor in the form received by such Junior Creditor (with proper endorsements or assignmentsendorsement is made. *, if necessary) to the extent necessary to pay the Senior Debt after giving effect to any concurrent payment to Senior Creditor from other sources. (c) As used hereinIF CREDITOR DOES NOT DO SO PRIOR TO 20 DAYS BEFORE THE EXPIRATION OF THE TIME TO FILE SUCH PROOFS OF CLAIM IN SUCH PROCEEDING, the term “Permitted Payment” shall mean any of the following:**, IF SILICON HAS RECEIVED WRITTEN CONFIRMATION FROM CREDITOR THAT CREDITOR DOES NOT INTEND TO VOTE OR IF SILICON HAS NOT RECEIVED SUCH CONFIRMATION FROM CREDITOR AT LEAST 10 DAYS PRIOR TO ANY DEADLINE FOR VOTING SUCH PROOFS OF CLAIM, ***UPON SILICON'S REQUEST,

Subordination of Debt. (a) Debtors may payThe Subordinated Lender and the Company covenant and agree that the obligations of the Company with respect to any payment of principal, and Junior Creditors may retain, Permitted Payments (as defined below) interest or other amounts payable with respect to the Junior Subordinated Debt are and shall be subordinate, to the extent and in the manner hereinafter set forth, for right of payment and subject to the prior payment or provision for payment in full of all principal, interest or other amounts payable with respect to the Senior Debt, provided and all amendments, renewals, extensions and refundings of the Senior Debt; PROVIDED HOWEVER that following the commencement of an Enforcement Action and for so as long as an Enforcement Action remains ongoingnone of the events described in Sections 1(b) or 1(c) have occurred, Junior Creditors the Subordinated Lender shall be entitled to no Permitted Payments until receive and retain all regularly scheduled payments of principal of and interest on the Senior Creditor Repayment shall have occurred, other than Permitted Payments described Subordinated Debt not to exceed the sum of Two Hundred Thousand Dollars ( $200,000.00) in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall have occurred, no Junior Creditor will ask for, demand, xxx for, take or receive from any Debtor, by setoff or aggregate in any other mannerone calendar year and further provided that before and after each payment to Subordinate Creditor the Company is within all applicable margins required under the Financing Agreement (but the Subordinated Lender shall not accept, nor shall the whole or Company make, any part prepayment on the Subordinated Debt, nor amend the payment schedule under the Subordinated Debt, without the prior written consent of the Junior Debt which does not constitute a Permitted Payment, including, without limitation, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant to the terms and conditions hereof and which contain the subordination legend required hereby), or the taking of any security for any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender). (b) Subject Upon the maturity of the Senior Debt by demand for payment of the Senior Debt, termination of the Credit Agreement or otherwise (including without limitation upon any assignment, transfer or sale of all or substantially all of the Company's business), all principal thereof and interest due thereon shall first be paid in full, or such payment duly provided for in cash or in a manner satisfactory to the terms holder of Section 2(athe Senior Debt, before any payment is made on account of the principal of or interest on the Subordinated Debt. (c) aboveUpon the happening of an event of default with respect to the Senior Debt, as such event of default is defined in the Credit Agreement, permitting the holder of the Senior Debt to accelerate the maturity thereof, then, unless and until the Senior Creditor Repayment such event of default shall have occurredbeen cured or waived or shall have ceased to exist, in no payment shall be made by the event that any Junior Creditor shall receive any cash payment or distribution Subordinated Lender with respect to the Junior principal of or interest on the Subordinated Debt. (d) In the event that, contrary to the provisions of Sections 1(b) or 1(c) hereof, any payment or distribution of assets of the Company of any character, whether in cash, securities or other property, is received by the Subordinated Lender before the Senior Debt which does not constitute a Permitted Payment, then, is paid in such eventfull, such payment or distribution (other than a Permitted Payment described in Section 2(c)(i)) shall will be deemed to have been paid to such Junior Creditor held in trust for the benefit of Senior Creditor of, and shall will be immediately paid over to Senior Creditor in or delivered to, the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) to the extent necessary to pay holder of the Senior Debt (or its duly authorized representative) until the Senior Debt has been paid in full, after giving effect to any the concurrent payment or distribution (or provision therefor) to Senior Creditor from other sources. (c) As used herein, the term “Permitted Payment” shall mean any holder of the following:Senior Debt. Under no circumstances, however, shall the Subordinated Lender be obligated to turn over any scheduled interest payment on the Subordinated Debt that is received by the Subordinated Lender pursuant to Section 1(a) and prior to the occurrence of the earliest event specified in Sections 1(b) or 1

Subordination of Debt. If Borrower is now or hereafter indebted to any joint venturer, partner, officer, or employee of Borrower, any person or entity affiliated with Borrower, or any Guarantor (aeach referred to herein as the "Subordinating Party") Debtors may payin any amount, the Borrower shall cause written subordination agreements to be furnished to Bank which have been duly executed by the Borrower and the Subordinating Party, under which the Borrower and the Subordinating Party shall agree (i) that all present and future indebtedness and obligations owing by the Borrower to the Subordinating Party, and Junior Creditors may retainall security interests created by the Borrower in favor of the Subordinating Party, Permitted Payments are subordinate in right of payment, claim, and priority to all present and future indebtedness and obligations owing by the Borrower to Bank, and to all security interests created by the Borrower in favor of Bank, (as defined belowii) with respect that no security interest in favor of the Subordinating Party shall be foreclosed until the Loan and all such other indebtedness and obligations owing by the Borrower to Bank have been paid in full, and (iii) that, if an event has occurred that, if not timely cured, would be an Event of Default under this Agreement, no payments of principal or interest shall be made by the Borrower on the subordinated indebtedness to the Junior Debt, provided that following the commencement of an Enforcement Action and for so long as an Enforcement Action remains ongoing, Junior Creditors shall be entitled to no Permitted Payments Subordinating Party until the Senior Creditor Repayment Event of Default is cured. The Borrower shall have occurrednot prepay the subordinated debt, other than Permitted Payments described in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall have occurred, no Junior Creditor will ask for, demand, xxx for, take or receive from any Debtor, by setoff or in any other manner, way modify or change the whole or any part of Borrower's repayment obligations under the Junior Debt which does not constitute subordinated debt in a Permitted Payment, includingmanner that would adversely affect the Borrower's ability to repay the Loan, without limitation, the taking prior written consent of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant to the terms and conditions hereof and which contain the subordination legend required hereby), or the taking of any security for any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender)Bank. (b) Subject to the terms of Section 2(a) above, unless and until the Senior Creditor Repayment shall have occurred, in the event that any Junior Creditor shall receive any cash payment or distribution with respect to the Junior Debt which does not constitute a Permitted Payment, then, in such event, such payment or distribution (other than a Permitted Payment described in Section 2(c)(i)) shall be deemed to have been paid to such Junior Creditor in trust for the benefit of Senior Creditor and shall be immediately paid over to Senior Creditor in the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) to the extent necessary to pay the Senior Debt after giving effect to any concurrent payment to Senior Creditor from other sources. (c) As used herein, the term “Permitted Payment” shall mean any of the following:

Subordination of Debt. (a) Debtors may payThe Subordinated Debt shall be subordinate and junior in right of payment and collection to the payment and collection in full of all of the Senior Debt. Until all Senior Debt has been Paid in Full, no Credit Party or any other Person will make any payment or any other Distribution, and Junior Creditors may retain, Permitted Payments (as defined below) with respect to the Junior Debt, provided that following the commencement of an Enforcement Action and for so long as an Enforcement Action remains ongoing, Junior Creditors shall be entitled to no Permitted Payments until the Senior Creditor Repayment shall have occurred, other than Permitted Payments described in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall have occurred, no Junior Creditor will ask for, demand, xxx for, take or receive from any Debtor, by setoff or in any other manner, the whole or any part of the Junior Debt which does not constitute a Permitted Payment, including, without limitation, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant to the terms and conditions hereof and which contain the subordination legend required hereby), or the taking of any security for any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt Creditor will not accept any Permitted Payments (payment or any other than Permitted Payments described Distribution, on any Subordinated Debt from any Credit Party or any other Person, and the Subordinated Creditor shall not be entitled to receive any payment or any other Distribution with respect thereto, and anything of value received on account of the Subordinated Debt will be held by the Subordinated Creditor in Section 2(c)(i)) (or if received trust and immediately will pay them be turned over to the Administrative Agent in the form received to be applied by the Administrative Agent to the Senior Lender)Debt. (b) Subject Notwithstanding the foregoing, the Credit Parties shall be permitted to make, and the Subordinated Creditor shall be entitled to receive and retain, Permitted Subordinated Debt Payments; provided that no Permitted Subordinated Debt Payment (except PIK Interest Payments which may be made without restriction) may be made by the Credit Parties or accepted by the Subordinated Creditor if, at the time of such payment, the Borrower and the Subordinated Creditor shall have been sent a Senior Default Notice from the Administrative Agent stating that a Senior Default exists. (c) The Credit Parties may resume (and may make any Permitted Subordinated Debt Payments missed due to the terms application of paragraph (b) of this Section 2(a2), and the Subordinated Creditor may thereafter accept, Permitted Subordinated Debt Payments, upon the earlier to occur of (A) above, unless and until the cure or waiver of the Senior Creditor Repayment shall have occurred, Default in accordance with Section 2(d) below and (B) the event that any Junior Creditor shall receive any cash payment or distribution with respect to the Junior Senior Debt which does not constitute a Permitted Payment, then, in such event, such payment or distribution is Paid In Full. (other than a Permitted Payment described in Section 2(c)(i)d) No Senior Default shall be deemed to have been paid cured or waived for purposes of this Section 2 unless and until the Credit Parties shall have received a written notice of cure or waiver from the Administrative Agent, which written notice the Administrative Agent agrees to furnish promptly following such Junior cure or waiver (if any), or, upon reasonable written request of the Subordinated Creditor or the Credit Parties following such actual cure or waiver (if any) in accordance with the terms of the Credit Agreement. (e) In the event of any Proceeding, all amounts or other items received following the commencement of such Proceeding by any of the Subordinated Creditor in trust respect of the Subordinated Debt (including any distribution which would otherwise, but for the benefit terms hereof, be payable or deliverable in respect of Senior Creditor and the Subordinated Debt, but excluding any Reorganization Securities) shall be immediately paid over to Senior Creditor in the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) delivered directly to the extent necessary Administrative Agent (to pay be held and/or applied by the Administrative Agent to the Senior Debt after giving effect to any concurrent payment to Senior Creditor from other sources. (c) As used herein, in accordance with the term “Permitted Payment” shall mean any terms of the following:Senior Debt Documents) until all Senior Debt is Paid In Full. The Subordinated Creditor irrevocably authorizes, empowers and directs any debtor, debtor in possession, receiver, trustee, liquidator, custodian, conservator or other Person having authority, to pay or otherwise deliver all distributions in respect of the Subordinated Debt to the Administrative Agent. The Subordinated Creditor also irrevocably authorizes and empowers the Administrative Agent, in the name of the Subordinated Creditor to demand, xxx for, collect and receive any and all such distributions which the Administrative Agent is entitled to receive pursuant to the preceding sentence.

Subordination of Debt. Each Creditor hereby subordinates payment by the Borrower of any and all indebtedness, liabilities, guarantees and other obligations of the Borrower to such Creditor of any nature whatsoever (including, without limitation, any such arising in connection with the Convertible Debt and Warrant Purchase Agreement dated December 19, 2002, as amended (the "2002 Debt Agreement")), whether now existing or hereafter arising (collectively, the "Subordinated Debt"), to the prior payment to the Lenders, in full in cash, of all indebtedness, liabilities, guarantees and other obligations of the Borrower to the Lenders, whether now existing or hereafter arising (including without limitation any interest, charges and other sums accruing after the filing of a petition by or against the Borrower under the United States Bankruptcy Code (the "Code")) (collectively, the "Lender Debt"), whether or not such Lender Debt has been voided, disallowed or subordinated pursuant to Section 548 of the Code or any applicable state fraudulent conveyance laws, whether asserted directly or under Section 544 of the Code. Each Creditor represents and warrants that the Subordinated Debt of such Creditor includes, without limitation, the amounts set forth on Schedule 1 hereto. Each Creditor represents and warrants that it has not transferred, assigned, pledged or encumbered the Subordinated Debt or given any other subordination agreement in respect thereof, and that it will not do so without the prior written consent of the Lenders. Without limiting the generality of the foregoing, each Creditor agrees that (a) Debtors may pay, and Junior Creditors may retain, Permitted Payments (as defined below) with respect to the Junior Debt, provided that following the commencement of an Enforcement Action and for so long as an Enforcement Action remains ongoing, Junior Creditors shall be entitled to no Permitted Payments until the Senior Creditor Repayment shall have occurred, other than Permitted Payments described in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall have occurred, no Junior Creditor it will not ask for, demand, xxx for, take or receive all or any part of the Subordinated Debt from any Debtorthe Borrower, by setoff set-off or in any other manner, nor any security therefor, and (b) without limiting the whole exception in the foregoing clause (a), it will not take any action to collect, demand payment of or accelerate all or any portion of the Subordinated Debt (provided that any Creditor may accelerate its portion of the Subordinated Debt if all outstanding Lender Debt has been previously accelerated, and thereafter may file appropriate proofs of claim in respect of the Subordinated Debt in any bankruptcy or insolvency proceeding of the Borrower), foreclose or otherwise realize upon any security therefor or exercise any of its other rights or remedies against the Borrower that it may have in respect of the Subordinated Debt, in each case (a) and (b) unless and until all of the Lender Debt has been fully, finally and indefeasibly paid and performed in cash, whether or not such Lender Debt has been voided, disallowed or subordinated pursuant to Section 548 of the Code or any applicable state fraudulent conveyance laws, whether asserted directly or under Section 544 of the Code. Each Creditor hereby irrevocably directs the Borrower to make such prior payments. Each Creditor further agrees that it will not institute against the Borrower any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law, until such time as the Lender Debt has been fully, finally and indefeasibly paid in cash. In furtherance of the foregoing and to make effective the subordination provided herein, each Creditor further agrees as follows: (a) In the event of any distribution, division or application, partial or complete, voluntary or involuntary, by operation of law or otherwise, of all or any part of the Junior assets of the Borrower or the proceeds thereof, to creditors of the Borrower, or upon any readjustment or repayment of the indebtedness of the Borrower, whether by reason of (1) liquidation, dissolution or other winding up of the Borrower or its business, or (2) any composition, bankruptcy, arrangement, receivership, assignment for the benefit of creditor or other action or proceeding involving the readjustment of all or any of the Subordinated Debt, or the application of the assets of the Borrower to the payment or liquidation thereof, then and in each such event: (i) any payment or distribution of any kind or character, whether in cash, securities or other property which but for this Agreement would be payable or deliverable upon or with respect to the Subordinated Debt, shall instead be paid or delivered directly to the Lenders for application to the Lender Debt, whether then due or not due, until the Lender Debt which does not constitute a Permitted Paymenthas been fully, finally and indefeasibly paid in cash; and (ii) in order to enable the Lenders to enforce their rights hereunder, each Creditor hereby irrevocably authorizes and empowers the Lenders, in their discretion (but without any obligation on their part), to demand, xxx for, collect and receive every payment or distribution and give acquittance therefor, and to make and present for and on behalf of each Creditor such proofs of claim against the Borrower on account of the Subordinated Debt as Lender may deem expedient or proper and to vote such proofs of claim in any such proceeding and to receive and collect any and all dividends or other payments or disbursements made thereon in whatever form the same may be paid or issued and to apply same on account of the Lender Debt. In furtherance of the foregoing, each Creditor further agrees to duly and promptly take such action as any Lender may reasonably request to assist the Lenders in the collection of the Subordinated Debt for the account of the Lenders, including, without limitation, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant to execute and deliver to the terms Lenders such powers of attorney, proofs of claim, assignments or other instruments as may be required by the Lenders in order to enable the Lenders to enforce any and conditions hereof all such claims and to collect any and all dividends or other payments or disbursements which contain the subordination legend required hereby), or the taking may be made at any time on account of any security for all and any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender)Debt. (b) Subject If any payment, distribution of security or proceeds of any security are received by any Creditor upon or in respect of the Subordinated Debt in contravention of the provisions hereof, such Creditor shall forthwith deliver the same to the Lenders in precisely the form received (except for the endorsement or assignment of such Creditor where necessary), for application to the Lender Debt, whether then due or not due, and, until so delivered, the same shall be held in trust by the Creditors as property of the Lenders. In the event of the failure of any Creditor to make any such endorsement or assignment, the Lenders, or any of them, are hereby irrevocably authorized to make the same. Each Creditor shall endorse all notes and other written evidence of the Subordinated Debt with a statement that they are subordinated to the Lender Debt pursuant to the terms of Section 2(a) above, unless and until the Senior Creditor Repayment shall have occurred, in the event that any Junior Creditor shall receive any cash payment or distribution with respect to the Junior Debt which does not constitute a Permitted Payment, thenthis agreement, in such eventform as Lender shall require, and Creditor will exhibit the originals of such payment or distribution (notes and other than a Permitted Payment described in Section 2(c)(i)) written evidence of the Subordinated Debt to Lender so that Lender can confirm that such endorsement has been made, but this Subordination Agreement shall be deemed to have been paid to fully effective, even if no such Junior Creditor endorsement is made. Notwithstanding the foregoing or any other provision in trust for the benefit of Senior Creditor and shall be immediately paid over to Senior Creditor in the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) this Agreement to the extent necessary contrary, so long as no Event of Default or event which, with notice or passage of time or both, would constitute an Event of Default under any present or future document, instrument or agreement evidencing, securing or relating to pay the Senior Debt Lender Debt, both before and after giving effect to any concurrent the following payments, has occurred and is continuing, each Creditor may accept payment to Senior Creditor from other sources. (c) As used herein, the term “Permitted Payment” shall mean any of the following:following amounts on the Subordinated Debt: regularly scheduled interest payments due on the Convertible Promissory Notes issued by the Borrower to the Creditors pursuant to the 2002 Debt Agreement; provided, however, that the Creditors shall only be entitled to receive payments of such regularly scheduled interest payments in cash to the extent that the Lenders have received payment of the most recent regularly scheduled interest payment due on the Unsecured Convertible Debentures issued to the Lenders on August 28, 2003 (which comprise a portion of the Lender Debt) in cash.

Subordination of Debt. (a) Debtors may payCreditor and the Company covenant and agree that the obligations of the Company with respect to any payment of principal, interest or other amounts payable with respect to Creditor are and Junior Creditors may retainshall be subordinate, Permitted Payments (as defined below) to the extent and in the manner hereinafter set forth, for right of payment and subject to the prior payment or provision for payment in full of all principal, interest or other amounts payable with respect to the Junior Senior Debt, and all amendments, renewals and extensions of the Senior Debt; provided however that following the commencement of an Enforcement Action and for so as long as an Enforcement Action remains ongoingnone of the events described in Sections 1(b) or 1(c) have occurred, Junior Creditors Creditor shall be entitled to no Permitted Payments until the Senior Creditor Repayment shall have occurred, other than Permitted Payments described in Section 2(c)(i). Unless receive and until the Senior Creditor Repayment shall have occurred, no Junior Creditor will ask for, demand, xxx for, take or receive from any Debtor, by setoff or in any other manner, the whole or any part retain all regularly scheduled payments of the Junior Debt which does not constitute a Permitted Payment, including, without limitation, the taking of any negotiable instruments evidencing such amounts (other than debentures now or hereafter issued in connection with Junior Debt which are subordinated pursuant invoices for goods sold and delivered to the terms and conditions hereof and which contain the subordination legend required hereby), or the taking of any security for any of the Junior Debt (other than security interests in the Collateral pursuant to the Subordinated Debenture Documents in effect on the date hereof unless permitted by Section 8 hereof), and while an Enforcement Action is outstanding, the holders of the Junior Debt will not accept any Permitted Payments (other than Permitted Payments described in Section 2(c)(i)) (or if received will pay them over to Senior Lender)Company. (b) Subject Upon the maturity of the Senior Debt by demand for payment of the Senior Debt, termination of the Financing Agreement or otherwise (including without limitation upon any assignment, transfer or sale of all or substantially all of the Company’s business), all principal thereof and interest due thereon shall first be paid in full, or such payment duly provided for in cash or in a manner satisfactory to the terms holder of Section 2(athe Senior Debt, before any payment is made on account of principal of or interest on the Creditor debt. (c) aboveUpon the happening of an event of default with respect to the Senior Debt, as such event of default is defined in the Security Agreements, permitting the holder of the Senior Debt to accelerate maturity thereof, then, unless and until the Senior Creditor Repayment such event of default shall have occurredbeen cured or waived or shall have ceased to exist, in the event that any Junior no payment shall be made to Creditor shall receive any cash payment or distribution with respect to the Junior principal of or interest on the Creditor debt. (d) In the event that, contrary to the provisions of Sections 1(b) or 1(c), hereof, any payment or distribution of assets of the Company of any character, whether in cash, securities or other property, is received by Creditor before the Senior Debt which does not constitute a Permitted Payment, then, is paid in such eventfull, such payment or distribution (other than a Permitted Payment described in Section 2(c)(i)) shall will be deemed to have been paid to such Junior Creditor held in trust for the benefit of Senior Creditor of, and shall will be immediately paid over to Senior Creditor in or delivered to, the form received by such Junior Creditor (with proper endorsements or assignments, if necessary) to the extent necessary to pay holder of the Senior Debt (or its duly authorized representative) until the Senior Debt has been paid in full, after giving effect to any the concurrent payment or distribution (or provision therefore) to the holder of the Senior Debt. Under no circumstances, however, shall Creditor from other sourcesbe obligated to turn over any scheduled principal or interest payment that is received by Creditor pursuant to Section 1(a) and prior to the occurrence of the earliest event specified in Sections 1(b) or 1(c) to occur. (ce) As used hereinNo right of any present or future holder of this Senior Debt to enforce the provisions of this Subordination Agreement will at any time in any way be prejudiced or impaired by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the term “Permitted Payment” shall mean Company with the terms, provisions and covenants of this Subordination Agreement, regardless of any of the following:knowledge thereof which any such holder may have or be otherwise charged with.