Lease Agreement

This Lease Agreement is made and entered into this 22 day of January 1995, by and between The Penn Mutual Life Insurance Company (hereinafter called "Lessor"), and 3DX Technologies, Inc., a Texas corporation (hereinafter called "Lessee"),


W I T N E S S E T H:


In consideration of the mutual covenants as set forth herein, Lessor and Lessee hereby agree as follows:


1. LEASED PREMISES


Lessor hereby leases to Lessee and Lessee hereby leases from Lessor
approximately 8,603 square feet of Net Rentable Area ("NRA") on floor
two (2), Suite 250 in the building known as Penn Woodbranch
(hereinafter called "Building"), located at 12012 Wickchester, Houston,
Harris County, Texas. The legal description of said property is
contained in the attached Exhibit "A". The area hereby leased
(hereinafter called "Leased Premises") in the Building is shown
outlined and hatched on the floor plan (s) attached hereto and made a
part hereof as Exhibit "B". Lessor shall have the right at any time and
from time to time to change the name of the Building.


2. NET RENTABLE AREA ("NRA")


The NRA contained in the Leased Premises and the Building have been
determined in accordance with Exhibit "C" hereto. The total NRA in the
Building is hereby stipulated for all purposes hereof to be
approximately 109,950 square feet, whether the same should be more or
less as a result of minor variations resulting from actual construction
and completion of the Building. The NRA of the Leased Premises
represents 7.82% of the total NRA within the Building such percentage
is hereafter referred to as "Tenant's Building Percentage".


3. PARKING


Tenant shall at all times during the Lease Term, lease parking rights
for twenty-six (26) cars pursuant to the terms and conditions described
in Exhibit "D" attached hereto.


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4. LEASE TERM


A. Subject to all and upon the conditions as set forth herein, or any
addenda or exhibits hereto, this Lease shall continue in force for
a term of five (5) years (sixty (60) months) commencing on the 1st
day of March, 1995 and shall terminate on the 29th day of February,
2000.


B. In the event the Leased Premises should not be ready for occupancy
by the Commencement Date stated in Section 4A above, Lessor shall
not be liable for any claims, damages or liabilities in connection
therewith or by reason thereof, and the term of this Lease shall
commence at the time that the Leased Premises are ready for
occupancy by Lessee. Should the term of this Lease commence on a
date other than that specified in Section 4A above for any reason,
Lessor and Lessee will at the request of either, execute a
declaration specifying the beginning date of the term of this Lease
Agreement. In such event, rental under this Lease Agreement shall
not commence until said revised Commencement Date, and the stated
term in this Lease Agreement shall thereupon commence and the
expiration date shall be extended so as to give effect to the full
stated term.


5. USE


A. The Premises are to be used and occupied by the Lessee for the
purpose of general office use only and for no other purposes.


B. Lessee agrees not to commit or suffer to be committed on the
Leased Premises any nuisance or other act or thing against public
policy or which violates any law or governmental regulation or
which is disreputable or which may disturb the quiet enjoyment of
any other tenant of the Building of which the Leased Premises are
a part.


C. Lessee will not use, occupy, or permit the use or occupancy of
these Leased Premises for any unlawful, disreputable, immoral or
hazardous purpose; or maintain or permit the maintenance of any
public or private nuisance; or do or permit any act or thing which
may disturb the quiet enjoyment of any other tenant of the
Building; or keep any substance or carry on or permit any
operation which might emit offensive odors into other portions of
the Building or permit anything to be done which would increase
the fire insurance rate of the Building or contents.


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6. BASE RENTAL OVER THE PRIMARY TERM HEREOF


A. Lessee hereby agrees to pay without demand, deduction,
abatement or setoff except as specifically provided for herein a
base annual rental ("Base Annual Rental") equal to $11.00
multiplied by the Net Rentable Area (8,603 NRA) encompassed by the
Leased Premises. The Lessee shall also pay, as additional rent
(hereinafter called "Additional Rent"), all such other sums of
money as shall become due from and payable by Lessee to Lessor
under this Lease. The Lessor shall have the same remedies for
default for the payment of Additional Rent as are available to
Lessor in the case of a default in the payment of Base Rental.
Subject to the provisions of this Lease regarding the prepayment
of Base Rental and other amounts, such Base Rental, together with
any adjustment of rent provided for herein then in effect, shall
be due and payable on the first day of each calendar month during
the term of this Lease and Lessee hereby agrees to so pay such rent to
Lessor at Lessor's address as provided herein (or such other
address as may be designated by Lessor from time to time) monthly in
advance without demand. If the term of this Lease Agreement as
heretofore established commences on other than the first day of a
month, then the installments of Base Rental for such month or
months shall be prorated and the installment or installments so
prorated shall be paid in advance. All past due installments of
rent shall bear interest at the maximum lawful rate per annum
until paid.


7. BASE RENTAL ESCALATION.


A. In the event that the Operating Cost (as hereinafter defined) of
Lessor's operation of the Building during any Lease Year of the
Lease Term shall exceed the total Operating Cost of the Building
for the calendar year 1995 on a per square foot of Net Rentable
Area basis, grossed up to reflect ninety-five percent (95%)
Building occupancy, Lessee shall pay to Lessor, as Additional
Rent, its proportionate share of the increase in such Operating
Cost. The proportionate share of such increase to be paid by
Lessee shall be determined by multiplying the amount of such
increase by Tenant's Building Percentage. Said Additional Rent
shall be paid in the manner and at the times set forth in Section
8 below. The term "Lease Year" shall mean the twelve month period
commencing January 1 and ending December 31.


B. "Operating Cost", as said term is used herein, shall be defined as
the operating expenses of the Building, which shall be computed on
the accrual basis and shall consist of all expenditures by Lessor
to maintain all facilities in operation during each Lease Year and
such additional facilities in subsequent years as may be
determined by Lessor to be necessary. All operating expenses shall
be determined in accordance with generally accepted accounting
principles, which shall be consistently applied. The term
"operating expenses"


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as used herein shall mean all expenses, costs and
disbursements (but not replacement of capital investment items
except those made for the purposes of reducing operating expenses,
nor Lessor's home office expense, nor specific costs specially
billed to and paid, or payable by specific tenants nor rental
commissions) of every kind and nature which Lessor shall pay or
become obligated to pay because of or in connection with the
ownership and operation of the Building, including, but not
limited to, the following:


(1) Wages and salaries of all employees actually engaged in
operation and maintenance of the Building, including taxes,
insurance and benefits relating thereto.


(2) all supplies and materials used in operation and maintenance
of the Building.


(3) Cost of all utilities including electric, gas, water,
heating, lighting, air conditioning and ventilating the
Building.


(4) Cost of all maintenance and service agreements for the
Building and the therein equipment, including security
service, window cleaning, elevator maintenance and janitorial
service.


(5) Cost of casualty and liability insurance applicable to the
Building and Lessor's personal property used in connection
therewith.


(6) All taxes and assessments and governmental charges whether
Federal, State, County or Municipal, and whether they be by
taxing districts or authorities presently taxing the Leased
Premises or by others, subsequently created or otherwise, and
any other taxes and assessments attributable to the Building
or their operation excluding, however, Federal and State
taxes on income.


It is agreed that Lessee will be responsible for ad valorem
taxes on its personal property and on the value of all
special leasehold improvements to the Leased Premises to the
extent same are separately assessed. If any such taxes on
leasehold improvements are paid by Lessor, Lessee will
reimburse Lessor therefor upon receipt of a bill from Lessor,
together with a reasonable supporting statement setting forth
Lessor's calculation of the amount of such taxes chargeable
to Lessee's Leasehold Improvements.


(7) Cost of repairs and general maintenance undertaken by Lessor
in its sole discretion on or of the Building (excluding only
repairs and general structural maintenance, foundation and
exterior walls of the Building, repairs and general
maintenance paid by


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proceeds of insurance or by Lessee or other third parties,
and alterations attributable solely to tenants of the
Building other than Lessee).


(8) Cost of capital expenditures made for the specific purpose of
installing equipment, devices, or materials intended to reduce
operating expense of the Building or required by any
governmental authority as a result of any legislation,
ordinance, regulation or building code enacted after the
effective date of this Lease Agreement. Such costs will be
amortized over the reasonable useful life of such equipment,
giving effect to its salvage value, on a straight-line basis
together with interest at the rate of ten percent (10%) per
annum on the unamortized balance. The annual amortization
plus interest shall not exceed an amount determined by (i)
calculating the operating expense as if no such capital
expenditure has been made, and (ii) subtracting therefrom the
actual cost of building operation of the Lease Year in
question.


(9) The Management Fee incurred by Lessor for the Manager of the
Building calculated as a percent of base Rental plus
Additional Rental. Said Management Fee shall be comparable to
other comparable buildings in Houston, Texas.


If any of the factors included in "Operating Cost" are not
payable, billed or otherwise due so as to allow an accurate
calculation of said factors annually (e.g., ad valorem taxes
and long-term contracts), then Lessor, in its sole
discretion, may estimate and prorate said factors on an
annual basis, and said factors shall be properly adjusted by
Lessor when they actually become due and payable.


Notwithstanding anything to the contrary in Section 7.A.B. above, the
following items shall be excluded from the Building Operating Cost in
Lessor's operation of the Building and garage:


(1) Repairs or other work occasioned by fire, windstorm or other
casualty of an insurable nature, excluding deductible, or by
the exercise of the right of eminent domain, to the extent
covered by insurance;


(2) Leasing commission, attorney's fees, costs and disbursement
and other expenses incurred in connection with negotiations
or disputes with tenants/Lessee, other occupants, or
prospective tenants of other occupants, or purchasers or
mortgagees of the Building;


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(3) Expenses incurred in renovating or otherwise improving or
decorating, painting, or redecorating space for
tenants/Lessee or other occupants or vacant space, excluding
Building common areas;


(4) Lessor's costs of electricity and other services sold to
tenants/Lessee and for which Lessor is entitled to be
reimbursed by tenants/Lessee as an additional charge or
rental over and above the basic rent payable under the lease
with such tenant/Lessee;


(5) Except as otherwise provided herein, depreciation and
amortization;


(6) Expenses in connection with services or other benefits of
a type which are not provided Lessee but which are provided
to another tenant or occupant;


(7) Costs incurred due to violation by Lessor or any tenant or
other occupant of the terms and conditions of any lease;


(8) Overhead and profit increment paid to subsidiaries or
affiliates of Lessor for services on or to the real
property, to the extent only that the costs of services
exceed competitive costs of such services were they not so
rendered by a subsidiary or affiliate;


(9) Interest on debt or amortization payments on any mortgage or
mortgages, and rental under any ground or underlying leases
or lease;


(10) Lessor's general partnership overhead, specifically
excluding salaries directly associated with managing the
Building, and Management Fees;


(11) Any compensation paid to clerks, attendants, or other
persons in commercial concessions operated by Lessor;


(12) Advertising and promotional expenditures;


(13) Any costs, fines or penalties incurred due to violations by
Lessor of any governmental rule or authority;


(14) Costs incurred in connection with the sale, refinancing,
mortgaging or selling or change of ownership of the
Building, including brokerage commissions, attorneys' and
accountants' fees, closing costs and interest charges;


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(15) Costs, fines, interest, penalties, legal fees or costs of
litigation incurred due to the late payments of taxes,
utilities, bills and other costs incurred by Lessor's failure
to make such payments when due;


(16) Costs or expenses for owning, leasing and/or maintaining
sculpture, painting or other works of art (but excluding lobby
plants which are leased) installed in and on the Building or
the land;


(17) State, local or federal personal or corporate income taxes
measured by the income of Lessor from all sources or from
sources other than rent alone, estate and inheritance taxes,
franchise, succession and transfer taxes and interest on taxes
and penalties resulting from failure to pay real estate taxes.
Further, the amount of tax expenses paid by Lessee and
attributable to tenant improvements, or tax expenses in
connection with other alterations, additions, substitutions,
and improvements done by or for the tenants in the Building
which is separately assessed to and paid by such other tenants
or directly received by Lessor from such other tenants, shall
be excluded from Operating Costs;


(18) Expenses and costs relating in any way whatsoever to the control,
encapsulation, removal, replacement, repair and abatement of
any hazardous materials within the Building, Leased Premises
and the land;


(19) Costs with respect to Lessor's central office, if any, or its
operations conducted, or employees engaged, therein, except
costs that directly relate to or are otherwise allocable to
the land, the Building, or any portion thereof;


(20) The costs of correcting defects in the construction of the
Building or in the Building equipment, except that conditions
(not occasioned by construction defects) resulting from
ordinary wear and tear will not be deemed defects for the
purpose of this category;


(21) The cost incurred by Lessor or any other tenant of complying with
building codes, any other governmental rule or requirement;
however, the cost of complying with any building code or any
other governmental rule or requirements enacted after this
Lease is signed shall be borne by Lessee only in proportion to
Lessee's Premises' share of the total Building; in no instance
will Lessee pay any fines or penalties incurred by Lessor for
failure to comply with such codes, rules or regulations unless
code violations were committed by Lessee.


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8. MONTHLY PAYMENT OF ESCALATION


A. Lessor shall have the right to estimate and collect monthly in
advance from Lessee the escalations of Operating Cost owned or to
be owned by Lessee under Section 7, said monthly payments (the
"Monthly Escalation Payments") to be in such amounts as are
estimated in good faith by Lessor in its sole discretion. The
Monthly Escalation Payments shall be due and payable at the same
time as the Base Rental is due and payable under Section 6.


B. Lessor shall, within the period of one hundred twenty (120)
days after the close of any Lease Year for which Additional Rent
may be due under the provisions of Section 7, give written notice
thereof to Lessee, which notice shall also contain or be
accompanied by a statement of the actual Operating Cost of Lessor's
operation of the Building during the preceding Lease Year and by a
computation of such Additional Rent. Failure of Lessor to give
Lessee said notice within said time period shall not be a waiver of
Lessor's right to collect said additional rent. When the Lessor
presents Lessee with the statements of amounts due by Lessee for
any escalation set out in Section 7, Lessee shall pay Lessor the
difference between its proportionate share of said escalation and
the amount of Monthly Escalation Payments actually made by Lessee
during the preceding Lease Year, attributable to said escalation;
or Lessee shall receive a credit therefore if Lessee's proportionate
share is less than the amount of Monthly Escalation Payments
actually collected by Lessor during the preceding Lease Year, said
credit to be applied to the next accruing installments of Base
Rental and Additional Rent.


C. Notwithstanding any other provision herein to the contrary, it
is agreed that in the event the Building is not fully occupied
during the initial Lease Year or any subsequent Lease Year, an
adjustment shall be made in computing the operating expenses for
the Operating Cost for such period so that the cost of all
utilities including electricity, gas, water, heating, lighting, air
conditioning and ventilating the Building and the cost of
furnishing the janitorial service to the Building shall be computed
for such period as though the Building had been 95% occupied during
such period.


D. Lessee shall have the right to audit Lessor's books and records
for the previous Lease Year relating to this Lease for which
Additional Rental Payments described in this Section 8 become due.
In the event that Lessee desires to conduct an audit of the
Operating Cost, Lessor agrees to make its books and records
regarding Operating Cost available to Lessee's auditors during
business hours and to cooperate with such auditors. In the event
the results of such audit correctly reflect that Operating Cost


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for the calendar year 1995 (as adjusted for ninety-five percent (95%)
occupancy) were understated by six percent (6%) or more, or that
Operating Costs for any other such previous Lease Year relating to
this Lease for which Additional Rental Payments described in this
Section 8 became due were overstated by six percent (6%) or more,
then Lessor shall pay for the costs of such audit. Any
discrepancies revealed by any such audit shall be adjusted between
Lessor and Lessee within thirty (30) days after the completion of
such audit and the submission of the report.


9. PREPAID RENT AND SECURITY DEPOSIT


On the execution of this Lease Agreement by Lessee, Lessee shall be
required to pay Lessor the sum of $141,949.44 (hereinafter referred to
as "Prepaid Rent"), which sum shall be applied against the initial
eighteen (18) month's Base Rental due hereunder. Lessee hereby agrees
that said Prepaid Rent shall be paid as an inducement for Lessor to
enter into this Lease Agreement with Lessee. The total amount of Prepaid
Rent in addition to the Prepaid Additional Construction Allowance
described in Exhibit "F" Section 2. of this Lease Agreement is
equivalent to the majority of Lessor's up front lease cost Lessor has
incurred in conjunction with this Lease Agreement. In the event Lessee
should default in, or fail to timely perform any of its obligations
contained in this Lease Agreement, or breach any of the terms,
covenants, conditions or agreements herein contained prior to the
expiration of the eighteenth (18th) month of the Lease Term, Lessee
hereby agrees that the then unearned portion of said Prepaid Rent and
Prepaid Additional Construction Allowance shall be retained by Lessor as
a credit against any claims for damages Lessor may have against Lessee
as described in Section 25. of this Lease Agreement. In addition, Lessee
shall deposit, on the date hereof, the sum of $7,886.08 (the "Security
Deposit") as security for Lessee's faithful performance of Lessee's
obligations herein contained. If Lessee defaults in any manner
(including the payment of any rents or other sums due hereunder) in the
performance of Lessee's obligations herein contained, Lessor may use,
apply or retain all or any portion of the Security Deposit for the
payment of any rent or other sum in default or for the payment of any
other sum or expense to which Lessee may become obligated by reason of
such default, or to compensate Lessor for any loss or damage which
Lessor may suffer thereby. Lessor and Lessee agree that the Security
Deposit shall not be an advance payment of rent or other sums due
hereunder, or a measure of Lessor's damages in case of Lessee's default.
If Lessor shall use or apply any or all of the Security Deposit as
herein provided, Lessee shall, on demand, deposit with Lessor the amount
of the Security Deposit so used or applied by Lessor so that Lessor
shall have the full Security Deposit on hand during the entire term of
this Lease. Lessor shall not be required to separately account for the
Security Deposit nor to maintain an escrow or separate account therefor.
If Lessee performs all of Lessee's obligations hereunder, the Security
Deposit, or so much thereof as has not theretofore been applied by
Lessor, shall be returned, without payment of interest or other


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increment for its use, to Lessee (or, at Lessee's option, the last
assignee, if any, of Lessee's interest hereunder) within sixty (60) days
of the expiration of the term hereto, and after Lessee has vacated the
Leased Premises. Lessor's right to so apply the Security Deposit shall in
no manner limit, impair or otherwise affect any of Lessor's remedies set
forth herein.


10. SERVICE TO BE PROVIDED BY LANDLORD


A. Subject to the rules and regulations hereinafter referred to, Lessor
shall furnish Lessee, at Lessor's expense, the following services
during the Lease Term:


(1) Air conditioning and heating, at such temperatures and in such
amounts as are reasonably considered to be standard for buildings
which are comparable to and similarly located in the Katy Freeway
submarket with th ...