Document:

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                                                                    EXHIBIT 4.25

                             SUBORDINATION AGREEMENT

     This Agreement, dated as of October 17, 2005, is made by RONALD A. HIRSCH,
a single man and resident of California, and STEPHEN D. SEYMOUR, a married man
and resident of Maryland (collectively, the "SUBORDINATED CREDITOR"), for the
benefit of AURAMET TRADING, LLC, a Delaware limited liability company (the
"LENDER").

     Nord Resources Corporation, a Delaware corporation (the "BORROWER"), is now
or hereafter may be indebted to the Lender on account of loans or the other
extensions of credit or financial accommodations from the Lender to the
Borrower, or to any other person under the guaranty or endorsement of the
Borrower.

     The Subordinated Creditor has made or may make loans or grant other
financial accommodations to the Borrower.

     As a condition to making any loan or extension of credit to the Borrower,
the Lender has required that the Subordinated Creditor subordinate the payment
of the Subordinated Creditor's loans and other financial accommodations to the
payment of any and all indebtedness of the Borrower to the Lender. Assisting the
Borrower in obtaining credit accommodations from the Lender and subordinating
their interests pursuant to the terms of this Agreement are in the Subordinated
Creditor's best interest.

     ACCORDINGLY, in consideration of the loans and other financial
accommodations that have been made and may hereafter be made by the Lender for
the benefit of the Borrower, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Subordinated
Creditor hereby agrees as follows:

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

          "BORROWER DEFAULT" means a Default or Event of Default as defined in
     the Loan Documents.

          "JOHNSON CAMP MINE" shall have the same definition ascribed to this
     term in the Deed of Trust, Assignment of Rents, and Security Agreement,
     dated October 17, 2005.

          "LENDER INDEBTEDNESS" means each and every debt, liability and
     obligation of every type and description which the Borrower may now or at
     any time hereafter owe to the Lender in connection with the Loan Agreement
     and any agreements of the Lender and Borrower, 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,

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     or joint, several or joint and several, all interest thereon, all renewals,
     extensions and modifications thereof and any notes issued in whole or
     partial substitution therefor.

          "LOAN AGREEMENT" shall mean the Secured Promissory Note, dated October
     17, 2005, by and between the Borrower and the Lender, as the same may
     hereafter be amended, supplemented or restated from time to time.

          "LOAN DOCUMENTS" shall have the same definition ascribed to this term
     in the Loan Agreement.

          "SUBORDINATED INDEBTEDNESS" means all obligations arising under the
     Subordinated Note and each and every other debt, liability and obligation
     of every type and description which the Borrower may now or at any time
     hereafter owe to the Subordinated Creditor, 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 NOTE" means the Borrower's Promissory Note, dated as of
     July 1, 2005, payable to the order of the Subordinated Creditor in the
     original principal amount of $600,000 together with all renewals,
     extensions and modifications thereof and any note or notes issued in
     substitution therefor.

     2. 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 Lender Indebtedness; and regardless of any
priority otherwise available to the Subordinated Creditor by law or by
agreement, the Lender shall hold a first security interest in all collateral
securing payment of the Lender Indebtedness (the "COLLATERAL"), and any security
interest claimed therein (including any proceeds thereof) by the Subordinated
Creditor shall be and remain fully subordinate for all purposes to the security
interest of the Lender therein for all purposes whatsoever.

     3. Payments. Until all of the Lender Indebtedness has been paid in full,
the Subordinated Creditor shall not, without the Lender's prior written consent,
demand, receive or accept any principal from the Borrower in respect of the
Subordinated Indebtedness, or exercise any right of or permit any setoff in
respect of the Subordinated Indebtedness; provided, however that Subordinated
Creditor may receive or accept only those principal payments from Borrower that
are made immediately after Lender is repaid in full, Subordinated Creditor
hereby expressly agreeing to extend the maturity date of the Subordinated Note
accordingly, provided further, that Subordinated Creditor may accept payment of
reasonable salaries and bonuses to the extent that the payment thereof does not

                                      -2-

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cause a Borrower Default to occur, except that no deferred salary or bonus shall
be paid if a Borrower Default has occurred.

     4. Interest Payments. The Subordinated Creditor may receive and accept
interest payments in accordance with the terms of the Subordinated Note, from
the Borrower in respect of the Subordinated Indebtedness so long as no Borrower
Default exists or will occur as a result of or immediately following such
interest payment.

     5. Receipt of Prohibited Payments. 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 Lender and will
forthwith turn over such payment to the Lender in the form received (except for
the endorsement of the Subordinated Creditor where necessary) for application to
then-existing Lender Indebtedness (whether or not due), in such manner of
application as the Lender may deem appropriate. If the 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 Lender, in immediately available funds, an amount equal
to the amount of the claims or obligations offset. If the Subordinated Creditor
fails to make any endorsement required under this Agreement, the Lender, or any
of its officers or employees or agents on behalf of the Lender, is hereby
irrevocably appointed as the attorney-in-fact (which appointment is coupled with
an interest) for the Subordinated Creditor to make such endorsement in the
Subordinated Creditor's name.

     6. Action on Subordinated Debt. The Subordinated Creditor will not 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 Lender shall 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 Collateral, or exercise or
enforce any right or remedy available to the Subordinated Creditor with respect
to any such Collateral, unless and until the Lender Indebtedness has been paid
in full.

     7. Action Concerning Collateral.

          (a) Notwithstanding any security interest now held or hereafter
     acquired by the Subordinated Creditor, the Lender may take possession of,
     sell, dispose of, and otherwise deal with all or any part of the
     Collateral, and may enforce any right or remedy available to it with
     respect to the Collateral, all without notice to or consent of the
     Subordinated Creditor except as specifically required by applicable law.

                                      -3-

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          (b) In addition, and without limiting the generality of the foregoing,
     if a Borrower Default has occurred and is continuing and the Borrower
     intends to sell any Collateral to an unrelated third party outside the
     ordinary course of business, the Subordinated Creditor shall, upon the
     Lender's request, execute and deliver to such purchaser such instruments as
     may reasonably be necessary to terminate and release any security interest
     or lien the Subordinated Creditor has in the Collateral to be sold.

          (c) The Lender shall have no duty to preserve, protect, care for,
     insure, take possession of, collect, dispose of, or otherwise realize upon
     any of the Collateral, and in no event shall the Lender be deemed the
     Subordinated Creditor's agent with respect to the Collateral. All proceeds
     received by the Lender with respect to any Collateral may be applied,
     first, to pay or reimburse the Lender for all costs and expenses (including
     reasonable attorneys' fees) incurred by the Lender in connection with the
     collection of such proceeds, and, second, to any indebtedness secured by
     the Lender's security interest in that Collateral in any order that it 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 Creditor 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 Lender and promptly pay over to the Lender in the form received (except
for the endorsement of the Subordinated Creditor where necessary) for
application to the then-existing Lender Indebtedness, any and all moneys,
dividends or other assets received in any such proceedings on account of the
Subordinated Indebtedness, unless and until the Lender Indebtedness has been
paid in full. If the Subordinated Creditor shall fail to take any such action,
the Lender, as attorney-in-fact for the Subordinated Creditor, may take such
action on the Subordinated Creditor's behalf. The Subordinated Creditor hereby
irrevocably appoints the Lender, or any of its officers or employees on behalf
of the Lender, as the attorney-in-fact for the Subordinated Creditor (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 Lender's own name or in the name of the Subordinated Creditor as
the Lender may deem necessary or advisable for the enforcement of the agreements
contained herein; and the Subordinated Creditor will execute and deliver to the
Lender such other and further powers-of-attorney or instruments as the Lender
may request in order to accomplish the foregoing.

                                      -4-

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     9. Restrictive Legend; Transfer of Subordinated Indebtedness. The
Subordinated Creditor will cause the Subordinated Note and all other notes,
bonds, debentures or other instruments evidencing the Subordinated Indebtedness
or any part thereof to contain a specific statement thereon to the effect that
the indebtedness thereby evidenced is subject to the provisions of this
Agreement, and the Subordinated Creditor will mark its books conspicuously to
evidence the subordination effected hereby. Attached hereto is a true and
correct copy of the Subordinated Note bearing such legend. At the request of the
Lender, the Subordinated Creditor shall deposit with the Lender the Subordinated
Note and all of the other notes, bonds, debentures or other instruments
evidencing the Subordinated Indebtedness, which notes, bonds, debentures or
other instruments may be held by the Lender so long as any Lender Indebtedness
remains outstanding. The Subordinated Creditor is the lawful holder of the
Subordinated Note and has not transferred any interest therein to any other
person. Without the prior written consent of the Lender, the Subordinated
Creditor will not assign, transfer or pledge to any other person any of the
Subordinated Indebtedness or agree to a discharge or forgiveness of the same so
long as there remains outstanding any of the Lender Indebtedness.

     10. Continuing Effect. For so long as there are any sums due and owing
under the Lender Indebtedness, this Agreement shall constitute a continuing
agreement of subordination, and the Lender may, without notice to or consent by
the Subordinated Creditor, modify any term of the Lender Indebtedness in
reliance upon this Agreement. Without limiting the generality of the foregoing,
the Lender may, at any time and from time to time, either before or after
receipt of any such notice of revocation, without the consent of or notice to
the Subordinated Creditor and without incurring responsibility to the
Subordinated Creditor or impairing or releasing any of the Lender's rights or
any of the Subordinated Creditor's obligations hereunder:

          (a) change the interest rate or change the amount of payment or extend
     the time for payment or renew or otherwise alter the terms of any Lender
     Indebtedness or any instrument evidencing the same in any manner;

          (b) sell, exchange, release or otherwise deal with any property at any
     time securing payment of the Lender Indebtedness or any part thereof;

          (c) release anyone liable in any manner for the payment or collection
     of the Lender Indebtedness or any part thereof;

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

                                      -5-

<PAGE>

          (e) apply any sums received by the Lender, by whomsoever paid and
     however realized, to the Lender Indebtedness in such manner as the Lender
     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 Lender to make any future loans or other extensions of credit or financial
accommodations to the Borrower.

     12. Notice. All notices and other communications hereunder shall be in
writing and shall be (i) personally delivered, (ii) transmitted by registered
mail, postage prepaid, or (iii) transmitted by telecopy, in each case addressed
to the party to whom notice is being given at its address as set forth below:

         If to the Lender:

         Auramet Trading, LLC
         2 Executive Drive
         Suite 645
         Fort Lee, New Jersey 07024
         Attn: Justin Sullivan
         Telecopier: (201) 905-5001

         And a copy (which shall not constitute notice) to:

         Fennemore Craig, P.C.
         3003 North Central Avenue, Suite 2600
         Phoenix, Arizona 85012
         Attn: Sarah A. Strunk, Esq.
         Telecopier: (602) 916-5327

         If to the Subordinated Creditor:

         Ronald A. Hirsch
         668 North Coast Highway, #171
         Laguna Beach, CA 92651
         Facsimile: (949) 715-6746

         And

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         Stephen D. Seymour
         1308 Wine Spring Lane
         Baltimore, Maryland 21204
         Facsimile: (410) 369-6601

          or at such other address as may hereafter be designated in writing by
     that party. All such notices or other communications shall be deemed to
     have been given on (i) the date received if delivered personally, (ii) the
     date of posting if delivered by mail, or (iii) the date of transmission if
     delivered by telecopy.

     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
Lender and the Subordinated Creditor.

     14. No Waiver. No waiver shall be deemed to be made by the Lender of any of
its rights hereunder unless the same shall be in writing signed on behalf of the
Lender, 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 Lender or the obligations of the Subordinated Creditor
to the Lender in any other respect at any time.

     15. Binding Effect; Acceptance. This Agreement shall be binding upon the
Subordinated Creditor and the Subordinated Creditor's heirs, legal
representatives, successors and assigns and shall inure to the benefit of the
Lender and its participants, successors and assigns irrespective of whether this
or any similar agreement is executed by any other Subordinated Creditor of the
Borrower. Notice of acceptance by the Lender of this Agreement or of reliance by
the Lender upon this Agreement is hereby waived by the Subordinated Creditor.

     16. Miscellaneous. The 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; Waiver of Jury Trial.
This Agreement shall be governed by and construed in accordance with the
substantive laws (other than conflict laws) of the State of Arizona. Each party
consents to the personal jurisdiction of the state and federal courts located in
the State of Arizona 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 shall be venued in either the Superior Court of Maricopa County,

                                      -7-

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Arizona or the United States District Court, District of Arizona. THE PARTIES
WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR
PERTAINING TO THIS ACKNOWLEDGMENT.

     18. Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties on different counterparts. This Agreement
shall be effective and binding once one or more counterparts hereof are executed
by each party hereto. All counterparts of this Agreement shall be deemed to
constitute one and the same Agreement.

     IN WITNESS WHEREOF, the Subordinated Creditor has executed this Agreement
as of the date and year first above-written.

                                        /s/ Ronald A. Hirsch
                                        ----------------------------------------
                                        Ronald A. Hirsch

                                        /s/ Stephen D. Seymour
                                        ----------------------------------------
                                        Stephen D. Seymour

                                      -8-

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                           Acknowledgment by Borrower

     The undersigned, being the Borrower referred to in the foregoing 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 Lender that it shall
make no payment on the Subordinated Indebtedness that the Subordinated Creditor
would not be entitled to receive under the provisions of the Agreement, (iv)
agrees that any such payment will constitute a default under the Lender
Indebtedness, and (v) agrees to mark its books conspicuously to evidence the
subordination of the Subordinated Indebtedness effected hereby.

                                        NORD RESOURCES CORPORATION

                                        By: /s/ Erland A. Anderson
                                            ------------------------------------
                                        Its: President

                                      -9-

<PAGE>

                                    EXHIBIT A

             Attach copy of Subordinated Note with following legend

     THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT BY
RONALD A. HISRCH AND STEPHEN D. SEYMOUR IN FAVOR OF AURAMET TRADING, LLC DATED
AS OF OCTOBER 17, 2005.

                                      -10-<PAGE>
                                                                    EXHIBIT 4.26

                     AGREEMENT FOR CREDIT RISK PARTICIPATION

     This Participation Agreement (the "AGREEMENT"), is entered into as of
October 17, 2005 by and between Auramet Trading, LLC, a Delaware limited
liability company (the "LENDER") and Ronald A. Hirsch, an adult single man
individual residing in the County of Orange, State of California (the
"PARTICIPATING ENTITY"). Lender and Participating Entity are sometimes referred
to herein as a "PARTY" and collectively, as the "PARTIES."

     WHEREAS, contemporaneously herewith, the Lender will enter into a loan
transaction (the "LOAN") with Nord Resources Corporation, a Delaware corporation
(the "BORROWER"), which such loan will be evidenced by a secured promissory note
given by the Borrower in favor of the Lender (the "NOTE") in the aggregate
principal amount of $2,850,000(the "LOAN AMOUNT"), a Deed Of Trust, Assignment
Of Rents, Security Agreement And Fixture Filing (the "DEED OF TRUST"), and
related loan documents (collectively, the "LOAN DOCUMENTS").

     THEREFORE, in consideration of the foregoing, and in order to induce the
Participating Entity to participate in the Loan with Lender, the parties hereto
agree as follows:

1.   By its execution hereof, the Participating Entity agrees to participate in
     the Loan in the amount of $1,850,000 (the "PARTICIPATED AMOUNT") or 65% of
     the Loan Amount (the "PARTICIPATION PERCENTAGE"), as a result of which
     Lender's unparticipated share shall be $1,000,000, or 35% of the Loan
     Amount (the "LOAN PERCENTAGE").

2.   The Participating Entity shall own a pari passu fractional interest in the
     Loan equal to the Participation Percentage, and in all documents,
     instruments and collateral issued by the Borrower to Lender in connection
     with the Loan, and in all payments made thereon and in any recoveries or
     distributions in connection therewith. Any payments, distributions or
     recoveries, in whole or in part, shall be applied to the Participating
     Entity's Participation Percentage of the Loan on a pari passu basis. Lender
     agrees to immediately pay to the Participating Entity its Participation
     Percentage of all payments, distributions and recoveries actually received
     from Borrower pursuant to the terms of the Loan Documents. Notwithstanding
     the foregoing provisions, the Participating Entity acknowledges and agrees
     that the $40,000 closing fee set forth in the Note is the sole and separate
     property of the Lender.

3.   The Lender shall act as principal for itself and as agent for the
     Participating Entity in all matters dealing with the service of the Loan,
     and as trustee solely for purposes of collecting and distributing the
     amounts received by it, and agrees to reflect the participation of the
     Participating Entity in all records kept by Lender regarding the Loan. In
     accordance therewith, the Lender shall immediately (a) advise the
     Participating Entity of the date and the amount of any disbursement to be
     made to the Borrower or any reduction or reimbursement received from the
     Borrower under the Loan; and (b) transfer to the Participating Entity its
     pro rata share of the amounts collected from the Borrower as reimbursement
     under the Loan to an account designated by Participating Entity.

4.   Without the prior written consent of the Participating Entity, which
     consent may be given or withheld in its absolute discretion, the Lender
     shall not (a) consent to or permit any substitution, withdrawal or release
     of any collateral or other security securing the payment of the Loan,
     except in accordance with the terms of the Loan Documents; or (b) amend or
     modify the terms of the Loan Documents; provided, however, that both the
     Lender and the Participating Entity contemplate a refunding of the Loan
     through a facility to be provided by

                                    -Page 1-

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     Nedbank Ltd. and Lender in the amount of $3,900,000 (on substantially the
     same terms and conditions as the Loan with only those additional items
     agreed between the Lender, Nedbank and the Company in that certain
     Indicative Term Sheet dated as of September, 2005) within 30 days of the
     date hereof; the proceeds of such refunding will be applied, inter alia, to
     repay the Participated Amount; and Participating Entity hereby consents to
     such refunding.

5.   Without providing two (2) business day's prior written notice thereof to
     the Participating Entity (a "Default Notice"), the Lender will not take any
     steps towards the recovery of any sums due to the Lender from the Borrower
     under the Loan. Should the Lender decide to refrain from taking any action
     to recover the amounts due under the Loan following a request in writing
     from the Participating Entity to do so, the Lender shall immediately assign
     to the Participating Entity any and all rights and claims against the
     Borrower in respect of the Participated Amount, and agrees to take all
     actions and execute all documents reasonably requested by Participating
     Entity to immediately effectuate such assignment to the Participating
     Entity. Along with any Default Notice, Lender shall offer, which offer must
     be accepted within the two business day period, for the Participating
     Entity to enter into a participation purchase agreement pursuant to which
     the Lender shall sell, and the Participating Entity shall purchase, all
     (but not less than all) of the Lender's Pro Rata Share of the Note as of
     the date of such Default Notice, including without limitation all accrued
     but unpaid interest to which the Lender shall then be entitled under the
     Note, and which purchase and sale shall be completed within ten (10)
     Business Days from the date of such Default Notice. Notwithstanding the
     foregoing, in the event the Lender, in its sole discretion, shall
     reasonably determine in good faith that it must act sooner than the two
     business day period to protect its rights and interests in its Pro Rata
     Share of the Note under any Loan Document as a result of the application of
     any insolvency or bankruptcy law applicable to the parties, then it shall
     so state in its Default Notice, and shall indicate therein the maximum
     amount of time by which the purchase of its Pro Rata Share of the Note must
     be accomplished in order to protect its rights and interests under the Loan
     Documents in light of such circumstance.

6.   The Lender shall promptly pay the Participating Entity's Pro Rata Share of
     all sums recovered (including the proceeds of any security held in respect
     of, and apportioned by the Lender to the obligations of the Borrower under
     the Loan). If, after payment by the Participating Entity of sums under this
     Section, the Lender recovers any sums from the Borrower or any other person
     on account of Borrower's obligations under the Note, the Lender shall
     promptly reimburse the Participating Entity its Pro Rata Share of any sums,
     which are so received. Should the Lender decide to refrain from taking
     steps against the Borrower, the Lender shall, upon written request of the
     Participating Entity, promptly assign to the Participating Entity any and
     all rights and claims against the Borrower in respect of the Participated
     Amount, and agrees to take all actions and execute all documents to
     promptly effectuate such assignment to the Participating Entity.

7.   The Lender shall service and enforce the Loan and obligations of the
     Borrower pursuant thereto and participated in by the Participating Entity
     in accordance herewith, with the same level of due care and professionalism
     as the Lender would if the Lender funded the full Loan Amount. In addition,
     the Lender agrees to use its best efforts to protect the interest of the
     Lender and the Participating Entity in respect of their pro rata interest
     in the Loan. Notwithstanding anything contained herein to the contrary,
     Lender makes no express or implied representations or warranties on its own
     behalf, or on behalf of its affiliates, representatives, directors or
     employees as to the quality or fitness of the Borrower or the Loan and all
     agreements and documentation in respect thereof. The Lender shall have no
     liability to the Participating Entity,

                                    -Page 2-

<PAGE>

     and the Participating Entity expressly waives all claims against the Lender
     for any decision, action, or omission by the Lender in connection with its
     service of the Loan, if such decision, action, or omission is taken in good
     faith. Participating Entity hereby indemnifies and holds Lender harmless
     from any loss, cost or expense it incurs in connection with the Loan that
     is the result of any claim of equitable subordination under the United
     States Bankruptcy Code or any similar law or equitable claim.

8.   All expenses including, but not limited to, counsel fees and court fees and
     expenses paid or incurred by Lender in any such action shall be borne by
     the parties hereto in proportion to their respective Participation
     Percentage and Lender Percentage, at the time of default in consideration
     of the participation interest. Payment shall be made by the Participant
     within five (5) business days after receipt of notice from Lender of its
     pro rata share. Any such payment not made shall accrue interest at the
     interest rate applicable to the Loan.

9    By their execution and delivery of this Agreement,

     A.   each party hereto represents and warrants to the other that it has
          assessed and will continue to asses for its own account the risks
          associated with the Loan Documents, the proposed Loan and its
          participation pursuant hereto and thereto, bearing alone all
          responsibilities in connection therewith;

     B.   each party hereto acknowledges to the other that it understands and
          accepts the risks on account of its participation in the Loan pursuant
          hereto, and agrees that it shall have no claim against the Lender, or
          its affiliates, directors, employees, representatives arising as a
          result of a Default (as such term is defined in the Loan Documents) by
          the Borrower, to the extent such Default of the Borrower is not caused
          by the willful misconduct or the gross negligence of the Lender; and

     C.   each party represents and warrants to the other party that it is
          empowered to enter into this Agreement and has taken all necessary
          steps to constitute the Agreement a valid, binding and enforceable
          obligation on its part.

10.  All payments under this Agreement, shall be made in the effective currency
     of the Loan without set-off or counterclaim and free and clear of all taxes
     or deductions of any nature whatsoever. All payments to be made to the
     Participating Entity hereunder will be made to the account designated by
     the Participating Entity on Schedule A, attached hereto, or to such other
     account as the Participating entity may hereafter designated by notice in
     writing to the Lender.

11.  The parties hereto may sell, assign or transfer by contract or by operation
     of law ("TRANSFER") their respective Pro Rata Shares of the Loan among
     themselves at any price agreed between them (any party desiring to sell
     such interest being hereinafter referred to as an "TRANSFERRING PARTY", and
     the other party being hereinafter referred to as a "NON-TRANSFERRING
     PARTY"). No party hereto shall Transfer, or offer to Transfer, any of such
     party's rights, benefits or interests in and to the Loan to any person who
     or which is not a Non-Transferring Party, unless the same shall first be
     offered irrevocably, in writing, for at least fifteen (15) days to the
     Non-Transferring Party at the same price and terms as offered in good faith
     to such third party in an arm's length transaction (and, to the extent that
     the terms and conditions pursuant to which such interest is to be
     Transferred to any such third party shall change from those initially
     offered to the Non-Transferring Party under this Section 12, then no such
     Transfer shall occur unless and until the Transferring Party shall first
     re-offer such interest to the Non-Transferring

                                    -Page 3-

<PAGE>

     Party under such new terms and conditions for the same period as was
     initially required hereunder). Neither party hereto shall permit the
     Transfer of any right, benefit or interest under the Loan Documents to any
     person who or which does not enter into and agree to be bound by the
     provisions of this Agreement. Any purported Transfer of any party's rights,
     benefits or interests under the Loan Documents to any party other than in
     accordance with the provisions of this Section 12 shall be null and void,
     and of no legal force or effect upon the Non-Transferring Party or the
     Borrower.

12.  All notices, requests, demands and other communications to be given
     hereunder shall be in writing and shall be deemed to have been duly given
     on the date of personal service or transmission by fax if such transmission
     is received during the normal business hours of the addressee, or on the
     first business day after sending the same by overnight courier service or
     by telegram, or on the third business day after mailing the same by first
     class mail, or on the day of receipt if sent by certified or registered
     mail, addressed to such party's principal place of business as set forth
     below, or at such other address as any party may hereafter indicate by
     notice delivered as set forth in this Section 13.

          If to Lender:                 Auramet Trading, LLC
                                        2 Executive Drive
                                        Suite 645
                                        Fort Lee, New Jersey 07024
                                        Attn: Justin Sullivan
                                        Telecopier: (201) 905-5001

          If to Participating Entity:   Ronald A. Hirsch
                                        668 North Coast Highway, #171
                                        Laguna Beach, CA 92651
                                        Telecopier: (949) 715-6746

13.  This Agreement shall constitute the binding agreement of the parties
     hereto, enforceable against each of them in accordance with its terms. This
     Agreement shall inure to the benefit of each of the parties hereto, and
     their respective heirs, personal representatives, successors and assigns.
     This Agreement may not be assigned by either party, whether by operation of
     law or by contract, without the prior, written consent of the other party
     hereto.

14.  This Agreement shall be governed by and construed in accordance with the
     internal laws of the State of Arizona applicable to the performance and
     enforcement of contracts made within such state, without giving effect to
     the law of conflicts of laws applied thereby. In the event that any dispute
     shall occur between the parties arising out of or resulting from the
     construction, interpretation, enforcement or any other aspect of this
     Agreement, the parties hereby agree to accept the exclusive jurisdiction of
     the Courts of the State of Arizona sitting in and for the County of
     Maricopa. In the event either party shall be forced to bring any legal
     action to protect or defend its rights hereunder, then the prevailing party
     in such proceeding shall be entitled to reimbursement from the
     non-prevailing party of all fees, costs and other expenses (including,
     without limitation, the reasonable expenses of its attorneys) in bringing
     or defending against such action.

14.  The parties hereby agree with each other that, in the event of any breach
     of this Agreement by any party where such breach may cause irreparable harm
     to any other party, or where

                                    -Page 4-

<PAGE>

     monetary damages may not be sufficient or may not be adequately quantified,
     then the affected party or parties shall be entitled to specific
     performance, injunctive relief or such other equitable remedies as may be
     available to it, which remedies shall be cumulative and non-exclusive, and
     in addition to such other remedies as such party may otherwise have at law
     or in equity.

16.  The provisions of this Agreement are severable, and if any one or more
     provisions is determined to be illegal, indefinite, invalid or otherwise
     unenforceable, in whole or in part, by any court of competent jurisdiction,
     then the remaining provisions of this Agreement and any partially
     unenforceable provisions to the extent enforceable in the pertinent
     jurisdiction, shall continue in full force and effect and shall be binding
     and enforceable on the parties.

17.  This Agreement constitutes the entire and final agreement and understanding
     among the parties with respect to the subject matter hereof and the
     transactions contemplated hereby, and supersedes any and all prior oral or
     written agreements, statements, representations, warranties or
     understandings by any party, all of which are merged herein and superseded
     hereby.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

THE PARTICIPATING ENTITY                THE LENDER

By: /s/ Ronald A. Hirsch                By: /s/ Justin Sullivan
    ---------------------------------       ------------------------------------
Title:                                  Title: COO
       ------------------------------

                                    -Page 5-

<PAGE>

                                   SCHEDULE A

                  [Participating Entity's Account Information]

                                    -Page 6-

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