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<SEC-DOCUMENT>0001144204-05-020213.txt : 20050629
<SEC-HEADER>0001144204-05-020213.hdr.sgml : 20050629
<ACCEPTANCE-DATETIME>20050629162117
ACCESSION NUMBER:		0001144204-05-020213
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20050623
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Unregistered Sales of Equity Securities
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050629
DATE AS OF CHANGE:		20050629

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATURAL GAS SYSTEMS INC/NEW
		CENTRAL INDEX KEY:			0001006655
		STANDARD INDUSTRIAL CLASSIFICATION:	OIL AND GAS FIELD EXPLORATION SERVICES [1382]
		IRS NUMBER:				411781991
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-27862
		FILM NUMBER:		05924997

	BUSINESS ADDRESS:	
		STREET 1:		820 GESSNER
		STREET 2:		SUITE 1340
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77024
		BUSINESS PHONE:		713-935-0122

	MAIL ADDRESS:	
		STREET 1:		820 GESSNER
		STREET 2:		SUITE 1340
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77024

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NATURAL GAS SYSTEMS, INC.
		DATE OF NAME CHANGE:	20040810

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	REALITY INTERACTIVE INC
		DATE OF NAME CHANGE:	19960301
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v020793.txt
<TEXT>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K


                Current Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934


                          Date of Report: June 29, 2005
                 Date of Earliest Event Reported: June 23, 2005
                 -----------------------------------------------


                            NATURAL GAS SYSTEMS, INC.
                            -------------------------
             (Exact Name of Registrant as Specified in its Charter)


                                     Nevada
                 (State or Other Jurisdiction of Incorporation)


                0-27862                                  80-0028196
- ------------------------------------------  ------------------------------------
        (Commission File Number)            (I.R.S. Employer Identification No.)


 820 Gessner, Suite 1340, Houston, Texas                   77024
- ------------------------------------------  ------------------------------------
 (Address of Principal Executive Offices)               (Zip Code)


                                 (713) 935-0122
              (Registrant's Telephone Number, Including Area Code)


          (Former Name or Former Address, if Changed Since Last Report)
<PAGE>

TABLE OF CONTENTS

Item 1.01 Entry Into a Material Definitive Agreement

Item 3.02 Unregistered Sale of Equity Securities

Item 9.01 Financial Statements and Exhibits

Signatures



Item 1.01 Entry Into a Material Definitive Agreement

Executive Employment Agreement: Daryl V. Mazzanti

         On June 23, Natural Gas Systems, Inc. ("NGS" or the "Company") entered
into an Executive Employment Contract with Mr. Daryl V. Mazzanti ("Mazzanti")
and for Mazzanti to serve as Vice President of Operations of the Company (the
"Employment Contract"). Under the Employment Contract, Mazzanti will receive an
annual salary of $155,000, a discretionary bonus of up to 75% of his annual
salary, and a six month severance package. The Employment Contract provided for
a grant of 350,000 stock options under the Company's 2004 Stock Plan,
exercisable at $1.61 and vesting quarterly over four years ("Stock Option
Agreement"). Further, Mazzanti shall receive a sign-on bonus of 25,000 shares of
the Company's common stock vesting over 12 months under the 2004 Stock Plan (the
"Stock Grant Agreement") and a cash payment of $10,000. In addition, the Company
granted Mazzanti a revocable warrant to purchase 200,000 shares of the Company's
common stock at an exercise price of $1.61, vesting over four years and subject
revocation upon the non-commencement of certain development projects (the
`Revocable Warrant Agreement").

         A copy of the Employment Contract, the Stock Option Agreement, the
Stock Grant Agreement and the Revocable Warrant Agreement are attached hereto as
Exhibits 10.1, 10.2, 10.3 and 10.4, respectively and are incorporated herein by
reference. The foregoing summary does not purport to be complete and is
qualified in its entirety by reference to the Employment Contract, the Stock
Option Agreement, Stock Grant Agreement and the Revocable Warrant Agreement.

Item 3.02   Unregistered Sale of Equity Securities

         On June 23, 2005, the Company granted to Mazzanti a revocable warrant
to purchase 200,000 shares of Company common stock at $1.61 per share, pursuant
to the Revocable Warrant Agreement. In addition, the Company granted to Mazzanti
a stock option to purchase 350,000 shares of Company common stock pursuant to
the Stock Option Agreement. The Company also granted Mazzanti of 25,000 shares
of the Company's common stock pursuant to the Stock Grant Agreement. The Company
granted the foregoing securities pursuant to certain exemptions from
registration provided by Rule 506 of Regulation D and Section 4(2) and Section
4(6) of the Securities Act of 1933, as amended.
<PAGE>

Item 9.01 Financial Statements and Exhibits

         Exhibits.

         The following exhibits are filed as an exhibit to this Current Report
on Form 8-K:

- --------------------------------------------------------------------------------
Exhibit     Description
 No.
- --------------------------------------------------------------------------------
10.1        Executive Employment Agreement, Daryl V. Mazzanti, dated
            June 23, 2005.
- --------------------------------------------------------------------------------
10.2        Stock Option Agreement, dated June 23 2005
- --------------------------------------------------------------------------------
10.3        Stock Grant Agreement
- --------------------------------------------------------------------------------
10.4        Revocable Warrant Agreement, dated June 23, 2005
- --------------------------------------------------------------------------------


                                      -2-
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                     NATURAL GAS SYSTEMS, INC.


Date:  June 29, 2005                 By:  /s/ Robert Herlin
                                          -----------------
                                          Robert Herlin, Chief Executive Officer


                                  EXHIBIT INDEX

- --------------------------------------------------------------------------------
Exhibit
 No.        Description
- --------------------------------------------------------------------------------
10.1        Executive Employment Agreement, Daryl V. Mazzanti, dated
            June 23, 2005.
- --------------------------------------------------------------------------------
10.2        Stock Option Agreement, dated June 23 2005
- --------------------------------------------------------------------------------
10.3        Stock Grant Agreement
- --------------------------------------------------------------------------------
10.4        Revocable Warrant Agreement, dated June 23, 2005
- --------------------------------------------------------------------------------


                                      -3-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>v020793_ex10-1.txt
<TEXT>
                            NATURAL GAS SYSTEMS, INC.

                              Employment Agreement


         THIS AGREEMENT ("Agreement") is entered into as of June 23, 2005, by
and between Daryl V. Mazzanti (the "Executive") and Natural Gas Systems, Inc., a
Nevada corporation (the "Company"). The Agreement supercedes any and all prior
agreements, written or oral, including the Company's offer letter, dated June
2005.

                  1. Duties and Scope of Employment.

                           (a) Position. For the term of his employment under
         this Agreement (the "Employment"), the Company agrees to employ the
         Executive in the position of Vice President of Operations. The
         Executive shall report to the Company's President, or to such other
         person as the Company subsequently may determine.

                           (b) Obligations to the Company. During the term of
         employment under this Agreement, Executive shall devote his full
         business efforts and time to the Company. The foregoing shall not
         preclude the Executive from engaging in appropriate civic, charitable
         or religious activities or from devoting a minor amount of time to
         private investments or from serving on the boards of directors of other
         entities, as long as such activities and/or services do not interfere
         or conflict with his/her responsibilities to the Company. The Executive
         shall comply with the Company's policies and rules, as they may be in
         effect from time to time during his Employment.

                           (c) No Conflicting Obligations. The Executive
         represents and warrants to the Company that he is under no obligations
         or commitments, whether contractual or otherwise, that are inconsistent
         with his obligations under this Agreement.

                  2. Cash and Incentive Compensation. For clarification, it is
understood by all parties that other than as specified herein, the Company is
not obligated to award any future grants of stock options or other form of
equity compensation to Executive during Executive's employment with the Company.

                           (a) Salary. The Company shall pay the Executive as
         compensation for his services a base salary at a gross annual rate of
         $155,000.00, effective the first date of employment hereunder, which
         may be increased annually at the election and sole discretion of the
         board of directors. Such salary shall be payable in accordance with the
         Company's standard payroll procedures. The annual compensation
         specified in this Subsection (a), together with any increases in such
         compensation that the Company may grant from time to time, is referred
         to in this Agreement as "Base Salary.")

                           (b) Incentive Bonuses. The Executive shall be
         eligible to be considered for an annual incentive bonus of up to 75% of
         base salary based on objective or subjective criteria established by
         President after consultation with the Compensation Committee of the
         Board of Directors. The determinations of the President and the
         Compensation Committee with respect to such bonus, if any, shall be
         final and binding. The Executive shall not be entitled to an incentive
         bonus if he is not employed by the Company on the date when such bonus
         is payable.

                           (c) Stock Options. The Company shall grant the
         Executive a stock option covering Three Hundred Fifty Thousand
         (350,000) shares of the Company's Common Stock. Such option shall be
         granted as soon as reasonably practicable after the date of this
         Agreement. The exercise price of such option shall be equal to the fair
         market value of such stock on the date of grant or this agreement. The
         term of such option shall be 10 years, subject to earlier expiration in
         the event of the termination of the Executive's Employment. The
         Executive shall vest in the option shares in equal quarterly
         installments of 1/16th per quarter over the next four years of
         continuous service. The grant of such option shall be subject to the
         other terms and conditions set forth in the Company's 2004 Stock Plan
         and in the Stock Option Agreement, attached hereto as Exhibits A and B,
         respectively.

                                     1 of 6
<PAGE>

                           (d) Revocable Warrants. Subject to the approval of
         the Board and the Compensation Committee of the Board, the Company
         shall grant the Executive warrants aggregating Two Hundred Thousand
         (200,000) shares of the Company's Common Stock. The grant of such
         warrants shall be subject to the terms and conditions set forth in the
         Warrant Agreement, attached hereto as Exhibit C.

                           (e) Sign-on Bonus. Subject to the approval of the
         Board and the Compensation Committee, the Company shall grant Executive
         a sign-on bonus of Ten Thousand Dollars ($10,000) on his first day of
         employment and Twenty Five Thousand (25,000) shares of restricted
         common stock, vesting monthly over a 12 month period, and registered on
         Form S-8, subject to the terms and conditions set forth in the Stock
         Grant Agreement, attached hereto as Exhibit E.

                  3. Vacation and Executive Benefits. Executive shall be
entitled to fifteen (15) days of vacation and five (5) personal days per year,
to be taken in such amounts and at such times as shall be mutually convenient
for Executive and the Company. Any vacation days exceeding five (5) days not
taken by Executive in one year shall be forfeited and not carried forward to
subsequent years. During his Employment, the Executive shall be eligible to
participate in the employee benefit plans maintained by the Company, subject in
each case to the generally applicable terms and conditions of the plan in
question and to the determinations of any person or committee administering such
plan.

                  4. Business Expenses. During his Employment, the Executive
shall be authorized to incur necessary and reasonable travel, entertainment and
other business expenses in connection with his duties hereunder. The Company
shall reimburse the Executive for such expenses upon presentation of an itemized
account and appropriate supporting documentation, all in accordance with the
Company's generally applicable policies.

                  5.       Term of Employment.

                           (a) Termination of Employment. The Company may
         terminate the Executive's Employment at any time and for any reason (or
         no reason), and with or without Cause, by giving the Executive ten
         day's notice in writing. The Executive may terminate his Employment by
         giving the Company ten days' advance notice in writing. The Executive's
         Employment shall terminate automatically in the event of his death. The
         termination of the Executive's Employment shall not limit or otherwise
         affect his obligations under Section 7.

                           (b) Employment at Will. The Executive's Employment
         with the Company shall be "at will," meaning that either the Executive
         or the Company shall be entitled to terminate the Executive's
         Employment at any time and for any reason, with or without Cause. Any
         contrary representations that may have been made to the Executive shall
         be superseded by this Agreement. This Agreement shall constitute the
         full and complete agreement between the Executive and the Company on
         the "at will" nature of the Executive's Employment, which may only be
         changed in an express written agreement signed by the Executive and a
         duly authorized officer of the Company.

                                     2 of 6
<PAGE>

                           (c) Constructive Termination. The term "Constructive
         Termination" shall mean any of the following: (i) any breach by the
         Company of any material provision of this Agreement, including, without
         limitation, the assignment to the Executive of duties inconsistent with
         his position specified in Section 1(a) hereof or any breach by the
         Company of such Section, which is not cured within 45 days after
         written notice of same by Executive (except that such cure period shall
         be fifteen days with respect to any breach of Section 10(h) hereof
         unless such breach is due to the actions or inactions of the
         Executive), describing in detail the breach asserted and stating that
         it constitutes notice pursuant to this Section 5(c); or (ii) relocation
         of Executive's offices in excess of 20 miles from its current location;
         or (iii) a substantial reduction of the responsibilities, authority or
         scope of work of Executive.

                           (d) Rights Upon Termination. Except as expressly
         provided in Section 6, upon the termination of the Executive's
         Employment, the Executive shall only be entitled to the compensation,
         benefits and expense reimbursements that the Executive has earned under
         this Agreement before the effective date of the termination. The
         payments under this Agreement shall fully discharge all
         responsibilities of the Company to the Executive.

                  6. Termination Benefits.

                           (a) General Release. Any other provision of this
         Agreement notwithstanding, Subsections (b) and (c) below shall not
         apply unless the Executive (i) has executed a general release of all
         claims (in a form prescribed by the Company) and (ii) has returned all
         property of the Company in the Executive's possession.

                           (b) Severance Pay. If the Company terminates the
         Executive's Employment for any reason other than Cause or Permanent
         Disability, or if the Executive subject to a Constructive Termination,
         then the Company shall pay the Executive his Base Salary and maintain
         and pay his medical benefit and long-term disability coverage for a
         period of six (6) months following the termination of his Employment
         (the "Continuation Period"). Such Base Salary shall be paid at the rate
         in effect at the time of the termination of Employment and in
         accordance with the Company's standard payroll procedures.

                           (c) Definition of "Cause." For all purposes under
         this Agreement, "Cause" shall mean:

                           (i) An unauthorized use or disclosure by the
         Executive of the Company's confidential information or trade secrets,
         which use or disclosure causes material harm to the Company;

                           (ii) A material breach by the Executive of any
         agreement between the Executive and the Company;

                           (iii) A material failure by the Executive to comply
         with the Company's written policies or rules;

                           (iv) The Executive's conviction of, or plea of
         "guilty" or "no contest" to, a felony under the laws of the United
         States or any state thereof;

                           (v) The Executive's gross negligence or willful
         misconduct; or

                                     3 of 6
<PAGE>

                           (vi) A continued failure by the Executive to perform
         assigned duties after receiving written notification of such failure
         from the Board of Directors.

                           (d) Definition of "Permanent Disability." For all
         purposes under this Agreement, "Permanent Disability" shall mean the
         Executive's inability to perform the essential functions of the
         Executive's position, with or without reasonable accommodation, for a
         period of at least 90 consecutive days because of a physical or mental
         impairment.

                           (e) Change in Control. In the event that a Change in
         Control of the Company occurs as a result of a sale or merger of the
         Company and the Executive is terminated or is subject to a Constructive
         Termination within one year following such event, then the Executive
         shall be paid an additional severance payment equal to six months of
         Base Salary, paid in monthly increments, (the "Change in Control
         Payment"), provided that if the Executive obtains similar employment
         before the end of the six months, then the remaining amount of the
         Change in Control Payment will be reduced by half. "Change in Control"
         shall mean: (1) The consummation of a merger or consolidation of the
         Company with or into another entity or any other corporate
         reorganization, if persons who were not controlling stockholders of the
         Company immediately prior to such merger, consolidation or other
         reorganization own immediately after such merger, consolidation or
         other reorganization 50% or more of the voting power of the outstanding
         securities of each of (A) the continuing or surviving entity and (B)
         any direct or indirect parent corporation of such continuing or
         surviving entity; OR (2)The sale, transfer or other disposition of all
         or substantially all of the Company's assets. A Change in Control shall
         not occur if its sole purpose is to change the state of the Company's
         incorporation or to create a holding company that will be owned in
         substantially the same proportions by the persons who held the
         Company's securities immediately before such transaction.

                  7. Proprietary Information and Inventions Agreement. The
Executive shall be bound by the provisions of the Proprietary Information and
Inventions Agreement, attached hereto as Exhibit D.

                  8. Successors.

                           (a) Company's Successors. This Agreement shall be
         binding upon any successor (whether direct or indirect and whether by
         purchase, lease, merger, consolidation, liquidation or otherwise) to
         all or substantially all of the Company's business and/or assets. For
         all purposes under this Agreement, the term "Company" shall include any
         successor to the Company's business and/or assets that becomes bound by
         this Agreement.

                           (e) Executive's Successors. This Agreement and all
         rights of the Executive hereunder shall inure to the benefit of, and be
         enforceable by, the Executive's personal or legal representatives,
         executors, administrators, successors, heirs, distributees, devisees
         and legatees.

                  9. Arbitration.

                           (a) Scope of Arbitration Requirement. The parties
         hereby waive their rights to a trial before a judge or jury and agree
         to arbitrate before a neutral arbitrator any and all claims or disputes
         arising out of this Agreement, and any of the agreements referenced in
         the attached Exhibits, and any and all claims arising from or relating
         to the Executive's Employment, including (but not limited to) claims
         against any current or former employee, director or agent of the
         Company, claims of wrongful termination, retaliation, discrimination,
         harassment, breach of contract, breach of the covenant of good faith
         and fair dealing, defamation, invasion of privacy, fraud,
         misrepresentation, constructive discharge or failure to provide a leave
         of absence, or claims regarding commissions, stock options or bonuses,
         infliction of emotional distress or unfair business practices.

                                     4 of 6
<PAGE>

                           (b) Procedure. The arbitrator's decision shall be
         written and shall include the findings of fact and law that support the
         decision. The arbitrator's decision shall be final and binding on both
         parties, except to the extent applicable law allows for judicial review
         of arbitration awards. The arbitrator may award any remedies that would
         otherwise be available to the parties if they were to bring the dispute
         in court. The arbitration shall be conducted in accordance with the
         National Rules for the Resolution of Employment Disputes of the
         American Arbitration Association. The arbitration shall take place in
         Houston, Texas.

                           (c) Costs. The parties shall share the costs of
         arbitration equally. Both the Company and the Executive shall be
         responsible for their own attorneys' fees. Notwithstanding the
         forgoing, the non-prevailing party shall reimburse the prevailing party
         for arbitration costs and reasonable attorney's fees.

                           (d) Applicability. This Section 9 shall not apply to
         (i) workers' compensation or unemployment insurance claims or (ii)
         claims concerning the validity, infringement or enforceability of any
         trade secret, patent right, copyright or any other trade secret or
         Confidential Information held or sought by either the Executive or the
         Company.

                  10. Miscellaneous Provisions.

                           (a) Notice. Notices and all other communications
         contemplated by this Agreement shall be in writing and shall be deemed
         to have been duly given when personally delivered or when mailed by
         U.S. registered or certified mail, return receipt requested and postage
         prepaid. In the case of the Executive, mailed notices shall be
         addressed to him at the home address that he most recently communicated
         to the Company in writing. In the case of the Company, mailed notices
         shall be addressed to its corporate headquarters, and all notices shall
         be directed to the attention of its Secretary.


                           (b) Modifications and Waivers. No provision of this
         Agreement shall be modified, waived or discharged unless the
         modification, waiver or discharge is agreed to in writing and signed by
         the Executive and by an authorized officer of the Company (other than
         the Executive). No waiver by either party of any breach of, or of
         compliance with, any condition or provision of this Agreement by the
         other party shall be considered a waiver of any other condition or
         provision or of the same condition or provision at another time.

                           (c) Whole Agreement. This Agreement, and the
         agreements referenced herein, supersedes any previous offer letter or
         employment agreement. No other agreements, representations or
         understandings (whether oral or written and whether express or implied)
         which are not expressly set forth in this Agreement have been made or
         entered into by either party with respect to the subject matter hereof.
         This Agreement and the exhibits and agreements referenced herein
         contain the entire understanding of the parties with respect to the
         subject matter hereof.

                           (d) Withholding Taxes. All payments made under this
         Agreement shall be subject to reduction to reflect taxes or other
         charges required to be withheld by law.

                                     5 of 6
<PAGE>

                           (e) Choice of Law and Severability. This Agreement
         shall be interpreted in accordance with the laws of the State of Texas
         (except their provisions governing the choice of law). If any provision
         of this Agreement becomes or is deemed invalid, illegal or
         unenforceable in any applicable jurisdiction by reason of the scope,
         extent or duration of its coverage, then such provision shall be deemed
         amended to the minimum extent necessary to conform to applicable law so
         as to be valid and enforceable or, if such provision cannot be so
         amended without materially altering the intention of the parties, then
         such provision shall be stricken and the remainder of this Agreement
         shall continue in full force and effect. If any provision of this
         Agreement is rendered illegal by any present or future statute, law,
         ordinance or regulation (collectively the "Law"), then such provision
         shall be curtailed or limited only to the minimum extent necessary to
         bring such provision into compliance with the Law. All the other terms
         and provisions of this Agreement shall continue in full force and
         effect without impairment or limitation.

                           (f) No Assignment. This Agreement and all rights and
         obligations of the Executive hereunder are personal to the Executive
         and may not be transferred or assigned by the Executive at any time.
         The Company may assign its rights under this Agreement to any entity
         that assumes the Company's obligations hereunder in connection with any
         sale or transfer of all or a substantial portion of the Company's
         assets to such entity.

                           (g) Counterparts. This Agreement may be executed in
         two or more counterparts, each of which shall be deemed an original,
         but all of which together shall constitute one and the same instrument.

                           (h) Indemnification. As an officer of the Company,
         Executive will be protected by the indemnification provisions of
         Article VIII of the Company's Certificate of Incorporation. In
         addition, the Company has purchased and currently maintains insurance
         protecting its officers and directors against certain losses arising
         out of actual or threatened actions, suits or proceedings to which such
         persons may be made or threatened or be made parties ("D&O Insurance").
         The Company covenants to continue D&O Insurance coverage at current
         levels for the duration of Executive's service and for two (2) years
         thereafter.

         IN WITNESS WHEREOF, each of the parties has executed this employment
Agreement, in the case of the Company by its duly authorized officer, as of the
day and year first above written.



                                    ----------------------------
                                    Daryl V. Mazzanti



                                    NATURAL GAS SYSTEMS, INC.



                                    ------------------------------
                                    By:  Robert S. Herlin
                                    Title: CEO and President



                                     6 of 6
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>v020793_ex10-2.txt
<TEXT>
                            NATURAL GAS SYSTEMS, INC.
                                 2004 STOCK PLAN

                             STOCK OPTION AGREEMENT


Name of Optionee:                       Daryl V. Mazzanti

Optioned Shares:                        350,000 shares of common stock, $0.001
                                        par value, of Natural Gas Systems, Inc.

Type of Option:                         INCENTIVE STOCK OPTION

Exercise Price Per Share:               $1.61

Option Grant Date:                      June 23, 2005

Vesting Commencement Date               June 23, 2005

Date Option Becomes Exercisable:        This Option may be exercised with
                                        respect to an 1/16th of the total
                                        Optioned Shares subject to this option
                                        when the Optionee completes each three
                                        months of continuous employment
                                        starting from the Vesting Commencement
                                        Date. This option may become
                                        exercisable on an accelerated basis
                                        under Section 8 of this Stock Option
                                        Agreement.

Expiration Date of Option:              June 23, 2015. This Option expires
                                        earlier if the Optionee's employment
                                        terminates earlier, as provided in
                                        Section 11 of the Plan.
<PAGE>

         This Stock Option Agreement (this "Agreement") is executed and
delivered as of June 23, 2005 by and between Natural Gas Systems, Inc., a Nevada
corporation (the "Company") and the Optionee. The Optionee and the Company
hereby agree as follows:

1.   The Company, pursuant to the Natural Gas Systems, Inc. 2004 Stock Plan (the
     "Plan"), which is incorporated herein by reference, and subject to the
     terms and conditions thereof, hereby grants to the Optionee an option to
     purchase the Optioned Shares at the Exercise Price Per Share.

2.   The option granted hereby ("Option") shall be treated as an incentive stock
     option under the Internal Revenue Code.

3.   The Option granted hereby shall terminate, subject to the provisions of the
     Plan, no later than at the close of business on the Expiration Date.

4.   The Optionee shall comply with and be bound by all the terms and conditions
     contained in the Plan, as incorporated by reference herein.

5.   Options granted hereby shall not be transferable except by will or the laws
     of descent and distribution. During the lifetime of the Optionee, the
     Option may be exercised only by the Optionee, the guardian or legal
     representative of the Optionee.

6.   The obligation of the Company to sell and deliver any stock under this
     Option is specifically subject to all provisions of the Plan and all
     applicable laws, rules, regulations and governmental and stockholder
     approvals.

7.   Any notice by the Optionee to the Company hereunder shall be in writing and
     shall be deemed duly given only upon receipt thereof by the Company at its
     principal offices. Any notice by the Company to the Optionee shall be in
     writing and shall be deemed duly given if mailed to the Optionee at the
     address last specified to the Company by the Optionee.

8.   In addition to the change of control provisions specified under Section
     14(e) of the Plan and the other conditions set forth in this Agreement, the
     Company hereby agrees that all or part of this Option may be exercised
     prior to its expiration at the time or times set forth below:

              (a) If the Company is subject to a Change in Control (as defined
     in below in this Agreement and not as defined in the Plan) before the
     Optionee's employment terminates, this Option shall become exercisable in
     full if and only if (i) this Option does not remain outstanding following
     the Change in Control; (ii) this Option is not assumed by the surviving
     corporation or its parent; (iii) the surviving corporation or its parent
     does not substitute an option with substantially the same terms for this
     Option; OR (iv) the full value of the vested shares under this Option is
     not settled in cash or cash equivalents.

              (b) If the Option is not exercisable in full under Paragraph (a)
     above, AND if the Optionee is subject to an Involuntary Termination
     (defined below) within 12 months after the Change in Control, then this
     Option shall become exercisable in full. However, in the case of an
     employee incentive stock option described in Section 422(b) of the Code,
     the acceleration of exercisability shall not occur without the Optionee's
     written consent.

                                      -1-
<PAGE>

              (c) If the Option is not exercisable in full under Paragraph (a)
     above, AND if the Company is subject to a Change of Control, then fifty
     percent (50%) of the remaining options shall become exercisable in full,
     and the remaining options shall become exercisable at the rate set forth
     herein, reduced by the accelerated Optioned Shares. All other terms and
     conditions shall remain unchanged.

              (d) Definitions:

                  (i) "Change in Control" shall mean: (1)The consummation of a
              merger or consolidation of the Company with or into another entity
              or any other corporate reorganization, if persons who were not
              controlling stockholders of the Company immediately prior to such
              merger, consolidation or other reorganization own immediately
              after such merger, consolidation or other reorganization 50% or
              more of the voting power of the outstanding securities of each of
              (A) the continuing or surviving entity and (B) any direct or
              indirect parent corporation of such continuing or surviving
              entity; OR (2) The sale, transfer or other disposition of all or
              substantially all of the Company's assets.

              A transaction shall not constitute a Change in Control if its
              sole purpose is to change the state of the Company's
              incorporation or to create a holding company that will be
              owned in substantially the same proportions by the persons who
              held the Company's securities immediately before such
              transaction.

                  (ii) "Involuntary Termination" shall mean the termination of
              the Optionee's employment by reason of: (1) The involuntary
              discharge of the Optionee by the Company for reasons other than
              Cause (as defined in Optionee's employment agreement with the
              Company, of even date herewith); or (2) The voluntary resignation
              of the Optionee following a reduction in the Optionee's base
              salary, a substantial reduction of the responsibilities, authority
              or scope of work of Executive, or receipt of notice that the
              Optionee's principal workplace will be relocated more than 20
              miles.

9.    The validity and construction of this Agreement shall be governed by the
      laws of the State of Nevada.

This Agreement is made under and subject to the provisions of the Plan, and all
of the provisions of the Plan are also provisions of this Agreement. If there is
a difference or conflict between the provisions of this Agreement and the
provisions of the Plan, the provisions of the Plan will govern; provided,
however, the acceleration of the Optioned Shares described in Section 8 above
shall govern in the event of any conflict with the Plan. By signing this
Agreement, the Optionee accepts and agrees to all of the foregoing terms and
provisions and to all of the terms and provisions of the Plan incorporated
herein by reference and confirms that he or she has received a copy of the Plan.

                                      -2-
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized representative and the Optionee has hereunto set
his hand as of the date here above first written.

                                          Natural Gas Systems, Inc.:



                                          By:
                                             -----------------------------------
                                             Name:     Robert S. Herlin
                                             Title:    President



                                          --------------------------------------
                                          Optionee:    Daryl V. Mazzanti



                                      -3-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>v020793_ex10-3.txt
<TEXT>
                            NATURAL GAS SYSTEMS, INC.
                                2004 STOCK PLAN:

                             SUMMARY OF STOCK GRANT
                  By your signature and the signature of the Company's
representative below, you and the Company agree that you are receiving shares
subject to the terms and conditions of the 2004 Stock Plan and the Stock Grant
Agreement, both of which are attached to and made a part of this document.

     Name of Transferee:                  Daryl V. Mazzanti

     Total Number of Transferred          25,000
     Shares:

     Sale Price Per Share:                $0.001

     Fair Market Value Per Share:         $1.61

     Date of Transfer:                    June 23, 2005

     Vesting Commencement Date:           June 23, 2005

     Vesting Schedule:                    The Forfeiture Condition shall lapse
                                          with respect to the first 1/12th of
                                          the Transferred Shares when the
                                          Transferee completes one month of
                                          continuous Service after the Vesting
                                          Commencement Date. The Forfeiture
                                          Condition shall lapse with respect to
                                          an additional 1/12th of the
                                          Transferred Shares when the Transferee
                                          completes each month of continuous
                                          Service thereafter.


TRANSFEREE:                            NATURAL GAS SYSTEMS, INC.

                                      By:
- -----------------------------------          ------------------------------
By:                                   Robert S. Herlin, President

<PAGE>

                            NATURAL GAS SYSTEMS, INC.
                                2004 STOCK PLAN:
                      STOCK GRANT AGREEMENT (FOR SERVICES)


SECTION 1.        ACQUISITION OF SHARES.

                  (a) Transfer. On the terms and conditions set forth in the
Summary of Stock Grant and this Agreement, the Company sell to the Transferee,
and the Transferee agrees to purchase, the number of Shares set forth in the
Summary of Stock Grant at the Sale Price, as set forth above. The transfer shall
occur at the offices of the Company on the date of transfer set forth in the
Summary of Stock Grant or at such other place and time as the parties may agree.

                  (b) Consideration. The Transferee and the Company agree that
the Transferred Shares are being issued to the Transferee as consideration for a
portion of the services performed by the Transferee for the Company. The value
of such portion is agreed to be not less than 100% of the Fair Market Value of
the Transferred Shares.

                  (c) Stock Plan and Defined Terms. The transfer of the
Transferred Shares is subject to the Plan, a copy of which the Transferee
acknowledges having received. The provisions of the Plan are incorporated into
this Agreement by this reference. Capitalized terms are defined in Section 12 of
this Agreement.

SECTION 2.        FORFEITURE CONDITION.

                  (a) Scope of Forfeiture Condition. All Transferred Shares
initially shall be Restricted Shares and shall be subject to forfeiture to the
Company. The Transferee shall not transfer, assign, encumber or otherwise
dispose of any Restricted Shares without the Company's written consent, except
as provided in the following sentence. The Transferee may transfer Restricted
Shares to one or more members of the Transferee's Immediate Family or to a trust
established by the Transferee for the benefit of the Transferee and/or one or
more members of the Transferee's Immediate Family, provided in either case that
the Transferee agrees in writing on a form prescribed by the Company to be bound
by all provisions of this Agreement. If the Transferee transfers any Restricted
Shares, then this Agreement shall apply to the Subsequent Transferee to the same
extent as to the Transferee.
<PAGE>

                  (b) Vesting. The Forfeiture Condition shall lapse and the
Restricted Shares shall become vested in accordance with the vesting schedule
set forth in the Summary of Stock Grant. The Company may, at its sole
discretion, accelerate the vesting and waive the Forfeiture Condition, at any
time.

                  (c) Execution of Forfeiture. The Forfeiture Condition shall be
applicable only if the Transferee's Service terminates for Cause, including
(without limitation) death or disability of Daryl Mazzanti, before all
Restricted Shares have become vested. In the event that the Transferee's Service
terminates for Cause, the certificate(s) representing any remaining Restricted
Shares shall be delivered to the Company properly endorsed for transfer. The
Company shall make no payment for Restricted Shares that are forfeited.

                  (d) Additional Shares or Substituted Securities. In the event
of the declaration of a stock dividend, the declaration of an extraordinary
dividend payable in a form other than stock, a spin-off, a stock split, an
adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of consideration,
any new, substituted or additional securities or other property (including money
paid other than as an ordinary cash dividend) which are by reason of such
transaction distributed with respect to any Restricted Shares or into which such
Restricted Shares thereby become convertible shall immediately be subject to the
Forfeiture Condition. Appropriate adjustments to reflect the distribution of
such securities or property shall be made to the number and/or class of the
Restricted Shares.
<PAGE>

                  (e) Termination of Rights as Stockholder. If Restricted Shares
are forfeited in accordance with this Section 2, then the person who is to
forfeit such Restricted Shares shall no longer have any rights as a holder of
such Restricted Shares. Such Restricted Shares shall be deemed to have been
forfeited in accordance with the applicable provisions hereof, whether or not
the certificate(s) therefor have been delivered as required by this Agreement.

                  (f) Escrow. Upon issuance, the certificates for Restricted
Shares shall be deposited in escrow with the Company to be held in accordance
with the provisions of this Agreement. Any new, substituted or additional
securities or other property described in Subsection (d) above shall immediately
be delivered to the Company to be held in escrow, but only to the extent the
Transferred Shares are at the time Restricted Shares. All regular cash dividends
on Restricted Shares (or other securities at the time held in escrow) shall be
paid directly to the Transferee and shall not be held in escrow. Restricted
Shares, together with any other assets or securities held in escrow hereunder,
shall be (i) surrendered to the Company for forfeiture and cancellation in the
event that the Forfeiture Condition applies or (ii) released to the Transferee
upon the Transferee's request to the extent the Transferred Shares are no longer
Restricted Shares (but not more frequently than once every six months). In any
event, all Transferred Shares that have vested (and any other vested assets and
securities attributable thereto) shall be released within 60 days after the
earlier of the termination of the Transferee's Service.

SECTION 3.        OTHER RESTRICTIONS ON TRANSFER.

                  (a) Transferee Representations. In connection with the
issuance and acquisition of Shares under this Agreement, the Transferee hereby
represents and warrants to the Company as follows:

<PAGE>

                           (i) The Transferee is acquiring and will hold the
         Transferred Shares for investment for his or her account only and not
         with a view to, or for resale in connection with, any "distribution"
         thereof within the meaning of the Securities Act.

                           (ii) The Transferee understands that the Transferred
         Shares have not been registered under the Securities Act by reason of a
         specific exemption therefrom and that the Transferred Shares must be
         held indefinitely, unless they are subsequently registered under the
         Securities Act or the Transferee obtains an opinion of counsel, in form
         and substance satisfactory to the Company and its counsel, that such
         registration is not required. The Transferee further acknowledges and
         understands that the Company is under no obligation to register the
         Transferred Shares.

                           (iii) The Transferee is aware of the adoption of Rule
         144 by the Securities and Exchange Commission under the Securities Act,
         which permits limited public resales of securities acquired in a
         non-public offering, subject to the satisfaction of certain conditions,
         including (without limitation) the availability of certain current
         public information about the issuer, the resale occurring only after
         the holding period required by Rule 144 has been satisfied, the sale
         occurring through an unsolicited "broker's transaction," and the amount
         of securities being sold during any three-month period not exceeding
         specified limitations. The Transferee acknowledges and understands that
         the conditions for resale set forth in Rule 144 have not been satisfied
         and that the Company has no plans to satisfy these conditions in the
         foreseeable future.

<PAGE>

                           (iv) The Transferee will not sell, transfer or
         otherwise dispose of the Transferred Shares in violation of the
         Securities Act, the Securities Exchange Act of 1934, or the rules
         promulgated thereunder, including Rule 144 under the Securities Act.
         The Transferee agrees that he or she will not dispose of the
         Transferred Shares unless and until he or she has complied with all
         requirements of this Agreement applicable to the disposition of
         Transferred Shares and he or she has provided the Company with written
         assurances, in substance and form satisfactory to the Company, that (A)
         the proposed disposition does not require registration of the
         Transferred Shares under the Securities Act or all appropriate action
         necessary for compliance with the registration requirements of the
         Securities Act or with any exemption from registration available under
         the Securities Act (including Rule 144) has been taken and (B) the
         proposed disposition will not result in the contravention of any
         transfer restrictions applicable to the Transferred Shares under
         applicable state law.

                           (v) The Transferee has been furnished with, and has
         had access to, such information as he or she considers necessary or
         appropriate for deciding whether to invest in the Transferred Shares,
         and the Transferee has had an opportunity to ask questions and receive
         answers from the Company regarding the terms and conditions of the
         issuance of the Transferred Shares.

                           (vi) The Transferee is aware that his or her
         investment in the Company is a speculative investment that has limited
         liquidity and is subject to the risk of complete loss. The Transferee
         is able, without impairing his or her financial condition, to hold the
         Transferred Shares for an indefinite period and to suffer a complete
         loss of his or her investment in the Transferred Shares.
<PAGE>

                           (vii) Transferee is an "accredited investor" as
         defined under Exhibit I attached hereto.

                  (b) Securities Law Restrictions. Regardless of whether the
offering and sale of Shares under the Plan have been registered under the
Securities Act or have been registered or qualified under the securities laws of
any state, the Company at its discretion may impose restrictions upon the sale,
pledge or other transfer of the Transferred Shares (including the placement of
appropriate legends on stock certificates or the imposition of stop-transfer
instructions) if, in the judgment of the Company, such restrictions are
necessary or desirable in order to achieve compliance with the Securities Act,
the securities laws of any state or any other law.

                  (c) Market Stand-Off. In connection with any underwritten
public offering by the Company of its equity securities pursuant to an effective
registration statement filed under the Securities Act, including the Company's
initial public offering, the Transferee shall not directly or indirectly sell,
make any short sale of, loan, hypothecate, pledge, offer, grant or sell any
option or other contract for the purchase of, purchase any option or other
contract for the sale of, or otherwise dispose of or transfer, or agree to
engage in any of the foregoing transactions with respect to, any Transferred
Shares without the prior written consent of the Company or its underwriters.
Such restriction (the "Market Stand-Off") shall be in effect for such period of
time following the date of the final prospectus for the offering as may be
requested by the Company or such underwriters. In no event, however, shall such
period exceed 180 days. The Market Stand-Off shall in any event terminate two
years after the date of the Company's initial public offering. In the event of
the declaration of a stock dividend, a spin-off, a stock split, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting the
Company's outstanding securities without receipt of consideration, any new,
substituted or additional securities which are by reason of such transaction
distributed with respect to any Shares subject to the Market Stand-Off, or into
which such Shares thereby become convertible, shall immediately be subject to
the Market Stand-Off. In order to enforce the Market Stand-Off, the Company may
impose stop-transfer instructions with respect to the Transferred Shares until
the end of the applicable stand-off period. The Company's underwriters shall be
beneficiaries of the agreement set forth in this Subsection (c). This Subsection
(c) shall not apply to Shares registered in the public offering under the
Securities Act, and the Transferee shall be subject to this Subsection (c) only
if the directors and officers of the Company are subject to similar
arrangements.

<PAGE>

                  (d) Rights of the Company. The Company shall not be required
to (i) transfer on its books any Transferred Shares that have been sold or
transferred in contravention of this Agreement or (ii) treat as the owner of
Transferred Shares, or otherwise to accord voting, dividend or liquidation
rights to, any Subsequent Transferee to whom Transferred Shares have been
transferred in contravention of this Agreement.

SECTION 4.        SUCCESSORS AND ASSIGNS.

                  Except as otherwise expressly provided to the contrary, the
provisions of this Agreement shall inure to the benefit of, and be binding upon,
the Company and its successors and assigns and be binding upon the Transferee
and the Transferee's legal representatives, heirs, legatees, distributees,
assigns and transferees by operation of law, whether or not any such person has
become a party to this Agreement or has agreed in writing to join herein and to
be bound by the terms, conditions and restrictions hereof.

SECTION 5.        NO RETENTION RIGHTS.

                  Nothing in this Agreement or in the Plan shall confer upon the
Transferee any right to continue providing services to the Company for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Company or of the Transferee, which rights are hereby
expressly reserved by each, to terminate his or her service at any time and for
any reason, with or without cause.

<PAGE>

SECTION 6.        TAX ELECTION.

                  The acquisition of the Transferred Shares may result in
adverse tax consequences that may be avoided or mitigated by filing an election
under Code Section 83(b). Such election may be filed only within 30 days after
the date of transfer set forth in the Summary of Stock Grant. The Transferee
should consult with his or her tax advisor to determine the tax consequences of
acquiring the Transferred Shares and the advantages and disadvantages of filing
the Code Section 83(b) election. The Transferee acknowledges that it is his or
her sole responsibility, and not the Company's, to file a timely election under
Code Section 83(b), even if the Transferee requests the Company or its
representatives to make this filing on his or her behalf.

SECTION 7.        LEGENDS.

                  All certificates evidencing Transferred Shares shall bear the
following legends:

         "THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
         ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE
         TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED
         HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES).
         SUCH IMPOSES CERTAIN FORFEITURE CONDITIONS UPON TERMINATION OF SERVICE
         WITH THE COMPANY. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN
         REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT
         CHARGE."

         "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
         OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
         SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
         COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
<PAGE>

If required by the authorities of any state in connection with the issuance of
the Transferred Shares, the legend or legends required by such state authorities
shall also be endorsed on all such certificates.

SECTION 8.        NOTICE.

                  Any notice required by the terms of this Agreement shall be
given in writing. It shall be deemed effective upon (i) personal delivery, (ii)
deposit with the United States Postal Service, by registered or certified mail,
with postage and fees prepaid or (iii) deposit with Federal Express Corporation,
with shipping charges prepaid. Notice shall be addressed to the Company at its
principal executive office and to the Transferee at the address that he or she
most recently provided to the Company in accordance with this Section 9.

SECTION 9.        ENTIRE AGREEMENT.

                  The Summary of Stock Grant, this Agreement and the Plan
constitute the entire contract between the parties hereto with regard to the
subject matter hereof. They supersede any other agreements, representations or
understandings (whether oral or written and whether express or implied) which
relate to the subject matter hereof.

SECTION 10.       CHOICE OF LAW.

                  This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Nevada, as such laws are applied to
contracts entered into and performed in such State.
<PAGE>

SECTION 11.       DEFINITIONS.

                  (a) "Agreement" shall mean this Stock Grant Agreement.

                  (b) "Board of Directors" shall mean the Board of Directors of
the Company, as constituted from time to time or, if a Committee has been
appointed, such Committee.

                  (c) "Cause" shall mean:

                           (i) An unauthorized use or disclosure by the
         Transferee of the Company's material non-public information or trade
         secrets;

                           (ii) A material breach by the Transferee of any
         consulting agreement between the Transferee and the Company;

                           (iii) A failure to perform satisfactorily the
         services and duties that Transferee is required to perform under its
         agreement with the Company;

                           (iv) The Transferee's conviction of, or plea of
         "guilty" or "no contest" to, a felony under the laws of the United
         States or any state thereof; or

                           (v) The Transferee's gross negligence or willful
         misconduct;

The foregoing, however, shall not be deemed an exclusive list of all acts or
omissions that the Company (or a Parent or Subsidiary) may consider as grounds
for the discharge of the Transferee without Cause.

                  (d) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
<PAGE>

                  (e) "Committee" shall mean a committee of the Board of
Directors, as described in Section 2 of the Plan.

                  (f) "Company" shall mean Natural Gas Systems, Inc., a Nevada
corporation.

                  (g) "Consultant" shall mean a person who performs bona fide
services for the Company, a Parent or a Subsidiary as a consultant or advisor,
excluding Employees and Outside Directors.

                  (h) "Employee" shall mean any individual who is a common-law
employee of the Company, a Parent or a Subsidiary.

                  (i) "Fair Market Value" shall mean the fair market value of a
Share, as determined by the Board of Directors in accordance with the Plan.

                  (j) "Forfeiture Condition" shall mean the forfeiture condition
described in Section 2.

                  (k) "Immediate Family" shall mean any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and
shall include adoptive relationships.

                  (l) "Outside Director" shall mean a member of the Board of
Directors who is not an Employee.

                  (m) "Parent" shall mean any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company, if each
of the corporations other than the Company owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.

                  (n) "Plan" shall mean the Natural Gas Systems, Inc. 2004 Stock
Plan, as amended.
<PAGE>

                  (o) "Restricted Share" shall mean a Transferred Share that is
subject to the Forfeiture Condition.

                  (p) "Securities Act" shall mean the Securities Act of 1933, as
amended.

                  (q) "Service" shall mean service as an Employee, Outside
Director or Consultant.

                  (r) "Share" shall mean one share of Stock, as adjusted in
accordance with Section 14 of the Plan (if applicable).

                  (s) "Stock" shall mean the Common Stock of the Company, with a
par value of $0.001 per Share.

                  (t) "Subsequent Transferee" shall mean any person to whom the
Transferee has directly or indirectly transferred any Transferred Shares.

                  (u) "Subsidiary" shall mean any corporation (other than the
Company) in an unbroken chain or corporations beginning with the Company, if
each of the corporations other than the last corporation in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

                  (v) "Summary of Stock Grant" shall mean the document so
entitled to which this Agreement is attached.

                  (w) "Transferee" shall mean the individual named in the
Summary of Stock Grant.

                  (x) "Transfer Notice" shall mean the notice of a proposed
transfer of Transferred Shares described in Section 3.

                  (y) "Transferred Shares" shall mean the Shares acquired by the
Transferee pursuant to this Agreement.
<PAGE>

                                    Exhibit I

                    CERTIFICATE OF ACCREDITED INVESTOR STATUS

         Except as may be indicated by the undersigned below, the undersigned is
an "accredited investor," as that term is defined in Regulation D under the
Securities Act of 1933, as amended (the "Securities Act"). The undersigned has
checked the box below indicating the basis on which he is representing his
status as an "accredited investor":

|_|      a bank as defined in Section 3(a)(2) of the Securities Act, or any
         savings and loan association or other institution as defined in Section
         3(a)(5)(A) of the Securities Act whether acting in its individual or
         fiduciary capacity; a broker or dealer registered pursuant to Section
         15 of the Securities Exchange Act of 1934, as amended (the "Securities
         Exchange Act"); an insurance company as defined in Section 2(13) of the
         Securities Act; an investment company registered under the Investment
         Company Act of 1940 or a business development company as defined in
         Section 2(a)(48) of that Act; a small business investment company
         licensed by the U.S. Small Business Administration under Section 301(c)
         or (d) of the Small Business Investment Act of 1958; a plan established
         and maintained by a state, its political subdivisions, or any agency or
         instrumentality of a state or its political subdivisions, for the
         benefit of its employees, and such plan has total assets in excess of
         $5,000,000; an employee benefit plan within the meaning of the Employee
         Retirement Income Security Act of 1974, if the investment decision is
         made by a plan fiduciary, as defined in Section 3(21) of such Act,
         which is either a bank, savings and loan association, insurance
         company, or registered investment adviser, or if the employee benefit
         plan has total assets in excess of $5,000,000 or, if a self-directed
         plan, with investment decisions made solely by persons that are
         "accredited investors";

|_|      a private business development company as defined in Section 202(a)(22)
         of the Investment Advisers Act of 1940;

|_|      an organization described in Section 501(c)(3) of the Internal Revenue
         Code, corporation, Massachusetts or similar business trust, or
         partnership, not formed for the specific purpose of acquiring the
         securities offered, with total assets in excess of $5,000,000;
<PAGE>

|_|      a natural person whose individual net worth, or joint net worth with
         the undersigned's spouse, at the time of this purchase exceeds
         $1,000,000;

|_|      a natural person who had an individual income in excess of $200,000 in
         each of the two most recent years or joint income with the
         undersigned's spouse in excess of $300,000 in each of those years and
         has a reasonable expectation of reaching the same income level in the
         current year;

|_|      a trust with total assets in excess of $5,000,000, not formed for the
         specific purpose of acquiring the securities offered, whose purchase is
         directed by a person who has such knowledge and experience in financial
         and business matters that he is capable of evaluating the merits and
         risks of the prospective investment; or

|_|      an entity in which all of the equity holders are "accredited investors"
         by virtue of their meeting one or more of the above standards.

|_|      an individual who is a director or executive officer of Natural Gas
         Systems, Inc.


         IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Accredited Investor Status effective as of __________________, 2005.


                                               _________________________________
                                               Name of Recipient

                                          By: ________________________
                                          Name: ______________________
                                          Title: _______________________


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>v020793_ex10-4.txt
<TEXT>
                           REVOCABLE WARRANT AGREEMENT

                            NATURAL GAS SYSTEMS, INC.

         THIS REVOCABLE  WARRANT  AGREEMENT (this  "Agreement") is made
and entered  into as of June __,  2005,  between  Natural Gas  Systems,
Inc.,  a Nevada  corporation  (the  "Company"),  and Daryl V.  Mazzanti
("Holder").

                                 R E C I T A L S

         WHEREAS, the Company proposes to issue to Holder a maximum of TWO
HUNDRED THOUSAND (200,000) revocable warrants (the "Revocable Warrants"), each
such Revocable Warrant entitling the holder thereof to purchase, under certain
conditions, one share of common stock, .001 par value, of the Company (the
"Shares" or the "Common Stock");

         WHEREAS, the Revocable Warrants which are the subject of this Agreement
will be issued by the Company to Holder in connection with Holder's employment
with the Company pursuant to the Employment Agreement ("Employment Agreement")
and the Stock Option Agreement ("Stock Option Agreement").

         WHEREAS, the Revocable Warrants shall be subject to revocation by the
Company without any further consideration under the terms and conditions
detailed herein.

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:

                                A G R E E M E N T

         1. Revocable Warrant Certificates. The warrant certificates to be
delivered pursuant to this Agreement (the "Revocable Warrant Certificates")
shall be in the form set forth in Exhibit A, attached hereto and made a part
hereof, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Revocable Warrant Agreement.

         2. Right to Exercise Revocable Warrants. Each Revocable Warrant may be
exercised, in whole or in part, after those Revocable Warrants are fully vested
and no longer Restricted Warrants (as defined in Section 3 below) until 11:59
P.M. (Eastern Standard Time) on the date that is ten (10) years after the date
of this Agreement (the "Expiration Date"). Each Revocable Warrant not exercised
or revoked on or before the Expiration Date shall expire.

         Other than as specified in Section 3 herein, each Revocable Warrant
shall entitle its holder to purchase from the Company one share of Common Stock
(each an "Exercise Share") at an exercise price of ___________________________
($_________) per share, subject to adjustment as set forth below ("Exercise
Price").

         The Company shall not be required to issue fractional shares of Common
Stock upon the exercise of this Revocable Warrant or to deliver Revocable
Warrant Certificates which evidence fractional shares of capital stock. In the
event that a fraction of an Exercise Share would, except for the provisions of
this paragraph 2, be issuable upon the exercise of this Revocable Warrant, the
Company shall pay to the Holder exercising the Revocable Warrant an amount in
cash equal to such fraction multiplied by the current market value of the
Exercise Share. For purposes of this paragraph 2, the current market value shall
be determined as follows:
<PAGE>

                  (a) if the Shares are traded in the over-the-counter market
and not on any national securities exchange and not in the NASDAQ Reporting
System, the average of the mean between the last bid and asked prices per share,
as reported by the National Quotation Bureau, Inc., or an equivalent generally
accepted reporting service, for the last business day prior to the date on which
the Revocable Warrant is exercised, or, if not so reported, the average of the
closing bid and asked prices for a Share as furnished to the Company by any
member of the National Association of Securities Dealers, Inc., selected by the
Company and Holder for that purpose.

                  (b) if the Shares are listed or traded on a national
securities exchange or in the NASDAQ Reporting System, the closing price on the
principal national securities exchange on which they are so listed or traded or
in the NASDAQ Reporting System, as the case may be, on the last business day
prior to the date of the exercise of the Revocable Warrant. The closing price
referred to in this Clause (b) shall be the last reported sales price or, in
case no such reported sale takes place on such day, the average of the reported
closing bid and asked prices on such day, in either case on the national
securities exchange on which the Shares are then listed or in the NASDAQ
Reporting System; or

                  (c) if no such closing price or closing bid and asked prices
are available, as determined by the Holder and the Board of Directors of the
Company.

         3. Revocation of the Revocable Warrants. Notwithstanding anything to
the contrary, all Revocable Warrants granted by the Company to the Holder under
this Agreement shall be subject to forfeiture, revocation and cancellation
without any further or additional consideration due or owed to Holder as
specified herein (the "Right of Revocation").

                  (a) Scope of Revocation Right. Until the Revocable Warrants
vest in accordance with Subsection (b) below, the Revocable Warrants shall be
restricted warrants and not exercisable under Section 2 hereof and shall be
subject to the Company's Right of Revocation (the "Restricted Warrants"). The
Company may exercise its Right of Revocation only during the period after one
year of continuous employment and/or 180 consecutive days after on the date the
Holder's Service terminates for any reason, including (without limitation) death
or disability (the "Revocation Period"). The Right of Revocation may be
exercised automatically under Subsection (d) below.

                  (b) Lapse of Revocation Right. Initially, all Revocable
Warrants granted under this Agreement shall be Restricted Warrants subject to
the Company's Right of Revocation. The Right of Revocation shall lapse with
respect to the first 1/4th of the Revocable Warrants when the Holder completes
one year and one day of continuous employment after the date of this Agreement.
The Right of Revocation shall lapse with respect to an additional 1/4th of the
total Revocable Warrants when the Holder completes each year of continuous
employment thereafter.

                  (c) Escrow. Upon issuance, the certificate(s) for Restricted
Warrants shall be deposited in escrow with the Company to be held in accordance
with the provisions of this Agreement. Any additional or exchanged securities or
other property described in Section 9 below shall immediately be delivered to
the Company to be held in escrow. Restricted Warrants, together with any other
assets held in escrow under this Agreement, shall be (i) surrendered to the
Company for repurchase upon exercise of the Right of Revocation or (ii) released
to the Holder upon his or her request to the extent that the Revocable Warrants
have ceased to be Restricted Warrants. In any event, all Revocable Warrants that
have ceased to be Restricted Warrants, together with any other vested assets
held in escrow under this Agreement, shall be released within 10 days after the
termination of the Holder's employment.
<PAGE>

                  (d) Exercise of Revocation Right. The Company shall be deemed
to have exercised its Right of Revocation automatically for all Restricted
Warrants during the Revocation Period, if (i) the Holder's employment with the
Company is terminated for any reason, or (ii) the Company HAS NOT commenced the
"Development Project" within one year of date hereof, specified and defined in
Exhibit B, attached hereto. If the Company HAS commenced the Development Project
within one year of date hereof, then Company may not exercise its revocation
rights except in the case of termination of employment of Holder for any reason.
For clarification, if the Company does not commence the Development Project
within one year of the date hereof, all warrants issued under this Agreement
shall be revoked by the Company; if the Company does commence the Development
Project within one year of the date hereof, then upon the one year anniversary
of the Holder's employment with the Company, 1/4th of the total warrants will
vest and no longer be subject to revocation, and the remaining Restricted
Warrants shall vest annually in equal amounts. In such event, the certificate(s)
representing the Restricted Warrants being repurchased shall be delivered to the
Company properly endorsed for transfer. The Company may, at its sole discretion,
choose to waive its Right of Revocation of the Restricted Stock as set forth in
part (ii) of this section by providing written notice thereof prior to the date
of revocation.

                  (e) Termination of Rights as Stockholder. If the Right of
Revocation is exercised in accordance with this Section 3, then the Holder shall
no longer have any rights as a holder of the Restricted Warrants. Such
Restricted Warrants shall be deemed to have been revoked pursuant to this
Section 3, whether or not the certificate(s) for such Restricted Warrants have
been delivered to the Company.

                  (f) Transfer of Warrants. The Holder shall not transfer,
assign, encumber or otherwise dispose of any Restricted Warrants without the
Company's written consent, except as provided in the following sentence. The
Revocable Warrants granted hereby shall not be transferable except by will or
the laws of descent and distribution. During the lifetime of the Holder, the
Revocable Warrant may be exercised only by the Holder, the guardian or legal
representative of the Holder.

                  (g) Acceleration. In addition to the other conditions set
forth in this Agreement, the Company's Right of Revocation with respect to
unvested Restricted Warrants shall lapse prior to the vesting period specified
in Section 3(b) above at the time or times set forth below:


                           (i) If the Company is subject to a Change in Control
         (as defined in below) before the Holder's employment terminates, the
         Right of Revocation shall lapse in full if and only if (1) this
         Revocable Warrant does not remain outstanding following the Change in
         Control; (2) this Revocable Warrant is not assumed by the surviving
         corporation or its parent; (3) the surviving corporation or its parent
         does not substitute an option with substantially the same terms for
         this Revocable Warrant; OR (iv) the full value of the vested Revocable
         Warrants under this Agreement is not settled in cash or cash
         equivalents.

                           (ii) If the Right of Revocation has not lapsed
         pursuant to Paragraph (i) above, AND if the Holder is subject to an
         Involuntary Termination (defined below) within 12 months after the
         Change in Control, then this Revocable Warrant shall become no longer
         be subject to a Right of Revocation.

                           (iii) If the Right of Revocation has not lapsed
         pursuant to Paragraph (i) above, AND if the Company is subject to a
         Change of Control, then fifty percent (50%) of the remaining Restricted
         Warrants shall no longer be subject to a Right of Revocation, and the
         remaining Restricted Warrants shall vest at the rate set forth in
         Section 3(b) above, reduced pro rata by the amount of Restricted
         Warrants no longer subject to a Right of Revocation pursuant to this
         Section. All other terms and conditions shall remain unchanged.
<PAGE>

                           (iv) Definitions:

                                    (1)     "Change in  Control"  shall
         mean: (A) The consummation of a merger or consolidation of the Company
         with or into another entity or any other corporate reorganization, if
         persons who were not controlling stockholders of the Company
         immediately prior to such merger, consolidation or other reorganization
         own immediately after such merger, consolidation or other
         reorganization 50% or more of the voting power of the outstanding
         securities of each of the continuing or surviving entity and any direct
         or indirect parent corporation of such continuing or surviving entity;
         OR (B) The sale, transfer or other disposition of all or substantially
         all of the Company's assets. A transaction shall not constitute a
         Change in Control if its sole purpose is to change the state of the
         Company's incorporation or to create a holding company that will be
         owned in substantially the same proportions by the persons who held the
         Company's securities immediately before such transaction.

                           (2) "Involuntary Termination" shall mean the
         termination of the Optionee's employment by reason of: (A) The
         involuntary discharge of the Holder by the Company for reasons other
         than Cause (as defined in Holder's Employment Agreement with the
         Company, of even date herewith); or (B) The voluntary resignation of
         the Holder following a reduction in the Holder's base salary or
         assigned duties or receipt of notice that the Holder's principal
         workplace will be relocated more than 30 miles.

         4. Mutilated or Missing Revocable Warrant Certificates. In case any of
the Revocable Warrant Certificates shall be mutilated, lost, stolen or destroyed
prior to the Expiration Date, the Company shall issue and deliver, in exchange
and substitution for and upon cancellation of the mutilated Revocable Warrant
Certificate, or in lieu of and in substitution for the Revocable Warrant
Certificate lost, stolen or destroyed, a new Revocable Warrant Certificate of
like tenor and representing an equivalent right or interest.

         5. Reservation of Shares. The Company will at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Shares or its authorized and issued Shares held in its
treasury for the purpose of enabling it to satisfy its obligation to issue
Exercise Shares upon exercise of Revocable Warrants, the full number of Exercise
Shares deliverable upon the exercise of all outstanding Revocable Warrants. The
Company covenants that all Exercise Shares which may be issued upon exercise of
Revocable Warrants will be validly issued, fully paid and non-assessable
outstanding Shares of the Company.

         6. Rights of Holder. The Holder shall not, by virtue of anything
contained in this Revocable Warrant Agreement or otherwise, prior to exercise of
this Revocable Warrant, be entitled to any right whatsoever, either in law or
equity, of a stockholder of the Company, including without limitation, the right
to receive dividends or to vote or to consent or to receive notice as a
stockholder in respect of the meetings of stockholders or the election of
directors of the Company of any other matter.

         7. Investment Intent; Accredited Investor. Holder represents and
warrants to the Company that Holder is acquiring the Revocable Warrants for
investment purposes and with no present intention of distributing or reselling
any of the Revocable Warrants. Holder represents that it is an "accredited
investor" within the meaning of Rule 501 of Regulation D under the Securities
Act of 1933, as amended (the "Act").
<PAGE>

         8. Certificates to Bear Legend. The Revocable Warrants and the
certificate or certificates therefore shall bear the following legend by which
each holder shall be bound:

         "THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
         PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
         THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF
         COUNSEL, REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL,
         THAT SUCH REGISTRATION IS NOT REQUIRED. THE SECURITIES REPRESENTED BY
         THIS INSTRUMENT ARE SUBJECT TO TRANSFER RESTRICTIONS, VESTING AND
         REVOCATION UNDER THE TERMS OF THE REVOCABLE WARRANT AGREEMENT, DATED
         JUNE __, 2005"

                  The Exercise Shares and the certificate or certificates
evidencing any such Exercise Shares shall bear the following legend:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES MAY NOT BE SOLD
         OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
         COUNSEL ACCEPTABLE TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION
         UNDER SUCH ACT IS AVAILABLE."

         Certificates for Revocable Warrants or Exercise Shares, as the case may
be, without such legend shall be issued if such Revocable Warrants or Exercise
Shares are sold pursuant to an effective registration statement under the Act or
if the Company has received an opinion from counsel reasonably satisfactory to
counsel for the Company that such legend is no longer required under the Act.

         9. Adjustment of Number of Shares and Class of Capital Stock
Purchasable. The number of Exercise Shares and class of capital stock
purchasable under this Revocable Warrant are subject to adjustment from time to
time as set forth in this Section 9.

              (a) Adjustment for Change in Capital Stock. If the Company:

                  (i)   pays a dividend or makes a distribution on its Common
                        Stock, in each case, in shares of its Common Stock;

                  (ii)  subdivides its outstanding shares of Common Stock into
                        a greater number of shares;

                  (iii) combines its outstanding shares of Common Stock into a
                        smaller number of shares; or

                  (iv)  makes a distribution on its Common Stock in shares of
                        its capital stock other than Common Stock

then the number and classes of Exercise Shares purchasable upon exercise of each
Revocable Warrant in effect immediately prior to such action shall be adjusted
so that the holder of any Revocable Warrant thereafter exercised may receive the
number and classes of shares of capital stock of the Company which such holder
would have owned immediately following such action if such holder had exercised
the Revocable Warrant immediately prior to such action.
<PAGE>

                  For a dividend or distribution the adjustment shall become
effective immediately after the record date for the dividend or distribution.
For a subdivision, combination or reclassification, the adjustment shall become
effective immediately after the effective date of the subdivision, combination
or reclassification.

                  If after an adjustment the holder of a Revocable Warrant upon
exercise of it may receive shares of two or more classes of capital stock of the
Company, the Board of Directors of the Company shall in good faith determine the
allocation of the adjusted Exercise Price between or among the classes of
capital stock. After such allocation, that portion of the Exercise Price
applicable to each share of each such class of capital stock shall thereafter be
subject to adjustment on terms comparable to those applicable to the Exercise
Shares in this Agreement.

                  (b) Consolidation, Merger or Sale of the Company. If the
Company is a party to a consolidation, merger, transfer of assets or any other
business combination which reclassifies or changes its outstanding Common Stock,
the successor corporation (or corporation controlling the successor corporation
or the Company, as the case may be) shall by operation of law assume the
Company's obligations under this Agreement. Upon consummation of such
transaction, the Revocable Warrants shall automatically become exercisable for
the kind and amount of securities, cash or other assets which the holder of a
Revocable Warrant would have owned immediately after the consolidation, merger,
transfer or business combination if the holder had exercised the vested amount
of the Revocable Warrant immediately before the effective date of such
transaction. The Company shall arrange for the person or entity obligated to
issue securities or deliver cash or other assets upon exercise of the Revocable
Warrant to, concurrently with the consummation of such transaction, assume the
Company's obligations hereunder by executing an instrument so providing and
further providing for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Section 9. The provisions of
this Section 9(b) shall similarly apply to successive reclassifications,
reorganizations, consolidations, mergers or other business combinations.

         10. Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or Holder shall bind and inure to the benefit
of their respective successor and assigns hereunder.

         11. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all proposes be deemed to
be an original, and such counterparts shall together constitute by one and the
same instrument.

         12. Notices. All notices or other communications under this Agreement
shall be in writing and shall be deemed to have been given if delivered by hand
or mailed by certified mail, postage prepaid, return receipt requested,
addressed as follows: if to the Company: Natural Gas Systems, Inc., Two Memorial
City Plaza, 820 Gessner, Suite 1340, Houston, TX 77024, Attention: Legal
Counsel, and to the Holder at the address of the Holder appearing on the books
of the Company or the Company's transfer agent, if any.

         Either the Company or the Holder may from time to time change the
address to which notices to it are to be mailed hereunder by notice in
accordance with the provisions of this Paragraph 12.
<PAGE>

         13. Supplements and Amendments. The Company may from time to time
supplement or amend this Agreement with the approval of the Holder in order to
cure any ambiguity or to be correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision, or to make any
other provisions in regard to matters or questions herein arising hereunder
which the Company may deem necessary or desirable and which shall not materially
adversely affect the interest of the Holder. Except as set forth in the
immediately preceding sentence, this Agreement may not be amended without the
prior written consent of the Holder and Company.

         14. Severability. If for any reason any provision, paragraph or term of
this Agreement is held to be invalid or unenforceable, all other valid
provisions herein shall remain in full force and effect and all terms,
provisions and paragraphs of this Agreement shall be deemed to be severable.

         15. Governing Law. This Agreement shall be deemed to be a contract made
under the laws of the State of Nevada and for all purposes shall be governed and
construed in accordance with the laws of said State.

         16. Headings. Paragraphs and subparagraph headings, used herein are
included herein for convenience of reference only and shall not affect the
construction of this Agreement nor constitute a part of this Agreement for any
other purpose.

         17. Taxes. The acquisition of the Revocable Warrants (and common stock
issuable thereunder) may result in adverse tax consequences to the Holder. The
Holder understands that he may suffer adverse tax consequences as a result of
his acquisition or disposition of the Revocable Warrants (and common stock
issuable thereunder). Holder represents that he has consulted any tax
consultants Holder deems advisable in connection with the acquisition or
disposition of the Revocable Warrants (and common stock issuable thereunder),
including the advantages and disadvantages of filing the Code Section 83(b)
election. The Holder acknowledges that it is his or her sole responsibility, and
not the Company's, to file a timely election under Code Section 83(b), even if
the Holder requests the Company or its representatives to make this filing on
his or her behalf. and that Holder is not relying on the Company or the
Company's attorney for any tax advice. Acquisitions or dispositions of cash or
equity made under this Agreement may be subject to reduction to reflect taxes or
other charges required to be withheld by law.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the date and year first above written.

 COMPANY                                   HOLDER:
 Natural Gas Systems, Inc.                 Daryl V. Mazzanti



By: _________________________________      By: _________________________________
Name: Robert S. Herlin, President
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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