Document:

EXHIBIT 10.1

                          AGREEMENT AND PLAN OF MERGER

         THIS  AGREEMENT  AND PLAN OF MERGER  ("Agreement")  is made and entered
into as of June 29, 2007,  by and among  WI-TRON,  INC., a Delaware  corporation
("Parent"),  TEK SUB, INC., a Delaware corporation and a wholly owned subsidiary
of Parent ("Acquisition Sub"), TEK, LTD., a New Jersey corporation  ("Company"),
and JOHN CHASE LEE ("JCL"), an individual and sole shareholder of the Company")

         WHEREAS, JCL is both the controlling shareholder of the Company, and an
executive officer, director and majority shareholder of the Parent;

         WHEREAS, the respective Boards of Directors of Parent,  Acquisition Sub
and Company have  determined  that a merger of Acquisition Sub with and into the
Company (the  "Merger"),  upon the terms and subject to the conditions set forth
in this Agreement,  would be fair and in the best interests of their  respective
shareholders,  and such Boards of Directors have approved such Merger,  pursuant
to which Parent shall issue to the  shareholders  of the Company an aggregate of
40,000,000 shares of Parent Common Stock ("Exchange  Stock") in exchange for all
of the  issued  and  outstanding  shares of  common  stock of the  Company  (the
"Company Stock");

         WHEREAS,  as a result of the foregoing,  immediately  after the Merger,
JCL shall own 60.4% of the  issued  and  outstanding  total  shares of  Parent's
Common Stock on a fully diluted basis,  and the stockholders of the Parent shall
own 39.6% of the Parent Common Stock;

         WHEREAS, the parties hereto intend and accordingly designate the Merger
so that the Merger  shall  qualify as a  reorganization  for federal  income tax
purposes  under the  provisions  of Section 368 of the Internal  Revenue Code of
1986, as amended (the "Code"); and

         WHEREAS,  the parties  hereto  desire to make certain  representations,
warranties,  covenants and agreements in connection  with the Merger and also to
prescribe various conditions to the Merger.

         NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  mutual
covenants and  agreements  herein  contained,  and intending to be legally bound
hereby, the parties hereby agree as follows:

                                    ARTICLE I

                                   THE MERGER

         SECTION 1.01 The Merger.  Upon the terms and subject to the  conditions
set  forth  in this  Agreement,  and in  accordance  with the  Delaware  General
Corporation Law (the "DGCL"),  Company shall merge with and into Acquisition Sub
at the Effective Time of the Merger (as defined in Section 1.03).  Following the
Effective  Time,  the separate  existence of  Acquisition  Sub shall cease,  and
Company shall continue as the surviving corporation  ("Surviving  Corporation"),
and shall further

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succeed  to and assume all the rights  and  obligations  of  Acquisition  Sub in
accordance  with the DGCL. As a result of the Merger,  Company shall be a wholly
owned subsidiary of the Parent.

         SECTION 1.02 The Closing.

         (a) The Closing of the transactions contemplated by this Agreement (the
"Closing") shall take place on the 15th day of July 2007,  commencing at 10:00am
Eastern Daylight Saving Time (the "Closing Date"),  unless another place or time
is mutually agreed upon in writing by the parties;  provided,  however, that the
Closing Date shall be no later than July 30, 2007.

         (b) At the Closing or prior thereto,  Parent and Company shall exchange
the various certificates,  instruments and such documents referred to in Article
VII of this Agreement.

         SECTION 1.03 Effective Time.

         (a) Subject to the provisions of this Agreement, as soon as practicable
on or after  the  Closing  Date,  Acquisition  Sub and  Company  shall  file the
Articles  of  Merger  or other  appropriate  documents  (in any such  case,  the
"Articles of Merger") executed in accordance with the relevant provisions of the
DGCL and shall make all other filings or recordings  required  under the DGCL in
order to effectuate the Merger and in order to accomplish  the proper  execution
of Acquisition Sub's and Parent's obligations under this Agreement.

         (b) The Merger shall  become  effective at such time as the Articles of
Merger are duly filed with the  Delaware  Secretary  of State,  or at such other
time as the Parent and the  Company  shall agree as should be  specified  in the
Articles  of Merger (the time the Merger  becomes  effective  being  hereinafter
referred to as the "Effective Time").

         (c) The  Surviving  Corporation  may,  at any time after the  Effective
Time, take any action  (including  executing and delivering any document) in the
name and on behalf of either  the  Company  or the  Acquisition  Sub in order to
carry out and effectuate the transactions  contemplated by this Agreement.  From
the Effective Time, the Surviving  Corporation  shall possess all of the rights,
privileges,  powers and  franchises  and be subject to all of the  restrictions,
disabilities  and duties of Company and  Acquisition  Sub, all as provided under
the DGCL.

         SECTION 1.04 Effects of the  Merger.  The Merger shall have the effects
set forth in the applicable provisions of the DGCL.

         SECTION 1.05 Articles of Incorporation and Bylaws.

                  (a) The Articles of  Incorporation of the Company as in effect
immediately  prior to the Effective Time shall be the Articles of  Incorporation
of the Surviving  Corporation  until  thereafter  changed or amended as provided
therein or by applicable law.

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                  (b) The bylaws of the Company as in effect  immediately  prior
to the  Effective  Time shall be the bylaws of the Surviving  Corporation  until
thereafter changed or amended as provided therein or by applicable law.

         SECTION 1.06 Directors. At  the  Closing  Date,  the  directors of  the
Company shall become the directors of the Surviving Corporation.

         SECTION 1.07 Officers. At the Closing Date, the officers of the Company
shall become the officers of the Surviving Corporation.

         SECTION 1.08 Shares Not Registered.  The Exchange Stock to be issued by
the Parent to the Company's  shareholders,  when issued,  will not be registered
under the Securities Act of 1933, as amended ("Act"),  or the securities laws of
any state or states,  but shall be issued in reliance upon the  exemptions  from
registration  provided  by  Section  4(2) of the Act  and/or  Rule 505 or 506 of
Regulation D under the Act and under  analogous state  securities  laws, or upon
any other such exemption,  on the grounds that the issuance does not involve any
public offering. The Exchange Stock will be "restricted securities" as that term
is defined in Rule 144(a) of the General Rules and Regulations under the Act and
must be held indefinitely, unless they are subsequently registered under the Act
or an exemption from the Act's registration  requirements is available for their
resale.  All  certificates  evidencing  the  Exchange  Stock to be issued by the
Parent  shall,  unless  and  until  removed  in  accordance  with  law,  bear  a
restrictive legend substantially in the following form:

                  "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
                  BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
                  AMENDED (THE "ACT"), AND ARE "RESTRICTED SECURITIES"
                  AS THAT TERM IS  DEFINED  IN RULE 144 UNDER THE ACT.
                  THESE  SHARES MAY NOT BE OFFERED  FOR SALE,  SOLD OR
                  OTHERWISE   TRANSFERRED   EXCEPT   PURSUANT   TO  AN
                  EFFECTIVE  REGISTRATION  STATEMENT UNDER THE ACT, OR
                  PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
                  ACT."

                                   ARTICLE II

                  EFFECT OF THE MERGER ON THE CAPITALIZATION OF
                            THE CONSTITUENT ENTITIES

         SECTION 2.01 Effect on  Capitalization.  As of the  Effective  Time, by
such actions to be taken by the parties'  hereto,  or otherwise by virtue of the
Merger and without any action on the part of the holders of the Company's Common
Stock or the holder of shares of capital stock of Acquisition Sub or Parent:

                  (a) Issuance of Exchange Stock.  Subject to this Section 2.01,
the Parent shall issue to the  shareholders  of the Company the Exchange  Stock.
Upon issuance of the Exchange  Stock,  the  shareholders of the Company will own
60% of the issued and outstanding  shares of Parent

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on a fully diluted basis and the remaining  shareholders of the Parent shall own
40% of the issued and outstanding shares of Parent on a fully diluted basis.

                  (b) Cancellation  of   Company's   Common  Stock.  As  of  the
Effective  Time, the Company's  Common Stock shall no longer be outstanding  and
shall  automatically  be canceled  and  retired  and shall  cease to exist,  and
holders of certificates  representing  the Company's Common Stock shall cease to
have any rights with respect  thereto,  except the right to receive the Exchange
Stock.

                  (d) No Further  Ownership  Rights in Company Common Stock. All
shares of Parent  Common  Stock  issued upon the  consummation  of the Merger in
accordance  with the terms of this  Article II shall be deemed to have been paid
in full satisfaction of all rights pertaining to the Company's Common Stock.

                  (e) Cancellation of Treasury  Stock. As of the Effective Time,
each share of Parent's  Common Stock held by the Parent as treasury  stock shall
be cancelled, and no payment shall be made with respect thereto.

                                  ARTICLE III

                 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         Company  represents and warrants to Parent and Acquisition Sub that the
statements  contained in this Article III are true, correct,  and complete as of
the date of this Agreement and will be true and correct as of the Closing Date:

         SECTION 3.01 Organization.   Company is a corporation  duly  organized,
validly  existing and in good standing  under the laws of New Jersey and has all
requisite  corporate  power and  authority to carry on its business as now being
conducted,  except  where the failure to be so  organized,  existing and in good
standing or to have such power and authority could not be reasonably expected to
(i) prevent or materially delay the  consummation of the Merger,  or (ii) have a
material adverse effect on Company.  Company is duly qualified or licensed to do
business and in good standing in each  jurisdiction in which the property owned,
leased or operated  by it or the nature of the  business  conducted  by it makes
such qualification or licensing necessary.

         SECTION 3.02 Subsidiaries.    Company   does  not  own,   directly   or
indirectly,  any capital stock or other ownership  interest in any  corporation,
partnership, joint venture or other entity.

         SECTION 3.03 Capitalization.   As  of the date of this  Agreement,  the
Company's  authorized  capital is 1,000 shares of Common Stock, no par value, of
which all  shares  are issued and  outstanding.  The  Company's  shares are duly
authorized,  validly  issued,  fully paid and  nonassessable  and not subject to
preemptive rights. There are no bonds,  debentures,  notes or other indebtedness
of Company having the right to vote (or that are convertible  into, or exchanged
for,  securities  having the right to vote) on any  matters on which  members of
Company may vote. There are no securities,  options,  warrants,  calls,  rights,
commitments,  agreements,  arrangements  or  undertakings  of any  kind to which
Company  is a party or by which  either is bound  obligating  Company  to issue,
deliver or

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sell, or cause to be issued,  delivered or sold, additional shares in Company or
obligating  Company to issue,  grant,  extend or enter  into any such  security,
option, warrant, call, right, commitment, agreement, arrangement or undertaking.
There are no  outstanding  contractual  obligations  of Company  to  repurchase,
redeem or otherwise acquire any shares of the Company.

         SECTION 3.04 Authority.

                  (a) Company has the  requisite  power and authority to execute
and deliver this  Agreement  and to  consummate  the  transactions  contemplated
hereby.  The  execution,  delivery and  performance  of this  Agreement  and the
consummation  by the  Company  of the  Merger  and  of  the  other  transactions
contemplated  hereby have been duly  authorized by all  necessary  action on the
part  of the  Company  and no  other  proceedings  on the  part of  Company  are
necessary to authorize  this  Agreement or to  consummate  the  transactions  so
contemplated,  subject to the filing of the Articles of Merger.  This  Agreement
has been duly  executed and delivered by Company and,  assuming  this  Agreement
constitutes  a valid and  binding  obligation  of Parent  and  Acquisition  Sub,
constitutes  a valid and  binding  obligation  of  Company  enforceable  against
Company  in  accordance  with  its  terms,   except  as  limited  by  applicable
bankruptcy,  insolvency,  reorganization,  moratorium  and other laws of general
application affecting enforcement of creditors' rights generally.

                  (b)  The  Company's  Board  of  Directors  have  duly  adopted
resolutions  (i) approving this Agreement and the Merger,  and (ii)  determining
that the terms of the Merger are in the best interests of Company.

                  (c) The holders of the Company's capital stock have executed a
written consent adopting resolutions approving this Agreement and the Merger.

         SECTION 3.05 Consents and Approvals; No Violations. Except for filings,
permits,  authorizations,  consents and approvals as may be required under,  and
other applicable requirements of the applicable and relevant laws of the laws of
the Delaware General Corporation Law ("DGCL"),  neither the execution,  delivery
or performance of this Agreement by Company nor the  consummation  by Company of
the  transactions  contemplated  hereby will (i) conflict  with or result in any
breach of any  provision  of the  Articles of  Incorporation  of  Company,  (ii)
require any filing with, or permit,  authorization,  consent or approval of, any
federal, state or local government or any court, tribunal, administrative agency
or commission or other  governmental  or other  regulatory  authority or agency,
domestic,  foreign or supranational (a "Governmental  Entity") (except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings could not reasonably be expected to have a material  adverse effect
on Company or prevent or materially delay the consummation of the Merger), (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a  default  (or give  rise to any  right of  termination,
amendment,  cancellation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage,  indenture,  lease,  license,  contract,
agreement or other  instrument  or  obligation to which Company is a party or by
which  Company or its  properties  or assets may be bound;  or (iv)  violate any
order,  writ,  injunction,  decree,  statute,  rule or regulation  applicable to
Company or any of its properties or assets,  except in the case of clauses (iii)
or (iv) for  violations,  breaches  or  defaults  that could not  reasonably  be
expected to have a material  adverse  effect on Company or prevent or materially
delay the consummation of the Merger.

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         SECTION 3.06 Financial Statements.  The audited financial statements of
Company as of and for the fiscal  year ended  December  31,  2006 (the  "Balance
Sheet  Date") and  December  31,  2005 have been  prepared  in  accordance  with
generally  accepted  accounting  principles  consistently  applied ("GAAP") with
respect  thereto  throughout  the periods  involved as explained in the notes to
such financial statements. The Company's financial statements present fairly, in
all material  respects,  as are their respective dates the financial position of
the  Company.  The  Company did not have,  as of the date of any such  financial
statements,  except as and to the extent  reflected or reserved against therein,
any  liabilities  or  obligations  (absolute  or  contingent)  which  should  be
reflected  therein in accordance  with GAAP,  and all assets  reflected  therein
presents fairly the assets of Company in accordance with GAAP.

         SECTION 3.07 Absence  of Certain  Changes or Events.  Since the Balance
Sheet Date, except as disclosed in the Company's audited financial statements as
of and for the fiscal  years ended  December 31, 2006 and 2005 to be provided to
Parent  pursuant to Section 5.03 of this  Agreement,  Company has  conducted its
business only in the ordinary course  consistent  with past practice,  and there
has not been any  material  adverse  change (as  defined  in Section  8.03) with
respect to Company.

         SECTION 3.08 No Undisclosed Liabilities.  As of the Balance Sheet Date,
except as disclosed in the Company's audited financial  statements as of and for
the fiscal  year  ended  December  31,  2006 and 2005 to be  provided  to Parent
pursuant to Section 5.03 of this  Agreement,  to the best  knowledge of Company,
Company has no liabilities or obligations of any nature, whether or not accrued,
contingent  or  otherwise,  that would be required by GAAP to be  reflected on a
balance sheet of Company (including the notes thereto).  Since the Balance Sheet
Date,  except for liabilities or obligations  incurred in the ordinary course of
business consistent with past practice, Company has not incurred any liabilities
of any nature,  whether or not accrued,  contingent or otherwise,  that could be
reasonably  expected to have a material  adverse effect on Company,  or would be
required by GAAP to be  reflected  on a  consolidated  balance  sheet of Company
(including the notes thereto).

         SECTION 3.09 Litigation.  There is no suit, claim,  action,  proceeding
pending or threatened  against Company,  nor is there any investigation  against
Company  threatened or pending before any  Governmental  Entity.  Company is not
subject to any outstanding order, judgment, writ, injunction or decree.

         SECTION 3.10 Permits;  Compliance with Law.  Company holds all permits,
licenses,  variances,  exemptions,  orders  and  approvals  of all  governmental
entities  necessary  for  the  lawful  conduct  of its  business  (the  "Company
Permits"),  except  for  failures  to hold such  permits,  licenses,  variances,
exemptions, orders and approvals that could not reasonably be expected to have a
material  adverse effect on Company.  Company is in compliance with the terms of
the Company Permits,  except where the failure so to comply could not reasonably
be expected to have a material adverse effect on the Company.  As of the date of
this Agreement,  no investigation,  inquiry or review by any Governmental Entity
with  respect  to  Company  is pending  or, to the best  knowledge  of  Company,
threatened,  nor has any  Governmental  Entity indicated an intention to conduct
any such investigation, inquiry or review.

         SECTION 3.11 Tax  Matters.   Company  has filed or shall file as of the
Closing Date all of its tax returns  required to be filed since  inception.  All
such  returns and reports are  accurate  and

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correct in all material respects. Company has no liabilities with respect to the
payment of any federal,  state,  county,  local,  or other taxes  (including any
deficiencies,  interest,  or  penalties)  accrued  for or  applicable  as of the
Closing Date,  and no deficiency  assessment or proposed  adjustment of any such
tax return is pending,  proposed or  contemplated.  To the knowledge of Company,
none of such income tax returns has been examined or is currently being examined
by the  Internal  Revenue  Service  and no  deficiency  assessment  or  proposed
adjustment of any such return is pending, proposed or contemplated. There are no
outstanding  agreements or waivers  extending the statutory period of limitation
applicable to any tax return of Company.

         SECTION 3.12 Intellectual Property.

                  (a) Except to the  extent  that the  inaccuracy  of any of the
following  (or the  circumstances  giving  rise to such  inaccuracy)  could  not
reasonably be expected to have a material adverse effect on Company:

                      (1) Company  owns,  or is licensed  or  otherwise  has the
legally  enforceable  right  to  use  (in  each  case,  clear  of any  liens  or
encumbrances of any kind),  all Intellectual  Property (as hereinafter  defined)
used in or necessary  for the conduct of its business as currently  conducted or
as proposed to be conducted;

                      (2) no claims are  pending  or, to the best  knowledge  of
Company,  threatened  that Company is infringing  on or otherwise  violating the
rights of any person with regard to any Intellectual  Property used by, owned by
and/or  licensed to Company and, to the best knowledge of Company,  there are no
valid grounds for any such claims;

                      (3)  to  the  best  knowledge  of  Company,  all  patents,
registered  trademarks,  service marks and copyrights  held by Company are valid
and subsisting.

                  (b) For purposes of this  Agreement,  "Intellectual  Property"
means patents,  trademarks  (registered or unregistered),  service marks,  brand
names,  certification  marks, trade dress,  assumed names, trade names and other
indications  of  origin,   the  goodwill   associated  with  the  foregoing  and
registrations  in any  jurisdiction  of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such  registration or application;  inventions,  discoveries and ideas,  whether
patented, patentable or not in any jurisdiction,  trade secrets and confidential
information  and  rights  in any  jurisdiction  to limit  the use or  disclosure
thereof  by  any  person,  writings  and  other  works  of  authorship,  whether
copyrighted,   copyrightable  or  not  in  any  jurisdiction;   registration  or
applications  for  registration  of  copyrights  in any  jurisdiction,  and  any
renewals or extensions thereof, any similar intellectual property or proprietary
rights and computer programs and software; licenses,  immunities,  covenants not
to sue and the like  relating  to the  foregoing;  and any  claims  or causes of
action arising out of or related to any infringement or  misappropriation of any
of the foregoing.

         SECTION 3.13 Risk   Knowledge  and   Analysis.  Each  of the  Company's
shareholders,  alone, or together with his or her adviser(s), has such knowledge
and experience in financial,  tax and business matters as to enable each of them
to utilize the information made available by Parent,  in connection with the and
issuance of the Merger  Consideration shares or any other consideration that may
be involved,  to evaluate  the merits and risks of acquiring  such shares and to
make an informed

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investment  decision with respect  thereto.  Each of the Company's  shareholders
confirms   that,   in  making  his  or  her   decision  to  receive  the  Merger
Consideration, such he or she has relied upon independent investigations made by
him,  or his  representatives,  including  his own  professional  tax and  other
advisers,  and that he and such  representatives have been given the opportunity
to examine all documents  and to ask  questions of, and to receive  answers from
Parent or any person(s) acting on its behalf concerning the terms and conditions
of this Agreement, and to obtain any additional information or documents, to the
extent Parent possesses such information or can acquire it without  unreasonable
effort or expense,  necessary to verify the accuracy of the information provided
by Parent.

         SECTION  3.14  Employment  Controversies.  There  are no  controversies
pending or, to the knowledge of Company, threatened,  between Company and any of
its  respective  employees.  The  Company  is  not a  party  to  any  collective
bargaining  agreement  or other  labor  union  contract  applicable  to  persons
employed by the Company.

         SECTION 3.15 Title to Property.  Company has good and defensible  title
to all of its  properties and assets,  free and clear of all liens,  charges and
encumbrances,  except  liens for taxes not yet due and payable and such liens or
other  imperfections  of title,  if any, as do not  materially  detract from the
value of or interfere with the present use of the property  affected  thereby or
which could not reasonably be expected to have a material adverse effect.

         SECTION 3.16 Environmental  Matters.    Company is not aware of nor has
ever received notice of any past or present violations of any environmental laws
or any event, condition,  circumstance,  activity, practice, incident, action or
plan  which  is  reasonably  likely  to  interfere  with  or  prevent  continued
compliance  with or  which  would  give  rise  to any  common  law or  statutory
liability,  or otherwise form the basis of any claim, action, suit or proceeding
against  Company  based  on  or  resulting  from  the  manufacture,  processing,
distribution,  use, treatment, storage, disposal, transport, handling, emission,
discharge or release into the  environment  of any  pollutant,  contaminant,  or
hazardous or toxic material or waste.

         SECTION 3.17  Interested  Party  Transactions.  Since the Balance Sheet
Date,  no event has occurred  that would be required to be reported as a Certain
Relationship  or Related  Transaction,  pursuant to Item 404 of  Regulation  S-K
promulgated by the SEC.

         SECTION 3.18 Absence of Certain Payments.  Neither Company,  nor any of
its  respective  affiliates,  officers,  directors,  employees or agent or other
people  acting on behalf of Company have (i) engaged in any activity  prohibited
by the United States Foreign Corrupt Practices Act of 1977, or any other similar
law,  regulation,  decree,  directive  or order of any  other  country  and (ii)
without  limiting the generality of the preceding clause (i), used any corporate
or other funds for unlawful contributions,  payments, gifts or entertainment, or
made any  unlawful  expenditures  relating to political  activity to  government
officials or others.  Neither  Company,  nor any of its  respective  affiliates,
directors,  officers,  employees or agents of other persons  acting on behalf of
any of them,  has  accepted or received any  unlawful  contributions,  payments,
gifts or expenditures.

         SECTION 3.19 Full Disclosure. No statement contained in any certificate
or schedule  furnished or to be  furnished by Company to Parent and  Acquisition
Sub in, or  pursuant to the  provisions  of,  this  Agreement,  contains or will
contain any untrue  statement of a material  fact or

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omits  or will  omit to  state  any  material  fact  necessary,  in light of the
circumstances under which it was made, in order to make the statements herein or
therein not misleading.

         SECTION 3.20 Real Property. The Company currently owns a building at 59
LaGrange Street,  Raritan,  New Jersey, and leases the property to Parent.  With
respect to any lease and sublease to which the Company is a party: (a) the lease
or sublease is legal, valid, binding,  enforceable, and in full force and effect
in all material  respects in accordance with its terms;  and (b) no party to the
lease or sublease is in material breach or material  default,  and, to Company's
knowledge,  no event has  occurred  which,  with notice or lapse of time,  would
constitute  a  material  breach  or  material  default  or  permit  termination,
modification, or acceleration.

         SECTION  3.21  Brokers.   The  Company  has  not  engaged  any  broker,
investment  banker,  financial  advisor or other person,  pursuant to which such
party is  entitled  to any  broker's,  finder's,  financial  advisor's  or other
similar fee or commission in connection  with the  transactions  contemplated by
this Agreement.

                                   ARTICLE IV

          REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB

         Each of Parent and Acquisition,  jointly and severally,  represents and
warrants to Company that the  statements  contained in this Article IV are true,
correct,  and  complete  as of the date of this  Agreement  and will be true and
correct as of the Closing Date:

         SECTION  4.01  Organization.  Each of Parent and  Acquisition  Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and has all requisite corporate power and authority to
carry on its business as now being conducted or to have such power and authority
could  not be  reasonably  expected  to (i)  prevent  or  materially  delay  the
consummation of the Merger, or (ii) have a material adverse effect on the Parent
or the  Acquisition  Sub. Each of the Parent and the  Acquisition Sub is in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the  nature of the  business  conducted  by it makes  such  good  standing
necessary.

         SECTION 4.02 Subsidiaries.  Each of Parent and Acquisition Sub does not
own,  directly or indirectly,  any capital stock or other ownership  interest in
any corporation, partnership, joint venture or other entity.

         SECTION 4.03  Capitalization.  The authorized  capitalization of Parent
consists of (i) 100,000,000 shares of Common Stock, $.0001 par value, 50,028,293
of which are issued and  outstanding,  and (ii)  5,000,000  shares of  preferred
stock,  none of which are issued  and  outstanding.  All issued and  outstanding
capital stock of Parent are legally issued,  fully paid, and  non-assessable and
not issued in violation of the  preemptive  or other right of any person.  There
are no  dividends  or other  amounts due or payable  with  respect to any of the
shares of capital stock of Parent, except as disclosed in Parent's SEC Documents
or in this  Agreement.  As of the date of this  Agreement  and as of the Closing
Date, there are 2,900,000  outstanding options and 1,445,000 warrants issued and

                                       9

<PAGE>

outstanding.  Other than  those  options  and  warrants,  there are no  purchase
rights,  subscription  rights,  conversion  rights,  exchange  rights,  or other
contracts  or  commitments  that  could  require  Parent or  Acquisition  Sub to
purchase,  issue,  sell, or otherwise  cause to become  outstanding any of their
capital stock,  outstanding  or authorized  stock  appreciation,  phantom stock,
profit  participation,  or similar  rights with respect to Parent or Acquisition
Sub, or voting  trusts,  proxies,  or other  agreements or  understandings  with
respect to the voting of the capital stock of Parent or  Acquisition  Sub. There
are no preemptive rights applicable with respect to Parent's Common Stock.

         SECTION 4.04 Authorization.  Each of Parent and Acquisition Sub has all
requisite  power and  authority  to execute and deliver  this  Agreement  and to
consummate the transactions  contemplated hereby. The board of directors of each
of Parent and  Acquisition  Sub has approved the  execution and delivery of this
Agreement and the  transactions  contemplated  by this  Agreement  including the
Merger in  accordance  with the  applicable  Delaware  law and with the DGCL and
Acquisition  Sub's  articles  of  incorporation  and  bylaws.  Parent,  as  sole
stockholder of Acquisition Sub, has approved the Merger,  and no other corporate
proceedings on the part of Parent or Acquisition  Sub are necessary to authorize
the execution,  delivery,  and performance,  and the resolutions  approving such
Merger are  irrevocable.  This Agreement has been duly executed and delivered by
each of Parent and  Acquisition  Sub and  constitutes  their  valid and  binding
obligations, enforceable against each of them in accordance with its terms.

         SECTION 4.05 Consents and Approvals; No Violations. Except for filings,
permits,  authorizations,  consents and  approvals as may be required  under the
DGCL,  and except for the  filings  required  to  consummate  the Merger and any
required  Form 8-K,  neither  the  execution,  delivery or  performance  of this
Agreement by Parent and Acquisition  Sub nor the  consummation by the Parent and
Acquisition Sub of the transactions  contemplated hereby will: (i) conflict with
or result in any breach of any  provision  of the Articles of  Incorporation  or
bylaws of Parent or  Acquisition  Sub,  (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity (except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings could not reasonably be expected to have a material  adverse effect
on Parent or Acquisition Sub or prevent or materially  delay the consummation of
the Merger),  (iii) result in a violation or breach of, or  constitute  (with or
without  due  notice  or lapse of time or both) a  default  (or give rise to any
right of termination, amendment, cancellation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage,  indenture,  lease,
license,  contract,  agreement or other  instrument  or  obligation to which the
Parent or Acquisition  Sub is a party or by which the Parent or Acquisition  Sub
or their  respective  properties  or assets may be bound;  or (iv)  violate  any
order,  writ,  injunction,  decree,  statute,  rule or regulation  applicable to
Parent or  Acquisition  Sub or any of their  respective  properties  or  assets,
except in the case of clauses (iii) or (iv) for violations, breaches or defaults
that could not  reasonably  be  expected  to have a material  adverse  effect on
Parent or Acquisition Sub or prevent or materially delay the consummation of the
Merger.

         SECTION 4.06 Financial Statements / SEC Filings.

                  (a) Included  in the last Form 10-KSB filed by Parent with the
SEC are the audited  balance  sheet of Parent as of December 31,  2006,  and the
related statements of operations, stockholders' equity (deficit), and cash flows
for the fiscal year ended December 31, 2006,  including

                                       10

<PAGE>

the notes  thereto,  and the  accompanying  report of the company's  independent
certified public accountant.

                  (b) The  financial  statements  of Parent for the fiscal  year
ended  December  31,  2006 have been  prepared  in  accordance  with GAAP and in
accordance  with the  published  rules and  regulations  of the SEC with respect
thereto  throughout  the  periods  involved  as  explained  in the notes to such
financial  statements.  The Parent financial  statements  present fairly, in all
material  respects,  as of their  respective  dates,  the financial  position of
Parent.  Parent did not have, as of the date of any such  financial  statements,
except  as and  to  the  extent  reflected  or  reserved  against  therein,  any
liabilities  or obligations  (absolute or contingent)  which should be reflected
therein in accordance with GAAP, and all assets reflected therein present fairly
the assets of Parent in accordance with GAAP.

                  (c) With the  exception  of any  filings  required  to be made
pursuant to Section 16 of the Exchange Act, Parent has made all filings with the
SEC that it has been required to make under the  Securities  Act of 1933 and the
Securities  Exchange Act of 1934. All documents required to be filed as exhibits
to the SEC Documents have been so filed, and all material  contracts so filed as
exhibits  are in full force and  effect,  except  those  which  have  expired in
accordance with their terms.  Each of Parent's SEC Documents has complied in all
material  respects with the Exchange Act in effect as of their respective dates.
None of Parent's SEC  Documents,  as of their  respective  dates,  contained any
untrue  statement  of a  material  fact or  omitted  to  state a  material  fact
necessary  in  order  to make  the  statements  made  therein,  in  light of the
circumstances under which they were made, not misleading.

         SECTION 4.07 Absence of Certain  Changes or Events.  Since December 31,
2006 Parent has conducted its business  only in the ordinary  course  consistent
with past  practice,  and there has not been any  material  adverse  change  (as
defined in Section 8.03) with respect to Parent.

         SECTION 4.08 No  Undisclosed  Liabilities.  As of December 31, 2007, to
the best knowledge of the Parent, neither the Parent nor the Acquisition Sub had
any liabilities or obligations of any nature, whether or not accrued, contingent
or otherwise,  that would be required by GAAP to be reflected on a balance sheet
of Parent or  Acquisition  Sub  (including  the notes  thereto).  Since the Most
Recent  Filing  Date,  except for  liabilities  or  obligations  incurred in the
ordinary course of business  consistent  with past practice,  neither the Parent
nor the Acquisition  Sub has incurred any liabilities of any nature,  whether or
not accrued,  contingent or otherwise, that could be reasonably expected to have
a material  adverse  effect on the Parent or the  Acquisition  Sub,  or would be
required by GAAP to be reflected on a  consolidated  balance sheet of the Parent
or the Acquisition Sub (including the notes thereto).

         SECTION 4.09 Benefit  Plans.  Neither  Parent nor  Acquisition  Sub has
operated any Pension Plan,  Welfare Plan, or other plan,  arrangement  or policy
(written or oral)  relating to stock  options,  stock  purchases,  compensation,
deferred  compensation,  bonuses,  severance,  fringe benefits or other employee
benefits.

         SECTION 4.10 Other  Compensation  Arrangements.  Neither the Parent nor
the Acquisition  Sub is a party to any oral or written (i) consulting  agreement
that is terminable on more than 30 calendar days notice,  or union or collective
bargaining  agreement,  (ii) agreement  with any executive

                                       11

<PAGE>

officer or other key employee of Parent or Acquisition  Sub, or (iii)  agreement
or plan,  including  any stock  option  plan,  stock  appreciation  right  plan,
restricted stock plan or stock purchase plan.

         SECTION 4.11 Litigation.  To the knowledge of Parent, other than as set
forth in its SEC filings, there is no suit, claim, action, proceeding pending or
threatened   against  Parent,   Acquisition   Sub,  or  any  of  Parent's  other
subsidiaries nor is there any investigation  against Parent,  Acquisition Sub or
any  of  Parent's   other   subsidiaries,   threatened  or  pending  before  any
Governmental  Entity.  Neither the Parent nor the  Acquisition Sub is subject to
any outstanding order, judgment, writ, injunction or decree.

         SECTION 4.12 Permits;  Compliance  with Law. Parent and Acquisition Sub
do not hold any permits, licenses,  variances,  exemptions, orders and approvals
of any Governmental Entities except for their incorporation and active status in
Delaware  (the  "Parent  Permits").  To its  knowledge,  as of the  date of this
Agreement,  no investigation,  inquiry or review by any Governmental Entity with
respect to the Parent or Acquisition  Sub is pending or threatened,  nor has any
Governmental  Entity  indicated an intention to conduct any such  investigation,
inquiry or review. To its knowledge, Parent is and at all times has been in full
compliance with the Sarbanes-Oxley Act of 2002 to the extent required.

         SECTION  4.13 Tax  Matters.  Parent  has filed or shall  file as of the
Closing Date all of its tax returns  required to be filed since  inception.  All
such  returns and reports are  accurate  and correct in all  material  respects.
Parent has no  liabilities  with respect to the payment of any  federal,  state,
county,  local,  or  other  taxes  (including  any  deficiencies,  interest,  or
penalties)  accrued for or applicable as of the Closing Date,  and no deficiency
assessment or proposed adjustment of any such tax return is pending, proposed or
contemplated.  To the  knowledge of Parent,  none of such income tax returns has
been examined or is currently being examined by the Internal Revenue Service and
no deficiency  assessment or proposed  adjustment of any such return is pending,
proposed or contemplated.  To its knowledge, there are no outstanding agreements
or waivers  extending the statutory  period of limitation  applicable to any tax
return of Parent.

         SECTION 4.14 Intellectual Property.

                  (a) Parent does not own any Intellectual Property;

                  (b) no claims are pending or, to the best knowledge of Parent,
threatened that Parent is infringing on or otherwise violating the rights of any
person with regard to any  Intellectual  Property and, to the best  knowledge of
the Parent, there are no valid grounds for any such claims.

         SECTION 4.15 Knowledge of Risk. Each of the Parent's  shareholders  and
members of Parent's  Board of  Directors,  alone,  or  together  with his or her
adviser(s),  has such  knowledge and  experience in financial,  tax and business
matters as to enable each of them to utilize the  information  made available by
Company,  in  connection  with the and the issuance of the Merger  Consideration
shares or with the receipt of  Company's  shares as part of the  Transaction  at
subject,  to evaluate the merits and risks of  acquiring  such shares of Company
and to make an informed  investment  decision with respect thereto.  Each of the
Company's  shareholders confirms that, in making his or her decision to sell his
or  her  shares  in  Parent,   such  he  or  she  has  relied  upon  independent
investigations

                                       12

<PAGE>

made by him, or his  representatives,  including  his own  professional  tax and
other  advisers,  and that he and  such  representatives  have  been  given  the
opportunity  to examine all  documents  and to ask  questions of, and to receive
answers from Company or any person(s) acting on its behalf  concerning the terms
and conditions of this  Agreement,  and to obtain any additional  information or
documents,  to the extent Company  possesses such  information or can acquire it
without unreasonable effort or expense,  necessary to verify the accuracy of the
information provided by Company

         SECTION 4.16 Labor Matters.  Parent has no employees.

         SECTION 4.17 Title to Property. Parent has good and defensible title to
all of its  properties  and  assets,  free and clear of all liens,  charges  and
encumbrances,  except  liens for taxes not yet due and payable and such liens or
other  imperfections  of title,  if any, as do not  materially  detract from the
value of or interfere with the present use of the property  affected  thereby or
which could not reasonably be expected to have a material adverse effect.

         SECTION 4.18 Environmental  Matters.  Parent is not aware of nor to its
knowledge it has ever received  notice of any past or present  violations of any
environmental laws or any event, condition,  circumstance,  activity,  practice,
incident, action or plan which is reasonably likely to interfere with or prevent
continued  compliance  with  or  which  would  give  rise to any  common  law or
statutory  liability,  or otherwise form the basis of any claim, action, suit or
proceeding   against  Parent  based  on  or  resulting  from  the   manufacture,
processing,   distribution,   use,  treatment,   storage,  disposal,  transport,
handling,  emission, discharge or release into the environment of any pollutant,
contaminant, or hazardous or toxic material or waste.

         SECTION  4.19  Interested  Party  Transactions.  Since the Most  Recent
Filing  Date,  no event has  occurred  that would be  required to be reported by
Parent as a Certain Relationship or Related Transaction, pursuant to Item 404 of
Regulation S-B promulgated by the SEC.

         SECTION 4.20 Absence of Certain Payments. To its knowledge, neither the
Parent nor any of its respective affiliates,  officers, directors,  employees or
agents or other  people  acting on behalf of any of them have (i) engaged in any
activity  prohibited by the United States Foreign Corrupt Practices Act of 1977,
or any other similar law,  regulation,  decree,  directive or order of any other
country and (ii) without  limiting the  generality of the preceding  clause (i),
used any corporate or other funds for unlawful contributions, payments, gifts or
entertainment,  or made any unlawful expenditures relating to political activity
to government officials or others. To its knowledge,  neither the Parent nor any
of its respective affiliates,  directors, officers, employees or agents of other
persons  acting on behalf of any of them,  has accepted or received any unlawful
contributions, payments, gifts or expenditures.

         SECTION 4.21 Insurance.     Parent  does  not  maintain  any  insurance
policies.

         SECTION 4.22 Full Disclosure. No statement contained in any certificate
or schedule  furnished or to be furnished by the Parent and  Acquisition  Sub to
Company,  or pursuant to the  provisions  of, this  Agreement,  contains or will
contain any untrue  statement of a material  fact or omits or will omit to state
any material fact necessary,  in light of the  circumstances  under which it was
made, in order to make the statements herein or therein not misleading.

                                       13

<PAGE>

         SECTION 4.23  Contracts.  Parent and Acquisition Sub are not in default
in any material respect under the terms of any outstanding contract,  agreement,
lease,  or other  commitment  which is  material  to the  business,  operations,
properties, assets, or condition thereof and there is no event of default in any
material respect under any such contract,  agreement, lease, or other commitment
in respect of which Parent and  Acquisition Sub have not taken adequate steps to
prevent such a default from occurring. To its knowledge after reasonable inquiry
Parent is not a party to any  agreement (or group of related  agreements)  that:
(a) provides for payments greater than $5,000 per annum or that extends for more
than one year in excess of $25,000  per annum;  (b)  concerns a  partnership  or
joint venture; (c) guarantees any indebtedness; (d) concerns noncompetition; (e)
relates  to  monies  advanced  or loaned to any of its  directors,  officers  or
employees;  or (f) a default or termination would have a material adverse effect
on the  business,  financial  condition,  operations or results of operations of
Parent or Acquisition  Sub. Also,  there is no valid  shareholders  agreement in
place.

         SECTION 4.24 Real Property.  Parent currently leases office space at 59
LaGrange Street, Raritan, New Jersey from the Company.

         SECTION 4.25  Exchange Act  Registration;  Listing.  The Parent  Common
Stock is registered  pursuant to Section 12(g) of the Exchange Act and is quoted
on the OTC Bulletin Board.  Parent has taken no action designed to, or which, to
the  knowledge  of  the  Company,  may  have  the  effect  of,  terminating  the
registration  of the Parent  Common  Stock under the  Exchange  Act,  and has no
knowledge of whether any or all of the market  makers intend to stop quoting the
Parent Common Stock on the Pink Sheets.

                                    ARTICLE V

                                    COVENANTS

         SECTION 5.01 Mutual Use of Best  Efforts.  The Parties agree as follows
with respect to the period from and after the execution of this Agreement.

                  (a) Each of the parties  hereto will use its  reasonable  best
efforts to take all action and to do all things necessary in order to consummate
and make effective the  transactions  contemplated by this Agreement,  including
the  preparation  of an 8-K regarding the Merger to be filed after the Effective
Date.

                  (b) Each of the parties hereto will give any notices (and will
cause its  subsidiary  to give any notices) to third  parties,  and will use its
reasonable  best  efforts to obtain  (and will cause its  subsidiary  to use its
reasonable  best  efforts to obtain)  any third party  consents,  that the other
Parties reasonably may request in connection with this Agreement.

                  (c) Each of the parties  hereto will give any notices to, make
any  filings  with,  and  use  its   reasonable   best  efforts  to  obtain  any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters in this Agreement.

                                       14

<PAGE>

                  (d) Each party hereto will give prompt  written  notice to the
other of any  material  adverse  development  causing a breach of any of its own
representations  and  warranties in this  Agreement.  No disclosure by any Party
pursuant to this Section 5.03,  however,  shall be deemed to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.

         SECTION 5.02 Conduct of Business of Parent.  Until the Effective  Time,
or termination of this Agreement,  Parent shall not,  without the consent of the
shareholders  of the  Company,  do any of the  following:  (i)  enter  into  any
transaction outside the ordinary course of business;  or (ii) enter into, assume
or become bound or obligated by any agreement,  contract or commitment or extend
or modify the terms of any presently  existing  agreement which (a) involves the
payment of greater  than $5,000 per annum or that extends for more than one year
and for such agreements in the aggregate such payments shall not exceed $10,000,
except for the renewal of Parent's  directors' and officers'  insurance  policy,
(b) increases  the  compensation  of any  employee,  (c) involves any payment or
obligation  to any  affiliate of Parent or (d) involves the sale,  assignment or
license of any material assets of Parent or any of its intellectual property; or
(iii) establish any new, or modify any existing, employee benefit,  compensation
or stock plan; or (iv) declare or pay any dividends or make any  distribution of
assets to its shareholders  (except for its  subsidiaries) or pay any bonuses or
make any other extraordinary  payments to its officers,  directors or employees;
or (v) grant any share options or issue any new shares or any other  securities;
or (vi) hire any new employees or consultants.

         SECTION 5.03 Delivery of Financial Statements of Company as of December
31, 2006 and 2005. On or prior to the Closing,  Company shall have delivered the
audited  financial  statements  of Company as of and for the fiscal  years ended
December 31, 2006 and 2005. Such financial  statements  shall have been prepared
in accordance with GAAP with respect thereto  throughout the periods involved as
explained in the notes to such financial statements.  These financial statements
shall present  fairly,  in all material  respects,  as of the date thereof,  the
financial position of the Company. The Company shall not have, as of the date of
these financial  statements,  except as and to the extent  reflected or reserved
against therein,  any liabilities or obligations  (absolute or contingent) which
should be reflected  therein in accordance  with GAAP, and all assets  reflected
therein presents fairly the assets of Company in accordance with GAAP.

                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS

         SECTION 6.01 Repayment  of Loans.    All prior  loans to Parent made by
either  Company or JCL shall be paid by Parent  within one year from the Closing
Date.

         SECTION 6.02 Fees and  Expenses.   All fees and  expenses  incurred  in
connection with the Merger, this Agreement and the transactions  contemplated by
this Agreement  shall be paid as of the Closing Date by the party incurring such
fees or expenses, whether or not the Merger is consummated.

         SECTION 6.03 Indemnification.

         (a) By Parent and  Acquisition  Sub.  Parent and  Acquisition Sub shall
defend and promptly  indemnify  the Company,  its  officers,  board  members and
stockholders,  and save and hold them harmless from, against, for and in respect
of and shall pay any and all damages,  liabilities,  claims, costs and expenses,
including  without  limitation,  reasonable  attorneys' fees and other costs and

                                       15

<PAGE>

expenses  incident  to any  suit,  action,  investigation,  claim or  proceeding
suffered,  sustained,  incurred  or  required  to be  paid by the  Company,  its
officers,  stockholders  and/or board  members by reason of (i) the existence of
any and all obligations  and/or  liabilities of Parent and Acquisition Sub which
were not  disclosed  in, or  pursuant  to,  this  Agreement;  (ii) any breach or
failure of observance or performance of any representation,  warranty, covenant,
agreement or commitment made by Parent and Acquisition Sub hereunder or relating
hereto or as a result of any such representation,  warranty, covenant, agreement
or commitment being untrue or incorrect in any respect, and/or (iii) any and all
actions,  suits,  investigations,  proceedings,  demands,  assessments,  audits,
judgments  and claims  arising out of any of the  foregoing or from any material
misrepresentation  or omission from any Schedules or Exhibits to this Agreement,
certificates,  financial statements or from any document furnished by Parent and
Acquisition Sub required to be furnished hereunder.

         (b) By Company.  The Company shall defend and promptly indemnify Parent
and Acquisition Sub and its officers,  directors and shareholders,  and save and
hold them harmless  from,  against,  for and in respect of and shall pay any and
all  damages,  liabilities,   claims,  costs  and  expenses,  including  without
limitation,  reasonable attorneys' fees and other costs and expenses incident to
any  suit,  action,  investigation,  claim or  proceeding  suffered,  sustained,
incurred or required to be paid by any of them by reason of (i) the existence of
any and all obligations  and/or  liabilities of Company which were not disclosed
in, or pursuant to, this Agreement;  (ii) any breach or failure of observance or
performance of any representation,  warranty,  covenant, agreement or commitment
made by the  Company  hereunder  or  relating  hereto or as a result of any such
representation,  warranty,  covenant,  agreement or  commitment  being untrue or
incorrect   in  any  respect,   and/or   (iii)  any  and  all  actions,   suits,
investigations,  proceedings, demands, assessments, audits, judgments and claims
arising out of any of the  foregoing or from any material  misrepresentation  or
omission  from  any  Schedules  or  Exhibits  to this  Agreement,  certificates,
financial  statements or from any document furnished or required to be furnished
by the Company.

                                   ARTICLE VII

                   EXCHANGE OF DOCUMENTS; CONDITIONS PRECEDENT

         SECTION 7.01 Prior to or at the Closing,  and as a condition  precedent
to the obligations of the Company, each of the following documents,  which shall
be  satisfactory  in form and  content  to  Company  and its  counsel,  shall be
delivered to the Company and/or its counsel:

         (a)  Certificates  evidencing  the  Exchange  Stock duly  endorsed  for
              transfer with medallion  signature  guaranteed,  with stock powers
              duly executed in blank;

         (b)  A certified copy of the Articles of  Incorporation  of Acquisition
              Sub; and

         (c)  Any further  document as may be reasonably  requested by Company's
              legal counsel in order to substantiate any of the  representations
              or warranties of Parent set forth herein.

         SECTION 7.02 Prior to or at the Closing,  and as a condition  precedent
to the obligations of the Parent, each of the following  documents,  which shall
be  satisfactory  in form  and  content  to  Parent  and its  counsel,  shall be
delivered to the Parent and/or its counsel:

                                       16

<PAGE>

         (a)  Company  shall  provide  Parent  with  its  audited   consolidated
         financial  statements  which shall  comply in form and  substance  with
         applicable  regulations of the SEC as of December 31, 2005 and December
         31,  2006,  and  such  unaudited  financial  statements  and pro  forma
         financial statements as required by the Form 8-K and other requirements
         of the SEC regarding the Merger;

         SECTION 7.03. Due Diligence.  As a condition precedent to Closing,  the
Parent and the Company shall be satisfied  with their findings and evaluation in
their due diligence.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         SECTION 8.01 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument  delivered
pursuant to this Agreement  shall survive the Effective  Time. This Section 8.01
shall not limit any  covenant or  agreement  of the  parties  which by its terms
contemplates performance after the Effective Time of the Merger.

         SECTION 8.02 Notices.  All notices and other  communications  hereunder
("Notice")  shall  be  in  writing  and  shall  be  deemed  given  if  delivered
personally,   telecopied  (which  is  confirmed),   sent  by  overnight  courier
(providing  proof of delivery) or mailed by registered or certified mail (return
receipt  requested) to the parties at the following  addresses (or at such other
address for a party as shall be specified by like notice):

                  (a) if to Parent or                Tochi Bains
                      Acquisition Sub:               Wi-Tron, Inc.
                                                     59 LaGrange St.
                                                     Raritan, NJ 08869
                                                     Facsimile: (908) 253-6875

                  with a copy to:                    Michael H. Freedman, Esq.
                                                     Law Offices of
                                                     Michael H. Freedman, PLLC
                                                     11 Bayside Avenue
                                                     Port Washington, NY 11050
                                                     Facsimile: (516) 767-1631

                  (b) if to  the  Company:           John Chase Lee
                                                     Tek, Ltd.
                                                     95 Mitchell Avenue
                                                     Piscataway, NJ 08854
                                                     Facsimile: (732) 463-2261

         SECTION 8.03 Interpretation. When a reference is made in this Agreement
to an Article or a Section,  such reference  shall be to an Article or a Section
of this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes

                                       17

<PAGE>

only and  shall not  affect in any way the  meaning  or  interpretation  of this
Agreement.  Whenever the words "include,"  "includes" or "including" are used in
this  Agreement,  they  shall be deemed  to be  followed  by the words  "without
limitation."  The phrase "made  available" in this Agreement shall mean that the
information  referred to has been made  available  if  requested by the party to
whom such  information is to be made available.  As used in this Agreement,  the
term  "subsidiary" of any person means another  person,  an amount of the voting
securities,  other voting ownership or voting partnership  interests of which is
sufficient  to elect at least a  majority  of its  Board of  Directors  or other
governing  body (or, if there are no such voting  interests,  50% or more of the
equity interests of which) is owned directly or indirectly by such first person,
and the  term  "affiliate"  shall  have the  meaning  set  forth  in Rule  12b-2
promulgated under the Exchange Act. As used in this Agreement, "material adverse
change" or "material  adverse  effect"  means,  when used in  connection  with a
person, any change or effect (or any development that, insofar as can reasonably
be foreseen, is likely to result in any change or effect) that,  individually or
in the aggregate with any such other changes or effects,  is materially  adverse
to the business,  prospects,  assets (including  intangible  assets),  financial
condition or results of operations of such person and its subsidiaries  taken as
a whole.

         SECTION 8.04  Counterparts.  This  Agreement  may be executed in one or
more  counterparts,  all of which shall be considered one and the same agreement
and shall become  effective when said  counterparts  have been signed by each of
the parties and delivered to the other  parties,  it being  understood  that all
parties need not sign the same counterpart.

         SECTION 8.05 Entire  Agreement;    Third   Party  Beneficiaries.   This
Agreement  (including  the  documents  and the  instruments  referred to herein)
constitutes  the  entire  agreement  and  supersedes  all prior  agreements  and
understandings,  both  written and oral,  among the parties  with respect to the
subject  matter  hereof and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.

         SECTION 8.06 Governing  Law.    This  Agreement  shall be governed  and
construed  in  accordance  with the laws of the State of New Jersey  and, to the
extent provided herein, the DGCL, without regard to any applicable  conflicts of
law. The Parties hereto  irrevocably  further consent to the jurisdiction of the
courts of the State of New Jersey and of any Federal court located in New Jersey
in connection  with any action or proceeding  arising out of or relating to this
Agreement,  any document or instrument delivered pursuant to, in connection with
or simultaneously with this Agreement, or a breach of this Agreement or any such
document or instrument.

         SECTION 8.07 Publicity.   Except as  otherwise  required by law, for so
long as this Agreement is in effect,  neither the Company nor Parent shall,  nor
shall Parent permit  Acquisition  Sub to, issue or cause the  publication of any
press  release or other public  announcement  with  respect to the  transactions
contemplated  by this  Agreement  without the consent of the other party,  which
consent shall not be unreasonably withheld or delayed.

         SECTION 8.08 Assignment.  Neither this Agreement nor any of the rights,
interests or  obligations  hereunder  shall be assigned by either of the parties
hereto  (whether by operation  of law or  otherwise)  without the prior  written
consent of the other party.  Subject to the preceding  sentence,  this Agreement
will be binding upon,  inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.

                                       18

<PAGE>

         SECTION 8.09 Enforcement.   The parties agree that  irreparable  damage
would occur in the event that any of the  provisions of this  Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is  accordingly  agreed that the parties  shall be entitled to an  injunction or
injunctions to prevent  breaches of this  Agreement and to enforce  specifically
the terms and  provisions of this  Agreement.  In addition,  each of the parties
hereto (i)  consents to submit such party to the  personal  jurisdiction  of any
Federal court located in the State of New Jersey in the event any dispute arises
out of this  Agreement  or any of the  transactions  contemplated  hereby,  (ii)
agrees  that  such  party  will not  attempt  to deny or  defeat  such  personal
jurisdiction by motion or other request for leave from any such court, and (iii)
agrees that such party will not bring any action  relating to this  Agreement or
any of the  transactions  contemplated  hereby in any court other than a Federal
court sitting in the State of New Jersey.  The prevailing  party in any judicial
action shall be entitled to receive from the other party  reimbursement  for the
prevailing  party's  reasonable  attorneys'  fees and  disbursements,  and court
costs.

         SECTION 8.10 No Remedy in Certain  Circumstances.   Each  party  agrees
that,  should any court or other competent  authority hold any provision of this
Agreement  to be null,  void or  unenforceable,  or order  any party to take any
action  inconsistent  herewith or not to take an action  consistent  herewith or
required  hereby,  the validity,  legality and  enforceability  of the remaining
provisions and obligations contained or set forth in this Agreement shall not in
any way be affected  or  impaired  thereby,  unless the  foregoing  inconsistent
action or the failure to take an action  constitutes  a material  breach of this
Agreement  or makes this  Agreement  impossible  to perform,  in which case this
Agreement shall terminate.  Except as otherwise  contemplated by this Agreement,
to the extent that a party hereto took an action inconsistent herewith or failed
to take action  consistent  herewith or required  hereby pursuant to an order or
judgment  of a court or other  competent  authority,  such party  shall incur no
liability or  obligation  unless such party did not in good faith seek to resist
or object to the imposition or entering of such order or judgment.

           [The remainder of this page is intentionally left blank.]

                                       19

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their  respective  officers  thereunto duly  authorized as of the date
first written above.

                                    WI-TRON, INC.

                                    By: /s/ Tarlochan Bains
                                       --------------------------------------
                                            Tarlochan Bains, Vice President

                                    TEK SUB, INC.

                                    By: /s/ Tarlochan Bains
                                       --------------------------------------
                                            Tarlochan Bains, President

                                    TEK, LTD.

                                    By: /s/  John Chase Lee
                                       --------------------------------------
                                        John Chase Lee, President

                                    /s/ John Chase Lee
                                    -----------------------------------------
                                    John Chase Lee, Individually

                                       20EX-10.1

FOURTH AMENDMENT TO

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
“Amendment”) is entered into this 29th day of June, 2007, by and between SILICON VALLEY BANK
(“Bank” or “Silicon”) and TELECOMMUNICATION SYSTEMS, INC., a Maryland corporation (“Borrower”)
whose address is 275 West Street, Suite 400, Annapolis, Maryland 21401.

RECITALS

A. Bank and Borrower have entered into that certain Second Amended and Restated Loan and
Security Agreement dated as of October 14, 2005 (as the same may from time to time be further
amended, modified, supplemented or restated, the “Loan Agreement”).

B. Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.

C. Borrower has requested that Bank make certain other revisions to the Loan Agreement as more
fully set forth herein.

D. Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the
extent, in accordance with the terms, subject to the conditions and in reliance upon the
representations and warranties set forth below.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows:

1. Definitions. Capitalized terms used but not defined in this Amendment shall have the
meanings given to them in the Loan Agreement.

2. Amendments to Loan Agreement

2.1 Term Loan. The following Section is added to the Loan Agreement immediately after Section
1.11 as Section 1.12:

1.12 Term Loan. At the request of Borrower, Silicon will make a term loan to
the Borrower (the “Term Loans”), in the amount shown on the Schedule,
provided no Default or Event of Default has occurred and is continuing. The Term Loan shall
be repaid in accordance with the Schedule.

2.2 Collection of Accounts and Remittance of Proceeds. Sections 4.4 and 4.5 of the Loan
Agreement are amended and restated in their entirety as follows:

4.4 Collection of Accounts. Borrower shall have the right to collect all
Accounts, unless and until a Default or an Event of Default has occurred and is

1

continuing and will deposit all Accounts and all proceeds of Collateral into
Borrower’s operating account maintained at Silicon. After a Default or an Event of Default,
Silicon may, require that all proceeds of Collateral be deposited by Borrower into a lockbox
account, or such other “blocked account” as Silicon may specify, pursuant to a blocked
account agreement in such form as Silicon may specify in its good faith business judgment, to
be applied to the Obligations in such order as Silicon shall determine.

4.5. Remittance of Proceeds. After a Default or an Event of Default, all
proceeds arising from the disposition of any Collateral shall be delivered, in kind, by
Borrower to Silicon in the original form in which received by Borrower not later than the
following Business Day after receipt by Borrower, to be applied to the Obligations in such
order as Silicon shall determine; provided that, if no Default or Event of Default has
occurred and is continuing, Borrower shall not be obligated to remit to Silicon the proceeds
of any Collateral and shall promptly deposit such proceeds into Borrower’s operating account
maintained at Silicon. Nothing in this Section limits the restrictions on disposition of
Collateral set forth elsewhere in this Agreement.

2.3 Definitions. (a) The definitions of “Buyer”, “Borrower Agreement”, “Exim Bank”, “Exim
Borrowing Base”, “Exim Eligible Foreign Accounts”, “Exim Eligible Foreign Inventory”, “Exim
Guarantee”, “Export Order” and “Streamline Period” are deleted in their entirety and the Loan
Agreement shall be construed and interpreted without reference to such terms.

(b) The definition of “Maximum Credit Limit” is amended and restated in its entirety as
follows:

“Maximum Credit Limit” means $22,000,000 at all times.

2.4 The Schedule. The Schedule to the Loan Agreement is amended and restated in its entirety
pursuant to the Schedule attached hereto.

2.5 Compliance Certificate. From and after the date of this Amendment, the Compliance
Certificate attached hereto as Exhibit A shall be the Compliance Certificate for purposes
of the Loan Agreement.

3. Limitation of Amendments.

3.1 The amendments set forth in Section 2, above, are effective for the purposes set forth
herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any
amendment, waiver or modification of any other term or condition of any Loan Document, or (b)
otherwise prejudice any right or remedy which Bank may now have or may have in the future under or
in connection with any Loan Document.

3.2 This Amendment shall be construed in connection with and as part of the Loan Documents and
all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan
Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full
force and effect.

2

4. Representations and Warranties. To induce Bank to enter into this Amendment,
Borrower hereby represents and warrants to Bank as follows:

4.1 Immediately after giving effect to this Amendment (a) the representations and warranties
contained in the Loan Documents are true, accurate and complete in all material respects as of the
date hereof (except to the extent such representations and warranties relate to an earlier date, in
which case they are true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;

4.2 Borrower has the power and authority to execute and deliver this Amendment and to perform
its obligations under the Loan Agreement, as amended by this Amendment;

4.3 The organizational documents of Borrower delivered to Bank on October 14, 2005 remain
true, accurate and complete and have not been amended, supplemented or restated and are and
continue to be in full force and effect;

4.4 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Agreement, as amended by this Amendment, have been duly
authorized;

4.5 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not
contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual
restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or
other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d)
the organizational documents of Borrower;

4.6 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Agreement, as amended by this Amendment, do not require any
order, consent, approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by any governmental or public body or authority, or subdivision
thereof, binding on Borrower, except as already has been obtained or made; and

4.7 This Amendment has been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws of general application and equitable principles relating to or affecting
creditors’ rights.

5. Counterparts. This Amendment may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same instrument.

6. Effectiveness. This Amendment shall be deemed effective upon the due execution and delivery
to Bank of this Amendment by each party hereto. The Borrower agrees to pay Bank’s legal fees and
expenses in connection with the negotiation and preparation of this Amendment.

3

IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the date first written above.

	 	 	 	 	 	 	 
	BANK	 	 	 	BORROWER	 	 
	Silicon Valley Bank

	 	

	 	

	 	

	 	 	 	 	TeleCommunication Systems, Inc.
	By:

	 	/s/ Silicon Valley Bank
	 	By:
	 	/s/ Thomas M. Brandt, Jr.
	 

	 	 
	 	 
	 	 
	Name:

Title:

	 	 	 	Name:

Title:
	 	Thomas M. Brandt, Jr.

Sr. Vice President & CFO

4

Replacement Schedule to

Second Amended and Restated Loan and Security Agreement

	 	 	 
	Borrower: TELECOMMUNICATION SYSTEMS, INC.

	Address: 275 West Street, Suite 400

	Annapolis, Maryland 21401

Date:

	 	

June 29, 2007

This Replacement Schedule replaces the current schedule to the Second Amended and Restated
Loan and Security Agreement dated October 14, 2005 and is an integral part of the Second Amended
and Restated Loan and Security Agreement between Silicon Valley Bank and the Borrower dated October
14, 2005, as amended from time to time.

1. CREDIT LIMIT

	 	 	 	(Section 1.1): An amount not to exceed the lesser of: (i) the Maximum Credit Limit, less the
amount of any outstanding Letters of Credit, FX Forward Contracts, FX Reserves (the
“Sublimit Outstandings”) and the applicable Term Loan Reserve; or (ii) eighty five percent
(85%) (the “Advance Rate”) of the amount of Borrower’s Eligible Receivables, less the
amount of Sublimit Outstandings and the applicable Term Loan Reserve. Silicon may, from
time to time, modify the Advance Rate, in its good faith business judgment, upon notice to
the Borrower, based on changes in collection experience with respect to Accounts or other
issues or factors relating to the Accounts or other Collateral.

Letters of Credit Sublimit,

Foreign Exchange Sublimit

And Cash Management

	 	 	 	Sublimit An aggregate amount not to exceed Ten Million Dollars ($10,000,000) at any one time.

Term Loan: Ten Million Dollars ($10,000,000).

For purposes hereof, the “Term Loan Reserve” shall at all times
that the Outstanding Obligations exceed Twenty Million Dollars
($20,000,000) mean an amount equal to fifty percent (50%) of the
then outstanding principal balance of the Term Loan, provided,
however, the Term Loan Reserve shall be reduced to Zero Dollars
($0) at all times that Borrower achieves and sustains a Fixed
Charge Coverage Ratio equal to or greater than 1.25 to 1.00.

5

2. INTEREST.

3. FEES:

All Revolving Loans shall bear interest at a rate equal to the Prime Rate in
effect from time to time per annum.

The Term Loan shall bear interest at a rate equal to the Prime Rate in effect
from time to time per annum, plus one quarter of one percent (0.25%) per annum.

The interest rate applicable to the Obligations shall change on each date there
is a change in the Prime Rate. Interest shall be calculated on the basis of a
360-day year for the actual number of days elapsed.

Loan Fee:

A non refundable fee in the amount of One Hundred Twenty Five
Thousand Dollars ($125,000) shall be due and payable within five
(5) Business Days that the outstanding Obligations (excluding the
face amount of all issued and outstanding Letters of Credit and
all amounts outstanding under the Term Loan) exceed Fifteen
Million Dollars ($15,000,000).

Collateral MonitoringFee:

Five Hundred Dollars ($500), per month, payable in arrears
(prorated for any partial month at the beginning and at
termination of this Agreement).

	 	 	 	Term Loan Fee: A non refundable fee in the amount of Seventy Five Thousand Dollars
($75,000) due and payable on the date hereof.

4. REPAYMENT OF TERM LOAN:

Repayment of Term Loan:

	 	 	 	Borrower will repay the outstanding balance of the Term Loan in
equal monthly principal payments of $166,666.66, plus
interest commencing on of August 1, 2007 and continuing on
the first day of each month thereafter.

	 	 	 	Early Termination:

	 	 	 	Borrower shall have the option to prepay the Term Loan in whole
from time to time, provided Borrower: (i) provides written
notice to Bank of its election to prepay the Term Loan at
least fifteen (15) days prior to such prepayment, and (ii)
pays, on the date of such prepayment (A) the principal amount
of such prepayment, plus accrued interest due and owing
thereon on such date, plus (B) the Make Whole Premium, plus
(C) all other sums, if any, that shall have become due and
payable, including interest at the Default Rate with respect
to any past due amounts. No Make Whole Premium shall be

6

	5.	 	MATURITY DATE: Loans

Term Loan

charged if the Term Loan is repaid with the proceeds from (i) a new facility from another
division of the Bank, (ii) new Subordinated Debt, or (iii) a new round of equity
financing. The Make Whole Promissory shall be due and payable on the effective date of
prepayment and thereafter shall bear interest at a rate equal to the highest rate
applicable to any of the Obligations.

For purposes hereof, “Make Whole Premium” shall mean an amount equal to (a) two percent
(2.0%) of the outstanding Term Loan if the prepayment is made on or before June 30, 2008,
(b) one and one half percent (1.50%) of the outstanding Term Loan if the prepayment is
made after June 30, 2008 but on or before June 30, 2009, (c) one percent (1.0%) of the
outstanding Term Loan if the prepayment is made after June 30, 2009 and on or before June
30, 2010; (d) one half percent (0.50%) of the outstanding Term Loan if the prepayment is
made after June 30, 2010 and on or before June 30, 2011, and (e) zero percent (0%) after
June 30, 2011.

June 29, 2010

Unless sooner paid, all accrued and unpaid interest plus unpaid principal on the Term
Loan shall be due and payable in full on July 1, 2012.

6. FINANCIAL COVENANTS:

Borrower shall comply with each of the following covenants.
Compliance shall be determined as of the end of each month, except
as otherwise specifically provided below:

	 	 	 
	Minimum Adjusted	 	 
	Quick Ratio:

	 	Borrower shall at all times maintain, tested as of

the last day of each month, maintain an Adjusted

Quick Ratio of not less than 1.10 to 1.00.
	Minimum Quarterly

EBITDA:

	 	

During any period prior to July 1, 2008, when

Borrower fails to meet the Minimum Liquidity

Ratio, Borrower shall maintain, tested as of the

last day of each fiscal quarter, EBITDA, less

unfunded capital expenditures, of not less than

$750,000.

Minimum Fixed Charge

Coverage Ratio: During any period from and after July 1, 2008,
when Borrower fails to meet the Minimum Liquidity Ratio, Borrower
shall

7

maintain at all times a Fixed Charge Coverage Ratio of
not less than 1.10 to 1.00.

	 	 	Definitions. For purposes of the foregoing financial covenants, the following term shall have the
following meaning:

“Adjusted Quick Ratio” shall mean the ratio of (A) unrestricted cash and
equivalents, plus billed accounts receivable divided by (B) Current Liabilities, less the current
portion of deferred revenue.

“Current Liabilities” shall mean the aggregate amount of Borrower’s Total Liabilities which
mature within one (1) year.

“EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c) to the extent
deducted in the calculation of Net Income, depreciation expense and amortization expense, plus (d)
income tax expense, less capitalized software development costs. Bank shall permit reasonable add
backs to EBITDA for non-cash items, including, but not limited to stock compensation. In addition,
gains and losses from discontinued operations related to the Borrower’s “Enterprise Mobility
Services” division shall be excluded from the calculation of EBTIDA.

“Fixed Charge Coverage Ratio” shall mean the ratio of (A) Borrower’s EBITDA for the twelve
(12) month period then ending to (B) Borrower’s Fixed Charges for the trailing three (3) month
period, multiplied by four (4).

“Fixed Charges” shall mean the sum of capital expenditures which are not finance, Interest
Expense, cash income taxes paid by Borrower, any required principal reductions during any period of
measurement, and any cash dividends paid by Borrower.

“Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash)
determined in accordance with GAAP for the relevant period ending on such date, including, in any
event, interest expense with respect to any Obligations and other Indebtedness of Borrower and its
Subsidiaries, including, without limitation or duplication, all commissions, discounts, or related
amortization and other fees and charges with respect to letters of credit and bankers’ acceptance
financing and the net costs associated with interest rate swap,

8

cap, and similar arrangements, and the interest portion of any deferred payment
obligation (including leases of all types).

“Minimum Liquidity Ratio” shall mean as of the date of determination, a Liquidity Ratio in
excess of 1.50 to 1.00.

“Net Income” means, as calculated on a consolidated basis for Borrower and its Subsidiaries
for any period as at any date of determination, the net profit (or loss), after provision for
taxes, of Borrower and its Subsidiaries for such period taken as a single accounting period.

“Liquidity Ratio” shall mean as of any date of determination the ratio of (A) the sum of
Borrower’s cash held at Bank, plus the lesser the Maximum Credit Limit, less the Sublimit
Outstandings, minus (e) the outstanding principal balance of any Revolving Loans to (B) the
outstanding principal balance of all Obligations, including the face amount of all Letters of
Credit issued under this Agreement.

“Total Liabilities” is on any day, obligations that should, under GAAP, be classified as
liabilities on Borrower’s consolidated balance sheet, and current portion Subordinated Debt allowed
to be paid, but excluding all other Subordinated Debt.

8. REPORTING. Borrower shall provide Silicon with the following:

	1.	 	Monthly transaction reports and schedules of collections, on Silicon’s standard form
shall be provided monthly (and upon each Loan request.

	2.	 	Monthly accounts receivable agings, aged by invoice date, within fifteen (15) days after the
end of each month.

	3.	 	Monthly accounts payable agings, aged by invoice date, and outstanding or held check
registers, if any, within fifteen (15) days after the end of each month.

	4.	 	Monthly unaudited financial statements, as soon as available, and in any event within thirty
(30) days after the end of each month.

	5.	 	Monthly Compliance Certificates, within thirty (30) days after the end of each month, in such
form as Silicon shall reasonably specify, signed by the Chief Financial Officer, Vice
President, Finance, Treasurer or Corporate Controller of Borrower, certifying that as of the
end of such month Borrower was in full compliance with all of the terms and

9

conditions of this Agreement, and setting forth calculations showing compliance
with the financial covenants set forth in this Agreement and such other information as Silicon
shall reasonably request, including, without limitation, a statement that at the end of such
month there were no held checks.

	6.	 	Annual forecasts prior to each fiscal year end of Borrower and operating budgets (including
income statements, balance sheets and cash flow statements, by month) for the current fiscal
year of Borrower within sixty (60) days after the end of each fiscal year of Borrower.

	7.	 	Annual financial statements, as soon as available, and in any event within one hundred twenty
(120) days following the end of Borrower’s fiscal year, certified by, and with an unqualified
opinion of, independent certified public accountants acceptable to Silicon.

	8.	 	Within five (5) days of filing, all reports on Form 10-K, 10-Q and 8 K filed with the
Securities and Exchange Commission or a link thereto on Borrower’s or another website on the
Internet

9. BORROWER INFORMATION:

Borrower represents and warrants that the information set forth in the Perfection
Certificate of the Company dated June 25, 2007, previously submitted to Silicon (the “Perfection
Certificate”) is true and correct as of the date hereof.

10. ADDITIONAL PROVISIONS:

	1.	 	Depository and Operating Accounts. Maintain its primary operating and other deposit
accounts with Bank and Bank’s Affiliates which accounts shall represent at least eighty
percent (80%) of the dollar value of Borrower’s accounts at all financial institutions.
Provide Bank five (5) days prior written notice before establishing any Collateral Account at
or with any bank or financial institution other than Bank or Bank’s Affiliates. For each
Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable
bank or financial institution (other than Bank) at or with which any Collateral Account is
maintained to execute and deliver a Control Agreement or other appropriate instrument with
respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in
accordance with the terms hereunder.

10

The provisions of the previous sentence shall not apply to deposit accounts
exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or
for the benefit of Borrower’s employees and identified to Bank by Borrower as such.

	2.	 	Subordination of Inside Debt. All present and future indebtedness of Borrower to its
officers, directors and shareholders (“Inside Debt”) shall, at all times, be subordinated to
the Obligations pursuant to a subordination agreement on Silicon’s standard form. Borrower
represents and warrants that there is no Inside Debt presently outstanding. Prior to incurring
any Inside Debt in the future, Borrower shall cause the person to whom such Inside Debt will
be owed to execute and deliver to Silicon a subordination agreement on Silicon’s standard
form.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

	 	 	 	 	 	 	 
	Borrower:

	 	Silicon
	 	:
	 	

	TELECOMMUNICATION SYSTEMS, INC.
	 	SILICON VALLEY BANK	 	 
	By:

	 	/s/ Thomas M. Brandt, Jr.
	 	By:
	 	/s/ Silicon Valley Bank
	
 
	 	 
	 	 	 	 
	Title:

	 	Sr. Vice President & CFO
	 	Title:
	 	

11

Name: Thomas M. Brandt, Jr. Name:COMPLIANCE CERTIFICATE

To: Silicon Valley Bank

8020 Towers Crescent Drive, Suite 475
Vienna, Virginia 22182

	 	 	From: TeleCommunication Systems, Inc. 275
West Street, Suite 400 Annapolis,
Maryland 21401	 

The undersigned authorized officer of Telecommunication Systems, Inc. (“Borrower”) certifies
that under the terms and conditions of the Second Amended and Restated Loan and Security Agreement
between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period
ending       with all required covenants except as noted below and (ii) all
representations and warranties in the Agreement are true and correct in all material respects on
this date. In addition, the undersigned authorized officer of Borrower certifies that Borrower and
each Subsidiary (i) has timely filed all required tax returns and paid, or made adequate provision
to pay, all material taxes, except those being contested in good faith with adequate reserves under
GAAP and (ii) does not have any legal actions pending or threatened against Borrower or any
Subsidiary which Borrower has not previously notified in writing to Bank. Attached are the required
documents supporting the certification. In addition, the undersigned certifies that (1) Borrower
and each Subsidiary has timely filed all required tax returns and paid, or made adequate provision
to pay, all material taxes, except those being contested in good faith with adequate reserves under
GAAP and (ii) no liens has been levied or claims made against Borrower or any of its Subsidiaries
relating to unpaid employee payroll or benefits which Borrower has not previously notified in
writing to Bank. The Officer certifies that these are prepared in accordance with Generally
Accepted Accounting Principles (GAAP) consistently applied from one period to the next except as
explained in an accompanying letter or footnotes. The Officer acknowledges that no borrowings may
be requested at any time or date of determination that Borrower is not in compliance with any of
the terms of the Agreement, and that compliance is determined not just at the date this certificate
is delivered.

Please indicate compliance status by circling Yes/No under “Complies” column.

	 	 	 	 	 
	REPORTING COVENANT	 	REQUIRED	 	COMPLIES
	Financials & Comp. Cert.

	 	Monthly w/in 30 days
	 	YES/NO
	Receivable agings (invoice date)

	 	Monthly w/in 15 days
	 	YES/NO
	Reconciliations of A/R agings,

	 	Monthly w/in 15 days
	 	YES/NO
	Transactions reports, G/L

	 	Monthly w/in 15 days
	 	YES/NO
	Payables agings

	 	Monthly w/in 15 days
	 	YES/NO
	Held Checks

	 	 	 	YES/NO
	If YES, Held Checks Register

	 	Monthly w/in 15 days
	 	YES/NO
	Audited Annual Financials

	 	FYE w/in 120 days
	 	YES/NO
	Annual Operating Budget and

	 	

	 	

	Forecasts

	 	W/in 60 days after to FYE
	 	YES/NO

	 	 	 	 	 
	SEC Filings w/in 5

	 	days YES/NO
	 	

	FINANCIAL COVENANT

	 	REQUIRED
	 	ACTUAL
	 

	 	 
	 	 

	 	 	 	Minimum Adjusted QR 1.10 to 1.00 $ : 1.00 (Tested Monthly)	 

Complies? YES/NO

Quarterly EBITDA $750,000 $ (Prior to 7/1/08 and Borrower

Fails to meet Minimum Liquidity

Ratio)

Complies? YES/NO

	 	 	 
	Fixed Charge Coverage Ratio

(After 7/1/08 and Borrower Fails

to meet Minimum Liquidity Ratio) 1.10 to 1.00

	 	

$: 1.00
	
 
	 	 

Complies? YES/NO

OTHER TRIGGERS

	 	 	 
	Minimum Liquidity Ratio

	 	1.50 to 1.00
	
 
	 	Complies? YES/NO
	Term Loan Reserve

50% of Term Loan

	 	When borrowings exceed $20 million and

Fixed Charge Coverage Ratio less than

1.25 to 1.00
	$0

	 	All other times.

Terms are defined in the Schedule to the Loan Agreement, Section 5.1. Comments regarding financial
covenants:

TELECOMMUNICATION SYSTEMS, INC.

By:

Name:

Title:

Received:

By:

Name:

Title:

12

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