QUANTITY DESCRIPTION, MODEL & CATALOG #, SERIAL OR OTHER IDENTIFICATION

LEASE RENTAL AGREEMENT

TERMS AND CONDITIONS OF LEASE

1.AGREEMENT TO LEASE. Lessee hereby agrees to lease from Lessor, and Lessor hereby agrees to lease to Lessee for Leasee’s business use, subject to the terms and conditions on the face and reverse side of this Lease Rental Agreement (“Lease”) the personal property described above (which, with all replacement parts, repairs, additions and accessories thereto, is hereinafter called “Equipment”), or, if separately scheduled, on the schedule annexed hereto (marked Schedule “A”) and made part hereof. The parties agree that this Lease is a “Finance Lease” as defined by Section 2A-104(g) of the Uniform Commercial Code (“UCC”). Lessee acknowledges either (a) that Lessee has reviewed and approved any written Supply Contract covering the Equipment purchased from the Supplier thereof for lease, or (b) that Lessor has informed or advised Lessee, in writing, either previously or by this Lease, of the following: (i) the identity of the Supplier, (ii) that Lessee may have rights under the Supply Contract; and (iii) that Lessee may contact the Supplier for a description of any such rights Lessee may have under the Supply Contract.

2.    SELECTION OF ORDERING THE EQUIPMENT. Lessee, at its sole option and discretion, has selected the Equipment and the Supplier(s) thereof and hereby requests Lessor to order the Equipment from the Supplier(s) named herein, to arrange for delivery to Lessee at Lessee’s expense and to pay for the Equipment after its delivery to and acceptance by Lessee.

3.    DISCLAIMER OF WARRANTIES AND CLAIMS/LIMITATION OF REMEDIES. There are no warranties by or on behalf of Lessor, and Lessee acknowledges and agrees by Lessee’s initials below that:

(a)       Lessor, being neither the manufacturer, nor the Supplier, nor a dealer in the Equipment, makes NO WARRANTY, express or implied, to anyone as to design, condition, capacity, performance or any other aspect of the Equipment, or its material or workmanship. Lessor also disclaims any warranty of merchantability or fitness for use or purpose, whether arising by operation of law or otherwise. Lessor further disclaims any liability for loss, damage or injury to Lessee or to any third parties as a result of any latent or patent defects in the Equipment, whether arising from the laws of strict liability or otherwise. As to the Lessor, the Lessee leases the Equipment “as-is”. Lessee acknowledges that Lessor has not recommended the Supplier(s) of the Equipment. Lessor shall have no obligation to install, maintain, or service the Equipment, or cause of the same to be performed by any third parties. If the Equipment is unsatisfactory for any reason, Lessee shall make claim on account thereof solely against the Supplier and/or manufacturer of the Equipment, and shall nevertheless pay or continue to pay all rent due under the lease.

(b)       As long as Lessee is not deemed to be in default hereunder, Lessor assigns to Lessee, solely for the purpose of prosecuting such a claim, all the rights which Lessor may have against the Supplier and/or the manufacturer of the Equipment for breach of warranty or other representations concerning the Equipment;

(c)       Regardless of any cause, Lessee agrees not to assert any claim or counterclaim whatsoever against Lessor for loss of anticipatory profits, or any other indirect, special or consequential damages, nor shall Lessor be responsible for any damages or costs which may be assessed against Lessee in any action for infringement of any United States Letters Patent. Lessor makes no warranty as to the treatment of this Lease for tax or accounting purposes;

(d)       Neither the Supplier, nor any of its representatives, agents, employees, or sales personnel are in any way to be construed as agents of Lessor; consequently, neither the Supplier, nor any of its representatives, agents, employees, or sales personnel are authorized to waive or alter any of the terms, conditions, or provisions of this Lease, or to make any representations whatsoever for or on behalf of Lessor;

(e)       Lessee, by affixing Lessee’s initials hereto, agrees and acknowledges that Lessor and Lessee have specifically negotiated and agreed to the terms and conditions of this Paragraph 3.

4.    TERM AND RENT, THIS LEASE IS NON-CANCELLABLE FOR THE ORIGINAL TERM HEREOF, EXCEPT AS HERIN PROVIDED. The Lease shall commence when accepted by the Lessor at its principal office in the County of Ventura, State of California and continue until all of Lessee’s obligations under the Lease have been performed to the satisfaction of Lessor. Lessee agrees to pay the total rent equal to the “Amount of Each Payment” multiplied by the number of payments specified in “No of Payments.” Payments will be made in advance and periodically as specified in “Terms” and will be considered to be made when received by Lessor at its principal office in Ventura County, California. Lessee’s obligation to pay the rentals due hereunder is unconditional. Lessee shall not set-off, abase, deduct any amount or reduce any payment for any reason. The first payment shall be due on the date Lessee accepts delivery of the Equipment, and subsequent payments shall be due on the same day of each succeeding payment period throughout the remaining term of the Lease. If, for any reason whatsoever, the Lease the lease does not commence, or the Lessor duly terminates the Lease, Lessor may retain the advance rental(s) as liquidated damages.

5.    SECURITY DEPOSIT. As security for the prompt, faithful and full payment of the amounts due under this Lease, and Lessee’s complete performance of all of its obligations under this Lease, and any extension or renewal hereof, Lessee, if so noted above, has deposited with Lessor the security amount set forth in the section shown as “Security Deposit.” In the event that any default shall be made in the performance of any of Lessee’s obligations to Lessor, whether under this Lease or otherwise, Lessor shall have the right, but shall not be obligated, to apply the Security Deposit to the curing of such default. Within 15 days after Lessor mails notice to Lessee that Lessor has applied any portion of the Security Deposit to the curing of any default, Lessee shall restore said Security Deposit to the full amount set forth hereinabove. On the expiration or earlier termination or cancellation of this Lease, or any extension or renewal hereof, Lessor will return to Lessee any then remaining balance of said Security Deposit, without interest. The Security Deposit may be commingled with Lessor’s other funds.

6.    EXPIRATION AND RENEWAL. Unless earlier terminated or cancelled by Lessor, and provided that Lessee has performed all of its covenants hereunder to Lessor’s satisfaction, this Lease shall expire upon expiration of the number of months set forth in “Term of Lease.” At the expiration of the Lease, Lessee shall return the Equipment to the Lessor in accordance with Paragraph 7 hereof. At Lessor’s option, this lease may be continued on a month-to-month basis until 30 days after the Lessee returns the equipment to the Lessor. In the event the Lease is continued, Lessee shall pay to Lessor rentals in such periodic amounts as may be agreed upon between Lessor and Lessee at the time.

7.    SURRENDER. By the Lease, Lessee acquires no ownership rights in the Equipment and has no option to purchase same. Upon the expiration or earlier termination or cancellation of the Lease, or in the event of a default, as defined under paragraph 18 hereunder, Lessee, at its sole cost and expense, shall return the Equipment in good repair, condition and working order, ordinary wear and tear resulting from proper use thereof alone excepted, by delivering it, packed and ready for shipment, to such place or carrier as Lessor may designate.

8.    OWNERSHIP/PERSONAL PROPERTY. The equipment is, and shall remain the property of the Lessor, and notwithstanding any trade-in or down payment made by Lessee or on its behalf, Lessee shall have no right, title, or interest to the Equipment, except as expressly set forth in this Lease. The Equipment shall remain personal property even though installed in or attached to real property. The Equipment is removable from and is not essential to the premises at which the Equipment is located.

9.    LOCATION OF EQUIPMENT. Lessee shall keep the Equipment at the location specified hereinabove, or if none is specified, at the Lessee’s address as shown hereinabove, and it shall not be removed without Lessor’s written consent.

10.  CARE AND USE OF EQUIPMENT. Lessee, at it sole cost and expense, shall at all times maintain and keep the Equipment in good repair, condition and working order, shall use the Equipment lawfully and shall not alter the Equipment without Lessor’s prior written consent. If the manufacturer of the Equipment has provided Lessee with a standard maintenance schedule, such schedule will constitute minimum maintenance compliance, and, at Lessor’s request, Lessee will furnish Lessor with evidence of such compliance.

11.  INSURANCE, LEINS, TAXES, FEES. Lessee shall provide and maintain insurance against loss, theft, damage or destruction of the Equipment in an amount not less than the full replacement value of the Equipment, with loss payable to Lessor. Lessee shall also provide and maintain comprehensive general all-risk liability insurance without limitation, insuring Lessor and Lessee, without a severability interest endorsement, or its equivalent, against any and all loss or liability for all damages, either to persons or property, or otherwise, which might result from or happen in connection with the condition, use or operation of the Equipment, with such limits and with and with an insurer satisfactory to Lessor. Each policy shall expressly provide that said insurance as to Lessor and its assigns shall not be invalidated by any act, omission, or neglect of Lessee and cannot be cancelled without 30 days’ prior written notice to Lessor. As to each policy, Lessee shall furnish to Lessor a certificate of insurance from the Insurer, which certificate shall evidence the insurance coverage required by this Paragraph. Lessor shall have no obligation to ascertain the existence of or provide any insurance coverage for the Equipment or for Lessee’s benefit. In the event that Lessor shall take real property as additional security to the Lease, Lessee agrees to maintain such fire and other hazard insurance upon said premises as Lessor shall direct, showing Lessor and/or it assigns as Loss Payee thereunder. Lessee shall keep the Equipment free and clear of any and all levies, liens, and encumbrances. Lessee shall pay all charges and taxes (local, state and federal) which may now or hereafter be imposed upon the ownership, leasing, rental, sale, purchase, possession, or use of the Equipment, excluding, however, all taxes on or measured by Lessor’s net income. Lessee shall pay all fees, other than those for credit investigation, incurred by Lessor on Lessee’s behalf. If Lessee fails to procure or maintain said insurance, or to pay any of the said fees, charges, or taxes, Lessor shall have the right but not be obligated, to effect such insurance, or to pay such fees, charges or taxes. In the event, Lessor shall notify Lessee of such payment, and Lessee shall repay to Lessor the cost thereof within 15 days after such notice is mailed to Lessee.

12.  LOSS AND DAMAGE. Lessee shall at all times after signing this Lease bear the entire risk of loss, theft, damage, or destruction of the Equipment from any cause whatsoever, and no loss, theft, damage, or destruction of the Equipment shall relieve the Lessee of the obligation of pay rent or to comply with any other obligation or provision under this lease. In the event of loss, Lessee shall give immediate written notice of such to Lessor or Lessor’s assignee, if any, but Lessor shall not by such notice become obligated to make proof of loss to the insurance company(ies). Each insurance carrier is hereby authorized and directed to make payment for such loss directly to the Lessor or Lessor’s assignee. In case of any loss, the amount collected under any policy of insurance on the Equipment, may at Lessor’s sole option and discretion be used by Lessor to repair or replace the Equipment, or hold by Lessor t compensate Lessor for diminution in the value of such Equipment as a result of said loss, or applied by Lessor to Lessee’s obligation under this Lease.

In furtherance of the assignment of rights contained herein, Lessee hereby appointees Lessor as Lessee’s attorney-in-fact (hereby granting Lessor a power of attorney coupled with an interest) to make claim for, receive payment of and execute and endorse any and all documents, checks, or drafts for loss, damages, or returned premium under any insurance policy(ies) in favor of Lessee insuring the Equipment, and with the power also to enter into any agreement on Lessee’s behalf and binding Lessee for settlement of any claim or claims relating to the Equipment which is the subject of this Lease.

13.  FURTHER ASSURANCES AND SPECIAL POWER OF ATTORNEY. Lessee shall execute, or otherwise authenticate, or obtain from third parties, and deliver to Lessor, upon Lessor’s request, such instruments and assurances and other records as Lessor deems necessary or advisable for the confirmation or perfection of this Lease or Lessor’s rights hereunder. Lessee further agrees and does hereby appoint Lessor as Lessee’s true and lawful attorney-in-fact to prepare, execute and file any and all documents including and without limitation, security agreements and financing statements, including UCC-1s, in order to give notice of Lessor’s ownership interest in the Equipment and to sign the name of the Lessee with the same force and effect as if, in fact, signed by the Lessee. The filing of the financing statement is made for the express purpose of protecting the interests of the parties hereto from any unwarranted claims made by any third party. This paragraph shall survive the termination, cancellation, expiration of this Lease. Lessee’s full and accurate legal name is first provided as above.

14.  INDEMNITY. Lease shall hold Lessor harmless from, indemnity and defend Lessor against any and all claims, actions, proceedings, costs, expenses, including attorney’s fees, damages and liability, arising out of, connected with, or resulting from the Equipment of this Lease, including, without limitation the manufacture, selection, delivery, possession, use, operation, or return of the Equipment. This indemnification shall survive the termination, cancellation, or expiration of this Lease. Lessee waives any immunity Lessee may have under any industrial insurance act, with regard to the indemnification of Lessor.

15.  ASSIGNMENT. ASSIGNMENT BY LESSEE IS PROHIBITED, WITOUT LESSOR’S PRIOR WRITTEN CONSENT, LESSEE SHALL NOT ASSIGN THIS LEASE OR SUBLEASE THE EQUIPMENT OR ANY INTEREST THEREIN, OR PLEDGE, HYPOTHECATE, TRANSFER, OR DISPOSE OF THE EQUIPMENT IN ANY MANNER, OR PERMIT THE EQUIPMENT TO BE USED BY ANYONE OTHER THAN LESSEE OR LESSEE’S EMPLOYEES. Any assignee of Lessor shall have the rights but none of the obligations of Lessor under this Lease. Lessee shall recognize and hereby consents to any assignment of this Lease by Lessor, and shall not assert against the assignee any defense, counterclaim, or setoff that Lessee may have against Lessor.

16.  SERVICE CHARGES; INTEREST. If Lessee shall fail to make any payment required by this Lease within 10 days of the due date thereof, Lessee shall pay to Lessor a service charge of 7% of the amount due; provided, however, that not more than one such service charge shall be made on any delinquent payment, regardless of the length of the delinquency. In addition, Lessee shall pay to Lessor any actual additional expenses incurred by Lessor in collection efforts, including, without limitation, long-distance telephone charges, and travel expenses. Lessee shall pay to Lessor interest on any delinquent payment or amount due under this Lease, from the due date thereof until paid, at the lesser of the maximum rate of