Document:

Lease Agreement with TBK Electronics Corp dtd July 13, 2005

 EXHIBIT 10.2 
  
 (This is a translation of the original Korean language Lease Agreement) 
  
 LEASE AGREEMENT 
  
 This Lease Agreement (hereinafter referred to as the “Agreement”) is made and
entered into by and between TBK Electronics Corp. (hereinafter referred to as the “Lessor” and Axesstel R&D Center Co., Ltd. (hereinafter referred to as the “Lessee”). 
  
 Article 1 (Indication of Lease Objects) 
  
 1. Location: #668-1 and other 3 lots, Goerang-ri, Jeongnam-myeon, Hwaseong-shi, Gyeonggi-do,
Seoul Korea 
  
 2. Indication of Lease Objects: 
  
 A. Object of exclusive use; Factory building (A building) 3,200m2, and warehouse attached to the factory building (A building). 
  
 B. Objects of common use; Refectory (C building) 448m2, wastes collection place 108m2, and parking lot and others
1,420m2. 
  
 (Hereinafter referred to in combination as the “Premises”) 
  
 Article 2 (Restriction of Use) 
  
 Lessee shall lease the Premises to use them for the purpose of manufacturing communication equipment and Lessee may make changes only upon prior agreement with Lessor if
he intends to use the Premises for other purposes. 
  
 Article 3 (Term of
Lease) 
  
 This Agreement shall enter into force on the date of execution
hereof and the term of lease hereunder shall be two (2) years from June 13, 2005 to June 12, 2007. 
  
 Article 4 (Extension of Lease Term) 
  
 The term of this Agreement shall be automatically extended for additional one (1) year unless either Party hereto gives to the other Party a written notice of expiration of the Agreement at least three (3) months prior to the expiration of
the lease term. 

 Article 5 (Termination of Lease Prior to Expiration) 
  

	1.	This Agreement may not be terminated prior to the expiration of its term as prescribed hereby except for the case of force majeure such as land expropriation, etc. and the case
otherwise expressly stipulated herein, and in the event of any cause for termination has occurred due to force majeure, Lessor shall notify Lessee in writing of the termination of the lease and Lessee shall surrender the Premises on the date when
the termination becomes effective. 

  

	2.	Lessee shall not demand compensation for any costs and losses of business incurred by Lessee due to any reason under the foregoing paragraph and in case where Lessor terminates the
Agreement due to any reason for Lessor, other than provided under the foregoing paragraph, Lessee may demand compensation for any moving costs incurred by Lessee to Lessor. 

  
 Article 6 (Deposit and Rent) 
  

	1.	The deposit for the lease shall be KRW 260,000,000, which shall be paid within ten (10) days from the execution of the Agreement in cash. 

  

	2.	Monthly rent shall be KRW 26,000,000, which shall be paid no later than 10th day of each month (if any such 10th day falls under any of the public holidays then the next following
business day) in cash. 

  

	3.	Lessee may not substitute the deposit for the payment of any monthly rent and may not assign his right of demanding the return of the deposit nor establish pledge over or offer the
deposit as security. 

  

	4.	If Lessee fails to pay any and all demanded amount such as the deposit, monthly rent, and management expenses by the respective due dates, Lessor may apply an interest rate of 19%
per annum for every one (1) day delayed as delayed payment charge to the amount delayed and may deduct such amount from the deposit and appropriate it to the recovery of claim right. 

 Article 7 (Increase of Rent and Deposit) 
  
 Lessor may increase the deposit and/or monthly rent even during the term of the Agreement by giving notice thereof to Lessee at least one
(1) month prior to the increase in order to maintain and operate the Premises in good conditions, or price hikes are remarkable or increase of the deposit and the rent is inevitable due to the change of any government policies. If Lessee has
objection against such increased the deposit and/or monthly rent he may terminate this Agreement as of the date on which the said increase enters into effect. 
  

Article 8 (Return of the Deposit) 
  
 Lessor shall return the deposit to Lessee in exchange for the surrender of the Premises by Lessee when the term of lease expires or the Agreement is terminated pursuant
respective provisions of the Agreement. If Lessee has any obligation owed to Lessor under this Agreement, then Lessor may deduct such obligation from the deposit. 
  
 Article 9 (Management Expenses) 
  
 Management expenses for the maintenance and management of the Premises and for the use of common facilities shall be calculated for the term from the first day up to the
last day of each month and shall be paid in cash by the 10th day of the next following month (if any such
10th day falls under any of the public holidays then the next following business day). Detailed regulations such as
items and method of allotment of the management expenses shall be prescribed by the lease management regulations. 
  
 Article 10 (Alteration to Facilities in Premises) 
  

	1.	When Lessee intends to change the existing facilities in the Premises, increase and/or build electric power, attach any propagation or newly establish or alter any other facilities,
he shall firstly obtain agreement of Lessor in advance by submitting documents attaching the drawings and explanations, and lessor shall allow Lessee to do so to the extent not to conflict with the Fire Service Act. Provided, That all the costs
required therefor shall be borne by Lessee. 

  

	2.	 In case of the foregoing paragraph hereof, Lessee shall execute the works at the 

	 	 
location selected by Lessor in the manner minimizing the loss of usefulness of the Premises by means of utilizing a technical expert and at the time of
surrender of the Premises in the future Lessee shall necessarily restore to the original state at the cost of Lessee if Lessor requests to do so. 

  

	3.	If Lessee fails to perform such obligations under the foregoing paragraph hereof or the restoration to the original state is not made in a way acceptable by Lessor, Lessor may
deduct any costs necessary for the restoration to the original state from the deposit. 

  

	4.	Even if Lessee has paid any costs in relation to the Premises, he shall not be entitled to demand to Lessor the payment thereof under any pretext such as installation expense,
public utilities expense and/or premium, etc. 

  
 Article 11
(Fire Insurance) 
  
 Lessee shall necessarily insure the Premises and the
Lessor’s property including the leased building against fire and Lessee shall be liable for reparation of damage to the Lessor’s property incurred by fire accident occurred due to Lessee’s intention, negligence and/or carelessness.
 
  
 Article 12 (Maintenance of Security) 
  
 Lessee shall secure, irrelevantly to Lessor, a means of self-protection of his production
facilities, appliances and parts, products and materials, etc. against theft and loss and Lessee shall not be entitled to demand any liability and reparation for any theft or loss accident not attributable to Lessor. 
  
 Article 13 (Taxes and Public Imposts) 
  
 Any and all costs, taxes and public imposts imposed upon the facilities and/or equipment
newly installed or constructed as needed by Lessee shall be borne by Lessee regardless of the title thereof. 
  
 Article 14 (Prohibition of Assignment and Sublease) 
  
 Lessee shall not assign or sublease his rights and obligations under the Lease Agreement to any third party nor transfer or offer his credit right under this Agreement as security. 

 Article 15 (Indemnity) 
  

In case where any damage to fixtures or property damage case has occurred due to fire, theft, natural calamity, extraordinary event or unexpected accident, Lessor
shall not be liable for an accident occurred owing to a cause not attributable to Lessor. 
  
 Article 16 (Action for Change to Lessee) 
  
 Lessee shall, without delay, notify Lessor in writing of any material changes to his address, trade name, representative, business purposes, matters of commercial registration and his standing. 
  
 Article 17 (Right of Termination) 
  
 Lessor may immediately terminate this Agreement without getting through any procedures such
as peremptory notice if Lessee falls under any of the followings and may demand the compensation for the damages incurred thereby: 
  

	1.	In case where property of Lessee becomes subject to attachment, provisional attachment or provisional disposition, or an application for auction against Lessee is filed due to his
debts; 

  

	2.	In case where Lessee fails to make timely payment of the prescribed rent, management expenses and any and all costs and expenses for not less than two months;

  

	3.	In case where the right to demand the return of the deposit becomes subject to pledge or security; 

  

	4.	In case where Lessee enters into bankruptcy or is insolvent, or there is a petition for reorganization against Lessee 

  

	5.	In case where transfer of ownership is made and the rights under this Agreement is assigned, resold or subleased to a third party without approval of Lessor; or

  

	6.	Any other case where Lessee violates his obligations prescribed by this Agreement. 

 Article 18 (Prohibited Acts) 
  
 Lessee shall not commit any of the following acts without consultation with Lessor: 
  

	1.	Any act obstructing the business of Lessor or other tenants; 

  

	2.	Any act bringing in and/or storing any explosives, dangerous or hazardous goods and/or materials or goods or materials considered harmful or offensive to human body or which may
cause damage to products 

  

	3.	Any act installing or displaying any nameplates, signs, or advertising materials at the place in and out the building other than those designated by Lessor;

  

	4.	Any act using charcoal, petroleum, or any other fuel which generates fume or odor; 

  

	5.	Any act lodging in the building or cooking at a place other than dining room; 

  

	6.	Any act using any noisy musical instruments or bringing in or raising a pet other than a fish basin; 

  

	7.	Any act locking the doors with the state of light on or turn switches on the electric machinery and fixtures such as electric heater or electric fan; 

  

	8.	Any collective action because of dispute or event, etc. or any noisy act using a loud speaker; 

  

	9.	Any act barring the way by loading the things at a common parts; or 

  

	10.	Any other act prohibition of which has been notified by Lessor taking into consideration of conveniences of general tenants as well as safety, beauty and keeping dignity in terms of
maintenance and management of the building and Premises. 

 Article 19 (Surrender and Restoration to Original State) 
  

	1.	Upon expiration of the term of the lease or termination during the term of lease, Lessee shall surrender the Premises to Lessor and shall restore the Premises and installations
changed by Lessor during the term of lease to the original state at his costs: Provided, That the foregoing shall not apply if the restoration to the original state is not needed as a result of consultation between both Parties hereto.

  

	2.	In case where Lessee fails to bring out his belongings or completely restore the Premises to the original state due to his own circumstances, Lessee shall pay ordinary rents and
other costs and expenses whatsoever calculating from the date on which this Agreement terminated to the day of surrender or restoration. 

  

	3.	Lessee shall not claim a reparation of such costs and assert rights such as the right to demand purchase any and all installations which were installed at the Lessee’s costs
with approval of Lessor according to the Lessee’s circumstances after the Agreement is executed for the Premises or right of retention when the term of lease expires or the lease is terminated prior to expiration of the term.

  

	4.	In case where Lessee fails to surrender the Premises to Lessor within 10 days of termination of the Agreement, Lessor may remove the Lessee’s belongings to an appropriate
place: Provided, That in such case all costs and expenses incurred thereby shall be borne by Lessee. 

  
 Article 20 (Measure for Temporary Building) 
  
 Lessee recognizes that the warehouse (501m2) attached to the factory building (A building) is a temporary building with existence period up to November 24, 2005 and Lessor shall demand payment of rent by reducing the rent for this portion of the leased area (501m2) if the extension of the period of existence shall be impossible despite Lessor’s efforts to extend the period thereof:
Provided, That Lessee shall not assert to terminate this Agreement and violation of the Agreement on the reason hereof. 
  
 Article 21 (Jurisdiction ) 
  
 Any matters not expressly provided for herein shall be determined according to general commercial practices and any and all disputes arising from this Agreement shall be
submitted to a court having jurisdiction over the location where Lessor is situated. 

 IN WITNESS HEREOF, the parties have caused two (2) counter parts of this Agreement to be signed and sealed and each party
shall retain one (1) copy thereof. 
  

			
	July 13, 2005
		
	Lessor:	 	TBK Electronics Corp.
		
	 	 	 /s/ Ki Jun Lee

	 	 	Representative Director, Ki Jun Lee (Seal)
	 	 	#686, Goerang-ri, Jeongnam-myeon,
	 	 	Hwaseong-shi, Gyeonggi-do
	 	 	Tax No.:124-85-22495
		
	Lessee:	 	Axesstel R&D Center Co., Ltd.
		
	 	 	 /s/ Jae Hun Lee

	 	 	Representative Director, Jae Hun Lee (seal)
	 	 	706 and 707 Ace Techno Tower 5 cha (fifth)
	 	 	#197-22 Gyro-dong, Guro-gu, Seoul
	 	 	Tax No.: 113-81-79710Summary of Director and Executive Officer Compensation

 EXHIBIT 10.3 
  
 AXESSTEL, INC. 
 SUMMARY SHEET 
 OF 
 DIRECTOR AND EXECUTIVE OFFICER COMPENSATION 
  
 Director
Compensation 
  
 Until August 2004, our non-employee directors did not
receive cash fees as compensation for their services. In August 2004, we began compensating our non-employee directors in the amount of $2,500 per calendar quarter; and in March 2005, we began compensating our non-employee directors in the amount of
$7,500 per calendar quarter. It has been our policy to reimburse our directors for their reasonable out-of-pocket expenditures. 
  
 Each non-employee director who joined our board prior to August 2004 was granted 30,000 restricted shares of our common stock when such director first joined our board.
These grants vested as to one-third of the shares on the date of the first board meeting the director attended, and an additional one-third of the shares on each of the first and second anniversaries following the director’s first board meeting
attended. Since August 2004, new non-employee directors have been entitled to 45,000 restricted shares of our common stock on the date of the appointment or election of such director to the board or upon a later date of acceptance. One-third of
these shares vest immediately, and an additional one-third of these shares will vest on each of the first and second anniversaries of the date of grant. In addition, on the third anniversary of joining the board and each subsequent anniversary, each
then-serving non-employee director will receive a fully vested option to purchase 15,000 shares of common stock with an exercise price equal to the fair market value of the common stock on the date of grant and expiring ten years after the date of
grant, subject to earlier termination as provided in our 2004 Equity Incentive Plan, but will vest as if they were granted on the date of the appointment or election of such director to the board or the later date of acceptance, if applicable. In
November 2004, Mr. Bhagat, Dr. Yang and Mr. Hsieh each received an additional 15,000 restricted shares of common stock vesting immediately as to one-third of the shares and as to one-third of the shares on each of the first and second anniversaries
of the date of each such director joined our board. These shares were issued upon the effective date of the approval of our stockholders of our 2004 Equity Incentive Plan in accordance with our policies adopted in August 2004. The restricted shares
of common stock granted to each of our outside directors who joined our board in or after August 2004 were issued in November 2004 upon the effective date of the approval of our stockholders of our 2004 Equity Incentive Plan. All of the shares so
granted are being treated for vesting purposes as if they had been granted on the date each such director first joined our board. 
  
 On March 18, 2005, our board approved an arrangement with Mr. Åke Persson, a director and member of our audit committee, nominating and governance committee and
executive committee, under which Mr. Persson provided consulting services to our company for which he received additional compensatory fees in the sum of $60,000. These services were not rendered by Mr. Persson in his capacity as a member of the
audit committee, the board, or any other committee of the board. Mr. Persson is no longer providing consulting services to us and is no longer receiving compensation from us other than in his capacity as a member of the board and board committees.

  
 Compensation of Current Executive Officers 
  
 Our executive officers serve at the discretion of our board of directors. From time to time,
the compensation committee of the board of directors reviews and evaluates the salaries that are paid to our executive officers. The following table sets forth the annual salary rates for our current executive officers as of the date of this report
on Form 10-QSB: 
  

					
	Mike H.P. Kwon	  	Chairman and Chief Executive Officer	  	$360,000
	David Morash	  	President and Chief Financial Officer	  	$260,000
	Clark Hickock	  	Chief Operating Officer	  	$250,000
	Lixin Cheng	  	Chief Sales Officer and President of the fixed wireless group	  	$250,000
	Patrick Gray	  	Vice President and Controller	  	$165,000

  

 -1- 

 Employment Arrangements with Current Executive Officers 
  
 The following discussion summarizes the employment arrangements between us and our current
executive officers as of the date of this report on Form 10-QSB: 
  
 Mike H.P. Kwon. In November 2004, we entered into an employment agreement with Mike H.P. Kwon under which Mr. Kwon is employed as our Chief Executive Officer. The agreement provides for a base salary of $265,000, which was increased
in accordance with the agreement to $310,000 upon the completion of our public offering in March 2005, and for Mr. Kwon to be eligible for an annual performance bonus under the terms of our incentive compensation plans that may be adopted from time
to time. Mr. Kwon’s base salary has been further increased to $360,000 pursuant to board approval effective June 16, 2005. Mr. Kwon is also entitled to a vehicle allowance of $1,490 per month, and we are obligated to obtain and maintain one or
more life insurance policies for Mr. Kwon, payable to his designated beneficiaries, with an aggregate death benefit of $5,000,000. The agreement also includes a termination provision stating that if we terminate Mr. Kwon’s employment without
cause, or if Mr. Kwon terminates his employment for good reason, we will be obligated to pay to Mr. Kwon a severance benefit equivalent to 18 months base salary in one lump-sum payment, and all of his outstanding stock options and any other equity
awards we may grant to him in the future will immediately vest in full. The agreement also provides that Mr. Kwon will be included on the recommended slate of directors nominated for election at our annual stockholder meetings so long as Mr. Kwon
serves as our Chief Executive Officer. 
  
 David L. Morash. In November
2004, we entered into an employment agreement with David Morash under which Mr. Morash was employed as our President and Chief Operating Officer. The agreement provides for a base salary of $180,000, which was increased in accordance with the
agreement to $260,000 upon the completion of our public offering in March 2005, and for Mr. Morash to be eligible for an annual performance bonus under the terms of our incentive compensation plans that may be adopted from time to time. Mr. Morash
is also entitled to a vehicle allowance of $1,000 per month, and we are obligated to obtain and maintain one or more life insurance policies for Mr. Morash, payable to his designated beneficiaries, with an aggregate death benefit of $5,000,000. The
agreement also includes a termination provision stating that if we terminate Mr. Morash’s employment without cause, or if Mr. Morash terminates his employment for good reason, we will be obligated to pay to Mr. Morash a severance benefit
equivalent to 18 months base salary in one lump-sum payment, and all of his outstanding stock options and any other equity awards we may grant to him in the future will immediately vest in full. The agreement also provides that Mr. Morash will be
included on the recommended slate of directors nominated for election at our annual stockholder meeting so long as Mr. Morash serves as our President and Chief Operating Officer. Mr. Morash currently serves as our President and Chief Financial
Officer. 
  
 H. Clark Hickock. In April 2005, we entered into an employment
agreement with Clark Hickock under which Mr. Hickock joined us as an employee on April 28, 2005, and assumed full duties as our Chief Operating Officer on May 23, 2005. The agreement provides for a base salary of $250,000, and for Mr. Hickock to be
eligible for an annual performance bonus under the terms of our incentive compensation plans that may be adopted from time to time. Mr. Hickock is also entitled to a vehicle allowance of $1,000 per month. Additionally, the agreement includes a
termination provision stating that if we terminate Mr. Hickock’s employment without cause, we will be obligated to pay to Mr. Hickock a severance benefit equivalent to 12 months base salary in one lump-sum payment, and his initial stock option
grant for 270,000 shares of common stock will immediately vest in full. 
  
 Lixin Cheng. On June 16, 2005, we entered into a new letter agreement with Mr. Cheng under which Mr. Cheng became our Chief Sales Officer and President of the fixed wireless group. The letter agreement, which supersedes all prior
agreements concerning the terms of Mr. Cheng’s employment, provides for a base salary of $250,000 and a vehicle allowance of $1,000 per month. The agreement also includes a termination provision stating that if we terminate Mr. Cheng’s
employment without cause, we will be obligated to pay to Mr. Cheng a severance benefit equivalent to 12 months base salary in one lump-sum payment, and all of his outstanding stock options granted prior to the effective date of the agreement will
immediately vest in full. 
  

 -2- 

 Patrick Gray. We entered into a letter agreement, dated as of February 11, 2004, with Mr. Gray under which Mr.
Gray is employed as Vice President, Controller. The letter agreement provides for a base salary of $130,000 and the grant of an option to purchase 50,000 shares of our common stock. In December 2004, the compensation committee voted to increase Mr.
Gray’s current annual base salary to $165,000 as of January 1, 2005 and to grant to Mr. Gray an option to purchase 50,000 shares of our common stock. Mr. Gray’s employment is terminable at-will by us or by Mr. Gray for any reason, with or
without notice 
  
 Incentive Bonus Plan 
  
 Our board of directors adopted and approved the Incentive Bonus Plan for
Employees of Axesstel, Inc. in August 2004, which we refer to as our Incentive Bonus Plan. Under the Incentive Bonus Plan, all of our employees who work for us for at least 180 consecutive days and are employed at the date of the bonus payment will
be eligible for a yearly cash bonus. For each fiscal year, a bonus pool will be determined by our compensation committee using a formula pre-approved by our board of directors. For 2005, the bonus pool will be determined based upon a net adjusted
earnings target to be determined by the board in its discretion. If the target is not met, the bonus pool will be zero. If the target is met, the bonus pool will be 20% of the first $2.0 million of net adjusted earnings and 25% of any excess net
adjusted earnings. 
  
 The total bonus pool will be divided on a
percentage basis among levels of eligible employees, and each level will be assigned a pre-set percentage of the total bonus pool. The three levels established under the plan for 2005, and the percentages of the bonus pool assigned to each level are
as follows: (1) 45% for executive, (2) 30% for middle management and corporate staff, and (3) 25% for engineering and research and development. Each year the compensation committee will establish the pre-set level percentages in its discretion. The
compensation committee will determine individual payments for the executive level, and management will determine individual payments for all other eligible employees. 
  

 -3-

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