CREDITOR WILL NOT DEMAND OR RECEIVE FROM A BORROWER (AND NO
BORROWER WILL PAY TO CREDITOR) ALL OR ANY PART OF THE SUBORDINATED DEBT, BY WAY
OF PAYMENT, PREPAYMENT, SETOFF, LAWSUIT OR OTHERWISE, NOR WILL CREDITOR EXERCISE
ANY REMEDY WITH RESPECT TO THE COLLATERAL, NOR WILL CREDITOR COMMENCE, OR CAUSE
TO COMMENCE, PROSECUTE OR PARTICIPATE IN ANY ADMINISTRATIVE, LEGAL OR EQUITABLE
ACTION AGAINST A BORROWER, FOR SO LONG AS ANY PORTION OF THE SENIOR DEBT REMAINS
OUTSTANDING.
NOTWITHSTANDING THE FOREGOING, CREDITOR SHALL BE ENTITLED TO
RECEIVE EACH REGULARLY SCHEDULED PAYMENT OF PRINCIPAL AND INTEREST UNDER AND IN
STRICT ACCORDANCE WITH THE TERMS AND CONDITIONS OF THAT CERTAIN PROMISSORY NOTE
MADE BY COMMODORE RESOURCES (NEVADA), INC. IN FAVOR OF CREDITOR, IN THE ORIGINAL
PRINCIPAL AMOUNT OF FIVE MILLION SIX HUNDRED THOUSAND DOLLARS ($5,600,000) DATED
AS OF MARCH 31, 2007, PROVIDED THAT NO EVENT OF DEFAULT (AS DEFINED IN THE LOAN
AGREEMENT) HAS OCCURRED UNDER THE LOAN AGREEMENT WHICH IS CONTINUING OR WOULD
EXIST IMMEDIATELY AFTER GIVING EFFECT TO SUCH PAYMENT.
4.
CREDITOR SHALL PROMPTLY DELIVER TO BANK IN THE FORM RECEIVED
(EXCEPT FOR ENDORSEMENT OR ASSIGNMENT BY CREDITOR WHERE REQUIRED BY BANK) FOR
APPLICATION TO THE SENIOR DEBT ANY PAYMENT, DISTRIBUTION, SECURITY OR PROCEEDS
RECEIVED BY CREDITOR WITH RESPECT TO THE SUBORDINATED DEBT OTHER THAN IN
ACCORDANCE WITH THIS AGREEMENT.
5.
IN THE EVENT OF A BORROWER'S INSOLVENCY, REORGANIZATION OR ANY
CASE OR PROCEEDING UNDER ANY BANKRUPTCY OR INSOLVENCY LAW OR LAWS RELATING TO
THE RELIEF OF DEBTORS, THESE PROVISIONS SHALL REMAIN IN FULL FORCE AND EFFECT,
AND BANK'S CLAIMS AGAINST SUCH BORROWER AND THE ESTATE OF SUCH BORROWER SHALL BE
PAID IN FULL BEFORE ANY PAYMENT IS MADE TO CREDITOR.
6.
FOR SO LONG AS ANY OF THE SENIOR DEBT REMAINS UNPAID, CREDITOR
IRREVOCABLY APPOINTS BANK AS CREDITOR'S ATTORNEY-IN-FACT, AND GRANTS TO BANK A
POWER OF ATTORNEY WITH FULL POWER OF SUBSTITUTION, IN THE NAME OF CREDITOR OR IN
THE NAME OF BANK, FOR THE USE AND BENEFIT OF BANK, WITHOUT NOTICE TO CREDITOR,
TO PERFORM AT BANK'S OPTION THE FOLLOWING ACTS IN ANY BANKRUPTCY, INSOLVENCY OR
SIMILAR PROCEEDING INVOLVING BORROWER:
(I)
TO FILE THE APPROPRIATE CLAIM OR CLAIMS IN RESPECT OF THE
SUBORDINATED DEBT ON BEHALF OF CREDITOR IF CREDITOR DOES NOT DO SO PRIOR TO 30
DAYS BEFORE THE EXPIRATION OF THE TIME TO FILE CLAIMS IN SUCH PROCEEDING AND IF
BANK ELECTS, IN ITS SOLE DISCRETION, TO FILE SUCH CLAIM OR CLAIMS; AND
(II)
TO ACCEPT OR REJECT ANY PLAN OF REORGANIZATION OR ARRANGEMENT ON
BEHALF OF CREDITOR AND TO OTHERWISE VOTE CREDITOR'S CLAIMS IN RESPECT OF ANY
SUBORDINATED DEBT IN ANY MANNER THAT BANK DEEMS APPROPRIATE FOR THE ENFORCEMENT
OF ITS RIGHTS HEREUNDER.
7.
CREDITOR SHALL IMMEDIATELY AFFIX A LEGEND TO THE INSTRUMENTS
EVIDENCING THE SUBORDINATED DEBT STATING THAT THE INSTRUMENTS ARE SUBJECT TO THE
TERMS OF THIS AGREEMENT.
NO AMENDMENT OF THE DOCUMENTS EVIDENCING OR RELATING
TO THE SUBORDINATED DEBT SHALL DIRECTLY OR INDIRECTLY MODIFY THE PROVISIONS OF
THIS AGREEMENT IN ANY MANNER WHICH