Document:

EXHIBIT

SAN JUAN PROPERTY

PROPERTY OPTION AGREEMENT

Dated November 16, 2006

Between:

PETAQUILLA MINERALS LTD.

and

REVELSTOKE INDUSTRIES, INC.

 

INDEX

	
1.
	
GRANT OF FIRST OPTION
	
2

	
2.
	
GRANT OF SECOND OPTION
	
4

	
3.
	
TECHNICAL SERVICES AGREEMENT
	
5

	
4.
	
OPTIONS ONLY
	
6

	
5.
	
SHARE ISSUANCES
	
6

	
6.
	
TRANSFER OF TITLE
	
6

	
7.
	
RIGHT OF ENTRY
	
6

	
8.
	
REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR
	
6

	
9.
	
REPRESENTATIONS AND WARRANTIES OF REVELSTOKE
	
8

	
10.
	
COVENANTS OF THE OPTIONOR
	
8

	
11.
	
COVENANTS OF REVELSTOKE
	
9

	
12.
	
TERMINATION
	
10

	
13.
	
INDEPENDENT ACTIVITIES
	
11

	
14.
	
CONFIDENTIALITY OF INFORMATION
	
12

	
15.
	
ARBITRATION
	
12

	
16.
	
DELAYS
	
13

	
17.
	
ASSIGNMENT
	
13

	
18.
	
NOTICES
	
14

	
19.
	
GENERAL TERMS AND CONDITIONS
	
15

	
SCHEDULE "A":

SCHEDULE "B":

SCHEDULE "C":
	
The Property

Joint Venture Agreement

Technical Services Agreement

 

SAN JUAN PROPERTY

PROPERTY OPTION AGREEMENT
THIS AGREEMENT is made as of the 10th day of November, 2006,

BETWEEN:

 
PETAQUILLA MINERALS LTD., a company duly incorporated under the laws of the Province of British Columbia and having its head office at  #410 - 475 West Georgia Street, Vancouver, B.C., V6B 4M9

(hereinafter referred to as the "Optionor")

OF THE FIRST PART,

AND:
REVELSTOKE INDUSTRIES, INC. , a company duly incorporated under the laws of the State of Nevada and having its head office at 1081 Kent Street, White Rock, B.C., V4B 4T2

(hereinafter referred to as "Revelstoke")

OF THE SECOND PART.

RECITALS

                         WHEREAS the Optionor, through its wholly-owned Panamanian subsidiary, is the beneficial owner of a 100% interest in five exploration concessions situated in the Republic of Panama, more particularly described in Schedule "A" attached hereto and made a part hereof (hereinafter collectively called the "Property");

                         AND WHEREAS the Optionor has agreed to grant to Revelstoke options to purchase a 60% or a 70% undivided interest in and to the Property;

                         AND WHEREAS Revelstoke's common shares are quoted on the Over the Counter Bulletin Board (the "OTCBB");

                         NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual covenants and agreements herein contained and subject to the terms and conditions hereafter set out, the parties hereto agree as follows:

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1.          GRANT OF FIRST OPTION

1.01       The Optionor, in consideration of the sum of $10, the receipt and sufficiency of which is hereby acknowledged, hereby grants to Revelstoke, on the terms and conditions hereinafter set out, the exclusive right and option (the "First Option") to acquire a 60% undivided interest in and to the Property by paying to the Optionor the sum of $600,000 cash, by issuing to the Optionor 4,000,000 shares in the capital of Revelstoke and by incurring, directly or indirectly, and paying for $6,000,000 in "Exploration Expenditures" (as hereinafter defined), to be respectively paid and issued to the Optionor and incurred and paid by Revelstoke as follows:
(a)       the sum of $100,000 in cash , the prior receipt of which from Revelstoke Industries, Inc, Revelstoke's predecessor in interest, is hereby acknowledged by the Optionor;

(b)       4,000,000 common shares of Revelstoke with a par value of $0.001 per common share, to be issued and delivered to the Optionor within five business days from the execution and delivery of this agreement,

(c)       an additional $200,000 in cash to be paid by wire transfer in immediately available funds, and Exploration Expenditures of not less than $1,000,000 to be incurred and paid, both on or before May 31, 2007;

(d)       an additional $300,000 in cash to be paid by wire transfer in immediately available funds, and cumulative Exploration Expenditures of not less than $3,000,000 to be incurred and paid, both on or before May 31, 2008; and

(e)       cumulative Exploration Expenditures of not less than $6,000,000 to be incurred and paid on or before May 31, 2009.

1.02       In this agreement, "Exploration Expenditures" means all direct and indirect costs and expenses, however denominated, incurred by Revelstoke on or in connection with the prospecting, exploration and development of the Property and shall include, without limiting generality:
(a)       all expenditures required to maintain the Property in good standing in accordance with the laws of the jurisdiction in which the Property is situated;

(b)       all expenditures required to acquire and maintain insurance pursuant to this agreement;

(c)       all expenditures made relating to reclamation, rehabilitation and protection of the environment; and

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(d)       the management fee payable under the "Technical Services Agreement" referred to in paragraph 3.01 hereof.

1.03       If Revelstoke fails to incur the Exploration Expenditures listed in paragraph 1.01 by the end of the last day on which the same was due to be incurred , Revelstoke may, at any time within 15 days of such day, make a cash payment to the Optionor in an amount equal to the deficiency in the Exploration Expenditures.  Any cash payment so made shall be deemed to have been Exploration Expenditures duly and properly incurred in an amount equal to the cash payment.

1.04       In this agreement, a written notice delivered by Revelstoke to the Optionor by no later than 30 days after each of the dates listed in paragraph 1.01 on or before which Exploration Expenditures are to be incurred and paid and accompanied by a statement of a representative of Revelstoke to the effect that the amount of Exploration Expenditures have been incurred and paid by the applicable date shall be conclusive evidence of the making thereof unless the Optionor questions the accuracy of such statement in writing within 15 days of receipt.  If the Optionor questions the accuracy of the statement, the matter shall be referred to a firm of Chartered Accountants for final determination.  If such firm determines, after having consulted with Revelstoke, that the Exploration Expenditures incurred and paid were less than those reported by Revelstoke, Revelstoke shall not lose any of its rights hereunder provided Revelstoke pays to the Optionor within 15 days of the receipt of the determination 100% of the deficiency in such Exploration Expenditures.  If Revelstoke makes such payment, it shall be deemed to have timely incurred and paid Exploration Expenditures equal to such payment and be deemed in full compliance with its obligations under paragraph 1.01.  If the firm of Chartered Accountants determines that the Exploration Expenditures incurred were less than 95% of those reported by Revelstoke, Revelstoke shall pay the entire cost of the determination; it they were 95% to 105% of those reported by Revelstoke, the cost of the determination shall be paid by Revelstoke and the Optionor equally; if in excess of 105% of the Exploration Expenditures reported by Revelstoke, the Optionor shall pay the entire cost of the Chartered Accountant's determination. 

1.05       During the currency of this agreement, the Optionor shall be entitled to nominate, and Revelstoke shall use its best efforts to cause to be appointed or elected, that number of directors of Revelstoke as most closely equates to 40% of the total number of directors of Revelstoke from time to time.

1.06       As soon as practicable following the execution and delivery of this agreement, Revelstoke shall establish a stock option plan which allocates not less than 15% of the then issued shares in the capital of Revelstoke for the granting of options, and shall grant to the Optionor or its nominees stock options equal in number to not less than one-third of the number of options allocated under such plan.  Thereafter, and during the currency of this agreement, Revelstoke shall maintain the grants to the Optionor or its nominees of stock options equal in number to not less than one-third of the number of options allocated under Revelstoke's stock option plan then in effect. 

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1.07       During the currency of this agreement, and in the event that Revelstoke proposes to issue shares for cash (the "Offering"), Revelstoke shall give written notice to the Optionor containing all material details of the Offering.  Within 15 days of receipt of such notice, the Optionor shall give notice to Revelstoke as to whether the Optionor wishes to participate in the Offering, and shall advise Revelstoke of the number of shares of Revelstoke of which the Optionor was the beneficial owner on the date of receipt of the notice of the Offering.  If the Optionor elects to participate in the Offering, it shall have the right to purchase under the Offering such number of securities as will maintain the Optionor's percentage holding of the issued shares of Revelstoke as calculated on the date of receipt of the notice of the Offering.

2.          EXERCISE OF FIRST OPTION AND GRANT OF SECOND OPTION

2.01       Revelstoke shall be deemed to have exercised the First Option and shall have acquired a 60% undivided interest in and to the Property, by making aggregate cash payments to the Optionor of $600,000, by issuing to the Optionor 4,000,000 shares and by having incurred and paid for cumulative Exploration Expenditures of $6,000,000, all in accordance with Article 1 hereof.

2.02       Subject to the prior exercise of the First Option, the Optionor hereby grants to Revelstoke the exclusive right and option (the "Second Option") to increase Revelstoke's undivided interest in and to the Property from 60% to 70% by incurring and paying for $3,000,000 in Exploration Expenditures during the period between the delivery of the "Notice of Election" referred to in paragraph 2.03 and May 31, 2010.

2.03       Within 60 days following the exercise of the First Option, Revelstoke shall give the Optionor notice (the "Notice of Election") that either:
(a)       Revelstoke elects to accept the grant of the Second Option; or

(b)       Revelstoke elects not to accept the grant of the Second Option.

              Failure of Revelstoke to give any such notice shall be deemed to be an election under subparagraph 2.03(a).

2.04       If Revelstoke makes the election under subparagraph 2.03(b), all further work on and with respect to the Property, and the subsequent relationship between the Optionor and Revelstoke in relation to the Property shall be governed by a joint venture agreement between the parties (the "JVA"), as attached hereto as Schedule "B".  The Optionor and Revelstoke will forthwith execute the JVA in the form attached as Schedule "B". In such circumstances, Revelstoke and the Optionor shall have an initial "Interests" (as defined in the JVA) of 60% and 40% respectively.

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2.05       If Revelstoke elects to be granted, but fails to exercise, the Second Option, Revelstoke and the Optionor shall have initial Interests of 60% and 40% respectively. .

2.06       Revelstoke shall be deemed to have exercised the Second Option and shall have acquired a 70% undivided interest in and to the Property, by having incurred and paid for $3,000,000 in Exploration Expenditures during the period between the delivery of the Notice of Election and May 31, 2010, all in accordance with paragraph 2.02 above.

2.07       The provisions of paragraphs 1.03 and 1.04 hereof shall apply mutatis mutandis to the Exploration Expenditures incurred and paid pursuant to paragraph 2.02.

2.08       If the Second Option is exercised, the Optionor and Revelstoke will forthwith execute the JVA in the form attached as Schedule "B", and Revelstoke and the Optionor shall have initial "Interests" therein of 70% and 30% respectively.

3.          TECHNICAL SERVICES AGREEMENT

3.01       During the currency of the First Option and, if applicable, the Second Option, Revelstoke hereby engages Petaquilla Minerals Ltd., or a subsidiary thereof (in this agreement referred to as the "Operator"), as an independent contractor, to carry out all work on and in connection with the Property.  Upon the execution of this agreement, the parties will in good faith, negotiate and execute a Technical Services Agreement, substantially in the form of Schedule "C". 

3.02       The Operator shall prepare draft exploration programs for each calendar year, and shall deliver such programs to Revelstoke not fewer than 45 days prior to the anticipated date for the commencement of such program.  The first program shall cover the partial year from the date of execution of this agreement to December 31, 2006.  The Operator and Revelstoke shall review each draft program and budget, and each shall use its best efforts to agree with the other on the final program and budget terms and costs.  However, in the event that consensus is not reached, the matter shall be determined by an independent "Qualified Person", as defined in National Instrument 43-101 promulgated by the Canadian Securities Administrators, as selected by the Operator.

3.03       During the currency of the Technical Services Agreement, Revelstoke, at its sole risk and expense, shall have access to the Property at all reasonable times and intervals to review the Operator's  operations thereon.

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4.          OPTIONS ONLY

4.01       This agreement represents the granting of options only, and except as herein specifically provided otherwise, nothing herein contained shall be construed as obligating Revelstoke to do any acts or make any payments hereunder, and any act or acts or payment or payments as shall be made hereunder shall not be construed as obligating Revelstoke to do any further act or make any further payment or payments.

5.0          SHARE ISSUANCES

5.01       The parties acknowledge that the shares in the capital of Revelstoke to be issued and delivered pursuant to this agreement may be subject to hold periods and legending requirements as required by  applicable securities laws and regulation.  For greater certainty, the shares of Revelstoke to be issued to the Optionor hereunder shall be free of all restrictions on trading other than those imposed by law or a securities regulatory body with jurisdiction over Revelstoke.

5.02       Revelstoke has not granted or agreed to grant to the Optionor any rights (including piggyback registration rights), to have any securities of Revelstoke registered with the U.S. Securities and Exchange Commission or registered or qualified with any other governmental authority.

6.          TRANSFER OF TITLE

6.01        Forthwith following the exercise of the First Option , the Optionor shall deliver to Revelstoke confirmation satisfactory to Revelstoke that Revelstoke is the beneficial owner of a 60% undivided interest in the Property.  In the event that Revelstoke elects not to be granted the Second Option, or if both the First Option and Second Option are exercised, the parties' respective interests in the Property shall be held in accordance with the terms and conditions of the JVA.

7.          RIGHT OF ENTRY

7.01       During the currency of this agreement until the JVA comes into effect, Revelstoke, its servants, agents and workmen and any persons duly authorized by Revelstoke, shall have the right of access to and from and, subject to sub-paragraph 11.01(f) hereof, the exclusive right to enter upon and take possession of and prospect, explore and develop the Property in such manner as Revelstoke in its sole discretion may deem advisable.  Revelstoke hereby confirms that for the currency of the Technical Services Agreement, assigns the foregoing rights to the Operator.

8.          REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR

8.01       The Optionor hereby represents and warrants to Revelstoke that:

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(a)       the Optionor, or a wholly-owned subsidiary thereof, is the recorded and beneficial owner of a 100% interest in and to the Property;

(b)       the exploration concessions comprising the Property have been validly acquired and are now duly recorded and in good standing in accordance with the laws of the Republic of Panama;

(c)       it has full corporate power and authority to enter into this agreement;

(d)       the entering into of this agreement does not conflict with any applicable laws or with its charter documents, nor does it conflict with, or result in a breach of, or accelerate the performance required by any contract or other commitment to which it is a party or by which it is bound;

(e)       the Optionor, has the exclusive right to enter into this agreement and all necessary authority to assign to Revelstoke up to a 70% right, title and interest in and to the Property in accordance with the terms and conditions of this agreement;

(f)       the Optionor has the exclusive right to receive 100% of the proceeds from the sale of minerals, metals, ores or concentrates removed from the Property and no person, firm or corporation, other than the Government of the Republic of Panama, is entitled to any royalty or other payment in the nature of rent or royalty on such materials removed from the Property or is entitled to take such materials in kind; 

(g)       the Property is free and clear of all liens, charges and encumbrances, other than those imposed by the Government of the Republic of Panama as part of the granting of the concessions comprising the Property; and

(h)       to the best of the Optionor's knowledge, information and belief, there are no actual, alleged or potential adverse claims, challenges, suits, actions, prosecutions, investigations or proceedings against or to the ownership of or title to the Property or any portion thereof, nor to the best of the Optionor's knowledge is there any basis therefor.

8.02       The representations and warranties hereinbefore set out are conditions upon which Revelstoke has relied in entering into this agreement and shall survive the exercise of the First Option or Second Option, as the case may be, and the Optionor hereby forever indemnifies and saves Revelstoke harmless from all loss, damage, costs, actions and suits arising out of or in connection with any breach of any representation or warranty made by it and contained in this agreement.

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9.       REPRESENTATIONS AND WARRANTIES OF REVELSTOKE

9.01       Revelstoke represents and warrants to the Optionor that:
(a)       it has full corporate power and authority to enter into this agreement;

(b)       the entering into of this agreement does not conflict with any applicable laws or with its charter documents nor does it conflict with, or result in a breach of, or accelerate the performance required by any contract or other commitment to which it is party or by which it is bound;

(c)       it is a company in good standing pursuant to the laws of the State of Nevada;

(d)       its authorized share capital consists of 50,000,000 common shares with a par value of $0.001 per common share, of which 37,200,000 common shares are issued and outstanding as of the date of this agreement;

(e)       the price of its common shares is or will be quoted on the OTCBB;

(f)       the shares issued to the Optionor pursuant to this agreement will, when issued, be fully paid and non-assessable shares in the capital of Revelstoke, free and clear of all charges, liens and encumbrances, and shall be free of all restrictions on trading other than those required by law or by any securities regulatory body having jurisdiction over Revelstoke;

(g)       it will use its best efforts to raise not less than $2,000,000 by the sale of shares at a price of not less than $1.00 per share, on or before November 16, 2007; and

(h)       it will incorporate a subsidiary under the laws of the Republic of Panama as soon as is necessary or desirable in order to carry out its obligations hereunder or to hold title to its interest in the Property. 

9.02       The representations and warranties hereinbefore set out are conditions upon which the Optionor has relied in entering into this agreement and shall survive the exercise of the First Option or the Second Option, as the case may be, and Revelstoke hereby indemnifies and saves the Optionor harmless from all loss, damage, costs, actions and suits arising out of or in connection with any breach of any representation or warranty made by it and contained in this agreement.

10.         COVENANTS OF THE OPTIONOR

10.01     The Optionor hereby covenants with and to Revelstoke that:

9
(a)       it will, within 30 days following the execution and delivery of this agreement, provide  Revelstoke with all of the data and information in its possession or under its control relating to the Optionor's exploration activities on and in the vicinity of the Property; and

(b)       until such time as the First Option, or the Second Option as the case may be, is exercised or otherwise terminates, it will not deal, or attempt to deal with its right, title and interest in and to the Property in any way that would adversely affect the right of Revelstoke to become absolutely vested in up to a 70% undivided interest in and to the Property, free and clear of any liens, charges and encumbrances.

11.         COVENANTS OF REVELSTOKE

11.01     Revelstoke covenants and agrees with the Optionor that until the First Option or the Second Option, as the case may be, is exercised or otherwise terminates it shall:
(a)       carry out and record or cause to be carried out and recorded all such work upon the Property as may be required in order to maintain the Property in good standing at all times; 

(b)       keep the Property clear of liens and other charges arising from its operations thereon; 

(c)       in the absence of an executed Technical Services Agreement, carry on all operations on the Property in compliance with all applicable governmental regulations and restrictions;

(d)       pay or cause to be paid any rates, taxes, duties, royalties, assessments or fees levied with respect to the Property or Revelstoke's operations thereon;

(e)       in the absence of an executed Technical Services Agreement, indemnify and hold the Optionor harmless from and against any and all liabilities, costs, damages or charges arising from the failure of Revelstoke to comply with the covenants contained in this article or otherwise arising from its operations on the Property;

(f)       allow the Optionor or any duly authorized agent or representative of the Optionor to inspect the Property upon giving Revelstoke 48 hours written notice; PROVIDED HOWEVER that it is agreed and understood that the Optionor or any such agent or representative shall not interfere with Revelstoke's activities on the Property and shall be at his own risk and that Revelstoke shall not be liable for any loss, damage or injury incurred by the Optionor or its agent or representative arising from its inspection of the Property, however caused;

10
(g)       in the absence of an executed Technical Services Agreement, allow the Optionor access at all reasonable times and intervals to all factual maps, reports, assay results and other factual technical data prepared or obtained by Revelstoke in connection with its operations on the Property;

(h)       during the currency of the First Option and the Second Option, as the case may be, and in the absence of an executed Technical Services Agreement, prepare and deliver to the Optionor on or before January 31, a comprehensive annual report, setting out the work performed during each 12-month period ending the preceding December 31, together with copies of all material assay results and reports of sub-contractors;

(i)       provide the Optionor with copies of any and all documents filed by Revelstoke with the Government of the Republic of Panama with respect to the Property;

(j)       in the absence of an executed Technical Services Agreement, obtain and maintain or cause any contractor engaged by it hereunder to obtain and maintain, during any period in which active work is carried out hereunder, reasonably adequate insurance; and

(k)       indemnify and save the Optionor, its directors, officers, employees and agents, harmless from and against any claim made with respect to an interest in the Property or an interest in this agreement by Eurogold Mining, Inc.

12.         TERMINATION

12.01     Revelstoke, at any time after it has paid the Optionor $100,000, has issued and delivered 4,000,000 shares to the Optionor and has incurred and paid for Exploration Expenditures of not less than $1,000,000, may terminate this agreement at any time upon giving 30 days' written notice thereof to the Optionor. 

12.02     Notwithstanding paragraph 12.01, if Revelstoke fails to make any payment or fails to do any thing on or before the last day provided for such payment or performance under this agreement, the Optionor may terminate this agreement but only if:
(a)       it shall have first given to Revelstoke written notice of the failure containing particulars of the payment which Revelstoke has not made or the act which Revelstoke has not performed; and

(b)       if the notice relates to a cash payment to the Optionor, Revelstoke has not made such payment within five business days following delivery of the Optionor's notice; or

(c)       in every other case, Revelstoke has not within 30 days following delivery of the Optionor's notice given notice to the Optionor that it has cured such failure or commenced proceedings to cure such failure by appropriate performance (Revelstoke hereby agreeing that should it so commence to cure any failure it will prosecute the same to completion without undue delay).

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12.03     Should Revelstoke fail to make the payment contemplated in sub-paragraph 12.02(b) within the said five business days, this agreement shall be deemed to have terminated on the day following the last day provided for the payment the failure of which by Revelstoke caused the Optionor to issue the notice referred to in subparagraph 12.02(a) hereof.

12.04     Should Revelstoke fail to deliver the notice provided for in sub-paragraph 12.02(c) within the said 30 days, this agreement shall be deemed to have terminated on the day following the last day provided for the performance the failure of which by Revelstoke caused the Optionor to issue the notice referred to in subparagraph 12.02(a) hereof.

12.05     Upon termination of this agreement under this article 12, Revelstoke:
(a)       shall cause the Property to be maintained in good standing for a period of at least 12 months from the date of termination; 

(b)       shall deliver to the Optionor, within 60 days of the effective date of termination, copies of all factual maps, reports, assay results and other factual data and documentation in its possession relating to its operations on the Property;

(c)       forfeits any and all interest in the Property hereunder and shall cease to be liable to the Optionor in debt, damages or otherwise save for the performance of those of its obligations which were not satisfied on the effective date of termination and which otherwise survive the termination of this agreement; and

(d)       shall vacate the Property within a reasonable time after such termin-ation, but shall have the right of access to the Property for a period of six months thereafter for the purpose of removing its chattels, machinery, equipment and fixtures therefrom.

13.         INDEPENDENT ACTIVITIES

13.01     Except as expressly provided herein, each party shall have the free and unrestricted right to independently engage in and receive the full benefit of any and all business endeavours of any sort whatsoever, whether or not competitive with the endeavours contemplated herein without consulting the other or inviting or allowing the other to participate therein.  No party shall be under any fiduciary or other duty to the other which will prevent it from engaging in or enjoying the benefits of competing endeavours within the general scope of the endeavours contemplated herein.  The legal doctrines of "corporate opportunity" sometimes applied to persons engaged in a joint venture or having fiduciary status shall not apply in the case of any party.  In particular, without limiting the foregoing, no party shall have an obligation to any other party as to:

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(a)       any opportunity to acquire, explore and develop any mining property, interest or right presently owned by it or offered to it outside the Property at any time; and

(b)       the erection of any mining plant, mill, smelter or refinery, whether or not such mining plant, mill, smelter or refinery treats ores or concentrates from the Property.

14.         CONFIDENTIALITY OF INFORMATION

14.01     Except as otherwise provided in this paragraph, both parties shall treat all data, reports, records and other information relating to this agreement and the Property as confidential.  The text of any news release or any other public statements, other than those required by law or regulatory bodies or stock exchanges, which a party desires to make shall be sent to the other party for its comments prior to publication and shall not include references to the other party unless such party has given its prior consent in writing, such consent not to be unreasonably withheld.  The text of any disclosure which a party is required to make by law, by regulatory bodies or stock exchanges shall be sent to the other party prior to filing in order that the other party may have the opportunity to comment thereon.  For all public disclosure, whether required to be made or not, any reasonable changes requested by the non-disclosing party shall be incorporated into the disclosure document.

15.         ARBITRATION

15.01     If there is any disagreement, dispute or controversy (hereinafter collectively called a "dispute") between the parties with respect to any matter arising under this agreement or the construction hereof, then the dispute shall be determined by arbitration in accordance with the following procedures:
(a)       the parties to the dispute shall appoint a single mutually acceptable arbitrator.  If the parties cannot agree upon a single arbitrator, then the party on one side of the dispute shall name an arbitrator, and give notice thereof to the party on the other side of the dispute;

(b)       the party on the other side of the dispute shall within 14 days of the receipt of notice, name an arbitrator; and

(c)       the two arbitrators so named shall, within seven days of the naming of the later of them, name a third arbitrator.

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If the party on either side of the dispute fails to name its arbitrator within the allotted time, then the arbitrator named may make a determination of the dispute.  Except as expressly provided in this paragraph, the arbitration shall be conducted in Vancouver, B.C. and in accordance with the Commercial Arbitration Act (British Columbia).  The decision shall be made within 30 days following the naming of the latest of them, shall be based exclusively on the advancement of exploration, development and production work on the Property and not on the financial circumstances of the parties, and shall be conclusive and binding upon the parties.  The costs of arbitration shall be borne equally by the parties to the dispute unless otherwise determined by the arbitrator(s) in the award.

16.         DELAYS

16.01     If any party should be delayed in or prevented from performing any of the terms, covenants or conditions of this agreement by reason of a cause beyond the control of such party, whether or not foreseeable, including fires, floods, earthquakes, subsidence, ground collapse or landslides, interruptions or delays in transportation or power supplies, First Nations land claims and blockades, strikes, lockouts, wars, acts of God, government regulation (including currency control) or interference or the inability to secure on reasonable terms any private or public permits or authorizations, then any such failure on the part of such party to so perform shall not be deemed to be a breach of this agreement and the time within which such party is obliged to comply with any such term, covenant or condition of this agreement shall be extended by the total period of all such delays.  In order that the provisions of this article may become operative, such party shall give notice in writing to the other party, forthwith and for each new cause of delay or prevention and shall set out in such notice particulars of the cause thereof, and the day upon which the same arose, and shall take all reasonable steps to remove the cause of such delay or prevention,  and shall give like notice forthwith following the date that such cause ceased to subsist.

17.         ASSIGNMENT

17.01     Either party may at any time dispose of all or any part of its interest in and to the Property and this agreement to any third party (the "Assignee") provided that the Assignee shall, prior to and as a condition precedent to such disposition, deliver to the non-assigning party its covenant with and to the non-assigning party that:
(a)       to the extent of the disposition, the Assignee agrees to be bound by the terms and conditions of this agreement as if it had been an original party hereto; and

(b)       it will subject any further disposition of the interest acquired to the restrictions contained in this paragraph;

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AND FURTHER PROVIDED THAT the non-assigning party shall have given its prior written consent to such disposition, such consent not to be unreasonably withheld or delayed.

18.         NOTICES

18.01     Any notice, election, consent or other writing required or permitted to be given hereunder shall be deemed to be sufficiently given if delivered or if mailed by registered air mail or by fax, addressed as follows:
In the case of the Optionor:

PETAQUILLA MINERALS LTD.

#410 - 475 W. Georgia Street

Vancouver, B.C.  V6B 4M9

Attention:  President

Fax No: (604) 694-0063

With a copy to:

VECTOR CORPORATE FINANCE LAWYERS

Barristers and Solicitors

Suite 1040, 999 West Hastings Street

Vancouver, BC  V6C  2W2

Attention: Graham H. Scott

Fax No: (604) 683-2643

In the case of Revelstoke:

REVELSTOKE INDUSTRIES, INC.

1081 Kent Street

White Rock, BC  V4B 4T2

Attention:  President

Fax No: (604) §

With a copy to:

Lang Michener LLP

Suite 1500, 1055 West Georgia Street

Vancouver, BC  V6E 4N7

Attention: Thomas J. Deutsch

Fax No: (604) 893-2679

and any such notice given as aforesaid shall be deemed to have been given to the parties hereto if delivered, when delivered, or if mailed, on the third business day following the date of mailing, or, if faxed, on the next succeeding business day following the faxing thereof PROVIDED HOWEVER that during the period of any postal interruption in either the country of mailing or the country of delivery, any notice given hereunder by mail shall be deemed to have been given only as of the date of actual delivery of the same.  Any party may from time to time by notice in writing change its address for the purpose of this paragraph.

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19.         GENERAL TERMS AND CONDITIONS

19.01     The parties hereto hereby covenant and agree that they will execute such further agreements, conveyances and assurances as may be requisite, or which counsel for the parties may deem necessary to effectually carry out the intent of this agreement, including the execution of such agreements as may be necessary to comply with the applicable laws of the Republic of Panama.

19.02     This agreement shall represent the entire understanding between the parties with respect to the subject matter hereof and replaces and supersedes all prior agreements and understandings between them with respect to the Property.  In particular, upon the execution and delivery of this agreement, that agreement dated May 8, 2006, between the Optionor and Revelstoke's predecessor in interest shall automatically terminate.  No representations or inducements have been made save as herein set forth.  No changes, alterations, or modifications of this agreement shall be binding upon either party until and unless a memorandum in writing to such effect shall have been signed by both parties hereto.

19.03     The titles to the articles to this agreement shall not be deemed to form part of this agreement but shall be regarded as having been used for convenience of reference only.

19.04     The schedules to this agreement shall be construed with and form an integral part of this agreement to the same extent as if they were set forth verbatim herein.

19.05     All references to dollar amounts contained in this agreement are references to United States funds.

19.06     This agreement will be exclusively governed by, and interpreted and construed in accordance with, the laws prevailing in the Province of British Columbia, without reference to its jurisprudence regarding conflict of laws. To the extent that any party to this agreement seeks a remedy from a court, the parties irrevocably and unconditionally attorn to the exclusive jurisdiction of the courts of the Province of British Columbia and all courts having appellate jurisdiction thereover.

16

19.07     This agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

19.08     This agreement may be signed by the parties hereto in as many counterparts as may be necessary and, if required, by facsimile, each of which so signed being deemed to be an original, and such counterparts together shall constitute one and the same instrument and notwithstanding the date of execution will be deemed to bear the date as set forth on the front page of this agreement.

               IN WITNESS WHEREOF this agreement has been executed by the parties hereto as of the day and year first above written.

 

	
The COMMON SEAL of PETAQUILLA MINERALS LTD. was hereunto affixed in the presence of:

/s/ Michael Levy         

MICHAEL LEVY

                                                                          
	
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c/s

 

	
The COMMON SEAL of REVELSTOKE INDUSTRIES, INC. was hereunto affixed in the presence of:

/s/ Marcus Johnson         

MARCUS JOHNSON

                                                                          
	
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c/s

This is page 16 of that certain agreement dated November 16, 2006, between PETAQUILLA MINERALS LTD. of the first part and REVELSTOKE INDUSTRIES, INC. of the second part.

SCHEDULE "A"

TO THAT PROPERTY OPTION AGREEMENT MADE AS OF NOVEMBER 16, 2006, BETWEEN PETAQUILLA MINERALS LTD. OF THE FIRST PART AND REVELSTOKE INDUSTRIES, INC. OF THE SECOND PART

 

THE "PROPERTY"

	
NAME OF CONCESSION
	
AREA (SQ. KM.)
	
EXPIRY DATE

	
San Juan Zona 1
	
24
	 
	
San Juan Zona 2
	
12
	 
	
San Juan Zona 3
	
10
	 
	
San Juan Zona 4
	
12
	 
	
San Juan Zona 5
	
54
	 

SCHEDULE "B"

TO THAT CERTAIN AGREEMENT MADE AS OF NOVEMBER 16, 2006, BETWEEN PETAQUILLA MINERALS LTD. OF THE FIRST PART AND REVELSTOKE INDUSTRIES, INC. OF THE SECOND PART

 

 

SAN JUAN PROPERTY

JOINT VENTURE AGREEMENT

I N D E X

	
Item
	
Heading
	
Page

	
1. 
	
INTERPRETATION
	
1

	
2. 
	
FORMATION OF THE JOINT VENTURE
	
6

	
3.
	
INTERESTS
	
6

	
4. 
	
MANAGEMENT COMMITTEE
	
7

	
5. 
	
OPERATOR
	
9

	
6. 
	
RIGHTS, DUTIES AND STATUS OF OPERATOR
	
10

	
7. 
	
EXPLORATION PROGRAMS
	
12

	
8. 
	
FEASIBILITY REPORT
	
16

	
9. 
	
PRODUCTION NOTICE
	
16

	
10. 
	
ELECTION TO CONTRIBUTE
	
17

	
11. 
	
OPERATOR'S FEE
	
19

	
12. 
	
MINE FINANCING
	
19

	
13. 
	
CONSTRUCTION
	
19

	
14. 
	
OPERATION OF THE MINE
	
19

	
15. 
	
PAYMENT OF MINE COSTS
	
20

	
16. 
	
DISTRIBUTION IN KIND
	
21

	
17. 
	
SURRENDER OF INTEREST
	
22

	
18. 
	
TERMINATION OF MINING OPERATIONS
	
23

	
19. 
	
THE PROPERTY
	
25

	
20. 
	
AREA OF COMMON INTEREST
	
25

	
21. 
	
INFORMATION AND DATA
	
26

	
22. 
	
LIABILITY OF THE OPERATOR
	
27

	
23. 
	
INSURANCE
	
27

	
24. 
	
RELATIONSHIP OF PARTIES
	
28

	
25. 
	
PARTITION
	
28

	
26. 
	
TAXATION
	
28

	
27. 
	
FORCE MAJEURE
	
28

	
28. 
	
NOTICE
	
29

	
29. 
	
WAIVER
	
29

	
30. 
	
AMENDMENTS
	
29

	
31. 
	
TERM
	
30

	
32. 
	
TIME OF ESSENCE
	
30

	
33. 
	
ASSIGNMENT   RIGHT OF FIRST REFUSAL
	
30

	
34. 
	
SUCCESSORS AND ASSIGNS
	
31

	
35. 
	
GOVERNING LAW
	
31

	
APPENDIX I:

APPENDIX II
	
Accounting Procedure

Net Proceeds of Production

THIS AGREEMENT made the ____ day of _____________, 20__,

BETWEEN:

 
PETAQUILLA MINERALS LTD., a company duly incorporated under the laws of the Province of British Columbia and having its head office at 410-475 West Georgia Street, Vancouver, B.C., V6B 4M9

(hereinafter referred to as "Petaquilla")

OF THE FIRST PART,

AND:
REVELSTOKE INDUSTRIES, INC. , a company duly incorporated under the laws of the State of Nevada and having its head office at 1081 Kent Street, White Rock, B.C., V4B 4T2

(hereinafter referred to as "Revelstoke")

OF THE SECOND PART.

1.                    INTERPRETATION

1.01                    In this Agreement the following words, phrases and expressions shall have the following meanings:

(a)       "Accounting Procedure" means the procedure attached to this Agreement as Appendix I.

(b)       "Affiliate" shall have the meaning attributed to it in the Canada Business Corporations Act, as amended.

(c)       "Assets" means all tangible and intangible goods, chattels, improvements or other items including, without limiting generality, land, buildings, and equipment but excluding the Property, acquired for or made to the Property under the Head Agreement or  this Agreement in connection with the Mining Operations.

(d)       "Completion Date" means the date determined by the Management Committee on which it is demonstrated to the satisfaction of the Management Committee that the preparing and equipping of the Mine is complete and is the date on which commercial production commences.

2
(e)       "Construction" means every kind of work carried out during the Construction Period by the Operator in accordance with the Feasibility Report and Production Notice related thereto, as approved by the Management Committee.

(f)       "Construction Period" means, unless the Production Notice is subsequently withdrawn, the period beginning on the date a Production Notice is given and ending on the Completion Date.

(g)       "Costs" means, except as to Prior Exploration Costs, all items of outlay and expense whatsoever, direct or indirect, with respect to Mining Operations, recorded by the Operator in accordance with this Agreement and shall include all obligations and liabilities incurred or to be incurred with respect to the protection of the environment such as future decommissioning, reclamation and long-term care and monitoring, even if not then due and payable so long as the amounts can be estimated with reasonable accuracy, and whether or not a mine reclamation trust fund has been established.  Without limiting generality, the following categories of Costs shall have the following meanings:

(i)       "Construction Costs" means those Costs recorded by the Operator during the Construction Period, including, without limiting generality, the Operator's fee contemplated in article 11;

(ii)      "Exploration Costs" means those Costs recorded by  the Operator during the Exploration Period, including, without limiting generality, the Operator's fee contemplated in article 11;

(iii)     "Mine Costs" means Construction Costs and Operating Costs;

(iv)      "Operating Costs" means those Costs recorded by the Operator subsequent to the Completion Date, including, without limiting generality, the  Operator's fee contemplated in article 11; and

(v)       "Prior Exploration Costs" means the deemed Expenditures of the parties under paragraph 7.09.

(h)       "Exploration Period" means the period beginning the Operative Date and ending the date a Production Notice is given and Construction Costs are fully committed.

3
(i)       "Feasibility Report" means a detailed report, in form and substance sufficient for presentation to arm's length institutional lenders considering project financing, showing the feasibility of placing any part of the Property into commercial production as a Mine and shall include a reasonable assessment of the various categories of ore reserves and their amenability to metallurgical treatment, a complete description of the work, equipment and supplies required to bring such part of the Property into commercial production and the estimated cost thereof, a description of the mining methods to be employed and a financial appraisal of the proposed operations and including at least the following:

(i)       a description of that part of the Property to be covered by the proposed Mine;

(ii)      the estimated recoverable reserves of Minerals and the estimated composition and content thereof;

(iii)      the proposed procedure for development, mining and production;

(iv)       results of ore amenability treatment tests (if any);

(v)       the nature and extent of the facilities proposed to be acquired, which may include mill facilities if the size, extent and location of the ore body makes such mill facilities feasible, in which event the study shall also include a preliminary design for such mill;

(vi)      the total costs, including capital budget, which are reasonably required to purchase, construct and install all structures, machinery and equipment required for the proposed Mine, including a schedule of timing of such requirements;

(vii)     all environmental impact studies and costs of implementation;

(viii)    the period in which it is proposed the Property shall be brought to commercial production; and

(ix)      such other data and information as are reasonably necessary to substantiate the existence of an ore deposit of sufficient size and grade to justify development of a mine, taking into account all relevant business, tax and other economic considerations including a cost comparison between purchasing or leasing and renting of facilities and equipment required for the operation of the Property as a Mine.

4

(j)       "Head Agreement" means the property option agreement between Petaquilla and Revelstoke, dated November 16, 2006.

(k)       "Interest" means an undivided beneficial percentage interest in the Property, the Assets and any Mine, calculated, during the Exploration Period, according to article 7 and subsequent to the Exploration Period according to article 10.

(l)       "Joint Operation" shall have the meaning attributed to it in paragraph 2.01.

(m)       "Management Committee" means the committee established pursuant to article 4.

(n)       "Mine" means the workings established and Assets acquired, including, without limiting generality, development headings, plant and concentrator installations, infrastructure, housing, airport and other facilities in order to bring the Property into commercial production in accordance with the Production Notice.

(o)       "Minerals" means any and all ores (and concentrates derived therefrom) and minerals, precious and base, metallic and non-metallic, in, on or under the Property which may lawfully be explored for, mined and sold.

(p)       "Mining Operations" means every kind of work done by the Operator:

(i)       on or in respect of the Property in accordance with a Program or Production Notice or Operating Plan; or

(ii)       if not provided for in a Program or Production Notice or Operating Plan, unilaterally and in good faith to maintain the Property in good standing, to prevent waste or to otherwise discharge any obligation which is imposed upon it pursuant to this Agreement and in respect of which the Management Committee has not given it directions;

including, without limiting generality, investigating, prospecting, exploring, developing, property maintenance, preparing reports, estimates and studies, designing, equipping, improving, surveying, construction and mining, milling, concentrating, rehabilitation, reclamation, and environmental protection.

5

(q)       "Net Proceeds of Production" shall have the meaning attributed to it in Appendix II.

(r)       "Operating Plan" means the annual plan of Mining Operations submitted pursuant to paragraph 14.02.

(s)       "Operative Date" means the date upon which this Agreement becomes effective.

(t)       "Operator" means the party appointed as the Operator in accordance with article 5.

(u)       "Participant" means a party that is contributing to Exploration Costs or Mine Costs, as the case may be.

(v)       "party" or "parties" means the parties to this Agreement and their respective successors and permitted assigns which become parties pursuant to this Agreement.

(w)       "Prime Rate" means the rate of interest stated by the ________ Bank, Main Branch, Vancouver, British Columbia, as being charged by it on Canadian Dollar demand loans to its most creditworthy domestic commercial customers.

(x)       "Production Notice" means a notice which is given to each of the parties pursuant to paragraph 9.02.

(y)       "Program" means the work plan and budget of Mining Operations conducted during the Exploration Period and adopted pursuant to paragraph 7.02.

(z)       "Property" means the mineral properties that become subject to this Agreement on the Operative Date, any additional mineral properties that become part of the Property pursuant to this Agreement, the Minerals thereon, all information obtained from Mining Operations and those rights and benefits appurtenant to the Property that are acquired for the purpose of conducting Mining Operations.

(aa)     "Proportionate Share" means that share which is equal to a party's percentage Interest.

(bb)     "Simple Majority" means a decision made by the Management Committee by more than 50 percent of the votes represented and entitled to be cast at a meeting thereof.

6

(cc)     "Special Majority" means a decision made by the Management Committee by more than 75 percent of the votes represented and entitled to be cast at a meeting thereof. 

(dd)     "$" means United States Dollars.

1.02                    The words "article", "paragraph", "subparagraph", "herein" and "hereunder" refer to this Agreement.  The words "this Agreement" include every Schedule or Appendix attached hereto but exclude the Head Agreement. 

1.03                    The captions and the emphases of the defined terms have been inserted for convenience and do not define the scope of any provision.

2.                    FORMATION OF THE JOINT VENTURE

2.01                    The parties hereby agree to associate and participate in a joint operation (herein called the "Joint Operation") for the purpose of exploring the Property and, if deemed warranted, bringing the Property or a portion thereof into commercial production by establishing and operating a Mine.

2.02                    Except as expressly provided in this Agreement, each party shall have the right independently to engage in and receive full benefits from business activities, whether or not competitive with the Joint Operation, without consulting any other party.  The doctrines of "corporate opportunity" or "business opportunity" shall not be applied to any other activity, venture or operation of any party and no party shall have any obligation to another party with respect to any opportunity to acquire any assets outside of the Property at any time, or within the Property after the termination of this Agreement.  Unless otherwise agreed in writing, no party shall have any obligation to mill, beneficiate or otherwise treat any Minerals or any other party's share of Minerals in any facility owned or controlled by such party.

3.                    INTERESTS

3.01                    Except as otherwise provided herein, the parties shall bear all Costs and all liabilities arising under this Agreement and shall own the Property, the Assets and any Mine all in proportion to their respective Interests.

3.02       On the Operative Date the respective Interests of the parties shall be as follows:

(a)       If Revelstoke has exercised only the First Option under the Head Agreement:
Petaquilla                 40%

7
Revelstoke               60%;

(b)       If Revelstoke has exercised both the First Option and the Second Option under the Head Agreement:
Petaquilla                 30%

Revelstoke               70%.

4.                    MANAGEMENT COMMITTEE

4.01                    A Management Committee shall be established on or forthwith after the Operative Date.  Except as herein otherwise provided, the Management Committee shall make all decisions in respect of Mining Operations.

4.02                    Each party owning an Interest shall forthwith appoint one representative and one alternate representative to the Management Committee.  The alternate representative may act for a party's representative in his absence.

4.03                    The Operator shall call a Management Committee meeting at least once every 12 months, and, in any event within 14 days of being requested to do so by any representative.

4.04                    The Operator shall give notice, specifying the time and place of, and the agenda for, the meeting to all representatives at least seven days before the time appointed for the meeting.  Unless otherwise agreed to by the Management Committee, all meetings of the Management Committee shall be held in Vancouver, British Columbia.  Each agenda for a meeting shall include the consideration and approval of the minutes of the immediately preceding meeting of the Management Committee.

4.05                    Notice of a meeting shall not be required if representatives of all of the parties are present and unanimously agree upon the agenda.

4.06                    A quorum for any Management Committee meeting shall be present if a representative of each of the parties holding an Interest is present.  If a quorum is present at the meeting, the Management Committee shall be competent to exercise all of the authorities, powers and discretions herein bestowed upon it hereunder.  The Management Committee shall not transact any business at a meeting unless a quorum is present at the commencement of the meeting.  If a quorum is not present within 30 minutes following the time appointed for the commencement of the Management Committee meeting, the meeting shall be automatically re-scheduled for the same time of day and at the same place five business days later, and the Operator shall be under no obligation to give any party notice thereof.  A quorum shall be deemed to be present at such re-scheduled meeting for all purposes under this Agreement if at least one representative is present, and a party or parties holding not less than 25% in Interest is or are represented.  A representative may attend and vote at a meeting of the Management Committee by telephone conference call in which each representative may hear, and be heard by, the other representatives.

8

4.07                    The Management Committee shall decide every question submitted to it by a vote with each representative being entitled to cast that number of votes which is equal to its party's Interest percentage.  Other than as is expressly set out herein to the contrary, the Management Committee shall make decisions by Simple Majority.  In the event of a tied vote, the chairman shall have a casting vote in addition to the votes to which the chairman is entitled to cast as the representative of a party.  

4.08                    The representative and alternate representative of the Operator shall be the chairman and secretary, respectively, of the Manage-ment Committee meeting.

4.09                    The secretary of the Management Committee meeting shall take minutes of that meeting and circulate copies thereof to each represent-ative within a reasonable time following the termination of the meeting, and in any event no later than the time of delivery of the notice of the next following meeting of the Management Committee.

4.10                  The Management Committee may make decisions by obtaining the consent in writing of the representatives of all parties.  Any decision so made shall be as valid as a decision made at a duly called and held meeting of the Management Committee.

4.11                  Management Committee decisions made in accordance with this Agreement shall be binding upon all of the parties.

4.12                  Each party shall bear the expenses incurred by its representative and alternate representative in attending meetings of the Management Committee.

4.13                  The Management Committee may, by agreement of the representatives of all the parties, establish such other rules of procedure, not inconsistent with this Agreement, as the Management Committee deems fit.

4.14                  Reference in this section to the "parties" shall apply during the Exploration Period.  After the date of a Production Notice this section shall be read as if the word "Participant" appeared wherever the word "party" appears.

9

5.                    OPERATOR

5.01                    Petaquilla shall act as Operator for so long as its Interest is 30% or more.  If Petaquilla's Interest is less than 30%, the Management Committee shall select a party, if such party so consents, to be the Operator.

5.02                    The party acting as Operator may resign as Operator on at least 90 days' notice to all the parties.

5.03                    The Management Committee may, by Special Majority, remove the party acting as Operator, effective the date designated by the Management Committee if:

(a)       that party makes an assignment for the benefit of its creditors, or consents to the appointment of a receiver for all or substantially all of its property, or files a petition in bankruptcy or is adjudicated bankrupt or insolvent; or

(b)       a court order is entered without that party's consent:

(i)       appointing a receiver or trustee for all or substantially all of its property; or

(ii)       approving a petition in bankruptcy or for a reorganization pursuant to the applicable bankruptcy legislation or for any other judicial modification or alteration of the rights of creditors; or

(c)       the Operator is in default under this Agreement and fails to cure such default, or to commence bona fide curative measures, within 30 days of receiving notice of the default from a non-Operator;

(d)       the Operator fails to meet any of its obligations pursuant to paragraph 6.04; or

(e)       the Operator undergoes a change in "Control" (as hereinafter defined).

5.04                    In paragraph 5.03, "Control" means the ability, directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of the Operator through (i) the legal or beneficial ownership of voting securities; (ii) the right to appoint managers, directors or corporate management; (iii) contract; (iv) operating agreement; (v) voting trust; or otherwise.

10

5.05                    If a party resigns or is removed as Operator, the Management Committee (the representative of the former Operator not being entitled to vote on the resolution) shall thereupon select another party to become the Operator effective the date established by the Management Committee.

5.06                    The new Operator shall assume all of the rights, duties, liabilities and status of the previous Operator as provided in this Agreement.  The new Operator shall have no obligation to hire any employees of the former Operator resulting from this change of Operator.

5.07                    Upon ceasing to be Operator, the former Operator shall forth-with deliver to the new Operator custody of all Assets, Property, books, records, and other property both real and personal which it prepared or maintained in its capacity as Operator.

5.08                    If the Operator resigns or is removed and no other party consents to act as Operator, the Joint Operation shall be terminated and the party which was the Operator may, if it consents to act, continue to act as Operator to effect the termination and the other parties shall be obligated to fund their respective Proportionate Shares of the Costs incurred.

6.                    RIGHTS, DUTIES AND STATUS OF OPERATOR

6.01                    The Operator in its operations hereunder shall be deemed to be an independent contractor.  The Operator shall not act or hold itself out as agent for any of the parties nor make any commitments on behalf of any of the parties unless specifically permitted by this Agreement or directed in writing by a party.

6.02                    Subject to any specific provision of this Agreement and subject to it having the right to reject any direction on reasonable grounds by virtue of its status as an independent contractor, the Operator shall perform its duties hereunder in accordance with the directions of the Management Committee and in accordance with this Agreement.

6.03                    The Operator shall manage and carry out Mining Operations substantially in accordance with Programs, Feasibility Reports and Production Notices, Operating Plans, Mine Maintenance Plans and Mine Closure Plans adopted by the Management Committee and in connection therewith shall, in advance if reasonably possible, notify the Manage-ment Committee of any change in Mining Operations which the Operator considers material and if it is not reasonably possible, the Operator shall notify the Management Committee so soon thereafter as is reason-ably possible.

11

6.04                    The Operator shall have the sole and exclusive right and authority to manage and carry out all Mining Operations in accordance herewith and to incur the Costs required for that purpose.  In so doing the Operator shall: 

(a)       comply with the provisions of all agreements or instruments of title under which the Property or Assets are held;

(b)       pay all Costs properly incurred promptly as and when due;

(c)       keep the Property and Assets free of all liens and encum-brances (other than those, if any, in effect on the Operative Date, those the creation of which is permitted pursuant to this Agreement, or builder's or mechanic's liens) arising out of the Mining Operations and, in the event of any lien being filed as aforesaid, proceed with diligence to contest or discharge the same;

(d)       with the approval of the Management Committee prosecute claims and, where a defence is available, defend litigation arising out of the Mining Operations, provided that any Participant may join in the prosecution or defence at its own expense;

(e)       subject to paragraph 20.06, perform such assessment work or make payments in lieu thereof and pay such rentals, taxes or other payments and do all such other things as may be necessary to maintain the Property in good standing, including, without limiting generality, staking and restaking mining claims, and applying for licenses, leases, grants, concessions, permits, patents and other rights to and interests in the Minerals;

(f)       maintain books of account in accordance with the Accounting Procedure, provided that the judgment of the Operator as to matters related to the accounting, for which provision is not made in the Accounting Procedure, shall govern if the Operator's accounting practices are in accordance with accounting principles generally accepted in the mining industry in Canada;

(g)       perform its duties and obligations hereunder in a sound and workmanlike manner, in accordance with sound mining and engineering practices and other practices customary in the Canadian mining industry, and in substantial compliance with all applicable federal, provincial, Territorial and municipal laws, by-laws, ordinances, rules and regulations and this Agreement;

(h)       prepare and deliver the reports provided for in paragraph 21.02; and

12

(i)       have such additional duties and obligations as the Management Committee may from time to time determine.

7.                    EXPLORATION PROGRAMS

7.01                    The Operator shall prepare draft Programs for consideration by the Management Committee.  Unless otherwise agreed to by a Special Majority, each Program shall cover a calendar year.  The draft Program shall contain a state-ment in reasonable detail of the proposed Mining Operations, estimates of all Exploration Costs to be incurred and an estimate of the time when they will be incurred, and shall be delivered to each Participant by no later than 60 days prior to the period to which the draft Program relates.  Each draft Program shall be accompanied by such reports and data as are reasonably necessary for each party to evaluate and assess the results from the Program for the then current year and, to the extent not previously delivered, from earlier Programs.

7.02                    The Management Committee shall review the draft Program prepared and, if it deems fit, adopt the Program with such modifications, if any, as the Management Committee deems necessary.  The Operator shall be entitled to an allowance for a Cost overrun of 10 percent in addition to any budgeted Exploration Costs and any Costs so incurred shall be deemed to be included in the Program, as adopted.

7.03                    The Operator shall forthwith submit the adopted Program to the parties.  Each party may, within 30 days of receipt of the Program, give notice to the Operator committing to contribute its Proportionate Share of the Exploration Costs for that Program.  A party which fails to give that notice within the 30 day period shall be deemed to have elected not to contribute to that Program.

7.04                    If any party elected not to contribute to a Program, the amounts to be contributed by the parties who elected to contribute shall be increased pro rata, subject to the right of any of them to elect, prior to the commencement of the Program, not to contribute more than its Proportionate Share.  If one or more party so elects to contribute no more than its Proportionate Share and the other parties do not elect to contribute pro rata to the resulting shortfall, the Operator shall in good faith revise the Program and Budget such that the technical objectives of the original Program are retained to the extent that is reasonably practicable given the reduced contributions to Costs.  The Operator shall, within 15 days following the end of the 30-day period set out in paragraph 7.03, deliver to each party a copy of the said revised Program which, if the budget contemplates Costs of at least 80% of those contemplated in the original adopted Program, shall then be deemed for all purposes under this Agreement to be the adopted Program .  If the budget for the revised Program contemplates Costs of less than 80% of those contemplated in the original adopted Program, the revised Program shall be re-submitted to the Management Committee as a draft Program pursuant to paragraph 7.01, and the procedure set out in paragraph 7.01 to 7.04 inclusive shall be repeated.

13

7.05                    The Operator shall be entitled to invoice each Participant:

(a)       no more frequently than monthly, for its Proportionate Share of Exploration Costs incurred and paid by the Operator in carrying out a Program; or

(b)       not more than 60 days in advance of requirements, for an advance of that Participant's Proportionate Share of Exploration Costs estimated to be incurred and paid by the Operator in carrying out a Program.

Each invoice shall be signed by a financial officer of the Operator.  Each Participant shall pay to the Operator the amount invoiced within 30 days of receipt of the invoice.  If a Participant protests the correctness of an invoice it shall nevertheless be required to make the payment.

7.06                    If any Participant, after having committed to contribute pursuant to paragraph 7.03, fails to pay an invoice within the 30-day period referred to in paragraph 7.05 the Operator may by notice demand payment.  If no payment is made within the period of 30 days next succeeding the receipt of the demand notice, that Participant shall be deemed to have forfeited its right to contribute to any further Costs under this Agreement and it shall be deemed to have elected not to contribute to each Program subsequently conducted and to any Production Notice, and accordingly, shall have its Interest reduced in the manner contemplated in paragraphs 7.09 and 10.02(b).

7.07                    The Operator shall expend all monies advanced by a Parti-cipant ratably with the advances of the other Participants.  If the Operator suspends or prematurely terminates a Program, any funds advanced by a Participant in excess of that Participant's Proportionate Share of Exploration Costs incurred prior to the suspension or premature termination shall be refunded within 60 days of the suspension or premature termination.  Unless approved unanimously by the Management Committee, the Operator shall be exclusively liable for the payment of all Costs incurred in excess of 110 percent of any budgeted Exploration Costs.

7.08                    Unless otherwise directed by the Management Committee, the Operator may suspend or terminate prematurely any Program when the Operator, in good faith, considers that conditions are not suitable for the proper continuation or completion of the Program or the results obtained to that time eliminate or substantially impair the technical rationale on which the Program was based.  If any Program is altered, suspended or terminated premature-ly so that the Exploration Costs incurred on that Program as altered, suspended or terminated are less than 80 percent of the Exploration Costs set out in the adopted Program, any party which elected not to contribute to that Program shall be given notice of the alteration, suspension or termination by the Operator and shall be entitled to contribute its Proportionate Share of the Exploration Costs incurred on that Program by payment thereof to the Operator within 30 days after receipt of the notice, but shall not be entitled to review the results of the Program until it has made full payment. If payment is not made by that party within the 30 days afore-said it shall forfeit its right to contribute to that Program without a demand for payment being required to be made thereafter by the Manage-ment Committee.  If payment is made by that party within the 30 days as aforesaid, the Operator shall distribute the payment to the original Participants pro rata according to their respective contributions to the Program, and shall deliver to the new Participant copies of all data previously delivered to the other Participants with respect to that Program

14

7.09                    If a party elected not to contribute to the Exploration Costs of any Program the Interest of that party shall be decreased on a straight-line basis and the Interest of each Participant contributing in excess of its Proportionate Share of the Exploration Costs shall be increased so that, subject to paragraph 7.10, at all times during the Exploration Period the Interest of each party will be that percentage which is equivalent to its Exploration Costs and Prior Exploration Costs expressed as a percentage of the Exploration Costs and Prior Exploration Costs of all parties.  Notwithstanding the foregoing but subject to paragraph 7.10 hereof, the party whose Interest has been reduced (other than a party who has forfeited the right to contribute pursuant to paragraph 7.06) shall be entitled to receive details of and to contribute to future Programs to the extent of its then Interest.  On the Operative Date, the parties' respective Interests and Prior Exploration Costs shall be deemed to be as follows:

(a)       if Revelstoke has exercised only the First Option under the Head Agreement:

	 	
Prior Exploration Costs
	
Interest

	
Petaquilla
	
US$4,000,000
	
40%

	
Revelstoke
	
US$6,000,000
	
60%

(b)       if Revelstoke has exercised both the First Option and the Second Option under the Head Agreement:

	 	
Prior Exploration Costs
	
Interest

	
Petaquilla
	
US$3,857,143
	
30%

	
Revelstoke
	
US$9,000,000
	
70%

7.10                    If the effect of the application of paragraph 7.09 is to reduce the Interest of any party to less than 10%, such party shall then be deemed to have assigned and conveyed its Interest to the Participants, if more than one then in proportion to their respective Interests, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, by way of royalty, 5% of Net Proceeds of Production, subject to adjustment as provided in paragraph 7.12.  

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7.11                    If the Operator fails to submit a draft Program or a revised Program by the date set out in this Agreement, the following shall apply:

(a)       the Operator shall not be entitled to submit a draft Program or revised Program for the subject period;

(b)       any Participant other than the Operator whose Interest is not less than 20% may, within 15 days following the date by which the Operator's draft Program or revised Program was due, submit a draft Program (the "Non-Operator's Program") for the subject period for consideration by the Management Committee;

(c)       the Management Committee shall review the Non-Operator's Program and, if it deems fit (the Operator not being entitled to vote with respect thereto), adopt the Non-Operator's Program with such modifications, if any, as the Management Committee deems necessary; the adopted Program shall then be submitted to the parties pursuant to paragraph 7.03;

(d)       If the Operator is a party and elects to contribute to the Non-Operator's Program, it shall remain as the Operator for the duration of the Non-Operator's Program.

(e)       if the Operator is a party and elects not to contribute to the Non-Operator's Program, it shall cease to be the Operator for the duration of the Non-Operator's Program, and the Management Committee shall appoint another party as Operator (the former Operator not being entitled to vote with respect thereto);

(f)       following the completion of the Non-Operator's Program the former Operator shall, subject to the provisions of paragraph 5.01, automatically become the Operator.

7.12                    Each of Revelstoke and Petaquilla hereby agree that the maximum royalty to which it and its assigns shall be collectively entitled pursuant to this Agreement is 5% of Net Proceeds of Production.  For example, if:

(a)       Petaquilla assigns a part of its Interest to a third party pursuant to this Agreement, and

(b)       Petaquilla then becomes entitled to receive 5% of Net Proceeds of Production  pursuant to paragraph 7.10 or subparagraph 10.02(b); and

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(c)       the said third party then also becomes entitled to receive 5% Net Proceeds of Production  pursuant to paragraph 7.10 or subparagraph 10.02(b),

then Petaquilla and such third party shall collectively be entitled to receive 5 % of Net Proceeds of Production, allocated between them on a proportionate basis based upon the respective Prior Exploration Costs and Exploration Costs of each of Petaquilla and such third party at the time that the assignment and conveyance of its Interest took place.

8.                    FEASIBILITY REPORT

8.01                    Except as provided in paragraph 8.02, a Feasibility Report shall only be prepared with the approval of the Management Committee. The Operator shall provide copies of the completed Feasibility Report to each of the parties forthwith upon receipt, together with copies of all of the latest technical data and information generated or received by the Operator from the immediately preceding Program and not contained in the Feasibility Report.

8.02                    Notwithstanding the provisions of paragraph 8.01, if a party (the "Proponent") is of the view that a Feasibility Report should be prepared, such party shall give notice thereof to the Operator and the Operator shall call a Management Committee meeting to consider the matter.  If the Management Committee fails to approve the preparation of the Feasibility Report supported by the Proponent, the Proponent may, either alone or with other parties, at its or their sole cost, prepare a Feasibility Report.  If such Feasibility Report indicates that production from the Property would be profitable to the Proponent, the Proponent shall deliver the Feasibility Report to the Operator who shall then call a Management Committee meeting to consider the Proponent's Feasibility Report.  If the Management Committee adopts the Feasibility Report, the non-contributing parties may either pay the Proponent an amount equal to 150% of their respective proportionate costs of the preparation of the Feasibility Report, or shall suffer reduction of their respective Interests pursuant to paragraph 7.09.  Upon the adoption by the Management Committee of the Proponent's Feasibility Report, it shall become a Feasibility Report for all purposes hereunder.

8.03                    The parties shall meet at reasonable intervals and times to review the Feasibility Report and discuss whether the establishing and bringing of a Mine into commercial production in conformity with the Feasibility Report is feasible or desirable.

9.                    PRODUCTION NOTICE

9.01                    The Operator shall call a Management Committee meeting to consider the Feasibility Report for a date no sooner than three months and no later than six months after the Feasibility Report was provided to each of the parties.

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9.02                    The Management Committee shall consider the Feasibility Report prepared and may by Special Majority, approve the Feasibility Report, with such modi-fications, if any, as it considers necessary or desirable, together with an estimate of Construction Costs.  If a Feasibility Report is approved as aforesaid the Management Committee shall forthwith cause a Production Notice to be given to each of the parties by the Operator stating that the Management Committee has approved that a Mine be established and brought into production in conformity with the Feasibility Report and estimated Construction Costs as so approved.

10.                    ELECTION TO CONTRIBUTE

10.01                  Each party with an Interest may, within 60 days of the receipt of the Production Notice, give the Operator notice committing to contribute its Proportionate Share of Construction Costs.  A party which fails to give that notice within the 60-day period shall be deemed to have elected not to contribute to Construction Costs.

10.02                  If any party elects not to contribute to Construction Costs that party, subject to its rights under paragraph 10.04, shall forfeit the right to contribute to any further Costs under this Agreement, and those parties which elected to contribute as aforesaid may thereupon elect to increase their contribution to Construction Costs, if more than one party then in proportion to their respective Interests, by the amount which any party has declined to contribute.  If elections are made so that Construction Costs are fully committed:

(a)       the Interest of each Participant shall be increased and that of each non-Participant shall be decreased as Costs are incurred so that the Interest of each party at all times is that percentage which is equivalent to

(i)       the sum of its Exploration Costs, its Prior Exploration Costs and its contribution to Construction Costs;

divided by

(ii)      the sum of the total Exploration Costs, total Prior Exploration Costs and the total Construction Costs of all the parties;

multiplied by

(iii)     100;

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(b)       then, at the Completion Date, each non-Participant shall be deemed to have assigned and conveyed its Interest to the Participants, if more than one then in proportion to their respective Interests, and shall be entitled to receive as its sole remuneration and benefit in consideration of that assignment and conveyance, by way of royalty, subject to adjustment as provided in paragraph 7.12, that percent of the Net Proceeds of Production, as and when available, which is equivalent to the Interest, calculated at the Completion Date.

(c)       each Participant shall severally calculate and cause to be paid to each non-Participant any Net Proceeds of Production derived from the Property in the manner provided in Appendix II; and

(d)       notwithstanding the provisions of subparagraphs 10.02(b) and (c), if the effect of the application of subparagraph 10.02(a) reduces any party's Interest to less than one percent it shall forfeit its Interest to the Participants, if more than one then in proportion to their respective Interests, and that party shall have no further right or interest under this Agreement. 

10.03                  If, after the operation of paragraph 10.02, Construction Costs are not fully committed the Production Notice shall be deemed to be with-drawn, and shall not be resubmitted, either in the same or a revised form, for a period of at least six months following such withdrawal.

10.04                  If, after the operation of paragraph 10.02, Construction Costs are fully committed, the Participants shall diligently proceed with bringing a Mine into production in substantial conformity with the Feasibility Report.  If the Participants fail to commence the implementation of the Feasibility Report within twelve months of Construction Costs being fully committed, for reasons other than general economic conditions in the mining industry, any party which forfeited the right to contribute to Construction Costs pursuant to paragraph 10.02 shall have the right, exercisable in the 30 days following the expiration of such twelve month period, to reacquire from the Participants not less than all of its Interest as last held, by paying its Proportionate Share of Construction Costs incurred to the end of such twelve month period (together with interest at the Prime Rate plus 3%) to the Participants in proportion to their respective Interests.

10.05                  During the twelve-month period referred to in paragraph 10.04, neither the Operator nor any Participant shall be obliged to provide any non-Participant with the results of any work carried out on the Property, the Participants' sole obligation during such period being to provide any non-Participant, on the written request of such non-Participant made only once during the said twelve months, with a summary of the nature of the work carried out and the total Costs thereof.

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11.                   OPERATOR'S FEE

11.01                    The Operator may charge 2.5% of all Costs in consideration of acting as the Operator and in return for its head office overhead functions which are not charged directly.

12.                   MINE FINANCING

12.01                  The contributions of the Participants toward the Mine Costs shall be individually and separately provided by them.

12.02                  Any party may pledge, mortgage, charge or otherwise encumber its Interest in order to secure moneys borrowed and used by that party for the sole purpose of enabling it to finance its participation under this Agreement or in order to secure by way of floating charge as a part of the general corporate assets of that party moneys borrowed for its general corporate purposes, provided that the pledgee, mortgagee, holder of the charge or encumbrance (in this subsection called the "Chargee") shall hold the same subject to the provisions of this Agreement and that if the Chargee realizes upon any of its security it will comply with this Agreement.  The Agreement between the party hereto, as borrower, and the Chargee shall contain specific provisions to the same effect as the provisions of this paragraph.

13.                   CONSTRUCTION

13.01                  Subject to paragraphs 10.02 and 10.03, the Management Committee shall cause the Operator to, and the Operator shall, proceed with Construction with all reasonable dispatch after a Production Notice has been given.  Construction shall be substantially in accordance with the Feasibility Report subject to any variations proposed in the Produc-tion Notice, and subject also to the right of the Management Committee to cause such other reasonable variations in Construction to be made as the Management Committee, by Special Majority, deems necessary and advisable.

14.                   OPERATION OF THE MINE

14.01                  Commencing on the Completion Date, all Mining Operations shall be planned and conducted and all estimates, reports and statements shall be prepared and made on the basis of a calendar year.

14.02                  With the exception of the year in which the Completion Date occurs, an Operating Plan for each calendar year shall be submitted by the Operator to the Participants not later than November 1 in the year immediately preceding the calendar year to which the Operating Plan relates.  Each Operating Plan shall contain the following:

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(a)       a description of the proposed Mining Operations;

(b)       a detailed estimate of all Mine Costs plus a reasonable allowance for contingencies;

(c)       an estimate of the quantity and quality of the ore to be mined and the concentrates or metals or other products and by-products to be produced; and

(d)       such other facts as may be necessary to reasonably illustrate the results intended to be achieved by the Operating Plan.

Upon request of any Participant the Operator shall meet with that Participant to discuss the Operating Plan and shall provide such additional or supplemental information as that Participant may reasonably require with respect thereto.

14.03                  The Management Committee shall adopt each Operating Plan, with such changes as it deems necessary, by November 30 in the year immediately preceding the calendar year to which the Operating Plan relates; provided, however, that the Management Committee, by Special Majority, may from time to time and any time amend any Operating Plan.

14.04                  The Operator shall include in the estimate of Mine Costs referred to in subparagraph 14.02(b) hereof the establishment of a trust or escrow fund providing for the reasonably estimated costs of satisfying continuing obligations that may remain after the permanent termination of Mining Operations, in excess of amounts actually expended.  Such continuing obligations are or will be incurred as a result of the Joint Operation and shall include such things as monitoring, stabilization, reclamation or restoration obligations, severance and other employee benefit costs and all other obligations incurred or imposed as a result of the Joint Operation which continue or arise after the permanent termination of Mining Operations and the termination of this Agreement and settlement of all accounts.  The payment of such continuing obligations shall be made on the basis of units of production, and shall be in amounts reasonably estimated to provide over the lifetime of proven and probable reserves funds adequate to pay for such reclamation and long term care and monitoring.  The Participants shall contribute to the trust or escrow fund cash (or provide letters of credit or other forms of security readily convertible to cash in form approved by the Management Committee).  The amount contributed from time to time for the satisfaction of such continuing obligations shall be classified as Costs hereunder but shall be segregated into a separate account.

15.                   PAYMENT OF MINE COSTS

15.01                  The Operator may invoice each Participant, from time to time, for that Participant's Proportionate Share of Construction Costs or Operating Costs incurred to the date of the invoice, or at the beginning of each month for an advance equal to that Participant's Proportionate Share of the estimated cash disbursements to be made during the month.  Each Participant shall pay its Proportionate Share of the Construction Costs or Operating Costs or the estimated cash disbursements aforesaid to the Operator within 30 days after receipt of the invoice.  If the payment or advance requested is not so made, the amount of the payment or advance shall bear interest calculated monthly not in advance from the 30th day after the date of receipt of the invoice thereof by that Participant at a rate equivalent to the weighted average Prime Rate for the month plus 3% until paid.  The Operator shall have a lien on each Participant's Interest in order to secure that payment or advance together with interest which has accrued thereon.

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15.02                  If any Participant fails to pay an invoice contemplated in paragraph 15.01 within the 30-day period aforesaid, the Operator may, by notice, demand payment.  If no payment is made within 30 days of the Operator's demand notice, the Operator may, without limiting its other rights at law, enforce the lien created by paragraph 15.01 by taking possession of all or any part of that Participant's Interest.  The Operator may sell and dispose of the Interest which it has so taken into its possession by:

(a)       first offering that Interest to the other Participants, if more than one then in proportion to the respective Interests of the Participants who wish to accept that offer, for that price which is the fair market value stated in the lower of two appraisals obtained by the Operator from independent, well recognized appraisers competent in the appraisal of mining properties; and

(b)       if the Participants have not purchased all or part of that Interest as aforesaid, then by selling the balance, if any, either in whole or in part or in separate parcels at public auction or by private tender (the Participants being entitled to bid) at a time and on whatever terms the Operator shall arrange, having first given notice to the defaulting Participant of the time and place of the sale.

As a condition of the sale as contemplated in subparagraph 15.02(b), the purchaser shall agree to be bound by this Agreement and, prior to acquiring the Interest, shall deliver notice to that effect to the parties, in form acceptable to the Operator.  The proceeds of the sale shall be applied by the Operator in payment of the amount due from the defaulting Participant and interest as aforesaid, and the balance remaining, if any, shall be paid to the defaulting Participant after deducting reasonable costs of the sale.  Any sale or disposal made as aforesaid shall be a perpetual bar both at law and in equity by the defaulting Participant and its successors and assigns against all other Participants.

16.                   DISTRIBUTION IN KIND

16.01                  It is expressly intended that, upon implementation of any Production Notice hereunder, the association of the parties hereto shall be limited to the efficient production of Minerals from the Property and related activities, and that each of the parties shall be entitled to use, dispose of or other-wise deal with its Proportionate Share of Minerals as it sees fit.  Each Participant shall take in kind, f.o.b. truck or railcar on the Property, and separately dispose of its Proportionate Share of the Minerals produced from the Mine.  From the time of delivery, each Participant shall have ownership of and title to its Proportionate Share of Minerals separate from, and not as tenant in common with, the other Participants, and shall bear all risk of loss of Minerals.  Extra costs and expenses incurred by reason of the Participants taking in kind and making separate dispositions shall be paid by each Participant directly and not through the Operator or Management Committee.

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16.02                  Each Participant shall construct, operate and maintain, all at its own cost and expense, any and all facilities which may be necessary to receive and store and dispose of its Proportionate Share of the Minerals at the rate the same are produced.

16.03                  If a Participant has not made the necessary arrangements to take in kind and store its share of production as aforesaid the Operator shall, at the sole cost and risk of that Participant store, in any location where it will not interfere with Mining Operations, the production owned by that Participant.  The Operator and the other parties shall be under no responsibility with respect thereto.  All of the Costs involved in arranging and providing storage shall be billed directly to, and be the sole responsibility of the Participant whose share of production is so stored.  The Operator's charges for such assistance and any other related matters shall be billed directly to and be the sole responsibility of the Participant.  All such billings shall be subject to the provisions of paragraphs 15.01 and 15.02 hereof.

17.                   SURRENDER OF INTEREST

17.01                  Any party not in default hereunder may, at any time upon notice, surrender its entire Interest to the other parties by giving those parties notice of surrender.

The notice of surrender shall:

(a)       indicate a date for surrender not less than three months after the date on which the notice is given; and

(b)       contain an undertaking that the surrendering party will:

(i)       satisfy its Proportionate Share, based on its then Interest, of all obligations and liabilities which arose at any time prior to the date of surrender;

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(ii)      if the Operator has not included in Mine Costs the costs of continuing obligations as set out in paragraph 14.04 hereof, pay on the date of surrender its reasonably estimated Proportionate Share, based on the surrendering party's then Interest, of the Costs of rehabilitating the Mine site and of reclamation based on the Mining Operations completed as at the date of surrender; and

(iii)     will hold in confidence, for a period of two years from the date of surrender, all information and data which it acquired pursuant to this Agreement.

17.02                  Upon the surrender of its entire Interest as contemplated in paragraph 17.01 and upon delivery of a release in writing, in form acceptable to counsel for the Operator, releasing the other parties from all claims and demands hereunder, the surrendering party shall be relieved of all obligations or liabilities hereunder except for those which arose or accrued or were accruing due on or before the date of the surrender.

17.03                  A party to whom a notice of surrender has been given as contemplated in paragraph 17.01 may elect, by notice within 90 days to the party which first gave the notice to accept the surrender, in which case paragraphs 17.01 and 17.02 shall apply, or to join in the surrender.  If all of the parties join in the surrender the Joint Operation shall be terminated in accordance with article 18.

18.                   TERMINATION OF MINING OPERATIONS

18.01                  The Operator may, at any time subsequent to the Completion Date, on at least 30 days notice to all Participants, recommend that the Management Committee approve that the Mining Operations be suspended.  The Operator's recommendation shall include a plan and budget (in this article 18 called the "Mine Maintenance Plan"), in reasonable detail, of the activities to be performed to maintain the Assets and Property during the period of suspension and the Costs to be incurred.  The Management Committee may, by Special Majority, at any time subsequent to the Completion Date, cause the Operator to suspend Mining Operations in accordance with the Operator's recommendation with such changes to the Mine Maintenance Plan as the Management Committee deems necessary.  The Participants shall be committed to contribute their Proportionate Share of the Costs incurred in connection with the Mine Maintenance Plan.  The Management Committee, by Special Majority, may cause Mining Operations to be resumed at any time.

18.02                  The Operator may, at any time following a period of at least 90 days during which Mining Operations have been suspended, upon at least 30 days notice to all Participants, or in the events described in paragraph 18.01, recommend that the Management Committee approve the permanent termination of Mining Operations.  The Operator's recommendation shall include a plan and budget (in this article 18 called the "Mine Closure Plan"), in reasonable detail, of the activities to be performed to close the Mine and reclaim and rehabilitate the Property, as required by applicable law, regulation or contract by reason of this Agreement.  The Management Committee may, by unanimous approval of the representatives of all Participants, approve the Operator's recommendation with such changes to the Mine Closure Plan as the Management Committee deems necessary.

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18.03                  If the Management Committee approves the Operator's recommendation as aforesaid, it shall cause the Operator to:

(a)       implement the Mine Closure Plan, whereupon the Participants shall be committed to pay, in proportion to their respective Interests, such Costs as may be required to implement that Mine Closure Plan;

(b)       remove, sell and dispose of such Assets as may reasonably be removed and disposed of profitably and such other Assets as the Operator may be required to remove pursuant to applicable environmental and mining laws; and

(c)       sell, abandon or otherwise dispose of the Assets and the Property.

The disposal price for the Assets and the Property shall be the best price reasonably obtainable and the net revenues, if any, from the removal and sale shall be credited to the Participants in proportion to their respective Interests.

18.04                  If the Management Committee does not approve the Operator's recommendation contemplated in paragraph 18.02, the Operator shall maintain Mining Operations in accordance with the Mine Maintenance Plan as pursuant to paragraph 18.01.

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19.                   THE PROPERTY

19.01                  Title to the Property shall be held in the name of the Operator in trust for the parties in proportion to their respective Interests as adjusted from time to time.  Each of the parties shall have the right to receive, forthwith upon making demand therefor from the Operator, such documents as it may reasonably require to confirm its Interest.

19.02                  This Agreement, or a memorandum of this Agreement, shall, upon the written request of any party, be recorded in the office of any governmental agency so requested, in order to give notice to third parties of the respective interests of the parties in the Property and this Agreement.  Each party hereby covenants and agrees with the requesting party to execute such documents as may be necessary to perfect such recording.

20.                   AREA OF COMMON INTEREST

20.01                  The area of common interest shall be deemed to comprise that area which is included within the outermost boundary of the mineral properties which constitute the Property as at the Operative Date. 

20.02                  If at any time during the subsistence of this Agreement any party or the Affiliate of any party (in this section only called in each case the "Acquiring Party") stakes or otherwise acquires, directly or indirectly, any right to or interest in any mining claim, licence, lease, grant, concession, permit, patent, or other mineral property located wholly or partly within the area of interest referred to in subparagraph 20.01, the Acquiring Party shall forthwith give notice to the other parties of that staking or acquisition, the total cost thereof and all details in the possession of that party with respect to the details of the acquisition, the nature of the property and the known mineralization.

20.03                  The Management Committee (the representative of the Acquiring Party not being entitled to vote with respect thereto) may, within 30 days of receipt of the Acquiring Party's notice, elect, by notice to the Acquiring Party, to require that the mineral properties and the right or interest acquired be included in and thereafter form part of the Property for all purposes of this Agreement.

20.04                  If the election aforesaid is made, all the other parties shall reimburse the Acquiring Party for that portion of the cost of acquisition which is equivalent to their respective Interests.

20.05                  If the Management Committee does not  make the election aforesaid within that period of 30 days, the right or interest acquired shall not form part of the Property and the Acquiring Party shall be solely entitled thereto.

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20.06                  Notwithstanding subparagraph 6.04(e), the Operator shall be entitled, at any time and from time to time to surrender all or any part of the Property or to permit the same to lapse, but only upon first either obtaining the unanimous consent of the Management Committee, or giving 60 days notice of its intention to do so to the other parties.  In this latter event, the parties, other than the Operator, shall be entitled to receive from the Operator, on request prior to the date of the surrender or lapse, pro rata in accordance with their respective Interests, a conveyance of that portion of the Property intended for surrender or lapse, together with copies of any plans, assay maps, diamond drill records and factual engineering data in the Operator's possession and relevant thereto.  Any part of the Property so acquired shall cease to be subject to this Agreement and shall not be subject to paragraph 20.02.  Any part of the Property which has not been so acquired by any of the parties shall remain subject to paragraph 20.02.

21.                   INFORMATION AND DATA

21.01                  At all times during the subsistence of this Agreement the duly authorized representatives of each Participant shall, at its and their sole risk and expense and at reasonable intervals and times, have access to the Property and to all technical records and other factual engineering data and information relating to the Property which is in the possession of the Operator.

21.02                  During the Exploration Period while Programs are being carried out, the Operator shall furnish the Participants with monthly progress reports and with a final report within 60 days following the conclusion of each Program.  The final report shall show the Mining Operations performed and the results obtained and shall be accompanied by a statement of Costs and copies of pertinent plans, assay maps, diamond drill records and other factual engineering data.  During the Construction Period and during the implementation of an Operating Plan the Operator shall provide monthly progress reports to the Participants, which report shall include information on any changes or developments affecting the Mine that the Operator considers are material.

21.03                  All information and data concerning or derived from the Mining Operations shall be kept confidential and, except to the extent required by law or by regulation of any Securities Commission or Stock Exchange, shall not be disclosed to any person other than an Affiliate without the prior consent of all the Participants, which consent shall not unreasonably be withheld.

21.04                  The text of any news releases or other public statements which a party intends to make with respect to the Property or this Agreement shall, to the extent practicable, be made available to the other parties prior to publication and the other parties shall have the right to make suggestions for changes therein.

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22.                   LIABILITY OF THE OPERATOR

22.01                  Subject to paragraph 22.02, each party shall indemnify and save the Operator harmless from and against any loss, liability, claim, demand, damage, expense, injury or death (including, without limiting the generality of the foregoing, legal fees) resulting from any acts or omissions of the Operator or its officers, employees or agents.

22.02                  Notwithstanding paragraph 22.01, the Operator shall not be indemnified nor held harmless by any of the parties for any loss, liability, claim, damage, expense, injury or death, (including, without limiting the generality of the foregoing, legal fees) resulting from the negligence or willful misconduct of the Operator or its officers, employees or agents.

22.03                  An act or omission of the Operator or its officers, employees or agents done or omitted to be done:

(a)       at the direction of, or with the concurrence of, the Management Committee; or

(b)       unilaterally and in good faith by the Operator to protect life or property

shall be deemed not to be negligence or willful misconduct.

22.04                  The obligation of each party to indemnify and save the Operator harmless pursuant to paragraph 22.01 shall be in proportion to its Interest as at the date that the loss, liability, claim, demand, damage, expense, injury or death occurred or arose.

22.05                  The Operator shall not be liable to any other party nor shall any party be liable to the Operator in contract, tort or otherwise for special or consequential damages, including, without limiting the generality of the foregoing, loss of profits or revenues.

23.                   INSURANCE

23.01                  Commencing on the Operative Date, the Management Committee shall cause the Operator to place and maintain with a reputable insurer or insurers such insurance, if any, as the Management Committee in its discretion deems advisable in order to protect the parties together with such other insurance as any Participant may by notice reasonably request.  The Operator shall, upon the written request of any Parti-cipant, provide it with evidence of that insurance.

23.02                  Paragraph 23.01 shall not preclude any party from placing, for its own account insurance for greater or other coverage than that placed by the Operator.

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24.                   RELATIONSHIP OF PARTIES

24.01                  The rights, duties, obligations and liabilities of the parties shall be several and not joint nor joint and several, it being the express purpose and intention of the parties that their respective Interests shall be held as tenants in common.

24.02                  Nothing herein contained shall be construed as creating a partnership of any kind or as imposing upon any party any partnership duty, obligation or liability to any other party hereto.

24.03                  No party shall, except when required by this Agreement or by any law, by-law, ordinance, rule, order or regulation, use, suffer or permit to be used, directly or indirectly, the name of any other party for any purpose related to the Property or this Agreement.

25.                   PARTITION

25.01                  Each of the parties hereto waives, during the term of this Agreement, any right to partition of the Property or the Assets or any part thereof and no party shall seek to be entitled to partition of the Property or the Assets whether by way of physical partition, judicial sale or otherwise during the term of this Agreement.

26.                   TAXATION

26.01                  All Costs incurred hereunder shall be for the account of the party or parties making or incurring the same, if more than one then in proportion to their respective Interests, and each party on whose behalf any Costs have been incurred shall be entitled to claim all tax benefits, write-offs, and deductions with respect thereto.

27.                   FORCE MAJEURE

27.01                  Notwithstanding anything herein contained to the contrary, if any Participant is prevented from or delayed in performing any obligation under this Agreement, and such failure is occasioned by any cause beyond its reasonable control, excluding only lack of finances, then, subject to paragraph 27.02, the time for the observance of the condition or performance of the obligation in question shall be extended for a period equivalent to the total period the cause of the prevention or delay persists or remains in effect regardless of the length of such total period.

27.02                  Any party hereto claiming suspension of its obligations as aforesaid shall promptly notify the other parties to that effect and shall take all reasonable steps to remove or remedy the cause and effect of the force majeure described in the said notice insofar as it is reasonably able so to do and as soon as possible; provided that the terms of settlement of any labour disturbance or dispute, strike or lockout shall be wholly in the discretion of the party claiming suspension of its obligations by reason thereof, and that party shall not be required to accede to the demands of its opponents in any such labour disturbance or dispute, strike, or lockout solely to remedy or remove the force majeure thereby constituted.  The party claiming suspension of its obligations shall promptly notify the other parties when the cause of the Force Majeure has been removed.

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27.03                  The extension of time for the observance of conditions or performance of obligations as a result of force majeure shall not relieve the Operator from its obligations to keep the Property in good standing pursuant to sub-paragraphs 6.04(a) and 6.04(e).

28.                   NOTICE

28.01                  All invoices, notices, consents and demands under this Agree-ment shall be in writing and may be delivered personally, transmitted by fax (with transmission confirmed in writing), or may be forwarded by first class prepaid registered mail to the address for each party specified in this Agreement or to such addresses as each party may from time to time specify by notice.  Any notice delivered or sent by fax shall be deemed to have been given and received on the business day next following the date of delivery or transmission.  Any notice mailed as aforesaid shall be deemed to have been given and received on the fifth business day following the date it is posted, provided that if between the time of mailing and the actual receipt of the notice there shall be a mail strike, slowdown or other labour dispute which affects delivery of the notice by mails, then the notice shall be effective only if actually delivered.

29.                   WAIVER

29.01                  No waiver of any breach of this Agreement shall be binding unless evidenced in writing executed by the party against whom charged. Any waiver shall extend only to the particular breach so waived and shall not limit any rights with respect to any future breach.

30.                   AMENDMENTS

30.01                  Except for those provisions, if any, of the Head Agreement specifically incorporated herein by reference, this Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof.  An amendment or variation of this Agree-ment shall only be binding upon a party if evidenced in writing executed by that party.

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31.                   TERM

31.01                  Unless earlier terminated by agreement of all parties having an Interest or as a result of one party acquiring both a 100 percent Interest and a 100 percent interest in the Net Proceeds of Production, the Joint  Operation and this Agreement shall remain in full force and effect for so long as any party has any right, title or interest in the Property.  Termination of this Agreement shall not, however, relieve any party from any obligations theretofore accrued but unsatisfied, nor from its obligations with respect to rehabilitation of the Mine site and reclamation.

32.                   TIME OF ESSENCE

32.01                  Time is of the essence of this Agreement.

33.                   ASSIGNMENT - RIGHT OF FIRST REFUSAL

33.01                  If a party (hereinafter in this paragraph referred to as the "Owner"):

(a)       receives a bona fide offer from an independent third party (the "Proposed Purchaser") dealing at arm's length with the Owner to purchase all or any part all of the Owner's Interest or its interest in this Agreement (which for certainty shall include the Owner's right to receive Net Proceeds of Production), which offer the Owner desires to accept, 

(b)       or if the Owner intends to sell all or any part of its Interest or its interest in this Agreement,

31

then, the Owner shall first offer (the "Offer")  such interest in writing to the other party upon terms no less favourable than those offered by the Proposed Purchaser or intended to be offered by the Owner, as the case may be.  The Offer shall specify the price and terms and conditions of such sale, the name of the Proposed Purchaser (which term shall, in the case of an intended offer by the Owner, mean the person or persons to whom the Owner intends to offer its interest) and, if the offer received by the Owner from the Proposed Purchaser provides for any consideration payable to the Owner otherwise than in cash, the Offer shall include the Owner's good faith estimate of the cash equiv-alent of the non-cash consideration.  If within a period of 60 days of the receipt of the Offer, the other party notifies the Owner in writing that it will accept the same, the Owner shall be bound to sell such interest to the other party (subject as hereinafter provided with respect to price) on the terms and conditions of the Offer.  If the Offer so accepted by the other party contains the Owner's good faith estimate of the cash equiv-alent consideration as aforesaid, and if the other party disagrees with the Owner's best estimate, the other party shall so notify the Owner at the time of acceptance and the other party shall, in such notice, specify what it considers, in good faith, the fair cash equivalent to be and the resulting total purchase price.  If the other party so notifies the Owner, the acceptance by the other party shall be effective and binding upon the Owner and the other party and the cash equivalent of any such non-cash consideration shall be determined by binding arbitration under the Commercial Arbitration Act (British Columbia) and shall be payable by the other party, subject to prepayment as hereinafter provided, within 60 days following its determination by arbitration.  The other party shall in such case pay to the Owner, against receipt of an absolute transfer of clear and unencumbered title to the interest of the Owner being sold, the total purchase price which it specified in its notice to the Owner and such amount shall be credited to the amount determined following arbitration of the cash equivalent of any non-cash consideration.  If the other party fails to notify the Owner before the expiration of the time limited therefor that it will purchase the interest offered, the Owner may sell and transfer such interest to the Proposed Purchaser at the price and on the terms and conditions specified in the Offer for a period of 60 days, provided that the terms of this paragraph shall again apply to such interest if the sale to the Proposed Purchaser is not completed within the said 60 days.  Any sale hereunder shall be conditional upon the Proposed Purchaser delivering a written undertaking to the other party, in form and content satisfactory to its counsel, to be bound by the terms and conditions of this Agreement.

34.                   SUCCESSORS AND ASSIGNS

34.01                  This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

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35.                   GOVERNING LAW

35.01                  This Agreement will be exclusively governed by, and interpreted and construed in accordance with, the laws prevailing in the Province of British Columbia, without reference to its jurisprudence regarding conflict of laws. To the extent that any party to this Agreement seeks a remedy from a court, the parties irrevocably and unconditionally attorn to the exclusive jurisdiction of the courts of the Province of British Columbia and all courts having appellate jurisdiction thereover.

                         IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written.

 

	
The COMMON SEAL of PETAQUILLA MINERALS LTD. was hereunto affixed in the presence of:

_________________________________ [signature]

_________________________________ [print name]

Authorized signatory

_________________________________ [signature]

_________________________________ [print name]

Authorized signatory
	
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c/s

	
 

The COMMON SEAL of REVELSTOKE INDUSTRIES, INC.  was hereunto affixed in the presence of:

_________________________________ [signature]

_________________________________ [print name]

Authorized signatory 

_________________________________ [signature]

_________________________________ [print name]

Authorized signatory
	
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c/s

 

 

This is page 32 to an agreement made the _____ day of ________________, 200_ between PETAQUILLA MINERALS LTD of the first part and REVELSTOKE INDUSTRIES, INC. of the second part.

THIS IS APPENDIX I TO THAT CERTAIN AGREEMENT BETWEEN PETAQUILLA MINERALS LTD. AND REVELSTOKE INDUSTRIES, INC.  MADE AS OF THE ____ DAY OF ___________, 20__.

 

ACCOUNTING PROCEDURE

1.                         INTERPRETATION

1.01                    Terms defined in the Agreement shall, subject to any contrary intention, have the same meanings herein.  In this Appendix the following words, phrases and expressions shall have the following meanings:
(a)       "Agreement" means the Agreement to which this Accounting Procedure is attached as Appendix I.

(b)       "Count" means a physical inventory count.

(c)       "Employee" means those employees of the Operator who are assigned to and directly engaged in the conduct of Mining Operations, whether on a full-time or part-time basis.

(d)       "Employee Benefits" means the Operator's cost of holi-day, vacation, sickness, disability benefits, field bonuses, amounts paid to and the Operator's costs of established plans for employee's group life insurance, hospitalisation, pension, retirement and other custom-ary plans maintained for the benefit of Employees and Personnel, as the case may be, which costs may be charged as a percentage assessment on the salaries and wages of Employees or Personnel, as the case may be, on a basis consistent with the Operator's cost experience.

(e)       "Field Offices" means the necessary sub-office or sub-offices in each place where a Program or Construction is being conducted or a Mine is being operated.

(f)       "Government Contributions" means the cost or contribu-tions made by the Operator pursuant to assessments imposed by governmental authority which are applicable to the salaries or wages of Employees or Personnel, as the case may be.

(g)       "Joint Account" means the books of account maintained by the Operator to record all assets, liabilities, costs, expenses, credits and other transactions arising out of or in connection with the Mining Operations.

(h)       "Material" means the personal property, equipment and supplies acquired or held, at the direction or with the approval of the Management Committee, for use in the Mining Operations and, without limiting the generality, more particularly "Controllable Material" means such Material which is ordinarily classified as Controllable Material, as that classification is determined or approved by the Management Committee, and controlled in mining operations.

(i)       "Personnel" means those management, supervisory, administrative, clerical or other personnel of the Operator normally associated with the Supervision Offices whose salaries and wages are charged directly to the Supervision Office in question.

(j)       "Reasonable Expenses" means the reasonable expenses of Employees or Personnel, as the case may be, for which those Employees or Personnel may be reimbursed under the Operator's usual expense account practice, as accepted by the Management Committee; including without limiting generality, any relocation expenses necessarily incurred in order to properly staff the Mining Operations if the relocation is approved by the Management Committee.

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(k)       "Supervision Offices" means the Operator's offices or department within the Operator's offices from which the Mining Operations are generally supervised.

2.                         STATEMENTS AND BILLINGS

2.01                    The Operator shall, by invoice, charge each Participant with its Proportionate Share of Exploration Costs and Mine Costs in the manner provided in sections 7 and 15 of the Agreement respectively.

2.02                    The Operator shall deliver, with each invoice rendered for Costs incurred a statement indicating:
(a)       all charges or credits to the Joint Account relating to Controllable Material ; and

(b)       all other charges and credits to the Joint Account summarised by appropriate classification indicative of the nature of the charges and credits.

2.03                    The Operator shall deliver with each invoice for an advance of Costs a statement indicating:
(a)       the estimated Exploration Costs or, in the case of Mine Costs the estimated cash disbursements, to be made during the next succeeding month;

(b)       the addition thereto or subtraction therefrom, as the case may be, made in respect of Exploration Costs or Mine Costs actually having been incurred in an amount greater or lesser than the advance which was made by each Participant for the penultimate month preceding the month of the invoice; and

(c)       the advances made by each Participant to date and the Exploration Costs or Mine Costs incurred to the end of the penultimate month preceding the month of the invoice.

3.                         DIRECT CHARGES

3.01                    The Operator shall charge the Joint Account with the following items:
(a)       Contractor's Charges:
All costs directly relating to the Mining Operations incurred under contracts entered into by the Operator with third parties.

(b)       Labour Charges:
(i)       The salaries and wages of Employees in an amount calculated by taking the full salary or wage of each Employee multiplied by that fraction which has as its numerator the total time for the month that the Employees were directly engaged in the conduct of Mining Operations and as its denominator the total normal working time for the month of the Employee;

(ii)      the Reasonable Expenses of the Employees; and

(iii)     Employee Benefits and Government Contributions in respect of the Employees in an amount proportionate to the charge made to the Joint Account in respect to their salaries and wages.

(c)       Office Maintenance:

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(i)       The cost or a pro rata portion of the costs, as the case may be, of maintaining and operating the Field Offices and the Supervision Offices.  The basis for charging the Joint Account for such maintenance costs shall be as follows:
(A)       the expense of maintaining and operating Field Offices, less any revenue therefrom; and

(B)       that portion of maintaining and operating the Supervision Offices which is equal to
(1)       the anticipated total operating expenses of the Supervision Offices
divided by

(2)       the anticipated total staff man days for the Employees whether in connection with the Mining Operations or not;
multiplied by

(3)       the actual total time spent on the Mining Operations by the Employee expressed in man days.

(ii)      Without limiting generality, the anticipated total operating expenses of the Supervision Offices shall include:
(A)       the salaries and wages of the Operator's Personnel which have been directly charged to the Supervision Offices;

(B)       the Reasonable Expense of the Personnel; and

(C)      Employee Benefits.

(iii)     The Operator shall make an adjustment in respect of the Office Maintenance cost forthwith after the end of each Operating Year upon having determined the actual operating expenses and actual total staff man days referred to in clause 3.01(c)(i)(B) of this Appendix I.

(d)       Material:
Material purchased or furnished by the Operator for use on the Property as provided under section 4 of this Appendix I.

(e)       Transportation Charges:
The cost of transporting Employees and Material necessary for the Mining Operations.

(f)       Service Charges:
(i)       The cost of services and utilities procured from outside sources other than services covered by paragraph 3.01(h).  The cost of consultant services shall not be charged to the Joint Account unless the retaining of the consultant is approved in advance by the Management Committee; and

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(ii)      Use and service of equipment and facilities furnished by the Operator as provided in sub-section 4.04 of this Appendix I.

(g)       Damages and Losses to Joint Property:
All costs necessary for the repair or replacement of Assets made necessary because of damages or losses by fire, flood, storms, theft, accident or other cause.  If the damage or loss is estimated by the Operator to exceed $10,000, the Operator shall furnish each Participant with written particulars of the damages or losses incurred as soon as practicable after the damage or loss has been discovered.  The proceeds, if any, received on claims against any policies of insurance in respect of those damages or losses shall be credited to the Joint Account.

(h)       Legal Expense:
All costs of handling, investigating and settling litigation or recovering the Assets, including, without limiting generality, attorney's fees, court costs, costs of investigation or procuring evidence and amounts paid in settlement or satisfaction of any litigation or claims; provided, however, that, unless otherwise approved in advance by the Management Committee, no charge shall be made for the services of the Operator's legal staff or the fees and expenses of outside solicitors.

(i)       Taxes:
All taxes, duties or assessments of every kind and nature (except income taxes) assessed or levied upon or in connection with the Property, the Mining Operations thereon, or the production therefrom, which have been paid by the Operator for the benefit of the parties.

(j)       Insurance:
Net premiums paid for

(i)       such policies of insurance on or in connection with Mining Operations as may be required to be carried by law; and

(ii)      such other policies of insurance as the Operator may carry for the protection of the parties in accordance with the Agreement; and

the applicable deductibles in event of an insured loss.

(k)       Rentals:
Fees, rentals and other similar charges required to be paid for acquiring, recording and maintaining permits, mineral claims and mining leases and rentals and royal-ties which are paid as a consequence of the Mining Operations.

(l)       Permits:
Permit costs, fees and other similar charges which are assessed by various governmental agencies.

(m)     Other Expenditures:

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Such other costs and expenses which are not covered or dealt with in the foregoing provisions of this sub-section 3.01 of this Appendix I as are incurred with the approval of the Management Committee for Mining Operations or as may be contemplated in the Agreement.

4.                         PURCHASE OF MATERIAL

4.01                    Subject to subsection 4.04 of this Appendix I the Operator shall purchase all Materials and procure all services required in the Mining Operations.

4.02                    Materials purchased and services procured by the Operator directly for the Mining Operations shall be charged to the Joint Account at the price paid by the Operator less all discounts actually received.

4.03                    Any Participant may sell Material or services required in the Mining Operations to the Operator for such price and upon such terms and conditions as the Management Committee may approve.

4.04                    Notwithstanding the foregoing provisions of this section 4, the Operator, after having obtained the prior approval of the Management Committee, shall be entitled to supply for use in connection with the Mining Operations equipment and facilities which are owned by the Operator and to charge the Joint Account with such reasonable costs as are commensurate with the ownership and use thereof.

5.                         DISPOSAL OF MATERIAL

5.01                    The Operator, with the approval of the Management Committee may, from time to time, sell any Material which has become surplus to the foreseeable needs of the Mining Operations for the best price and upon the most favourable terms and condi-tions available.

5.02                    Any Participant may purchase from the Operator any Material which may from time to time become surplus to the fore-seeable need of the Mining Operations for such price and upon such terms and conditions as the Management Committee may approve.

5.03                    Upon termination of the Agreement, the Management Committee may approve the division of any Material held by the Operator at that date, which Material may be taken by the Participants in kind or be taken by a Participant in lieu of a portion of its Proportion-ate Share of the net revenues received from the disposal of the Assets and Property.  If the division to a Participant be in lieu, it shall be for such price and on such terms and conditions as the Management Committee may approve.

5.04                    The net revenues received from the sale of any Material to third parties or to a Participant shall be credited to the Joint Account.

6.                         INVENTORIES

6.01                    The Operator shall maintain records of Material in reasonable detail and records of Controllable Material in detail.

6.02                    The Operator shall perform Counts from time to time at reasonable intervals, and in any event at the end of each calendar year.  The independent external auditor of the Operator shall be given reasonable notice of each Count, and shall be given the opportunity to attend the Count.

6.03                    Forthwith after performing a Count, the Operator shall reconcile the inventory with the Joint Account.  The Operator shall not be held accountable for any shortages of inventory except such shortages as may have arisen due to a lack of diligence on the part of the Operator.

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7.                         ADJUSTMENTS

7.01                    Payment of any invoice by a Participant shall not prejudice the right of that Participant to protest the correct-ness of the statement supporting the payment; provided, however, that all invoices and statements presented to each Participant by the Operator during any calendar year shall conclusively be presumed to be true and correct upon the expiration of 12 months following the end of the calendar year to which the invoice or statement relates, unless within that 12 month period that Participant gives notice to the Operator making claim on the Operator for an adjustment to the invoice or statement.

7.02                    The Operator shall not adjust any invoice or statement in favour of itself after the expiration of 12 months following the end of the calendar year to which the invoice or statement relates.

7.03                    Notwithstanding subsections 7.01 and 7.02 of this Appendix I, the Operator may make adjustments to an invoice or statement which arise out of a Count of Material or Assets within 60 days of the completion of the Count.

7.04                    A Participant shall be entitled upon notice to the Operator to request that the independent external auditor of the Operator provide that Participant with its opinion that any invoice or statement delivered pursuant to the Agreement in respect of the period referred to in subsection 7.01 of this Appendix I has been prepared in accordance with this Agreement.

7.05                    The time for giving the audit opinion contemplated in subsection 7.04 of this Appendix I shall not extend the time for the taking of exception to and making claims on the Operator for adjustment as provided in subsection 7.01 of this Appendix I.

7.06                    The cost of the auditor's opinion referred to in sub-section 7.04 of this Appendix I shall be solely for the account of the Participant requesting the auditor's opinion, unless the audit disclosed a material error adverse to that Participant, in which case the cost shall be solely for the account of the Operator.

7.07                    Upon not less than 10 business days' notice to the Operator, and no more frequently than twice during the currency of each Operating Plan, a Participant shall be entitled to inspect the Joint Account , at the location(s) where such records are normally kept.  All costs incurred in carrying out such inspection shall be borne by the Participant.  All disagreements or discrepancies identified by the Participant shall be referred to the independent external auditor for final resolution.

APPENDIX II

TO THAT CERTAIN AGREEMENT (THE "AGREEMENT") MADE AS OF ______________, 20__ BETWEEN PETAQUILLA MINERALS LTD., OF THE FIRST PART AND REVELSTOKE INDUSTRIES, INC..

NET PROCEEDS OF PRODUCTION

 

1.                         OBLIGATION

1.01                    If any non-Participant becomes entitled to a royalty pursuant to paragraph 7.12 or subparagraph 10.02(b) of the Agreement, each Participant shall separately calculate, as at the end of each calendar quarter subsequent to the Completion Date, the Net Proceeds of Production.

1.02                    Each Participant shall within 60 days of the end of each calendar quarter, as and when any Net Proceeds of Production are available for distribution:

(a)       severally pay or cause to be paid to each non-Partici-pant that percentage of the Net Proceeds of Production to which that non-Participant is entitled under paragraph 7.12 or subparagraph 10.02(b) of the Agreement;

(b)       deliver to each non-Participant a statement indicating:

(i)       the Gross Receipts during the calendar quarter;

(ii)      the deductions therefrom made in the order itemized in subsection 3.01 of this Appendix II;

(iii)     the amount of Net Proceeds of Production remaining; and

(iv)      the amount of those Net Proceeds of Production to which that non-Participant is entitled;

provided, however, that until such time as there are Net Proceeds of Production available, each Participant shall deliver to each non-Participant, within 60 days of the end of each calendar quarter commencing with the first calendar quarter following the Completion Date, a statement indicating the Gross  Receipts during the calendar quarter less the deductions therefrom made in the order itemized in subsection 3.01 of this Appendix II.

1.03                    Nothing contained in the Agreement or this Appendix II shall be construed as:

(a)       imposing on a Participant any obligation with respect to the payments of royalty due hereunder to a non-Participant from any other Participant; or

(b)       conferring on any non-Participant any right to or interest in any Property or Assets except the right to receive royalty payments from each Participant as and when due.

1.04                    The Participants agree that on the request of any non-Participant they will execute and deliver such documents as may be necessary to permit that non-Participant to record its royalty right against the Property.

2.                         DEFINITIONS

2.01                    Terms defined in the Agreement shall, subject to any contrary intention, bear the same meaning herein.

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2.02                    In addition to the definitions of the classes of Costs provided in paragraph 1.01(g) of the Agreement and without limiting the generality thereof:

(a)       "Distribution Costs" means all costs of:

(i)       transporting ore or concentrates from a Mine or a concentrating plant to a smelter, refinery or other place of delivery designated by the purchaser and, in the case of concentrates tolled, of transporting the concentrate or metal from a smelter or refinery to the place of delivery designated by the purchaser;

(ii)      handling, warehousing and insuring the concentrates and metal; and

(iii)     in the case of concentrates tolled, of smelting and refining, including any penalties thereon or in connection therewith.

(b)       "Interest Costs" means interest computed each calendar quarter and calculated as follows:

(i)       the average of the opening and closing monthly outstanding balances for each month during the quarter of the net unrecovered amounts of all costs in the classes enumerated in subparagraphs 1.01(g)(i), (ii), (iv) and (v) of the Agreement, and in paragraphs 2.02 (a), (b), (c) and (d) of this Appendix II;

multiplied by:

(ii)      the Prime Rate plus two percent;

multiplied by:

(iii)     the number of days in the quarter;

divided by:

(iv)      the number of days in the Year;

(c)       "Marketing Costs" means such reasonable charge for marketing of diamonds, ores and concentrates sold or of concentrates tolled as is consistent with generally accepted industry marketing practices including, without limitation, costs of market analysis, preparation of diamonds for sale, collection of sale proceeds and the costs of all associated activities; and

(d)       "Taxes and Royalties" means all taxes (other than income taxes), royalties or other charges or imposts provided for pursuant to any law or legal obligation imposed by any government in connection with a Participant's involvement in the Joint Operation if paid by the Participant.

2.03                    Wherever used in this Appendix II, "Gross Receipts" means the aggregate of all receipts, recoveries or amounts received by or credited to a Participant in connection with its participation under the Agreement including, without limiting the generality of the foregoing:

(a)       the receipts from the sale of that Participant's propor-tionate share of the concentrates derived from the Mineral produced from the Mine;

(b)       all proceeds received from the sale of the Property or Assets subsequent to the Operative Date;

(c)       all insurance recoveries (including amounts received to settle claims) in respect of loss of, or damage to any portion of the Property or Assets subsequent to the Operative Date;

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(d)       all amounts received as compensation for the expropriation or forceable taking of any portion of the Property or Assets subsequent to the Operative Date;

(e)       the fair market value, at the Property, of those Assets, if any, purchased for the Joint Account, that are transferred from the Property for use by a Participant elsewhere subsequent to the Operative Date; and

(f)       the amount of any negative balance remaining after the reallocation of negative balances pursuant to subsection 3.03 of this Appendix II;

to the extent that those receipts, recoveries or amounts have not been applied by the Participant as a recovery of any of the classes of Costs itemized in subsection 3.01 of this Appendix II.

3.                         NET PROCEEDS OF PRODUCTION

3.01                    "Net Proceeds of Production" means the Gross Receipts minus deductions therefrom, to the extent of but not exceeding the amount of those Gross Receipts, of the then net unrecovered amounts of the following classes of Costs made in the following itemized order:

(a)       Marketing Costs;

(b)       Distribution Costs;

(c)       Operating Costs;

(d)       Taxes and Royalties;

(e)       Interest Costs;

(f)       Construction Costs;

(g)       Exploration Costs; and

(h)       Prior Exploration Costs;

it being understood that the deductions in respect of the Costs referred to in paragraphs 3.01(a), (b), (d) and (e) of this Appendix II shall be based on those Costs as recorded by that Participant and the deductions in respect of the Costs referred to in paragraphs 3.01(c), (f), (g) and (h) of this Appendix II shall be based on that Participant's Proportionate Share of those Costs as recorded by the Operator.

3.02                    Any amount by which the aggregate of the Costs set out in paragraphs 3.01(a) to (h) inclusive in any quarter exceeds Gross Receipts for such quarter shall, together with any negative balance carried forward from the previous quarter, be carried forward for deduction from Gross Receipts in the immediately succeeding quarter.

4.                         ADJUSTMENTS AND VERIFICATION

4.01                    Payment of any Net Proceeds of Production by a Participant shall not prejudice the right of that Participant to adjust its own statement supporting the payment; provided, however, that all statements presented to the non-Participant by that Participant for any quarter shall conclusive-ly be presumed to be true and correct upon the expiration of 12 months following the end of the quarter to which the statement relates, unless within that 12 month period that Participant gives notice to the non-Participant making claim on the non-Participant for an adjustment to the statement which will be reflected in subsequent payment of Net Proceeds of Production.

4.02                    The Participant shall not adjust any statement in favour of itself after the expiration of 12 months following the end of the quarter to which the statement relates.

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4.03                    The non-Participant shall be entitled upon notice to any Participant to request that the auditor of that Participant provide the non-Participant with its opinion that any statement delivered pursuant to subsection 1.01 of this Appendix II in respect of any quarterly period falling within the 12 month period immediately preceding the date of the non-Participant's notice has been prepared in accordance with this Agreement.

4.04                    The time for giving the audit opinion contemplated in subsection 4.03 of this Appendix II shall not extend the time for the taking of exception to and making claim on the non-Partici-pant for adjustment as provided in subsection 4.01 of this Appendix II.

4.05                    The cost of the auditor's opinion referred to in subsection 4.03 of this Appendix II shall be solely for the account of the non-Participant requesting the auditor's opinion, except where the said opinion is to the effect that the statement has not been prepared substantially in accordance with this Agreement, in which case the cost shall be solely for the account of the Participant.

SCHEDULE "C"

TO THAT CERTAIN AGREEMENT MADE AS OF NOVEMBER 16, 2006, BETWEEN PETAQUILLA MINERALS LTD. OF THE FIRST PART AND REVELSTOKE INDUSTRIES, INC. OF THE 

SECOND PART

 

THE "TECHNICAL SERVICES AGREEMENT"

Revelstoke Industries, Inc

1801 Kent Street,

White Rock, British Columbia,

Canada, V4B 4T2

 

November 16th, 2006

Attention: Michael Levy, President

PETAQUILLA MINERALS LTD.

Suite 410 - 475 West Georgia Street

Vancouver, B.C.  V6B 4M9

Dear Sirs:

          Re:          San Juan Property, Panama

 

          This letter will confirm our agreement relating to work to be undertaken by Petaquilla Minerals Ltd. ("Petaquilla") in the capacity of an independent contractor on the San Juan Property (the "Property") located in Panama, as more fully described in Schedule "A" attached hereto.  The parties acknowledge that Revelstoke Industries, Inc. ("Revelstoke") has the exclusive right to acquire an interest in the Property from Petaquilla, as Optionor, pursuant to the agreement (the "Option Agreement") dated November 16h, 2006, between Revelstoke and Petaquilla.  The parties further acknowledge that this agreement does not, and is not intended to, amend in any way the terms of the Option Agreement.  The current program contemplates  ̈
 and related exploration activities as outlined in Schedule "B" hereto.

          Kindly sign and return the enclosed duplicate copy of this letter confirming our agreement.  The terms set forth below shall then form a contract binding upon both of us.

1.          Description of Work

Revelstoke Minerals Ltd. ("Revelstoke") hereby retains Petaquilla to manage and implement exploration work on the Property in accordance with the budget as presented in Schedule "B".  Petaquilla will commence field work in  ̈
, 2006, with planning and organizational work having been started in  ̈
, 2006.

2.          Payment

Revelstoke, in consideration of Petaquilla acting as the Operator in accordance with the Option Agreement, will pay to Petaquilla 2.5% of all costs incurred.  Petaquilla will use its best efforts to complete the work in accordance with the budget as presented in Schedule "B".

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Petaquilla shall be entitled to invoice Revelstoke, no more frequently than monthly, and no more than two months in advance, for the exploration expenditures reasonably anticipated to be incurred in any calendar month.  Each monthly statement shall include a reconciliation of invoices and actual expenditures incurred from the month for which advance cash calls were made.  Terms shall be 30 days net.  Petaquilla shall have no obligation to provide its services hereunder unless it is in receipt of funds from Revelstoke.

3.          Changes to Work

Site conditions, fieldwork and weather may necessitate changes to the exploration program.  All changes to the scope of the work will require the written authorization from Revelstoke, and any such changes shall not be binding upon Revelstoke until such authorization has been given.  Notwithstanding the foregoing, Revelstoke has the right to change the scope of the work program at any time upon giving notice to Petaquilla, provided that such changes do not result in Revelstoke being in default of its expenditure commitments under the Option Agreement.

4.          Force Majeure

In the event of fires, floods, storms, slides, transportation disruptions (e.g. in air or highway transport), ordered work stoppages or closures, adverse weather, political or social instability or unsafe conditions, or a similar event beyond the control of Petaquilla (a "Force Majeure Event"), and Petaquilla is delayed or prevented from performing the work as a result of the Force Majeure Event, Petaquilla will use its reasonable efforts to resume work with the least possible delay.  However, in the event such failure is caused by a Force Majeure Event, then during the period of the Force Majeure Event Petaquilla shall not be liable to Revelstoke for failing to perform the work, and Revelstoke shall not be liable to Petaquilla (in its capacity as Optionor) under the Option Agreement.

5.          Stop Work

In the event:

	that the nature of the Force Majeure Event is such that the work cannot be continued or has been or will be delayed for an excessive period of time; or

	Revelstoke fails to comply with its payment obligations or is otherwise in default under the terms of this agreement;

Petaquilla shall have the right to terminate completion of the work and Revelstoke shall be responsible for payment of the work performed to the date of termination together with all reasonable costs for demobilization of field personnel and equipment.

6.          Obligations

Subject to the terms of this agreement it shall be the responsibility of Petaquilla to complete the work in a competent manner and in accordance with accepted geological practice in Panama and to have in force public liability insurance in an amount that is customary for operators carrying out like operation in the vicinity of the Property.  It shall also be the responsibility of Petaquilla:

	to ensure that Petaquilla and any subcontractors have full right and all permissions necessary (from property owners or governmental authorities, etc.) prior to commencement of the work;

	to ensure that the work contemplated to be performed by Petaquilla will not contravene any laws, ordinances, by-laws (including, without limitation, environmental and other laws) or other restrictions affecting the site.

It shall be the responsibility of Revelstoke:

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	to obtain any bonds, in Petaquilla's name, with respect to reclamation work which may be required following the work to be performed by Petaquilla; and

	to remit payments in accordance with paragraph 2.

7.          Indemnity

Petaquilla shall conduct all work on the site in a good and workmanlike manner and shall adhere to all regulations and practices to protect human life and health, and the environment.  Furthermore, Petaquilla shall indemnify Revelstoke from all liability of whatsoever nature, including death and injury of any person, resulting from it or its subcontractors, activities in and in connection with the Property; excepting that Petaquilla shall not be responsible for any such liability resulting from the acts of Revelstoke, its employees or contractors.

8.          Sub-Contracts

Petaquilla shall not enter into a service contract with any party involving expenditures in excess of $50,000 without first consulting Revelstoke and obtaining its approval of the contract documents, such approval not to be unreasonably withheld.

9.          Entire Agreement

Subject to the acknowledgment regarding the Option Agreement contained in the introductory paragraph of this agreement, the foregoing is the entire agreement between the parties and supersedes any prior understanding whether written or oral.  Any amendment to this agreement shall be in writing and signed by the parties hereto.

10.         Applicable Law

This agreement shall be governed by and interpreted in accordance with the laws in effect in British Columbia, and is subject to the exclusive jurisdiction of the Courts of British Columbia.

          If you are in agreement with the foregoing, please acknowledge receipt and confirm your agreement with above terms by signing below and returning the signed copy to us as soon as possible.

Yours very truly,

Revelstoke Industries, Inc

Per:

_____________________

Marcus Johnson, President

ACKNOWLEDGMENT AND AGREEMENT

Petaquilla Minerals Ltd. hereby acknowledges receipt of this letter and confirms its agreement with the terms set out above.  By the signature of its authorized officer below, Petaquilla Minerals Ltd. acknowledges a binding agreement between Revelstoke Industries, Inc and Petaquilla Minerals Ltd.

	
____________________________

Michael Levy, President

Petaquilla Minerals Ltd.

	
_________________________

Date

	
Dated:
	
November 16, 2006

	
___________________________________________________________________________________________

 

BETWEEN:

PETAQUILLA MINERALS LTD.

OF THE FIRST PART

AND:

REVELSTOKE INDUSTRIES, INC.

OF THE SECOND PART 

___________________________________________________________________________________________

 

SAN JUAN PROPERTY

PROPERTY OPTION AGREEMENT

___________________________________________________________________________________________

VECTOR Corporate Finance Lawyers

Barristers & Solicitors

Suite 1040, 999 West Hastings Street

Vancouver, B.C.  V6C 2W2

(604) 683-1102

GHSOffice Lease between NightHawk Radiology Services, LLC and Quatro Investments

 Exhibit 10.27 
 OFFICE LEASE 
 WESTLAKE OAKS EXECUTIVE OFFICE PARK, BLDG. I OFFICE BUILDING 
 This is a Lease Agreement dated November 20, 2006 and entered into between Quatro Investments, as “Lessor” and Nighthawk Radiology Services, L.L.C. , as
“Lessee”, whether one or more. 
 1.1 The Leased Premises. 
 Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor the “Leased Premises”. In addition, Lessee shall have the non-exclusive right to use the “Common Areas” as described below. 
 (a) Leased Premises. “Leased Premises”, to which Lessee shall have exclusive use rights, consists of suite(s) 200, representing the office space outlined on
the floor plan contained in Exhibit A. Such space is located in the building on a tract of land, legally described by lot and block or metes and bounds in Exhibit B. The street address of the building is 1001 S. Capital of Texas Hwy, Building I,
Suite 200 , Austin, Texas 78746. 
 (b) Common Areas. The “Common Areas”, to which Lessee shall have non-exclusive use rights, consists of
(1) the interior common area located in the above described building, i.e., areas normally accessible to tenants such as the hallways, stairwells, elevators, lobby, restrooms, and snack bar areas, and (2) the exterior common area located
outside the building on the above described land, i.e., loading areas, sidewalks, driveways, parking garage, parking areas, and other open areas (if any), subject to paragraph 9.2 on parking and Exhibit F-1 regarding parking rules. 
 1.2 Use. 
 The Leased Premises may be used only for general office purposes,
and not for school, classroom or group training purposes. 
 1.3 Usable Area. 
 Lessee’s approximate “usable area” is 4,978 square feet. It is the office space outlined in Exhibit A. Such area is measured from the interior of the exterior walls and the exterior glass lines of the
building to the middle of the remaining perimeter walls of the office space. Any correction of the measurement of the square footage of usable area shall be made prior to the rent commencement date and not afterward. The usable area stated above
shall be deemed correct by both parties for all purposes unless the remeasurement and correction is made prior to rent commencement. 
 1.4 Rentable Area.

 Lessee’s approximate “rentable area” is 4,978 square feet which will be 0.5 percent of the total rentable square feet in the building which
is 9,956. It consists of Lessee’s “usable area” as defined above, plus Lessee’s prorata share of the Common Areas. 
 2.1 Base Rent and
Additional Rents. 
 As set forth below, Lessee shall pay to Lessor base rent(s) per square foot of net rentable area per calendar year as set forth below,
which amounts to the monthly and annualized rents set forth below. As used in this Lease, the term “Rent” or “rent” shall refer collectively to the base rent, Lessee’s prorata share of Operating Expenses (“Additional
Rent”), all other rental adjustments, and other charges of any kind, type or nature whatsoever. 
  

 Page 1 

 Base Rent: 
 Annual Rate 
  

										
	 Time Period
	  	Monthly Rent	  	Term Rent	  	psf of NRA
	 12/15/06 to 12/31/06
	  	$	3,733.50	  	$	3,733.50	  	$	18.00
	 01/01/07 to 12//31/07
	  	$	7,467.00	  	$	89,604.00	  	$	18.00
	 01/01/08 to 12/31/08
	  	$	7,778.13	  	$	93,337.50	  	$	18.75
	 01/01/09 to 12/31/09
	  	$	8,089.25	  	$	97,071.00	  	$	19.50
	 01/01/10 to 12/31/10
	  	$	8,400.38	  	$	100,804.50	  	$	20.25
	 01/01/11 to 12/31/11
	  	$	8,711.50	  	$	104,538.00	  	$	21.00

 Additional rent (representing Lessee’s pro rata share of building operating expenses over the actual building
operating expenses incurred in 2006) shall be paid in accordance with paragraph 32.1. Any increase in building operating expenses incurred in 2007 shall be paid by Lessee in accordance with paragraph 32.1 and Exhibit C. 
 3.1 Date and Place of Payment. 
 The monthly rent and one-twelfth of
Lessee’s share of estimated Building Operating Expenses under paragraph 32.1 shall be due on the first day of each calendar month without demand. The estimated first year Building Operating Expense passthru is $0.00 per square foot per year or
a total of $0.00 per month. Partial months shall be prorated. All rent and other sums are due in the county where the building is located at the address designated by Lessor from time to time. All sums due by Lessee are without right of setoff or
deduction. Monies mailed are considered timely paid only if received by Lessor by the due date. Rent and late payment charges shall be paid without notice or demand. All other sums shall be due upon delivery of written notice in accordance with
paragraph 29.1. 
 3.2 Late Payments. 
 If any rent payment or
other sum due by Lessee to Lessor is received and accepted by Lessor later than five (5) business days after its due date, Lessee shall pay a late charge equal to the greater of $100.00 or 3% of such rent payment plus 1% thereof
for each day thereafter (for up to 15 days) until such rent or other sum is paid. Late charges shall be considered liquidated damages for Lessor’s time inconvenience and overhead (except for attorneys fees and litigation costs) in collecting
late rent. Lessor’s acceptance of late rent or other sum shall not constitute permission for Lessee to pay the rent or other sum late thereafter and shall not constitute a waiver of Lessor’s remedies for subsequent late payments. Late
payment charges are due immediately upon notice or demand. All payments shall be by check or money order on a local bank, not cash. For each returned check, Lessee shall pay all applicable bank charges incurred by Lessor plus $50.00. Payments of any
kind received by Lessor on behalf of Lessee may be applied at Lessor’s option to nonrent items first, then to rent. Payment of rent by Lessee shall be an independent covenant. If Lessee has not timely paid rentals and other sums due on two or
more occasions, or if a check from Lessee is returned for insufficient funds or no account, Lessor may, for the next 12 months, require that all rent and other sums due be paid by cashier’s check, certified check, or money order, without prior
notice. 
 3.3 Security Deposit. 
 The total security deposit to
be provided by Lessee to secure performance of Lessee’s obligation under this Lease is $8,711.50 to be paid at the time of execution of this Lease. Lessor shall have a lien on the security deposit for that purpose. If Lessee fails to pay rent
or other sums when due under this Lease, Lessor may apply any security deposit toward amounts due and unpaid by Lessee. Lessee shall, within ten 

  

 Page 2 

 
(10) days after written demand from Lessor, restore the security deposit to its original amount after any portion of it is applied to amounts due and unpaid
by Lessee. Lessee’s failure to restore the security deposit within ten (10) days after demand shall constitute an event of default by Lessee hereunder without further notice being required, notwithstanding any other provisions of this
Lease to the contrary. The security deposit may not be applied to the last month’s rent. 
 4.1 Term, Possession, and Anniversary. 
 The initial lease term shall be for sixty and a half (60.5) full calendar months from commencement date, plus any partial month at the beginning of the Lease term, the
last day of the Lease term being December 31, 2011. The commencement date of this Lease shall be the earlier of: (a) December 15, 2006, or (b) The day Lessor delivers possession of the Leased Premises to Lessee. Lessor’s
anticipated delivery date of possession is December 15, 2006. However, it is possible that the existing Lessee may vacate the premises prior to December 15, 2006, if that is the case, the Commencement Date would be moved accordingly. If
Lessor delays in delivering possession of the Leased Premises as shown on Exhibit A, the commencement, expiration and anniversary dates shall be delayed according to the number of days of the delay. Rent and building operating expense pass-throughs
will begin to accrue on the Lease commencement date. 
 4.2 Acknowledgement of Lease. 
 Upon commencement of this Lease, Lessor and Lessee shall execute a recordable acknowledgment of this Lease and which will confirm the commencement date, ending date, annual anniversary date of the Lease, and
approximate square footage in the Leased Premises. 
 4.3 Delivery of Possession. 
 Lessor shall deliver keys and/or access cards or codes and possession of the Leased Premises to Lessee on the lease commencement date stated in paragraph 4.1 unless otherwise agreed in writing by the parties. Lessee
shall not be liable for rent until Lessor delivers possession of the Leased Premises to Lessee unless due to a Lessee Delay as provided in Exhibit E. If there is a delay in delivery of possession, rent shall be abated until the Leased Premises is
ready for occupancy; and neither Lessor nor Lessor’s agents shall otherwise be liable for any damages; and the Lease shall not terminate. Internal construction shall, to the extent “readily achievable”, comply with state and federal
architectural barrier standards. 
 5.1 Tenant Finish-Out (Check as appropriate): 
  

			
	 ̈	 	 (a)    Lessor shall provide no tenant finish-out or improvements since Lessee has taken the Leased Premises “as
is”.

		
	 ̈	 	 (b)    Lessor shall perform any special construction described in Exhibit E. Costs of tenant finish-out or special
construction shall be paid for pursuant to such exhibit.

		
	x	 	 (c)    Lessee shall perform all finish out work described in Exhibit E. Any tenant finish-out allowance will be
according to Exhibit E.

 6.1 Quiet Possession. 
 If Lessee is current and in compliance with all of Lessee’s obligations under this Lease, Lessee shall be entitled to peaceful and quiet possession and enjoyment of the Leased Premises, subject to the terms and conditions of this
Lease. Lessee shall have access to the building parking garage, if applicable and common parking areas at all times, subject to parking fees and the rules referred to in paragraphs 9.2 and 23.1. Lessor shall make diligent efforts to have all other
tenants in the building comply with building rules. Otherwise, failure of other tenants to comply with such rules shall not be considered a default by Lessor. Construction noise or vibrations shall not be considered a default by Lessor. Unless
specifically provided in Exhibit E, Lessor shall have no obligation to make any modifications or improvements to the Leased 

  

 Page 3 

 
Premises for the purposes of providing sound insulation to the Leased Premises or reducing the noise level from suites adjacent to the Leased Premises during
the term of this Lease. 
 7.1 Utilities and Services by Lessor. 
 Except where otherwise stated in this Lease, Lessor shall pay for and furnish in a timely and diligent manner to Lessee the following utilities (subject to Lessee being required to pay for same directly to the utility provider) and services
and no others, subject to paragraph 32.1 regarding Lessee’s payment of Lessee’s prorata share of building operating expenses. 
  

	(a)	water and wastewater services for common areas; 

  

	(b)	janitorial and cleaning services five days a week, other than holidays, for building standard installations; 

  

	(c)	trash collection services (dumpster or garbage cans); 

  

	(d)	pest control services as needed in the reasonable judgment of Lessor; 

  

	(e)	landscaping and parking lot maintenance services; 

  

	(f)	reasonable repair and maintenance services pursuant to paragraph 8.1; 

  

	(g)	replacement of fluorescent light bulbs and ballasts in building standard lighting fixtures (but not incandescent light bulbs for nonstandard fixtures or for Lessee’s lamps);
and 

  

	(h)	elevator service, if there is an elevator in the building. 

 7.2 Utilities
and Services by Lessee. 
 If applicable, Lessee shall pay for all utilities and services not expressly furnished by Lessor under paragraph 7.1. Lessee shall
pay for all electricity consumed through any individual electrical meter(s) or submeter(s) serving the Leased Premises. Costs of such utilities are not considered Building Operating Expenses to be allocated among all tenants under paragraph 32.1.
Lessor reserves the right to submeter electricity and/or water. Any electricity or water submetering shall be billed to and paid by Lessee at Lessor’s average cost per KWH or gallon. If the water bill from the utility company includes
wastewater charges, Lessee’s liability for water submetering shall include corresponding wastewater costs (if any). If Lessee locates an excessive number of persons or heat-generating equipment in the Leased Premises which overloads the
capacity of the building’s HVAC system or interferes with such systems’ ability to perform adequately, Lessor shall provide supplementary systems, if reasonably feasible, at Lessee’s expense. 
 7.3 Interruption of Utilities or Services. 
 Temporary interruption or
malfunction of utilities, services, and/or telephones shall not render Lessor liable for damages, rent abatements, or release of any Lessee obligation. Lessor shall use diligent efforts to have such utilities and services restored as soon as
reasonably possible. 
 7.4 Extra Electricity. 
 There shall be
no extra electricity charges for typewriters, facsimile machines, word processors, dictating equipment, adding machines, desk top calculators, lamps, or other standard 110 volt office equipment in quantities commensurate with normal office use.
Lessee shall pay for installation of any submeters to measure consumption of such extra electricity. However, Lessee shall pay Lessor monthly, as billed, for charges which are separately metered or which Lessor may reasonably compute for electricity
utilized by Lessee for the following purposes: x-ray machines, hotplates, electric heaters, 220 volt equipment, computers (other than desktop or word processor computers), supplementary HVAC installed due to Lessee’s excessive occupant or
equipment load, and other electrical service not standard for the building. 
 7.5 Extra Heating or Air Conditioning. 
 If Lessee requests air conditioning or heating after the hours as set forth in paragraph 7.1(a), Lessor may charge Lessee the same extra hourly fee charged by Lessor to
all other tenants in the Building for after-hour air conditioning or heating. The after-hours hourly charge per zone for the Building, which may 

  

 Page 4 

 
change periodically throughout the lease term, is currently $0.00. There is a two-hour minimum charge per zone. 
 8.1 Maintenance and Repairs by Lessor. 
 Lessor shall repair and/or replace,
as needed, the following items as a Building Operating Expense under paragraph 32.1, so long as they are building standard items: light bulbs, ballasts, and fixtures; common area plumbing; hardware; doors; and wall and window coverings. Lessor shall
use diligence to provide for the reasonable cleaning, maintenance, repair, reconnection of interrupted utilities or services, and landscaping of common areas, subject to any reimbursement obligations of Lessee under paragraph 8.2. Lessor may
temporarily close any part of the common facilities if reasonably necessary for repairs or construction. Repairs and maintenance shall be in accordance with applicable governmental requirements. 
 8.2 Maintenance and Repairs by Lessee. 
 Lessee shall promptly reimburse
Lessor for the cost of maintaining, repairing or replacing non-building standard items (including supplemental HVAC units) and the cost of repairing or replacing damage which is caused inside the Leased Premises by Lessee, Lessee’s agents,
employees, family, or licensees, invitees, visitors, or customers or outside the Leased Premises by Lessee or Lessee’s employee’s, agents, or contractors. Kitchen appliances, wetbars, sump pumps, and hot water heaters in the Leased
Premises, and plumbing in the Leased Premises serving same are not considered building standard items. Lessor may require advance payment therefor prior to repair or replacement. Lessor shall have right of approval of all repairmen or maintenance
personnel. Lessee shall not damage or allow other persons listed above to damage any portion of the Leased Premises. Lessee shall pay for replacement of all non-building standard light bulbs and for unstopping any drains or water closets in the
Leased Premises. If Lessee or Lessee’s workmen or contractors are permitted to repair, alter, or modify the Leased Premises, Lessee shall warrant that no mechanic or materialman’s lien shall be filed against the Leased Premises and that
all such contractors shall provide evidence of liability insurance as required by Lessor. All such work shall be in accordance with applicable governmental requirements. 
 8.3 Telecommunications. 
 All telecommunications equipment necessary to serve Lessee shall be located in the Leased Premises
and paid for by Lessee. Lessee may not require Lessor to install or allow others to install telecommunication lines or equipment elsewhere in the building. Lessee expressly waives any rights to require same under any circumstances. 
 9.1 Access, Keys, Locks, and Security. 
 (a) Access. Lessee shall have access
to the Leased Premises at all times. Lessor shall have access to the Leased Premises at reasonable times for reasonable business purposes upon prior notice to Lessee except notice shall not be necessary in the event of an emergency threatening life
or property or the lawful exercise of Lessor’s remedies in case of default by Lessee. Lessor may show the Leased Premises six months before the lease expiration date or the date Lessee gives notice to vacate, whichever is earlier. 

(b) Keys. Lessor shall furnish Lessee up to 5 keys or access codes or cards for the Leased Premises, up to 5 keys or access codes or cards for the main exterior entry
doors of the building if such door is locked after hours, and 2 keys or access codes or cards to Lessee’s mailbox in the building. Additional or replacement keys or access codes or cards shall be furnished at the same cost charged to all other
tenants in the building at the time of Lessee’s request. Lessor shall not be liable for risk of loss resulting from Lessee’s keys, access codes, or cards being stolen, lost or used by unauthorized persons. Lessor reserves the right to
rekey or change locks for security reasons if new keys are timely furnished to Lessee. 
  

 Page 5 

 (c) Locks. Lessee may not add locks, change locks, or rekey locks without written permission of Lessor. Locks may be
changed at Lessee’s request and expense. If locks to the Leased Premises are changed, Lessor may specify kind and brand of locks, placement, installation, master key compatibility, etc. If Lessee or any of Lessee’s employees lock
themselves out of the Leased Premises, said person must call a fellow-employee to gain access. Neither Lessor nor management company personnel are authorized to unlock a door after hours except for emergency or cleaning purposes. 
 (d) Security. Lessor shall have no duty to provide any security services of any kind unless expressly provided in this Lease. Lessor shall not be liable to Lessee or
Lessee’s employees, family, customers, invitees, contractors, or agents for injury, damage, or loss to person or property caused by criminal conduct of other persons, including theft, burglary, assault, vandalism or other crimes. Lessee shall
lock the doors of the Leased Premises when the last person leaves for the day. If such actions do not unreasonably interfere with Lessee’s occupancy, Lessor may take reasonable measures that Lessor deems advisable for the security, safety,
improvement, and preservation of the Building. 
 9.2 Parking. 
 (a) Lessor shall have sole control over parking. Parking rules, if applicable, are contained in attached Exhibit F-1. If vehicles are parked in violation of Lessor parking rules or in violation of state statutes, Lessor may exercise vehicle
removal remedies under Texas Transportation Code, Chapter 684 upon compliance with statutory notice. There shall be no reserved parking spaces unless agreed in writing by Lessor. If applicable, Lessee and Lessee’s employees and customers shall
have exclusive right to park in Lessee’s assigned parking spaces which are shown on the map contained in Exhibit A. 
 (b) In consideration of the total
rent due under paragraph 2.1, Lessee shall be entitled to one parking space per 200 square feet of Lessee’s rentable area. Lessee hereby acknowledges that Lessee is allocated only the amount of parking set forth in Item 9 of the Basic
Lease Information attached to this Lease. Lessee hereby represents to Lessor that Lessee’s use of the Leased Premises will at no time exceed the amount of such parking allocation. In the event the use of parking facilities by Lessee,
Lessee’s employees, visitors, customers and invitees at any time exceeds the allocation set forth in Item 9 of the Basic Lease Information, Lessor shall have the right to require Lessee to make alternate provisions off-site, at
Lessee’s sole cost and expense, for all of such excess parking. Lessee’s failure to comply with the provisions of this paragraph will constitute a default under this Lease, subject to the notice and opportunity cure provisions of
Section 19.1(a); provided however that Lessor shall not be required to give Lessee written notice or the opportunity to cure violations of this paragraph more than three (3) times during the term of this Lease. 
 10.1 Occupancy, Nuisance, and Hazards. 
 The Leased Premises shall be
occupied only by Lessee or Lessee’s employees and shall not be left entirely vacant or used exclusively for storage. Lessee and Lessee’s agents, employees, family, licensees, invitees, visitors, and contractors shall comply with all
federal, state, and local laws relating to occupancy or to criminal conduct while such persons are on the Leased Premises. Lessee and the persons listed above shall not (1) use, occupy, or permit the use or occupancy of the Leased Premises for
any purpose which is directly or indirectly forbidden by such laws or which may be dangerous to life or property, (2) permit any public or private nuisance, (3) disturb the quiet enjoyment of other tenants, (4) do anything which might
emit offensive odors or fumes, (5) make undue noise or vibrations, (6) permit anything which would cancel insurance coverage or increase the insurance rate on the building or contents, or (7) otherwise damage the Leased Premises.

 11.1 Taxes. 
 Lessor shall be responsible for payment of all
taxes and assessments against the Building subject to Lessee’s obligation to pay Lessor for Lessee’s share thereof, on a prorata square foot basis, as additional rent 

  

 Page 6 

 
pursuant to paragraph 32.1. Lessee shall timely pay all taxes assessed against Lessee’s furniture, equipment, fixtures, or other personal property in
the Leased Premises. 
 12.1 Insurance. 
 Lessor and Lessee shall
comply with the respective insurance obligations as set forth below: 
 (a) Lessor. Lessor shall maintain (1) fire and extended coverage insurance,
including vandalism and malicious mischief, on the Building, and (2) commercial general liability insurance. The amounts shall be as required by Lessor’s mortgagee or as Lessor may deem reasonably appropriate, whichever is greater. Lessor
shall have no responsibility to maintain fire and extended coverage insurance on Lessee’s contents. The portion of Lessor’s insurance premiums reasonably due to Lessee’s acts or omissions or Lessee’s special use, improvements, or
tenant finish-out (over and above Lessee’s normal use as contemplated in paragraph 1.1(a)) shall be paid for by Lessee. 
 (b) Lessee. Lessee shall
provide Lessee’s own public liability insurance for its operations on the Leased Premises in an amount not less than $2,000,000. Upon written notice by Lessor to Lessee, such dollar amount of Lessee’s liability policy shall be increased by
the amount of any increase required by Lessee’s carrier for “primary coverage” under an umbrella liability policy. Lessee is required to maintain adequate fire and extended coverage insurance (including theft, vandalism and malicious
mischief) on the contents in the Leased Premises, including fixtures, furniture, equipment, supplies, inventory, and other personal property. Such property is not covered by Lessor’s insurance. 
 (c) Insurance certificates. Lessee shall provide Lessor with a certificate of Lessee’s insurance or a copy thereof as required above within 7 days after Lessee
initially occupies the Leased Premises or any portion thereof. Lessor and Lessor’s managing agent (if any) shall be named as additional insureds on Lessee’s liability insurance policy. Upon written request by Lessor, changes in the name of
Lessor or Lessor’s managing agent shall be reflected on such certificate. 
 (d) Additional Notice from Lessee. Lessee shall give Lessor 10 days written
notice in advance of (1) any change in insurance carrier, (2) any change in policy coverage amount, or (3) any change in additional insureds. 
 12.2 Waiver of Subrogation. 
 (a) If waiver of subrogation is not contained in the form language of the insurance policy, Lessor and Lessee may
require that the other party’s fire, casualty, or liability insurance policy contain a waiver of subrogation clause. For purposes of waiver of subrogation, Lessor and Lessee release each other and their respective officers, directors,
employees, and agents from any claims based on negligence or otherwise, for loss, damage, or injury which occur hereafter and are insured against by the releasing party under insurance policies carried by Lessor and/or Lessee. The foregoing shall
not apply to losses, damages, or injuries that are in excess of policy limits or that are not covered due to a deductible clause in the policy. 
 (b) Upon
written request, Lessor and Lessee shall furnish to each other copies of the policies of insurance referred to in this Lease, including any waivers of subrogation, or satisfactory evidence of same. 
 12.3 Hold Harmless and Indemnity. 
 To the extent that it is not covered by
Lessor’s insurance, Lessee shall indemnify Lessor for and shall hold Lessor harmless from all fines, claims, liabilities, and suits (including costs and expenses of defending against same) resulting from any breach or nonperformance of the
Lease by Lessee or Lessee’s agents, employees, family, licensees, or invitees. To the extent that it is not covered by Lessee’s insurance, Lessor shall indemnify Lessee for and shall hold Lessee harmless from all fines, claims,
liabilities, and suits (including costs and expenses of defending against same) resulting from any breach or nonperformance of 

  

 Page 7 

 
the Lease by Lessor or Lessor’s agents, employees, family, licensees, or invitees. To the extent that it is covered by Lessor’s insurance, Lessor
and Lessee shall not be liable to the other or the other’s agents, employees, or family for any damage to personal property resulting from any act, omission, or negligence of any other tenant, visitor, or occupant of the office building. This
paragraph shall survive termination or expiration of this Lease. 
 13.1 Alterations by Lessee. 
 Lessee may not make any alterations, improvements, doorlock changes, or other modifications of any kind to the Leased Premises without Lessor’s written consent. Consent for governmentally required changes may not
be unreasonably withheld. “Alterations” include but are not limited to improvements glued, screwed, nailed, or otherwise permanently attached to the building, structural changes, roof and wall penetrations, and all plumbing, electrical,
and HVAC changes. Requests for Lessor’s approval shall be in writing and shall be detailed to Lessor’s reasonable satisfaction. The foregoing shall be done only by Lessor’s contractors or employees or by third parties approved by
Lessor in writing. Lessee shall pay in advance for any requested alterations, improvements, lock changes, or other modifications which are approved and performed by Lessor. If same are performed by Lessee with Lessor’s permission, Lessee shall
not allow any liens to be placed against the buildings as a result of such additions or alterations. Alterations, improvements, and modifications done at Lessee’s request shall comply with all applicable laws. Changes in Lessee’s
alterations or improvements in Lessee’s space which may be later required by governmental action shall also be paid for by Lessee. Lessee shall pay Lessor a 10% administrative/supervision fee if Lessor contracts on Lessee’s behalf for any
work to be done for Lessee and paid directly by Lessor to such contractors. 
 13.2 Americans With Disabilities Act. 
 Lessor shall be responsible for any requirements under the Americans with Disabilities Act or similar state or local laws as relate to any common area entrance and exit
doorways and elevators and any doors into the Leased Premises and to structural building items that Lessor is required to maintain under the terms of this Lease. Lessor agrees to indemnify Lessee for any liability Lessee shall incur as a result of
Lessor’s failure to comply with the provisions of this paragraph. Lessee agrees to cooperate fully with Lessor to enable Lessor to timely comply with the provisions of this paragraph and to immediately forward to Lessor any notice Lessee
receives regarding complaints, injuries, or claims by anyone claiming that those items which are the responsibility of Lessor do not comply with the provisions of the Americans with Disabilities Act. Lessee shall be responsible for any requirements
under such architectural barrier laws as they relate to Lessee’s use of the Leased Premises, including, but not limited to, the positioning of Lessee’s furnishings within the office space. Lessee agrees to indemnify Lessor for any
liability Lessor shall incur as a result of Lessee’s failure to comply with the provisions of this paragraph. 
 14.1 Removal of Property by Lessee.

 Lessee may remove its trade fixtures, furniture, and equipment only if (1) such removal is made prior to the end of the lease term, (2) Lessee is
not in default under this Lease at time of removal, and (3) such removal is not in anticipation of an early moveout prior to the end of the Lease term. Lessee shall pay all costs of removal. Lessee shall have no rights to property remaining on
the Leased Premises after moveout. Lessee may not remove any alterations as defined in paragraph 13.1 or improvements such as wall-to-wall carpeting, book shelves, window coverings, drapes, cabinets, paneling, counters, kitchen or breakroom
built-ins, shelving, wall covering, and anything else attached to the floor, walls, or ceilings. If and only if Lessor requests in writing no later than one month after Lessee moves out, Lessee shall remove any alterations, fixtures, equipment,
cabling, and other property installed by Lessee. Lessee shall pay for cleaning or repairing damage caused by Lessee’s removal of any property. 
  

 Page 8 

 15.1 Subletting and Assignment. 
 (a) Lessee may not sublet, assign, pledge, or mortgage this Lease and may not grant licenses, commissions, or other rights of occupancy to all or any part of the Leased Premises without Lessor’s prior written approval which shall not
be unreasonably withheld. Lessee shall submit a copy of the proposed sublease and sublessee’s financials; and Lessor shall have 15 days to approve or not approve the sublease. If Lessor does not timely approve the sublease, it shall be deemed
disapproved. Sublessee’s financial strength, reputation, personnel, and length of sublease or assignment shall be important factors in Lessor’s approval. Sale, transfer, or merger of the majority of the voting shares or voting partnership
interests in Lessee (if a corporation or partnership) shall be considered an assignment; likewise for issuance of treasury stock or admission of a new general partner. However, if Lessor gives such approval, Lessor shall be entitled to (1) 50%
of any excess between Lessee’s rental per square foot under the Lease and the rental per square foot under the sublease or assignment, and (2) 50% of any other consideration flowing directly or indirectly from the sublessee or assignee to
Lessee or Lessee’s agents. The foregoing is in consideration of additional management performed or to be performed by Lessor under such sublease or assignment. In addition to the foregoing, Lessor may charge Lessee a one-time fee equal to one
month’s lease rental for such additional administrative, investigative, and management services. 
 (b) Violation of this Lease by sublessees or
assignees shall be deemed a violation by Lessee. Approval by Lessor of any sublease or assignment shall not release Lessee from any obligation under this Lease and shall not constitute approval for subsequent subletting or assignment. Sublessees or
assignees shall be liable for all of Lessee’s obligations under this Lease unless otherwise specified in writing. Upon default by Lessee, any sublessee shall pay all sublease rentals and other sums due Lessor, direct to Lessor, to be credited
against sums owed to Lessor by Lessee under this Lease. Unless otherwise agreed in writing, no sublease or assignment shall be valid unless (1) a copy of this Lease is attached thereto, (2) the sublessee or assignee agrees in writing to be
liable for all of Lessee’s obligations under this Lease, and (3) Lessor’s written approval is attached to the sublease or assignment. 
 (c)
At any time, Lessor may, at Lessor’s option, release Lessee from further liability for all or any portion of the Leased Premises that has been subleased or assigned to a third party; and Lessor may terminate the Lease to the extent that it
applies to such space. If the Lease or a portion of it is so terminated, Lessee shall remain liable for rents and Building Operating Expenses accrued through the effective termination date, including any year-end adjustment of such expenses; and
this obligation shall survive any termination or release unless it is expressly waived in the termination or release agreement. 
 16.1 Destruction by Fire
or Other Casualty. 
 (a) Total destruction, rent abatement, and restoration. If the Leased Premises is totally damaged by fire or other casualty so that it
cannot reasonably be used by Lessee and if this Lease is not terminated as provided in subparagraph (d) below, there shall be a total abatement of Lessee’s rent and Lessee’s obligation to pay office building operating expenses until
the Leased Premises is restored by Lessor. 
 (b) Partial destruction, rent abatement, and restoration. If the Leased Premises is partially destroyed or
damaged by fire or other hazard so that it can be only partially used by Lessee for the purposes allowed in this Lease and if this Lease is not terminated as provided in subparagraph (d) below, there shall be a partial abatement of
Lessee’s Rent and Lessee’s obligation to pay office Building Operating Expenses which fairly and reasonably corresponds to the time and extent to which the Leased Premises cannot reasonably be used by Lessee. 
 (c) Restoration. Lessor’s obligation to restore shall be limited to the condition of the Leased Premises existing prior to the casualty. Lessor shall proceed with
diligence to restore. During restoration, Lessee shall continue business to the extent practical in Lessee’s reasonable judgment. 
 (d) Lease
termination. If the Leased Premises or the Building is so badly damaged that restoration and repairs cannot be completed within 6 months after the fire or casualty, then this Lease may be terminated 

  

 Page 9 

 
as of the date of the destruction by either Lessor or Lessee by serving written notice upon the other. Termination notice must be delivered within one month
after the casualty. 
 17.1 Condemnation. 
 If the Leased
Premises or the Common Areas or any material portion thereof, including any portion of the parking lot is taken by condemnation and if the Leased Premises is thereby reasonably rendered unusable for Lessee’s business use and activities, this
Lease shall automatically terminate as of the date lessee is reasonably required to vacate the lease premises; and Lessor and Lessee shall be relieved of all further obligations under this Lease. Lessor shall be entitled to recover from the
condemning authority the full amount of Lessor’s interest in this Lease and in the property which is taken in condemnation; provided, however, if Lessee is not in default hereunder on the day of taking or acquisition by the condemning
authority, Lessee shall be allowed to recover from the condemning authority, at Lessee’s own expense, Lessee’s trade fixtures, if any, which are taken in condemnation; but not otherwise. Lessee shall be responsible for Lessee’s own
attorney’s fees and for proving its own damages. 
 18.1 Default by Lessor. 
 Lessee shall be entitled to recover actual damages if (1) Lessor fails to pay any sum due and owing to Lessee within 7 days after written demand from Lessee, or (2) Lessor remains in default on any other
obligation for 7 days after Lessee’s written demand for performance. However, Lessor shall not be in default if Lessor promptly commences to cure such noncompliance and diligently proceeds in good faith to cure same after receiving written
notice of such default. If taxes and utilities are not timely paid, Lessee may pay same to the extent that it is necessary to avert foreclosure or cutoff. 
 19.1 Default by Lessee. 
 If Lessee defaults, Lessor shall have any or all remedies set forth below. 
 (a) Definition of default. The occurrence of any of the following shall constitute a default by Lessee: (1) failure to pay rent or any other sum due by Lessee under
this Lease within 4 days after written demand therefor by Lessor; (2) failure to vacate on or before the last day of the Lease term, renewal term, or extension period; (3) failure to pay rent in advance on a daily basis in the event of
unlawful holdover by Lessee; (4) unauthorized early move-out or notice of same as set forth below; (5) acquisition of Lessee’s interest in the Lease by a third party by judicial or non-judicial process; or (6) failure to comply
with any other provision of the Lease (including rules) if such failure to comply is not cured as soon as possible after delivery of written notice by Lessor to Lessee. However, Lessee shall not be in default under subclause (6) above if Lessee
promptly commences to cure such noncompliance and diligently proceeds in good faith to cure same after receiving written notice of such default. 
 (b)
Utilities and services. If Lessee is in default for nonpayment of rent or other sums due and if Lessee fails to pay same in full within 4 days after Lessor hand delivers to Lessee or to Lessee’s representative written notice of Lessor’s
intent to terminate utilities or services which are furnished by Lessor, then Lessor may terminate such utilities or services after such 4-day notice period, without further notice. Lessor’s right to terminate such utilities or services shall
occur automatically and without notice if Lessee’s rent is accelerated under subparagraph (d) below, relating to unlawful early move-out. 
 (c)
Acceleration after notice of rental delinquency. If Lessee is in default for nonpayment of rent or other sums due and if Lessee fails to pay same in full within 10 days after Lessor delivers to Lessee or to the Leased Premises a written notice of
Lessor’s intent to accelerate, then all rent for the remainder of the lease term shall be accelerated, due, and delinquent at the end of such 10-day notice period without further demand or notice. Such acceleration rights are in consideration
of the rentals for the entire term 

  

 Page 10 

 
being payable in monthly installments rather than in one lump sum at the beginning of the lease term. If Lessee has already vacated the Leased Premises,
notice of acceleration may be delivered to Lessee pursuant to paragraph 29.1. Liability for additional rents accruing in the future (over and above any base rents) shall not be waived by such acceleration. 
 (d) Acceleration. If Lessee is lawfully evicted, all remaining rents for the remainder of the Lease term shall be accelerated immediately and automatically, without
demand or notice. Such accelerated rents shall be due and delinquent without notice before or after such acceleration. Such acceleration shall occur even if the rent for the current month has been paid in full. 
 If Lessee moves out or gives verbal or written notice (in person or by an authorized employee or agent) of intent to move-out prior to the end of the
Lease term, Lessee may continue to pay rent without the Lessor accelerating the rent as long as rent is paid on a timely basis per the Lease Agreement. Should Lessee not pay rent for a period of thirty (30) days, Lessor may accelerate the rent
for the entire remainder of the Lease Term without further notice. 
 (e) Termination of possession. If Lessee is in default as defined in subparagraph
(a) above and if Lessee remains in default for 4 days after Lessor gives notice of such default to Lessee, or if Lessee abandons the Leased Premises, Lessor may (with or without demand for performance) terminate Lessee’s right of
possession by giving one day’s written notice to vacate; and Lessor shall be entitled to immediate possession without termination of Lessee’s obligations under the Lease. Lessor’s repossession shall not be considered an election to
terminate this Lease unless written notice of such intention to terminate is given to Lessee by Lessor. Repossession may be by voluntary agreement or by eviction lawsuit. Commencement of an eviction lawsuit shall not preclude other Lessor remedies
under this Lease or other laws. 
 (f) Reletting costs. If Lessee is in default under this Lease and if Lessor terminates Lessee’s right of possession
without terminating this Lease and Lessee’s space is released, Lessee shall pay upon Lessor’s demand the following: (1) all costs of reletting (which in no event shall be less than one month’s rent), including leasing commissions,
rent concessions (whether in the form of assuming or buying out lease remainders elsewhere, free rent for a period of time, or reduced rental rates), utilities during the vacancy, advertising costs, administrative overhead, and all costs of repair,
remodeling, or redecorating for replacement tenants in the Leased Premises, (2) all rent and other indebtedness due from Lessee to Lessor through the date of termination of Lessee’s right of possession, and (3) all rent and other sums required
to be paid by Lessee during the remainder of the entire lease term, subject to the acceleration paragraphs above. 
 (g) Mitigation by Lessor. Upon eviction
or voluntary vacation of the Leased Premises by Lessee without the Lease being terminated by Lessor, Lessor shall make reasonable efforts to relet the Leased Premises. After deduction of reasonable expenses incurred by Lessor, Lessee shall receive
credit for any rentals received by Lessor through reletting the Leased Premises during the remainder of the Lease term or renewal or extension period. Such deductible expenses may include real estate commissions, attorney’s fees, and all other
expenses in connection with reletting. Lawsuit to collect amounts due by Lessee under this Lease may be brought from time to time on one or more occasions without the necessity of Lessor’s waiting until the expiration of the lease term.

  

 Page 11 

 (h) Termination of Lease. Lessor may terminate this Lease (as contrasted to termination of possession rights only) upon
default by Lessee or at any time after Lessor’s lawful re-entry or repossession following default by Lessee. Lessor’s agents have authority to terminate the Lease only by written notice given pursuant to paragraph 29.1. After termination,
Lessee shall remain liable to Lessor for all sums accruing and unpaid prior to termination and any year-end adjustments of building operating expense, prorated through the date of termination. 
 (i) Damages. In addition to other remedies, Lessor may recover actual damages incurred. 
 20.1 Lien for Rent. 
 (a) Notwithstanding anything to the contrary in this Lease, Lessor’s landlord lien shall be
subordinate to any existing security interest and any future purchase money security interests on Lessee’s personal property if such security interest is properly perfected and timely recorded as required by the Texas Business and Commerce
Code. Lessor shall cooperate in signing lien subordinations in accordance with the foregoing. Any lien subordination shall be on forms reasonably acceptable to Lessor. 
 (b) Subject to the limitations of subparagraph (a) above, Lessee gives to Lessor a contractual lien on all of Lessee’s property which may be found on the Leased Premises to secure payment of all monies and
damages owed by Lessee under the Lease. Such lien also covers all insurance proceeds on such property. Lessee shall not remove such property while rent or other sums remain due and unpaid to Lessor and such property shall not be removed until all
Lessee’s obligations under the Lease have been complied with. This lien is in addition to Lessor’s statutory lien under Section 54.021 of the Texas Property Code. If Lessee is in default for nonpayment of rent or any other sums due by
Lessee, Lessor’s representatives may peacefully enter the Leased Premises and remove and store all property. If Lessor removes any property under this lien, Lessor shall leave the following information in a conspicuous place inside the Leased
Premises: (1) written notice of exercise of lien, (2) a list of items removed, (3) the name of Lessor’s representative who removed such items, and (4) the date of such removal. Lessor shall be entitled to reasonable charges
for packing, removing, or storing abandoned or seized property, and may sell same at public or private sale (subject to any properly recorded chattel mortgage or recorded financing statement) after one month’s written notice of time and place
of sale is given to Lessee by certified mail, return receipt requested. Upon request by Lessor, Lessee shall acknowledge the above lien rights by executing Exhibit D. 
 21.1 Attorney’s Fees, Interest, and Other Expenses. 
 If Lessee or Lessor is in default and if the nondefaulting party
places the Lease in the hands of an attorney in order to enforce lease rights or remedies, the nondefaulting party may recover reasonable attorney’s fees from the defaulting party even if suit has not been filed. In any lawsuit enforcing lease
rights, the prevailing party shall be entitled to recover reasonable attorney’s fees from the nonprevailing party, plus all reasonable out-of-pocket expenses. Trial shall be to judge only. All delinquent sums due by Lessor or Lessee shall bear
interest at the maximum lawful rate of interest, compounded annually, from date of default until paid, plus any late payment fees. Late payment fees as set forth in paragraph 3.2 shall be considered reasonable liquidated damages for the time,
trouble, inconvenience, and administrative overhead expense incurred by Lessor in collecting late rentals, such elements of damages being uncertain and difficult to ascertain. Late payment fees shall not be liquidated damages for attorney’s
fees or for Lessor’s loss of use of such funds during the time of delinquency. Whenever Lessee requests Lessor to take any action or give any consent required or permitted under this Lease, Lessee will reimburse Lessor for Lessor’s
reasonable costs incurred in reviewing the proposed action or consent, including reasonable attorneys’, engineers’, or architects’ fees, within 10 days after Lessor’s delivery to Lessee of a statement of such costs. Lessee will
be obligated to make such reimbursement without regard to whether Lessor consents to any such proposed action. 
  

 Page 12 

 22.1 Nonwaiver. 
 The
acceptance of monies past due or the failure to complain of any action, nonaction, delayed payment, or default, whether singular or repetitive, shall not constitute a waiver of rights or obligations under the Lease. Lessor’s or Lessee’s
waiver of any right or any default shall not constitute waiver of other rights, violations, defaults, or subsequent rights, violations, or defaults under this Lease. No act or omission by Lessor or Lessor’s agents shall be deemed an acceptance
or surrender of the Leased Premises, and no agreement by Lessor to accept a surrender of the Leased Premises shall be valid unless it is in writing and signed by a duly authorized agent of Lessor. 
 23.1 Building Rules. 
 Lessee will comply with Lessor’s rules for the
office building which are attached as Exhibit F-2. The rules are subject to reasonable change if the changes are applicable to all tenants of the office building. Separate parking rules are contained in paragraph F-1. Lessee agrees to provide a copy
of the Building Rules (Exhibit F-2) to each of Lessee’s employees. 
 24.1 Transfer of Ownership by Lessor. 
 If Lessor transfers ownership of the office building (other than as security for a mortgage) and if Lessor has delivered to the transferee all of Lessee’s security
deposits and any prepaid rents, Lessor shall be released from all liability under the Lease; and such transferee shall become liable as Lessor. Such right to be released of liability shall accrue to subsequent owners only if such transfer is in good
faith and for consideration. 
 25.1 Mortgages. 
 Unless
otherwise provided in this Lease, Lessee shall subordinate and attorn to mortgage liens now or hereafter on the Building. Lessee agrees to execute, from time to time, documentation therefor which is necessary in the reasonable judgment of Lessor.
This Lease shall be subordinate to all existing and future mortgages. However, such mortgagees may at any time subordinate their lien to this Lease by filing a subordination notice in the county real property records without necessity of notice to
Lessee. Lessee waives and holds any mortgagee or holder of a security interest harmless from all claims of Lessee against Lessor arising prior to such mortgagee succeeding to the Lessor’s ownership interest in the property. 
 If requested in writing by Lessor, Lessee shall not seek to enforce any remedy it may have for any default on the part of Lessor without first giving written notice by
certified mail, return receipt requested, specifying the default in reasonable detail, to any Lessor’s Mortgagee (defined as the mortgagee under any such mortgage) whose address has been given to Lessee, and affording such Mortgagee a
reasonable opportunity to perform Lessor’s obligations under this Lease. 
 26.1 Surrender of Leased Premises. 
 Upon termination of this Lease, Lessee shall surrender the Leased Premises in the same condition as on the date of Lease commencement by Lessee (as changed or improved
from time to time in accordance with this Lease), less ordinary wear. Removal of property from the Leased Premises is subject to paragraph 14.1. Upon surrender, Lessee shall provide Lessor with all of Lessee’s keys, access codes and cards to
the Leased Premises and the combination to all safes and vaults, if any in the Leased Premises. 
 27.1 Holding Over. 
 If Lessee remains in possession of the Leased Premises after the expiration or mutually-agreed termination date of the Lease, without the execution by Lessor and Lessee
of a new lease or a renewal or extension of the Lease, then (1) Lessee shall be deemed to be occupying the Leased Premises as a tenant-at-sufferance on a daily basis, subject to all obligations of the Lease, (2) Lessee shall pay rent for
the entire holdover period at the rate of 200% of the then-current rental rate under this Lease or 200% of the then-current market rental rate for the space as reasonable determined by Lessor, whichever is greater, (3) Lessee shall 

  

 Page 13 

 
be subject to all other remedies of Lessor as provided in paragraph 19.1, (4) Lessee shall indemnify Lessor and/or prospective tenants for damages,
including lost rentals, storage expenses, and attorney’s fees, and (5) at Lessor’s sole option, Lessee may extend the lease term for a period of one month at the rate of 200% of the then-current rental rate under this Lease or 200% of
the then-current market rental rate for the space as reasonably determined by Lessor, whichever is greater, by giving notice to Lessee or to the Leased Premises while Lessee is holding over. Holdover rents shall be immediately due on a daily basis
and delinquent without notice or demand; and the prior written notice and waiting period requirements of this Lease shall not be necessary in order for Lessor to exercise remedies thereunder. 
 28.1 Signs and Building Name. 
 There shall be no signs, symbols, or
identifying marks on or in the building, halls, elevators, staircases, entrances, parking areas, landscape areas, doors, walls, or windows without prior written approval of Lessor. Lessor shall provide and pay for the initial building standard suite
sign and directory strip. If the lease term is less than 12 months, the cost of initial suite signage for Lessee’s space and initial directory strip shall be at Lessee’s expense. All signs or lettering shall conform to the sign and
lettering criteria established by Lessor. Unless otherwise stated in the rules, suite signage and building directory changes shall be done exclusively by Lessor and at Lessee’s expense. Lessor may remove all unapproved signs without prior
notice to Lessee and at Lessee’s expense. Lessor may change the name of the building upon six months’ written notice to Lessee. 
 29.1 Notices.

 Whenever written notice is required or permitted under this Lease, such notice shall be in writing and shall be either (a) hand delivered personally
to the party being notified, (b) hand delivered to or inside such party’s mailing address, (c) delivered by fax provided there is a fax transmittal confirmation, or (d) delivered at such party’s mailing address by overnight
commercial courier or by certified mail, return receipt requested. The notice address of Lessor shall be the address to which Lessee normally mails or delivers the monthly rent unless Lessor notifies Lessee of a different address in writing. The
notice address of Lessee shall be the Leased Premises under this Lease. However, if Lessee moves out, it shall be Lessee’s last address known by Lessor. Hand delivered notice is required only when expressly required in the Lease. Notice by
noncertified mail is sufficient if actually received by the addressee or an employee or agent of addressee. The term “notice” shall be inclusive of notices, billings, requests, and demands. 
 30.1 Estoppel Certificates. 
 From time to time, upon 7 days’ prior
written request from Lessor, Lessee shall execute and deliver to Lessor an estoppel certificate in a form similar to the attached as Exhibit G. The form in Exhibit G may be changed as reasonably required by a prospective purchaser or lender. If any
statement in the estoppel certificate form is contrary to the facts existing at the time of execution of such form, Lessee may correct same before signing. Reasonable modifications in the form may be made as requested by a prospective lienholder or
purchaser. The estoppel certificate may be conclusively relied upon by Lessor and by any prospective lienholder or purchaser of the Leased Premises. If Lessee fails to comply with the foregoing by the end of such 7-day period, it shall be
conclusively presumed that (1) this Lease is in full force and effect without any subleases or assignments and is unamended or modified except for amendments verified by affidavit of Lessor to the prospective lienholder or purchaser,
(2) no rents, security deposits, or other charges have been prepaid, (3) the statements contained in the estoppel certificate form (Exhibit G) are correct, (4) there are no uncured defaults by Lessor, (5) Lessee has no right of
offset or rescission, and (6) any prospective purchaser or lienholder may conclusively rely on such silence or noncompliance by Lessee and may conclusively assume no Lessor defaults within the four months following Lessee’s receipt of
Lessor’s request for an estoppel certificate. 
  

 Page 14 

 31.1 Successors. 
 This Lease
shall bind and inure to the benefit of the parties, any guarantors of this Lease, and their respective successors and assigns. 
 31.2 Leasing Agent
Commissions. 
 No leasing commission shall be due by Lessor to any leasing agent unless in writing. Commission agreements executed by Lessor shall be binding
on subsequent building owners if the tenant of the Lease in question is in possession at the time of transfer of building ownership. 
 32.1 Building
Operating Expense. 
 In addition to the monthly Base Rent in paragraph 2.1, Lessee shall pay Additional Rent on a monthly basis, equivalent to Lessee’s
prorata share of actual Building Operating Expenses as per Exhibit C. Lessee’s responsibility for payment of Building Operating Expenses shall be subject to the expense stop referred to in Paragraph 2.1. 
 33.1 Representations and Warranties by Lessor. 
 Lessor warrants that Lessor
is the sole owner of the land and improvements comprising the office building and that Lessor has full right to enter into this Lease. Lessor’s duties and warranties are limited to those expressly stated in this Lease and shall not include any
implied duties or implied warranties, now or in the future. No representations or warranties have been made by Lessor other than those expressly contained in this Lease. 
 34.1 Representations and Warranties by Lessee. 
 Lessee warrants to Lessor that financial statements on file and publicly
available as to Lessee are true and correct and may be relied upon by Lessor. 
 35.1 Place of Performance. 
 Unless otherwise expressly stated in this Lease, all obligations under this Lease, including payment of rent and other sums due, shall be performed in the county where
the Building is located, at the address designated from time to time by Lessor. 
 36.1 Miscellaneous. 
 This Lease contains the entire agreement of the parties. No other written or oral promises or representations have been made, and none shall be binding. This Lease
supersedes and replaces any previous lease between the parties on the Leased Premises, including any renewals or extensions thereunder. Except for reasonable changes in written rules, this Lease shall not be amended or changed except by written
instrument, signed by both Lessor and Lessee. Lessor’s agents do not and will not have authority to (1) make exceptions, changes or amendments to this Lease, or factual representations not expressly contained in this Lease, (2) waive any right,
requirement, or provision of this Lease, or (3) release Lessee from all or part of this Lease, unless such action is in writing and signed by both parties to this Lease. Multiple lessees shall be jointly and severally liable under this Lease.
Notices, requests, or agreements to, from, or with one of multiple lessees shall be deemed to be to, from, or with all such Lessees. Under no circumstances shall Lessor or Lessee be considered an agent of the other. The Lease shall not be construed
against either party more or less favorably by reason of who drafted the Lease or changes in the Lease. Texas law applies. If any date of performance or exercise of a right ends on a Saturday, Sunday, or state holiday, such date shall be
automatically extended through the next business day. Time is of the essence; and all performance dates, time schedules, and conditions precedent to exercising a right shall be strictly adhered to without delay except where otherwise expressly
provided. Time for performance of non-monetary obligations of either party shall be reasonably extended to the extent delay is caused by force majeure, i.e., a cause such as riot, strikes, etc., beyond the control of the 

  

 Page 15 

 
party obligated to perform. If any provision of this Lease is invalid under present or future laws, the remainder of this Lease shall not be affected.

 37.1 Hazardous Materials. 
 Various materials utilized in the
construction of any improvements to the property or in the use thereof, past or present, may contain materials that have been or may in the future be determined to be hazardous. For example, some electrical transformers and other electrical
components can contain PCBs, and asbestos may have been used in a wide variety of building components such as fire-proofing, air duct insulation, acoustical tiles, spray-on acoustical materials, linoleum, floor tiles and plaster. Such substances may
be present on or in soils, underground water, building components or other portions of the Leased Premises in areas that may or may not be accessible or noticeable. 
 Current federal, state and local laws and regulations may require the clean-up of such hazardous or undesirable materials. 
 Lessor, real estate brokers, and leasing agents in this transaction have no expertise with respect to hazardous materials and have not made, nor will any of their statements constitute representations, either express or implied, regarding
the existence or nonexistence of hazardous materials in or on the Leased Premises. 
 38.1 Confidentiality. 
 Lessee acknowledges that the terms and provisions of this Lease, if disclosed to third parties, could interfere with and injure Lessor’s business relationship with
or ability to lease to other existing or prospective tenants. Therefore, except as otherwise provided herein, Lessee agrees to keep confidential any and all terms and provisions of this Lease, including but not limited to rental amounts, tenant
improvements, expense passthrough terms and calculations, etc. Signature of person signing as same may be subsequently amended or modified together with all information, business terms, agreements, and other matters discussed during the lease
negotiations or to be subsequently discussed between Lessee, Lessor, their leasing agents, or their respective representatives and to not disclose same in any way to any persons or entities without Lessor’s written consent which Lessor shall
have no obligation to give. Provided, however, Lessee may reveal such (if applicable) information to those agents and employees of Lessee made aware of such information shall be informed by Lessee of this Confidentiality Agreement, and Lessee shall
be responsible for their compliance with same. In this Confidentiality Agreement, the term “Lessee” shall include Lessee, and any agent, owner, employee, officer, director or affiliate of Lessee. 
 Notwithstanding the above, Lessee may disclose to any entity from which Lessee is attempting to secure financing those terms of the Lease and the financing. Lessee
shall, however, inform the lender of the Confidentiality Agreement and Lessee shall require the lender to comply with the terms hereof. Also, Lessee may disclose the terms of this Lease if required to do so by court order. This lease must be
disclosed by Lessee in accordance with the rules promulgated under the Securities and Exchange Act of 1934, as amended. 
 If any terms of this Lease are
disclosed by Lessee to any third party other than as expressly allowed, or if any third party becomes aware of said information due to a previous disclosure of same by Lessee, Lessor shall, in addition to any other remedies Lessor may have against
Lessee at law, in equity, or pursuant to the terms of this Lease, have available to it one or more of the following remedies: 
  

	 	(a)	Lessor may secure injunction or other equitable relief in any court of competent jurisdiction to prevent or otherwise restrain a breach of this provision; and

  

	 	(b)	Lessee’s breach of this Confidentiality Agreement shall be deemed a default by Lessee under this Lease. 

  

 Page 16 

 39.1 Special Conditions. 
 Additional provisions of this Lease are set forth in Exhibit J. 
 40.1 Exhibit List. 
 The exhibits attached to this Lease are listed below. All exhibits are a part of this Lease except for those which have been lined out or which have been
shown below as omitted. 
  

			
	Exhibit A	  	Floor Plan of the Leased Premises (paragraph 1.1)
		
	Exhibit B	  	Legal Description of Office Building (paragraph 1.1)
		
	Exhibit C	  	Building Operating Expense Passthrough Calculations (paragraphs 2.1 and 32.1)
		
	Exhibit E	  	Construction by Lessor or Lessee (Paragraph 5.1)
		
	Exhibit F-1	  	Parking Rules (paragraphs 9.2 and 23.1)
		
	Exhibit F-2	  	Building Rules (paragraph 23.1)
		
	Exhibit G	  	Estoppel Certificate (paragraph 30.1)
		
	Exhibit H	  	Intentionally Deleted
		
	Exhibit I	  	Intentionally Deleted
		
	Exhibit J	  	Special Conditions (paragraph 37.2)
		
	Exhibit K	  	Limited Right of First Refusal
		
	Exhibit L	  	Acknowledgement of Receipt of Agency Disclosure

  

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 41.1 Lease Dates and Authority to Sign. 
 The “identification” date of this Lease is November 20, 2006 (the same date as at the beginning of Basic Lease Information). The “effective date” on which this Lease becomes binding is the date on
which the Lease has been signed by Lessor, Lessee, and any guarantors. The names and signatures of all parties are shown below; and all persons signing have been duly authorized to sign. If Lessee is a corporation, a corporate resolution authorizing
Lessee to execute this lease is attached as Exhibit I. Corporate seals are unnecessary under Texas law. 
  

					
	LESSOR	  		 	LESSEE
			
	QUATRO INVESTMENTS	  		 	NIGHTHAWK RADIOLOGY SERVICES, L.L.C.
	Printed name of company or firm (if applicable)	  		 	Printed name of company or firm (if applicable)
			
	SUSAN GOLDBERG	  		 	PAUL CARTEE
	Printed name of person signing	  		 	Printed name of person signing
			
	/s/ Susan Goldberg	  		 	/s/ Paul Cartee
	Signature	  		 	Signature
			
	GENERAL PARTNER	  		 	GENERAL COUNSEL AND OFFICER
	Title of person signing (if applicable)	  		 	Title of person signing (if applicable)
			
	November 20, 2006	  		 	November 16, 2006
	Date signed	  		 	Date signed

  

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 EXHIBIT A 
 Floor Plan of the Leased Premises 
 (see paragraph 1.1 of Lease) 
 Building Name: Westlake Oaks Executive Office Park, Bldg. I Usable SF: 4,978 
 Suite Number(s): Suite 200 Rentable SF: 4,978 
 The parties agree that the floor plan outlined in bold or hashmarked below is a true and correct
diagram of the Leased Premises referred to in paragraph 1.1. 
 

 
  

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 EXHIBIT B 
 Legal Description of Office Building 
 by lot, block, subdivision, and county or 
 by metes and bounds description 
 (see paragraph
1.1 of Lease) 
 NIT 2, BUILDING I, WESTLAKE OAKS EXECUTIVE PARK CONDOMINIUMS AMENDED PLUS 6.3929% INTEREST IN COMMON AREA 
  

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 EXHIBIT C 
 Page One of Two 
 Building Operating Expense Pass-Through Calculations 
 (see paragraphs 2.1 and 32.1 of Lease) 
 (a)
“ESTIMATED” PRORATA BUILDING OPERATING EXPENSES. On or before the beginning of each calendar year, Lessor shall calculate the estimated Building Operating Expenses for that calendar year, according to the criteria in subparagraph (c)
below. One-twelfth of Lessee’s prorata share of estimated Building Operating Expenses which are in excess of any expense stop shall be due on the first of each month as additional rent. 
 (b) YEAR-END ADJUSTMENT FOR OVERPAYMENT OR UNDERPAYMENT BY LESSEE BECAUSE OF DIFFERENCES BETWEEN “ESTIMATED” AND “ACTUAL” BUILDING OPERATING
EXPENSES. After each calendar year of the Lease term and renewal or extension periods, Lessor shall determine the actual Building Operating Expenses for that calendar year. If it is then determined that actual Building Operating Expenses were less
than estimated expenses and that Lessee’s monthly payments of estimated expenses over Lessee’s expense stop figure were too much, Lessor shall promptly credit to Lessee the excess amount paid by Lessee. If it is determined that actual
Building Operating Expenses were more than estimated expenses and that Lessee’s monthly payments of estimated expenses over Lessee’s expense stop figure were insufficient, Lessor shall invoice Lessee for the amount of Lessee’s
underpayment. Payment thereof shall be due upon delivery of invoice to Lessee. Payment may be made prior to or with the next scheduled rental payment, but not later. The foregoing calculations and adjustments may also be made one or more times
during the calendar year, at Lessor’s option. 
 (c) DEFINITION OF BUILDING OPERATING EXPENSES. Building Operating Expenses for each calendar year shall
include: all ad valorem taxes, assessments and related government charges becoming due on the building and personal property used in operation of the building in such period; utilities; insurance premiums for fire, extended coverage, vandalism, and
liability on the building and personal property used in building management; janitorial expenses; window cleaning; supplies; painting, roof repairs, window replacement, which are reasonably related to the operation of the building and utilities
serving same. No such category shall include more than 12 months’ worth of expenses. Building Operating Expenses shall also include the following improvements if amortized over the useful life of such improvements together with interest at 12%
per annum on the unamortized cost: (i) improvements which or are designed to reduce operating expenses, (ii) improvements or modifications required by governmental agencies following completion of the building, and (iii) improvements to the common
areas of the building, including but not limited to carpeting, floor covering, draperies and wall coverings. Building Operating Expenses shall be calculated on an accrual basis in accordance with generally accepted accounting principles,
consistently applied. The word “building” as referred to above shall include the building, parking areas, parking garage (if any), and common areas. 
 Building Operating Expenses shall not include: principal and interest payments on mortgages; depreciation or improvements which IRS requires to be depreciated (except as provided above); expenses of repairing damage of the type normally
covered by fire, vandalism, flood, and EC insurance; any expense paid or reimbursed from insurance proceeds; costs of repairing damage for which Lessor is entitled to reimbursement from others; remodeling costs for new or existing tenants; common
area improvements or personal property required by other tenants to be made, purchased, or furnished to such tenants; utility and air conditioning or heating costs or other expenses which are separately billed to specific tenants; franchise and
income taxes of Lessor; leasing commissions; expenses of marketing vacant space in the building; legal fees; structural repairs to roof, foundation, and walls; asbestos removal; and installation of sprinklers, fire alarms, and smoke detector
systems. 
  

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 If utilities and taxes included in “Building Operating Expense” are not payable, billed or otherwise due so as
to allow an accurate calculation of said factors annually, then Lessor, in its reasonable discretion, may estimate and prorate said expenses on an annual basis, and said factors shall be properly adjusted by Lessor when they actually become due and
payable. Otherwise, expenses must be supported by invoices and actually paid. 
  

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 EXHIBIT C (cont’d) 
 Page Two of Two 
 (d) DEFINITION OF PRORATA SHARE. Lessee’s prorata share of estimated and actual Building Operating
Expenses is the percentage result of dividing “Lessee’s rentable square feet” is 4,978 by the total rentable area in the entire building which is 9,956. 
 (e) PERCENTAGE OF BUILDING OCCUPIED. With respect to any calendar year or partial calendar year in which the Building is not occupied to the extent of 95% of the rentable area thereof, the Operating Costs for such
period shall, for the purposes of calculating Building Operating Expenses, be increased to the amount which would have been incurred if the rentable area of the Building had been 95% occupied for the entire year. 
 (f) DELAY IN IMPLEMENTATION. At Lessor’s option, adjustments may be delayed. Lessor’s delay in implementing such adjustments shall not waive Lessor’s
right thereto, and the most recent monthly rental figures shall continue to be paid during such delay. If Lessor delays in timely calculating adjustments, such adjustments shall be retroactive to the respective date on which Lessor had a right to
make such adjustment; and such delayed rent adjustments shall become due upon written notice to Lessee. 
 (g) EXAMINATION OF RECORDS. Provided Lessee has
paid all rent, Building Operating Expense pass-throughs and other amounts of every kind due and unpaid under this Lease, upon reasonable notice to Lessor in writing, Lessee may, at Lessee’s sole expense, examine or audit Lessor’s invoices
and statements related to Building Operating Expenses for the year immediately preceding, such review to be conducted at the place where such invoices and statements are customarily maintained by Lessor. Examination or audit of Building Operating
Expenses for a particular year must be completed no later than four months after Lessee’s receipt of a reconciliation notice or statement of Building Operating Expenses for that year. If not examined or audited within the four-month period,
such reconciliation shall be deemed as accepted and agreed to by all parties. Lessee and Lessee’s agents and employees shall keep confidential all results of the audit. If Lessee objects to Lessor’s accounting of any Operating Expenses,
Lessee shall, within 30 days after the completion of Lessee’s audit, notify Lessor that Lessee disputes the correctness of such accounting, specifying the particular line items which Lessee claims are incorrect. If such dispute has not been
settled by agreement within 30 days thereafter, either party may submit the dispute to arbitration in accordance with the commercial arbitration rules of the American Arbitration Association. The decision of the arbitrators shall be final and
binding on Lessor and Lessee and judgment thereon may be entered in any court of competent jurisdiction. 
  

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 EXHIBIT E 
 TENANT FINISH OUT 
 CONSTRUCTION BY LESSOR 
  

			
	Lessor	  	Quatro Investments
	Lessee	  	Nighthawk Radiology Services, L.L.C.
	Date of lease	  	November 20, 2006
	Office space	  	200
	Building name / address	  	Westlake Oaks Executive Office Park, Bldg. I / 1001 S. Capital of Texas Hwy / Austin, TX 78746

 Lessee agrees to lease Suite 200 with the following improvements listed (below) or (on the attached floor plan).
The cost for said improvements, including space planning fees, and construction management fees, shall be payable by Lessee, Lessor shall contribute an allowance of $24,890.00 ($5.00/rsf). Lessee shall be responsible for the any costs in excess of
the allowance. 
 Lessee may choose own contractor. Tenant Improvements are to be agreed upon by Lessee and Lessor, as well as Lessee’s contractor and
Lessor’s receipt of an acceptable certificate of insurability prior to construction from Lessee’s contractor. 
  

					
	Improvements:	  	1) CARPET. Carpet selections and quality of carpet to be chosen by Lessee and approved by Lessor, approval of such shall not be unreasonably withheld or
delayed.
		
		  	2) PAINT. Paint selections to be chosen by Lessee and approved by Lessor, approval of such shall not be unreasonably withheld or delayed.

  

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 EXHIBIT F-1 
 Parking Rules 
 (see paragraph 9.2 of Lease) 
 It is the desire of Lessor to maintain and operate the parking garage and parking areas in an orderly manner. The following rules and regulations apply to all tenants in the building and their agents, employees,
family, licensees, invitees, visitors, and contractors unless otherwise stated. Lessor reserves the right to rescind these rules, make reasonable changes, or make other reasonable rules and regulations for the safety, care, and cleanliness of the
parking garage, if applicable, and parking areas and for the preservation of good order. 
 1. TRAFFIC SIGNS. All persons parking in the parking areas and
parking garage shall observe posted signs and markings regarding speed, stop signs, traffic lanes, reserved parking, no parking, parking stripes, etc. 
 2.
LESSEE EMPLOYEE AND CUSTOMER PARKING. Lessees and their employees and customers [ X ]may OR [ ]may not park without charge. Lessor reserves the right to utilize any reasonable system by which building tenants may pay for parking of their guests or
customers. 
 3. TRASH. All persons parking in the parking garage or parking areas shall refrain from throwing trash, ashtray contents, or other debris on
the garage floor or parking areas. 
 4. FLAT TIRES. All vehicle owners and all persons parking in the parking garage or parking areas shall be responsible
for promptly repairing flat tires or other conditions of the vehicle which cause unsightliness in the reasonable judgment of Lessor. 
 5. REMOVAL OF
UNAUTHORIZED VEHICLES. If vehicles are blocking driveways or passageways or parked in violation of these rules and regulations or state statutes, Lessor may exercise vehicle removal remedies under Texas Transportation Code, Chapter 684 upon
compliance with statutory notice. 
 6. SECURITY. Lessor shall use reasonable diligence in the maintenance of existing lighting in the parking garage or
parking areas. Lessor shall have no duty for additional lighting or any security measures in the parking areas, including the parking garage. 
 7. PARKING
OF EMPLOYEE VEHICLES. Lessor may from time to time designate specific areas in which vehicles owned by Lessee and Lessee’s employees, sublessees, assignees, licensees, and concessionaires shall be parked. Lessee shall use best efforts to see
that such vehicles are parked in such areas. Upon request by Lessor, Lessee shall furnish Lessor a complete list of license numbers of all vehicles operated by Lessee and the above listed persons. Lessor may charge reasonable parking fees for such
vehicles not parked in the designated areas. 
 8. PARKING OF TRUCKS AND DELIVERY VEHICLES. Without Lessor’s prior written approval, no trailers or
large trucks may be parked in the parking areas except for temporary loading or unloading. Service and delivery vehicles may be parked in loading zones only when necessary. 
 9. TIMELY PAYMENT OF PARKING RENT. If applicable, Lessee shall be entitled to monthly parking rights in the parking garage only upon timely payment of the then current monthly parking rent, in advance. Lessee may rent
less than the allowed number of spaces. Lessee may rent more than the allowed number of spaces if available in the reasonable judgment of Lessor. 
 10.
CONTROL DEVICES. Lessor reserves the right to install or utilize any reasonable system of entry and exit control devices in marked loading areas. 
  

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 11. ILLEGALLY PARKED VEHICLES. Lessor has no duty to patrol for illegally parked vehicles or to have them removed.
Parking is for daily employee parking only and vehicles may not be left for periods longer than one week. Employees may not use more than one parking space at a time. 
  

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 EXHIBIT F-2 
 Page One of Three 
 Building Rules 
 (see paragraphs 9.2 and 23.1 of Lease) 
 LESSEE AGREES TO PROVIDE A COPY OF THESE RULES
TO EVERY EMPLOYEE 
 It is the desire of Lessor to maintain in the building the highest standard of dignity and good taste consistent with comfort and
convenience for all tenants. Any action or condition not meeting this high standard should be reported directly to the building manager. Cooperation by all tenants will be sincerely appreciated. The following rules and regulations apply to all
tenants in the building and their agents, employees, family, licensees, invitees, visitors, and contractors unless otherwise stated. Pursuant to paragraph 23.1 of the Lease, Lessor reserves the right to rescind these rules, make reasonable
modification thereto, and make other reasonable rules and regulations for the safety, care, and cleanliness of the building and for the preservation of good order. 
 1. DELIVERIES AND MOVEMENT OF FURNITURE. Movement into or out of the building of furniture, equipment shall be restricted to hours, stairways, and elevators designated by Lessor. Unless Lessor notifies Lessee otherwise, only the freight
elevator may be used for such purposes, and such elevator may be used only after regular business hours without prior approval of Lessor. All such movement and delivery shall be under the supervision of the building manager and carried out in a
manner agreed between Lessee and the building manager, by prearrangement. Prearrangement shall include time, method, routing, and any limitations imposed for reasons of safety or nondisturbance of others. The hold harmless and indemnification
provisions of paragraph 12.3 shall apply to the foregoing. Lessor may require that movement of furniture or equipment which interferes with normal building traffic shall be made at hours other than normal business hours. 
 2. OBSTRUCTION OF PASSAGEWAYS. None of the passageways, outside entries, exterior doors, elevators, hallways, or stairways shall be locked or obstructed. No rubbish,
trash, litter, or materials of any nature may be emptied or thrown into these areas. These areas may be used only for ingress and egress. 
 3. DOORS AND
DOORLOCKS. When Lessee’s corridor doors are not in use, Lessee shall use its best efforts to keep them closed on all floors where Lessee is a partial tenant on the floor. No additional locks shall be placed on any doors in the Leased Premises
without written consent of Lessor. Lessee shall not change, alter, or replace locks provided by Lessor on doors in the building, except with written permission of the building manager. All necessary keys shall be furnished by Lessor, and Lessor
shall be entitled to have a key for every door in the Leased Premises. Lessee shall surrender all keys upon termination of Lessee’s right of occupancy; and at such time, Lessee shall give Lessor the combination to all vaults or combination
locks remaining in the Leased Premises after surrender by Lessee. 
 4. SAFES. Safes and other heavy articles shall be carried onto the Leased Premises only
at such times and in such manner as prescribed by Lessor. Lessor shall have the right to specify weight limitations and positioning of safes or other heavy articles. Any damage done to the building by installation, presence, or removal of a safe or
other article owned or controlled by Lessee on the Leased Premises, shall be paid for by Lessee. 
 5. REMOVAL OF FURNITURE. Removal of furniture or
equipment from the Leased Premises shall require presentation of written authorization by an authorized representative of Lessor. Security guards, watchmen, janitors, and other building employees will have the right to challenge all persons leaving
the building with such items. 
 6. INSTALLATION AND REPAIR WORK. Lessee shall refer all contractors, contractors’ representatives, and installation
technicians who render any service on or to the Leased Premises, to the building manager for approval and supervision before performance of any service. This provision shall apply to all work performed in the building, including installation of
telephones, electrical lines, and other 

  

 Page 27 

 
electrical devices where such installation affects the floors, walls, woodwork, trim, windows, ceilings, mechanical equipment, or any other part of the
building. If Lessee desires telephone or other electronic connections, Lessee shall notify Lessor; and Lessor shall then direct installation servicemen as to where and how wires may be introduced. Without such directions, no such installations shall
be permitted. 
  

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 EXHIBIT F-2 (cont’d) 
 Page Two of Three 
 7. HAZARDOUS MATERIALS. Lessee shall not place or install, on the Leased Premises or any part of the
building, any explosive, gasoline, kerosene, oil, acids, caustics, or any other inflammable, explosive, or hazardous materials without written consent of the building manager. Lessee shall not operate electric space heaters, stoves, engines, or
other equipment not typical of an office building without written consent of the building manager. 
 8. ENTRY BY LESSOR. Lessor shall have the right to
enter for the purposes set forth in paragraph 9.1 of the Lease at all times. 
 9. PLUMBING. Plumbing fixtures and appliances shall be used only for the
purposes for which they were constructed. No sweeping, rubbish, rags, or other unsuitable materials may be thrown or placed in plumbing fixtures or appliances. The cost of any stoppage or damage resulting from negligence or improper use of these
fixtures and appliances by Lessee or Lessee’s agents, employees, family, invitees, licensees, or visitors shall be paid for by the Lessee. 
 10.
WINDOWS. Lessee shall not allow windows within the Leased Premises to be opened at any time, except in emergencies. Nothing shall be thrown out of the windows of the building or down the stairwells or other passages. Lessor reserves the right to
cause any or all windows of the building to be locked, sealed, closed, or otherwise made inoperable, or to install permanent or temporary screens thereon, and to include the cost thereof with the operating expenses of the building. 
 11. THEFT AND DAMAGES. Lessor shall not be responsible for lost or stolen personal property, equipment, money, or jewelry from the Leased Premises or from the public
areas of the building, regardless of whether such loss occurs when the area is locked against entry. Lessor will not be liable to Lessee, or Lessee’s employees, customers, or invitees for any damages or losses to persons or property caused by
other lessees in the building or for damages or losses caused by theft, burglary, assault, vandalism, or other crimes. Lessor shall not be liable for personal injury or loss of Lessee’s property from fire, flood, water leaks, rain, hail, ice,
snow, smoke, lightning, wind, explosions, or interruption of utilities unless such injury or damage is caused by negligence of Lessor. If this does indeed require same, Lessor strongly recommends that lessee secure lessee’s own insurance to
protect against the above occurrences.  
 12. ANIMALS. No birds, fowl, or animals (except guide dogs for handicapped persons) shall be brought into
or kept in or about the building or common areas. 
 13. BICYCLES AND OTHER VEHICLES. No bicycles, motorcycles, or similar vehicles shall be allowed in the
building. No trailers or large trucks may be parked in the building parking areas except for temporary loading or unloading. 
 14. RESIDENTIAL USE. No
sleeping, cooking, clothes cleaning, or laundering is permitted on the Leased Premises without written consent of Lessor. 
 15. INTOXICATION. Lessor
reserves the right to exclude or expel from the building any person who in the reasonable judgment of Lessor, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any rules of the building.

 16. DISTURBANCES. Lessee shall not obstruct, disturb, or interfere with the rights of other Lessees or occupants or in any way injure or annoy them.
Lessee shall not make any noises by any means which, in the reasonable judgment of Lessor, are likely to disturb other lessees or occupants of the building. 
 17. COMPLIANCE WITH SAFETY AND SANITATION LAWS. Lessee shall comply with all laws relating to fire, safety, and sanitation, and shall comply with any requirements of Lessor’s insurance company with respect to fire prevention, safety
standards, and sanitation. 
  

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 EXHIBIT F-2 (cont’d) 
 Page Three of Three 
 18. CLEANING. Lessee shall not employ any person or persons without written consent of Lessor, for the
purpose of cleaning or maintaining of the Leased Premises. Lessee shall cooperate with Lessor’s employees, agents, and cleaning personnel in keeping Lessee’s Leased Premises neat and clean. Any special cleaning requested by Lessee and
performed by Lessor or Lessor’s employees, agents, or contractors shall be paid for by Lessee. 
 19. SOLICITING. Canvassing, soliciting, or peddling in
the building is prohibited without written permission of Lessor, and Lessee shall cooperate to prevent same. 
 20. SIGNS. No signs, fixtures, or notices of
any kind may be displayed except by written consent of Lessor. All signs shall conform to the requirements of paragraph 28.1 of the Lease. 
 21. NOTICE OF
PERSONAL INJURIES OR UTILITY OR MECHANICAL PROBLEMS. Lessee shall give prompt notice to the building manager, to the best of Lessee’s knowledge, of any significant accidents involving injury to persons or property, including plumbing,
electrical, heating, air conditioning, stairwell, corridor, and elevator problems and/or personal injury and property damage caused thereby. 
 22. REQUESTS
BY LESSEE. Except in emergencies, requests by Lessee shall be attended to only after written request by Lessee to the building management. Lessor’s employees are not allowed to perform or do anything outside their regular duties unless pursuant
to special orders from Lessor. Lessee may not contract with Lessor’s employees for the performance of paid or free services to Lessee. If, at the request of Lessee, Lessor or Lessor’s agents furnish services, goods, labor, or material to
Lessee which are not required to be furnished by Lessor under this Lease, Lessee shall pay for same upon delivery of a written statement therefore to Lessee. 
 23. BUILDING ACCESS. Anyone who does not reasonably satisfy a building security guard (if any) that he has a right to enter the building may be excluded by the guard. Lessor shall not be liable for damages for any good faith error with
regard to admission or exclusion from the building of any person. In case of fire, destruction, invasion, mob, riot, or other commotion, Lessor reserves the right to prevent access to the building by closing the doors or otherwise. 
 24. REQUEST FOR EXTRA AIR CONDITIONING. Requests for heating or air conditioning before or after the hours of operation stated in paragraph 7.1 of the Lease must be
received at the management office at least 24 hours in advance. 
 25. LEASE PROVISIONS REGARDING LESSEE’S CONDUCT. Lessee shall comply with all the
provisions of paragraph 9.2 regarding parking and paragraph 10.1 regarding occupancy, nuisance, and hazards. 
 26. ELEVATORS. Lessor shall not be liable for
damages from stoppage of elevators for repair, service, or improvements, nor shall Lessor be liable for delays of any duration in connection with elevator repair, service, or improvements. 
  

	27.	SMOKING. This is a non-smoking building; smoking is not permitted anywhere inside the building. 

 28. ICE, SLEET, SNOW, OR WATER. Lessor shall have no duty to remove, in whole or in part, ice, sleet, snow, or water from parking lots, walkways, sidewalks, or stairs, regardless whether they are covered, uncovered,
inside, or outside of buildings. At Lessor’s option, Lessor may remove such ice, sleet, snow, or water at any time, in whole or in part, with or without notice to anyone. 
  

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 29. WATER LEAKS AND INFILTRATION. Lessee shall immediately notify Lessor of any visible water leaks, significant water
spills on carpet, or water infiltration into any wall or ceiling in Lessee’s space or any mold or mildew in Lessee’s space. 
  

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 EXHIBIT G 
 Page One of Two 
 This form is not to be filled in or executed at time of lease execution. 

Estoppel Certificate 
 (see paragraph 30.1
of Lease) 
 The purpose of this certificate is to confirm the current status of matters relating to the Lease described below. It is for the benefit of the
owner or prospective purchaser or mortgagee of the building in which the Leased Premises are located. 
 1. The undersigned is the Lessee under a Lease
between Quatro Investments, as Lessor, and Nighthawk Radiology Services, L.L.C. , as Lessee, dated
                                 on Leased Premises locally known as the Westlake
Oaks Executive Office Park, Bldg. I building and located at 1001 S. Capital of Texas Hwy , Austin, Texas 78746. A copy of the fully executed Lease and any amendments or modifications thereto are attached. There are no other modifications or
amendments to the above described Lease. The dates of any amendments or modifications are: (put “none” if inapplicable)
                                        
                                        
                                
                                        
                    . 
 2. There are no unfulfilled
written or verbal promises, representations, or warranties by Lessor. 
 3. There are no subleases of the Leased Premises or any portions thereof.

 4. The Lease (together with any amendments or modifications referred to above) is in good standing and in full force and effect. Lessor is not in default.
Lessee agrees to give notice of any Lessor default to any purchaser or lender making written requests to Lessee for same. 
 5. Except for rents (if any)
which may be due under the Lease for the current month, there are no rents or other charges which have been prepaid by the undersigned Lessee to Lessor under the Lease other than the following: 

 6. The amount of security deposit currently posted by Lessee with Lessor is
$                     in the form of ( ) cash or ( ) an irrevocable, unconditional letter of credit issued by Bank Issuing Letter of
Credit in favor of Lessor which is still valid. 
 7. Lessee acknowledges that the space being leased consists of
                     rentable square feet according to the Lease, that the improvements to be constructed by Lessor have been satisfactorily
completed, that the Lease space has been accepted by Lessee, that Lessee now occupies the lease space, and that the commencement date for the lease term was
                                . 
 8. There are no rentals which are due and unpaid. Rentals are fully paid (if required by the Lease) through the last day of the month in which this estoppel certificate
has been executed. 
 9. There are no known offsets or credits against rentals except as expressly provided by the terms of the Lease. There is no known
right of rescission and no known defense to Lessee’s future obligations to pay the specified rentals at the times and in accordance with the lease terms. Lessee has not received any concession (rental or otherwise) or similar compensation not
expressed in the Lease which is presently in effect. 
 10. Lessee has no options or rights of refusal regarding the Leased Premises or additional rental
space other than as set out in the Lease. 
  

 Page 32 

 11. Lessee has not: (a) made a general assignment for the benefit of creditors; and (b) commenced any case,
proceeding or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution, or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization, or relief of debtors; or (c) had any
involuntary case, proceeding, or other action commenced against it which seeks to have an order for relief entered against it, as debtor, or seeks reorganization, arrangement, adjustment, liquidation, dissolution, or 
  

 Page 33 

 EXHIBIT G 
 Page Two of Two 
 composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization, or relief
of debtors; or (d) concealed, removed, or permitted to be concealed or removed, any part of its property, with intent to hinder, delay, or defraud its creditors or any of them, or made or suffered a transfer of any of its property which may be
fraudulent under any bankruptcy, fraudulent conveyance, or similar law; or made any transfer of its property to or for the benefit of a creditor at a time when other creditors similarly situated have not been paid; or (e) had a trustee,
receiver, custodian or other similar official appointed for or take possession of all or any part of its property or had any court take jurisdiction of any other of its property. 
 12. Lessee agrees to furnish Lessor with estoppel letters on this form within 10 days (stating the then-current facts) after written request by Lessor or subsequent owners of the building. 
 13. Lessee acknowledges that, upon 10 days’ prior written request of Lessor’s mortgagee at any time after foreclosure proceedings or a deed in lieu of
foreclosure, Lessee shall attorn to the mortgage or foreclosure purchaser by recognizing such new owner as Lessor under the Lease provided that such purchaser shall recognize the rights of tenant under the Lease as long as tenant is not in default.
The agreement of Lessee to attorn shall survive any foreclosure sale or deed in lieu of foreclosure. Lessee shall, upon 10 days’ written notice from Lessor’s mortgagee anytime before or after foreclosure sale, execute, acknowledge, and
deliver to Lessor’s mortgagee all instruments and certificates that in the reasonable judgment of Lessor’s mortgagee may be necessary or proper to confirm such attornment. 
 14. Lessee acknowledges that this estoppel certificate and the statements therein may be conclusively relied upon by Lessor and by any prospective purchaser or lien holder of the Leased Premises. 
 15. The form of this estoppel certificate may vary, depending on lender or purchaser requirements. It is agreed that this certificate may be modified to conform to
reasonable requests by lenders or purchasers. 
 16. This agreement shall be binding upon and shall inure to the benefit of the Lessor, any present or future
mortgagee, any prospective buyer or master Lessee of the property, and their successors and assigns. 
 Dated this
                 day of                     ,
20    . 
  

			
	LESSEE 	 	  

			
		
	 By 
	 	  

			
		
	Printed name of signatory 	 	  

			
		
	 Title 
	 	  

  

 Page 34 

 EXHIBIT J 
 Special Conditions 
 (see special conditions paragraph 37.1 of Lease) 
 The following special conditions shall apply to this Lease and shall prevail on any other provisions to the contrary. 
 CREDIT REPORTS. Lessee gives Lessor express permission to order a consumer report (credit report) from any consumer reporting agency before, during, and after
Lessee’s tenancy for any legitimate business purpose. 
 RENEWAL OPTION. Lessee shall have the option to renew this Lease (the “ Renewal
Option”) for one (1) period of sixty (60) months (the “Renewal Term”), provided that Lessee delivers to Lessor written notice of Lessee’s exercise of such Renewal Option at least 120 days prior to the expiration of the
original Lease term. This Renewal Option shall be null and void if Lessee is in default beyond any applicable cure period allowed by this Lease, either at the time of such notice of renewal or at the end of the original Lease term. If Lessee
exercises the Renewal Option 180 days or more prior to the end of the original Lease term, Lessee will definitely be committed to lease the space for the Renewal Term, with rent being determined as follows. Base Rent shall be the then be the greater
of a) the current fair market rental rate for comparable office space in Austin or; b) the previous years Lease rate plus $0.75 psf and increasing by $0.75 psf per year thereafter. Any Renewal Option notice given by Lessee shall apply to the entire
Leased Premises. This Renewal Option is not transferable to any assignee, sublessee or any other successor in interest to the initial Lessee under this Lease. Any termination of the Lease shall also terminate this Renewal Option. 
 GENERATOR. Lessor hereby approves the installation of a generator on the outside of the building by Lessee, at Lessee’s expense. Location to be on the ground in the
vicinity of where the current units are now. 
 SEPARATE AC UNIT. At Lessee’s cost, Lessor hereby approves Lessee’s installation of a separate air
conditioning unit to Lessee’s server room. Location to be on the ground in the vicinity of where the current units are now. 
 CONTINGENCY. This Lease
is contingent upon an acceptable termination agreement between this Lessor and the existing Lessee, Land Mortgage, LLC, occupying the Leased Premises. 
  

 Page 35 

 EXHIBIT K 
 Limited Right of First Refusal 
 Lessee shall have a limited right to lease the entire 1st floor of Westlake Oaks, Building I, anytime during the primary Lease Term, according to the terms and conditions set forth below. 
 1. NOTICE TO LESSEE. The first time the foregoing space or portion thereof becomes available for lease, Lessor shall give written notice to Lessee of such fact ten (10)
days before such space becomes available, or within ten (10) days after Lessor becomes aware of the date of availability. Such notice shall set out the square footage and location of the space and the date of availability. 
 2. ELECTION BY LESSEE. Lessee shall then have a period of fifteen (15) working days after receipt of such notice from Lessor within which to give Lessor notice of
Lessee’s election to lease such additional space. If Lessee does not elect to lease such space within such time period, the right of first refusal granted herein shall terminate automatically and without further notice from Lessor. 

3. AMENDMENT TO LEASE. If Lessee elects to lease such space, Lessor shall submit a lease amendment to Lessee within five (5) days after receiving Lessee’s notice
of such election. Lessee shall have three (3) days after receipt of the amendment to execute and return same to Lessor. If the amendment is not executed and returned to Lessor within such time period, the right of first refusal granted herein shall
terminate automatically and without further notice. The amendment shall only amend the particular lease paragraphs or provisions which are affected. 
 4.
TERMS OF LEASE AMENDMENT. The rental rate for such additional space shall be at the greater of a) the then current market rate; or b) the rate that Lessee is paying under the primary Lease. The lease term for such additional space shall commence on
the sooner of the date such space is available for lease or the date the premises is ready for occupancy by Lessee, and such term shall continue for the then unexpired current term of this lease as long as there is at least 30 months left in the
primary lease term. Otherwise, if there is less than 30 months left in the primary lease term, then, at Lessor’s sole option, as a condition of this right of first refusal, Lessee shall extend the primary lease term such that the new term shall
be for no less than 3 years from the effective date of the expansion 
 5. SUBJECT TO OUTSTANDING COMMITMENTS. The right of first refusal granted herein
shall be subject to the renewal options, expansion options, and/or preferential rights to lease, if any, held by the then current Lessee or any other Lessee, if any, of such additional space or portion thereof. 
 6. TERMINATION UPON DEFAULT. The right of first refusal granted herein shall terminate automatically and without notice if Lessee is in default under paragraph 19.1 of
this lease or if Lessee vacates the office space described in paragraph 1.1 of this lease prior to the exercise of the right of first refusal granted herein. 
  

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 EXHIBIT L 
 Lessee’s Acknowledgment of Receipt of Broker’s Agency Disclosure 
 Approved by the Texas Real Estate
Commission for Voluntary Use 
 Texas law requires all real estate licensees to give the following 
 information about brokerage services to prospective buyers, tenants, sellers and landlords. 
 Information About Brokerage Services 
 Before working with a real estate broker, you should know
that the duties of a broker depend on whom the broker represents. If you are as prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the
owner’s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer’s agent represents the buyer. A broker may act as an intermediary between the parties if the parties
consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining financing without representing you. A broker is obligated by law to treat you honestly. 
 IF THE BROKER REPRESENTS THE OWNER: 
 The broker becomes the owner’s
agent by entering into an agreement with the owner, usually through a written listing agreement, or by agreeing to act as a subagent by accepting an offer of subagency from the listing broker. A subagent may work in a different real estate office. A
listing broker or subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner’s agent anything the buyer would not want the owner to know because an
owner’s agent must disclose to the owner any material information known to the agent. 
 IF THE BROKER REPRESENTS THE BUYER: 
 The broker becomes the buyer’s agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement. A buyer’s
agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer’s agent anything the owner would not want the buyer to know because a buyer’s agent must
disclose to the buyer any material information known to the agent. 
 IF THE BROKER ACTS AS AN INTERMEDIARY: 
 A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License Act. The broker must obtain the written consent of each
party to the transaction to act as an intermediary. The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker’s obligations as an intermediary. The broker is required to treat each
party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction: 
 (1)
shall treat all parties honestly; 
 (2) may not disclose that the owner will accept a price less than the asking price unless authorized in
writing to do so by the owner; 
 (3) may not disclose that the buyer will pay a price greater than the price submitted in a written offer
unless authorized in writing to do so by the buyer; and 
 (4) may not disclose any confidential information or any information that a party
specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the
condition of the property. 
 With the parties’ consent, a broker acting as an intermediary between the parties may appoint a person who is licensed
under The Texas Real Estate License Act and associated with the broker to communicate with and carry out instruction so one party and another person who is licensed under that Act and associated with the broker to communicate with an carry out
instruction of the other party. 
 If you choose to have a broker represent you, 
 you should enter into a written agreement with the broker that clearly establishes the broker’s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the
right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the
broker, you should resolve those questions before proceeding. 
 
 Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee’s records. 
  

			
	  	  	  
	Lessee Signature	  	Date                

  

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 Texas Real Estate Brokers and Salesmen are licensed and regulated by the Texas Real Estate Commission (TREC). If you have
a question or complaint regarding a real estate licensee, you should contact TREC at P.O. Box 12188, Austin, Texas 78711-2188 or 512-465-3960. 
  

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