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leaseagreeement.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    LEASE
AGREEMENT

    

    THIS LEASE AGREEMENT (“Lease”) is
effective as of January 1, 2007 by and between AVT, Inc., a Nevada corporation
(“Landlord”), and SWI Trading, Inc., a California corporation
("Tenant").

    

    WITNESSETH:

    

    In
consideration of the covenants, terms, conditions, agreement and payments as
hereinafter set forth, the parties hereto covenant and agree as
follows:

    

    1.           PROPERTY
- LEASED PREMISES

    

    Landlord
hereby leases unto Tenant the following described
premises:  Approximately 1,200 office/warehouse space in the AVT, Inc.
facility located at 341 Bonnie Circle, Suite 102, Corona, CA 92880.

    

    2.           TERM

    

    The term
of this Lease shall commence at 12:00 noon on the 1st day of
January 1, 2007, and unless terminated as herein provided for, shall end at
12:00 noon on the 31st day of
December 2010.

    

    3.           RENT

    

    
      	
               
      

            	
              Tenant
      shall pay to Landlord, at address as herein set forth, the following as
      rental for the leased premises:  $1 per
  month.

            

    

    

    4.           TAXES
- REAL PROPERTY – ADJUSTMENT

    

    A.   Real Property Tax
to be paid by Landlord.

    

    5.           TAXES
- PERSONAL PROPERTY – RESPONSIBILITY

    

    Tenant
shall be responsible and pay for any and all taxes and/or assessments levied
and/or assessed against any furniture, fixtures, equipment and items of a
similar nature installed and/or located in or about the leased premises by
Tenant.

    

    6.           UTILITIES

    

    Landlord shall pay for all
utilities.

    

    7.           HOLDING
OVER

    

    If after
expiration of the term of the Lease, Tenant shall remain in possession of the
leased premises and continue to pay rent without a written agreement as to such
possession, then Tenant shall be deemed a month to month Tenant and the rental
rate during such holdover tenancy shall be equivalent to the monthly rental paid
for the last month of tenancy under this Lease.  No holding over by
Tenant shall operate to renew or extend this Lease without the written consent
of Landlord to such renewal or extension having been first
obtained.

    

    5.        MODIFICATION
OR EXTENSIONS

    

    No
modification or extension of this Lease shall be binding unless in writing,
signed by the parties hereto and endorsed hereon or attached
hereto.

    

    6.        ALTERATION
- CHANGES AND ADDITIONS – RESPONSIBILITY

    

    Subject
to Landlord's prior approval, which shall not be unreasonably withheld, Tenant
may, during the term of this Lease, at Tenant's expense, erect inside
partitions, add to the existing electric power service, add telephone outlets,
add light fixtures, install additional heating and/or air conditioning or make
such other changes or alterations as Tenant may desire.  At the end of
this Lease, all such fixtures, equipment, additions and/or alterations (except
trade fixtures installed by Tenant) shall be and remain the property of
Landlord; provided, however, Landlord shall have the option to require Tenant to
remove any or all such fixtures, equipment, additions and/or alterations and
restore the lease premises to the condition existing immediately prior to such
change and/or installation, normal wear and tear excepted, all at Tenant's cost
and expense. All such work shall be done in a good and workmanlike manner and
shall consist of new materials unless agreed to otherwise by
Landlord.  Any and all repairs, changes and/or modifications thereto
shall be the responsibility and at the cost of Tenant.  Landlord may
also require adequate security from Tenant assuring no mechanic's liens on
account of work done on the premises by Tenant.  Landlord may also
require adequate security to assure Landlord that the premises will be restored
to their original condition upon termination of the Lease.

    

    7.        APPROVAL
OF CHANGES - SIGN APPROVAL

    

    Landlord
must approve in writing any sign to be placed in or on the leased premises,
regardless of size or value and/or any addition, change or alteration to the
exterior of the leased premises. Prior to the cutting of any holes in the roof
or prior to any work being performed and/or any equipment being installed on the
roof, the prior written approval is to be obtained by Tenant.  If
Tenant fails to get such prior written approval, then any roof repairs shall be
the responsibility of Tenant.  Landlord must approve in writing any
other improvements, alteration, additions and/or changes to the leased premises
in excess of Two Thousand and No/100ths Dollars ($2,000.00). As a condition to
the granting of such approval, Landlord shall have the right to require the
Tenant to furnish a bond or other security acceptable to Landlord sufficient to
insure completion of and payment for any such work to be so
performed.

    

    8.        CARE
OF LEASED PREMISES - RESPONSIBILITY OF TENANT

    

    During
the term of this Lease, Tenant agrees to keep and maintain the interior of the
leased premises in good condition and repair.  Tenant further agrees
at the end of the term to return the leased premises to Landlord in
substantially as good condition as when received, except for usual and ordinary
wear and tear.

     

    

    9.        MAINTENANCE
RESPONSIBILITY OF LANDLORD

    Except as
herein otherwise provided for, Landlord shall keep and maintain the roof and
exterior of the building, the exterior grounds and all common areas of the
improvements of which the leased premises are a part in good repair and
condition.

    

    10.        CONTROL
OF COMMON AREAS

    

    All
parking areas, driveways, entrances and exits, common areas and other facilities
furnished by Landlord, in, on or near the improvements of which the leased
premises are a portion, shall at all times be subject to the exclusive control
and management of Landlord, notwithstanding that Tenant and/or Tenant's
employees and/or customers, may have a non-exclusive right to the use
thereof.  Landlord shall have the right from time to time to
establish, modify and enforce reasonable rules and regulations with respect to
said facilities and areas.

    

    11.        USE
OF PREMISES AND CARE OF GROUNDS – TENANT

    

    Tenant
shall conform to all present and future laws and ordinances of any governmental
authority having jurisdiction over the leased premises.  Tenant shall
not allow an accumulation of trash or debris on the leased premises or within
any portion of the improvements of which the leased premises are a
part.  No storage of any material outside of the leased premises shall
be allowed unless first approved by Landlord in writing, and then in only such
areas as are designated by Landlord.  Tenant shall not commit or
suffer any waste on the leased premises nor shall Tenant permit any nuisance to
be maintained on the leased premises or permit any disorderly conduct, common
noise or other activity having a tendency to annoy or disturb any occupants of
any part of the improvements of which the leased premises are a part and/or any
adjoining property.

    

    13.        LIABILITY
FOR OVERLOAD – TENANT

    

    Tenant
shall be liable for the cost of any damage to the leased premises, the
improvements of which the leased premises are a part or the sidewalks and
pavements adjoining the same, which will result from Tenant’s movement of heavy
articles.  Tenant shall not unduly load or overload the floors or any
part on any part of the leased premises.

    

    14.        GLASS
AND DOOR RESPONSIBILITY – TENANT

    

    All glass
and doors on the leased premises shall be the responsibility of the Tenant. Any
replacement or repair shall be promptly completed at the expense of the
Tenant.

    

    15.        RULES
AND REGULATIONS

    

    Landlord
reserves the right to adopt and promulgate rules and regulations applicable to
the leased premises and the land and improvements of which the leased premises
are a part and from time to time to amend or supplement said rules and
regulations.  Notice of such rules and regulations and amendments and
supplements thereto shall be given to Tenant, and Tenant agrees to comply with
and observe such rules and regulations and amendments and supplements thereto,
provided, however the same apply uniformly to all tenants of the improvements of
which the leased premises are a part and do not impair Tenant’s ability to do
Tenant’s intended business.

    

     

    16.        USE
OF PREMISES

    

    Tenants
shall use the leased premises for retail garment sales and for no other purpose
whatsoever except with the written consent of the Landlord, which consent shall
not be unreasonably withheld.

    

    17.        PARKING

    

    Throughout
the term of this Lease, Landlord shall provide a reasonable area for off-street
parking, if available and a part of the property being leased, for the use of
customers of Tenant in common with customers of other occupants or other
portions of the improvements of which the leased premises are a
part.  Tenant shall park all vehicles of whatever type used by Tenant
and/or Tenant's employees only in those areas which are designated by Landlord
for this purpose, and Tenant accepts the responsibility of seeing that Tenant's
employees park only in such areas as are so designated.

    

    18.        INSURANCE
- RESPONSIBILITY OF TENANT

    

    Tenant
shall procure, pay for and maintain comprehensive public liability insurance
providing coverage from any loss or damage occasioned by an accident or
casualty, about or adjacent to the leased premises, which policy shall be
written on an "occurrence basis" with limits of not less than $1,000,000.00
liability coverage and $100,000.00 property damage coverage.  In
addition thereto, Tenant shall, at all times, procure, pay for and maintain fire
legal liability insurance coverage on the leased
premises.  Certificates of such insurance shall be delivered to
Landlord and shall provide that said coverage shall not be changed, modified,
reduced or canceled without thirty (30) days prior written notice thereof being
given to Landlord.  If Tenant uses, in the leased premises, any kind
of steam or other high pressure boiler or other apparatus which present any
possibility of damage to the leased premises or the improvements of which the
leased premises are a part or the life and limb of persons within such premises,
Tenant agrees to carry appropriate boiler insurance in an amount satisfactory to
Landlord to indemnify against any loss resulting from any explosion or other
damage or liability.

    

    19.        INSURANCE
- RESPONSIBILITY OF LANDLORD

    

    The
landlord shall be responsible for and shall have in effect at all times fire,
extended coverage, and vandalism and malicious mischief insurance in such
amounts as shall be determined appropriate by Landlord.

    

    20.        REGULATIONS
ON USE

    

    It shall
be Tenant's sole and exclusive responsibility to meet all requirements and laws
of any governmental body having jurisdiction over the leased premises as such
regulations affect tenant's operations, all at Tenant's sole cost and
expense.  Tenant further agrees not to install any electrical
equipment that overloads any electrical paneling, circuitry or wiring and
further agrees to comply with the requirements of the insurance underwriter or
any governmental authorities having jurisdiction thereof.

    

    

    

    21.        DAMAGE
TO LEASED PREMISES

    

    In the
event the leased premises and/or the improvements of which the leased premises
are a part shall be totally destroyed by fire or other casualty or so badly
damaged that, in the opinion of Landlord, it is not feasible to repair or
rebuild the same, Landlord shall have the right to terminate this Lease upon
written notice to Tenant.  If the leased premises shall be partially
damaged by fire or other casualty, except if caused by Tenant's negligence, and
said leased premises are not rendered untenantable thereby, as determined by
Landlord, an appropriate reduction of the rent shall be allowed for the
unoccupied portion of the leased premises until repair thereof shall be
substantially completed.  If the leased premises are rendered
untenantable thereby, except if caused by Tenant's negligence, Tenant may, at
its election, terminate this Lease as of the date of the damage. If Tenant
elects not to terminate the Lease, the rent shall abate in proportion to the
loss of use of the leased premises by Tenant during such
untenantability.

    

    22.        INSPECTION
OF AND RIGHT OF ENTRY TO LEASED PREMISES

    

    A. Tenant has inspected the leased
premises and accepts the same in condition that exists as of the date
hereof.

    

    B. Landlord, and/or Landlord's agents
and employees, shall have the right to enter the leased premises at all times
during regular business hours and, at all times during emergencies, to examine
the leased premises, to make such repairs, alterations, improvements or
additions as Landlord may deem necessary or desirable, and Landlord shall be
allowed to take all materials into and upon said premises that may be required
thereon without the same constituting an eviction of Tenant in whole or in part,
and the rent reserved shall in no way abate while such repairs, alterations,
improvements or additions are being made, by reason of loss or interruption of
business of Tenant or otherwise. During the one hundred twenty days
(120)  prior to the expiration of the term of this Lease or any
renewal thereof, Owner may exhibit the premises to prospective tenants and/or
purchasers and may place upon the leased premises the usual notice indicating
the leased premises are for lease and/or sale.

    

    23.        DEFAULT
- REMEDIES OF LANDLORD

    

    If Tenant
shall default in the payment of rent or in the keeping of any of the terms,
covenants or conditions of this Lease to be kept and/or performed by Tenant and
if such default isn't cured within five (5) days after notice of default from
Landlord, Landlord may immediately, or at any time thereafter, re-enter the
leased premises, remove all persons and property therefrom, without being liable
to indictment, prosecution for damage therefore, or for forcible entry and
detainer and repossess and enjoy the leased premises, together with all
additions thereto or alterations and improvements thereof.  Landlord
may, at its option, at any time and from time to time thereafter, relet the
leased premises or any part thereof for the account of Tenant or otherwise, and
receive and collect the rents therefore and apply the same first to the payment
of such expenses as Landlord may have incurred in recovering possession and for
putting the same in good order and condition for rerental, and expense,
commissions and charges paid by Landlord in reletting the leased
premises.  Any such reletting may be for the remainder of the term of
this Lease or for a longer or shorter period.  In lieu of reletting
such leased premises, Landlord may occupy the same or cause the same to be
occupied by others.  Whether or not the leased premises or any part
thereof be relet, Tenant shall pay the Landlord the rent, and all other charges
required to be paid by Tenant up to the time of expiration of this Lease or such
recovered possession, as the case may be, and thereafter, Tenant, if required by
Landlord, shall pay to Landlord until the end of the term of this Lease, the
equivalent of the amount of all rent reserved herein and all other charges
required to be paid by Tenant, less the net amount received by Landlord for such
reletting, if any.  If the leased premises shall be reoccupied by
Landlord, then, from and after the date of repossession, Tenant shall be
discharged of any obligations to Landlord under the provisions hereof for the
payment of rent.  In the event of any default by Tenant, and
regardless of whether the premises shall be relet or possessed by Landlord,
fixtures, additions, furniture, and the like then on the premises may be
retained by Landlord. In the event Tenant is in default under the terms hereof
and, by the sole determination of Landlord, has abandoned the leased premises,
Landlord shall have the right to remove all the Tenant's property from the
leased premises and dispose of said property in such a manner as determined best
by Landlord, all at the cost and expense of Tenant and without liability of
Landlord for the actions so taken. In the event an assignment of Tenant's
business or property shall be made for the benefit of creditors, or, if the
Tenant's leasehold interest under the terms of this Agreement shall be levied
upon by execution or seized by virtue of any writ of any court of law, or, if
application be made for the appointment of a receiver for the business or
property of Tenant, or, if a petition in bankruptcy shall be filed by or against
Tenant, then and in any such case, at Landlord's option, with or without notice,
landlord may terminate this Lease and immediately retake possession of the
leased premises without the same working any forfeiture of the obligations of
Tenant hereunder. In addition to remedy granted to Landlord by the terms hereof,
Landlord shall have available any and all rights and remedies available under
the Statutes of the State of Colorado. No remedy herein or otherwise conferred
upon or reserved to Landlord shall be considered exclusive of any other remedy
but shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by Statute.
Further, all powers and remedies given by this Lease to Landlord shall be
exercised, from time to time, and as often as occasion may arise or as may be
deemed expedient. No delay or omission of Landlord to exercise any right or
power arising from any default shall impair any such right or power or shall be
considered to be a waiver of any such default or acquiescence
thereof.  The acceptance of rental by Landlord shall not be deemed to
be a waiver of any breach of any covenants herein contained or of any of the
rights of Landlord to any remedies herein given.

    

    24.        LEGAL
PROCEEDINGS – RESPONSIBILITIES

    

    In the
event of proceeding at law or in equity by either party hereto, and if the
non-defaulting party shall pursue his rights through legal proceedings, then the
defaulting party shall pay all costs and expenses, including all reasonable
attorney's fees incurred by the non-defaulting party in pursuing such remedy in
the event such non-defaulting party is awarded substantially the relief
requested.

    

    25.        HOLD
HARMLESS OF TENANT

    

    Tenant
will indemnify and hold Landlord harmless from and against any and all claims,
losses, expenses, costs, judgments, and/or demands arising from the conduct of
Tenant on the leased premises and/or on account of any operation or action by
Tenant and/or from and against all claims arising from any breach or default on
the part of Tenant or any act of negligence of Tenant, its agents, contractors,
servants, employees, licensees, or invitees; or any accident, injury or death of
any person or damage to any property in or about the leased
premises.

     

    26.        ASSIGNMENT
OR SUBLETTING

    

    Tenant
may not assign the Lease, or sublet the leased premises without the consent of
Landlord; such consent shall not be unreasonably withheld, provided, however, no
such assignment or subletting shall relieve Tenant of any of its obligations
hereunder, and performance of the covenants herein by subtenants shall be
considered as performance pro tanto by the Tenant.

    

    27.        WARRANTY
OF TITLE

    

    Landlord
covenants it has good right to lease the leased premises in the manner described
herein and that Tenant shall peaceably and quietly have, hold, occupy, and enjoy
the premises during the term of the Lease.

    

    28.        ACCESS

    

    Landlord
shall provide Tenant non-exclusive access to the leased premises through and
across land and/or other improvements owned by Landlord.

    

    29.        GOVERNMENTAL
ACQUISITION OF PROPERTY

    

    The
parties agree that Landlord shall have complete freedom of negotiation and
settlement of all matters pertaining to the acquisition of the property by any
governmental body, it being understood and agreed that any financial settlement
respecting land to be taken whether resulting from negotiation and agreement or
condemnation proceedings, shall be the exclusive property of Landlord, there
being no sharing whatsoever between Landlord and Tenant of any sum received in
settlement. In the event of any such governmental taking, Landlord shall have
the right to terminate this lease on the date possession is delivered to the
governmental body.  Such taking of the property by a governmental body
shall not be a breach of this Lease by Landlord nor give rise to any claims in
Tenant for damages or compensation from Landlord.

    

    30.        CHANGES
AND ADDITIONS TO IMPROVEMENTS

    

    Landlord
reserves the right at any time to make alterations or additions to the
improvements of which the leased premises are a part and/or to build additions
or other structures adjoining said improvements. Landlord also reserves the
right to construct other buildings and/or improvements in the immediate area of
the improvements in which the leased premises are located and to make
alterations or additions thereto, all as Landlord shall determine. Easements for
light and air are not included in the leasing of the leased premises to Tenant.
Landlord further reserves the exclusive right to the roof of the improvements of
which the leased premises are a part except as provided for in this Lease
Agreement. Landlord also reserves the right at any time to relocate, vary and
adjust the size of any of the improvements, parking areas or other common areas
relating to the land and/or improvements of which the leased premises are a
part, provided however, that all such changes shall be in compliance with the
minimum requirements of governmental authorities having jurisdiction over the
property.  Any such change shall in no way interfere with Tenant’s
ability to conduct Tenant’s business.

    

    

    

    31.        SUBORDINATION.

    

    The
Tenant agrees that its Lease rights will be subordinate to any lending
institutions making loans on the real property of which the leased premises are
a part.  The Tenant agrees to sign reasonable documents reflecting
this subordination when, and if required by Landlord.

    

    32.        INTEREST
ON PAST DUE OBLIGATIONS.

    

    Any
amount due to Landlord not paid when due shall bear interest at one and one-half
percent (1 1/2%) per month from the due date until paid.  Payment of
such interest shall not excuse or cure any default by Tenant under this
Lease.

    

    33.        LATE
CHARGE.

    

    The
Landlord shall have the right to collect from Tenant, in addition to any amounts
due under this Lease above, a monthly collection charge for any payment due to
Landlord hereunder which is delinquent five days or longer, said charge being
$250 or three (3) percent of said payment, whichever sum shall be
greater.

    

    34.        MEMORANDUM
OF LEASE – RECORDING

    

    The
parties hereto agree this Lease shall not be recorded in the office of the Clerk
and Recorder of the county in which the leased premises are
located.  In order to effect public recordation, the parties hereto
may, at the time this Lease is executed, agree to execute a Memorandum of Lease
incorporating therein by reference the terms of this Lease, but deleting
therefrom any expressed statement or mention of the amount of rent herein
reserved, which instrument may be recorded by either party in the office of the
Clerk and Recorder of the county in which the leased premises are
located.

    

    35.        NOTICE
PROCEDURE.

    

    All
notices and other communications hereunder shall be in writing and shall be
deemed to have been given when delivered personally or, if mailed, three (3)
business days after having been mailed by registered or certified mail with
return receipt requested, postage prepaid, addressed:

     

    (a)           If
to
Tenant:                                SWI
Trading, Inc.

    2320 Whiteoak Lane

    Corona, CA 92882

    

    (b)           If
to
Seller:                                AVT,
Inc.

    341 Bonnie Circle, Suite
102

    Corona, CA 92880

    
 

    36.        CONTROLLING
LAW.

    

    The
Lease, and all terms hereunder shall be construed consistent with the laws of
the State of California.  Any dispute resulting in litigation
hereunder shall be resolved in court proceedings instituted in County of Orange,
State of California and in no other jurisdiction.

    

    37.        BINDING
UPON SUCCESSORS.

    

    The
covenants and agreements herein contained shall bind and inure to the benefit of
Landlord and Tenant and their respective successors.  This Lease shall
be signed by the parties in duplicate, each of which shall be a complete and
effective original Lease.

    

    38.        PARTIAL
INVALIDITY.

    

    If any
term, covenant, or condition of this Lease or the application thereof to any
person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Lease or the application of such term, covenant, or condition
to persons and circumstances other than those to which it has been held invalid
or unenforceable, shall not be affected thereby, and each term, covenant, and
condition of this Lease shall be valid and shall be enforced to the fullest
extent permitted by law.

    

    39.        CONDITION
OF SPACE.

    

    With the
exception of the changes, additions and corrections herein noted, Tenant agrees
to accept this space "as is". Any changes desired by Tenant in addition to those
listed and agreed to by Landlord shall be done at the sole expense of the Tenant
unless otherwise agreed in this Lease.

    

    40.        NOTICE

    

    All
parties acknowledge that they have not relied upon any statement or
representations made by the real estate agents concerning the legal consequences
of this transaction.  The agents have recommended that Landlord and
Tenant obtain legal advice from their respective attorneys and all parties
hereby agree not to hold its agents responsible or liable as the legal
consequences of this transaction.

    

    41.        PHONES
AND COMPUTERS.

    

    Tenant is
responsible for installing, repairing and maintaining all phone and computer
wiring in the demised premises and for all wiring run from the demised premises
to Tenant's main phone panel or terminal equipment if located outside the
demised premises.  Landlord owns all wiring, whether installed by
Tenant or not, between the Tenant's individual jacks and the main phone panel or
terminal equipment; and Tenant agrees to leave all phone and computer wiring and
jacks in place upon vacating the premises.  Landlord shall not be
liable for any interruption in Tenant's phone service.  Landlord makes
no representations or warranty that the building's wiring is sufficient to meet
the Tenant's particular telecommunications or computer
requirements.  Tenant agrees not to take any action that would damage
the public phone network.

    

    

    

    42.        MISCELLANEOUS.

    

    All
marginal notations and paragraph headings are for purposes of references and
shall not affect the true meaning and intent of the terms hereof. Throughout
this Lease, wherever the words "Landlord" and "Tenant" are used, they shall
include and imply to the singular, plural, persons both male and female,
companies, partnerships and corporations, and in reading said Lease, the
necessary grammatical changes required to make the provisions hereof mean and
apply as aforesaid shall be made in the same manner as though originally
included in said Lease.

    

    43.        OPTION
TO EXTEND.

    

    Upon full
and complete performance of all the terms, covenants, and conditions herein
contained by Tenant and payment of all rental due hereunder, Tenant shall be
given one option to renew this Lease for an additional term of 36 months at a rate
to be determined by the Landlord and Tenant at the time the option is
executed.  In the event Tenant desires to exercise said option, Tenant
shall give written notice of such fact to the Landlord not less than ninety (90)
days or more than one-hundred eighty (180) days prior to the expiration of the
then current term of this Lease.  In the event of such exercise, this
Lease Agreement shall be deemed to be extended for the additional
period.  Any such increased rental shall be subject to adjustments and
be payable as herein provided for. Landlord shall further have the right to make
any further adjustments and/or assessments of charges against Tenant as herein
provided for. In the event of exercise of said option, any funds retained by
Landlord as herein provided for shall be continued to be so held subject to the
same terms and conditions.

    

    IN WITNESS WHEREOF, the parties have
executed this Lease as of the date hereof.

    

    LANDLORD:

    

    AVT, Inc.

    

    

    _______________________________________________

    By: Natalie Russell

    Its:  President

    

    

    

    TENANT:

    

    SWI Trading, Inc.

     

    

    

    ____________________________________________

    By:

    Its:employmentagreement3.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    EMPLOYMENT
AGREEMENT

     

     

    This
EMPLOYMENT AGREEMENT (this “Agreement”), is effective as of January 1, 2008 (the
“Effective Date”), by and between AVT, Inc., a Nevada corporation,
and Natalie Russell, an individual (the “Executive”).

     

    WITNESSETH:

     

    WHEREAS,
the Company desires to continue to employ the Executive and the Executive
desires to continue to be so employed and to serve from and after the Effective
Date, in the capacity of Vice President of Engineering to perform services on
its behalf in said position;

     

    NOW,
THEREFORE, in consideration of the foregoing and of the mutual promises and
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     

    1.           EMPLOYMENT

     

    The
Company agrees to continue to employ the Executive, and the Executive agrees to
continue to serve the Company, on the terms and conditions set forth
herein.

     

    2.           TERM

     

    Subject
to Section 5 hereof, the Executive’s employment under this Agreement shall
commence on the Effective Date and shall end on the first anniversary of the
Effective Date (the “Initial Term”); provided that such
term shall be automatically extended for additional one-year periods, unless,
not later than 45 days prior to the expiration of the Initial Term (or any
extension thereof pursuant to this Section 2) either party hereto shall
provide written notice of its or her desire not to extend the term hereof to the
other party hereto.  As used herein, the term “Term” shall mean the
Initial Term together with each one-year extension.

     

    3.           POSITION AND
DUTIES

     

    (a)           The
Executive shall be duly appointed, effective on the Effective Date, and shall
thereafter during the Term, serve as Secretary and Office Manager of the Company
and shall perform such duties and exercise such supervision and powers over and
with regard to the business of the Company customarily associated with the
position of Secretary and Officer Manager, as well as such duties and services
required herein and as may be reasonably assigned to her from time to time by
the Board of Directors of the Company (the “Board”).  The Executive
shall perform her duties to the best of her ability and in a diligent and proper
manner.

     

    (b)           Except
during vacations and periods of illness, the Executive shall, during the Term,
devote all Executive’s business time (as opposed to personal time) and attention
to the performance of services for the Company and its subsidiaries hereunder;
provided, however, that the
Executive shall be permitted, to (i) continue to serve on the boards of the
business enterprises on which she is serving as of the Effective Date, (ii)
subject to the prior consent of the Corporate Governance Committee of the Board
(the “Corporate Governance Committee”), serve on any board of any business
enterprise other than those referenced in clause (i) above, and
(iii) serve on any board of any non-profit organization without obtaining
such a consent.  Notwithstanding the foregoing, the Corporate
Governance Committee shall have the right, at any time during the Term, to
require that the Executive resign from Executive’s position on the board or
trusteeship of any for-profit organization, effective as soon as such
resignation may be properly effected under applicable law, and the charters,
by-laws or other governing documents of the applicable for-profit
organization.  On or before the Effective Date, the Executive shall
provide the Corporate Governance Committee with a list of the boards and
committees on which she is serving as of the Effective Date.

     

    4.           COMPENSATION AND RELATED
MATTERS

     

    (a)           Salary.                      During
the Term, the Company shall pay to the Executive a base salary at a rate of not
less than $84,500 per annum, payable in accordance with the usual payroll
practices of the Company, but not less frequently than bi-weekly.  The
Executive’s base salary may be increased from time to time by the Compensation
Committee of the Board (the “Committee”) and, if so increased, shall not
thereafter be decreased during the Term.  As used herein, “Base
Salary” means the Executive’s initial salary hereunder as the same may be
increased during the Term.

     

     Notwithstanding anything in this
Agreement to the contrary, the Executive shall not be entitled to assert that
any breach of this Section 4(a)(ii) constitutes grounds for the Executive’s
termination of Executive’s employment for “Good Reason” (as defined
below).

     

    (b)           Bonus.                      Executive
shall be eligible to earn an annual bonus (the “Bonus”) as directed by the
Company’s Committee.

     

    (c)           Restricted
Shares.                                           Executive
shall receive such number of restricted shares of the Company’s common stock as
is equal to $25,000, based upon the average closing price for the ten (10)
trading days immediately preceding each of the following dates: March 31, 2008;
June 30, 2008; September 30, 2008; and December 31, 2008.

     

    (d)           Vacations.                                During
the Term, Executive shall be entitled to the number of days of paid time off
(“PTO”) in each fiscal year determined in accordance with the Company’s PTO
policies.  During the first year of this Agreement, Executive shall
receive 15 days vacation and 5 sick days.

     

    (e)           Benefit
Plans.                                Executive
will be entitled to the Company’s standard benefit plans.

     

    5.           TERMINATION

     

    The
Executive’s employment hereunder and the Term may be terminated under the
following circumstances:

     

    (a) Death.  The
Executive’s employment hereunder shall terminate upon Executive’s
death.  In the case of any such termination upon death, the
Executive’s estate shall be entitled to the payments and benefits described in
Section 6(a).

     

    (b) Disability.  If
the Executive is unable to timely and regularly perform Executive’s duties
hereunder due to physical or mental illness, injury or incapacity, as determined
by the Board in good faith based on medical evidence acceptable to it (a
“Disability”), and such Disability continues for a period of six consecutive
months, then the Company may terminate the Executive’s employment
hereunder.  A return to work for less than 30 consecutive days
during any period of Disability shall not be deemed to interrupt the running of
(and shall be included in) the aforementioned six-month period.  In
the case of any such termination by the Board on account of Disability, the
Executive shall be entitled to the payments and benefits described in
Section 6(a).

     

    (c) Termination by the Company
for Cause.  The Company may terminate the Executive’s
employment hereunder at any time for Cause.  For purposes of this
Agreement, “Cause” shall mean a termination of employment of the Executive by
the Company due to (i) the commission by the Executive of an act of fraud
or embezzlement against the Company or any of its subsidiaries or the conviction
of the Executive in a court of law, or guilty plea or no contest plea, of any
charge involving an act of fraud or embezzlement (including the willful and
unauthorized disclosure of information of the Company or any of its subsidiaries
which the Executive knows or should know to be material, confidential and
proprietary to the Company or any of its subsidiaries, which results, or could
reasonably have been expected to result, in material financial loss to the
Company or any of its subsidiaries), (ii) the conviction of the Executive
in a court of law, or guilty plea or no contest plea, to a felony charge,
(iii) the willful misconduct of the Executive as an employee of the Company
or any of its subsidiaries which is reasonably likely to result in injury or
financial loss to (I) the Company or (II) to any subsidiaries of the
Company, which injury or loss is material to the Company taken as a whole,
(iv) the willful failure of the Executive to render services to the Company
or any of its subsidiaries in accordance with the Executive’s employment, which
failure amounts to a material neglect of the Executive’s duties to the Company
and does not result from physical illness, injury or incapacity, and which
failure is not cured promptly after adequate notice of such failure and a
reasonably detailed explanation has been presented by the Company to the
Executive, or (v) a material breach of any of the covenants in
subsections 3(a), 3(b) or Section 10 hereof by the Executive, which
breach is not cured, if curable, within 30 days after a written notice of
such breach is delivered to the Executive.  The Executive shall not be
deemed to have been terminated for Cause unless the Company shall have given or
delivered to the Executive (1) reasonable notice setting forth the basis
for termination for Cause, and (2) a reasonable opportunity for the
Executive, together with Executive’s counsel, to request reconsideration by and
be heard before the Board, provided; however, that such
notice and opportunity to be heard shall not be required if the Board, based on
the advice of counsel, deems it inconsistent with its fiduciary duties and so
advises the Executive.

     

    For purposes of determining whether the
Executive was given “reasonable notice” and “reasonable opportunity to be heard”
in connection with any determination by the Board as to whether Cause exists,
10 business days’ notice of the Board meeting shall be deemed to constitute
“reasonable notice” (without prejudice to the determination of whether some
other period would also constitute “reasonable notice”), and the opportunity for
the Executive and Executive’s counsel to present arguments to the Board at such
meeting as to why the Executive believes that no Cause exists shall constitute
“reasonable opportunity to be heard” (without prejudice to the determination of
whether some other forum or method would also constitute a “reasonable
opportunity to be heard”).  For purposes of this Agreement, no act, or
failure to act, on the Executive’s part shall be deemed “willful” unless done,
or omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive’s action or omission was in the best interest of the
Company.

     

    (d) Termination by the Executive
for Good Reason.  The Executive may voluntarily terminate
Executive’s employment hereunder at any time for Good Reason.  For
purposes of this Agreement, “Good Reason” shall mean (i) a material breach
by the Company of this Agreement (for the avoidance of doubt, other than any
breach of Section 4(a)(ii) or 4(c)(ii)) or of the Non-Qualified Stock
Option Agreement, which breach is not cured within 30 days after the Board’s
receipt of written notice of such non-compliance from the Executive;
(ii) the assignment to the Executive without Executive’s consent by the
Company of duties materially and adversely inconsistent with the Executive’s
position, duties or responsibilities as in effect immediately after the
Effective Date, including, but not limited to, any material reduction in such
position, duties or responsibilities, or a change in the Executive’s title or
office, as then in effect, or any removal of the Executive from any of such
positions, titles or offices, or any failure to elect or reelect the Executive
as a member of the Board or any removal of the Executive as such a member,
except in connection with the termination of Executive’s employment pursuant to
any of subsections 5(a), 5(b) or 5(c) hereof; or (iii) the relocation
of the Company’s headquarters to a place more than 50 miles from its location as
of the Effective Date without the approval of the Executive.

     

    (e) Termination by the Company
Without Cause.  The Company may at any time terminate the
Executive for any reason, and, except for the amounts payable pursuant to
subsection 6(b) hereof (or as otherwise set forth in any equity agreement), the
Executive shall have no claim against the Company under this Agreement or
otherwise by reason of such termination.

     

    (f) Termination by the Executive
Without Good Reason. The Executive may at any time terminate Executive’s
employment hereunder without Good Reason; provided that the Executive will be
required to give the Company at least 90 days’ advance written notice of a
resignation without Good Reason.

     

    (g) Notice of
Termination.  Any termination of the Executive’s employment
hereunder, by the Company or by the Executive (other than termination pursuant
to subsection 5(a) hereof), shall be communicated by written “Notice of
Termination” to the other party hereto.  For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon.

     

    6.           COMPENSATION UPON
TERMINATION

     

    (a)           Death or
Disability.  If the Executive’s employment hereunder terminates
pursuant to subsections 5(a) (Death) or 5(b) (Disability), the Executive or
Executive’s estate (as the case may be) shall be entitled to receive: (i) a
lump sum payment on the date of such termination equal to the amount of any
earned, but unpaid Base Salary through the date of such termination; and
(ii) an additional lump sum payment not later than thirty (30) days
following such termination equal to (A) two times Base Salary, and
(B) the amount of any unreimbursed business expenses properly incurred by
the Executive in accordance with Company policy prior to the date of the
Executive’s termination.  In addition, the Executive or Executive’s
estate, as the case may be, shall be entitled to receive the Bonus for the
Fiscal Year in which such termination occurs, which is provided under the Bonus
formula for such Fiscal Year, based on Actual Performance for such Fiscal Year
as if the Executive had remained in the employ of the Company through the end of
such Fiscal Year.  Such Bonus to be paid as and when bonuses are paid
to the other senior executives of the Company.  In addition, for a
period of 24 months after such termination, the Executive (unless the
termination is the result of the Executive’s death) and Executive’s eligible
dependents shall, to the extent permitted under the applicable plans of the
Company as in effect on the date of such termination be eligible to continue to
participate in the medical, life, dental and disability insurance coverage
provided to employees at the Company’s expense; provided, however, that after
such termination the Executive shall continue to pay premiums in respect to such
coverage to the same extent that the Executive was paying such premiums
immediately prior to such termination.

     

    (b)           Termination by the Company
Without Cause or by the Executive for Good Reason.

     

    If the
Executive’s employment is terminated by the Company pursuant to
subsection 5(e) (Without Cause) or if the Executive terminates Executive’s
employment pursuant to subsection 5(d) (for Good Reason), then the
Executive shall be entitled to receive: (A) a lump sum payment on the date
of such termination equal to the amount of any earned, but unpaid Base Salary
through the date of such termination; and (B) an additional lump sum
payment not later than thirty (30) days following such termination equal to
(I) any earned but unpaid Bonus; and (II) the amount of any unreimbursed
business expenses properly incurred by the Executive in accordance with Company
policy prior to the date of the Executive’s termination.  The
Executive shall have no further rights to any compensation or other benefits
under this Agreement.

     

    (c)           Termination by the Company
For Cause or by the Executive Without Good Reason.

     

    If the Executive’s employment is
terminated by the Company under subsection 5(c) (for Cause) or by the
Executive under subsection 5(f) (without Good Reason), the Executive shall
be entitled to receive: (i) a lump sum payment on the date of such
termination equal to the amount of any earned, but unpaid Base Salary through
the date of such termination; and (ii) an additional lump sum payment not
later than thirty (30) days following such termination for reimbursement of
any unreimbursed business expenses properly incurred by the Executive in
accordance with Company policy prior to the date of the Executive’s
termination.  If the Executive’s employment hereunder is terminated by
the Executive under subsection 5(f) (without Good Reason), the Executive
shall also be entitled to receive any earned but unpaid Bonus not later than
thirty (30) days following such termination.  The Executive shall
have no further rights to any compensation or other benefits under this
Agreement.

     

    (d)           Expiration of the Employment
Term.  In the event that the Company or the Executive elects
not to extend the Term as provided in Section 2 hereof, the Executive’s
employment shall be terminated upon the expiration of the Term, and, subject to
Section 14 hereof, the provisions of this Agreement shall cease to apply
effective as of such expiration, and the Executive shall be entitled to receive
only the following:  (i) any accrued but unpaid Base Salary
through the date of termination; (ii) reimbursement of any unreimbursed
business expenses properly incurred by the Executive in accordance with Company
policy prior to the date of termination; and (iii) any earned but unpaid
Bonus.  The Executive shall thereafter receive no other compensation
or benefits, other than pursuant to the terms of the plans, policies and
practices of the Company; provided, however, that the
Executive shall not be entitled to any payments or benefits under any separately
stated severance plan, policy or program of the Company.

     

    7.           INDEMNIFICATION AND
INSURANCE

     

    During
the Term and thereafter, the Executive shall be entitled to indemnification to
the fullest extent permitted in accordance with the By-Laws and/or charters or
other formation and governing documents of the Company and its subsidiaries and
affiliates and as provided under the terms of the Company’s directors and
officers liability and (if applicable) fiduciary liability insurance policies
(the “Policies”), as the Policies may be amended from time to time, or any
successor policy, provided, that any such policy shall have terms that are, in
the aggregate, no less favorable than the terms of the relevant policy in effect
on the Effective Date.  If at any time the Company’s Board of
Directors or a committee thereof approves a form of indemnification agreement
for use with the Company’s directors or officers, then the Company shall enter
into an indemnification agreement with the Executive containing the same terms
and conditions as are contained in such form of indemnification agreement.

     

    8.           TAXES

     

    Except as
otherwise provided in Section 7 of this Agreement, the Company shall
withhold from all amounts payable under this Agreement all federal, state, local
and other taxes required by law to be withheld with respect to such
payments.

     

    9.           CONFIDENTIALITY AND
NON-SOLICITATION

     

    (a)           The
Executive acknowledges that the information, observations and data obtained by
Executive’s while employed by the Company concerning the business or affairs of
the Company and its subsidiaries and affiliates which are not available to the
public, customers, suppliers and competitors of the Company which are in the
nature of trade secrets, are proprietary or the disclosure of which could
reasonably be expected to cause a financial loss to the Company, or otherwise
have an adverse effect on the Company (“Confidential Information”) are the
property of the Company or such subsidiary or affiliate.  Therefore,
the Executive agrees that, except as required by law or the rules of any
national securities exchange, she shall not disclose to any unauthorized person
or use for Executive’s own account any Confidential Information without the
prior written consent of the Board, unless and to the extent that any of the
aforementioned matters becomes generally known to the public or is ascertainable
from public or published information and is available for use by the public
other than as a result of the Executive’s acts or omissions to
act.  The Executive shall deliver to the Company any time the Company
may request in writing, all copies of all memoranda, notes, plans, records,
reports, computer tapes and software and other documents and data, or the
portions thereof, that contain the Confidential Information, which she may then
possess or have under Executive’s control.

     

    During the Term and for 36 months
thereafter, the Executive shall not either directly or indirectly through
another entity, (i) induce or attempt to induce any management or other key
employees of the Company or its subsidiaries or affiliates to leave the employ
of the Company or such subsidiary or affiliate, or in any way interfere with the
relationship between the Company or its subsidiaries or affiliates and any such
employee, or (ii) hire any person who was a management or other key
employee of the Company or its subsidiaries or affiliates at any time during the
Executive’s employment with the Company.

     

    (b)           If,
at the time of enforcement of this Section 10, a court shall hold that the
duration, scope or area restrictions stated herein are unreasonable under
circumstances then existing, the parties agree that the maximum duration, scope
or area reasonable under such circumstances, if less, shall be substituted for
the stated duration, scope or area and that the court or arbitrator shall be
allowed to revise the restrictions contained herein to cover, if less, the
maximum period, scope and area permitted by law.

     

    (c)           In
the event of the breach or a threatened breach by the Executive of any of the
provisions of this Section 10, the Company, in addition and supplementary
to other rights and remedies existing in its favor, may apply to any court of
law or equity of competent jurisdiction for specific performance or injunctive
or other relief in order to enforce or prevent any violations of the provisions
hereof (without posting a bond or other security).

     

    10.           SUCCESSORS; BINDING
AGREEMENT

     

    (a)           This
Agreement shall be binding upon and inure to the benefit of the Company and any
successor of the Company, including, any corporation acquiring directly or
indirectly all or substantially all of the Common Stock, business or assets of
the Company, whether by merger, restructuring, reorganization, consolidation,
sale or otherwise (and such successor shall thereafter be deemed the “Company”
for the purposes of this Agreement).  Each of the Company’s
subsidiaries is hereby acknowledged to be a third-party beneficiary with respect
to the provisions of Section 10 hereof and shall be entitled to enforce
such provisions as if it were a party hereto.

     

    (b)           This
Agreement and all rights of the Executive hereunder shall inure to the benefit
of and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.  In the event of the Executive’s death or of a judicial
determination of Executive’s incompetence, reference in this Agreement to the
Executive shall be deemed to refer, as appropriate, to Executive’s beneficiary,
estate or other legal representative.

     

     

    11.           NO
MITIGATION; NO OFFSET

     

    The
Company agrees that, subsequent to the Executive’s termination of employment by
the Company, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to Executive’s due under this
Agreement, and that the amount of any payment that the Company is obligated to
make to the Executive shall not be reduced by any compensation earned by the
Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.

     

    12.           NOTICE

     

    For the
purposes of this Agreement, notices, demands and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when hand delivered or (unless otherwise specified) when mailed
by United States certified mail, return receipt requested, postage prepaid,
addressed as follows:

     

    If to the
Executive:

     

    [redacted]

    

    If to the
Company:

     

    Natalie Bishop

    AVT, Inc.

    341 Bonnie Circle, Suite
102

    Corona, CA 92880

    

    or to
such other address as any party may have furnished to the others in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.

     

    13.           SURVIVORSHIP

     

    The
respective rights and obligations of the parties hereunder, including the rights
and obligations set forth in Sections 6, 7, 8, 9 and 10 of this Agreement,
shall survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.

     

    14.           REPRESENTATIONS AND
WARRANTIES

     

    (a)           The
Company represents and warrants that (i) it is fully authorized and
empowered to enter into this Agreement and that the Board has approved the terms
of this Agreement, (ii) the execution of this Agreement and the performance
of its obligations under this Agreement will not violate or result in a breach
of the terms of any material agreement to which the Company is a party or by
which it is bound, (iii) no approval by any governmental authority or body
is required for it to enter into this Agreement, and (iv) the Agreement is
valid, binding and enforceable against the Company in accordance with its
terms.

     

    (b)           The
Executive hereby represents to the Company that the execution and delivery of
this Agreement by the Executive and the Company, and the performance by the
Executive of the Executive’s duties hereunder, shall not constitute a breach of,
or otherwise contravene, the terms of any employment or other agreement to which
the Executive is a party or otherwise bound.

     

    15.           MISCELLANEOUS

     

    The
parties hereto agree that this Agreement contains the entire understanding and
agreement between them, and supersedes all prior understandings and agreements
between the parties respecting the employment by the Company of the Executive
(including, without limitation, the Executive Severance Agreement, dated as of
November 19, 1999), and that the provisions of this Agreement may not be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the parties hereto.  No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.  No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement.  The validity,
interpretations, construction and performance of this Agreement shall be
governed by the laws of the State of California without giving effect to
conflict of laws principles.  The parties hereby consent to the
jurisdiction of the state and federal courts located within the State of
California.  Any legal action, mediation or arbitration shall be held
in North County San Diego, State of California.

     

    16.           VALIDITY

     

    The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision or
provisions of this Agreement, which shall remain in full force and
effect.

     

    17.           OWNERSHIP.

     

    Company
shall solely own and have exclusive worldwide right, title and interest in to
all the work performed by Executive, and to all derivative works and/or
modifications thereto, and in all United States and foreign trademarks, service
marks, copyrights, patents, trade secrets, and all other intellectual property
rights (collectively “Intellectual Property Rights”) relating
thereto.  No license, ownership or other interest of any kind in the
Work is granted directly or indirectly to Contractor.  In the event
this Agreement is terminated for any reason prior to the completion of all of
the Term, Company shall still exclusively own all rights in the work and other
work in process related thereto, and in all Intellectual Property Rights related
thereto.

     

    18.           ASSIGNMENT.

     

    All work
performed by Executive, and all written, graphic and/or machine readable
materials, documentation, designs, models, drawings, inventions, know-how,
software code and tools, algorithms, libraries, routines, deliverables and other
items created or produced by Executive hereunder (collectively “Related
Materials”) are commissioned at Company’s request and direction and shall be
considered a “work-made-for-hire” under the copyright laws of the United
States.  To the extent that any of the work performed by Executive
and/or Related Materials are not considered a “work-made-for-hire,” Executive
hereby irrevocably assigns and transfers to Company all right, title and
interest worldwide in and to the work performed by Executive and Related
Materials, whether or not patentable or copyrighted, made or conceived or
reduced to practice, and to all modifications and derivative works thereof and
to all Intellectual Property Rights related thereto.  In addition,
Executive hereby irrevocably waive any right to assert any moral rights against
Company or any third party with respect to the work performed by Executive,
Related Materials, any modifications or derivative works thereof, and/or to any
Intellectual Property Rights related thereto.

     

    19.           COUNTERPARTS

     

    This
Agreement may be executed in one or more counterparts (and by facsimile), each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

     

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and the year first above written.

     

    
      	
              Automated
      Vending Technologies, Inc.

              A
      Delaware corporation

               

               

               

              ______________________________________

              By:  Loretta
      Vermette

              Its:  Chairman
      of the Board

            	 
      	
              Executive

               

               

               

               

              _______________________________________

              Natalie
      Russell

            

    

    

     

    

     

    
      
        
          

           

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