Restated Subordination Agreement, dated as of May 24, 2013

THIS RESTATED SUBORDINATION AGREEMENT (“Agreement”), dated as of May 24, 2013 is made by and among Gregory J. Vislocky, Brian Rick Delamarter, Harold Guy Delamarter, Baruch Halpern and Shoshana Halpern as trustees for The Shoshana Shapiro Halpern Revocable Trust UA June 13, 2006, Weintraub Partners, a California general partnership, W. John Short and Karen A. Wilson, Edward McMillan as trustee for the The Revocable Trust of Edward L. McMillan Revocable Trust U/D/T dated February 17, 1999, Zanesville Partners Fund, LLC, a limited liability company, Alon Gibli, Michael Geliebter, and Pensco Trust Co., FBO Baruch Halpern IRA (collectively the “Subordinated Creditors”), TCA Global Credit Master Fund, LP, a limited partnership organized and existing under the laws of the Cayman Islands (“TCA”) and Hillair Capital Investments, L.P., a a limited partnership organized and existing under the laws of the Cayman Islands (“Hillair”) (with its participants, successors and assigns, TCA and Hillair are sometimes referred to herein as the “Preferred Lenders”, and together with the Subordinated Creditors, the “Parties”). For all purposes herein, the “Borrower” means RiceBran Technologies, a California corporation.

A.                Pursuant to that certain Securities Exchange Agreement, dated as of July 31, 2012, between the Borrower and Hillair (“Exchange Agreement”), the Borrower issued to Hillair an aggregate of $1,299,200 in principal amount of Original Issue Discount Senior Secured Convertible Debentures Due January 1, 2014 (the “Exchange Debentures”) in exchange for $870,000 in principal amount of the  Original Issue Discount Senior Secured Convertible Debentures Due July 1, 2013 held by Hillair (the “Prior Debentures”).

 

B.                 Pursuant to that certain Securities Purchase Agreement, dated as July 31, 2012, between the Borrower and Hillair, the Borrower issued to Hillair an aggregate of $290,000 in principal amount of the Original Issue Discount Senior Secured Convertible Debentures Due January 1, 2014 (the “New Debentures” and, collectively with the Exchange Debentures, the “Debentures”);

    

C.                 Borrower previously entered into that certain Note and Warrant Purchase Agreement dated January 17, 2012, and as amended on July 31, 2012 (the “Purchase Agreement”) with each of the Subordinated Creditors. In connection with the transactions contemplated by the Purchase Agreement, the Borrower issued to the Subordinated Creditors an aggregate of $6,187,602.94 in principal amount of Subordinated Notes (as defined below);

 

D.                 As a condition under the Purchase Agreement, the Subordinated Creditors, Borrower and Hillair entered into Subordination Agreements (collectively “Prior Subordination Agreements”) to subordinate the Subordinated Creditors’ respective security interests granted under the Security Agreements entered into by the Subordinated Creditors and the Borrower, dated of even date with the Purchase Agreements, (the “Security Agreements”) to the Preferred Lenders Debt (as defined herein); and

E.                 TCA, Borrower, NutraCea, LLC, a limited liability company organized and existing under the laws of the State of Delaware, SRB-IP, LLC, limited liability company organized and existing under the laws of the State of Delaware, SRB-MERM, LLC, a limited liability company organized and existing under the laws of the State of Delaware, SRB-LC, LLC, a limited liability company organized and existing under the laws of the State of Delaware, SRB-MT, LLC, a limited liability company organized and existing under the laws of the State of Delaware, SRB-WS, LLC, a limited liability company organized and existing under the laws of the State of Delaware, RiceX Company, a corporation incorporated under the laws of the State of Delaware, RiceX Nutrients, Inc., a corporation incorporated under the laws of the State of Montana, Rice Science, LLC, a limited liability company organized and existing under the laws of the State of Delaware, and Rice RX, LLC, a limited liability company organized and existing under the laws of the State of Delaware have entered into a Senior Secured Revolving Credit Facility Agreement dated as of this same date (“TCA Credit Agreement”). In connection therewith, Borrower has executed and delivered to TCA a Revolving Convertible Promissory Note dated this same date (“TCA Note”).

 

G.                 In connection with the foregoing, TCA and Hillair wish to set forth, and coordinate, their rights pursuant to this Agreement.

 

F.                 In consideration of the capital provided or to be provided by TCA pursuant to the TCA Credit Agreement and the TCA Note, the agreement of Hillair hereunder and other financial accommodations that have been made and may hereafter be made by the Preferred Lenders for the benefit of the Borrower, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Subordinated Creditors hereby agree to the terms hereof.

 

1.                  Definitions.  As used herein, the following terms have the meanings set forth below:

 

“Borrower Default” means any Event of Default as defined in the TCA Credit Agreement and the Debentures.

 

“Lien” means any security interest, mortgage, deed of trust, pledge, lien, charge, encumbrance, title retention agreement or analogous instrument or device, including the interest of each lessor under any capitalized lease and the interest of any bondsman under any payment or performance bond, in, of or on any assets or properties of a person, whether now owned or hereafter acquired and whether arising by agreement or operation of law.

“Preferred Lenders Debt”, used herein in its most comprehensive sense, means the TCA Credit Agreement, the TCA Notes, the Debentures and any and all advances, debts, obligations and liabilities of the Borrower to either or both of the Preferred Lenders, heretofore, now or hereafter made, incurred or created, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, including under any swap, derivative, foreign exchange, hedge, deposit, treasury management or other similar transaction or arrangement at any time entered into by the Borrower with either or both of the Preferred Lenders, and whether the Borrower may be liable individually or jointly with others, or whether recovery upon such amounts may be or hereafter become unenforceable.

 

“Subordinated Indebtedness” means all obligations arising under the Subordinated Notes and each and every other debt, liability and obligation of every type and description which the Borrower or any of its subsidiaries may now or at any time hereafter owe to one or more of the Subordinated Creditors, whether such debt, liability or obligation now exists or is hereafter created or incurred, and whether it is or may be direct or indirect, due or to become due, absolute or contingent, primary or secondary, liquidated or unliquidated, or joint, several or joint and several.

 

“Subordinated Notes” means Borrower’s Secured Convertible Promissory Notes, dated July 31, 2012, payable to the order of the Subordinated Creditors in the original aggregate principal amount of Six Million One Hundred Eighty Seven Thousand Six Hundred Two Dollars and Ninety Four Cents ($6,187,602.94), together with all renewals, extensions and modifications thereof and any note or notes issued in substitution therefor.

 

2.                  Intercreditor Terms.

 

2.1.              Equal Priority.  The Preferred Lenders agree that the security interests granted by Borrower and its subsidiaries to each Preferred Lender shall be of equal priority, as between TCA and Hillair.  TCA and Hillair further acknowledge that, because of the nature of the filing of the applicable Mortgages, Deeds of Trust, UCC-1 Financing Statements, and other instruments filed to perfect the Preferred Lenders Debt, the security interests of TCA and Hillair necessarily will be perfected at different times.  Each of the Preferred Lenders agrees that, regardless of the time of perfection of each of their security interests, the Preferred Lenders shall have equal priority as if such security interests were perfected simultaneously.

 

2.2.              Coordinated Efforts.

 

(a)                          The Preferred Lenders each agree to use commercially reasonable efforts to coordinate efforts, cooperate and act in a manner likely to obtain maximum liquidation value and return to each of the Preferred Lenders in the event of any Borrower Default, including in the exercise of any foreclosure, liquidation, enforcement or other rights and remedies as a Preferred Lender (whether in an action initiated by any Preferred Lender after any Preferred Lender Standstill Period or otherwise), and in and the exercise and enforcement of the Preferred Lenders rights under this Agreement.

(b)                          In the event of a Borrower Default or a breach by any Subordinated Creditor of its obligations hereunder, the Preferred Lenders each agree not to commence any action or proceeding against the Borrower to recover all or any part of the Preferred Lender Debt, or join with any creditor (unless the Preferred Lenders shall both so join) in bringing any proceeding against the Borrower under any bankruptcy, reorganization, readjustment of debt, arrangement of debt receivership, liquidation or insolvency law or statute of the federal or any state government, or take possession of, sell, or dispose of any item that comprises “Collateral” pursuant to the terms of any of the Security Agreements entered into with respect to the Preferred Lender Debt (“Collateral”), or exercise or enforce any right or remedy available to a Preferred Lender with respect to any such Collateral.  Notwithstanding anything to the contrary set forth in this Section 2.2, upon five (5) business days’ prior written notice to the other Preferred Lender after expiration of the Preferred Lender Standstill Period (as defined below), either Preferred Lender may exercise any rights or remedies they may have against Borrower whether by judicial or non-judicial foreclosure or otherwise; provided, that the non-initiating Preferred Lender shall have the right, but not the obligation, to join any such action as a co-plaintiff (or other co-moving party, however denominated), at its own expense. “Preferred Lender Standstill Period” means the period beginning on the occurrence of an event of default under any of the agreements between the Preferred Lenders and Borrower and ending on the date that is thirty (30) days following the date after either Preferred Lender shall have given notice to the other Preferred Lender and to Borrower that such event of default shall have occurred and be continuing and of the intent of any of said Preferred Lender to exercise its  rights and remedies.  In addition, it is expressly acknowledged and agreed by and amongst the parties hereto that an event of default under any one of the agreements between the Preferred Lenders and Borrower shall constitute and event of default under all agreements between the Preferred Lenders and the Borrower.

 

2.3.             Non-transfer.  Neither TCA nor Hillair will transfer, delegate, or assign its rights, duties or obligations hereunder to any person, other than a wholly owned subsidiary, without said transferee and/or assignee first agreeing to be bound by the terms and conditions herein contained and executing a counterpart hereto.

 

2.4.             Expenses.  The Preferred Lenders agree that should any action need to be taken with respect to the enforcement of any rights hereunder, including, but not limited to, declaring a default, instituting foreclosure procedures, and attorney’s fees associated therewith, the Preferred Lenders will each pay such fees and costs in proportion to their outstanding share of the Preferred Lender Debt and, unless otherwise agreed between the Preferred Lenders, any recovery shall be shares between the Preferred Lenders in proportion to the outstanding share of the Preferred Lender Debt.

 

3.                 Subordination.  The payment of all of the Subordinated Indebtedness is hereby expressly subordinated to the extent and in the manner hereinafter set forth to the payment in full of the Preferred Lenders Debt; and regardless of any priority otherwise available to the Subordinated Creditors by law or by agreement, and any Lien claimed therein by the Subordinated Creditors shall be and remain fully subordinate for all purposes to the rights of the Preferred Lenders for all purposes whatsoever. The Subordinated Indebtedness shall continue to be subordinated to the Preferred Lenders Debt even if the Preferred Lenders Debt or any portion thereof is deemed subordinated, avoided or disallowed under the United States Bankruptcy Code or other applicable law.

4.                  Principal and Interest Payments.

 

4.1.              Principal Payments. Except as set forth in Section 6, until all of the Preferred Lenders Debt has been paid in full, no Subordinated Creditor shall, without the prior written consent of each of the Preferred Lenders, demand, receive or accept any principal payment from the Borrower in respect of the Subordinated Indebtedness, or exercise any right of or permit any setoff in respect of the Subordinated Indebtedness.

 

4.2.             Interest Payments.  A Subordinated Creditor may demand, receive and accept regularly scheduled payments of interest in respect of the Subordinated Indebtedness; provided, that without the prior written consent of each of the Preferred Lenders, the Subordinated Creditor shall not demand, receive or accept any interest payment from the Borrower in respect of the Subordinated Indebtedness so long as any Borrower Default exists or if a Borrower Default will occur as a result of or immediately following such interest payment.

 

5.                  Receipt of Prohibited Payments.  The Subordinated Creditors each agree that if the Subordinated Creditor receives any payment on the Subordinated Indebtedness that the Subordinated Creditor is not entitled to receive under the provisions of this Agreement, the Subordinated Creditor will hold the amount so received in trust for the Preferred Lenders and will forthwith turn over such payment to the Preferred Lenders in the form received (except for the endorsement of the Subordinated Creditor where necessary) for application to then-existing Preferred Lenders Debt (whether or not due), in such manner of application as the Preferred Lenders may deem appropriate.  Such funds or other property shall be deposited in an escrow account established by the Preferred Lenders, to be distributed in proportion to their outstanding share of the Preferred Lender Debt.  If a Subordinated Creditor exercises any right of setoff that the Subordinated Creditor is not permitted to exercise under the provisions of this Agreement, the Subordinated Creditor will promptly pay over to the Preferred Lenders, in immediately available funds, an amount equal to the amount of the claims or obligations offset.  If a Subordinated Creditor fails to make any endorsement required under this Agreement, the Preferred Lenders, or any officer or employee or agent on behalf of the Preferred Lenders, is hereby irrevocably appointed as the attorney-in-fact (which appointment is coupled with an interest) for such Subordinated Creditor to make such endorsement in the Subordinated Creditor’s name.

6.                 Action on Subordinated Indebtedness.  The Subordinated Creditors each agree not to commence any action or proceeding against the Borrower to recover all or any part of the Subordinated Indebtedness, or join with any creditor (unless the Preferred Lenders shall both so join) in bringing any proceeding against the Borrower under any bankruptcy, reorganization, readjustment of debt, arrangement of debt receivership, liquidation or insolvency law or statute of the federal or any state government, or take possession of, sell, or dispose of any item that comprises “Collateral” pursuant to the terms of any of the Security Agreements entered pursuant to the TCA Credit Agreement or the Exchange Agreement (“Collateral”), or exercise or enforce any right or remedy available to a Subordinated Creditor with respect to any such Collateral, unless and until all Preferred Lenders Debt has been paid in full. Notwithstanding anything to the contrary set forth in this Section 6, if all of Borrower’s obligations to the Preferred Lenders are not fully paid and satisfied, and neither of the Preferred Lenders has initiated a foreclosure or other action against Borrower, upon five (5) business days’ prior written notice to each of the Preferred Lenders after expiration of the Subordinated Creditor Standstill Period (as defined below), the Subordinated Creditors may exercise any rights or remedies they may have against Borrower whether by judicial or non-judicial foreclosure or otherwise provided that the receipt of any payments by the Subordinated Creditors shall be paid over to the Preferred Lenders, in immediately available funds, until payment in full of the obligations to the Preferred Lenders. “Subordinated Creditor Standstill Period” means the period beginning on the occurrence of an event of default under any of the agreements between the Subordinated Creditors and Borrower and ending on the date that is six (6) months following the date after the Subordinated Creditors shall have given notice to each of the Preferred Lenders and to Borrower that such event of default shall have occurred and be continuing and of the intent of any of the Subordinated Creditors to exercise their rights and remedies.

 

7.                  Action Concerning Collateral.

 

7.1.             Remedies. Notwithstanding any Lien now held or hereafter acquired by the Subordinated Creditors, the Preferred Lenders may take possession of, sell, dispose of, and otherwise deal with all or any part of any collateral of the Subordinated Creditors, and may enforce any right or remedy available to it with respect to the Borrower or such collateral, all without notice to or consent of any of the Subordinated Creditors except as specifically required by applicable law.

 

7.2.             Deemed Consent and Release of Lien. In addition, and without limiting the generality of Section 7.1, if (i) a Borrower Default has occurred and is continuing, (ii) the Borrower or any of the Preferred Lenders intends to sell or otherwise dispose of any Collateral of the Preferred Lenders to an unrelated third party outside the ordinary course of business, (iii) Preferred Lenders have each given written notice thereof to the Subordinated Creditors, and (iv) the Subordinated Creditors have failed, within ten (10) days after receipt of such notice, to purchase for cash the Preferred Lenders Debt for the full amount thereof, the Subordinated Creditors shall be deemed to have consented to such sale or disposition, to have released any Lien they may have in such Collateral and to have authorized the Preferred Lenders or their agents to file partial releases (and any related financing statements such as “in lieu” financing statements under Part 7 of Article 9 of the Uniform Commercial Code) with respect to such Collateral.

 

7.3.             No Assumed Duty. The Preferred Lenders shall have no duty to preserve, protect, care for, insure, take possession of, collect, dispose of, or otherwise realize upon any of the assets of Borrower, whether or not they comprise Collateral for the Preferred Lenders, and in no event shall the Preferred Lenders be deemed a Subordinated Creditor’s agent with respect to any assets of Borrower.  All proceeds received by the Preferred Lenders with respect to any of Borrower’s assets may be applied, first, to pay or reimburse the Preferred Lenders for all costs and expenses (including reasonable attorneys’ fees) incurred by the Preferred Lenders (or either of them) in connection with the collection of such proceeds, and, second, to any Preferred Lenders Debt in any order that the Preferred Lenders may choose.

8.                  Bankruptcy and Insolvency.  In the event of any receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization or arrangement with creditors, whether or not pursuant to bankruptcy law, the sale of all or substantially all of the assets of the Borrower, dissolution, liquidation or any other marshalling of the assets or liabilities of the Borrower, the Subordinated Creditors will file all claims, proofs of claim or other instruments of similar character necessary to enforce the obligations of the Borrower in respect of the Subordinated Indebtedness and will hold in trust for the Preferred Lenders and promptly pay over to the Preferred Lenders in the form received (except for the endorsement of the Subordinated Creditors where necessary) for application to the then-existing Preferred Lenders Debt, any and all moneys, dividends or other assets received in any such proceedings on account of the Subordinated Indebtedness, unless and until the Preferred Lenders Debt has been paid in full. If a Subordinated Creditor shall fail to take any such action, the Preferred Lenders, as attorney-in-fact for the Subordinated Creditor, may take such action on the Subordinated Creditor’s behalf.  The Subordinated Creditors each hereby irrevocably appoints the Preferred Lenders, or any officers or employees of a Preferred Lender designated by the Preferred Lenders, as the attorney-in-fact for the Subordinated Creditors (which appointment is coupled with an interest) with the power but not the duty to demand, sue for, collect and receive any and all such moneys, dividends or other assets and give acquittance therefor and to file any claim, proof of claim or other instrument of similar character, to vote claims comprising Subordinated Indebtedness to accept or reject any plan of partial or complete liquidation, reorganization, arrangement, composition or extension and to take such other action in the Preferred Lenders’ name or in the name of the Subordinated Creditors as the Preferred Lenders may deem necessary or advisable for the enforcement of the agreements contained herein; and the Subordinated Creditors will each execute and deliver to the Preferred Lenders such other and further powers-of-attorney or instruments as the Preferred Lenders may request in order to accomplish the foregoing. If the Preferred Lenders desire to permit the use of cash collateral or to provide post-petition financing to the Borrower, the Subordinated Creditors shall not object to the same or assert that its interests are not being adequately protected.

 

9.                  Restrictive Legend; Transfer of Subordinated Indebtedness.  The Subordinated Creditors will cause the Subordinated Notes and all other notes, bonds, debentures or other instruments evidencing the Subordinated Indebtedness or any part thereof to contain a specific statement (in the form attached hereto as Exhibit A) thereon to the effect that the indebtedness thereby evidenced is subject to the provisions of this Agreement, and the Subordinated Creditors will mark their books conspicuously to evidence the subordination effected hereby.  The Subordinated Creditors each represents and warrants to the Preferred Lenders that each such Subordinated Creditor is the lawful holder of the applicable Subordinated Note and has not transferred any interest therein to any other person or entity.  In the event of the transfer in any manner of the Subordinated Indebtedness by the Subordinated Creditors to any person who is not a party to this Agreement, the transferring party shall obtain, as a condition to and upon such transfer, the written consent of the transferee to become a party to and be bound by the terms of this Agreement and to the placing of the legend as required by this Section 9 upon the notes, bonds, debentures or other instruments evidencing the Subordinated Indebtedness.

10.                Continuing Effect.  This Agreement shall constitute a continuing agreement of subordination, and the Preferred Lenders may, without notice to or consent by the Subordinated Creditors, and except as set forth in Section 2, modify any term of the Preferred Lenders Debt in reliance upon this Agreement.  Without limiting the generality of the foregoing, the Preferred Lenders may, at any time and from time to time, without the consent of or notice to the Subordinated Creditors and without incurring responsibility to the Subordinated Creditors or impairing or releasing any of the Preferred Lenders’ rights or the Subordinated Creditors’ obligations hereunder:

 

(a)            change the amount of payment or extend the time for payment or renew or otherwise alter the terms of any Preferred Lenders Debt or any instrument evidencing the same in any manner;

 

(b)            if applicable, sell, exchange, release or otherwise deal with any property at any time securing payment of all or any portion of the Preferred Lenders Debt or any part thereof;

 

(c)            release anyone liable in any manner for the payment or collection of the Preferred Lenders Debt or any part thereof;

 

(d)            exercise or refrain from exercising any right against the Borrower or any other person (including the Subordinated Creditors); and

 

(e)            apply any sums received by the Preferred Lenders, by whomsoever paid and however realized, to the Preferred Lenders Debt in such manner as the Preferred Lenders shall deem appropriate.

 

11.                No Commitment.  None of the provisions of this Agreement shall be deemed or construed to constitute or imply any commitment or obligation on the part of the Preferred Lenders to make any future loans or other extensions of credit or financial accommodations to the Borrower. Each of the Subordinated Creditors hereby waives any and all right to require the marshalling of assets in connection with the exercise of any of the Preferred Lenders’ remedies permitted by applicable law or agreement.

 

12.                Notices.  Any notice or other communication required or permitted to be given or made under this Agreement (i) shall be in writing, (ii) may be delivered by hand delivery, First Class U.S. Mail (regular, certified, registered or expedited delivery), FedEx, UPS Overnight, Airborne or other nationally recognized delivery service, fax, or electronic transmission, and (iii) shall be delivered or transmitted to the appropriate address as set forth herein. Each notice or other communication shall be delivered or addressed to a party at its address set forth below.  A party’s address for notice may be changed from time to time by notice given to the other party.

Absent fraud or manifest error, a receipt signed by the addressee or its authorized representative, a certified or registered mail receipt, a signed delivery service confirmation or a fax or e-mail confirmation of transmission shall constitute proof of delivery.  Any notice actually received by the addressee shall constitute delivery notwithstanding the failure to comply with any provisions of this subsection. A notice delivered by regular First Class U.S. Mail shall be deemed to have been delivered on the third (3^rd) business day after its post-mark.  Any other notice shall be deemed to have been received on the date and time of the signed receipt or confirmation of delivery or transmission thereof, unless that receipt or confirmation date and time is not a business day or is after 5:00 p.m. local time on a business day, in which case such notice shall be deemed to have been received on the next succeeding business day.

13.            Conflict in Agreements.  If the subordination provisions of any instrument evidencing Subordinated Indebtedness conflict with the terms of this Agreement, the terms of this Agreement shall govern the relationship between the Preferred Lenders and the Subordinated Creditors.

 

14.            No Waiver.  No waiver shall be deemed to be made by any Party of any of its rights hereunder unless the same shall be in writing signed on behalf of the Party, and each such waiver, if any, shall be a waiver only with respect to the specific matter or matters to which the waiver relates and shall in no way impair the rights of the Party or the obligations of the other Parties in any other respect at any time.

 

15.            Binding Effect; Acceptance.  This Agreement shall be binding upon the Parties and their respective heirs, legal representatives, successors and assigns and shall inure to the benefit of the Parties and their respective participants, successors and assigns irrespective of whether this or any similar agreement is executed by any other creditor of the Borrower.  Notice of acceptance of this Agreement or of reliance upon this Agreement is hereby waived by each of the Parties.

 

16.            Miscellaneous.  The Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.  This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

 

17.            Governing Law; Consent to Jurisdiction and Venue.  This Agreement shall be governed by and construed in accordance with the substantive laws (other than conflict laws) of the State of California.  Each party consents to the personal jurisdiction of the state and federal courts located in the State of California in connection with any controversy related to this Agreement, waives any argument that venue in any such forum is not convenient, and agrees that any litigation initiated by any of them in connection with this Agreement may be venued in either the state or federal courts located in Sacramento County, California.

 

18.            Waiver of Jury Trial.  To the extent permissible under law, the parties hereto, each after consulting or having had the opportunity to consult with legal counsel, knowingly, voluntarily and intentionally waive any right they may have to a trial by jury in any litigation.  No party shall seek to consolidate, by counterclaim or otherwise, any litigation in which a jury trial has been waived with any other litigation in which a jury trial cannot be or has not been waived.  This provision shall be deemed to be enforceable to the fullest extent of the law as it may exist at the time any litigation is commenced.

The undersigned, being the Borrower referred to in the foregoing Restated Subordination Agreement (“Agreement”), hereby (i) acknowledges receipt of a copy thereof, (ii) agrees to all of the terms and provisions thereof, (iii) agrees to and with the Preferred Lenders that it shall make no payment on the Subordinated Indebtedness that the Subordinated Creditors would not be entitled to receive under the provisions of the Agreement, (iv) agrees that any such payment will constitute a default under the Preferred Lenders Debt, and (v) agrees to mark its books conspicuously to evidence the subordination of the Subordinated Indebtedness effected hereby.

Each of the undersigned hereby (i) acknowledges receipt of a copy of the Restated Subordination Agreement dated as of May __, 2013 made by and among Gregory J. Vislocky, Brian Rick Delamarter, Harold Guy Delamarter, Baruch Halpern and Shoshana Halpern as trustees for The Shoshana Shapiro Halpern Revocable Trust UA June 13, 2006, Weintraub Partners, W. John Short and Karen A. Wilson, Edward McMillan as trustee for The Revocable Trust of Edward L. McMillan Revocable Trust U/D/T dated February 17, 1999, Zanesville Partners Fund, LLC, Alon Gibli, Michael Geliebter, and Pensco Trust Co., FBO Baruch Halpern IRA (collectively the “Subordinated Creditors”), TCA Global Credit Master Fund, LP, a limited partnership organized and existing under the laws of the Cayman Islands (“TCA”) and Hillair Capital Investments, L.P., a Delaware limited partnership(“Hillair”) (with its participants, successors and assigns, TCA and Hillair are sometimes referred to herein as the “Preferred Lenders”) (the “Agreement”), (ii) agrees to all of the terms and provisions of the Agreement, (iii) agrees to and with the Preferred Lenders that it shall make no payment on the Subordinated Indebtedness that the Subordinated Creditors would not be entitled to receive under the provisions of the Agreement, (iv) agrees that any such payment will constitute a default under the Preferred Lenders Debt, and (v) agrees to mark its books conspicuously to evidence the subordination of the Subordinated Indebtedness effected hereby.

“THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A RESTATED SUBORDINATION AGREEMENT BY _____________ IN FAVOR OF TCA GLOBAL CREDIT MASTER FUND, LP AND THE HILLAIR CAPITAL INVESTMENTS, L.P., DATED ____________________.”

 

 

---