Document:

Agreement
                  on the Lease of Non-Residential
                  Premises

              

      

    

     

     

    concluded
      on the below stated date pursuant to Act No. 116/1990 Coll., on lease and
      sublease of non-residential premises, as amended,

    hereinafter
      referred to as “Agreement”

    

    

    between

    

    

    

    Multidisplay
      s.r.o.

    a
      company
      existing under the laws of the Czech Republic

    with
      its
      registered seat in Humpolec,
      Central Trade Park D1 1571, 396 01, Identification No.: 26166453,
      registered with the Commercial Register kept at the Regional Court in Ostrava,
      Section C, File No.: 24381

    

    (hereinafter
      referred to as the “
      Lessor”)

    

    

    and

    

    

    SENDIO
      s.r.o. a company existing under the laws of the Czech Republic,

    with
      its
      registered seat in Prague 5, Radlická 14, 150 00

    Identification
      No.: 281 64 440

    entered
      in the Commercial Register kept at the Municipal Court in Prague,
      Section C, File No.: 129 886

    

    (hereinafter
      referred to as the “Lessee”)

    

    

    (hereinafter
      together referred to as the “Parties”)

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    ARTICLE
      I.

    Subject
      of the Agreement

    

    
      	1.1	
              The
                Lessor is the owner of a part of an industrial complex located in
                Hranice,
                known as CTPark
                Hranice
                (hereinafter referred to as the “Park”).

            

    

     

    Within
      the Park, the Lessor is: 

     

    (a)
      the
      owner of the land plot No. (st.p.č.)
      2363
in
      the
      cadastral area of Drahotuše,
      registered on the ownership deed No. 1789, land plots. Nos. (st.p.č.)
      5504,
      5506, 5509 and 5511, in the cadastral area of Hranice, registered on the
      ownership deed No. 4342 and the sublessee of the land plot No. (st.p.č.)
      5505
      and 5510 in the cadastral area of Hranice, registered on the ownership deed
      No.
      10002, all in municipality of Hranice,
      district of Přerov
      (hereinafter referred to as the “Land”);

     

    (b)
      the
      owner of the production/warehouse building without registration
      number,
      located
      on the Land, cadastral
      area of Drahotuše
      and
      Hranice, municipality of Hranice,
      district of Přerov
      registered on the ownership deed No. 1789 (hereinafter
      referred to as the “Building”);
      and

    
 

    (c)
      the
      owner of 10
      parking lots built in front of the Building as shown in Annex
      No. 1 and Annex no. 6,
      hereto
(hereinafter
      referred to as the “Exclusive
      Parking Lots”).
      

    

    Non-residential
      premises located in the Building of total rentable area 39,003
      sq
      m have
      the following parameters (hereinafter referred to as the “Premises”):

    

    - the
      warehouse / production area          approx.
      14,022
      sq
      m

    - clean
      premises approx.
      11,268
      sq
      m

    - utilities
      / sanitary area approx.
      12,930 sq m

    - office
      premises approx.
      783 sq m

    

    The
      Premises and the Exclusive Parking Lots are hereinafter referred to as the
      “Property”.
      Detail
      technical specification of the Property forms Annex
      No. 1
      hereto.
      Site plan of the Property containing also the exact location of the Property
      (including the location of the Premises within the Building and the Parking
      Lots
      within the Park) form Annex
      No. 6
      hereto.

    

    
      	1.2	
              Lessor
                hereby rents to the Lessee and the Lessee hereby rents from the Lessor
                the
                Property.
                The Lessor hereby represents and warrants that (i) he is truly and
                fully
                entitled to enter into this Agreement, (ii) his relationships with
                third
                parties shall not affect the position of the Lessee as a bona fide
                lessee,
                (iii) the execution of this Agreement shall not constitute breach
                of any
                agreement of the Lessor, (iv) he has obtained a written consent of
                Immorent-Bank GmbH, being the Property mortgagee, with the lease
                and with
                the execution of this Agreement, which consent is attached as Annex
                No.9 hereto
                and (v) the Property is free from any pollution or other environmentally
                hazardous substances and it complies with the relevant environmental
                laws.
                The Lessor shall be obliged to obtain a new consent of Immorent-Bank
                GmbH
                with the execution of this Agreement, with the assignment of the
                Initial
                Rent (as defined below) and the assignment of debt corresponding
                to the
                Initial Rent, both assignments described in Clause 5.6 hereof, within
                30
                days from the date hereof.

            

    

    

    
      	1.3	
              The
                Lessee shall be entitled to the full use of the Property for production
                /
                warehousing, office and related ancillary uses in accordance with
                this
                Agreement during the whole duration of this Agreement. The Lessee
                shall be
                entitled to use on a non-exclusive basis together with the other
                users of
                the Park 287 car parking spaces and all the truck (lorry) parking
                spaces
                located within the Park or around the Park owned by the Lessor or
                determined by the Lessor to be used as such by the users of the Park
                (“Non-exclusive
                Parking Lots”)
                (the Exclusive Parking Lots and
                the

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Non-Exclusive
      Parking Lots are hereinafter referred to as the “Parking
      Lots”)
      for no
      additional fee or rent.

     

    
      	1.4	
              The
                Lessee
                is entitled to use all connections to the public suppliers of utilities
                and the Lessor is obliged to secure for the Lessee supplies of the
                utilities provided by their public suppliers (electricity, gas, water,
                telephone, etc.) in the extent necessary for the operation of Lessee’s
                plant, but not exceeding the extent specified in the technical
                specifications attached hereto as Annex
                No. 1.
                The Lessor will make available to the Lessee a facility for the production
                of the deionized water and the effluent water treatment facility
                with
                parameters listed in Annex
                No. 2
                hereto (hereinafter referred to as the “DI
                water”)
                and compressed air, industrial gases and vacuum and shall use all
                reasonable efforts to supply the DI water, compressed air, industrial
                gases and vacuum to the Lessee and accept the effluent DI water back
                from
                the Lessee at the levels required by the Lessee. The Lessor shall
                not be
                liable for not supplying the DI water compressed air, industrial
                gases and
                vacuum to the Lessee and for not accepting the effluent DI water
                back from
                the Lessee as far as he will not breach his obligation to use all
                reasonable efforts to do so. The Lessor acknowledges that the effluent
                water to be accepted back from the Lessee’s production will contain
                phosphorus and other hazardous substances and declares that its effluent
                water treatment facility will be able to treat such effluent water
                in
                accordance with the applicable laws. The Lessor shall not be obliged
                to
                accept back the effluent water from the Lessee that contains hazardous
                substances the presence of which in the effluent water would not
                be in
                compliance with the applicable laws and the permits available on
                the date
                hereof. The Lessor shall be obliged, at the request of the Lessee,
                to
                issue all relevant confirmations with respect to such treatment for
                the
                Lessee to comply with the applicable laws. Based on the written request
                of
                the Lessee, the Lessor is further obliged to procure that the current
                capacity of the connections to the public suppliers of utilities
                and the
                level of supplies are extended to the level required by the Lessee,
                or to
                ensure that the Lessee has the possibility to negotiate such extensions
                with the third party suppliers and the Lessor shall provide the Lessee
                with all necessary assistance, including consents with any changes
                to the
                current connections or enabling building of new connections. The
                costs of
                such extensions are to be paid for by the Lessee. 

            

    

    

    The
      Parties shall negotiate in good faith the future arrangement with respect to
      the
      technology relating to the DI water, compressed air, industrial gases and vacuum
      production and the effluent water treatment (“Technology”) and its operation and
      ownership, including the potential purchase of the Technology by the Lessee.
      If
      no such agreement in written form is reached by 30 April, 2008, this Agreement
      shall automatically terminate as of 30 June, 2008.

    

    If
      requested by the Lessee, the Lessor shall also cooperate in the timely manner
      with the Lessee and shall provide the Lessee with all necessary assistance
      for
      the Lessee to be able to enter into separate contracts regarding the supplies
      of
      the utilities supplied by third party suppliers.

    

    The
      Parties shall also negotiate in good faith the prices for the supplies of the
      utilities supplied to the Lessee by the Lessor, including the DI water and
      the
      costs for accepting back the effluent water. The Parties agree that the supplies
      of the utilities under this Clause 1.4 should not be considered as supplies
      of
      services connected with the lease; those shall be only the services under
      Article VI. hereof. The absence of agreement on the costs of those supplies
      of
      utilities shall not in any way affect the validity of this
      Agreement.

    

    The
      Parties agree that until 30 June, 2008 the Lessor shall be liable for any and
      all accidents, including environmental accidents, effluent water leakages etc.
      arising from the operation of the Technology, the respective connections thereto
      and the effluent water treatment, except for the cases when such accident was
      caused by the Lessee or a third party engaged by the Lessee (except for the
      Lessor). 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      Parties further agree that until 30 June, 2008 the Lessee shall only be liable
      for those accidents caused by it or by third parties engaged by the Lessee
      (except for the Lessor). Starting from 1 July, 2008 and, at the same time,
      if
      the Lessee takes over the operation of the Technology, the Lessee shall further
      be liable for any and all accidents, including environmental accidents, effluent
      water leakages etc. arising from the operation of the Technology, the respective
      connections thereto and the effluent water treatment, except for the cases
      when
      such accident was caused by the Lessor or third parties engaged by the Lessor
      (except for the Lessee).

     

    Detailed
      description of the above mentioned utilities
      and connections thereto as well as the parameters of the DI water is stipulated
      in Annex
      No. 2 hereto.

    

    
      	1.5	
              The
                use permit for the Premises was issued on 23
                March, 2004 and
                effective on 24
                March, 2004.
                Copy of the use permit forms Annex
                No. 3
                hereto (hereinafter
                referred to as the
                “Use
                Permit”).
                The
                Lessee acknowledges that installations and technology brought into
                the
                Premises by the Lessee might not be approved for use on the basis
                of the
                Use Permit. The Parties declare that there is certain equipment of
                the
                Lessor currently located within the Premises (“Equipment”).
                Until 30 June, 2008 the Lessee shall have the exclusive right to
                use all
                the Equipment necessary for its operations together with the use
                of the
                Premises for no additional fee or rent. The Parties shall negotiate
                in
                good faith the future arrangement with respect to the use of the
                Equipment
                as of 1 July, 2008. If no such agreement in written form is reached
                by 30
                April, 2008, this Agreement shall automatically terminate as of 30
                June,
                2008.

            

    

    

    If
      the
      Lessee is not able to commence or continue with its production activities under
      the Use Permit, the parties shall work together and cooperate in good faith
      and
      a timely manner to change the Use Permit or to obtain a new permit in accordance
      with the requests of the Lessee. If the Lessor fails to cooperate with the
      Lessee, namely if it does not sign and submit the relevant motions for the
      change of the Use Permit or for the issuance of the new permit and does not
      remedy such failure within 15 days from the written notice of the Lessee, the
      Lessee is entitled to rescind this Agreement with immediate effect.

     

    
      	1.6	
              The
                Parties shall further work together and cooperate in good faith and
                timely
                manner to obtain all permits necessary for the operations of the
                Lessee,
                especially the relevant environmental permits, should it prove that
                the
                permits issued for the previous user of the Property cannot be used
                for
                the Lessee’s operations. If the Lessor fails to cooperate with the Lessee
                and does not remedy such failure within 15 days from the written
                notice of
                the Lessee, the Lessee is entitled to rescind this Agreement with
                immediate effect. 

            

    

    

    
      	
              1.7

            	
              The
                Lessee shall be responsible for obtaining and maintaining all
                administrative permits necessary for its contemplated activities
                performed
                within the Property, such as the trade licenses or authorizations
                under
                Act No. 455/1991 Coll., (the Trade Licenses Act), as amended.
                

            

    

     

    
      	1.8	
              The
                Lessee is entitled to require a lease of additional non-residential
                premises in the Building or in the newly constructed building located
                on
                the side of the Building specified as “Extension Jumbo”, “Extension Option
                1” and Extension Option 2” in Annex
                No. 11
                hereto (Extension Jumbo, Extension Option 1 and Extension Option
                2
                together hereinafter referred to as the “Expansion
                Premises”)
                subject to the following
                procedures:

            

    

     

    
      	
            	1.8.1	
              The
                Lessee shall have the right to send a request delivered to the Lessor
                by
                registered mail for the expansion for the whole duration of this
                Agreement
                (hereinafter referred to as the “Expansion
                Request”).
                The Expansion Request must specify in which of the Expansion Premises
                the
                Lessee is interested. 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
            	1.8.2	
              If
                the Expansion Request is delivered to the Lessor with respect to
                the
                Extension Option 1 and/or Extension Option 2 within 12 months following
                the date hereof, or with respect to any of the Expansion Premises
                after
                that date, but only in case the Expansion Premises are not leased
                so far
                when the Lessor did not breach its obligation under Clause 1.8.6
                and 1.8.7
                by leasing them, the Lessor shall be obliged to sign a new lease
                agreement
                in case of the Extension Jumbo or an agreement on future lease agreement
                in case of Extension Option 1 and/or Extension Option 2 to lease
                the
                Expansion Premises determined by the Lessee with the Lessee no later
                than
                6 weeks from the receipt of the Expansion
                Request.

            

    

     

    
      	
            	1.8.3	
              Provided
                that the Extension Option 1 and/or Extension Option 2 are to be used,
                per
                request of the Lessee, for similar purpose of use as the Premises
                hereunder, the Lessor shall further be obliged to complete and hand-over
                the Extension Option 1 and/or Extension Option 2 to the Lessee being
                fit
                for use as requested by the Lessee within 10 months from the delivery
                of
                the Expansion Request, and the determination of the layout of the
                Expansion Premises, whichever occurs later, provided that the respective
                agreement on future lease agreement was
                signed.

            

    

     

    
      	
            	1.8.4	
              The
                lease agreement for the Expansion Premises should be signed on the
                same
                terms and conditions as this Agreement at that time, however, at
                least for
                the period of 7 years and with the rent applicable hereunder at the
                time
                of the execution of the new lease and indexed according to the same
                mechanism as agreed hereunder. Should the remaining Term of this
                Agreement
                be less then 7 years, the Lessor shall further be obliged, together
                with
                the new lease agreement for the Expansion Premises, to enter into
                an
                amendment to this Agreement prolonging the Term of this Agreement
                so that
                it ends on the same day as the term of the rent of the Expansion
                Premises.
                Should the lease agreement for the Expansion Premises be signed before
                1
                July, 2014, the conditions for the termination for convenience under
                Article IV, Clause 4.9 hereof shall change in the way that it shall
                be
                applicable solely on the seventh anniversary of the lease agreement
                for
                the Expansion Premises, otherwise under the same conditions as stipulated
                in the Clause 4.9, i.e. so that the lease for the Expansion Premises
                lasts
                at least 7 years.

            

    

     

    
      	
            	1.8.5	
              If
                the Lessor, due to its fault, fails to execute the agreement on future
                lease agreement or the new lease agreement for the lease of the Expansion
                Premises or fails to hand-over the Expansion Premises to the Lessee
                or
                fails to ensure that the Expansion Premises are fit for use as requested
                by the Lessee, including a situation when this situation was caused
                by the
                breach of Lessor’s obligation under Clause 1.8.6 or 1.8.7 below,
                (hereinafter referred to as the “Expansion
                Breach”),
                it shall be obliged to pay a contractual penalty to the Lessee in
                the
                amount of 25 eurocents per square meter of the required size of the
                Expansion Premises per day of delay, but up to the maximum amount
                of EUR
                500,000. If the Lessor fails to remedy its Expansion Breach within
                additional 6 months, the Lessee shall be entitled to terminate this
                Lease
                by serving a 2 months written notice to the
                Lessor.

            

    

     

    
      	
            	1.8.6	
              In
                addition to the above, the Lessor shall not be entitled to lease
                the
                Extension Option 1 and Extension Option 2 or the whole building in
                which
                they are to be situated within 12 months from the date hereof (for
                avoidance of doubts the Lessor is not limited in leasing other premises
                in
                the building in which the Extension Option 1 and Extension Option
                2 are
                situated if the building is bigger than the Extension Option 1 and
                Extension Option 2 and includes also other premises).
                

            

    

     

    
      	
            	1.8.7	
              Furthermore,
                the Lessee shall have the right of first refusal for the lease of
                the
                Expansion Premises during the whole duration of this Agreement, i.e.
                the
                Lessor shall not be entitled to lease any of the Expansion Premises
                (or
                the whole buildings in

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    which
      the
      Expansion Premises are situated - but the Lessor is entitled to lease premises
      in those buildings other than the Expansion Premises) before first offering
      the
      Expansion Premises to the Lessee. The Lessee shall have a right to send the
      Expansion Request within 4 weeks from the date when the Lessor delivered to
      the
      Lessee a written notice of its intention to lease the Expansion Premises (“Lease
      Notice”). Should the Lessee fail to send the Expansion Request within such time
      period or should it issue a written notice stating that it will not exercise
      its
      right of first refusal, the Lessor shall be free to lease the Expansion Premises
      in question. Should the Lessor not sign the lease agreement or an agreement
      on
      future lease agreement with any third party within 1 year following the date
      of
      the Lease Notice, it shall be obliged to repeat the procedure described in
      this
      Clause 1.8.7.

     

    
      	
            	1.8.8	
              If
                the Lessee sends the Expansion Request in accordance with Clause 1.8.7,
                the Parties shall follow the procedures described above under Clauses
                1.8.1 till 1.8.5 above.

            

    

     

     

    II.

    Early
      Access, Hand Over

    

    
      	
              2.1

            	
              The
                Lessee has been granted a right to visit and inspect the Premises
                before
                the execution of this Agreement free of charge.

            

    

    

    
      	2.2	
              The
                Property shall be handed over to be used in the full scope on the
                date of
                execution of this Agreement (hereinafter referred to as the “Hand
                Over Date”). The
                Parties declare that on the Hand Over Date the Property is fit for
                use for
                the purpose agreed under this Agreement regarding both its constructional
                and its technical specifications. On the date hereof, the Parties
                shall
                sign the handover protocol in which they will identify defects of
                the
                Property to be removed by the Lessor. The Lessor shall remove all
                such
                defects within the shortest possible time, but not later than within
                30
                days after the Hand Over Date.

            

    

    

    
      	2.3	
              Provided
                that certain defects are identified at the hand-over and they are
                stipulated in the Hand Over Protocol attached as Annex
                No. 8 hereto,
                the Lessor shall remove all the defects within the shortest possible
                time.
                Should such defects prevent the Lessee from the use of the Property
                for
                the intended purpose in accordance with this Agreement, the Lessee
                shall
                be entitled to the full or proportional reduction of the Rent. Rights
                of
                the Lessee stipulated in Clause 2.2 shall not be prejudiced by this
                Clause
                2.3. The Parties will negotiate in good faith to agree the amount
                of such
                reduction at the hand over of the Property.

            

    

    

    
      	2.4	
              The
                Lessor shall not bear responsibility for late hand over of the Property
                if
                it is caused by circumstances on part of the Lessee.
                

            

    

    

    
      	2.5	
              The
                Lessor is further obliged to construct for the Lessee and at the
                Lessor’s
                costs two loading bays specified in Annex
                No. 10
                hereto (hereinafter
                referred to as the “Additional
                Loading Bays”)
                and hand them over to the Lessee no later than 1 April, 2008. As
                of the
                day of handover, the subject of the lease hereunder is extended by
                the
                Additional Loading Bays with no additional increase of the Rent and
                no
                special payments of the Lessee.

            

    

    

    
      	2.6	
              Until
                the completion of the Additional Loading Bays and their hand-over
                for use
                to the Lessee, the Lessee shall be entitled to use with other lessees
                of
                the Building two existing loading bays of the Building (hereinafter
                referred to as the “Existing
                Loading Bays”)
                for no special payment of the Lessee.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    III.

    Purpose
      of the Lease, Scope of Business

    

    
      	3.1	
              The
                Premises shall be used by the Lessee in accordance with their technical
                specification as a production / warehouse facility with clean premises,
                office and sanitary areas in accordance with the Use Permit or any
                change
                thereto made in the future or any permit that replaces the Use Permit
                and
                the Exclusive Parking Lots as passenger car parking lots. Detailed
                specification of the use of individual parts of the Property by the
                Lessee
                is enclosed as Annex
                No. 5
                hereto. The Lessee is entitled to use the Property in accordance
                with the
                scope of business as stipulated in the Annex
                No. 4
                hereto.

            

    

    

    
      	3.2	
              The
                Lessee shall be obliged to abide by all the existing administrative
                permits regulating the use of the Property. The Lessor undertakes
                not to
                initiate any proceedings regarding a different use of the Property
                without
                a previous written approval by the Lessee unless it is required by
                applicable law. 

            

    

    

    
      	3.3	
              The
                Lessee is entitled to decide on alteration of the use of individual
                parts
                of the Property as long as such use is in accordance with the
                administrative permits regulating the use of the  Property
                provided the Lessor has been informed about such change of use in
                writing
                prior to filing any application and does not unreasonably oppose
                to it
                within 7 (seven) days from the receipt of the
                information.

            

    

     

     

    IV.

    Term
      of Agreement and its Termination

    

    
      	
              4.1

            	
              The
                lease of the Property shall start on the date of this Agreement
                (hereinafter referred to as the “Commencement
                Date”).

            

    

    

    This
      Agreement is concluded for a definitive period of time until 30 June, 2008
      (hereinafter referred to as the “Term”).
      The
      Term may be extended by the Lessee until 1 October, 2017 by delivery of a
      written notice of the Lessee by means of registered mail to the Lessor no later
      than 30 April, 2008 (hereinafter referred to as the “First
      Extended Term”).
      This
      extension notice of the Lessee shall have no effects and this Agreement shall
      terminate on 30 June, 2008 if no written agreement is reached between the
      parties by 30 April, 2008 with respect to the (i) Technology and its operation
      and ownership, and (ii) Equipment and its use.

    

    This
      Agreement may be further extended 3
      times
      for another period of 5
      calendar years
      following the First Extended Term by delivery of a written notice of the Lessee
      by means of registered mail to the Lessor at least 12 (twelve) months before
      the
      expiration of the First Extended Term or previous Further Extended Term
      (hereinafter referred to as the “Further
      Extended Term”).
      (First
      Extended Term and Further Extended Term hereinafter referred to as the
“Extended
      Term”).

    

    
      	4.2	
              The
                Lessor is authorized to an early termination of this Agreement by
                delivery
                of a registered letter with 30 (thirty) days notice period in case
                any of
                the events listed below occurs:

            

    

    

    
      	 	
              (a)

            	
              the
                Lessee is in default with the performance of financial obligations
                due
                under this Agreement for more than 30 (thirty) consecutive days;
                or

            

    

    
      	
            	(b)	
              the
                Lessee breaches its obligation to use the Property in compliance
                herewith,
                namely with Article III. hereof;
                or

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
            	(c)	
              the
                Lessee carries out substantial structural changes on the Property
                without
                the prior consent of the Lessor; or

            

    

    
      	
            	(d)	
              the
                Lessee subleases the Property without the prior written consent of
                the
                Lessor; or

            

    

    
      	 	
              (e)

            	
              the
                Lessee does not deliver and keep valid a Guarantee in the form as
                attached
                in Annex
                No. 7
                hereto; or

            

    

    
      	
            	(f)	
              the
                Lessee is declared bankrupt or the bankruptcy petition is rejected
                due to
                lack of Lessee's Property;

            

    

    

    and
      at the
      same time, regarding the reasons given under clauses b) to e) it applies that
      the
      Lessor is authorized to give a notice to the Lessee only after the Lessee failed
      to redress breach of any of its obligations within 60 (sixty) consecutive days,
      and in case of the reason given under clause a) within 30 (thirty) days, after
      receipt of a written reminder describing the default of the Lessee and including
      the notice that due to such default this Agreement may be subject to early
      termination.

     

    
      	
              4.3

            	
              In
                case of early termination of this Agreement by the Lessor in accordance
                with Clause 4.2 hereof, the Lessee shall pay to the Lessor the contractual
                penalty as follows:

            

    

    

    
      	 	
              a)

            	
              until
                the expiry of the 5th
                (fifth) year of duration of this Agreement: 36
                times of the then applicable monthly rent;

            

    

    
      	 	
              b)

            	
              between
                the 5th
                (fifth) and 10th
                (tenth)
                anniversary of this Agreement and during any Further Extended Term:
                24
                times of the then applicable monthly rent,
                but not more than the remaining Rent to be paid until the expiry
                of the
                respective Extended Term;

            

    

     

    
      	4.4	
              The
                Lessor and the Lessee shall be responsible for the behavior and negligence
                of their representatives and
                employees.

            

    

    

    
      	
              4.5

            	
              The
                Lessee is entitled to prematurely terminate this Agreement within
                30
                (thirty) days notice given to the Lessor by a registered letter in
                case
                any of the events listed below occur:

            

    

    

    
      	 	
              (a)

            	
              the
                Lessee was unable to use (i) the whole Property for more than 30
                (thirty)
                days without the Lessee being at fault or (ii) any part of the Property
                resulting in the Lessee’s production activity in the Premises being
                discontinued for more than 30 (thirty) days without the Lessee being
                at
                fault; or

            

    

    
      	 	
              (b)

            	
              the
                Lessee was unable to use 60 % or more of the Property for more than
                45
                (forty five) days without the Lessee being at fault or (ii) any part
                of
                the Property resulting in the Lessee’s production activity in the Premises
                being reduced by more than 30% for more than 45 (forty five) days
                without
                the Lessee being at fault; or

            

    

    
      	 	
              (c)

            	
              the
                Lessee could not use any of the connections to the public suppliers
                of
                utilities and/or the Lessor failed to supply the Lessee with the
                utilities
                for more than 30 (thirty) days without the Lessee being at fault;
                or

            

    

    
      	 	
              (d)

            	
              the
                canteen referred to in Clause 6.6 will be out of operation for more
                than
                30 (thirty) days or the Lessee’s employees will be prevented from the
                access and use of the canteen by the Lessor or by the canteen’s operator;
                or

            

    

    
      	 	
              (e)

            	
              the
                representations of the Lessor contained in Clause 1.2 proved to be
                breached or misleading; or

            

    

    
      	 	
              (f)

            	
              the
                Additional Loading Bays will not be completed and handed over to
                the
                Lessee for use by 1 June, 2008; or

            

    

    
      	 	
              (g)

            	
              the
                Lessee will not be allowed use of the Existing Loading Bays or Additional
                Loading Bays for than 30 (thirty) days;
                or

            

    

    
      	 	
              (h)

            	
              the
                Lessor failed to comply with any and all conditions of the confirmation
                of
                the results of the composition proceedings, as contained in the decision
                of the Regional Court in Ostrava No. 36 Kv 1/2006 - 302, which came
                into
                legal effect on January 30,

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2007
      and
      such failure has a negative effect on the Lessee’s operations and/or the use of
      the Property; or

    
      	 	
              (i)

            	
              the
                Lessee was unable to use the Equipment during the Term due to the
                fault of
                the Lessor for more than 30 days,

            

    

    

    and
      at the
      same time the Lessee is
      authorized to give a notice to the Lessor only after the Lessor has failed
      to
      redress breach of any of its obligations within 30 (thirty) consecutive days
      after receipt of a written reminder describing the default of the Lessor and
      including the notice that due to such default this Agreement may be subject
      to
      early termination. 

    

    
      	4.6	
              Intentionally
                left blank.

            

    

    

    
      	4.7	
              In
                case of the premature termination of this Agreement by the Lessee
                in
                accordance with Clause 4.5, 1.4 or 1.8 hereof, the Lessor shall (for
                the
                respective breach of this Agreement) pay to the Lessee the contractual
                penalty amounting to 36 times of the then applicable monthly rent
                if this
                Agreement is terminated until the expiry of the 5th (fifth) year
                of
                duration of this Agreement and 24 times of the then applicable monthly
                rent, but not more than the remaining Rent to be paid until the expiry
                of
                the respective Extended Term, if this Agreement is terminated between
                the
                5th (fifth) and 10th (tenth) anniversary of this Agreement and during
                any
                Further Extended Term. Number of days of delay shall be counted as
                of the
                4th
                day of receipt of written reminder describing default and including
                the
                notice that non-curing of default within the above specified grace
                period
                is the reason for the early termination hereof and creates the right
                to
                claim the contractual penalty.

            

    

    

    
      	
              4.8

            	
              However,
                in case of events listed under Clause 4.5. above, the Lessor shall
                not be
                obliged to pay the contractual penalties if the Lessee has not been
                able
                to use the Property due to reasons of force majeure or any other
                reason
                than a fault of the Lessor or third parties or reasons under Lessor’s
                control..

            

    

    

    
      	4.9	
              Termination
                for Convenience.
                The Lessee may prematurely terminate this Agreement by notice without
                any
                reasons to be stated with at least 12 months notice and with the
                break fee
                in the amount of the 12 monthly then applicable Rent payments by
                1 July,
                2014, i.e. provided that the notice is delivered to the Lessor at
                least 12
                months before 1 July, 2014. 

            

    

    

    
      	4.10	
              The
                Lessee is further entitled to prematurely terminate this Agreement
                by
                notice with immediate effects if the Lessor is declared bankrupt
                or if any
                similar decision is issued by the relevant authority with respect
                to the
                Lessor and/or its assets.

            

    

     

     

    V.

    Rent

    

    
      	5.1	
              The
                Lessee shall be obligated to pay to the Lessor the rent for the lease
                of
                the Property (hereinafter referred to as the “Rent“)
                as follows: 

            

    

    

    The
      total
yearly
      base rent starting on 1 July, 2008 amounts to EUR 2,100,000
      (in
      words: two million one hundred thousand Euro) plus mandatory VAT. 

     

    The
      Rent
      does not include costs for the park management services as they are listed
      and
      calculated in the Article VI. hereof.

     

    Total
      rent for the period from the Commencement Date to 30 June, 2008 shall amount
      to
EUR 1,575,000
      (in
      words:
      one million five hundred and seventy five thousand euro) (“Initial
      Rent”)
      plus
      mandatory VAT.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	5.2	
              The
                Rent shall be paid quarterly in advance in Euro. Dates of taxable
                supplies
                are agreed as follows: (i) Initial Rent is considered to be the first
                partial taxable supply and the date of taxable supply shall be 1
                November,
                2007, and (ii) the Rent in respect of future calendar quarters after
                30
                June 2008 is considered to be additional partial taxable supplies
                and the
                date of taxable supply shall be the first day of each calendar quarter.
                The Lessor shall be issuing invoices that will meet the requirements
                of
                Czech tax law.

            

    

     

    
      	5.3	
              The
                Rent amount and the park management fee shall be secured against
                inflation
                by annual
                increase of 2% a year. The first indexation shall take place on
                1st
                January 2009.

            

    

    

    
      	5.4	
              The
                Rent is paid duly if it is credited to the Lessor ́s account on the due
                date. The Initial Rent shall be due by 20 December, 2007. The Lessor
                shall
                issue its invoice with respect to the Initial Rent no later than
                10 days
                following the date hereof. The Rent for each quarter of the year
                (following 30 June 2008) shall be due within 14 (fourteen) days following
                the day of issuance of the respective invoice; the invoice shall
                be issued
                on the first business day of the first month of respective calendar
                quarter, i.e. 1st
                January, 1st
                April, 1st
                July, and 1st
                October. In case the invoice has not been delivered to the Lessee
                at the
                latest on 5th
                day after its issuance, the due date shall be postponed by the number
                of
                days the Lessor is in delay with such invoice
                delivery.

            

    

     

    
      	5.5	
              The
                Lessee shall be entitled to full or proportional reduction of the
                Rent in
                the case that the Lessee could not use the Property or any part thereof,
                including the access to the Property, the use of utilities or the
                Existing
                or Additional Loading Bays (irrespective of reason, including acts
                of
                God), this all resulting in the operation of the Lessee’s plant/production
                being halted, interrupted or substantially reduced without the Lessee
                being at fault. Should, however, the reason that hinders the use
                of the
                Property be on the side of the supplier of the public utility, the
                Lessee
                shall be entitled to full or proportional reduction of the Rent only
                after
                7 (seven) days of interruption of/defects in the utilities
                supplies.

            

    

    

    
      	5.6	
              The
                Parties shall be entitled to assign their monetary receivables arising
                under this Agreement to a company belonging to the same group of
                companies
                as each of the Parties. The Lessor shall be obliged to assign its
                receivable corresponding to the Initial Rent no later than within
                30 days
                following the execution of this Agreement to its parent company CTP
                Products B.V. In addition, the Lessee shall be both entitled and
                obliged
                to assign its debt corresponding to the Initial Rent to its parent
                company, Telegen Corporation, and the Lessor hereby explicitly agrees
                with
                such assignment and with the assumption of the Lessee’ debt corresponding
                to the Initial Rent by the parent company of the Lessee, Telegen
                Corporation. The Parties declare and agree that no further consent
                of the
                Lessor as a creditor of the Lessee is necessary for the assumption
                of the
                Lessee’s debt corresponding to the Initial Rent. Should the Lessor fail
                to
                assign its receivables corresponding to the Initial Rent to CTP Products
                B.V. or should CTP Products B.V. not become or cease to be the owner
                of
                the assigned receivables, the Lessee shall be entitled to cancel
                the
                assignment of the debt corresponding to the Initial Rent so that
                the
                Lessee would be again the entity solely obliged to pay the Initial
                Rent.

            

    

    

    
      	5.7	
              The
                Parties hereby declare that at or around the date hereof, their parent
                companies and the Lessor shall have entered into an agreement governed
                by
                US laws to stipulate for the mechanism of the settlement of the Initial
                Rent. 

            

    

     

     

    VI.

    Park
      Management Services and Fee

    

    
      	6.1	
              Apart
                from the Rent the Lessee shall pay to the Lessor the park management
                services costs connected to the use of the Property in accordance
                with
                this Article VI. Park
                management

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    services
      are the expenses and costs connected with the operation and maintenance of
      the
      Property and the common areas of the Park
      to
      be
      provided by the Lessor.

    

    
      	6.2	
              Park
                management provided by the Lessor includes the following
                services:

            

    

    

    
      	 	
              ·

            	
              Office
                waste disposal up to 1,500
                kg
                per month;

            

    

    
      	 	
              ·

            	
              Cameras
                and security lighting;

            

    

    
      	 	
              ·

            	
              Security
                of the Park and the controlled access (security gate) to the
                Park;

            

    

    
      	 	
              ·

            	
              Park
                maintenance - green belts, connections, roads, Parking
                Lots;

            

    

    
      	 	
              ·

            	
              Snow
                and ice removal from common areas (including all access roads, Parking
                Lots) and from the yard adjacent to the Building; removal of snow
                and ice
                from roofs of the Building is
                excluded;

            

    

    
      	 	
              ·

            	
              General
                lighting system; 

            

    

    
      	 	
              ·

            	
              Cleaning
                - Park (including the access roads), the Building, the Parking Lots,
                and
                Premises outside; and

            

    

    
      	 	
              ·

            	
              Park
                publicity and sign-posting;

            

    

    

    
      	6.3	
              The
                unit price for the services amounts to EUR 5 per year per 1 sq m
                of the
                area of the Premises, excluding 50% of the mezzanine areas, i.e.
                excluding
                3,580 sq m of the area of the Premises, therefore the total price
                for
                these services amounts to (5x 35,423) EUR
                177,115
                (in words: one hundred and seventy seven thousand one hundred and
                fifteen
                Euro) per
                year
                plus mandatory VAT. This
                price shall be indexed
                on
                the same basis as the Rent in accordance with Clause 5.4 hereof.
                

            

    

    

    
      	6.4	
              The
                park management fee shall be paid quarterly in advance in accordance
                with
                the same rules and principles as payment of the Rent, unless stipulated
                otherwise below. First payment for the period until 31 December,
                2007
                shall be calculated as a figure for the whole calendar quarter (i.e.
                from
                1 October to 31 December 2007 - one quarter of the yearly fee) and
                shall
                be paid within 60 days from the date hereof. The second payment for
                the
                period between 1 January, 2008 until 30 June, 2008 shall be calculated
                as
                a figure for the whole two calendar quarters (i.e. half of the yearly
                fee)
                and shall be paid by 28 February, 2008.

            

    

    

    
      	
              6.5

            	
              The
                Lessee shall be obliged to pay the cost for the consumed utilities
                supplied by the public utilities suppliers. The Lessor shall conclude
                contracts with the suppliers of utilities for the Lessee and the
                Lessee
                shall pay the costs of provided utilities to the Lessor on the basis
                of
                invoices issued by the suppliers and presented to him by the Lessor.
                If
                separate measuring of consumption is not possible, the cost shall
                be paid
                by the Lessee on the pro-rata
                basis.

            

    

    

    
      	
              6.6

            	
              The
                Lessor is obliged to secure the existence and a due service/operation
                of a
                canteen situated in the Building/within the Park for the whole time
                of the
                lease to be used inter
                alia by
                the Lessee’s employees. The price of the main dish will not exceed CZK 85,
                however, will be increased in the future in such a way that the prices
                will comply with market conditions at that time. There will be no
                extra
                charge for the Lessee for the operation of the
                canteen.

            

    

    

    
      	
              6.7

            	
              The
                Lessor shall maintain the level of security measures within the Park
                and
                the Building as described in Annex
                no. 12
                hereto throughout the Term and Extended Term of this Agreement. The
                Lessee
                shall have a right to request that the security measures within the
                Park
                or the Building are changed or improved on the Lessee’s costs which are to
                be agreed in advance. The Lessor shall be obliged to implement any
                such
                changes or improvements (if such changes do not decrease the security
                level within the Park) without undue delay from the request of the
                Lessee
                and upon agreeing on the costs
                thereof.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    VII.

    Assignment,
      Sublease, Use of Premises

    

    
      	
              7.1

            	
              The
                Lessee is without limitation entitled to sublease the Property as
                a whole
                or in parts to the company belonging to the group company (defined
                pursuant to the Section 66a of the Czech Commercial Code) of the
                Lessee.
                The Lessee is entitled to assign this Agreement to the company belonging
                to the group company of the Lessee provided that (i) the Guarantee
                issued
                in accordance with the Article XVI., Section 16.6 hereof shall be
                submitted to the Lessor prior to such assignment and remains effective
                also after such assignment, as the case may be, and (ii) the Lessee
                shall
                not have any outstanding due payments hereunder and (iii) such assignment
                shall be approved in advance by the Lessor not unreasonably withholding
                the approval. 

            

    

     

    
      	7.2	
              The
                Lessee is entitled to further sublease the Property as whole or in
                parts
                in an unlimited number to other legal entities of the same or better
                financial status than the Lessee and with a previous approval of
                the
                Lessor, which shall not be unreasonably withheld; the financial status
                of
                the legal entity shall be reviewed by the Lessor. The
                Lessee undertakes not to further sublease the area to the companies
                that
                keep in store or process hazardous raw materials other than the Lessee
                or
                to the companies, which could have negative impact on the good reputation
                of the CTPark.

            

    

     

    
      	
              7.3

            	
              In
                the event of further sublease, the Lessee shall remain the contractual
                party of the Lessor to the full extent and for the duration of this
                Agreement and shall be fully liable for its
                sublessees.

            

    

    

    
      	7.4	
              The
                Lessee shall provide the Lessor with a list of chemicals used in
                connection with its production,
                should the
                Lessor be obliged, under the relevant laws, to disclose such information
                to state authorities.
                The Lessor acknowledges that the list of chemicals might be subject
                to the
                intellectual property rights or a business secret (if the Lessee
                notifies
                the Lessor about this fact) and the Lessor thus agrees that it will
                keep
                any information obtained from the Lessee regarding the chemicals
                strictly
                confidential, including the relevant warning to the relevant state
                authorities, to which the information will be disclosed.
                

            

    

    

    
      	
              7.5

            	
              The
                Lessee is entitled to place advertising boards anywhere inside the
                Premises provided that it does not violate any applicable laws,
                regulations, decrees or permits by doing so. Placing of advertising
                boards
                outside of the Property or on the facade of the Building shall be
                subject
                to previous consent of the Lessor in terms of size and design of
                the
                advertising boards, the consent of the Lessor shall not be unreasonably
                withheld. The Lessor is obliged to provide the necessary cooperation
                to
                the Lessee, in particular to provide it with the necessary approvals
                required by the relevant public administration
                authorities.

            

    

    

    
      	7.6	
              The
                Lessor undertakes to allow and secure free and unrestricted access
                for the
                Lessee and his employees, officers, suppliers, customers and other
                personnel at all times, 24 hours per day, 7 days a week thought all
                gates
                and any other access points and along all roads and paths to the
                Property.

            

    

     

     

    VIII.

    Repairs
      and Maintenance

    

    
      	8.1	
              The
                Lessee shall perform (at its own expense) repairs and maintenance
                of the
                Premises in the following extent: day to day repair and maintenance,
                repair, periodical revisions and maintenance of electrical (including
                electrical doors) and compressed air equipment as well as installations
                for heating and cooling (offices) and the sprinklers, but only in
                case
                such equipment, installations and sprinklers are located in the Premises
                and they exclusively serve the Premises. For avoidance of doubts
                the
                Lessee shall not be responsible for repairs
                and

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    maintenance
      of those parts of equipment, installations and sprinklers that are before the
      connecting point to those parts of equipment, installations and sprinklers
      entering and serving the Premises. Furthermore, the Lessee shall repair the
      defects caused by the operation of its plant. If
      the
      cost of repair of a defect not caused by the Lessee exceeds an amount
      of
      EUR
      1,000/
      every
      time a repair is necessary and EUR 30,000/per year in the aggregate amount,
      such
      repair has to be carried out by the Lessor. In any case the maintenance of
      the
      equipment has to be carried out by the Lessee. If any broken part of the
      Premises is under supplier’s guarantee, the repair shall be settled by
      reimbursement from this supplier’s guarantee. 

    

    
      	8.2	
              The
                Lessor shall carry out (at its own expense) all the repairs and
                maintenance of the Property, except for those specified within Clause
                8.1
                hereof; it shall particularly ensure repair and maintenance of the
                ceilings, floors, roof, external walls and cladding, downspouts,
                gutters
                and mezzanine floors and all the structural elements of the Building
                and
                the Premises, roads, paths and car parks. Any repairs and maintenance
                performed by the Lessor shall hinder the operation of the plant to
                the
                smallest possible extent.

            

    

    

    
      	8.3	
              The
                Lessee shall be liable toward the Lessor for damage to the Property
                caused
                by the Lessee or its representative(s), employee(s) and
                suppliers.

            

    

    

    
      	
              8.4

            	
              The
                Lessee shall without unnecessary delay announce to the Lessor any
                damage
                to the Property, which the Lessee is not obliged to repair by itself.
                The
                Lessee shall be responsible for additional damage arisen as a result
                of no
                reporting of the primary damage as stipulated in the first
                sentence.

            

    

    

    
      	
              8.5

            	
              The
                Lessor shall perform any and all repairs and maintenance that it
                is
                obliged to carry out under this Agreement without undue delay and
                within
                the shortest possible time. If the Lessor fails to meet this obligation
                after receiving a written reminder and within a reasonably extended
                time
                period, the Lessee is entitled to perform such repairs and maintenance
                at
                the Lessor’s expense and the Lessor is obliged to refund it to the
                Lessee.

            

    

    

    
      	
              8.6

            	
               The
                Lessee is aware of the fact that as an entity using the Property
                for
                operating its activities, it is obliged to secure fulfillment of
                fire
                safety obligations (including periodical revisions of fire installations)
                pursuant to the Act No. 133/1985 Coll., on Fire Protection, as amended,
                namely pursuant to Section 2, clause 2 of the Act on Fire Protection.
                If
                the Building is used by more lessees and there are any common areas
                within
                the Building used by these lessees or some of them, the Lessor shall
                secure fulfillment of the above mentioned obligations and the Lessee
                and
                the other lessees shall pay the pro-rata share of the reasonably
                accrued
                and proven costs.

            

    

     

     

    IX.

    Structural
      changes, introduction of machinery

    

    
      	9.1.	
              The
                Lessee is entitled to perform structural changes of Property (other
                than
                those in Clause 9.2) upon the previous written notice given by the
                Lessee
                to the Lessor. The Lessee shall be free in installing its equipment
                and
                technology in the Property as long as the Lessee complies with the
                respective laws and permit
                regulations.

            

    

    

    
      	9.2	
              The
                structural changes concerning the core of the Building or requiring
                a
                building permit (in
                Czech "Stavební povolení")
                issued by the building authority or a notification (in
                Czech “Ohlášení”)
                to
                the building authority shall only be performed with a previous written
                consent of the Lessor, which shall not be unreasonably
                withheld.

            

    

    

    All
      the
      permits and approvals or notifications required for the structural changes
      shall
      be obtained by the Lessee at its own expense; the Lessor undertake to provide
      the Lessee with all

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    reasonable
      co-operation necessary for obtaining such permits. The accounting write-offs
      of
      the constructional adaptation cost in this case are included in the accounting
      of the Lessee. Should any such changes be considered technical improvements
      for
      the purposes of Section 28(3) of the Income Tax Act, the Tenant is authorized
      to
      depreciate the value of such changes and the Lessor is obliged not to increase
      the value of the Building by costs of such changes.

    

    
      	9.3	
              At
                the termination of the Agreement the Lessee shall be
                obliged to either (i)
                remove all structural changes at its own expense in order to restore
                the
                Property to its original condition or (ii) leave the structural changes
                in
                the Property upon previous consent by the Lessor. If the Lessor approved
                the structural change before its implementation, such approval is
                considered as its previous consent for the purpose of this section
                9.3.

            

    

    

    
      	9.4	
              The
                Lessee shall document all the structural changes undertaken by it
                in the
                form of building plans and shall provide the Lessor with a copy of
                such
                plans free of charge. 

            

    

    

    
      	9.5	
              Structural
                changes of any kind shall be carried out by the authorized companies
                while
                observing all applicable legal regulations solely at the expense
                and risk
                of the Lessee.

            

    

     

     

    X.

    Right
      of Inspection

    

    
      	10.1	
              The
                representatives of the Lessor have the right to enter the Property
                for the
                purposes of inspection on the condition that they notify the Lessee
                three
                days ahead and arrange a meeting. No other persons shall be allowed
                to
                enter the Property without a prior written consent of the Lessee.
                The
                visits of representatives of the Lessor shall not hinder due operation
                of
                the plant. The Lessor’s visits shall always take place at the presence of
                the designated representative of the
                Lessee.

            

    

    

    
      	10.2	
              In
                the case of immediate danger the Lessor is entitled to enter the
                Property
                at any time, however, only for the purpose of forestalling such dangerous
                situations. In such case the Lessor shall notify the Lessee about
                such
                entry into the Property on the earliest possible
                occasion.

            

    

    

    
      	10.3	
              The
                Lessor is not entitled to take pictures within the Premises or make
                other
                records of the production line (or any part thereof). The Lessor
                also
                agrees that it will keep strictly confidential any and all information
                obtained from the Lessee or from the inspection of the Premises regarding
                the Lessee’s production.

            

    

     

     

    XI.

    Costs
      and Fees

    

    Each
      party shall carry its own costs in connection with the conclusion of this
      Agreement.

     

    XII.

    Return
      of the Property

    

    
      	12.1	
              Upon
                the termination of this Agreement shall be the Property handed over
                to the
                Lessor in the state as at the beginning of the lease under this Agreement
                with permissible deviations from the original state of the Property
                resulting from:

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
            	(a)	
              structural
                changes made by the Lessee in accordance with Article IX., clause
                9.1
                hereof, and/or

            

    

    
      	 	
              (b)

            	
              usual
                wear and tear.

            

    

    

    After
      the
      inspection of the Property at the time of the hand-over to the Lessor a handover
      protocol shall be mutually agreed and signed by the Lessor and the Lessee,
      in
      which the state as well as all defects of the Property shall be
      recorded.

    

    
      	12.2	
              If
                the Property is returned later than stipulated above due to the Lessee’s
                fault, the Lessee shall pay a contractual penalty in the amount of
                the
                double daily Rent. The Lessor shall not be entitled to request any
                unjust
                enrichment from the Lessee and if it raises such request against
                the
                Lessee, the amount of the contractual penalty which the Lessee is
                obliged
                to pay hereunder, or has paid, decreases by the amount claimed by
                the
                Lessor as an unjust enrichment. If the Lessee already paid the contractual
                penalty, the claim of the Lessor for the unjust enrichment shall
                be
                set-off against the claim of the Lessee against the Lessor for returning
                of the relevant amount of the contractual penalty. Furthermore, the
                Lessee
                shall be obliged to pay the Park management fee as stated in Article
                VI.
                hereof.

            

    

    

    
      	
              12.3

            	
              Unless
                agreed otherwise, upon the termination of this Agreement the Lessee
                shall
                remove all machinery and mechanical installations and pieces of equipment
                brought in and owned by the Lessee at his own
                expense.

            

    

     

     

    XIII.

    Insurance

    

    
      	13.1	
              The
                Lessor shall conclude sufficient storm, fire, water (including flood
                damage), liability, loss of utility, glass damage and other appropriate
                property insurance for the Property in an amount sufficient to cover
                the
                costs for reconstruction of the
                Property.

            

    

    

    
      	13.2	
              As
                of the delivery of the Property and during the whole duration of
                this
                Agreement the Lessor shall conclude and maintain in effect a general
                public liability insurance, covering claims, demands and actions
                for
                accidental injury or death, and for any liability arising from damages
                to
                Property of Lessee or third parties, in the amount not less than
                EUR
                600,000
                (in
                words: six
                hundred thousand Euro)
                per incident and EUR 1,500,000
                (in
                words: one
                million five hundred thousand Euro)
                in the aggregate in one policy year, related to, or connected with
                the
                Lessor ́s employees, agents, visitors, contractors undertakings in relation
                to the Property. 

            

    

    

    
      	13.3	
              All
                insurance provided for in this Article shall be valid and enforceable
                policies issued by recognized and reputable insurance companies,
                which are
                authorized to do business in Czech Republic, copies of the insurance
                policies shall be provided to the Lessee upon its
                request.

            

    

    

    
      	13.4	
              In
                case of casualty to the Property resulting in damage or destruction
                to the
                Premises, the Lessee shall promptly telephone the Lessor within 24
                hours
                after the casualty occurred (if the Lessee was present in the Premises)
                and subsequently give written notice thereof to Lessor. The Lessor
                shall
                apply funds to begin restoration repairs immediately thereafter in
                order
                to restore the Property to its full use as soon as practicable. If
                a
                substantial part of the Property cannot be used, and if requested
                by the
                Lessee the Lessor shall use all best endeavors to secure suitable
                facilities for the Lessee whilst the restoration of the Premises
                is
                undertaken under the conditions agreed between the
                Parties.

            

    

     

    
      	13.5	
              The
                Lessee
                is
                liable for all damage caused to the Property because of the faulty
                use of
                the Property by its representative(s), employee(s), visitors, contractors
                and suppliers. The
                Lessee shall take out and maintain at its own expense adequate operation
                liability insurance as well as

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    adequate
      insurance of its furniture and machinery covering in particular storm, theft
      and
      burglary.

    

    
      	13.6.	
              The
                Lessor is liable for all damage caused to the Lessee (including its
                property) by the Lessor’s representative(s), employee(s), contractors or
                other lessees.

            

    

     

     

    XIV.

    Governing
      Law, Court Jurisdiction

    

    
      	14.1	
              This
                Agreement shall be governed by the laws of the Czech
                Republic.

            

    

     

    
      	14.2	
              The
                Parties agree to resolve disputes that arise on grounds of this Agreement
                primarily by way of negotiations and amicable settlement, in the
                spirit of
                the purpose of this Agreement and along the lines of the intentions
                expressed herein. The Parties shall avoid everything that may lead
                to
                conflict and undertake to render each other the assistance necessary
                to
                bring this Agreement into existence and to implement and perform
                under the
                same. If, in the opinion of either of the Parties, no agreement can
                be
                reached even after talks on the level of the statutory representatives,
                then either Party may refer the dispute to the court that has
                jurisdiction. 

            

    

     

     

    XV.

    Indemnity

    

    
      	15.1	
              Lessee
                shall indemnify, defend, save and hold Lessor as well as the Lessor ́s
                agents, representatives or employees harmless from and against all
                losses,
                demands, claims, payments, suits, actions, recoveries and judgments
                of any
                nature and type brought by any third party against the Lessor by
                reason of
                any negligence or acts or omissions of Lessee, its agents,
                representatives, or employees, during the
                duration of this Agreement.

            

    

    

    
      	15.2	
              Lessor
                will vice versa indemnify, defend, save and hold the Lessee, its
                shareholders, employees, representatives and invitees harmless from
                and
                against any and all losses, damages, claims, payments, suits, actions,
                recoveries and judgments of any nature and type brought by any third
                party
                against the Lessee by reason of any negligence or acts or omissions
                of
                Lessee, its agents, representatives, or employees, during the duration
                of
                this Agreement or arising from:

            

    

    

    
      	
            	(i)	
              any
                defects in the Property if they have not been caused by Lessee and
                /or
                Lessee’s occupancy and operation within the
                Property;

            

    

    

    
      	
            	(ii)	
              any
                activity, work or things done either by the Lessor or with the Lessor ́s
                explicit permission in the Property;
                and

            

    

    

    
      	
            	(iii)	
              any
                breach, violation, or non-performance (including negligence) by Lessor
                or
                any person authorized by Lessor or the employees, agents, or contractors,
                of Lessor of any term, covenant, or provision of this Agreement or
                any
                law, ordinance, or governmental requirement of any kind.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    XVI.

    Final
      Provisions

    

    
      	16.1	
              The
                Lessee shall be obliged to provide the Lessor with an unconditional
                parent
                company guarantee in the form attached as Annex
                no.7
                hereto within 6 weeks from the conclusion hereof (hereinafter referred
                to
                as “Lessee’s Guarantee”).
                The Lessee’s Guarantee is covering all financial risks arising under and
                in connection with this Agreement, but its amount and thus the overall
                financial exposure of the parent company shall be limited to the
                amount
                corresponding to 36 monthly Rent payments (level of Rent being the
                original level of Rent agreed hereunder) for the first six years
                of the
                lease under this Agreement and by the amount corresponding to 24
                monthly
                of the Rent applicable for the sixth year of the lease for the remaining
                duration of this Agreement. For avoidance of doubt the Parties agree
                that
                payment under the Lessee’s Guarantee will never exceed 36 monthly Rent
                and, if no amount is claimed to be paid or paid within first six
                years of
                the lease, it will never exceed 24 monthly of the Rent applicable
                for the
                sixth year of the lease. The Lessee is obliged to keep this Lessee’s
                Guarantee valid and enforceable and covering the above stipulated
                amount
                during the whole time of duration hereof. Should the Lessee breach
                this
                obligation or breach its obligation to provide the Lessee’s Guarantee to
                the Lessor, the Lessor shall be entitled to a contractual penalty
                equal to
                EUR 500 (in words: five hundred Euro) for each day the event of default
                is
                lasting.

            

    

    

    
      	18.2	
              The
                Lessor shall be obliged to provide the Lessee with an unconditional
                parent
                company guarantee in the form attached as Annex
                no. 13
                hereto within 6 weeks from the conclusion hereof (hereinafter referred
                to
                as “Lessor’s Guarantee”).
                The Lessor’s Guarantee is covering all financial risks arising under and
                in connection with this Agreement, but its amount and thus the overall
                financial exposure of the parent company shall be limited to the
                amount
                corresponding to 36 monthly Rent payments (level of Rent being the
                original level of Rent agreed hereunder). The Lessor’s Guarantee shall
                expire (i) on the date when the Lessor fulfills all its obligations
                and
                conditions of the confirmation of the results of the composition
                proceedings, as contained in the decision of the Regional Court in
                Ostrava
                No. 36 Kv 1/2006 - 302, which came into legal effect on January 30,
                2007
                or (ii) on 30 April, 2008, whichever occurs earlier (“Lessor’s
                Guarantee Expiration Date”).
                The Lessor is obliged to keep this Lessor’s Guarantee valid and
                enforceable until the Lessor’s Guarantee Expiration Date. Should the
                Lessor breach this obligation or breach its obligation to provide
                the
                Lessor’s Guarantee to the Lessee, the Lessee shall be entitled to a
                contractual penalty equal to EUR 500 (in words: five hundred Euro)
                for
                each day the event of default is
                lasting.

            

    

    

    
      	18.3	
              If
                any provisions hereof become invalid, the rest of the provisions
                shall not
                be affected thereby. Parties shall replace such invalid provisions
                by
                other legally valid provisions, which shall be similar in their meaning
                and purpose to the invalid ones.

            

    

    

    
      	18.4	
              The
                rights and obligations resulting from this Agreement shall be assumed
                by
                the Parties’ legal successors. 

            

    

    

    
      	18.5	
              Changes
                and amendments to this Agreement shall require a written and legally
                valid
                agreement of both Parties hereof or their legal
                successors.

            

    

    

    
      	18.6	
              The
                address to which any reminders, notices or any other official mail
                between
                the Parties shall be sent is the address stated in the heading of
                this
                Agreement, unless another address has been announced by the Party
                to the
                other Party. All written notices under this Agreement shall be sent
                via
                registered mail.

            

    

    

    
      	18.7	
              This
                Agreement has been executed in 3 (three) English counterparts. The
                Lessor
                shall obtain 2 (two) counterparts and the Lessee 1 (one) counterpart
                hereof.

            

    

    

    
      	18.8	
              List
                of annexes:

            

    

    

    Annex
      No.
      1 - Technical Specification

    Annex
      No.
      2 - Description of utilities provided by public suppliers and connections
      thereto and the parameters of the DI water

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Annex
      No.
      3 - Copy of the Use Permit 

    Annex
      No.
      4 - Scope of business to be performed by the Lessee within the
      Premises

    Annex
      No.
      5 - Detailed specification of the use of the Property by the Lessee

    Annex
      No.
      6 - Site plan of the Property

    Annex
      No.
      7 - Draft of Lessee’s Guarantee

    Annex
      No.
      8 - Hand-over protocol

    Annex
      No.
      9 - Consent of Immorent with the execution of this Agreement

    Annex
      No.
      10 - Specification of the Additional Loading Bays

    Annex
      No.
      11 - Specification of the Expansion Premises

    Annex
      No.
      12 - Specification of the Security Measures within the Park and the
      Building

    Annex
      No.
      13 - Draft of Lessor’s Guarantee

     

    All
      the
      Annexes hereto shall form an integral part of this Agreement.

    

    
      	18.8	
              This
                Agreement has been read and jointly discussed by the Parties to the
                Agreement before its execution. The Parties hereby confirm that they
                have
                reached an agreement regarding all the contractual provisions
                hereunder.

            

    

    

    * * *

    

    
      	
              In
                Prague on _________ 2007

            	 	
              In
                Prague on __________ 2007

            
	 	 	 
	 	 	 
	 	 	 
	
              /s/
                Mr. Vos

            	 	
              /s/
                Philip Glyn Styles

            
	
              Multidisplay
                s.r.o.

            	 	
              SENDIO
                s.r.o.

            
	 	 	
              Philip
                Glyn Styles

            
	 	 	
              the
                executiveCTP
      Products B.V.

    Veendam

    Stolberweg
      197, 9641

    The
      Netherlands

    

    31st
      October,
      2007

    

    

    Telegen
      Corporation

    1840
      Gateway Drive

    Suite
      200

    San
      Mateo

    CA
      94404

    United
      States of America

    

    

    
      	Re:	
              Settlement
                of Rent under Premises Lease
                Obligations

            

    

    

    Dear
      Sir:

    

    This
      Letter Agreement (the “Agreement”) sets forth the terms and conditions agreed to
      by and between Telegen Corporation (“Telegen”), CTP Netherlands (“CTP”) and
      Multidisplay s.r.o., a subsidiary of CTP (“Multidisplay”), in connection with
      the following lease agreements: (1) that certain Agreement on the Lease of
      Non-Residential Premises entered into on October 31, 2007 by and between Sendio
      s.r.o., a subsidiary of Telegen (“Sendio”), and Multidisplay (the “Premises
      Lease”). The parties agree as follows:

    

    1.    Assignment
      of Receivable to CTP.
      Multidisplay has duly and irrevocably assigned to CTP all right, title and
      interest in and to all amounts owing, including without limitation, for rent,
      taxes, levies or other fees or payments of whatever nature (the “Receivables”)
      from Sendio to Multidisplay under the Premises Lease for the period from
      November 1, 2007 through June 30, 2008 in the amount of EUR 1,575,000. CTP
      is
      the sole owner of all rights with respect to the Receivables, and no other
      person has any right or interest thereto. CTP shall not assign, sell or
      otherwise transfer any right, title and interest in and to the Receivables,
      or
      any part thereof, or allow any other person to assert any right therein. CTP
      shall protect and defend Telegen and Sendio from all demands or claims by or
      liabilities to any person with respect to the Receivables.

    

    2.    Consent
      of Bank.
      Multidisplay has received and delivered to Telegen the written consent of Bank
      IMMORENT-BANK GMBH,
      an
      Austrian limited liability company, having registered office at 1060 Vienna,
      Windmühlgasse 22-24, Austria 
      to the
      assignment of the Receivables from Multidisplay to CTP, which consent is in
      full
      force and effect. A complete and correct copy of the signed consent is attached
      to this Agreement as Exhibit A. Multidisplay and CTP represent and warrant
      to
      Telegen that no consent, approval, filing or notice is required from or with
      any
      other person, entity or governmental agency in connection with consummation
      of
      the transactions contemplated by this Agreement, and that consummation of the
      transactions contemplated by this Agreement will not cause a default, breach
      or
      violation of or under any or agreement, instrument, document, judgment, order,
      law, rule or regulation to which CTP, Multidisplay, or any of their respective
      assets are bound. In addition, and without limiting the foregoing, CTP and
      Multidisplay confirm that the assignment of the Receivables and the transactions
      contemplated by this Agreement comply in all respects with Section 196(a) of
      Act
      No. 513/1991 Col., as amended, of the Czech Commercial Code.

    

    3.    Issuance
      of Common Stock as Payment in Full on Receivables.
      As
      payment in full on the Receivables, Telegen shall issue to CTP shares of its
      common stock (the “Shares”) as set forth below, subject to Section 5 below. In
      no event shall Telegen be required to make any cash payments to CTP on the
      Receivables.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a)    As
      advance payment in full for all Receivables due under the Premises Lease for
      the
      period from November 1, 2007 through June 30, 2008, Telegen shall issue to
      CTP
      6,100,000 Shares, effective as of November 1, 2007.

    

    (b)    Upon
      issuance of the 6,100,000 Shares to CTP pursuant to the terms in (a) above
      of
      this Agreement, the respective Receivables shall be automatically and
      irrevocably deemed cancelled, being fully paid.

    

    4.    Representations
      and Warranties of CTP.
      In
      connection with the issuance of the Shares, CTP represents and warrants to
      Telegen as follows:

    

    (a)    It
      has
      knowledge of Telegen’s business, management, operations, financial condition and
      prospects, and it has been furnished with or has had access to such information
      as it requires to evaluate the merits and risks of the proposed investment
      (including Telegen’s public filings available at www.sec.gov),
      together with such additional information as is necessary to verify the accuracy
      of the information supplied;

    

    (b)    It
      is
      acquiring the Shares solely for its own account, for investment and not with
      a
      view to resale or distribution of any part thereof, and it has no present
      intention of selling, granting any participation in, or otherwise distributing
      the same. It shall not have the right to assign this agreement or any rights
      hereunder;

    

    (c)    It
      is not
      a “U.S. Person” as defined in Regulation S promulgated under the Securities Act
      of 1933, as amended (the “Securities Act”), that it is not acting as a fiduciary
      for a “U.S. Person,” that the acquisition of the Shares originated by CTP
      outside of the United States, and that its principal place of business is in
      Humpolec, Czech Republic.

    

    (d)    It
      acknowledges that the Shares are considered “restricted securities” under
      applicable U.S. securities laws and may not be resold in the United States
      and
      must be held indefinitely unless subsequently registered under the Securities
      Act or unless an exemption from such registration is available. In particular,
      CTP is aware of the restrictions and limitations on resale of the Shares into
      the United States or to a U.S. Person pursuant to the provisions of Regulation
      S.

    

    5.    Forfeiture.
      In the
      event that Multidisplay breaches any provision of the Premises Lease at any
      time
      prior to June 30, 2008 or CTP or Multidisplay breaches any of its respective
      covenants, representations or warranties contained in this Agreement, CTP shall
      forfeit all right, title and interest in and to all of the Shares. In addition,
      in the event that Multidisplay terminates the Premises Lease at any time prior
      to June 30, 2008, CTP shall forfeit all right, title and interest in and to
      all
      of the applicable Shares issued for such respective period, determined in
      Sections 2 (a) above. Upon such breach or termination, CTP shall immediately
      return all Shares to Telegen, and Telegen shall have the right to cancel such
      Shares with immediate effect. To facilitate such cancellation and transfer
      of
      the Shares to Telegen, CTP hereby executes and delivers to Telegen the blank
      stock powers, substantially in the form attached to this Agreement as
Exhibit
      B.
      Without
      limiting the foregoing, CTP hereby irrevocably constitutes and appoints Telegen
      as CTP’s attorney-in-fact and agent to execute with respect to such Shares all
      documents or instrument of assignment, transfer or cancellation necessary or
      appropriate to transfer and cancel on the books and records of Telegen such
      Shares and complete any transaction herein contemplated. This power of attorney
      granted to Telegen is a special and limited power of attorney coupled with
      an
      interest, is irrevocable (to the maximum extent permitted by law), shall be
      binding on CTP’s successors and assigns and is limited to those matters herein
      set forth. In addition, until July 1, 2008, CTP shall not, voluntarily or
      involuntarily, directly or indirectly, sell, transfer, assign, pledge or
      otherwise dispose of, or mortgage, pledge, hypothecate or otherwise encumber,
      or
      permit or suffer any encumbrance, foreclosure or attachment of, all or any
      part
      of the Shares, and any purported sale, transfer, assignment, pledge or
      encumbrance shall be null and void and of no force or effect
      whatsoever.

    

    6.    Governing
      Law.
      This
      Agreement shall be interpreted in accordance with the laws of the State of
      Washington in the United States without giving effect to its conflict of laws
      principles. The substantially prevailing party in any suit or proceeding shall
      be entitled to reimbursement for its reasonable costs and attorneys’ fees
      incurred.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.    No
      Assignment.
      Neither
      CTP nor Multidisplay may assign, delegate or transfer, by merger, operation
      of
      law or otherwise, any of its respective rights or obligations under this
      Agreement without the prior written consent of Telegen.

    

    8.    Entire
      Agreement.
      This
      Agreement represents and contains the entire understanding between the parties
      in connection with the subject matter of this Agreement. The Agreement shall
      not
      be modified or varied except by a written instrument signed by the parties.
      All
      prior written or oral agreements, understanding or representations between
      CTP
      and Telegen with respect to the subject matter hereof are merged into and
      superseded by this Agreement.

    

    Please
      acknowledge your agreement with the foregoing by signing in the space indicated
      below and returning it to me.

    

    Very
      truly yours,

     

    CTP
      Products BV

     

     

    By: 
      /s/ Eltje Maas
      
        

      

    

    Name:

    Title:

     

    Multidisplay
      s.r.o.

     

     

    By: 
      /s/ Mr. vos
      
        

      

    

    Name:

    Title:

    

    

    

    

    

    ACCEPTED
      and AGREED to this

    31st
      day of
      October, 2007.

     

    /s/
      Duncan Troy

    
      
        

      

    

    Duncan
      Troy

    Chairman,
      Telegen Corporation

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A to Letter Agreement

     

    IMMORENT-BANK GMBH
      CONSENT

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B to Letter Agreement

     

    ASSIGNMENT
      SEPARATE FROM CERTIFICATE

     

    FOR
      VALUE
      RECEIVED, the undersigned, CTP Netherlands hereby sells, assigns, and transfers
      unto Telegen Corporation, a California corporation (the “Company”), a total of
      6,100,000 shares of Company common stock standing in the undersigned’s name on
      the books of the Company, such shares being represented by Certificate No(s).
      __________ and does hereby irrevocably constitute and appoint the Company,
      and
      its Chairman and Chief Executive Officer, and any one of them acting alone,
      as
      attorney-in-fact to transfer the shares on the books of the Company with full
      power of substitution in the premises.

    

    

    EXECUTED
      this ___ day of November, 2007.

    

    CTP
      Netherlands

     

     

    By:
      
      
        

      

    

    Name:

    Title:

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