Document:

Exhibit 10.6

 

PROTECTION
ONE, INC.

2010 STOCK APPRECIATION RIGHTS PLAN

 

1.             PURPOSE

 

The Plan provides
incentives to key employees of the Company and its Subsidiaries.  Its
purposes are to attract, retain and motivate such employees.

 

2.             DEFINITIONS

 

(a)           “Base Price” means, with respect to each SAR,
$7.50 for one share of Stock.

 

(b)           “Board” means the Board of Directors of the
Company.

 

(c)           “Cause” has the meaning ascribed thereto in a
Participant’s employment agreement with the Company.

 

(d)             “Change of Control” has the meaning ascribed
thereto in the Company’s 2008 Long-Term Incentive Plan that occurs in
connection with or following a Qualified Sale (as defined in a Participant’s
employment agreement with the Company).

 

(e)           “Change of Control Price” has the meaning
ascribed thereto in the Company’s 2008 Long-Term Incentive Plan.

 

(f)            “Code” means the Internal Revenue Code of 1986,
as amended.

 

(g)           “Committee” means a committee of two or more
directors designated by the Board to administer the Plan, or, to the extent
that the Board administers the Plan, the Board.

 

(h)           “Company” means Protection One, Inc., a
Delaware corporation.

 

(i)            “Exit Price” means (i) for each SAR that
is automatically exercised upon a Change in Control, the lesser of (a) the
Change of Control Price and (b) $9.50, and (ii) for each SAR that is
exercised as described in Section 4(f), the lesser of (x) the Fair
Market Value of  a share of Stock on the
date of exercise of such SAR, and (y) $9.50.

 

(j)            “Expiration Date” means the tenth anniversary
of the Grant Date.

 

(k)           “Fair Market Value” has the meaning ascribed
thereto in the Company’s 2008 Long-Term Incentive Plan.

 

(k)           “Good Reason” has the meaning ascribed thereto
in a Participant’s employment agreement with the Company.

 

(l)            “Grant Agreement” means an agreement in the
form attached in Appendix I hereof, evidencing an award of SARs under the Plan.

 

(m)          “Grant Date” means the date of the approval by
the Board of the adoption of this Plan by the Company.

 

(n)           “Participant” means each key employee of the
Company or any Subsidiary who has been selected by the Committee to participate
in the Plan and who has executed a Grant Agreement agreeing to be bound by the
terms of the Plan.

 

(o)           “Permissible Distribution Event” means an event
described in paragraph (i), (ii), (iii), or (v) of Section 409A(a)(2)(A) of
the Code.

 

 

(p)           “Plan” means this Protection One, Inc.
2010 Stock Appreciation Rights Plan.

 

(q)           “Non-Qualifying Termination” has the meaning
ascribed thereto in a Participant’s employment agreement with the Company.

 

(r)            “Qualifying Termination” has the meaning
ascribed thereto in a Participant’s employment agreement with the Company.

 

(s)           “Redemption Price” with respect to a SAR means
the amount, if any, by which the Exit Price of such SAR exceeds the Base Price
of such SAR.

 

(t)            “Retirement” means a Participant’s termination
of his employment on or after his attainment of age 65.

 

(u)           “SAR” means a stock appreciation right granted
under the Plan.

 

(v)           “Stock” means the common stock, par value $0.01
per share, of the Company.

 

(w)          “Subsidiary” means a corporation that is a “subsidiary
corporation” of the Company as that term is defined in Section 424 of the
Code.

 

3.             GRANT
AND ADJUSTMENT OF SARS

 

(a)           Effective as of the date of adoption of this Plan by
the Company, the Committee shall grant an aggregate of 439,160 SARs to selected
senior executive officers of the Company and its Subsidiaries allocated as
follows:  195,182 to Richard Ginsburg,
130,284 to Darius Nevin, and 113,694 to Peter Pefanis.

 

(b)           The number of SARs awarded to any Participant, the
Base Price, the Exercise Price, the Exit Price, the Redemption Price and the
Change of Control Price of SARs so awarded, and the provisions of the Plan
affecting the value of outstanding SARs (i) shall be equitably adjusted or
modified as necessary to preserve the intended economic benefit of the original
grant in the event that there is a stock split, reverse stock split, stock
dividend, recapitalization, reclassification, additional issuance or other
similar capital adjustment of the Stock effected without the receipt of
consideration, and (ii) shall be adjusted or modified to the extent that
the Committee determines to be appropriate and equitable in the event that
there is (A) a merger, consolidation, spin-off, split-up, or other similar
corporate transaction with respect to the Company that the Committee determines
would otherwise result in inappropriate dilution or enlargement of the rights
of Participants, or (B) any other event for which the Committee, in its
sole discretion, determines that such adjustment or modification is appropriate
and equitable to prevent inappropriate penalties or windfalls with respect to
the terms of the Plan or its applicability to any Participant.

 

4.             VESTING,
EXERCISABILITY AND PAYMENT.  SARs will become vested and exercisable, or automatically exercised, as
provided herein and in the Grant Agreement. 
Exercised SARs (including automatically exercised SARs) shall only be
payable upon the payment dates provided in the Grant Agreement.  For the avoidance of doubt, SARs that are
exercised shall cease to be deemed outstanding.

 

(a)           Subject to Sections 4(b), each
Participant’s SARs shall vest and become exercisable as follows: (x) one-half
of the SARs granted to a Participant shall vest and become exercisable on the
second anniversary of the Grant Date and (y) the remaining one-half of the
SARs granted to a Participant shall vest and become exercisable on the third
anniversary of the Grant Date; provided, however, that all unvested SARs
outstanding as of a Change in Control shall immediately vest upon a Change in
Control, and all outstanding SARs shall be automatically exercised (without any
action on the part of the Participant or any other person or entity) upon a Change
in Control.

 

 

(b)           SARs shall expire on the Expiration Date, subject to
earlier expiration as provided in the Grant Agreement and further subject to
earlier termination due to termination of a Participant’s employment with the
Company or its Subsidiaries 
(collectively, the “Employer”) as provided in clauses (i)-(iv) below:

 

(i) Voluntary Termination of Employment. If prior
to the Expiration Date, a Participant voluntarily terminates employment with
the Employer other than for Good Reason: (a) all vesting with respect to
the Participant’s SARs shall cease, (b) any unvested portion of the
Participant’s SARs shall expire as of the date of such termination, and (c) any
vested and unexercised portion of the Participant’s SARs shall expire on the
earlier of the Expiration Date or three (3) months after the date of such
Participant’s termination.

 

(ii) Termination Without Cause or For Good
Reason.  If prior to the Expiration Date,
a Participant’s employment is terminated pursuant to a Qualifying Termination: (a) all
vesting with respect to the Participant’s SARs shall cease, except that any
unvested portion of the Participant’s SARs shall vest upon a Change of Control
(and for avoidance of doubt, be automatically exercised) if a Change of Control
occurs prior to the earlier of (x) the second anniversary of the Grant
Date or (y) 90 days after the date of such Participant’s termination (or
the date of such Participant’s termination, if such date is after the second
anniversary of the Grant Date), (b) any unvested portion of the
Participant’s SARs shall expire upon the earlier of (x) the second
anniversary of the Grant Date or (y) 90 days after the date of such
Participant’s termination (or the date of such Participant’s termination, if
such date is after the second anniversary of the Grant Date) and (c) any
vested and unexercised portion of the Participant’s SARs shall expire on the
earlier of the Expiration Date or six (6) months after  the date of such Participant’s termination.

 

(iii)  Termination of Employment — Death,
Disability or Retirement. If prior to the Expiration Date, a Participant’s
employment with the Employer terminates by reason of the Participant’s death,
Disability or Retirement: (a) all vesting with respect to the Participant’s
SARs shall cease, (b) any unvested portion of the Participant’s SARs shall
immediately expire as of the date of such termination and (c) any vested
and unexercised portion of the participant’s SARs shall expire on the earlier
of the Expiration Date or six (6) months after the date of such
Participant’s termination.  In the event
of a Participant’s death, the Participant’s SARs, to the extent exercisable,
shall be exercisable by the person or persons to whom the Participant’s rights
under the participant’s Grant Agreement pass by will or the applicable laws of
descent and distribution.

 

(iv) Termination for Cause. If prior to the
Expiration Date, a Participant’s employment with the Employer is terminated by
the Employer for Cause, the Participant’s outstanding SARs (including any
vested portion of the Participant’s SARs) shall immediately expire as of the
date of such termination and no payment shall be made on account of any such
unexercised SARs.

 

(c)           The amount payable in respect of each outstanding SAR
that is exercised shall be equal to the Redemption Price of such SAR, with
interest credited at four percent (4%) per annum and compounded annually from
the date of exercise until the date of payment as set forth in the Grant
Agreement.

 

(d)           If SARs are automatically exercised by reason of a
Change of Control that is not a Permissible Distribution Event and the Payment
Date (as defined in the Grant Agreement) is not immediately upon the date of
exercise, the aggregate Redemption Price payable in respect of all outstanding
SARs shall be deposited in an irrevocable “rabbi trust,” pursuant to a trust
agreement substantially in the form attached hereto as Exhibit A (the “Trust
Agreement”) to the extent allowed under Code Section 409A, having an
independent trustee who will be instructed to pay such amounts to Participants,
with interest credited at four percent (4%) per annum and compounded annually,
on the dates specified in the Grant Agreement, except as otherwise provided by
the terms of the Trust Agreement.

 

(e)           For the avoidance of doubt, unexercised SARs shall be
forfeited and shall no longer be deemed to be outstanding as the date that they
expire.

 

 

(f)            A Participant may exercise outstanding SARs that have
vested pursuant to this Plan by delivering a written notice which shall state
the election to exercise the SARs, in whole or in part, to the office of the
Corporate Secretary.  The SARs shall be
deemed to be exercised upon receipt by the Company secretary of such written
notice.

 

5.             AMENDMENT
AND TERMINATION

 

(a)  The Board may amend, suspend or terminate the
Plan at any time; provided, however, that no amendment,
suspension or termination of the Plan may materially and adversely affect the
rights of a Participant with respect to outstanding SARs without the written
consent of such Participant.

 

6.             UNFUNDED
PLAN

 

The Plan shall be
unfunded and no Participant shall have any right, title, or interest whatsoever
in or to any investments which the Company may make to aid it in meeting its
obligations under the Plan.  No officer, director or member of the Board
or the Committee shall have any personal liability for failure to make payments
of benefits under the Plan.  To the extent that any person acquires a
right to receive payments from the Company under the Plan, such right shall be
no greater than the right of an unsecured general creditor of the
Company.  The Plan is intended to be a “bonus plan” that is not subject to
the Employee Retirement Income Security Act of 1974, as amended.

 

7.             ASSIGNMENT
AND ALIENATION OF BENEFITS

 

To the maximum extent
permitted by law, a Participant’s rights and benefits under this Plan shall not
be subject to anticipation, alienation, sale, assignment, pledge, encumbrance
or charge, and any attempt to anticipate, alienate, sell, assign, pledge,
encumber or charge the same shall be void; provided, however that
in the event of a Participant’s death, any such rights and benefits shall pass
to such Participant’s beneficiaries or estate in accordance with the laws of
descent and distribution.  Except as prohibited by law, payments or
benefits payable to or with respect to a Participant pursuant to this Plan may
be reduced by amounts the Participant may owe to the Company.

 

8.             SUCCESSORS

 

The Company shall require
any successor (whether direct or indirect, by purchase, merger, consolidation,
or otherwise) to all or substantially all of the business or assets of the
Company to expressly assume the Plan and agree to perform obligations hereunder
in the same manner and to the same extent that the Company would be required to
perform if no such succession had occurred.

 

9.             ADMINISTRATION

 

The Plan shall be
administered by the Committee, which shall have sole authority, in a good faith
exercise of discretion, (i) to construe and interpret the Plans; (ii) to
establish, amend and revoke rules and regulations for the Plan
administration; and (iii) to exercise such powers and to perform such acts
as the Committee deems necessary or expedient to promote the best interests of
the Company which are not in conflict with the provisions of the Plan. 
All actions taken and all determinations made by the Committee in accordance
with the power and authority conferred upon the Committee under this Plan shall
be final, binding and conclusive on all parties, including the Company and all
Participants.  In the event of any litigation between the Company and any
Participant (or successor to a Participant’s interest), judicial review shall
occur on a de novo basis, without deference to any Committee determinations.

 

 

10.          MISCELLANEOUS

 

(a)           The establishment of this Plan shall not be construed
as granting any Participant the right to remain in the employ of the Company,
nor shall this Plan be construed as limiting the right of the Company to
discharge a Participant from employment at any time for any reason whatsoever,
with or without Cause.

 

(b)           The payment of any amounts due in respect of SARs
shall be subject to withholding by the Company for all federal, state and local
taxes required by law to be withheld.  If
a Participant’s share of any taxes referred to above are due prior to the time
of payment of any amounts due hereunder, the Participant will be required to
pay (by payroll deduction or by check to the Company) the Participant’s share
of any such taxes when due and payable. 
Notwithstanding the previous sentence and to the extent allowed under Section 409A,
the Company may deduct from any amounts due hereunder the amounts required to
pay any such taxes.

 

(c)           The Section headings in this Plan are for
convenience only, form no part of the Plan and shall not affect its
interpretation.

 

(d)           This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to the
principles of conflicts of laws.

 

(e)           No member of the Committee or the Board, and no
officer or other employee of the Company or a Subsidiary who has been delegated
authority under the Plan, shall be personally liable by reason of any action
taken in good faith in connection with the administration of the Plan, or in
connection with any contract or other instrument executed by such individual,
or on his or her behalf, in his or her capacity as a member of the Committee, a
member of the Board, an officer or an employee, nor for any mistake of judgment
made in good faith, and the Company shall indemnify and hold harmless each
member of the Committee, each member of the Board and each other employee,
officer or director of the Company to whom any duty or power relating to the
administration or interpretation of the Plan may be allocated or delegated,
against any cost or expense (including counsel fees) or liability (including
any sum paid in settlement of a claim) arising out of any act or omission to
act in connection with the Plan unless arising out of such person’s own fraud
or bad faith; provided, however, that approval of the Board shall
be required for the payment of any amount in settlement of a claim against any
such person.  The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company’s certificate of incorporation or by-laws, as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.

 

(f)            Any economic or other benefit to you under this Plan
shall not be taken into account in determining any benefits to which you may be
entitled under any retirement or other benefit or compensation plan maintained
by the Company or any Subsidiary. 
Provided, however, for the avoidance of doubt, that this section shall
not be construed to affect or modify the application of Section 6 of any
Participant’s employment agreement with the Company and Protection One Alarm
Monitoring, Inc, dated as of February 22, 2010.

 

 

Exhibit A

 

PROTECTION ONE,
INC.

 

GRANTOR TRUST
AGREEMENT

 

PREAMBLE.  This Grantor Trust Agreement (the
“Trust Agreement”)
made this        day of                   ,
20  , by and between Protection One, Inc. and any successor to
its interest (the “Company”)
as creator and grantor, and  as trustee
(the “Trustee”).

 

WHEREAS, the Company has
adopted the Protection One, Inc. 2010 Stock Appreciation Rights Plan
attached as Exhibit A
(the “Plan”)
under which the Company has current or potential liability to individuals (the “Beneficiaries”) who
are either covered by the Plan, are a party to the Plan, or are the designated
beneficiary for any benefits payable under the Plan in the event of the death
of an individual who is covered by or party to the Plan;

 

WHEREAS, it is the
intention of the Company to establish this trust (the “Trust”) and to
contribute assets to the Trust that shall be held therein, subject to the
claims of the Company’s general creditors in the event of the Company’s
Insolvency, as defined in Section 3(a) hereof, until paid to
Beneficiaries of this Trust in such manner and at such times as specified in
the Plan;

 

WHEREAS, it is the
intention of the parties hereto that this Trust shall constitute an unfunded
arrangement and shall not affect the status of the Plan as being unfunded for
the purpose of providing deferred compensation for a select group of highly
compensated employees for purposes of Title I of the Employee Retirement Income
Security Act of 1974; and

 

WHEREAS, it is the
intention of the Company to make contributions to the Trust to enable the Trust
to fully fund its liabilities under the Plan.

 

NOW, THEREFORE, the
parties do hereby establish this Trust and agree that the Trust shall be
established and administered as set forth herein:

 

Section 1.  Establishment of Trust

 

(a)           The Company will shortly hereafter deposit $          
with the Trustee in trust, which shall constitute the initial principal of the
Trust to be held, administered and disbursed by the Trustee as provided for in
this Trust Agreement.

 

(b)           The Company, in its sole discretion, may at any time,
or from time to time, make additional contributions of cash or other assets to
the Trustee to augment the principal of the Trust to be held, administered and
disbursed by the Trustee as provided for in this Trust Agreement.  Neither
the Trustee nor any Beneficiary shall have any right to compel such additional
contributions.

 

(c)           Upon a “Change of Control” (as defined herein) that is
described in Section 4(a) of the Plan, the Company shall, as soon as
possible but in no event later than ten business days after the Change of
Control, make an irrevocable contribution to this Trust, to the extent allowed
under Code Section 409A, in an amount that is projected to provide the
Trust with sufficient funds to pay (i) each Beneficiary the benefits to
which he or she is entitled pursuant to the Plan as in effect on the date of
the Change of Control, and (ii) all fees associated with maintaining the
Trust for the maximum period over which Beneficiaries are reasonably expected
to be receiving payments from the Trust.  “Change of Control” shall have the
meaning set forth in the Plan.  Any amendment to the Plan’s definition
shall be deemed to apply with equal force, effect, and timing to the definition
of Change of Control for purposes of this Trust, except that a modification
that does or may adversely affect a Beneficiary shall be ineffectual as to the
Beneficiary unless he or she consents in writing to be bound by the
modification.

 

 

(d)           Within 75 days following each December 31st after
a Change of Control described in Section 4(a) of the Plan occurs, the
Company shall, if the Trustee deems necessary, be required to irrevocably
deposit additional cash or other property to the Trust in an amount sufficient
to pay each Participant or Beneficiary the benefits to which he or she is or
may become entitled pursuant to the Plan.  The Trustee shall have the
right to monitor, enforce and/or collect any amounts due and owing from the
Company or to give notice of any default in the payment of benefits to
Participants.

 

(e)           The Trust hereby established shall be irrevocable.

 

(f)            The Trust is intended to be a grantor trust, of which
the Company is the grantor, within the meaning of subpart E, part I, subchapter
J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended (the “Code”),
and shall be construed accordingly.

 

(g)           The principal of the Trust, and any earnings thereon,
shall be held separate and apart from other funds of the Company, and shall be
used exclusively for the uses and purposes of Beneficiaries and general
creditors as herein set forth.  Beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any Trust assets.  Any
rights created under the Plan and this Trust Agreement shall be unsecured
contractual rights of the Beneficiaries, as provided for in this
Agreement.  Any assets held by the Trust will be subject to the claims of
the Company’s general creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.

 

Section 2.  Payments to Beneficiaries

 

(a)           Upon a Permissible Distribution Event (as defined
herein) that relates to any Beneficiary (or, if earlier, the tenth anniversary
of the Grant Date (as defined herein)), the Company shall deliver to the
Trustee a schedule (the “Payment Schedule”) which reflects the benefits
payable with respect to each affected Beneficiary pursuant to Sections 4(c) and
4(d) of the Plan and the Grant Agreement, a formula or other instructions
acceptable to the Trustee for determining the benefits so payable, the form in
which such benefits are to be paid (as provided for or available under the
Plan), and the date of commencement for payment of such benefits.  Except
as otherwise provided herein, the Trustee shall make payments to Beneficiaries
in accordance with such Payment Schedule.  The Trustee shall make
provisions for the reporting and withholding of any federal, state or local
taxes that may be required to be withheld with respect to the payment of benefits
pursuant to the terms of the Plan and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts have been
reported, withheld, and paid by the Company.  “Permissible Distribution Event”
and “Grant Date” shall have the meanings set
forth in the Plan.

 

(b)           The entitlement of a Beneficiary to benefits under the
Plan shall be determined by the Company or such party as may be designated
under the Plan, and any claim for such benefits shall be considered and
reviewed under the procedures set forth in the Plan.

 

(c)           The Company may make payment of benefits directly to
Beneficiaries as such benefits become due under the terms of the Plan. 
The Company shall notify the Trustee of its decision to make such payment of
benefits prior to the time benefits are payable to Beneficiaries.  In
addition, if the principal of the Trust, and any earnings thereon, are not
sufficient to make payments of benefits in accordance with the terms of the
Plan, the Company shall make the balance of each such payment as due.  The
Trustee shall notify the Company when existing principal and earnings are
insufficient under the Payment Schedule.

 

(d)           The Trustee shall make such distributions in a manner
reasonably intended to provide each Beneficiary with all of his or her benefits
payable under the Plan.

 

Section 3.  Trustee Responsibility
Regarding Payments to Trust Beneficiary When the Company Is Insolvent

 

(a)           The Trustee shall cease payment of benefits to
Beneficiaries if the Company is Insolvent.  The Company shall be
considered “Insolvent” for purposes of this Trust Agreement if (i) the
Company is unable to pay

 

 

its debts when the same
become due, or (ii) the Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.

 

(b)           At all times during the existence of this Trust, as
provided in Section 1(d) hereof, the principal and income of the
Trust shall be subject to claims of general creditors of the Company under
federal and state law as set forth below.

 

(c)           The Board of Directors and the Chief Executive Officer
of the Company shall have the duty to inform the Trustee in writing of the
Company’s Insolvency.  If a person claiming to be a creditor of the
Company alleges in writing to the Trustee that the Company has become Insolvent,
the Trustee shall determine whether the Company is Insolvent and, pending such
determination, the Trustee shall discontinue payment of benefits to
Beneficiaries.

 

(1)           Unless the Trustee has actual knowledge of the Company’s
Insolvency, or has received notice from the Company or a person claiming to be
a creditor alleging that the Company is Insolvent, the Trustee shall have no
duty to inquire whether the Company is Insolvent.  The Trustee may in all
events rely on such evidence concerning the Company’s solvency as may be
furnished to the Trustee and that provides the Trustee with a reasonable basis
for making a determination concerning the Company’s solvency.

 

(2)           If at any time the Trustee has determined that the
Company is Insolvent and the making of any payment pursuant to the Plan would
jeopardize the Company’s ability to continue as a going concern, the Trustee
shall discontinue payments to Beneficiaries, shall liquidate the Trust’s
investment, if any, in common stock (“Common Stock”) of the Company, and shall
hold the assets of the Trust for the benefit of the Company’s general
creditors.  Nothing in this Trust Agreement shall in any way diminish any
rights of Beneficiaries as general creditors of the Company with respect to
benefits due under the Plan or otherwise.

 

(3)           The Trustee shall resume the payment of benefits to
Beneficiaries in accordance with Section 2 of this Trust Agreement only
after the Trustee has determined that the payment of such benefits no longer
jeopardizes the Company’s ability to continue as a going concern.

 

(d)           If the Trustee discontinues the payment of benefits
from the Trust pursuant to Section 3(a) hereof and subsequently
resumes such payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to Beneficiaries under the
terms of the Plan for the period of such discontinuance, provided that there
are sufficient assets to make such payments.  The aggregate amount of any
payments to Beneficiaries by the Company, in lieu of the payments provided for
hereunder during any such period of discontinuance, shall be deducted from any
payments made by the Trustee hereunder.

 

Section 4.  Payments to the Company

 

After the Trust has
become irrevocable, the Company shall have no right or power to direct the
Trustee to return to the Company or to divert to others any of the Trust assets
before all payment of benefits have been made to Beneficiaries pursuant to the
terms of the Plan, except as provided for in Section 3 hereof.

 

Section 5.  Investment Authority

 

(a)           The Trustee shall have the sole discretion as to the
investment of Trust assets, provided that the Trustee shall invest Trust assets
in a manner reasonably anticipated to provide the Trust with assets sufficient
to fund the Company’s obligations under the Plan.

 

(b)           All rights associated with assets of the Trust shall
be exercised by the Trustee or the person designated by the Trustee, and shall
in no event be exercisable by or through Beneficiaries.  The Company shall
have the right, in its sole discretion, to substitute assets of equal fair
market value for any assets held by the Trust.  This right is exercisable
by the Company in a non-fiduciary capacity without consent of any person in a
fiduciary capacity.

 

 

Section 6.  Disposition of Income

 

During the term of this
Trust, all income received by the Trust, net of expenses and taxes, shall be
reinvested.

 

Section 7.  Accounting by Trustee

 

The Trustee shall keep
accurate and detailed records of all investments, receipts, disbursements of
all transactions, including such specific records as shall be agreed upon in
writing between the Company and the Trustee.  Within 75 days following
each December 31 after the execution of this Agreement, and within 20 days
after the removal or resignation of the Trustee, the Trustee shall deliver (i) to
each Beneficiary a statement, substantially in the form attached as Exhibit A,
delineating his or her beneficial interest in the Trust, and (ii) to the
Company a written account of its administration of the Trust during such year
or during the period from the close of the last preceding year to the date of
such removal or resignation, reflecting all investments, receipts,
disbursements and other transactions effected by it, including a description of
all securities and investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or receivable recorded
separately), and reflecting all cash, securities and other property held in the
Trust at the end of such year or as of the date of such removal or resignation,
as applicable.

 

Section 8.  Responsibility of Trustee

 

(a)           The Trustee shall act with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent person acting
in like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like objectives, provided, however,
that the Trustee shall incur no liability to any person for any action taken
pursuant to a direction, request or approval given by the Company which is
contemplated by, and in conformity with, the terms of the Plan or this Trust
Agreement and is given in writing by the Company.  In the event of a
dispute between the Company and a party, the Trustee may apply to a court of
competent jurisdiction to resolve the dispute.

 

(b)           If the Trustee undertakes or defends any litigation
arising in connection with this Trust, the Company agrees to indemnify the
Trustee against Trustee’s costs, expense and liabilities (including, without
limitation, attorneys’ fees and expenses) relating thereto and to be primarily
liable for such payments, except in those cases where the Trustee shall have
been found by a court of competent jurisdiction to have acted with negligence
or willful misconduct.  If the Company does not pay such costs, expenses
and liabilities in a reasonably timely manner, the Trustee may obtain payment
from the Trust.

 

(c)           The Trustee may consult with legal counsel with
respect to any of its duties or obligations hereunder.

 

(d)           The Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants or other professionals to assist it
in performing any of its duties or obligations hereunder.

 

(e)           The Trustee shall have, without exclusion, all powers
conferred on trustees by applicable law, unless expressly provided otherwise
herein, provided, however, that if an insurance policy is held as an asset of
the Trust, the Trustee shall have no power to name a beneficiary of the policy
other than the Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor Trustee, or to loan to
any person the proceeds of any borrowing against such policy.

 

(f)            Notwithstanding any powers granted to the Trustee
pursuant to this Trust Agreement or to applicable law, the Trustee shall not
have any power that may accord the Trust the authority to engage in a business
and to receive the gains therefrom, within the meaning of
section 301.7701-2 of the Procedure and Administrative Regulations
promulgated pursuant to the Code.

 

 

Section 9.  Compensation
and Expenses of Trustee

 

The Company shall pay all
administrative expenses and the Trustee’s fees and expenses relating to the
Plan and this Trust.  If not so paid, the fees and expenses shall be paid
from the Trust.

 

Section 10.  Resignation and Removal of
Trustee

 

The Trustee may resign at
any time by written notice to the Company, which resignation shall be effective
30 days after the Company receives such notice (unless the Company and the
Trustee agree otherwise).  The Trustee may be removed by the Company on 30
days notice, or upon shorter notice accepted by the Trustee; provided that if
such removal occurs on or after a Change of Control, or within 90 days
beforehand, the removal will be ineffective unless it is done with the written
consent of Beneficiaries who are entitled to at least 75% of the Trust’s
assets.

 

If the Trustee resigns or
is removed, a successor shall be appointed, in accordance with Section 11
hereof, by the effective date or resignation or removal under this
section.  If no such appointment has been made, the Trustee may apply to a
court of competent jurisdiction for appointment of a successor or for
instructions.  All expenses of the Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.  Upon
resignation or removal of the Trustee and appointment of a Successor Trustee,
all assets shall subsequently be transferred to the Successor Trustee. 
The transfer shall be completed within 60 days after receipt of a notice of
resignation, removal or transfer, unless the Company extends the time for such
transfer.

 

Section 11.  Appointment of Successor

 

If the Trustee resigns or
is removed in accordance with Section 10 hereof, the Company may appoint
any other party as a successor to replace the Trustee upon such resignation or
removal.  The appointment shall be effective when accepted in writing by
the new trustee, who shall have all of the rights and powers of the former
trustee, including ownership rights in the Trust assets.  The former
trustee shall execute any instrument necessary or reasonably requested by the
Company or the Successor Trustee to evidence the transfer. 
Notwithstanding the foregoing, if the Trustee resigns or is removed in
connection with or following a Change of Control, the Trustee that has resigned
or is being removed shall appoint as its successor a third party financial
institution that has trust powers, is independent of and unrelated to the
Company, its affiliates, or their successors, and is agreed to in writing by
Beneficiaries who are entitled to at least 75% of the Trust’s assets.

 

A Successor Trustee need
not examine the records and acts of any prior trustee and may retain or dispose
of existing Trust assets, subject to Sections 7 and 8 hereof.  The
Successor Trustee shall not be responsible for, and the Company shall indemnify
and defend the Successor Trustee from, any claim or liability resulting from
any action or inaction of any prior trustee or from any other past event, or
any condition existing at the time it becomes Successor Trustee.

 

12

 

Section 12.  Amendment or Termination

 

(a)           This Trust Agreement may be amended
by a written instrument executed by the Trustee and the Company, provided that
no such amendment shall conflict with the terms of the Plan.

 

(b)           Notwithstanding subsection (a) hereof,
the provisions of this Trust Agreement and the Trust created thereby may not be
amended, within six months before or at any time on or after a Change of
Control occurs, without the written consent of Beneficiaries who are entitled
to at least 75% of the Trust’s assets.

 

(c)           The Trust shall not terminate until
the date on which no Beneficiary is entitled to benefits pursuant to the terms
hereof or of the Plan.  Upon termination of the Trust, the Trustee shall
return any assets remaining in the Trust to the Company.

 

(d)           The Company may terminate this Trust
prior to the payment of all benefits under the Plan only upon written approval
of all Beneficiaries entitled to payment of such benefits.

 

Section 13.  Miscellaneous

 

(a)           Any provision of this Trust Agreement
prohibited by law shall be ineffective to the extent of any such prohibition,
without invalidating the remaining provisions hereof.

 

(b)           Benefits payable to Beneficiaries
under this Trust Agreement may not be anticipated, assigned (either at law or
in equity), alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable process, except pursuant
to the terms of the Plan and this Trust Agreement.

 

(c)           This Trust Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
without reference to the principles of conflicts of laws.

 

(d)           The Trustee agrees to be bound by the
terms of the Plan, as in effect from time to time.

 

Section 14.  Effective Date

 

The effective date of
this Trust Agreement shall be the date referenced in the Preamble.

 

13

 

IN WITNESS WHEREOF, the
Company, by its duly authorized officer, has caused this Trust Agreement to be
executed, and its corporate seal affixed, and the Trustee has executed this
Trust Agreement, on the date referenced in the Preamble.

 

	
  Witnessed by:

  	
   

  	
  PROTECTION
  ONE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witnessed by:

  	
   

  	
  TRUSTEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

14

 

Appendix
I

 

Grant
Agreement

 

I acknowledge receipt of
a copy of the Protection One, Inc. 2010 Stock Appreciation Rights Plan
(the “Plan”) to which this Grant Agreement is attached.  As a condition of
being selected as a Participant in the Plan, I agree to be bound by the terms
of the Plan and to accept the decisions of the Committee taken in accordance
with such terms.  I further agree that the benefits, if any, that are paid
or payable under the Plan shall in no event be taken into account for purposes
of determining the amount of any severance or similar benefit to which I may be
entitled under my employment agreement, or any other plan, agreement or
practice of the Company, regardless of the date of implementation.  The SARs are subject to all of the terms and
conditions set forth herein as well as all of the terms and conditions of the
Plan, all of which are incorporated herein in their entirety.   Capitalized terms not otherwise defined
herein shall have the same meaning as set forth in the Plan.   In the event of a conflict or inconsistency
between the terms and provisions of the Plan and the provisions of this
Agreement, the Plan shall govern and control.

 

Date of Grant: February 22, 2010

 

Number
of SARs Awarded: 

 

Exercise of SARs:   
The Participant may exercise (subject to Section 4(b) and
other provisions of the Plan) outstanding vested SARs in whole or in part at any
time and from time to time prior to their expiration; provided that outstanding
SARs that are vested at the time of, or in connection with, a Payment Date (as
defined below) shall immediately expire after such Payment Date.  Exercised SARs shall only be paid upon a
Payment Date, as set forth below.

 

Delivery of Payment:   Any payment
that a Participant shall be owed as a result of the exercise of SARs will be
paid to the Participant upon (and only upon) the earlier of:

 

(1) 6 months after a
Permissible Distribution Event that is described in paragraphs (i), (ii) or
(iii) of Section 409A(2)(A) of the Code; or

 

(2) immediately upon
a Permissible Distribution Event that is described in paragraph (v) of Section 409A(2)(A) of
the Code; or

 

(3) the tenth anniversary
of the Grant Date.

 

(the earlier of such
dates, a “Payment Date”);

 

provided, for the
avoidance of doubt, that there may be more than one Payment Date in the event a
Permissible Distribution Event occurs prior to the date that all of a
Participant’s outstanding SARs have vested; and provided, further, that the
amount of cash so payable shall be credited with interest at four percent (4%)
per annum, compounded annually, from the date that the exercise of applicable
SARs is effective until the applicable Payment Date.

 

 

	
  Agreed
  and Accepted by:

  	
   

  	
   

  
	
   

  PARTICIPANT

  	
   

  	
   

  
	
  Print
  Name: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:
  

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PROTECTION
  ONE, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
  Print
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:ex1019.htm

     

     

    
      

      

    

     

    
 

    
      “Exhibit
10”

    

     

    Purchase
Agreement

     

    This
Agreement to Purchase ("Agreement") is made
as of February __, 2010 by and between X-Change Corporation, a Nevada
corporation ("Buyer"), and Nydia
Del Valle ("Seller").

     

    PRELIMINARY
STATEMENT

     

    Seller
desires to sell, and Buyer desires to purchase, all of the outstanding shares
(the "Shares")
of Connected Media Technologies, Inc. a corporation organized under the laws of
Delaware (the "Company"), on the
terms and subject to the conditions set forth in this Agreement.

     

    AGREEMENT

     

    The
parties, intending to be legally bound, agree as follows:

     

    ARTICLE
1

     

    DEFINITIONS

     

    For the
purposes of this Agreement, the following terms and variations on them have the
meanings specified in this Article
1:

     

    "Buyer" is defined in
the first paragraph of this Agreement.

     

    "Buyer Shares" means
400,000,000 newly issued shares of Buyer’s common stock, par value $.001 per
share.

     

    "Closing" means the
consummation and completion of the purchase and sale of the Shares.

     

    "Closing Date" means
the date on which the Closing actually takes place.

     

    "Company" is defined
in the Preliminary Statement.

     

    "Company Contract"
means any Contract (a) under which the Company has or may acquire rights,
(b) under which the Company is or may become subject to Liability or
(c) by which the Company or any of its assets is or may become
bound.

     

    "Consent" means any
approval, consent, ratification, waiver or other authorization.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    "Contemplated
Transactions" means all of the transactions to be carried out in
accordance with this Agreement, including the purchase and sale of the Shares,
the performance by the parties of their other obligations under this
Agreement.

     

    "Contract" means any
contract, agreement, commitment, understanding, lease, license, franchise,
warranty, guaranty, mortgage, note, bond or other instrument or consensual
obligation (whether written or oral and whether express or implied) that is
legally binding.

     

    "Contravene" -- an act
or omission would "Contravene" something if, as the context
requires:

     

    (a)           the
act or omission would conflict with it, violate it, result in a breach or
violation of or failure to comply with it, or constitute a default under
it;

     

    (b)           the
act or omission would give any Governmental Body or other Person the right to
challenge, revoke, withdraw, suspend, cancel, terminate or modify it, to
exercise any remedy or obtain any relief under it, or to declare a default or
accelerate the maturity of any obligation under it; or

     

    (c)           the
act or omission would result in the creation of an Encumbrance on the stock or
assets of the Company.

     

    "Encumbrance" means
any charge, claim, mortgage, servitude, easement, right of way, community or
other marital property interest, covenant, equitable interest, license, lease or
other possessory interest, lien, option, pledge, security interest, preference,
priority, right of first refusal or similar restriction.

     

    “Escrow Agreement”
means the agreement to hold Buyer’s Shares in an Escrow Account until Corrected
Media Technologies closes on the purchase agreements with Global Broadcasting
Systems, LLC, Inc and Cinemania TV, LLC.

     

    "Financial Statements"
is defined in Section 3.4.

     

    "GAAP" means generally
accepted accounting principles for financial reporting in the United
States.

     

    "Governing Document"
means any charter, articles, bylaws, certificate, statement, statutes or similar
document adopted, filed or registered in connection with the creation, formation
or organization of an entity, and any Contract among all equity holders,
partners or members of an entity.

     

    "Governmental
Authorization" means any Consent, license, permit or registration issued,
granted, given or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Law.

     

    "Governmental Body"
means any (a) nation, region, state, county, city, town, village, district or
other jurisdiction, (b) federal, state, local, municipal, foreign or other
government, (c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department or other entity and any
court or other tribunal), (d) multinational organization, (e) body exercising,
or entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory or taxing authority or power of any nature, or (f) official
of any of the foregoing.

     

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    "Knowledge" means,
with respect to Seller, the actual knowledge after reasonable investigation of
Seller or of the Company's directors, officers or senior managerial
employees.

     

    "Law" means any
constitution, law, statute, treaty, rule, regulation, ordinance, code, binding
case law, principle of common law or notice of any Governmental
Body.

     

    "Liabilities" includes
liabilities or obligations of any nature, whether known or unknown, whether
absolute, accrued, contingent, choate, inchoate or otherwise, whether due or to
become due, and whether or not required to be reflected on a financial statement
prepared in accordance with GAAP.

     

    "Order" means any
order, injunction, judgment, decree, ruling, assessment or arbitration award of
any Governmental Body or arbitrator and any Contract with any Governmental Body
pertaining to compliance with Law.

     

    "Ordinary Course of
Business" refers to actions taken in the Company's normal operation,
consistent with its past practice and having no material adverse effect on the
financial or other condition, results of operations, assets, Liabilities,
equity, business or prospects of the Company.

     

    "Person" refers to an
individual or an entity, including a corporation, share company, limited
liability company, partnership, trust, association, Governmental Body or any
other body with legal personality separate from its equityholders or
members.

     

    "Proceeding" means any
action, arbitration, audit, examination, investigation, hearing, litigation or
suit (whether civil, criminal, administrative, judicial or investigative,
whether formal or informal, and whether public or private) commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental Body
or arbitrator.

     

    "Purchase Price" is
defined in Section
2.2.

     

    "Securities Act" means
the Securities Act of 1933.

     

    "Securities Exchange
Act" means the Securities Exchange Act of 1934.

     

    "Seller Release" is
defined in Section
2.4(a)(ii).

     

    "Seller" is defined in
the first paragraph of this Agreement.

     

    "Seller's Disclosure
Schedule" means the disclosure schedule delivered pursuant to Article 3 by
Seller to Buyer concurrently with the execution of the Agreement.

     

    "Shares" is defined in
the Preliminary Statement.

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    ARTICLE
2

     

    SALE
AND TRANSFER OF SHARES; CLOSING

     

    
      	
              2.1

            	
              SHARES

            

    

     

    Upon the
terms and subject to the conditions set forth in this Agreement, at the Closing,
Seller will sell and transfer the Shares to Buyer, and Buyer will purchase and
acquire the Shares from Seller.

     

    
      	
              2.2

            	
              PURCHASE
      PRICE

            

    

     

    The
purchase price for the Shares (the "Purchase Price") will
be paid by delivery of the Buyer’s Shares to Seller at the Closing, subject to
the Escrow agreement attached hereto as “Exhibit C”.

     

    
      	
              2.3

            	
              CLOSING

            

    

     

    The
Closing will take place at the offices of Buyer, at 10:00 a.m. (local time) on
the date that is on the date of the satisfaction or waiver of each of the
conditions set forth in Articles 5 and
6, unless Buyer
and Seller agree otherwise.

     

    
      	
              2.4  

            	
              CLOSING
      DELIVERIES

            

    

     

    At the
Closing:

     

    (a)      Seller
will deliver to Buyer:

     

    (i)           
certificates representing the Shares, duly endorsed in blank (or accompanied by
duly executed stock powers in blank);

     

    (ii)           a
release in the form of Exhibit 2.4(a)(ii) executed by Seller (the "Seller
Release");

     

    (iii)          a
certificate executed by Seller as to the accuracy of Seller's representations
and warranties as of the date of this Agreement and as of the Closing in
accordance with Section 6.1 and
as to their compliance with and performance of its covenants and obligations to
be performed or complied on or before the Closing Date in accordance with Section 6.2.

     

    (b)      Buyer
will deliver:

     

    (i)           Stock
certificates representing the Buyer’s Shares; and

     

    (ii)          a
certificate executed by the President of Buyer as to the accuracy of Buyer's
representations and warranties as of the date of this Agreement and as of the
Closing in accordance with Section 7.1 and
as to its compliance with and performance of its covenants and obligations to be
performed or complied with on or before the Closing Date in accordance with
Section 7.2.

     

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    ARTICLE
3

     

    REPRESENTATIONS
AND WARRANTIES OF SELLER

     

    Seller
represents and warrants to Buyer that:

     

    
      	
              3.1

            	
              ORGANIZATION
      AND GOOD STANDING

            

    

     

    The
Company is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, with full corporate power
and authority to conduct its business as presently conducted, to own or use the
properties and assets that it purports to own or use, and to perform all its
obligations under all its Company Contracts.

     

    
      	
              3.2

            	
              ENFORCEABILITY;
      NO CONFLICT

            

    

     

    (a)      Seller
and the Company have the absolute and unrestricted right, power, authority and
capacity to execute and deliver this Agreement and to perform their obligations
under this Agreement.  Assuming due authorization, execution and
delivery of this Agreement by Buyer, this Agreement constitutes the legal, valid
and binding obligation of Seller and the Company, enforceable against Seller and
the Company in accordance with its terms.

     

    (b)      Seller
and the Company are not and will not be required to give any notice to any
Person or obtain any Consent or Governmental Authorization in connection with
the execution and delivery of this Agreement or the consummation or performance
of any of the Contemplated Transactions.

     

    (c)      Neither
the execution and delivery of this Agreement nor the consummation or performance
of any of the Contemplated Transactions will directly or indirectly (with or
without notice or lapse of time) (i) Contravene any provision of the
Governing Documents of the Company, (ii) Contravene any Company Contract,
Governmental Authorization, Law or Order to which Company or Seller, or any of
the assets owned or used by the Company, may be subject, or (iii) result in
the imposition or creation of any Encumbrance upon or with respect to any of the
assets owned or used by the Company.

     

    
      	
              3.3  

            	
              CAPITALIZATION
      AND OWNERSHIP

            

    

     

    The
authorized equity securities of the Company consist of 100 shares of common stock,
par value $0.001 per
share, of which 100
shares are issued and outstanding.  The Shares represent all of the
issued and outstanding shares in the Company.  Seller is and will be
on the Closing Date the record holders and beneficial owners of the Shares, free
and clear of all Encumbrances.  All of the outstanding equity
securities of the Company have been duly authorized and validly issued and are
fully paid and nonassessable.  There are no Contracts relating to the
issuance, sale or transfer of any equity securities or other securities of the
Company.

     

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    
      	
              3.4

            	
              FINANCIAL
      STATEMENTS

            

    

     

    Seller
has furnished to Buyer financial statements as of December 31, 2009, and
June 30, 2009 (collectively, the "Financial
Statements") which is in the form of a listing of assets and
liabilities.  The Financial Statements were prepared in accordance
with the books and records of the Company.  The Financial Statements
and notes thereto are complete and fairly present the assets, liabilities and
financial condition of the Company as of the date thereof.

     

    
      	
              3.5

            	
              NO
      UNDISCLOSED LIABILITIES

            

    

     

    The
Company has no Liabilities except for Liabilities reflected or reserved against
in the Financial Statements, and current Liabilities incurred in the Ordinary
Course of Business since the respective dates thereof.

     

    
      	
              3.6

            	
              CONTRACTS;
      NO DEFAULTS

            

    

     

    (a)      Section 3.6 of
Seller's Disclosure Schedule contains an accurate and complete list
of:

     

    (i)           each
Company Contract that involves performance of services or delivery of goods or
materials by the Company of an amount or value in excess of
$10,000;

     

    (ii)          each
Company Contract that involves performance of services for or delivery of goods
or materials to the Company of an amount or value in excess of $10,000;
and

     

    (iii)         each
Company Contract that was not entered into in the Ordinary Course of Business
and that involves the expenditure or receipt by the Company of an amount or
value in excess of $10,000.

     

    
      	
              3.7

            	
              LEGAL
      PROCEEDINGS; ORDERS

            

    

     

    (a)      There
exists no pending Proceedings (i) by or against the Company or that
otherwise relate to or may affect the business of, or any of the assets owned or
used by, the Company or (ii) that challenge, or that may have the effect of
preventing, delaying, making illegal or otherwise interfering with, any of the
Contemplated Transactions.  To Seller's Knowledge, no other such
Proceeding has been threatened, and no event has occurred or circumstance exists
that may give rise
to or serve as a basis for the commencement of any such Proceeding.

     

    (b)      There
exists no pending Order to which the Company or any of the assets owned or used
by the Company, is or has been subject.

     

    
      	
              3.8

            	
              SECURITIES
      LAW MATTERS

            

    

     

    Seller is
acquiring the Buyer’s Shares for her own account and not with a view to
distribution within the meaning of Section 2(11) of the Securities
Act.  Seller confirms that Buyer has made available to Seller the
opportunity to ask questions of the officers and management employees of Buyer
and to acquire such additional information about the business and financial
condition of Buyer as Seller has requested, and all such information has been
received.  Seller understands that Buyer Shares shall be considered
"restricted securities" as that term is defined in Rule 144 promulgated under
the Securities Act and Buyer is under no obligation to cause the registration of
the Buyer Shares.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

    
      	
              3.9

            	
              BROKERS
      OR FINDERS

            

    

     

    Seller
has not incurred any Liability for brokerage or finders' fees or agents'
commissions or other similar payment in connection with the Contemplated
Transactions.

     

    ARTICLE
4

     

    REPRESENTATIONS
AND WARRANTIES OF BUYER

     

    Buyer
represents and warrants to Seller that:

     

    
      	
              4.1

            	
              ORGANIZATION

            

    

     

    Buyer is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization.

     

    
      	
              4.2

            	
              ENFORCEABILITY;
      NO CONFLICT

            

    

     

    (a)      Buyer
has the absolute and unrestricted right, power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement,
which actions have been duly authorized and approved by all necessary corporate
action of Buyer.  Assuming the execution and delivery of this
Agreement by Seller, this Agreement constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms.

     

    (b)      Buyer
is not and will not be required to obtain any Consent or Governmental
Authorization in connection with the execution and delivery of this Agreement or
the consummation or performance of any of the Contemplated
Transactions.

     

    (c)      Neither
the execution and delivery of this Agreement by Buyer nor the consummation or
performance of any of the Contemplated Transactions by Buyer will give any
Person the right to prevent, delay or otherwise interfere with any of the
Contemplated Transactions pursuant to (i) any provision of Buyer's
Governing Documents, (ii) any resolution adopted by the board of directors
or the stockholders of Buyer, (iii) any Law, Order or Governmental
Authorization to which Buyer may be subject or (iv) any Contract to which
Buyer is a party or by which Buyer may be bound.

     

    
      	
              4.3

            	
              BROKERS
      OR FINDERS

            

    

     

    Buyer has
not incurred any Liability for brokerage or finders' fees or agents' commissions
or other similar payment in connection with the Contemplated
Transactions.

     

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

    ARTICLE
5

     

    COVENANTS
OF THE PARTIES BEFORE CLOSING

     

    
      	
              5.1

            	
              ACCESS
      AND INVESTIGATION

            

    

     

    Between
the date of this Agreement and the Closing Date and upon reasonable advance
notice from Buyer, Seller will, and will cause the Company to, (a) afford Buyer
full and free access to Company’s personnel, properties, Contracts, books and
records, and other documents and data, (b) furnish such Persons with copies of
all such Contracts, books and records, and other documents and data as Buyer may
reasonably request, and (c) furnish such Persons with such additional financial,
operating and other data and information as Buyer may reasonably
request.

     

    
      	
              5.2

            	
              OPERATION
      OF THE BUSINESS OF THE COMPANY

            

    

     

    Between
the date of this Agreement and the Closing Date, Seller will, and will cause the
Company to, (a) conduct its business only in the Ordinary Course of
Business, (b) use their Best Efforts to preserve intact the current
business organization of the Company, keep available the services of the current
officers, employees and agents of the Company, and maintain relations and
goodwill with suppliers, customers, landlords, creditors, employees, agents and
others having business relationships with the Company, (c) confer with
Buyer concerning operational matters of a material nature and (d) otherwise
report periodically to Buyer concerning the status of the business, operations
and finances of the Company.

     

    
      	
              5.3

            	
              REQUIRED
      APPROVALS

            

    

     

    As
promptly as practicable after the date of this Agreement, Buyer and Seller will,
and Seller will cause the Company to, make all filings that they are required by
Law to make to consummate the Contemplated Transactions.  Between the
date of this Agreement and the Closing Date, Buyer and Seller will, and Seller
will cause the Company to, (a) cooperate with the other Party with respect
to all filings that such Party elects to make or that such Party is required by
Law to make in connection with the Contemplated Transactions, and
(b) cooperate with Buyer in obtaining any Governmental
Authorizations.

     

    
      	
              5.4

            	
              SHAREHOLDER
      APPROVAL

            

    

     

                   
Buyer does not require shareholder approval

     

    

     

    ARTICLE
6

     

    CONDITIONS
PRECEDENT TO BUYER'S OBLIGATION TO CLOSE

     

    Buyer's
obligation to purchase the Shares and to take the other actions required to be
taken by Buyer at the Closing is subject to the satisfaction, on or before the
Closing Date, of each of the following conditions (any of which may be waived by
Buyer, in whole or in part):

     

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

    
      	
              6.1

            	
              ACCURACY
      OF REPRESENTATIONS

            

    

     

    All of
Seller's representations and warranties in this Agreement (considered both
collectively and individually) must have been accurate in all material respects
as of the date of this Agreement, and must be accurate in all material respects
as of the Closing Date as if then made.

     

    
      	
              6.2

            	
              SELLERS’
      AND COMPANY’S PERFORMANCE

            

    

     

    All of
the covenants and obligations that Seller and Company is required to perform or
to comply with under this Agreement on or before the Closing Date (considered
both collectively and individually) must have been duly performed and complied
with in all material respects.

     

    
      	
              6.3

            	
              STOCKHOLDER
      APPROVAL 

            

    

     

    The
Contemplated Transactions shall have been approved by the Buyer’s
stockholders.

    

    ARTICLE
7

     

    CONDITIONS
PRECEDENT TO SELLER'S OBLIGATION TO CLOSE

     

    Seller's
obligation to sell the Shares and to take the other actions required to be taken
by Seller at the Closing is subject to the satisfaction, on or before the
Closing Date, of each of the following conditions (any of which may be waived by
Seller, in whole or in part):

     

    
      	
              7.1

            	
              ACCURACY
      OF REPRESENTATIONS

            

    

     

    All of
Buyer's representations and warranties in this Agreement (considered both
collectively and individually) must have been accurate in all material respects
as of the date of this Agreement and must be accurate in all material respects
as of the Closing Date as if then made.

     

    
      	
              7.2

            	
              BUYER’S
      PERFORMANCE

            

    

     

    All of
the covenants and obligations that Buyer is required to perform or to comply
with under this Agreement on or before the Closing Date (considered both
collectively and individually) must have been performed and complied with in all
material respects.

     

    ARTICLE
8

     

    TERMINATION

     

    
      	
              8.1

            	
              TERMINATION
      EVENTS

            

    

     

    Subject
to Section 8.2,
this Agreement may, by notice given before or at the Closing, be
terminated:

     

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (a)      by
mutual consent of Buyer and Seller;

     

    (b)      by
Buyer if the satisfaction of any condition in Article 6 is or
becomes impossible (other than through the failure of Buyer to comply with its
obligations under this Agreement) and Buyer has not waived such
condition;

     

    (c)      by
Seller if the satisfaction of any condition in Article 7 is or
becomes impossible (other than through the failure of Seller to comply with its
obligations under this Agreement) and Seller has not waived such condition;
and

     

    (d)      by
either Buyer or Seller if the Closing has not occurred (other than through the
failure of any party seeking to terminate this Agreement to comply fully with
its obligations under this Agreement) on or before February 15, 2010, or such
later date as Buyer and Seller may agree upon.

     

    
      	
              8.2

            	
              EFFECT
      OF TERMINATION

            

    

     

    Each
party's right of termination under Section 8.1 is
in addition to any other rights it may have under this Agreement or otherwise,
and the exercise of such right of termination will not be an election of
remedies.  If this Agreement is terminated pursuant to Section 8.1, all
obligations of the parties under this Agreement will terminate; provided, however,
that if this Agreement is terminated by a party because of the breach of the
Agreement by another party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of any other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.

     

    ARTICLE
9

     

    INDEMNIFICATION;
REMEDIES

     

    
      	
              9.1

            	
              SURVIVAL

            

    

     

    All
representations, warranties, covenants and obligations in this Agreement, and
any other certificate or document delivered pursuant to this Agreement will
survive the Closing and the consummation of the Contemplated
Transactions.

     

    ARTICLE
10

     

    GENERAL
PROVISIONS

     

    
      	
              10.1

            	
              EXPENSES

            

    

     

    Except as
otherwise expressly provided in this Agreement, each party to this Agreement
will bear its respective expenses incurred in connection with the preparation,
execution and performance of this Agreement and the Contemplated Transactions,
including all fees and expenses of its Representatives.

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
              10.2

            	
              FURTHER
      ACTIONS

            

    

     

    Upon the
request of any party to this Agreement, the other parties will (a) furnish
to the requesting party any additional information, (b) execute and
deliver, at their own expense, any other documents and (c) take any other
actions as the requesting party may reasonably require to more effectively carry
out the intent of this Agreement and the Contemplated Transactions.

     

    
      	
              10.3

            	
              ENTIRE
      AGREEMENT AND MODIFICATION

            

    

     

    This
Agreement supersedes all prior agreements among the parties with respect to its
subject matter a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter.  This
Agreement may not be amended, supplemented or otherwise modified except in a
written document executed by the party against whose interest the modification
will operate.

     

    
      	
              10.4

            	
              SEVERABILITY

            

    

     

    If a
court of competent jurisdiction holds any provision of this Agreement invalid or
unenforceable, the other provisions of this Agreement will remain in full force
and effect.  Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

     

    
      	
              10.5

            	
              GOVERNING
      LAW

            

    

     

    This
Agreement will be governed by and construed under the laws of Nevada without
regard to conflicts of laws principles that would require the application of any
other law.

     

    
      	
              10.6  

            	
              COUNTERPARTS

            

    

     

    This
Agreement may be executed in two or more counterparts.

     

    The
parties have executed and delivered this Agreement as of the date indicated in
the first sentence of this Agreement.

     

    
      	
              10.7

            	
              Purchase
      Agreement

            

    

     

    This
Letter of Intent may be turned into a Purchase Agreement only if both parties
agree on the terms of Purchase and execute a new Purchase
Agreement.

    

     

    
    

     

    
      	 X-Change
      Corporation	 Nydia Del
  Valle
	 	 
	 By: 
      /S/ R. Wayne
Duke	 /S/ Nydia Del Valle
	        
      President	 

    

     

    

    Agreed
TO:

    Connected
Media Technologies, Inc.

    

    BY:  /S/ Nydia Del
Valle

             President

     

     

    
 

    
      
         

      

      
        11

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