Document:

Unassociated Document

    Exhibit 10.4

     

    LEASE
AGREEMENT

    
      (Triple
Net)

       

      This
Lease, made as of by and between the Landlord and the Tenant named
below.

       

      ARTICLE
1. - BASIC LEASE TERMS

       

      For the
purposes of this Lease, the following terms shall have the meanings set forth
below:

       

      1.1    
Landlord. JUMA,
L.L.C..

       

      1.2    
Tenant. Deep
Down, Inc., a Delaware Corporation

       

      1.3    
Building. The
Building known as 15473 East Freeway, Channelview, Harris County, Texas, on
that tract of land (the "Land") more particularly described on Exhibit "A" hereto,
together with all other buildings, structures, fixtures and other improvements
located thereon from time to time. The Building and the Land are sometimes
collectively referred to herein as the "Property" and or the "Leased
Premises".

       

      1.4    
Lease Term. 5
years and no months, beginning on the Commencement Date.

       

      1.6    
Commencement
Date. September 1, 2006.

       

      1.7    
Base Rent. Base
rent is $ 11,000.00 per month.

       

      1.8    
Security
Deposit. Security deposit is $0.00.

       

      1.9    
Addresses.

       

      
        	
                Landlord's

              	
                Tenant's

              
	
                Address:

              	
                Address:

              
	
                15473
      East Freeway

              	
                15473
      East Freeway

              
	
                Channelview
      Texas

              	
                Channelview
      Texas

              

      

       

      Landlord
and Tenant, by written notice to the others may change from time to time the
foregoing addresses.

       

      1.10    
Permitted Use.
Office warehouse, manufacturing facility.

       

      1.11    
Common
Areas. Such parking areas,
streets, driveways, aisles, sidewalks, curbs, delivery passages, loading areas,
lighting facilities, and all other areas situated on or in the Property
which are designated by
Landlord, from time to time, for use by all tenants of the Property in
common.

      
        
           

        

        
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      1.12    
Lease Year.
Each succeeding twelve (12) month period commencing with the first day of the
first full calendar month of the Lease Term.

       

      1.13    
Proportionate
Share means 1.00%..

      

      ARTICLE
2. - GRANTING CLAUSE AND RENT PROVISIONS

       

      2.1    
Grant of
Premises. In consideration of the obligation of Tenant to pay the rent
and other charges as provided in this Lease and in consideration of the other
terms and provisions of this Lease, Landlord hereby leases the Leased Premises
to Tenant during the Lease Term, subject to the terms and provisions of this
Lease.

      

      2.2    
Base Rent.
Tenant agrees to pay monthly as base rent during the term of this Lease the sum
of money set forth in Section 1.7 of this
Lease, which amount shall be payable to Landlord at the address shown above or
at such other address that Landlord in writing shall notify Tenant. One (1)
monthly installment of rent shall be due and payable upon execution of this
Lease by Tenant for the first month's rent and a like monthly installment shall
be due and payable on or before the first day of each calendar month
succeeding the Commencement Date during the term of this Lease. without demand,
offset or reduction; provided, if the Commencement Date should be a date other
than the first day of a calendar month, the monthly rental set forth above shall
be prorated to the end of that calendar month, and all succeeding installments
of rent shall be payable on or before the first day of each succeeding calendar
month during the term of this Lease. Tenant shall pay, as additional rent, all
other sums due under this Lease.

      

      2.3    
Common
Area Costs. As used in this Lease, the term "Common Area Costs" shall
mean all expenses of Landlord with respect to the maintenance, servicing,
repairing and operation of the Property, including, but not limited to the
following: maintenance, repair and replacement costs; electricity, fuel, water,
sewer, gas and other utility charges; security, cleaning; trash and snow and ice
removal; landscaping and pest control; management fees, wages and benefits
payable to employees of Landlord whose duties are directly connected with the
operation and maintenance of the Property; all services, supplies, repairs,
replacement or other expenses for maintaining and operating the Property;
the cost, including interest, amortized over its useful life, of any
capital improvement made to the Property by Landlord after the date of this
Lease; all other expenses which generally would be regarded as operating and
maintenance expenses; all real property taxes and installments of special
assessments, including dues and assessments by means of deed restrictions and/or
owner's associations which accrue against the Property during the term of this
Lease; governmental levies or charges of any kind or nature assessed or imposed
on the Property, whether by state, county, city or any political subdivision
thereof; and all insurance premiums Landlord is required to pay or deems
necessary to pay, including public liability insurance, with respect to the
Property. The term operating expenses does not include the following: expenses
for repairs, restoration or other work occasioned by fire, wind, the elements or
other casualty that are covered by insurance; income and franchise taxes of
Landlord; expenses incurred in leasing to or procuring of tenants, leasing
commissions, advertising expenses and expenses for the renovating of space for
new tenants; interest or principal payments on any mortgage or other
indebtedness of Landlord; compensation
paid to any employee of Landlord above the grade of property manager; or
operating expenses
which are the responsibility of Tenant. Prior to the Commencement Date,
and from time to time
thereafter, Landlord shall deliver to Tenant its estimate of the Common Area
Costs to be incurred
during the then-current calendar year. Landlord may adjust the estimate from
time to time during
the year to which it relates.

      
        
           

        

        
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      2.4     Common Area
Costs Payments. Tenant, on the first day of each
month during the Lease Term shall pay to Landlord, as
additional rent, without offset or deduction, an amount equal to Tenant's Proportionate Share of the
estimated Common Area Costs as calculated by Landlord
(prorated for any partial
month). All sums payable as additional rent under the terms of this Section
shall be subject to
adjustment as provided in Section
2.5.

       

       2.5     Adjustments to Common Area
Costs. Within one-hundred
twenty (120) days following the
end of each calendar year, Landlord shall furnish to Tenant a statement showing
the total actual Common Area Costs for the
calendar year just expired, the amount of Tenant's Proportionate Share of the Common Area Costs, and
payments made by Tenant during such
calendar year under Section 2.4. If Tenant's Proportionate Share of the actual
Common Area Costs for such calendar year
exceeds the aggregate of Tenant's monthly payments made during the calendar year
just expired, Tenant shall pay to Landlord the deficiency within thirty (30)
days after receipt of said statement. If
Tenant's payments exceed Tenant's Proportionate Share of the actual Common Area
Costs as shown on such statement, Tenant
shall be entitled to offset the excess against payments thereafter becoming due as Tenant's Proportionate Share
of Common Area Costs. No portion of the Common Area Costs paid by Tenant under this Article 2 shall be credited against the Base Rent or any
other rental obligations hereunder.

       

       2.6     Late Payment Charge. Other remedies for nonpayment of rent
notwithstanding, if any monthly rental payment or any payment of Percentage Rent
is not received by Landlord on or before the fifth (5th) day of the month for which the rent is
due, or if any other payment hereunder due
Landlord by Tenant is not received by
Landlord on or before the fifth (5th) day of the month next following the month in which Tenant was invoiced, a late
payment charge of five percent (5%) of such
past due amount shall become due and
payable in addition to such amounts owed under this Lease.

       

       2.7    Increase in Insurance
Premiums. If an increase in any
insurance premiums paid by Landlord for
the Property is caused by Tenant's use of the Leased Premises, or if Tenant
vacated the Leased Premises and caused an increase in such premiums,
then Tenant shall pay as
additional rent the amount of such increase
to Landlord. Tenant agrees to pay any amount due under this Section within ten (10) days following receipt of the invoice
showing the additional rent
due.

       

       2.8     Security Deposit. The Security Deposit set forth in Section 1.8 shall be held by Landlord for
the performance of Tenant's covenants and obligations under this Lease, it being
expressly understood that the Security Deposit shall not he considered an advance payment of rental or a measure
of Landlord's damage in case of default hereunder by Tenant, and shall be held
by Landlord without payment of any interest
thereon. Upon the occurrence of any event
of default by Tenant under this Lease.
Landlord may, from time to time, without prejudice to any other
remedy, use the Security Deposit to the extent necessary to make
good any arrears of rent, or to repair any damage or injury,
or pay any expense or liability incurred by Landlord as a result of the event of
default or breach of covenant, and any remaining balance of the Security Deposit
shall be returned by Landlord to Tenant
upon the termination of this Lease. If any portion of the Security Deposit is so used or applied,
Tenant shall upon ten (10) days written notice from Landlord, deposit with
Landlord by cash or cashier's check an
amount sufficient to restore the Security Deposit to its original amount. The Security Deposit may be assigned and transferred by Landlord to the
successor in interest of Landlord and, upon
acknowledgment by such successor of receipt of such security and its assumption of the obligation to account
to Tenant for such security in accordance with the terms of
this Lease, Landlord shall thereby be discharged of any further obligation
relating thereto.

      
        
           

        

        
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      2.9    
Holding Over.
If Tenant does not vacate the Leased Premises upon the expiration or earlier
termination of this Lease, Tenant shall be a tenant at sufferance for the
holdover period and all of the terms and provisions of this Lease shall be
applicable during that period, except that Tenant shall pay Landlord (in
addition to additional rent payable under Section 2.4 and any
other sums payable under this Lease) as base rental for the period of such
holdover an amount equal to two times the base rent which would have been
payable by Tenant had the holdover period been a part of the original term of
this Lease (without waiver of Landlord's right to recover damages as permitted
by law). Upon the expiration or earlier termination of this Lease, Tenant agrees
to vacate and deliver the Leased Premises, and all keys thereto, to Landlord
upon delivery to Tenant of notice from Landlord to vacate. The rental payable
during the holdover period shall be payable to Landlord on demand. No holding
over by Tenant, whether with or without the consent of Landlord, shall operate
to extend the term of this Lease. Tenant shall indemnify Landlord against all
claims made by any tenant or prospective tenant against Landlord resulting from
delay by Landlord in delivering possession of the Leased Premises to such other
tenant or prospective tenant.

      

       

      ARTICLE
3. - OCCUPANCY, USE AND OPERATIONS

       

      

      3.1    
Use and Operation of
Tenant's Business. Tenant warrants and represents to Landlord that the
Leased Premises shall be used and occupied only for the purpose as set forth in
Section 1.10.
Tenant shall occupy the Leased Premises, conduct its business and control its
agents, employees, invitees and visitors in such a manner as is lawful,
reputable and will not create a nuisance to other tenants in the Property.
Tenant shall in good faith continuously throughout the Lease Term conduct and
carry on its business in the entire Leased Premises under the Trade Name
specified in Article
I hereof (or under such other name approved in writing by Landlord).
Tenant shall not conduct any auction or fire or bankruptcy sale in the Leased
Premises. Tenant shall not solicit business, distribute handbills or display
merchandise within the Common Areas, or take any action which would interfere
with the rights of other persons to use the Common Areas. Tenant shall not
permit any operation which emits any odor or matter which intrudes into other
portions of the Property, use any apparatus or machine which makes undue noise
or causes vibration in any portion of the Property or otherwise interfere with,
annoy or disturb any other tenant in its normal business operations or Landlord
in its management of the Property. Tenant shall neither permit any waste on the
Leased Premises nor allow the Leased Premises to be
used in any way which would, in the opinion of Landlord, be extra
hazardous on account of fire or which would in any way increase or render void
the fire insurance on the Property.

      
        
           

        

        
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      3.2    
Signs. Tenant
shall not erect or place, or cause to be erected or placed, any sign on the
Property without the prior written consent of Landlord, which consent will not
he unreasonably withheld or delayed. Tenant acknowledges that because of space
limitation, all tenants of the Property may not be permitted to place individual
signs on such pylon, and nothing herein contained shall require Landlord to
provide space for a sign on the Property to Tenant. Any sign placed on the
Property by Tenant must be installed in compliance with Landlord's sign criteria
and shall be removed within five (5) days after the termination of this Lease
for any reason. Any failure to so remove such sign shall automatically vest
ownership in same to Landlord. Tenant shall be liable to Landlord for any cost
or expense incurred by Landlord in removing such sign and for any damage caused
by the removal of such sign. Landlord reserves the right, in Landlord's
discretion, to permit a sign or signs which deviate from the Landlords
then-established sign criteria, and such permission by Landlord to any tenant or
tenants shall not give rise to any rights in any other tenants to object thereto
or to require Landlord to permit such other tenant to deviate from the criteria.
Nothing contained herein shall limit Landlord's right to modify or amend such
criteria from time to time.

      

      3.3    
Compliance with Laws,
Rules and Regulations. Tenant, at Tenant's sole cost and expense, shall
comply with all laws, ordinances, orders, acts, rules and regulations of state,
federal, municipal or other agencies or bodies having jurisdiction over the use,
condition or occupancy of the Leased Premises, including, but not limited to,
the Americans with Disabilities Act of 1990 (the "ADA"). Tenant shall procure at
its own expense all permits and licenses required for the transaction of its
business in the Leased Premises. Tenant will comply with the rules and
regulations of the Property adopted by Landlord which are set forth on a
schedule attached to this Lease. If Tenant is not complying with such rules and
regulations, or if Tenant is in any way not complying with this Article 3, then,
notwithstanding anything to the contrary contained herein, Landlord, may, at its
election, enter the Leased Premises without liability therefor and fulfill
Tenant's obligations. Tenant shall reimburse Landlord on demand for any expenses
which Landlord may incur in effecting compliance with Tenant's obligations and
agrees that Landlord shall not be liable for any damages resulting to Tenant
from such action_ Landlord shall have the right at all times to change and amend
the rules and regulations in any reasonable manner as it may deem advisable for
the safety, care, cleanliness, preservation of good order and operation or use
of the Property or the Leased Premises.

      

      3.4    
Warranty of
Possession. Landlord and Tenant each warrants that it has the right and
authority to execute this Lease, and Landlord warrants to Tenant, that upon
payment of the required rents by Tenant, and subject to the terms, conditions,
covenants and agreements contained in this Lease, Tenant shall have possession
ofthe Leased Premises during the full term of this Lease, as well as any
extension or renewal thereof, without hindrance from Landlord or any person or
persons lawfully claiming the Leased Premises by, through or under Landlord (but
not otherwise); subject, however, to all mortgages, deeds of trust, leases and
agreements to which this Lease is subordinate and to all laws, ordinances,
orders, rules and regulations of any governmental authority. Landlord shall not
be responsible for the acts or omissions of any other lessee or third party that
may interfere with Tenant's use and enjoyment of the Leased
Premises.

      
        
           

        

        
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      3.5    
Inspection.
Landlord or its authorized agents shall at any and all reasonable times have the
right to enter the Leased Premises to inspect the same, to supply janitorial
service or any other service to be provided by Landlord, to show the Leased
Premises to prospective mortgagees, purchasers or prospective tenants, and to
alter, improve or repair the Leased Premises or any other portion of the
Property. Tenant hereby waives any claim for abatement or reduction of rent or
for any damages for injury or
inconvenience to or interference with Tenant's business, for any loss of
occupancy or use of the Leased Premises, and for any other loss occasioned
thereby. Landlord shall at all times have and retain a key with which to unlock
all of the doors in, upon and about the Leased Premises_ Tenant shall not change
Landlord's lock system or in any other manner prohibit Landlord from entering
the Leased Premises. Landlord shall have the right at all times to enter the Leased
Premises by any means in the event of an emergency without liability
therefor.

      

      3.6    
Personal Property
Taxes. Tenant shall be liable for all taxes levied against leasehold
improvements, merchandise, personal property, trade fixtures and all other
taxable property located in the Leased Premises. If any such taxes for which
Tenant is liable are levied against Landlord or Landlord's property and if
Landlord elects to pay the same or if the assessed value of
Landlord's property is increased by inclusion of personal property and trade
fixtures placed by Tenant in the Leased Premises and Landlord elects to pay the
taxes based on such increase, Tenant shall pay to Landlord, upon demand, that
part of such taxes for which Tenant is primarily liable pursuant to the terms of
this Section. Tenant shall pay when due any and all taxes related to Tenant's
use and operation of its business in the Leased Premises.

      

      3.7    
Garbage. All garbage and refuse shall be kept
in an area designated by Landlord and in the kind of container specified by
Landlord and shall be placed outside of the Leased Premises daily, prepared for
collection in the manner and at the times and places specified by Landlord. If
Landlord provides or
designates a service for collection of refuse and garbage, Tenant shall use it,
at Tenant's expense,
provided the cost thereof is competitive with any identical service
available to Tenant.

      ARTICLE
4. - UTILITIES AND SERVICE

      

      4.1    
Utility
Services. Landlord shall
provide or cause to be provided the mains, conduits and other facilities necessary
to supply water, gas, electricity, telephone service and sewage service to the
Property. Tenant shall, however, be responsible, at its expense, to make
provisions for connecting or hooking up to such utilities, directly with the
appropriate utility company furnishing same.

       

      4.2    
Responsibility for
Charges. Tenant shall promptly pay all charges and deposits for electricity,
gas, water/sewage and telephone service and all other utilities furnished to the
Leased Premises. Landlord may, if it so elects, furnish one or more utility
services to Tenant, and in such event, Tenant shall purchase the use of such
services as are tendered by Landlord, and shall pay on demand the rates
established therefor by Landlord.

      
        
           

        

        
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      4.3     Landlord's
Services. Landlord shall provide
routine maintenance, painting
and electric lighting service for all Common Areas and
special service areas of the Property in the manner and to the extent deemed by Landlord to be
standard. Landlord may, in its sole discretion, provide additional services not enumerated herein.

       

      4.4     No Liability. Landlord shall not be liable for any interruption
whatsoever in utility services not furnished by it, nor for interruptions in
utility service furnished by it which are due to fire, accident, strikes, acts of God, riot, civil
commotion, terrorist act, national emergency, shortages of labor or materials or other causes beyond the control
of Landlord or in order to make alterations, repairs or improvements. Moreover,
Landlord shall not be liable for any
interruption of such utility services which continues during any reasonable
period necessary to restore such service upon the occurrence of any of the foregoing
conditions

       

      4.5     Theft or
Burglary. Landlord shall not be liable
to Tenant for losses to
Tenant's property or personal injury caused by criminal acts or
entry by unauthorized persons into the Leased Premises or the Property.

       

      ARTICLE
5. - REPAIRS AND MAINTENANCE

       

      5.1     Landlord
Repairs. Landlord shall not be
required to make any improvements, replacements
or repairs of any kind or character to the Leased Premises during the term of
this Lease except as are set forth in this
Section. Landlord shall maintain only the roof, foundation, parking and
Common Areas, the structural
soundness of the exterior walls. Landlord's
cost of maintaining and repairing the items
set forth in this Section are subject to the additional rent provisions in
Section
2.4. Landlord shall not be liable to
Tenant for any damage or inconvenience, and Tenant shall not be
entitled to any damages nor to any abatement or reduction of rent by reason of
any repairs, alterations or additions made
by Landlord under this Lease.

       

      5.2     Tenant Repairs. Tenant, at its own cost and expense, shall
maintain the Leased Premises in a
first-class condition (except for those items that are the responsibility of
Landlord under Section 5.1). Without limiting the generality of the foregoing,
Tenant shall maintain and keep in good
repair (including replacement when necessary): (a) the interior of the Leased Premises, including walls, floors and ceilings; (b) all windows
and doors, including frames, glass, molding and hardware; (c) all wires and plumbing within the Leased
Premises which serve the Leased Premises; (d) all signs, air conditioning and heating equipment, mechanical doors and other
mechanical equipment situated on or in the
Leased Premises or serving the Leased Prem ises; and (e) those utility
facilities that are not Landlord's
responsibility hereunder. Tenant shall further make all other repairs to the Leased Premises made necessary by Tenant's
failure to comply with its obligations under this Section. All fixtures
installed by Tenant shall be new or shall have been completely and recently
reconditioned.

       

      5.3     Tenant Damages. Tenant shall
not allow any damage to be committed on any portion of the Leased
Premises or Property, and at the termination of this Lease, by lapse of time or
otherwise, Tenant shall deliver the Leased
Premises to Landlord in as good condition as existed at the
Commencement Date of this Lease, ordinary wear and tear excepted. The cost and
expense of any repairs necessary to restore the condition of the Leased Premises
shall be borne by Tenant.

      
        
           

        

        
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      ARTICLE
6. - ALTERATIONS AND IMPROVEMENTS

      

      6.1    
Construction.
If any construction of tenant improvements is necessary for the initial
occupancy of the Leased Premises, such construction shall be accomplished and
the cost of such construction shall be borne by Tenant in accordance with a
separate Leasehold Improvements Agreement (herein so called) between Landlord
and Tenant. Additionally, if any construction, modification or renovation is
necessary on the Leased Premises as a result of the enactment of any federal,
state or local law, act, regulation or ordinance, including the ADA, such
construction, modification or renovation shall also be accomplished and the cost
of such construction, modification or renovation shall be borne by Tenant. In
accordance with the ADA, Tenant shall be responsible for all readily achievable
(as defined in the ADA) changes, provisions of auxiliary aids and modifications
of policies within the Leased Premises; Landlord shall only be responsible for
making readily achievable changes in Common Areas and for modifying policies,
practices or procedures applicable to all tenants. Except as expressly provided
in this Lease or in the Leasehold Improvements Agreement (if any), Tenant
acknowledges and agrees that Landlord has not undertaken to perform any
modification, alteration or improvements to the Leased Premises, and Tenant
further waives any defects in the Leased Premises and acknowledges and accepts
(1) the Leased Premises as suitable for the purpose for which they are leased
and (2) the Property and every part and appurtenance thereof as being in good
and satisfactory condition. Upon the request of Landlord, Tenant shall deliver
to Landlord a completed acceptance of premises memorandum in the form prescribed
by Landlord.

      

      6.2    
Tenant
Improvements. Tenant shall not make or allow to be made any alterations,
physical additions or improvements in or to the Leased Premises without first
obtaining the written consent of Landlord, which consent may in the sole and
absolute discretion of Landlord be denied. Any alterations, physical additions
or improvements to the Leased Premises made by or installed by either party
hereto shall remain upon and be surrendered with the Leased Premises and become
the property of Landlord upon the expiration or earlier termination of this
Lease without credit to Tenant; provided, however, Landlord, at its option, may
require Tenant to remove any physical improvements or additions and/or repair
any alterations in order to restore the Leased Premises to the condition
existing at the time Tenant took possession, all costs of removal and/or
alterations to be borne by Tenant. This clause shall not apply to moveable
equipment, furniture or moveable trade fixtures owned by Tenant, which may be
removed by Tenant at the end of the term of this Lease if Tenant is not then in
default and if such equipment and furniture are not then subject to any other
rights, liens and interests of Landlord. Tenant shall have no authority or
power, express or implied, to create or cause any mechanic's or materialmen's
lien, charge or encumbrance of any kind against the Leased Premises, the
Property or any portion thereof. Tenant shall promptly cause any such liens that
have arisen by reason of any work claimed to have been undertaken by or through
Tenant to be released by payment, bonding or otherwise after request by
Landlord, and shall indemnify Landlord against
losses arising out of any such claim (including, without I imitation, regal fees
and court costs).

      
        
           

        

        
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      6.3     Common and Service Area A
Iterations. Landlord shall have
the right to decorate and to make repairs, alterations, additions, changes or
improvements, whether structural of otherwise, in, about or on the Property or any part thereof, and to
change, alter, relocate, remove or replace
service areas and/or Common Areas, to place, inspect, repair and replace in the
Leased Premises (below floors, above
ceilings or next to columns) utility lines, pipes and the like to serve other
areas of the Property outside the Leased
Premises and to otherwise alter or modify the Property, and for such purposes to
enter upon the Leased Premises and, during the continuance of any such work, to
take such measures for safety or for the
expediting of such work as may be required, in Landlord's judgment, all without affecting any of Tenant's
obligations hereunder.

       

      ARTICLE
7. - CASUALTY AND INSURANCE

       

      7.1     Substantial Destruction. If in the determination of Landlord the Leased
Premises should be totally destroyed by fire or other casualty,
or if in the determination of Landlord the Leased Premises should be damaged so that rebuilding cannot
reasonably be completed substantially within one hundred and eighty (180)
working days after Landlord's receipt of
written notification by Tenant of the
destruction, or if the Leased Premises are damaged or destroyed by casualty not
covered by the standard broad form of fire
and extended coverage insurance then in common use in the State of where the property is situated, then, at Landlord's sole option,
this Lease may be terminated and, in such
event, the rent shall be abated for the unexpired portion of the Lease,
effective as of the date of the written
notification.

       

      7.2     Partial Destruction. If following
damage or destruction to the Leased Premises by fire or other
casualty, this Lease is not terminated pursuant to Section 7.1 hereof, Landlord shall proceed, to the extent of insurance proceeds actually
received by Landlord after the exercise by any mortgagee of the
Property of an option to apply proceeds against Landlord's debt to such
mortgagee, with reasonable diligence to
rebuild or repair the Building or other improvements to substantially the same
conditions in which they existed prior to the damage. If the Leased Premises are to be rebuilt or repaired
and are untenantable in whole or in part following the damage, and the damage
or destruction was not caused or
contributed to by act or negligence of Tenant, its agents, employees,
invitees or those for whom Tenant is responsible, the Base Rent payable
under this Lease during the period for
which the Leased Premises arc wholly or partially untenantable shall be reduced
in an equitable manner. Landlord's obligation to rebuild or restore under this
Section shall be limited to restoring the
Leased Premises to substantially the condition in which the same existed prior
to the casualty, exclusive of improvements
for which Tenant is responsible under the terms of the Leasehold Improvements Agreement, if any, described above in Section 6.1, and Tenant shall, promptly after the completion of such work by Landlord,
proceed with reasonable diligence and at Tenant's sole cost and expense to restore those
improvements for which Tenant is responsible under the terms of such Leasehold Improvements Agreement to
substantially the condition in which the same existed prior to the casualty and
to otherwise make the Leased Premises suitable for Tenant's use.

      

      
        
           

        

        
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      7.3     Property Insurance. Landlord shall at all times during the term of this Lease insure the Property
against all risk of direct physical loss in an amount and with such deductibles
as Landlord considers appropriate; provided, Landlord shall
not be obligated in any way or manner to insure any personal
property (including, but not limited to, any furniture, machinery, goods or
supplies) of Tenant upon or within the
Leased Premises, any fixtures installed or paid for by Tenant upon or within the Leased Premises, or any improvements
which may have been constructed on the
Leased Premises. Tenant shall have no right
in or claim to the proceeds of any policy of insurance maintained by Landlord even i f the cost of such
insurance is borne by Tenant as set forth in Article 2. Landlord
shall have the right to self-insure against
the above-described risk. Tenant at all times during the term of this Lease shall, at its own expense,
keep in full force and effect insurance against fire and such other risks as are from time to time
included in standard all-risk insurance
(including coverage against vandalism and
malicious mischief) for the full insurable value of Tenant's merchandise, trade fixtures, furnishings, wall
coverings, carpeting, drapes, equipment, improvements and betterments, furniture, supplies and all items of personal property of Tenant located
on or within the Leased
Premises.

       

      7.4     
Waiver of Subrogation. Anything in this Lease to the contrary
notwithstanding, Tenant and its underwriters hereby waive and release
Landlord and Landlord's Representative from
any and all right of recovery, claim, action or cause of action, against
Landlord and Landlord's Representative,
their agents. officers and employees, for any loss or damage that may occur to
the Leased Premises, improvements to the
Property, or personal property within the
Property, by reason of fire or the
elements, regardless of cause or origin, including negligence of Landlord or
Landlord's Representative and their
respective agents, officers and employees. Tenant agrees to immediately
give its insurance companies which have
issued policies of insurance covering all risk of direct physical loss, written notice of the terms of the
waivers contained in this Section, and to have the insurance policies properly endorsed, if necessary, to
prevent the invalidation of the insurance
coverages by reason of the waivers.

       

      7.5    
Hold
Harmless. Landlord
and Landlord's Representative shall not be liable to Tenant or to
Tenant's customers. employees, agents, guests or invitees, or to any other
person whomever, for
any injury to persons or damage to property on or about the Leased Premises or
the Common Area,
including but not limited to, consequential damage, (a) caused by any act or
omission of Tenant,
its employees, subtenants, licensees and concessionaires or of
any other person entering the Property
or the Leased Premises by express or implied invitation of Tenant, or (b)
arising out of the use of
the Leased Premises or the Property by Tenant, its employees, subtenants,
licensees, concessionaires
or invitees, or
(c) arising out of any
breach or default by Tenant
in the performance of its
obligations hereunder, or (d) caused by the improvements located in the Leased
Premises becoming out of repair or by defect in or failure of equipment, pipes,
or wiring, or by
broken glass, or by the
backing up of drains, or by gas, water, steam, electricity or oil leaking,
escaping or flowing into the
Leased Premises or Property, or (e) arising out of the failure or cessation of
any service provided
by Landlord and Landlord's
Representative (including security service and devices), and Tenant
hereby agrees to indemnify Landlord and Landlord's Representative and hold
Landlord and Landlord's
Representative harmless from any liability, loss, expense or claim (including,
but not
limited
to reasonable attorneys' fees) arising out of such damage or injury. Nor shall
Landlord or Landlord's
Representative be liable to Tenant for any loss or damage that may be occasioned
by or through the acts or
omissions
of other tenants of the Property or of any other persons whomsoever.
Further,
Tenant specifically agrees to be responsible for and indemnify and hold Landlord
and Landlord's
Representative harmless from any and all damages or expenses of whatever kind
arising out of or caused by a burglary, theft, vandalism, malicious mischief or
other illegal acts performed in, at
or from the Leased Premises.

      
        
           

        

        
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       7.6    
Liability
Insurance. Tenant at all times during the Lease term shall, at its own
expense, keep in full force and effect commercial general liability insurance
with "personal injury" coverage and contractual liability coverage, with a
minimum combined single limit of $1,000,000.00. Landlord and Landlord's
Representative shall be named as additional insureds on said policy. All
insurance policies or duly executed certificates for the same required to be
carried by Tenant under this Lease, together with satisfactory evidence of the
payment of the premium thereof, shall be deposited with Landlord on the date
Tenant first occupies the Leased Premises and upon renewals of such policies not
less than fifteen (15) days prior to the expiration of the term of such
coverage. All insurance required to be carried by Tenant under this Lease shall
be in form and content, and written by insurers acceptable to Landlord, in its
sole discretion. If Tenant shall fail to comply with any of the requirements
contained herein relating to insurance, Landlord may obtain such insurance and
Tenant shall pay to Landlord, on demand as additional rent hereunder, the
premium cost thereof.

      

       7.7    
Environmental
Matters. Throughout the term of this Lease. Tenant shall prevent the
presence, use, generation, release, discharge, storage, disposal, or
transportation of any Hazardous Materials (as hereinafter defined) on, under,
in, above, to, or from the Leased Premises other than in strict compliance with
all applicable federal. state, and local laws, rules, regulations, and orders.
For purposes of this provision, the term "Hazardous Materials" shall mean and
refer to any wastes, materials, or other substances of any kind or character
that are or become regulated as hazardous or toxic waste or substances, or which
require special handling or treatment, under any applicable local, state, or
federal law, rule, regulation, or order. Tenant shall indemnify, defend, and
hold Landlord harmless from and against (a) any loss, cost, expense, claim, or
liability arising out of any investigation, monitoring, clean-up, containment,
removal, storage, or restoration work (herein referred to as "Remedial Work")
required by, or incurred by Landlord or any other person or party in a
reasonable belief' that such Remedial Work is required by any applicable
federal, state or local law, rule, regulation or order, or by any governmental
agency, authority, or political subdivision having jurisdiction over the Leased
Premisses, and (b) any claims of third parties for loss, injury, expense, or
damage arising out of the presence, release, or discharge of any Hazardous
Materials on, under, in, above, to. or from the Leased Premises. In the event
any Remedial Work is so required under any applicable federal. state, or local
law, rule, regulation or order, Tenant shall promptly perform or cause to be
performed such Remedial Work in compliance with such law, rule, regulation, or
order. In the event Tenant shall fail to commence the Remedial Work in a timely
fashion, or shall fail to prosecute diligently the Remedial Work to completion,
such failure shall constitute an event of default on the part of Tenant under
the terms of this Lease, and Landlord, in addition to any other rights or
remedies afforded it hereunder. may, but shall not be obligated to, cause the
Remedial Work to be performed, and Tenant shall promptly reimburse Landlord for
the cost and expense thereof upon demand.

      

      
        
           

        

        
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      ARTICLE
8. - CONDEMNATION

       

      8.1     
Substantial Taking. If in the determination of Landlord all or a substantial part of the Leased
Premises are taken for any public or quasi-public use under any governmental
law, ordinance or regulation, or by right
of eminent domain or by purchase in lieu thereof, and in the determination of
Landlord the taking would prevent or
materially interfere with the use of the Leased Premises for the purpose for
which it is then being used, this Lease shall, at the option of Landlord,
terminate and the rent shall be abated during the unexpired portion of this
Lease effective on the date physical possession is taken by the condemning
authority.

       

      8.2     Partial Taking. If in the determination of Landlord a portion of
the Leased Premises shall be taken for any public or quasi-public use under
any governmental raw, ordinance or regulation, or by right of eminent domain or by purchase
in lieu thereof, and this Lease is not terminated as provided in Section 8.1 above, Landlord shall restore and reconstruct, to the
extent of condemnation proceeds (excluding any proceeds for land) actually received after the exercise by any mortgagee of the Property of an option to apply such
proceeds against Landlord's debt to such mortgagee. the Property and other improvements on the
Leased Premises to the extent necessary to make it reasonably tenantable. The rent payable under this Lease during the
unexpired portion of the term shall be
reduced to an amount determined by multiplying the Base Rent that would
otherwise be payable but for this provision
by the ratio that the portion of the Leased Premises not rendered
untenantable due to such taking bears to the total net rentable area of the
Demised Premises prior to the
taking.

       

      8.3     Condemnation Proceeds. All compensation awarded for any taking (or the
proceeds of private sale in lieu thereof), whether for the whole or a part of the Leased Premises,
shall be the property of Landlord (whether such award is compensation for
damages to Landlord's or Tenant's interest
in the Leased Premises), and Tenant hereby assigns all of its interest in any
such award to Landlord; provided, however, Landlord shall have no
interest in any award made to Tenant for loss of business or for taking of Tenant's fixtures and other
property within the Leased Premises if a separate award for such items is made
to Tenant.

       

      ARTICLE
9. - ASSIGNMENT OR SUBLEASE

       

      9.1     Tenant Assignment. Tenant shall not assign, in whole or in part, this
Lease, or allow it to be assigned, in whole or in part, by operation of
law or otherwise (including without limitation by merger, dissolution or transfer of a controlling interest in any partnership or
corporate tenant, which merger, dissolution or transfer shall be deemed an
assignment) or mortgage or pledge the same,
or sublet the Leased Premises, in whole or in part, without the prior written
consent of Landlord, and in no event shall any such assignment or
sublease ever release Tenant or any guarantor from any obligation or liability hereunder. No assignee
or sublessee of the Leased Premises or any portion thereof may assign or sublet the
Leased Premises or any portion
thereof.

       

      9.2     Landlord
Assignment. Landlord shall have the
right to sell, transfer or assign, in whole or in
part, its rights and obligations under this Lease and in the Property. Any such
sale, transfer or assignment shall
operate to release Landlord from any
and all liabilities under this Lease arising after the date of such sale, assignment or
transfer.

      
        
           

        

        
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      9.3     Rights of
Mortgagee. Tenant accepts this
Lease subject and subordinate to any recorded
lease, mortgage or deed of trust lien presently existing, if any, or hereafter
encumbering the Property and to all
existing ordinances and recorded restrictions, covenants, easements, and
agreements with respect to the Property.
Landlord hereby is irrevocably vested
with full power and authority to
subordinate Tenant's interest under this Lease to any mortgage or deed of trust
lien hereafter placed on the Property. Upon
any foreclosure, judicially or non-judicially, of any such mortgage, or the sale of the Property in lieu of foreclosure, or any other
transfer of Landlord's interest in the
Property, whether or not in connection with a mortgage, Tenant hereby does, and
hereafter agrees to attorn to the purchaser
at such foreclosure sale or to the grantee
under any deed in lieu of foreclosure or to
any other transferee of Landlord's interest, and shall recognize such purchaser,
grantee, or other transferee as Landlord
under this Lease, and no further attornment or other agreement shall be required to effect or evidence Tenant's attornment to and recognition
of such purchaser or grantee as Landlord
hereunder. Such agreement of Tenant to attorn shall survive any such foreclosure sale, trustee's sale, conveyance in
lieu thereof, or any other transfer of Landlord's interest
in the Property. Tenant, upon demand, at any time, before or after any such
foreclosure sale, trustee's sale,
conveyance in lieu thereof, or other transfer shall execute, acknowledge, and
deliver to the prospective transferee and
or mortgagee a leases subordination,
non-disturbance and attornment agreement
and any additional written instruments and certificates evidencing such
attornment as the mortgagee or other
prospective transferee may reasonably require, and Tenant hereby irrevocably
appoints Landlord as Tenant's agent and
attorney-in-fact for the purpose of executing, acknowledging, and delivering any such
instruments and certificates. Notwithstanding anything to the contrary implied in this Section, any
mortgagee under any mortgage shall have the
right at any time to subordinate any such
mortgage to this Lease on such terms and subject to such conditions as the mortgagee in its discretion may
consider appropriate.

       

       9.4    
Estoppel Certificates. Tenant agrees to furnish, from time to
time, within ten (10) days after
receipt of a request from Landlord or Landlord's mortgagee, a statement
certifying, if applicable, all or some of
the following: Tenant is in possession of the Leased Premises; the Lease
is in full force and effect; the Lease
is unmodified (except as disclosed in such
statement); Tenant claims no present
charge, lien, or claim of offset against rent: the rent is paid for the current
month, but is not prepaid for more than one (1) month and will not be prepaid
for more than one (1) month in advance; there is no existing default by reason of
some act or omission by Landlord; that Landlord has performed all inducements required of Landlord in
connection with this Lease, including construction obligations, and Tenant accepts the
Leased Premises as constructed; an
acknowledgment of the assignment of rentals
and other sums due hereunder to the mortgagee and agreement to be bound thereby; an agreement requiring
Tenant to advise the mortgagee of damage to
or destruction of the Leased Premises by
fire or other casualty requiring reconstruction; an agreement by Tenant to give the mortgagee written notice
of Landlord's default hereunder and to permit the mortgagee to cure such default within a
reasonable time after such notice before exercising any
remedy Tenant might possess as a result of such default; and such other matters
as may be reasonably required by Landlord
or Landlord's mortgagee. Tenant's
failure to deliver such statement, in addition to being a default under this
Lease, shall be deemed to establish conclusively that this Lease is in full force and effect except as
declared by Landlord. that Landlord is not in default of any of its obligations under this Lease,
and that Landlord has not received more
than one (1)
month's rent in
advance.

      
        
           

        

        
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      ARTICLE
10. - DEFAULT AND REMEDIES

       

      10.1    
Default by
Tenant. The following shall be deemed to be events of default by Tenant
under this Lease: (a) Tenant shall fail to pay when due any installment of rent
or any other payment required pursuant to this Lease; (b) Tenant shall abandon
any substantial portion of the Leased Premises; (c) Tenant or any guarantor of
Tenant's obligations hereunder shall file a petition or be adjudged bankrupt or
insolvent under any applicable federal or state bankruptcy or insolvency law or
admit that it cannot meet its financial obligations as they become due, or a
receiver or trustee shall he appointed for all or substantially all of the
assets of Tenant or any guarantor of Tenant's obligations hereunder; (d) Tenant
or any guarantor of Tenant's obligations hereunder shall make a transfer in
fraud of creditors or shall make an assignment for the benefit of creditors; (e)
Tenant shall do or permit to be done any act which results in a lien being filed
against the Leased Premises or the Property; (f) the liquidation, termination,
dissolution or (if the Tenant is a natural person) the death of Tenant or any
guarantor of Tenant's obligations hereunder; (g) Tenant fails during operating
hours to continuously conduct and carry on in good faith the type of business
for which the Leased Premises are leased; (h) Tenant fails to open for business
within five (5) calendar days after the Commencement Date of this Lease; or (i)
Tenant shall he in default
of any other term, provision or covenant of this Lease, other than those
specified in subparts (a) through (h). above, and such default is not cured
within ten (10) days after written notice thereof to Tenant.

       

      10.2    
Remedies for Tenant's
Default. Upon the occurrence of any event of default set forth in this
Lease, Landlord shall have the option to pursue any one or more of the following
remedies without any additional notice or demand:

       

      (a)        Without
declaring this Lease terminated, Landlord may enter upon and take possession of
the Leased Premises, by picking or changing locks if necessary, and lock out,
expel or remove Tenant and any other person who may be occupying all or any part
of the Leased Premises without being liable for any claim for damages, and relet
the Leased Premises on behalf of Tenant and receive the rent directly by reason
of the reletting. Tenant agrees to pay Landlord on demand any deficiency that
may arise by reason of any reletting of the Leased Premises; further, Tenant
agrees to reimburse Landlord for any expenditures made by it in order to relet
the Leased Premises, including, but not limited to, remodeling, brokerage
commissions and repair costs.

       

      (b)        Without
declaring this Lease terminated, Landlord may enter upon the Leased Premises, by
picking or changing locks if necessary, without being liable for any claim for
damages, and do whatever Tenant is obligated to do under the terms of this
Lease. Tenant agrees to reimburse Landlord on demand for any expenses which
Landlord may incur in effecting compliance with Tenant's obligations under this
Lease; further, Tenant agrees that Landlord shall not be liable for any damages
resulting to Tenant from effecting compliance with Tenant's obligations under
this Lease caused by the negligence of Landlord or otherwise.

      
        
           

        

        
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       (c)     Landlord may terminate this
Lease, in which event Tenant shall immediately surrender the Leased Premises to Landlord, and if
Tenant fails to surrender the Leased
Premises, Landlord may, without prejudice
to any other remedy which it may have for possession or arrearages in rent, enter upon and take
possession of the Leased Premises. by picking or changing locks if necessary, and
lock out, expel or remove Tenant and any
other person who may be occupying all or
any part of the Leased Premises without being liable for any claim for damages. Tenant agrees to pay on demand
the amount of all loss and damage which
Landlord may suffer for any reason due to
the termination of this Lease under this Section 10.2, including (without limitation) loss and damage due
to the failure of Tenant to maintain and/or
repair the Leased Premises as required hereunder and/or due to the inability
of Landlord to relet the Leased Premises on satisfactory terms or
otherwise.

       

      Landlord's exercise, following a default
by Tenant under this Lease, of any right granted hereunder or under any applicable law to lock out or change the
locks securing the Leased Premises shall
not impose upon Landlord any duty to notify
Tenant of the name and address or telephone number of the individual or company from whom a new key may be
obtained, nor shall Landlord have any duty to provide Tenant with a new key or any other means of
access to the Leased Premises. Landlord
and Tenant agree that the parties hereto
intend that all rights and remedies of Landlord under this Lease or otherwise available to Landlord under
applicable law shall supersede any conflicting provisions of Chapters the Property Code of the state where the property is
located, and any amendments, modifications,
recodification or other changes thereto. Notwithstanding any other remedy set forth in this Lease, if Landlord has made
rent concessions of any type or character, or waived any
base rent, and Tenant fails to take possession of the Leased Premises on the
Commencement Date or otherwise defaults at
any time during the term of this Lease, the rent concessions, including any waived base rent, shall be
canceled and the amount of the base rent or
other rent concessions shall be due and payable immediately as if no rent
concessions or waiver of any base rent had
ever been granted. A rent concession or waiver of the base rent shall not
relieve Tenant of any obligation to
pay any other charge due and payable
under this Lease, including, without
limitation, any sum due under Section
2.4 of this Lease. Notwithstanding
anything contained in this Lease to the
contrary, this Lease may be terminated by Landlord only by written notice of such termination to Tenant given in accordance
with Section
11.7 below, and no other act
or omission of Landlord shall be construed
as a termination of this Lease.

       

      10.3    
Remedies
Cumulative. All rights
and remedies of Landlord herein or existing at law or in equity are cumulative and the
exercise of one or more rights or remedies shall not be taken to exclude or waive the right to the
exercise of any other.

       

      10.4    
Default by
Landlord. If Landlord defaults in the
performance of any term, covenant or
condition required to be performed by
Landlord under this Lease, Landlord shall have thirty (30) days following the receipt of written notice from Tenant
specifying such default to cure such default, provided that if Landlord has commenced actions to cure
such default within said thirty (30) day
period, Landlord shall have all reasonable and necessary time to complete such
cure. Upon the occurrence of any default set forth in this Lease and subsequent
failure by Landlord to cure or commence
actions to cure as provided herein, Tenant
shall, as Tenant's sole remedy, only have the right to
maintain an action against Landlord in interest of the Property, for actual (not
consequential) damages suffered as a result
of Landlord's default.

       

      
        
           

        

        
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      ARTICLE 11.
-
MISCELLANEOUS

       

      11.1     Waiver. Failure of Landlord to declare an event of default
immediately upon its occurrence, or delay in taking any action in connection
with an event of default, shall not constitute a waiver of the default, but Landlord shall have the right to declare the default at any
time and take such action as is lawful or
authorized under this Lease. Pursuit of any one or more of the remedies set
forth in Article
10 above shall not preclude pursuit of
any one or more of the other remedies
provided elsewhere in this Lease or provided by law, nor shall pursuit of any
remedy hereunder or at law constitute
forfeiture or waiver of any rent or damages accruing to Landlord by reason of
the violation of any of the terms,
provisions or covenants of this Lease.
Failure by Landlord to enforce one or more
of the remedies provided hereunder or at law upon any event of default shall not
be deemed or construed to constitute a waiver of the default or of any other
violation or breach of any of
the terms provisions and covenants
contained in this Lease. Landlord may collect and receive rent due from Tenant without waiving or affecting any rights
or remedies that Landlord may have at law or in equity or by virtue of this Lease at the time of
such payment. Institution of a forcible
detainer action to re-enter the Leased
Premises shall not be construed to be an election by Landlord to terminate this Lease.

       

      11.2    
Act of God. Landlord shall not be required to perform any
covenant or obligation in this
Lease, or be liable in damages to Tenant,
so long as the performance or non-performance of the covenant or obligation is delayed, caused or prevented
by an act of God, force majeure or by Tenant.

       

      11.3    
Attorney's Fees. If Tenant defaults in the performance of
any of the terms, covenants agreements or conditions contained in this Lease and
Landlord places in the hands of any attorney the enforcement of all or any part of this Lease, the
collection of any rent or other sums due or to become due or recovery of the possession of the Leased Premises, Tenant agrees to pay
Landlord's costs of collection, including
reasonable attorneys' fees, whether suit is actually filed or
not.

       

      11.4    
Successors. This Lease shall be binding upon and inure to the
benefit of Landlord and Tenant and their respective heirs, personal
representatives, successors and assigns.

       

      11.5    
Rent
Tax. If applicable in the jurisdiction
where the Leased Premises are situated, Tenant shall pay and be liable for all rental, sales and
use taxes or other similar taxes, if
any , levied or imposed by any city, state, county or
other governmental body having authority, such payments to he in addition to all other payments required to be
paid to Landlord by Tenant under the terms of this Lease. Any such payment shall be paid concurrently
with the payment of the rent, additional rent, operating expenses or other
charge upon which the tax is based as set forth
above.

       

      11.6    
1nterpretation. The captions appearing in this Lease are
convenience only and in no way define, limit, construe or describe the scope or
intent of any Section. Grammatical changes required to make the provisions of this Lease apply (1)
in the plural sense where there is more than one tenant, and (2) to either corporations,
associations, partnerships or individuals, males or females, shall in all
instances be assumed as though in each case fully expressed. The laws of the
State of where the property is situated shall govern the validity, performance
and enforcement of this Lease. This lease shall not be construed more or less
favorably with respect to either party as a consequence of this Lease or various
provisions hereof having been drafted by one of the parties
hereto.

       

      
        
           

        

        
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      11.7    
Notices. All
rent and other payments required to be made by Tenant shall be payable to
Landlord, at Landlord's address set forth on page 1 of this Lease. All payments
required to be made by Landlord to Tenant shall be payable to Tenant at Tenant's
address set forth on page 1. Any notice or document (other than rent) required
or permitted to be delivered by the terms of this Lease shall be deemed to be
delivered (whether or not actually received) when deposited in the United States
Mail, postage prepaid, certified mail, return receipt requested, addressed to
the parties at the respective addresses set forth on page 1 (or, in the case of
Tenant, at the Leased Premises), or to such other addresses as the parties may
have designated by written notice to each other, with copies of notices to
Landlord being sent to Landlord's address as shown on page 1.

       

      11.8    
Submission of
Lease. SUBMISSION OF THIS LEASE TO TENANT FOR SIGNATURE DOES NOT
CONSTITUTE A RESERVATION OF SPACE OR AN OPTION TO LEASE. THIS LEASE IS NOT
EFFECTIVE UNTIL EXECUTION BY AND DELIVERY TO BOTH LANDLORD AND
TENANT.

       

      11.9    
Corporate
Authority. If Tenant executes this Lease as a corporation or a
partnership (general or limited), each person executing this Lease on behalf of
Tenant hereby personally represents and warrants that: Tenant is a duly
authorized and existing corporation or partnership (general or limited), Tenant
is qualified to do business in the state in which the Leased Premises are
located, the corporation or partnership (general or limited) has full right and
authority to enter into this Lease, each person signing on behalf of the
corporation or partnership (general or limited) is authorized to do so, and the
execution and delivery of this Lease by Tenant will not result in any breach of,
or constitute a default under any mortgage, deed of trust, lease, loan, credit
agreement, partnership agreement, or other contract or instrument to which
Tenant is a party or by which Tenant may be bound. If any representation or
warranty contained in this Section is false, each person who executes this Lease
shall be liable, individually, as Tenant hereunder.

       

      11.10    
Severability.
If any provision of this Lease or the application thereof to any person or
circumstances shall be invalid or unenforceable to any extent, the remainder of
this Lease and the application of such provisions to other persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law. Each covenant and agreement contained in this
Lease shall be construed to be a separate and independent covenant and
agreement, and the breach of any such covenant or agreement by Landlord shall
not discharge or relieve Tenant from Tenant's obligation to perform each and
every covenant and agreement of this Lease to be performed by
Tenant.

       

      11.11    
Landlord's
Liability. If Landlord shall be in default under this Lease and, if as a
consequence of such default. Tenant shall recover a money judgment against
Landlord, such judgment shall be satisfied only out of the right, title, and
interest of Landlord in the Property as the same may then be encumbered and
neither Landlord nor any person or entity comprising Landlord shall be liable
for any deficiency. In no event shall Tenant have the right to levy execution
against any property of Landlord nor any person or entity comprising Landlord
other than its interest in the Property as herein expressly
provided.

       

      
        
           

        

        
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      11.12    
Sale of
Property. Upon any conveyance, sale or exchange of the Leased Premises or
assignment of this Lease, Landlord shall be and is hereby entirely free and
relieved of all liability under any and all of its covenants and obligations
contained in or derived from this Lease arising out of any act, occurrence, or
omission relating to the Leased Premises or this Lease occurring after the
consummation of such sale or exchange and assignment.

       

      11.13    
Time is of
the
Essence. The time of the performance of all of all of the covenants,
conditions and agreements of this Lease is of the essence of this
Lease.

       

      11.14    
Common Areas.
Landlord reserves the right to change, from time to time, the dimensions and
location, identity and type of any buildings comprising the Building, and to
construct additional buildings or additional stories on existing buildings or
other improvements on the Property, provided that such changes and additional
construction do not materially or adversely affect parking and s i page for the
Leased Premises. Landlord reserves the right to change, from time to firm, the
dimensions and location of the Common Area and to allow the Common Area to be
put to such uses as Landlord shall. from time to time, deem desirable. Tenant
and its employees and customers shall have the nonexclusive right to use the
Common Area in common with Landlord, other tenants of the Building and other
persons designated by Landlord, subject to reasonable rules and regulations
governing use that Landlord from time to time prescribes. Tenant shall not
solicit business, distribute handbills or display merchandise within the Common
Area, or take any action which would interfere with the rights of other persons
to use the Common Area. Landlord may temporarily close any part of the Common
Area to make repairs or alterations. The Common Area shall be under Landlord's
sole operation and control. Tenant shall be responsible for and shall indemnify
and hold Landlord harmless from any liability, loss or damage arising out of or
caused by Tenant, its employees, subtenants, licensees, concessionaires, agents,
suppliers, vendors, or service contractors, to any part of the Common Area, or
to the Property whether such damages be structural or
nonstructural.

       

      ARTICLE
12. - AMENDMENT AND LIMITATION OF WARRANTIES

       

      12.1    
Entire
Agreement. IT IS EXPRESSLY AGREED BY TENANT, AS A MATERIAL CONSIDERATION
FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE, WITH THE SPECIFIC REFERENCES
TO EXTRINSIC DOCUMENTS, IS THE ENTIRE AGREEMENT OF THE PARTIES; THAT THERE ARE,
AND WERE, NO VERBAL REPRESENTATIONS, WARRANTIES, UNDERSTANDINGS, STIPULATIONS,
AGREEMENTS OR PROMISES PERTAINING TO THE SUBJECT MATTER OF THIS LEASE OR OF ANY
EXPRESSLY MENTIONED EXTRINSIC DOCUMENTS THAT ARE NOT INCORPORATED IN WRITING IN
THIS LEASE OR IN SUCH DOCUMENTS.

       

      
        
           

        

        
          LEASE
AGREEMENT - Page 18

          
            

          

        

        
           

        

      

      12.2    
Amendment. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR
EXTENDED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LANDLORD AND TENANT.

       

      12.3    
Limitation of
Warranties. LANDLORD AND TENANT
EXPRESSLY AGREE THAT THERE ARE AND
SHALL BE NO IMPLIED WARRANTIES OF
MERCHANTABILITY, HABITABILITY, SUITABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, AND THERE ARE NO
WARRANTIES WHICH EXTEND BEYOND THOSE
EXPRESSLY SET FORTH IN THIS LEASE. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, TENANT EXPRESSLY ACKNOWLEDGES THAT LANDLORD HAS MADE NO WARRANTIES OR REPRESENTATIONS
CONCERNING ANY HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL MATTERS AFFECTING ANY
PART OF THE PROPERTY, AND LANDLORD HEREBY
EXPRESSLY DISCLAIMS AND TENANT WAIVES ANY EXPRESS OR IMPLIED WARRANTIES WITH
RESPECT TO ANY SUCH
MATTERS.

       

      12.4    
Waiver And
Releases. TENANT SHALL NOT HAVE THE
RIGHT TO WITHHOLD OR TO OFFSET RENT OR TO
TERMINATE THIS LEASE EXCEPT AS EXPRESSLY
PROVIDED HEREIN. TENANT WAIVES AND
RELEASES ANY
AND ALL STATUTORY LIENS AND OFFSET
RIGHTS.

       

      EXECUTED effective as of the 1st day of September, 2006

      
      

       

      
        	 	      
                LANDLORD:

                 

                 

                JUMA,
      L.L.C.

                 

                 

                By:  /s/
      Ronald E.
      Smith             
      

                Ronald E. Smith, President

                 

              

      

       

       

       

       

       

      
        
           

        

        
          LEASE
AGREEMENT - Page 19

          
            

          

        

        
           

        

      

       

       

      
        	 	      
                TENANT:

                 

                Deep
      Down, Inc.

                 

                 

                By:  /s/
      Ronald E.
      Smith             
      

                Ronald E. Smith, President

                 

              

      

       

       

       

       

       

       

       

      
        
           

        

        
          LEASE AGREEMENT - Page 20

          
            

          

        

        
           

        

      

       

      EXHIBIT
"A"

      [Property
Description]

      (This page should be
substituted by a separate page(s) containing the complete legal description
(metes and bounds or lot
and block) of the property. The description should be labeled "Exhibit
A".

       

       

       

       

       

       

       

       

       

      LEASE AGREEMENT - Page 21erf_10ksba-ex1022.htm

    EXHIBIT
10.22

    EMPLOYMENT
AGREEMENT

    

    THIS
EMPLOYMENT AGREEMENT ("Agreement") is officially dated March 24, 2008 and is
executed between ERF Wireless, Inc., a Nevada corporation (the "Company") and
Royall & Fleschler, Inc. Certified Public Accountants of which Richard R.
Royall is a shareholder.

    

    WHEREAS,
the Company desires to retain the services of Richard R. Royall (“the
Executive”) as the. Chief Financial Officer of ERF Wireless, Inc.  It
is anticipated that the Executive will concentrate the majority of his time and
attention to the day to day financial aspects of the company including managing
all of the financial affairs of the Company in support of the CEO of Company The
Executive desires to render such services on the terms and conditions set forth
herein;

    

    NOW,
THEREFORE, in consideration of the mutual promises contained herein, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as
follows:

    

    1. Employment
Term.

    

    The
Company employs the Executive and the Executive accepts employment by the
Company, upon the terms and subject to the conditions set forth in this
Agreement, until January 31, 2011; provided, however, that such employment may
be sooner terminated pursuant to the terms of this Agreement.

    

    2. Management of the
Company.

    

    The
Executive shall devote the Executive's full time, best efforts, attention and
skill to, and shall perform faithfully, loyally and efficiently the Executive's
duties at the Company Corporate Headquarters or other locations as agreed to by
the CEO of Company. Further, the Executive will punctually and faithfully
perform and observe any and all rules and regulations that the Company may now
or shall hereafter reasonably establish governing the Executive's conduct and
the conduct of the Company's business that are consistent with this
Agreement.

    

    3. Compensation.

    

    In
consideration of the services rendered to the Company by the Executive, the
Company shall pay Royall & Fleschler, Inc. annual compensation of $200,000
(the "Base Compensation"). The Executive agrees that the Base Compensation will
be paid in ERF Wireless free-trading common stock to Royall & Fleschler,
Inc.  The compensation shall be payable in accordance with the normal
payroll practices of the Company then in effect. All federal, state or local
income taxes will be responsibility of Royall & Fleschler, Inc.

    

    Benefits.  In
addition to the Salary, during the Employment Term, the Executive shall be
entitled to: all legal and religious holidays in accordance with Company policy,
and four weeks paid vacation per annum in accordance with the standard policies
and procedures of the company. The Executive shall arrange for vacations in
advance at such time or times as shall be mutually agreeable to the Executive
and the Company's CEO. The Executive may; (i) not receive pay in lieu of
vacation; (ii) participate in all employee benefit plans and/or arrangements
adopted by the Company relating to pensions, hospital, medical, dental,
disability and life insurance, deferred salary and savings plans, and other
similar employee benefit plans or arrangements to the extent that the Executive
meets the eligibility requirements for any such plan as in effect from time to
time (all medical and dental plans continue through April 15, 2011 at company
practice); (iii) receive payment by the Company directly, or reimbursement by
the Company for, reasonable and customary business and out-of-pocket expenses
incurred by the Executive in connection with the performance by the Executive of
the Executive's duties under this Agreement in accordance with the Company's
policies and practices for reimbursement of such expenses, as in effect from
time to time, including, without limitation, reasonable and necessary travel,
lodging, entertainment and meals incurred by the Executive in furtherance of the
Company's business and at the Company's request.

    

    Incentives.

    

    As
incentive to accelerate the rapid and profitable growth of the company you will
be awarded 1,000,000 shares of restricted common stock with piggyback rights at
the point where the company has EBITDA(earnings before interest(which includes
financing derivative expenses), taxes, depreciation and amortization) based on
the Company’s filings of Form 10-K's or Form 10-Q’s.

    

    As
incentive to accelerate the rapid and profitable growth of the company you will
be awarded 1,000,000 shares of restricted common stock with piggyback rights at
the point where the company has achieved a private or public financing of at
least $25M from any source.

     

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
 

    As
incentive to accelerate the rapid and profitable growth of the company you will
be awarded 1,000,000 shares of restricted common stock with piggyback rights at
the point where the company has achieved a listing on a national stock
exchange.

    

    4. Termination of
Employment.

    

    The
Executive's employment hereunder shall terminate upon the earliest to occur of
any the following events, unless earlier renewed, on the dates and at the times
specified below:

    

    (i)   the close
of business on January 31, 2011 (the "Expiration Date")

    

    (ii)  the close of
business on the date of the Executive's death “Death")

    

    (iii)  the close of
business on the Termination Date (as defined below) specified in the Notice of
Termination (as defined below) which the Company shall have delivered to the
Executive due to the Executive's Disability. "Disability" shall mean if (i) the
Executive is absent from work for 45 consecutive calendar days in any
twelve-month period by reason of un-excused illness or incapacity whether
physical or otherwise) or (ii) the Executive is unable to perform his duties,
services and responsibilities by reason of illness or incapacity (whether
physical or otherwise) for a total of 45 consecutive calendar days in any
twelve-month period during the Employment Term.  The Executive agrees,
in the event of any dispute under this Section, and after receipt by the
Executive of such Notice of Termination from the Company, to submit to a
physical examination by a licensed physician selected by the Company. The
Executive may seek a second opinion from a licensed physician acceptable to the
Company. If the results of the first examination and the second examination are
different, a licensed physician selected by the physicians who have performed
the first and second examinations shall perform a third physical examination of
the Executive, the result of which shall be final for purposes of this
Section.

    

    (iv) the close of business on
the Termination Date specified in the Notice of Termination which the Executive
shall have delivered to the Company to terminate his employment ("Voluntary
Termination”)

    

    (v) the close of business on
the Termination Date specified in the Notice of Termination which the Company
shall have delivered to the Executive to terminate the Executive's employment
for Cause. "Cause" as used herein means termination based on (i) the Executives
material breach of this Agreement, (ii) conviction of the Executive for (a) any
crime constituting a felony in the jurisdiction in which committed, (b)
conviction of any crime involving moral turpitude whether or not a felony), or
(c) any other criminal act against the Company involving dishonesty or willful
misconduct intended to injure the Company (whether or not a felony), (iii)
illegal substance abuse by the Executive, (iv) the continued failure or refusal
of the Executive to follow one or more lawful and proper directives of the Board
of Directors delivered to the Executive in writing, or (v) willful malfeasance
or gross misconduct by the Executive which discredits or damages the
Company.

    

    5.
Rights Upon Termination

    

    Any
purported termination by the Company or the Executive (other than by reason of
Death or on the Expiration Date) shall be communicated by written Notice of
Termination to the other. As used herein, the term "Notice of Termination" shall
mean a notice which indicates the specific termination provision in this
Agreement relied upon and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. After receipt of a Notice of
Termination, the Executive shall continue to be available to the Company on a
part-time basis at reasonable and customary hourly rates to assist in the
necessary transition.

    

    As used
herein, the term "Termination Date" shall mean, (i) in the case of Death, the
date of the Executive's death, (ii) in the case of expiration of the term
hereof: the Expiration Date, or (iii) in all other cases, the date specified in
the Notice of Termination.

    

    Upon
involuntary termination of this agreement, unless involuntary termination was by
cause for prohibited or competitive activities as defined in this agreement,
Executive shall receive for excluding the possibility of long term bonus
incentives a severance package to include:

    

    a. The
remainder of the employment contract annual compensation paid
monthly

    b. One
year look forward vesting privileges on all incentives.

     

     

    
      
         

      

      
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    6.
Employee Covenants.

    

    Trade
Secrets and Proprietary Information. The Executive agrees and understands that
due to the Executive's position with the Company, the Executive will be exposed
to, and has received and will receive, confidential and proprietary information
of the Company or relating to the Company's business or affairs collectively,
the "Trade Secrets"), including but not limited to technical information,
product information and formulae, processes, business and marketing plans,
strategies, customer information, other information concerning the Company's
products, promotions, development, financing, expansion plans, business policies
and practices and other forms of information considered by the Company to be
proprietary and confidential and in the nature of trade secrets. Trade Secrets
shall not include any such information which (A) was known to the Executive
prior to his employment by the Company or (B) was or becomes generally available
to the public other than as a result of a disclosure by the Executive in
violation of the provisions of this Section. Except to the extent that the
proper performance of the Executive's duties, services and responsibilities
hereunder may require disclosure, the Executive agrees that during the
Employment Term and at all times thereafter the Executive will keep such Trade
Secrets confidential and will not disclose such information, either directly or
indirectly, to any third person or entity without the prior written consent of
the Company. This confidentiality covenant has no temporal, geographical or
territorial restriction. On the Termination Date unless the Executive remains as
an employee of the Company thereafter in which case, on the date which the
Executive is no longer an employee of the Company), the Executive will promptly
supply to the Company all property, keys, notes, memoranda, writings, lists,
files, reports, customer lists, correspondence, tapes, disks, cards, surveys,
maps, logs, machines, technical data, formulae or any other tangible product or
document which has been produced by, received by or otherwise submitted to and
retained by the Executive in the course of his employment with the
Company.  Any material breach of the terms of this paragraph shall be
considered Cause.

    

    Prohibited
and Competitive Activities. The Executive and the Company recognize that due to
the nature of the Executive's engagement hereunder and the relationship of the
Executive to the Company, the Executive has had and will have access to, has had
and will acquire, and has assisted and may continue to assist in, developing
confidential and proprietary information relating to the business and operations
of the Company and its affiliates, including, without limitation, Trade Secrets.
The Executive acknowledges that such information has been and will be of central
importance to the business of the Company and its affiliates and that disclosure
of it to, or its use by, others (including, without limitation, the Executive
(other than with respect to the Company's business and affairs)) could cause
substantial loss to the Company.

    

    The
Executive and the Company also recognize that an important part of the
Executive's duties win be to develop good will for the Company and its
affiliates through the Executive's personal contact with Clients (as defined
below), employees, and others having business relationships with the Company,
and that there is a danger that this good will, a proprietary asset of the
Company, may follow the Executive if and when the Executive's relationship with
the Company is terminated. The Executive accordingly agrees as
follows:

    

    (i)
Prohibited Activities. The Executive agrees that the Executive will not at any
time during the Employment Term: (A) (other than in the course of the
Executive's employment) disclose or furnish to any other person or, directly or
indirectly, use for the Executive's own account or the account of any other
person, any Trade Secrets, no matter from where or in what manner he may have
acquired such Trade Secrets, and the Executive shall retain all such Trade
Secrets in trust for the benefit of the Company, its affiliates and the
successors and assigns of any of them, (B) directly or through one or more
intermediaries, solicit for employment or recommend to any subsequent employer
of the Executive the solicitation for employment of: any person who, at the time
of such solicitation, is employed by the Company or any affiliate, (C) directly
or indirectly, whether for the Executive's own account or for the account of any
other person, solicit, divert, or endeavor to entice away from the Company or
any entity controlled by the Company, or otherwise engage in any activity
intended to terminate, disrupt, or interfere with, the Company's or any of its
affiliates' relationships with, Clients, or otherwise adversely affect the
Company's or any of its affiliates' relationships with Clients or other business
relationships of the Company or any affiliate thereof, or (D) publish or make
any statement critical of the Company or any shareholder or affiliate of the
Company or in any way adversely affect or otherwise malign the business or
reputation of any of the foregoing persons (any activity described in clause
(A), (B), (C) or (D) of this Section being referred to as a Prohibited
Activity"); provided, however, that if in the written opinion of Counsel, the
Executive is legally compelled to disclose Trade Secrets to any tribunal or else
stand liable for contempt or suffer other similar censure or penalty, then the
disclosure to such tribunal of only those Trade Secrets which such counsel
advises in writing are legally required to be disclosed shall not constitute a
Prohibited Activity provided that the Executive shall give the Company as much
advance notice of such disclosure as is reasonably practicable. As used herein,
the term "Clients" shall mean those persons who, at any time during the
Executive's course of employment with the Company (including, without
limitation, prior to the date of this Agreement) are or were clients or
customers of the Company or any affiliate thereof or any predecessor of any of
the foregoing.

    

    (ii)
Non-Competition. By and in consideration of the Company's entering into this
Agreement, the Executive agrees that the Executive will not, during the
Employment Term, engage in any Competitive Activity. The term "Competitive
Activity" means engaging in any of the following activities: (A) serving as a
director of any Competitor (as defined below), (B) directly or indirectly
through one or more intermediaries, either (X) controlling any Competitor or (Y)
owning any equity or debt interests in any Competitor (other than equity or debt
interests which are publicly traded and, at the time of any acquisition thereof
by the Executive, do not in the aggregate exceed 5% of the particular class of
interests of such Competitor then outstanding) (it being understood that, if
interests in any Competitor are owned by an investment vehicle or other entity
in which the Executive owns an equity interest, a portion of the interests in
such Competitor owned by such entity shall be attributed to the Executive, such
portion determined by applying the percentage of the equity interest in such
entity owned by the Executive to the interests in such Competitor owned by such
entity), (C) employment by (including serving as an officer, director or partner
of), providing consulting services to (including, without limitation, as an
independent contractor), or managing or operating the business or affairs of:
any Competitor or (D) participating in the ownership, management, operation or
control of or being connected in any manner with any Competitor. The term
"Competitor" as used herein (i) during the Employment Term, means any person
(other than the Company or any of their respective affiliates) that competes,
either directly or indirectly with any of the business offerings conducted
through the termination date of the Employee's employment by the Company or any
affiliate.

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
 

    7. Remedies.

    

    The
Executive agrees that any breach of the terms of this Section would result in
irreparable injury and damage to the Company for which the Company would have no
adequate remedy at law. The Executive therefore agrees that in the event of said
breach or any threat of breach, the Company shall be entitled to an immediate
injunction and restraining order to prevent such breach and/or threatened breach
and/or continued breach by the Executive and/or any and all persons and/or
entities acting for and/or with the Executive, without having to prove
damages.

    The terms
of this paragraph shall not prevent the Company from pursuing any other
available remedies to which the Company may be entitled at law or in equity for
any breach or threatened breach hereof, including but not limited to the
recovery of damages from the Executive.  The provisions of this
Section 8 shall survive any termination of this Agreement. The existence of any
claim or cause of action by the Executive against the Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of the covenants and agreements of this
Section.

    

    8.
Proprietary Information and Inventions.

    

    The
Executive agrees that any and all inventions, discoveries, improvements,
processes, formulae, business application software, patents, copyrights and
trademarks made, developed, discovered or acquired by him prior to and during
the Employment Term, solely or jointly with others or otherwise, which relate to
the business of the Company, collectively, the "Inventions"), shall be fully and
promptly disclosed to the Board of Directors and to such person or persons as
the Board of Directors shall direct and the Executive irrevocably assigns to the
Company all of the Executive's right, title and interest in and to all
Inventions of the Company and all such Inventions shall be the sole and absolute
property of the Company and the Company shall be the sole and absolute owner
thereof The Executive agrees that he will at all times keep all Inventions
secret from everyone except the Company and such persons as the Board of
Directors may from time to time direct. The Executive shall, as requested by the
Company at any time and from time to time, whether prior to or during the
Employment Term, execute and deliver to the Company any instruments deemed
necessary by the Company to effect disclosure and assignment of the Inventions
to the Company or its designees and any patent applications (United States or
foreign) and renewals with respect thereto, including any other instruments
deemed necessary by the Company for the prosecution of patent applications, the
acquisition of letters patent and/or the acquisition of patents or copyrights in
any and all countries and to vest title thereto in the Company or its
nominee.

    

    9. Representations and Warranties of
the Executive.

    

    The
Executive represents and warrants to the Company that:

    

    (i) The
Executive's employment by the Company as contemplated will not conflict with,
and will not be constrained by, any prior or current employment, consulting
agreement or relationship, whether written or oral; and

    

    (ii) The
Executive does not possess confidential information arising out of any
employment, consulting agreement or relationship with any person or entity other
than the Company, which could be utilized in connection with the Executive's
employment by the Company.

    

    (iii) The
Executive participates in outside businesses not related to the Company, and may
have obligations to serve on the Board of Directors of other entities. The
Executive may participate and have ownership in business outside the Company and
the work product of such participation in outside businesses does not constitute
a violation this agreement.

    

    10. Binding Effect or
Assignment.

    

    This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective heirs, executors, representatives, states, successors and
assigns, including any successor or assign to all or substantially all of the
business and/or assets of the Company, whether direct or indirect, by purchase,
merger, consolidation, acquisition of stock, or otherwise; provided, however,
that the Executive, or any beneficiary or legal representative of the Executive,
shall not assign all or any portion of the Executive's rights or obligations
under this Agreement without the prior written consent of the
Company.

     

     

    
      
         

      

      
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    11. Notices.

    All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made as of the date
delivered, mailed or transmitted, and shall be effective upon
receipt.

    

    12. Amendment and
Modification.

    

    No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by each of
the Executive and the Company. No such waiver or discharge by either party
hereto at any time or any waiver or discharge of any breach by the other party
hereto of, or compliance with, any condition or provision of this agreement to
be performed by such other party, shall be deemed a waiver or discharge of
similar or dissimilar provisions or conditions, or a waiver or discharge of any
breach of any provisions at the same or at any prior or subsequent
time.

    

    13. Governing
Law.

    

    This
Agreement shall be governed by and construed and enforced in accordance with the
laws of Texas without giving effect to the conflict of law principles of that
state.

    

    14. Severability.

    

    In the
event that any one or more of the provisions of this Agreement shall be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other portion of this Agreement, and
this Agreement shall be construed as if such provision had never been contained
herein.

    

    15. Withholding
Taxes.

    

    Notwithstanding
anything contained herein to the contrary, all payments required to be made
hereunder by the Company to the Executive, Royall & Fleschler, or his estate
or beneficiaries, shall be subject to the withholding of such amounts as the
Company may reasonably determine it should withhold pursuant to any applicable
federal, state or local law or regulation.

    

    16. Arbitration of
Disputes.

     

    The
parties hereto mutually consent to the resolution by arbitration of all claims
and controversies arising out of or relating to this Agreement. Any dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively in the manner set forth in this Section 16. If the Company and the
Executive disagrees on any matter arising under or in connection with this
Agreement, either party shall have the right to deliver to the other party a
written request (a "Consent Request") that the other party consent to the
position of the requesting party with respect to the matter in question. The
parties shall negotiate in good faith to resolve the matters set forth in the
Consent Request. If the parties are unable to agree on a matter set forth in a
Consent Request within thirty (30) days following delivery thereof: then the
parties shall elect one arbitrator, who shall be knowledgeable in the high
technology industry. If the parties fail to agree upon an arbitrator within
thirty (30) days either party may request the Office of the president of the
American Arbitrator Association to do so.

     

    Each
party shall then submit its or his position in writing to the arbitrator within
thirty (30) days of the arbitrator's selection. After receiving the written
positions of the parties, and after a hearing, if the arbitrators deem a hearing
to be necessary, the arbitrator shall and must select the position offered by
one of the parties. Such arbitration procedure shall be commenced immediately
upon selection of the arbitrator and shall be completed within ninety (90) days.
The decision of the arbitrator shall be final and binding on the parties.
Notwithstanding any other provision of this Agreement, if any termination of
this Agreement becomes subject to arbitration, the Company shall not be required
to pay any amounts to the Executive (except those amounts required by law) until
completion of the arbitration and the rendering of the arbitrator's
decision.

     

    The
amounts, if any, determined by the arbitrator to be owed by the Company to the
Executive shall be paid within the five (5) days after the decision by the
arbitrator is rendered. All matters approved pursuant to this Section 16 shall
be deemed conclusively to have been approved or agreed upon by the parties for
all purposes of the Agreement. Judgment may be entered on the Arbitrator's award
in any court having jurisdiction. The costs and expenses of such arbitration
shall be borne in accordance with the determination of the arbitrator. All
benefits including salary and other compensation will be in full effect during
the duration of the arbitration if the disagreement occurs during the term of
this contract. Failure on behalf of the Company to continue compensation will
result in an automatic breach of this agreement and all compensation earn and
unearned will become immediately due to the employee.

     

     

    
      
         

      

      
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    17. Counterparts.

    

    This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same instrument.

    

    18. Entire
Agreement.

    

    This
Agreement constitutes the entire agreement between the parties and supersedes
any and all prior agreements, written or oral, understandings and arrangements,
either oral or written, between the parties with respect to the subject matter,
and shall, as of the date hereof: constitute the only employment agreement
between the parties.

    

    19. Further
Assurances.

    

    Each
party shall do and perform, or cause to be done and performed, all further acts
and things and shall execute and deliver all other agreements, certificates,
instruments, and documents as any other party reasonably may request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated.

    

    20. Construction.

    

    The
headings in this Agreement are for reference purposes only and shall not limit
or otherwise affect the meaning or interpretation of this
Agreement.

    

    IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of
the date first above written.

    

    ERF
Wireless, Inc.

    

    /s/ H. Dean
Cubley                                

    By:

    Name: Dr.
H. Dean Cubley

    Title:
Chief Executive Officer

    

    

    "Executive"

    

    

    /s/ Richard R.
Royall                                           

    By:

    Richard
R. Royall, Shareholder

    Royall
& Fleschler, Inc.

    

    

     

    6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}]]