Document:

EXHIBIT
      10.26

     

    LEASE
      AGREEMENT BY AND BETWEEN NETSOL TECHNOLOGIES, LTD. AND ARGYLL BUSINESS CENTRES
      

    LIMITED
      DATED APRIL 28, 2006.THIS
      NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
      OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
      COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
      REQUIRED.

     

    NAYNA
      NETWORKS, INC.

     

    CONVERTIBLE
      PROMISSORY NOTE

     

    
      	
              $100,000.00

            	
                 July
                11, 2006

              Santa
                Clara,
                California

            

    

     

    FOR
      VALUE
      RECEIVED, Nayna Networks, Inc., a Nevada corporation (the “Company”)
      promises to pay to Investment
      Partnership Tsunami 2000-No.1
      (“Investor”),
      or
      its registered assigns, in lawful money of the United States of America the
      principal sum of One Hundred Thousand Dollars ($100,000.00), or such lesser
      amount as shall equal the outstanding principal amount hereof, together with
      interest from the date of this Note on the unpaid principal balance at a rate
      equal to 8.00% per annum, computed on the basis of the actual number of days
      elapsed and a year of 365 days. All unpaid principal, together with any then
      unpaid and accrued interest and other amounts payable hereunder, shall be due
      and payable on the earlier of (i) January 31, 2007 (the “Maturity
      Date”),
      or
      (ii) when, upon or after the occurrence of an Event of Default (as defined
      below), such amounts are declared due and payable by Investor or made
      automatically due and payable in accordance with the terms hereof.

     

    The
      following is a statement of the rights of Investor and the conditions to which
      this Note is subject, and to which Investor, by the acceptance of this Note,
      agrees:

     

    1.  Definitions.
      As used
      in this Note, the following capitalized terms have the following
      meanings:

     

    (a)  
      the
“Company”
      includes the corporation initially executing this Note and any Person which
      shall succeed to or assume the obligations of the Company under this
      Note.

     

    (b)  “Event
      of Default”
has
      the
      meaning given in Section 4
      hereof.

     

    (c)  “Investor”
shall
      mean the Person specified in the introductory paragraph of this Note or any
      Person who shall at the time be the registered holder of this
      Note.’

    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    (d)  “Obligations”
shall
      mean and include all loans, advances, debts, liabilities and obligations,
      howsoever arising, owed by the Company to Investor of every kind and description
      (whether or not evidenced by any note or instrument and whether or not for
      the
      payment of money), now existing or hereafter arising under or pursuant to the
      terms of this Note, including, all interest, fees, charges, expenses, attorneys’
fees and costs and accountants’ fees and costs chargeable to and payable by the
      Company hereunder and thereunder, in each case, whether direct or indirect,
      absolute or contingent, due or to become due, and whether or not arising after
      the commencement of a proceeding under Title 11 of the United States Code
      (11 U. S. C. Section 101 et
      seq.),
      as
      amended from time to time (including post-petition interest) and whether or
      not
      allowed or allowable as a claim in any such proceeding.

     

    (e)  “Person”
shall
      mean and include an individual, a partnership, a corporation (including a
      business trust), a joint stock company, a limited liability company, an
      unincorporated association, a joint venture or other entity or a governmental
      authority.

     

    (f)  “Securities
      Act”
shall
      mean the Securities Act of 1933, as amended.

     

    2.  Interest.
      Accrued
      interest on this Note shall be payable at maturity.

     

    3.  Prepayment.
      Upon
      five days prior written notice to Investor, the Company may prepay this Note
      in
      whole or in part; provided that any such prepayment will be applied first to
      the
      payment of expenses due under this Note, second to interest accrued on this
      Note
      and third, if the amount of prepayment exceeds the amount of all such expenses
      and accrued interest, to the payment of principal of this Note.

     

    4.  Events
      of Default.
      The
      occurrence of any of the following shall constitute an “Event
      of Default”
under
      this Note:

     

    (a)  Failure
      to Pay.
      The
      Company shall fail to pay (i) when due any principal or interest payment on
      the due date hereunder or (ii) any other payment required under the terms
      of this Note on the date due and such payment shall not have been made within
      five days of the Company’s receipt of Investor’s written notice to the
      Company of such failure to pay; or

     

    (b)  Voluntary
      Bankruptcy or Insolvency Proceedings. The
      Company shall (i) apply for or consent to the appointment of a receiver,
      trustee, liquidator or custodian of itself or of all or a substantial part
      of
      its property, (ii) be unable, or admit in writing its inability, to pay its
      debts generally as they mature, (iii) make a general assignment for the
      benefit of its or any of its creditors, (iv) be dissolved or liquidated,
      (v) become insolvent (as such term may be defined or interpreted under any
      applicable statute), (vi) commence a voluntary case or other proceeding
      seeking liquidation, reorganization or other relief with respect to itself
      or
      its debts under any bankruptcy, insolvency or other similar law now or hereafter
      in effect or consent to any such relief or to the appointment of or taking
      possession of its property by any official in an involuntary case or other
      proceeding commenced against it, or (vii) take any action for the purpose
      of effecting any of the foregoing; or

    
      
        
        

      

      
        -2-

        
          

        

      

       

    

     

    (c)  Involuntary
      Bankruptcy or Insolvency Proceedings. Proceedings
      for the appointment of a receiver, trustee, liquidator or custodian of the
      Company or of all or a substantial part of the property thereof, or an
      involuntary case or other proceedings seeking liquidation, reorganization or
      other relief with respect to the Company or the debts thereof under any
      bankruptcy, insolvency or other similar law now or hereafter in effect shall
      be
      commenced and an order for relief entered or such proceeding shall not be
      dismissed or discharged within 30 days of commencement.

     

    5.  Rights
      of Investor upon Default.
      Upon
      the occurrence or existence of any Event of Default (other than an Event of
      Default described in Sections 4(b)
      or
4(c))
      and at
      any time thereafter during the continuance of such Event of Default, Investor
      may, by written notice to the Company, declare all outstanding Obligations
      payable by the Company hereunder to be immediately due and payable without
      presentment, demand, protest or any other notice of any kind, all of which
      are
      hereby expressly waived. Upon the occurrence or existence of any Event of
      Default described in Sections 4(b)
      and
4(c), immediately
      and without notice, all outstanding Obligations payable by the Company hereunder
      shall automatically become immediately due and payable, without presentment,
      demand, protest or any other notice of any kind, all of which are hereby
      expressly waived. In addition to the foregoing remedies, upon the occurrence
      or
      existence of any Event of Default, Investor may exercise any other right power
      or remedy permitted to it by law, either by suit in equity or by action at
      law,
      or both.

     

    6.  Conversion.

     

    (a)  Automatic
      Conversion. In
      the
      event the Company consummates, prior to the Maturity Date an equity financing
      pursuant to which it sells shares of its Common Stock (the “Common
      Stock”)
      with
      an aggregate sales price of not less than $1,000,000, including any and all
      notes which are converted into Common Stock (including this Note), and with
      the
      principal purpose of raising capital (a “Qualified
      Equity Financing”),
      then
      the outstanding principal amount of and all accrued interest under this Note
      shall automatically convert into shares of the Common Stock at the same price
      and on the same terms as the other investors that purchase the Common Stock
      in
      the Qualified Equity Financing. Upon such conversion of this Note, Investor
      hereby agrees to execute and deliver to the Company all transaction documents
      related to the Qualified Equity Financing, including a purchase agreement and
      other ancillary agreements, with customary representations and warranties and
      transfer restrictions, and having the same terms as those agreements entered
      into by the other purchasers of the Common Stock. Investor also agrees to
      deliver the original of this Note (or a notice to the effect that the original
      Note has been lost, stolen or destroyed and an agreement acceptable to the
      Company whereby the holder agrees to indemnify the Company from any loss
      incurred by it in connection with this Note) at the closing of the Qualified
      Equity Financing for cancellation; provided,
      however,
      that
      upon satisfaction of the conditions set forth in this Section 6(a),
      this
      Note shall be deemed converted and of no further force and effect, whether
      or
      not it is delivered for cancellation as set forth in this
      sentence.

    
      
        
        

      

      
        -3-

        
          

        

      

       

    

     

    (b)  Optional
      Conversion. If
      no
      Qualified Financing takes place prior to the Maturity Date, then all or a
      portion of the outstanding principal amount of and all accrued interest under
      this Note shall be convertible at the option of Investor into that number of
      shares of the Company’s Common Stock as is determined by dividing such principal
      amount and accrued interest by the then current fair market value of such
      security which shall be the closing price for one share of the Common Stock
      on
      the date of conversion on the Over-the-Counter Bulletin Board (the “OTCBB”)
      or, if
      the OTCBB is not the principal trading market for such security, the last
      trading price of such security on the principal securities exchange or trading
      market where such security is listed or traded. Before Investor shall be
      entitled to convert this Note into shares of Common Stock under this
Section
      6(b),
      it
      shall surrender this Note, duly endorsed, at the office of the Company and
      shall
      give written notice to the Company at its principal corporate office, of the
      election to convert the same pursuant to this Section, and shall state therein
      the amount of the unpaid principal amount of this Note to be converted and
      the
      name or names in which the certificate or certificates for shares of Common
      Stock are to be issued. The Company or the Company’s transfer agent shall, as
      soon as practicable thereafter, issue and deliver at such office to Investor
      a
      certificate or certificates for the number of shares of Common Stock to which
      Investor shall be entitled upon conversion (bearing such legends as are required
      by applicable state and federal securities laws in the opinion of counsel to
      the
      Company), together with a replacement Note (if any principal amount is not
      converted) and any other securities and property to which Investor is entitled
      upon such conversion under the terms of this Note, including a check payable
      to
      Investor for any cash amounts payable as described in Section 6(c).
      The
      conversion shall be deemed to have been made immediately prior to the close
      of
      business on the date of the surrender of this Note, and the Person or Persons
      entitled to receive the shares of Common Stock upon such conversion shall be
      treated for all purposes as the record Investor or Investors of such shares
      of
      Common Stock as of such date.

     

    (c)  Fractional
      Shares; Interest; Effect of Conversion. No
      fractional shares shall be issued upon conversion of this Note. In lieu of
      the
      Company issuing any fractional shares to Investor upon the conversion of this
      Note, the Company shall pay to Investor an amount equal to the product obtained
      by multiplying the conversion price by the fraction of a share not issued
      pursuant to the previous sentence. Upon conversion of this Note in full and
      the
      payment of any amounts specified in this Section 6(c),
      the
      Company shall be forever released from all its obligations and liabilities
      under
      this Note

     

    7.  Representations
      and Warranties of Investor.
      Representations and Warranties of Investors.
      Investor represents and warrants to the Company as follows:

     

    (a)  Securities
      Law Compliance.
      Investor has been advised that this Note and the underlying securities have
      not
      been registered under the Securities Act, or any state securities laws and,
      therefore, cannot be resold unless they are registered under the Securities
      Act
      and applicable state securities laws or unless an exemption from such
      registration requirements is available. Investor is aware that, the Company
      is
      under no obligation to effect any such registration with respect to the Note
      or
      the underlying securities or to file for or comply with any exemption from
      registration. Investor has not been formed solely for the purpose of making
      this
      investment and is purchasing this Note for its own account for investment,
      not
      as a nominee or agent, and not with a view to, or for resale in connection
      with,
      the distribution thereof. Investor has such knowledge and experience in
      financial and business matters that Investor is capable of evaluating the merits
      and risks of such investment, is able to incur a complete loss of such
      investment and is able to bear the economic risk of such investment for an
      indefinite period of time. Investor is an accredited investor as such term
      is
      defined in Rule 501 of Regulation D under the Securities
      Act.

    
      
        
        

      

      
        -4-

        
          

        

      

       

    

     

    8.  Successors
      and Assigns.
      Subject
      to the restrictions on transfer described in Sections 10
      and
11
      below,
      the rights and obligations of the Company and Investor shall be binding upon
      and
      benefit the successors, assigns, heirs, administrators and transferees of the
      parties.

     

    9.  Waiver
      and Amendment.
      Any
      provision of this Note may be amended, waived or modified upon the written
      consent of the Company and Investor.

     

    10.  Transfer
      of this Note or Securities Issuable on Conversion
      Hereof.
      With
      respect to any offer, sale or other disposition of this Note or securities
      into
      which such Note may be converted, Investor will give written notice to the
      Company prior thereto, describing briefly the manner thereof, together with
      a
      written opinion of Investor’s counsel, or other evidence if reasonably
      satisfactory to the Company, to the effect that such offer, sale or other
      distribution may be effected without registration or qualification (under any
      federal or state law then in effect). Upon receiving such written notice and
      reasonably satisfactory opinion, if so requested, or other evidence, the
      Company, as promptly as practicable, shall notify Investor that Investor may
      sell or otherwise dispose of this Note or such securities, all in accordance
      with the terms of the notice delivered to the Company. If a determination has
      been made pursuant to this Section 10
      that the
      opinion of counsel for Investor, or other evidence, is not reasonably
      satisfactory to the Company, the Company shall so notify Investor promptly
      after
      such determination has been made. Each Note thus transferred and each
      certificate representing the securities thus transferred shall bear a legend
      as
      to the applicable restrictions on transferability in order to ensure compliance
      with the Securities Act, unless in the opinion of counsel for the Company such
      legend is not required in order to ensure compliance with the Securities Act.
      The Company may issue stop transfer instructions to its transfer agent in
      connection with such restrictions. Subject to the foregoing, transfers of this
      Note shall be registered upon registration books maintained for such purpose
      by
      or on behalf of the Company. Prior to presentation of this Note for registration
      of transfer, the Company shall treat the registered holder hereof as the owner
      and holder of this Note for the purpose of receiving all payments of principal
      and interest hereon and for all other purposes whatsoever, whether or not this
      Note shall be overdue and the Company shall not be affected by notice to the
      contrary.

     

    11.  Assignment
      by the Company.
      Neither
      this Note nor any of the rights, interests or obligations hereunder may be
      assigned, by operation of law or otherwise, in whole or in part, by the Company
      without the prior written consent of Investor.

    
      
        
        

      

      
        -5-

        
          

        

      

       

    

     

    12.  Notices.
      All
      notices, requests, demands, consents, instructions or other communications
      required or permitted hereunder shall in writing and faxed, mailed or delivered
      to each party at the respective addresses of the parties as set forth on the
      signature pages hereto, or at such other address as the Company shall have
      furnished to Investor in writing. All such notices and communications will
      be
      deemed effectively given the earlier of (i) when received, (ii) when
      delivered personally, (iii) one business day after being delivered by
      facsimile (with receipt of appropriate confirmation), (iv) one business day
      after being deposited with an overnight courier service of recognized standing
      or (v) four days after being deposited in the U.S. mail, first class with
      postage prepaid.

     

    13.  Usury.
      In the
      event any interest is paid on this Note which is deemed to be in excess of
      the
      then legal maximum rate, then that portion of the interest payment representing
      an amount in excess of the then legal maximum rate shall be deemed a payment
      of
      principal and applied against the principal of this Note.

     

    14.  Waivers.
      The
      Company hereby waives notice of default, presentment or demand for payment,
      protest or notice of nonpayment or dishonor and all other notices or demands
      relative to this instrument.

     

    15.  Governing
      Law.
      This
      Note and all actions arising out of or in connection with this Note shall be
      governed by and construed in accordance with the laws of the State of
      California, without regard to the conflicts of law provisions of the State
      of
      California, or of any other state.

     

    [Remainder
      of Page Intentionally Left Blank]

    
      
        
        

      

      
        -6-

        
          

        

      

       

    

     

    The
      Company has caused this Note to be issued as of the date first written
      above.

     

    
      	 	 	 
	 	
              NAYNA
                NETWORKS, INC.

              a
                Nevada corporation

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Naveen
              S. Bisht, President
	 	 
	 	Address:
              4699 Old Ironsides Drive, Suite 420
               Santa
                Clara, California 95054

               Attn:
                President

            

    

     

    Acknowledged:

     

    Investment
      Partnership Tsunami 2000-No.1

     

    
      	 	 	 	 	 
	By: 	 	 	 	 
	
               

               

            	
              
                

              

            	 	 	
            

    
      Name:___________________________

      Title:____________________________

      Address:_________________________

      ________________________________

    

    
      
        
        

      

      
        (Signature
          Page to Convertible Prommisory Note)

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