LEASE AGREEMENT

LEASE AGREEMENT

THE STATE OF TEXAS §
COUNTY OF HARRIS

THIS LEASE AGREEMENT made the 16, day of July, 2007 between Westfalia, a Texas Limited Partnership, herein called “Landlord” and South Sea Energy Corporation, a Canadian Corporation. herein called "Tenant."

WITNESSETH

ARTICLE I PREMISES

Landlord LEASES, DEMISES and LETS to Tenant and Tenant leases from Landlord certain office space (the “Premises”) located at 3403 Marquart Street, Room ___ Houston, Harris County, Texas 77027 (“the Building”) Such space is located on the 1st floor of the building and is shown on the floor plan attached Exhibit "A-. This Lease is made on and subject to all of the provisions terms. covenants and conditions set out below.

This lease is conditioned on the faithful performance of all the following agreements, covenants, rules and regulations, herein set out and agreed to by Tenant.

ARTICLE II TERM OF LEASE

Basic Rent: $1267.20 total base rent consideration for a six (6) month term. Rent to he paid in monthly installments as follows:

Permitted Use: General Office.
Expense Stop: Basic Costs per square foot of the Building in calendar year 2004.
Rentable Area of the Premises 128 square feet.

Security Deposit: $ 211.20

Notice Address for Landlord:
3403 Marquart
Houston, TX 77027

Notice Address for Tenant:
3403 Marquart. Room 10

Houston. TX 77027

Address of the Premises:
3403 Marquart
Houston. IA 77027

ADDENDUM

The following Addenda are attached to and make a part of this Lease for all purposes:

Exhibit A – Floor Plan showing the Leased Premises
Exhibit B – Tenant Improvements
Exhibit C – Rules and Regulations
Exhibit D – Special Provisions
Exhibit E – Parking Rules and Regulations
Exhibit F – Security Notification
Exhibit G – Guarantee of Lease

ARTICLE III SUPPLEMENTAL TERMS, COVENANTS, AND CONDITIONS

Landlord leases the Premises to Tenant and Tenant accepts and agrees to use and possess the Premises on the following Supplemental Terms, Covenants and Conditions References below to the -Basic Lease Information- are references to the information set out above. If a conflict exists between the Basic Lease Information and the provision below, the provisions below will control.

Tenant will pay Landlord, without demand, setoff or deduction. a net monthly rental (the “Base Rent”) as specified in the Basic Lease Information. The Base Rent will be due in advance on the first day of each calendar month during the Term. If the Term begins on a day other than the first day of a calendar month on the or ends on a day other than the last day of a calendar month, the Base Rent for such partial month will be prorated by Landlord. The first installment of Base Rent, whether for all or only a portion of a calendar month, must be paid contemporaneously with the execution of this Lease. All amounts due under this Lease from time to time other than Base Rent shall be additional rent (whether or not so designated in the following provisions) and shall be due on demand if no time for payment is otherwise specified below. Tenant will pay all amounts due to Landlord under this Lease at the address of Landlord specified in the Basic Lease Information or elsewhere as designated from time to time in notice from Landlord to Tenant.

     (a) Tenant will use and occupy the Premises continuously throughout the Term for the Permitted Use specified in the Basic Lease Information and for no other purpose. Tenant must use and maintain the Premises in a clean, careful, safe and proper manner and in

compliance with all applicable laws. ordinances, orders, rules and regulations of all governmental entities and regulatory agencies (collectively, "Applicable Law"). Without limiting the foregoing, Tenant will be responsible for obtaining any permits required for Tenant's use of the Premises and for determining that such use complies with Applicable Laws. Tenant will comply with all rules and regulations (the "Rules and Regulations-) adopted by Landlord from time to time for the safety and convenience of tenants and others in the Building. The present form of the Rules and Regulations are attached as Exhibit C. Tenant will not in any manner deface or injure the Building or the Land or overload the Floors of the Premises. Tenant must pay on demand for any damage occurring to the Premises during the Term, however caused by Tenant, except for damage proximately caused by the negligence or intentional misconduct of Landlord or by structural defects in the Building. Tenant must also pay on demand for any damage to any other part of the Building or the Land caused by any negligence or willful act, misuse or abuse by Tenant or any of its agents, employees, licensees, or invitees. Tenant will not use the Premises for retail, lodging or sleeping purposes, and Tenant will not do any cooking or permit any cooking odors or any other unusual or objectionable odors to emanate from the Premises. Tenant will conduct its business and occupy the Premises and will control its agents, employees, licensees and invitees in a manner that will not create a nuisance or interfere with, annoy or disturb any of the other Tenants in the Building. Tenant will not use the Premises or permit them to be used in any way that will increase the rate of fire or other insurance for the building, or its contents. Tenant will not place any sign, advertising matter, stand, booth, or showcase in or upon the doorsteps, vestibules, corridors, doors. walls or windows of the building (except for lettering on the door or doors to the Premises as allowed by the Rules and Regulations forming, a part of this Lease) without the prior written consent of Landlord. Tenant may use the Premises for: (i) general office and administrative use: (ii) the installation and maintenance of its telecommunications system and equipment; (iii) for any other lawful use which is allowed in the Building in which the Premises are located and which is consistent with the character of the Building. Tenant shall have access to the Building, the Premises and the parking area twenty-four hours (24) per day, seven (7) days per week, three hundred sixty five (365) days per year. Tenant's agents, servants, employees, customers. invitees, or licensees shall have access to the Building during normal business hours, which shall be Monday through Friday, from 7:00 a.m. to 6:00 p.m. and on Saturday from 8:00 a.m. to 12:00 p.m. exclusive of holidays. At the Lease Commencement Date, Landlord shall provide one (1) key to the Premises Tenant shall pay Landlord a fee for any lost or additional keys and card keys.

     (b) The Premises do not include. and Landlord reserves for its use. any and all mechanical, electrical, telephone or similar rooms; janitor closets: elevator, pipe, and other vertical shafts and ducts; flues: stairwells: any area above the acoustical ceiling: and any other areas not specifically shown on Exhibit A as being part of the Premises. But Tenant will have the non-exclusive right, subject to Paragraph 3 below, to use corridors. lobbies and other areas in the Building that Landlord provides from time to time for the common use of the tenants of the Building (collectively. the "Common Areas").

     If for any reason the Premises are not ready for occupancy by Tenant on the date of the commencement of the Term, this Lease and the obligations of Tenant will nonetheless continue

in full force and the Term will not he extended. However, if the Premises are not ready for occupancy because of an omission, delay or default on the part of Landlord, the Term of the Lease will not commence until such omission, delay or default is corrected or the Premises are otherwise substantiality ready for occupancy. Such delay in the commencement of the Term and subsequent delay in Tenant's required payment of Base Rent will constitute full settlement of all claims that Tenant might otherwise have against Landlord because of the delay in making the Premises ready for occupancy. The taking of possession of the Premises by Tenant will by conclusive evidence that: (i) Tenant accepts the Premises as suitable for the purpose for which they arc leased; (ii) Tenant accepts the Building and the Land and each and every part of appurtenance as being in a satisfactory condition.

     (a) So long as Tenant has not committed an uncured event of default under this Lease. Landlord agrees to furnish for the occupied portion of the Premises. at Landlord's expense, the following services during the Term; (i) heating and air conditioning in season during normal business hours (as specified in the Rules and Regulations) at such temperatures and in such amounts Landlord shall consider to he standard: (ii) water for lavatory and toilet purposes at points of supply provided for the general use of tenants of the Building; (iii) janitor and maid service on weekdays other than holidays and such window washing and wall cleaning as may in the judgment of Landlord be reasonably required (provided, however. if Tenant's leasehold improvements are of different quality than is standard in the Building and, therefore, the cost of janitor and maid service for the Premises exceed the cost of janitor and maid service for other premises in the Building with standard leasehold improvements, then Tenant will pay the excess cost as additional rent upon receipt of a statement therefore): (iv) elevator service to an from the floor(s) on which the Premises are located during normal business hours (provided. however, that Landlord may limit the use of Building elevators for freight service to times other than normal business hours and to such times as are scheduled through the manager of the Building); and (v) electric lighting and routine maintenance for the Common Areas in the manner and to the extent Landlord deems reasonable and standard. The current charge for HVAC after normal business hours is $35 per hour.

     (b) So long as Tenant has not committed an event of default under this Lease. Landlord will furnish sufficient power to the Premises for lighting for typewriters, calculating machines and other machines (including personal computers and peripheral equipment, a water cooler, and, a microwave that draws no more than 500 watts) of similar low electrical consumption, but not for computer and/or electronic data processing equipment, special lighting in excess of lighting that is standard in the Building, or any other item of electrical equipment which, singly, consumes more than .25 kilowatts per hour at rated capacity or requires a nominal voltage of more than 120 volts single phase. If Tenant requires electricity in excess Landlord must furnish under the preceding sentence, Landlord, at Tenant's expense, of that which will make a reasonable effort to meet Tenant's needs through the then existing feeders servicing the Building. But Landlord reserves the right to require Tenant to procure electricity, for such excess requirements at Tenant's expense by arrangement with local utility companies approved by Landlord. Landlord, not Tenant, will install any supplemental risers or wiring to meet Tenant's excess electrical requirements. However, such installation is not necessary or will cause

permanent damage or injury to the Building or create a hazardous condition or entail excessive or unreasonable alterations, repairs or expense or interfere with or disturb other tenants, then Landlord will not be required to install the supplemental risers or wiring. Landlord will not be responsible or liable to Tenant for any failure or defect in the supply or character of electricity furnished the Premises or the Building because of any requirement, act or omission of the electric utility' company serving the Building. All installations of electrical fixtures, appliances and equipment in the Premises are subject to Landlord's prior written approval. Landlord agrees to provide carpet cleaning/shampoo of Leased Premises one time annually at Landlord's expense.

     (c) The services described in subparagraphs (a) and (h) above ("Building Services") may be curtailed or interrupted as required by any Applicable Laws or because of the maintenance, repair, replacement or improvement of the equipment involved in furnishing such services or because of changes of the suppliers of services or because of labor controversies. Accidents, acts of God or the elements or any other cause beyond the reasonable control of Landlord. Notwithstanding anything to the contrary in this Lease, any curtailment or interruption of Building Services covered by the preceding sentence will not be construed as an eviction (actual or constructive) of Tenant, nor cause any abatement of the rent payable under this Lease, nor relieve Tenant from any of its obligations under this Lease, and Landlord will not be liable for injury to persons or property. or be in default under this Lease, as a result of such curtailment or interruption. However, Landlord agrees to attempt in good faith to resume any curtailed or interrupted Building Services after receipt of notice from Tenant advising Landlord of the affected services.

     (d) Landlord and 'landlord's Mortgagee" (as defined in Paragraph 26 below) will have 90 days to cure any failure to provide Building Service that amounts to a constructive eviction of Tenant under applicable law (a "Serious Interruption") after receiving notice of the Serious Interruption and of Tenant's intention to terminate this Lease because of the Serious Interruption if it is not cured. If a Serious Interruption occurs and is not cured within the 90 days allowed, the Tenant shall, as its sole remedy, have the right to terminate the Lease. Any failure or defect in Landlord's herein above described services shall not be construed as an eviction of tenant nor entitle Tenant to any reductions. abatement. offset. or refund of Rent or to any damages from Landlord. Landlord shall not be in breach or default under this Lease, provided Landlord uses reasonable diligence to restore any such failure or defect after Landlord receives written notice thereof. Notwithstanding anything in Article 111 of the Lease Agreement to the contrary, if there is an interruption or shortage in any essential service to substantially all the Leased Premises (the essential services being defined as air conditioning services and heating services, electrical services or elevator service) and (i) such interruption is not the result of the negligence or willful misconduct of Tenant, its agents or employees. (ii) restoration of such essential services is within the reasonable control of Landlord. and (iii) such interruption continues for a period of five (5) consecutive business days. Tenant shall be entitled to an abatement of rent (commensurate with that portion of the Leased Premises to which Landlord's services have been interrupted calculated on a per square foot basis) tior the period commencing with the expiration of such fifth (5`h) business day until such services are restored, but only to the extent that such interruption interferes with the normal use of the Leased Premises by the Tenant in the ordinary course of the business and Tenant does not actually use such portion of the Leased Premises in the ordinary course of business. If an interruption or shortage of essential

services of the nature described in (i) and (ii) above continues for a period of ninety (90) consecutive days after Landlord receives notice from Tenant of such interruption or shortage, then Tenant shall have the right to terminate this Lease upon written notice thereof to Landlord.

     (e) Under no circumstances will Landlord be liable for any indirect or consequential damages caused by the curtailment or interruption of Building Services except for Landlord's negligence causing any such curtailing or interruption.

     Landlord will keep the roof, foundation, exterior walls. exterior windows and exterior doors of the Building, in good condition during the Term. Landlord will also make any repairs to the Premises required because of Landlord's negligence or willful misconduct or because of structural defects in the Building. For the purpose of this Lease. repairs required because of movement of the soil under or around the Building as a result of changes in moisture saturation shall be deemed not be caused by "structural defects". Landlord's obligations under this Paragraph are expressly subject to the other provisions of this Lease.

     Tenant. at Tenant's expense and under Landlord's supervision. will keep the Premises in good and tenantable condition and will promptly make all necessary non structural repairs to the Premises; provided, however. Tenant will not have to make any repairs that are required because of the negligence or intentional misconduct of Landlord. or because of structural defects in the Building. If Tenant fails to make repairs required of it within 30 days after Landlord directs Tenant to make such repairs, Landlord shall be entitled. without notice to Tenant, to make the repairs and charge Tenant for the cost of making them.

     Tenant will not make or permit the making of any alterations. improvements or additions in or to the Premises without first obtaining the written consent of Landlord. All alterations, additions and improvements made to or fixtures placed in the Premises (other than movable office furniture and equipment not attached to the Building) will be deemed a part of the Building and the property of Landlord when placed in the Premises. Landlord may insist that Tenant's proposed alterations, improvements and additions be made or built by Landlord or Landlord's contractor at Tenant's expense.

     Tenant will not permit the placing of any mechanic's liens against the Premises. the Building. the Parking Garage or the Land caused by or resulting from any work performed. materials furnished or obligation incurred by or at the request of Tenant. Nothing in this lease or in any other agreement between Landlord and Tenant constitutes the consent or request of Landlord. express or implied, to any contractor, subcontractor, laborer or material-man for the performance of any labor or the furnishing of any materials for any specific improvements.

alteration or repair to the Building or the Land. Nor does anything herein concerning the Premises give Tenant any right, power or authority to contract for or permit the rendering of any services or the furnishing of any materials that would give rise to the filing of any mechanic's or other liens against the interest of Landlord in the Building, Parking Garage or the Land. If any lien is filed against the interest of Landlord in the Building, Parking Garage or the Land or against the interest of Tenant in the Premises because of work performed, materials supplied or any obligation incurred by or at the request of (or alleged request of) Tenant. then Tenant will cause the same to he discharged of record within 20 days after filing. If Tenant fails to discharge the lien within such period, then, in addition to any other right or remedy of Landlord. Landlord may, but will not he obligated to, discharge the same either by paying the amount claimed to be due or by procuring the discharge by deposit in court or bonding. Any amount paid by Landlord to discharge the lien, and all reasonable legal and other expenses of Landlord. including reasonable attorney's fees, in defending any such action or in procuring the discharge of the lien will be repaid by Tenant on demand.

     (a) Tenant will procure and maintain throughout the Term and any extensions or renewals of the Term comprehensive general liability insurance (including blanket contractual liability coverage), which shall cover any claims for bodily injury. death and/or property damage occurring in or resulting from any occurrence in the Premises. including injury. death and/or damage caused by the condition of or any defect in the Premises. The policies evidencing such insurance must be in broad form satisfactory to Landlord, must name the Landlord as an additional insured. must be issued by insurance companies acceptable to Landlord. and must afford immediate protection to the limit of not less than $250.000.00 per accident. unless a greater or lesser minimum dollar amount of coverage is specified in the Basic Lease Information. With respect to each policy evidencing such liability insurance. Tenant will obtain any available endorsements required by Landlord. Tenant will also deliver the policy or a certificate evidencing the same to Landlord prior to occupying the Premises or commencing the construction of any improvements therein, and Tenant will deliver a certificate of renewal from the applicable insurer at least ten days prior to the expiration of the policy. In addition, Tenant will obtain and deliver to Landlord a written obligation on the part of each of its insurance companies to notify Landlord at least 10 days prior to any cancellation of or material change to such insurance.

     (b) Tenant will indemnify and hold Landlord harmless from all fines. suits, costs and liability of every kind arising because of: (i) any violation or nonperformance by Tenant of any representation or covenant contained in this lease; (ii) any bodily injury, death and/or damage to property occurring in or resulting from any occurrence in the Premises during the Term; and (iii) any bodily injury, death and/or property damage that is incident to. arises out of, or is in any way caused by the acts or negligent omissions of Tenant or any of its agents. employees. contractors. licensees or invitees.

     (c) Tenant accepts responsibility for keeping all personal property and equipment in the Premises adequately insured and for maintaining adequate business interruption insurance. T enant waives for itself and its insurer all rights of Landlord, Landlord's agent,

officers and employees, and the other tenants in the Building an the other tenant's agents, officers and employees for any damage or loss, whether caused by the negligence of such parties or otherwise. to the personal property and equipment in the Premises and for any theft thereof and for direct or consequential damages arising because of any interruption of Tenant's business in the Premises. Because the preceding sentence will preclude any recovery by Tenant or Tenant's insurers against Landlord and the other parties listed in the preceding sentence for damage to or theft of Tenant's property in the Premises or for any interruption of Tenant's business in the Premises, Tenant agrees immediately to notify its insurers of the Terms of this Paragraph. Landlord will not be liable to Tenant, its employees, agents, licensees, invitees or insures for bodily injury, death or property damage occasioned by the acts or omissions of any other tenant of the Building or of other tenant's agents, employees, licensees. or invitees within the Building. Further. Landlord will not be liable to Tenant for any property damage, bodily injury or inconvenience caused by the condition. maintenance, repair or alteration of the Building or Land, or the failure to provide maintenance or repairs, except to the extent caused by Landlord's negligence or willful misconduct.

     (a) Tenant will give Landlord prompt written notice of any damage to the Premises. If during the Term the Building is so damaged by fire or other casualty that substantial alteration or reconstruction, is in Landlord's opinion, required (whether or not the Premises are damaged by such casualty), or if any mortgagee of Landlord should require that the insurance proceeds payable as a result of such a fire or other casualty be applied to the Payment of debt secured by a lien on the Building or Land, or if fire or other casualty results in any material uninsured damage to the Building then and in any of these events. Landlord may, at its option, terminate this Lease by notifying Tenant thereof within 60 days after Landlord is notified of the fire or other casualty. If Landlord does not elect to terminate this lease, Landlord will, within the 60 days after Landlord is notified of the fire or other casualty commence and proceed with due diligence to restore the Building shell and the leasehold improvements (but not the personal property) located on the Premises. However, Landlord will not be obligated to spend more for the restoration than the insurance proceeds and other compensation Landlord actually receives because of the fire or other casualty. Rent shall abate during any period premises are rendered un-tenantable by fire or other casualty, and the Term shall be proportionately extended for every day of abatement.

     (b) Landlord will not be liable for any inconvenience or annoyance to Tenant or injury to the business of Tenant resulting and any way from damage caused by fire or other casualty or the repair of such damage. Nor will Base Rent or other charges abate because of fire or other casualty unless Landlord terminates this Lease.

     (c) Anything in this Lese to the contrary notwithstanding. Landlord and Tenant each waive any right of recovery against the other. and the other's agents, officers, or employees, for any damage or loss to the Building or its contents resulting from fire or other casualty covered by a valid and collectible insurance policy; provided, however, such waiver shall be effective insofar, but only insofar, as compensation for such damage or loss is actually recoverable by the waiving party (net of the costs of collection) under the policy.

     (a) If the whole or substantially the of the Building. Parking Garage or the Premises is taken for any public or quasi-public use by eminent domain or should be sold in lieu of such taking, then this Lease will terminate as of the date when physical possession of the Building. Parking Garage or the Premises is taken by the condemning authority. If less than the whole or substantially the whole of the Building or the Premises sold. Landlord (whether or not the Premises are affected) may terminate this Lease by giving notice to Tenant. in which event this lease shall terminate as of the date when the condemning authority takes physical possession of the condemned or sold portion of the Building, Parking Garage or Premises. If a substantial portion of the is so taken or sold. Tenant may terminate this Lease by giving notice to Landlord, in which event this lease shall terminate as of the date when the condemning authority takes physical possession of the condemned or sold portion of the Premises. If a substantial portion of the Building or Premises is so taken or sold, Tenant may terminate this Lease by giving notice to Landlord, in which event this Lease shall terminate as of the date when the condemning authority takes physical possession of the condemned or sold portion of the Premises. Following any such taking or sale, if this Lease is not terminated, the Base Rent payable by Tenant will be reduced in proportion to the square footage of the Premises taken (if any) and Landlord will restore the Building and the Premises to the extent feasible; provided, however, Landlord will not be required to spend more for such restoration than the net proceeds of the taking or sale available to Landlord.

     (b) All damages awarded for any taking of all or any part of the Premises by eminent domain and all proceeds from any sale in lieu of such taking will be paid to Landlord, whether designated as compensation for the diminution in value of Tenant's leasehold or for the fee of the Premises. However, Landlord will not be entitled to any separate award made to Tenant for loss or damage to Tenant's removable personal property. Nor will Landlord be entitled to any award made to Tenant because of the interruption of Tenant's business, unless the award is combined with or reduces an award for the diminution in value of Tenant's leasehold.

     (a) Upon the expiration or termination to this lease. whether caused by lapse of time or otherwise, Tenant will immediately surrender possession of the Premises to Landlord in good condition, reasonable wear and tear excepted, Tenant will also deliver to Landlord all keys to Premises. If possession is not immediately surrendered. Landlord may enter and take control of the Premises and remove Tenant and any other person who may be occupying them, without incurring any liability.

     (b) All alterations, additions or improvements made to the Premises by or on behalf of Tenant will remain on the Premises without compe