Document:

buckeye_sb2a1-ex1014.htm

    Exhibit 10.14

     

    
      IRREVOCABLE
TRANSFER AGENT INSTRUCTIONS

       

      June 29,
2007

       

      American
Registrar & Transfer Company 

      342 East
900 South 

      Salt Lake
City, UT 84111

       

      Attention:       
Richard Day

       

      

      RE:  
BUCKEYE VENTURES, INC.

       

      Ladies
and Gentlemen:

       

      Reference
is made to that certain Securities Purchase Agreement (the “Securities Purchase
Agreement”), dated the date hereof, by and between Buckeye Ventures,
Inc.., a corporation organized under the laws of Michigan (the “Company”), and the
Buyers set forth on Schedule I attached thereto (collectively the “Buyer”), pursuant to
which the Company shall sell to the Buyer up to Five Million Dollars
($5,000,000) of the Company’s secured convertible debentures (singly, a “Convertible
Debenture” and collectively, the “Convertible
Debentures”), which shall be convertible into shares of the Company’s
common stock, par value $.001 per share (the “Common Stock”).
Pursuant to the Securities Purchase Agreement, the Company is also issuing to
the Buyer certain warrants for the purchase of Common Stock (“Warrants”). The
shares of Common Stock to be converted under the Convertible Debentures plus
interest which may be converted into Common Stock and any liquidated damages
which may be converted into Common Stock thereunder along with the shares of
Common Stock which may be acquired upon exercise of the Warrants, are referred
to collectively herein as the “Conversion Shares.”
This letter shall serve as our irrevocable authorization and direction to you (“
TA”) (provided that you are the transfer agent of the Company at such time) to
issue the Conversion Shares in shares of the Company’s Common Stock, in the
event the Buyer has elected to have the interest of the Convertible Debenture,
pursuant to Section 1.05 of the Convertible Debenture, paid in Common Stock (the
“Interest
Shares”), to the Buyer from time to time upon surrender to you of a
properly completed and duly executed Conversion Notice, in the form attached
hereto as Exhibit
I, delivered on behalf of the Company by James G. Dodrill II,
P.A..

       

      Specifically,
upon receipt by the Company of a copy of a Conversion Notice as set forth in the
Convertible Debenture, the Company, shall as soon as practicable, but in no
event later than one (1) Trading Day (as defined below) after receipt of such
Conversion Notice, send, via facsimile, a Conversion Notice, which shall
constitute an irrevocable instruction to you to process such Conversion Notice
in accordance with the terms of these instructions. Upon your receipt of a copy
of the executed Conversion Notice, you shall use your best efforts to, within
three (3) Trading Days following the date of receipt of the Conversion Notice,
(A) issue and surrender to a common carrier for overnight delivery to the
address as specified in the Conversion Notice, a certificate, registered in the
name of the Buyer or its designee, for the number of shares of Common Stock to
which the Buyer shall be entitled as set forth in the Conversion Notice or (B)
provided you are participating in The Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program, upon the request of the Buyer, credit such
aggregate number of shares of Common Stock to which the Buyer shall be entitled
to the Buyer’s or its designee’s balance account with DTC through its Deposit
Withdrawal At Custodian (“DWAC”) system
provided the Buyer causes its bank or broker to initiate the DWAC transaction.
(“Trading
Day” shall mean
any day on which the Nasdaq Market is open for customary trading.)

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      The
Company hereby confirms to you and the Buyer that certificates representing the
Conversion Shares shall not bear any legend restricting transfer of the
Conversion Shares thereby and should not be subject to any stop-transfer
restrictions and shall otherwise be freely transferable on the books and records
of the Company provided that the Company counsel delivers (i) the Notice of
Effectiveness set forth in Exhibit II attached
hereto and (ii) an opinion of counsel in the form set forth in Exhibit III attached
hereto, and that if the Conversion Shares are not registered for sale under the
Securities Act of 1933, as amended, then the certificates for the Conversion
Shares shall bear the following legend:

       

      “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.”

       

      The
Company hereby confirms and TA acknowledges that in the event Counsel to the
Company does not issue an opinion of counsel as required to issue the Conversion
Shares and the Interest Shares free of the legend set forth above, the Company
authorizes and TA will accept an opinion of Counsel from James G. Dodrill II,
P.A..

       

      The
Company hereby confirms to you and the Buyer that no instructions other than as
contemplated herein will be given to you by the Company with respect to the
Conversion Shares. The Company hereby agrees that it shall not replace TA as the
Company’s transfer agent unless the Company has delivered a replacement of these
Irrevocable Transfer Agent Instructions to such substitute transfer agent,
without the prior written consent of the Buyer.

       

      Any
attempt by you to resign as transfer agent hereunder shall not be effective
until such time as the Company provides to you written notice that a suitable
replacement has agreed to serve as transfer agent and to be bound by the terms
and conditions of these Irrevocable Transfer Agent Instructions.

      Buckeye
Ventures – Irrevocable TA instructions.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

       

      The
Company and TA hereby acknowledge and confirm that complying with the terms of
this letter does not and shall not prohibit TA from satisfying any and all
fiduciary responsibilities and duties it may owe to the Company.

       

      The
Company and TA acknowledge that the Buyer is relying on the representations and
covenants made by the Company and TA hereunder and are a material inducement to
the Buyer purchasing Convertible Debentures. The Company and TA further
acknowledge that without such representations and covenants of the Company and
TA made hereunder, the Buyer would not enter into the Securities Purchase
Agreement and purchase Convertible Debentures pursuant thereto.

       

      Each
party hereto specifically acknowledges and agrees that in the event of a breach
or threatened breach by a party hereto of any provision hereof, the Buyer will
be irreparably damaged and that damages at law would be an inadequate remedy if
these Irrevocable Transfer Agent Instructions were not specifically enforced.
Therefore, in the event of a breach or threatened breach by a party hereto,
including, without limitation, the attempted termination of the agency
relationship created by this instrument, the Buyer shall be entitled, in
addition to all other rights or remedies, to an injunction restraining such
breach, without being required to show any actual damage or to post any bond or
other security, and/or to a decree for specific performance of the provisions of
these Irrevocable Transfer Agent Instructions.

       

      IN WITNESS WHEREOF, the
parties have caused this letter agreement regarding Irrevocable Transfer Agent
Instructions to be duly executed and delivered as of the date first written
above.

       

      

      COMPANY:

       

      BUCKEYE
VENTURES, INC.

       

      By:
________________________________

      Name:
______________________________

      Title:
_______________________________

      

       

      AGREED
TO AND ACKNOWLEDGED BY:

      
 

      AMERICAN
REGISTRAR & TRANSFER COMPANY

       

      By:
_____________________________

      Name:
___________________________

      Title:
____________________________

       

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      SCHEDULE
I

       

      SCHEDULE
OF BUYERS

       

       

       

      
        	
                 Name

              	 	
                 
      Signature

              	 	
                Address/Facsimile

                Number of Buyer

              
	
                Trafalgar
      Capital Specialized

              	 	
                By:

              	
                Trafalgar
      Capital Sarl

              	 	
                BP
      3023

              
	
                Investment
      Fund, Luxembourg

              	 	
                Its:

              	
                General
      Partner

              	 	
                L-1030
      Luxembourg

              
	 
      	 	 
      	 
      	 	
                Facsimile:

              
	 
      	 	 
      	 
      	 	
                011-44-207-405-0161

              
	 
      	 	
                By:

              	 ______________________	 	
                and

              
	 
      	 	
                Name:

              	
                Andrew
      Garai

              	 	
                001-786-323-1651

              
	 
      	 	
                Its:

              	
                Chairman
      of the Board

              	 	 
      

      

      

      

      
        
           

        

        
          SCHEDULE
I-1

          
            

          

        

        
           

        

      

      EXHIBIT
I

       

      TO
IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

       

      FORM OF
CONVERSION NOTICE

       

      

       

      Reference
is made to the Securities Purchase Agreement (the “Securities Purchase
Agreement”) between Buckeye Ventures, Inc., (the “Company”), and
Trafalgar Capital Specialized Investment Fund, Luxembourg., dated June __, 2007.
In accordance with and pursuant to the Securities Purchase Agreement, the
undersigned hereby elects to convert convertible debentures into shares of
common stock, par value $.001 per share (the “Common Stock”), of
the Company for the amount indicated below as of the date specified
below.

       

      
        

        
          	
                  Conversion
      Date:

                	 
      	 
      	 
	 	 	 	 
	
                  Amount
      to be converted:

                	 
      	
                  $

                	 
	 	 	 	 
	
                  Conversion
      Price:

                	 
      	
                  $

                	 
	 	 	 	 
	
                  Shares
      of Common Stock Issuable:

                	 
      	 
      	 
	 	 	 	 
	
                  Amount
      of Debenture unconverted:

                	 
      	
                  $

                	 
	 	 	 	 
	
                  Amount
      of Interest Converted:

                	 
      	
                  $

                	 
	 	 	 	 
	
                  Conversion
      Price of Interest:

                	 
      	
                  $

                	 
	 	 	 	 
	
                  Shares
      of Common Stock Issuable:

                	 
      	 
      	 
	 	 	 	 
	
                  Amount
      of Liquidated Damages:

                	 
      	
                  $

                	 
	 	 	 	 
	
                  Conversion
      Price of Liquidated Damages:

                	 
      	
                  $

                	 
	 	 	 	 
	
                  Shares
      of Common Stock Issuable:

                	 
      	 
      	 
	 	 	 	 
	
                  Total
      Number of shares of Common Stock to be issued:

                	 
      	 
      	 

        

        

      

       

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      

      Please
issue the shares of Common Stock in the following name and to the following
address:

       

       

        

        
          	
                  Issue
      to:

                	 
      	 
      	 
	 	 	 	 
	
                  Authorized
      Signature:

                	 
      	
                   

                	 
	 	 	 	 
	
                  Name:

                	 
      	
                   

                	 
	 	 	 	 
	
                  Title:

                	 
      	 
      	 
	 	 	 	 
	
                  Phone
      #:

                	 
      	
                   

                	 
	 	 	 	 
	
                  Broker
      DTC Participant Code:

                	 
      	
                   

                	 
	 	 	 	 
	
                  Account
      Number*:

                	 
      	
                   

                	 

        

        

*
Note that receiving broker must initiate transaction on DWAC
System.

         

         

        
          
             

          

          
            2

            
              

            

          

          
             

          

        

      

      EXHIBIT
II

       

      TO IRREVOCABLE TRANSFER
AGENT INSTRUCTIONS

       

      _________,
200___

       

      Attention:

       

      RE:
BUCKEYE VENTURES, INC.

       

      Ladies
and Gentlemen:

       

      We are
counsel to Buckeye Ventures, Inc., a corporation organized under the laws of
___________ (the “Company”), and have
represented the Company in connection with that certain Securities Purchase
Agreement, dated as of June 29, 2007 (the “Securities Purchase
Agreement”), entered into by and among the Company and the Buyers set
forth on Schedule I attached thereto (collectively the “Buyer”) pursuant to
which the Company has agreed to sell to the Buyer up to Five Million Dollars
($5,000,000) of secured convertible debentures (“Convertible Debentures”), which
shall be convertible into shares (the “Conversion Shares”)
of the Company’s common stock, par value $.001 per share (the “Common Stock”), in
accordance with the terms of the Securities Purchase Agreement. Pursuant to the
Securities Purchase Agreement, the Company also has entered into a Registration
Rights Agreement, dated as of June ___, 2007, with the Buyer (the “Investor Registration Rights
Agreement”) pursuant to which the Company agreed, among other things, to
register the Conversion Shares under the Securities Act of 1933, as amended (the
“1933 Act”). In
connection with the Company’s obligations under the Securities Purchase
Agreement and the Registration Rights Agreement, on _______, 2007, the Company
filed a Registration Statement (File No. ___-_________) (the “Registration
Statement”) with the Securities and Exchange Commission (the “SEC”) relating to the
sale of the Conversion Shares.

       

      In
connection with the foregoing, we advise you that a member of the SEC’s staff
has advised us by telephone that the SEC has entered an order declaring the
Registration Statement effective under the 1933 Act at ____ P.M. on __________,
2007 and we have no knowledge, after telephonic inquiry of a member of the SEC’s
staff, that any stop order suspending its effectiveness has been issued or that
any proceedings for that purpose are pending before, or threatened by, the SEC
and the Conversion Shares are available for sale under the 1933 Act pursuant to
the Registration Statement.

       

      The Buyer
has confirmed it shall comply with all securities laws and regulations
applicable to it including applicable prospectus delivery requirements upon sale
of the Conversion Shares.

       

      Very
truly yours,

       

      [Company
Counsel]

       

       

      By:
_____________________________

       

       

      
        
           

        

        
          
            EXHIBIT II-1

          

          
            

          

        

        
           

        

      

      EXHIBIT
III

       

      TO IRREVOCABLE TRANSFER
AGENT INSTRUCTIONS

       

      

      FORM OF
OPINION

      ________________
2007

       

      

      VIA FACSIMILE AND REGULAR
MAIL

       

      Attention:

       

      

      RE:
BUCKEYE VENTURES, INC.

       

      Ladies
and Gentlemen:

       

      We have
acted as special counsel to BUCKEYE VENTURES, INC. (the
“Company”), in
connection with the registration of ___________shares (the “Shares”) of its
common stock with the Securities and Exchange Commission (the “SEC”). We have not
acted as your counsel. This opinion is given at the request and with the consent
of the Company.

       

      In
rendering this opinion we have relied on the accuracy of the Company’s
Registration Statement on Form SB-2, as amended (the “Registration
Statement”), filed by the Company with the SEC on _________ ___, 2007.
The Company filed the Registration Statement on behalf of certain selling
stockholders (the “Selling
Stockholders”). This opinion relates solely to the Selling
Shareholders listed on Exhibit “A” hereto
and number of Shares set forth opposite such Selling Stockholders’ names. The
SEC declared the Registration Statement effective on __________ ___,
2007.

       

      We
understand that the Selling Stockholders acquired the Shares in a private
offering exempt from registration under the Securities Act of 1933, as amended.
Information regarding the Shares to be sold by the Selling Shareholders is
contained under the heading “Selling Stockholders” in the Registration
Statement, which information is incorporated herein by reference. This opinion
does not relate to the issuance of the Shares to the Selling Stockholders. The
opinions set forth herein relate solely to the sale or transfer by the Selling
Stockholders pursuant to the Registration Statement under the Federal laws of
the United States of America. We do not express any opinion concerning any law
of any state or other jurisdiction.

       

      In
rendering this opinion we have relied upon the accuracy of the foregoing
statements.

       

       

      
        
           

        

        
          EXHIBIT
III-1

          
            

          

        

        
           

        

      

       

      Based on
the foregoing, it is our opinion that the Shares have been registered with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
and that ________ may remove the restrictive legends contained on the Shares.
This opinion relates solely
to the number of Shares set forth opposite the Selling Stockholders
listed on Exhibit “A”
hereto.

       

      This
opinion is furnished to you specifically in connection with the issuance of the
Shares, and solely for your information and benefit. This letter may not be
relied upon by you in any other connection, and it may not be relied upon by any
other person or entity for any purpose without our prior written consent. This
opinion may not be assigned, quoted or used without our prior written consent.
The opinions set forth herein are rendered as of the date hereof and we will not
supplement this opinion with respect to changes in the law or factual matters
subsequent to the date hereof.

       

      Very
truly yours,

       

      JAMES
G. DODRILL II, P.A.

      

      
        
           

        

        
          EXHIBIT
III-2

          
            

          

        

        
           

        

      

      EXHIBIT
“A”

       

      (LIST OF
SELLING STOCKHOLDERS)

       

      

       

      Name: _________________________________________________________________________________  
No. of Shares: _____________________

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      EXHIBIT A-1buckeye_sb2a1-ex1015.htm

    Exhibit 10.15

     

    

      LEASE

       

      This
Lease (this "Lease"), made as of January 2, 2007 between Harold Barnett (the
"Landlord") and Energy King, Inc., a California corporation
("Tenant").

       

      The
parties hereto hereby agree as follows:

       

      1.             Premises; Term. The
Landlord is the owner of that certain real property commonly known as 5729
Terminal Avenue, Riverbank, California 95367, together with all improvements
constructed thereon, including the building (the "Building"), the parking and
loading areas, if any, and all easements, rights-of-way, and other rights
appurtenant thereto (collectively, the "Premises"). Landlord does hereby lease
to Tenant and Tenant hereby leases from Landlord the Premises for the period
from January 2, 2007 (the "Commencement Date") to December 31, 2007 (the
"Initial Term" and as such Initial Term may be extended, the "Term"), unless
sooner terminated or extended as provided herein, subject to the terms,
covenants, and agreements herein contained. Upon the expiration of the Initial
Term, the Term shall automatically be renewed for a period of one additional
year until December 31, 2008 (the "First Renewal Term"), unless Tenant or
Landlord notifies the other at least ninety (90) days in advance of the
expiration of the Initial Term that the Term shall not be extended.
Notwithstanding the foregoing, Tenant may terminate this Lease and the Term at
any time upon at least thirty (30) days prior notice to Landlord. A portion of
the Premises is currently used by Harold Barnett or Robert E. Barnett or their
affiliates for the storage of certain property under separate arrangements with
the Landlord. The parties agree that such persons may continue to use such
portion of the Premises solely for the storage of such property, but that the
Tenant shall not have any responsibility whatsoever with respect to such
property and such property shall be maintained on the Premises at the sole cost,
expense and risk of the Landlord and such persons. The Landlord shall cause (1)
such persons to waive any and all claims they may have at any time against the
Tenant with respect to any loss of or damage to such property and (ii) such
storage or any access to or removal of such property not to interfere with the
Tenant's business or use of the remainder of the Premises.

       

      2.              Use;
Compliance.  Tenant shall not use and occupy the Premises for any
unlawful purpose. Tenant shall not make any use of the Premises that will
invalidate any policies of insurance now or hereafter carried on the Building.
Tenant will not do anything upon the Premises that would constitute a nuisance.
Tenant shall comply in all material respects with all applicable laws, statutes,
ordinances, rules and regulations relating to the Tenant's specific use (and not
mere occupancy) of the Premises.

       

      3.        Rent.
Tenant shall pay to Landlord monthly rent ("Rent") for each month during the
Term in the amount equal to $1,800 per month, provided, however, that the
monthly Rent shall be increased by five percent (5%) on the first day of the
First Renewal Term. Rent shall be payable in advance on the Commencement Date
and on the first day of each month. thereafter during the Term. lithe Term
commences on a day other than the first day of a month, or ends on a day other
than the last day of a month, then the Rent for such fractional month shall be
prorated on the basis of 1/30th of the monthly Rent for each day of such
fractional month.

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

       

      

       

      4.             Utilities. Tenant
shall pay for all water, gas, electricity, telephone and other utilities used by
Tenant. If not separately metered or if used by other persons, the Landlord and
the Tenant shall mutually agree upon the portion of any such charges to be paid
by Tenant.

       

      5.    Taxes.  Landlord shall be
responsible for paying and discharging all Real Property Taxes. As used herein,
the term "Real Property Taxes" shall mean any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any license fee,
rental tax, improvement bond or bonds, levy or tax imposed upon the Premises.
Tenant shall be responsible for paying all taxes levied against its personal
property and trade fixtures.

       

      6.             Repairs and
Maintenance.  This Lease is a gross lease and that, except as
expressly provided in this Lease, Landlord at its sole cost and expense shall be
responsible for ensuring that the Premises comply with all applicable laws,
statutes, ordinances, rules and regulations and for all general and capital
maintenance, repair and replacement of the Building, and Premises and all
portions thereof. Without limiting the foregoing, Landlord, at its own expense,
shall keep the Building and the Premises, including without limitation all
parking areas, the roof, foundation, exterior and interior walls, common areas,
structural elements and components, Building systems, and all sewer and utility
lines serving the Building in good order and repair and perform and make such
repairs and replacement as shall be required to keep the Premises and the
Building in good condition and repair. At the expiration or other termination of
this Lease, Tenant shall surrender the Building and the Premises in as good
condition as when received, loss by fire or other casualty or ordinary wear and
tear, changes contemplated or permitted by this Lease or by Landlord and items
which Landlord is required to maintain, repair and replace excepted. Tenant
shall give Landlord notice of any maintenance, repair or replacement which
Tenant becomes aware, after which Landlord shall promptly commence and
diligently complete such maintenance, repairs or replacement within a reasonable
period of time. Tenant shall have the right to perform any required maintenance,
repairs and replacements if Landlord fails to promptly commence and complete the
same or if that Tenant has obtained Landlord's prior written approval, which
approval shall not be unreasonably withheld or delayed. In the event Tenant is
permitted to and performs any such work, Tenant shall be entitled, at Tenant's
option, to offset all or part of the cost from any Rent or other payments and/or
require Landlord to pay Tenant for all or part of the cost thereof upon
demand.

       

      7.             Alterations. Tenant
shall not make installations, alterations or additions in or to the Premises
without securing the prior written consent of Landlord, which consent shall not
be unreasonably withheld or delayed; provided, however, Tenant shall have the
right, without obtaining Landlord's consent, to install trade fixtures or
otherwise perform any such work that does not permanently affect the Building's
systems or structure. Unless Landlord notifies the Tenant to the contrary at the
time of its approval of any installations, alterations or additions or, if no
approval is required, prior to the time of Tenant's making of any installations,
alterations or additions, no installations, alterations or additions shall be
required to be removed by Tenant and the Premises shall not be required to be
restored to their prior condition upon any termination or expiration of this
Lease and Tenant may, at its option, either leave such items at the Premises or
remove such items and restore the Premises to their prior
condition.

      

      8.    No Liens. 
Nothing contained in this Lease shall authorize Tenant to in any way encumber
Landlord's title to the Premises, and any claim to a lien arising from any act
or omission of Tenant shall attach only against Tenant's interest and shall in
all respects be subordinate to Landlord's title. If Tenant has not removed,
bonded or otherwise insured over to Landlord's reasonable satisfaction any such
unpermitted encumbrance within thirty (30) days after written notice to Tenant
by Landlord, Landlord may, but shall not be obligated to, pay the amount
necessary to remove such encumbrance, and the amount so paid, together with all
reasonable costs and expenses incurred by Landlord in connection therewith,
shall be deemed additional Rent payable upon demand.

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      

       

      9.             Casualt .  If
the Premises shall be damaged by fire or other casualty (any of the foregoing, a
"Casualty"), Landlord shall cause the Premises to be repaired and restored
substantially to the same condition existing prior to the Casualty within sixty
(60) days; provided, however, that if such repairs and restoration are
reasonably expected to take in excess of sixty (60) days, or if Tenant
determines in good faith that it is desirable or necessary to terminate the
Lease because its use of any part of the Premises has been adversely affected,
then either Landlord or Tenant shall have the right to terminate this Lease as
of the date of such Casualty upon notice to such effect to the other and Tenant
shall pay Rent, which shall be equitable abated as provided below, only for such
period of time as Tenant continues to occupy the Premises. If Tenant is unable
to use any portion of the Premises for substantially the same purposes and to
substantially the same extent as prior to such Casualty, the Rent shall be
equitably abated until Landlord shall have completed the required repairs or
restorations. Any excess proceeds of any insurance carried by Landlord which
remain after the completion of any repair or restoration may be retained by
Landlord.

      

      10.             Property
Insurance.  Tenant shall obtain and maintain in force and effect
during the Term hereof such insurance as it desires on its own fixtures and
personal property. Landlord shall obtain and maintain at Landlord's expense, in
full force and effect throughout the Term for the mutual benefit of Landlord and
Tenant, fire and extended coverage insurance on the Building in an. amount equal
to the full insurable value of the Building (subject to self-insurance,
deductibles and self- insured risk retentions in amounts not to exceed those
maintained by persons with similar financial conditions engaged in similar
businesses). Landlord and Tenant each hereby waive any and every claim for
recovery from the other for any and all loss of or damage to the Building or
Premises or to the contents thereof (including Tenant's personal property),
which loss or damage is covered, is required under this Lease to be covered or
can be covered by physical damage insurance policies (including without
limitation any claim for recovery of any self-insurance, deductibles or
self-insured risk retentions). Inasmuch as this mutual waiver will preclude the
assignment of any such claim by subrogation (or otherwise) to an insurance
company (or any other person), Landlord and Tenant each agree to give to each
insurance company which has issued, or in the future may issue, to it policies
of physical damage insurance, written notice of the terms of this mutual waiver
and to have said insurance policies properly endorsed, if necessary, to prevent
the invalidation. of said insurance coverage by reason of said waiver and to
provide that such insurance may not be cancelled or materially and adversely
charged without at least ten (10) days prior notice to the other party hereto.
Upon request, Landlord and Tenant shall deliver to the other certificates of
insurance or copies of insurance policies (if requested) evidencing the coverage
and endorsements.

      

      11.    Other
Insurance.  Each of Landlord and Tenant shall obtain and maintain
during the Term comprehensive public liability insurance with limits similar to,
and subject to self-insurance, deductibles and self-insured risk retentions in
amounts not to exceed, those maintained by persons with similar financial
conditions engaged in similar businesses. Tenant shall also obtain and maintain
worker's compensation insurance in accordance with all statutory requirements.
All such liability policies shall include an endorsement which names the other
as an additional insured and provides that such insurance may not be cancelled
or materially and adversely modified without at least ten (10) days prior notice
to the other party hereto. Upon request, Landlord and Tenant shall deliver to
the other certificates of insurance or copies of insurance policies (if
requested) evidencing the coverages and endorsements required
above.

      
        
           

        

        
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      12.             Condemnation. 
If (i) all or any part of the Premises shall be taken or condemned by any
authority for any public or quasi-public use or purpose or if any adjacent
property or street shall be condemned or improved in such manner as to require
or adversely affect the use of any part of the Premises and (ii) Tenant
determines in good faith that it is desirable or necessary to terminate this
Lease because such action will adversely affect Tenant's use of the Premises or
ingress and egress thereto, then either Landlord or Tenant shall have the right
to terminate this Lease upon written notice to the other as of the date when the
possession of the part so taken shall be required for such use or purpose.
Landlord shall be entitled to receive the portion of any award not attributed to
the value of Tenant's trade fixtures and equipment, loss of business, or
Tenant's moving and relocation expenses. If this Lease is terminated, Rent shall
be apportioned as of the date of such termination. If this Lease is not
terminated, Rent shall be equitably adjusted as of the date of any taking or
condemnation.

       

      13.             Default by
Tenant.  If (i) default shall be made in the payment of the Rent or
in the payment of any other sum required to be paid by Tenant under this Lease
and such default shall continue for ten (10) business days after Tenant's
receipt of written notice from Landlord, (ii) Tenant shall fail to perform in
all material respects any of the other covenants which Tenant is required to
perform and such default shall continue for thirty (30) days after written
notice to Tenant from Landlord, provided, however, if such default cannot be
reasonably cured within said thirty (30) day period Tenant shall not be in
default if Tenant promptly commences to cure the default and thereafter
diligently continues such efforts to cure the default, (iii) Tenant shall make a general assignment for the benefit of
its creditors or shall file a voluntary petition for bankruptcy or other
reorganization, arrangement, conservation, liquidation, dissolution or similar
relief, or (iv) any proceeding is filed against Tenant seeking any relief
mentioned or similar to that referred to in (iii) above and said proceeding is
not discharged within thirty (30) days of the filing thereof or Tenant consents,
acquiesces, admits or otherwise approves or agrees to any such proceeding or
such relief, then Landlord may treat the occurrence of any one or more of the
foregoing events as a breach of this Lease, and thereupon at its option may,
with notice to Tenant, may terminate this Lease and the Term created hereby and
recover any sum of money or damages owed by Tenant to Landlord,

       

      14.    Default by
Landlord.  If (i) default shall be made in the payment of any sum
required to be paid by Landlord under this Lease and such default shall continue
for ten (10) business days after Landlord's receipt of written notice from
Tenant or (ii) Landlord shall fail to perform in all material respects any of
the other covenants which Landlord is required to perform and such default shall
continue for thirty (30) days after written notice to Landlord, provided,
however, if such default cannot be reasonably cured within said thirty (30) day
period Landlord shall not be in default if Landlord promptly commences to cure
the default and thereafter diligently continues such efforts to cure the
default, then Tenant may, without limiting its rights or remedies as a result of
such default, treat the occurrence of any one or more of the foregoing events as
a breach of this Lease, and thereupon at its option may, with notice to
Landlord, terminate this Lease. In addition, in the event Landlord does not
perform any of its obligations under this Lease, Tenant also shall have the
right, but not the obligation, upon notice to the Landlord to perform such
obligations. Without limiting foregoing, in the event of an emergency or other
event that may result in physical injury or any damage to property, Tenant may
(but shall not be required to), at its option, immediately commence to perform
Landlord's obligations if Landlord. does not immediately commence such
performance following notice from Tenant. Any and all reasonable costs and
expenses incurred by Tenant in the performance of any of Landlord's obligations
shall be due and payable by Landlord to Tenant upon demand. Without limiting any
of its rights or remedies, Tenant may setoff or reduce any and all future
payments of Rent or other amounts due under this Lease until such costs and
expenses are fully reimbursed to Tenant. The parties hereby agree that the
exercise of any of Tenant's set-off rights under this Lease shall not be deemed
a default or breach under any term of this Lease.

      
        
           

        

        
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      15.             Surrender.  On
or before the date this Lease and the Term hereby created expires, or promptly
following the date this Lease is terminated, Tenant shall remove from the
Premises all of Tenant's personal property and surrender possession of the
Premises to Landlord, free of all rubbish and debris created by
Tenant.

       

      16.             Holding Over. 
In the event that Tenant fails to surrender possession of the Premises after the
expiration or termination of the Term, Tenant shall be deemed to be occupying
the Premises on a month-to-month tenancy, subject to the other terms and
conditions of this Lease, but the provisions of this Article shall not be a
waiver by Landlord of any right to terminate this Lease or of re-entry, nor
shall the receipt of any Rent operate as a waiver of such rights.

       

      17.             Estoppel.  From
time to time, within fifteen (15) days of any request by the other party hereto,
Landlord and Tenant shall deliver a written statement certifying (a) that this
Lease is unmodified and in full force and effect (or if there have been
modifications that the Lease as modified is in full force and effect and
identifying any such modifications), (b) the dates to which the Rent and other
charges have been paid, (c) that neither such party nor, to the knowledge of
such party, the other party hereto is in default under this Lease, or, if in
default, the nature thereof in reasonable detail, (d) that to the knowledge of
such party there are no offsets or defenses to the payment of Rent, additional
rent or any other sums payable under this Lease or, if there are any such
offsets or defenses, specifying such in reasonable detail, and (e) such further
matters as may be reasonably requested by the requesting party.

       

      18.           Assignment. 
Tenant shall not, without the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed, assign, convey, sublet, mortgage,
pledge or otherwise transfer this Lease, or any part thereof, or any interest
hereunder.

       

      19.             Notice.  In
every instance where it shall be necessary or desirable for Landlord or Tenant
to serve any notice or demand upon the other, such notice or demand shall be
sent by United States registered or certified mail, postage prepaid, courier
service or personal delivery. Notices and demands shall be addressed to Landlord
at the place where rental under this Lease is then being paid or such other
address as Landlord may have specified for notices. Any notices and demands
shall be addressed to Tenant at the Premises or to such other address as Tenant
may have specified for notices. Notice sent as aforesaid shall be deemed to have
been served at the time the same is delivered or refused.

      
        
           

        

        
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      20.    Subordination.  The rights of
Tenant under this Lease shall be subordinate at all times to all ground leases and underlying leases,
if any, now or hereafter in force against the Premises, and to the lien of any
mortgages or deeds of trust now or hereafter in force against such leases, the
Premises or the Building. Notwithstanding the foregoing, the foregoing
subordination is expressly conditioned upon Landlord obtaining from any such
lessor, mortgagee or trustee and delivering to Tenant a non- disturbance
agreement in form and substance reasonably satisfactory to Tenant.

       

      21.    Miscellaneous.

       

      (A)    All of
the representations and obligations of Landlord and Tenant with respect to the
subject matter of this Lease are contained herein. Headings in this Lease arc
solely for convenience of reference and shall not in any way limit or amplify
the terms and provisions hereof.

       

      (B)    No
modification, waiver or amendment of any provision of this Lease shall be
binding unless in writing signed by Landlord and Tenant or by a duly authorized
officer or agent of Landlord or Tenant empowered by a written authority signed
by Landlord or Tenant, as the case may be. No waiver of any provision of this
Lease shall be implied by any failure of Landlord or Tenant to enforce any
remedy on account of the violation of such provision. No waiver shall be
effective unless in writing, and no express waiver shall affect any provision
other than the one specified in such waiver and that then only for the time and
in the manner specifically stated.

       

      (C)    Each of
the provisions of this Lease shall be binding upon and inure to the benefit of
Landlord and of Tenant and their respective heirs, legal representatives,
successors and assigns. The laws of the State of California are located shall
govern the validity, performance and enforcement of this Lease. The invalidity
or unenforceability of any provision of this Lease shall not invalidate or
otherwise impair any other provision.

       

      (D)    So long
as Tenant is not in default in any material respect hereunder beyond any
applicable notice or grace period, Tenant shall during the Term hereof
peacefully and quietly enjoy the Premises without hindrance by Landlord, or by
anyone claiming by, through or under Landlord. Landlord hereby waives any
statutory or common law lien it may have in any of Tenant's personal property.
From time to time, Landlord shall execute any documents Tenant or Tenant's
lenders may request to evidence or confirm such waiver.

       

      IN
WITNESS WHEREOF, the undersigned have entered into this Lease as of the date
first written above.

       

      
      

       

      
        	LANDLORD:	TENANT:
	 	 
	
                /s/
      Harold
      Barnett                      
      

                Harold Barnett

              	
                ENERGY
      KING, INC.

                 

                By:  _______________________________

                Name:  _____________________________

                Title: 
    ______________________________

              

      

       

       

       

       

      
        
          
          

        

        
          -6-

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