Document:

Exhibit 10.8

 

TRUST AGREEMENT

 

ENERPULSE, INC.

(2011 NON-QUALIFIED DEFERRED COMPENSATION
PLAN)

 

This Trust Agreement
(the “Trust Agreement”) is made and entered as of this 20th day of December, 2011 by and between Enerpulse Inc., a
corporation organized under the laws of the State of Delaware (the “Company”) and The First National Bank of Santa
Fe, Corporate Trust Department, Santa Fe, New Mexico as Trustee (the “Trustee”).

 

WHEREAS, the Company has adopted a non-qualified
deferred compensation plan (the “Plan”) which is attached hereto and incorporated herein by reference as Appendix A;
and

 

WHEREAS, the Company
expects to incur liability under the terms of the Plan with respect to the individuals participating in the Plan as more particularly
described in Appendix B which is incorporated by reference herein; and

 

WHEREAS, the Company
desires to establish a trust (the “Trust”) and to contribute to the Trust assets that shall be held therein subject
to the claims of the creditors of the Company in the event of the Company’s Insolvency, as defined herein, until paid to
the Plan participants and their beneficiaries in such a manner and at such times as specified in the Plan; and

 

WHEREAS, it is the
intention of the Company to make contributions of cash or securities to the Trust to provide itself with a source of funds or assets,
to assist it in meeting its liabilities under the Plan.

 

NOW THEREFORE, the
Parties do hereby establish the Trust and agree that the Trust shall be comprised of the following assets and held and disposed
of as follows:

 

Section 1. Creation of Trust. 

 

		(a)	The Company hereby agrees to deposit with the Trustee an amount not to exceed two hundred and sixty
one thousand dollars ($261,000.00 U.S.D.) which shall become the principal of the Trust to be held, administered and disposed of
by the Trustee as provided in this Trust;

		(b)	The Company and the Trustee agree that the Trust hereby established shall be irrevocable;

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

 

    	 

    	 

    

 

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

		(e)	The Company, in its sole discretion, may at any time, or from time to time, make additional deposits
of cash or securities to augment the principal of the Trust to be administered pursuant to this Trust Agreement. Neither the Trustee
nor any Participant or Beneficiary shall have the right to compel the Company to make such additional deposits.

 

Section 2. Payments to Plan Participants and their Beneficiaries.

 

		(a)	The Company shall deliver to the Trustee a schedule (the “Payment Schedule”) that indicates
the amount of cash payable to each Participant (and his or her beneficiaries), that provides a list, formula, or other instructions
acceptable to the Trustee for determining the amount to be paid or delivered (as provided for or available under the Plan) to the
Participants, and the time of payment of such amounts or delivery of Shares, as applicable. Except as otherwise provided herein,
the Trustee shall make payments to the Participants in accordance with the Payment Schedule. The Company shall make provision for
the reporting and withholding of any state, federal or local taxes that may be required to be withheld with respect to the payments
of benefits pursuant to the Plan and shall pay such amounts, as applicable, to the appropriate taxing authorities or determine
that such amounts have been reported, withheld and paid.

		(b)	The entitlement by a Participant to benefits under the Plan and any claim therefore shall be considered
and reviewed under the procedures set forth in the Plan.

		(c)	The Company may make payment of benefits to the Participants or the Beneficiaries as they become
due under the terms of the Plan. The Company shall notify the Trustee of its decision to make payment of benefits directly prior
to the time amounts or Shares are due to Participants or Beneficiaries. In addition, if the principal of the Trust and any earnings
thereon, are not sufficient to make payments or distribute benefits in accordance with the terms of the Plan, the Company shall
make the balance of each payment as may be due when the assets of the Trust are insufficient to do so.

 

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Section 3. Trustee Responsibility Regarding Distributions
from the Trust.

 

		(a)	The Trustee shall cease payment of benefits to the Participants and the Beneficiaries if the Company
is Insolvent. The Company shall be considered “Insolvent” for the purposes of this Trust Agreement if (i) the Company
is unable to pay its debts as they become due, or (ii) the Company is a party to or subject to a proceeding as a debtor under the
United States Bankruptcy Code.

		(b)	Unless the Trustee has actual knowledge of the Company’s insolvency, or has received notice
from the Company or a bona fide creditor of the Company claiming that the Company is Insolvent, the Trustee shall make the scheduled
distributions for the Trust to the Beneficiaries. The Trustee shall have no duty to inquire as to whether or not the Company is
Insolvent, however, the Trustee may rely on any evidence available and acceptable to the Trustee to make its own decision as to
whether or not the Company is Insolvent.

		(c)	Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits
from the Trust due to the Company’s Insolvency pursuant to Section 3 (b) hereof and subsequently resumes such payments or
distributions, the first payment or distribution following such discontinuance shall include the aggregate amount of all payments
or distributions due to the Participants or the Beneficiaries under the terms of the Plan, less the amount of any payments or distributions
made during a period of discontinuance to the Participants or the Beneficiaries.

		(d)	The Trustee may invest in the securities (including stock or rights to acquire stock) or obligations
issued by the Company. All rights associated with assets of the Trust shall be exercised by the Trustee except that voting rights
and dividend rights shall remain with the Company.

 

Section 4. Disposition of Income.

 

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

 

Section 5. Accounting by the Trustee.

 

The Trustee shall keep
accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including
such specific records as shall be agreed upon in writing between the Company and the Trustee. Within ninety (90) days following
the close of each calendar year and within thirty (30) days after the removal or resignation of the Trustee, the Trustee shall
deliver to the Company a written account of its administration of the Trust during such year or during the period from the close
of the last preceding year to the date of such removal or resignation of the Trustee, setting forth all investment, receipts, disbursements
and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost
or net proceeds of such purchases or sales and showing all cash, securities and other property held in the Trust at the end of
such year or as of the date of such removal or resignation.

 

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Section 6. Responsibility of the
Trustee.

 

		(a)	The Trustee shall act with the care, skill, prudence and diligence, under the circumstances then
prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise
or business of like character and with like aims, provided, however, that the Trustee shall incur no liability to any person for
any action taken pursuant to a direct request or approval given by the Company to the Trustee. In the event of a dispute between
the Company or a Participant, or the Company or the Trustee and, a Participant or Beneficiary, the Trustee shall submit the dispute
to binding arbitration prior to the institution of any litigation by the Trustee.

		(b)	If the Trustee undertakes or defends any litigation, arbitration or mediation arising in connection
with this Trust, the Company agrees to indemnify the Trustee against the Trustee’s costs, expenses and liabilities, including
reasonable attorneys’ fees and expenses.

		(c)	The Trustee shall have all powers conferred on Trustees by applicable law, unless expressly provided
otherwise herein.

		(d)	Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or to applicable
law, the Trustee shall not have any power that could give the Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the
Internal Revenue Code of 1986, as amended.

 

Section 7. Compensation and Expenses of the Trustee.

 

The Company shall pay
all of the Trustee’s administrative fees and expenses. The Trustee shall not hire outside counsel relating to this Trust
without the approval of the Company. If the Company fails to pay the fees and expenses of the Trustee within thirty (30) days of
the invoice date, whether such fees and expenses are based on the Trustee’s standard fee schedule or whether such fees and
expenses are incurred as a result of litigation or arbitration due to a dispute pursuant to Section 8 (a) of the Trust Agreement,
the Trustee shall pay all such fees and expenses from the assets held in the Trust. In the event the assets of the Trust are insufficient
to pay the Trustee’s fees and expenses in full, the Trustee shall take whatever action it deems necessary to recover from
the Company the balance of unpaid fees and expenses.

 

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Section 8. Resignation and Removal
of the Trustee.

 

		(a)	The Trustee may resign at any time by written notice to the Company, which shall be effective thirty
(30) days after receipt of such notice or such other time as the Company and Trustee may agree.

		(b)	The Trustee may be removed by the Company upon thirty (30) days written notice from the Company
to the Trustee.

		(c)	Upon resignation or removal of the Trustee and appointment of a successor Trustee, all assets shall
be subsequently transferred to the successor Trustee. The transfer shall be completed within thirty (30) days of the effective
date of the appointment of the successor Trustee unless the Company, in its sole discretion extends the time limit.

		(d)	If the Trustee resigns or is removed, a successor shall be appointed, in accordance with Section
11 hereof, by the effective date of such resignation or removal under subparagraphs (a) or (b) of this Section 10. If no such appointment
has been made, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor Trustee or for instructions.
All reasonable and necessary expenses of the Trustee in connection with such proceedings shall be allowed as an administrative
expense of the Trust and shall be paid by the Company.

 

Section 9. Appointment of Successor Trustee.

 

If the Trustee
resigns or is removed in accordance with Section 10 (a) or (b) hereof, the Company shall appoint as a successor Trustee any
bank or financial institution with corporate trust powers under the laws of the United States or state of New Mexico and
assets of over $5,000,000. The appointment of the successor Trustee shall become effective upon the acceptance in writing of
the successor Trustee, who shall have all of the rights and powers of the prior Trustee, including ownership rights in the
assets of the Trust. The prior Trustee shall execute any instrument necessary or reasonably requested by the Company or the
successor Trustee to complete the transfer to the successor Trustee.

 

Section 10. Amendment or Termination.

 

		(a)	This Trust Agreement may be amended or supplemented by a written instrument executed by the Trustee
and the Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan or make the Trust revocable.

		(b)	The Trust shall not terminate until the date on which the Plan’s Participants and Beneficiaries
are no longer entitled to benefits pursuant to the terms of the Plan. Upon termination of the Trust, any assets remaining in the
Trust shall be returned to the Company.

 

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Section 11. Miscellaneous.

 

		(a)	If any provision of this Trust Agreement is found by a court of competent jurisdiction to be contrary
to law, the remaining provisions of this Trust Agreement shall remain in full force and effect.

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

		(c)	The interpretation and enforcement of this Trust Agreement and, the provisions thereof shall be
governed by the laws of the State of New Mexico.

		(d)	For the purposes of this Trust Agreement, the term “Change in Control” shall mean:
for purposes of the interpretation of this Plan in conformance with section 409A of the Code and the applicable guidance issued
by the Department of the Treasury with respect to the application of section 409A, with respect to a Plan Participant, a Change
in Control event must relate to: (i) the corporation for which the Participant is performing services at the time of the Change
in Control event, (ii) the corporation that is liable for the payment of the deferred compensation (or all corporations liable
for the payment if more than one corporation is liable), or (iii) a corporation that is a majority shareholder of a corporation
identified in part (i) or part (ii) above, or any corporation in a chain of corporations in which each corporation is a majority
shareholder of another corporation in the chain, ending in a corporation identified in part (i) or part (ii) above. For purposes
of this provision, a majority shareholder is a shareholder owning more than fifty percent (50%) of the total fair market value
and total voting power of such corporation. Also, for purposes of this provision, section 318(a) of the Code applies to determine
stock ownership. Additionally, for purposes of this provision and in conformance with section 409A and the applicable guidance
issued by the Department of the Treasury with respect to the application of section 409A, a change in the ownership of a corporation
or a change in the effective control of a corporation is determined in accordance with the provisions described below in this definition.

 

(i) A change
in the ownership of a corporation shall occur on the date that any one person, or more than one person acting as a group, in one
transaction or a series of transactions, directly or indirectly, acquires ownership of stock of the corporation that, together
with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting
power of the stock of the corporation. However, if any one person or more than one person acting as a group, is considered to own
more than fifty percent (50%) of the total fair market value or total voting power of the stock of the corporation, the acquisition
of additional stock by the same person or persons shall not be considered to cause a change in the ownership of the corporation
(or to cause a change in the effective control of the corporation). An increase in the percentage of stock owned by any one person,
or persons acting as a group, as a result of a transaction, in one transaction or a series of transactions, directly or indirectly,
in which the corporation acquires its stock in exchange for property shall be treated as an acquisition of stock for purposes of
this provision.

 

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(ii) For
purposes of paragraph (i) above, persons will not be considered to be acting as a group solely because they purchase or own stock
of the same corporation at the same time, or as a result of the same public offering. However, persons will be considered to be
acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock,
or similar business transaction with the corporation. If a person, including an entity, owns stock in both corporations that enter
into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting
as a group with other shareholders in a corporation prior to the transaction giving rise to the change and not with respect to
the ownership interest in the other corporation.

(iii) A
change in the effective control of a corporation shall occur on the date that either:

(A) any
one person, or more than one person acting as a group, in one transaction or a series of transactions, directly or indirectly,
acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the corporation possessing thirty-five percent (35%) or more of the total voting power of the stock of the
corporation; or

(B) a majority
of members of the board of directors of the corporation is replaced during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of the board of directors of the corporation prior to the date of the appointment
or election, provided that for purposes of this subparagraph (B) the term “corporation” shall be determined in accordance
with the requirements of section 409A of the Code and the applicable guidance issued by the Department of the Treasury with respect
to the application of section.

(iv) A
change in the ownership of a substantial portion of the assets of a corporation shall occur on the date that any one person, or
more than one person acting as a group acquires (or has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than
forty percent (40%) of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition
or acquisitions. For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the
assets being disposed of, determined without regard to any liabilities associated with such assets.

 

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(v) The
provisions of this subsection (e) regarding the definition of the term “Change in Control,” shall be determined and
administered in accordance with section 409A and the applicable guidance issued by the Department of the Treasury with respect
to the application of section 409A.

 

		(e)	No officer, director, employee, attorney or agent of the Company shall have any personal liability
for any act or omission of the Trustee or the Company relating to this Trust and the Company agrees to indemnify and hold harmless
any such officer, director, attorney, employee or agent from all liability including reasonable attorney’s fees and costs
in the event that any action is brought against such persons relating to the enforcement or interpretation of this Trust.

 

Section 12. Effective Date.

 

The effective date of this Trust Agreement
shall be December 20, 2011.

 

 

	ENERPULSE, INC.	 	THE FIRST NATIONAL BANK OF SANTA FE, 
	 	 	 
	 	 	Trust Department

  

	By:	  /s/ Bryan C. Templeton	 	By:	 /s/ Pam Martin

 

    	8Exhibit 10.11

 

New Mexico Commercial Lease Agreement

 

This Commercial Lease Agreement ("Lease") is made
and effective March 1, 2012, by and between New Mexico Fluid Systems Tech, LLC ("Landlord") and Enerpulse, Inc ("Tenant").

 

Landlord is the owner of land and improvements commonly known
and numbered as 2451 Alamo Ave SE, Albuquerque, NM 87106 and legally described as follows (the "Building"): TR A-8A BLK
2 Summary Plat TRS A-8A & A-9A being a repl of TRS A-8 & A-9 Blk 2 Airport Industrial Park Cont 0.816 AC.

 

Landlord desires to lease the Leased Premises to Tenant, and
Tenant desires to lease the Leased Premises from Landlord for the term, at the rental and upon the covenants, conditions and provisions
herein set forth.

 

THEREFORE, in consideration of the mutual promises herein, contained
and other good and valuable consideration, it is agreed:

 

1. Term.

 

A. Landlord hereby leases the Leased Premises to Tenant, and
Tenant hereby leases the same from Landlord, for a "New Extended Term" beginning March 1, 2012 and ending February 28,
2014. Tenant has current possession, therefore should continue with seamless transition into the new lease.

 

B. Tenant may renew the Lease for two extended terms of two
years. Tenant shall exercise such renewal option, if at all, by giving written notice to Landlord not less than ninety (90) days
prior to the expiration of the Initial Term. The renewal term shall be at the current market rental rates and otherwise upon the
same covenants, conditions and provisions as provided in this Lease.

 

2. Rental.

 

A. Tenant shall pay to Landlord during the Initial Term rental
of $45,000 per year, payable in installments of $3,750 per month. Each installment payment shall be due on the first day
of each calendar month during the lease term to Landlord at 27 Blue Sage Circle, Corrales, NM 87048-9603 or at such other place
designated by written notice from Landlord or Tenant. The rental payment amount for any partial calendar months included in the
lease term shall be prorated on a daily basis. Tenant shall also leave on file with the Landlord a "Security Deposit"
in the amount of $7,810, which is on deposit.

 

B. The rental for any renewal lease term, if created as permitted
under this Lease, shall be $50,000 for the second year per year payable in installments of $4,166.66 per month.

 

    	 

    	 

    

 

3. Use

 

Notwithstanding the forgoing, Tenant shall not use the Leased
Premises for the purposes of storing, manufacturing or selling any explosives, flammables or other inherently dangerous substance,
chemical, thing or device.

 

4. Sublease and Assignment.

 

Tenant shall have the right without Landlord's consent, to assign
this Lease to a corporation with which Tenant may merge or consolidate, to any subsidiary of Tenant, to any corporation under common
control with Tenant, or to a purchaser of substantially all of Tenant's assets. Except as set forth above, Tenant shall not sublease
all or any part of the Leased Premises, or assign this Lease in whole or in part without Landlord's consent, such consent not to
be unreasonably withheld or delayed.

 

5. Repairs.

 

During the Lease term, Tenant shall make, at Tenant's expense,
all necessary repairs to the Leased Premises. Repairs shall include such items as routine repairs of floors, walls, ceilings, and
other parts of the Leased Premises damaged or worn through normal occupancy, except for major mechanical systems or the roof, subject
to the obligations of the parties otherwise set forth in this Lease.

 

6. Alterations and Improvements.

 

Tenant, at Tenant's expense, shall have the right following
Landlord's consent to remodel, redecorate, and make additions, improvements and replacements of and to all or any part of the Leased
Premises from time to time as Tenant may deem desirable, provided the same are made in a workmanlike manner and utilizing good
quality materials. Tenant shall have the right to place and install personal property, trade fixtures, equipment and other temporary
installations in and upon the Leased Premises, and fasten the same to the premises. All personal property, equipment, machinery,
trade fixtures and temporary installations, whether acquired by Tenant at the commencement of the Lease term or placed or installed
on the Leased Premises by Tenant thereafter, shall remain Tenant's property free and clear of any claim by Landlord. Tenant shall
have the right to remove the same at any time during the term of this Lease provided that all damage to the Leased Premises caused
by such removal shall be repaired by Tenant at Tenant's expense.

 

7. Property Taxes.

 

Tenant shall pay, prior to delinquency, all general real estate
taxes and installments of special assessments coming due during the Lease term on the Leased Premises, and all personal property
taxes with respect to Tenant's personal property, on the Leased Premises. Landlord shall be responsible for paying all personal
property taxes with respect to Landlord's personal property at the Leased Premises.

 

    	 

    	 

    

 

8. Insurance.

 

A. If the Leased Premises or any other part of the Building
is damaged by fire or other casualty resulting from any act or negligence of Tenant or any of Tenant's agents, employees or invitees,
rent shall not be diminished or abated while such damages are under repair, and Tenant shall be responsible for the costs of repair
not covered by insurance.

 

B. Landlord shall maintain fire and extended coverage insurance
on the Building and the Leased Premises in such amounts as Landlord shall deem appropriate. Tenant shall be responsible, at its
expense, for fire and extended coverage insurance on all of its personal property, including removable trade fixtures, located
in the Leased Premises.

 

C. Tenant and Landlord shall, each at its own expense, maintain
a policy or policies of comprehensive general liability insurance with respect to the respective activities of each in the Building
with the premiums thereon fully paid on or before due date, issued by and binding upon some insurance company approved by Landlord,
such insurance to afford minimum protection of not less than $1,000,000 combined single limit coverage of bodily injury, property
damage or combination thereof. Landlord shall be listed as an additional insured on Tenant's policy or policies of comprehensive
general liability insurance, and Tenant shall provide Landlord with current Certificates of Insurance evidencing Tenant's compliance
with this Paragraph. Tenant shall obtain the agreement of Tenant's insurers to notify Landlord that a policy is due to expire at
least (10) days prior to such expiration. Landlord shall not be required to maintain insurance against thefts within the Leased
Premises or the Building.

 

9. Utilities.

 

Tenant shall pay all charges for water, sewer, gas, electricity,
telephone and other services and utilities used by Tenant on the Leased Premises during the term of this Lease unless otherwise
expressly agreed in writing by Landlord. In the event that any utility or service provided to the Leased Premises is not separately
metered, Landlord shall pay the amount due and separately invoice Tenant for Tenant's pro rata share of the charges. Tenant shall
pay such amounts within fifteen (15) days of invoice. Tenant acknowledges that the Leased Premises are designed to provide standard
office use electrical facilities and standard office lighting. Tenant shall not use any equipment or devices that utilizes excessive
electrical energy or which may, in Landlord's reasonable opinion, overload the wiring or interfere with electrical services to
other tenants.

 

10. Signs.

 

Following Landlord's consent, Tenant shall have the right to
place on the Leased Premises, at locations selected by Tenant, any signs which are permitted by applicable zoning ordinances and
private restrictions. Landlord may refuse consent to any proposed signage that is in Landlord's opinion too large, deceptive, unattractive
or otherwise inconsistent with or inappropriate to the Leased Premises or use of any other tenant. Landlord shall assist and cooperate
with Tenant in obtaining any necessary permission from governmental authorities or adjoining owners and occupants for Tenant to
place or construct the foregoing signs. Tenant shall repair all damage to the Leased Premises resulting from the removal of signs
installed by Tenant.

 

    	 

    	 

    

 

11. Entry.

 

Landlord shall have the right to enter upon the Leased Premises
at reasonable hours to inspect the same, provided Landlord shall not thereby unreasonably interfere with Tenant's business on the
Leased Premises.

 

12. Parking.

 

During the term of this Lease, Tenant shall have the non-exclusive
use in common with Landlord, other tenants of the Building, their guests and invitees, of the non-reserved common automobile parking
areas, driveways, and footways, subject to rules and regulations for the use thereof as prescribed from time to time by Landlord.
Landlord reserves the right to designate parking areas within the Building or in reasonable proximity thereto, for Tenant and Tenant's
agents and employees. Tenant shall provide Landlord with a list of all license numbers for the cars owned by Tenant, its agents
and employees if requested by the Landlord.

 

13. Building Rules.

 

Tenant will comply with the rules of the Building adopted and
altered by Landlord from time to time and will cause all of its agents, employees, invitees and visitors to do so; all changes
to such rules will be sent by Landlord to Tenant in writing. The initial rules for the Building are attached hereto as Exhibit
"A" and incorporated herein for all purposes.

 

14. Damage and Destruction.

 

Subject to Section 8 A. above, if the Leased Premises or any
part thereof or any appurtenance thereto is so damaged by fire, casualty or structural defects that the same cannot be used for
Tenant's purposes, then Tenant shall have the right within ninety (90) days following damage to elect by notice to Landlord to
terminate this Lease as of the date of such damage. In the event of minor damage to any part of the Leased Premises, and if such
damage does not render the Leased Premises unusable for Tenant's purposes, Landlord shall promptly repair such damage at the cost
of the Landlord. In making the repairs called for in this paragraph, Landlord shall not be liable for any delays resulting from
strikes, governmental restrictions, inability to obtain necessary materials or labor or other matters which are beyond the reasonable
control of Landlord. Tenant shall be relieved from paying rent and other charges during any portion of the Lease term that the
Leased Premises are inoperable or unfit for occupancy, or use, in whole or in part, for Tenant's purposes. Rentals and other charges
paid in advance for any such periods shall be credited on the next ensuing payments, if any, but if no further payments are to
be made, any such advance payments shall be refunded to Tenant. The provisions of this paragraph extend not only to the matters
aforesaid, but also to any occurrence which is beyond Tenant's reasonable control and which renders the Leased Premises, or any
appurtenance thereto, inoperable or unfit for occupancy or use, in whole or in part, for Tenant's purposes.

 

    	 

    	 

    

 

15. Default.

 

If default shall at any time be made by Tenant in the payment
of rent when due to Landlord as herein provided, and if said default shall continue for fifteen (15) days after written notice
thereof shall have been given to Tenant by Landlord, or if default shall be made in any of the other covenants or conditions to
be kept, observed and performed by Tenant, and such default shall continue for thirty (30) days after notice thereof in writing
to Tenant by Landlord without correction thereof then having been commenced and thereafter diligently prosecuted, Landlord may
declare the term of this Lease ended and terminated by giving Tenant written notice of such intention, and if possession of the
Leased Premises is not surrendered, Landlord may reenter said premises. Landlord shall have, in addition to the remedy above provided,
any other right or remedy available to Landlord on account of any Tenant default, either in law or equity. Landlord shall use reasonable
efforts to mitigate its damages.

 

16. Quiet Possession.

 

Landlord covenants and warrants that upon performance by Tenant
of its obligations hereunder, Landlord will keep and maintain Tenant in exclusive, quiet, peaceable and undisturbed and uninterrupted
possession of the Leased Premises during the term of this Lease.

 

17. Condemnation.

 

If any legally, constituted authority condemns the Building
or such part thereof which shall make the Leased Premises unsuitable for leasing, this Lease shall cease when the public authority
takes possession, and Landlord and Tenant shall account for rental as of that date. Such termination shall be without prejudice
to the rights of either party to recover compensation from the condemning authority for any loss or damage caused by the condemnation.
Neither party shall have any rights in or to any award made to the other by the condemning authority.

 

    	 

    	 

    

 

18. Subordination.

 

Tenant accepts this Lease subject and subordinate to any mortgage,
deed of trust or other lien presently existing or hereafter arising upon the Leased Premises, or upon the Building and to any renewals,
refinancing and extensions thereof, but Tenant agrees that any such mortgagee shall have the right at any time to subordinate such
mortgage, deed of trust or other lien to this Lease on such terms and subject to such conditions as such mortgagee may deem appropriate
in its discretion. Landlord is hereby irrevocably vested with full power and authority to subordinate this Lease to any mortgage,
deed of trust or other lien now existing or hereafter placed upon the Leased Premises of the Building, and Tenant agrees upon demand
to execute such further instruments subordinating this Lease or attorning to the holder of any such liens as Landlord may request.
In the event that Tenant should fail to execute any instrument of subordination herein require d to be executed by Tenant promptly
as requested, Tenant hereby irrevocably constitutes Landlord as its attorney-in-fact to execute such instrument in Tenant's name,
place and stead, it being agreed that such power is one coupled with an interest. Tenant agrees that it will from time to time
upon request by Landlord execute and deliver to such persons as Landlord shall request a statement in recordable form certifying
that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force
and effect as so modified), stating the dates to which rent and other charges payable under this Lease have been paid, stating
that Landlord is not in default hereunder (or if Tenant alleges a default stating the nature of such alleged default) and further
stating such other matters as Landlord shall reasonably require.

 

19. Security Deposit.

 

The Security Deposit shall be held by Landlord without liability
for interest and as security for the performance by Tenant of Tenant's covenants and obligations under this Lease, it being expressly
understood that the Security Deposit shall not be considered an advance payment of rental or a measure of Landlord's damages in
case of default by Tenant. Unless otherwise provided by mandatory non-waivable law or regulation, Landlord may commingle the Security
Deposit with Landlord' s other funds. Landlord may, from time to time, without prejudice to any other remedy, use the Security
Deposit to the extent necessary to make good any arrearages of rent or to satisfy any other covenant or obligation of Tenant hereunder.
Following any such application of the Security Deposit, Tenant shall pay to Landlord on demand the amount so applied in order to
restore the Security Deposit to its original amount. If Tenant is not in default at the termination of this Lease, the balance
of the Security Deposit remaining after any such application shall be returned by Landlord to Tenant. If Landlord transfers its
interest in the Premises during the term of this Lease, Landlord may assign the Security Deposit to the transferee and thereafter
shall have no further liability for the return of such Security Deposit.

 

20. Notice.

 

Any notice required or permitted under this Lease shall be deemed
sufficiently given or served if sent by United States certified mail, return receipt requested, addressed as follows:

 

If to Landlord to:

 

New Mexico Fluid Systems Technologies

PO Box 91867, Albuquerque, NM 87199-1867

 

    	 

    	 

    

 

If to Tenant to:

 

Enerpulse, Inc

2451 Alamo Ave SE, Albuquerque, NM 87106

 

Landlord and Tenant shall each have the right from time to time
to change the place notice is to be given under this paragraph by written notice thereof to the other party.

 

21. Brokers.

 

Tenant represents that Tenant was not shown the Premises by
any real estate broker or agent and that Tenant has not otherwise engaged in, any activity which could form the basis for a claim
for real estate commission, brokerage fee, finder's fee or other similar charge, in connection with this Lease.

 

22. Waiver.

 

No waiver of any default of Landlord or Tenant hereunder shall
be implied from any omission to take any action on account of such default if such default persists or is repeated, and no express
waiver shall affect any default other than the default specified in the express waiver and that only for the time and to the extent
therein stated. One or more waivers by Landlord or Tenant shall not be construed as a waiver of a subsequent breach of the same
covenant, term or condition.

 

23. Memorandum of Lease.

 

The parties hereto contemplate that this Lease should not and
shall not be filed for record, but in lieu thereof, at the request of either party, Landlord and Tenant shall execute a Memorandum
of Lease to be recorded for the purpose of giving record notice of the appropriate provisions of this Lease.

 

24. Headings.

 

The headings used in this Lease are for convenience of the parties
only and shall not be considered in interpreting the meaning of any provision of this Lease.

 

25. Successors.

 

The provisions of this Lease shall extend to and be binding
upon Landlord and Tenant and their respective legal representatives, successors and assigns.

 

26. Consent.

 

Landlord shall not unreasonably withhold or delay its consent
with respect to any matter for which Landlord's consent is required or desirable under this Lease.

 

    	 

    	 

    

 

27. Performance.

 

If there is a default with respect to any of Landlord's covenants,
warranties or representations under this Lease, and if the default continues more than fifteen (15) days after notice in writing
from Tenant to Landlord specifying the default, Tenant may, at its option and without affecting any other remedy hereunder, cure
such default and deduct the cost thereof from the next accruing installment or installments of rent payable hereunder until Tenant
shall have been fully reimbursed for such expenditures, together with interest thereon at a rate equal to the lesser of twelve
percent (12%) per annum or the then highest lawful rate. If this Lease terminates prior to Tenant's receiving full reimbursement,
Landlord shall pay the unreimbursed balance plus accrued interest to Tenant on demand.

 

28. Compliance with Law.

 

Tenant shall comply with all laws, orders, ordinances and other
public requirements now or hereafter pertaining to Tenant's use of the Leased Premises. Landlord shall comply with all laws, orders,
ordinances and other public requirements now or hereafter affecting the Leased Premises.

 

29. Final Agreement.

 

This Agreement terminates and supersedes all prior understandings
or agreements on the subject matter hereof. This Agreement may be modified only by a further writing that is duly executed by both
parties.

 

30. Governing Law.

 

This Agreement shall be governed, construed and interpreted
by, through and under the Laws of the State of New Mexico.

 

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

 

	 /s/ Jeff Thompson	 
	[Landlord] Signature Block	 
	 	 
	 /s/ Bryan C. Templeton	 
	[Tenant] Signature Block

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