Document:

Unassociated Document

     

    
      Exhibit
        10.16

       

      

      

      DEBT
        SUBORDINATION AND INTERCREDITOR AGREEMENT

      

      This
        Debt
        Subordination and Intercreditor Agreement (as the same may from time to time
        be
        amended, modified or restated, the “Agreement”)
        is
        dated as of November __, 2008, and is entered into by and among (a) CAPITAL
        GROWTH SYSTEMS, INC., a Florida corporation (“Parent”),
        (b)
        GLOBAL CAPACITY GROUP, INC., a Texas corporation (“GCG”),
        (c)
        CENTREPATH, INC., a Delaware corporation (“Centrepath”),
        (d)
        20/20 TECHNOLOGIES, INC., a Delaware corporation (“20/20
        Inc.”),
        (e)
        20/20 TECHNOLOGIES I, LLC, a Delaware limited liability company (“20/20
        LLC”),
        (f)
        NEXVU TECHNOLOGIES, LLC, a Delaware limited liability company (“Nexvu”),
        (g)
        FNS 2007, INC., a Delaware corporation (“FNS”),
        (h)
        VANCO DIRECT USA, LLC, a Delaware limited liability company (“Vanco”),
        (i)
        MAGENTA NETLOGIC LIMITED, a company incorporated in England and Wales
        (“Magenta”),
        (j)
        CAPITAL GROWTH ACQUISITION, INC., a Delaware corporation (“Acquisition”;
        Parent, GCG, Centrepath, 20/20 Inc., 20/20 LLC, Nexvu, FNS, Vanco, Magenta
        and
        Acquisition are referred to herein individually as a “Debtor”
and
        collectively as the “Debtors”),
        (k)
        ENABLE GROWTH PARTNERS, L.P., a Delaware limited partnership, in its capacity
        as
        agent for the Debenture Purchasers under and as defined in the Subordinated
        Debenture Agreements described below (in such capacity, the “Junior
        Agent”),
        (l)
        the Purchasers under and as defined in the
        Subordinated Debenture Agreements (Junior Agent and such Purchasers are
        sometimes referred to herein as a “Junior
        Creditor”
and
        collectively as the “Junior
        Creditors”),
        (m)
        each Lender under and as defined in the Senior Loan Agreement described below
        (each a “Senior
        Lender”),
        and
        (n) ACF CGS, L.L.C., a Delaware limited liability company, as administrative
        agent for each of the Senior Lenders under the Senior Loan Agreement (together
        with each such Senior Lender, collectively, the “Senior
        Creditor”).

      

      WITNESSETH:

      

      WHEREAS,
        Certain Junior Creditors have provided financing to Parent pursuant to that
        certain Securities Purchase Agreement dated as of March 11, 2008 (as amended,
        restated or otherwise modified from time to time, the “Original
        Subordinated Debenture Agreement”),
        as
        further evidenced by those certain Variable Rate Senior Secured Convertible
        Debentures due March 11, 2013, made by Parent payable to such Junior Creditors
        in the aggregate original principal amount of $19,000,000 (collectively,
        the
“Original
        Debentures”).

      

      WHEREAS,
        pursuant to the terms of that certain Consent, Waiver, Amendment and Exchange
        Agreement dated as of even date herewith, by and among the Parent and the
        Junior
        Creditors holding Original Debentures identified therein, the Parent and
        the
        holders of the Original Debentures have agreed to exchange the Original
        Debentures for new Amended and Restated Original Issue Discount Secured
        Convertible Debentures due March 11, 2015, made by Parent to such Junior
        Creditors in the aggregate original principal amount of $30,847,551 (the
        “Amended
        and Restated Debentures”).

      

      WHEREAS,
        on the date hereof, Junior Creditors will provide additional financing to
        Parent
        in the aggregate principal amount of $14,891,250 pursuant to that certain
        Securities Purchase Agreement dated
        on
        or about the date hereof among Junior Creditors and Parent (the “New
        Subordinated Debenture Agreement”,
        and,
        together with the Original Subordinated Debenture Agreement, the “Subordinated
        Debenture Agreements”),
        as
        further evidenced by those certain Original Issue Discount Secured Convertible
        Debentures due November __, 2015, made by Parent payable to Junior Creditors
        in
        the aggregate principal amount of $14,891,250 (each debenture issued under
        any
        Subordinated Debenture Agreement, as such debenture may be amended, restated
        or
        otherwise modified from time to time, is hereafter referred to as a
“Subordinated
        Debenture”).

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      WHEREAS,
        each Debtor other than Parent has guaranteed the obligations of Parent with
        respect to the Subordinated Debentures pursuant to (i) that certain Subsidiary
        Guarantee dated as of March 11, 2008, by such Debtors in favor of the holders
        of
        the Original Debentures, and (ii) that certain Subsidiary Guaranty dated
        on or
        about the date hereof, by such Debtors in favor of the Junior Creditors
        (collectively, the “Subordinated
        Debenture Guarantees”),
        and
        the obligations of Debtors to Junior Creditors are secured by substantially
        all
        assets of Debtors pursuant to (i) that certain Security Agreement dated as
        of
        March 11, 2008, by Debtors in favor of the holders of the Original Debentures,
        and (ii) that certain Security Agreement dated on or about the date hereof,
        by
        Debtors in favor of the Junior Creditors (collectively, the “Subordinated
        Debenture Security Agreements”).
        All
        current and future documents relating to the Junior Debt (as hereinafter
        defined), including without limitation the Subordinated Debentures, the
        Subordinated Debenture Agreements, the Subordinated Debenture Guarantees,
        the
        Subordinated Debenture Security Agreements and any other guaranty, security
        agreement, pledge agreement, control agreement, mortgage, deed of trust or
        other
        instrument, document or agreement executed and/or delivered in connection
        with
        any of the foregoing (including any share of stock or other security into
        which
        any Subordinated Debenture has been or may be converted), as the same may
        be
        amended, modified or restated, are referred to herein as the “Subordinated
        Debenture Documents”.

       

      WHEREAS,
        Senior Creditor and Debtors are parties to that certain Loan and Security
        Agreement dated on or about the date hereof (as amended, restated, or otherwise
        modified from time to time, and including any Refinancing thereof, the
“Senior
        Loan Agreement”),
        pursuant to which Senior Creditor has made a loan to the Debtors in the
        principal amount of $8,500,000. All current and future documents relating
        to the
        Senior Debt, as hereafter defined, including without limitation the Senior
        Loan
        Agreement and any guaranty, security agreement, pledge agreement, control
        agreement, mortgage, or deed of trust, and any documents evidencing or relating
        to any Additional Senior Loans, as the same may be amended, modified or
        restated, are herein and now referred to collectively and individually as
        the
“Senior
        Loan Documents”.

       

      WHEREAS,
        the Senior Debt is secured by the Collateral, as hereafter defined.

       

      WHEREAS,
        in order to induce Senior Creditor to enter into the Senior Loan Agreement
        and
        to provide financing to Debtors thereunder, Junior Creditors and Debtors
        have
        agreed to enter into this Agreement in order to subordinate the Junior Debt
        to
        the Senior Debt and to subordinate the security interest and other rights
        of
        Junior Creditors in the Collateral to the security interest and other rights
        of
        Senior Creditor with respect thereto.

      

      NOW,
        THEREFORE, for good and valuable consideration, receipt of which is hereby
        acknowledged, Junior Creditors and Debtors hereby agree with Senior Creditor
        as
        follows:

      

      1. Certain
        Defined Terms.
        In
        addition to the terms defined above and elsewhere in this Agreement, the
        following terms used in this Agreement will have the following meanings,
        applicable both to the singular and the plural forms of the terms
        defined:

      

      “Bankruptcy
        Code”:
        Title
        11 of the United States Code (11 U.S.C. § 101 et seq.).

      

      “Bankruptcy
        Event”:
        (a)
        any insolvency or bankruptcy case or proceeding (including any case under
        the
        Bankruptcy Code), or any receivership, custodianship, liquidation,
        reorganization, administration, administrative receivership, arrangement
        or
        other similar case or proceeding, relative to any Debtor, or to the assets
        of
        any Debtor, (b) any liquidation, dissolution, reorganization or winding up
        of
        any Debtor, whether voluntary or involuntary and whether or not involving
        solvency or bankruptcy, (c) any assignment for the benefit of creditors or
        any
        other marshalling of assets and liabilities of any Debtor, (d) any sale,
        transfer or other disposition of all or substantially all of the assets of
        any
        Debtor in connection with any of the foregoing, or (e) any application, notice,
        resolution or order made, passed or given for or in connection with any of
        the
        foregoing or any event analogous to any of the foregoing.

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

      “Blockage
        Notice”:
        a
        written notice from Senior Creditor to Junior Agent that a Non-Payment Default
        or Payment Default has occurred and is continuing. Any Blockage Notice shall
        specify the nature of the applicable Payment Default(s) and Non-Payment
        Default(s).

       

      “Blockage
        Period”:
        any
        period commencing on the date a Blockage Notice is given and ending (a) with
        respect to a Blockage Period in connection with a Payment Default, on the
        earliest to occur of (i) the date when such Payment Default has been cured
        or
        waived in writing by Senior Creditor, or (ii) 180 days from the date a Blockage
        Notice is given if prior to such date the Senior Creditor has not formally
        accelerated the Senior Debt and undertaken good faith proceedings to effect
        such
        acceleration; (b) with respect to a Class 1 Non-Payment Default, on the earliest
        to occur of (i) the date when such Class-1 Non-Payment Default has been cured
        or
        waived in writing by Senior Creditor, or (ii) 180 days from the date a Blockage
        Notice is given if prior to such date the Senior Creditor has not formally
        accelerated the Senior Debt and undertaken good faith proceedings to effect
        such
        acceleration; and (c) with respect to a Class 2 Non-Payment Default, on the
        earliest to occur of (i) the date when such Class-2 Non-Payment Default has
        been
        cured or waived in writing by Senior Creditor, or (ii) 60 days from the date
        a
        Blockage Notice is given if prior to such date the Senior Creditor has not
        formally accelerated the Senior Debt and undertaken good faith proceedings
        to
        effect such acceleration.

       

      “Class
        1 Non-Payment Default”:
        each
        of the Non-Payment Defaults under the Senior Loan Documents described on
        Schedule
        1
        attached
        hereto.

       

      “Class
        2 Non-Payment Default”:
        each
        of the Non-Payment Defaults under the Senior Loan Documents described on
        Schedule
        2
        attached
        hereto. 

       

      “Collateral”:
        any
        and all of the assets now owned or hereafter acquired by any Debtor, together
        with all proceeds, products, accessions and additions thereto from time to
        time,
        including without limitation any insurance proceeds. 

       

      “Debtor”:
        has
        the meaning ascribed to such term in the introductory paragraph of this
        Agreement and shall include any successor assign or assign of any Debtor,
        including, without limitation, a receiver, trustee or
        debtor-in-possession.

      

      “Deed
        of Priority”:
        means
        that certain Deed of Priority dated as of the date hereof, by and among Magenta
        and 20/20 LLC, as chargors, Senior Agent, the Junior Creditors, and Parent,
        Centrepath, GCG, 20/20 Inc., FNS, Nexvu, Acquisition and Vanco.

      

      “Default”:
        any
“Default”, as such term is defined in the Senior Loan Agreement, together with
        any other default, event of default or other breach of any Senior Loan Document
        (after giving effect to any applicable notice and cure periods) that entitles
        Senior Creditor to accelerate the Senior Debt or exercise any other right
        or
        remedy against any Debtor.

      
 

      
        
          
            
            

          

          
            -3-

            
              

            

          

          
            
            

          

        

      

      

      “Enforcement
        Action”
shall
        mean (a) the commencement of legal proceedings by Senior Creditor against
        the
        Debtors for the collection of all or substantially all of the indebtedness
        owed
        pursuant to the Senior Loan Agreement, whether pursuant to institution of
        a
        lawsuit or the taking of actions to foreclose on substantially all of the
        collateral securing Senior Debt, including, without limitation, the institution
        of any enforcement or foreclosure proceedings, the noticing of any public
        or
        private sale or other disposition pursuant to the United States Bankruptcy
        Code,
        or any diligently pursued attempt to vacate or obtain relief from a stay
        or
        other injunction restricting any other action described in this definition,
        (b)
        the exercise of any right or remedy in connection with a Default as provided
        under the Senior Loan Documents (including delivery of any notice to seek
        to
        obtain payment directly from any account debtor of any Debtor or the taking
        of
        any action or the exercise of any right or remedy in respect of the setoff
        or
        recoupment against the Collateral or proceeds of Collateral), under applicable
        law, at equity, in a Bankruptcy Event or otherwise, (c) the sale, assignment,
        transfer, lease, or other disposition of all or substantially all of the
        Collateral, by private or public sale or any other means as permitted under
        the
        Senior Loan Documents, (d) the engagement or retention of sales brokers,
        marketing agents, investment bankers, accountants, appraisers, auctioneers
        or
        other third parties for the purpose of marketing or disposing of all or
        substantially all of the Collateral, provided that any such engagement or
        retention shall require the applicable party to obtain letters of intent
        with
        regard to a transaction within a commercially reasonable period of time and
        in
        any event within sixty (60) days following the date of the engagement of
        such
        person, or (e) the commencement of, or the joinder with any creditor in
        commencing, any Bankruptcy Event against any Debtor or any assets of any
        Debtor,
        including the appointment of a receiver, interim receiver, trustee or similar
        official over any Debtor of any assets of any Debtor.

      

      “Junior
        Agent”:
        has
        the meaning set forth in the introductory paragraph of this
        Agreement.

      

      “Junior
        Creditor”:
        has
        the meaning set forth in the introductory paragraph of this
        Agreement.

      

      “Junior
        Debt”:
        all
        indebtedness, fees, expenses, obligations and liabilities of each Debtor
        to any
        Junior Creditor, whether now existing or hereafter incurred or created, under
        or
        with respect to the Subordinated Debenture Documents, in each case, whether
        such
        amounts are due or not due, direct or indirect, absolute or
        contingent.

      

      “Lien”:
        any
        interest in property securing an obligation owed to, or a claim by, a Person
        other than the owner of such property, whether such interest is based on
        the
        common law, equity, statute or contract, and including a security interest,
        charge, claim or lien arising from a mortgage, deed of trust, encumbrance,
        pledge, hypothecation, assignment, deposit arrangement, agreement, security
        agreement, conditional sale or trust receipt or a lease, consignment or bailment
        for security purposes.

      

      “New
        Subordinated Debenture Agreement”:
        has
        the meaning set forth in the recitals of this Agreement.

      

      “Non-Payment
        Default”:
        any
        Default (other than a Payment Default), or any other event (other than a
        Payment
        Default) the occurrence of which (after giving effect to any applicable notice
        and cure periods) entitles the Senior Creditor to accelerate the maturity
        of any
        of the Senior Debt, and including all Class 1 Non-Payment Defaults and Class
        2
        Non-Payment Defaults.

       

      “Original
        Subordinated Debenture Agreement”:
        has
        the meaning set forth in the recitals of this Agreement.

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

       

      “Payment
        Default”:
        any
        default in the payment of any Senior Debt (whether upon maturity, mandatory
        prepayment, acceleration or otherwise) beyond any applicable grace period
        with
        respect thereto.

       

      “Person”:
        any
        individual, corporation, partnership, joint venture, limited liability company,
        association, joint-stock company, trust, unincorporated organization or
        government or any agency or political subdivision thereof.

       

      “Refinancing”:
        any
        replacement or refinancing of the Senior Debt, provided that such replacement
        or
        refinancing indebtedness does not (i) increase the principal amount of the
        Senior Debt beyond the limits described in clause (a) of the definition of
        “Senior Debt”, (ii) extend the stated maturity date of some or all of the Senior
        Debt beyond the maturity date of the Senior Debt as of the date of this
        Agreement, or (iii) add any additional events of default or financial covenants
        such that such refinancing indebtedness is materially more restrictive to
        the
        Debtors than the Senior Debt as of the date of this Agreement.

      

      “Senior
        Creditor”:
        means
        the Senior Creditor referred to in the introductory paragraph of this Agreement
        and any other holder of Senior Debt from time to time.

      

      “Senior
        Creditor Repayment”:
        the
        circumstance in which (a) subject to Section 12(a), the Senior Debt has been
        paid in full in cash, and (b) the commitment of Senior Creditor to make loans
        under the Senior Loan Agreement has been terminated.

      

      “Senior
        Debt”:
        all
        liabilities of any Debtor to Senior Creditor from time to time outstanding
        pursuant to or in connection with the Senior Loan Documents (including, without
        limitation, all principal, interest, fees, reimbursement obligations with
        respect to letters of credit, indemnities, costs and expenses) up to an
        aggregate amount not to exceed the sum of (a) up to $8,500,000 of loans at
        any time outstanding pursuant to the Senior Loan Agreement plus, subject
        to
        Senior Creditor’s compliance with Section 13(a) of this Agreement, up to an
        additional $2,000,000 of loans under the Senior Loan Agreement (“Additional
        Senior Loans”);
        plus
        (b) all
        interest arising under or with respect to the Senior Loan Documents, including,
        in the event of a Bankruptcy Event, any and all post-petition interest and
        costs
        from and after the date of filing of a petition by or against any Debtor
        or its
        bankruptcy estate, whether or not such amounts are allowed as a claim against
        any Debtor in any Bankruptcy Event; plus
        (c) all
        costs and expenses incurred by Senior Creditor in connection with its
        enforcement of any rights or remedies under the Senior Loan Documents, the
        collection of any of the Senior Debt, or the protection of, or realization
        upon,
        any Collateral, including, by way of example, court costs, appraisal and
        consulting fees, reasonable attorneys’ fees, auctioneers’ fees, rent, storage,
        insurance premiums and like items, and whether or not such amounts are allowed
        as a claim against any Debtor in connection with any Bankruptcy Event;
plus
        (d) all
        fees, charges, and indemnities owing by any Debtor to Senior Creditor under
        or
        in connection with the Senior Loan Documents; plus
        (e) all
        principal, interest, fees, costs and expenses in connection with any
        debtor-in-possession financing provided by Senior Creditor to one or more
        Debtors in connection with a Bankruptcy Event.

      

      “Senior
        Loan Agreement”:
        has
        the meaning set forth in the recitals of this Agreement.

      

      “Senior
        Loan Documents”:
        has
        the meaning set forth in the recitals of this Agreement.

      

        
          
            
            

          

          
            -5-

            
              

            

          

          
            
            

          

        

      

       

      “Subordinated
        Debenture”:
        has
        the meaning set forth in the recitals of this Agreement.

      

      “Subordinated
        Debenture Agreement”:
        has
        the meaning set forth in the recitals of this Agreement.

      

      “Subordinated
        Debenture Documents”:
        has
        the meaning set forth in the recitals of this Agreement.

      

      “Subordinated
        Debenture Guarantees”:
        has
        the meaning set forth in the recitals of this Agreement.

      

      “Subordinated
        Debenture Security Agreements”:
        has
        the meaning set forth in the recitals of this Agreement.

       

      2. Subordination
        of Debt.

      

      (a) Debtors
        may pay, and Junior Creditors may retain, Permitted Payments (as defined
        below)
        with respect to the Junior Debt, provided that following the commencement
        of an
        Enforcement Action and for so long as an Enforcement Action remains ongoing,
        Junior Creditors shall be entitled to no Permitted Payments until the Senior
        Creditor Repayment shall have occurred, other than Permitted Payments described
        in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall
        have
        occurred, no Junior Creditor will ask for, demand, sue for, take or receive
        from
        any Debtor, by setoff or in any other manner, the whole or any part of the
        Junior Debt which does not constitute a Permitted Payment, including, without
        limitation, the taking of any negotiable instruments evidencing such amounts
        (other than debentures now or hereafter issued in connection with Junior
        Debt
        which are subordinated pursuant to the terms and conditions hereof and which
        contain the subordination legend required hereby), or the taking of any security
        for any of the Junior Debt (other than security interests in the Collateral
        pursuant to the Subordinated Debenture Documents in effect on the date hereof
        unless permitted by Section 8 hereof), and while an Enforcement Action is

        outstanding, the holders of the Junior Debt will not accept any Permitted
        Payments (other than Permitted Payments described in Section 2(c)(i)) (or
        if
        received will pay them over to Senior Lender).

      

      (b) Subject
        to the terms of Section 2(a) above, unless and until the Senior Creditor
        Repayment shall have occurred, in the event that any Junior Creditor shall
        receive any cash payment or distribution with respect to the Junior Debt
        which
        does not constitute a Permitted Payment, then, in such event, such payment
        or
        distribution (other than a Permitted Payment described in Section 2(c)(i))
        shall
        be deemed to have been paid to such Junior Creditor in trust for the benefit
        of
        Senior Creditor and shall be immediately paid over to Senior Creditor in
        the
        form received by such Junior Creditor (with proper endorsements or assignments,
        if necessary) to the extent necessary to pay the Senior Debt after giving
        effect
        to any concurrent payment to Senior Creditor from other sources.

      

      (c) As
        used
        herein, the term “Permitted
        Payment”
shall
        mean any of the following:

      

      (i) non-cash
        payments of principal, interest or other amounts due to one or more Junior
        Creditors pursuant to and in accordance with the Subordinated Debenture
        Documents via the issuance of Parent’s capital stock; 

      

        
          
            
            

          

          
            -6-

            
              

            

          

          
            
            

          

        

      

       

      (ii) so
        long
        as no Blockage Period is in effect and no Enforcement Action has been commenced
        and is continuing, cash payments of liquidated damages made pursuant to the
        Subordinated Debenture Documents as in effect on the date hereof or as amended
        as permitted by this Agreement; 

      

      (iii)
         so
        long
        as no Blockage Period is in effect and no Enforcement Action has been commenced
        and is continuing, cash payments on account of Quarterly Redemption Amounts
        (as
        defined in the Subordinated Debentures) due under the Subordinated Debenture
        Documents in an amount not to exceed 25% of the Debtors’ Excess Cash Flow (as
        defined in the Senior Loan Agreement), contemporaneously with the payment
        of
        Excess Cash Flow to the Senior Creditor pursuant to Section 2(c)(v) of the
        Senior Loan Agreement; 

      

      (iv)
         so
        long
        as the outstanding principal balance of the Senior Debt is no more than
        $2,500,000 and so long as no Blockage Period is in effect and no Enforcement
        Action has been commenced and is continuing, cash payments on account of
        Quarterly Redemption Amounts due under the Subordinated Debentures, provided
        that no such payment shall be made unless (x) as of the end of the month
        immediately preceding payment of any proposed Quarterly Redemption Amount
        the
        Debtors are in compliance with each of the financial covenants set forth
        in the
        Senior Loan Agreement required to be complied with as of the end of such
        preceding month, and (y) no less than ten (10) days prior to the proposed
        date
        of payment of such Quarterly Redemption Amount, Debtors shall have delivered
        to
        Senior Creditor and Junior Creditor Agent written certification of such
        compliance, together, in the case of Senior Creditor, with calculations in
        reasonable detail evidencing compliance with such financial covenants (if
        requested in writing, and only if requested in writing, subject to Section
        4.8
        of the Original Subordinated Debenture Agreement, the Debtors shall deliver
        calculations in reasonable detail evidencing compliance with such financial
        covenants to the Junior Creditor Agent); and 

      

      (v) so
        long
        as no Blockage Period is in effect an no Enforcement Action has been commenced
        and is continuing, reimbursement of out of pocket expenses (including, if
        applicable, legal fees and expenses) payable to Junior Creditors pursuant
        to the
        Subordinated Debenture Documents (as in effect as of the date of this Agreement)
        and Section 32 of this Agreement.

      

      (d) The
        rights of each Junior Creditor to receive any payments with respect to the
        Subordinated Debenture Documents (other than Permitted Payments described
        in
        Section 2(c)(i)) will be suspended upon delivery of a Blockage Notice to
        Junior
        Agent. Upon the termination of any Blockage Period, each Junior Creditor’s right
        to receive Permitted Payments as provided above shall be reinstated, and
        Debtors
        may resume making such payments to Junior Creditors (including any payments
        that
        were deferred as a result thereof). The aggregate number of days in any
        consecutive 365-day period during which Blockage Periods may be in effect
        solely
        as a result of Non-Payment Defaults shall be 180 days. No Blockage Period
        may be
        imposed by Senior Creditor as a result of any Non-Payment Default existing
        on
        the date that any previous Blockage Notice was given and of which an officer
        of
        Senior Creditor had actual knowledge on the date such Blockage Notice was
        given.

      

      3. Subordination
        of Liens.
        Unless
        and until the Senior Creditor Repayment shall have occurred, each
        Debtor, for itself and its successors and assigns, covenants and agrees,
        and
        each Junior Creditor, for itself and its successors and assigns, hereby
        covenants and agrees, that all Liens now or hereafter acquired by Senior
        Creditor in any or all of the Collateral shall at all times be prior and
        superior to any Lien now held or hereafter acquired by any Junior Creditor
        in
        the Collateral. Said priority shall be applicable irrespective of the time
        or
        order of attachment or perfection of any Lien or the time or order of filing
        of
        any financing statements or other documents, or any statutes, rules or law,
        or
        court decisions to the contrary. The Lien subordination provisions in this
        Agreement are for the benefit of and shall be enforceable directly by Senior
        Creditor, and Senior Creditor shall be deemed to have acquired the Senior
        Debt
        in reliance upon this Agreement.

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

       

      4. Disposition
        of Collateral.

      

      (a) Each
        Junior
        Creditor hereby agrees that, until the Senior Creditor Repayment, Senior
        Creditor may dispose of, and exercise any other rights with respect to, any
        or
        all of the Collateral, free of the Liens of such Junior Creditor, provided
        that
        such Junior Creditor retains any rights it may have as a junior secured creditor
        with respect to the Junior Debt with respect to the surplus, if any, arising
        from any such disposition or enforcement. Upon any disposition of any of
        the
        Collateral by Senior Creditor, each Junior Creditor (i) agrees, if requested,
        to
        execute and immediately deliver any and all releases or other documents or
        agreements which Senior Creditor deems reasonably necessary to accomplish
        a
        disposition thereof free of the Liens of such Junior Creditor, and (ii)
        authorizes Senior Creditor to record, or cause to have recorded, any UCC
        financing statements which Senior Creditor deems reasonably necessary to
        accomplish a disposition thereof free of the Liens of such Junior Creditor
        (it
        being understood that Senior Creditor shall not release any Liens of any
        Junior
        Creditor in any Collateral which is not the subject of such disposition).
        Each
        Junior Creditor agrees that any funds of any Debtor which it obtains through
        the
        exercise of any right of setoff or other similar right constitute Collateral,
        and each Junior Creditor shall immediately pay such funds to Senior Creditor
        to
        be applied to the outstanding Senior Debt. Senior Creditor agrees to act
        in a
        commercially reasonable fashion in connection with any disposition of any
        Collateral by Senior Creditor.

      

      (b) In
        the
        event of a sale or other disposition by any Debtor of some or all of the
        Collateral in connection with the liquidation or winding up of its business,
        each Junior Creditor agrees to release its Lien on such Collateral promptly
        (and
        in any event within three business days) upon the request of Senior Creditor,
        whether or not such Junior Creditor will receive any proceeds from such sale,
        but only if the net proceeds are used to pay the Senior Debt in cash and,
        if
        such net proceeds are sufficient to repay the Senior Debt in full, if the
        remaining proceeds are used to pay the Junior Debt in cash (unless otherwise
        required by applicable law). Should any Junior Creditor fail to provide a
        release of its Lien in any such Collateral sold or agree in writing to release
        its Lien contemporaneously with any such sale in accordance with the provisions
        of the preceding sentence (including the application of proceeds) within
        three
        (3) business days after its receipt of Senior Creditor’s written request, Senior
        Creditor may, acting as such Junior Creditor’s attorney-in-fact, do so itself in
        such Junior Creditor’s name. Such power of attorney is coupled with an interest
        and is irrevocable until the Senior Creditor Repayment shall have
        occurred. 

      

      5. Limitations
        on Rights and Remedies.
        

      

      (a) So
        long
        as a Blockage Period is in effect or if Senior Lender has commenced and is
        diligently pursuing an Enforcement Action, each Junior
        Creditor hereby agrees, severally and not jointly with the other Junior
        Creditors, that it shall not exercise any rights or remedies with respect
        to any
        Debtor or any Collateral, including, without limitation, the right to (a)
        enforce any Liens or repossess, sell or otherwise foreclose on any portion
        of
        the Collateral, or (b) request any action, institute litigation or other
        proceedings, give any instructions, make any election, notice account debtors
        or
        make collections with respect to any portion of the Collateral; provided,
        however,
        that if
        Debtors or Senior Creditor shall cure the applicable event of default under
        the
        Subordinated Debenture Documents prior to the taking of such remedial action
        by
        any Junior Creditor, no Junior Creditor will take or continue any remedial
        action with respect to such event of default after the date of such cure;
        and,
        until the Senior Creditor Repayment, any payments, distributions or proceeds
        resulting from the exercise of any such remedial action received by any Junior
        Creditor shall be subject to the terms of this Agreement and shall be paid
        or
        delivered to Senior Creditor as provided in this Agreement; provided,
        further,
        notwithstanding anything to the contrary contained herein, Junior Creditors
        shall not be prohibited (at any time, with or without notice, even during
        a
        Blockage Period or while an Enforcement Action is outstanding) from taking
        action against the Debtors to (x) collect Permitted Payments described in
        Section 2(c)(i) including, without limitation, seeking specific performance
        or
        taking action against the Borrowers to collect capital stock of the Parent
        at
        any time any Debtor is obligated to issue the same to the extent such obligation
        is a non-cash obligation that would constitute a Permitted Payment under
        Section
        2(c)(i), or (y) seeking specific performance against the Debtors to enforce
        the
        provisions of the Subordinated Debenture Documents described on Schedule
        3
        attached
        hereto.

      
        
          
          

        

        
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      (b) To
        the
        extent that any Default under the Senior Loan Documents gives rise to a “cross
        default” under the Subordinated Debenture Documents (a “Junior
        Cross Default”),
        the
        cure or waiver of such Default under the Senior Loan Documents shall be deemed
        to automatically cure or waive such Junior Cross Default under the Subordinated
        Debenture Documents. To the extent that any default or event of default under
        the Subordinated Debenture Documents gives rise to a “cross default” under the
        Senior Loan Documents (a “Senior
        Cross Default”),
        the
        cure or waiver of such default or event of default under the Subordinated
        Debenture Documents shall be deemed to automatically cure or waive such Senior
        Cross Default under the Senior Loan Documents.

      

      6. Intercreditor
        Arrangements in Bankruptcy.

      

      (a) Notwithstanding
        any Bankruptcy Event, this Agreement shall remain in full force and effect
        and
        enforceable pursuant to its terms in accordance with Section 510(a) of the
        Bankruptcy Code, and all references herein to any Debtor shall be deemed
        to
        apply to such entity as debtor in possession and to any trustee in bankruptcy
        for the estate of such entity.

      

      (b) Except
        as
        otherwise specifically permitted in this Section 6, until the Senior Creditor
        Repayment, no Junior Creditor shall assert, without the written consent of
        Senior Creditor, which consent may be granted or withheld in Senior Creditor’s
        sole discretion, any claim, motion, objection, or argument in respect of
        any
        Collateral in connection with any Bankruptcy Event which could otherwise
        be
        asserted or raised in connection with such Bankruptcy Event by such Junior
        Creditor as a secured creditor of the applicable Debtor, including without
        limitation any claim, motion, objection or argument seeking adequate protection
        or relief from the automatic stay in respect of any Collateral. 

      

      (c) Without
        limiting the generality of the foregoing, each Junior Creditor agrees that
        if a
        Bankruptcy Event occurs, (i) Senior Creditor may consent to the use of cash
        collateral on such terms and conditions and in such amounts as Senior Creditor,
        in its discretion, may decide without seeking or obtaining the consent of
        such
        Junior Creditor as holder of an interest in the Collateral; (ii) Senior Creditor
        may (A) provide financing to any Debtor or (B) consent to the granting of
        a
        priming Lien to secure postpetition financing, in each case pursuant to Section
        364 of the Bankruptcy Code or other applicable law and on such terms and
        conditions and in such amounts as Senior Creditor, in its sole discretion,
        may
        decide without seeking or obtaining the consent of such Junior Creditor as
        holder of an interest in the Collateral; (iii) such Junior Creditor shall
        not
        oppose any Debtor’s use of cash collateral to the extent such use has been
        approved by Senior Creditor; (iv) such Junior Creditor shall not oppose any
        sale
        or other disposition of any Collateral free and clear of Liens or other claims
        of any Person, including such Junior Creditor, under Section 363 of the
        Bankruptcy Code if Senior Creditor has consented to such sale or disposition
        of
        such assets.

      
        
          
          

        

        
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      (d) Each
        Junior Creditor agrees that it will not initiate, prosecute, encourage, or
        assist with any other Person to initiate or prosecute any claim, action or
        other
        proceeding (i) challenging the validity or enforceability of this Agreement,
        (ii) challenging the validity or enforceability of Senior Creditor’s claim
        against any of the Debtors, (iii) challenging the perfection or enforceability
        of any of Senior Creditor’s Liens, or (iv) asserting any claims which any Debtor
        may hold with respect to Senior Creditor or the Senior Debt, if
        any.

      

      (e) Notwithstanding
        any other provision of this Section 6, (i) each Junior Creditor shall be
        entitled to file any necessary responsive or defensive pleadings in opposition
        to any motion, claim, adversary proceeding or other pleading made by any
        Person
        objecting to or otherwise seeking the disallowance of the claims of such
        Junior
        Creditor, including without limitation any claims secured by the Collateral,
        and
        (ii) each Junior Creditor shall be entitled to file any pleadings, objections,
        motions or agreements which (y) assert rights or interests available to
        unsecured creditors of the applicable Debtor arising under either the Bankruptcy
        Code or applicable non-bankruptcy law or (z) which preserve Junior Creditors’
rights to the Collateral after giving effect to the Senior Creditor Repayment
        which do not adversely affect the rights of Senior Creditor.

      

      7. Bankruptcy
        Event.
        In the
        event of any Bankruptcy Event, as between Senior Creditor and Junior Creditors,
        the following shall apply:

      

      (a) Upon
        any
        payment or distribution of assets or securities of any kind or character,
        whether in cash, securities or other property, of any Debtor or the estate
        created by the commencement of any such Bankruptcy Event, the Senior Debt
        shall
        first be paid irrevocably in full in cash before any Junior Creditor shall
        be
        entitled to receive any payment or distribution of any cash, securities or
        other
        property on account of the Junior Debt.

      

      (b) Senior
        Creditor shall be entitled to receive from Debtors and any other Person making
        any distribution in accordance with clause (a) above any payment or distribution
        of any kind or character, whether in cash, securities or other property which
        may be payable or deliverable in respect of the Junior Debt in connection
        with
        any such Bankruptcy Event for application to the payment of the Senior Debt
        (to
        the extent necessary to pay such Senior Debt after giving effect to any
        concurrent payment to Senior Creditor). To facilitate the foregoing, each
        Junior
        Creditor irrevocably authorizes, empowers and directs any Debtor, debtor
        in
        possession, receiver, liquidator, custodian, conservator, trustee or other
        Person having authority to pay or otherwise deliver all such payments or
        distributions to Senior Creditor as required by this clause (b).

      

      (c) In
        the
        event that, notwithstanding the foregoing provisions of clause (b) above,
        any
        Junior Creditor receives any payment from or distribution of assets or
        securities of any Debtor or the estate created by the commencement of any
        such
        Bankruptcy Event, of any kind or character in respect of the Junior Debt,
        whether in cash, securities or other property before the Senior Creditor
        Repayment shall have occurred, then, and in such event, such payment or
        distribution shall be received and held in trust by such Junior Creditor
        for the
        benefit of Senior Creditor and shall be promptly paid over or delivered by
        such
        Junior Creditor to Senior Creditor to the extent necessary to pay the Senior
        Debt in full after giving effect to any concurrent payment to Senior Creditor.
        In addition, to the extent that Senior Creditor receives a payment in excess
        of
        the amount required to effectuate the Senior Creditor Repayment, then Senior
        Creditor shall, unless otherwise required by applicable law or court order,
        hold
        such excess amount in trust for the Junior Creditors and promptly pay such
        excess amount to Junior Agent for the benefit of Junior Creditors, and Junior
        Agent and Junior Creditors shall allocate such amount among themselves in
        such
        manner as they elect.

      
        
          
          

        

        
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      (d) Each
        Junior Creditor covenants and agrees to provide Senior Creditor with a copy
        of
        any proof of claim filed by such Junior Creditor in connection with any
        Bankruptcy Event, and Senior Creditor agrees to provide Junior Creditors
        with a
        copy of any proof of claim filed by Senior Creditor in connection with any
        Bankruptcy Event.

      

      (e) In
        connection with any Bankruptcy Event, each Junior Creditor agrees that it
        shall
        not vote to accept or approve any plan of partial or complete liquidation,
        reorganization, arrangement, composition or extension (nor shall it provide
        any
        financing to any Debtor or its affiliates under any such plan) that would
        (i)
        not provide for the payment in full of all Senior Debt in cash, unless Senior
        Creditor has voted to accept such plan (which vote shall be within Senior
        Creditor’s sole and absolute discretion), or (ii) cause such Junior Creditor or
        any affiliate thereof to receive any payment in respect of Junior Debt (other
        than current interest in connection with any debt owing to such Junior Creditor
        pursuant to a plan of reorganization, provided that the payment of such current
        interest is subordinated to the Senior Debt on substantially the terms set
        forth
        herein) prior to the Senior Creditor Repayment.

      

      8.
         No
        Additional Liens.
        Other
        than as set forth in the Subordinated Debenture Security Agreements, each
        Junior
        Creditor hereby represents, severally, and not jointly with the other Junior
        Creditors, that such Junior Creditor has not been granted or obtained any
        Liens
        in any assets of any Debtor or any other assets securing the Senior Debt.
        Each
        Junior Creditor agrees that, without the prior written consent of Senior
        Creditor, no Junior Creditor will take any other Liens on any assets of any
        Debtor or any other assets as security for the Junior Debt unless Senior
        Creditor also has a Lien on such assets which is senior to that of the
        applicable Junior Creditor, and no Junior Creditor shall obtain any additional
        guarantees for the Junior Debt unless the Person obligated under such guaranty
        also guarantees the Senior Debt and such guaranty in favor of Junior Creditor(s)
        is subordinated to such guaranty in favor of Senior Creditor in a manner
        consistent with the terms and conditions of this Agreement pursuant to
        documentation reasonably acceptable to Senior Creditor.

      

      9.
         Junior
        Debt Owed Only to Junior Creditors; Restrictions on
        Transfer.
        

      

      (a) Each
        Junior Creditor represents and warrants severally, and not jointly with the
        other Junior Creditors that: (a) no Junior Creditor has previously assigned
        any
        interest in the Junior Debt or any Lien in connection therewith, if any;
        (b) no
        Person other than Junior Creditors owns an interest in any Junior Debt or
        security therefor (whether as joint holders of the Junior Debt, participants
        or
        otherwise); and (c) the entire Junior Debt is owing only to Junior Creditors.
        Each Junior Creditor covenants that, in the event that such Junior Creditor
        wishes to transfer, in whole or in part, all or any part of the Junior Debt
        or
        any Lien therefor to another Person, then the terms and conditions of this
        Agreement will be and remain binding upon the Junior Debt and all Liens
        therefor, and such Junior Creditor shall cause such proposed transferee,
        before
        any such transfer is made, to execute and deliver to Senior Creditor a written
        acknowledgment in form and substance reasonably acceptable to Senior Creditor,
        pursuant to which such proposed transferee acknowledges that it will constitute
        a Junior Creditor hereunder and be bound by the terms and conditions hereof.
        

      
        
          
          

        

        
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      (b) Senior
        Creditor covenants that, in the event that the Senior Creditor wishes to
        transfer, in whole or in part, all or any part of the Senior Debt or any
        Lien
        therefor to another Person, then the terms and conditions of this Agreement
        will
        be and remain binding upon the Senior Debt and all Liens therefor, and Senior
        Creditor shall cause such proposed transferee, before any such transfer is
        made,
        to execute and deliver to the Junior Creditors a written acknowledgment that
        such proposed transferee acknowledges that it will constitute a Senior Creditor
        hereunder and be bound by the terms and conditions hereof. Senior Creditor
        agrees that (i) in the event of any transfer by Senior Creditor of less than
        all
        of the Senior Debt, ACF CGS, L.L.C. shall continue to serve as administrative
        agent for the holder(s) of Senior Debt (including for purposes of administering
        and enforcing this Agreement), and (ii) in the event of the transfer by Senior
        Creditor of all of the Senior Debt then held by Senior Creditor, prior to
        consummating any such transfer, Senior Creditor shall notify Junior Agent
        of
        such proposed transfer (the “Transfer
        Notice”)
        (which
        notice shall include the identity of the proposed transferee(s) and the
        scheduled date of closing of the transfer to such person(s) (the “Scheduled
        Transfer Date”)),
        and
        Junior Creditors shall have the right to exercise the Purchase Option with
        respect to all, but not less than all of the Senior Debt, upon the terms
        and
        conditions described in Section 10 below; provided,
        however,
        that in
        such event Junior Creditors desiring to exercise the Purchase Option shall
        deliver a Purchase Option Notice to ACF CGS, L.L.C. within two (2) days
        following delivery of the Transfer Notice by ACF CGS, L.L.C., and shall
        consummate the Purchase Option and pay the Option Purchase Price no later
        than
        the later of (A) the Scheduled Transfer Date identified in the Transfer Notice,
        or four (4) business days following the date of delivery of the Purchase
        Option
        Notice.

      

      10.
         Purchase
        Option.

      

      (a) Senior
        Creditor shall give Junior Agent a copy of any written notice of acceleration
        of
        any Senior Debt given by Senior Creditor to one or more Debtors, concurrently
        with, or as soon as practicable after, the giving of such notice to such
        Debtors. For a period of 10 calendar days following receipt of such notice
        by
        Junior Agent (the “Option
        Period”),
        Junior Creditors shall have the option (the “Purchase
        Option”)
        to
        purchase from Senior Creditor (i) all, but not less than all, of the Senior
        Debt
        owed to Senior Creditor at the time of purchase (excluding the Retained Debt,
        as
        defined below) and (ii) all of Senior Creditor’s right, title and interest in
        and to, and all of Senior Creditor’s obligations under, the Senior Loan
        Documents (excluding the Retained Interests, as defined below, and excluding
        all
        rights and remedies of Senior Creditor under and with respect to any warrant,
        registration rights agreement, capital stock of any Debtor and other similar
        equity investments) (all such property referred to in clauses (i) and (ii)
        being
        collectively called the “Assigned
        Interests”).
        At
        any time during the Option Period, Junior Creditors may exercise the Purchase
        Option by causing Junior Agent to deliver to Senior Creditor a written notice
        of
        intent to exercise the Purchase Option (the “Purchase
        Option Notice”),
        in
        which notice Junior Agent shall specify the date of closing (which shall
        be a
        business day within the Option Period). On the closing date specified in
        the
        Purchase Option Notice, Senior Creditor shall, pursuant to an assignment
        agreement in form and substance satisfactory to Senior Creditor and Junior
        Creditors, assign all of its right, title and interest in and to the Assigned
        Interests to Junior Creditors, without
        representation, recourse or warranty (except
        as expressly set forth below), upon Senior Creditor’s receipt of payment, in
        cash (and in immediately available federal funds by wire transfer to a bank
        account designated by Senior Creditor), of the purchase price (the “Option
        Purchase Price”),
        which
        shall be an amount equal to 100% of the Senior Debt owed on the date of payment
        to Senior Creditor (it being understood and agreed to by all parties that
        any
        purchase and sale consummated pursuant to this Section 10 shall be deemed
        to be
        a prepayment of all of the Senior Debt for all purposes of the Senior Loan
        Documents), including, without limitation, (w) all unpaid interest, fees
        and any
        other charges, without regard to whether or not such amounts are allowed
        or are
        recoverable pursuant to Section 506 of the Bankruptcy Code or otherwise,
        (x) any
        prepayment fee or early termination fee set forth in the Senior Loan Documents,
        and (y) any amounts that are due and payable to Senior Creditor in respect
        of
        claims for which Senior Creditor is entitled to indemnification under the
        Senior
        Loan Documents, but excluding the Retained Debt. Without duplication of any
        amounts to be paid as part of the Option Purchase Price, Junior Creditor
        shall
        furnish to Senior Creditor on the date of closing on the Purchase Option
        cash
        collateral as security to Senior Creditor for the payment of all Asserted
        Known Indemnification Claims, as defined below, such cash collateral to be
        an
        amount equal to 100% of such claims. The
        election to exercise the Purchase Option pursuant to the Purchase Option
        Notice
        shall be irrevocable and shall fully obligate and commit Junior Creditors
        to
        acquire the Assigned Interests as herein provided. The amount of and payment
        of
        the Option Purchase Price or any other sum required to be paid by Junior
        Creditors to Senior Creditor pursuant to this Section 10 shall not be subject
        to
        any defense, reduction, recoupment or offset, for any reason, including,
        without
        limitation, any breach or alleged breach by Senior Creditor at any time of
        any
        provision of this Agreement. The failure of Junior Agent to deliver the Purchase
        Option Notice so that it is received by Senior Creditor prior to expiration
        of
        the Option Period or to consummate the purchase pursuant to the Purchase
        Option
        as provided herein prior to the expiration of the Option Period shall result
        in
        the forfeiture of the Purchase Option, unless otherwise agreed by Senior
        Creditor in its sole discretion. As used herein, the term “Retained
        Debt”
shall
        mean any and all amounts required to be paid by any Debtor to Senior Creditor
        pursuant to any indemnity provisions contained in any of the Senior Loan
        Documents, the claim for which arises or becomes due and payable after the
        consummation of the purchase by Junior Creditor pursuant to the Purchase
        Option;
        the term “Retained
        Interests”
shall
        mean the rights and interest retained by Senior Creditor under all of the
        Senior
        Loan Documents, notwithstanding the sale and the assignment of the Assigned
        Interests, in respect of the Retained Debt and in respect of indemnification
        obligations of Debtors in accordance with the Senior Loan Documents (all
        of
        which shall survive the sale and assignment of the Assigned Interests and
        continue to benefit Senior Creditor); and the term “Asserted
        Known Indemnification Claim”
means
        any matters or circumstances for which notice or demand has been made or
        asserted against Senior Creditor in writing that at the time of determination
        could reasonably be expected to result in direct or actual damages and expenses
        (including, without limitation, reasonable and documented attorneys' fees
        and
        disbursements but excluding special, indirect,
        consequential or punitive damages to Senior Creditor)
        to
        Senior Creditor and which are subject to indemnification by any Debtor pursuant
        to the terms of the Senior Loan Documents. Any reference to the amount of
        any
        Asserted Known Indemnification Claim shall mean that amount as reasonably
        determined by Senior Creditor in light of the facts and circumstances of
        the
        underlying claim. In connection with any such sale or assignment, each Debtor
        agrees to execute and deliver to Senior Creditor all such agreements,
        instruments or documents as Senior Creditor may reasonably request to evidence
        the survival of such rights, interest and obligations. The grant of the Purchase
        Option shall not operate to restrict Senior Creditor from assigning or
        transferring to any Person any or all of its loan commitments under the Senior
        Loan Documents or any Senior Debt owing to it or any of its rights or other
        interests under the Senior Loan Documents, so long as such Person agrees
        to be
        bound by the terms of this Section 10.

      
        
          
          

        

        
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      (b) The
        purchase price and any cash collateral shall be remitted by wire transfer
        of
        immediately available funds to such bank account of Senior Creditor as Senior
        Creditor may designate in writing to Junior Agent for such purpose. Interest
        shall be calculated to but excluding the business day on which such purchase
        and
        sale shall occur if the amounts so paid by Junior Creditors to the bank account
        designated by Senior Creditor are received in such bank account prior to
        1:00
        p.m. Central time. Interest shall be calculated to and including the business
        day on which such purchase and sale shall occur if the amounts so paid by
        Junior
        Creditors to the bank account designated by Senior Creditor are received
        in such
        bank account after 1:00 p.m. Central time.

       

      (c) The
        obligation of Senior Creditor to consummate any sale pursuant to the Purchase
        Option shall be subject to (i) obtaining any required approval of any applicable
        governmental authority and (ii) Senior Creditor’s receipt of an undertaking (in
        form and substance satisfactory to Senior Creditor) from Junior Creditors
        to
        reimburse Senior Creditor for any loss, cost or expense (including interest
        at
        the rate applicable under the Senior Loan Agreement) outstanding on the date
        the
        Purchase Option is exercised and reasonable attorney’s fees and other legal
        expenses) relating to any payment items that have been provisionally credited
        to
        any of the Senior Debt and that are returned unpaid or are otherwise dishonored
        or charged back.

      

      (d) Any
        purchase pursuant to the Purchase Option shall be without any representation
        or
        warranty of any kind by Senior Creditor as to any of the Assigned Interests
        or
        otherwise and without recourse to Senior Creditor, except that Senior Creditor
        shall represent and warrant to Junior Creditors: (i) the
        amount of the Senior Debt being purchased from Senior Creditor,
        (ii)
        that Senior Creditor owns such Senior Debt free and
        clear
        of any Liens and (iii) that Senior Creditor has the right
        to
        assign such Senior Debt and the assignment is duly authorized.

      

      (e) Upon
        the
        consummation of any purchase and sale pursuant to the Purchase Option, Junior
        Creditors (and not Senior Creditor) shall thereafter be obligated pursuant
        to
        the terms of the Senior Loan Documents with respect to the Assigned Interests
        and responsible for the discharge and performance of all of the duties,
        responsibilities and obligations of Senior Creditor under the loan commitments
        included within the Assigned Interests, with the Junior Creditors thereafter
        being deemed to be the “Lender” for all purposes under the Senior Loan Documents
        (except with respect to the Retained Debt and Retained Interests) and with
        Senior Creditor thereafter being released from its duties, responsibilities
        and
        obligations under the Senior Loan Documents.

      

      (f) All
        Retained Debt shall remain secured by the Collateral, Junior Agent shall
        act as
        collateral agent for Senior Creditor in connection with all Retained Debt
        and
        Senior Creditor shall have the benefits of the Retained Interests in the
        Senior
        Loan Documents. Senior Creditor shall be entitled to payment in respect of
        such
        Retained Debt on the due date of any such Retained Debt.

      

      (g) Each
        Debtor agrees that any such sale and assignment by Senior Creditor of the
        Assigned Interests shall not operate to terminate or impair such Debtor’s
        obligations to indemnify Senior Creditor or the obligations of such Debtor
        with
        respect to any Retained Rights under the Senior Loan Documents or otherwise,
        all
        of which indemnity and other obligations with respect to the Retained Rights
        shall survive any such sale and assignment. Nothing in this Section 10 shall
        be
        deemed to require Senior Creditor to extend any credit to any Debtor during
        the
        Option Period.

      

      (h) Junior
        Creditors agree that, after consummation of any purchase of the Assigned
        Interests in accordance with this Section 10, Junior Creditors will not
        authorize or allow any amendment to be made to any of the provisions of the
        Senior Loan Documents in a manner that would restrict or otherwise adversely
        effect the Retained Interests or the security for the Retained
        Debt.

      

        
          
            
            

          

          
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      (i) For
        avoidance of doubt, Junior Creditors agree and acknowledge that Senior Creditor
        shall not be required to provide any prior notice to Junior Creditor of Senior
        Creditor’s commencement of, or intent to commence, any enforcement action
        against or with respect to any Debtor or any of the Collateral, and Senior
        Creditor shall not be obligated to forbear from taking any such enforcement
        action during the Option Period.

      

      (j) Notwithstanding
        anything herein to the contrary, the rights and obligations of each Junior
        Creditor hereunder are several and not joint with the rights and obligations
        of
        any other Junior Creditor and no Junior Creditor shall have liability or
        obligations hereunder unless and until such Junior Creditor duly exercises
        its
        rights hereunder in its sole discretion.

      

      11.
         Continuing
        Nature of Subordination.
        This
        Agreement will be effective and may not be terminated or otherwise revoked
        by
        any Junior Creditor until the Senior Creditor Repayment shall have occurred.
        Each Junior Creditor hereby waives to the fullest extent permitted by applicable
        law any right it may have to terminate or revoke this Agreement or any of
        the
        provisions of this Agreement. In the event that any Junior Creditor has any
        right under applicable law otherwise to terminate or revoke this Agreement
        which
        right cannot be waived, such termination or revocation will not be effective
        until written notice of such termination or revocation, signed by such Junior
        Creditor, is actually received by Senior Creditor’s officer responsible for such
        matters. In the absence of the circumstances described in the immediately
        preceding sentence, this is a continuing agreement of subordination and Senior
        Creditor may continue, at any time and without notice to any Junior Creditor,
        to
        extend credit or other financial accommodations and loan monies to or for
        the
        benefit of Debtors on the faith hereof. Any termination or revocation described
        hereinabove will not affect this Agreement in relation to any of the Senior
        Debt
        which arose or was committed to prior to receipt thereof.

      

      12.
         Invalidated
        Payments; Waivers by Junior Creditors.
        

      

      (a) To
        the
        extent that Senior Creditor receives payments or transfers on the Senior
        Debt or
        proceeds of the Collateral which are subsequently invalidated, declared to
        be
        fraudulent or preferential, set aside, avoided and/or required to be repaid
        to a
        trustee, receiver or any other Person under any bankruptcy law, state or
        federal
        law, common law, or equitable cause or pursuant to the Senior Loan Documents,
        then, to the extent of such payment or proceeds received, the Senior Debt,
        or
        part thereof, intended to be satisfied shall be revived and continue in full
        force and effect as if such payments or proceeds had not been received by
        Senior
        Creditor.

      

      (b) Each
        Junior Creditor hereby waives and releases, to the fullest extent permitted
        by
        applicable law, any claim which such Junior Creditor may now or hereafter
        have
        against Senior Creditor arising out of any and all actions which Senior Creditor
        takes or omits to take with respect to any Debtor, any Collateral or any
        Senior
        Loan Document, including, without limitation: (a) any action or inaction
        with
        respect to the creation, perfection or continuation of Liens on the Collateral
        and other security for the Senior Debt, (b) any action or inaction with respect
        to the occurrence of any Default, (c) any action or inaction with respect
        to the
        foreclosure upon, repossession, sale, release or depreciation of, or failure
        to
        realize upon, any of the Collateral, (d) any action or inaction with respect
        to
        the collection of any claim for any part of the Senior Debt from any account
        debtor, guarantor, or any other Person, (e) any other action or inaction
        with
        respect to the enforcement of the Senior Loan Documents or the valuation,
        use,
        protection or disposition of the Collateral or any other security for the
        Senior
        Debt, (f) the election of Senior Creditor, in any proceeding instituted under
        Chapter 11 of the Bankruptcy Code, for application of Section 1111(b) of
        the
        Bankruptcy Code; provided,
        however,
        that
        the foregoing shall not apply to any actions or omissions of Senior Creditor
        constituting a violation of applicable law or a violation of this Agreement
        or,
        with respect to matters relating to the realization, foreclosure or other
        disposition of Collateral, the failure of Senior Creditor to act in a
        commercially reasonable manner.

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

       

      13. Additional
        Senior Debt; Amendments to Loan Documents.

      

      (a) Senior
        Creditor may from time to time in its discretion make Additional Senior Loans
        to
        the Debtors, provided, that prior to making any such Additional Senior Loan
        Senior Creditor shall notify Junior Agent in writing (an “Additional
        Senior Loan Notice”)
        of the
        proposed terms and conditions thereof (including, without limitation, the
        proposed amount, ranking, pricing, date of funding (the “Proposed
        Additional Senior Loan Funding Date”),
        and
        all other material terms relating to such proposed Additional Senior Loan),
        which notice shall be accompanied by the definitive agreements that Senior
        Creditor would propose to use in connection with such Additional Senior Loan
        (the “Proposed
        Additional Senior Loan Documents”),
        and
        Junior Creditors shall have the option to provide all but not less than all
        of
        such Additional Senior Loan on the terms set forth in the Additional Senior
        Loan
        Notice and the Proposed Additional Senior Loan Documents. Junior Agent shall
        notify Senior Creditor in writing (the “Junior
        Creditor Commitment Notice”)
        within
        three (3) business days following receipt of an Additional Senior Loan Notice
        of
        Junior Creditors’ election whether or not to provide the Additional Senior Loan
        to the Debtors on the terms described in the Additional Senior Loan Notice
        and
        the Proposed Additional Senior Loan Documents (provided that the failure
        of
        Junior Agent to respond within such time period shall be deemed to be an
        election of Junior Creditors not to provide such Additional Senior Loan),
        which
        notice shall (i) identify the applicable Junior Creditor(s) electing to make
        the
        Additional Senior Loan, (ii) indicate the date on which such Junior Creditors
        propose to fund such Additional Senior Loan to the Borrowers, which shall
        be no
        later than seven (7) days following the date of the Junior Creditor Commitment
        Notice, and (iii) serve as such Junior Creditors’ commitment to make such
        Additional Senior Loan on the applicable terms and conditions. If requested
        by
        Borrowers, Senior Creditor may, in its sole discretion, elect to fund the
        Additional Senior Loan prior to the agreed date of funding by Junior Creditors,
        in which event Senior Creditor shall so notify Junior Agent, and the applicable
        Junior Creditors shall, no later than the date seven (7) days following the
        date
        of the Junior Creditor Commitment Notice, fund such Additional Senior Loan
        to
        Borrowers with the proceeds to be used to repay the amount advanced by Senior
        Creditor. If Junior Creditors elect to make the Additional Senior Loan, Junior
        Creditors shall execute and deliver the Additional Senior Loan Documents
        and, if
        applicable, enter into an appropriate amendment of this Agreement.
        Notwithstanding anything to the contrary set forth herein, the Senior Creditor
        shall not make Additional Senior Loans in an amount such that the aggregate
        amount of Senior Debt would exceed the amount described in clause (a) of
        the
        definition of “Senior Debt”. 

      

      (b) Senior
        Creditor, at any time and from time to time, may enter into such agreements,
        amendments and modifications with any Debtor as Senior Creditor may deem
        proper,
        extending the time of payment of or renewing or otherwise altering the terms
        and
        conditions of all or any portion of the Senior Debt or affecting the security
        underlying any or all of the Senior Debt, all without affecting the rights
        of
        Senior Creditor hereunder; provided, however, that Senior Creditor shall
        not,
        without the prior written consent of Junior Creditors holding at least 67%
        of
        the outstanding principal amount of Debentures, agree to any such amendment
        or
        modification which (i) increases the principal amount of the Senior Debt
        beyond
        the limits described in the definition of “Senior Debt” set forth herein, (ii)
        extends the stated maturity date of some or all of the Senior Debt; or (iv)
        adds
        any additional events of default or financial covenants. 

      

        
          
            
            

          

          
            -15-

            
              

            

          

          
            
            

          

        

      

       

      (c) Junior
        Creditors agree with Senior Creditor that the Subordinated Debenture Documents
        may not be materially modified or amended without the prior written consent
        of
        Senior Creditor (including, without limitation, any amendment which has the
        effect of shortening the maturity of the Junior Debt, accelerating the due
        date
        of any payment with respect thereto, increasing the interest rate or any
        fees or
        liquidated damages payable in cash with respect thereto, requiring any amount
        not required to be paid in cash thereunder to be paid in cash, or making
        any
        covenant more restrictive on any Debtor); provided,
        however,
        that
        Junior Creditors and Debtors may amend the terms and conditions of any non-cash
        payment obligations pursuant to the Subordinated Debenture Documents without
        the
        consent of Senior Creditor.

      

      14. No
        Waiver by Senior Creditor.
        No
        right of Senior Creditor to enforce the subordination or other terms as provided
        in this Agreement will at any time in any way be prejudiced or impaired by
        any
        act or failure to act on the part of any Debtor or by any act or failure
        to act
        by Senior Creditor, or by any noncompliance by any Debtor with the terms,
        provisions and covenants of this Agreement, the Senior Loan Documents or
        the
        Subordinated Debenture Documents, regardless of any knowledge thereof which
        Senior Creditor may have or be otherwise charged with. No waiver will be
        deemed
        to be made by Senior Creditor of any of Senior Creditor’s rights hereunder,
        unless the same will be in writing signed on behalf of Senior Creditor, and
        each
        waiver, if any, will be a waiver only with respect to the specific instance
        involved and will in no way impair the rights of Senior Creditor or the
        obligations of any Junior Creditor to Senior Creditor in any other respect
        at
        any other time. The failure of Senior Creditor to enforce at any time any
        provision of this Agreement will not be construed to be a waiver of such
        provisions, nor in any way to affect the validity of this Agreement or any
        part
        hereof or the right of Senior Creditor thereafter to enforce each and every
        such
        provision. No waiver by Senior Creditor of any breach of this Agreement will
        be
        held to constitute a waiver of any other or subsequent breach.

      

      15. Certain
        Stock Certificates.
        Junior
        Agent hereby represents and warrants to Senior Creditor that Junior Agent
        is in
        possession of the stock certificates and membership interest certificates
        of
        Debtors described on Exhibit
        A
        attached
        hereto (the “Certificates”). Promptly following the closing of the transactions
        contemplated by the Senior Loan Agreement (and in any event within 5 business
        days), Junior Agent shall provide the Certificates to Senior Creditor, and
        Junior Agent hereby agrees that, until such time, Junior Agent shall hold
        such
        Certificates as Senior Creditor’s agent for purposes of perfection. Within 5
        business days following the date that the Senior Creditor Repayment occurs,
        Senior Creditor shall redeliver the Certificates to the Junior Agent, subject
        to
        the undertaking by the Junior Creditors that if a Bankruptcy Event occurs
        within
        90 days following the date of the Senior Creditor Repayment, then the Junior
        Agent shall promptly return the Certificates to Senior Creditor and, until
        such
        return, Junior Agent shall hold such Certificates as Senior Creditor’s agent for
        purposes of perfection.

      

      16.
         Information
        Concerning Financial Condition of Debtors; Notices of
        Default.
        

      

      (a) Each
        Junior Creditor hereby assumes responsibility for keeping informed of the
        financial condition of Debtors, any and all endorsers and any and all other
        guarantors of the Junior Debt and/or the Senior Debt and of all other
        circumstances bearing upon the risk of nonpayment of the Senior Debt and/or
        Junior Debt, and each Junior Creditor hereby agrees that Senior Creditor
        will
        not have any duty to advise such Junior Creditor of any information regarding
        such condition or any such circumstances. In the event that Senior Creditor,
        in
        its sole discretion, undertakes, at any time or from time to time, to provide
        any such information to any Junior Creditor, Senior Creditor will be under
        no
        obligation (i) to provide any such information to any Junior Creditor on
        any
        subsequent occasion, or (ii) to undertake any investigation or to disclose
        any
        information which Senior Creditor wishes to maintain as
        confidential.

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

       

      (b) Senior
        Creditor hereby assumes responsibility for keeping informed of the financial
        condition of Debtors, any and all endorsers and any and all other guarantors
        of
        the Senior Debt and/or the Junior Debt and of all other circumstances bearing
        upon the risk of nonpayment of the Senior Debt and/or Junior Debt, and Senior
        Creditor hereby agrees that no Junior Creditor will have any duty to advise
        Senior Creditor of any information regarding such condition or any such
        circumstances. In the event that any Junior Creditor, in its sole discretion,
        undertakes, at any time or from time to time, to provide any such information
        to
        Senior Creditor, such Junior Creditor will be under no obligation (i) to
        provide
        any such information to Senior Creditor on any subsequent occasion, or (ii)
        to
        undertake any investigation or to disclose any information which such Junior
        Creditor wishes to maintain as confidential.

      

      (c) Each
        Junior Creditor agrees to make reasonable efforts to provide Senior Creditor
        with a copy of any notice of default to any Debtor within three business
        days of
        such notice to such Debtor, but any failure of any Junior Creditor to provide
        such notice to Senior Creditor shall not result in any liability of such
        Junior
        Creditor to Senior Creditor or limit any rights of such Junior Creditor
        hereunder.

      

      (d) Without
        limiting the obligation of Senior Creditor to provide Junior Agent with a
        copy
        of any notice of acceleration as set forth in Section 10(a), Senior Creditor
        agrees to make reasonable efforts to provide Junior Agent with a copy of
        any
        notice of default to any Debtor within three business days of such notice
        to
        such Debtor, but any failure of Senior Creditor to provide such notice to
        Junior
        Agent shall not result in any liability of Senior Creditor to Junior Agent
        or
        any Junior Creditor or limit any rights of Senior Creditor
        hereunder.

      

      17. Payments
        to Senior Creditor Do Not Reduce Junior Debt.
        Each
        Debtor acknowledges and agrees that any payment by or on behalf of any Debtor
        with respect to any Junior Debt which is paid over to Senior Creditor pursuant
        to the terms and conditions hereof shall not be deemed to reduce the Junior
        Debt.

      

      18. Cure
        of Payment Default.
        If a
        Payment Default exists at any time, Senior Creditor agrees that any Junior
        Creditor may cure such Payment Default by paying to Senior Creditor, in
        immediately available funds, the amount necessary to cure such Payment Default,
        and Senior Creditor agrees to accept such payment from such Junior Creditor
        for
        application to the Senior Debt. Nothing contained herein shall be deemed
        to
        obligate Senior Creditor to notify Junior Creditor of the existence of any
        Default.

      

      19. Relationship
        Among Junior Creditors and Junior Agent, Waiver of
        Marshalling.
        Each
        Debtor, Junior Agent and each Junior Creditor acknowledges and agrees that
        Senior Creditor has no knowledge of, and shall not have any duty or
        responsibility for determining, the relative rights and obligations of Junior
        Agent or any Junior Creditor on one hand, to Junior Agent or any other Junior
        Creditor, on the other hand, with respect to any Subordinated Debt, any
        Collateral, any Subordinated Debenture Document, the Subordinated Debt Control
        Account or otherwise

      

        
          
            
            

          

          
            -17-

            
              

            

          

          
            
            

          

        

      

       

      Each
        Debtor and each Junior Creditor hereby waives any right to require marshalling
        of any assets by Senior Creditor and any similar rights.

      

      20. Confirmation
        of Appointment of Junior Agent.
        Each of
        the undersigned Junior Creditors hereby designates Enable Growth Partners,
        LP
        (“EGP”) as Junior Agent under this Agreement (including for purposes of
        receiving notices on behalf of each Junior Creditor), and agrees that EGP’s
        rights, responsibilities and immunities as Junior Agent shall be as set forth
        in
        Annex B to the Subordinated Debenture Security Agreement.

      

      21. CONSENT TO JURISDICTION; SERVICE OF
        PROCESS; NO JURY TRIAL.

      

      (a) EACH
        PARTY HERETO CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED
        IN NEW YORK, NEW YORK AND WAIVES ANY OBJECTION BASED UPON FORUM NON CONVENIENS
        AND ANY
        OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER. NOTHING IN THIS SECTION
        WILL AFFECT THE RIGHT OF SENIOR CREDITOR TO BRING ANY ACTION OR PROCEEDING
        AGAINST ANY OTHER PARTY HERETO OR ITS PROPERTY IN THE COURTS OF ANY OTHER
        JURISDICTION. ANY
        JUDICIAL PROCEEDING COMMENCED BY ANY DEBTOR OR ANY JUNIOR CREDITOR AGAINST
        SENIOR CREDITOR OR ANY OTHER HOLDER OF ANY SENIOR DEBT INVOLVING, DIRECTLY
        OR
        INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED
        WITH
        THIS AGREEMENT SHALL BE BROUGHT ONLY IN A UNITED STATES FEDERAL COURT OR
        NEW
        YORK STATE COURT SITTING IN NEW YORK, NEW YORK. 

      

      (b) EACH
        OF
        THE PARTIES REPRESENTS TO EACH OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS
        AGREEMENT WITH COUNSEL OF ITS CHOICE AND IS FULLY AWARE OF THE LEGAL
        CONSEQUENCES AND EFFECTS HEREOF AND HAS KNOWINGLY AGREED TO THE PROVISIONS
        HEREOF.

      

      (c) EACH
        PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
        ACTION
        OR PROCEEDING (i) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
        WITH
        THIS AGREEMENT, OR (ii) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION
        WITH OR RELATED TO THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
        SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

      

      22. ARM’S
        LENGTH AGREEMENT.
        EACH OF
        THE PARTIES TO THIS AGREEMENT AGREES AND ACKNOWLEDGES THAT THIS AGREEMENT
        HAS
        BEEN NEGOTIATED IN GOOD FAITH, AT ARM’S LENGTH, AND NOT BY ANY MEANS FORBIDDEN
        BY LAW.

      

      23. INJUNCTIVE
        RELIEF.
        EACH
        JUNIOR CREDITOR AND EACH DEBTOR ACKNOWLEDGES AND AGREES THAT ITS COVENANTS
        AND
        OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER DOCUMENTS, INSTRUMENTS AND
        AGREEMENTS EXECUTED IN CONNECTION HEREWITH ARE INTEGRAL TO SENIOR CREDITOR’S
        REALIZATION OF ITS RIGHTS AGAINST, AND THE VALUE OF ITS INTEREST IN, THE
        ASSETS
        OF DEBTORS AND THEIR AFFILIATES, THAT A BREACH OF ANY OF THE COVENANTS AND
        OBLIGATIONS OF SUCH JUNIOR CREDITOR, SUCH DEBTOR HEREUNDER OR UNDER THE OTHER
        DOCUMENTS, INSTRUMENTS AND AGREEMENTS EXECUTED IN CONNECTION HEREWITH WILL
        ENTITLE SENIOR CREDITOR TO INJUNCTIVE RELIEF AND SPECIFIC PERFORMANCE WITHOUT
        THE NECESSITY OF PROVING IRREPARABLE INJURY TO SENIOR CREDITOR OR THAT SENIOR
        CREDITOR DOES NOT HAVE AN ADEQUATE REMEDY AT LAW IN RESPECT OF SUCH BREACH
        (EACH
        OF WHICH ELEMENTS SUCH JUNIOR CREDITOR, SUCH DEBTOR ADMITS EXIST) AND, AS
        A
        CONSEQUENCE, SUCH JUNIOR CREDITOR, SUCH DEBTOR AGREES THAT EACH AND EVERY
        COVENANT AND OBLIGATION APPLICABLE TO IT AND CONTAINED IN THIS AGREEMENT
        OR THE
        OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS EXECUTED IN CONNECTION HEREWITH
        WILL
        BE SPECIFICALLY ENFORCEABLE AGAINST IT. EACH JUNIOR CREDITOR, EACH DEBTOR
        HEREBY
        WAIVES AND AGREES NOT TO ASSERT ANY DEFENSES AGAINST AN ACTION FOR SPECIFIC
        PERFORMANCE OF ITS RESPECTIVE COVENANTS AND OBLIGATIONS HEREUNDER AND/OR
        UNDER
        THE OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS EXECUTED IN CONNECTION
        HEREWITH.

      
        
          
          

        

        
          -18-

          
            

          

        

        
          
          

        

      

       

      SENIOR
        CREDITOR ACKNOWLEDGES AND AGREES THAT ITS COVENANTS AND OBLIGATIONS UNDER
        THIS
        AGREEMENT AND THE OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS EXECUTED IN
        CONNECTION HEREWITH ARE INTEGRAL TO EACH JUNIOR CREDITOR’S REALIZATION OF ITS
        RIGHTS AGAINST, AND THE VALUE OF ITS INTEREST IN, THE ASSETS OF DEBTORS AND
        THEIR AFFILIATES, THAT A BREACH OF ANY OF THE COVENANTS AND OBLIGATIONS OF
        SUCH
        SENIOR CREDITOR HEREUNDER OR UNDER THE OTHER DOCUMENTS, INSTRUMENTS AND
        AGREEMENTS EXECUTED IN CONNECTION HEREWITH WILL ENTITLE EACH JUNIOR CREDITOR
        TO
        INJUNCTIVE RELIEF AND SPECIFIC PERFORMANCE WITHOUT THE NECESSITY OF PROVING
        IRREPARABLE INJURY TO JUNIOR CREDITORS OR THAT ANY JUNIOR CREDITOR DOES NOT
        HAVE
        AN ADEQUATE REMEDY AT LAW IN RESPECT OF SUCH BREACH (EACH OF WHICH ELEMENTS
        SENIOR CREDITOR ADMIT EXIST) AND AS A CONSEQUENCE, SENIOR CREDITOR AGREES
        THAT
        EACH AND EVERY COVENANT AND OBLIGATION APPLICABLE TO IT AND CONTAINED IN
        THIS
        AGREEMENT OR THE OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS EXECUTED IN
        CONNECTION HEREWITH WILL BE SPECIFICALLY ENFORCEABLE AGAINST IT. EACH JUNIOR
        CREDITOR HEREBY WAIVES AND AGREES NOT TO ASSERT ANY DEFENSES AGAINST AN ACTION
        FOR SPECIFIC PERFORMANCE OF ITS RESPECTIVE COVENANTS AND OBLIGATIONS HEREUNDER
        AND/OR UNDER THE OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS EXECUTED IN
        CONNECTION HEREWITH.

      

      24. Notices.
        Except
        as otherwise provided for herein, whenever it is provided herein that any
        notice, demand, request, consent, approval, declaration or other communication
        will or may be given to or served upon either of the parties by the other,
        or
        whenever either of the parties desires to give or serve upon the other
        communication with respect to this Agreement, such notice, demand, request,
        consent, approval, declaration or other communication will be in writing
        (including, but not limited to, facsimile communication), and will either
        be
        delivered in person, telecopied, sent by reputable overnight courier or mailed
        by first class mail, or registered or certified mail, return receipt requested,
        postage prepaid or provided for, addressed as follows:

      

        
          
            
            

          

          
            -19-

            
              

            

          

          
            
            

          

        

      

       

      (a) If
        to
        Senior Creditor at:

      

      Archer
        Capital Management, L.P.

      570
        Lexington Avenue

      40th
        Floor    

      New
        York,
        New York

      Attn.:
        Mr. Gary Katz

      Fax:
        (2112) 319-1032

      

      With
        a
        copy to:

      

      Greenberg
        Traurig, LLP

      One
        International Place

      Boston,
        Massachusetts 02110

      Attn:
        Jeffrey M. Wolf,. Esq.

      Fax:
        (617) 310-6001

      

      (b) If
        to
        Junior Agent at:

      

      Enable
        Growth Partners, L.P.

      One
        Ferry
        Building, Suite 255

      San
        Francisco, CA 94111

      Attn.:
            

      Fax:
        (415)  677-1580

      

      With
        a
        copy to:

      

      Feldman
        Weinstein & Smith LLP

      420
        Lexington Avenue

      New
        York,
        New York 10170

      Attn.:
        Michael F. Nertney, esquire

      Fax:
        (212) 401-4741

      

      

      (c) If
        to any
        other Junior Creditor, at its address or facsimile number set forth beneath
        its
        signature block on the signature pages to this Agreement.

      

      (d) if
        to any
        Debtor at:

      

      Capital
        Growth Systems, Inc.

      500
        W.
        Madison Street

      Suite
        2060

      Chicago,
        Illinois 60661

      Attn.:
        Patrick C. Shutt, CEO

      Fax:
        312-673-2422

      

      or
        to
        such other address as any party designates to the other parties in the manner
        herein prescribed. Any such notice shall be deemed to have been duly given
        or
        made (w) when delivered by hand against acknowledgment of receipt or (x)
        three
        business days after being deposited in the mail, postage prepaid or (y) one
        business day after being sent by priority overnight mail with an internationally
        recognized overnight delivery carrier or (z) if by telecopy or facsimile,
        when
        confirmed in writing by the sender’s facsimile device if sent on business day at
        the office of the recipient, otherwise on the next business
        day.

      
        
          
          

        

        
          -20-

          
            

          

        

        
          
          

        

      

       

      25. GOVERNING
        LAW.
        ANY
        DISPUTE BETWEEN TWO OR MORE PARTIES HERETO ARISING OUT OF, CONNECTED WITH,
        RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
        CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS, INSTRUMENTS
        OR
        AGREEMENTS EXECUTED IN CONNECTION HEREWITH AND WHETHER ARISING IN CONTRACT,
        TORT, EQUITY, OR OTHERWISE, WILL BE RESOLVED IN ACCORDANCE WITH THE SUBSTANTIVE
        LAWS (OTHER THAN CONFLICT OF LAW PROVISIONS AND PRINCIPLES, BUT INCLUDING
        SECTION 5-1401 AND SECTION 5-1402 OF THE GENERAL OBLIGATIONS LAW) OF THE
        STATE
        OF NEW YORK.

      

      26. Counterparts;
        Facsimile or E-mail Effectiveness.
        This
        Agreement may be executed in one or more counterparts, each of which will
        be
        considered an original counterpart, and will become a binding agreement when
        Senior Creditor, Junior Creditors and Debtors have each executed one
        counterpart. Each of the parties hereto agrees that a signature transmitted
        to
        Senior Creditor or its counsel by facsimile transmission or by electronic
        mail
        will be effective to bind the party so transmitting its signature.

      

      27. Deed
        of Priority.
        Senior
        Creditor and Junior Creditors hereby acknowledge and agree that the Deed
        of
        Priority is intended to supplement this Agreement, and no party shall take
        any
        action relative to the Deed of Priority that is inconsistent with the terms
        of
        this Agreement. In the event that any provision of the Deed of Priority
        conflicts with any provision of this Agreement, the terms of this Agreement
        shall control over the Deed of Priority in all respects. 

      

      28. Complete
        Agreement; Merger.
        This
        Agreement, including the schedules and exhibits hereto, contains the entire
        understanding of the parties hereto with regard to the subject matter contained
        herein. This Agreement supersedes all prior or contemporaneous negotiations,
        promises, covenants, agreements and representations of every nature whatsoever
        with respect to the matters referred to in this Agreement, all of which have
        become merged and finally integrated into this Agreement. Each of the parties
        understands that in the event of any subsequent litigation, controversy or
        dispute concerning any of the terms, conditions or provisions of this Agreement,
        no party will be entitled to offer or introduce into evidence any oral promises
        or oral agreements between the parties relating to the subject matter of
        this
        Agreement not included or referred to herein and not reflected by a writing
        included or referred to herein. 

      

      28. No
        Third Party Beneficiaries.
        This
        Agreement is solely for the benefit of Senior Creditor and its respective
        successors and assigns and Junior Creditors and their respective successors
        and
        assigns and is not intended to confer upon any Debtor or any other third
        party
        any rights or benefits.

      

      30. Severability.
        Wherever possible, each provision of this Agreement will be interpreted in
        such
        manner as to be effective and valid under applicable law, but if any provision
        of this Agreement will be prohibited by or invalid under applicable law,
        such
        provision will be ineffective to the extent of such prohibition or invalidity,
        without invalidating the remainder of such provision or the remaining provisions
        of this Agreement.

       

      31. Section
        Titles.
        The
        section titles contained in this Agreement are and will be without substantive
        meaning or content of any kind whatsoever and are not a part of the agreement
        between the parties hereto.

      

      32. No
        Strict Construction.
        The
        parties (directly and through their counsel) hereto have participated jointly
        in
        the negotiation and drafting of this Agreement. In the event an ambiguity
        or
        question of intent or interpretation arises, this Agreement will be construed
        as
        if drafted jointly by the parties hereto and no presumption or burden of
        proof
        will arise favoring or disfavoring any party by virtue of the authorship
        of any
        provisions of this Agreement.

      

      33. Further
        Assurances.
        Each
        party hereto will, at the expense of Debtors, and at any time and from time
        to
        time, promptly execute and/or authorize and deliver all further instruments
        and
        documents, and take all further action, that any other party hereto may
        reasonably request in order to perfect or otherwise protect any right or
        interest granted or purported to be granted hereby or to enable any party
        to
        exercise and enforce its rights and remedies hereunder, including, without
        limitation, appropriate amendments to financing statements authorized by
        any
        Debtor in favor of any Junior Creditor in order to refer to this Agreement
        (but
        this Agreement shall remain fully effective notwithstanding any failure to
        execute any additional documents or instruments).

      

      34. Expenses.
        Debtors
        shall pay to Senior Creditor, upon demand, the amount of any and all reasonable
        expenses, including, without limitation, the reasonable fees and expenses
        of
        counsel for Senior Creditor, which Senior Creditor may incur in connection
        with
        the exercise or enforcement of any of its rights or interests vis-à-vis any
        Debtor or any Junior Creditor, and all such amounts shall constitute part
        of the
        Senior Debt. Debtors shall pay to each Junior Creditors, upon demand, the
        amount
        of any and all reasonable expenses, including, without limitation, the
        reasonable fees and expenses of counsel for such Junior Creditor, which such
        Junior Creditor may incur in connection with the exercise or enforcement
        of any
        of its rights or interests vis-à-vis any Debtor or Senior Creditor, and all such
        amounts shall constitute part of the Junior Debt.

      

      35. Termination.
        This
        Agreement shall terminate on the date that the Senior Creditor Repayment.
        

      

      36. Independent
        Nature of Junior Creditors’ Obligations and Rights.
        The
        obligations of each Junior Creditor hereunder are several and not joint with
        the
        obligations of any other Junior Creditor, and no Junior Creditor shall be
        responsible in any way for the performance or non-performance of the obligations
        of any other Junior Creditor hereunder. Nothing contained herein, and no
        action
        taken by any Junior Creditor pursuant hereto, shall be deemed to constitute
        the
        Junior Creditors as a partnership, an association, a joint venture or any
        other
        kind of entity, or create a presumption that the Junior Creditors are in
        any way
        acting in concert or as a group with respect to such obligations or the
        transactions contemplated by this Agreement. Each Junior Creditor shall be
        entitled to independently protect and enforce its rights, including, without
        limitation, the rights arising out of this Agreement, and it shall not be
        necessary for any other Junior Creditor to be joined as an additional party
        in
        any proceeding for such purpose.

      

      

      [SIGNATURES
        BEGIN ON NEXT PAGE]

      
        
          
          

        

        
          -22-

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, this Debt Subordination and Intercreditor Agreement has
        been
        executed and delivered as of the date first written above

      

      

      

      Senior
        Creditor: ACF
        CGS, L.L.C., as
        Agent
        under the Senior Loan Agreement and as Senior Lender

      

      

      By:      

      Name:

      Title:
        

      [Signature
        Page to Debt Subordination and Intercreditor Agreement]

      
        
          
          

        

        
          -23-

          
            

          

        

        
          
          

        

      

       

      Junior
        Agent:    ENABLE
        GROWTH PARTNERS, L.P.

      

      

      By:      

      Name:

      Title:

      [Signature
        Page to Debt Subordination and Intercreditor Agreement]

      
        
          
          

        

        
          -24-

          
            

          

        

        
          
          

        

      

       

      Junior
        Creditors:   MIDSUMMER
        INVESTMENT, LTD.

      

      

      By:      

      Name:

      Title:

       

      Notice
        Address:

      

      Attn:
        ______________________ 

       

      [Signature
        Page to Debt Subordination and Intercreditor
        Agreement]Unassociated Document

     

    
      Exhibit
        10.17

       

    INTER-CREDITOR
      AGREEMENT

    

    This
      INTER-CREDITOR
      AGREEMENT
      (the
“Agreement”)
      is
      made and effective as of November __, 2008, by and between the holders of
      Capital Growth Systems, Inc.’s Original Issue Discount Secured Convertible
      Debentures Due March 2015signatory hereto (“Existing
      Creditors”)
      and
      the New Creditors (as defined below) (the Existing Creditors and the New
      Creditors are collectively referred to as the “Creditors”).

    

    RECITALS

    

    WHEREAS,
      the Existing Creditors are the parties to that certain Securities Purchase
      Agreement dated March 11, 2008 (the “Purchase
      Agreement”)
      by and
      between each Existing Creditor and Capital Growth Systems, Inc. (the
“Company”)
      and
      are the holders of Original Issue Discount Secured Convertible Debentures Due,
      subject to the terms therein, March 2015, with an aggregate total face amount
      of
      $30,877,552 executed by the Company in favor of the Existing Creditors (the
      “Existing
      Indebtedness”),
      and
      the Existing Creditors are the beneficiaries of that certain Security Agreement
      dated March 11, 2008 (the “Security
      Agreement”)
      between the Company and the Existing Creditors and Enable Growth Partners,
      LP
      (“Collateral
      Agent”),
      as
      collateral agent for the benefit of the Existing Creditors (“Collateral
      Agent”);

    

    WHEREAS,
      pursuant to that certain Securities Purchase Agreement dated November ___,
      2008,
      the investors signatory thereto (the “New
      Creditors”)
      will
      be purchasing $14,891,250, in the aggregate principal amount of Original Issue
      Discount Secured Convertible Debentures due, subject to the terms therein,
      seven
      years from their issuance, from the Company (the “New
      Indebtedness”
and
      together with the Existing Indebtedness, the “Indebtedness”);

    

    WHEREAS,
      the New Indebtedness will also be secured by all assets of the
      Company;

    

    WHEREAS,
      the New Indebtedness and the Existing Indebtedness will also be secured by
      all
      assets of the Company on a pari passu
      basis;

    

    WHEREAS,
      the Creditors wish to memorialize their agreements concerning their respective
      rights, duties and obligations to one another with respect to the security
      interests granted under the Indebtedness.

    

    NOW,
      THEREFORE, in consideration of the mutual covenants herein, their respective
      performances and benefits pertaining to the Indebtedness, and other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties agree as follows:

    

    
      	
              1.
                

            	
              Ranking.

            

    

    

    
      	 	
              1.1

            	
              The
                Indebtedness shall rank in the following order of priority: any sums
                secured or owed to the Existing Creditors or the New Creditors,
                pari
                passu
                and pro-rata
                in
                proportion to such Creditor’s outstanding principal amounts of
                Indebtedness at any given time that a determination needs to be made
                of
                pro-rata holdings. For clarity, as of the date of the closing of
                the
                issuance of the New Indebtedness, the pro-rata
                holdings of the Existing Creditors (collectively) are $30,877,552
                and the
                pro-rata
                holdings of the New Creditors (collectively) are $14,891,250. The
                Creditors authorize the Collateral Agent to perform its obligations
                under
                the Security Agreements pursuant to this provision. The Company and
                each
                Subsidiary agree that all payments of Obligations under the New
                Indebtedness and the Existing Indebtedness shall be made in accordance
                with the relative priorities and proportions set forth herein. In
                addition, the Company hereby agrees to cause all direct and indirect
                subsidiaries hereafter formed or acquired to agree to be bound by
                the
                terms of this Agreement.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              1.2

            	
              If
                an Event of Default (as defined under any Indebtedness) occurs and
                any
                party hereto receives payment from the Company not in compliance
                with this
                Agreement, the other parties hereto shall be immediately notified
                and such
                payment shall be shared with all of the other Creditors in proportion
                to
                their respective pro-rata holdings as set forth
                above.

            

    

    

    
      	 	
              1.3

            	
              If
                an Event of Default occurs and any party hereto collects proceeds
                pursuant
                to its rights under any Indebtedness, the other parties shall be
                immediately notified and such payment shall be shared with all of
                the
                other Creditors as set forth above.

            

    

    

    
      	 	
              1.4

            	
              Notwithstanding
                any other provision in this Agreement, adjustments shall be made
                between
                the Creditors from time to time to reflect the fact that any contingent
                obligation taken into account as an obligation under the Indebtedness
                becomes satisfied or incapable of maturing into an actual
                obligation.

            

    

    

    
      	 	
              1.5

            	
              Notwithstanding
                anything to the contrary contained in the Purchase Agreement or any
                document executed in connection with the New Indebtedness or the
                Existing
                Indebtedness and irrespective of: (i) the time, order or method of
                attachment or perfection of the security interests created in favor
                of
                Existing Creditors and the New Creditors, (ii) the time or order
                of filing
                or recording of financing statements or other documents filed or
                recorded
                to perfect security interests in any collateral; (iii) anything contained
                in any filing or agreement to which any Creditor now or hereafter
                may be a
                party; and (iv) the rules for determining perfection or priority
                under the
                Uniform Commercial Code or any other law governing the relative priorities
                of secured creditors, each Creditor acknowledges that (x) all other
                Creditors have a valid security interest in the Collateral and (y)
                the
                security interests of the Creditors in any Collateral pursuant to
                any
                outstanding Indebtedness shall be pari-passu with each
                other.

            

    

    

    
      	 	
              1.6

            	
              Each
                Creditor agrees not to commence any action or proceeding concerning
                the
                Indebtedness or the Collateral without providing at least one business
                day’s notice to all Creditors.

            

    

    

    
      	
              2.

            	
              Indemnification
                by Existing Creditors.
                Existing Creditors shall indemnify, defend, and hold harmless New
                Creditors against and in respect of any and all claims, demands,
                losses,
                costs, expenses, obligations, liabilities, damages, recoveries, and
                deficiencies, including interest, penalties, and reasonable professional
                and attorneys’ fees, including those arising from settlement negotiations,
                that New Creditors shall incur or suffer, which arise, result from,
                or
                relate to a breach of, or failure by Existing Creditors to perform
                under
                this Agreement.

            

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
              3.

            	
              Indemnification
                by New Creditors.
                New Creditors shall indemnify, defend, and hold harmless Existing
                Creditors against and in respect of any and all claims, demands,
                losses,
                costs, expenses, obligations, liabilities, damages, recoveries, and
                deficiencies, including interest, penalties, and reasonable professional
                and attorneys’ fees, including those arising from settlement negotiations,
                that Existing Creditors shall incur or suffer, which arise, result
                from,
                or relate to a breach of, or failure by New Creditors to perform
                under
                this Agreement.

            

    

     

    
      	
              4.

            	
               Miscellaneous.

            

    

    

    4.1 Assignment.
      The
      rights and obligations of the Creditors under this Agreement may be assigned
      to
      or assumed to a transferee of the Debentures (as defined in the Existing
      Creditors Securities Purchase Agreement and as defined in the New Creditors
      Securities Purchase Agreement), as applicable.

    

    4.2 Binding
      Effect.
      This
      Agreement shall be binding on, and shall inure to the benefit of, the parties
      to
      it and their respective heirs, legal representatives, and
      successors.

    

    4.3 Parties
      in Interest.
      Except
      as expressly provided in this Agreement, nothing in this Agreement, whether
      express or implied, is intended to confer any rights or remedies under or by
      reason of this Agreement on any persons other than the parties to it and their
      respective successors and assigns, nor is anything in this Agreement intended
      to
      relieve or discharge the obligation or liability of any third persons to any
      party to this Agreement, nor shall any provision give any third persons any
      right to subrogation or action over against any party to this
      Agreement.

    

    4.4 Entire
      Agreement.
      This
      Agreement constitutes the entire agreement between the parties pertaining to
      the
      subject matter contained in it and supersedes all prior and contemporaneous
      agreements, representations and understandings of the parties. 

    

    4.5 Amendment.
      No
      supplement, modification, or amendment of this Agreement shall be binding unless
      executed in writing by all the parties.

    

    4.6 Waiver.
      No
      waiver of any of the provisions of this Agreement shall be deemed, or shall
      constitute, a waiver of any other provision, whether or not similar, nor shall
      any waiver constitute a continuing waiver. No waiver shall be binding unless
      executed in writing by the party making the waiver.

    

    4.7 Notices.
      Notices
      given under this Agreement shall be delivered as set forth in the Purchase
      Agreement.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    4.8 Governing
      Law and Venue.
      This
      Agreement shall be construed in accordance with, and governed by, the laws
      of
      the State of New York, and any action or proceeding, including arbitration,
      brought by any party in which this Agreement is a subject, shall be brought
      in
      New York County, New York.

    

    4.9 Effect
      of Headings.
      The
      headings of the Sections of this Agreement are included for purposes of
      convenience only, and shall not affect the construction or interpretation of
      any
      of its provisions.

    

    4.10 Invalidity.
      Any
      provision of this Agreement which is invalid, void, or illegal, shall not
      affect, impair, or invalidate any other provision of this Agreement, and such
      other provisions of this Agreement shall remain in full force and
      effect.

    

    4.11 Counterparts.
      This
      Agreement may be executed in multiple counterparts, each of which may be
      executed by less than all of the parties and shall be deemed to be an original
      instrument which shall be enforceable against the parties actually executing
      such counterparts and all of which together shall constitute one and the same
      instrument. In lieu of the original documents, a facsimile transmission or
      copy
      of the original documents shall be as effective and enforceable as the original.
      

    

    4.12 Number
      and Gender.
      When
      required by the context of this Agreement, each number (singular and plural)
      shall include all numbers, and each gender shall include all
      genders.

    

    4.13 Further
      Assurances.
      Each
      party to this Agreement agrees to execute further instruments as may be
      necessary or desirable to carry out this Agreement, provided the party
      requesting such further action shall bear all related costs and
      expenses.

    

    4.14 Professional
      Fees and Costs.
      If any
      legal or equitable action, arbitration, or other proceeding, whether on the
      merits or on motion, are brought or undertaken, or an attorney retained, to
      enforce this Agreement, or because of an alleged dispute, breach, default,
      or
      misrepresentation in connection with any of the provisions of this Agreement,
      then the successful or prevailing party or parties in such undertaking (or
      the
      party that would prevail if an action were brought) shall be entitled to recover
      reasonable attorney's fees and other professional fees and other costs incurred
      in such action, proceeding, or discussions, in addition to any other relief
      to
      which such party may be entitled. The parties intend this provision to be given
      the most liberal construction possible and to apply to any circumstances in
      which such party reasonably incurs expenses.

    

    

    

    *************************

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    [SIGNATURE
      PAGE CGSY INTERCREDITOR AGREEMENT]

    

    IN
      WITNESS WHEREOF, this Agreement has been duly executed by the Creditors as
      of
      the day and year first written above.

    

    

    CREDITORS:

    

    Print
      Name: __________________________

    

    By:
      ________________________________

    Name:

    Title:

    

    Address
      for Notice:

    
       

      ________________________

    

    
       

      ________________________

    

    ACKNOWLEDGED
      AND AGREED TO:

    

    

    CAPITAL
      GROWTH SYSTEMS, INC.

    

    

    
      
        By:
          ________________________________
Name:

    

    Title:

    

    [INSERT
      NAMES AND SIGNATURE BLOCKS FOR SUBSIDIARIES]

    
      
        
        

      

      
        5

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