Document:

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                                                                   Exhibit 10.58

                             SUBORDINATION AGREEMENT

         This subordination Agreement (this "Agreement") is entered into as of
February 12, 2003, by and among FIRST UNION NATIONAL BANK ("LENDER") and CAPCO
FINANCIAL COMPANY, A DIVISION OF CUPERTINO NATIONAL BANK ("CAPCO").

         WHEREAS, LENDER has or may hereafter have a security interest in the
present and future accounts, contract rights and other forms of obligation for
the payment of money arising out of the sale of goods or rendition of services,
arising after February 12, 2003 and proceeds thereof ("Accounts") of PACIFIC
COAST TECHNOLOGIES, INC. ("CLIENT") as collateral security for obligations of
CLIENT to LENDER, now existing or hereafter arising;

         WHEREAS, LENDER has or may hereafter have a security interest in the
present and future inventory, raw materials, work-in-process, finished goods and
proceeds thereof ("Inventory") of PACIFIC COAST TECHNOLOGIES, INC. ("CLIENT") as
collateral security for obligations of CLIENT to LENDER, now existing or
hereafter arising;

         WHEREAS, CAPCO also has or may hereafter have a security interest in
the Accounts and Inventory as collateral security for all obligations of CLIENT
to CAPCO, now existing or hereafter arising; and

         WHEREAS, in connection with, and in consideration of CAPCO's financing
of CLIENT, LENDER desires to subordinate its interest in the Accounts and
Inventory to CAPCO's interest, and CAPCO requires a first position security
interest in the Accounts and Inventory, it is hereby agreed as follows:

         1. All security interests which LENDER may now or hereafter have in the
Accounts and Inventory shall at all times be subordinate and junior in right of
priority to any security interest in the Accounts and Inventory that CAPCO may
at any time have.

         2. LENDER hereby agrees that until the obligations of CLIENT to CAPCO
shall have become due and payable (whether pursuant to their terms or as a
result of the occurrence of an event of default, or otherwise) and CAPCO shall
have commenced liquidation of the Accounts and Inventory, LENDER shall not
directly or indirectly seek to foreclose or realize upon the Accounts and
Inventory or LENDER's junior security interest therein.

         3. LENDER hereby consents to CAPCO's financing of CLIENT from time to
time upon such terms and for such amounts (whether less than or greater than the
face amount or actual value of the Accounts and Inventory) as may be agreed to
between CLIENT and CAPCO PROVIDED THAT THE TOTAL SUM MADE AVAILABLE TO CLIENT
WILL NOT EXCEED THREE MILLION DOLLARS, ($3,000,000.00), UNLESS APPROVED BY
LENDER IN WRITING. Such terms and loans may be amended, modified, extended or
terminated from time to time, all without notice to or further consent by
LENDER, WITH THE EXCEPTION OF THE PRECEDING SENTENCE. LENDER also consents to
the liquidation of the Accounts and Inventory, and any other security CAPCO may
hold for CLIENT's obligations to CAPCO, in such order and manner as CAPCO may
elect from time to time without notice to Lender. LENDER hereby waives any
rights (if any) that LENDER may have to require a marshalling of CLIENT's assets
upon liquidation of the Accounts and Inventory. LENDER hereby waives all other
notices of any kind to which LENDER may be entitled at any time in connection
with CAPCO's financing arrangements with CLIENT or the transactions contemplated
by this Agreement. IN THE EVENT OF DEFAULT OF CLIENT, CAPCO WILL NOTIFY LENDER
VIA CERTIFIED MAIL SIMULTANEOUS WITH ANY NOTICE OF DEFAULT TO CLIENT.

         4. This Agreement shall be effective regardless of the time or order of
attachment or manner of perfection of LENDER's and CAPCO's respective security
interests in the Accounts and Inventory. This Agreement shall be binding upon
LENDER's heirs, representatives, successors and assigns and shall inure to the
benefit of CAPCO's successors and assigns. This agreement shall be governed in
accordance with the laws of the State of Washington.

Form Date 6/97                  page 1                           Initial________
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         5. This agreement may not be terminated so long as any of CLIENT's
obligations to CAPCO, or any agreements under which CAPCO may, or may be
obligated to, extend credit to CLIENT, remain outstanding. No modification or
amendment hereof shall be binding unless in writing and signed by the parties
hereto.

         6. Execution of this document may contain multiple signature pages;
each shall be considered, when combined, as one signed and executed document.

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

CAPCO FINANCIAL COMPANY, A DIVISION OF CUPERTINO NATIONAL BANK

By:__________________________________

Its: __________________________________

FIRST UNION NATIONAL BANK

By:_________________________________

Its: _________________________________

PACIFIC COAST TECHNOLOGIES, INC.

By:_________________________________

Its: _________________________________

Date: _______________________________

Form Date 6/97                  page 2                           Initial________<PAGE>
                                                                   Exhibit 10.59

                     CROSS GUARANTY AND COLLATERAL AGREEMENT

      This Agreement is entered into between CAPCO Financial Company, a division
of Cupertino National Bank ("CAPCO"), and Pacific Aerospace & Electronics, Inc.
("Pacific") and its wholly owned subsidiaries, Cashmere Manufacturing Co., Inc.,
Northwest Technologies, Inc., and Pacific Coast Technologies, Inc. (collectively
"Subsidiaries").

      WHEREAS Pacific and the Subsidiaries have requested that CAPCO provide
funding and other services to them collectively under which CAPCO would purchase
accounts receivable generated and owned by each of the Subsidiaries and other
assets owed by Pacific and the Subsidiaries; and

      WHEREAS Pacific and the Subsidiaries desire that the receivables and other
assets purchased by CAPCO be pooled on a collective basis in order to create a
single large base against which advances will be made to Pacific and who in turn
may provide advances to the Subsidiaries;

      CAPCO is willing to provide these services on the terms and conditions set
forth below, and in addition to the terms and conditions set forth in other
agreements between CAPCO and the parties of even date, now, therefore, the
parties agree as follows:

      1. Each Subsidiary shall transfer, sell and assign its eligible invoices
and other assets ("Assets") to CAPCO pursuant to the terms set forth in
respective agreements between it and CAPCO.

      2. For the purpose of calculating the advances to be made available as a
result of purchased Assets, CAPCO shall be pool all Assets purchased from
Pacific or any Subsidiary into

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one account and shall calculate the borrowing base in the aggregate without
regard to the identity of the seller of each Asset.

      3. CAPCO shall make all advances that are available as a result of the
purchased Assets payable to Pacific, and Pacific shall have the sole discretion
and authority as to the distribution of the advances.

      4. In order to induce CAPCO into entering into this arrangement Pacific
and each of its subsidiaries agree that they shall be jointly and severally
liable for the following:

            a. All advances made by CAPCO to Pacific;

            b. All fees earned by CAPCO against outstanding advances;

            c. All collection costs incurred by CAPCO;

            d. All attorneys' fees as may be incurred by CAPCO in collecting any
account;

            e. Any and all such further charges as Pacific or any of its
subsidiaries shall be liable for pursuant to the terms of their respective
agreements with CAPCO; and

            f. CAPCO shall not be obligated to notify Pacific or any Subsidiary
of a default by any other party.

      5. Pacific and each of its subsidiaries hereby acknowledge receipt of
copies of all lending documents between CAPCO and Pacific and/or CAPCO and each
subsidiary.

      6. Neither Pacific nor any of its subsidiaries shall be permitted to
terminate this Agreement without the written consent of CAPCO, and CAPCO may
condition its agreement to terminate upon immediate payment in full of all sums
due and owing to CAPCO.

      7. This Agreement shall be construed according to the laws of the State of
Washington.

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      8. If any suit is commenced to enforce this Agreement suit shall be
brought in the Superior Court of King County Washington, and the prevailing
party shall be entitled to reasonable attorneys' fees.

      DATED this ____ day of February, 2003.

                                       CAPCO Financial Company, a division of
                                       Cupertino National Bank.

                                       By
                                         ---------------------------------------
                                       Its
                                          --------------------------------------

                                       Pacific Aerospace & Electronics, Inc.

                                       By
                                         ---------------------------------------
                                       Its
                                          --------------------------------------

                                       Cashmere Manufacturing Co., Inc.

                                       By
                                         ---------------------------------------
                                       Its
                                          --------------------------------------

                                       Northwest Technologies, Inc.

                                       By
                                         ---------------------------------------
                                       Its
                                          --------------------------------------

                                       Pacific Coast Technologies, Inc.

                                       By
                                         ---------------------------------------
                                       Its
                                          --------------------------------------

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