Document:

Exhibit
10.69

 

	
  STATE OF
  TEXAS

  	
  §

  	
   

  
	
   

  	
  §

  	
  COMMERCIAL LEASE AGREEMENT

  
	
  COUNTY OF
  BEXAR

  	
  §

  	
  12906
  Flagship Drive

  

 

THIS COMMERCIAL LEASE AGREEMENT (the “Lease”)
is made and entered into as of the effective date provided below, by and
between Green Wing Management, Ltd. (“Lessor”), and ISI Security Group, Inc.,
a Delaware corporation d/b/a Argyle Security USA (“Lessee”).

 

1.                                    LEASED
PREMISES.  For and in consideration of
the rents, covenants, agreements, and stipulations herein contained, Lessor
does hereby lease unto Lessee, and Lessee does hereby rent from Lessor for the
term and upon the terms and conditions hereinafter set out, the following (the “Leased
Premises”): the property located at 12906 Flagship Drive (commonly referred to
collectively as “12906 Flagship Drive”), in the City of San Antonio, Bexar
County, Texas, the land being described on Exhibit A attached hereto, and
the improvements shown on the site plan which is attached hereto as Exhibit B.

 

A.                            Acceptance.  Taking possession of the Leased Premises by Lessee
shall be deemed conclusively to establish that Lessee accepts the Leased
Premises in its “as is” condition, and acknowledges that it is in good and
satisfactory condition, as of the date when possession was so taken, except for
any latent defects or matters which Lessee notifies Lessor in writing within
six (6) months after occupancy, which latent defects and other matters,
Lessor agrees to correct within a reasonable time after notification
thereof.  Lessee acknowledges that Lessor
has made no warranties or representations of any kind, neither express nor
implied, and that Lessee has inspected the premises and has made all
investigations as to its suitability for its particular purposes that it deems,
in its sole opinion, necessary.  Lessee
is not relying upon any representations by Lessor as to the suitability of the
Premises for Lessee’s particular purpose. 
Lessee accepts the Premises based on its own investigation and believes
them to be suitable for Lessee’s intended commercial purpose.

 

2.                                     USE
OF PREMISES.  The Leased Premises will be
used and occupied by Lessee for a commercial enterprise engaged in the sale,
installation, repair, and maintenance of: (i) detention equipment and
systems; (ii) fire and security alarm systems and equipment; (iii) access
control systems and equipment; (iv) commercial enterprises and light
manufacturing reasonably suited for the Leased Premises and permissible under
all applicable laws, rules, regulations and ordinances, and for other uses
reasonably incident thereto, and Lessee shall not use the Leased Premises for
any other purpose without the written consent of Lessor, which consent will not
be unreasonably withheld.  Lessee shall
not perform any acts or carry on any practices in its use of the Leased
Premises which may damage the improvements situated thereon, or which may be a
nuisance or menace to the general public or the tenants and owners of adjoining
properties.  Lessee shall keep the Leased
Premises and all sidewalks, driveways, and other areas of public access on the
Leased Premises clean and free of all rubbish and debris at all times.  Lessee shall comply with all laws,
ordinances, orders, rules and regulations of state, federal, municipal or
other governmental agencies or bodies having jurisdiction relating to the use,
condition and 

 

1

 

occupancy of
the Leased Premises.  The operating hours
of Lessee’s business shall be in Lessee’s sole discretion.

 

3.                                    TERM.  The term of this Lease will commence on June 1,
2008, (the “Effective Date”), and shall end on the last day of November, 2019  (the “Primary Term”), unless sooner terminated in
accordance with the terms and conditions hereinafter set forth.  During the last year of the lease term,
Lessor will have the right to enter and show the Leased Premises for the
purpose of reletting said premises at reasonable times and on reasonable notice
to the Lessee.

 

A.                            Option
to Renew.  Lessee shall have one
option to extend the term of this Lease for a period of five (5) years.  To exercise the option, Lessee must give
written notice of its exercising the option to Lessor on or before two years
prior to the expiration of the Primary Term. 
Lessee may exercise this option to renew only if:  (1) Lessee is not in default in the performance
of this Lease, which remains uncured, when Lessee gives notice of its
exercising of the option; (2) Lessee and Lessor are able to agree, within
the time frame set forth below, upon an amount for a monthly rental during the
five (5) year term of the option (“Option Term”); (3) Lessee and
Lessor shall make a good faith effort to agree upon a rental amount; and (4) Lessee
remains in full compliance with the Lease until the Primary Term expires.  The monthly rental for the Option Term shall
be negotiated between Lessor and Lessee at the time that Lessee exercises its
option, subject to the requirement that each year’s rent shall be not less than
the previous year’s rent paid by Lessee hereunder.  If Lessor and Lessee are unable to agree upon
the amount of the monthly rental for the Option Term within two hundred and
seventy (270) days of the expiration of the Primary Term, then this option to
renew shall, without further action by Lessor, be deemed to be wholly and
conclusively terminated, and Lessee shall vacate the Leased Premises by the end
of the Primary Term.

 

4.                                   PARENT’S
RIGHT TO PURCHASE/RIGHT OF FIRST REFUSAL. 
At any time during the Primary Term, Argyle Security, Inc., a
Delaware corporation (“Parent”) maintains the right, at Parent’s sole discretion,
to purchase Lessor’s interest in the Leased Premises at fair market value to be
determined by independent appraisal conducted contemporaneously with purchase
and agreed to by both Parent and Lessor; provided, however, that such amount
shall not be less than the appraisal amount set in connection with the
execution of this Lease.  Should Lessor
offer the Leased Premises for sale to any party at any time during the Primary
Term, Parent is granted a right of first refusal to purchase the Leased Premises
according to the terms of this section. 
If Parent elects not to exercise its right of first refusal, then Lessor
reserves the right to sell, mortgage or otherwise dispose of all or any part of
Lessor’s interest in the Leased Premises to such party, provided that if the
sale to such party is not consummated, Lessor shall once again be bound by the
provision of this Section 4.  In the
event of a sale by Lessor to such party, this Lease shall continue in full
force and effect.  Any such sale shall
operate to release Lessor from all obligations and liability under this Lease
except for the return of any security deposit not transferred to the new owner.

 

5.                                    RENT.  Lessee agrees to pay Lessor at San Antonio,
Bexar County, Texas, monthly rentals as provided below.

 

2

 

A.                               Base
Rental.  The base monthly rental for
the Leased Premises is hereby agreed to be $17,105.83.  The base monthly rental shall be payable in
advance and without demand, on the Effective Date and on the first day of each
subsequent calendar month during the term hereof.

 

B.                                 Recalculation
of Base Rental.  At the end of each
three-year period of occupancy, an independent rent appraisal will be conducted
to establish the new market rate and to determine the basis for setting the
monthly base rental applicable to the ensuing three-year period.  This adjustment of base monthly rental will
be calculated as follows: (i) if the new appraisal reflects a market rate
greater than the market rate established at the most recent prior appraisal,
then the base monthly rental will be set at ten percent (10%) less than the new
market rate; or (ii) if the new appraisal reflects a market rate lower
than the market rate established at the most recent prior appraisal, then the
base monthly rental will (a) remain unchanged if the new market rate is
less than ten percent (10%) below the previous market rate, or (b) equal
the new market rate if the new market rate is more than ten percent (10%) below
the previous market rate.

 

C.                                 Late
Penalty.  If any monthly rental
payment is not received by Lessor on or before the fifth (5th) day of the
month, but is received on or before the fifth (5th) day thereafter, a late
charge equal to five percent (5.0%) of the then due monthly rental payment
shall be added to the rental due; if the monthly rental payment is received
after the fifth (5th) day, but on or before the fifteenth (15th) day of the
month it is due, a late charge equal to ten percent (10%) of such rental
payment shall be added to the rental due. 
The parties agree that any charge or collection of late fees pursuant to
this subsection is to compensate for costs incurred as a consequence of late
payments, and that such fees will not constitute contracting for, charging, or
collecting interest.

 

D.                                Taxes.

 

(1)                             Personal
Property Taxes.  Lessee agrees that
it will pay to the appropriate taxing authorities all taxes, assessments, or
other charges levied by any governmental or quasi-governmental authority, which
during the time of this Lease may be levied or assessed against its personal
property.

 

(2)                             Ad
Valorem Taxes.  Lessee shall also pay
all ad valorem taxes and assessments levied against the Leased Premises
including, but not limited to, the real property described on Exhibit A and
the improvements described on Exhibit B. 
Lessee will remit payment for the taxes owed by Lessee to Lessor no
later than January 5 of each year; however, if the due date of such taxes
is not February 1, then Lessee will remit payment to Lessor not later than
twenty-five (25) days prior to the date of delinquency of such taxes.  In the event Lessee fails to pay for the
taxes owed by Lessee as provided above, and fails to cure such failure within
thirty (30) days after receipt of written notice from Lessor, then such failure
shall constitute a default hereunder. 
Taxes for any partial calendar year during the term of this Lease shall
be prorated between Lessor and Lessee as follows: (i) Lessee shall pay to
Lessor that amount equal to the product of the amount of taxes for such
calendar year (determined as if this Lease had been in 

 

3

 

effect for the entire tax year), multiplied
by a fraction, the numerator of which is the number of days during such year
that Lessee occupied the Leased Premises under the terms of this Lease and the
denominator of which is 365; and (ii) Lessor shall pay that amount equal
to the tax assessment for such calendar year, less the amount paid by Lessee
pursuant to (i) above.  In the event
this Lease terminates or expires prior to Lessor’s receipt of the tax
assessment for such calendar year, Lessee shall pay to Lessor an amount equal
to Lessee’s pro rata share of one hundred twenty-five percent (125%) of the
taxes for the previous calendar year. 
Upon receipt of the assessment for such calendar year, Lessor shall
calculate Lessee’s pro rata share of such taxes and send to Lessee a copy of
such tax assessment together with either (i) a refund of any amounts paid
by Lessee in excess of Lessee’s pro rata share of such taxes, or (ii) a
request for payment of any amount still owed by Lessee to Lessor for Lessee’s
pro rata share of taxes.  Lessee shall
pay any such amount still owed to Lessor within thirty (30) days following
receipt of the request for payment.

 

Notwithstanding the foregoing, Lessee may, upon notice to Lessor, at
Lessee’s option and at Lessee’s sole cost and expense, protest, appeal, or
institute such other proceedings as Lessee may deem appropriate to effect a
reduction of ad valorem taxes or assessments against the Leased Premises and
Lessor, without out-of-pocket cost or expense to Lessor, shall cooperate with
Lessee in such protest, appeal, or other action to the extent required in order
comply with all applicable state, federal and local laws and ordinances
pertaining to the process of such protest, appeal or other action.  Lessee hereby agrees to indemnify, defend,
and hold Lessor harmless from and against any claims, obligations, costs,
expenses, fees, and liabilities against or incurred by Lessor in connection
with such cooperation.

 

E.                                    Miscellaneous.  All payments shall be made in lawful money of
the United States of America.  Lessee
shall not be entitled to deduct from or offset any sums owing or claimed to be
owing by Lessor to Lessee from any such amounts, and no conditions or
circumstances shall entitle Lessee to an abatement of any such payment unless
otherwise specifically provided herein. 
All rent shall be due and payable without demand.  All past due rent shall bear interest at the
annual rate of eighteen percent (18%) or the maximum legal rate, whichever is
less, until paid.  If any payment is made
by check and the check is not honored, then (i) Lessee shall pay all of
Lessor’s costs, expenses, and fees resulting from the dishonor and an
additional $50.00 for processing; and (ii) in the event two (2) checks
are ever dishonored during this Lease, then Lessor may, at its option, require
that all future rent payments be in the form of certified funds (money order,
certified check, etc.).

 

F.                                    Place
for Payment.  All rents are payable
to Lessor at 12903 Delivery Drive, San Antonio, Texas 78247, or other place
designated in writing by Lessor.

 

6.                                       SIGNS.  Lessee shall maintain signs, lettering, and
advertising materials as may be placed on the exterior or in the exterior
windows of the Leased Premises in good condition and 

 

4

 

repair at all times and in absolute
compliance with all applicable governmental ordinances and regulations
including, but not limited to, all applicable deed restrictions.

 

7.                                    RULES
AND REGULATIONS.  No garbage, refuse or
debris shall be deposited or stored by Lessee in any public area except as
designated by Lessor, and then only in approved containers, and shall be
handled in such a manner as to not be offensive nor create a nuisance.  The plumbing facilities and water fixtures
shall not be used for any purpose other than those for which they were
constructed.  In addition to Lessee’s
duties of maintenance and repair as contained in the Lease, Lessee has the duty
to repair the following conditions that may occur during the Lease Term, or any
renewal or extension: (i) damage from wastewater stoppages caused by
foreign or improper objects in lines; (ii) damage of any nature to doors,
windows, screens, or signs; and (iii) damage from windows or doors left
open.  Lessee will not allow any
canvassing, soliciting, peddling, or panhandling within the Leased Premises.

 

8.                                       OBLIGATIONS
FOR REPAIRS.  Except for Lessor’s
obligation to repair latent defects and other matters referenced in Section 1
above, Lessee agrees to maintain and make all repairs and replacements to, at
its own cost and expense, the interior and exterior of the Leased Premises, so
as to return the Leased Premises to Lessor at the end of the Primary Term, and
any renewal or extension thereof, in substantially the same condition as when
originally leased, reasonable wear and tear excepted, including the
maintenance, repair, and replacement of exterior walls, foundations, plumbing,
HVAC, lighting systems, electrical, telephone, and data wiring, roof, gutters,
and down spouts, including the performance of all maintenance replacements and
repairs necessary or incidental thereto. 
Lessee will accomplish such maintenance repairs and replacements
promptly in a good and workmanlike manner, in compliance with all applicable
laws of all governmental authorities, and in a style, character, and quality
conforming to existing construction, and will provide Lessor with advance
notice of intent to make such repairs and replacements; such repairs and
replacements to include, but not be limited to, all necessary maintenance and
repairs to and replacements of the construction materials forming the outer
shell of the buildings, the water, sewage, gas, electrical, telephone, and data
lines and installation servicing the buildings and the Leased Premises, the
heating and air-conditioning system in the buildings, all repairs and
restoration made necessary by fire or other casualty, and all necessary repairs
and replacements of improvements to the Leased Premises originally constructed
by Lessor.  Except as otherwise provided
in this Lease, all maintenance, repairs, and replacements required to preserve
the Leased Premises in the condition they exist on the day this Lease commences
shall be the sole responsibility and obligation of Lessee, and not Lessor.  Except for latent defects and other matters
referenced in Section 1 above, Lessee agrees to hold Lessor harmless, and
to fully indemnify Lessor, for any damages occasioned by the physical condition
or state of repair of the buildings or the Leased Premises.  Lessee shall have an annual pest and termite
inspection performed at the Leased Premises on or before July 1 of each
year and provide a copy of the inspection to Lessor.  The cost of such inspection and any repairs
occasioned by pest and termite damage shall be paid by Lessee.  Except for latent defects and other matters
referenced in Section 1 above, Lessor shall have no responsibility or
obligation of any nature to maintain the Leased Premises or perform any repairs
or replacements relating to the Leased Premises.

 

5

 

A.                              In
the event Lessee does not complete the maintenance, repairs, and replacements
as required of Lessee herein, Lessor shall have the right, but not the
obligation, to immediately perform such replacements, repairs, or maintenance
as may be deemed an emergency by Lessor, and to charge the cost thereof to
Lessee, said cost to be payable by Lessee on demand as additional rent
hereunder.  An “emergency” shall mean a
defect, or state of disrepair, that Lessor reasonably believes constitutes a
dangerous condition to the physical safety or well-being of any person entering
the Leased Premises or possibility of significant damage to premises.  Failure to pay said charge within fifteen
(15) days of a demand by Lessor shall be a material default and breach of this
Lease, and shall not be subject to the rights of remediation or cure set forth
in Section 18 herein, or otherwise.

 

B.                                In
the event Lessor believes that the Leased Premises are not being properly
repaired or maintained, but the defect is not of an emergency nature, then
Lessor shall give Lessee notice of the defect. 
If Lessee does not repair the defect within twenty (20) days after
receiving the notice from Lessor, then Lessor shall have the right, but not the
obligation, to perform such repairs or maintenance as may be necessary, and to
charge the reasonable cost thereof to Lessee. 
These costs of maintenance or repair shall be payable by Lessee on
demand as additional rent.  Failure to
pay said charge within fifteen (15) days of a demand by Lessor shall be a
material default and breach of this Lease, and shall not be subject to the
rights of remediation or cure set forth in Section 18 herein, or
otherwise.

 

9.                                    UTILITIES.  Lessee shall pay all charges for water, gas,
telephone, electricity, and all utilities used in the Leased Premises as well
as waste disposal services and all janitorial services.  Lessee shall at its expense maintain, repair,
and replace when necessary, all heating, air conditioning, plumbing, gas,
electrical and mechanical appurtenances and fixtures in the Leased Premises.

 

10.                               SECURITY
DEPOSIT.  Lessee shall deposit with
Lessor as security for Lessee’s continued performance of this Lease a sum equal
to three months’ rental hereunder.  Upon
Lessee’s failure to pay any required payment hereunder, the deposit may, at
Lessor’s option, be applied by Lessor to delinquent rental or to damages, and
if so used, Lessee shall immediately pay to Lessor the amount so used.  Any Security Deposit remaining at the
conclusion of the Primary Term, or any extension thereof, shall be returned to
Lessee within sixty (60) days after the Lessee has vacated the Leased Premises,
subject to the relevant provisions of the Texas Property Code.

 

11.                              INDEMNITY.  Lessor will not be liable to Lessee or any
other person for injury, death, or damage to persons or property received on,
related to, or incidental to the use of the Leased Premises or this Lease,
except for such which is caused by the willful misconduct or gross negligence
of Lessor.  Lessee further agrees to
defend, at its own expense, and on behalf of Lessor and in the name of Lessor,
any claim, demand, assertion, or litigation of every nature brought or made
against Lessor in connection with, arising from, or relating to the Leased
Premises or this Lease; and Lessee shall indemnify and save Lessor harmless
from and against any loss, claim, cost, expense, fee, or liability of every
nature in connection with, arising from, or relating to the Leased Premises or
this Lease, save and except for claims arising solely from 

 

6

 

structural defects or building
code non-compliance in the Leased Premises or acts of god, and except for such
claims which are caused by the willful misconduct or gross negligence of
Lessor.  Lessee irrevocably stipulates that this provision is conspicuous, as
required by law, and Lessee specifically represents and warrants to Lessor,
with the intent to induce Lessor to rely thereon, that Lessee has reviewed this
provision and has full understanding and appreciation of the import of each of
the terms of this provision.

 

12.                               ALTERATIONS.

 

A.                                   Lessee
shall not make any additions, alterations, or changes in the Leased Premises
without first obtaining Lessor’s written approval, which approval will not be
unreasonably withheld.  Notwithstanding
the foregoing, Lessee may install in the Leased Premises any and all equipment,
trade fixtures, furnishings, furniture and other personal property used by
Lessee in connection with its business (collectively, “Lessee’s Property”)
without obtaining Lessor’s approval, unless such installation would affect or
modify the structural integrity, foundation/slab, roof or exterior walls of the
Leased Premises (a “Structural Modification”). 
Upon termination or expiration of the Lease, Lessee shall remove all of
Lessee’s Property and shall restore the Leased Premises to the condition in
which it existed prior to installation of the Lessee’s Property.  In the event Lessee makes a permitted
Structural Modification, Lessor shall have the option to elect whether such
Structural Modification shall remain on the Leased Premises and become the
property of Lessor or shall be removed by Lessee at Lessee’s expense.  Lessee shall furnish to Lessor, not less than
180 days prior to the expiration of the Lease term, a written list of all
Structural Modifications; within thirty (30) days of receipt of this list,
Lessor will furnish to Lessee a written list of all Structural Modifications to
be removed by Lessee.  Notwithstanding
any provision herein to the contrary, HVAC systems, plumbing lines and fixtures,
electrical, telephone, and data wiring and fixtures, and other fixtures (i) which
are integrally incorporated into the Leased Premises and (ii) the removal
of which would alter the structural integrity, foundation/slab or roof of the
Leased Premises, shall constitute Structural Modifications.  In the event Lessor elects to have any such
Structural Modifications removed, Lessee agrees to pay all costs of and repair
any damages resulting from such removal. 
Such removal shall be completed on or before the date of the expiration
of the Lease term provided herein, or, in the event of early termination due to
default by Lessee, within a reasonable time after receipt of written notice of
the items to be removed, and shall be diligently conducted to completion.

 

B.                                     Lessee
covenants and agrees to keep the premises free and clear of all liens and
encumbrances of whatsoever kind, granted or claimed by, through, or under
Lessee.

 

13.                               LESSOR’S
ACCESS.  Lessor shall have the right to
enter upon the Leased Premises at reasonable hours and on reasonable notice to
Lessee for the purpose of inspecting same.

 

14.                               INSURANCE.  Lessee shall, at Lessee’s expense, provide
and maintain in full force and effect during the term of this Lease insurance
from reputable companies to which Lessor has no reasonable objection and which
are authorized to do business in Texas as follows: (a) Commercial General
Liability insurance in an amount of $2,000,000.00 each occurrence for 

 

7

 

bodily injury and property
damage, plus an excess umbrella liability policy with a limit for bodily injury
and/or property damage in an amount of not less than $3,000,000.00; and (b) fire
and extended coverage insurance, including vandalism and malicious mischief, on
the Leased Premises and all of Lessee’s improvements in an amount equal to the “full
replacement value” (as hereinafter defined) thereof;; and (c) Worker’s
Compensation Insurance as required by the State of Texas.  All insurance which Lessee is required to
maintain pursuant to the terms of this Lease shall: (i) name the Lessor as
an additional insured and the holder or holders (“Mortgagee”) of any mortgage,
deed of trust or other security agreement now or hereafter granted by Lessor
covering the Leased Premises as additional insureds pursuant to a standard
mortgagee’s loss payable endorsement; and (ii) be written by such
companies and upon such policy forms as Lessor shall approve, which approval
shall not be unreasonably withheld or delayed. 
Lessee shall furnish Lessor with certificates of all insurance required
by this section prior to Lessee’s taking possession of the Leased
Premises.  In the event Lessee shall fail
to provide or maintain the insurance required in this section, in addition to
any other right or remedy which Lessor may have pursuant to this Lease, at law
or in equity, or otherwise, Lessor shall have the right, but not the
obligation, to procure such insurance and charge the cost thereof to Lessee,
said cost to be payable by Lessee upon demand by Lessor.  Failure to pay said charge within fifteen
(15) days of a demand for payment by Lessor shall be a material default and
breach of this Lease, and shall not be subject to the rights of remediation and
cure set forth in Section 18 hereof, or otherwise.  Losses shall be payable to Lessor and Lessee
as provided in Section 15 hereof. 
The amount of any insurance coverage required under this Lease shall be
increased from time to time, as Lessor reasonably requires.  Lessee is not required to carry insurance on
its furniture, furnishings, fixtures and equipment on or in the Leased
Premises, but Lessee warrants and represents that, if it chooses not to carry
such insurance, it will maintain an adequate financial standing to be
responsible for any and all losses to such items.

 

For purposes hereof, the phrase “full replacement value” shall mean the
actual replacement cost of the Leased Premises requiring replacement from time
to time, including an increased cost of construction endorsement, if available
and economically feasible, less exclusions provided in the standard form of
fire insurance policy.  In the event
Lessor reasonably believes that full replacement cost (the then replacement
cost less such exclusions) has increased or decreased at any time during the
Lease term, Lessor shall have the right to have such replacement cost
redetermined.

 

A.                              Subject
to the provisions of Section 15 below, Lessor and Lessee agree that in the
event of loss due to any of the perils for which they have agreed to provide
insurance, each party shall look solely to its insurance for recovery.  Lessor and Lessee hereby grant to each other,
on behalf of any insurer providing insurance to either of them with respect to
the Leased Premises, a waiver of any right of subrogation which any insurer of
one party may acquire against the other by virtue of payment of any loss under
such insurance.

 

B.                               Lessor
and Lessee hereby waive any and every claim which arises or may arise in its
favor and against the other party hereto during the term of this Lease or any
extension or renewal thereof for any and all loss of, or damage to, any of its
property located within or upon, or constituting a part of, the Leased
Premises, which loss or damage is covered by valid and collectible fire and extended
coverage insurance policies, to the extent that 

 

8

 

such loss or
damage is recoverable under said insurance policies.  Said mutual waivers shall be in addition to,
and not in limitation or derogation of, any other waiver or release contained
in this Lease with respect to any loss or damage to property of the parties
hereto.  Inasmuch as the above mutual
waivers will preclude the assignment of any aforesaid claim by way of
subrogation (or otherwise) to an insurance company (or any other person),
Lessor and Lessee hereby agree immediately to give to each insurance company
which has issued to it policies of fire and extended coverage insurance written
notice of the terms of said mutual waivers, and to have said insurance policies
properly endorsed, if necessary, to prevent the invalidation of said insurance
coverage by reason of said waivers.

 

15.                               DAMAGE
TO PREMISES.

 

A.                                   Rights
of Mortgagee.  All of the rights of
Lessee and Lessor in this Section 15 are subject to, and inferior to, the
rights of any party holding a mortgage or deed of trust to the Leased Premises
(the “Mortgagee”) to require, pursuant to such Mortgagee’s mortgage, deed of
trust or other security instrument, that all insurance proceeds received in
connection with a casualty event be paid to the Mortgagee for purposes of
reducing the indebtedness then owed by Lessor to such Mortgagee.  In the event any Mortgagee requires that all
insurance proceeds be paid to it following damage or destruction of the Leased
Premises, either Lessee or Lessor may terminate this Lease immediately upon
written notice to the other party. 
Thereafter, Lessee and Lessor shall have no further obligations under
this Lease (except for such obligations which expressly survive termination).

 

B.                               Total
Destruction.  If, during the term of
this Lease, the Leased Premises are totally destroyed or so damaged by fire or
any other casualty or accident that the Leased Premises cannot, in Lessor’s
reasonable determination, be used by Lessee for conducting its business
therein, then this Lease may be terminated by either Lessee or Lessor, without
liability to the other.  Such election
shall be made, and written notice thereof given to the other, within thirty
(30) days following the destruction or damage. 
In the event the Lease is terminated under this subsection B, all
insurance proceeds payable in connection with such damage or destruction shall
be paid to Lessor, and Lessee shall have no further obligations hereunder with
respect to repair or restoration of the Leased Premises or removal of any
Structural Modifications or other improvements from the Leased Premises (except
for Lessee’s Property which Lessee shall have the right to remove).  Notwithstanding any provision herein to the
contrary, in the event of casualty or other damage or destruction of the Leased
Premises, Lessee shall receive all insurance proceeds payable in connection
with or attributable to Lessee’s Property.

 

C.                                     Partial
Destruction.  In the event the Leased
Premises are partially damaged or destroyed but, in Lessor’s reasonable
determination, can still be used for the purposes and in the manner intended by
Lessee, or in the event of total destruction of the Leased Premises and neither
Lessor nor Lessee has elected to terminate this Lease, then all insurance
proceeds payable in connection with such damage or destruction shall be paid to
Lessee and used by Lessee to repair and restore the Leased Premises in
accordance with this section.  In this
event, the Lease shall continue in full force and effect, provided 

 

9

 

that rent shall be abated with respect to all
or any portion of the Leased Premises that is rendered untenantable from the
date of such damage or destruction until the Leased Premises are fully
restored.  Lessee shall prepare or have
prepared plans, specifications, and working drawings that will be necessary for
repair and restoration of the Leased Premises. 
The plans, specifications, and working drawings must be approved by
Lessor (and by the Mortgagee, if applicable), which approval shall not be
unreasonably withheld and must be given or refused within ten (10) business
days after receipt thereof by Lessor (and Mortgagee, if applicable).  If Lessor or the Mortgagee disapproves the
plans, specifications, or working drawings, Lessor or Mortgagee shall notify
Lessee of its objections and Lessee may either satisfy the objections, mediate
any such matters, or terminate the Lease by written notice to the Lessor.  In the event of such termination, all of the
insurance proceeds payable in connection with such damage or destruction shall
be paid to Lessor (except for proceeds from insurance attributable to Lessee’s
Property).  If Lessor (and Mortgagee, if
applicable) approves the plans, specifications and working drawings, Lessee
shall restore the Leased Premises substantially in accordance with the approved
plans, specifications, and working drawings. 
Construction shall commence as soon as reasonably possible after the
necessary governmental approvals have been obtained and shall be diligently
pursued to completion.  Lessee shall
retain a contractor that is experienced in the type of construction required.  In the event that insurance proceeds received
by Lessee for the damage or destruction of the Leased Premises are insufficient
to cover all costs of repair or restoration of the Leased Premises, Lessee, in
its sole discretion, shall either (i) pay any and all costs and expenses
for repair and restoration of the Leased Premises in accordance with the
approved plans, specifications and working drawings, in excess of such
insurance proceeds, (ii) modify the plans, specifications and working
drawings such that all repairs and restoration of the Leased Premises may be
completed for an amount equal to or less than the insurance proceeds received
by Lessee hereunder, or (iii) terminate this Lease by written notice to
Lessor, unless Lessor, in its sole discretion, elects to: (a) terminate
this Lease by written notice to Lessee; or (b) pay such excess.

 

16.                               SUBLETTING
AND ASSIGNING; CHANGE IN LESSEE’S CORPORATE FORM.

 

A.                                   Lessee
shall not mortgage, encumber, or pledge the Leased Premises.  If Lessee intends to sublet the Leased
Premises or any portion thereof, Lessee shall give notice of intent to sublease
to Lessor not less than one hundred eighty (180) days prior to the anticipated
effective date of such sublease.  After
receiving notice, Lessor will have the right to conduct due diligence on the
proposed sublessee to determine if the proposed sublessee is comparable to
Lessee’s status (as of the execution of this Lease) with regard to (a) financial
standing, (b) business reputation, and (c) capability of operating a
business as is contemplated in this Lease. 
If Lessor, in its sole discretion, determines that the proposed
sublessee is not comparable to Lessee’s status as of the date of execution of
this Lease with regard to these matters, Lessor may refuse to approve such
sublease, which refusal Lessee hereby conclusively recognizes as
reasonable.  Lessor may also refuse to
approve such sublease on any other grounds that Lessor, in its sole discretion,
deems to be proper, provided that in no event will Lessor’s refusal to approve
such sublease operate to terminate the Lease.

 

10

 

B.            Lessee shall not assign this Lease,
in whole or in part, by operation of law or otherwise, except with the prior
written consent of Lessor.  Lessor’s
consent to an assignment or subletting shall not be required if the assignee or
subtenant is (a) an “affiliate” (as defined below) of the Lessee, or (b) an
entity which acquires all or substantially all the assets or outstanding stock
of the Lessee through a merger or acquisition, and the assignee or subtenant
agrees to be bound by the terms of the Lease.  For purposes hereof, the term “affiliate”
means any person or entity which now owns at least 51% voting control of the
Lessee and any entity in which the Lessee or Lessee’s current owners own at
least 51% voting control.

 

C.            In the event that this Lease is
sublet or assigned as provided herein, such action shall not relieve Lessee
from any liability hereunder.

 

17.         HOLDING OVER.  It is
agreed and understood that any holding over by the Lessee of the Leased
Premises after the expiration of the lease term or termination for whatever
cause shall be a tenancy at the will of the Lessor at a monthly rental equal to
one-hundred and fifty percent (150%) of the rental then payable as provided
herein and may be terminated by Lessor at any time upon notice to Lessee.

 

18.         LESSEE’S DEFAULT.  In
the event Lessee defaults in the payment of any of the rentals or other sums
provided to be paid hereunder which is not remedied within fifteen (15) days
after written notice of such default is given by Lessor to Lessee and Lessee’s
lenders as set forth in Schedule A; or, if Lessee defaults in the
observance or performance of any other covenant, condition, agreement or
provision hereof which is not remedied within thirty (30) days after written
notice of such default is given by Lessor to Lessee and Lessee’s lenders as set
forth on Schedule A (so long as Lessee’s right hereunder of remediation or
cure of said default has not been excluded pursuant to the terms of this
Lease); provided, however, that if such default cannot be cured within said
thirty (30) day period then such thirty (30) day period shall be extended by
such time as is necessary for Lessee to effect such cure as long as (i) Lessee
or Lessee’s lenders are diligently prosecuting such cure, and (ii) Lessee
or any of Lessee’s lenders deliver a written notice to Lessor prior to the
expiration of the initial thirty (30) day period in which Lessee or any of
Lessee’s lenders notify Lessor that it cannot cure the default within such
thirty (30) day period and Lessee or any of Lessee’s lenders represent to
Lessor that they will diligently prosecute to cure such default; or, if Lessee
becomes insolvent or bankrupt, conveys substantially all its assets, admits its
inability to pay its debts as they mature, or makes an assignment for the
benefit of creditors, or applies for or consents to the appointment of a
trustee or receiver; or if a bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceeding, or other proceedings for relief under
the bankruptcy law or similar law for the relief of debtors are instituted by
or against Lessee; then, in any such event, Lessor may, at its option, in
addition to any other remedy available to Lessor hereunder, or at law or in
equity, upon fifteen (15) days written prior notice to Lessee, exercise any one
or more of the following remedies without any further notice or demand:

 

A.         Lessor may terminate this Lease, in
which event the term of this Lease shall end, and all right, title, and
interest of Lessee hereunder shall terminate on the date stated in such
notice.  In such event, Lessor shall be
entitled to recover from Lessee all rentals 

 

11

 

accrued and
unpaid for the period up to and including such termination date, as well as any
other sums payable by Lessee as provided herein which may then be owing and
unpaid, and all costs and expense, including court costs and attorney’s fees,
incurred by Lessor in the enforcement of its rights and remedies hereunder;
and/or

 

B.            Lessor may, without terminating this
Lease, terminate the right of Lessee to possession of the Leased Premises by
giving notice to Lessee that Lessee’s right of possession shall end on the date
stated in the notice.  In such event
Lessee’s right to possession of the Leased Premises shall terminate, and Lessor
may take possession thereof.

 

19.         DISPUTES; MEDIATION; ARBITRATION.  All disputes and controversies between Lessor
and Lessee that are not resolved within forty-five (45) days of the date they
first arise shall be submitted for mediation. 
All disputes not resolved by mediation shall be subjected to the sole
remedy of binding, non-appealable arbitration pursuant to the then existing rules and
regulations of the National Arbitration Foundation.  Such arbitration shall be conducted in San
Antonio, Texas.

 

20.         NON-WAIVER.  It is
expressly agreed and understood that the acceptance of rental hereunder, lapse
of time or any other act or omission on the part of Lessor or its agents shall
not constitute a waiver of any breach by Lessee of the conditions and covenants
of this Lease, but rather, so long as any such breach continues, Lessor shall
have the right to terminate this Lease and pursue any remedies to which it may
be entitled as provided herein.  No act
or conduct of Lessor, including but without limitation the acceptance of the
keys to the Leased Premises shall constitute an acceptance of the surrender of
the Leased Premises by Lessee before the expiration of the term of this
Lease.  Only a written notice from Lessor
to Lessee, signed by an authorized representative of Lessor, shall constitute
an acceptance of the surrender of the Leased Premises so as to effect a
termination of this Lease.  No waiver of
Lessee’s default by Lessor shall be valid unless it is in writing and signed by
an authorized representative of Lessor.

 

21.         LANDLORD’S LIEN.

 

A.         In addition to and
cumulative of any statutory or constitutional lien to which Lessor may be
entitled, Lessor shall have a lien as security for rents and other covenants of
Lessee herein on Lessee’s Property; provided, however, Lessor acknowledges and
agrees that any statutory or constitutional liens of Lessor and the lien
granted to Lessor pursuant to this Section 22 (collectively, “Lessor’s
Liens”) are subordinate to any and all properly perfected liens now or
hereafter held by any of Lessee’s lenders, including all renewals,
modifications, and extensions thereof. 
The subordination herein provided shall be self-operative and no further
instrument of subordination shall be required; provided, however, within ten (10) business  days following
any request therefor, Lessor agrees to execute and deliver to Lessee or any of
Lessee’s lenders any instrument reasonably requested to evidence such
subordination.  Lessor hereby appoints
Lessee as its true and lawful agent and attorney-in-fact (“Attorney-in-Fact”)
for the Lessor and in the Lessor’s name, place and stead for the sole purpose
of executing and delivering all documents and to take such action as is deemed
necessary to evidence subordination of Lessor’s Liens in 

 

12

 

the event Lessor fails to execute and deliver such instrument as herein
required.  Additionally, Lessee shall be
permitted to remove Lessee’s Property from the Leased Premises without Lessor’s
consent free and clear of any Lessor’s Liens. 
If Lessee is in default under this Lease, or if Lessee abandons or
vacates the Leased Premises, Lessor may enter upon the Leased Premises, by any
means whatsoever, and take possession of all or any part of the Lessee’s
Property, and store same at the expense of Lessee.  Lessor will relinquish its possession of any
of Lessee’s Property that is subject to a superior lien described above upon
the written request of the holder of such superior lien.  Subject to the rights of superior lien
holders, Lessor may sell Lessee’s Property at a public or private sale to the
highest bidder for cash thirty (30) days after written notice of such sale has
been mailed to Lessee at its last known address.  The proceeds of any such sale shall be first
applied by Lessor to the cost of such sale and then to the payment of all sums
due by Lessee to Lessor under the terms of this Lease.  Any surplus shall be mailed to Lessee at its
last known address.  It is agreed that
none of the above procedures shall necessitate prior judicial hearing.

 

B.           This Lease is intended as and
constitutes a security agreement within the meaning of the Texas Business and
Commerce Code.  Lessor, in addition to
the rights prescribed in this Lease, but subject to the rights of superior lien
holders (as described in subsection A above), shall have all of the rights,
titles, liens, and interests in and to Lessee’s property, now or hereafter
located upon the Leased Premises, which may be granted a secured party, as that
term is defined, under the Texas Business and Commerce Code to secure to Lessor
payment of all sums due and the full performance of all Lessee’s covenants
under this Lease.  Lessee will on request
execute and deliver to Lessor a financing statement for the purpose of
perfecting Lessor’s security interest under this Lease; if Lessee fails or
refuses to do so, then Lessor may file this Lease or a copy thereof as a
financing statement; such filing shall not be a violation of Section 37 of
this Lease.  Unless otherwise provided by
law and for the purpose of exercising any right pursuant to this section,
Lessor and Lessee agree that reasonable notice shall be met if such notice is
given by ten (10) days written notice, certified mail, return receipt
requested, to Lessor or Lessee at the addresses specified herein.

 

22.         NOTICES.  Any notices,
requests, or other communications hereunder shall be deemed duly given if made
in writing and delivered in person or mailed by registered or certified mail as
follows:

 

	
   

  	
  To Lessor:

  	
  Green Wing
  Management, Ltd. 

  12903
  Delivery Drive 

  San Antonio,
  Texas 78247

  
	
   

  	
   

  	
   

  
	
   

  	
  To Lessee:

  	
  ISI Security Group, Inc. 

  12903 Delivery Drive 

  San Antonio, Texas 78247

  

 

13

 

Any party may change its
address for notices by notifying all the other parties pursuant to this
section.

 

23.           BINDING EFFECT. 
This Lease shall be binding upon and inure to the benefit of the heirs,
legatees, devisees, executors, administrators, successors and, to the extent
assignment is permitted hereunder, assigns of the parties hereto.

 

24.           CERTIFICATION. 
Lessor and Lessee agree that at any time and from time to time upon not
less than ten (10) days prior notice to the other, Lessor or Lessee will
execute, acknowledge and deliver to the other a statement in writing certifying
(a) that this Lease is unmodified and in full force and effect (or if
there have been modifications, that this lease is in full force and effect as
modified and identifying the modifications), (b) the date to which the
rental and other charges have been paid and (c) that so far as the
certifier knows, there is no default under the provisions of this Lease.  It is intended that any such statement may be
relied upon by any person proposing to acquire Lessor’s or Lessee’s interest,
as the case may be, in this Lease or any prospective mortgagee or assignee of
any mortgage upon such interest.

 

25.          SUBORDINATION.  This Lease and all of the rights of Lessee
hereunder shall be subject and subordinate to any mortgage or deed of trust
(all such mortgages or deeds of trust hereinafter collectively called “Mortgage”)
that may now or in the future encumber the Leased Premises, and to all
renewals, modifications, consolidations, replacements, and extensions
thereof.  Lessor represents and warrants
that it has requested the Mortgagee of the Leased Premises to execute a
non-disturbance agreement acceptable to Lessee recognizing this Lease and
agreeing, for itself and its successors and assigns, that so long as Lessee is
not in default in the payment of rent or the performance and observance of all
covenants, conditions, provisions, terms and agreements to be performed and
observed by Lessee hereunder, that such Mortgagee shall not interfere with,
hinder or impair Lessee’s right to quiet enjoyment under this Lease, nor the
right of Lessee to continue to occupy the Leased Premises, and all portions
thereof and to conduct its business thereon in accordance with the covenants,
conditions, provisions, terms and agreements of this Lease.  Lessor further agrees to cooperate in any and
all reasonable ways in attempting to secure a non-disturbance agreement from
the current Mortgagee of the Leased Premises. 
If the current Mortgagee agrees to execute such a non-disturbance
agreement, upon receipt by Lessee of such a non-disturbance agreement, Lessee
shall, at Lessor’s request, promptly execute any certificate or instrument that
Lessor may request evidencing such subordination.  If such a non-disturbance agreement is
executed by the current Mortgagee, Lessor agrees not to execute any additional
or replacement Mortgage (not including required periodic renewals of the
currently existing Mortgage, or a replacement Mortgage in the event the current
Mortgagee determines to terminate or not renew the current Mortgage) without
obtaining the same non-disturbance agreement from the proposed mortgagee.  Lessor and Lessee acknowledge that a
non-disturbance agreement will not be provided by Mortgagee if the Lessee is a
related party to the borrower or guarantor under the current Mortgage.  Notwithstanding any provision herein to the
contrary, the lien of any such Mortgagee shall not cover Lessee’s Property
located in or on the Leased Premises.  No
Mortgagee shall be bound by (a) any payment of rentals for more than one (1) month
in advance, except prepayments in the nature of security for the performance by
Lessee of its obligations under this Lease, or (b) any amendment or
modification of this Lease made without the written consent of such Mortgagee.

 

14

 

26.          CONDEMNATION.  If
during the term of this Lease, all of the Leased Premises shall be taken or
condemned for any public or quasi-public use under any governmental law,
ordinance or regulation, or by right of eminent domain or by private purchase
in lieu thereof, either Lessor or Lessee may, terminate this Lease upon sixty
(60) days written notice to the other party and the rent shall be abated for
the unexpired portion of this Lease effective on the date possession is
surrendered by Lessee.  If any such
taking shall occur which leaves the Leased Premises suitable for the operation
of Lessee’s business, the Lease shall remain in force and effect but the rental
shall be reduced in proportion to the value of square footage, if any, taken,
by the condemning authority as compared to the total value of the Leased
Premises.  Lessor shall receive the
entire award made by the condemning authority.

 

27.           REIMBURSEMENT OF LESSOR. 
If Lessor pays any sum that Lessee is obligated to pay hereunder,
whether for utilities, taxes, insurance, repairs, replacements, maintenance, or
otherwise, Lessee agrees to pay any such sum to Lessor on demand, plus interest
at the lesser of five percent (5%) above the interest rate outstanding on the
Lessor’s financing of the Leased Premises or ten percent (10%) per annum from
the date Lessor paid said sum until the date of repayment by Lessee.

 

28.          ATTORNEYS’ FEES.  In
the event either party breaches any of the terms or covenants of this Lease,
and it is necessary to employ attorneys to protect or enforce the rights
hereunder, then the defaulting party agrees to pay the non-defaulting party’s
reasonable attorneys’ fees and court costs.

 

29.          ENTIRE AGREEMENT. 
This written Lease contract contains each and all of the agreements
between the parties hereto, and no prior, contemporaneous agreement, whether
oral, implied or in writing, shall vary the terms and provisions hereof.  This Lease may be amended by the written
consent of the parties hereto.

 

30.          INVALID CLAUSES.  In
the event any one or more of the provisions contained in this Lease shall for
any reason be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect any other
provision thereof, and this Lease shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.

 

31.          WAIVER OF APPLICABILITY. 
The parties to this Lease desire to avoid the applicability of the
Deceptive Trade Practices Act (“DTPA”) of Texas to the full extent permitted by
law.  In order to avoid applicability of
the DTPA for the mutual benefit of the parties, Lessee represents that: (i) it
is not in a significantly disparate bargaining position with respect to this
transaction; and (ii) Lessee waives all of the provisions of the DTPA
other than Section 17.55.

 

32.         KEYS.  Lessee shall
provide Lessor with at least one key for each different door lock within the
Leased Premises.  Lessor agrees not to
use the keys without prior notice to, and approval of, Lessee, except in case
of emergency.

 

15

 

33.          FINANCIAL STATEMENTS. 
Lessee shall furnish Lessor, prior to the execution of this Lease, and
also as a condition to the exercise of any option for additional term(s), a
statement of financial condition of Lessee prepared by an independent certified
public accountant and in form reasonably satisfactory to Lessor.  Said financial statements shall be updated on
an annual basis to reflect current information and shall be delivered by Lessee
to Lessor within 120 days of the close of its fiscal year.  Lessor may provide a copy of the financial
statements to any financial institution that holds a first mortgage on the
Leased Premises.

 

34.          CORPORATE AUTHORITY.  If Lessee executes this Lease as a
corporation, each of the persons executing this Lease on behalf of Lessee do
hereby personally represent and warrant that Lessee is a duly authorized and
existing corporation, that Lessee is qualified to do business in the state in
which the Leased Premises are located, that the corporation has full right and
authority to enter into this Lease, and that each person signing on behalf of
the corporation is authorized to do so.

 

35.          LIMITATION OF WARRANTIES. 
Lessor and Lessee expressly agree that there are and shall be no implied
warranties of merchantability, habitability, fitness for a particular purpose,
or of any other kind arising out of this Lease, and there are no warranties
which extend beyond those expressly set forth in this Lease.

 

36.          QUIET ENJOYMENT. 
Lessor agrees that, subject to the terms, covenants, and provisions of
this Lease, Lessee may, upon observing and complying with all terms, covenants,
and provisions of this Lease, peaceably and quietly occupy the Leased Premises.

 

37.          CONFIDENTIALITY. 
This Lease is a confidential agreement between the parties herein and no
terms or conditions of this Lease (including rental payments paid or due or the
method of calculating said payments) shall be released to any appraiser, rent
survey, or any third party.  No portion
of this Section 37, however, shall prevent either party from complying
with requirements of a lender, or government regulation or law, where said law
requires confidential disclosure of rental terms for purposes of tax
assessment, for purposes of tax audit, or otherwise.  No portion of this Section 37 shall
apply to a prospective buyer of the Leased Premises pursuant to Section 4
provided the prospective buyer has signed a letter of intent satisfactory to
Lessor and has signed a confidentiality agreement not to disclose the terms and
conditions of this Lease.  No portion of
this Section 37 shall prohibit Lessor from disclosing the terms of this
Lease, pursuant to a confidentiality agreement, to any appraiser employed by
Lessor for tax or estate planning purposes. 
No portion of this Section 37 shall apply to the holder of any
mortgage, deed of trust, or security interest that may now or in the future encumber
the Leased Premises or any personal property located at the Leased Premises,
and to all renewals, modifications, consolidations, replacements, and
extensions thereof, said holder having the authority, if it chooses, to record
any lease estoppel letters or subordination and non-disturbance agreements to
which this Lease may be attached as an exhibit.

 

38.          SPECIAL PROVISION. 
Sam Youngblood, President of LESSEE, and Don Carr, Vice President of
LESSEE are the principals of Green Wing Management, Ltd, LESSOR.  Sam Youngblood and Don Carr agree to act in a
commercially reasonable manner as to their 

 

16

 

obligations relating to both
the LESSOR and the LESSEE, under this Commercial Lease Agreement.

 

17

 

This
Commercial Lease Agreement is hereby executed on June 10, 2008 and
effective as of the Effective Date provided above.

 

 

	
  LESSEE:

  	
  LESSOR:

  
	
   

  	
   

  
	
  ISI Security Group, Inc.

  	
  Green Wing Management, Ltd.

  
	
  d/b/a Argyle Security USA

  	
  By Green Wing GP, Inc, its General Partner

  
	
   

  	
   

  
	
  By:

  	
  

  	
   

  	
  By:

  	
  

  
	
          Sam
  Youngblood

  	
          Sam
  Youngblood

  
	
  Its:   President

  	
  Its:   Chief Executive
  Officer

  
					

 

18

 

EXHIBIT
A

 

LEGAL
DESCRIPTION

 

Lot 4 and 5, Block 4, WETMORE BUSINESS PARK,
UNIT 3 in the City of San Antonio, Bexar County, Texas according to plat
recorded in Volume 9509, Page 103, Deed and Plat Records of Bexar County,
Texas, now known as Lot 11, Block 4, New City Block 17578, WETMORE BUSINESS
PARK, in the City of San Antonio, Bexar County, Texas, according to plat
thereof recorded in Volume 9584, Page 45, Deed and Plat Records of Bexar
County, Texas.

 

19

 

EXHIBIT B

 

Improvements

 

 

20

 

SCHEDULE A

 

LaSalle Bank National Association, a national association

William Blair Mezzanine Capital Fund III, L.P.

 

21Exhibit 10.1

METRO ONE DEVELOPMENT, INC.

June 2008 STOCK OPTION PLAN

Article I.    Purposes of the Plan

The purposes of this June 2008 Stock Option Plan are to attract and retain
the best available personnel, to provide additional incentive to Employees,
Directors and Consultants, and to promote the success of the Company's
business.

Article II.   Definitions

As used herein, the following definitions shall apply:

2.01   "Administrator" means the Board or any of the Committees appointed
        to administer the Plan.

2.02   "Applicable Laws" means the legal requirements relating to the
        administration of share incentive plans, if any, under applicable
        provisions of the U.S. federal securities laws, the U.S. state
        corporate and securities laws, the Code, the rules of any applicable
        stock exchange or national market system, and the laws and rules of
        any jurisdiction outside the U.S. applicable to Options including
        Canadian laws, SARs or Restricted Shares granted to residents
        therein.

2.03   "Board" means the Board of Directors of the Company.

2.04   "Code" means the U.S. Internal Revenue Code of 1986, as amended.

2.05   "Committee" means any committee appointed by the Board to administer
        the Plan, and shall, following the Registration
        Date and, solely to the extent required to comply with Applicable Laws,
        be composed of "non-employee" directors within the meaning of
        Rule 16b-3 as promulgated under the Exchange Act and "outside
        directors" within the meaning of the Code.  To the extent the Plan
        is administered by the Board, the term "Committee" shall refer to
        the Board.

2.06   "Common Share" means a share of US$0.0001 par value of the Company.

2.07   "Company" means Metro One Development, Inc., a company incorporated
        under the laws of Delaware.

2.08   "Consultant" means any person (other than an Employee or a Director)
        who is engaged by the Company or any Related Entity to render
        consulting or advisory services to the Company or such Related Entity
        or any other selective persons the Administrator determines provides,
        directly or indirectly, bona fide value to the Company or any Related
        Entity.

2.09   "Continuous Service" means that the provision of services to the Company
        or a Related Entity in any capacity of Employee, Director, or
        Consultant, is not interrupted or terminated.  Continuous Service
        shall not be considered interrupted in the case of:

<PAGE>

        (i)   any approved leave of absence;

        (ii)  transfers among the Company, any Related Entity, or any
              successor, in any capacity of Employee, Director, or
              Consultant; or

        (iii) any change in status as long as the individual remains in the
              service of the Company or a Related Entity in any capacity of
              Employee, Director, or Consultant (except as otherwise provided
              in the Option Agreement).

        An approved leave of absence shall include sick leave, maternity leave,
        or any other authorized personal leave.

2.10   "Corporate Transaction" means any of the following transactions to which
        the Company is a party:

        (i)   a merger or consolidation or reorganization in which the Company
              is not the surviving entity; or

        (ii)  the sale, transfer or other disposition of all or substantially
              all of the assets of the Company (including the share capital of
              the Company's Subsidiaries).

2.11   "Director" means a member of the Board or the board of directors of any
        Related Entity.

2.12   "Disability" means that an Optionee is permanently unable to carry out
        the responsibilities and functions of the position held by the Optionee
        by reason of any medically determinable physical or mental impairment
        as determined by the Administrator.  An Optionee will not be considered
        to have incurred a Disability unless he or she furnishes proof of such
        impairment sufficient to satisfy the Administrator in its discretion.

2.13   "Effective Date" means the date on which a Grant of Options and/or SARs
        and/or Restricted Shares shall take effect in accordance with Option
        Agreement.

2.14   "Employee" means any person, including an Officer or Director, who is an
        employee of the Company or any Related Entity.  The payment of an
        independent director's fee by the Company or a Related Entity shall
        not be sufficient to constitute "employment" of such person by the
        Company.

2.15   "Exchange Act" means the U.S. Securities Exchange Act of 1934, as
        amended.

2.16   "Fair Market Value" means, as of any date, the value of Common Shares
        as follows:

       (a) Where there exists a public market for the Common Shares, the Fair
           Market Value shall be:

                (i)   the closing price for a Share for the last market trading
                      day prior to the time of the determination (or, if no
                      closing price was reported on that date, on the last
                      trading date on which a closing price was reported) on
                      the stock exchange determined by the Administrator to be
                      the primary market for the Common Shares or the Nasdaq
                      National Market, whichever is applicable; or

<PAGE>

                (ii)  if the Common Shares are not traded on any such exchange,
                      or national market system, the average of the closing
                      bid and asked prices of a Share on the Nasdaq Small
                      Cap Market for the day prior to the time of the
                      determination (or, if no such prices were reported on
                      that date, on the last date on which such prices were
                      reported), in each case, as reported in The Wall Street
                      Journal or such other source as the Administrator deems
                      reliable.

       (b) In the absence of an established market for the Common Shares of
           the type described in (a), above, the Fair Market Value thereof
           shall be determined by the Administrator in good faith by reference
           to:

                (i)   the valuation price made by an independent appraiser
                      appointed by the Administrator;

                (ii)  the placing price of the latest private placement of the
                      Shares; and

                (iii) the development of the Company's business operations
                      since such latest private placement.

2.17  "Grant" means the number of Options and/or Stock Appreciation Rights
       and/or Restricted Shares and/or Restricted Share Units granted to an
       Optionee at any time in accordance with Article VI hereof.

2.18  "Immediate Family" means any child, stepchild, grandchild, parent,
       stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
       mother-in-law, father-in-law, son-in-law, daughter-in-law,
       brother-in-law, or sister-in-law, including adoptive relationships,
       any person sharing the Optionee's household (other than a tenant or
       employee), a trust in which these persons (or the Optionee) have more
       than fifty percent (50%) of the beneficial interest, a foundation in
       which these persons (or the Optionee) control the management of
       assets, and any other entity in which these persons (or the Optionee)
       own more than fifty percent (50%) of the voting interests.

2.19  "Liquidation Event" means a complete dissolution or liquidation of the
       Company.

2.20  "Non-Statutory Stock Option" means an Option not intended to qualify as
       an Incentive Stock Option within the meaning of Section 422 of the Code.

2.21  "Officer" means a person who is an officer of the Company or a Related
       Entity within the meaning of Section 16 of the Exchange Act and the
       rules and regulations promulgated thereunder or, to the extent
       applicable, other Applicable Laws.

2.22  "Option" means an option to purchase Shares pursuant to an Option
       Agreement granted under the Plan.

2.23   "Optionee" means an Employee, Director, or Consultant who receives a
        Grant under the Plan.

2.24   "Option Agreement" means the written agreement evidencing the grant of
        an option and/or SARs and/or Restricted Shares executed by the Company
        and the Optionee, including any amendments thereto.

2.25   "Option Period" means the period commencing on the Effective Date of a
        Grant and ending no later than on the day prior to the tenth
        anniversary of such Effective Date.

<PAGE>

2.26   "Parent" means a "parent corporation", whether now or hereafter
        existing, as defined in Section 424(e) of the Code or, to the extent
        applicable, other Applicable Laws.

2.27   "Plan" means this June 2008 Stock Option Plan of Metro One Development,
       Inc., dated June 18, 2008, as set forth herein and as may be amended
       from time to time.

2.28   "Registration Date" means the first to occur of:

        (a) the closing of the first sale to the general public of:

                (i)  the Common Shares; or

                (ii) the same class of securities of a successor corporation
                     (or its Parent) issued pursuant to a Corporate Transaction
                     in exchange for or in substitution of the Common Shares,
                     pursuant to a registration statement filed with and
                     declared effective by the Securities and Exchange
                     Commission under the Securities Act or an equivalent
                     thereof in a jurisdiction outside the U.S.;

        and

        (b) in the event of a Corporate Transaction, the date of the
            consummation of the Corporate Transaction if the same class of
            securities of the successor corporation (or its Parent) issuable in
            such Corporate Transaction shall have been sold to the general
            public pursuant to a registration statement filed with and declared
            effective by the Securities and Exchange Commission under the
            Securities Act or an equivalent thereof in a jurisdiction outside
            the U.S., on or prior to the date of consummation of such Corporate
            Transaction.

2.29   "Related Entity" means any Parent, Subsidiary and any other corporation,
        partnership, limited liability company or other business entity in
        which the Company, its Parent or a Subsidiary holds a substantial
        ownership interest, directly or indirectly.

2.30   "Securities Act" means the U.S. Securities Act of 1933, as amended.

2.31   "SAR" means a Stock Appreciation Right granted to an Optionee under
        this Plan.

2.32   "Shares" mean Common Shares of the Company.

2.33   "Subsidiary" means a "subsidiary corporation", whether now or hereafter
        existing, as defined in Section 424(f) of the Code or, to the extent
        applicable, other Applicable Laws.

Article III.  Shares Subject to the Plan

3.01   Subject to the provisions of Section 10.01 below, the maximum aggregate
       number of Shares with respect to which Grants may be made under the
       Plan shall not exceed 300,000,000 shares.

<PAGE>

3.02   Any Shares covered by a Grant (or portion of a Grant) which is forfeited
       or cancelled, expires or is settled in cash or otherwise, shall be
       deemed not to have been issued for purposes of determining the maximum
       aggregate number of Shares which may be issued under the Plan.  If any
       unissued Shares are retained by the Company upon exercise of a Grant in
       order to satisfy the exercise price for such Grant or any withholding
       taxes due with respect to such Grant, such retained Shares subject to
       such Grant shall become available for future issuance under the Plan
       (unless the Plan has terminated).  Shares that actually have been
       issued under the Plan pursuant to a Grant shall not be returned to
       the Plan and shall not become available for future issuance under
       the Plan.

Article IV.   Administration of the Plan

4.01   Plan Administrator.  The Committee shall administer the Plan in
       accordance with its terms.

4.02   Powers of the Administrator.  Subject to Applicable Laws and the
       provisions of the Plan (including any other powers given to the
       Administrator hereunder), and except as otherwise provided by the Board,
       the Administrator shall have the authority, in its discretion:

        (a) to determine the eligibility of Grants, and to authorize
            the Chief Executive Officer and Chief Financial Officer to
            determine number of shares of each Grant;

        (b) to approve forms of Option Agreements for use under the Plan;

        (c) to determine to grant Options with or without SARs;

        (d) to determine the Exercise Price applicable to the Share covered
            by each Option;

        (e) to determine the Option Period applicable thereto;

        (f) to establish additional terms, conditions, rules or procedures to
            accommodate the rules or laws of applicable foreign jurisdictions
            and to afford Optionees favorable treatment under such rules or
            laws; provided, however, that no Grant shall be granted under any
            such additional terms, conditions, rules or procedures with terms
            or conditions which are inconsistent with the provisions of the
            Plan;

        (g) to amend the terms of any outstanding Grant granted under the Plan,
            and to reduce the exercise price of any Option or SAR to the then
            current Fair Market Value if the Fair Market Value of the Shares
            covered by such Grant shall have declined since the date the Grant
            was granted and to make any other amendments or adjustments to any
            Grant that the Administrator determines, in its discretion and
            under the authority granted to it under this Plan, to be necessary
            or advisable, provided that the exercise price shall never fall
            below the nominal or par value of the Shares, and that any such
            amendment or adjustment that would adversely affect the Optionee's
            rights under an outstanding Grant shall not be made without the
            Optionee's written consent;

        (h) to construe and interpret the terms of the Plan and Grants,
            including without limitation, any notice of Grant or Option
            Agreement granted pursuant to the Plan; and

        (j) to take such other action, not inconsistent with the terms of the
            Plan, as the Administrator deems appropriate.

<PAGE>

Article V.    Eligibility

Options may be granted to Employees, Directors, and Consultants.  An Employee,
Director, or Consultant who has been granted a Grant may, if otherwise
eligible, be granted additional Grants.  Grants may be granted to such
Employees, Directors, or Consultants who are residing in foreign jurisdictions
as the Administrator may determine from time to time.

Article VI.   Type of Grants; Terms and Conditions of Grants

Grants under the Plan may consist of one or more of the following: Options,
SARs, or Restricted Shares (which may be granted as Restricted Share units).
Restricted Stock may be registered on a Form S-8 prior or subsequent to any
grants. Awards of Restricted Shares may provide the Optionee with dividends
or dividend equivalents and voting rights prior to vesting.  Additionally,
shares of common stock may be granted as free-trading shares if the shares of
common stock are registered on a Form S-8.  Each Grant shall be designated in
the Option Agreement.

6.01   Options

        (a) Option Designation.  Options shall be designated as Non-Statutory
            Stock Option.

        (b) Option Exercise Price.  The exercise price of an Option shall be
            as follows:

                (i)  granted to a person who, at the time of the grant of such
                     Non-Statutory Stock Option owns shares representing more
                     than ten percent (10%) of the voting power of all classes
                     of shares of the Company or any Parent or Subsidiary, the
                     per Share exercise price shall be not less than one
                     hundred percent (100%) of the Fair Market Value per
                     Share on the date of grant; or

                (ii) granted to a person other than a person described in the
                     preceding paragraph, the per Share exercise price shall
                     be not less than eighty five percent (85%) of the Fair
                     Market Value per Share on the date of grant.

        (c) Consideration.  In addition to any other types of consideration the
            Administrator may determine, the Administrator is authorized to
            accept as consideration for Shares issued under the Plan the
            following:

                (i)   cash or check

                (ii)  cancellation of indebtedness owed by the Company to the
                      Optionee;

                (iii) promissory note;

                (iv)  Shares previously acquired by the Optionee valued at the
                      Fair Market Value at the time of the exercise;

                (v)   withholding from delivery to the Optionee that number of
                      whole Shares having a Fair Market Value at the time of
                      the exercise equal to the exercise price payable to the
                      Company upon exercise of the Option; or

                (vi)  any combination of the foregoing methods of payment.

        (d) Easy-Sale Exercise.

<PAGE>

                (i)   Exercise/Sale.  An Option Agreement may, but need not,
                      provide that, if Shares are publicly traded, all or part
                      of the exercise price of an Option and any withholding
                      taxes may be paid by the delivery (on a form prescribed
                      by the Company) of an irrevocable direction to a
                      securities broker approved by the Company to sell
                      Shares and to deliver all or part of the sales proceeds
                      to the Company.

                (ii)  Exercise/Pledge.  An Option Agreement may, but need not,
                      provide that, if Shares are publicly traded, all or part
                      of the exercise price of an Option and any withholding
                      taxes may be paid by the delivery (on a form prescribed
                      by the Company) of an irrevocable direction to pledge
                      Shares to a securities broker or lender approved by the
                      Company, as security for a loan, and to deliver all or
                      part of the loan proceeds to the Company.

6.02   SARs.

        (a) Grant.  SARs may be granted in tandem with an Option, in addition
            to an Option, or may be freestanding and unrelated to an Option.
            SARs granted in tandem or in addition to an Option may be granted
            either at the same time as the Option or at a later time.  SARs
            shall vest and become exercisable at a rate determined by the
            Administrator, and shall remain exercisable for such period as
            specified by the Administrator.  A SAR shall entitle the Optionee
            to receive from the Company an amount equal to the excess of the
            Fair Market Value of a Share on the exercise of the SAR over the
            Fair Market Value of a Share on the date of grant or, in the case
            of a SAR granted in tandem with an Option, the per Share exercise
            price applicable to such Option.

        (b) Settlement.  The Administrator shall determine, in its sole
            Discretion, whether the SAR shall be settled in cash, Shares, or a
            combination of cash and Shares.  In no event may any Optionee
            receive grants of SARs with respect to more than 350,000 Shares in
            any calendar year.

6.03   Restricted Shares.

        (a) Grant.  Restricted Shares may be granted in the form of Shares or
            share units having a value equal to an identical number of Shares.
            The employment conditions and the length of the period for vesting
            of Restricted Shares shall be established by the Administrator at
            time of grant.  In the event that a share certificate is issued in
            respect of Restricted Shares, such certificate shall be registered
            in the name of the Optionee but shall be held by the Company until
            the end of the restricted period.  During the restricted period,
            Restricted Shares may not be sold, assigned, transferred or
            otherwise disposed of, or pledged or hypothecated as collateral
            for a loan or as security for the performance of any obligation
            or for any other purpose as the Administrator shall determine.

        (b) Settlement.  The Administrator shall determine, in its sole
            Discretion, whether Restricted Shares granted in the form of share
            units shall be paid in cash, Shares, or a combination of cash and
            Shares.

<PAGE>

6.04   Conditions of Grants; Vesting, and Repurchase Rights.  Subject to the
       terms of the Plan, the Administrator shall determine the provisions,
       terms, and conditions of each Grant including, but not limited to, the
       Grant vesting schedule, repurchase provisions, rights of first refusal,
       forfeiture provisions, form of payment (cash, Shares, or other
       consideration) upon settlement of the Grant, payment contingencies,
       and satisfaction of any performance criteria, provided, however,
       unless specifically provided otherwise in the relevant Option Agreement,
       one fourth (1/4th) of the Grant shall vest at each of 1st, 2nd, 3rd,
       and 4th anniversaries following the issuance of such Grant so long as
       the Optionee provides Continuous Service to the Company.

6.05   Acquisitions and Other Transactions.  The Administrator may issue Grants
       under the Plan in settlement, assumption or substitution for,
       outstanding Grants or obligations to grant future Grants in connection
       with the Company or a Related Entity acquiring another entity, an
       interest in another entity or an additional interest in a Related
       Entity whether by merger, share purchase, asset purchase, or other form
       of transaction.

6.06   Deferral of Grant Payment.  The Administrator may establish one or more
       programs under the Plan to permit selected Optionees the opportunity to
       elect to defer receipt of consideration upon exercise of a Grant,
       satisfaction of performance criteria, or other event that absent the
       election would entitle the Optionee to payment or receipt of Shares or
       other consideration under a Grant.  The Administrator may establish the
       election procedures, the timing of such elections, the mechanisms for
       payments of, and accrual of interest or other earnings, if any, on
       amounts, Shares or other consideration so deferred, and such other
       terms, conditions, rules and procedures that the Administrator deems
       advisable for the administration of any such deferral program.

6.07   Award Exchange Programs.  The Administrator may establish one or more
       programs under the Plan to permit selected Optionees to exchange a
       Grant under the Plan for one or more other types of Grants under the
       Plan on such terms and conditions as determined by the Administrator
       from time to time.

6.08   Separate Programs.  The Administrator may establish one or more separate
       programs under the Plan for the purpose of issuing particular forms of
       Grants to one or more classes of Optionees on such terms and conditions
       as determined by the Administrator from time to time.

6.09   Early Exercise.  The Option Agreement may, but need not, include a
       provision whereby the Optionee may elect, at any time while being an
       Employee, Director, or Consultant, to exercise any part or all of the
       Grant prior to full vesting of the Grant.  Any unvested Shares received
       pursuant to such exercise may be subject to a repurchase right in favor
       of the Company or a Related Entity or to any other restriction the
       Administrator determines to be appropriate.

6.10   Option Period.  The Option Period shall be the term stated in the Option
       Agreement up to ten (10) years from the Effective Date of Grant thereof.

6.11   Transferability of Grants.  No Grant may be sold, pledged, assigned,
       hypothecated, transferred, or disposed of in any manner other than by
       will or by the laws of descent or distribution and may be exercised,
       during the lifetime of the Optionee, only by the Optionee; provided,
       however, during the lifetime of the Optionee, SARs may be transferred
       by gift to members of the Optionee's Immediate Family to the extent and
       manner determined by the Administrator.

6.12   Time of Grants.  The date of grant of a Grant shall, for all purposes,
       be the date on which the Administrator makes the determination to grant
       such Grant, or such other date as is determined by the Administrator.
       Notice of the grant determination shall be given to each Employee,
       Director, or Consultant to whom a Grant is so granted within a
       reasonable time after the date of such grant.

<PAGE>

6.13   Buyout Provisions.  The Administrator may at any time offer to buy out
       for a payment in cash or Shares or other consideration, any Grant
       previously granted based on such terms and conditions as the
       Administrator shall establish and communicate to the Optionee at
       the time such offer is made.

Article VII.  Withholding

The Company shall have the right to deduct from any payment to be made pursuant
to the Plan the amount of any taxes required by law to be withheld therefrom,
or to require an Optionee to pay to the Company such amount required to be
withheld prior to the issuance or delivery of any Shares or the payment of cash
under the Plan.  The Administrator may, in its discretion, permit an Optionee
to elect to satisfy such withholding obligation by having the Company retain
the number of Shares whose Fair Market Value equals the amount required to be
withheld.  Any fraction of a Share required to satisfy such obligation shall
be disregarded and the amount due shall instead be paid in cash by the
Optionee.

Article VIII. Exercise of Grant

8.01   Procedure for Exercise; Rights as a Shareholder.

        (a) Any Grant granted hereunder shall be exercisable at such times
            and under such conditions as determined by the Administrator under
            the terms of the Plan and specified in the Option Agreement.

        (b) A Grant shall be deemed to be exercised when written notice of such
            exercise has been given to the Company, as in a form required
            under the applicable Option Agreement, in accordance with the
            terms of the Grant by the person entitled to exercise the Grant
            and full payment for the Shares is made with respect to which the
            Grant is exercised.  Until the issuance (as evidenced by the
            appropriate entry on the books of the Company or of a duly
            authorized transfer agent of the Company) of the share certificate
            evidencing such Shares, no right to vote or receive dividends or
            any other rights as a shareholder shall exist with respect to
            Shares subject to a Grant, notwithstanding the exercise of an
            Option or other Grant.  The Company shall issue (or cause to be
            issued) such share certificate as soon as practicable following
            the exercise of the Grant.  No adjustment will be made for a
            dividend or other right for which the record date is prior to the
            date the share certificate is issued, except as provided in the
            Option Agreement or Article X, below.

8.02   Exercise of Option or SAR Following Termination of Continuous Service.
       If the Optionee's Continuous Service is terminated for any reason other
       than death or Disability, such Optionee shall have the right to
       exercise the Option or SAR at any time within thirty (30) days (or such
       other period of time not exceeding three (3) months as is determined
       by the Administrator at the time of granting the Option), following the
       date such Optionee ceases his or her Continuous Service to the extent
       that such Optionee was entitled to exercise the Option or SAR at the
       date of such termination; provided, however, that no Option or SAR
       shall be exercisable after the expiration of the term set forth in the
       applicable Option Agreement.  To the extent that such Optionee was not
       entitled to exercise the Option or SAR at the date of such termination,
       or if such Optionee does not exercise such Option or SAR (which such
       Optionee was entitled to exercise) within the time specified herein,
       the Option or SAR shall terminate.

<PAGE>

8.03   Death or Disability of Optionee.  If an Optionee's Continuous Service
       is terminated due to death or Disability, the Option or SAR may be
       exercised at any time within six (6) months following the date of death
       or termination of employment due to Disability, in the case of death, by
       the Optionee's estate or by a person who acquired the right to exercise
       the Option or SAR by bequest or inheritance, or, in the case of
       Disability, by the Optionee, but in any case only to the extent the
       Optionee was entitled to exercise the Option or SAR at the date of his
       or her termination of Continuous Service by death or Disability;
       provided, however, that no Option or SAR shall be exercisable after the
       expiration of the term set forth in the Option Agreement.  To the extent
       that such Optionee was not entitled to exercise such Option or SAR at
       the date of his or her termination of employment by death or Disability
       or if such Option or SAR is not exercised (to the extent it could be
       exercised) within the time specified herein, the Option or SAR shall
       terminate.

8.04   Extension of Time to Exercise.  Notwithstanding anything to the contrary
       in this Article VIII, the Administrator may at any time and from time to
       time prior to the termination of a Non-statutory Stock Option, with
       the consent of the Optionee, extend the period of time during which
       the Optionee may exercise his or her Non-statutory Stock Option
       following the date the Optionee ceases Continuous Services; provided,
       however, that:

        (a) the maximum period of time during which a Non-statutory Stock
            Option shall be exercisable following such termination date shall
            not exceed an aggregate of six (6) months;

        (b) the Non-statutory Stock Option shall not become exercisable after
            the expiration of the term of such Option as set forth in the
            Option Agreement as a result of such extension; and

        (c) notwithstanding any extension of time during which the
            Non-statutory Stock Option may be exercised, such Option, unless
            otherwise amended by the Administrator, shall only be exercisable
            to the extent to which the Optionee was entitled to exercise it
            on the date the Optionee ceased Continuous Services.

        To the extent that such Optionee was not entitled to exercise the
        Option at the date of such termination, or if such Optionee does not
        exercise an Option which the Optionee was entitled to exercise within
        the time specified herein, the Option shall terminate.

Article IX.   Conditions Upon Issuance of Shares

9.01   No Violation of Law.  Shares shall not be issued pursuant to a Grant or
       the exercise of a Grant unless the exercise of such Grant and the
       issuance and delivery of such Shares pursuant thereto shall comply with
       all Applicable Laws, and the Administrator may further subject any
       issuance of Shares to the approval of counsel for the Company with
       respect to such compliance.

9.02   Execution of Documents.  As a condition to the exercise of a Grant,
       the Administrator may require the person exercising such Grant to
       execute an investment representation statement acceptable to the
       Company or a share purchase agreement acceptable to the Company, each
       in forms approved by the Administrator from time to time, in addition
       to any other instrument the Administrator deems necessary or
       advisable.

<PAGE>

Article X.    Adjustments Upon Changes in Capitalization or Corporate
              Transaction

10.01  Adjustments upon Changes in Capitalization.  Subject to any required
       action by the shareholders of the Company, the number of Shares covered
       by each outstanding Grant, and the number of Shares which have been
       authorized for issuance under the Plan but as to which no Grants have
       yet been granted or which have been returned to the Plan, the exercise
       or purchase price of each such outstanding Grant, as well as any other
       terms that the Administrator determines require adjustment shall be
       proportionately adjusted for:

        (a) any increase or decrease in the number of issued Shares resulting
            from a share split, reverse share split, share dividend,
            combination or reclassification of the Shares, or similar
            transaction affecting the Shares;

        (b) any other increase or decrease in the number of issued Shares
            effected without receipt of consideration by the Company; or

        (c) as the Administrator may determine in its discretion, any other
            transaction with respect to Shares to which Section 424(a) of the
            Code applies or a similar transaction; provided, however, that
            conversion of any convertible securities of the Company shall not
            be deemed to have been "effected without receipt of consideration."

       Such adjustment shall be made by the Administrator and its
       determination shall be final, binding and conclusive.  Except as the
       Administrator determines, no issuance by the Company of shares of any
       class, or securities convertible into shares of any class, shall
       affect, and no adjustment by reason hereof shall be made with respect
       to, the number or price of Shares subject to a Grant.

10.02  Corporate Transaction.  In the event of a proposed Corporate
       Transaction, subject to the actual consummation of the proposed
       transaction, each outstanding Grant shall automatically become fully
       vested and exercisable, unless the Grant is assumed or substituted with
       an equivalent option or right by the successor corporation or the Parent
       or Subsidiary thereof.  If the successor corporation refuses to assume
       or substitute for the Grant, the Administrator shall notify the Optionee
       that the Grant shall be fully vested and exercisable with respect to all
       of the Shares underlying the Grant (including Shares as to which it
       would not otherwise be vested or exercisable) for a period of fifteen
       (15) days from the date of such notice.  If the Grant thus becomes fully
       vested and exercisable but is not exercised during this fifteen (15) day
       period, it shall terminate immediately prior to the effective time of
       such Corporate Transaction.  For the purposes of this Section 10.02,
       the Grant shall be considered assumed or substituted with an equivalent
       option or right if, in connection with the Corporate Transaction, the
       Grant is replaced with a comparable option or right with respect to
       shares of the successor corporation or Parent or Subsidiary thereof or
       is replaced with a cash incentive program of the successor corporation
       or Parent or Subsidiary thereof which preserves the compensation element
       of such Grant existing at the time of the Corporate Transaction and
       provides for subsequent payout in accordance with the same vesting
       schedule applicable to such Grant.  The determination of Grant
       comparability above shall be made by the Administrator and its
       determination shall be final, binding and conclusive.

<PAGE>

10.03  Liquidation Event.  In the event of a proposed Liquidation Event, the
       Administrator shall notify each Optionee of the proposed event at least
       twenty (20) days prior to the proposed effective date of the Liquidation
       Event.  The Administrator in its discretion may provide for an Optionee
       to have the right to exercise his or her Grant until ten (10) days prior
       to the proposed effective date for the Liquidation Event with respect
       to all Shares underlying the Grant (including Shares as to which it
       would not otherwise be vested or exercisable), subject to the actual
       completion of the Liquidation Event at the time and in the manner
       contemplated.  In addition, the Administrator may provide that any
       Company repurchase option applicable to any Shares issued upon grant
       or an exercise of a Grant shall lapse as to all Shares, subject to the
       actual completion of the Liquidation Event at the time and in the manner
       contemplated.  Any unexercised Grant  shall terminate immediately prior
       to effective time of the Liquidation Event.

Article XI.   Effective Date and Term of Plan

The Plan, and any amendments to the Plan, shall become effective upon its
adoption by the Board.  It shall continue in effect until June 18, 2018,
unless sooner terminated.  Subject to Applicable Laws, Grants may be granted
under the Plan upon its becoming effective.

Article XII.  Amendment, Suspension or Termination of the Plan

The Board may at any time amend, suspend or terminate the Plan.  No Grant may
be granted during any suspension of the Plan or after termination of the Plan.
Any amendment, suspension or termination of the Plan (including termination of
the Plan pursuant to this Article XII) shall not affect Grants already granted,
and such Grants shall remain in full force and effect as if the Plan had not
been amended, suspended or terminated, unless mutually agreed otherwise between
the Optionee and the Administrator, which agreement must be in writing and
signed by the Optionee and the Company.

Article XIII. Availability of Shares; No Issuance in Violation of Law

13.01  Availability of Shares.  The Company, during the term of the Plan, will
       at all times keep available such number of unissued Shares as shall be
       sufficient to satisfy the requirements of the Plan.

13.02  No Issuance in Violation of Law.  The inability of the Company to obtain
       authority from any regulatory body having jurisdiction under Applicable
       Law, which authority is deemed by the Company's counsel to be necessary
       to the lawful issuance and sale of any Shares hereunder, relieve the
       Company of any liability in respect of the failure to issue or sell
       such Shares as to which such requisite authority shall not have been
       obtained.

Article XIV.  No Effect on Terms of Employment/Consulting Relationship

The Plan shall not confer upon any Optionee any right with respect to the
Optionee's Continuous Service, nor shall it interfere in any way with his
or her right or the Company's or a Related Entity's right to terminate the
Optionee's Continuous Service at any time, with or without cause.

<PAGE>

Article XV.   No Effect on Retirement and Other Benefit Plans

Except as specifically required by law or provided in a retirement or other
benefit plan of the Company or a Related Entity, Grants shall not be deemed
compensation for purposes of computing benefits or contributions under any
retirement plan of the Company or a Related Entity, and shall not affect any
benefits under any other benefit plan of any kind or any benefit plan
subsequently instituted under which the availability or amount of benefits is
related to level of compensation.

Article XVI.  Liability of the Company; Consents

16.01  Consents.  Optionee shall be responsible for obtaining any governmental
       or other official consent that may be required by any country or
       jurisdiction in order to permit the grant or exercise of any Grant.
       Neither the Company nor any Related Entity shall be responsible for any
       failure by an Optionee to obtain such consent or for any tax or other
       liability to which an Optionee may become subject to as a result of his
       or her participation in the Plan.

<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}]]