FIRST AMENDMENT TO MEMORANDUM OF UNDERSTANDING

This First  Amendment is made to the Memorandum of  Understanding  ("MOU") dated
December 3, 2004, by and between AirGATE  Technologies  Inc.  ("AGTI"),  a Texas
corporation with offices at 710 Century Parkway,  Allen, Texas 75013, and Borden
Chemical Inc. (now Hexion Specialty Chemicals,  Inc.,  ("Hexion"),  a New Jersey
corporation, with offices at 15115 Park Row, Suite 160, Houston, Texas 77084.

FOR AND IN CONSIDERATION of the mutual covenants and agreements contained in the
MOU and in this First Amendment, the parties hereby agree as follows:

1. Phases I and II have been  completed  pursuant to Sections 1.1 and 1.2 of the
MOU.

2. Pursuant to Section 1.3 and 1.4 of the MOU, the milestones, costs, budget and
due  dates  for  Phase  III  shall  be as shown on  ATTACHMENT  1 to this  First
Amendment.  Any savings in engineering  costs will be shared by the parties on a
50/50 basis.

3.  Pursuant to Section 3.0 of the MOU, it is agreed that the royalty to be paid
by Hexion shall be 7.5% of the Revenue received by Hexion from commercialization
of  the  Work   Product   during  the  first   seven  (7)  years   after   First
Commercialization,  after  which  the  royalty  shall be deemed  fully  paid up.
"Revenue"  means the net sales price  received  by Hexion  after  deducting  any
returns,  rebates,  discounts,  allowances,  taxes  and  transportation.  "First
Commercialization"  is defined as being achieved upon Hexion  receiving  payment
from Hexion  customers for ten (10) jobs run by AirGate  engineers and deemed by
Hexion, in its reasonable judgment,  to have been successful and to have met the
defined performance criteria of *** . The date of First  Commercialization shall
be designated by Hexion in writing to AGTI. For a six (6) month period following
such date, AGTI shall,  at no additional  cost to Hexion,  train up to three (3)
Hexion employees to operate the equipment and analyze the data and results.

4. The  first  sentence  of the  seventh  paragraph  of  Section 8 of the MOU is
amended to read as follows:

"AGTI  shall pay to Hexion a royalty  based on 7.5% of all  Revenue  received by
AGTI in the AGTI Field of Use."

5. A new Section 1.6 is added to the MOU, to read as follows:

"1.6 AGTI shall  provide  Hexion  monthly  reports  detailing  progress to date,
milestones,  hours and expenses. AGTI shall also establish a change order system
acceptable to Hexion to manage variations in hardware costs.



***Confidential  Information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.


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IN WITNESS WHEREOF,  the parties have executed this First Amendment effective as
of this 12th day of September, 2006.


AIRGATE TECHNOLOGIES, INC. HEXION SPECIALTY CHEMICALS, INC.

By: ____________________            By: __________________________________
         Michael L. Sheriff                          Jerry F. Borges
         CEO/President                               Vice President

























***Confidential  Information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.


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