NOTE 11   COMMITMENTS AND CONTINGENCIES Operating Lease Commitments The Company leases its facilities and certain equipment under non-cancelable operating lease agreements. On October 20, 2011, the Company executed an amendment to its lease providing for a new termination date of May 31, 2012; decreasing the Company s obligation for space occupied to 22,000 square feet from 52,200 square feet; and decreasing the monthly lease payment to $14,300 from $33,365. However, should the landlord procure a new tenant for the facility prior to the expiration date, the landlord may require the Company to vacate the premises but the landlord must first provide the Company with not less than sixty days prior notice of its intent for the Company to vacate. On July 6, 2009, the Company entered into a sub-lease for approximately 30% of its facility with a term of 18 months and an option to renew for an additional 22 months. The total amount of minimum rentals to be received under the sub-lease for the initial 18 month period is $160,578. In addition to the base rent, the sub-tenant was required to pay its proportionate share of the monthly operating expenses related to the facility. The sub-tenant provided a notice of its intent to terminate the sub-lease in August 2010, but continued to sub-lease the space on a month-to-month basis on the same terms and conditions until May 31, 2011. Capital Lease Obligations The Company currently has no capital lease obligations. Financial Agreements On October 29, 2008, the Company entered into a Sale of Accounts and Security Agreement dated as of October 24, 2008 with Rexford Funding, LLC, which was acquired by Bay View Funding on November 11, 2009. The Sale of Accounts and Security Agreement provides for an accounts receivable-based credit facility. As of September 30, 2011, no amounts were outstanding under the facility. Service Agreements The Company periodically enters into various agreements for the provision of services from third parties including, but not limited to, public relations,