Common use of Subordination of Inside Debt Clause in Contracts

Subordination of Inside Debt. All present and future indebtedness of Borrower to its officers, directors and shareholders ("Inside Debt") shall, at all times, be subordinated to the Obligations pursuant to a subordination agreement on Bank's standard form. Borrower represents and warrants that there is no Inside Debt presently outstanding, except as provided in the Representations. Prior to incurring any Inside Debt in the future, Borrower shall cause the person to whom such Inside Debt will be owed to execute and deliver to Bank a subordination agreement on Bank's standard form. BORROWER: BANK: FIBERSTARS, INC. SILICON VALLEY BANK By By ------------------------- -------------------------- Title Title ------------------------ ------------------------ EXHIBIT A FORM OF BORROWING BASE CERTIFICATE EXHIBIT B FORM OF COMPLIANCE CERTIFICATE TO: SILICON VALLEY BANK Date: 3003 Tasman Drive Santa Clara, CA 95054 FROM: FIBERSTARS, IXX. Xxx xxxxxxxxxxx Xxxxx Xxxxxxxxx Officer of FiberStars, Inc. ("Borrower") certifies that under the terms and conditions of the Loan and Security Agreement dated August 15, 2005, between Borrower and Bank (the "Agreement"), (i) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below and (ii) all representations and warranties in the Agreement are true and correct in all material respects on this date. In addition, the undersigned certifies that (x) Borrower and each of its Subsidiaries has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP, (y) there are no legal actions pending or threatened against Borrower or any of its Subsidiaries which Borrower has not previously notified in writing to Bank, and (z) as of the end of this compliance period, there were no held checks. Attached are the required financial reports and calculation of financial covenants supporting the certification. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES, NO, OR N/A UNDER "COMPLIES" COLUMN.

Subordination of Inside Debt. All present and future indebtedness of Borrower to its officers, directors and shareholders ("“Inside Debt"”) shall, at all times, be subordinated to the Obligations pursuant to a subordination agreement on Bank's Silicon’s standard form. Borrower represents and warrants that there is no Inside Debt presently outstanding, except as provided in the Representations. Prior to incurring any Inside Debt in the future, Borrower shall cause the person to whom such Inside Debt will be owed to execute and deliver to Bank Silicon a subordination agreement on Bank's Silicon’s standard form. BORROWERBorrower: BANKSilicon : FIBERSTARSTELECOMMUNICATION SYSTEMS, INC. SILICON VALLEY BANK By By ------------------------- -------------------------- Title Title ------------------------ ------------------------ EXHIBIT A FORM OF BORROWING BASE CERTIFICATE EXHIBIT B FORM OF By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Silicon Valley Bank Title: Sr. Vice President & CFO Title: 11 Name: Xxxxxx X. Xxxxxx, Xx. Name:COMPLIANCE CERTIFICATE TOTo: SILICON VALLEY BANK DateSilicon Valley Bank 0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxxx 000 Xxxxxx, Xxxxxxxx 00000 From: 3003 Tasman Drive Santa ClaraTeleCommunication Systems, CA 95054 FROM: FIBERSTARSInc. 000 Xxxx Xxxxxx, IXX. Xxx xxxxxxxxxxx Xxxxx Xxxxxxxxx Officer 000 Xxxxxxxxx, Xxxxxxxx 00000 The undersigned authorized officer of FiberStarsTelecommunication Systems, Inc. ("“Borrower"”) certifies that under the terms and conditions of the Second Amended and Restated Loan and Security Agreement dated August 15, 2005, between Borrower and Bank (the "“Agreement"”), (i) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below and (ii) all representations and warranties in the Agreement are true and correct in all material respects on this date. In addition, the undersigned authorized officer of Borrower certifies that (x) Borrower and each of its Subsidiaries Subsidiary (i) has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP, GAAP and (yii) there are no does not have any legal actions pending or threatened against Borrower or any of its Subsidiaries Subsidiary which Borrower has not previously notified in writing to Bank, and (z) as of the end of this compliance period, there were no held checks. Attached are the required financial reports and calculation of financial covenants documents supporting the certification. In addition, the undersigned certifies that (1) Borrower and each Subsidiary has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP and (ii) no liens has been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits which Borrower has not previously notified in writing to Bank. The undersigned Officer certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The Officer acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES, NO, OR NPlease indicate compliance status by circling Yes/A UNDER "COMPLIES" COLUMNNo under “Complies” column.

Subordination of Inside Debt. All present and future indebtedness of Borrower to its officers, directors and shareholders ("“Inside Debt"”) shall, at all times, be subordinated to the Obligations pursuant to a subordination agreement on Bank's Silicon’s standard form. Borrower represents and warrants that there is no Inside Debt presently outstanding, except as provided in the Representations. Prior to incurring any Inside Debt in the future, Borrower shall cause the person to whom such Inside Debt will be owed to execute and deliver to Bank Silicon a subordination agreement on Bank's Silicon’s standard form. BORROWERBorrower: BANKSilicon: FIBERSTARSTHERMA-WAVE, INC. SILICON VALLEY BANK By /s/ Jxxxxx Xxxxxxxxxx By ------------------------- -------------------------- /s/ Txx Xxxxx Title Vice President of Finance Title ------------------------ ------------------------ EXHIBIT A FORM OF BORROWING BASE CERTIFICATE EXHIBIT B FORM OF Senior V.P. COMPLIANCE CERTIFICATE TO: SILICON VALLEY BANK Date: 3003 Tasman Drive Santa Clara3000 Xxxxxx Xxxxx Xxxxx Xxxxx, CA 95054 XX 00000 FROM: FIBERSTARSTHERMA-WAVE, IXXINC. 1000 Xxxxxxxx Xxx xxxxxxxxxxx Xxxxx Xxxxxxxxx Officer Xxxxxxx, XX 00000 The undersigned authorized officer of FiberStarsTHERMA-WAVE, Inc. INC. ("“Borrower"”) certifies that under the terms and conditions of the Loan and Security Agreement dated August 15, 2005, between Borrower and Bank Silicon (the "“Agreement"”), (i) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below and (ii) all representations and warranties in the Agreement are true and correct in all material respects on this date. In addition, the undersigned certifies that (xi) Borrower [and each of its Subsidiaries Subsidiary] has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAPGAAP [(ii) no liens has been levied or claims made against Borrower [or any of its Subsidiaries] relating to unpaid employee payroll or benefits which Borrower has not previously notified in writing to Silicon, and (yiii) there are no legal actions pending or threatened against Borrower or any of its Subsidiaries Subsidiary which Borrower has not previously notified in writing to Bank, and (z) as of the end of this compliance period, there were no held checks. Silicon.] Attached are the required financial reports and calculation of financial covenants documents supporting the certification. The undersigned Officer certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The Officer acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YESPlease indicate compliance status by circling Yes/No under “Complies” column. Reporting Covenant Required Complies Monthly financial statements + CC Monthly within 30 days Yes No Annual (Audited) FYE within 120 days Yes No A/R & A/P Agings Monthly within 30 days Yes No A/R Audit Initial and Annual Yes No Borrowing Base Certificate Monthly within 30 days Yes No Financial Covenant Required Actual Complies Maintain on a Monthly Basis: Minimum Quick Ratio (Adjusted) 0.75:1.00 _____:1.00 Yes No Minimum Tangible Net Worth $ 16,000,000 * $ ———— Yes No * $18,000,000 until June 30, NO, OR N/A UNDER "COMPLIES" COLUMN2005 Borrower only has deposit accounts located at the following institutions: ___________________.

Subordination of Inside Debt. All present and future indebtedness of Borrower to its officers, directors and shareholders ("Inside Debt") shall, at all times, be subordinated to the Obligations pursuant to a subordination agreement on BankSilicon's standard form. Borrower represents and warrants that SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT -------------------------------------------------------------------------------- there is no Inside Debt presently outstanding, except as provided in the Representations. Prior to incurring any Inside Debt in the future, Borrower shall cause the person to whom such Inside Debt will be owed to execute and deliver to Bank Silicon a subordination agreement on BankSilicon's standard form. BORROWERBorrower: BANKSilicon: FIBERSTARS, INC. ONYX SOFTWARE CORPORATION SILICON VALLEY BANK By /s/ XXX XXXX By ------------------------- -------------------------- /s/ XXX XXXXXXXX -------------------------------- ----------------------------------- Xxx Xxxx, Treasurer Title Title ------------------------ ------------------------ EXHIBIT A FORM OF BORROWING BASE CERTIFICATE EXHIBIT B FORM OF COMPLIANCE CERTIFICATE TO: Vice President --------------------------------- By /s/ XXX XXXXXXXX -------------------------------- Secretary or Ass't Secretary SILICON VALLEY BANK DateAMENDMENT TO LOAN DOCUMENTS BORROWER: 3003 Tasman Drive Santa ClaraONYX SOFTWARE CORPORATION ADDRESS: 0000 000XX XXXXXX XX, CA 95054 FROMXXXXX 000 XXXXXXXX, XXXXXXXXXX 00000 DATE: FIBERSTARSFEBRUARY 14, IXX. Xxx xxxxxxxxxxx Xxxxx Xxxxxxxxx Officer of FiberStars, Inc. 2002 THIS AMENDMENT TO LOAN DOCUMENTS is entered into between SILICON VALLEY BANK ("Silicon") and the borrower named above (the "Borrower") certifies ), with reference to the various loan and security agreements and other documents, instruments and agreements between them, including but not limited to that under the terms and conditions of the certain Loan and Security Agreement dated August 15September 30, 20052001 (as amended, between Borrower and Bank (if at all, the "Existing Loan Agreement"; the Existing Loan Agreement and all related documents, instruments and agreements may be referred to collectively herein as the "Existing Loan Documents"), (i) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below and (ii) all representations and warranties in the Agreement are true and correct in all material respects on this date. In addition, the undersigned certifies that (x) Borrower and each of its Subsidiaries has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP, (y) there are no legal actions pending or threatened against Borrower or any of its Subsidiaries which Borrower has not previously notified in writing to Bank, and (z) as of the end of this compliance period, there were no held checks. Attached are the required financial reports and calculation of financial covenants supporting the certification. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of Parties agree to amend the terms of the AgreementExisting Loan Documents, and that compliance is determined not just at the date this certificate is delivered. PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES, NO, OR N/A UNDER "COMPLIES" COLUMN.as follows: