Document:

Exhibit
        10.1

     

     

    EMPLOYMENT
      AGREEMENT

    

    THIS
      AGREEMENT, made and entered into this 24th day of April 2008 by and between
      SIMCLAR, INC., a Florida corporation with its offices at 2230 West
      77th
      Street,
      Hialeah, Florida 33016 (the “Company”) and BARRY PARDON, RESIDING AT 580 N.W.
      66TH
      Avenue,
      Plantation, Florida 33317 (the “Executive”)

    

    WITNESSETH:

    

    WHEREAS,
      the Company is engaged in the manufacture and assembly of electro-mechanical
      and
      electronic components; and

    

    WHEREAS,
      the Executive has been and continues to be employed by the Company;
      and

    

    WHEREAS,
      the parties wish to enter into this agreement whereby Company shall continue
      the
      employment of the Executive as President under the terms and conditions herein
      contained.

    

    NOW,
      THEREFORE, for good and valuable consideration receipt of which is hereby
      acknowledged and in consideration of the covenants and promises contained
      herein, the parties mutually agrees as follows:

    

    
      	 	
              1.

            	
              Employment.
                The Company hereby employs the Executive as its President, his duties
                to
                be such as are customarily performed by persons employed in such
                capacity.
                The Executive agrees to perform his duties in a competent and expeditious
                manner and to devote his whole time, attention and best efforts in
                acting
                as President and in promoting the best interests of the Company.
                The
                Executive shall not knowingly do and shall exercise his best endeavours
                to
                prevent being done, any act or thing which may in any way be prejudicial
                to the Company. The Executive shall perform his duties under the
                direction
                of the Chairman of the Board and Chief Executive Officer of the Company
                and in conformity with all reasonable standards and policies established
                by the Company, and shall not engage in any other business, directly
                or
                indirectly, and shall not sell nor cause to be sold any other products,
                merchandise or services of any other business. The Executive shall
                perform
                such services for the Company and any of its subsidiaries and affiliates
                within such hours of work as may from time to time reasonably be
                required
                of him and the Executive shall accept such offices, positions,
                directorships and/or other responsibilities as the Company may determine,
                all without being entitled to receive any additional remuneration
                for work
                outside his normal hours and for such other
                positions.

            

    

    

    
      	 	
              2.

            	
              Term
                of Employment.
                The term of employment under the provisions of this Agreement shall
                be for
                a period of two (2) years effective January 1, 2008 and ending December
                31, 2009 unless terminated sooner pursuant to the express provisions
                hereof (the “Term”). Within 120 days of the expiration of this Agreement,
                the Company will notify the Executive as to whether it intends to
                negotiate a renewal of his employment and this
                Agreement.

            

    

     

    
      	 	
              3.

            	
              Remuneration.

            

    

    

    
      	 	
              (a)

            	
              During
                the Term, the Company will compensate the Executive for his services
                with
                a base
                salary of One Hundred and Thirty Thousand ($147,000) Dollars per
                annum,
                subject
                to deductions for withholding and Social Security and shall be paid
                in
                accordance
                with the Company’s normal payroll procedures. The compensation shall
                be
                deemed to include any fee or remuneration to which the Executive
                may
                otherwise be
                entitled in respect of his holding any office, directorship or other
                position with the Company
                or any of its subsidiaries or affiliates. The Executive shall be
                entitled
                to life
                and health coverage and pension benefits available and in effect
                for other
                executive
                employees of the Company.

            

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              (b)

            	
              In
                addition to the base salary as provided in paragraph 3(a), the Company
                shall pay the Executive an annual bonus. The amount of such annual
                bonus
                will be determined entirely at the discretion of the Chairman and
                Chief
                Executive Officer of the Company and will take account of the financial
                performance of the Company in its most recent financial year and
                the
                performance of the Executive in his role as President of the Company
                in
                the same period. Such bonus, if any, shall be paid in cash no later
                than
                March 31st
                of
                each year.

            

    

    

    
      	 	
              4.

            	
              Expenses.

            

    

    

    
      	 	
              (a)

            	
              The
                Company shall furnish to the Executive a company automobile and the
                Company shall pay all automobile and travel expenses incurred by
                the
                Executive relating to the Company’s
                business.

            

    

    

    
      	 	
              (b)

            	
              The
                Company shall reimburse the Executive for reasonable expenses incurred
                by
                him in or about the performance of his duties in furtherance of the
                Company’s business, provided the Executive shall submit to the Company an
                expense report including vouchers for the same in accordance with
                the
                Company’s expense reimbursement
                policy.

            

    

    

    
      	 	
              5.

            	
              Termination.
                The Term shall terminate prior to December 31, 2009 upon the happening
                of
                any of the following events:

            

    

    

    
      	 	
              (a)

            	
              Automatically
                and without notice from the Company upon the death of the
                Executive.

            

    

    

    
      	 	
              (b)

            	
              Upon
                written notice from the Company to the Executive in the event that
                the
                Executive becomes physically or mentally disabled, either totally
                or
                partially.

            

    

    

    
      	 	
              (c)

            	
              Upon
                written notice by the Company on grounds of conviction of a crime,
                failure
                to carry out the policies of the Company, persistent absenteeism,
                felonious act or other dishonest practice, non-performance of his
                responsibilities and obligations to the Company, breach of the provisions
                of this Agreement, gross misconduct or neglect, whether by commission
                or
                omission, conduct prejudicing or tending to bring himself or the
                Company
                or its subsidiaries or affiliates into contempt or disrepute, or
                any
                similar cause.

            

      	 	 	 

      	 	 	Upon termination of employment hereunder, the Company
              shall not be required to pay
              the Executive any severance pay, or any other sum except his salary,
              to
              the date of
              such termination; provided, however, that upon termination of the
              Executive only (i)
              through death of the Executive during the Term, or (ii) by the Company
              without cause
              which shall be deemed a reason other than by termination as per
              subparagraphs (b)
              and (c) of this section 5, then the Company shall pay the Executive
              one
              year salary,
              as his salary is at such date of termination, as severance
              pay.

    

    

    
      	 	
              6.

            	
              Non-Competition.

            

    

    

    
      	 	
              (a)

            	
              The
                Executive shall not at any time within a period of one year from
                the date
                of termination
                of his employment hereunder for any reason whatsoever unless with
                the
                prior
                written consent of the
                Company,

            

    

    

    
      	 	
              (i)

            	
              directly
                or indirectly, whether as principal, servant, agent or consultant,
canvass,
                solicit or entice or endeavour to entice away from the Company
                (which
                term for purposes of this Section 6 means and includes any and all
                of
                the Company’s subsidiaries of affiliates) any director, officer or
                employee
                of the Company, or

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	 	
              (ii)

            	
              directly
                or indirectly, whether as principal, servant or agent or in any other
                capacity whatsoever carry on or be engaged or interested in any business
                within
                the United States and Mexico carrying on trade (“the trade”) as
                manufacturer,
                assembler, designer, installer, developer, producer, dealer in,
                agent
                for or distributor of electronic products and assemblies, such as
                but
                not
                limited to conventional and moulded cables and wire harnesses and
                printed
                circuit-boards, electro-mechanical assemblies and products, plastic
                insert
                and injection moulded products, and other related services or products
                (collectively “Products”) of the Company in competition with the
                Company,
                competition to mean those Products then produced and marketed with
                customer as that term is used and defined herein, provided, the
                Executive
                shall be entitled to invest and/or own up to 5% of the equity of
                any
                such business; or

            

    

    

    
      	 	
              (iii)

            	
              directly
                or indirectly, whether as principal, servant or agent, solicit or
                seek
                to
                obtain for himself or for any person, firm or corporation by whom
                he is
                employed
                or with whom he is associated, the business of or act as principal,
                servant
                or agent for, or directly or indirectly accept any benefit, whether
                in
                money
                or otherwise from any business in connection with the trade conducted
                for any person, firm or corporation, which either at the date of
                termination
                of his employment or at any time during the 36 months immediately
                preceding such termination, is or was a customer of the Company,
                provided that such restriction applies only with respect to Products
                produced and marketed within such 36 month period by the Company
                for that customer; and provided
                further:

            

    

    

    
      	 	
              (A)

            	
              for
                the purpose of this clause the expression “customer” shall be deemed to
                include a prospective customer whose business was the subject of
negotiation
                with the Company or any of its subsidiaries or affiliates at any
                time
                within a period of 12 months prior to the termination of the Executive,
                and
                

            

    

     

    
      	 	
              (B)

            	
              in
                the event the Executive, directly or indirectly, receives any benefit,
                whether in money or otherwise as aforesaid, at or in respect of any
                time
                during
                such non-compete period of one year he shall, without prejudice to
                any
                other rights or remedies available to the Company, be bound forthwith
                to
                account for and make payment to the Company in respect to such benefit,
                and

            

    

    

    
      	 	
              (C)

            	
              for
                the purpose of this clause the Executive acknowledges and agrees
                that
                where
                multinational companies are customers of the Company the restrictions
                herein contained shall have effect in relation to such 
                multinational
                  companies in whatever country they are
                  located.

              

            

    

    

    
      	 	
              (b)

            	
              Each
                of the foregoing obligations shall be deemed to be separate and severable
                obligations
                and each said obligations shall be construed
                accordingly.

            

    

    

    
      	 	
              (c)

            	
              While
                the foregoing restrictions are considered by the parties to be reasonable
                in all the
                circumstances, it is agreed that if any of such restrictions shall
                be held
                to be void or
                ineffective for whatever reason but would be held to be valid and
                effective if part of
                the wording thereof were deleted or the periods thereof reduced or
                the
                area thereof
                reduced in scope, the said restrictions shall apply with such
                modifications as may
                be necessary to make them valid and
                effective.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	7.	Restriction on Effect of Termination.
              The termination of this Agreement howsoever arising
              shall not operate to affect such of the provisions hereof as in accordance
              with their
              terms are expressed to operate or have effect
              thereafter.

      	 	 	 

      	 	
              8.

            	
              Confidentiality.

            

    

    

    
      	 	
              (a)

            	
              The
                Executive shall not during the period of his employment hereunder,
                except
                in the proper
                course of his duties, and shall not at any time and in any circumstances
                after the
                termination thereof, divulge to any person whomsoever and shall use
                his
                best efforts
                to prevent the publication or disclosure of any secrets, trade secrets,
                confidential
                knowledge or information or any information concerning the business,
                finances
                or affairs of the Company or of any of its subsidiaries and affiliates
                or
                of any
                of their respective customers or clients (including without prejudice
                to
                the foregoing
                generality the names and location of customers, names or persons
                to
                contact
                within customer organization, specifications of customer needs,
                specifications
                of products meeting customer needs, cost and pricing policies, sources
                of
                supply of stocks and products and other proprietary information)
                or any of
                their dealings
                or transactions which may come or may come to his knowledge during
                or in
                the
                course of his employment, except what is already in the public
                domain.

            

    

     

    
      	 	
              (b)

            	
              The
                Executive shall immediately upon termination of his employment hereunder
                for whatsoever reason deliver up to the Company all price lists,
                lists of
                customers, correspondence
                and other documents, papers and property belonging to the Company
                or
                any of its subsidiaries or affiliates which may be have prepared
                by him or
                may have
                come into this possession in the course of his employment hereunder
                and
                shall not
                retain any copies thereof.

            

    

    

    
      	 	
              9.

            	
              Indemnity.
                The Company shall indemnify and hold harmless the Executive from
and
                against any and all claims, judgements, fines, penalties, liabilities
                ,
                losses, costs and
                expenses (including reasonable attorneys’ fees and costs) asserted against
                or incurred
                by the Executive as a result of acts or omissions of the Executive
                taken
                or made
                in the course of performing his duties for the Company or by reason
                of the
                Executive
                acting or having acted as an officer of the Company, to the maximum
                extent
                permitted by law, including Section 607.0850 of the Florida Business
                Corporation
                Act (including the advancement of expense provisions thereof);
                provided,
                however that such indemnity shall not apply to acts or omissions
                of the
                Executive
                which constitute wilful misconduct, gross negligence or which were
                intended
                by the Executive to personally benefit the Executive, directly or
                indirectly, at
                the expense of the Company, unless the matter which benefits the
                Executive
                was first
                fully disclosed to the board of directors of the Company and approved
                by
                said board.

            

      	 	 	 

      	 	10.	Binding on Successors. The
              rights and obligations of the parties shall inure to the benefit
              and shall be binding upon their successors and
              assigns.

      	 	 	 

      	 	11.	Waiver of Breach.
              The waiver by the Company or the Executive of a breach by either
              party of any provision hereof shall not operate or be construed to
              operate
              as a  waiver
              by either party of any subsequent breach of any other provision
              hereof.

      	 	 	 

      	 	12.	Survival of Provisions. The
              provisions of Sections 6 and 8 shall survive termination
              of employment of this Agreement. If any provision of this Agreement
              is
              declared
              invalid by any court or other competent authority the remaining provision
              of this
              Agreement shall not be affected thereby.

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	13.	Entire Agreement. 
              This instrument contains the entire agreement of the parties and
              may
              not be changed orally, but only by an agreement in writing signed by
              the
              party against
              whom enforcement of any waiver, change, modification, extension or
              discharge
              is sought.

      	 	 	 

      	 	14.	Governing Law. 
              This Agreement shall be governed by the Laws of the State of Florida.

      	 	 	 

      	 	
              15.

            	
              Assignability. 
                This agreement and its rights and obligations may not be assigned
                by the
                Executive. The Company may assign any of its rights and obligations
                hereunder to
                a successor or surviving corporation resulting from a merger,
                consolidation, sale of
                assets or stock, or other corporate
                reorganization.

            

    

    

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Agreement to be executed in its
      corporate
      name by an appropriate officer and its corporate seal to be hereto affixed,
      and
      the Executive has affixed his signature, all on the date and year first above
      written.

    

    

    
      	
              ATTEST:

            	
              SIMCLAR,
                INC.

            
	 	 
	 	 
	 	 
	 	 
	 	 
	
              /s/
                Stephen P.
                Donnelly               
                

            	
              By
                /s/ Samuel J.
                Russell               
                

            
	
              STEPHEN
                P DONNELLY, Secretary

            	
              SAMUEL
                J RUSSELL,

            
	 	
              Chairman
                of the Board and chief

            
	 	
              Executive
                Officer

            
	 	 
	
              WITNESS:

            	
              EXECUTIVE

            
	 	 
	 	 
	 	 
	 	 
	
              /s/
                Roxana Alvares

            	
              /s/
                Barry Pardon

            
	
              ROXANA
                ALVARES

            	
              BARRY
                PARDONREVOLVING
      CREDIT AND SECURITY AGREEMENT

     

    This
      Revolving Credit and Security Agreement (this “Agreement”), dated as of April
      22, 2008, is made by and between g8wave, Inc., a Delaware corporation
      (“Borrower”), and PMCG Management Company, LLC (“Lender”). 

     

    W
      I T N E
      S S E T H :

     

    In
      consideration of the premises and of the mutual covenants herein contained
      and
      to induce Lender to extend credit to Borrower, the parties agree as follows:
      

     

    1.
       Definitions.
      Capitalized terms that are not otherwise defined herein shall have the meanings
      set forth in Exhibit
      1
      hereto.

     

    2.
       The
      Revolving Credit Loans.

     

    2.1.
       Revolving
      Credit Loans.
      Upon a
      request from Borrower, Lender in its sole and absolute discretion may make
      Revolving Credit Loans to Borrower from time to time during the Revolving Credit
      Period in amounts such that the aggregate principal amount of Revolving Credit
      Loans at any one time outstanding will not exceed the Maximum Loan Amount.
      Borrower
      may borrow, prepay and request additional Revolving Credit Loans at any time
      during the Revolving Credit Period. 

     

    2.2.
       Interest
      Rate.
      The
      Revolving Credit Loans will bear interest at the Prime Rate plus 2% per annum.
      

     

    2.3.
       Revolving
      Credit Loans. 

     

    (a)
       Borrower
      may request a Revolving Credit Loan in form satisfactory to Lender. Lender
      will
      either advance the requested Revolving Credit Loan or inform Borrower that
      it
      will not make the requested Revolving Credit Loan within one Business Day of
      any
      such request. 

     

    (b)
       Notwithstanding
      the foregoing, at the request of Borrower, Lender may, in its sole and absolute
      discretion, make or permit to remain outstanding Revolving Credit Loans in
      excess of the original Maximum Loan Amount, each of which shall be a Revolving
      Credit Loan secured hereunder with interest at the Prime Rate plus 2% per annum.
      

     

    (c)
       Borrower
      will maintain all of its primary deposit accounts with Sovereign Bank.

     

    2.4.
       Promise
      to Pay.
      The
      Borrower promises to pay within ten (10) days of written DEMAND being made
      by
      the Lender on the Borrower:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (a)
       The
      Revolving Credit Loans, and the principal amount thereof and all interest,
      fees,
      expenses and other amounts payable hereunder, and

     

    (b)
       All
      other
      Indebtedness. 

     

    2.5.
       Payment
      of Interest.
      Until
      Demand is made under Section 2.4, Borrower will pay interest on the aggregate
      unpaid principal balance of the Revolving Credit Loans in arrears on the first
      Business Day of each month. 

     

    2.6.
       Overdue
      Amounts.
      Any
      payments not made as and when due or on DEMAND shall bear interest from the
      date
      due until paid at the Default Rate. 

     

    2.7.
       Statement
      of Account.
      The
      Lender will maintain a record of Revolving Credit Loans, interest thereon,
      expenses related thereto and payments made by Borrower and such records and
      such
      records will be presumed complete and accurate and will be definitive and
      binding on Borrower absent manifest error. 

     

    2.8.
       Computation
      of Interest.
      All
      interest hereunder shall be computed on the basis of a year of 360 days, and
      in
      each case shall be payable for the actual number of days elapsed (including
      the
      first day but excluding the last day). The applicable Prime Rate shall be
      determined by Lender and such determination shall be conclusive absent manifest
      error. 

     

    3.
       Conditions
      Precedent to Initial Advance.
      In
      addition to any other requirement set forth in this Agreement, Lender will
      not
      make the initial Revolving Credit Loan unless and until the following conditions
      shall have been satisfied: 

     

    (a)
       Agreement
      and Other Documents.
      Borrower shall have executed and delivered this Agreement, and other documents
      required by Lender, all in form and substance satisfactory to Lender.

     

    (b)
       Supporting
      Documents.
      Borrower shall cause to be delivered to Lender all certificates evidencing
      all
      of the outstanding shares of g8wave, Ltd. 

     

    (c)
       Perfection
      of Liens.
      UCC-1
      financing statements shall duly have been recorded or filed in the manner and
      places required by law to establish, preserve, protect and perfect the interests
      and rights created or intended to be created by the security interest granted
      hereunder; and all taxes, fees and other charges in connection with the
      execution, delivery and filing of the financing statements shall duly have
      been
      paid. 

     

    3.2.
       Further
      Assurances.
      Borrower shall have delivered such further documentation or assurances as Lender
      may reasonably require. 

     

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

     

    4.
       Representations
      and Warranties.
      In
      order to induce Lender to enter into this Agreement and to make the Revolving
      Credit Loans provided for herein, Borrower makes the following representations
      and warranties, all of which shall survive the execution and delivery of this
      Agreement. Unless otherwise specified, such representations and warranties
      shall
      be deemed made as of the date hereof and as of each date Borrower requests
      a
      Revolving Credit Loan: 

     

    4.1.
       Valid
      Existence and Power.
      Borrower is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware and is duly qualified or licensed to
      transact business in all places where the failure to be so qualified would
      have
      a Material Adverse Effect on it. The Borrower has the power to make and perform
      this Agreement and this Agreement will constitute the legal, valid and binding
      obligation of the Borrower enforceable in accordance with its terms, subject
      only to bankruptcy and similar laws affecting creditors' rights generally.
      

     

    4.2.
       Authority.
      The
      execution, delivery and performance by Borrower of this Agreement has been
      duly
      authorized by all necessary action of the Borrower. 

     

    4.3.
       Title.
      The
      Borrower has good title to all of the assets shown in its financial statements
      free and clear of all Liens, except Permitted Liens. 

     

    4.4.
       Collateral. The security interests granted to Lender herein (a)
      constitute, and as to subsequently acquired property included in the Collateral
      will constitute, a security interest under the Code entitled to all of the
      rights, benefits and priorities provided by the Code, and (b) are, and as to
      such subsequently acquired Collateral will be, fully perfected, superior and
      prior to the rights of all third persons, now existing or hereafter arising
      to
      the extent a security interest can be perfected by filing a UCC-1 financing
      statement and Lender files an effective UCC-1 financing statement in the
      appropriate jurisdictions in accordance with the Uniform Commercial Code as
      in
      effect in such jurisdictions, subject only to Permitted Liens. All of the
      Collateral is intended for use solely in Borrower's business. 

     

    4.5.
       Taxes.
      Borrower has filed all federal and state income and other tax returns which
      are
      required to be filed, and have paid all taxes as shown on said returns and
      all
      taxes, including withholding, FICA and ad valorem
      taxes,
      shown on all assessments received by it to the extent that such taxes have
      become due. Neither Borrower nor any Subsidiary is subject to any federal,
      state
      or local tax Liens nor has such Person received any notice of deficiency or
      other official notice to pay any taxes. Borrower and each Subsidiary have paid
      all sales and excise taxes payable by it. 

     

    4.6.
       Judgment
      Liens.
      Neither
      Borrower nor any of its assets, are subject to any unpaid judgments (whether
      or
      not stayed) or any judgment liens in any jurisdiction. 

     

    4.7.
       Subsidiaries.
      Borrower’s only Subsidiary is g8wave, Ltd. 

     

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

     

    4.8.
       Compliance
      with Law.
      Borrower and each Subsidiary thereof is in compliance in all material respects
      with the requirements of all laws and all orders, writs, injunctions and decrees
      applicable to it or to its properties, except in such instances in which (a)
      such requirement of law or order, writ, injunction or decree is being contested
      in good faith by appropriate proceedings diligently conducted or (b) the failure
      to comply therewith, either individually or in the aggregate, could not
      reasonably be expected to have a Material Adverse Effect.

     

    5.
       Affirmative
      Covenants of Borrower.
      Borrower covenants and agrees that from the date hereof and until payment in
      full of the Indebtedness and the formal termination of this Agreement, Borrower
      and each Subsidiary: 

     

    5.1.
       Use
      of
      Revolving Credit Loan Proceeds.
      Shall
      use the proceeds of the Revolving Credit Loans for working capital to be used
      in
      the operation of Borrower’s business and Borrower shall furnish Lender all
      evidence that it may reasonably require with respect to such use. 

     

    5.2.
       Maintenance
      of Business and Properties.
      Shall
      at all times maintain, preserve and protect all Collateral and all the remainder
      of its material property used or useful in the conduct of its business, and
      keep
      the same in good repair, working order and condition (ordinary wear and tear
      accepted), and from time to time make, or cause to be made, all material needful
      and proper repairs, renewals, replacements, betterments and improvements thereto
      so that the business carried on in connection therewith may be conducted
      properly and in accordance with standards generally accepted in businesses
      of a
      similar type and size at all times, and maintain and keep in full force and
      effect all licenses and permits reasonably necessary to the proper conduct
      of
      its business. 

     

    5.3.
       Inspections.
      Shall
      permit inspections of the Collateral and the records of such Person pertaining
      thereto and verification of the Accounts, at such times and in such manner
      as
      may be reasonably required by Lender. 

     

    5.4.
       Financial
      Information.
      Shall
      maintain books and records in accordance with GAAP and shall furnish to Lender
      such financial information including, without limitation, a balance sheet of
      Borrower and a consolidated income statement and statement of cash flows,
      together with all supporting schedules, setting forth in comparative form the
      figures for the same period of the preceding fiscal year, and certified by
      the
      chief financial officer of Borrower as true and correct and fairly representing
      the financial condition of Borrower and its Subsidiaries and that such
      statements are prepared in accordance with GAAP, as the Lender may request
      from
      time to time. 

     

    5.5.
       Tax
      Returns.
      Shall
      deliver copies of all tax returns filed with any taxing authority within 10
      days
      of filing such return.

     

    
      
        
        

      

      
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          4
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    5.6.
       Maintenance
      of Existence and Rights.
      Shall
      preserve and maintain its corporate existence, authorities to transact business,
      rights and franchises, trade names, patents, trademarks and permits necessary
      to
      the conduct of its business. 

     

    5.7.
       Payment
      of Taxes, Etc.
      Shall
      pay before delinquent all of its debts and taxes, except for debts and taxes
      being actively contested in good faith and in accordance with law and with
      proper reserves maintained on its books and records. Borrower shall promptly
      notify Lender of any such taxes being so contested. 

     

    5.8.
       Compliance
      with Intellectual Property.
      Shall
      maintain all of its patents, trademarks and copyrights, shall actively pursue
      any infringement of any such patent, trademark or copyright, and shall operate
      its business so as to not knowingly infringe any patent, trademark or copyright.
      

     

    5.9.
       Further
      Assurances.
      Shall
      take such further action and provide to Lender such further assurances as may
      be
      reasonably requested to ensure compliance with the intent of this Agreement.
      

     

    5.10.
       Covenants
      Regarding Collateral.
      

     

    (a)
       Shall
      use
      the Collateral only in the ordinary course of its business and shall not permit
      the Collateral to be used in violation of any applicable law or policy of
      insurance; 

     

    (b)
       Shall
      defend the Collateral against all claims and demands of all Persons, except
      for
      Permitted Liens; 

     

    (c)
       Shall
      obtain and deliver to Lender such waivers as Lender may require waiving the
      landlord's, mortgagee's or other lienholder's enforcement rights against the
      Collateral and assuring Lender's access to the Collateral in exercise of its
      rights hereunder; 

     

    6.
       Negative
      Covenants of Borrower.
      Borrower covenants and agrees that from the date hereof and until payment in
      full of the Indebtedness and the formal termination of this Agreement, Borrower
      and each Subsidiary: 

     

    6.1.
       Debt.
      Shall
      not create or permit to exist any Debt, except Permitted Debt. 

     

    6.2.
       Liens.
      Shall
      not create or permit any Liens on any of its property except Permitted Liens.
      

     

    6.3.
       Dividends.
      Shall
      not declare or pay any dividend other than dividends and distributions made
      by
      the Subsidiary of Borrower to Borrower. 

     

    
      
        
        

      

      
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          5
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    6.4.
       ERISA.
      Shall
      not institute or maintain any Benefit Plan a other than the existing 401(k)
      plan
      for its employees under 26 USC §401(k).

     

    6.5.
       Loans
      and Other Investments.
      Shall
      not make or permit to exist any advances or loans to, or guarantee or become
      contingently liable, directly or indirectly, in connection with the obligations,
      leases, stock or dividends of, or own, purchase or make any commitment to
      purchase any stock, bonds, notes, debentures or other securities of, or any
      interest in, or make any capital contributions to (all of which are sometimes
      collectively referred to herein as “Investments”) any Person except for (a)
      purchases of direct obligations of the federal government, (b) deposits in
      commercial banks, (c) commercial paper of any U.S. corporation having the
      highest ratings then given by the Moody’s Investors Services, Inc. or Standard
& Poor’s Corporation, (d) existing investments in Subsidiaries, (e)
      endorsement of negotiable instruments for collection in the ordinary course
      of
      business, (f) advances to employees for business travel and other expenses
      incurred in the ordinary course of business which do not at any time exceed
      $5,000.00 in the aggregate and (g) any mutual fund or other pooled investment
      vehicle rated at least AA by Moody’s Investor Services, Inc. or AAA by Standard
& Poors Corporation. 

     

    6.6.
       Change
      in Business.
      Shall
      not enter into any business which is substantially different from the business
      in which it is presently engaged. 

     

    6.7.
       Accounts.
      Shall
      not sell, assign or discount any of its Accounts, chattel paper or any
      promissory notes, instrument or payment intangible held by it other than the
      discount of such notes in the ordinary course of business for collection.

     

    6.8.
       No
      Change in Name, Offices; Removal of Collateral.
      Shall
      not, unless it shall have given 60 days’ advance written notice thereof to
      Lender, (a) change its name or the location of its chief executive office or
      other office where books or records are kept, (b) change its state of
      organization or (c) permit any Inventory or other tangible Collateral to be
      located at any location other than its usual place of business at the address
      listed in Section 9.6. 

     

    6.9.
       Margin
      Stock.
      Shall
      not use any proceeds of the Revolving Credit Loan to purchase or carry any
      margin stock (within the meaning of Regulation U of the Board of Governors
      of
      Federal Reserve System) or extend credit to others for the purpose of purchasing
      or carrying any margin stock. 

     

    6.10.
       Tangible
      Collateral.
      Shall
      not allow any Inventory or other tangible Collateral to be commingled with,
      or
      become an accession to or part of, any property of any other Person so long
      as
      such property is Collateral; nor allow any tangible Collateral to become a
      fixture. 

     

    6.11.
       Subsidiaries.
      Shall
      not acquire, form or dispose of any Subsidiaries or permit any Subsidiary to
      issue capital stock except to its parent.

     

    
      
        
        

      

      
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          6
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    6.12.
       Change
      of Name.
      Shall
      not use any new trade or fictitious name. 

     

    6.13.
       Change
      of fiscal year or Accounting Methods.
      Shall
      not change its fiscal year or its significant accounting methods without the
      prior written consent of Lender.

     

    7.
       Remedies.
      UPON A
      DEMAND UNDER SECTION 2.4, Lender may, without notice to Borrower, at its option,
      take any or all of the following actions, except as limited by Section 7.4:
      

     

    7.1.
       Bring
      suit against Borrower to collect the Indebtedness, exercise any remedy available
      to Lender hereunder or at law and take any action or exercise any remedy
      provided herein or under applicable law. No remedy shall be exclusive of other
      remedies or impair the right of Lender to exercise any other remedies.

     

    7.2.
       Without
      waiving any of its other rights hereunder exercise all rights and remedies
      of a
      secured party under the Code (and the Uniform Commercial Code of any other
      applicable jurisdiction) and such other rights and remedies as may be available
      hereunder, under other applicable law or pursuant to contract. If requested
      by
      Lender, Borrower will promptly assemble the Collateral and make it available
      to
      Lender at a place to be designated by Lender. Borrower agrees that any notice
      by
      Lender of the sale or disposition of the Collateral or any other intended action
      hereunder, whether required by the Code or otherwise, shall constitute
      reasonable notice to Borrower if the notice is mailed to Borrower by regular
      or
      certified mail, postage prepaid, at least ten days before the action to be
      taken. Borrower shall be liable for any deficiencies in the event the proceeds
      of the disposition of the Collateral do not satisfy the Indebtedness in full.
      

     

    7.3.
       Demand,
      collect and sue for all amounts owed pursuant to Accounts, general intangibles,
      chattel paper or for proceeds of any Collateral (either in Borrower's name
      or
      Lender's name at the latter's option), with the right to enforce, compromise,
      settle or discharge any such amounts. 

     

    7.4.
       Lender acknowledges that Borrower's parent company, g8wave Holdings, Inc.,
      a Delaware corporation ("Parent"), and Brad Mindich, an affiliate of Lender
      ("Mindich"), are currently negotiating a stock purchase agreement pursuant
      to
      which Parent would sell to Mindich all of the outstanding equity securities
      of
      Borrower (the "Stock Purchase Agreement"). Accordingly after the execution
      and
      delivery of the Stock Purchase Agreement and until the Stock Purchase Agreement
      has been terminated or the transactions provided for in the Stock Purchase
      Agreement have been consummated the period of time for payment after DEMAND
      as
      provided in Section 2.4 shall be extended to twenty (20) days.

     

    
      
        
        

      

      
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          7
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    8.
       Security
      Agreement.
      

     

    8.1.
       Security
      Interest.
      

     

    (a)
       As
      security for the payment and performance of any and all of the Indebtedness
      and
      the performance of all other obligations and covenants of Borrower hereunder,
      certain or contingent, now existing or hereafter arising, which are now, or
      may
      at any time or times hereafter be owing by Borrower to Lender, Borrower hereby
      pledges to Lender and gives Lender a continuing security interest in and general
      Lien upon and right of set off against, all right, title and interest of
      Borrower in and to the Collateral, whether now owned or hereafter acquired
      by
      Borrower. 

     

    (b)
       Except
      as
      herein or by applicable law otherwise expressly provided, Lender shall not
      be
      obligated to exercise any degree of care in connection with any Collateral
      in
      its possession, to take any steps necessary to preserve any rights in any of
      the
      Collateral or to preserve any rights therein against prior parties. In any
      case
      Lender shall be deemed to have exercised reasonable care if it shall have taken
      such steps for the care and preservation of the Collateral or rights therein
      as
      Borrower may have reasonably requested Lender to take and Lender's omission
      to
      take any action not requested by Borrower shall not be deemed a failure to
      exercise reasonable care. No segregation or specific allocation by Lender of
      specified items of Collateral against any liability of Borrower shall waive
      or
      affect any security interest in or Lien against other items of Collateral or
      any
      of Lender's options, powers or rights under this Agreement or otherwise arising.
      

     

    8.2.
       Delivery
      of Certificated Securities.
      In
      furtherance of the security interest granted by the Borrower to the Lender,
      the
      Borrower shall deliver to the Lender each certificate evidencing any
      certificated security which the Borrower owns or controls with such endorsements
      or stock power executed in blank as is necessary to permit the transfer the
      interest of the Borrower in such certificated security, 

     

    8.3.
       Control
      Agreement.
      The
      Borrower shall obtain control agreement or control agreements from each bank
      or
      other institution with which the Borrower maintains a deposit account of any
      nature in such form satisfactory to the Lender, perfecting the security interest
      of the Lender in each such deposit account. 

     

    8.4.
       Power of Attorney. Borrower authorizes Lender at Borrower's expense to
      file any financing statements relating to the Collateral which Lender deems
      appropriate and Borrower irrevocably appoints Lender as its
      attorney in fact to perform all other acts which Lender deems
      appropriate to perfect and to continue perfection of the security interest
      of
      Lender. Effective upon a demand made pursuant to Section 2.4, and subject to
      Section 7.4, Borrower hereby appoints Lender as Borrower's
      attorney in fact to endorse, present and collect on behalf of Borrower
      and in Borrower's name any draft, checks or other documents necessary or
      desirable to collect any amounts, which Borrower may be owed. Effective upon
      a
      demand made pursuant to Section 2.4, and subject to Section 7.4, to the extent
      permitted by applicable law or by the terms of any such licenses or franchise
      agreements, Lender is hereby granted a license or other right to use, without
      charge, Borrower’s patents, copyrights, rights of use of any name, trade
      secrets, trade names, trademarks and advertising matter, or any Property of
      a
      similar nature, as it pertains to the Collateral, in advertising for sale and
      selling any Collateral, and Borrower’s rights under all licenses and all
      franchise agreements shall inure to Lender’s benefit. The proceeds realized from
      the sale or other disposition of any Collateral may be applied, after allowing
      two (2) Business Days for collection, first to the reasonable costs, expenses
      and attorneys’ fees and expenses incurred by Lender for collection and for
      acquisition, completion, protection, removal, storage, sale and delivering
      of
      the Collateral; secondly, to interest due upon any of the Indebtedness; and
      thirdly, to the principal amount of the Indebtedness. If any deficiency shall
      arise, Borrower shall remain liable to Lender therefor. 

     

    
      
        
        

      

      
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          8
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    8.5.
       Entry. Borrower hereby irrevocably consents to any act by Lender or its
      agents in entering upon any premises for the purposes of either (i) inspecting
      the Collateral or (ii) upon a demand made pursuant to Section 2.4, and subject
      to Section 7.4, taking possession of the Collateral and Borrower hereby waives
      its right to assert against Lender or its agents any claim based upon trespass
      or any similar cause of action for entering upon any premises where the
      Collateral may be located. 

     

    8.6.
       Other
      Rights.
      Borrower authorizes Lender without affecting Borrower's obligations hereunder
      from time to time to take from any party and hold additional collateral or
      guaranties for the payment of the Indebtedness or any other supporting
      obligations or any part thereof, and to exchange, enforce or release such
      collateral or guaranty of payment of the Indebtedness or any other supporting
      obligation or any part thereof and to release or substitute any endorser or
      guarantor or any party who has given any security interest in any collateral
      as
      security for the payment of the Indebtedness or any part thereof or any party
      in
      any way obligated to pay the Indebtedness or any part thereof. 

     

    8.7.
       Waiver
      of Marshaling.
      Borrower hereby waives any right it may have to require marshaling of its
      assets. 

     

    9.
       Miscellaneous.
      

     

    9.1.
       No
      Waiver, Remedies Cumulative.
      No
      failure on the part of Lender to exercise, and no delay in exercising, any
      right
      hereunder shall operate as a waiver thereof, nor shall any single or partial
      exercise of any right hereunder preclude any other or further exercise thereof
      or the exercise of any other right. The remedies herein provided are cumulative
      and are in addition to any other remedies provided by law or otherwise.

     

    9.2.
       Survival
      of Representations.
      All
      representations and warranties made herein shall survive the making of the
      Revolving Credit Loans hereunder and shall continue in full force and effect
      so
      long as any Indebtedness is outstanding, there exists any commitment by Lender
      to Borrower, and until this Agreement is formally terminated in writing.

     

    
      
        
        

      

      
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          9
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    9.3.
       Costs
      and Expenses.
      Borrower shall pay (i) all reasonable out of pocket expenses incurred by Lender
      (including the reasonable fees, charges and disbursements of counsel for Lender,
      in connection with the preparation, negotiation, execution, delivery and
      administration of this Agreement or any amendments, modifications or waivers
      of
      the provisions hereof or thereof and (ii) all out of pocket expenses incurred
      by
      Lender (including the fees, charges and disbursements of any counsel for Lender,
      in connection with the enforcement or protection of its rights (A) in connection
      with this Agreement or (B) in connection with the Revolving Credit Loans made
      hereunder, including all such out of pocket expenses incurred during any
      workout, restructuring or negotiations in respect of such Revolving Credit
      Loans. 

     

    9.4.
       Indemnification
      by Borrower.
      Borrower shall indemnify Lender and its Affiliates, and each officer, director,
      agent or attorney of any of the foregoing Persons (each such Person being called
      an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all
      losses, claims, damages, liabilities and related expenses (including the fees,
      charges and disbursements of any counsel for any Indemnitee), incurred by any
      Indemnitee or asserted against any Indemnitee by any third party or by Borrower
      arising out of, in connection with, or as a result of (i) the execution or
      delivery of this Agreement or any agreement or instrument contemplated hereby
      or
      thereby, the performance by the parties hereto of their respective obligations
      hereunder or thereunder or the consummation of the transactions contemplated
      hereby or thereby, (ii) any Revolving Credit Loan or the use or proposed use
      of
      the proceeds therefrom (iii) any actual or alleged presence or release of
      hazardous or toxic materials on or from any property owned or operated by
      Borrower or any of its Subsidiaries, or any liability under any environmental
      law related in any way to Borrower or any of its Subsidiaries, or (iv) any
      actual or prospective claim, litigation, investigation or proceeding relating
      to
      any of the foregoing, whether based on contract, tort or any other theory,
      whether brought by a third party or by Borrower, and regardless of whether
      any
      Indemnitee is a party thereto. 

     

    9.5.
       Waiver
      of Consequential Damages, Etc.
      To the
      fullest extent permitted by applicable law, Borrower shall not assert, and
      hereby waives, any claim against any Indemnitee, on any theory of liability,
      for
      special, indirect, consequential or punitive damages (as opposed to direct
      or
      actual damages) arising out of, in connection with, or as a result of, this
      Agreement or any agreement or instrument contemplated hereby, the transactions
      contemplated hereby or thereby or the use of the proceeds thereof. No Indemnitee
      shall be liable for any damages arising from the use by unintended recipients
      of
      any information or other materials distributed by it through telecommunications,
      electronic or other information transmission systems in connection with this
      Agreement or the transactions contemplated hereby or thereby. 

     

    9.6.
       Notices
      Generally.
      Except
      in the case of notices and other communications expressly permitted to be given
      by telephone, notice of DEMAND under Section 2.4 and all other notices and
      other
      communications provided for herein shall be in writing and shall be delivered
      by
      hand or overnight courier service, mailed by certified or registered mail or
      sent by telecopier as follows: 

     

    
      
        
        

      

      
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                Lender:

              	
                PMCG
                  Management Company, LLC

              
	 	 	
                126
                  Brookline Avenue

              
	 	 	
                Boston,
                  MA 02215

              
	 	 	
                Attn:
                  Richard F. Gallagher, Jr.

              
	 	 	
                Fax:
                  617-425-2638

              
	 	 	
                Email:
                  rgallagher@phx.com

              
	 	 	 
	 	
                Borrower:
                  

              	
                g8wave,
                  Inc.

              
	 	 	
                126
                  Brookline Ave

              
	 	 	
                Boston,
                  MA 02215

              
	 	 	
                Attn:
                  William Duke

              
	 	 	
                Fax:
                  (617) 859-8328

              
	 	 	
                Email:
                  wduke@g8wave.com

              

      

    

     

    Notices
      sent by hand or overnight courier service, or mailed by certified or registered
      mail, shall be deemed to have been given when received; notices sent by
      facsimile shall be deemed to have been given when sent (except that, if not
      given during normal business hours for the recipient, shall be deemed to have
      been given at the opening of business on the next business day for the
      recipient). Notices and other communications sent to an e-mail address shall
      be
      deemed received upon the sender’s receipt of an acknowledgment from the intended
      recipient (such as by the “return receipt requested” function, as available,
      return e-mail or other written acknowledgment), provided
      that if
      such notice or other communication is not sent during the normal business hours
      of the recipient, such notice or communication shall be deemed to have been
      sent
      at the opening of business on the next business day for the recipient,

     

    9.7.
       Governing
      Law.
      This
      Agreement is made under the laws of The Commonwealth of Massachusetts and shall
      be governed by and construed in accordance with the laws of said commonwealth
      (excluding its conflict of laws provisions if such provisions would require
      application of the laws of another jurisdiction) except insofar as the laws
      of
      another jurisdiction may, by reason of mandatory provisions of law, govern
      the
      perfection, priority and enforcement of security interests in the Collateral.
      

     

    9.8.
       Successors
      and Assigns.
      This
      Agreement shall be binding upon and shall inure to the benefit of Borrower
      and
      Lender, and their respective successors and assigns; provided that Borrower
      may
      not assign any of its rights hereunder without the prior written consent of
      Lender, and any such assignment made without such consent will be void.

     

    9.9.
       Counterparts.
      This
      Agreement may be executed in any number of counterparts and by different parties
      hereto in separate counterparts, each of which when so executed and delivered
      shall be deemed an original and all of which when taken together shall
      constitute but one and the same instrument. 

     

    
      
        
        

      

      
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    9.10.
       Powers.
      All
      powers of attorney granted to Lender are coupled with an interest and are
      irrevocable. 

     

    9.11.
       Approvals.
      If this
      Agreement calls for the approval or consent of Lender, such approval or consent
      may be given or withheld in the discretion of Lender unless otherwise specified
      herein. 

     

    9.12.
       No
      Punitive Damages.
      Each
      party agrees that it shall not have a remedy of punitive or exemplary damages
      against the other in any dispute and hereby waives any right or claim to
      punitive or exemplary damages it may have now or which may arise in the future
      in connection with any dispute. 

     

    9.13.
       WAIVER
      OF JURY TRIAL.
      EACH
      PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
      ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
      INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
      CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
      EACH
      PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
      OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
      WOULD
      NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
      ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
      INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
      CERTIFICATIONS IN THIS SECTION 10.15. 

     

    9.14.
       Waiver
      of Certain Defenses.
      All
      rights of Lender and all obligations of Borrower hereunder shall be absolute
      and
      unconditional irrespective of (i) any change in the time, manner or place of
      payment of, or any other term of, all or any of the Indebtedness, or any other
      amendment or waiver of or any consent to any departure from any provision of
      this Agreement, (ii) any exchange, release or non-perfection of any other
      collateral given as security for the Indebtedness, or any release or amendment
      or waiver of or consent to departure from any guaranty for all or any of the
      Indebtedness, or (iii) any other circumstance which might otherwise constitute
      a
      defense available to, or a discharge of, Borrower or any third party, other
      than
      payment and performance in full of the Indebtedness.

     

    [SIGNATURES
      ON NEXT PAGE]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed as of the day and year first above written. 

     

    LENDER:

    PMCG
      Management Company, LLC

    

    By:
      /s/
      Richard F. Gallagher, Jr.

    Name:
      Richard F. Gallagher, Jr.

    Its:
      Chief Financial Officer

     

    BORROWER

    g8WAVE,
      INC.:

    

    By:
      /s/
      Habib Khoury

    Name:
      Habib Khoury

    Its:
      President & CEO 

    

    
      
        
        

      

      
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    EXHIBITS
      AND SCHEDULES

     

    (If
      any
      exhibit is omitted, the information called for therein shall be considered
      “None” or “Not Applicable”) 

     

    
      	
              Exhibit

            	
              Section

            	
              Reference Title

            
	
              1

            	
              1

            	
              Definitions

            
	
              Schedules

            	
              Section
                Reference

            	
              Title

            
	
              A

            	 	
              Permitted
                Debt

            
	
              B

            	 	
              Permitted
                Liens

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      1

     

    Definitions

     

    1.1
      Defined
      Terms:
      

     

    “Account”
means
      any account receivable as defined in the Code. 

     

    “Affiliate”
of
      a
      Person means (a) any Person directly or indirectly controlling, controlled
      by or
      under common control with such named Person; (b) any officer, director or
      employee of such named Person or any Affiliate of the named Person; and (c)
      any
      family member of the named Person or any Affiliate of such named Person.

     

    “Benefit
      Plan”
shall
      mean an employee pension benefit plan of Borrower or an ERISA Affiliate, as
      defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA.

     

    “Business
      Day”
means
      any day that is not a Saturday, Sunday or other day on which commercial banks
      in
      Massachusetts are authorized or required by law to remain closed. 

     

    “Code”
means
      the Uniform Commercial Code, as in effect in the Commonwealth of Massachusetts
      from time to time. 

     

    “Collateral”
means
      the following property of Borrower, wherever located and whether now owned
      by
      Borrower or hereafter acquired (all terms shall have the meaning provided in
      the
      Code): (a) all Accounts. (b) all Inventory; (c) all general intangibles; (c)
      all
      chattel paper, (d) all instruments, (e) all payment intangibles, (f) all
      Equipment, (g) all investment property, (h) all bank accounts and deposit
      accounts, (i) all supporting obligations, (j) all trademarks, tradenames,
      copyrights or other rights in intellectual property, (k) all rights of the
      Borrower in any contracts or agreements which may be assigned of right and
      (l) all parts, replacements, substitutions, profits, products and cash and
      non-cash proceeds of any of the foregoing (including insurance proceeds payable
      by reason of loss or damage thereto) in any form and wherever located.
      Collateral shall include all written or electronically recorded books and
      records relating to any such Collateral and other rights relating thereto.
      

     

    “Debt”
means
      the following obligations of a Person as determined under GAAP and all such
      obligations which such Person has guaranteed or endorsed or is otherwise
      secondarily or jointly liable for including: (a) all obligations for borrowed
      money or purchased assets, (b) obligations secured by assets whether or not
      any
      personal liability exists, (c) the capitalized amount of any capital or finance
      lease obligations, (d) the unfunded portion of pension or benefit plans or
      other
      similar liabilities, and (e) contingent obligations pursuant to guaranties,
      endorsements, letters of credit and other secondary liabilities. 

     

    “Default
      Rate”
means
      a
      rate equal to the lesser of (a) the Prime Rate plus five percent (5%) per annum
      or (b) the highest rate of interest allowed by law. 

     

    “Equipment”
shall
      have the meaning provided in the Code. 

     

    
      
        
        

      

      
        Exhibit
          1

        
          

        

      

      
        
        

      

    

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended from time to
      time. 

     

    “GAAP”
means
      generally accepted accounting principles as in effect in the Unites States
      from
      time to time. 

     

    “Indebtedness”
means
      all obligations now or hereafter owed to Lender by Borrower, whether related
      or
      unrelated to the Revolving Credit Loans, including, without limitation, amounts
      owed or to be owed under the terms of this Agreement, or arising out of the
      transactions described therein, including, without limitation, the Revolving
      Credit Loans together with all interest accruing thereon, all fees, all costs
      of
      collection, attorneys' fees and expenses of or advances by Lender which Lender
      pays or incurs in discharge of obligations of Borrower or to inspect, repossess,
      protect, preserve, store or dispose of any Collateral, whether such amounts
      are
      now due or hereafter become due, direct or indirect and whether such amounts
      due
      are from time to time reduced or entirely extinguished and thereafter
      re-incurred. 

     

    “Inventory”
shall
      have the meaning provided in the Code. 

     

    “Lien”
means
      any mortgage, pledge, statutory lien or other lien arising by operation of
      law,
      security interest, trust arrangement, security deed, financing lease, collateral
      assignment or other encumbrance, conditional sale or title retention agreement,
      or any other interest in property designed to secure the repayment of
      Indebtedness, whether arising by agreement or under any statute or law or
      otherwise. 

     

    “Material
      Adverse Effect”
means
      any event, condition or fact which could reasonably be expected to materially
      and adversely effect the ability of Borrower to fulfill or perform any of its
      obligation under this Agreement. 

     

    “Maximum
      Loan Amount”
means
      $250,000. 

     

    “Permitted
      Debt” means (a) the Indebtedness, (b) any other Debt listed on Schedule A hereto
      (if any) and any extensions, renewals, replacements, modifications and
      refundings of any such Debt; provided, however, that the principal amount of
      such Debt may not be increased from the amount shown as outstanding on such
      exhibit, except as provided on such exhibit, and (c) Debt incurred for capital
      expenditures secured only by the capital asset purchased with such Debt, and
      (d)
      trade debt incurred in the ordinary course of business, consistent with past
      practices. 

     

    “Permitted
      Liens”
shall
      mean (i) statutory liens of landlords, carriers, warehousemen, processors,
      mechanics, materialmen or suppliers incurred in the ordinary course of business
      and securing amounts not yet due or declared to be due by the claimant
      thereunder, (ii) liens or security interests in favor of Lender, (iii) zoning
      restrictions and easements, rights of way, licenses, covenants and other
      restrictions affecting the use of real property that do not individually or
      in
      the aggregate have a Material Adverse Effect on Borrower's ability to use such
      real property for its intended purpose in connection with Borrower's business,
      (iv) liens securing the payment of taxes or other governmental charges not
      yet
      delinquent or being contested in good faith and by appropriate proceedings,
      (v)
      liens incurred or deposits made in the ordinary course of Borrower's business
      in
      connection with capitalized leases or purchase money security interests for
      purchase of Equipment, (vi) liens securing indebtedness owing by any Subsidiary
      to Borrower (vii) liens specifically permitted by Lender in writing or set
      forth
      on Schedule B attached hereto; (viii) pledges or deposits in connection with
      worker's compensation, unemployment insurance and other social security
      legislation; and (ix) rights of setoff, banker's lien and other similar rights
      arising solely by operation of law. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Person”
means
      any natural person, corporation, unincorporated organization, trust,
      joint stock company, joint venture, association, company, limited or
      general partnership, any government or any agency or political subdivision
      of
      any government, or any other entity or organization. 

     

    “Prime
      Rate”
shall
      mean the Prime Rate in effect from time to time as published in the Wall Street
      Journal. 

     

    “Revolving
      Credit Loan”
means
      a
      loan made pursuant to and as limited by Section 2.3. 

     

    “Revolving
      Credit Period”
means
      the period from and including the date of this Agreement to but not including
      June 30, 2008. 

     

    “Subsidiary”
means
      any corporation, partnership or other entity in which Borrower, directly or
      indirectly, owns more than fifty percent (50%) of the stock, capital or income
      interests, or other beneficial interests, or which is effectively controlled
      by
      such Person. 

     

    1.2
      Terms
      Generally.
      The
      definitions of terms herein shall apply equally to the singular and plural
      forms
      of the terms defined. Whenever the context may require, any pronoun shall
      include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
      phrase “without limitation”. The word “will” shall be construed to have the same
      meaning and effect as the word “shall.” Unless the context requires otherwise
      (a) any definition of or reference to any agreement, instrument or other
      document herein shall be construed as referring to such agreement, instrument
      or
      other document as from time to time amended, supplemented or otherwise modified
      (subject to any restrictions on such amendments, supplements or modifications
      set forth herein), (b) any reference herein to any Person shall be construed
      to
      include such Person's successors and assigns, (c) the words “herein”, “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
      this Agreement in its entirety and not to any particular provision hereof,
      (d)
      all references herein to Articles, Sections, Exhibits and Schedules shall be
      construed to refer to Articles and Sections of, and Exhibits and Schedules
      to,
      this Agreement and (e) the words “asset” and “property” shall be construed to
      have the same meaning and effect and to refer to any and all tangible and
      intangible assets and properties, including cash, securities, accounts and
      contract rights.

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