NOTE 8 - AGREEMENTS

Lease Agreement

On January 3, 2011, the Company executed a sublease agreement with Perigon Companies, LLC, a related party.  The lease term is month to month at a rate of $1,500 per month.  The Company paid a refundable security deposit of $1,500.  During January 2012, the Company renegotiated its sublease agreement with Perigon Companies, LLC for a period of one year at a rate of $3,500 per month.  Rent expense for the three months ended June 30, 2012 and 2011 was $14,500 and $4,500, respectively.  Rent expense for the six months ended June 30, 2012 and 2011 was $21,000 and $9,000, respectively.

Employment Agreement

Effective March 1, 2012, the Company entered into an amended employment agreement with the President of the Company.  The officer will receive annual compensation of $12,000 due monthly.  Additionally, the Company will issue 15,000 shares of common stock per quarter starting from the three months ended May 31, 2012.  Compensation expense for the three months ended June 30, 2012 and 2011 was $27,000 and $50,500, respectively.  Compensation expense for the six months ended June 30, 2012 and 2011 was $101,909 and $54,000, respectively.