EXECUTIVE EMPLOYMENT AGREEMENT

1.

TERM. The initial term of this Agreement shall be for the period commencing on December 5, 2005 (the "Start Date"), and ending on the third anniversary of the Start Date (the "Initial Term"), provided, however, that the term of this Agreement shall be automatically extended for successive one (1) year periods thereafter (each, a "Renewal Period") unless either the Company or the Executive shall have given written notice to the other party at least ninety (90) days prior to the end of the Term of Agreement (as hereinafter defined), that the Term of Agreement shall not be so extended. The Initial Term together with each Renewal Period, if any, are collectively referred to herein as the "Term of Agreement". The Executive's employment hereunder shall be coterminous with the Term of Agreement, unless sooner terminated as provided in Section 5 hereof.

2.

EMPLOYMENT. During the term of the Executive's employment under this Agreement:

(a)

Subject to the terms and conditions of this Agreement, the Executive shall be employed as Executive Vice President and Chief Financial Officer of the Company or such other senior executive capacity as may be mutually agreed to in writing by the parties. The Executive agrees to discharge all of the duties normally associated with such positions, to faithfully and to the best of his abilities perform such other services consistent with his position as a senior executive as may from time to time be assigned to him by the Company's President (the “President”), and to devote all of his business time, skill and attention to such services. The Executive agrees that he shall not engage in any other business activities of any kind which would give rise to a conflict of interest for the Executive with respect to his duties and obligations to the Company.

(b)

The Executive shall report directly to the President of the Company.

3.

COMPENSATION. During the term of the Executive's employment under this Agreement:

(a)

Base Salary. The Company agrees to pay or cause to be paid to the Executive during the Term of Agreement a base salary at the rate of $200,000 per annum or such increased amount as the President or the Board of Directors of the Company (“the Board”) may from time to time determine (hereinafter referred to as the "Base Salary"). Such Base Salary shall be payable in accordance with the Company's customary practices applicable to its executives. Such Base Salary shall be reviewed at least annually by the President or the Board and may be further increased (but not decreased) in such amounts as the President in its discretion may decide.

(b)

Signing Bonus. The Executive shall receive a special one-time signing bonus on the Start Date in the amount of One-Hundred Thousand (100,000) free-trading unrestricted shares, and after completion of thirty (30) days following the Start Date in the amount of One-Hundred-Fifty Thousand (150,000) restricted shares of the common stock, par value $.01 per share, of the Company (the “Common Stock”).

(c)

Stock Options/Warrants.

(i)

Initial Grant. On or prior to the Start Date, the Company hereby grants to the Executive an option/warrant (the "Initial Stock Option/Warrant") to purchase One Million (1,000,000) shares of the Common Stock at the purchase/exercise price of $1.75 per share. This Initial Stock Option/Warrant shall vest and be exercisable as follows: 1/3 of the shares vest and become exercisable as of the Start Date; 1/3 of the shares shall vest and become exercisable one year after the Start Date; and 1/3 of the shares shall vest and become exercisable two years after the Start Date. Notwithstanding the foregoing, the Initial Stock Option/Warrant shall vest and be fully exercisable upon a Change in Control and shall vest as otherwise provided herein upon termination of the Executive's employment.

(ii)

Future Grants. The Executive shall be entitled to participate in future stock option grants (the "Future Stock Options/Warrants") as determined by the President or the Board or any dully authorized Committee of the Board.

(iii)

Option/Warrant Agreement. The Initial Stock Option/Warrant and any Future Stock Options/Warrants shall be evidenced by agreements in customary form for grants of stock options/warrants to executive officers of the Company, consistent with the terms and conditions of this Agreement.

4.

OTHER BENEFITS. During the term of the Executive's employment under this Agreement:

(a)

Employee Benefits. The Executive shall be entitled to participate in all employee benefit plans, practices and programs maintained by the Company and made available to employees generally including, without limitation, all pension, retirement, profit sharing, savings, medical, hospitalization, disability, dental, life or travel accident insurance benefit plans. The Executive's participation in such plans, practices and programs shall be on the same basis and terms as are applicable to employees of the Company generally.

(b)

Executive Benefits. The Executive shall be entitled to participate in all executive benefit or incentive compensation plans now maintained or hereafter established by the Company for the purpose of providing compensation and/or benefits to executives of the Company including, but not limited to, any supplemental retirement, salary continuation, stock option, deferred compensation, supplemental medical or life insurance, or other bonus or incentive compensation plans. Unless otherwise provided herein, the Executive's participation in such plans shall be on the same basis and terms, as other senior executives of the Company, and shall be reasonably equivalent to the benefit levels and reward opportunities applicable to the Executive as in effect on the date hereof. No additional compensation provided under any of such plans shall be deemed to modify or otherwise affect the terms of this Agreement or any of the Executive's entitlements hereunder.

(c)

Fringe Benefits and Perquisites. The Executive shall be entitled to all fringe benefits and perquisites (e.g. professional membership dues, additional reimbursement for uncovered medical expenses, executive life insurance and tax advisory services) generally made available by the Company to its senior executives.

(d)

Eligibility Waiver of Waiting Times . Subject to the terms of this Agreement, the Executive (and to the extent applicable under the terms and benefits of such plans which apply to the Dependents shall have the right to participate in all employee plans and benefits currently existing or hereafter granted by the Company to its employees and all waiting periods under such plans and benefits arrangements will be waived to the full extent possible unless such waiver would require the Company to waive waiting periods for other employees. In the event that the provisions of any such employee plans or benefit arrangements do not permit immediate waiver of waiting periods, comparable benefits will be provided to the Executive and the Dependents outside such plans and arrangements.

(e)

Business Expenses. Upon submission of proper invoices in accordance with the Company's normal procedures, the Executive shall be entitled to receive prompt reimbursement of all reasonable out-of-pocket business, entertainment and travel expenses incurred by him in connection with the performance of his duties hereunder or for promoting, pursuing or otherwise furthering the business or interest of the Company.

(f)

Office and Facilities. The Executive shall be provided with an appropriate office in Irvine, California, with such secretarial and other support facilities as are commensurate with the Executive's status with the Company and adequate for the performance of his duties hereunder.

(g)

Vacation and Sick Leave. The Executive shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment under this Agreement, pursuant to the following:

(i)

The Executive shall be entitled to annual vacation in accordance with the policies as periodically established by the President for similarly situated executives of the Company, which shall in no event be less than four weeks per year;

(ii)

in addition to the aforesaid paid vacations, the Executive shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment for such additional periods of time and for such valid and legitimate reasons as the President in its discretion may determine. Further, the President shall be entitled to grant to the Executive a leave or leaves of absence with or without pay at such time or times and upon such terms and conditions as the President in its discretion may determine; and

(iii)

The Executive shall be entitled to sick leave (without loss of pay) in accordance with the Company's policies as in effect from time to time, which shall in no event be less than six (6) days per year.

5.

TERMINATION. The Executive's employment hereunder may be terminated under the following circumstances:

(a)

Death. The Executive's employment shall be terminated as of the date of the Executive's death and the Executive's Dependents shall be entitled to the benefits provided in Section 7(b) hereof.

(b)

Disability. The Company may terminate the Executive's employment after having established the Executive's Disability, subject to the payment by the Company to the Executive of the benefits provided in Section 7(b) hereof. For purposes of this Agreement, "Disability" shall mean the Executive's inability to substantially perform his duties and responsibilities hereunder by reason of any physical or mental incapacity for two or more periods of ninety (90) consecutive days each in any three hundred and sixty (360) day period, as determined by a physician with no history of prior dealings with the Company or the Executive, as reasonably agreed upon by the Company and the Executive.

(c)

Cause. The Company may terminate the Executive's employment for "Cause", effective as of the date of the Notice of Termination (as defined in Section 6 below), subject to the payment by the Company to the Executive of the benefits provided in Section 7(a) hereof. A termination for Cause is a termination made because the Executive has (A) committed an act of fraud or embezzlement against the Company or any affiliate thereof, or (B) a knowing and willful unauthorized disclosure of Confidential Information (as defined in Section 10 below) of the Company, which disclosure results in material damage to the Company, or (C) a breach of one or more of the following duties to the Company which continues after written notice thereof specifying the particular events or conditions which constitute the alleged breach and the specific cure requested by the Company and a reasonable opportunity to cure: (1) the duty not to take actions which would reasonably be viewed by the Company as placing the Executive's interest in a position adverse to the interests of the Company, or (2) the duty not to engage in self-dealing with respect to the Company's assets, properties or business opportunities; or (D) been convicted (or entered a plea of nolo contendere) for the commission of (1) a felony or (2) a crime involving fraud, dishonesty or moral turpitude; or (E) engaged in intentional misconduct as an employee of the Company, which misconduct or violation results in material damage to the Company or its reputation and continues after written notice thereof specifying the particular events or conditions which constitute the alleged misconduct or violation and the specific cure requested by the Company and a reasonable opportunity to cure (if such misconduct is susceptible to cure by the Executive), including, but not limited to (1) intentional violations by the Executive of written policies of the Company, or specific directions of the President, which policies or directives are not illegal (or do not involve illegal conduct) and do not require the Executive to violate reasonable business ethical standards, or (2) intentional violations of the Company's code of corporate conduct; or (F) failed, after written notice from the Company to render services to the Company in accordance with this Agreement or the Executive's position and responsibilities with the Company in a manner that amounts to gross neglect in the performance of his duties to the Company.

(d)

Without Cause. The Company may terminate the Executive's employment without Cause. The Company shall deliver to the Executive a Notice of Termination (as defined in Section 6 below) not less than thirty (30) days prior to the termination of the Executive's employment without Cause and the Company shall have the option of terminating the Executive's duties and responsibilities (but not his employment) prior to the expiration of such thirty-day notice period, subject to the payment by the Company of the benefits provided in either Section 7(c) or 7(e) hereof, as may be applicable.

(e)

Good Reason. The Executive may terminate his employment for "Good Reason" (as defined below) by delivering to the Company a Notice of Termination (as defined in Section 6 below) not less than thirty (30) days prior to the termination of the Executive's employment for Good Reason. The Company shall have the option of terminating the Executive's duties and responsibilities (but not his employment) prior to the expiration of such thirty-day notice period, subject to the payment by the Company of the benefits provided in either Section 7(c) or 7(e) hereof, as may be applicable. For purposes of this Agreement, Good Reason shall mean the occurrence of any of the events or conditions described in Subsections (i) through (viii) hereof which are not cured by the Company (if susceptible to cure by the Company) within fifteen (15) days after the Company has received written notice from the Executive specifying the particular events or conditions which constitute Good Reason and the specific cure requested by the Executive.

(i)

Diminution of Responsibility. (A) A change in the Executive’s status, title, position or responsibilities (including reporting responsibilities) which in the Executive’s reasonable judgment constitutes a material diminution in the Executive's status, title, position or responsibilities (including reporting responsibilities) as in effect immediately prior thereto; or (B) the assignment to the Executive of any duties or responsibilities (including reporting responsibilities) which are in the Executive’s reasonable judgment materially inconsistent with such status, title, position or responsibilities (including reporting responsibilities); or (C) any removal of the Executive from or failure to reappoint the Executive to the position of Chief Financial Officer, except in connection with the termination of the Executive's employment as provided for elsewhere in this Agreement;

(ii)

Salary Reduction. A reduction in the Executive's Base Salary as defined in Section 3(a);

(iii)

Relocation. The Company's requiring the Executive to be based at any place other than the Company's current headquarters or within a 30-mile radius thereof;

(iv)

Discontinuation of Material Compensation or Benefit Plan. The failure by the Company to continue in effect any material compensation or benefit plan in which the Executive was participating, including, but not limited to, the Company's deferred compensation plan and 401(k) plan without providing the Executive with compensation and benefits substantially equal (in terms of benefit levels and/or reward opportunities) to those provided for under such plan;

(v)

Bankruptcy. The initiation by or against the Company of proceedings under the United States Bankruptcy Code or under state insolvency laws, which proceedings are not vacated within 60 days of notice thereof to the Company;

(vi)

Breach by Company. Material breach by the Company of the terms and conditions of this Agreement or any other agreement between the Executive and the Company after formal notice by the Executive and a reasonable opportunity to cure;

(vii)

Purported Termination. Any purported termination of the Executive’s employment for Cause by the Company which does not comply with the terms of Section 5 of this Agreement; and

(viii)

Failure to Successfully Assign. Failure of the Company to obtain an agreement from any successor or assign of the Company to assume and agree to perform the Company's obligations under this or any other agreement between the Executive and the Company;

(f)

G ood Reason Arising Prior To Change in Control. Any event or condition described in Sections 5(e)(i) through (viii) which occurs prior to a Change in Control, but which (A) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (B) otherwise arose in connection with a Change in Control, will constitute Good Reason for purposes of this Agreement notwithstanding that it occurred prior to a Change in Control.

(g)

Without Good Reason. The Executive may voluntarily terminate his employment without Good Reason by delivering to the Company a Notice of Termination not less than thirty (30) days prior to the termination of the Executive's employment and the Company shall have the option of terminating the Executive's duties and responsibilities (but not his employment) prior to the expiration of such thirty-day notice period, subject to the payment by the Company to the Executive of the benefits provided in Section 7(a) hereof through the last day of such notice period.

(h)

Non-Renewal of Term of Agreement. Either party may elect not to extend the Term of Agreement pursuant to Section 1 hereof, subject to the payment by the Company to the Executive of the benefits provided in Section 7(d) hereof.

6.

NOTICE OF TERMINATION. Any purported termination by the Company or by the Executive shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which (1) indicates a termination of the Executive’s employment date, (2) the specific termination provision in this Agreement relied upon and (3) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. For purposes of this Agreement, no such purported termination of the Executive's employment hereunder shall be effective without such Notice of Termination.

7.

COMPENSATION UPON TERMINATION. Upon termination of the Executive's employment during the Term of Agreement, the Executive shall be entitled to the following benefits:

(a)

Termination by the Company for Cause or by the Executive Without Good Reason. If the Executive's employment is terminated by the Company for Cause or by the Executive Without Good Reason, the Company shall pay the Executive all amounts earned hereunder through the date of termination of the Executive's employment, including:

(i)

any accrued and unpaid Base Salary;

(ii)

reimbursement for any and all monies advanced to the Executive or expenses incurred in connection with the Executive's employment for reasonable and necessary expenses incurred by the Executive on behalf of the Company for the period ending on the date of termination of the Executive’s employment;

(iii)

any accrued and unpaid vacation pay;

(iv)

any stock options and stock appreciation rights (including Initial Stock Option/Warrant and Future Stock Options/Warrants) granted to the Executive and vested through the date of termination of the Executive’s employment pursuant to the vesting schedule in Section 3(c)(i) shall become immediately exercisable for a period of thirty (30) days following the date of termination of the Executive’s employment; and

(v)

any previous compensation which the Executive has previously deferred (including any interest earned or credited thereon), subject to the terms and conditions of the applicable deferred compensation plans then in effect.

(vi)

The foregoing items in Section 7(a)(i) through 7(a)(v) being collectively referred to as the "Accrued Compensation".

(b)

Termination Upon Death or Disability. If the Executive's employment is terminated by the Company upon the Executive's Disability or by reason of the Executive's death, the Executive (or his beneficiaries, as applicable) shall be entitled to the following:

(i)

any Accrued Compensation through the date of termination of the Executive’s employment;

(ii)

all restrictions on any outstanding awards granted by the Company (including restricted stock awards) granted to the Executive shall lapse and such awards shall become fully (100%) and immediately vested, and all stock options and stock appreciation rights (including Initial Stock Option/Warrant and Future Stock Options/Warrants) granted to the Executive and vested through the date of termination of the Executive’s employment pursuant to the vesting schedule in Section 3(c)(i) shall become immediately exercisable for a remaining life of the Stock Option/Warrant, or a period which shall be no less than twenty-four (24) months following the date of termination of the Executive’s employment, whichever is greater;

(iii)

for a number of months equal to twenty-four (24), the Company shall at its expense continue on behalf of the Executive’s dependents and beneficiaries (the “Dependents”) the life insurance, disability, medical, dental and hospitalization benefits which were being provided to the Dependents at the time Notice of Termination is given. In the event that the provisions of any such employee benefit arrangements do not permit continuing coverage, then the Company shall provide the Dependents with substantially equivalent coverage through other sources. The benefits provided in this Section 7(b)(iii) shall be no less favorable to the Dependents, in terms of amounts and deductibles and costs to them, than the coverage provided the Dependents under the plans providing such benefits at the time Notice of Termination is given. This Subsection (iii) shall not be interpreted so as to limit any benefits to which the Dependents may be entitled under any of the Company's employee benefit plans, programs or practices following the Executive's termination of employment, including without limitation, retiree medical and life insurance benefits; and

(iv)

The Executive's entitlement to any other compensation or benefits hereunder shall be determined in accordance with the Company's employee benefit plans and other applicable programs and practices then in effect.

(c)

Termination by the Company Without Cause or by the Executive for Good Reason. If the Executive's employment by the Company shall be terminated by the Company without Cause, or if the Executive terminates his employment for Good Reason, the Executive shall be entitled to the following:

(i)

any Accrued Compensation through the date of termination of the Executive’s employment;

(ii)

If the Executive voluntarily elects and agrees not to engage in Prohibited Activities (as hereinafter defined) for a period of one (1) year after the date of termination of the Executive’s employment, the Company shall pay the Executive as additional compensation for the periods subsequent to the termination date, an amount in ca