VIEWCAST COM INC
SUBORDINATION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>10
<FILENAME>d00579exv10w7.txt
<DESCRIPTION>SUBORDINATION AGREEMENT
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.7

                             SUBORDINATION AGREEMENT




      THIS SUBORDINATION AGREEMENT (this "AGREEMENT") is entered into as of the
11th day of October, 2002, by and among KELTIC FINANCIAL PARTNERS, LP (the
"LENDER"), MMAC COMMUNICATIONS CORP. (the "BORROWER"), and VIEWCAST.COM, INC.
(the "CREDITOR").

                                    RECITALS

      The Lender has established or is establishing certain credit facilities
with the Borrower, as evidenced by certain documents, instruments and agreements
all between the Lender and the Borrower (collectively, the "LOAN DOCUMENTS").
Unless otherwise defined herein, the capitalized terms used herein shall have
the same meaning ascribed thereto in the Loan Documents.

      The Creditor has extended or is extending or may in the future extend to
the Borrower certain loans, advances and extensions of credit, as evidenced by a
certain note or notes (collectively, the "CREDITOR DOCUMENTS").

      The Lender and the Creditor hereby desire to set forth the respective
rights and obligations each has as against the other with respect to the
Borrower.

      NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

      1. DEFINITIONS.

            "OBLIGATIONS" means all the following: (a) all principal of and
interest on the Revolving Loans and all other sums payable by Borrower or any
Affiliate under the terms of the Loan Documents; (b) all other indebtedness,
liabilities, obligations and agreements of every kind and nature of Borrower to
or with Lender or any Affiliate of Lender whether pursuant to the Loan
Documents, any of the other Loan Documents or otherwise, whether in the form of
refinancing, letters of credit, bankers acceptances, interest rate agreements,
hedge or currency contracts, guaranties, loans, interest, overdrafts, charges,
fees, expenses or otherwise, whether direct or indirect, whether acquired
outright, conditionally or as collateral security from another, whether absolute
or contingent, joint or several, liquidated or unliquidated, secured or
unsecured, and whether arising by operation of law or otherwise; (c) any
participation or interest of Lender or any Affiliate of Lender in any
indebtedness, liabilities, obligations or agreements of Borrower, or any
Guarantor to or with others; and (d) all out-of-pocket costs and expenses
incurred by Lender in connection with the Loan Documents at any time, including,
but not limited to, the expenses and reasonable fees of Lender's counsel,
whether of outside counsel or the allocated cost of Lender's in-house counsel;
in each case whether now existing or hereafter created, whether now or hereafter
contemplated, and including without limitation any future advances, renewals,
extensions



<PAGE>

modifications or changes in form of, or substitutions for, any of the items
described in the preceding clauses (a) through (d).

            "COLLATERAL" means any collateral now or in the future securing the
Obligations, including but not limited to claims against any guarantors of the
Obligations and any collateral securing such guarantees.

            "SUBORDINATED DEBT" means any loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Creditor of any
kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, whether arising under any agreement, instrument or
document, whether or not for the payment of money, whether arising by reason of
an extension of credit, loan or guarantee or in any other manner, whether direct
or indirect, absolute or contingent, joint or several, due or to become due, now
existing or hereafter arising (including any such obligations purchased or
otherwise acquired by Creditor), whether consisting of principal, interest,
expense payments, management and consulting fees, liquidation costs, attorneys'
fees and costs or otherwise, and all whether arising or created pursuant to the
Creditor Documents or otherwise.

      2. SUBORDINATION.

            (a) Subject to Section 3 hereof, the Creditor hereby irrevocably
subordinates and postpones the payment and the time of payment of all the
Subordinated Debt and all claims and demands arising therefrom to the
Obligations and directs that the Obligations be paid in full before the
Subordinated Debt.

            (b) Creditor shall: (i) make notations on the books of the Creditor
beside all accounts or on such other statements evidencing or recording any
Subordinated Debt to the effect that such Subordinated Debt is subject to the
provisions of this Agreement, (ii) furnish the Lender, upon Lender's request
from time to time, a statement of the account between the Creditor and the
Borrower representing the Subordinated Debt and copies of each of the Creditor
Documents, and (iii) give the Lender, upon its request, full and free access to
the Creditor's books pertaining only to such accounts with the right to make
copies thereof. Each and every Creditor Document shall bear a legend as set
forth in paragraph 13(c) hereof.

      3. PAYMENTS TO CREDITOR. Notwithstanding any other provision of this
Agreement, the Borrower shall be entitled to pay and the Creditor shall be
entitled to receive, so long as no Default or Event of Default has occurred
under the Loan Documents or would result from such payment, any payments owed by
the Borrower to the Guarantor resulting from the Guarantor's providing products
or services to the Borrower in the ordinary course of the Guarantor's business,
provided such arrangements are on terms at least as favorable as in an arm's
length transaction. Notwithstanding any other provision of this Agreement, the
Borrower shall be entitled to pay and the creditor shall be entitled to receive,
so long as no Default or Event of Default has occurred under the Loan Documents
or would result from such payment, and provided further that both before and
after such payment there is a minimum excess availability under the Revolving
Loan of $150,000 after giving effect to such payment and the payment of Accounts
Payable that are in



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excess of ninety (90) days past due, only all scheduled payments of interest (at
the current rate set forth in the Creditor Documents) and scheduled payments of
principal under the Subordinated Debt, and only when due. No prepayments of
principal on the Subordinated Debt or default interest thereon or costs and
expenses shall be permitted or made without the Lender's prior written consent.
After the occurrence of a Default or Event of Default under the Loan Documents
and receipt by the Creditor of written notice thereof from the Lender to the
Creditor, the Borrower shall not make, and the Creditor shall not receive, any
direct or indirect payments of principal, interest, costs or expenses under the
Subordinated Debt.

      4. SECURITY. The Borrower shall not grant and the Creditor shall not take
any lien on or security interest in any of the Borrower's property, now owned or
hereafter acquired or created, without the prior written consent of the Lender.

      5. STANDBY LIMITATION. Notwithstanding any breach or default by the
Borrower under the Creditor Documents, the Creditor shall not at any time or in
any manner: (a) foreclose upon, take possession of, or attempt to realize on any
Collateral, or proceed in any way to enforce any claims it has or may have
against the Borrower under the Subordinated Debt or otherwise, or (b) contest,
protest or object to any action taken by Lender under the Loan Documents or
otherwise, unless and until the Obligations have been fully and indefeasibly
paid and satisfied in full.

      6. BANKRUPTCY/PROBATE OF BORROWER. In the event a petition or action for
relief shall be filed by or against the Borrower under any federal bankruptcy
statute in effect from time to time, or under any other law relating to
bankruptcy, insolvency, reorganization, receivership, general assignment for the
benefit of creditors, moratorium, creditor composition, arrangement or other
relief for debtors, the Lender's claim (secured or unsecured) against the assets
or estate of the Borrower for repayment of the Obligations shall be indefeasibly
paid in full before any payment is made to the Creditor on the Subordinated
Debt, whether such payment is in cash, securities or any other form of property
or rights. The Lender may, in its discretion, file a proof of claim for or
collect the Creditor's claim first for the benefit of the Lender to the extent
of the unpaid Obligations and then for the benefit of the Creditor (but without
creating any duty or liability to the Creditor other than to remit to the
Creditor distributions, if any, actually received in such proceedings after the
Obligations have been paid and satisfied in full) directly from the receiver,
trustee, custodian, liquidator or representative of the Borrower's estate in
such proceeding. The Borrower and the Creditor shall furnish all assignments,
powers or other documents requested by the Lender to facilitate such direct
collection by the Lender.

      7. RECEIPT OF PAYMENTS BY CREDITOR. Should the Creditor directly or
indirectly receive any payment or distribution not permitted by the provisions
of this Agreement or any Collateral or proceeds thereof, prior to the full and
indefeasible payment and satisfaction of the Obligations and the termination of
all financing arrangements between the Lender and the Borrower, the Creditor
will deliver the same to the Lender in the form received (except for the
endorsement or assignment of the Creditor where necessary), for application to
the Obligations in such order and manner as the Lender may elect. Until so
delivered, the Creditor shall hold the same, in trust, for the Lender as



                                      -3-
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property of the Lender, and shall not commingle such property of the Lender with
any other property held by the Creditor. In the event the Creditor fails to make
any such endorsement or assignment, the Lender, or any of its officers or
employees on behalf of the Lender, is hereby irrevocably authorized in its own
name or in the name of the Creditor to make such endorsement or assignment and
is hereby irrevocably appointed as the Creditor's attorney-in-fact for those
purposes.

      8. LENDER'S RIGHTS.

            a) The Creditor hereby consents that at any time and from time to
time, without further consent of or notice to the Creditor and without in any
manner affecting, impairing, lessening or releasing any of the provisions of
this Agreement, the Lender may, in its sole discretion: (i) renew, compromise,
extend, expand, postpone, waive, accelerate, terminate, change the payment terms
of, or otherwise modify the Obligations or amend, renew, replace or terminate
the Loan Documents or any and all other agreements now or hereafter related to
the Obligations; (ii) extend credit to the Borrower in whatever amount on a
secured or unsecured basis or take other support for the Obligations and
exchange, enforce, waive, sell, transfer, collect, adjust or release any such
security or other support or any part thereof; (iii) apply any and all payments
or proceeds of such security or other support and in any order or manner as the
Lender, in its discretion, may determine; and (iv) release or substitute any
party liable on the Obligations, any guarantor of the Obligations, or any other
party providing support for the Obligations.

            b) This Agreement will not be affected, impaired or released by any
delay or failure of the Lender to exercise any of its rights and remedies
against the Borrower or any guarantor or under any of the Obligations or against
any Collateral, by any failure of the Lender to take steps to perfect or
maintain its lien on, or to preserve any rights to, any Collateral by any
irregularity, unenforceability or invalidity of any of the Obligations or any
part thereof or any security or guarantee therefor, or by any other event or
circumstance which otherwise might constitute a defense available to, or a
discharge of, the Borrower or a subordinated creditor. The Creditor hereby
waives demand, presentment for performance, protest, notice of dishonor and of
protest with respect to the Subordinated Debt and the Collateral, notice of
acceptance of this Agreement, notice of the making of any of the Obligations and
notice of default under any of the Obligations.

            c) NOTHING IN THIS AGREEMENT WILL OBLIGATE THE LENDER TO GRANT
CREDIT TO, OR CONTINUE FINANCING ARRANGEMENTS WITH, THE BORROWER.

      9. CONTINUING AGREEMENT. This is a continuing agreement and will remain in
full force and effect until all of the Obligations and all of the Creditor's
obligations and undertakings to the Lender have been fully performed and
indefeasibly satisfied and until all the Loan Documents have been terminated.
This Agreement will continue to be effective or will be automatically
reinstated, as the case may be, if at any time payment of all or any part of the
Obligations is rescinded or must



                                      -4-
<PAGE>

otherwise be returned by the Lender upon insolvency, bankruptcy, or
reorganization of the Borrower or otherwise, all as though such payment had not
been made.

      10. NO CHALLENGE TO LIENS. The Creditor agrees that it will not make any
assertion, claim or argument in any action, suit or proceeding of any nature
whatsoever in any way challenging the priority, validity or effectiveness of the
liens and security interests granted to the Lender.

      11. DISPOSITION OR RELEASE OF COLLATERAL.

            a) If at any time or from time to time the Collateral, or any
portion thereof, is in any manner sold or otherwise transferred, the Creditor's
consent to such disposition shall be automatically and irrevocably given if the
Lender, in its sole discretion and for any reason, consents to such disposition,
and in any event the Creditor shall not be entitled to receive any proceeds
(cash or non-cash) of such disposition unless and until the Obligations have
been indefeasibly paid in full.

            b) If, at any time and for any reason, the Lender releases its lien
on the Collateral, or any portion thereof, the Creditor shall likewise release
its lien on the property so released from the Lender's lien, if the Creditor has
obtained such a lien. In the event the Creditor fails to release its lien on
such property as aforesaid, the Lender, or any of its officers or employees on
behalf of the Lender, is hereby irrevocably authorized in its own name or in the
name of the Creditor to execute and deliver such releases and is hereby
irrevocably appointed as the Creditor's attorney-in-fact for said purpose.

      12. ORDER OF PROCEEDINGS. Nothing in this Agreement is intended to compel
the Lender or the Creditor at any time to declare the Borrower in default or
compel the Lender to proceed against or refrain from proceeding against any
Collateral in any order or manner. All rights and remedies of the Lender with
respect to the Collateral, the Borrower, and any other obligors concerning the
Obligations are cumulative and not alternative.

      13. REPLACEMENT FINANCING; ASSIGNMENT OF SUBORDINATED DEBT.

            a) The provisions hereof shall inure to the benefit of any financial
institution obtained by the Borrower or the Lender to provide replacement
working capital or other financing for the Borrower in place of the Lender,
regardless of whether any such replacement lender provides its own financing or
succeeds to the Lender's financing by assignment. If requested by such
replacement lender, the Creditor shall execute with such replacement lender a
subordination agreement substantially similar to this Agreement.



                                      -5-
<PAGE>

            b) The Creditor also agrees that as a prior condition of any
assignment of any of its interests under any of the Creditor Documents, the
Creditor shall require the assignee to acknowledge this Agreement and agree, in
writing, to be bound by the terms and conditions hereof.

            (c) Each and every Creditor Document shall bear the following
legend, or a similar legend acceptable to Lender, in boldface type:

            This Note is subject to the terms of a Subordination Agreement in
            favor of Keltic Financial Partners, LP. Notwithstanding any contrary
            statement contained in the within instrument, no payment on account
            of any obligation arising from or in connection with the within
            instrument or any related agreement (whether of principal, interest
            or otherwise) shall be made, paid, received or accepted except in
            accordance with the terms of said Subordination Agreement.

      14. FINANCING OF FIDUCIARY. In the event of a bankruptcy, reorganization,
other insolvency or court proceeding for the Borrower commences, the Lender
shall have the option (in its sole and absolute discretion) to continue to
provide financing (on terms acceptable to the Lender) of the trustee, other
fiduciary, or of the Borrower as a debtor-in-possession, if the Lender deems
such financing to be in its best interests. The subordination and lien priority
provisions of this Agreement shall continue to apply to all advances made during
the pendency of such court proceedings, so that the Lender shall have a prior
lien on all Collateral, created before or during such court proceeding, to
secure all Obligations, whether created before or during such court proceeding.
The Creditor hereby waives any right it may have to object to financing by the
Lender during the pendency of such court proceeding and the Creditor's consent
to such financing shall not be required regardless of whether the court
supervising such proceeding approves, grants or allows adequate protection to
the Creditor.

      15. INVESTIGATION OF PARTIES. The Creditor has entered into the Creditor
Documents with the Borrower and the Lender has entered into the Loan Documents
with the Borrower and the Creditor and the Lender have entered into this
Agreement each upon its own independent investigation, and each makes no
warranty or representation as to each other with respect to the financial
condition of the Borrower, or its ability to repay its loans to the Creditor or
the Lender in the future. Nothing in this Agreement shall be deemed to
constitute this Agreement as a security or create a joint venture or partnership
between the Creditor and the Lender for any purpose.

      16. IMPROPER ACTION BY CREDITOR. If the Creditor, the Borrower or both,
contrary to this Agreement, make, attempt to or threaten to allow the Creditor
to exercise its remedies against the Borrower under the Creditor Documents, or
make any payment or take any action contrary to this Agreement, the Lender may
restrain or enjoin the Creditor and the Borrower from so doing, it being
expressly understood and agreed by the Creditor and the Borrower that: (i) the
Lender's damages from their actions may at that time be difficult to ascertain
and may be irreparable, and (ii) the Creditor and the Borrower waive any defense
or claim that the Lender or the Borrower cannot demonstrate damages or can be
made whole by the awarding of damages.



                                      -6-
<PAGE>

      17. INDEMNIFICATION OF LENDER. The Creditor agrees to indemnify and to
hold the Lender, its officers, directors, agents and employees harmless for any
and all losses, damages, liabilities, expenses and obligations, including
reasonable attorneys' fees and expenses, as they arise, relating to actions of
the Creditor taken contrary to this Agreement.

      18. NOTICES. All notices, demands, requests, consents, approvals and other
communications required or permitted hereunder must be in writing and will be
effective upon receipt. Such notices and other communications may be
hand-delivered, sent by facsimile transmission with confirmation of delivery
with a copy sent by first-class mail, or sent by nationally recognized overnight
courier service, to a party's address set forth below or to such other address
as any party may give to the other in writing for such purpose:

To the Lender:                       Keltic Financial Partners, LP
                                     555 Theodore Fremd Avenue
                                     Suite C-207
                                     Rye, New York 10580
                                     Attention: John P. Reilly, Managing Partner
                                     Telephone No.: (914) 921-3555, Ext. 208
                                     Facsimile No.: (914) 921-1154

To the Borrower:                     MMAC Communications Corp.
                                     Attn: Alex Roque, Chief Financial Officer
                                     900 Huyler Street
                                     Teterboro, New Jersey 07608
                                     Telephone No.: (201) 440-8585
                                     Facsimile No.: (201) 440-1311

To the Creditor:                     ViewCast.com, Inc.
                                     Attn: Chief Financial Officer
                                     17300 Dallas Parkway, Suite 2000
                                     Dallas, Texas 75248
                                     Telephone No.: (972) 488-7200
                                     Facsimile No.: (972) 488-7299

With a copy to:                      Haynes and Boone, LLP
                                     Attn: Janice V. Sharry, Esq.
                                     901 Main Street, Suite 3100
                                     Dallas, Texas 75202
                                     Telephone No.: (214) 651-5562
                                     Facsimile No.: (214) 200-0676

      19. PRESERVATION OF RIGHTS. No delay or omission on the Lender's part to
exercise any right or power arising hereunder will impair any such right or
power or be considered a waiver of any



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such right or power, nor will the Lender's action or inaction impair any such
right or power. The Lender's rights and remedies hereunder are cumulative and
not exclusive of any other rights or remedies which the Lender may have under
other agreements, at law or in equity. Nothing in this Agreement is intended to
modify, alter, reduce or impair any rights which the Lender or the Creditor may
have against the Borrower under the Loan Documents or the Creditor Documents,
respectively, or under any other agreement between them, or either of them, and
the Borrower.

      20. ILLEGALITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

      21. CHANGES IN WRITING. No modification, amendment or waiver of any
provision of this Agreement nor consent to any departure by the Borrower or the
Creditor therefrom, will be effective unless made in a writing and signed by the
Lender, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.

      22. ENTIRE AGREEMENT. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.

      23. COUNTERPARTS. This Agreement may be signed in any number of
counterpart copies and by the parties hereto on separate counterparts, but all
such copies shall constitute one and the same instrument. Delivery of an
executed counterpart of a signature page to this Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart.
Any party so executing this Agreement by facsimile transmission shall promptly
deliver a manually executed counterpart, provided that any failure to do so
shall not affect the validity of the counterpart executed by facsimile
transmission.

      24. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and inure
to the benefit of the Borrower, the Creditor and the Lender and their respective
heirs, executors, administrators, successors and assigns; provided, however,
that neither the Borrower nor the Creditor may assign this Agreement in whole or
in part without the Lender's prior written consent and the Lender at any time
may assign this Agreement in whole or in part. No claims or rights are intended
to be created hereunder for the benefit of the Borrower or any alleged third
party beneficiary hereof.

      25. INTERPRETATION. In this Agreement, unless the parties otherwise agree
in writing, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; the word "or" shall be deemed to
include "and/or", the words "including", "includes" and "include" shall be
deemed to be followed by the words "without limitation"; references to articles,
sections (or subdivisions of sections) or exhibits are to those of this
Agreement unless otherwise indicated; and references to agreements and other
contractual instruments shall be



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<PAGE>

deemed to include all subsequent amendments and other modifications to such
instruments, but only to the extent such amendments and other modifications are
not prohibited by the terms of this Agreement. Section headings in this
Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose. If this Agreement is
executed by more than one party as Borrower or by more than one party as
Creditor, the obligations of such persons or entities hereunder will be joint
and several.

      26. GOVERNING LAW AND JURISDICTION. This Agreement has been delivered to
and accepted by the Lender and will be deemed to be made in the State where the
Lender's office indicated above is located. THIS AGREEMENT WILL BE INTERPRETED
AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE
WITH THE LAWS OF THE STATE WHERE THE LENDER'S OFFICE INDICATED ABOVE IS LOCATED,
EXCLUDING ITS CONFLICT OF LAWS RULES. Each of the Borrower and the Creditor
hereby irrevocably consents to the exclusive jurisdiction of any state or
federal court in the county or judicial district where the Lender's office
indicated above is located; provided that nothing contained in this Agreement
will prevent the Lender from bringing any action, enforcing any award or
judgment or exercising any rights against the Borrower or the Creditor
individually, against any security or against any property of the Borrower
within any other county, state or other foreign or domestic jurisdiction. The
parties hereto agree that the venue provided above is the most convenient forum
for each of the parties. Each of the Borrower and the Creditor waives any
objection to venue and any objection based on a more convenient forum in any
action instituted under this Agreement.

      27. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE CREDITOR AND THE
LENDER IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY
DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER, THE CREDITOR AND THE LENDER
ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

                     [END OF TEXT - SIGNATURE PAGE FOLLOWS]



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<PAGE>

      WITNESS the due execution hereof as a document under seal, as of the date
first written above.

                                       BORROWER:

WITNESS/ATTEST:                        MMAC COMMUNICATIONS CORP.


/s/ FREDERICK B. COWEN                 By: /s/ LAURIE L. LATHAM
----------------------------------        --------------------------------------
Name: Frederick B. Cowen                  Laurie L. Latham
Title: Secretary                          Chief Financial Officer


                                       CREDITOR:
WITNESS/ATTEST:
                                       ViewCast.com, Inc.

/s/ FREDERICK B. COWEN                 By: /s/ LAURIE L. LATHAM
----------------------------------        --------------------------------------
Name: Frederick B. Cowen                  Laurie L. Latham
Title: Secretary                          Chief Financial Officer


                                       LENDER:

                                       KELTIC FINANCIAL PARTNERS, LP
                                       By:  Keltic Financial Services LLC,
                                            General Partner

                                       By: /s/ JOHN P. REILLY
                                          --------------------------------------
                                          Name: John P. Reilly
                                          Title: Managing Partner



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