Filed by Automated Filing Services Inc. (604) 609-0244 - Aegis Industries , Inc. - Exhibit 10.3






Exhibit 10.3 

[FORM OF] TERM LOAN NOTE

	$5,000,000 	June __, 2007 


          FOR
VALUE RECEIVED, the undersigned, AEGIS INDUSTRIES, INC., a Nevada
corporation (“Maker”), does hereby promise to pay to the order of
THOMAS KEENAN VENTURES, LLC (“Holder”), at its office at
_______________________________ , or at such other place as the holder hereof
(including Holder, hereinafter referred to as “Holder”) may designate,
the principal sum of FIVE MILLION DOLLARS ($5,000,000), in Dollars and in
immediately available funds, together with interest on the unpaid principal
under this Note beginning on the date hereof, before and after maturity (by
acceleration or otherwise) or judgment (but subject to the default rate of
interest set forth below), at the per annum rates described below, and to pay
all taxes (except taxes on the overall net income or gross receipts of Holder)
levied or assessed on this Note or the debt evidenced hereby against Holder, and
together with all costs, expenses and attorneys' and other professional fees
incurred in any action to collect and/or enforce this Note or other agreement
relating to this Note or in any litigation or controversy arising from or
connected with this Note. 

          This
Note has been executed and delivered subject to the following terms and
conditions: 

1.       
Definitions.

          As
used above, in this Paragraph 1 and elsewhere in this Note, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined): 

          “Business
Day” means any day that is not a Saturday, Sunday or a day on which commercial
banks located in Hartford, Connecticut are required or authorized by law to
close. 

          “Change
of Control” means any one of the following events: (i) the consummation of a
merger, reorganization, consolidation or sale or other transfer of all or
substantially all of the assets of the Maker or all or substantially all of the
combined voting power of the Maker’s then outstanding voting securities
(“Outstanding Voting Securities”) (each a “Corporate
Transaction”), excluding, however, such a Corporate Transaction pursuant
to which all or substantially all of the persons who are the beneficial owners
of the Outstanding Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 50% of the
Outstanding Voting Securities of the corporation or other entity resulting from
such Corporate Transaction. 

          “Default
Rate” shall have the meaning assigned to it in Section 2(b) hereof. 

          “Dollar”
and the sign “$” mean lawful money of the United States of America. 

          “Event
of Default” shall have the meaning assigned to that term in Paragraph 7 hereof.





          “Federal
Funds Rate” means, for any day, the rate per annum equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate (rounded upward, if
necessary, to a whole multiple of 1/100 of 1%) charged to banking institutions
on such day on such transactions as determined by Holder. 

          “Guaranty”
means that certain Continuing Guaranty Agreement of Guarantor dated as of even
date herewith in favor of Holder. 

          “Guarantor”
means Aegis Merger Corporation.

          “Loan”
means the loan evidenced by this Note. 

          “Loan
Documents” means this Note, the Guaranty and any other documents relating
thereto. 

          “Maturity
Date” means March 31, 2008. 

          “Merger
Documents” means that certain Agreement and Plan of Merger dated as of even date
herewith by and among Z5 Technologies LLC, Aegis Merger Corporation, Aegis
Industries, Inc. and Thomas Keenan Ventures, LLC, and any other related document
including, but not limited to, the Related Documents, the New Employment
Agreements and the Registration Rights Agreement. 

          “Obligations”
means all advances to, and debts, liabilities, obligations, covenants and duties
of, Maker arising under any Loan Document or otherwise with respect to any loan
by Holder to Maker or under the Merger Documents, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against Maker or any affiliate thereof
of any proceeding under any debtor relief laws naming such person as the debtor
in such proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding, and all reasonable out-of-pocket costs, expenses,
fees, charges and attorneys’, paralegals’ and professional fees incurred in
connection with any of the foregoing, or in any way connected with, involving or
relating to the preservation, enforcement, protection or defense of, or
realization under this Agreement, the Note, any of the other Loan Documents or
the Merger Documents, any related agreement, document or instrument, and the
rights and remedies hereunder or thereunder. 

          “Principal
Repayment Date” means each date a payment of principal is due pursuant to
Section 3(b).

          2.           Interest
Rates, Interest Periods, Default Rate, Calculation of Interest, Lawful
Interest. 

2 




          (a)           Pre-default
Rates. Subject to the terms of Paragraph 2(b), the Loan shall bear interest
at a rate per annum equal to five percent (5%).

           (b)           Default
Rate. Upon the occurrence of an Event of Default or after maturity (by
acceleration or otherwise) or after judgment has been rendered on this Note, the
unpaid principal balance of this Note shall automatically and without notice
bear interest at the lesser of (i) thirteen percent (13%), or (ii) the maximum
rate per annum permitted by applicable law, if any (the “Default Rate”).


          (c)           Calculation
of Interest. All computations of interest under this Note shall be made on
the basis of a 360 day year and the actual number of days elapsed.

          (d)          
Lawful Interest. Notwithstanding any provisions of this Note, it is the
understanding and agreement of Maker and Holder that the maximum rate of
interest to be paid by Maker to Holder shall not exceed the highest or the
maximum rate of interest permissible to be charged under the laws of the State
of Connecticut. In this regard, it is expressly agreed that it is the intent of
Maker and Holder in the execution, delivery and acceptance of this Note to
contract in strict accordance with the laws of the State of Connecticut (without
regards to its conflict of laws provisions) from time to time in effect. If, at
any time, the rate of interest, together with all amounts which constitute
interest and which are reserved, charged or taken by Holder as compensation for
fees, services or expenses incidental to the making, negotiating or collection
of the Loan, shall be deemed by any competent court of law or other governmental
authority to exceed the maximum rate of interest permitted to be charged by
Holder to Maker, then, during such time as such rate of interest would be deemed
excessive, that portion of each sum paid attributable to that portion of such
interest rate that exceeds the maximum rate of interest so permitted shall be
deemed a voluntary prepayment of principal. 

3.        Payments.


          (a)           Interest.
Interest on the Loan shall be due and payable in Dollars in immediately
available funds on each Principal Repayment Date. 

          (b)          
Principal. Principal shall be due and payable in Dollars in immediately
available funds as follows: (i) one million two hundred fifty thousand dollars
($1,250,000) on August 15, 2007; (ii) one million two hundred fifty thousand
dollars ($1,250,000) on November 15, 2007; (iii) one million two hundred fifty
thousand dollars ($1,250,000) on February 15, 2008; and (iv) one (1) final
installment in an amount equal to the then outstanding principal on the Maturity
Date. Notwithstanding anything herein to the contrary, unless sooner accelerated
as a result of the occurrence of an Event of Default, the entire outstanding
indebtedness under this Note, including, but not limited to, outstanding
principal together with any and all accrued and unpaid interest and any other
amounts due hereunder, shall be due and payable in full, in Dollars and in
immediately available funds on the Maturity Date. 

          (c)           Method
of Payment. Maker shall make each payment due under this Note to Holder not
later than 3:00 P.M., Stamford, Connecticut time on the date when due in Dollars
in immediately available funds, without setoff, defense or counterclaim.
Whenever any payment to be made under this Note shall be stated to be due on a
day which is not a Business Day, such 

3 




payment shall be made on the next succeeding Business Day, and
such extension of time shall be included in the computation of the payment of
interest. 

4.      Late Charge.
Holder may collect a late charge not to exceed five (5) percent of any
installment of interest or payment of principal or any other amount due to
Holder, which is not paid or reimbursed in full, in Dollars and in immediately
available funds by Maker within ten (10) days of the due date thereof. 

5.      Prepayment. 

          (a)           Voluntary.
Maker may, at its option and upon ten (10) Business Days' prior written notice,
prepay principal evidenced by this Note, in whole or in part, on the condition
that Maker shall pay all accrued interest on the principal being paid to the
date of such prepayment. 

          (b)          
Partial Prepayments. Any and all partial prepayments of the Loan shall be
applied to principal installments due hereunder in the inverse order of maturity
and shall not relieve Maker's obligation to make regularly-scheduled principal
and other payments hereunder. 

6.      RESERVED 

7.      Events of Default;
Remedies. Each of the following shall constitute an “Event of
Default” hereunder: 

          (a)           Maker
shall fail to pay the principal of, premium, if any, or interest on this Note,
or any amount of any fee, or any other indebtedness owing to Holder when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or by acceleration thereof or otherwise; or


          (b)           immediately
upon the termination of the employment of Brendan Reilly without Cause or for
Good Reason (as such terms are defined in the Employment Agreement by and
between Brendan Reilly and the Maker, dated as of the date hereof); or

          (c)           Maker
and/or Guarantor shall admit to Holdings its inability to pay its debts as they
mature, shall fail generally to pay its debts as they become due, or shall make
an assignment for the benefit of its or any of its creditors; or 

          (d)           Proceedings
in bankruptcy or for reorganization of Maker and/or Guarantor or for the
readjustment, arrangement, composition or adjustment of any of Maker's or
Guarantor's debts under the federal bankruptcy act, as amended, or any part
thereof, or under any other laws, whether state or federal, for the relief of
debtors, now or hereafter existing, (i) shall be commenced by Maker and/or
Guarantor, or (ii) shall be commenced against Maker and/or Guarantor and shall
not be discharged, vacated, dismissed, or stayed within forty-five (45) calendar
days of their commencement, or Maker and/or Guarantor shall discontinue its
business or materially change the nature of its business; or 

          (e)          
A receiver, liquidator or trustee shall be appointed by Maker and/or Guarantor
or by Maker and/or Guarantor for any substantial part of the assets of Maker or
Guarantor, or any proceedings shall be instituted by Maker and/or Guarantor for
the dissolution or the full or partial 

4 




liquidation of Maker and/or Guarantor, or Maker and/or
Guarantor shall discontinue its business or materially change the nature of its
business; or 

          (f)           Guarantor
shall revoke its Guaranty or the Guaranty is otherwise terminated for any reason
whatsoever; or 

          (g)          
In the event of a Change of Control of the Maker. 

          Upon
the occurrence and during the continuance of any Event of Default which is not
cured in a period of seven (7) calendar days, Holder may declare all outstanding
indebtedness hereunder to be forthwith due and payable, whereupon all
indebtedness hereunder shall become and be forthwith due and payable, without
presentment, demand, protest, or any other notice of any kind, all of which are
hereby expressly waived by Maker, anything contained herein or in any other Loan
Document to the contrary notwithstanding; provided, however, that upon
the occurrence of any Event of Default described in Paragraphs 7(c), Paragraph
7(d), and Paragraph 7(e) herein, all outstanding indebtedness hereunder,
including all interest, and all such other amounts payable under this Note and
the other Loan Documents shall become automatically due and payable, without
presentment, demand, protest, or any other notice of any kind, all of which are
hereby expressly waived by Maker, anything contained herein or in any Loan
Document to the contrary notwithstanding. 

          The
occurrence of an Event of Default under this Note shall constitute an event of
default under or within the meaning of any other Loan Documents and vice versa,
and shall also entitle Holder to initiate and pursue, in Holder's sole
discretion exercised on one or more occasions, and all and any rights and
remedies available to Holder hereunder and under any of the other Loan
Documents, without notice to Maker (except as otherwise provided in any Loan
Document). 

8.      Prejudgment Remedy and
Other Waivers. TO INDUCE HOLDER TO ENTER INTO THE COMMERCIAL LOAN
TRANSACTIONS EVIDENCED BY THIS NOTE, AND THE OTHER LOAN DOCUMENTS, MAKER AGREES
THAT THIS IS A COMMERCIAL TRANSACTION AND NOT A CONSUMER TRANSACTION, AND
WAIVES ANY RIGHT TO NOTICE AND A HEARING UNDER CHAPTER 903a OF THE CONNECTICUT
GENERAL STATUTES, AS AMENDED, OR UNDER ANY OTHER FEDERAL OR STATE STATUTE OR
STATUTES OR FOREIGN LAWS AFFECTING PREJUDGMENT REMEDIES, AND AUTHORIZES HOLDER'S
ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER, PROVIDED
THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER, AND WAIVES ANY CLAIM IN
TORT, CONTRACT OR OTHERWISE AGAINST HOLDER'S ATTORNEY WHICH MAY ARISE OUT OF
SUCH ISSUANCE OF A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER. FURTHER,
IN THE EVENT HOLDER SEEKS TO TAKE POSSESSION OF ANY OR ALL OF THE COLLATERAL BY
COURT PROCESS OR OTHER METHOD AVAILABLE UNDER THE LAW, MAKER IRREVOCABLY WAIVES
ANY BOND AND ANY SURETY OR SECURITY RELATING THERETO REQUIRED BY ANY STATUTE,
COURT RULE OR OTHERWISE AS AN INCIDENT TO SUCH POSSESSION, AND WAIVES ANY DEMAND
FOR POSSESSION PRIOR TO THE COMMENCEMENT OF ANY SUIT OR ACTION TO RECOVER WITH
RESPECT 

5 




THERETO. SPECIFICALLY, MAKER RECOGNIZES AND UNDERSTANDS THAT
THE EXERCISE OF HOLDER'S RIGHTS DESCRIBED ABOVE MAY RESULT IN THE ATTACHMENT OF
OR LEVY AGAINST MAKER'S PROPERTY, AND SUCH WRIT FOR A PREJUDGMENT REMEDY WILL
NOT HAVE THE PRIOR WRITTEN APPROVAL OR SCRUTINY OF A COURT OF LAW OR OTHER
JUDICIAL OFFICER AND MAKER WILL NOT HAVE THE RIGHT TO ANY NOTICE OR PRIOR
HEARING WHERE MAKER MIGHT CONTEST SUCH A PROCEDURE. THE INTENT OF MAKER IS TO
GRANT TO HOLDER FOR GOOD AND VALUABLE CONSIDERATION THE RIGHT TO OBTAIN SUCH A
PREJUDGMENT REMEDY AND TO EXPRESS ITS BELIEF THAT ANY SUCH PREJUDGMENT REMEDY
OBTAINED IS VALID AND CONSTITUTIONAL UNLESS A COURT OF COMPETENT JURISDICTION
SHOULD DETERMINE OTHERWISE. FURTHER, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, MAKER HEREBY WAIVES DEMAND, PRESENTMENT FOR PAYMENT, PROTEST,
NOTICE OF PROTEST, NOTICE OF DISHONOR, DILIGENCE IN COLLECTION, NOTICE OF
NONPAYMENT OF THIS NOTE AND ANY AND ALL NOTICES OF A LIKE NATURE. FURTHER, TO
THE EXTENT NOT OTHERWISE EXPRESSLY PROVIDED HEREIN, MAKER EXPRESSLY WAIVES ALL
DEFENSES BASED UPON SURETYSHIP OR IMPAIRMENT OF COLLATERAL. MAKER CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF HOLDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT HOLDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
ANY OF THE WAIVERS GRANTED ABOVE. MAKER ACKNOWLEDGES AND STIPULATES THAT THE
WAIVERS AND AUTHORIZATIONS GRANTED ABOVE ARE MADE KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY AND AFTER FULL CONSULTATION WITH COUNSEL AND CONSTITUTE A MATERIAL
INDUCEMENT FOR HOLDER TO MAKE THE LOANS. 

9.      Jury Trial Waiver.
MAKER AND HOLDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LOAN DOCUMENTS OR ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF HOLDER RELATING TO THE
ADMINISTRATION OF ANY OF THE LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND
AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS
PROHIBITED BY LAW, MAKER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR
ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. MAKER CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF HOLDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT HOLDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
ANY OF THE WAIVERS GRANTED ABOVE. MAKER ACKNOWLEDGES AND STIPULATES THAT THE
WAIVERS AND 

6 




AUTHORIZATIONS GRANTED ABOVE ARE MADE KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY AND AFTER FULL CONSULTATION WITH COUNSEL AND CONSTITUTE A
MATERIAL INDUCEMENT FOR HOLDER TO MAKE THE LOANS. 

10.      No Waiver. Failure by
Holder to insist upon the strict performance by Maker of any terms and
provisions herein shall not be deemed to be a waiver of any terms and provisions
herein, and Holder shall retain the right thereafter to insist upon strict
performance by Maker of any and all terms and provisions of this Note or any
other Loan Documents. 

11.      General. No
course of dealing on the part of Holder nor any delay on the part of Holder in
exercising any right hereunder or under any other Loan Documents shall operate
as a waiver of any such right, and any waiver granted for one occasion shall not
operate as a waiver in the event of a subsequent default. The rights and
remedies of Holder hereof shall be cumulative and not in the alternative, and
shall include all rights and remedies granted herein, in any other Loan
Documents and under all applicable laws. This Note is the final, complete and
exclusive statement of the terms governing the Loan. 

12.      Acknowledgment
of Copy, Replacement Note. Maker acknowledges receipt of a copy of this
Note. Upon receipt of any affidavit of an officer of Holder as to the loss,
theft, destruction or mutilation of this Note or any other Loan Document which
is not of public record, if any, and, in the case of any such loss, theft,
destruction or mutilation, upon surrender and cancellation of such Note or other
Loan Document, Maker will issue, in lieu thereof, a replacement of this Note or
other Loan Document in the same principal amount thereof and otherwise of like
tenor. 

13.      Assignments.
Maker hereby agrees that Holder, in its sole discretion, shall have the
unrestricted right at any time and from time to time, and without Maker's or any
Guarantor's consent, to assign all or a portion of its rights and obligations
under this Note and other Loan Documents to one or more banks, other financial
institutions, or any other person or entity (each, an “Assignee”). In the
event of any such assignment to an Assignee, Maker and each Guarantor agrees
that it shall execute, or cause to be executed, such documents, including
without limitation, amendments to this Note and to any other Loan Document, as
Holder shall deem reasonably necessary to effect the foregoing (provided,
however, that such documents and amendments do not substantively affect the
terms of the Loan). In addition, at the request of Holder and any such Assignee,
Maker shall issue one or more new Notes, as applicable, to any such Assignee
and, if Holder has retained any of its rights and obligations following such
assignment, to Holder, which new Notes shall be issued in replacement of, but
not in discharge of, the Obligations evidenced by this Note prior to such
assignment and shall reflect the amount of the respective Loans held by such
Assignee and Holder after giving effect to such assignment. Upon the execution
and delivery of appropriate assignment documentation, amendments and any other
documentation required by Holder in connection with such assignment, such
Assignee shall be a party to this Note and shall have all of the rights and
obligations of Holder hereunder (and under any and all other Loan Documents) to
the extent that such rights and obligations have been assigned by Holder
pursuant to the assignment documentation between Holder and such Assignee, and
Holder shall be released form its obligations hereunder to a corresponding
extent. Holder may furnish any information concerning Maker in its possession
from time to time to Assignees and prospective Assignees, provided that
Holder shall require any such Assignees 

7 




and prospective Assignees to agree in writing to maintain the
confidentiality of such information, except as required by applicable laws or
governmental authorities. 

14.      Governing Law.
This Note shall be governed by the laws of the State of Connecticut (without
regard to its conflicts of law provisions). 

15.      Severability. If
any provision of this Note is deemed void, invalid or unenforceable under
applicable law, such provision is and will be deemed to be totally ineffective
to that extent, but the remaining provisions shall be deemed unaffected and
shall remain in full force and effect. 

16.      Successors and
Assigns. The provisions of this Note shall bind the assigns and successors
of Maker and shall inure to the benefit of Holder, its successors and assigns.


           
IN WITNESS WHEREOF, Maker has caused this Note to be duly executed as a sealed
instrument. 

AEGIS INDUSTRIES, INC.

By:
__________________________________________

      
Its_____________________________


8