Document:

ex10-2.htm

Exhibit
    10.2
    GROUND
      LEASE

    

    BETWEEN

    

    THE
      CITY
      OF OAK RIDGE NORTH

    

    AND

    

    BIOFUELS
      POWER CORPORATION

    

    FOR
      GROUND GENERATION SITE

    

    

    
      
        
        

      

      
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    GROUND
      LEASE AGREEMENT

    

    
      	
              STATE
                OF TEXAS

            	
              §

            
	 	
              §

            
	
              COUNTY
                OF MONTGOMERY

            	
              §

            

    

    

    THIS
      AGREEMENT, made and entered into
      this

    

    THIS
      AGREEMENT, made and entered into
      this 1st day of August 2007 by and between The City of Oak Ridge North,
      hereinafter referred to as “Lessor”, and Biofuels Power Corporation, hereinafter
      referred to as “Lessee”.

    WHEREAS,
      Lessee desires to lease from
      Lessor and Lessor desires to lease to Lessee the real property described on
      Exhibit “A” attached hereto and made a part hereof, being described as the Land,
      Leased Premises, Premises, situated in Oak Ridge North, Montgomery County,
      Texas
      and

    WHEREAS,
      Lessee intends to construct
      certain improvements on the Land, said improvements described on attached
      Exhibit “B”.

    NOW,
      THEREFORE, subject to the terms,
      provisions and conditions hereinafter set forth, and in consideration of the
      covenants of payment and performance stipulated herein, Lessor does hereby
      lease, demise and let unto Lessee and Lessee, subject to the terms of Paragraph
      1 below, does hereby lease and rent from Lessor the real property described
      above, and the parties further agree as follows:

    1.           Conditions.  Lessee
      accepts the Leased Premises in an “As-Is,” “Where-Is” condition, after debris
      and vehicles are removed.

    2.           Term.  Subject
      to the terms of Paragraph 1, the primary term of this Lease shall be for a
      period of forty-four (44) months, said term to commence August 1, 2007 and
      terminate November 30, 2010.

    3.           Rental.  Lessee
      agrees to pay as base rental to Lessor a monthly rent of $3,500 per month,
      and
      which amounts shall be payable to Lessor at the address shown below for a term
      of forty-four (44) months.  The first monthly installment of rent
      shall be due and payable on the Commencement Date and a like monthly installment
      shall be due and payable on or before the 15th day of
      each
      succeeding calendar month thereafter.  If the Commencement Date should
      be a date other than the first day of a calendar month, the monthly rental
      set
      forth above shall be prorated to the end of that calendar month, and all
      succeeding installments of rent shall be payable on or before the 15th day of
      each
      succeeding calendar month during the demised term.

    4.           Renewal
      Options.  Lessor hereby grants to Lessee the right and option to
      extend the term of this Lease for tow (2) separate consecutive renewal terms
      of
      five (5) years each (the “Renewal Term” or “Renewal Terms”, as appropriate), the
      Renewal Terms to begin upon the expiration of the Primary Term or prior Renewal
      Term, provided that no Lessee Event of Default (as hereinafter defined in
      Paragraph 13) exists at such time.  All of the terms, provisions, and
      covenants of this Lease shall apply to each of the Renewal Terms, except that
      the rental amount be determined by parties at the time of said renewal
      option.  Lessee shall exercise each such option by delivering to
      Lessor written notice of its election to renew no later than one hundred ninety
      (190) days prior to the expiration of the Primary Term or Renewal Term, as
      is
      applicable.  Lessee’s rights under
      this Paragraph 4 shall terminate if (a) this Lease or Lessee’s right to
      possession of the Premises is terminated in accordance with this Lease in
      connection with the occurrence of a Lessee Event of Default, or (b) Lessee
      fails
      to timely exercise any of its options under this Paragraph 4, time being of
      the
      essence with respect to Tenant’s exercise thereof.

    
      
        
        

      

      
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    5.           Construction.  Approval
      of Plans and Specifications.  Within a period of thirty (30) days
      from the later of (i) the Effective Date (the date Lessor and Lessee executes
      this Agreement), (ii) the date on which Lessee receives all zoning, site plan
      and other similar approvals from applicable governmental authorities and Lessor,
      as applicable.

    

    Building:  The
      building will consist of a metal building approximately 40 feet by 60 feet
      with
      a concrete slab.  The building will be used to house the generation
      equipment for an environmental shelter and sound suppression.

    

    Access:  Gated
      access will be available from Alana Lane to the south, the fire line that runs
      along the rear of the shopping center to the north, and an access gate that
      will
      allow a thoroughfare from the lot lying to the west of the Biofuels Power
      site.

    

    Land
      and
      Pad Site:  The land located within the Biofuels Power site will be
      graded to better manage the sheet flow which crosses the street.  All
      grading will be done with consideration of the neighbors and other tenants
      in
      and around the complex.  (See photos in Exhibit “C”.)

    

    Drainage:  The
      City of Oak Ridge North has agreed to improve the drainage on Alana Lane to
      relieve some of the source of the runoff and sheet flow which negatively affects
      the Biofuels Power site and the rear access to the Robinson Road Shopping
      Center.

    

    
      	
               

            	
              6.

            	
              Liability
                Insurance.

            

    

    a.           Lessee
      shall maintain so called “all risk” fire and extended coverage insurance
      (including vandalism and malicious mischief insurance, and flood insurance)
      on
      the Improvements, with a limit of or in an amount not less than eighty percent
      (80%) of the replacement value thereof, less the cost of excavations,
      foundation, footings and underground tanks, conduits, pipes, pilings and other
      underground items.  Payments for losses shall be made solely to
      Lessee.

    b.           Lessee
      shall also insure against property damage and public liability

    c.           Tenant
      shall subscribe to the workers’ compensation law in the state in which the
      Premises are located and shall each maintain (at its sole cost and expense)
      workers’ compensation and employers’ liability insurance covering all of its
      employees as required of a subscriber to the relevant statutes in the state
      in
      which the Premises are located, in the amount of not less than FIVE HUNDRED
      THOUSAND DOLLARS ($500,000) per disease, and in the amount of not less than
      FIVE
      HUNDRED THOUSAND DOLLARS ($500,000) per disease aggregate.

    
      
        
        

      

      
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    7.           Rights
      of Leasehold Mortgagee.  Lessee, during the term of this Lease,
      shall not mortgage or otherwise encumber its leasehold estate or interest in
      any
      improvement hereafter situated upon the Land.

    8.           Maintenance
      and Repair.  Lessee shall maintain and keep the Lease Premises in
      good order, repair and condition, at Lessee’s own cost and
      expense.  Lessee further agrees to keep the Leased Premises
      continually in a neat, orderly, sanitary and respectable condition, free from
      any environmental contamination.

    9.           Equipment,
      Fixtures and Signs.  Lessee shall have the right to erect,
      install, maintain and operate on the Leased Premises such equipment, trade
      and
      business fixtures, and other personal property as Lessee may deem necessary
      or
      appropriate.  Any such installations shall not materially injure or
      deface the Improvements.  Lessee shall repair, at its sole cost and
      expense, any damage to the Leased Premises resulting from the removal of such
      personal property.

    10.           Lessee’s
      Property.  All merchandise, equipment, property and vehicles in or
      about the Leased Premises, shall be at Lessee’s sole risk, and Lessee does
      hereby no and forever release Lessor from any and all claims or damages unless
      caused by Lessor’s gross negligence.

    11.           Utilities.  Lessee
      shall pay all charges incurred for the use of utility services at the Leased
      Premises including, without limitation, gas, electricity, water, sanitary sewer,
      storm sewer, cable television, and telephone, impact, tap or connection fees
      associated with sewer and/or water service.

    12.           Damage
      by Casualty.  If during the term hereof the Leased Premises or any
      part thereof shall suffer damages for fire, explosion, providential means or
      other casualty this Agreement shall not be terminated thereby but shall remain
      in full force and effect without regard of the extent of such
      damage.

    13.           Default.

    a.           Each
      of the following events shall be a “Lessee Event of Default” under this
      Lease:

    i.           Lessee
      shall fail to pay any installment of rent hereby reserved or any other charges
      which are due hereunder as and when the same shall become due and shall not
      cure
      such default within seven (7) days after written notice thereof is given by
      Lessor to Lessee;

    ii.           Lessee
      shall fail to comply with any term, provision or covenant of this Lease, other
      than the payment of rent or any other charges which are due hereunder, and
      shall
      not cure such failure within thirty (30) days after written notice thereof
      is
      given by Lessor to Lessee (provided that if such default cannot reasonably
      be
      cured within thirty (30) days, then Lessee shall have an additional reasonable
      period of time (not to exceed ninety (90) days) within which to cure such
      default);

    iii.           Lessee
      shall be adjudged insolvent, make a transfer in fraud of creditors or make
      an
      assignment for the benefit of creditors;

    iv.           Lessee
      shall file a petition under any section or chapter of the Bankruptcy Reform
      Act
      of 1978, as amended, or under any similar law or statute of the United States
      or
      any state thereof, or Lessee shall be adjudged bankrupt or insolvent in
      proceedings filed against Lessee thereunder, or

    
      
        
        

      

      
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    v.           A
      receiver or trustee shall be appointed for all or substantially all of the
      assets of Lessee or Guarantor and Lessee or Guarantor shall not have had such
      appointment discharged within thirty (30) days after Lessee receives written
      notices of such appointment.

    b.           Upon
      the occurrence of any Lessee Event of Default, Lessor shall have the option
      to
      pursue any one or more of the following remedies without any notice or demand
      whatsoever:

    i.           Terminate
      this Lease, in which event Lessee shall immediately surrender the Premises
      to
      Lessor, and if Lessee fails to do so, Lessor may, without prejudiceto any other
      remedy which it may have for possession or arrearages in rent, enter upon and
      take possession of the Premises and expel or remove Lessee and any other person
      who may be occupying the Premises, or any part thereof, by force if necessary,
      without being liable to prosecution or for any claim for damages (including
      specifically any liability or duty under Section 93.002 of the Texas Property
      Code, which is specifically superseded hereby); and Lessee agrees to pay to
      Lessor on demand the amount of all loss and damage which Lessor may suffer
      by
      reason of such termination including without limitation, accrued rent and
      interest thereon pursuant to this Lease, the reasonable cost of recovering
      the
      Premises and the reasonable costs of reletting the Premises (including, without
      limitation, advertising costs, brokerage fees, leasing commissions, reasonable
      attorneys’ fees and reasonable refurbishing costs), whether through inability to
      relet the Premises on satisfactory terms or otherwise;

    ii.           Enter
      upon and take possession of the Premises (without terminating the Lease) and
      expel or remove Lessee and other persons who may be occupying the Premises,
      or
      any part thereof, by force if necessary, without being liable to prosecution
      or
      for any claim for damages (including specifically any liability or duty under
      Section 93.002 of the Texas Property Code, which is specifically superseded
      hereby), and relet the Premises, as Lessee’s agent, and receive the rent
      therefore; and Lessee agrees to pay Lessor on demand any deficiency that may
      arise by reason of such reletting.  Lessee hereby waives any right to
      claim damages for such re-entry and repossession, including any rights granted
      to Lessee by Chapter 93 of the Texas Property Code.  In the event of a
      termination of Lessee’s possession of the Premises under this Paragraph 13(b)
      and notwithstanding anything in Section 93.002 of the Texas Property Code to
      the
      contrary, Lessor shall have no obligation whatsoever to tender to Lessee a
      key
      for new locks installed in the Premises and Lessee shall have no further right
      to possession of the Premises.  The provisions contained in the
      preceding sentence shall override and control any inconsistent conflicting
      provisions of Section 93.002 of the Texas Property Code.  In the event
      Lessor shall elect so to relet, then rent received by Lessor from such reletting
      shall be applied first, to the payment of any indebtedness other than rent
      due
      hereunder from Lessee to Lessor (in such order as Lessor shall designate),
      second, to the payment of any cost of such reletting,
      including, without limitation, reasonable refurbishing costs, reasonable
      attorneys’ fees, advertising costs, brokerage fees and leasing commissions, and
      third, to the payment of rent due and unpaid hereunder (in such order as Lessor
      shall designate).  Lessor shall not be responsible or liable for any
      failure, and Lessee hereby waives any obligation on the part of Lessor, to
      relet
      the Premises or any part thereof or to collect any rent due upon any such
      reletting.  No re-entry or taking of possession of the Premises by
      Lessor pursuant to this paragraph shall be construed as an election on Lessor’s
      part  to terminate this Lease unless a written notice of such
      termination is given to Lessee pursuant to paragraph and, notwithstanding any
      such reletting without termination, Lessor may at any time thereafter elect
      to
      terminate this Lease for such previous breach.  If Lessor relets the
      Premises (it being understood and agreed that Lessor shall have no obligation
      whatsoever to relet the Premises), either before or after the termination of
      this Lease, for a rental greater than the rent provided in this Lease, then
      for
      that portion of the Premises that is subject to such new lease, all such excess
      rentals shall be and remain the exclusive property of Lessor, and Lessee shall
      not be, at any time, entitled to recover said excess rental;
      or

    
      
        
        

      

      
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    iii.           Enter
      upon the Premises, without being liable to prosecution of for any claim for
      damages, and do whatever Lessee is obligated to do under the terms of this
      Lease; and the Lessee agrees to reimburse Lessor on demand for any reasonable
      and necessary expenses which Lessor may incur in thus effecting compliance
      with
      Lessee’s obligations hereunder.  No repossession of or re-entering
      upon the Premises or any part thereof pursuant to this Paragraph 13(b) or
      otherwise and no reletting of the Premises or any part thereof pursuant to
      this
      Paragraph 13(b) shall relieve Lessee or any Guarantor of its liabilities and
      obligations hereunder, all of which shall survive such repossession or
      re-entering.  Pursuant of any of the foregoing 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 Lessor hereunder or of
      any
      damage accruing to Lessor by reason of the violation of any of the terms,
      provisions and covenants herein contained.  Forbearance by Lessor to
      enforce one or more of the remedies herein provided upon the occurrence of
      a
      Lessee Event of Default shall not be deemed or construed to constitute a waiver
      of such default.

    c.           Each
      of the following events shall be a “Lessor Event of Default” under this
      Lease:

    i.           Lessor
      shall fail or refuse to pay any sum of money payable hereunder when due, and
      the
      failure or refusal continues for thirty (30) days after written notice thereof
      is given by Lessee to Lessor; or

    ii.           Lessor
      shall fail or refuse to comply with any term, provision, or covenant of this
      Lease, other than provisions for the payment of money, and does not cure the
      failure or refusal within thirty (30) days after
      written notice thereof is given by Lessee to Lessor (provided that is such
      default cannot reasonably be cured within thirty (30) days, then Lessor as
      the
      case may be, shall have an additional reasonable period of time within which
      to
      cure such default).

    
      
        
        

      

      
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    d.           Upon
      the occurrence of any Lessor Event of Default, Lessee shall have the option
      to
      pursue any one or more of the following remedies without any notice or demand
      whatsoever:

    i.           Cure
      the Lessor Event of Default and in connection therewith pay or incur reasonable
      expenses.  Notwithstanding the foregoing, Lessee shall not have such
      right to cure a Lessor Event of Default set forth in Paragraph 13(c)(ii) in
      the
      event Lessor or their mortgagee takes action to cure such default within the
      cure period therein provided, but is unable, by reason of the nature of the
      work
      involved, to cure the same within such period, provided Lessor or their
      mortgagee (whoever commences such work) continues such work thereafter
      diligently and without unnecessary delays.  Additionally, Lessee shall
      have the right to remedy any default of an emergency nature, in the event Lessor
      or their morrgagee fails to commence to cure any default creating an emergency
      situation promptly upon being given notice which is reasonable under the
      circumstances, and Lessee shall have the right to remedy such a default without
      notice (if the giving of notice is not reasonably practicable) in the event
      of
      an emergency.  All sums so expended or obligations incurred by Lessee
      in connection with the foregoing, shall be paid by Lessor to Lessee within
      five
      (5) days after demand.

    Pursuant
      to any of the foregoing remedies shall not preclude pursuit of any of the other
      remedies provided by law, nor shall pursuit of any remedy herein provided
      constitute a forfeiture or waiver of any damage accruing to Lessee by mason
      of
      the violation of any of the terms, provisions, and covenants herein
      contained.  Forbearance by Lessee to enforce one or more of the
      remedies herein provided upon the occurrence of a Lessor Event of Default shall
      not be deemed or construed to constitute a waiver of such default.

    
      	
               

            	
              14.

            	
              Assignment
                of Subletting.

            

    

    a.           Tenant
      shall not assign this Lease or sublet the whole or any part of the Premises
      without the prior written consent of Landlord, which consent Landlord shall
      not
      unreasonably withhold, condition or delay, provided (i) no Tenant Event of
      Default (hereinafter defined) has occurred and is continuing at the time of
      the
      request for consent to the assignment or sublease, (ii) the use to be made
      of
      the Premises by the assignee or subtenant shall be permitted by
      Paragraph  hereof, (iii) the assignee or subtenant shall assume in
      writing the performance of all of the terms, provisions and covenants of this
      Lease on the part of Tenant to be kept and performed, and (iv) shall deliver
      to
      Landlord within fifteen (15) days (or as soon thereafter as is reasonably
      practicable) after the assignment or subletting an executed duplicate of such
      agreement, together with a duly executed assumption agreement.  Any
      such assignment or subletting shall be otherwise
      subject to and upon all of the terms, provisions and covenants of this
      Lease.

    
      
        
        

      

      
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    b.           No
      assignment or subletting or collection of rent from the assignee or subtenant
      shall be deemed to constitute a novation or in any way release Tenant from
      further performance of its obligations under this Lease, and Tenant shall
      continue to be liable under this Lease for the balance of the Primary Term
      and
      any Renewal Term with the same force and effect as if no such assignment had
      been made.

    15.           Warranty.  Lessor
      warrants that it has full right to execute and to perform this Agreement and
      to
      grant the estate demised and that Lessee, upon payment of the requirements
      and
      performance of the terms, conditions, covenants and agreements contained in
      the
      Lease, shall peacefully and quietly have, hold and enjoy the Leased Premises
      during the full term of this Agreement and any extension or renewal thereof,
      without interruption by Lessor or any person or persons lawfully or equitably
      claiming by, through, or under Lessor.

    16.           Compliance
      with the Law.  Lessee shall, at its sole cost and expense,
      throughout the original term of the Lease or any renewal thereof, comply with
      all governmental laws, ordinances and regulations applicable to the use of
      the
      Lease Premises including, without limitation, environmental laws and
      regulations, the Americans with Disabilities Act of 1990, and all rules, orders
      and regulations of the National Board of Fire Underwriters or Sublessor’s fire
      insurance rating organization or other bodies exercising similar functions
      in
      connection with the prevention of fire or the correction of hazardous
      conditions, which apply to the Leased Premises.

    Lessee
      covenants and agrees that it will not use or allow the Lease Premises to be
      used
      for the storage, use, treatment or disposal of any “hazardous substance” as
      defined under either the Comprehensive Environmental Response, Compensation
      and
      Liability Act of 1980, the Resource Conservation and Recover Act of 1976, the
      Superfund Amendments and Reauthorization Act of 1986, the Occupational Safety
      and Health Act, and any amendments thereto.  Lessee’s agreements under
      this paragraph 16 shall survive termination of this Lease.  Lessee
      shall, at its sole cost and expense, perform any “clean up” which may be
      required by any governmental or quasi-governmental agency and indemnify Lessor
      and Lessor’s mortgagee from any damage, loss or injury.

    17.           Time
      of the Essence.  It is mutually agreed that time is of the essence
      of this Agreement and that all times herein provided shall be strictly adhered
      to.

    18.           Non-Disturbance.  Provided
      Lessee is given a non-disturbance agreement by a future mortgagee or new
      lienholder, Lessee will agree to expressly subordinate its rights as Lessee
      hereunder to such mortgagee or lienholder.  So long as Lessee is not
      in default hereunder, should such mortgage be foreclosed, this Agreement shall
      not be affected and a purchaser at such foreclosure sale shall recognize
      Lessee’s right to continue to occupy the Leased Premises and to exercise and
      enjoy all rights granted hereunder.

    19.           Waiver
      of Subrogation.  Anything in this Agreement to the contrary
      notwithstanding, Lessor and Lessee each hereby waives any and all rights of
      recovery, claim, action or cause of action against the other, its agents,
      officers, or employees for any loess or damage to or loss of any part of the
      land or any improvements thereto, or for damage to or loss of any personal
      property of such party therein, by reason of fire, the elements,
      or any other perils to the extent against which such matters are insured under
      the terms of the standard fire and extended coverage insurance policies, which
      either Lessee or Lessor may at his option elect to obtain, regardless of cause
      or origin, and each party hereto covenants that to the extent permitted by
      the
      laws and insurance regulations of the State of Texas, without penalty or extra
      premium charge on account thereof, no insurer shall hold any right of
      subrogation against such other party, but only to the extent that such waiver
      would not have the effect of invalidating any insurance coverage of Lessor
      or
      Lessee.

    
      
        
        

      

      
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    20.           Condemnation
      and Loss or Damage.  Lessor agrees that if 25% or more of the
      Lease Premises shall be taken or condemned (or sold in lieu thereof) for any
      public purpose to such an extent as to render the Leased Premises untenantable,
      this Agreement shall, at Lessee’s option, forthwith cease and terminate upon
      written notification from Lessee to Lessor.  All proceeds from any
      taking or condemnation (or sale in lieu thereof) of the Leased Premises shall
      belong to and be paid to Lessor.

    21.           Surrender.  The
      Lessee shall on the last day of term or any renewal and extension thereof,
      or
      upon the sooner termination of the term, peaceably and quietly surrender the
      Leased Premises with any improvements to the Lessor, in good condition and
      repair, reasonable wear and tear thereof excepted.

    22.           Holding
      Over by Lessee.  Should Lessee fail to vacate the Leased Premises
      or any part thereof after the expiration of the Primary Term hereof, then unless
      otherwise agreed in writing, such failure to vacate shall constitute and be
      construed as a tenancy from month-to-month (at 150% of the monthly installment
      of Base Rent for the immediately preceding calendar month) and shall otherwise
      be upon the same terms and conditions as set forth in this Lease.

    23.           Waiver.  A
      waiver by Lessor or Lessee of any default or breach hereunder shall not be
      construed to be a continuing waiver or such default or breach, nor as a waiver
      or permission, express or implied, of any other or subsequent default or
      breach.

    24.           Notices.  Any
      notice hereunder shall be sufficient if sent by registered mail to:

    
      	
              LESSEE:

            	
              Biofuels
                Power Corporation

            
	 	
              10003
                Woodloch Forest Drive, Suite 900

            
	 	
              The
                Woodlands, TX 77380

            
	
              LESSOR:

            	
              The
                City of Oak Ridge North

            
	 	
              27424
                Robinson Road

            
	 	
              Oak
                Ridge North, TX 77385

            

    

    25.           Successor.  The
      provisions, covenants and conditions of this Lease shall bind and inure to
      the
      benefit of the heirs, legal representative, successors and assigns of each
      of
      the parties hereto.

    26.           Right
      to Terminate.  Lessor and/or Lessee, upon written notification to
      Lessor, shall have the right to terminate this Ground Lease if Lessee is unable
      to receive a building permit within sixty (60) days from execution of this
      Ground Lease Agreement by Lessor and Lessee.  If Lessee does not
      notify the Lessor in writing of the termination, then this Ground Lease remains
      in full force and effect.

    27.           Liability
      of Trustee.  All persons, including the Tenant under this Lease,
      dealing with the Landlord in his capacity as Trustee, must look solely to the
      assets and property of the Trust for the satisfaction of any claim, damages
      or
      liability arising out of or
      resulting from the execution, performance, or non-performance by the landlord
      of
      its obligations under this Lease.  Landlord shall have no personal
      liability for the performance of failure of performance of any covenant,
      agreement or obligation of the Landlord under the terms of this
      Lease.  Any suit or claim arising out of or resulting from this Lease,
      if made, shall be instituted against Landlord solely in his representative
      capacity and not in his capacity as an individual.

    
      
        
        

      

      
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    EXECUTED
      in duplicate originals this 1st day of August, 2007.

    

    

    

    
      	 
              
              LESSEE:

            	
              /s/
                Steven S. McGuire

            
	 	
              Steven
                S. McGuire for

            
	 	
              Biofuels
                Power Corporation

            
	 	 
	 	 
	 
              
              LESSOR:

            	
              /s/
                Fred O'Connor

            
	 	
              Fred
                O’Connor, Mayor

            
	 	
              The
                City of Oak Ridge North

            

    

    

    

    

    
      
        
        

      

      
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    ACKNOWLEDGEMENTS

    

    
      	
              STATE
                OF TEXAS

            	
              §

            
	 	
              §

            
	
              COUNTY
                OF HARRIS

            	
              §

            

    

    

    BEFORE
      ME, the undersigned authority on
      this day personally appeared Steven S. McGuire known to me to be the
      person whose name is subscribed above, being by me duly sworn did say that
      he is
      the person whose signature appears above.

    

    TO
      CERTIFY WHICH WITNESS my official
      signature and seal of office this 1st day of August
      2007.

    

    

    

    
      	 	/s/
              Kristi Bomar
	 	
              Notary
                Public in and for

            
	 	
              Harris
                County, Texas

            
	 	 
	 	
              My
                Commission Expires: 10-3-08

            

    

    

    ACKNOWLEDGEMENTS

    

    
      	
              STATE
                OF TEXAS

            	
              §

            
	 	
              §

            
	
              COUNTY
                OF MONTGOMERY

            	
              §

            

    

    

    BEFORE
      ME, the undersigned authority on
      this day personally appeared Fred O'Connor known to me to be the person
      whose name is subscribed above, being by me duly sworn did say that he is the
      person whose signature appears above.

    

    TO
      CERTIFY WHICH WITNESS my official
      signature and seal of office this 1st day of August,
      2007.

    

    
      

      

      
        	 	/s/
                Sylvia Jones
	 	
                Notary
                  Public in and for

              
	 	
                Harris
                  County, Texas

              
	 	 
	 	
                My
                  Commission Expires: Jan. 10,
                  2008

              

      

      

    

    
      
        
        

      

      
        -11-ex10-3.htm

Exhibit
    10.3
    COMMERCIAL
      LEASE

    

    Preamble
      – Parties and Premises  Bullet Concrete Materials. Inc.
“Lessor,” hereby leases to Texoga Technologies Corporation, referred to in this
      lease as “Lessee,” those certain premises, referred to as “the Premises,” the
      following described real property in Montgomery County, Texas to
      wit:

    

    The
      North
      40 feet in lot 10 and lot 21, all of lot 11 and 22, Block 4, the North 90 feet
      of never opened Berry Street lying between Block 4 and Block 8, the North 20
      feet of Lot 9 and Lot 20, all of lot 10, 11, 21, and 22, Block 8 and the North
      120 feet of never opened Lee Street lying between Block 8 and Block 12 all
      situated in the Townsite of Tamina, Montgomery County, Texas according to the
      Map thereof recorded in the Montgomery County Deed Records in Volume 34 page
      281
      and 282, containing 1.157 acres of land, more or less (copy of plat
      attached)

    

    Reservation  This
      lease is made on the above described property subject to Lessor’s and its
      successors and assigns reservation and retention of a right-of-way, servitude
      and easement fifty (50) feet in width for the location, construction,
      reconstruction, repairs, operation, inspection and maintenance of railroad
      facilities now or in the future which Lessor and/or its successors and assigns
      may desire.

    Lessee
      agrees not to construct any
      structure on the leased premises without the express written consent of the
      Lessor.

    Lessor
      reserves the right to furnish
      ready mix concrete poured on the leased premises.

    

    Term  The
      term of this lease shall be for the period of 48 months commencing on the 1st
      of
      May 2007, and ending at 12:01 a.m. 48 months later, unless sooner terminated
      as
      herein provided.

    

    Rent  Lessee
      agrees to pay to Lessor as rent for the use and occupancy of the premises the
      sum of money reflected in the rental schedule that follows on the 1st day of
      every month
      commencing with May 1, 2007, at the office of Lessor or such other place as
      Lessor may designate by written notice given to Lessee.

    

    Rental
      Schedule

    

    
      	
              Commencing
                on May 1, 2007

            	 	
              $2,620.80
                / month

            
	
              Commencing
                on May 1, 2008

            	 	
              $2,725.63
                / month

            
	
              Commencing
                on May 1, 2009

            	 	
              $2,834.65
                / month

            
	
              Commencing
                on May 1, 2010

            	 	
              $2,948.04
                / month

            

    

    

    It
      is
      agreed that this real property shall be used to construct an electricity
      generating machine no more than one (1) 30,000 gallon storage
      tank.  If Lessee should need to construct additional storage tanks on
      the property, it should notify Lessor of its intent and begin to pay additional
      rent in the amount of $500.00 per month, per tank with a 4% per year increase
      in
      rental each year.  The increase beginning on the 1st day of
      the month
      in which construction of each additional tank begins.  Access to the
      leased property shall be across
      Lots 10 and 12, Block 12, Townsite of Tamina and Lots 12 and 13, Shady Meadows,
      Section 1, subdivision leased to Texoga Technologies
      Corporation.

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    

    Special  Lessee
      agrees to fully comply with any permitting or registration required by Local,
      State and Federal Regulations for the proposed operation, and to furnish Lessor
      with a copy of same.  Lessee agrees to provide to Lessor a written
      spill prevention and response plan to the Lessor within 20 days of the start
      of
      this lease.  Lessee agrees to provide security fencing and spill
      barriers sufficient to insure that any spill will be contained on the leased
      premises.  If any spilled or discharged material, caused by Lessee,
      shall leave the leased premises and encroach on adjacent land this lease shall
      terminate effective on the last day of the month that such encroachment occurs
      notwithstanding any other provision contained in this lease.  Lessee
      shall furnish soil test reports made on leased premises to Lessor.

    

    Utilities  Any
      cost to prepare the electrical service for use by the Lessee shall be at the
      sole cost of the Lessee.  Any cost of replacing lamps or ballasts or
      disconnects or wiring shall be at the sole cost of the Lessee.  All
      electrical services shall be maintained according to all applicable
      codes.

    

    Hold
      Over  Should Lessee hold over and continue in possession of
      the premises after expiration of the term of this lease or any extension
      thereof, Lessee’s continued occupancy of the premises shall be considered a
      month-to-month tenancy subject to all the terms and conditions of this
      lease.

    

    Use
      of Premises  The premises shall be used for generating
      electricity by Lessee and for not other use or uses without the express written
      consent of Lessor.

    

    Prohibited
      Uses  Lessee shall not commit or permit the commission of any
      acts on the premises nor use or permit the use of the premises in any way
      that:

    

    
      	
               

            	
              a)

            	
              will
                increase the existing rates for or cause cancellation of any fire,
                casualty, or liability policy insuring the
                premises.

            

    

    
      	
               

            	
              b)

            	
              violates
                or conflicts with any law, statute, ordinance, or governmental rule
                or
                regulation, whether now in force or hereinafter enacted, governing
                the
                premises.

            

    

    
      	
               

            	
              c)

            	
              obstructs
                or interferes with the rights of other tenants or occupants on site
                where
                the premises are located or injures or annoys them;
                or

            

    

    
      	
               

            	
              d)

            	
              constitutes
                the commission of waste on the premises or the commission or maintenance
                of a nuisance; or

            

    

    
      	
               

            	
              e)

            	
              violates
                any environmental rule, regulation, or law, or results in the
                contamination of the leased premises or any land surrounding or near
                to
                the leased premises by the discharge, intentional placement or spillage
                of
                material which Lessee may allow, permit, or suffer to be present
                on the
                lease premises; or

            

    

    
      	
               

            	
              f)

            	
              creates
                a noise level outside of the perimeter of the leased property greater
                than
                85 decibels in any 8-hour weighted average in accordance with OSHA
                Safety
                and Health Standard (29 CFR 1910.95);
                or

            

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              g)

            	
              blows
                air or exhaust fumes onto or  across land adjacent to the leased
                premises.

            

    

    

    Alterations  Lessee
      shall not make or permit any other person to make any major alterations to
      the
      premises without the prior written consent of Lessor.  Should Lessor
      consent to the making of any alternations to the premises by Lessee, the
      alterations shall be made at the sole cost and expense of Lessee by a contractor
      or other person selected by Lessee and approved in writing before work commences
      by Lessor.  Any and all alterations, additions, or improvements made
      to the premises shall on expiration or sooner termination of this lease, become
      the property of Lessor and remain on the premises; provided, however, that
      on
      expiration or sooner termination of this lease and written demand being given
      by
      Lessor, Lessee shall at Lessee’s sole cost and expense remove all alterations,
      additions, and improvements made to the premises by Lessee and pay all costs
      of
      repairing any damages to the premises caused by their removal.

    

    Maintenance
      and Repairs  Lessee admits, by entering into possession under
      this lease, that the premises are now in a condition satisfactory to
      Lessee.  Lessee at all times during the term of this lease and any
      renewal or extension thereof, maintain, at Lessee’s sole cost and expense, the
      premises, and every part of the premises, in a good, clean, and safe condition,
      and shall on expiration or sooner termination of this lease surrender the
      premises to Lessor in as good condition and repair as they are in on the date
      of
      this lease, reasonable wear and tear and damage by the elements
      excepted.  Lessee hereby waives any right to make repairs to the
      premises at the expense of Lessor as provided by any law or statute now or
      hereafter enacted.

    

    Inspection
      by Lessor  Lessee shall permit Lessor or Lessor’s agents,
      representatives, or employees to enter the premises at all reasonable times
      for
      the purpose of inspecting the premises to determine whether Lessee is complying
      with the terms of this lease and for the purpose of doing other lawful acts
      that
      may be necessary to protect Lessor’s interest in the premises under this
      lease.

    

    Personal
      Property Taxes  Lessee shall pay before they become
      delinquent all taxes, assessments, or other charges levied or imposed by any
      governmental entity on the furniture, trade fixtures, appliances, and other
      personal property placed by Lessee in, on, or about the premises including,
      without limiting the generality of the other terms used in this section, any
      shelves, counters, vaults, vault doors, wall safes, partitions, fixtures,
      machinery, plant equipment, office equipment, television or radio antennas,
      or
      communication equipment brought on the premises by Lessee.

    

    Real
      Property Taxes  All real property taxes at the present
      valuation and/or rate will be paid by Lessor.  All increases in Real
      Property Taxes after the start date of this lease, shall be paid by Lessee
      to
      the Lessor after written notices to Lessee by Lessor.

    

    Destruction
      of Premises  Should the premises or the Building of which
      they are a part be damaged or destroyed by any cause  not the fault of
      Lessee, Lessor or Lessee shall have the option to repair the premises, or to
      cancel the lease without damages to either Lessee or Lessor.

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    

    Condemnation
      of Premises  Should all or any part of the premised be taken
      by any public or quasi-public agency or entity under the power of eminent domain
      during the term of this lease:

    

    
      	
               

            	
              a)

            	
              either
                Lessor or Lessee may terminate this lease by giving the other 30
                days
                written notice of termination; provided, however, that Lessee cannot
                terminate this lease unless the portion of the premises taken by
                eminent
                domain is so extensive as to render the remainder of the premises
                useless
                for the uses permitted by this
                lease;

            

    

    
      	
               

            	
              b)

            	
              any
                and all damages and compensation awarded or paid because of the taking,
                except for amounts paid Lessee for moving expenses or for damage
                to any
                personal property or trade fixtures owned by Lessee, shall belong
                to
                Lessor, and Lessee shall have no claim against Lessor or the entity
                exercising eminent domain power for the value of the unexpired term
                of
                this lease;

            

    

    
      	
               

            	
              c)

            	
              should
                only a portion of the premises be taken by eminent domain and neither
                Lessor nor Lessee terminates this lease, the rent thereafter payable
                under
                this lease shall be reduced by the same percentage that the floor
                area of
                the portion taken by eminent domain bears to the floor area of the
                entire
                premises; and

            

    

    

    No
      Assignment or Subleasing  Lessee shall not encumber, assign,
      or otherwise transfer this lease, any right or interest in this lease, or any
      right or interest in the premises without the prior express written consent
      of
      Lessor.  Neither shall Lessee sublet the premises or any part thereof
      or allow any other persons, other than Lessee’s agents and servants, to occupy
      or use the premises or any part thereof without the prior written consent of
      Lessor.

    

    Indemnity  Lessee
      shall indemnify and hold Lessor and the property of Lessor, including the
      premises, free and harmless from any and all liability, claims, loss, damages
      or
      expenses, including counsel fees and costs, arising by reason of the death
      or
      injury of any person, including Lessee or any person who is an employee or
      agent
      of Lessee, or by reason of damage to or destruction of any property, including
      property owned by Lessee or any person who is an employee or agent of Lessee,
      caused or allegedly caused by:

    

    
      	
               

            	
              a)

            	
              any
                cause whatsoever while such person or property is in or on the premises
                or
                in any way connected with the premises or with any personal property
                on
                the premises;

            

    

    
      	
               

            	
              b)

            	
              some
                condition of the premises;

            

    

    
      	
               

            	
              c)

            	
              some
                act or omission on the premises of Lessee or any person in, on, or
                about
                the premises with the permission of Lessee;
                or

            

    

    
      	
               

            	
              d)

            	
              any
                matter connected with Lessee’s occupation and use of the
                premises.

            

    

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    Liability
      Insurance  Lessee shall, at its own cost and expense, secure
      within 10 days and maintain during the entire term of this lease and any
      renewals or extensions of such term a broad form comprehensive coverage policy
      of public liability insurance issued by an insurance company acceptable to
      Lessor and insuring Lessor against loss or liability caused
      by
      or connected with Lessee’s occupation and use of the premises under this lease
      in amounts not less than:

    

    
      	
               

            	
              a)

            	
              $1,000,000
                for injury to or death of one person and, subject to such limitation
                for
                the injury or death of one person, of not less than $2,000,000 for
                injury
                to or death of two or more persons as a result of any one accident
                or
                incident; and

            

    

    
      	
               

            	
              b)

            	
              $50,000
                for damage to or destruction of any property of
                others.

            

    

    
      	
               

            	
              c)

            	
              Environmental
                insurance in the amount of
                $2,000,000.

            

    

    

    Trade
      Fixtures  Any trade fixtures, equipment, inventory, or
      supplies that are not removed from the leased premises by Lessee 60 days after
      this lease’s expiration or sooner termination, regardless of cause, shall be
      deemed abandoned by Lessee and shall automatically become the property of Lessor
      as owner of the real property.  This is not intended to be a penalty
      provision, but rather a provision to hasten Lessor’s access to and renewal
      possession of its premises upon the termination of this lease to which Lessee
      agrees.

    

    Acts
      Constituting Breaches by Lessee  Lessee shall be guilty of a
      material default and breach of this lease should:

    

    
      	
               

            	
              a)

            	
              any
                rent be unpaid when due and remain unpaid for 15 days after written
                notice
                to pay such rent or surrender possession of the premises has been
                given to
                Lessee by Lessor:

            

    

    
      	
               

            	
              b)

            	
              Lessee
                default in the performance of or breach any provision, covenant,
                or
                condition, or condition of this lease other than one for the payment
                of
                rent and such default or breach is not cured within 15 days after
                written
                notice thereof is given by Lessor to
                Lessee:

            

    

    
      	
               

            	
              c)

            	
              Lessee
                breach this lease and abandon the premises before expiration of the
                term
                of this lease;

            

    

    
      	
               

            	
              d)

            	
              a
                receiver be appointed to take possession of all or substantially
                all of
                Lessee’s property and not be discharged within 20 days after his or her
                appointment;

            

    

    
      	
               

            	
              e)

            	
              Lessee
                make a general assignment for the benefit of creditors;
                or

            

    

    
      	
               

            	
              f)

            	
              execution
                or attachment be levied on all or substantially all of Lessee’s property
                and assets and not be discharged within 20
                days.

            

    

    

    Lessor’s
      Remedies for Lessee’s Default  Should Lessee be guilty of a
      material default and breach of this lease as defined in this lease, Lessor,
      in
      addition to any other remedies given Lessor by law or equity, may:

    

    
      	
            	
              a)

            	
              continue
                this lease in effect by not terminating Lessee’s right to possession of
                the premises and thereby be entitled enforce all Lessor’s right to recover
                the rent specified in this lease as it becomes due under this
                lease;

            

    

    
      	
            	
              b)

            	
              terminate
                Lessee’s right to possession of the premises, thereby terminating this
                lease, and recover from Lessee:

            

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    
      	
            	
              1)

            	
              the
                worth at the time of award of the unpaid rent which had been earned
                at the
                time of the termination of the
                lease;

            

    

    
      	
               

            	
              2)

            	
              the
                worth at the time of award of the amount by which the unpaid rent
                which
                would have been earned after termination of the lease until the time
                of
                award exceeds the amount of rental loss that Lessee proves could
                have been
                reasonably avoided;

            

    

    
      	
               

            	
              3)

            	
              the
                worth at the time of award of the amount by which the unpaid rent
                for the
                balance of the term of award exceeds the amount of rental loss that
                Lessee
                proves could be reasonably avoided;
                and

            

    

    
      	
               

            	
              4)

            	
              any
                other amount necessary to compensate Lessor for all detriment
                approximately caused by Lessee’s failure to perform Lessee’s obligations
                under this lease.

            

    

    
      	
               

            	
              c)

            	
              in
                lieu of, or in addition to, bringing an action for any or all of
                the
                recoveries described in this lease, bring an action to recover and
                regain
                possession of the premises in the manner provided by the laws of
                Texas.

            

    

    

    Waiver
      of Breach  The waiver by Lessor of any breach by Lessee of
      any of the provisions if this lease shall not constitute a continuing waiver
      or
      a waiver of any subsequent breach by Lessee either of the same or another
      provision of this lease.

    

    Force
      Majeure – Unavoidable Delays  Should the performance of any
      act required by this lease to be performed by either Lessor or Lessee be
      prevented or delayed by reason of an act of God, strike, lockout, labor
      troubles, inability to secure materials, restrictive governmental laws or
      regulations, or any other cause, except financial inability, not the fault
      of
      the party required to perform the act, the time for performance of the act
      will
      be extended for a period equivalent to the period of delay and performance
      of
      the act during the period of delay will be excused; provided, however, that
      nothing contained in this section shall excuse the prompt payment of rent by
      Lessee as required by this lease or the performance of any act rendered
      difficult solely because of the financial condition of the party, Lessor or
      Lessee, required to perform the act.

    

    Attorneys’
      Fees  Should any litigation or arbitration be commenced
      between the parties to this lease concerning the premises, this lease, or the
      rights and duties of either in relation thereto, the party, Lessor or Lessee,
      prevailing in such litigation or arbitration shall be entitled, in addition
      to
      such other relief as may be granted, to a reasonable sum for its attorneys
      fees.

    

    Notices  Except
      as otherwise expressly provided by law, any and all notices or other
      communications required or permitted by this lease or by law to be served on
      or
      given to either party hereto by the other party hereto shall be in writing
      and
      shall be deemed duly served and given when personally delivered to (any member
      of) the party to whom they are directed, or in lieu of such personal service
      when deposited in the United States mail, first-class postage prepaid, addressed
      to Lessee at 10003 Woodloch Forest Drive, Suite 900, The Woodlands, Texas 77380
      or to Lessor at 9393 Broadway, Conroe, Texas 77385.  Either party,
      Lessee or Lessor, may change his address for the purpose of this section by
      giving written notice of such change to the other party in the manner provided
      in this section.

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    

    Binding
      on Heirs and Successors  This lease shall be binding on and
      shall inure to the benefit of the heirs, executors, administrators, successors,
      and assigns of the parties hereto, Lessor and Lessee, but nothing in this
      section contained shall be construed as a consent by Lessor to any assignment
      of
      this lease or any interest therein by Lessee.

    

    Partial
      Invalidity  Should any provision of this lease be held by a
      court of competent jurisdiction to be either invalid, void or unenforceable,
      the
      remaining provisions of this lease shall remain in full force and effect
      unimpaired by the holding.

    

    Sole
      and Only Agreement  This instrument constitutes the sole and
      only agreement between Lessor and Lessee respecting the premises, the leasing
      of
      the premises to Lessee, or the lease term herein specified, and correctly sets
      forth the obligations of Lessor and Lessee to each other as of its
      date.  Any agreements or representations respecting the premises or
      their leasing by Lessor to Lessee not expressly set forth in this instrument
      are
      void.

    

    Time
      of Essence  Time is expressly declared to be the essence of
      this lease.

    

    EXECUTED
      on April 27, 2007 at The Woodlands, Texas.

    

    LESSOR

    Bullet
      Concrete Materials, Inc.

    

    

    

    By: /s/
      Harold Denton, Jr.

    Harold
      Denton, Jr., President

    

    LESSEE

    Texoga
      Technologies Corporation

    

    

    

    
      By: /s/
        Steven S. McGuire
Steven
      S.
      McGuire, Chief Executive Officer

    

    

    
      
        
        

      

      
        -7-

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