Document:

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                                                                    EXHIBIT 10.7

                      COMMUTATION AND SETTLEMENT AGREEMENT
                  (hereinafter referred to as the "AGREEMENT")

       This Agreement, dated July 28, 2005 is entered into by and between

 CENTRE SOLUTIONS (BERMUDA) LIMITED (hereinafter referred to as the "REINSURER")

                                       and

PENN TREATY AMERICAN CORPORATION ("PTAC"), PENN TREATY NETWORK AMERICA INSURANCE
       COMPANY ("PTNAIC") AND AMERICAN NETWORK INSURANCE COMPANY (ANIC")
   (PTAC, PTNAIC AND ANIC hereinafter jointly referred to as the "COMPANIES")

WHEREAS, the Reinsurer and the Companies entered into two Quota Share
Reinsurance Contracts: Penn Treaty 2001 and Penn Treaty 2002 as more fully
defined in Schedule A (as they may have been amended from time to time,
collectively, the "REINSURANCE AGREEMENTS"), it being understood and agreed that
the term "Reinsurance Agreements" shall include any and all other arrangements,
representations and agreements (whether written or not) which the Reinsurer and
the Companies may have made with respect to the Reinsurance Agreements; and

WHEREAS, the Reinsurer and the Companies desire to fully and finally settle and
commute all obligations arising out of or under or relating, directly or
indirectly, to the Reinsurance Agreements; and

WHEREAS, the Reinsurer has offered to pay and the Companies have agreed to
accept in full satisfaction of the Reinsurer' past, present and future
obligations and liabilities under the Reinsurance Agreements the Commutation
Amount (as described below): and

WHEREAS, the Reinsurer has provided to the Companies as collateral security for
its obligations to the Companies pursuant to the Reinsurance Agreements the
following four letters of credit: (i) Royal Bank of Scotland (the "RBS Bank")
(LOC No. 010203600630NY in the face amount of $19,700,000.00), (ii) Royal Bank
of Canada (the "RBC Bank") (LOC No. 4218/S22494 in the face amount of
$50,000,000), (iii) Citibank (LOC No. 162446 in the face amount of
$69,840,578.97) and (iv) Citibank (LOC No. 162447 in the face amount of
$17,922,911.00 ) (the RBS Bank, the RBC Bank and Citibank are collectively
referred to herein as the "LOC Banks") (the letters of credits are individually
referred to as, "LOC RBS" , "LOC RBC", " LOC Citibank 46", and " LOC Citibank
47" and collectively, the "LOCs"); and the Reinsurer has set-up two trust
accounts as follows (x) a trust with Bank of New York as the Trustee (Account
056826), Centre Solutions (Bermuda) Limited as grantor and Penn Treaty Network
America Insurance Company as beneficiary (the "PTNA Trust") and (y) a trust with
Bank of New York as the Trustee (Account

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056825), Centre Solutions (Bermuda) Limited as grantor and American Network
Insurance Company as beneficiary (the "ANIC Trust") , (hereinafter collectively
referred to as the "Trust Accounts")

NOW, THEREFORE, intending to be legally bound, in consideration of these
premises, covenants, conditions, promises and releases contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Reinsurer and the Companies agree as follows (any
capitalized term not herein defined shall have the meaning ascribed to it in the
Reinsurance Agreements):

        1.      PAYMENT OF COMMUTATION AMOUNT. Effective on and as of the
Closing date (i) With respect to Penn Treaty 2001, the Reinsurer will deliver as
soon as practicable, but within three (3) business days, to the Companies as
directed by the Companies the marketable securities (actual securities delivered
will be different from those listed in the attached schedule 1.1, to reflect
transactions occurring on or after 5/23/05 as a result of partial and full
redemptions, purchases and sales as authorized by the Companies and as described
in the attached schedule 1.2. Any remaining cash proceeds are included in cash
amounts listed on the schedule) and cash identified and listed in Schedule 1
attached hereto, any item in this article 1 or on Schedule 1 which is either an
estimate or has not been determined as of the closing date will be trued-up as
soon as practicable when actual amounts are available (ii) With respect to Penn
Treaty 2002, the Reinsurer will deliver to the Companies as soon as practicable,
but within three business days an amount equal to $4,688,230 as described in
Schedule 1 hereof (iii) the Reinsurer hereby relinquishes its rights to any
Funds Withheld Balance held by any of the Companies, (iv) the Reinsurer hereby
forfeits all warrants for the Companies' preferred stock, and (v) the Companies
hereby relinquish any rights to the LOC's and the Trust Accounts (and shall
deliver the LOC's and take such actions with respect to the LOC's and Trust
Accounts as provided in paragraph 5(e), below. The amounts and considerations
described in (i) through (v) are hereinafter collectively referred to as the
Commutation Amount. The Commutation Amount is in full satisfaction of all past,
present and future liabilities and obligations owed by the Reinsurer to the
Companies and by the Companies to the Reinsurer under the Reinsurance Agreements
Payment of any cash component of the Commutation Amount shall be made by wire
transfer to the Companies in accordance with instructions set forth in Schedule
B hereto and transfer and delivery of the marketable securities will be made in
accordance with the Companies instructions via DTC. No other payments (except as
may be expressly provided in this Agreement) or any other consideration shall be
payable or provided by either the Reinsurer or the Companies in connection with
this Agreement and the Reinsurance Agreements.

        2.      CANCELLATION OF REINSURANCE AGREEMENTS. The Reinsurance
Agreements and all rights and obligations thereunder are hereby cancelled in
their entirety, and neither party has any liability or obligations thereunder,
and the Companies hereby recapture all of the liabilities ever arising under the
Reinsurance Agreements from its effective date, and discharges the Reinsurer
from all such liabilities and from all amounts that the Reinsurer may owe under
the Reinsurance Agreements.

        3.      RELEASE BY THE COMPANIES. In consideration of the payment of the
Commutation Amount, the Companies, each on behalf of itself and its direct and
indirect past and present

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parents, subsidiaries and affiliates, and each of their respective officers,
directors, employees, agents, attorneys, predecessors, successors, liquidators,
receivers, administrators and assigns (collectively, the "COMPANIES RELEASORS"),
hereby irrevocably and unconditionally release and forever fully discharge the
Reinsurer and its direct and indirect past and present parents, subsidiaries and
affiliates, and each of their respective officers, directors, employees, agents,
attorneys, predecessors, successors, liquidators, receivers, administrators and
assigns (all the foregoing, including the Reinsurer, collectively the "REINSURER
RELEASEES"), from any and all past, present and future payment or other
obligations, adjustments, executions, offsets, dues, commissions, salvage,
premiums, return premiums, unearned premiums, reserves for ceded losses,
reserves for outstanding claims, reserves for known or unknown claims, actions,
causes of action, suits, debts, sums of money, accounts, reckonings, bonds,
bills, covenants, contracts, controversies, agreements, promises, damages,
judgments, claims, demands, liabilities and/or losses whatsoever; in each case
whether reported or unreported, known or unknown, which any or all of the
Companies Releasors ever had, now have, or hereinafter may have, whether
grounded in law or equity, in contract or in tort, against any or all of the
Reinsurer Releasees; by reason of any matter whatsoever arising out of or under
or relating, directly or indirectly, to the Reinsurance Agreements including,
without limitation the full amount under the LOCs.

        4.      RELEASE BY THE REINSURER. The Reinsurer, on behalf of itself and
its direct and indirect past and present parents, subsidiaries and affiliates,
and each of their respective officers, directors, employees, agents, attorneys,
predecessors, successors, liquidators, receivers, administrators and assigns
(collectively, the "REINSURER RELEASORS), hereby irrevocable and unconditionally
releases and forever fully discharges the Companies and their direct and
indirect past and present parents, subsidiaries and affiliates, and each of
their respective officers, directors, employees, agents, attorneys,
predecessors, successors, liquidators, receivers, administrators and assigns
(all the foregoing, including the Companies, collectively the "COMPANIES
RELEASEES"), from any and all past, present and future payment or other
obligations, adjustments, executions, offsets, dues, commissions, salvage,
premiums, return premiums, unearned premiums, reserves for ceded losses,
reserves for outstanding claims, reserves for known or unknown claims, actions,
causes of action, suits, debts, sums of money, accounts, reckonings, bonds,
bills, covenants, contracts, controversies, agreements, promises, damages,
judgments, claims, demands, liabilities and/or losses whatsoever; in each case
whether reported or unreported, known or unknown, which any or all of the
Reinsurer Releasors ever had, now have, or hereinafter may have, whether
grounded in law or equity, in contract or in tort, against any or all of the
Companies Releasees; by reason of any matter whatsoever arising out of or under
or relating, directly or indirectly, to the Reinsurance Agreements.

        5.      ADDITIONAL RELEASE PROVISIONS.

                a.      The parties acknowledge and agree that this Agreement
        and the releases granted hereunder shall be and remain in effect, and
        not be affected at all, for any reason whatsoever including any of the
        following reasons: (i) if a party or a Releasor may be or hereafter
        becomes liable for claims or other payment obligations, or discovers
        facts or there is an occurrence, in each case which are not now known to
        or suspected to exist or discoverable by such party or Releasor (even
        though it may be known, suspected to exist or discoverable by the other
        party or another Releasor) or to have occurred pursuant to

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        the Reinsurance Agreements, even if such claims or other payment
        obligations or facts or occurrences, (x) had they been known or
        suspected to exist by one or both of the parties hereto on or prior to
        the date hereof, could have affected such party's decision to enter into
        this Agreement or (y) were not within the contemplation of the parties
        on the date hereof; or (ii) the breach of any obligation or
        representation hereunder. For the avoidance of any doubt and without
        limiting the foregoing, should any such claim or other payment
        obligation or fact or occurrence pursuant to the Reinsurance Agreements
        become known or be discovered or occur, it will not entitle any
        Releasors, or their respective successors and assigns, if any, to void,
        set aside or re-open the commutation effected by this Agreement, nor to
        recover any further reinsurance indemnity in respect of such claim.

                b.      Nothing in Sections 2, 3, 4 or 5 hereof is intended or
        shall be deemed to release any party from any obligation undertaken
        pursuant to this Agreement. Neither this Agreement nor the payment of
        the Commutation Amount nor any other facts or positions taken in
        preparation for negotiations of or in connection with negotiating this
        Agreement shall be considered or deemed an admission of liability or
        wrongdoing by any party or any Releasor or entities released hereunder.

                c.      The releases contained in this Agreement are full and
        final. Each party hereby waives any right to assert hereafter that any
        matter or claim released by this Agreement has, through ignorance,
        oversight or error, been erroneously included in the scope of the
        release. Each party hereby waives any rights under any law that may in
        any way limit the effect of the releases purported to be effected by
        this Agreement.

                d.      In the event that all or any portion of the
        consideration provided by either the Companies or the Reinsurer is
        deemed to constitute a void or voidable preference under the law of any
        jurisdiction, the party receiving such consideration (or its successors
        or assigns, if any), shall return such consideration to the other party
        and thereupon this Agreement shall be fully rescinded, and the
        Reinsurance Agreements and the original liabilities and obligations of
        the parties pursuant to the Reinsurance Agreements shall be reinstated.
        Such reinstated liabilities and obligations may be asserted in any
        proceeding and shall be subject to any rights, claims and defenses of
        the parties.

                e.      On the Closing Date The Companies shall deliver the
        LOC's to the LOC Banks for cancellation without a draw thereon and shall
        deliver letters to the trustees of the Trust Accounts instructing such
        trustees to allow the withdrawal transfer or disposition by the
        Reinsurer of all assets held in such Trust Accounts, and the Companies
        shall execute any and all required documents to acknowledge and effect
        such cancellation without draw with respect to the LOC's and effect such
        withdrawal transfer or disposition with respect to the Trust Accounts.

        6.      REPRESENTATIONS. Each of the parties hereto expressly warrants
and represents to the other that:

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                a.      it is duly organized, validly existing and in good
        standing in its place of organization;

                b.      this Agreement is the legal, valid and binding
        obligation of it;

                c.      this Agreement does not violate its organization
        documents, or, based upon its actual knowledge, any agreements to which
        it is a party or any obligation to which it is subject;

                d.      the persons executing this Agreement have the full
        authority to execute this Agreement on behalf of such party;

                e.      all consents and any other necessary authorizations and
        approvals required to enable it lawfully to enter into and perform and
        comply with its obligations under this Agreement have been obtained and
        are in full force and effect, including, without limitation, approval,
        consent or other agreement to the terms and conditions of this Agreement
        by the Department of Insurance of the State of Pennsylvania (the
        "Department") prior to the Effective Date and all conditions thereto (if
        any) have been satisfied;

                f.      it has not assigned or encumbered, or purported to
        assign or encumber, any claim or cause of action purported to be
        released by this Agreement;

                g.      it has been represented by legal counsel in the
        negotiation and joint preparation of this Agreement and is fully aware
        of this Agreement's provisions and legal effect; and

                h.      it enters into this Agreement freely, without coercion,
        and based on its own independent decision to enter into this Agreement
        and as to whether this Agreement is appropriate for it, based upon its
        own judgment, information and analyses and upon its own tax, accounting,
        regulatory, legal, financial and other advice relying on such of its own
        advisers as it may have deemed necessary and in each case without
        relying on the other party or any of the Releasors it is hereby
        releasing or any representations thereof; and

                i.      it is solvent and no order has been made or petition
        presented or other step taken for it to be wound up or for the
        appointment of a liquidator, provisional liquidator, rehabilitator,
        conservator, receiver, supervisor, administrator or other like office
        holder under the laws of any jurisdiction whatsoever.

        7.      ENTIRE AGREEMENT. This Agreement contains a final and complete
integration of all prior expressions of the parties with respect to the subject
matter hereof and shall constitute the entire agreement with respect to the
subject matter hereof, superseding all prior oral or written understandings,
negotiations, representations or agreements relating thereto.

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        8.      NO AMENDMENTS; SUCCESSORS AND ASSIGNS. This Agreement may not be
modified or amended, nor any of its provisions waived, except by an instrument
in writing, signed by the parties hereunder. Neither party may assign this
Agreement or its rights or obligations hereunder without the prior written
consent of the other party. The rights, duties and obligations set forth herein
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns, including, without limitation, any
liquidator, provisional liquidator, rehabilitator, conservator, receiver,
supervisor, administrator or other like office holder under the laws of any
jurisdiction whatsoever of the Reinsurer or the Companies. The Reinsurer
Releasees and the Companies Releasees are intended third-party beneficiaries of
the releases contained in this Agreement.

        9.      FURTHER ASSURANCES. Each party agrees to do such things and
execute such further documents (at the other party's expense) as may be
reasonably requested by the other party to effect this Agreement, including,
without limitation, (i) providing such information and representations as may be
requested by the Department in connection with its review and approval of this
Agreement and (ii) execution and delivery of any written instruments as may be
required by the LOC Banks to effect the release of the Reinsurer' obligations
and liabilities arising under or pursuant to the LOC's.

        10.     COSTS OF ENFORCEMENT. Each party agrees that the prevailing
party in any action arising under or relating to this Agreement may recover its
out-of-pocket costs (including reasonable legal fees and expenses) incurred by
the prevailing party or its affiliates in connection with such action.

        11.     GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.

        12.     COUNTERPARTS. This Agreement may be executed and delivered in
one or more counterparts, each of which shall together constitute one and the
same instrument. A facsimile copy of a signature shall have the same force and
effect as an original signature.

        13.     EFFECTIVE DATE AND CLOSING DATE. This Agreement shall be
effective as of May 24, 2005 with respect to Penn Treaty 2001 (such day being
the "Penn Treaty 2001 Effective Date") and as of February 1, 2005 with respect
to Penn Treaty 2002 (such day being the "Penn Treaty 2002 Effective Date") . The
Closing Date shall mean July 28, 2005.

        14.     NOTICE. All notices under this Agreement shall be in writing and
shall be deemed to be duly given and received (i) upon delivery if delivered by
certified mail; or (ii) on the next Business Day if sent by overnight courier,
if sent to a Party to its Address for Notices on Schedule C hereto or to such
other address as any party may have furnished to the other in writing.

        15.     WAIVER OF JURY TRIAL. TO THE EXTENT A RIGHT TO JURY TRIAL IS
AVAILABLE TO ANY PARTY TO THIS AGREEMENT, EACH PARTY HEREBY WAIVES ITS RIGHT TO
A TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE SUBJECT MATTER HEREOF.

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IN WITNESS WHEREOF, this Agreement has been executed by:

PENN TREATY AMERICAN CORPORATION

/s/ Cameron B. Waite                               Date:    July 28, 2005
Name:  Cameron B. Waite
Title: Executive Vice President

PENN TREATY NETWORK AMERICA INSURANCE COMPANY

/s/ Cameron B. Waite                               Date:    July 28, 2005
Name:  Cameron B. Waite
Title: Executive Vice President

AMERICAN NETWORK INSURANCE COMPANY

/s/ Cameron B. Waite                               Date:    July 28, 2005
Name:  Cameron B. Waite
Title: Executive Vice President

CENTRE SOLUTIONS (BERMUDA) LIMITED

/s/ Steve Williams                                 Date:    July 28, 2005
Name:  Steve Williams
Title: Vice President

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                                   SCHEDULE A
                                   ----------

100% Quota Share Reinsurance Contract between Penn Treaty Network America
Insurance Company and American Network Insurance Company (as "Reinsureds") and
Centre Solutions (Bermuda), Limited (as "Reinsurer") effective December 31,
2001(referred to herein as "Penn Treaty 2001")

Quota Share Reinsurance Contract between Penn Treaty American Corporation, Penn
Treaty Network America Insurance Company and American Network Insurance Company
(as "Reinsureds") and Centre Solutions (Bermuda), Limited (as "Reinsurer")
effective January1, 2002 (referred to herein as "Penn Treaty 2002")

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                                   SCHEDULE B
                                   ----------

Wire Transfer Instructions and instructions for the transfer of securities:

        To be delivered by the Companies under separate cover

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                                   SCHEDULE C
                                   ----------

                               ADDRESS FOR NOTICE
                               ------------------

To the REINSURER:

        Centre Solutions (Bermuda) Limited
        Wellesley House
        90 Pitts Bay Road
        Pembroke HM 08
        P.O. Box HM 1788
        Hamilton HM HX
        Bermuda

With a copy to

        Centre Group Holdings (U.S.) Limited
        105 E. 17th Street
        New York, NY 10003
        Att. General Counsel

To the COMPANIES:

        Penn Treaty Network America Insurance Company
        3440 Lehigh Street
        Allentown, PA 18103-7001
        Attn:  William W. Hunt, President and CEO

                                       10Form of Promissory Note dated July 22, 2005

 Exhibit 4.87 
  
 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES
LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF
SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. 
  
 SP Holding Corp. 
  
 PROMISSORY NOTE 
  

			
	U.S. $             	  	Irvine, CA
	No.: PN-01-	  	July     , 2005

  
 FOR VALUE
RECEIVED, the undersigned, SP Holding Corp., a Delaware corporation (the “Company”), hereby promises to pay to the order of
                    ., or any future permitted holder of this promissory note (the “Payee”), at the principal office of the
Payee set forth herein, or at such other place as the holder may designate in writing to the Company, the principal sum of up to
                     Thousand Dollars (U.S. $_0,000.00), or such other amount as may be outstanding hereunder, together with all accrued but
unpaid interest, in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts and in immediately available funds, as provided in this promissory note (the
“Note”). 
  
 1. Principal and Interest
Payments. 
  
 (a) The Company shall repay in full the entire
principal balance then outstanding under this Note on the first to occur (the “Maturity Date”) of: (i) September 30, 2005; or (ii) the acceleration of the obligations as contemplated by this Note. 
  
 (b) Interest on the outstanding principal balance of this Note shall accrue
at a rate of eight percent (8%) per annum from the Issuance Date. Interest on the outstanding principal balance of the Note shall be computed on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days and
shall be payable on the last day of each quarter following the date hereof by the Company in cash or in shares of the Company’s equity securities as contemplated in Section 1(c) hereof. Furthermore, upon the occurrence of an Event of Default,
then to the extent permitted by law, the Company will pay interest to the Payee, payable on demand, on the outstanding principal balance of the Note from the date of the Event of Default until payment in full at the rate of twelve percent (12%) per
annum. 
  
 (c) Upon the mutual agreement of the Company and the
Payee, this Note may be exchanged without penalty for any other security of the Company. 

 2. Non-Business Days. Whenever any payment to be made shall be due on a Saturday, Sunday or a
public holiday under the laws of the State of New York, such payment may be due on the next succeeding business day and such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date. 

 
 3. Representations and Warranties of the Company. The Company
represents and warrants to the Payee as follows: 
  
 (a) The
Company has been duly incorporated and is validly existing and in good standing under the laws of the state of Delaware, with full corporate power and authority to own, lease and operate its properties and to conduct its business as currently
conducted. 
  
 (b) This Note has been duly authorized, validly
executed and delivered on behalf of the Company and is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to limitations on enforcement by general principles of equity and by
bankruptcy or other laws affecting the enforcement of creditors’ rights generally, and the Company has full power and authority to execute and deliver this Note and to perform its obligations hereunder. 
  
 (c) The execution, delivery and performance of this Note will not (i)
conflict with or result in a breach of or a default under any of the terms or provisions of, (A) the Company’s certificate of incorporation or by-laws, or (B) any material provision of any indenture, mortgage, deed of trust or other material
agreement or instrument to which the Company is a party or by which it or any of its material properties or assets is bound, (ii) result in a violation of any material provision of any law, statute, rule, regulation, or any existing applicable
decree, judgment or order by any court, Federal or state regulatory body, administrative agency, or other governmental body having jurisdiction over the Company, or any of its material properties or assets or (iii) result in the creation or
imposition of any material lien, charge or encumbrance upon any material property or assets of the Company or any of its subsidiaries pursuant to the terms of any agreement or instrument to which any of them is a party or by which any of them may be
bound or to which any of their property or any of them is subject. 
  
 (d) No consent, approval or authorization of or designation, declaration or filing with any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Note. 
  
 4. Events of Default. The occurrence of any of the following events
shall be an “Event of Default” under this Note: 
  
 (a) the Company shall fail to make the payment of any amount of any principal outstanding for a period of three (3) business days after the date such payment shall become due and payable hereunder; or 
  

 2 

 (b) the Company shall fail to make any payment of interest for a period of three (3) business days after
the date such interest shall become due and payable hereunder; or 
  
 (c) any representation, warranty or certification made by the Company herein or in any certificate or financial statement shall prove to have been false or incorrect or breached in a material respect on the date as of which made; or

  
 (d) the holder of any indebtedness of the Company or any of
its subsidiaries shall accelerate any payment of any amount or amounts of principal or interest on any indebtedness (the “Indebtedness”) (other than the Indebtedness hereunder) prior to its stated maturity or payment date, whether
such Indebtedness now exists or shall hereinafter be created, and such accelerated payment entitles the holder thereof to immediate payment of such Indebtedness which is due and owing and such indebtedness has not been discharged in full or such
acceleration has not been stayed, rescinded or annulled within ten (10) business days of such acceleration; or 
  
 (e) A judgment or order for the payment of money shall be rendered against the Company or any of its subsidiaries in excess of $500,000 in the aggregate
(net of any applicable insurance coverage) for all such judgments or orders against all such persons (treating any deductibles, self insurance or retention as not so covered) that shall not be discharged, and all such judgments and orders remain
outstanding, and there shall be any period of sixty (60) consecutive days following entry of the judgment or order in excess of $500,000 or the judgment or order which causes the aggregate amount described above to exceed $500,000 during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or 
  
 (f) the Company shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property or assets, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or
domestic), (iv) file a petition seeking to take advantage of any bankruptcy, insolvency, moratorium, reorganization or other similar law affecting the enforcement of creditors’ rights generally, (v) acquiesce in writing to any petition filed
against it in an involuntary case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic), or (vi) take any action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing;
or 
  
 (g) a proceeding or case shall be commenced in respect of
the Company or any of its subsidiaries without its application or consent, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment of its debts, (ii)
the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of its assets or (iii) similar relief in respect of it under any law providing for the relief of debtors, and such proceeding or case
described in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in effect, for a period of thirty (30) consecutive days or any order for relief shall be entered in an involuntary 
  

 3 

 case under the Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or domestic) against the Company
or any of its subsidiaries or action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be taken with respect to the Company or any of its subsidiaries and shall continue undismissed, or unstayed and in
effect for a period of thirty (30) consecutive days; or 
  
 (h)
the suspension from listing or the failure of the Common Stock to be listed on the OTC Bulletin Board for a period of five (5) consecutive trading days. 
  
 5. Remedies Upon An Event of Default. If an Event of Default shall have occurred and shall be continuing, the Payee of this Note may at any time at
its option, (a) declare the entire unpaid principal balance of this Note, together with all interest accrued hereon, due and payable, and thereupon, the same shall be accelerated and so due and payable; provided, however, that upon the
occurrence of an Event of Default described in (i) Sections 4(f) and (g), without presentment, demand, protest, or notice, all of which are hereby expressly unconditionally and irrevocably waived by the Company, the outstanding principal balance and
accrued interest hereunder shall be automatically due and payable, and (ii) Sections 4(a) through (e) and Section 4(h), the Payee may exercise or otherwise enforce any one or more of the Payee’s rights, powers, privileges, remedies and
interests under this Note or applicable law. No course of delay on the part of the Payee shall operate as a waiver thereof or otherwise prejudice the right of the Payee. No remedy conferred hereby shall be exclusive of any other remedy referred to
herein or now or hereafter available at law, in equity, by statute or otherwise. Notwithstanding the foregoing, Payee agrees that its rights and remedies hereunder are limited to receipt of cash or shares of the Company’s equity securities in
the amounts described herein. 
  
 6. Replacement.
Upon receipt of a duly executed, notarized and unsecured written statement from the Payee with respect to the loss, theft or destruction of this Note (or any replacement hereof), and without requiring an indemnity bond or other security, or, in the
case of a mutilation of this Note, upon surrender and cancellation of such Note, the Company shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note. 
  
 7. Parties in Interest, Transferability. This Note shall be binding
upon the Company and its successors and assigns and the terms hereof shall inure to the benefit of the Payee and its successors and permitted assigns. This Note may be transferred or sold, subject to the provisions of Section 16 of this Note, or
pledged, hypothecated or otherwise granted as security by the Payee. 
  
 8. Amendments. This Note may not be modified or amended in any manner except in writing executed by the Company and the Payee. 
  
 9. Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be
effective (a) upon hand delivery by telecopy or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery
(if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following 
  

 4 

 the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The Company will give written notice to the Payee at least thirty (30) days prior to the date on which the Company closes its books or takes a record (x) with respect to any dividend or distribution upon the
common stock of the Company, (y) with respect to any pro rata subscription offer to holders of common stock of the Company or (z) for determining rights to vote with respect to a major transaction, dissolution, liquidation or winding-up and in no
event shall such notice be provided to such holder prior to such information being made known to the public. The Company will also give written notice to the Payee at least twenty (20) days prior to the date on which dissolution, liquidation or
winding-up will take place and in no event shall such notice be provided to the Payee prior to such information being made known to the public. 
  

					
	 Address of the Payee:
	  	  

	 	 
			
	 Address of the Company:
	  	SP Holding Corp.	 	 
	 	  	2361 Campus Drive	 	 
	 	  	Irvine, CA 92612	 	 
	 	  	Attention: Mark Schaftlein, Chairman	 	 
	 	  	Tel. No.: (949) 833-9001	 	 
	 	  	Fax No.: (949) 833-8211	 	 

  
 10. Governing
Law. This Note shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to the choice of law provisions. This Note shall not be interpreted or construed with any presumption against
the party causing this Note to be drafted. 
  
 11.
Headings. Article and section headings in this Note are included herein for purposes of convenience of reference only and shall not constitute a part of this Note for any other purpose. 
  
 12. Remedies, Characterizations, Other Obligations, Breaches and
Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in equity (including, without limitation, a decree of specific performance and/or other
injunctive relief), no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Payee’s right to pursue actual damages for any failure by the Company to
comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Payee and shall not, except as expressly provided herein, be
subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable and material harm to the Payee and that the remedy at law for any such
breach may be inadequate. Therefore the Company agrees that, in the event of any such breach or threatened breach, the Payee shall be entitled, in addition to all other available rights and remedies, at law or in equity, to seek and obtain such
equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required. 
  

 5 

 13. Failure or Indulgence Not Waiver. No failure or delay on the part of the Payee in the exercise
of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

  
 14. Enforcement Expenses. The Company agrees to pay all
costs and expenses of enforcement of this Note, including, without limitation, reasonable attorneys’ fees and expenses. 
  
 15. Binding Effect. The obligations of the Company and the Payee set forth herein shall be binding upon the successors and assigns of each such
party, whether or not such successors or assigns are permitted by the terms hereof. 
  
 16. Compliance with Securities Laws. The Payee of this Note acknowledges that this Note is being acquired solely for the Payee’s own account and not as a nominee for any other party, and for investment,
and that the Payee shall not offer, sell or otherwise dispose of this Note other than in compliance with the laws of the United States of America and as guided by the rules of the Securities and Exchange Commission. This Note and any Note issued in
substitution or replacement therefore shall be stamped or imprinted with a legend in substantially the following form: 
  
 “THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.” 
  
 17. Severability. The provisions of this Note are severable, and if any provision shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall not in any manner affect such provision in any other jurisdiction or any other provision of this Note in any jurisdiction. 
  
 18. Consent to Jurisdiction. Each of the Company and the Payee (i) hereby irrevocably submits to the jurisdiction of
the United States District Court sitting in the Southern District of New York and the courts of the State of New York located in New York county for the purposes of any suit, action or proceeding arising out of or relating to this Note and (ii)
hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not 
  

 6 

 personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper. Each of the Company and the Payee consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address set forth in
Section 9 hereof and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 18 shall affect or limit any right to serve process in any other manner permitted by law. 

 
 19. Company Waivers. Except as otherwise specifically provided
herein, the Company and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons
and without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Company liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL
BY JURY. 
  
 (a) No delay or omission on the part of the Payee in
exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such rights or any other right of the Payee, nor shall any waiver by the Payee of any such right or rights on any one occasion be deemed a
waiver of the same right or rights on any future occasion. 
  
 (b) THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY
WHICH THE PAYEE OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 7 

 IN WITNESS WHEREOF, the Company has executed and delivered this Note as of the date first written
above. 
  

			
	SP Holding Corp.
		
	By:	 	  

	Name:	 	Mark Schaftlein
	Title:	 	Chairman and Chief Executive Officer

  

 8

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