Document:

Exhibit
      10.2

     

    eMagin

     

    April
      17,
      2007

     

    To
      the
      Holders of the 6% Senior Secured Convertible Notes Due 2007-2008 under the
      Now
      Purchase Agreements Dated July 21, 2006

     

    Reference
      is made to the Note Purchase Agreements dated as of July 21, 2006 which you
      entered into with eMagin Corporation ("eMagin"
      or the
"Comnani")
      in
      connection with your purchase of 6% Senior Secured Convertible Now Due 2007-2008
      (the "Notes")
      and
      warrants to purchase shares of the Company's common stock. Capitalized terms
      not
      defined herein shall have the meanings ascribed to such terms in the
      Notes.

     

    As
      you
      are aware, Section 3.13 of the Notes provides that the Company shall not enter
      into any agreement which would adversely affect the Collateral Agent's Lien
      on
      the Security Interest in the Collateral and Section 4.1(c) deems the
      Company's
      failure to comply with Section 3.13 an Event of Default. Section 4.1(i) deems
      the Occurrence of an Event of Default in the Security Agreements to be an Event
      of Default in the Notes.

     

    In
      connection with the proposed agreement between the Company and Kodak Corporation
      ("Kodak") the Company will transfer its patent number 6,337,492 related to
      Serially-connected organic light emitting diode stack having conductors
      sandwiching each light emitting layer (the "Kodak Patent") in return for two
      years of reduced royalty payments (the "Royalty Agreement").

     

    As
      such,
      the Company respectfully requests your prior written consent to the
      Company's
      entering into the Royalty Agreement and your waiver of any potential Event
      of
      Default and any event triggered by an Event of Default in either the Notes
      or
      the Security Agreements which may occur as a result of the Company entering
      into
      an agreement to transfer the Kodak Patent and/or the transfer of the Kodak
      Patent to Kodak.

     

    The
      undersigned hereby confirms that the execution of this letter agreement shall
      serve as the undersigned's waiver of any claim that may have otherwise been
      made
      regarding the potential Event of Default under with the Notes or the Security
      Agreements and any event which may be triggered by such event as a result of
      the
      Company entering into an agreement to transfer the Kodak Patent and/or the
      transfer of the Kodak Patent to Kodak.

     

    The
      undersigned also consents to the release of the Kodak Patent from the Collateral
      (as defined in the Security Agreement), the removal of the Lien (as defined
      in
      the Security Agreement) on the Kodak Patent and the filing of a UCC Financing
      Statement Amendment, substantially in the form attached hereto, to evidence
      the
      removal of the Lien on the Kodak Patent.

     

    Notwithstanding
      anything contained herein, this letter agreement and the consents and waivers
      contained herein shall be deemed effective upon receipt by the Company of letter
      agreements of like tenor to this letter agreement which, together with this
      letter agreement, are from holders of a majority of the aggregate outstanding
      principal amount of Notes.

     

    Except
      as
      expressly set forth herein, this letter agreement shall not by implication
      or
      otherwise (a) limit in any manner whatsoever the Company's obligation to comply
      with, and the undersigned's right to insist on the Company's compliance with,
      each and every term of the Notes and the other Transaction Documents, or (b)
      constitute a waiver of any default or Event of Default or any right or remedy
      available to the undersigned, or of the Company's obligation to pay and perform
      all of its obligations, in each such case whether arising under the Notes,
      the
      Transaction Documents, any other related agreements, applicable law and/or
      in
      equity, all of which rights and remedies are hereby expressly reserved, are
      not
      waived and may be exercised
      at any time, and none of which obligations are waived. Nothing herein shall
      be
      deemed to entitle the Company to a consent to, or a waiver, amendment,
      modification or other change of, any of the terms, conditions, obligations,
      covenants or agreements contained in the Notes in similar or different
      circumstances.

     

     

    
      
        
          
             

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    This
      letter agreement may be executed in two or more counterparts, all of which
      when
      taken together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. in the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original

    thereof

     

    
      	 	 	 
	 	EMAGIN
              CORPORATION
	 
 	 
 	 
 
	
            	By:  	/s/ 
	 	
              
Name:
              John Atherly
	 	Title:
              Chief Financial Officer

    

     

     

     

     

    10500
      NE
      Street - Suite 1400 - Bellevue, WA 98004

    P:
      (425)
      749-3600 F: (425) 749-3601 www.emagin.com

     

     

     

    
      Agreed
        and AcknowledgedHouston lease

    Exhibit
      10.1

     

    
      LEASE
        AGREEMENT

      (triple
        net lease)

      

      STATE
        OF TEXAS

      

      COUNTY
        OF HARRIS

      

      

      This
        lease agreement (“Lease”), made and entered into as of the _________ day of
        _________, 2007, by and between GKII
        CLAY CROSSING, LP,
        a
        Delaware limited partnership (“Landlord”), and SULPHCO.,
        INC.,
        a
        Nevada corporation (“Tenant”), upon the following terms and
        conditions:

      

      A
        G R E E M E N T

      

      1. Leased
        Premises

      

      In
        consideration of the rents reserved and the covenants and agreements herein
        contained on the part of Tenant to be observed and performed, Landlord hereby
        demises, lets and leases unto Tenant, and Tenant hereby rents from Landlord,
        those certain premises consisting of a space containing an area of approximately
        12,000 square feet (the “Leased Premises”) shown on Exhibit
        “A”
        attached
        hereto and constituting a part of the office/warehouse building, known as
        Building I, located at 4333 West Sam Houston Parkway North, Suite 190,
        Houston, Harris County, Texas (the “Building”), which Building is located upon
        the lot, tract or parcel of land more particularly described on Exhibit “A-1”
attached hereto and made a part hereof for all purposes. The Building is
        in a
        development containing other buildings, such buildings together with all
        related
        site land, improvements, parking facilities, common areas, driveways and
        landscaping, together with the Building are referred to herein as the
“Project”.

      

      The
        purpose of the site plan attached as Exhibit
        “A”
        is to
        show the approximate location of the Leased Premises. Landlord reserves the
        right at any time to relocate, vary and adjust the size of the various
        buildings, automobile parking areas, and other common areas as shown on said
        site plan provided the same do not materially and adversely affect the Tenant's
        use and occupancy of the Premises. The use and occupancy by Tenant of the
        Leased
        Premises shall include the use, in common with others entitled thereto, of
        the
        common service areas, pedestrian walks, automobile driveways and parking
        areas,
        all as shown on the site plan attached hereto as Exhibit
        “A”.

      

      In
        determining the number of square feet of area of the Leased Premises, Tenant
        acknowledges that the Leased Premises includes the usable area, without
        deduction for columns or projections, multiplied by a load factor to reflect
        a
        share of certain areas, which may include mechanical and service rooms and
        closets in the Building. 

      

      2. Term:

      

      To
        have
        and to hold the Leased Premises for a term of sixty (60) months commencing
        on
        July 1, 2007 (“Commencement Date”) and ending on June 30, 2012 (the
“Expiration Date”). If Tenant occupies the Leased Premises prior to the
        Commencement Date for any reason other than construction of improvements
        therein, such occupancy shall be upon all of the terms and conditions contained
        herein, including, without limitation, the obligation to pay Rent, but shall
        not
        advance the Expiration Date, and Tenant shall indemnify and hold Landlord
        harmless from any liability as a result of Tenant’s early occupancy of the
        Leased Premises. Tenant’s occupancy of the Leased Premises prior to the
        Commencement Date for the purpose of constructing the Work (as defined in
        Exhibit
        “C”
        attached
        hereto) shall be subject to all of the terms and conditions of this Lease
        other
        than the obligation to pay Rent, and Tenant shall indemnify and hold Landlord
        harmless from any liability as a result of Tenant’s early occupancy of the
        Leased Premises. Tenant shall have the option to renew the Lease term as
        set
        forth in Addendum
        One
        attached
        to this Lease.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      
 

      3. Acceptance
        of Leased Premises

      

      Tenant
        acknowledges that Landlord has not made any representations or warranty with
        respect to the condition or quality of the Leased Premises or the Building.
        Tenant has inspected and accepts the Leased Premises and the Building in
        their
        present “AS IS” condition as suitable for the purpose for which the Leased
        Premises are leased. Tenant further acknowledges that no representations
        as to
        the repair of the Leased Premises or Building nor promises to alter, remodel
        or
        improve the Leased Premises or Building have been made by Landlord, except
        as
        set out in Exhibit C.

      

      4. Base
        Rent and Security Deposit

      

      (a) Base
        Rent.
        Tenant
        agrees to pay to Landlord as base rent (the “Base Rent”) the following amounts
        during the periods set forth below:

      

      
        	 	
                Period

              	 	
                Annual
                  

                Base
                  Rent

              	 	
                Monthly
                  Installment 

                of
                  Base Rent

              
	 	 	 	 	 	 
	 	
                Month
                  1-24

              	 	
                $142,560.00

              	 	
                $11,880.00

              
	 	
                Month
                  25-36

              	 	
                $146,880.00

              	 	
                $12,240.00

              
	 	
                Month
                  37-60

              	 	
                $151,200.00

              	 	
                $12,600.00

              

      

      

      Base
        Rent
        shall for the Leased Premises shall be paid in advance, without demand,
        deduction or set off, for the entire term hereof. A monthly installment of
        $11,880.00 shall be due and payable on the date hereof and the remaining
        installments of Base Rent shall be due and payable on or before the first
        day of
        each calendar month succeeding the Commencement Date during the hereby demised
        term, except that the rental payment for any fractional calendar month at
        the
        commencement or end of the Lease period shall be prorated.

      

      (b) Security
        Deposit.
        In
        addition, Tenant agrees to deposit with Landlord on the date hereof the sum
        of
        $12,600.00 (the “Security Deposit”), which sum shall be held by Landlord,
        without obligation for interest, as security for the performance of Tenant’s
        covenants and obligations under this Lease, it being expressly understood
        and
        agreed that such deposit is not an advance rental deposit or a measure of
        Landlord’s damages in case of Tenant’s default. Landlord shall not be required
        to keep the Security Deposit separate from its other accounts and no trust
        relationship is created with respect to the Security Deposit. Upon the
        occurrence of any event of default by Tenant, Landlord may, from time to
        time,
        without prejudice to any other remedy provided herein or provided by law,
        use
        such Security Deposit to the extent necessary to make good any arrears of
        rent
        or other payments due Landlord hereunder, and any other damage, injury, expense
        or liability caused by such event of default; and Tenant shall pay to Landlord
        on demand the amount so applied in order to restore the Security Deposit
        to its
        original amount. Any remaining balance of such deposit shall be returned
        by
        Landlord to Tenant within sixty (60) days after Tenant’s obligations under this
        Lease have been fulfilled, and Tenant has provided Landlord with Tenant’s
        forwarding address. 

      

      5. Tenant’s
        Pro Rata Share of Building Costs 

      

      Subject
        to all of the provisions of this Lease relevant hereto, Tenant promises and
        agrees to pay, as additional rent hereunder and as provided herein, at the
        office of the Landlord or at such other place designated by Landlord, without
        any prior demand therefore and without any deduction or set-off throughout
        the
        term of this Lease, Tenant’s Pro Rata Share (hereinafter defined) of certain
        Project expenditures made by Landlord, as follows:

      

      (1) Real
        Estate Taxes, as defined in Paragraph 6;

      (2) Common
        Area Maintenance Costs, as defined in Paragraph 7; and

      (3) Building
        Insurance Costs, as defined in Paragraph 8.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      
 

      “Tenant’s
        Pro Rata Share” as used in this Lease shall be obtained by multiplying the
        expense in question by a fraction, the numerator of which shall be the rentable
        square footage area of the Leased Premises (stipulated to be 12,000 square
        feet
        as of the date of this Lease) and the denominator of which shall be the rentable
        square footage area of the Building (stipulated to be 40,950 square feet
        as of
        the date of this Lease). If a particular expense is incurred or charged to
        more
        than one building in the Project rather than solely to the building in which
        the
        Leased Premises are located, then, for the purposes of calculating Tenant’s Pro
        Rata Share with respect to the building in which the Leased Premises are
        located, such multi-building expense shall be allocated to building in which
        the
        Leased Premises are located by multiplying the expense in question by a
        fraction, the numerator of which shall be the rentable square footage of
        the
        building in which the Leased Premises are located and the denominator of
        which
        shall be the rentable square footage area of the buildings for which the
        expense
        was incurred or otherwise allocated to, with the resulting number being used to
        calculate Tenant’s Pro Rata Share as to the Leased Premises. The amounts due
        from Tenant as Tenant’s Pro Rata Share of Real Estate Taxes, Common Area
        Maintenance Costs and Building Insurance Costs (sometimes herein collectively
        called “Building Costs”) shall be estimated by Landlord for each calendar year
        and paid by Tenant in equal installments of one-twelfth (1/12) of such estimated
        amount, monthly in advance, upon the first day of each calendar month provided,
        however, if the term shall commence upon a day other than the first day of
        the
        calendar month, Tenant shall pay upon the commencement date of this Lease
        a
        portion of Tenant’s Pro Rata Share of Building Costs calculated on a per diem
        basis with respect to the fractional month preceding the commencement of
        the
        first full calendar month of the term of this Lease. Said amounts shall be
        adjusted between Landlord and Tenant annually and at the expiration or earlier
        termination of this Lease as set forth below. The term “Rent” shall mean Base
        Rent, Tenant’s Pro Rata Share of Real Estate Taxes, Common Area Maintenance
        Costs and Building Insurance Costs and all other sums payable by Tenant to
        Landlord hereunder. 

      

      Tenant
        will pay Landlord the sum of the following per month, in advance, payable
        at the
        same time and place as the Base Rent is payable,
        as
        estimated charges for Tenant’s Pro Rata Share of Real Estate Taxes, Common Area
        Maintenance Costs and Building Insurance Costs:

      

      
        	
                (1)
                  Real Estate Taxes

              	 	
                $

              	
                2,093.00

              	 
	
                (2)
                  Common Area Maintenance Costs

              	 	
                $

              	
                972.00

              	 
	
                (3)
                  Building Insurance Costs

              	 	
                $

              	
                129.00

              	 
	
                Total:

              	 	
                $

              	
                3,194.00

              	 

      

      

      The
        estimated charges as set out above are subject to changes from time to time
        throughout the Lease term.

      

      6. Taxes

      

      (a) Definitions.
        For
        purposes of this Lease, the following definitions shall apply:

      

      (1) “Tax
        Year” means the calendar and/or fiscal year basis upon which taxes and/or
        special assessments are assessed upon the Project throughout the term of
        this
        Lease.

      

      (2) “Real
        Estate Taxes” means (a) all real estate taxes and assessments on the Project,
        the Building or the Leased Premises, and taxes and assessments levied in
        substitution or supplementation in whole or in part of such taxes, (b) all
        personal property taxes for the Building’s personal property, including license
        expenses, (c) all taxes imposed on services of Landlord’s agents and employees,
        (d) all sales, use or other tax, excluding state and/or federal income tax
        now
        or hereafter imposed by any governmental authority upon Rent received by
        Landlord, (e) all other taxes, fees or assessments now or hereafter levied
        by
        any governmental authority on the Project, the Building or its contents or
        on
        the operation and use thereof (except as relate to specific tenants), (f)
        any
        new taxes (including House Bill 3 and franchise taxes) levied against Landlord
        and/or the Project in lieu of ad valorem taxes on the Project as a result
        of
        property tax reform in the State of Texas, and (g) all costs and fees incurred
        in connection with seeking reductions in or refunds in Taxes including, without
        limitation, any costs incurred by Landlord to challenge the tax valuation
        of the
        Building, but excluding income taxes, estate or death, and succession
        taxes.

      

      (b) Landlord’s
        Payment.
        Subject
        to the limitations, conditions and agreements contained in this Paragraph,
        Landlord shall pay annually, all Real Estate Taxes. 

      

      (c) Annual
        Adjustment.
        On or
        before one hundred eighty (180) days after the end of each Tax Year during
        the
        term of this Lease, Landlord shall render a statement showing the actual
        Real
        Estate Taxes for the applicable Tax Year and the total of Tenant’s estimated
        payments of Tenant’s Proportionate Share of Real Estate Taxes paid during the
        preceding Tax Year, and the balance, if any, then due from Tenant. Real Estate
        Taxes for a fractional year, if any, shall be prorated. Landlord’s failure to
        provide the statements shall not relieve Tenant of any liability hereunder.
        Within ten (10) days after the receipt of Landlord’s statement showing the total
        amount paid in advance by Tenant and the actual Real Estate Taxes paid or
        to be
        paid by Landlord, there shall be an adjustment between Landlord and Tenant.
        Tenant shall pay to Landlord on demand the difference between the amount
        paid by
        Tenant and the actual amount due. If the total amount paid by Tenant hereunder
        for any such calendar year shall exceed such actual amount due from Tenant
        for
        such calendar year, the excess shall be credited by Landlord against any
        amounts
        then due and owing by Tenant to Landlord, and any remaining net surplus shall
        then be promptly refunded by Landlord to Tenant. 

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      
 

      7. Common
        Area Maintenance

      

      (a) Landlord’s
        Maintenance Obligation.
        Landlord agrees to maintain and repair throughout the term hereof the Common
        Areas and facilities of the Project, including, without limitation, the
        automobile entrances, exits, driveways, parking areas, pedestrian walks,
        landscaped areas, lighting facilities, service areas and Project signs not
        otherwise the responsibility of Tenant as set out in this Lease (said areas
        hereinafter called the “Common Areas”). Landlord’s maintenance and repairs shall
        include all repairs and replacements and the supplies and materials therefore,
        which in Landlord’s reasonable judgment are necessary to preserve the utility of
        the Common Area and facilities in the condition same were in at the time
        of
        completion, reasonable wear and tear excepted.

      

      (b) Common
        Area Maintenance Costs.
        As used
        herein, the term “Common Area Maintenance Costs” shall mean all costs and
        expenses of every kind paid or incurred during the term of this Lease in
        connection with the operation and upkeep of the Common Areas and facilities
        within the Project, and where necessary, the cost of replacing any of said
        common facilities and the cost of policing and protecting same. In addition
        to
        the foregoing, the Common Area Maintenance Costs may include a reserve fund
        of
        ten percent (10%) of the aggregate Common Area Maintenance Costs, which reserve
        fund will be put into an escrow account and accrue interest until such time
        as a
        major repair such as resurfacing the parking lot or major concrete drive
        replacement, where it shall be applied against such cost. Also, in addition
        to
        the foregoing, the Common Area Maintenance Costs shall include but not limited
        to, maintenance and repair costs, management fees, wages and fringe benefits
        paid to or for employees of Landlord whose duties are connected with the
        operation and maintenance of the Project and Common Areas, all services,
        supplies, repairs, replacements or other expenses for maintaining and operating
        the Building. Except as otherwise provided herein, the cost of any replacements,
        additions or alterations that are required to be capitalized for federal
        income
        tax purposes shall be amortized on a straight line basis over a period equal
        to
        the lesser of the useful life thereof for federal income tax purposes or
        10
        years. 

      

      (c) Annual
        Adjustment.
        On or
        before one hundred eighty (180) days after the end of each calendar year
        during
        the term of this Lease, Landlord shall render a statement showing the actual
        Common Area Maintenance Costs for the applicable calendar year and the total
        of
        Tenant’s estimated payments of Tenant’s Proportionate Share of Common Area
        Maintenance Costs paid during the preceding calendar year, and the balance,
        if
        any, then due from Tenant. Common Area Maintenance Costs for a fractional
        year,
        if any, shall be prorated. Within ten (10) days after the receipt of Landlord’s
        statement showing the total amount paid in advance by Tenant and the total
        Common Area Maintenance Costs paid or to be paid by Landlord, there shall
        be an
        adjustment between Landlord and Tenant. Tenant shall pay to Landlord on demand
        the difference between the amount paid by Tenant and the actual amount due.
        If
        the total amount paid by Tenant hereunder for any such calendar year shall
        exceed such actual amount due from Tenant for such calendar year, the excess
        shall be credited by Landlord against any amounts then due and owing by Tenant
        to Landlord and any remaining net surplus shall then be promptly refunded
        by
        Landlord to Tenant. Landlord’s failure to provide the statements shall not
        relieve Tenant of any liability hereunder.

      

      8. Insurance

      

      (a) Tenant’s
        Liability and Property Insurance.
        Effective as of the earlier of: (1) the date Tenant enters or occupies the
        Leased Premises; or (2) the Commencement Date, and continuing throughout
        the term, Tenant shall maintain the following insurance policies:
        (A) commercial general liability insurance in amounts of $3,000,000 per
        occurrence, which shall apply on a per location basis, or, following the
        expiration of the initial Term, such other amounts as Landlord may from time
        to
        time reasonably require (and, if the use and occupancy of the Leased Premises
        include any activity or matter that is or may be excluded from coverage under
        a
        commercial general liability policy [e.g., the sale, service or consumption
        of
        alcoholic beverages], Tenant shall obtain such endorsements to the commercial
        general liability policy or otherwise obtain insurance to insure all liability
        arising

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

       from
        such activity or matter [including liquor liability, if applicable] in such
        amounts as Landlord may reasonably require), insuring Tenant, Landlord and
        Landlord’s property management company against all liability for injury to or
        death of a person or persons or damage to property arising from the use and
        occupancy of the Leased Premises and (without implying any consent by Landlord
        to the installation thereof) the installation, operation, maintenance, repair
        or
        removal of Tenant’s Off-Premises Equipment with an additional insured
        endorsement in form CG 20 26 11 85; (B)Automobile Liability covering any
        owned,
        non-owned, leased, rented or borrowed vehicles of Tenant with limits no less
        than $3,000,000 combined single limit for property damage and bodily injury;
        (C)
        All Risk Property insurance covering the full value of all Alterations and
        improvements and betterments in the Leased Premises, naming Landlord and
        Landlord’s mortgagee as additional loss payees as their interests may appear;
        (D) All Risk Property insurance covering the full value of all furniture,
        trade fixtures and personal property (including property of Tenant or others)
        in
        the Leased Premises or otherwise placed in the Project by or on behalf of
        Tenant
        or any assignees claiming by, through, or under Tenant or any subtenants
        claiming by, through, or under Tenant and any of their respective agents,
        contractors, employees, and invitees(including Tenant’s Off-Premises Equipment)
        it being understood that no lack or inadequacy of insurance by Tenant shall
        in
        any event make Landlord subject to any claim by virtue of any theft of or
        loss
        or damage to any uninsured or inadequately insured property;
        (E) contractual liability insurance sufficient to cover Tenant’s indemnity
        obligations hereunder (but only if such contractual liability insurance is
        not
        already included in Tenant’s commercial general liability insurance policy);
        (F) worker’s compensation insurance in amounts not less than statutorily
        required, and Employers’ Liability insurance with limits of not less than Three
        Million Dollars ($3,000,000); (G) business interruption insurance in an
        amount that will reimburse Tenant for direct or indirect loss of earnings
        attributable to all perils insured against under Paragraph 8(a)(2)(C) or
        attributable to the prevention of access to the Building or Leased Premises;
        (H)
        in the event Tenant performs any alterations or repairs in, on, or to the
        Leased
        Premises, Builder’s Risk Insurance on an All Risk basis (including collapse) on
        a completed value (non-reporting) form, or by endorsement including such
        coverage pursuant to Paragraph 8(a)(2)(C) hereinabove, for full replacement
        value covering all work incorporated in the Building and all materials and
        equipment in or about the Leased Premises; and (I) such other insurance or
        any changes or endorsements to the insurance required herein, including
        increased limits of coverage, as Landlord, or any mortgagee or lessor of
        Landlord, may reasonably require from time to time. Tenant’s insurance shall
        provide primary coverage to Landlord and shall not require contribution by
        any
        insurance maintained by Landlord, when any policy issued to Landlord provides
        duplicate or similar coverage, and in such circumstance Landlord’s policy will
        be excess over Tenant’s policy. Tenant shall furnish to Landlord certificates of
        such insurance, with an additional insured endorsement in form CG 20 26 11
        85,
        and such other evidence satisfactory to Landlord of the maintenance of all
        insurance coverages required hereunder at least ten (10) days prior to the
        earlier of the Commencement Date or the date Tenant enters or occupies the
        Leased Premises, and at least fifteen (15) days prior to each renewal of
        said
        insurance, and Tenant shall obtain a written obligation on the part of each
        insurance company to notify Landlord at least thirty (30) days before
        cancellation or a material change of any such insurance policies. All such
        insurance policies shall be in form, and issued by companies with a Best’s
        rating of A:VII or better, reasonably satisfactory to Landlord. If Tenant
        fails
        to comply with the foregoing insurance requirements or to deliver to Landlord
        the certificates or evidence of coverage required herein, Landlord, in addition
        to any other remedy available pursuant to this Lease or otherwise, may, but
        shall not be obligated to, obtain such insurance and Tenant shall pay to
        Landlord on demand the premium costs thereof, plus an administrative fee
        of
        fifteen percent (15%) of such cost. It is expressly understood and agreed
        that
        the foregoing minimum limits of insurance coverage shall not limit the liability
        of Tenant for its acts or omissions as provided in this Lease.

      

      (b) Landlord’s
        Liability Insurance.
        Landlord agrees to maintain in force during the term of this Lease a policy
        or
        policies of comprehensive general liability insurance, including property
        damage, written by one or more responsible insurance companies approved by
        Landlord and licensed to do business in Texas insuring Landlord against loss
        of
        life, bodily injury and/or property damage with respect to the Common Areas
        of
        the Project and the operation of the Project, in which the limit of public
        liability shall be not less than FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
        ($500,000.00) single limit bodily injury and in which the limit of property
        damage liability shall be not less than ONE HUNDRED THOUSAND AND NO/100 DOLLARS
        ($100,000.00). In addition, Landlord may maintain in force such umbrella
        policy
        or policies of general liability insurance as Landlord, in its sole discretion,
        may deem appropriate.

      

      (c) Landlord’s
        Fire and Extended Coverage Insurance.
        Landlord agrees to procure and keep in effect during the term of this Lease,
        a
        policy or policies of fire and extended coverage insurance covering the Building
        and other improvements in the Project, or separate fire rating division as
        determined by the State Board of Insurance which includes the Leased Premises,
        including rent abatement, vandalism and malicious mischief coverage, written
        by
        an insurance company authorized to do business within the State of Texas,
        and in
        an amount equal to not less than eighty percent (80%) of the replacement
        cost of
        the premises covered. Such insurance shall provide protection against losses
        so
        insured against for the benefit of Landlord and any first mortgagee of Landlord,
        subject to the terms and provisions of this Lease and any first mortgage;
        provided, however, that all proceeds payable by any insurance company under
        such
        policy or policies shall be payable to such mortgagee, if any, and shall
        be
        applied in accordance with the terms of such mortgage; or, if there is no
        mortgage, the full amount of such proceeds shall be payable to Landlord,
        and
        Tenant shall not be entitled to, and shall have no interest in, such proceeds
        or
        any part thereof. Such policy or policies shall contain a provision or
        endorsement with respect to mutual waiver of right of subrogation. 

       

      
        
           

        

        
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      (d) Building
        Insurance Costs.
        As used
        herein, the term “Building Insurance Costs” shall mean the actual premium costs
        of general liability, fire and extended coverage insurance, rent abatement
        and
        other insurance maintained by Landlord with respect to the Project, including
        without limitation, terrorism insurance, and any deductible incurred in any
        loss. 

      

      (e) Annual
        Adjustment.
        On or
        before one hundred eighty (180) days after the end of each calendar year
        during
        the term of this Lease, Landlord shall furnish Tenant a statement showing
        the
        actual Building Insurance Costs paid by Landlord during the preceding calendar
        year and the total of Tenant’s estimated payments of Tenant’s Proportionate
        Share of Building Insurance Costs paid during the preceding calendar year,
        and
        the balance, if any, then due from Tenant. Landlord’s failure to provide the
        statement shall not relieve Tenant of any liability hereunder. Within ten
        (10)
        days after the receipt of Landlord’s statement showing the total amount paid in
        advance by Tenant and the actual Building Insurance Costs paid or to be paid
        by
        Landlord, there shall be an adjustment between Landlord and Tenant. Tenant
        shall
        pay to Landlord on demand the difference between the amount paid by Tenant
        and
        the actual amount due. If the total amount paid by Tenant hereunder for any
        such
        calendar year shall exceed such actual amount due from Tenant for such calendar
        year, the excess shall be credited by Landlord against any amounts then due
        and
        owing by Tenant to Landlord and any remaining net surplus shall then be promptly
        refunded by Landlord to Tenant.

      

      (f) Mutual
        Waiver of Subrogation.
        Notwithstanding any provision in this Lease to the contrary, Landlord and
        Tenant
        each hereby waive any and all rights of recovery, claim, action or cause
        of
        action, against the other, its officers, employees or agents, for any loss
        or
        damage that may occur to the Leased Premises, or any improvements thereto,
        or
        the Building or any improvements thereto, or any personal property of such
        party
        therein, by reason of fire, the elements, or any other cause which is insured
        against under the terms of standard fire and extended coverage general liability
        insurance policies, REGARDLESS
        OF CAUSE OR ORIGIN, INCLUDING NEGLIGENCE OF THE OTHER PARTY HERETO, ITS
        OFFICERS, EMPLOYEES OR AGENTS, AND EACH COVENANTS THAT NO INSURER SHALL HOLD
        ANY
        RIGHT OF SUBROGATION AGAINST SUCH OTHER PARTY.

      

      (g) Oil
        Pollution Insurance Coverage. At all times during the term of the Lease (and,
        if
        applicable, prior to the commencement of the term of the Lease that Tenant
        brings any oil onto the Leased Premises or the Project), Tenant agrees, warrants
        and guarantees that Tenant shall maintain in full force and effect, valid
        oil
        pollution insurance coverage for the intended usage of oil into, at and out
        of
        the Leased Premises and the Project, which insurance coverage shall be in
        an
        amount reasonably required by Landlord and shall include Landlord as an
        additional insured.

       

      9. Use

      

      The
        Leased Premises shall be used only for the purpose of receiving, storing,
        shipping and selling (other than retail) products, materials and merchandise
        made and/or distributed by Tenant, and for such other lawful purposes as
        may be
        incidental thereto including Tenant’s patented SonocrackingTM Technology,
        a
        process that upgrades crude oil prior to distillation. Tenant covenants and
        agrees that Tenant’s operations shall otherwise be subject to all of the terms
        of this Lease, and Tenant specifically covenants and agrees that (i) Tenant
        will
        not treat in excess of approximately 30 gallons of oil (crude) at any one
        time
        (and subsequent to each test run, Tenant will inspect all operational machinery
        to ensure all oil has been properly contained and that no leakage or spillage
        has occurred, after which a subsequent test run may occur), (ii) in no event
        will Tenant allow or permit any oil to enter

       

      
        
           

        

        
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      either
        the building sewer system, or any drainage leading from the Leased Premises,
        the
        Building or the Project, (iii) all oil brought upon the Leased Premises shall
        be
        safely contained within the Leased Premises in appropriate containers that
        will
        be transported from the Leased Premises and properly disposed of at an
        industrial feedstock or refinery willing to accept the treated oil on a regular
        basis, and (iv) prior to bring any oil onto the Project or the Leased Premises,
        Tenant shall have construct storage areas and treatment areas reasonably
        acceptable to Landlord which shall contain (by way of cement boom and other
        improvements required by Landlord) at least that amount of oil being utilized
        in
        the test process and all oil being maintained at the Leased Premises, and
        (v) in
        no event shall Tenant be permitted to maintain within the Leased Premises
        at any
        one time an amount of oil in excess of 5 barrels (containing approximately
        ______ gallons each). The oil storage area shall be properly “boomed” so as to
        prevent any stored oil from not being contained within the designated “boomed”
area. Outside storage, including, without limitation, trucks and other vehicles,
        is prohibited without Landlord’s prior written consent. Tenant shall at its own
        costs and expense obtain any and all licenses and permits necessary for any
        use
        of the Leased Premises. Tenant shall comply with all governmental orders
        and
        directives for the correction, prevention and abatement of nuisances in or
        upon,
        or connected with, the Leased Premises all at Tenant’s sole expense. Tenant
        shall not permit any objectionable or unpleasant odors, smoke, dust, gas,
        noise
        or vibrations to emanate from the Leased Premises, or take any other action
        which would constitute a nuisance or would disturb or endanger any other
        tenants
        of the Building or Project or unreasonably interfere with the use of their
        respective premises. Without Landlord’s prior written consent, Tenant shall not
        receive, store or otherwise handle any product, material or merchandise which
        is
        explosive or highly inflammable. Tenant will not permit the Leased Premises
        to
        be used for any purpose or in any manner (including, without limitation,
        any
        method of storage) which would render the insurance thereon void or the
        insurance risk more hazardous or cause the State Board of Insurance or other
        insurance authority to disallow any sprinkler credits. Tenant shall faithfully
        observe and comply with the rules and regulations attached to this Lease
        as
        Exhibit “B”, as well as all modifications thereof and additions thereto as are
        from time to time promulgated by Landlord. 

      

      10. Landlord’s
        Repairs

      

      Landlord
        shall at its expense (subject to inclusion in Common Area Maintenance Costs)
        maintain only the roof, foundation and the structural soundness of the exterior
        walls of the Building in good repair, reasonable wear and tear excepted.
        Tenant
        shall repair and pay for any damage caused by Tenant, or Tenant’s employees
        agents or invitee, or caused by Tenant’s default hereunder. The term “walls” as
        used herein shall not include windows, glass or plate glass, doors, special
        storefronts or office entries. Tenant shall immediately give Landlord written
        notice of defect or need for repairs, after which Landlord shall have reasonable
        opportunity to repair same or cure such defect. Landlord’s liability with
        respect to any defects, repairs or maintenance for which Landlord is responsible
        under any of the provisions of this Lease shall be limited to the cost of
        such
        repairs or maintenance or the curing of such defect.

      

      11. Tenant’s
        Repairs

      

      (a) Tenant
        shall at its own cost and expenses keep and maintain all parts of the Leased
        Premises (except those for which Landlord is expressly responsible under
        the
        terms of this Lease) in good condition, promptly making all necessary repairs
        and replacements, including but not limited to, windows, glass, plate glass
        doors, any special office entry, interior walls and finish work, floors and
        floor covering, downspout, gutters, heating and air conditioning systems,
        lighting, electrical systems, dock boards, truck doors, door bumpers, paving,
        plumbing lines, equipment, and fixtures, termite and pest extermination,
        regular
        removal of trash and debris, including rail spur areas, keeping these areas,
        parking areas, driveways, alleys and the whole of the Leased Premises in
        a clean
        and sanitary condition.

      

      (b) Tenant
        shall not damage any demising wall or disturb the integrity and support provided
        by any demising wall and shall, at its sole cost and expense, promptly repair
        any damage or injury to any demising wall caused by Tenant or its employees,
        agents or invitee.

      

      
        
           

        

        
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      (c) In
        the
        event the Leased Premises constitute a portion of a multiple occupancy building,
        Tenant and its employees, customers and licensees shall have the non-exclusive
        right to use the parking areas, if any, as may be designated by Landlord
        in
        writing, subject to such reasonable rules and regulations as Landlord may
        from
        time to time prescribe and subject to rights of ingress and egress of other
        tenants. Landlord shall not be responsible for enforcing Tenant’s parking rights
        against any third parties. Further, in multiple occupancy buildings, Landlord
        shall perform the paving and landscape maintenance, and reserves the right
        to
        perform exterior painting and common sewage line plumbing which are otherwise
        Tenant’s obligations under subparagraph (a) above with respect to such items,
        and Tenant shall be liable for its Pro Rata Share (as defined in Paragraph
        5
        above) of the cost and expense of the care for the grounds around the Building,
        including but not limited to the mowing of grass, care of shrubs, general
        landscaping, maintenance of parking areas, driveways, and alleys, exterior
        repainting and common sewage line plumbing; provided, however, that Landlord
        shall have the right to require Tenant to pay such other reasonable proportion
        of said mowing, shrub care and general landscaping costs as may be determined
        by
        Landlord in its sole discretion; and further provided that if Tenant or any
        other particular tenant of the Building can be clearly identified as being
        responsible for obstructions or stoppage of the common sanitary sewage line,
        then Tenant, if Tenant is responsible, or such other responsible tenant,
        shall
        pay the entire cost thereof, upon demand, as additional rent. Tenant shall
        pay
        its share, determined as aforesaid, of such costs and expenses in the event
        Landlord elects to perform or caused to be performed such work which sum
        shall
        be due and payable ten (10) days after receipt of a statement
        thereafter.

      

      (d) Tenant
        shall, at its own costs and expense, enter into a regularly scheduled preventive
        maintenance/service contract with a maintenance contractor for servicing
        all hot
        water, heating and air conditioning systems and equipment within or exclusively
        serving the Leased Premises. The maintenance contractor and the contract
        must be
        approved by Landlord. The service contract must include all services suggested
        by the equipment manufacturer within the operation/maintenance manual and
        must
        become effective (and a copy thereof delivered to Landlord) within thirty
        (30)
        days of the date Tenant takes possession of the Leased Premises and provide
        for
        service not less than a quarterly basis.

      

      12. Tenant
        Improvements and Alterations

      

      Tenant
        shall not make any alterations, additions or improvements to the Leased Premises
        (including but not limited to roof and wall penetrations) or the Building
        without the prior written consent of Landlord; provided, however, Landlord’s
        consent shall not be required for any alteration, addition or improvement
        that
        satisfy all of the following criteria (a “Minor
        Alteration”):
        (i)
        is of a cosmetic nature such as painting, wallpapering, hanging pictures
        and
        installing carpeting; (ii) is not visible from outside the Leased Premises
        or
        Building; (iii) will not affect the systems or structure (including, without
        limitation, the roof) of the Building; and (iv) the cost of the particular
        project does not exceed $25,000, but the performance of any such Minor
        Alteration shall in any event be subject to the terms of this Paragraph
        4(b)
        other
        than the need for Landlord consent. All Tenant alterations, additions and/or
        improvements shall comply with insurance requirements and with all applicable
        laws, ordinances, and regulations, including without limitation, the provisions
        of Tex. Rev. Civ. Stat. Ann. art. 9102 and the provisions of the Americans
        With
        Disabilities Act of 1990, 42 U.S.C. §§12101-12213 (collectively, the “Disability
        Acts”). Additionally, all Tenant alterations, additions and/or improvements
        shall be in accordance with specifications approved by Landlord except that
        such
        requirement shall not apply with respect to alterations, additions and/or
        improvements which do not affect the systems or structure of the Building
        and
        are of a nature where the preparation of specifications for such work is
        not
        normal and customary. All Tenant alterations, additions and/or improvements
        shall be constructed in a good and workmanlike manner. All plans and
        specifications for Tenant’s alterations, additions and/or improvements shall be
        submitted to Landlord for Landlord’s written approval. Tenant agrees that
        Landlord may monitor all phases of Tenant’s construction. Tenant shall reimburse
        Landlord for Landlord’s reasonable expenses for reviewing plans and documents
        and in monitoring construction. Landlord’s review of plans and monitoring
        construction shall be solely for Landlord’s own benefit and shall impose no duty
        or obligation on Landlord to confirm that the plans and specifications and/or
        construction comply with applicable laws, codes, rules, or regulations. At
        Landlord’s request, Tenant shall obtain payment and performance bonds approved
        by Landlord, for any Tenant construction which bonds shall be delivered to
        Landlord prior to commencement of construction. Upon completion of Tenant’s
        construction, Tenant shall deliver to Landlord sworn statements setting forth
        the names of all contractors and subcontractors who performed work along
        with
        final lien waivers from such contractors and subcontractors. Tenant may,
        without
        the consent of Landlord, but at its own cost and expense and in a good
        workmanlike manner, erect such shelves, bins, machinery, and trade fixtures
        as
        it may deem advisable, without altering the basic character of the Building
        or
        improvements and without overloading or damaging such Building or improvements,
        and in each case complying with all applicable governmental laws, ordinances,
        regulations and other requirements. All alterations, additions, improvements
        and
        partitions erected by Tenant shall be and remain the property of Tenant during
        the term of this Lease, and Tenant shall, unless Landlord otherwise elects
        as
        hereinafter provided, remove all alterations, additions, improvements and
        partitions erected by Tenant and restore the Leased Premises to its original
        condition by the date of termination of this Lease or upon earlier vacating
        of
        the Leased Premises; provided, however, that if Landlord so elects prior
        to
        termination of this Lease or upon earlier vacating of the Leased Premises,
        such
        alterations, additions, improvements and partitions shall become the property
        of
        Landlord as of the date of termination of this Lease or upon earlier vacating
        of
        the Leased Premises and shall be delivered up to the Landlord with the Leased
        Premises. All shelves, bins, machinery and trade fixtures installed by Tenant
        may be removed by Tenant prior to the termination of this Lease, after written
        notice to Landlord of Tenant’s intentions, and shall be removed by the date of
        termination of this Lease or upon earlier vacating of the Leased Premises.
        Any
        removal by Tenant shall be accomplished in a good workmanlike manner so as
        not
        to damage the primary structure or structural qualities of the buildings
        and
        other improvements situated on the Leased Premises.

       

      
        
           

        

        
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      13
        . Signs

      

      Tenant
        shall have the right to install signs upon the Leased Premises only when
        first
        approved in writing by Landlord and subject to any applicable governmental
        laws,
        ordinances, regulations, Landlord’s or other architectural controls, and other
        requirements. Tenant shall maintain all signs upon the Leased Premises in
        good
        condition. Tenant shall remove all such signs by the termination of this
        Lease.
        Such installations and removals shall be made in such manner as to avoid
        injury
        or defacement of the Building and other improvements, and Tenant shall repair
        any injury or defacement, including, without limitation, discoloration, caused
        by such installation and/or removal.

      

      14. Inspection

      

      Landlord
        and Landlord’s agents and representatives shall have the right to enter and
        inspect the Leased Premises and Building at any reasonable time during business
        hours, for the purpose of ascertaining the condition of the Leased Premises
        or
        in order to made such repairs as may be required or permitted to be made
        by
        Landlord under the terms of this Lease. During the period that is nine (9)
        months prior to the end of the term hereof, Landlord and Landlord’s agents and
        representatives shall have the right to enter the Leased Premises at any
        reasonable time during business hours for the purpose of showing the Leased
        Premises and shall have the right to erect on the Leased Premises a suitable
        sign indicating the Leased Premises are available. Landlord will use
        commercially reasonable efforts to minimize, to the extent reasonably
        practicable, any interference with Tenant's business as a result of such
        inspections or showings. Tenant shall give written notice to Landlord at
        least
        thirty (30) days prior to vacating the Leased Premises and shall arrange
        to meet
        with Landlord for a joint inspection of the Leased Premises prior to vacating.
        In the event of Tenant’s failure to give such notice or arrange to meet with
        Landlord for a joint inspection of the Leased Premises prior to vacating,
        and,
        in the event following Tenant’s vacation of the Leased Premises Tenant fails to
        meet with Landlord to perform such inspection within five (5) days following
        Landlord’s written request for such meeting, then Landlord’s inspection of the
        Leased Premises shall be conclusively deemed correct for purposes of determining
        Tenant’s responsibility for repairs and restoration.

      

      15. Utilities

      

      Landlord
        agrees to provide water, electricity and telephone service connections to
        the
        Building. Tenant shall pay to bring such utilities to the Leased Premises
        and
        for all water, gas, heat, light, power, telephone, sewer, sprinkler charges
        and
        other utilities and services used on or from the Leased Premises, together
        with
        any taxes, penalties, surcharges or the like pertaining thereto and any
        maintenance changes for utilities, as well as shall furnish all electric
        light
        bulbs and tubes. If any such services are not separately metered to Tenant,
        Tenant shall pay Tenant’s reasonable proportion, as determined by Landlord, of
        all charges jointly metered with other premises. Landlord shall in no event
        be
        liable for any interruption or failure of utility services on the Leased
        Premises.

      

      16. Assignment
        and Subletting

      

      (a) Tenant
        will not assign this Lease, or allow same to be assigned by operation of
        law or
        otherwise, or sublet the Leased Premises or any part thereof without the
        prior
        written consent of Landlord, which consent Landlord may withhold in its sole
        and
        absolute discretion. Notwithstanding any permitted assignment or subletting,
        Tenant shall at all times remain directly, primarily and fully responsible
        and
        liable for the payment of the rent herein specified and for compliance with
        all
        of its other obligations under the terms, provisions and covenants of this
        Lease. If the Leased Premises or any part thereof are then assigned or sublet,
        Landlord, in addition to any other remedies herein provided or provided by
        law,
        may at its option collect directly from such assignee or subtenant all rents
        becoming due to Tenant under such assignment or sublease and apply such rent
        against any sums due to Landlord from Tenant hereunder, and no such collection
        shall be construed to constitute a novation or a release of Tenant from the
        further performance of Tenant’s obligations hereunder. For purpose of this Lease
        a transfer of more than fifty percent (50%) of the beneficial interest in
        Tenant
        or of the control of Tenant (if Tenant is a partnership, corporation, limited
        liability, company, trust, or other type of business, organization or entity)
        shall constitute an assignment of this Lease.

       

      
        
           

        

        
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      (b) If
        Tenant
        shall propose to sublet or assign this Lease, it shall so notify Landlord
        in
        writing not less than thirty (30) days prior to the date of the proposed
        assignment or subletting. The notice shall set forth the name of the proposed
        subtenant or assignee, the term, use, rental rate and other particulars of
        the
        proposed subletting or assignment, including without limitation, proof
        satisfactory to Landlord that the proposed subtenant or assignee is financially
        responsible and will immediately occupy and hereafter use the entire Leased
        Premises (or any sublet portion thereof) for the remaining term of this Lease
        (or for the entire term of the sublease, if shorter).

      

      (c) Landlord
        shall have the option, in the event of any proposed assignment or subletting,
        to
        cancel this Lease as of the date the subletting or assignment described in
        Tenant’s notice is to be effective. The option shall be exercised, if at
        all, by
        Landlord’s giving Tenant written notice thereof within twenty (20) days
        following Landlord’s receipt of Tenant’s written request. Upon cancellation,
        Tenant shall pay to Landlord all costs or charges which are the responsibility
        of Tenant hereunder through the date of cancellation, and Tenant shall, at
        Tenant’s own cost and expense, discharge in full any outstanding real estate
        commission obligation on the part of Landlord with respect to this Lease.
        Further, upon any such cancellation Landlord and Tenant shall have no further
        obligations or liabilities to each other under this Lease, except with respect
        to obligations or liabilities which accrue hereunder as of the cancellation
        date
        in the same manner as if such cancellation date were the date originally
        fixed
        for the expiration of the term hereof. Without limitation, Landlord may lease
        the Leased Premises to the prospective subtenant or assignee, without liability
        to the Tenant. Landlord’s failure to exercise any right hereunder shall not
        waive Landlord’s right as to any subsequent proposed sublease or assignment, nor
        shall any such failure be deemed to constitute Landlord’s right as to any
        subsequent proposed sublease or assignment, nor shall any such failure be
        deemed
        to constitute Landlord’s approval of the proposed sublease or
        assignment.

      

      (d) If
        Landlord does not cancel this Lease, Landlord agrees to approve any assignment
        by Tenant to any corporation succeeding to substantially all the business
        and
        assets of Tenant by merger, consolidation, purchase of assets or otherwise,
        or
        any assignment or subletting to a corporation which is an affiliate of tenant.
        In other cases, provided that there is no event of default on the part of
        Tenant, Landlord agrees not to unreasonably withhold approval of any proposed
        subletting or assignment as to which Landlord declines its rights of
        cancellation hereunder provided the proposed transaction is consummated within
        thirty (30) days after Landlord’s approval, is upon the same terms and
        conditions disclosed to Landlord in Tenant’s notice, and the assignment or
        subletting is with another financially responsible party whose use of the
        Leased
        Premises will not depreciate the value of the Leased Premises, or the value
        of
        the property adjacent thereto, or will not be extra hazardous with reference
        to
        the risk of fire or other hazards, and shall not result in any additional
        environmental risk for the Project. Any assignment or subletting without
        Landlord’s approval, where required hereunder, shall be void and of no
        effect.

      

      (e) Landlord
        shall have the right to transfer and assign, in whole or in part, any of
        its
        rights under this Lease, and in the Building or Project referred to herein;
        and
        to the extent that such assignee assumes Landlord’s obligations hereunder,
        Landlord shall by virtue of such assignment be released from such
        obligation.

      

      17. Fire
        and Casualty Damage

      

      (a) If
        the
        Building should be damaged or destroyed by fire, tornado or other casualty,
        Tenant shall promptly give written notice thereof to Landlord.

      

      (b) If
        the
        Building should be totally destroyed by fire, tornado or other casualty,
        or if
        it should be so damaged, thereby that rebuilding or repairs cannot in Landlord’s
        estimation be completed within two hundred (200) days after the date of such
        damage, this Lease shall terminate and the Rent shall be abated during the
        unexpired portion of this Lease, effective upon the date of the occurrence
        of
        such damage.

       

      
        
           

        

        
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      (c) If
        the
        Building should be damaged by any peril covered by the insurance to be provided
        by Landlord under this Lease, but only to such extent that rebuilding or
        repairs
        can in Landlord’s estimation be completed within two hundred (200) days after
        the date of such damage, this Lease shall not terminate, and Landlord shall
        at
        its sole costs and expense thereupon proceed with reasonable diligence to
        rebuild and repair the Building to substantially the condition in which it
        existed prior to such damage, except that Landlord shall not be required
        to
        rebuild, repair or replace any part of the partitions, fixtures, additions
        and
        other improvements which may have been placed in, on or about the Leased
        Premises by Tenant. If the Leased Premises are untenantable, the Rent owed
        by
        Tenant shall not be abated but shall be reduced to such extent as may be
        fair
        and reasonable under all of the circumstances. In the event that Landlord
        shall
        fail to complete such repairs and rebuilding within two hundred (200) days
        after
        the date upon which Landlord is notified by Tenant of such damage, Tenant
        may at
        its option terminate this Lease by delivering written notice of termination
        to
        Landlord within ten (10) days after expiration of such two hundred (200)
        day
        period as Tenant’s exclusive remedy, whereupon all rights and obligations
        hereunder shall cease and terminate. Failure by Tenant to timely terminate
        this
        Lease as set forth in the preceding sentence shall be deemed a waiver by
        Tenant
        of its right to do so.

      

      (d) Without
        limiting the other provisions of this Paragraph 17, if a portion of the Leased
        Premises shall be damaged or destroyed by fire, tornado or other casualty
        within
        the last twelve (12) months of the Lease Term so as to render the remainder
        of
        the Leased Premises unfit for Tenant to continue its normal business from
        the
        Leased Premises, then either Landlord or Tenant shall have the right to
        terminate this Lease within fifteen (15) days following the date of such
        damage
        or destruction; provided, however, that Tenant may not exercise such right
        of
        termination if such casualty was caused by Tenant or its employees, agents
        or
        contractors.  

      

      (e) Notwithstanding
        anything herein to the contrary, in the event the holder of any indebtedness
        secured by a mortgage or deed of trust covering the Leased Premises requires
        that the insurance proceeds be applied to such indebtedness, than Landlord
        shall
        have the right to terminate this Lease by delivering written notice of
        termination to Tenant within fifteen (15) days after such requirement is
        made by
        any such holder, whereupon all rights and obligations hereunder shall cease
        and
        terminate.

      

      18. Condemnation

      

      (a) If
        the
        whole or any substantial part of the Leased Premises is taken for any public
        or
        quasi-public use under governmental law, ordinance or regulation, or by right
        of
        eminent domain, or by private purchase in lieu thereof and the taking would
        prevent or materially interfere with the use of the Leased Premises for the
        purposes for which they are being used, this Lease shall terminate and the
        Rent
        shall be abated during the unexpired portion of this Lease, effective when
        the
        physical taking of the Leased Premises occur.

      

      (b) If
        part
        of the Leased Premises is taken for any public or quasi-public use under
        any
        governmental law, ordinance or regulation, or by right of eminent domain,
        or by
        private purchase in lieu thereof, and this Lease is not terminated as provided
        in the subparagraph above, this Lease shall not terminate but the Rent payable
        hereunder during the unexpired portion of this Lease shall be reduced to
        such
        extent as may be fair and reasonable under all of the
        circumstances.

      

      (c) In
        the
        event of any such taking or private purchase in lieu thereof, all compensation
        awarded for any such taking or condemnation, or sale proceeds in lieu thereof,
        shall be the property of Landlord, and Tenant shall have no claim thereto,
        the
        same being hereby expressly waived by Tenant, except for any portions of
        such
        award or proceeds which are specifically allocated by the condemning or
        purchasing party for the taking of or damage to trade fixtures of Tenant,
        which
        Tenant specifically reserves to itself. 

      

      19. Holding
        Over

      

      Tenant
        agrees that at the termination of this Lease by lapse of time or otherwise,
        to
        yield up immediate possession to Landlord. If Tenant holds over after the
        expiration or termination of this Lease, unless the parties hereto otherwise
        agree in writing on the terms of such holding over, occupancy of the Leased
        Premises subsequent to such termination or expiration shall be that of a
        tenancy
        at sufferance and in no event for month-to-month or year-to-year. During
        the
        holdover, all of the other terms and provisions of this Lease shall be
        applicable during that period, except that Tenant shall pay Landlord from
        time
        to time upon demand, as Rent for the period of any holdover, an amount equal
        to
        150% of the Rent in effect on the termination date, computed on a monthly
        basis
        for each month of the holdover period (without proration for partial
        months).  In addition, Tenant shall be liable for all damages incurred by
        Landlord as a result of such holding over. No holding over by Tenant, whether
        with or without consent of Landlord, shall operate to extend this Lease except
        as otherwise expressly provided. The preceding provisions of this paragraph
        shall not be construed as Landlord’s consent for Tenant to hold
        over.

       

      
        
           

        

        
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      20. Quiet
        Enjoyment

      

      Landlord
        covenants that it now has, good title to the Leased Premises, free and clear
        of
        all liens and encumbrances, excepting only the lien for current taxes not
        yet
        due, such mortgage or mortgages as are permitted by the terms of this Lease,
        zoning ordinances and other building and fire ordinances and governmental
        regulations relating to the use of such property, and easements, restrictions
        and other conditions of record. In the event this Lease is a sublease, then
        Tenant agrees to take the Leased Premises subject to the provisions of the
        prior
        leases. Landlord represents and warrants that it has full right and authority
        to
        enter into this Lease and that Tenant, upon paying the rentals herein set
        forth
        and performing its other covenants and agreements herein set forth, shall
        peaceably and quietly have, hold and enjoy the Leased Premises for the term
        hereof without hindrance or molestation from Landlord, subject to the terms
        and
        provisions of this Lease.

      

      21. Tenant’s
        Events of Default

      

      The
        following events shall be deemed to be events of default by Tenant under
        this
        Lease:

      

      (a) Tenant
        fails to pay any installment of the Rent when due (including, without
        limitation, any payment with respect to Tenant’s Pro Rata Share of Building
        Costs hereunder when due), or any other payment or reimbursement to Landlord
        required herein when, due, and such failure shall continue for a period of
        five
        (5) days from the date such payment was due.

      

      (b) Tenant
        shall become insolvent, or shall make a transfer in fraud of creditors, or
        shall
        make an assignment for the benefit of creditors.

      

      (c) Tenant
        shall be adjudged bankrupt or insolvent in proceedings filed against
        Tenant.

      

      (d) A
        receiver or trustee shall be appointed for all or substantially all of the
        assets of Tenant.

      

      (e) Tenant
        shall desert or vacate any substantial portion of the Leased
        Premises.

      

      (f) Tenant
        shall fail to comply with any term, provision or covenant of this Lease (other
        than the foregoing in this Paragraph), and shall not cure such failure within
        twenty (20) days after written notice thereof to Tenant; provided however,
        if
        the nature of Tenant’s obligation is such that more than twenty (20) days are
        required for its performance, Tenant shall not have suffered an event of
        default
        if Tenant commences to cure such failure within the twenty (20) day period
        and
        completes performance within ninety (90) days thereafter.

      

      (g) If
        the
        term of any lease, other than this Lease, heretofore or hereafter made by
        Tenant
        for any space in the Building or any other building owned by Landlord, if
        applicable, shall be terminated or terminable after the making of this Lease
        because of any default by Tenant under such other lease.

      

      22. Landlord’s
        Remedies

      

      Upon
        the
        occurrence of any such events of default described in Paragraph 21 hereof,
        Landlord shall have the option to pursue any one or more of the following
        remedies without any notice or demand whatsoever:

       

      
        
           

        

        
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      (a) Terminate
        this Lease, or terminate Tenant’s rights to possession of the Leased Premises
        under this Lease (but not the Lease, itself), and in either event Landlord
        shall
        have the right to immediate possession of the Leased Premises and may reenter
        the Leased Premises, change the locks and remove all property there from
        without
        being guilty in any manner of trespass or otherwise; waived; and any such
        termination or re-entry on the part of Landlord shall be without prejudice
        to
        any remedy available to Landlord for arrears of Rent, breach of contract,
        damages or otherwise, nor shall the termination of this Lease or of Tenant’s
        rights of possession under this Lease by Landlord acting under this subparagraph
        be deemed in any manner to relieve Tenant from the obligation to pay the
        Rent
        and all other amounts due or to become due as provided in this Lease for
        and
        during the entire unexpired portion then remaining of the Lease term. In
        the
        event of termination of this Lease or of Tenant’s rights of possession under
        this Lease by Landlord as provided in this subparagraph, Landlord shall have
        the
        further right to relet the Leased Premises upon such terms, conditions and
        covenants as are deemed proper by Landlord for the account of Tenant as set
        forth below, and in such event, Tenant shall pay to Landlord all costs of
        renovating and altering the Leased Premises for a new tenant or tenants in
        addition to all brokerage and/or legal fees incurred in connection therewith.
        Landlord shall credit Tenant only for such amounts as are actually received
        from
        such reletting during the then remaining Lease term. Alternatively, at the
        election of Landlord, Tenant covenants and agrees to pay as damages to Landlord,
        upon any such termination by Landlord of this Lease or of Tenant’s rights of
        possession under this Lease, such sum as at the time of such termination
        equals
        the amount of the excess, if any, of the then present value of all the Rent
        which would have been due and payable hereunder during the remainder of the
        full
        Lease term (had Tenant kept and performed all agreements and covenants of
        Tenant
        set forth in this Lease) over and above the then present rental value of
        the
        Leased Premises for said remainder of the Lease term. For purposes of present
        value calculations, Landlord and Tenant stipulate and agree to a discount
        rate
        of six (6) percent per annum.

      

      (b) Without
        terminating this Lease, to enter upon the Leased Premises and without being
        guilty in any manner of trespass or otherwise and without liability for any
        damage to Tenant or persons holding under Tenant by reason of such re-entry,
        all
        of which are hereby expressly waived, and to do or perform whatever Tenant
        is
        obligated hereunder to do or perform under the terms of this Lease; and Tenant
        shall reimburse Landlord on demand for any expenses or other sums which Landlord
        may incur or expend plus fifteen percent (15% ) thereof to cover Landlord’s
        overhead and administrative cost, pursuant to this subparagraph, and Landlord
        shall not be liable for any damages resulting to Tenant from such action,
        whether caused by the negligence of Landlord or otherwise; provided, however,
        nothing in this subparagraph shall be deemed an obligation or undertaking
        by
        Landlord to remedy any such defaults of Tenant.

      

      (c) Without
        waiving such event of default, apply all or any part of the Security Deposit
        to
        cure the event of default or to any damages suffered as a result of the event
        of
        default to the extent of the amount of damages suffered. Tenant shall reimburse
        Landlord for the amount of such depletion of the Security Deposit on
        demand.

      

      (d) In
        addition to any of the remedies noted above or hereinafter, Landlord is entitled
        and authorized to enter upon and take possession of the Leased Premises and
        remove any property that may be found within the Leased Premises. Landlord
        shall
        have the right to change any and all locks and other security devices
        restricting access to the Leased Premises. To the extent permitted by law,
        Tenant hereby waives: (i) any notices of Landlord’s intent to re-enter or
        re-take possession of the Leased Premises; (ii) any notice provided by statute
        or otherwise of such re-entry or repossession or changing of locks; (iii)
        any
        claim or cause of action, whether based on trespass, conversion, or otherwise,
        against Landlord or Landlord’s agents, employees, officers, or contractors for
        any damages caused by the alteration of any locks or re-entry or repossession
        by
        Landlord, whether or not caused by the negligence of Landlord or otherwise;
        and
        (iv) any right of redemption, re-entry, or repossession of Tenant and any
        notice
        of legal proceeding for re-entry, including actions for forcible detainer
        and
        entry. 

      

      Provided
        that Landlord has not terminated this Lease in writing or permanently excluded
        Tenant from the Leased Premises, Landlord shall not be obligated to provide
        a
        new key to Tenant except during Landlord’s normal business hours, and only after
        the following: (1) Tenant cures all events of default existing at the time
        of
        lock-out, including payment of late charges and reasonable expenses of lock-out
        (which shall include the cost of security services and removal of old locks
        and
        installation of new locks), and (2) Tenant has provided Landlord additional
        security or further assurances of Tenant’s future performance of all Tenant’s
        obligations arising under this Lease, such security or assurances to be
        satisfactory to Landlord in the exercise of Landlord’s sole and absolute
        discretion, which security may include, but is not limited to, a requirement
        that the Security Deposit be increased to an amount equal to three (3) months
        Rent. Such lock-out should not be deemed to be a termination of this Lease
        unless Landlord gives a written notice of termination to Tenant. It is agreed
        that if Tenant abandons or vacates the Leased Premises, Landlord may take
        such
        steps as Landlord deems necessary, appropriate, or desirable to protect the
        Leased Premises and the property therein from deterioration, including but
        not
        limited to, the lock-out of Tenant as described herein.

       

      
        
           

        

        
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      All
        property of Tenant removed from the Leased Premises by Landlord pursuant
        to any
        provision of this Lease or applicable law may be handled, removed or stored
        by
        Landlord at the cost and expense of Tenant, and Landlord shall not be
        responsible in any event for the value, preservation or safekeeping thereof.
        Tenant shall pay Landlord for all expenses incurred by Landlord with respect
        to
        such removal and storage so long as the same is in Landlord’s possession or
        under Landlord’s control. All such property not removed from the Leased Premises
        or retaken from storage by Tenant within thirty (30) days after the end of
        the
        Term or the termination of Tenant’s right to possession of the Leased Premises,
        however terminated, at Landlord’s option, shall be conclusively deemed to have
        been conveyed by Tenant to Landlord as by bill of sale without further payment
        or credit by Landlord to Tenant.

      

      In
        the
        event Tenant fails to pay any installment of Rent or any reimbursement,
        additional rent, or any other payment hereunder as and when such payment
        is due,
        to help defray the additional cost to Landlord for processing such late payments
        Tenant shall pay to Landlord on demand a late charge in an amount equal to
        five
        percent (5%) of such installment, reimbursement, additional rent or any other
        payment and the failure to pay such late charge within ten (10) days after
        demand therefore shall be an event of default hereunder. The provision for
        such
        late charge shall be in addition to all of Landlord’s other rights and remedies
        hereunder or at law and shall not be construed as liquidated damages or as
        limiting Landlord’s remedies in any manner.

      

      Pursuit
        of any of the forgoing remedies shall not preclude pursuit of any of the
        other
        remedies herein provided or any other remedies provided by law, nor shall
        pursuit of any remedy herein provided constitute a forfeiture or waiver of
        any
        Rent due to Landlord hereunder or of any damages accruing to Landlord by
        reason
        of the violation of any of the terms, provisions and covenants herein contained.
        No act or thing done by the Landlord or its agents during the term hereby
        granted shall be deemed a termination of this Lease or an acceptance of the
        surrender of the Leased Premises, and no agreement to terminate this Lease
        or
        accept a surrender of the Leased Premises shall be valid unless in writing
        signed by Landlord. No waiver by Landlord of any violation or breach of any
        of
        the terms, provisions and covenants herein contained shall constitute a waiver
        by Landlord of any of its rights with respect to any future violation or
        breach
        thereof. Landlord’s acceptance of the payment of Rent or other payments
        hereunder after the occurrence of an event of default shall not be construed
        as
        a waiver of such default, unless Landlord so notifies Tenant in writing.
        Forbearance by Landlord to enforce one or more of the remedies herein provided
        upon an event of default shall not be deemed or construed to constitute a
        waiver
        of such default or of Landlord’s right to enforce any such remedies with respect
        to such default or any subsequent default. If, on account of any breach or
        default by Tenant in Tenant’s obligations under the terms and conditions of this
        Lease, it shall become necessary or appropriate for Landlord to employ or
        consult with any attorney concerning or to enforce of defend any of Landlord’s
        rights or remedies hereunder, Tenant agrees to pay any reasonable attorney’s
        fees so incurred.

      

      All
        sums
        due and owing by Tenant to Landlord under this Lease shall bear interest
        from
        the date ten (10) days after the date due until paid at the lesser of (a)
        the
        maximum non-usurious rate permitted by law or (b) the greater of (i) two
        percent
        (2%) above the “prime rate” per annum of Chase Bank or its successor in effect
        on said due date or (ii) eighteen percent (18%) per annum. In either case,
        such
        interest to be compounded daily; provided, however, in no event shall the
        rate
        of interests hereunder exceed the maximum non-usurious rate of interest
        (hereinafter called the “Maximum Rate”) permitted by the applicable laws of the
        State of Texas or the United States of America, whichever shall permit the
        higher non-usurious rate, and as to which Tenant could not successfully assert
        a
        claim or defense of usury. To the extent that the Maximum Rate is determined
        by
        reference to the laws of the State of Texas, the Maximum Rate shall be the
        indicated rate ceiling (as defined and described in Credit Title of the Texas
        Finance Code, as amended at the applicable time in effect).

      

      23. Landlord’s
        Lien

      

      In
        addition to any statutory lien for Rent in Landlord’s favor, Landlord shall have
        and Tenant hereby grants to Landlord a continuing security interest for all
        rentals and other sums of money becoming due hereunder from Tenant, upon
        all
        goods, wares, equipment, fixtures, furniture, inventory, accounts, contract
        rights, receivables, chattel paper and other personal property of Tenant
        situated on the Leased Premises, and such property shall not be removed there
        from without the consent of Landlord until all arrearage in Rent as well
        as any
        and all other sums of money then due to Landlord hereunder shall first have
        been
        paid and discharged. In the event of a default under this Lease, Landlord
        shall
        have, in addition to any other remedies provided herein or by law, all rights
        and remedies 

       

      
        
           

        

        
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      under
        the
        Texas Business and Commerce Code, including without limitation the right
        to sell
        the property described in this paragraph at public or private sale upon ten
        (10)
        days notice to Tenant. Tenant hereby authorizes Landlord to file financing
        statement(s) in form sufficient to perfect the security interest granted
        hereunder. Landlord shall have all the rights and remedies of a secured party
        under the Texas Business and Commerce Code and this lien and security interest
        may be foreclosed by process of law. The requirement of reasonable notice
        prior
        to any sale under Article 9 of the Texas Business and Commerce Code shall
        be met
        if such notice is given in the manner prescribed herein at least ten (10)
        days
        before the day of sale. Any sale made pursuant to the provisions of this
        Paragraph shall be deemed to have been a public sale conducted in a commercially
        reasonable manner if held in the Leased Premises after the time, place and
        method of sale and a general description of the types of property to be sold
        have been advertised for ten (10) consecutive days prior to the date of sale
        in
        a daily newspaper published in the county in Texas where the Building is
        located. Any statutory lien for Rent is not hereby waived, the express
        contractual lien herein granted being in addition and supplementary thereto.
        Notwithstanding the provisions of this Paragraph 23 to the contrary, if Tenant
        desires to obtain a loan secured by Tenant’s personal property in the Premises
        and requests that Landlord execute a lien waiver in connection therewith,
        Landlord agrees to subordinate its lien rights to the rights of Tenant’s lender
        pursuant to a lien subordination on Landlord’s standard form, provided that
        Tenant delivers such request in writing to Landlord together with a
        nonrefundable processing fee in the amount of Five Hundred Dollars ($500.00).
        Notwithstanding the foregoing, however, if Landlord incurs processing costs
        (including attorneys’ fees) in connection with any such request which exceed
        Five Hundred Dollars ($500.00), then Tenant shall reimburse Landlord for
        such
        excess within three (3) business days following Tenant’s receipt of invoice(s)
        therefor from Landlord. Nothing in this Article 23.shall permit Tenant to
        encumber its leasehold interest in the Premises. 

      

      24.
         Subordination

      

      This
        Lease and all rights of Tenant hereunder are subject and subordinate (i)
        to any
        mortgage or deed of trust, blanket or otherwise, which does now or may hereafter
        affect the Building (and which may also affect other properties) and (ii)
        to any
        and all increases, renewals, modifications, consolidations, replacements
        and
        extensions of any such mortgage or deed of trust. This provision is hereby
        declared by Landlord and Tenant to be self-operative and no further instruments
        shall be required to effect such subordination of this Lease. Tenant shall,
        however, upon demand at any time or times execute, acknowledge and deliver
        to
        Landlord any and all instruments and certificates that may be necessary or
        proper to more effectively subordinate this Lease and all rights of Tenant
        hereunder to any such mortgage or deed of trust or to confirm or evidence
        such
        subordination. In the event Tenant shall fail or neglect to execute, acknowledge
        and deliver any subordination agreement or certificate, Landlord in addition
        to
        any other remedies it may have, as the agent and attorney in fact of Tenant,
        execute, acknowledge and deliver the same and Tenant hereby irrevocably
        nominates, constitutes and appoints Landlord Tenant’s proper and legal agent and
        attorney in fact for such purposes. Such power of attorney shall not terminate
        on disability of the principal. Tenant covenants and agrees, in the event
        any
        proceedings are brought for the foreclosure of any such mortgage or if the
        Building is sold to any purchaser, to attorn to and recognize such purchaser
        as
        the Landlord under this Lease. Tenant expressly recognizes and agrees that
        the
        holder of any mortgage or deed to secure debt or any of their successors
        or
        assigns or any other holder of such instrument may sell the Project or the
        Building in the manner provided for by law in such instrument; and further,
        such
        sale may be made subject to this Lease. In the event of the enforcement by
        the
        grantee under any such mortgage or deed to secure debt of the remedies provided
        for by law or by such mortgage or deed to secure debt, Tenant will, upon
        request
        of any person or party succeeding to the interest of said lessor or grantee,
        as
        a result of such enforcement, automatically become Tenant of such successor
        in
        interest without change in the terms or provisions of this Lease; provided,
        however, that such successor in interest shall not be bound by (i) any payment
        of rent for more than one month in advance except prepayments in the nature
        of
        security for the performance by Tenant of its obligations under this Lease,
        or
        (ii) any amendment or modification of this Lease made without the written
        consent of such lessor or grantee or such successor in interest if such lessor,
        grantee or successor in interest had previously notified Tenant in writing
        of
        its interest. Notwithstanding anything contained in this Lease to the contrary,
        in the event of any default by Landlord in performing its covenants or
        obligations hereunder which would give Tenant the right to terminate this
        Lease,
        Tenant shall not exercise such right unless and until (i) Tenant gives written
        notice of such default (which notice shall specify the exact nature of said
        default) to any holder(s) of any mortgage or deed to secure debt who has
        heretofore notified Tenant in writing of its interest and the address to
        which
        notices are to be sent, and (ii) said holder(s) fail to cure said default
        within
        thirty (30) days (or such longer period of time as may be reasonably necessary)
        from the giving of such notice by Tenant. The provisions of Paragraph 27
        below
        shall govern the manner and effective date of any notice to be given by Tenant
        to any such parties. Tenant agrees to execute and deliver at any time and
        from
        time to time, upon the request of Landlord or of any holder(s) of any of
        the
        indebtedness or other obligations secured by any of the mortgages or deeds
        of
        trust be necessary or appropriate in any such foreclosure proceeding or
        otherwise to evidence such attornment. Tenant hereby irrevocably appoints
        Landlord and the holders of the indebtedness or other obligations secured
        by the
        aforesaid mortgages and/or deeds of trust jointly and severally the agent
        and
        attorney shall not terminate on disability of the principal. Tenant further
        waives the provisions of any statute or rule of law, now or hereafter in
        effect,
        which may give or purport to give Tenant any right or election to terminate
        or
        otherwise adversely affect this Lease and the obligation of Tenant hereunder
        in
        the event any such foreclosure proceedings is brought or trustee’s sale occurs
        and agrees that this Lease shall not be affected in any way whatsoever by
        any
        such foreclosure proceeding or trustee’s sale unless the holder(s) of the
        indebtedness or other obligations secured by said mortgages and/or deeds
        of
        trust shall declare otherwise.

       

      
        
           

        

        
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      25. Landlord’s
        Default

      

      Landlord
        shall only be deemed to be in default on the terms of this Lease in the event
        Landlord shall violate, neglect, or fail to observe, keep or perform any
        covenant or agreement which is not observed, kept, or performed by Landlord
        within thirty (30) days after the receipt by Landlord of Tenant’s written notice
        of such breach which notice shall specifically set out the breach. Landlord
        shall not be considered in default so long as Landlord commences to cure
        the
        breach in a diligent and prudent manner and is allowed such additional time
        as
        reasonably necessary to correct the breach. Notwithstanding any provisions
        to
        the contrary contained in this Lease, no personal liability of any kind or
        character whatsoever shall attach or at any time hereafter attach under any
        conditions to Landlord or any subsidiary, affiliate or partner of Landlord
        or
        their respective officers, directors, shareholders, or employees for payments
        of
        any amounts due under this Lease or for the performance of any obligation
        under
        this Lease. The exclusive remedies of Tenant for failure of Landlord to perform
        any of its obligations under this Lease shall be to proceed against the interest
        of Landlord in and to the Leased Premises it being understood that in no
        event
        shall a judgment for any deficiency or monetary claim be sought, obtained
        or
        enforced against Landlord or any subsidiary, affiliate or partner of Landlord
        or
        their respective officers, directors, shareholders or employees. In no event
        shall Landlord be liable for any consequential, special, punitive or exemplary
        damages. Except to the extent arising out of Tenant’s obligations under
        Paragraph 19 or Paragraph 31 hereof, Tenant shall not be liable hereunder
        for
        any other consequential, special, punitive or exemplary damages. TENANT HEREBY
        WAIVES ITS STATUTORY LIEN UNDER SECTION 91.004 OF THE TEXAS PROPERTY
        CODE.

      

      26. Mechanic’s
        Liens

      

      Tenant
        shall have no authority, express or implied, to create or place any lien
        or
        encumbrance of any kind or nature whatsoever upon, or in any manner to bind,
        the
        interest of Landlord in the Leased Premises or to charge the rentals payable
        hereunder for any claim in favor of any person dealing with Tenant, including
        those who may furnish materials or perform labor for any construction or
        repairs, and each such claim shall affect and each such lien shall attach
        to, if
        it all, only the leasehold interest granted to Tenant by this instrument.
        Tenant
        covenants and agrees that it will pay or cause to be paid all sums legally
        due
        and payable by it on account of any labor performed or materials furnished
        in
        connection with any work performed on the Leased Premises on which any lien
        is
        or can be validly and legally asserted against its leasehold interest in
        the
        Leased Premises or the improvements thereon and that it will indemnify, defend
        and save and hold Landlord harmless from any and all loss, cost or expense
        based
        on or arising out of asserted claims or liens against the leasehold estate
        or
        against the right, title and interest of the Landlord in the Leased Premises
        or
        under the terms of this Lease. In the event any such lien is attached to
        the
        Leased Premises, the Building, or the Project, Tenant shall discharge the same
        of record (by bonding or otherwise) within ten (10) days after receiving
        notice
        thereof. Tenant’s failure to comply with the provisions of the foregoing
        sentence shall be deemed an event of default under Paragraph 22 hereof entitling
        Landlord to exercise all of its remedies therefor without the requirement
        of any
        additional notice or cure period. If Tenant fails to discharge such lien
        of
        record with such ten (10) day period, then in addition to any other right
        or
        remedy of Landlord, Landlord may, but shall not be obligated to, discharge
        the
        same. Any amount paid by Landlord for any of the aforesaid purposes including,
        but not limited to, reasonable attorneys’ fees, shall be paid by Tenant to
        Landlord promptly on demand as additional Rent. 

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      
 

      27. Notices

      

      Each
        provision of this instrument or of any applicable governmental laws, ordinances,
        regulations and other requirements with reference to the sending, mailing
        or
        delivery of any notice or the making of any payment by Landlord to Tenant
        or
        with reference to the sending, mailing or delivery of any notice or the making
        of any payment by Tenant to Landlord shall be deemed to be complied with
        when
        and if the following steps are taken:

      

      (a) All
        Rent
        and other payments required to be made by Tenant to Landlord hereunder shall
        be
        payable to Landlord c/o Transwestern, 1900 West Loop South, Suite 1300, Houston,
        Texas 70727, Attention: Property Manager, or at such other address as Landlord
        may specify from time to time by written notice delivered in accordance
        herewith. Tenant’s obligation to pay Rent and any other amounts to Landlord
        under the terms of this Lease shall not be deemed satisfied until such Rent
        and
        other amounts have been actually received by Landlord.

      

      (b) All
        payments required to be made by Landlord to Tenant hereunder shall be payable
        to
        Tenant at the address hereinbelow set forth, or at such other address within
        the
        continental United States as Tenant may specify from time to time by written
        notice delivered in accordance herewith.

      

      (c) Any
        notice or document required or permitted to be delivered hereunder shall
        be
        deemed to be delivered whether actually received or not, when deposited in
        the
        United States Mail, postage prepaid, Certified or Registered Mail, or on
        the
        next business day following deposit with a nationally recognized overnight
        delivery service, addressed to the parties hereto at the respective addresses
        set out below, or at such other address as they have heretofore specified
        by
        written notice delivered in accordance herewith:

      
        

        
          	 	
                  Landlord:

                	 	
                  Tenant:

                
	 	 	 	 
	 	
                  GKII
                    Clay Crossing, L.P.

                	 	
                  SulphCo,
                    Inc.

                
	 	
                  c/o
                    KBS Realty Advisors, LLC

                	 	
                  4333
                    West Sam Houston Parkway North, Suite 190

                
	 	
                  620
                    Newport Center Drive, Suite 1300

                	 	
                  Houston,
                    Texas 77043

                
	 	
                  Attention:
                    Asset Manager

                	 	
                  Attention:
                    _____________________

                
	 	 	 	 
	 	
                  With
                    Copy To:

                	 	
                  With
                    Copy To:

                
	 	 	 	 
	 	
                  Transwestern

                	 	
                  Richard
                    L. Spencer

                
	 	
                  1900
                    West Loop South, Suite 1300

                	 	
                  1221
                    Lamar, Suite 1000

                
	 	
                  Houston,
                    Texas 77027

                	 	
                  Houston,
                    Texas 77010

                

        

        

      

      

      If
        and
        when included within the term “Landlord”, as used in this instrument, there are
        more than one person, firm or corporation, all shall jointly arrange among
        themselves for their joint execution of such a notice specifying some individual
        at some specific address for their receipt of notices and payments to Landlord;
        if and when included within the term “Tenant” as used in this instrument, there
        are more than one person, firm or corporation, all shall jointly arrange
        among
        themselves for their joint execution of such a notice specifying some individual
        at some specific address within the continental United States for the receipt
        of
        notices and payments to Tenant. All parties included within the terms “Landlord”
and “Tenant”, respectively, shall be bound by notices given in accordance with
        the provisions of this paragraph to the same effect as if each had received
        such
        notice.

      

      28. Miscellaneous

      

      (a) Words
        of
        any gender used in this Lease shall be held and construed to include any
        other
        gender, and words in the singular number shall be held to include the plural,
        unless the context otherwise requires.

      

      (b) The
        terms, provisions and covenants and conditions contained in this Lease shall
        apply to, inure to the benefit of, and be binding upon, the parties hereto
        and
        upon their respective heirs, legal representatives, successors and permitted
        assigns, except as otherwise herein expressly provided. Each party agrees
        to
        furnish to the other, promptly upon demand, a corporate resolution, proof
        of due
        authorization by partners, or other appropriate documentation evidencing
        the due
        authorization of such party to enter into this Lease.

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      
 

      (c) The
        captions inserted in this Lease are for convenience only and in no way define,
        limit or otherwise describe the scope or intent of this Lease, or any provision
        hereof, or in any way affect the interpretation of this Lease.

      

      (d) Tenant
        agrees from time to time within ten (10) days after request of Landlord to
        deliver to Landlord, or Landlord’s designee, an estoppel certificate stating
        that this Lease is in full force and effect, the date to which Rent has been
        paid, the unexpired term of this Lease and such other matters pertaining
        to this
        Lease as may be requested by Landlord. It is understood and agreed that Tenant’s
        obligation to furnish such estoppel certificates in a timely fashion is a
        material inducement for Landlord’s execution of this Lease.

      

      (e) This
        Lease may not be altered, changed or amended except by an instrument in writing
        signed by both parties hereto.

      

      (f) All
        obligations of Tenant hereunder not fully performed as of the expiration
        or
        earlier termination of the term of this Lease shall survive the expiration
        or
        earlier termination of the term hereof, including, without limitation, all
        payments obligations with respect to Real Estate Taxes, Common Area Maintenance
        Costs and Building Insurance Costs, all obligations concerning the condition
        of
        the Leased Premises and all indemnity obligations hereunder. Upon the expiration
        or earlier termination of the term hereof, and prior to Tenant vacating the
        Leased Premises, Tenant shall pay to Landlord any amount reasonably estimated
        by
        Landlord as necessary to put the Leased Premises, including without limitation
        all heating and air conditioning systems and equipment therein, in good
        condition and working order. Tenant shall also, prior to vacating the Leased
        Premises, pay to Landlord the amount, as estimated by Landlord, of Tenant’s
        obligation hereunder for Tenant’s pro rata share of Building Costs for the year
        in which the Lease expires or terminates. All such amounts shall be used
        and
        held by Landlord for payment of such obligations of Tenant hereunder, with
        Tenant being liable for any additional costs therefore upon demand by Landlord,
        or with any excess to be promptly returned to Tenant after all such obligations
        have been determined and satisfied, as the case may be. Any Security Deposit
        held by Landlord shall be credited against the amount payable by Tenant under
        this Paragraph.

      

      (g) If
        any
        clause or provision of this Lease is illegal, invalid or unenforceable under
        present or future laws effective during the term of this Lease, then and
        in that
        event, it is the intention of the parties hereto that the remainder of this
        Lease shall not be affected thereby, and it is also the intention of the
        parties
        to this Lease that in lieu of each clause or provision of this Lease that
        is
        illegal, invalid or unenforceable, there be added as a part of this Lease
        contract a clause or provision as similar in terms to such illegal, invalid
        or
        unenforceable clause or provision as may be possible and be legal, valid
        and
        enforceable.

      

      (h) Because
        the Leased Premises are on the open market and are presently being shown,
        this
        Lease shall be treated as an offer with the Leased Premises being subject
        to
        prior lease and such offer to withdrawal or non-acceptance by Landlord or
        to
        other use of the Leased Premises without notice, and this Lease shall not
        be
        valid or binding unless and until accepted by Landlord in writing.

      

      (i) All
        references in this Lease to the “date hereof” or similar references shall be
        deemed to refer to the last date, in point of time, on which all parties
        hereto
        have executed this Lease.

      

      (j) It
        is
        expressly stipulated and agreed that none of the obligations to be undertaken
        by
        Landlord hereunder shall constitute any form of warranty, express or implied,
        all such obligations being contractual covenants of performance. Without
        limiting the generality of the foregoing, THERE
        IS NO WARRANTY AS TO SUITABILITY, HABITABILITY, MERCHANTABILITY OR FITNESS
        FOR
        ANY PARTICULAR PURPOSE GIVEN IN CONNECTION WITH THIS LEASE.
        This
        disclaimer of express and implied warranties and the provisions of Paragraph
        11
        under which Tenant assumes responsibility for repairs, are provisions bargained
        for by the parties entering into this Lease. Were warranties undertaken by
        the
        Landlord hereunder or were the Landlord agrees to perform repairs beyond
        that
        contemplated to be performed by Landlord hereunder, the economics of this
        Lease
        would have been affected and it would require an increase in Base Rent from
        that
        payable hereunder.

       

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      
 

      (k) TENANT
        HEREBY WAIVES ALL RIGHTS TO PROTEST THE APPRAISED VALUE OF THE PROJECT OR
        APPEAL
        THE SAME AND ALL RIGHTS TO RECEIVE NOTICES OF REAPPRAISALS SET FORTH IN SECTIONS
        41.413 AND 42.015 OF THE TEXAS TAX CODE 

      

      (l)
         TENANT
        HEREBY WAIVES ALL ITS RIGHTS UNDER THE TEXAS DECEPTIVE TRADE PRACTICES -
        CONSUMER PROTECTION ACT, SECTION 17.41 ET. SEQ. OF THE TEXAS BUSINESS AND
        COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.
        AFTER
        CONSULTATION WITH AN ATTORNEY OF TENANT’S OWN SELECTION, TENANT VOLUNTARILY
        CONSENTS TO THIS WAIVER. 

      

      (m) Landlord
        and Tenant agree that each provision of this Lease for determining charges,
        amounts and additional rent payments by Tenant (including without limitation,
        Paragraph 5 of this Lease) is commercially reasonable, and as to each such
        charge or amount, constitutes a “method by which the charge is to be computed”
for purposes of Section 93.012 (Assessment of Charges) of the Texas Property
        Code, as such section now exists or as it may be hereafter amended or
        succeeded.

      

      (n) Tenant
        acknowledges that it has provided Landlord with its financial statement(s)
        as a
        primary inducement to Landlord’s agreement to lease the Leased Premises to
        Tenant, and that Landlord has relied on the accuracy of said financial
        statement(s) in entering into this Lease. Tenant represents and warrants
        that
        the information contained in said financial statement(s) is true, complete
        and
        correct in all material aspects, and agrees that the foregoing representations
        shall be a precondition to this Lease. At the request of Landlord, Tenant
        shall,
        not later than ninety (90) days following the close of each fiscal year of
        Tenant during the term of this Lease, furnish to Landlord a balance sheet
        of
        Tenant as of the end of such fiscal year and a statement of income and expense
        for the year then ended, together with an opinion of an independent certified
        public accountant satisfactory to Landlord or, at the election of Landlord,
        a
        certificate of the chief financial officer, owner or partner of Tenant to
        the
        effect that the financial statements have been prepared in conformity with
        generally accepted accounting principles consistently applied and which fairly
        present the financial condition and results of operations of Tenant as of
        and
        for the periods covered.

      

      (o) This
        Lease has been negotiated through the agency of Cushman & Wakefield of
        Texas, Inc. (represented by Graham Horton) (“Tenant’s Broker”) and Transwestern
        (“Landlord’s Broker”). Tenant warrants and represents to Landlord that no broker
        other than Tenant’s Broker was involved with the leasing of the Leased Premises
        or the negotiation of this Lease on behalf of Tenant or is entitled to any
        commission in connection herewith by, through or under Tenant. Tenant agrees
        to
        indemnify and hold Landlord harmless against any other claims (including
        court
        costs and attorneys fees) for commissions by any broker other than Tenant’s
        Broker claiming by, through or under Tenant or Tenant’s Broker. Landlord
        warrants and represents to Tenant that no brokers other than Landlord’s Broker
        was involved with the leasing of the Leased Premises or the negotiation of
        this
        Lease on behalf of Landlord is entitled to any commission in connection herewith
        by, through or under Landlord. Landlord agrees to indemnify and hold Tenant
        harmless against any other claims (including court costs and attorneys fees)
        for
        commissions by any broker other than Landlord’s Broker claiming by, through or
        under Landlord or Landlord’s Broker.

      

      29. Exhibits
        and Attachment

      

      All
        Exhibits, attachments, riders and addenda referred to in this Lease are
        incorporated in this Lease and made a part hereof for all intents and
        purposes.

      

      30. Tenant’s
        Indemnity

      

      Landlord
        shall not be liable to Tenant or Tenant’s employees, agents, patrons or
        visitors, or to any other person whomsoever, for any injury to person or
        damage
        to property on or about the Leased Premises and/or Building, resulting from
        and/or caused in part or whole by the negligence or misconduct of Tenant,
        its
        agents, servants or employees, or of any other person entering upon the Leased
        Premises, or caused by the Building or buildings and improvements located
        on the
        Leased Premises becoming out of repair, or caused by leakage of gas, oil,
        water
        or steam or by electricity emanating from the Leased Premises.
        IN
        THOSE REGARDS, TENANT HEREBY COVENANTS AND AGREES THAT IT WILL AT ALL TIMES
        INDEMNIFY AND HOLD SAFE AND HARMLESS THE LEASED PREMISES, BUILDING AND LANDLORD
        (INCLUDING WITHOUT LIMITATION THE TRUSTEE AND BENEFICIARIES IF LANDLORD IS
        A
        TRUST), LANDLORD’S AGENTS AND EMPLOYEES FROM ANY LOSS, LIABILITY, CLAIMS, SUITS,
        COSTS, EXPENSES, INCLUDING WITHOUT LIMITATION ATTORNEY’S FEES AND DAMAGES, BOTH
        REAL AND ALLEGED, ARISING OUT OF ANY SUCH DAMAGE OR INJURY FROM THE OCCUPANCY
        OR
        USE OF THE LEASED PREMISES BY TENANT, INCLUDING, WITHOUT LIMITATION, TENANT’S
        CUSTOMERS, INVITEES, AGENTS, CONTRACTORS, EMPLOYEES, SERVANTS, SUBTENANTS,
        ASSIGNEES, LICENSEES OR CONCESSIONAIRES OR BY ANY PERSON OR PERSONS HOLDING
        THERE UNDER, OR BY REASON OF THE USE OR MISUSE OF THE PARKING AREA OR ANY
        PART
        THEREOF; EXCEPT INJURY TO PERSONS OR DAMAGE TO THE BUILDING, THE SOLE CAUSE
        OF
        WHICH IS THE NEGLIGENCE OF LANDLORD OR THE FAILURE OF LANDLORD TO REPAIR
        ANY
        PART OF THE BUILDING WHICH LANDLORD IS OBLIGATED TO REPAIR AND MAINTAIN
        HEREUNDER WITHIN A REASONABLE TIME AFTER THE RECEIPT OF WRITTEN NOTICE FROM
        TENANT OF NEEDED REPAIRS. THIS INDEMNITY IS IN ADDITION TO THE INDEMNITY
        SET
        FORTH BELOW. 

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      
 

      31. Hazardous
        Materials

      

      (a) Except
        as
        otherwise expressly provided herein to the contrary, Tenant shall not, without
        Landlord’s prior written consent, cause or permit any Hazardous Materials
        (hereinafter defined) to be stored, used or disposed of in or about the Leased
        Premises or Project by Tenant, its agents, employees, contractors or invitees,
        nor shall the use which Tenant makes of the Leased Premises result in any
        Hazardous Materials Contamination (hereinafter defined). For purposes of
        this
        Lease, the following terms shall have the meanings herein specified:

      

      (1) “Hazardous
        Materials” shall mean (i) any “hazardous waste” as defined by the Resource
        Conservation and Recovery Act of 1976 (42 U.S.C.A. §§6901 et seq.), as amended
        from time to time, and regulations promulgated thereunder (“RCRA”); (ii) any
“hazardous substance” as defined by the Comprehensive Environmental Response,
        Compensation and Liability Act of 1980 (42 U.S.C.A. §§9601 et seq.), as amended
        from time to time, and regulations promulgated thereunder (“CERCLA”); (iii) any
        hazardous substances as defined by the Texas Natural Resource Conservation
        Commission (“TNRCC”); (iv) asbestos, polychlorinated biphenyls or other
        substances specifically regulated under the Toxic Substances Control Act
        (15
        U.S.C. §§2601 et seq.), as amended from time to time, and regulations
        promulgated thereunder (“TSCA”); (v) pesticides specifically regulated under the
        Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.A. §§135 et seq.),
        as amended from time to time, and regulations promulgated thereunder (“FIFRA”);
        (vi) storage tanks, whether or not underground and whether empty, filled
        or
        partially filled with any substance; (vii) the presence of oil, petroleum
        products, and their by-products; (viii) any substance the presence of which
        in
        or about the Property is prohibited by any governmental authority or which
        is
        hereafter classified by any governmental authority as a hazardous or toxic
        waste, material, substance or similar phraseology; and (ix) any other substance
        which by any governmental authority requires special handling or notification
        of
        any governmental authority in its collection, storage, treatment, or
        disposal.

      

      (2) “Hazardous
        Materials Contamination” shall mean the spillage, leakage, emission or disposal
        of Hazardous Materials (whether presently existing or hereafter occurring)
        in or
        about the buildings, facilities, soil, groundwater, air or other elements
        in or
        about the Property or any other property as a result of Hazardous Materials
        at
        any time emanating from the Leased Premises.

      

      (b) Notwithstanding
        the foregoing, Tenant shall be permitted to store, use and dispose of deminimis
        amounts of Hazardous Materials which are incidental to Tenant’s business,
        including the limited amounts of oil (crude) specifically described in Paragraph
        9 hereof, so long as such amounts does not increase the Landlord’s insurance or
        change the occupancy class of the Building. Such Hazardous Materials and
        all
        containers therefore, shall be stored, used and disposed of in a manner that
        complies with all federal, state and local laws or regulations applicable
        to
        such Hazardous Materials. Tenant shall be liable for all costs and expenses
        related to the storage, use and disposal of such deminimis amounts of Hazardous
        Materials incidental to Tenant’s business and shall indemnify, defend and hold
        Landlord harmless from any claims or liabilities relating thereto.

      

      (c) At
        the
        commencement of each “Lease Year” (the term “Lease Year” as used in this Lease
        shall mean any twelve (12) month period beginning with the Commencement Date
        and
        each twelve (12) month period beginning on any anniversary date thereof),
        Tenant
        shall disclose to Landlord the names and approximate amounts of all Hazardous
        Materials which Tenant intends to store, use or dispose of in or about the
        Leased Premises in the coming Lease Year. In addition, at the commencement
        of
        each Lease Year (beginning with the second Lease Year), Tenant shall disclose
        to
        Landlord the names and amounts of all Hazardous Materials that to Tenant’s
        knowledge were actually stored, used or disposed of in or about the Leased
        Premises, if such materials were not previously identified to Landlord at
        the
        commencement of the previous Lease Years.

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      
 

      (d) Tenant
        shall give written notice to Landlord immediately upon Tenant’s acquiring
        knowledge of the presence of any Hazardous Materials in or about the Leased
        Premises (subject to the provisions of paragraph b. hereof) or of any Hazardous
        Materials Contamination with a full description thereof. Landlord shall have
        the
        right, but not the obligation, without in any way limiting Landlord’s other
        rights and remedies under the Lease, to enter onto the Leased Premises or
        to
        take such other actions as it deems necessary or advisable to cleanup, remove,
        resolve or minimize the impact of, or otherwise deal with, any Hazardous
        Materials or Hazardous Materials Contamination on the Project following receipt
        of any notice from any person or entity asserting the existence of any Hazardous
        Materials or Hazardous Materials Contamination pertaining to the Leased Premises
        or any part of the Project which, if true, could result in an order, suit,
        imposition of a lien on the Project, or other action and/or which, in Landlord’s
        sole opinion, could jeopardize Landlord’s security under the Lease.

      

      (e) TENANT
        HEREBY AGREES THAT TENANT SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS LANDLORD,
        ITS AGENTS AND EMPLOYEES FROM AND AGAINST ANY CLAIMS, DEMANDS, PENALTIES,
        FINES,
        LIABILITIES, SETTLEMENTS, DAMAGES, COSTS OR EXPENSES (INCLUDING WITHOUT
        LIMITATION, ATTORNEYS’ AND CONSULTANTS’ FEES, COURT COSTS AND LITIGATION
        EXPENSES) OF WHATEVER KIND OR NATURE, KNOWN OR UNKNOWN, CONTINGENT OR OTHERWISE,
        ARISING OUT OF OR IN ANY WAY RELATED TO (A) THE PRESENCE, DISPOSAL, RELEASE
        OR
        THREATENED RELEASE AND SUBSEQUENT REMEDIATION OF ANY HAZARDOUS MATERIALS
        OR ANY
        HAZARDOUS MATERIALS CONTAMINATION FROM THE LEASED PREMISES; (B) ANY PERSONAL
        INJURY (INCLUDING WRONGFUL DEATH) OR PROPERTY DAMAGE (REAL OR PERSONAL) ARISING
        OUT OF OR RELATED TO SUCH HAZARDOUS MATERIALS OR HAZARDOUS MATERIALS
        CONTAMINATION; OR (C) THE APPLICABILITY OF ANY LAWS RELATING TO HAZARDOUS
        MATERIALS ON THE LEASED PREMISES OR CAUSED BY TENANT. THE PROVISIONS OF THIS
        PARAGRAPH E. SHALL BE IN ADDITION TO ANY OTHER OBLIGATIONS AND LIABILITIES
        TENANT MAY HAVE TO LANDLORD AT LAW OR IN EQUITY AND SHALL SURVIVE THE EXPIRATION
        OF THIS LEASE OR THE TERMINATION THEREOF.

      

      32. Mitigation
        of Damages

      

      (a) General
        Duty to Mitigate.
        Both
        Landlord and Tenant shall each use commercially reasonable efforts to mitigate
        any damages resulting from a default of the other party under this
        Lease.

      

      (b) Landlord’s
        Duty to Mitigate Damages.
        Landlord’s obligation to mitigate damages after a default by Tenant under this
        Lease shall be satisfied in full if Landlord undertakes to lease the Leased
        Premises to another tenant (a “Substitute Tenant”) in accordance with the
        following criteria:

      

      (i) Landlord
        shall have no obligation to solicit or entertain negotiations with any other
        prospective tenants for the Leased Premises until Landlord obtains full and
        complete possession of the Leased Premises including, without limitation,
        the
        final and unappealable legal right to relet the Leased Premises free of any
        claim of Tenant or such other written agreement of Tenant with respect to
        such
        matters as shall be reasonably acceptable to Landlord.

      

      (ii) Landlord
        shall not be obligated to offer the Leased Premises to a prospective tenant
        when
        other premises in the Project suitable for that prospective tenant’s use are (or
        soon will be) available.

      

      
        
          
          

           

        

        
          21

          
            

          

        

        
           

          
          

        

      

      

      (iii) Landlord
        shall not be obligated to lease the Leased Premises to a Substitute Tenant
        for a
        rental less than the current fair market rental then prevailing for similar
        office space in comparable office/warehouse buildings in the same market
        area as
        the Project, nor shall Landlord be obligated to enter into a new lease under
        other terms and conditions that are unacceptable to Landlord under Landlord’s
        then current leasing policies for comparable space in the Project.

      

      (iv) Landlord
        shall not be obligated to enter into a lease with any proposed tenant whose
        use
        would:

      

      a. Violate
        any restriction, covenant, or requirement contained in the lease of another
        tenant of the Project;

      

      b. Adversely
        affect the reputation of the Project; or

      

      c. Be
        incompatible with the operation of the Project as a first-class office/warehouse
        building.

      

      (v) Landlord
        shall not be obligated to enter into a lease with any proposed Substitute
        Tenant, which does not have, in Landlord’s reasonable opinion, sufficient
        financial resources or operating experience to operate the Leased Premises
        in a
        first-class manner.

      

      (vi) Landlord
        shall not be required to expend any amount of money to alter, remodel, or
        otherwise make the Leased Premises suitable for uses by a proposed Substitute
        Tenant unless:

      

      a. Tenant
        pays any such sum to Landlord in advance of Landlord’s execution of a Substitute
        Lease with such Substitute Tenant (which payment shall not be in lieu of
        any
        damages or other sums to which Landlord may be entitled as a result of Tenant’s
        default under this Lease); or

      

      b. Landlord,
        in Landlord’s sole discretion, determines that any such expenditure is
        financially justified in connection with entering into any such Substitute
        Lease.

      

      (c) Effect
        of Releasing.
        Upon
        compliance with the above criteria regarding the releasing of the Leased
        Premises after a default by Tenant, Landlord shall be deemed to have fully
        satisfied Landlord’s obligation to mitigate damages under this Lease and under
        any law or judicial ruling in effect on the date of this Lease or at the
        time of
        Tenant’s default.

       

      33.
         [INTENTIONALLY
        DELETED]

       

      34. Mold

      

      It
        is
        agreed and understood that mold spores are present essentially everywhere.
        Tenant acknowledges and understands that mold can grow in most any moist
        location including within the Leased Premises. Landlord places the burden
        on
        Tenant to properly prevent moisture in the Leased Premises, and on good
        housekeeping and ventilation practices. Tenant acknowledges the necessity
        of
        housekeeping, ventilation, and moisture control (especially in kitchens,
        bathrooms, beneath cabinets and around outside walls) for mold prevention.
        In
        signing this Lease, Tenant has first inspected the aforementioned Leased
        Premises, and certifies that Tenant has not observed mold, mildew or excessive
        moisture within the Leased Premises. Tenant agrees to immediately notify
        Landlord if Tenant observes mold/mildew and/or excessive moisture conditions
        (from any source, including leaks), and allow Landlord to evaluate and make
        recommendations and/or take appropriate corrective action. Tenant relieves
        Landlord from any liability for any personal injury or damages to property
        caused by or associated with the growth of or occurrence of mold or mildew
        on or
        in the Leased Premises.

      

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

      

      35. Tenant
        Representation

      

      Tenant
        represents and warrants to, and covenants with, Landlord that neither Tenant
        nor
        any of its respective constituent owners or affiliates currently are, or
        shall
        be at any time during the Term hereof, in violation of any laws relating
        to
        terrorism or money laundering (collectively, the “Anti-Terrorism Laws”),
        including without limitation Executive Order No. 13224 on Terrorist Financing,
        effective September 24, 2001 and relating to Blocking Property and Prohibiting
        Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
        (the “Executive Order”) and/or the Uniting and Strengthening America by
        Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
        Act of
        2001 (Public Law 107-56) (the “USA Patriot Act”). Tenant covenants with Landlord
        that neither Tenant nor any of its respective constituent owners or affiliates
        is or shall be during the Term hereof a “Prohibited Person,” which is defined as
        follows: (A) a person or entity that is listed in the Annex to, or is otherwise
        subject to, the provisions of the Executive Order; (B) a person or entity
        owned
        or controlled by, or acting for or on behalf of, any person or entity that
        is
        listed in the Annex to, or is otherwise subject to the provisions of, the
        Executive Order; (C) a person or entity with whom Landlord is prohibited
        from
        dealing with or otherwise engaging in any transaction by any Anti-Terrorism
        Law,
        including without limitation the Executive Order and the USA Patriot Act;
        (D) a
        person or entity who commits, threatens or conspires to commit or support
        “terrorism” as defined in Section 3(d) of the Executive Order; (E) a person or
        entity that is named as a “specially designated national and blocked person” on
        the then-most current list published by the U.S. Treasury Department Office
        of
        Foreign Assets Control at its official website,
        http://www.treas.gov/offices/eotffc/ofac/sdn/t11sdn.pdf, or at any replacement
        website or other replacement official publication of such list; and (F) a
        person
        or entity who is affiliated with a person or entity listed in items (A) through
        (E), above. At any time and from time-to-time during the Term, Tenant shall
        deliver to Landlord, within ten (10) days after receipt of a written request
        therefor, a written certification or such other evidence reasonably acceptable
        to Landlord evidencing and confirming Tenant’s compliance with this Section
        35.

      

      36. Signage
        Rights. 

      

      Provided
        that (x) Tenant is the Tenant originally named herein, (y) Tenant is leasing
        and
        actually occupies at least 12,000 square feet of space in the Building, and
        (z)
        no event of default or event which but for the passage of time or the giving
        of
        notice, or both, would constitute an event of default has occurred and is
        continuing, and subject to the further provisions of this paragraph, Tenant
        shall have the right, at Tenant’s sole cost and expense, to install and maintain
        a building standard sign reflecting Tenant’s name above the store front entry of
        the Building, in a location designated by Landlord (“Tenant’s
        Sign”).
        Tenant shall pay for the initial costs of preparing and installing Tenant’s
        sign, and for all other costs associated with Tenant’s Sign. Notwithstanding the
        foregoing, Tenant’s Sign (and Tenant’s right to install and maintain the same)
        shall be subject to and in compliance with all Laws, applicable conditions,
        covenants and restrictions effecting the Building. Tenant shall be solely
        responsible for the cost and expense of obtaining and maintaining any necessary
        permits for Tenant’s Sign and any sign licenses related thereto, and for the
        cost and expense of maintenance and utilities, if any, for Tenant’s Sign
        (including all metered electrical usage). Additionally, Tenant shall, in
        a first
        class manner, maintain and repair any damage to Tenant’s Sign. Tenant’s Sign
        shall be installed in accordance with all applicable Laws, codes, ordinances,
        covenants, conditions and restrictions relating to the Building. The style,
        type, color, size, and design of Tenant’s Sign shall be subject to Landlord’s
        prior written approval, which approval shall not be unreasonably withheld
        or
        delayed. Upon the expiration or earlier termination of the Lease, Tenant
        shall
        pay all costs associated with the removal of Tenant’s Sign. All rights and
        remedies of Landlord under this Lease (including, without limitation, Landlord’s
        self-help remedies) shall apply in the event Tenant fails to perform Tenant’s
        obligations hereunder with respect to Tenant’s Sign, and, in the event Landlord
        performs any of Tenant’s obligations hereunder, Tenant shall pay to Landlord,
        upon demand as additional rental hereunder, the cost incurred by Landlord
        in
        connection therewith, plus an additional charge of fifteen percent (15%)
        of such
        cost to cover overhead. Tenant shall protect, defend, indemnify and hold
        harmless Landlord from and against any and all claims, damages, liabilities,
        costs or expenses of every kind and nature (including without limitation
        reasonable attorney’s fees) imposed upon or incurred by or asserted against
        Landlord and which arise out of any work performed by or on behalf of Tenant
        in
        connection with Tenant’s Signage. The terms and provisions of this paragraph
        shall survive the expiration or earlier termination of this Lease.

      

      THE
        PARTIES EXECUTING this Lease represent and warrant that each such party
        possesses all lawful rights and authority to enter into this Lease; that
        there
        are no judgments, decrees, or outstanding orders of any court prohibiting
        the
        execution of this Lease; and that all required approvals, consents and
        resolutions necessary to effectuate the terms and provisions of this Lease
        have
        been obtained. Submission by Landlord of this instrument to Tenant for
        examination or signature does not constitute a reservation of or option for
        lease. This Lease will be effective as a lease or otherwise only upon execution
        by and delivery of this Lease by Landlord and Tenant.

      

      

      [SIGNATURE
        PAGE TO FOLLOW]

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

      Executed
        in multiple counterparts, each of which shall have the full force and effect
        of
        any original, on the latter of the dates indicated below. 

      

      LANDLORD:

      

      GKII
        CLAY CROSSING, L.P.,

      a
        Delaware limited partnership

      

      By: KBS
        Realty Advisors, LLC,

      a
        Delaware limited liability company,

      its
        authorized agent

      

      

      

      By:
        __________________________________________

      Rodney
        Richerson, Senior Vice President

      

      Date:
        ____________________________________,
        2007

      

      

      

      TENANT:

      

      SULPHCO,
        INC., 

      a
        Nevada corporation

      

      

      

      By:
        ___________________________________

      Name:
        ________________________________

      Title:
        _________________________________

      

      Date:
        _________________________________

      

      

      
        
          
          

           

        

        
          24

          
            

          

        

        
           

          
             

          

        

      

      ADDENDUM
        ONE

      TO
        LEASE AGREEMENT BY AND BETWEEN

      GKII
        CLAY CROSSING, L.P.

      AND

      SULPHCO,
        INC.

       

      Additional
        Provisions

       

      This
        Exhibit is attached to and incorporated in that certain lease (hereinafter
        referred to as the “Lease”) by and between GKII
        CLAY CROSSING, L.P.,
        a
        Delaware limited partnership (“Landlord”) and SULPHCO,
        INC.,
        a
        Nevada corporation (“Tenant”) with the terms defined in the Lease to have the
        same definition where used herein.

       

      I. RENEWAL
        OPTION.

       

      A. Tenant
        shall have the right to extend the term of this Lease (the “Renewal Option”) for
        one additional period of five (5) years commencing on the day following the
        Expiration Date of the initial term of this Lease (the “Renewal Term”), provided
        that each of the following occurs:

       

      
        	 	
                1.

              	
                Landlord
                  receives notice of exercise of the Renewal Option (“Initial Renewal
                  Notice”) not more than twelve (12) and not less than nine (9) full
                  calendar months prior to the expiration of the initial term of
                  this Lease;
                  and

              

      

       

      
        	 	
                2.

              	
                No
                  event of default exists at the time that Tenant delivers its Initial
                  Renewal Notice or at the time Tenant delivers its Binding Renewal
                  Notice
                  (hereinafter defined); and

              

      

       

      
        	 	
                3.

              	
                Tenant
                  occupies all of the Leased Premises initially demised under this
                  Lease and
                  any space added to the Leased Premises at the time Tenant delivers
                  its
                  Initial Renewal Notice and at the time Tenant delivers its Binding
                  Renewal
                  Notice; and 

              

      

       

      
        	 	
                4.

              	
                The
                  Lease has not been assigned prior to the date that Tenant delivers
                  its
                  Initial Renewal Notice or prior to the date Tenant delivers its
                  Binding
                  Renewal Notice.

              

      

       

      B. The
        initial Base Rent rate per rentable square foot for the Leased Premises during
        the Renewal Term shall equal the Prevailing Market (hereinafter defined)
        rate
        per rentable square foot for the Leased Premises.

       

      C. Tenant
        shall pay additional Rent (i.e. Real Estate Taxes, Common Area Maintenance
        Costs
        and Building Insurance Costs) for the Leased Premises during the Renewal
        Term in
        accordance with Paragraphs 5, 6, 7 and 8 of the Lease.

       

      D. Within
        thirty (30) days after receipt of Tenant’s Initial Renewal Notice, Landlord
        shall advise Tenant of the applicable Base Rent rate for the Leased Premises
        for
        the Renewal Term. Tenant, within ten (10) days after the date on which
        Landlord advises Tenant of the applicable Base Rent rate for the Renewal
        Term,
        shall either (i) give Landlord final binding written notice (“Binding Notice”)
        of Tenant’s Exercise of its option, or (ii) if Tenant disagrees with Landlord’s
        determination, provide Landlord with written notice of rejection (the “Rejection
        Notice”). If Tenant fails to provide Landlord with either a Binding Notice or
        Rejection Notice within such ten (10) day period, Tenant’s Renewal Option shall
        be null and void and of no further force and effect. If Tenant provides Landlord
        with a Binding Notice, Landlord and Tenant shall enter into the Renewal
        Amendment (hereinafter defined) upon the terms and conditions set forth herein.
        If Tenant provides Landlord with a Rejection Notice, Landlord and Tenant
        shall
        work together in good faith to agree upon the Prevailing Market rate for
        the
        Leased Premises during the Renewal Term. Upon agreement Tenant shall provide
        Landlord with Binding Notice and Landlord and Tenant shall enter into the
        Renewal Amendment in accordance with the terms and conditions hereof.
        Notwithstanding the foregoing, if Landlord and Tenant are unable to agree
        upon
        the Prevailing Market rate for the Leased Premises within forty-five (45)
        days
        after the date on which Tenant provides Landlord with a Rejection Notice,
        Tenant’s Renewal Option shall be null and void and of no force and
        effect.

       

       

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

      E. If
        Tenant
        is entitled to and properly exercises its Renewal Option, Landlord shall
        prepare
        an amendment (the “Renewal Amendment”) to reflect changes in the Base Rent,
        Lease term, Expiration Date and other appropriate terms. An otherwise valid
        exercise of the Renewal Option shall, at Landlord’s Option, be fully effective
        whether or not the Renewal Amendment is executed. The renewal rights of Tenant
        hereunder shall not be severable from the Lease and are personal to the Tenant
        originally named in the Lease.

       

      F. For
        purpose hereof, “Prevailing Market” rate shall mean the arms length fair market
        annual rental rate per rentable square foot under renewal leases and amendments
        entered into on or about the date on which the Prevailing Market is being
        determined hereunder for space comparable to the Leased Premises in the Building
        and in office/warehouse buildings comparable to the Building in the vicinity
        of
        the Building. Determination of Prevailing Market shall take into account
        any
        material economic differences between the terms of this Lease and any comparison
        lease, such as rent abatements, construction costs and other concessions
        and the
        manner, if any, in which the Landlord under any such lease is reimbursed
        for
        operating expenses and taxes. The determination of Prevailing Market rate
        from
        the time such Prevailing Market rate is being determined and the time such
        Prevailing Market rate will become effective under this Lease.

       

      

      
        
          
          

           

        

        
          26

          
            

          

        

        
           

          
            

          

        

      

      EXHIBIT
        “A”

      

      Site
        Plan 

      

      

      

      

      

      
        
          
          

           

        

        
          27

          
            

          

        

        
           

          
            

          

        

      

      

      EXHIBIT
        “A-1”

      

      Legal
        Description

      

      Clay
        Crossing Business Center

      

      TRACT
        I

      

      DESCRIPTION
        OF A TRACT OF LAND CONTAINING 12.8654 ACRES (560,418 SQUARE FEET) SITUATED
        IN
        THE J.R. CURL, SURVEY, A-1163, HARRIS COUNTY, TEXAS.

      

      Being
        a
        tract of land containing 12.8654 acres (560,418 square feet), more or less,
        situated in the J.R. Curl Survey. A-1163 in Harris County, Texas, and being
        all
        of Restricted Reserve “A” of Claymoore Commercial Business Park, Section Two, a
        subdivision plat recorded in Volume 379, Page 53 of the Map Records of Harris
        County, Texas as conveyed unto TPC-Claymoore Two, Ltd. by deed recorded in
        County Clerk’s File No. S044692, Film Code No. 509-41-2008 of the Official
        Public Records of Real Property of Harris County, Texas. Said 12.8654-acre
        tract
        being more particularly described by metes and bounds as follows:

      

      BEGINNING
        at a 5/8-inch iron rod found for the northeast corner of a cutback located
        at
        the intersection of the east right-of-way line of Brittmoore Road (90 feet
        wide)
        and the south right-of-way line of Clay Road (100 feet wide) for the most
        northerly northwest corner of said tract herein described and the most northerly
        northwest corner of said Restricted Reserve “A”;

      

      THENCE
        South 89° 56’ 55” East with the north line of said Restricted Reserve “A” and
        the south right-of-way line of said Clay Road, a distance of 785.05 feet
        to a
        point for the most northerly northeast corner of said Restricted Reserve
“A” and
        the most northerly northeast corner of said tract herein described from which
        a
        found 5/8-inch iron rod bears North, 0.1 feet and East. 0.1 feet;

      

      THENCE
        South 44° 37’ 48” East, a distance of 21.09 feet to a set 5/8-inch iron rod with
        cap located in the west right-of-way line of Claymoore Park Drive (width
        varies)
        for the most easterly northeast corner of said tract herein described and
        for
        the most easterly northeast corner of said Restricted Reserve “A”;

      

      THENCE
        in
        a southeasterly direction with the east line of said Restricted Reserve “A” and
        the west right-of-way line of said Claymoore Park Drive the following courses
        and distances:

      

      South
        00°
41’ 20” West, a distance of 215.13 feet to a set 5/8-iron rod with cap for the
        beginning of a curve to the left;

      

      In
        a
        southeasterly direction with said curve to the left whose central angle is
        07°
31’ 41” and whose radius is 580.10 feet (chord bears South 03° 04’ 31” East, a
        distance of 76.16 feet) for a curve length of 76.22 feet to a set 5/8-inch
        iron
        rod with cap for the point of reverse curvature:

      

      Continuing
        in a southeasterly direction with said curve to the right whose central angle
        is
        07° 31’ 41” and whose radius is 580.10 feet (chord bears South 03° 04’ 31” East,
        a distance of 76.16 feet) for a curve length of 76.22 feet to set 5/8-inch
        iron
        rod with cap for the point of tangency;

      

      South
        00°
41’ 20” West, a distance of 292.00 feet to a point for the most easterly
        southeast corner of said, tract herein described and for the most easterly
        southeast corner of said Restricted Reserve “A” from which a found 5/8-inch iron
        rod bears South, 0.2 feet and East, 0.5 feet;

      

      THENCE
        south 45° 41’ 20” West, a distance of 21.21 feet to a found 5/8-inch iron rod
        located in the north right-of-way line of Braymoore Road (60 feet wide) for
        the
        most southerly southeast corner of said tract herein described and for the
        most
        southeast corner of said Restricted Reserve “A”;

       

      
        
           

        

        
          28

          
            

          

        

        
           

        

      

      
 

      THENCE
        North 89° 18’ 40” West with the north right-of-way line of said Braymoore Road
        and the south line of said Restricted Reserve “A”, a distance of 384.50 feet to
        a set 5/8-inch iron rod with cap for a corner of said Restricted Reserve
“A” and
        the southeast corner of Restricted Reserve “K” of Claymoore Business Park, a
        subdivision plat recorded in Volume 331, Page 89 of the Map Records of Harris
        County, Texas;

      

      THENCE
        North 00° 41’ 20” East with the east line of said Restricted Reserve “K”, a
        distance of 30.00 feet to a set 5/8-inch iron rod with cap for a corner of
        said
        Restricted Reserve “A” and the northeast corner of said Restricted Reserve
“K”;

      

      THENCE
        North 89° 18’ 40” West with the north line of said Restricted Reserve “K”, a
        distance of 30.00 feet set 5/8-inch iron rod with cap for a corner of said
        Restricted Reserve “A” and the northwest corner of said Restricted Reserve
“K”;

      

      THENCE
        South 00° 41’ 20” West with the west line of said Restricted Reserve “K”, a
        distance of 30.00 feet to a set 5/8-inch iron rod with cap located in the
        north
        right-of-way line of said Braymoore Road for a corner of said Restricted
        Reserve
“A” and the southwest corner of said Restricted Reserve K’’;

      

      THENCE
        North 89° 18’ 40 West with the south line of said Restricted Reserve “A” and the
        north right-of -way line of said Braymoore Road, a distance of 380.50 feet
        to a
        5/8-inch iron rod found for the most southerly southwest corner of said tract
        herein described and for the southerly southwest corner of said Restricted
        Reserve “A”,

      

      THENCE
        North 44° 18’ 40” West, a distance of 21.21 feet to a 5/8-inch iron rod found in
        the east right-of-way line of said Brittmoore Road for the most westerly
        southwest corner of said tract herein described and for the most westerly
        southwest corner of said Restricted Reserve “A”;

      

      THENCE
        North 00° 41’ 20’ East with the east right-of-way line of said Brittmoore Road
        and the west line of said Restricted Reserve “A”, a distance of 650.06 feet to a
        5/8-inch iron rod found for the most westerly northwest corner of said tract
        herein described and for the most westerly northwest corner of said Restricted
        Reserve “A”;

      

      THENCE
        North 45° 22’ 12” East, a distance of 21.33 feet to the POINT OF BEGINNING and
        containing 12.8654 acres (560,418 square feet) of land, more or
        less.

      

      TRACT
        II:

      

      DESCRIPTION
        OF A TRACT OF LAI CONTAINING 2.5659 ACRES (111,769 SQUARE FEET) SITUATED
        IN THE
        J.R. CURL SURVEY, A-1163, HARRIS COUNTY, TEXAS

      

      Being
        a
        tract of land containing 2.5559 acres (111,769 square feet), more or less,
        situated in the J.R. Curl Survey, A-1163 in Harris County, Texas, and also
        being
        all of Unrestricted Reserve “J” of Claymoore Business Park, a subdivision plat
        recorded in Volume 331, Page 89 of the Map Records of Harris County, Texas,
        as
        conveyed unto TPC-Claymoore Two, Ltd. by deed recorded in County Clerk’s File
        No. R768210, Film Code No. 506-99-1023 of the Official Public Records of
        Real
        Property of Harris County, Texas. Said 5659-acre tract being more particularly
        described by metes and bounds as follows:

      

      BEGINNING
        at a point located in the south right-of-way line of Clay Road (100 feet
        wide)
        for the northeast corner of said tract herein described, the northeast corner
        of
        a said Unrestricted Reserve “J” and the northwest corner of a 18.5554-acre tract
        as conveyed unto Robert E. Hibbert by deed recorded in County Clerk’s File No.
        N433980 of the Official Public Records of Real Property of Harris County,
        Texas,
        from which a found 5/8-inch iron rod bears North, 0.6 feet;

      

      THENCE
        South 00° 10’ 02” East with the east line of said Unrestricted Reserve “J” and
        the west line of said 18.5554-acre tract, a distance of 388.97 feet to a
        5/8-inch iron rod with cap set for the southeast corner of said tract herein
        described, the southeast corner of said Unrestricted Reserve “J” and the
        northeast corner of Unrestricted Reserve “G” of said subdivision;

      

      THENCE
        North 89° 18’ 40” West with the south line of said Unrestricted Reserve “J” and
        the north line of said Unrestricted Reserve “G”, a distance of 299.70 feet to a
        point for the southwest corner of said tract herein described, the southwest
        corner of said Unrestricted Reserve “J” and the northwest corner of said
        Unrestricted Reserve “G” located in the east right-of-way line of Claymoore Park
        Drive (width varies) from which a found 5/8-inch iron rod bears South, 0.6
        feet
        and East, 0.6 feet;

       

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

      
 

      THENCE
        in
        a northeasterly direction with the east right-of-way line of said Claymoore
        Park
        Drive and the west line of said Unrestricted Reserve “J” the following coursed
        and distances;

      

      North
        00°
41’ 20” East, a distance of 2.76 feet to a set 5/8-inch iron rod with cap for
        the beginning of a curve to the left;

      

      In
        a
        northeasterly direction with said curve to the left whose central angle is
        07°
37’ 41” and whose radius is 580.10 feet (chord bears North 04° 27’ 11” East, a
        distance 76.16 feet) for a curve length of 76.22 feet to a set 5/8-inch iron
        rod
        with cap for the point of reverse curvature;

      

      Continuing
        in a northeasterly direction with said curve to the right whose central angle
        is
        07° 31’ 41” and whose radius is 580.10 feet (chord bears North 04° 27’ 10” east,
        a distance of 76.16 feet) for a curve length of 76.22 feet to a set 5/8-inch
        iron rod with cap for the point of tangency;

      

      North
        00°
41’ 20’ East, a distance of 216.02 feet to a set 5/8-inch iron rod with cap for
        the most southerly northwest corner of said tract herein described and the
        for
        the most southerly northwest corner of said Unrestricted Reserve
“J”;

      

      Thence
        South 45° 22’ 13” West, a distance of 21.33 feet to a found 5/8-inch iron rod
        located in south right-of-way line of said Clay Road for the most northerly
        northwest corner of said tract herein described and the most northerly northwest
        corner of said Unrestricted Reserve “J”,

      

      THENCE
        South 89° 55’ 45” East with the south right-of-way line of said Clay Road and
        the north line of said Unrestricted Reserve “J”, a distance of 268.91 feet to
        the POINT CF BEGINNING and containing 2.5659-acres (111,759 square feet)
        of
        land, more or less.

      

      TRACT
        III

      

      DESCRIPTION
        OF A TRACT OF LAND CONTAINING 6.8243 ACRES (297,265 SQUARE FEET) SITUATED
        IN THE
        J.R. CURL SURVEY, A-1163, HARRIS COUNTY TEXAS

      

      Being
        a
        tract of land containing 6.8243 acres (297,265 square feet), more or less,
        situated in the J.R. Curl Survey, A-1163 in Harris County, Texas, and also
        being
        all of Unrestricted Reserve “G” of Claymoore Business Park, a subdivision plat
        recorded in Volume 331, Page 89 of the Map Records of Harris County, Texas,
        as
        conveyed unto TPC-Claymoore Two, Ltd. by deed recorded under County Clerk’s File
        No. R7682l0, Film Code No. 506-99-1023 of the Official Public Records of
        Real
        Property of Harris County, Texas. Said 6.8243-acre tract being more particularly
        described by metes and bounds as follows:

      

      COMMENCING
        FOR REFERENCE at a point located in the south right-of-way line of Clay Road
        (100 feet wide) for the northeast corner of Unrestricted Reserve “J” of said
        Claymoore Business Park and for the northwest corner of a 18.5554-acre tract,
        (Tract 6) as conveyed unto Robert F. Hibbert by deed recorded under County
        Clerk’s File No N433980 of the Official Public Records of Real Property of
        Harris County, Texas, from which a found 5/8-inch iron rod bears North, 0.6
        feet; THENCE South 00° 10’ 02” East with the east line of said Unrestricted
        Reserve “J” and the west line of said 18.5554-acre tract, a distance of 388.97
        feet to a set 5/8-inch iron rod with cap for the northeast corner of said
        Unrestricted Reserve “G”, for the northeast corner of said tract herein
        described and for the POINT OF BEGINNING;

      

      
        
           

        

        
          30

          
            

          

        

        
           

        

      

      THENCE
        South 00° 10’ 02” East with the east line of said Unrestricted Reserve “G” and
        the west line of said 18.5554-acre tract, a distance of 968.60 feet to a
        found
        5/8-inch iron rod for the southeast corner of said tract herein described
        and
        for the southeast corner of said Unrestricted Reserve “G”;

      

      THENCE
        North 89° 18’ 40’ West with the south line of said Unrestricted Reserve “G”, a
        distance of 314.17 feet to a set 5/8-iron rod with cap located in the east
        right-of-way line of Claymoore Park Drive (width varies) for the southwest
        corner of said tract herein described and for the southwest corner of said
        Unrestricted Reserve “G”‘

      

      THENCE
        North 00° 41’ 20” East with the east right-of-way line of said Claymoore Park
        Drive and the west line of said Unrestricted Reserve “G”, a distance of 968.50
        feet to a point for the northwest corner of said tract herein described,
        for the
        northwest corner of said Unrestricted Reserve “G” and the southwest corner of
        said Unrestricted Reserve “J” from which a found 5/8-inch iron rod bears south,
        0.6 feet and East, 0.6;

      

      THENCE
        South 89° 18’ 40” East with the north line of said Unrestricted Reserve “G” and
        the south line of said Unrestricted Reserve “J” a distance of 299.70 feet to the
        POINT OF BEGINNING and containing 6.8243 acres (297,265 square feet) of land,
        more or less.

      

      TRACT
        IV

      

      METES
        & BOUNDS DESCRIPTION 14.6926 ACRES BEING ALL OF BLOCK ONE, RESTRICTED
        RESERVE ”A” CLAYMOORE COMMERCIAL BUSINESS PARK HOUSTON, HARRIS COUNTY,
        TEXAS

      

      All
        that
        certain 14.6926 acres of land, more or less, being all of Block One, Restricted
        Reserve “A”, Claymoore Commercial Business Park, according to the plat thereof
        recorded at Film Code No. 371020, Harris County Map Records, and being more
        particularly described by metes and bounds as follows:

      

      BEGINNING
        at a found 5/8” iron rod marking the south cut-back corner of the intersection
        of the north right-of-way line of Moss Ridge Road (60’ wide) and the east
        right-of-way line of Brittmoore Road (90’ wide)

      

      THENCE
        N
        44° 18’ 40” W - 21.21’ to a found “X” in concrete wall marking the north
        cut-back corner of said intersection of the north right-of-way line of Moss
        Ridge Road and the east right-of-way line of Brittmoore Road;

      

      THENCE
        N
        00° 41’ 20” E - 748.00’ with said east right-of -way line of Brittmoore Road to
        a found 5/8” iron rod marking the south cut-back corner of the intersection of
        said east right-of-way line of Brittmoore Road and the south right-of-way
        line
        of Braymoore Drive (60’ wide)

      

      THENCE
        N
        45° 41’ 19” E - 21.21’ to a found 5/8” iron rod marking the north cut-back
        corner of said intersection of the east right-of-way line of Brittmoore Road
        and
        the south right-of-way line of Braymoore Drive;

      

      THENCE
        S
        89° 18’ 40” E - 795.00’, with said south right-of-way line of Braymoore Drive to
        a found 5/8” iron rod with cap marking the north cut-back corner of the
        intersection of said south right-of-way line of Braymoore Drive and the west
        right-of-way line of Claymoore Park Drive (60’ wide)

      

      
        
           

        

        
          31

          
            

          

        

        
           

        

      

      THENCE
        S
        44° 18’ 40” E - 21.21’ to a found 5/8” iron rod with cap marking the south
        cut-back corner of said intersection of the south right-of-way line of Braymoore
        Drive and the west right-of-way line of Claymoore Park Drive;

      

      THENCE
        S
        00° 41’ 20” W - 748.00’ with said west right-of-way line of Claymoore Park Drive
        to a found 5/8 iron rod with cap marking the north cut-hack corner of the
        intersection of said west right-of-way line of Claymoore Park Drive and said
        north right-of -way line of Moss Ridge Road;

      

      THENCE
        S
        45° 41’ 20’ W - 21.21’ to a found 5/8” iron rod with cap marking the south
        cut-back corner of said intersection of the west right-of-way line of Claymoore
        Park Drive and the north right-of-way line of Moss Ridge Road;

      

      THENCE
        N
        89° 18’ 40” W - 362.50’ with said north right-of-way line of Moss Ridge Road to
        a found 5/8” iron rod with cap marking the south cut-back corner of the
        intersection of said north right-of-way line of Moss Ridge Road and the east
        right-of-way line of Birtcher Lane (60’ wide);

      

      THENCE
        N
        44° 18’ 40’ W - 14.14’ to a found 5/8” iron rod with cap marking the north
        cut-back corner of said intersection of the north right-of-way line of Moss
        Ridge Road and the east right-of-way line of Birtcher Lane;

      

      THENCE
        N
        00 41’ 20” E - 11.50’, with said east right-of-way line of Birtcher Lane to a
        found 5/8” iron rod with cap for corner;

      THENCE
        N
        89° 18’ 40” W - 60.00’ to a found 5/8” iron rod with cap for
        corner;

      

      THENCE
        S
        00° 41’ 20’ W - 11.50’, with the west right-of-way line of said Birtcher Lane to
        a found 5/8” iron rod with cap marking the north cut-back corner of the
        intersection of said west right-of-way line of Birtcher Lane and the north
        right-of-way line of said Moss Ridge Road;

      

      Thence
        S
        45° 41’ 20” W - 14.14’ to a found 5/8” iron rod with cap marking the south
        cut-back corner of said intersection of the west right-of-way line of Birtcher
        Lane and the north right-of -way line of Moss Ridge Road;

      

      THENCE
        N
        89’ 18’ 40’ W - 352.50 with said north right-of-way line of Moss Ridge Road, to
        the POINT OF BEGINNING and containing 14.6926 acres (840,010 square feet)
        of
        land, more or less.

      

      

      
        
          
          

           

        

        
          32

          
            

          

        

        
           

          
            

          

        

      

      EXHIBIT
        “B “

      

      Rules
        and Regulations

      

      

      1. No
        storage outside the Leased Premises of any material, pallets, disabled vehicles,
        showcases or other items will be permitted, including but not limited to
        trash,
        except in containers approved by Landlord.
        Tenant,
        its officers, agents, servants and employees shall not allow anything to
        remain
        in any common area passageway, hallway, stairway, sidewalk, court, corridor,
        ramp, entrance, exit, loading area, or other area outside the Leased Premises,
        or permit such areas to be used at any time except for ingress or egress
        of
        Tenant, its officers, agents, servants, employees, patrons, licensees,
        customers, visitors or invitees. Common utility closets, telephone closets,
        and
        other such closets, rooms and areas shall be used only for the purposes and
        in
        the manner designated by Landlord, and may not be used by Tenant, or its
        contractors, agents, employees, or other parties without Landlord’s prior
        written consent.

      

      2. The
        movement of furniture, equipment, machines, merchandise or materials within,
        into or out of the Leased Premises or the Building not in the ordinary course
        of
        Tenant’s business as permitted herein, shall be restricted to time, method and
        routing of movement as determined by Landlord upon request from Tenant and
        Tenant shall assume all liability and risk to property, the Leased Premises,
        the
        Building and, if applicable, the Project in such movement. The movement of
        furniture, equipment, machines, merchandise or materials within, into or
        out of
        the Leased Premises in the ordinary course of Tenant’s permitted business shall
        also be at Tenant’s sole risk and responsibility and shall be conducted in such
        a fashion as not to cause damage or injury to the Leased Premises or the
        Building or to disturb other occupants thereof. Tenant shall not move furniture,
        machines, equipment, merchandise or materials within, into or out of the
        Leased
        Premises or the Building not in the ordinary course of Tenant’s permitted
        business without having first obtained a written permit from Landlord
        twenty-four (24) hours in advance. Safes and other heavy fixtures, equipment
        or
        machines intended to be kept permanently in the Leased Premises shall be
        moved
        into the Leased Premises or the Building only with Landlord’s written consent
        and placed where directed by Landlord.

      

      3. Landlord
        will not be responsible for lost or stolen personal property, equipment,
        money
        or any article taken from Leased Premises, regardless of how or when loss
        occurs.

      

      4. Tenant,
        its officers, agents, servants and employees shall not install or operate
        any
        refrigerating or HVAC apparatus or carry on any mechanical operation without
        written permission of Landlord. Tenant shall give Landlord prompt notice
        of all
        damage to or defects in HVAC equipment, plumbing, electric facilities or
        any
        part of appurtenance of the Leased Premises.

      

      5. Tenant,
        its officers, agents, servants or employees shall not use the Leased Premises
        for housing, lodging or sleeping purposes or for the cooking or preparation
        of
        food without written permission of Landlord.

      

      6. Tenant,
        its officers, agents, servants, employees, patrons, licensees, customers,
        visitors or invitees shall not bring into the Leased Premises or keep on
        Leased
        Premises any fish, fowl, reptile, insect or animal without the prior written
        consent of the Landlord.

      

      7. No
        locks
        shall be placed on any door in the Building without the prior written consent
        of
        Landlord. Landlord will furnish two keys to each lock on doors in the Leased
        Premises and Landlord, upon request of Tenant, shall provide additional
        duplicate keys at Tenant’s expense. Tenant, its officers, agents, servants and
        employees shall, before leaving the Leased Premises unattended, close and
        lock
        all doors and shut off all lights, business equipment and machinery. Damage
        to
        the Leased Premises or Building resulting from the failure to do so shall
        be
        paid by Tenant.

       

      
        
           

        

        
          33

          
            

          

        

        
           

        

      

      
 

      8. Tenant,
        its officers, agents, servants or employees shall do no painting or decorating
        in the Leased Premises; or mark, paint or cut into, drive nails or screw
        into
        nor in any way deface any part of the Leased Premises or the Building without
        the prior written consent of Landlord. If Tenant desires signal, communication,
        alarm or other utility or service connection installed or changed, such work
        shall only be done at expense of Tenant, with the written approval and under
        the
        direction of Landlord. Tenant, without the prior written consent of Landlord,
        shall not lay linoleum or other similar floor covering within the Leased
        Premises. Tenant shall not install any antenna, satellite dish or aerial
        wires,
        radio or television equipment or any other type of equipment inside or outside
        of the Building, without Landlord’s prior approval in writing. No showcases,
        awnings or other articles or projections shall be affixed to any part of
        the
        exterior of the Building, without the prior written consent of
        Landlord.

      

      9. Tenant,
        its officers, agents, servants and employees shall not permit the operation
        of
        any musical or sound-producing instruments or device which may be heard outside
        the Leased Premises, or which may emanate electrical waves or x-rays or other
        emissions which will be hazardous to health, well-being or condition of persons
        or property.

      

      10. All
        plate
        and other glass now in the Leased Premises or Building which is broken through
        cause attributable to Tenant, its officers, agents, servants, employees,
        patrons, licensees, customers, visitors or invitees shall be replaced by
        and at
        expense of Tenant under the direction of Landlord.

      

      11. The
        plumbing facilities (including, without limitation, toilet rooms, urinals,
        wash
        bowls, drains and sewers) shall not be used for any other purpose than that
        for
        which they are constructed, and no foreign substance of any kind shall be
        thrown
        therein. The expense of any breakage, stoppage or damage resulting from a
        violation of this provision shall be borne by Tenant, who shall, or whose
        officers, employees, agents, servants, patrons, customers, licensees, visitors
        or invitees shall, have caused it. Landlord shall not be responsible for
        any
        damage due to stoppage, backup or overflow of the drains or other plumbing
        fixtures.

      

      12. All
        contractors and/or technicians performing work for Tenant within the Leased
        Premises, Building or Project shall be referred to Landlord for written approval
        before performing such work. This shall apply to all work including, but
        not
        limited to, installation of telephones, telegraph equipment, electrical devices
        and attachments, and all installations affecting floors, walls, windows,
        doors,
        ceilings, equipment or any other physical feature of the Building, the Leased
        Premises or the Project. Tenant shall do no work without Landlord’s prior
        written approval.

      

      13. Neither
        Tenant nor any officer, agent, employee, servant, patron, customer, visitor,
        licensee or invitee of any Tenant shall go upon the roof of the Building,
        without the written consent of the Landlord.

      

      14. Canvassing,
        soliciting, distribution of hand-bills or any other written material peddling
        in
        the Building or the Project are prohibited, and Tenant shall cooperate to
        prevent the same. Tenant shall not advertise the business, profession or
        activities of Tenant in any manner which violates the letter or spirit of
        any
        code of ethics adopted by any recognized association or organization pertaining
        thereto, use the name of the Building for any purpose other than that of
        the
        business address of Tenant or use any picture or likeness of the Building
        or the
        Project name in any letterheads, envelopes, circulars, notices, advertisements,
        containers or wrapping material without Landlord’s express consent in
        writing.

      

      15. Tenant
        shall not conduct its business and/or control its officers, agents, employees,
        servants, patrons, customers, licensees and visitors in such a manner as
        to
        commit waste or suffer or permit waste to be committed in Leased Premises.
        Tenant shall not do or permit anything in or about the Leased Premises that
        is
        immoral, obscene, pornographic, disreputable or dangerous to life, limb or
        property, or do any act tending to injure the reputation of the Project.
        No
        activity creating dust or fumes that may be hazardous shall be performed
        in the
        Leased Premises except in an environment controlled by air-handling equipment
        properly and lawfully designed and utilized, which shall be maintained and
        operated at all times to prevent hazardous accumulations of pollutants in
        the
        atmosphere within the Leased Premises or Project.

      

      16. Tenant
        shall not install in the Leased Premises any equipment, which uses a substantial
        amount of electricity without the advance written consent of the Landlord.
        Tenant shall ascertain from the Landlord the maximum amount of electrical
        current which can safely be used in the Leased Premises, taking into account
        the
        capacity of the electric wiring in the Building and the Leased Premises and
        the
        needs of other tenants in the Building and the Project. Tenant agrees not
        to use
        more than such safe capacity. The Landlord’s consent to the installation of
        electric equipment shall not relieve the Tenant from the obligation not to
        use
        more electricity than such safe capacity.

      

      17. Tenant
        shall not use, or permit any other party to use, the Leased Premises for
        any
        distress, fire, bankruptcy, close-out, “lost our lease” or going-out-of-business
        sale or auction. Tenant shall not display any signs advertising the foregoing
        anywhere in or about the Leased Premises. This prohibition shall also apply
        to
        Tenant’s creditors.

       

      
        
           

        

        
          34

          
            

          

        

        
           

        

      

      
 

      18. Tenant
        agrees to park in only those parking stalls designated as tenant parking.
        Tenant
        shall hold Landlord harmless for the removal and charges related thereto
        when
        Tenant, or its employees, park in spaces designated as reserved parking (other
        than reserved for Tenant), visitor parking, handicapped parking, or red or
        yellow curb areas. Tenant shall not park or allow to be kept any vehicle
        on the
        Leased Premises, either company or personnel, which is not being used on
        a daily
        basis.

      

      19. Tenant
        shall not maintain armed security in or about the Leased Premises nor possess
        any weapons, explosives, combustibles or other hazardous devices in or about
        the
        Building and/or Leased Premises.

      

      20. All
        of
        Tenant’s signs shall: (i) be professionally designed, prepared and installed,
        (ii) not advertise any product, (iii) comply with any sign criteria developed
        by
        Landlord from time to time, and (iv) be subject to all Applicable Laws and
        any
        covenants, conditions and restrictions applicable to the Project or Building.
        Tenant shall maintain all signs hereunder in good repair and sightly first
        class
        condition. Tenant shall not use strobe or flashing lights in or on the Leased
        Premises or in any signs therefore.

      

      21. Tenant
        shall conduct its labor relations and relations with employees so as to avoid
        strikes, picketing, and boycotts of, on or about the Leased Premises or Project.
        If any employees strike, or if picket lines or boycotts or other visible
        activities objectionable to Landlord are established, conducted or carried
        out
        against Tenant, other occupants of the Leased Premises or their employees,
        agents, transferees or contractors in or about the Leased Premises or Project,
        Tenant shall immediately close the Leased Premises and remove or cause to
        be
        removed all such occupants, employees, agents, transferees and contractors
        until
        the dispute has been settled.

      

      22. Upon
        expiration or earlier termination of this Lease, in addition to the requirements
        under the terms the Lease, Tenant shall ensure that:

      

      a. All
        interior and exterior lights and bulbs are operational.

      

      b. All
        exhaust, ceiling and overhead fans are operational.

      

      c. Warehouse
        floor areas are broom swept and clean of all trash and materials.

      

      d. Warehouse
        floor areas are cleaned of oils, fluids and other foreign
        materials.

      

      e. All
        electrical, plumbing and other utilities which are terminated are disconnected,
        capped and/or terminated according to applicable building codes and all other
        governmental requirements.

       

      f. All
        electrical and telecommunications conduit and wiring installed by or for
        Tenant
        specifically for Tenant’s equipment is removed to the originating panel if
        Landlord so requires.

       

      g. Overhead
        interior and exterior doors are operational and in good condition.

      

      h. Any
        bolts
        secured to the floor are cut off flush and sealed with epoxy.

       

      
        
           

        

        
          35

          
            

          

        

        
           

        

      

      
 

      i. Warehouse
        fencing or partitions are removed if Landlord so requires.

      

      j. All
        furniture, trash and debris are removed. 

      

      k. All
        signs
        and pictures, posters, signage, stickers and all similar items of Tenant
        and any
        other occupant of the Leased Premises are removed from all walls, windows,
        doors
        and all other interior and exterior surfaces of the Leased Premises and other
        locations of the Project.

      

      l. All
        carpet areas are vacuumed.

      

      m. All
        uncarpeted office floors are swept, and any excess wax build-up on tile and
        vinyl floors is properly removed.

      

      n. All
        computer cable and conduit installed by or for Tenant is removed to point
        of
        origin.

      

      o. All
        windows and miscellaneous hardware are operational and in good
        condition.

      

      p. All
        HVAC
        and mechanical systems and equipment are operational and in good
        condition.

      

      q. Ceiling
        tiles, grid, light lenses, air grills and diffusers are in place with no
        holes
        or stains.

      

      r. There
        are
        no broken windows or other glass items.

      

      s. Bathroom
        walls, floors, and fixtures are clean and in good condition.

      

      t. All
        plumbing fixtures are intact, operational free of leaks and in good
        condition.

      

      u. All
        gutters and downspouts are undamaged and operational.

      

      v. Walls
        (internal and external) are clean and any holes are properly and permanently
        patched.

      

      23. Landlord
        may waive any one or more of these Rules and Regulations for the benefit
        of any
        particular tenant or landlords, but no such waiver by Landlord shall be
        construed as a waiver of such Rules and Regulations in favor of any other
        tenant
        or landlords, nor prevent Landlord from thereafter enforcing any such Rules
        and
        Regulations against any or all of the tenants of the Project.

      

      24. These
        Rules and Regulations are in addition to, and shall not be construed to in
        any
        way modify or amend, in whole or in part, the terms, covenants, agreements
        and
        conditions of any lease on premises in the Building or the Project. Tenant
        shall
        be responsible for ensuring compliance with these Rules and Regulations as
        they
        may be amended, by Tenant’s employees and as applicable, by Tenant, any other
        occupant of the Leased Premises and their respective agents, employees,
        invitees, transferees and contractors.

      

      25. In
        the
        event of an irreconcilable conflict between the Rules and Regulations and
        the
        terms of this Lease to which this Exhibit “B” is attached, the terms of the
        Lease shall prevail. 

      
        
          
          

           

        

        
          36

          
            

          

        

        
           

          
            

          

        

      

      EXHIBIT
        “C”

      

      Work
        Letter Agreement

      

      This
        Work
        Letter Agreement supplements and is hereby incorporated in that certain lease
        (hereinafter referred to as the “Lease”) dated and executed concurrently
        herewith by and between GKII
        CLAY CROSSING, L.P.,
        a
        Delaware limited partnership, (“Landlord”) and SULPHCO.,
        INC.,
        a
        Nevada corporation (“Tenant”) with the terms defined in the Lease to have the
        same definition where used herein.

      

      (a) Tenant
        Improvements.
        Landlord, at Tenant’s sole cost and expense, agrees to furnish or perform those
        items of construction and those improvements (the “Tenant Improvements”)
        specified in the Final Plans to be agreed to by Landlord and Tenant as set
        forth
        in Paragraph (b)
        below;
        provided, however, Landlord shall pay for the cost of such Tenant Improvements
        up to the extent of Landlord’s Construction Allowance as set forth in
Paragraph (e)
        below.
        All Tenant Improvements and components thereof will be the sole property
        of
        Landlord. Notwithstanding anything herein to the contrary, the Tenant
        Improvements shall include parking canopies over eight (8) parking spaces
        in the parking area at the rear of the Building.

       

      (b) Space
        Planner.
        Landlord has retained a space planner (the “Space Planner”) to prepare certain
        plans, drawings and specifications (the “Temporary Plans”) for the construction
        of Tenant Improvements to be installed in the Leased Premises by a general
        contractor selected by Landlord pursuant to this Work Letter. Tenant shall
        deliver to Space Planner within ten (10) days after the execution of this
        Lease all necessary information required by the Space Planner to complete
        the
        Temporary Plans. Tenant shall have five (5) business days after its receipt
        of the proposed Temporary Plans to review the same and notify Landlord in
        writing of any comments or required changes, or to otherwise give its approval
        or disapproval of such proposed Temporary Plans. If Tenant fails to give
        written
        comments to or approve the Temporary Plans within such five (5) business
        day period, then Tenant shall be deemed to have approved the Temporary Plans
        as
        submitted. Landlord shall have five (5) business days following its receipt
        of Tenant’s comments and objections to redraw the proposed Temporary Plans in
        compliance with Tenant’s request and to resubmit the same for Tenant’s final
        review and approval or comment within five (5) business days of Tenant’s
        receipt of such revised plans. Such process shall be repeated twice and if
        at
        such time final approval by Tenant of the proposed Temporary Plans has not
        been
        obtained, then Landlord shall complete such Temporary Plans, at Tenant’s sole
        cost and expense, and it shall be deemed that Tenant has approved the Temporary
        Plans. Once Tenant has approved or has been deemed to have approved the
        Temporary Plans, then the approved (or deemed approved) Temporary Plans shall
        be
        thereafter known as the “Final Plans”. The Final Plans shall include the
        complete and final layout, plans and specifications for the Leased Premises
        showing all doors, light fixtures, electrical outlets, telephone outlets,
        wall
        coverings, plumbing improvements (if any), data systems wiring, floor coverings,
        wall coverings, painting, any other improvements to the Leased Premises beyond
        the shell and core improvements provided by Landlord and any demolition of
        existing improvements in the Leased Premises. The improvements shown in the
        Final Plans shall (i) utilize Landlord’s building standard materials and methods
        of construction, (ii) be compatible with the shell and core improvements
        and the
        design, construction and equipment of the Leased Premises, and (iii) comply
        with
        all applicable laws, rules, regulations, codes and ordinances.

       

      (c) Bids.
        As soon
        as practicable following the approval of the Final Plans, Landlord shall
        (i)
        obtain a written non-binding itemized estimate of the costs of all Tenant
        Improvements shown in the Final Plans as prepared by a general contractor
        selected by Landlord, and (ii) if required by applicable law, codes or
        ordinances, submit the Final Plans to the appropriate governmental agency
        for
        the issuance of a building permit or other required governmental approvals
        prerequisite to commencement of construction of such Tenant Improvements
        (“Permits”). Tenant acknowledges that any cost estimates are prepared by the
        general contractor and Landlord shall not be liable to Tenant for any inaccuracy
        in any such estimate. Within five (5) business days after receipt of the
        written non-binding cost estimate prepared by the general contractor, Tenant
        shall either (A) give its written approval thereof and authorization to proceed
        with construction or (B) immediately request the Space Planner to modify
        or
        revise the Plans in any manner desired by Tenant to decrease the cost of
        the
        Tenant Improvements. If Tenant is silent during such five (5) business day
        period, then Tenant shall be deemed to have approved such non-binding cost
        estimate as set forth in Clause (A) above. If the Final Plans are revised
        pursuant to Clause (B) above, then Landlord shall request that the general
        contractor provide a revised cost estimate to Tenant based upon the revisions
        to
        the Final Plans. Such modifications and revisions shall be subject to Landlord’s
        reasonable approval and shall be in accordance with the standards set forth
        in
        Paragraph (b) of this Work Letter. Within ten (10) business days after receipt
        of the general contractor’s original written cost estimate and the description,
        if any, of any Tenant Delay, Tenant shall give its final approval of the
        Final
        Plans to Landlord which shall constitute authorization to commence the
        construction of the Tenant Improvements in accordance with the Final Plans,
        as
        modified or revised. Tenant shall signify its final approval by signing a
        copy
        of each sheet or page of the Final Plans and delivering such signed copy
        to
        Landlord.

       

      
        
           

        

        
          37

          
            

          

        

        
           

        

      

       

      (d) Construction.
        Landlord shall commence construction of the Tenant Improvements within ten
        (10)
        days following the later of (i) the approval of the Final Plans, or (ii)
        Landlord’s receipt of any necessary Permits. Landlord shall diligently pursue
        completion of construction of the Tenant Improvements and use its commercially
        reasonable efforts to complete construction of the Tenant Improvements as
        soon
        as reasonably practicable. Notwithstanding anything in this Lease or in this
        Work Letter to the contrary, Landlord’s Construction Allowance, as specified in
Paragraph
        (e)
        below,
        shall be used only for the construction of the Tenant Improvements, and if
        construction of the Tenant Improvements is not completed within six (6) months
        following the Date of this Lease (“Construction Termination Date”), then
        Landlord’s obligation to provide the Landlord’s Construction Allowance, as
        specified in Paragraph (e) of this Lease, shall terminate and become null
        and
        void, and Tenant shall be deemed to have waived its rights in and to said
        Landlord’s Construction Allowance.

       

      (e) Landlord’s
        Construction Allowance.
        Subject
        to the terms and provisions of this Work Letter, Landlord shall pay the cost
        of
        the Tenant Improvements (“Work”) up to the amount of Fifty Thousand and No/100
        Dollars ($50,000.00) (“Landlord’s Construction Allowance”). If the amount of the
        bid to perform the Work exceeds the Landlord’s Construction Allowance, Tenant
        shall bear the cost of such excess and shall pay the estimated cost of such
        excess to Landlord prior to commencement of construction of such Tenant
        Improvements and a final adjusting payment based upon the actual costs of
        the
        Tenant Improvements shall be made when the Tenant Improvements are completed.
        If
        the cost of the Work is less than such amount, then Tenant shall not receive
        any
        credit whatsoever for the difference between the actual cost of the Work
        and
        Landlord’s Construction Allowance. All remaining amounts due to Landlord shall
        be paid upon the earlier of Substantial Completion of the Tenant Improvements
        or
        presentation of a written statement of the sums due, which statement may
        be an
        estimate of the cost of any component of the Work. The cost of the permits,
        working drawings, hard construction costs, mechanical and electrical planning,
        fees, permits, general contract overhead shall be payable out of the Landlord’s
        Construction Allowance and shall be included in the cost of the Work. The
        cost
        of the Work shall not include any construction management fees payable to
        Landlord. 

       

      (f) Change
        Order.
        If
        Tenant shall desire any changes to the Final Plans, Tenant shall so advise
        Landlord in writing and Landlord shall determine whether such changes can
        be
        made in a reasonable and feasible manner. Any and all costs of reviewing
        any
        requested changes, and any and all costs of making any changes to the Tenant
        Improvements which Tenant may request and which Landlord may agree to shall
        be
        at Tenant’s sole cost and expense and shall be paid to Landlord upon demand and
        before execution of the change order. In no event shall Landlord be obligated
        to
        perform any Tenant Improvements which would extend the construction period
        past
        the Construction Termination Date, unless such extension was mutually agreed
        to
        in writing by Landlord and Tenant prior to the commencement of said
        construction. If Landlord approves Tenant’s requested change, addition, or
        alteration, the Space Planner, at Tenant’s sole cost and expense, shall complete
        all working drawings necessary to show the change, addition or alteration
        being
        requested by Tenant.

       

      Substantial
        Completion.
        “Substantial Completion” of construction of the Tenant Improvements shall be
        defined as the date upon which the Space Planner or other consultant engaged
        by
        Landlord determines that the Tenant Improvements have been substantially
        completed in accordance with the Final Plans except for Punch List items
        (defined below), unless the completion of such improvements was delayed due
        to
        any Tenant Delay (defined below), in which case the date of Substantial
        Completion shall be the date such improvements would have been completed,
        but
        for the Tenant Delays. The term “Punch List” items shall mean items that
        constitute minor defects or adjustments which can be completed after occupancy
        without causing any material interference with Tenant’s use of the Leased
        Premises. Landlord shall complete all punchlist items as soon as reasonably
        practicable following Substantial Completion. After the completion of the
        Tenant
        Improvements, Tenant shall, upon demand, execute and deliver to Landlord
        a
        letter of acceptance of improvements performed on the Leased Premises. The
        term
“Tenant Delay” shall include, without limitation, any delay in the completion of
        construction of Tenant Improvements resulting from (i) Tenant’s failure to
        comply with the provisions of this Work Letter, (ii) any additional time
        as
        reasonably determined by Landlord required for ordering, receiving, fabricating
        and/or installing items or materials or other components of the construction
        of
        Tenant Improvements, including, without limitation, mill work, (iii) delay
        in
        work caused by submission by Tenant of a request for any change order (defined
        below) following Tenant’s approval of the Final Plans, or for the implementation
        of any change order, or (iv) any delay by Tenant in timely submitting comments
        or approvals to the Temporary Plans or Final Plans. The failure of Tenant
        to
        take possession of or to occupy the Leased Premises shall not serve to relieve
        Tenant of obligations arising on the Commencement Date or delay the payment
        of
        Rent by Tenant. 

       

      38

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