Unassociated Document


     

    INTERCREDITOR
      AGREEMENT

    


    THIS
      INTERCREDITOR AGREEMENT (this "Agreement"),
      dated
      as of January 29, 2007 (the “Effective
      Date”),
      is
      entered into between Mapleridge Insurance Services, a California S corporation
      ("Mapleridge")
      and
Westrec
      Properties Inc. & Affiliated Companies 401(k) Plan
      (the
“Plan”)
      (sometimes collectively referred to as the “Creditors”
or,
      individually as a “Creditor”),
      based
      upon the following:

    


    RECITALS

    


    A.  WHEREAS,
      AuraSound, Inc., a California corporation, formerly known as Algo Sound, Inc.
      (dba Aura Sound, Inc.) (the “Debtor”),
      and
      Mapleridge have entered into: (i) a Loan Agreement; (ii) a Secured Promissory
      Note in the principal amount of $750,000 (the “Mapleridge
      Note”);
      (iii)
      a Security Agreement; and (iv) a Common Stock Purchase Warrant, each of which
      is
      dated December 29, 2006, and together are referred to herein as the
“Mapleridge
      Loan Documents.”
      

    


    B.  WHEREAS,
      the Debtor and the Plan have entered into: (i) a Loan Agreement; (ii) a Secured
      Promissory Note in the original principal amount of $500,000 (the “Plan
      Note”);
      and
      (iii) a Security Agreement, each of which is dated as of the Effective Date,
      and
      together are referred to herein as the “Plan
      Loan Documents.”

    


    C.  WHEREAS,
      the Debtor’s obligations under the Mapleridge Loan Documents and the Plan Loan
      Documents are secured by the Collateral, as herein defined.

    


    D.  WHEREAS,
      the Creditors desire to enter into this Agreement pursuant to which all
      obligations under the Mapleridge Loan Documents and the Plan Loan Documents
      will
      be secured on parity with respect to the Collateral, and to stipulate that
      all
      rights and remedies with respect to such debt will be controlled by this
      Agreement. 

    


    NOW,
      THEREFORE, the Creditors agree as follows:

     

    Article
      I.  

    DEFINITIONS

     

    Section
      1.01  Definitions.
      Terms
      not defined elsewhere in this Agreement shall have the meanings specified
      herein.

     

    
      	(a)  	
              “Business
                Day” shall mean a day other than a Saturday, Sunday, or other day on which
                national banks in the United States are authorized or required by
                law to
                close.

            


    

     

     

    
      	(b)  	
              “Collateral”
                means all presently existing and hereafter acquired personal property
                of
                the Debtor, including all Collateral as such term is defined in the
                Loan
                Documents.

            


    

     

     

    
      	(c)  	
              “Loan
                Documents” shall mean collectively the Plan Loan Documents and the
                Mapleridge Loan Documents.

            


    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	(d)  	
              “Majority
                Creditor” shall have the meaning defined in Section
                4.02.

            


    

     

    
      	(e)  	
              “Mapleridge
                Indebtedness” means any and all indebtedness, claims, debts, liabilities
                or other obligations owing from the Debtor to Mapleridge under the
                Mapleridge Loan Documents, of whatever nature, character or description,
                howsoever arising and whether currently existing or arising hereafter,
                together with all interest accruing thereon and all costs and expenses,
                including attorneys’ fees, or collection thereof, whether the same accrues
                or is incurred before or after the commencement of any bankruptcy
                case by
                or against the Debtor.

            


    

     

    
      	(f)  	
              “Minority
                Creditor” shall have the meaning defined in Section
                3.04.

            


    

     

    
      	(g)  	
              “Notes”
                shall mean collectively the Plan Note and the Mapleridge
                Note.

            


    

     

    
      	(h)  	
              “Plan
                Indebtedness” means any and all indebtedness, claims, debts, liabilities
                or other obligations owing from the Debtor to the Plan under the
                Plan Loan
                Documents, of whatever nature, character or description, howsoever
                arising
                and whether currently existing or arising hereafter, together with
                all
                interest accruing thereon and all costs and expenses, including attorneys’
                fees, or collection thereof, whether the same accrues or is incurred
                before or after the commencement of any bankruptcy case by or against
                the
                Debtor.

            


    

     

    
      	(i)  	
              “UCC”
                means the Uniform Commercial Code as the same may, from time to time,
                be
                in effect in the state of incorporation of the Debtor; provided,
                however,
                in the event that, by reason of mandatory provisions of law, any
                or all of
                the attachment, perfection or priority of the Creditor’s interest in any
                Collateral is governed by the UCC as in effecting a jurisdiction
                other
                than the one stated herein, the term “UCC” shall mean the Uniform
                Commercial Code as in effect in such other jurisdiction or such other
                laws, as the case may be, for purposes of the provisions hereof relating
                to such attachment, perfection or
                priority.

            


    

    


    Article
      II.  

    REPRESENTATIONS
      AND WARRANTIES

    


    Section
      2.01  Representation
      and Warranties of All Parties.
      Each
      party hereto represents and warrants that:

     

    
      	(a)  	
              Existence.
                It is duly organized or formed, and validly existing under the laws
                of the
                jurisdiction of its formation.

            


    

     

     

    
      	(b)  	
              Authority.
                The execution, delivery and performance of this Agreement and the
                performance of the transactions contemplated hereby have been duly
                authorized by all necessary actions and do not violate any provision
                of
                law or any charter, articles of incorporation, organization documents
                or
                bylaws, trust formation documents, as applicable, or result in any
                breach
                of, or constitute a default under, any agreement, security agreement,
                not
                or other instrument to which it is a party or by which it may be
                bound.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	(c)  	
              Consent.
                No authorizations, approvals or consents of, and no filings or
                registrations with, any governmental or regulatory authority or agency
                are
                necessary for the execution, delivery or performance of this Agreement
                or
                for the validity or enforceability
                hereof.

            


    

     

    
      	(d)  	
              No
                Existing Transfer or Subordination.
                It
                has not (i) sold, assigned or otherwise transferred, in whole or
                in part,
                its respective Note, any interest therein or any collateral security
                or
                guaranty therefor to any other person, or (ii) made, given or permitted
                any currently effective subordination or postponement in respect
                of its
                respective Note or the Collateral, except as provided
                herein.

            


    

     

    Section
      2.02  Representations
      and Warranties of the Creditors.
      Each
      Creditor represents and agrees that:

     

    
      	(a)  	
              No
                Fiduciary Relationship.
                The
                relationship between each Creditor as provided hereunder is solely
                that of
                creditors and neither Creditor has a fiduciary duty or other special
                relationship with the other.

            


    

     

    
      	(b)  	
              Independent
                Credit Investigations.
                Each
                Creditor has entered into its respective financing agreements with
                the
                Debtor based upon its own independent investigation, and makes no
                warranty
                or representation to the other, nor does it rely upon any representation
                of the other Creditor with respect to the financial condition or
                ability
                of the Debtor to repay any obligation secured under the respective
                Loan
                Documents. 

            


    

    


    Article
      III.  

    RIGHTS
      AND REMEDIES AS TO CREDITORS

    


    Section
      3.01  Exclusive
      Remedies.
      It is
      the intent of the Creditors that the rights and remedies provided herein with
      respect to any of the Collateral shall be governed solely by the provisions
      hereof, notwithstanding the date, manner or order of attachment or perfection,
      or the lack of any thereof, or the description of any such Collateral by or
      for
      the benefit of any Creditor, and shall supersede all other remedies provided
      for
      in the Loan Documents, or any other documents to which they are a party with
      respect to the Collateral. Each Creditor hereby covenants that it shall only
      execute on the Collateral in accordance with this Agreement.

    


    Section
      3.02  Rights
      as to Collateral.
      Each
      Creditor acknowledges the other’s right, on a pari passu basis, in the
      Collateral and a lien therein securing the indebtedness of each Creditor
      evidenced by the Notes. Neither Creditor will challenge or contravene the
      perfection of the security interests of the other Creditor. Each Creditor agrees
      to hold and administer, as trustee for the pro rata benefit of itself and the
      other Creditor, any agreements or other security instruments or interests that
      may be conveyed or granted to it pursuant to the provisions of its respective
      Loan Documents and, upon either Creditor receiving any proceeds from any sale,
      assignment, foreclosure or other disposition of or realization upon any of
      the
      Collateral, such Creditor will hold such proceeds, to the extent it may legally
      do so, for the ratable benefit of itself and the other Creditor and will apply
      the same in accordance with the provisions of this Article.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Section
      3.03  Distribution
      of proceeds.
      Any
      Creditor conducting a liquidation or other enforcement action with respect
      to
      the Collateral shall provide the other Creditor with copies of all demands,
      communications, correspondence, and pleadings that relate to such Creditor’s
      conduct. Such enforcing Creditor shall provide the other Creditor with a written
      statement of the results of such liquidation or other action. The receipt of
      any
      proceeds from such action(s) shall be distributed to the other Creditor as
      soon
      as practicable on a pro rata basis with respect to each Creditor’s outstanding
      balance on its respective Note. Notwithstanding the agreement to ratably share
      the Collateral and the proceeds thereof, the Creditor conducting such
      liquidation or other action shall be entitled to first apply the proceeds
      collected on the Collateral to its reasonable costs of such action(s), including
      reasonable attorney’s fees, before distributing the remainder among the
      Creditors.

    


    Section
      3.04  Rights
      of Minority Creditor.
      The
      Creditor that is not the Majority Creditor (the “Minority
      Creditor”)
      shall
      not exercise and enforce against the Collateral any rights or remedies herein
      or
      in its respective Loan Documents conferred upon or reserved by law to such
      Creditor unless and until ten (10) days have passed after the Majority Creditor
      shall have had knowledge of the happening of an Event or Events of Default.
      Then, and only then, such Minority Creditor may proceed to exercise any such
      right(s) and remedies not being enforced by the Majority Creditor.

    


    Section
      3.05  Independent
      Loans.
      Subject
      to the terms of this Agreement, each Creditor is entitled to manage and
      supervise its respective loans and extensions of credit to the Debtor in
      accordance with law and as it may otherwise, in its sole discretion, deem
      appropriate. Neither Creditor shall have any duty to the other to act or refrain
      from acting in a manner that would allow, or result in, the occurrence or
      continuance of an Event of Default, regardless of any knowledge thereof which
      either Creditor may have or be charged with.

    


    Section
      3.06  Remedies
      for Non-compliance.
      Upon
      the occurrence of a breach of this Agreement by either Creditor, the other
      Creditor may pursue all rights and remedies available to it that are
      contemplated by this Agreement in the manner, upon the conditions, and with
      the
      effect provided herein, including, but not limited to, a suit for specific
      performance or injunctive relief.

    


    Article
      IV.  

    RIGHTS
      AND REMEDIES AS TO DEBTOR

     

    Section
      4.01  Acceleration
      of Maturity; Annulment of Acceleration

     

    
      	(a)  	
              If
                any Event of Default, as hereinafter defined, has occurred and is
                continuing, any Creditor may, by written notice to the Debtor and
                delivery
                of a copy thereof to the other Creditor, declare all unpaid principal
                and
                accrued interest on any or all of their respective Notes to be due
                and
                payable immediately; and upon any such declaration, all such unpaid
                principal and accrued interest shall immediately become due and payable,
                notwithstanding anything contained herein or in any Note to the
                contrary.

            


    

     

    
      	(b)  	
              If
                after the unpaid principal and accrued interest on any of the Notes
                shall
                have been so declared to be due and payable, all payments in respect
                of
                principal and interest that have become due and payable by the terms
                of
                such Note shall be paid to the Creditor who accelerated its Note,
                such
                Creditor may, by written notice to the Debtor and delivery of a copy
                thereof to the other Creditor, annul such declaration or declarations
                and
                waive such default(s) and consequences thereof, with such waiver
                not
                extending to or affecting any subsequent default or impairing any
                right
                consequent thereon.

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Section
      4.02  Remedies
      of Majority Creditor.
      If any
      Event of Default has occurred and is continuing, the holder of not less than
      a
      majority of the total amount of principal outstanding on the Notes, (hereinafter
      the “Majority
      Creditor”)
      for
      itself and as the agent of the other Creditor, personally or by attorney, in
      its
      or its discretion, may, insofar as not prohibited by law:

     

     

    
      	(a)  	
              (i)
                take immediate possession of the Collateral; (ii) collect and receive
                all
                credits, outstanding accounts, bills, receivables, rents, income,
                revenues, and profits of the Debtor, pertaining to or arising from
                the
                Collateral, or any part thereof, and issue binding receipts therefor;
                and
                (iii) manage, control, and/or operate the Collateral as fully as
                the
                Debtor might do if in possession thereof, including, without limitation,
                the making of all repairs or replacements deemed necessary or
                advisable;

            


    

     

    
      	(b)  	
              the
                Majority Creditor, or any employee or agent of it, is hereby constituted
                and appointed as true and lawful attorney-in-fact of the Debtor with
                full
                power to (i) notify or require the Debtor to notify any and all customers
                that the Collateral has been assigned to the Creditors and/or that
                the
                Creditors have a security interest in the Collateral; (ii) sign and
                endorse the name of the Debtor upon any notes, checks, acceptances,
                drafts, money orders, or other instruments of payment (including
                payments
                made under any policy of insurance) that may come into possession
                of
                either Creditor, or upon any invoice, freight or express bill, bill
                of
                lading, storage or warehouse receipt, assignment, verification, or
                notice
                in connection with receivables, all in full or part payment of any
                amount
                owing to any Creditor; (iii) send requests for verifications of the
                Collateral to customers or account debtors; (iv) sell, assign, sue
                for,
                collect, or compromise payment of all or any part of the Collateral
                in the
                name of the Debtor or in its own name, or make any other disposition
                of
                Collateral, or any part thereof, for cash, credit, or any combination
                thereof; granting to the Majority Creditor, as the attorney-in-fact
                of the
                Debtor, full power of substitution and full power to do any and all
                things
                necessary to be done in and about the premises fully and effectually
                as
                the Debtor might or could do but for this appointment, and hereby
                ratifying all that said attorney-in-fact shall lawfully do or cause
                to be
                done by virtue hereof. The Majority Creditor, the other Creditor,
                their
                employees, or agents shall not be liable for any act, omission, error
                of
                judgment, or mistake of fact or law in its capacity as attorney-in-fact.
                This power of attorney is coupled with an interest and shall be
                irrevocable during the term of this Agreement so long as any Notes
                shall
                remain outstanding;

            


    

     

    
      	(c)  	
              proceed
                to protect and enforce the rights of the Creditors under this Agreement
                by
                suits or actions in equity or at law in any court of competent
                jurisdiction, whether for specific performance of any covenant or
                any
                agreement contained herein, for aid of execution of any power herein
                granted, for foreclosure hereunder, for sale of the Collateral, or
                any
                part thereof, for collection of debts hereby secured, or for enforcement
                of other appropriate legal or equitable remedies as may be deemed
                most
                effectual to protect and enforce the rights and remedies herein granted
                or
                conferred; 

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	(d)  	
              sell
                or cause to be sold the Collateral, all or in part, and all right,
                title,
                interest, claim, and demand of the Debtor therein or thereto, in
                accordance with the UCC. The expenses incurred by the Creditor(s),
                including but not limited to professional fees, including attorneys’ fees,
                cost of advertisement, and agents’ compensation, in the exercise of any of
                the remedies provided in this Agreement shall be secured by this
                Agreement; and

            


    

     

    
      	(e)  	
              enter
                and/or remain upon the premises of the Debtor without any obligation
                to
                pay rent to the Debtor or others, or any other place(s) where any
                of the
                Collateral is located and kept, and: (i) remove the Collateral therefrom
                in order to maintain, collect, sell, and/or liquidate the Collateral
                or,
                (ii) use such premises, together with materials, supplies, books,
                and
                records of the Debtor, to maintain possession and/or the condition
                of the
                Collateral, and to prepare the Collateral for sale, liquidation,
                or
                collection. The Creditors may require the Debtor to assemble the
                Collateral and make it available to the Creditors at a place to be
                designated by the Creditors.

            


    

     

    Section
      4.03  Enforcement
      Action(s) by Minority Creditor.
      Notwithstanding the rights and remedies of the Majority Creditor as provided
      in
      Section 4.02, upon the expiration of ten (10) days after the Majority Creditor
      shall have had knowledge of the happening of an Event or Events of Default,
      any
      right, power or remedy herein or by law conferred which the Majority Creditor
      shall not have proceeded to exercise or enforce, may be exercised and enforced
      by the Minority Creditor.

     

    Section
      4.04  Right
      to Purchase Collateral.
      At any
      sale hereunder any Creditor shall have the right to bid for and purchase the
      Collateral, or such part thereof as shall be offered for sale, and any Creditor
      may in lieu of actual payment of the purchase price, set off against the
      purchase price the amount owing to said Creditor as evidenced by its respective
      Note and such set off amount shall be credited as a payment on account of
      principal and interest on said Note held by such Creditor.

     

    Section
      4.05  Remedies
      Cumulative, No Election.
      Every
      right or remedy herein conferred upon or reserved to the Creditors shall be
      cumulative and shall be in addition to every other right and remedy given
      hereunder, or now or hereafter existing at law, in equity, or by statute. The
      pursuit of any right or remedy shall not be construed as an
      election.

     

    Section
      4.06  Waiver
      of Appraisement Rights, Marshaling of Assets Not Required.
      The
      Debtor, for itself and for all who may claim through or under it, covenants
      that
      it will not at any time insist upon or plead, or in any manner whatsoever,
      claim
      or take the benefit or advantage of, any appraisal, valuation, stay, extension,
      or redemption laws, now or hereafter in force in any locality where any of
      the
      Collateral may be situated, in order to prevent, delay or hinder the enforcement
      or foreclosure of this Agreement, or the absolute sale of the Collateral, or
      any
      part thereof, or the final and absolute putting into possession thereof,
      immediately after such sale, of the purchaser(s) thereat, and the Debtor, for
      itself and for all who may claim through or under it, hereby waives the benefit
      of all such laws, unless such waiver shall be forbidden by law. Under no
      circumstance shall there be any marshalling of assets upon any foreclosure
      or
      other enforcement of this Agreement.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    


    Article
      V.  

    AFFIRMATIVE
      COVENANTS OF THE CREDITORS

     

    Section
      5.01  Further
      Acts.
      The
      Creditors will promptly execute and deliver such further documents and do such
      further acts and things as may be reasonably required in order to affect fully
      the intent of this Agreement.

    


    Section
      5.02  Access
      to Contracts, Books and Records.
      In the
      event that any Creditor obtains title to any of the Collateral, that Creditor
      shall allow the other Creditor, and its agents or representatives to have the
      right, upon reasonable prior written request to the obtaining Creditor, and
      during normal business hours, to review the contracts, books and records
      relating to the obtained Collateral.

    


    Section
      5.03  Information
      Sharing.
      In the
      event that either Creditor shall, in connection with any enforcement action
      over
      the Collateral, receive possession or control of any books and records that
      contain information identifying or pertaining to any of the Collateral herein,
      it shall notify the other Creditor that it has received such books and records
      and shall, as promptly as practicable thereafter, make available to it duplicate
      copies of such books and records in the same form as the original. The failure
      of either Creditor to share information shall not create a cause of action
      against the party failing to share information or create any claim on behalf
      of
      it or any third Party.

    


    Section
      5.04  Bailee.
      To the
      extent that either Creditor obtains possession of the Collateral, the Creditor
      having possession shall notify the other of such fact. Each Creditor shall
      be a
      bailee for the other with respect to Collateral in its possession. 

    


    Section
      5.05  Legend.
      The
      Creditors agree that they shall place or cause to be placed on the face of
      the
      Notes or other instruments evidencing the Mapleridge Indebtedness, or the Plan
      Indebtedness, a legend stating that the payment thereof is subject to the terms
      of this Agreement. 

    


    Article
      VI.  

    [INTENTIONALLY
      OMITTED]

    


    Article
      VII.  

    NEGATIVE
      COVENANTS

     

    Section
      7.01  Adequate
      Protection.
      Each
      Creditor, on behalf of itself and the other Creditor, agrees that it will not
      contest (or support any other person contesting) (a) any request by the other
      Creditor for adequate protection, or (b) any objection by the Creditor to any
      motion, relief, action or proceeding, which objection is based on the Creditor’s
      claim to a lack of adequate protection.

    


    Section
      7.02  Prohibition
      on Contesting Liens.
      Each
      Creditor, for itself and on behalf of the other Creditor, agrees that it shall
      not, and hereby waives any right to, contest or support any other person in
      contesting, in any proceeding, the priority, validity or enforceability of
      a
      lien held by the other Creditor on the Collateral; provided that nothing in
      this
      Agreement shall be construed to prevent or impair the rights of each Creditor
      to
      enforce this Agreement.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
 

    Article
      VIII.  

    NOTICE

     

    Section
      8.01  Notice
      Hereunder.
      Any
      notice, demand, offer, request or other communication required or permitted
      to
      be given pursuant to the terms of this Agreement shall be in writing and shall
      be deemed effectively given the earlier of (i) when received,
      (ii) when delivered personally, (iii) one Business Day after being
      delivered by facsimile (with receipt of appropriate confirmation), (iv) one
      Business Day after being deposited with an overnight courier service, or
      (v) four days after being deposited in the U.S. mail, First Class with
      postage prepaid, and addressed to the recipient at the address set forth below
      unless another address is provided to the other party in writing:

    
      	 	
              if
                to Mapleridge, to:

              Jim
                Adams

              Mapleridge
                Insurance Services

              114
                Pacifica, Suite 130

              Irvine,
                CA 92618

              Fax:
                _________________

            
	 	
               

              with
                a copy to:

              Mark
                Niu

              114
                Pacifica, Suite 100

              Irvine,
                CA  92618

              Fax:
                _________________

            
	 	
               

              if
                to the Plan, to:

              Westrec
                Properties Inc. & Affiliated Companies 401(k) Plan

              Att:
                Michael Sachs

              16633
                Ventura Blvd., 6th Floor

              Encino,
                CA 91436

              Fax:
                (818) 907-1104

            
	 	
               

              with
                a copy to:

              Heller
                Ehrman LLP

              333
                Hope Street, 39th
                Floor

              Los
                Angeles, CA 90071

              Att:
                Steven O. Weise, Esq.

              Fax:
                (213) 614-1868

            


    

    


    Section
      8.02  Notice
      to Other Agreements.
      Each of
      the Creditors shall provide the other with a copy of any notice of demand,
      or
      similar communication as and when given to the Debtor. Each of the Creditors
      shall make reasonable efforts to provide the other as and when received, given,
      or executed, a copy of any amendment, modification, waiver, replacement or
      supplement of their respective agreements with the Debtor. No Creditor shall
      have any liability to any other Creditor for failure to comply with this
      Section. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Section
      8.03  Change
      to Notice.
      Any of
      the addresses set forth in this Article may be changed upon prior written notice
      to the other party.

    


    Article
      IX.  

    MISCELLANEOUS

     

    Section
      9.01  Term.
      This
      Agreement shall continue until all amounts owing under the Notes have been
      fully
      paid, beyond any applicable state or federal preference period.

    


    Section
      9.02  Enforcement.
      In the
      event that any Creditor finds it necessary to retain counsel in connection
      with
      the interpretation, defense, or enforcement of this Agreement, the prevailing
      party shall recover its reasonable attorney’s fees and expenses from the
      unsuccessful party.

    


    Section
      9.03  Successors
      and Assigns.
      All of
      the agreements, covenants, stipulations, undertakings, and promises herein
      of
      the parties hereto shall bind their successors and assigns, whether so specified
      or not, and all titles, rights, and remedies hereby granted to, or conferred
      upon, the Creditors shall pass to and inure to the benefit of the successors
      and
      assigns of the Creditors and shall be deemed to be granted or conferred for
      the
      ratable benefit and security of all who shall from time to time be the holders
      of Notes executed and delivered as herein provided.

    


    Section
      9.04  Headings.
      The
      descriptive headings of the various articles of this Agreement were formulated
      and inserted for convenience only and shall not be deemed to affect the meaning
      or construction of any provision hereof.

    


    Section
      9.05  Conflicts
      among Loan Documents.
      To the
      extent that any of the provisions of this Agreement conflict with any provisions
      of the Loan Documents, the provisions of this Agreement shall
      control.

    


    Section
      9.06  Modifications
      and Waivers.
      Any
      modification or waiver of any provision of this Agreement, or any consent to
      any
      departure by either party from the terms hereof, shall not be effective unless
      the same is in writing and signed by the parties hereto, and then such
      modification, waiver or consent shall be effective only in the specific instance
      and for the specific purpose given. No failure or delay in exercising any right
      hereunder shall impair any such right that a party may have.

    


    Section
      9.07  Amendments
      to Financing Arrangements.
      Each
      Creditor shall each endeavor to notify the other of any material amendment
      or
      modification of its Loan Documents, respectively, but the failure to do so
      shall
      not create a cause of action against the party failing to give such notice
      or
      create any claim or right on behalf of the other Party. Each Creditor shall,
      upon request of the other, provide copies of all such modifications or
      amendments and copies of all other documentation relevant to the
      Collateral.

     

    
      
        
        

      

      
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    Section
      9.08  Creditors
      Right to File Financing Statements.
      The
      Creditors shall have the right to file such financing statements and
      continuation statements on their behalf, as secured party, and the Debtor,
      as
      debtor, as the Creditors deem necessary to perfect a first lien on the
      Collateral and to maintain and preserve such perfected first lien as long as
      their respective Notes remain outstanding. 

    


    Section
      9.09  Severability
      Cause.
      If any
      provision of this Agreement shall for any reason be found or held invalid or
      unenforceable by any governmental agency or court of competent jurisdiction,
      such invalidity or unenforceability shall not affect the validity, legality,
      and
      enforceability of the remainder of such provision, nor any other provision
      thereof and this Agreement shall survive and be construed as if such invalid
      or
      unenforceable provision had not been contained therein. Any invalidity or
      unenforceability as to any Creditor hereunder shall not affect or impair the
      rights hereunder of the other Creditor.

    


    Section
      9.10  Counterparts.
      This
      Agreement may be simultaneously executed and delivered in two or more
      counterparts, each of which so executed and delivered shall be deemed an
      original, and shall constitute but one and the same instrument.

    


    Section
      9.11  Choice
      of law; Venue.
      THE
      VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
      AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY
      AND
      CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES
      AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT
      SHALL BE TRIED AND LITIGATED ONLY IN THE STATE COURTS LOCATED IN THE COUNTY
      OF
      LOS ANGELES, STATE OF CALIFORNIA, OR THE FEDERAL COURTS WHOSE VENUE INCLUDES
      THE
      COUNTY OF LOS ANGELES, STATE OF CALIFORNIA. THE PARTIES EXPRESSLY SUBMIT AND
      CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED
      IN
      ANY SUCH COURT, AND THE PARTIES HEREBY WAIVE ANY OBJECTION WHICH EITHER MAY
      HAVE
      BASED UPON LACK OF PERSONAL JURISDICTION AND HEREBY CONSENT TO THE GRANTING
      OF
      SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY ANY SUCH COURT.
      

    


    Section
      9.12  Waiver
      of Right to Trial by Jury.
      THE
      PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
      CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
      TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
      OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. THE PARTIES
      REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
      WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN
      THE
      EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
      TO A TRIAL BY THE COURT.

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have entered into this Intercreditor
      Agreement as of the date first above written.

     

     

     

    
      	
              MAPLERIDGE
                INSURANCE SERVICES

            	
              WESTREC
                PROPERTIES INC. & AFFILIATED COMPANIES 401(K)
                PLAN 

            
	
               

              By:________________________________

              Name:_____________________________

              Its:
                _______________________________

            	
               

              By:
                __________________________________

              Name:
                Michael Sachs

              Its:
                Trustee

            


    

     

    
      
        
        

      

      
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    The
      undersigned, AuraSound, Inc., a California corporation, being the Debtor named
      in the foregoing Intercreditor Agreement, hereby accepts and consent thereto
      and
      agrees to be bound by all of the provisions thereof and to recognize all
      priorities and other rights granted thereby to Mapleridge and the Plan in
      accordance therewith.

    

      
        	 	 
	
                DATED:
                  January__, 2007

              	
                AURASOUND,
                  INC.,
                  a
                  California corporation

              
	 	 
	 	 
	 	
                By:_____________________________

              
	 	
                Name:
                  Arthur Liu

              
	 	
                Title:
                  President

              


      



    
      
        
        

      

      
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