SUBLEASE AGREEMENT

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Exhibit 10.23

This SUBLEASE AGREEMENT ("Sublease") is entered into this 29^th day of July, 2005, by and between K2 INC., a Delaware corporation ("Sublessor") whose address is 0000 Xx Xxxxxx Xxxx, Xxxxxxxx, XX 00000 and ALPHATEC MANUFACTURING, INC., a California corporation ("Sublessee") whose address is 0000 Xxxxx Xxx Xxxxx, Xxxxxxxx, XX 00000.

RECITALS

A. MG Palomar, LLC, a California limited liability company, as landlord ("Landlord"), and Sublessor, as tenant, entered into a lease dated December 3, 2002 ("Master Lease"), with regard to Xxxxx 000, 0000 Xxxxxxx Xxxxxxx Xxxx, Xxxxxxxx, California ("Premises"). A copy of the Master Lease is attached hereto as Exhibit "A".

B. Sublessor wishes to sublease to Sublessee, and Sublessee wishes to sublease from Sublessor, the entire Premises in accordance with the terms and conditions set forth hereinbelow.

NOW, THEREFORE, Sublessor and Sublessee agree as follows:

AGREEMENT

1. Sublease. Sublessor subleases the Subleased Premises to Sublessee, and Sublessee subleases the Premises from Sublessor, according to the terms and conditions of this Sublease. The provisions of the Master Lease (except Paragraphs 39, 52, 53, and 55) are incorporated herein as though Sublessor was landlord under the Master Lease and Sublessee was tenant under the Master Lease.

2. Term. The term ("Term") of this Sublease will begin on August 1, 2005 ("Commencement Date"), and will end on July 31, 2006, inclusive. Sublessee shall be allowed early occupancy ("Early Commencement Date") upon execution of execution of this Sublease, subject to approval of Landlord, but such date shall be no sooner than five (5) days prior to the Commencement Date.

3. Rent. Sublessee will pay Sublessor as rent ("Rent") for the Premises the sum of Twenty Eight Thousand Five Hundred Fifty-five and 00/100 Dollars ($28,555.00) per month, in advance, without notice, demand, offset, or counterclaim, on the first day of each month prior to the month such Rent shall be applicable to (e.g.. Rent for September 2005 shall be payable August 1, 2005). Rent and any other sums due to Sublessor from Sublessee under this Sublease will be paid at the following address (unless written notice provided of a change of address): 0000 Xx Xxxxxx Xxxx, Xxxxxxxx, XX 00000. If the Term of this Sublease begins on a day other than the first day of a month or ends on a day other than the last day of a month, Rent will be prorated on a per diem basis. For Rent in respect of August 2005, Sublessee shall pay Sublessor at the time of execution of this Sublease.

4. Acceptance of the Premises. Sublessor, at its sole expense, shall ensure that doors, locks, windows, lights, HVAC, plumbing, roof and electrical are in good working order and/or condition at the earlier of the Commencement Date or the Early Commencement Date. Other than as set forth in the previous sentence, Sublessee accepts the Premises in its present condition and Sublessor makes no representation or warranty as to its fitness for Tenant's intended use. Other than as set forth in the first sentence of this section, Sublessor will not be obligated to make any alterations or improvements to the Subleased Premises on account of this Sublease. Any signage shall be at Sublessee's sole cost and expense pursuant to the approval of Landlord.

5. Security Deposit. Sublessee has deposited with Sublessor the sum of Twenty Eight Thousand Five Hundred Fifty-five and 00/100 Dollars ($28,555.00) that Sublessor will hold in accordance with Paragraph 5 of the Master Lease.

6. Other Charges. During the Term of this Sublease, Sublessee will pay to Sublessor "Lessee's Share" (as such term is defined in the Master Lease) of any Operating Expense Increases payable by

Sublessor pursuant to Paragraph 4.2 of the Master Lease. Such payments will be made as and when due under the Master Lease. Sublessee shall also pay for all janitorial services.

7. Parking. Sublessor agrees that during the Term of this Sublease, Sublessee will be entitled to non-exclusive use of seventy six (76) vehicle parking spaces in the Project's parking facility at no additional charge to Sublessee.

8. Services. Sublessor will not be obligated to provide any services to Sublessee. Sublessee's sole source of such services is Landlord, pursuant to the Master Lease. Sublessor makes no representation about the availability or adequacy of such services.

9. The Master Lease. This Sublease is subject to the Master Lease. The provisions of the Master Lease are applicable to this Sublease as though landlord under the Master Lease were the Sublessor under this Sublease and tenant under the Master Lease were Sublessee under this Sublease; provided, however, that all communications between Sublessee and Landlord shall be through Sublessor only. Sublessee has received a copy of the Master Lease. Sublessee will not cause or allow to be caused any default under the Master Lease. Sublessee will indemnify Sublessor against any loss, liability, and expenses (including reasonable attorneys' fees and costs) arising out of any default under the Master Lease caused by Sublessee, and Sublessor will indemnify Sublessee against any loss, liability, and expenses (including reasonable attorneys' fees and costs) arising out of any default under the Master Lease caused by Sublessor.

10. Consent of Landlord. In the event the Master Lease requires that Sublessor obtain the consent of Landlord to any subletting by Sublessor then, this Sublease shall not be effective unless, within ten (10) days of the date hereof, Landlord consents to this Sublease in writing.

11. Subsequent Subleases, Assignments and Modifications. Sublessee shall not further sublet the Premises or any portion thereof, nor assign, amend or modify this Sublease, without the express prior written consent of Sublessor, which consent may be withheld by Sublessor in its sole and absolute discretion.. Any attempted further subletting of the Premises or assignment, amendment or modification of this Sublease without the express prior written consent of Sublessor shall be void ab initio and shall constitute a material default by Sublessee under this Sublease.

12. Attorneys' Fees. In the event suit is brought to enforce or interpret any part of this Agreement, the prevailing party shall be entitled to recover as an element of his costs of suit, and not as damages, reasonable attorneys' fees to be fixed by the court.

13. Executed Counterparts. This Agreement may be executed in one or more counterparts, all of which together shall constitute a single agreement and each of which shall be an original for all purposes.

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IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be duly executed as of the day and year first above written.

SUBLESSOR		SUBLESSEE
K2 INC., a Delaware corporation		ALPHATEC MANUFACTURING, INC., a California corporation
By:	/s/ XXXXX XXXXX Name: Xxxxx Xxxxx Title: General Counsel	By:	/s/ XXXXXX X. XXXXXXX Name: Xxxxxx X. Xxxxxxx Title: President and CEO