Document:

Employment Agreement

    
Exhibit 10.1

      EMPLOYMENT
AGREEMENT

       

      

       

      This
Employment Agreement (the "Agreement") is entered into
as of the 5th day of  May 2009 between Jerry Alvarez ("Employee") and Alternative
Energy Development Corporation, a Nevada Corporation, it’s affiliates,
predecessors and subsidiaries (the "Company”).

       

      WHEREAS,
Employee and the Company desire to enter into this Agreement setting forth the
terms and conditions for the employment relationship of Employee with the
Company during the Employment Term (as defined below).

       

      NOW,
THEREFORE, in consideration of the mutual promises contained herein, the parties
to this Agreement hereby agree as follows:

       

      1.             Services

       

                      1.1       Employment. During the
Employment Term (as defined below), the Company hires Employee to perform such
services as the Company may from time to time reasonably request consistent with
Employee's position with the Company (as set forth in Section 1.1 and 1.5
hereof) and Employee's stature and experience in the publishing industry (the
"Services"). The
Services and authority of Employee shall include, but not necessarily be limited
to, management and supervision of (A) the general business, affairs, management
and operations of the of the Company, (B) the general business, affairs,
management and operations of  the future acquisitions and
Affiliates.  For purposes of this Agreement, "Affiliates" shall mean, as
to any person, any other person controlled by or under common control with (or,
where applicable, controlling), directly or indirectly, such person; and "person" shall mean any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof, or any other
entity; whereas such person in the normal course of business shall be deemed an
affiliate of the publishing division and further, for the sole purpose of this
Agreement, Affiliate shall not mean and or include the Company.

       

                     
1.2        Location.
During the Term, Employee's Services shall be performed in the Phoenix, Arizona
area or any other area of Employee’s convenience which permits regular
communication via telephone, Internet or other popular medium with employees,
officers, directors, customers and other affiliates as needed to effectively
carry out duties as described herein.  Employee acknowledges and
understands that the Company’s current headquarters are located in Glendale,
Arizona and that officers and other participants critical to the Company’s
business are dispersed nationally and internationally, and that such dispersion
will increase substantially as the Company grows. The parties therefore
acknowledge and agree that the nature of Employee's duties hereunder may require
domestic and international travel from time to time.

       

                      1.3        Term. The term of
Employee's employment under this Agreement (the "Employment Term") shall
commence on the 5th day of May 2009 (the "Effective Date") and shall
end on May 4th 2011 unless sooner extended or terminated in accordance with the
provisions of this Agreement.

       

      For
purposes of this Agreement, "Employment Year" shall mean
each twelve-month period during the Term commencing on May 5th,  and
ending on May 4th, of the
following year. In the event the parties decide to extend this Agreement for an
additional one year Employment Term, any extension agreed upon must be done so
in writing and executed by the Company and Employee no later than 5 p.m. Eastern
Standard Time on February  5th, 2011.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

                     
1.4        Exclusive
Employment; Non-Competition.  Employee agrees that his
employment hereunder is on an exclusive basis, and that as long as Employee is
employed by the Company, Employee will not engage in any other business activity
which is in conflict with Employee’s duties and obligations
hereunder.  Employee agrees that during the Employment Term, Employee
shall not directly or indirectly engage in or participate as an owner, partner,
shareholder, officer, employee, director, agent of or consultant for any
business that competes with any of the principal activities of the
Company.  Provided however, that Employee may acquire and/or retain,
as an investment, and take customary actions (including the exercise or
conversion of any securities or rights) to maintain and preserve Employee's
ownership of any one or more of the following (provided such actions, other than
passive investment activities, do not unreasonably interfere with Employee's
Services hereunder): (i) securities of any corporation that are registered under
Sections 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and
that are publicly traded as long as Employee is not part of any control group of
such corporation and, in the case of public corporations in competition with the
Company, such securities do not constitute more than five percent of the voting
power of that public corporation; (ii) any ownership interest in a partnership,
trust, corporation or other person so long as Employee remains a passive
investor in that entity and so long as such entity is not, directly or
indirectly, in competition with the Company, (iii) securities or other interests
now owned or controlled, in whole or in part, directly or indirectly, by
Employee in any corporation or other person and which are identified on Schedule
1.4 hereto; and (iv) securities of the Company or any of its Affiliates. Nothing
in this Agreement shall be deemed to prevent or restrict Employee's ownership
interest in the Company and any of its Affiliates or Employee’s ability to
render charitable or community services not in competition with the
Company.

       

                     
1.5        Power and Authority.

       

                                   
1.5.1        During the
Employment Term, Employee shall be Employed as President and Chief Executive
Officer of the Company, Employee shall report directly to the Company’s Board of
Directors.

       

                                   
1.5.2        During the
Employment Term, all officers and employees of the Company shall report to
Employee (directly or through such channels as Employee and the Board may
designate).

       

                                   
1.5.3       The Company may from time
to time during the Term appoint Employee to one or more additional offices of
the Company. Employee agrees to accept such offices if consistent with
Employee's stature 

                                   
and experience and position with the Company.

       

                      1.6       
Indemnification.
The Company shall indemnify Employee to the fullest extent allowed by applicable
law. Without limiting the foregoing, Employee shall be entitled to the benefit
of the indemnification provisions contained on the date hereof in the Bylaws of
the Company and any applicable Bylaws of any Affiliate, notwithstanding any
future changes therein.

       

      2.           
 Compensation.

       

      As
compensation and consideration for the Services provided by Employee during the
Term pursuant to this Agreement, the Company agrees to pay to Employee the
compensation set forth below.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

                     
2.1        Fixed
Annual Compensation. The Company shall
pay to Employee salary ("Fixed
Annual Compensation") at the rate of 120,000.00 per annum beginning on
May 5th, 2009, and continuing for the term of this agreement, with stated salary
for the first year of the Employment Term to be paid as follows: Fixed Annual
Compensation payable to Employee by the Company hereunder shall be paid
beginning May 5th of each year during the Employment Term and at such times and
in such amounts as the Company may designate in accordance with the Company’s
usual salary practices, but in no event less than twice monthly.

       

         
2.2        Stock. The Company shall grant
to Employee One Million (1,000,000) shares of the Company’s common stock or
equivalent within ninety days subsequent to the effective date of this
agreement.  The total amount of the Company’s common stock or
equivalent to be issued in accordance with this Section 2.3 shall be One Million
Share (1,000,000) and shall be vested as follows: (a) 50% of the total during
the first fiscal year throughout the Term; and (b) 50% of the total during the
second fiscal year throughout the Term. If the Executive voluntarily terminates
his employment with the company within 12 months of the date of this agreement,
all shares granted under this section shall be returned to the
Company.

       

         
2.3        Bonus.
Under this Agreement, Employee shall be entitled to participate in the highest
bonus incentive program (hereafter “BIP”) set up by the Board. While the
specific structure and trigger mechanisms for the BIP are at the sole discretion
of the Board, the BIP shall afford Employee the opportunity to earn a minimum of
$120,000 in cash bonus through the Employee’s accomplishment of specific
pre-identified reasonable milestones in the development of the Company’s
business, or by exceeding the approved business plan revenue and income levels.
Any payments under the BIP shall be paid annually to Employee and shall be paid
no later than the end of the first quarter following the Company’s fiscal
year-end. In addition to the BIP, Employee shall also be entitled to such
additional bonus, if any, as may be granted by the Board (with Employee
abstaining from any vote thereon) or compensation or similar committee thereof
in the Board's (or such committee's) sole discretion based upon Employee's
performance of his Services under this Agreement.

       

      3.            
Expenses; Additional
Benefits

       

         
3.1        Vacation.
Employee shall be entitled to an aggregate of two weeks of paid vacation during
each year of the Employment Term. Employee may take vacation at times determined
by the Employee, however, subject the Company’s business needs. In addition,
Employee shall be entitled to holidays generally observed in the United States
and the State of Arizona.

       

              
3.2        Employee
Business Expense Reimbursement. Employee shall be entitled to
reimbursement of all business expenses for which Employee makes a submission for
and provides an adequate accounting to the Company beginning on the effective
date of this Agreement. The determination of the adequacy of the accounting of
the foregoing expenses shall be within the reasonable discretion of the
Company’s independent certified accountants taking into consideration the
substantiation requirements of the Internal Revenue Code of 1986, as amended
(the "Code"). Employee
shall be entitled to cash reimbursement for expense items, including extended
travel. Employee shall be entitled to cash or stock reimbursement for ordinary
expenses, including phone and local travel, as approved in advance by the Board.
Such reimbursement of business expenses shall be payable to Employee at the end
of each calendar month for the business expenses incurred by the Employee for
the month prior for each specific submission for reimbursement during the Term
of this Agreement,

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

                     
3.3        Stock
Option Plan and Agreement. Concurrently with the execution of this
Agreement and in consideration for the execution thereof, Employee and the
Company shall develop, implement and enter into the Alternative Energy
Development Corporation 2009 Stock Option Plan and Agreement, which represents a
material inducement to Employee's willingness to enter into this
Agreement.

       

                     
3.5        Medical
and Dental Insurance. In the event that the Company, with the approval of
the Board of Directors, elects to establish a Medial Insurance Benefit Plan for
the benefit of the Company’s employment staff, Employee shall be entitled to
participate in such plan which shall include comprehensive medical and dental
insurance (from a reputable and financially-sound insurance carrier of national
standing) for himself and his immediate family. Such insurance shall cover at
the minimum 100% of all hospitalization costs after payment of deductibles and
80% of other medical costs, with the annual deductible not exceeding $500 per
person. There shall be no cap on benefits for the medical insurance, and the
annual cap for dental insurance benefits shall not be less than $3,000. The
Company may either provide these benefits directly to Employee or promptly
reimburse Employee for the cost of such benefits, at the Company’s
election.

       

              
3.6        Other
Agreements. Concurrent with the execution of this Agreement, Employee and
the Company shall enter into other Transaction Documents that have not been
previously executed.

       

                      
3.7       General.
Employee shall be entitled to participate in any profit-sharing, pension,
health, sick leave, holidays, personal days, insurance or other plans, benefits
or policies (not duplicative of the benefits provided hereunder) available to
the employees of the Company or its Affiliates on the terms generally applicable
to such employees.

       

                      
3.8        No
Reduction of Benefit or Payment. No payment or benefit made or provided
under this Agreement shall be deemed to constitute payment to Employee or his
legal representative or guardian in lieu of, or in reduction of, any benefit or
payment under an insurance, pension or other benefit plan, and no payment under
any such plan shall reduce any payment or benefit due under this Agreement
except as set forth in Section 5.3 of this Agreement.

       

                      
3.9       Covenant
Not To Solicit.  Employee agrees that for a period of two (2)
years following any termination of the employment of the Employee with the
Company, Employee will not, directly or indirectly, without the prior written
consent of the Company:  solicit, entice, persuade or induce any
employee, consultant, agent or independent contractor of the Company or of any
of its subsidiaries or Affiliates to terminate his or her employment by the
Company or such subsidiary or Affiliate to become employed by any person,
corporation or other entity other than the Company or such subsidiary or
Affiliate,  or approach any such employee, consultant, agent or
independent contractor for any of the foregoing purposes, or hire any such
employee, consultant, agent or independent contractor or authorize or assist in
the taking of any such actions by any third party.

       

                      
3.10     Confidentiality.  During
the Term of Employment and continuously thereafter, Employee shall keep secret
and retain in strictest confidence and not use or disclose, furnish or make
accessible to anyone outside the Company and any of its Affiliates, directly or
indirectly, or use for the benefit of Employee or others except in conjunction
with the business of the Company and the business of any of its subsidiaries or
Affiliates, any Protected Information.  The term “Protected
Information” shall mean trade secrets, confidential or proprietary information
and all other knowledge, technology, know-how, information, documents or
materials owned, developed or possessed by the Company or any of its
subsidiaries or Affiliates, whether in tangible or intangible form, pertaining
to the business of the Company or any of its subsidiaries or Affiliates,
including, but not limited to, research and development, operations, systems,
databases, computer programs and software, designs, models, operating
procedures, knowledge of the organization, products and services (including
prices, costs, sales or  content), processes, techniques, contracts,
financial information or measures, business methods, future business plans,
details of consultant contracts, new personnel acquisition plans, business
acquisition plans, customers and suppliers (including identities of customers
and prospective customers and suppliers, identities of individual contacts at
business entities which are customers  or prospective customers or
suppliers, preferences, businesses or habits), and business
relationships.  Provided however, that Protected Information shall not
include information that shall become generally known to the public or the trade
without violation of this Section 1.6.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

                      3.11      Company
Ownership.  The results and proceeds of Employee’s services
hereunder, including, without limitation, any works of authorship resulting from
Employee’s services during his employment with the Company or any of the
Company’s Affiliates and any works in progress, shall be works-made-for-hire,
and the Company shall be, and shall be deemed, the sole owner throughout the
universe of any and all rights of whatsoever nature therein, whether or not now
or hereafter known, existing, contemplated, recognized or developed, with the
right to use the same in perpetuity in any manner the Company determines in its
sole discretion without any further payment to Employee
whatsoever.  If, for any reason, any of such results and proceeds
shall not legally be a work-for-hire and/or there are any rights which do not
accrue to the Company under the preceding sentence, then Employee hereby
irrevocably assigns and agrees to assign any and all of Employee’s right, title
and interest thereto, including, without limitation, to any and all copyrights,
patents, trade secrets, trademarks and/or other rights of whatsoever nature
therein, whether or not now or hereafter known, existing, contemplated,
recognized or developed to the Company, and the Company shall have the right to
use the same in perpetuity throughout the universe in any manner the Company
determines without any further payment to Employee
whatsoever.  Provided however, that if the Company elects not to
utilize any work(s) of authorship resulting from Employee’s services during his
Employment Term, the Company shall wave and release all rights to said work(s)
and assign all rights thereto to Employee.

       

      Employee
shall, from time to time, as may be requested by the Company, do any and all
things which the Company may deem useful or desirable to establish or document
the Company’s exclusive ownership of any and all rights in any such results and
proceeds, including, without limitation, the execution of appropriate copyright
and/or patent applications or assignments.  To the extent Employee has
any rights in the results and proceeds of Employee’s services that cannot be
assigned in the manner described above, Employee unconditionally and irrevocably
waives the enforcement of such rights.  This Section 3.11 is subject
to, and shall not be deemed to limit, restrict, or constitute any waiver by the
Company of any rights of ownership to which the Company may be entitled by
operation of law by virtue of the Company’s being the employer of
Employee.

       

                      
3.12     Litigation.  Employee
agrees that, during the Employment Term, for two (2) year thereafter and, if
longer, during the pendency of any litigation or other proceeding, (i) Employee
shall not communicate with anyone (other than his personal attorney(s) and/or
tax advisor(s)) and, except to the extent necessary in the performance of
Employee’s duties hereunder, with respect to the facts or subject matter of any
pending or potential litigation, or regulatory or administrative proceeding
involving the Company or any of its Affiliates, or any of their officers,
directors, shareholders, representatives, agents, employees, suppliers or
customers, other than any litigation or other proceeding in which Employee is a
party-in-opposition, without giving prior notice to the Company’s Board of
Directors or General Counsel and receiving a response, and (ii) in the event
that any other party attempts to obtain information or documents from Employee
with respect to matters possibly related to such litigation or other proceeding,
Employee shall promptly so notify the Company’s Board of Directors  or
General Counsel and await any response .

       

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

                     
3.13      No right
to Give Interviews or to Write Books, Articles,
etc.    Employee agrees that during
the   Employment Term and for a period of two (2) years
thereafter, except with the Company’s prior written authorization, Employee
shall not (i) give any interviews or speeches, or (ii) prepare or assist any
person or entity in the preparation of any books, articles, television or motion
picture productions or other creations, in either case, concerning the Company
or any of its Affiliates, or any of their officers, directors, shareholders,
representatives, agents, employees, suppliers or customers.

       

                     
3.14      Return of
Property.  All documents, date books, recordings, or other
property, whether tangible or intangible, including all information stored in
electronic form, obtained or prepared by or for Employee and/or utilized by
Employee in the course of Employee’s employment with the Company shall remain
the exclusive property of the Company.  In the event of the
termination of Employee’s employment for any reason, the Company reserves the
right, to the extent permitted by law and in addition to any other remedy the
Company may have, to deduct from any monies otherwise payable to Employee by the
Company the following:  (i) the full amount of any debt Employee owes
to the Company or to any of the Company’s Affiliates at the time of or
subsequent to the termination of Employee’s employment with the
Company;  and (ii) the value of the Company’s property which is
retained in Employee’s possession after the termination of Employee’s employment
with the Company.  In the event that the law of any state or other
jurisdiction requires the consent of an employee for such deductions, this
Agreement and the Employee’s signature hereon shall serve, and be deemed to
serve, as such consent. Employee acknowledges and agrees that the foregoing
remedy shall not be the sole and/or exclusive remedy of the Company with respect
to a breach of this Section 3.14.

       

                     
3.15      Non-Disparagement.  Employee
agrees that he shall not, during the Employment Term and for a period of two (2)
years thereafter, criticize, ridicule or make any statement which disparages or
is derogatory of the Company or any of its Affiliates, or of any of their
officers, directors, shareholders, representatives, agents, employees, suppliers
or customers.

       

                      
3.16     Injunctive
Relief/Specific Enforcement. The Company has entered into this Agreement
in order to obtain the benefit of Employee’s unique skills, talent, and
experience.  Employee acknowledges that the services to be rendered by
Employee are of a special, unique and extraordinary character and, in connection
with such services, Employee will have access to confidential or proprietary
information or trade secret vital to the Company’s business and the businesses
of its subsidiaries and Affiliates.  By reason of this, Employee
acknowledges, consents and agrees that any violation of Sections 1.4 and 3.10 –
3.16 of this Agreement will result in irreparable harm to the Company and its
subsidiaries or Affiliates, and that money damages will not provide adequate
remedy to the Company, and that the Company shall be entitled to have those
sections specifically enforced by any court having competent jurisdiction.
Accordingly, Employee agrees that the Company may obtain injunctive and/or other
equitable relief for any breach or threatened breach of those sections, in
addition to any other remedies, including the recovery of money damages from
Employee available to the Company.

       

                      3.17    
 Non-Renewal
Notice.  The Company shall notify Employee in writing in the
event that the Company elects not to extend or renew this
Agreement.  If the Company gives Employee such notice less than three
(3) months before the end of the Employment Term, or Employee’s employment
terminates pursuant to Section 4.1 hereof during the three (3) months of the
Employment Term, Employee shall be entitled to receive his Salary as provided in
Section 2.1, payable in accordance with the Company’s then-effective payroll
practices, subject to applicable withholding requirements, for the period
commencing after the end of  the Employment Term which, when added to
the portion of the Employment Term, if any, remaining when the notice is given
or the termination occurs, equals three (3) months.  The payments
provided for in this Section 3.17 are in lieu of any severance or income
continuation or protection under any Company plan that may now or hereafter
exist.  Employee shall be required to mitigate the amount of any
payment provided for in this Section 3.17 by seeking other employment or
otherwise, and the amount of any such payment provided hereunder shall be
reduced by any compensation earned by Employee from any third
person.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

                      
3.18      The provisions of Sections 1.4
and 3.11-3.18 shall, without any limitation as to time, survive the expiration
of Employee’s employment hereunder, irrespective of the reason for any
termination.

       

      4.             
Termination:

       

                     
4.1        Voluntary
Termination.   Employee may voluntarily terminate his
employment with the Company at any time upon at least thirty (30) days prior
written notice, in which case this Agreement shall terminate on the 30th day
from such notice, or such longer period as may be consented to in writing by the
Company.  Upon such termination, the Company shall have no further
obligations under this Agreement, except to pay all amounts of Base Salary
accrued, but unpaid, at the effective date of voluntary termination, and all
reasonable unreimbursed business-related expenses, if any.

       

                     
4.2        Disability.  In
the event of the permanent disability (as hereinafter defined) of Employee
during the Term of Employment, the Company shall have the right, upon written
notice to Employee, to terminate Employee’s employment under this Agreement,
effective upon the 30th
calendar day following the giving of such notice (or such later day as shall be
specified in such notice).  Upon the effectiveness of such
termination, (i) the Company shall have no further obligations under this
Agreement, except as to pay and to provide, subject to applicable withholding,
(A) all amounts of Base Salary accrued, but unpaid, at the effective date of
termination, (B) a lump sum amount equal to Employee’s then annual Base Salary,
(C) a pro rata portion of Employee’s Quarterly Bonus or Target Bonus, as
applicable, and (D) all reasonable unreimbursed business-related expenses, and
(ii) Employee shall have no further obligations hereunder other than those
provided for in Sections 1.4 and 3.18  of this Agreement.

       

      All
amounts payable to Employee pursuant to this Section 4.2 shall be payable within
thirty  (30) days following the effective date of the termination of
Employee’s employment.  For purposes of this Section, “permanent
disability” shall be defined as any physical or mental disability or incapacity
which renders Employee incapable in any material respect of performing the
services required of him in accordance with his obligations under Sections 1.1
and 1.5 for a period of one hundred and twenty (120) days, consecutive or
otherwise, in any three hundred and sixty (360) day period.

       

                     
4.3        Death.  In
the event of the death of Employee during the Term of Employment, this Agreement
shall automatically terminate and the Company shall have no further obligations
hereunder, except as to pay and provide to Employee’s beneficiary or other legal
representative, subject to applicable withholding, (A) all amounts of Base
Salary accrued but unpaid, at the date of death, (B) a pro rata portion of
Employee’s Quarterly bonus or Target Bonus, as applicable, and (C) all
reasonable unreimbursed  business-related expenses.  All
amounts payable to Employee pursuant to this Section 4.3 shall be payable within
thirty (30) days following the Companies receipt of notice of date of
death.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

                     
4.4        Cause.  The
Company shall have the right, upon written notice to Employee, to terminate
Employee’s employment under this Agreement for Cause (as hereinafter
defined);  In the event of a termination for cause, this Agreement
shall terminate and the Employee shall be removed from office effective as of
the date specified by the Company in the notice, and (i) the Company shall have
no further obligations hereunder, except to pay all amounts of Base Salary,
reimburse all reasonable unreimbursed business-related expenses and pay and
provide all other benefits accrued to the date of termination and (ii) Employee
shall have no further obligations hereunder, except for those provided in
Sections 1.4 and 3.18 hereof;  provided, however, that nothing
contained in this Section 4.4 shall constitute a waiver or release by the
Company of any rights or claims it may have against Employee for actions or
omissions which give rise to a termination under this
Section  4.4.

       

      

                     
For purposes of this Agreement, the term “Cause” shall mean:

       

                                   
(i)  any act
of fraud, embezzlement or dishonesty on the part of Employee with respect to the
Company or any of its subsidiaries or Affiliates; or

       

                                   
(ii)  any
material breach by Employee of his obligations under this
Agreement;  or

       

                                    (iii)    
conviction
of Employee of any felony; or

       

                                   
(iv)     a material breach of, or the failure or
refusal by Employee to perform and discharge Employee’s duties, responsibilities
or obligations under this Agreement (it being understood that no action or
failure to act by  

                                   
Employee shall be considered to be Cause if such action or failure to act shall
have been taken by Employee in good faith).

       

                     
4.6        Plan
Benefits.  Upon any termination of Employee’s employment
hereunder, the Company shall pay Employee the amounts and shall provide all
benefits generally available upon termination under any employee benefit plans,
policies and practices of the Company, determined in accordance with the
applicable terms and provisions of such plans, policies and
practices.

       

      5.            
General

       

       5.1       
Governing
Law. Venue
The laws of the State of Arizona shall govern the interpretation, construction
and applicability of this Agreement in any arbitration or judicial
proceeding.

       

       5.2      
Attorneys’
Fees. In the event that any legal (judicial or arbitral) proceeding is
instituted in connection with any controversy arising out of this Agreement or
the enforcement of any rights hereunder, the prevailing party (as defined by the
courts of Arizona) shall be entitled to recover, in addition to court and other
costs, such sums as the court or arbitrator may decide are reasonable as
attorneys’ fees.

       

       5.3        Indemnification.  In
the event Employee is made, or threatened to be made, a witness or party to any
civil, criminal or administrative action, proceeding or investigation of the
fact that Employee is or was a director or officer of the Company, or serves on
the Board of another corporation fifty percent (50%) or more owned by the
Company in any capacity at the Company’s request, or serves or served as a
director of any other corporation at the request, or serves as a fiduciary of
any ERISA plan at the Company’s request, Employee shall be indemnified by the
Company for all amounts paid as a fine or settlement, including the cost of
defense.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

                      
5.4       Waiver.  Neither
party shall, by mere lapse of time, without giving notice be deemed to have
waived any breach by the other party of any of this
Agreement.  Further, the waiver by either party of a particular breach
of this Agreement shall be construed or deemed as a continuing waiver of such
breach.

       

      

                     
 5.5       Entire
Agreement. The parties agree that this instrument constitutes and
contains the entire agreement between the parties concerning the subject matter
and contents of this Agreement, and that this instrument supersedes all prior
negotiations, proposed agreement, or understandings, if any, between the parties
concerning any of the provisions or contents of this Agreement.  No
amendment to this Agreement shall be effective unless it is in writing and
signed by a duly authorized representative of each of the parties to this
Agreement.

       

                      
5.6       Fair
Meaning. The parties agree that the wording of this Agreement shall be
construed as a whole according to its fair meaning, and not strictly for or
against the party that drafted this Agreement.

       

                      
5.7        Counterparts.  This
Agreement may be executed in any number of counterparts which shall be deemed an
original, and all of which taken together constitutes one and the same
Agreement.

       

                     
5.8        Severability.  The
parties agree that if any provision of this Agreement should ever be declared or
determined by any court of competent jurisdiction to be illegal or invalid, the
validity of the remaining parts, terms or provisions shall not be affected
thereby, and said illegal or invalid part, term or provision shall be
automatically conformed to the law, if possible, or if not possible, be deemed
to be stricken from this Agreement.

       

                      5.9        Waiver/Estoppel.
Any party hereto may waive the benefit of any term, condition or covenant in
this Agreement or any right or remedy at law or in equity to which any party may
be entitled, but only by an instrument in writing signed by the parties to be
charged. No estoppel may be raised against any party except to the extent the
other parties rely on an instrument in writing, signed by the party to be
charged, specifically reciting that the other parties may rely thereon. The
parties' rights and remedies under and pursuant to this Agreement or at law or
in equity shall be cumulative and the exercise of any rights or remedies under
any provision hereof or rights or remedies at law or in equity shall not be
deemed an election of remedies; and any waiver or forbearance of any breach of
this Agreement or remedy granted hereunder or at law or in equity shall not be
deemed a waiver of any preceding or succeeding breach of the same or any other
provision hereof or of the opportunity to exercise such right or remedy or any
other right or remedy, whether or not similar, at any preceding or subsequent
time.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

                      
5.10     Notices.
Any notice that the Company is required to give or may desire to give to
Employee hereunder shall be in writing and may be served by delivering it to
Employee, or by sending it to Employee by certified mail, return receipt
requested (effective five days after mailing) or overnight delivery of the same
by delivery service capable of providing verified receipt (effective the next
business day), or facsimile (effective twenty-four hours after receipt is
confirmed by person or machine), at the address set forth below, or such
substitute address as Employee may from time to time designate by notice to the
Company. Any notice that Employee is required or may desire to serve upon the
Company hereunder shall be in writing and may be served by delivering it
personally or by sending it certified mail, return receipt requested or
overnight delivery, or facsimile (with receipt confirmed by person or machine)
to the address set forth below, or such other substitute address as the Company
may from time to time designate by notice to Employee. Such notices by Employee
shall be effective at the same times as specified in this Section 5.10 for
notices by the Company.

       

                                   
The Company:

       

                                   
Alternative Energy Development Corporation

                                   
17505 North 79th Ave.  Suite# 309

                                   
Glendale, AZ 85308

       

                                   
Employee:

       

                                   
Jerry Alvarez

                                   
17505 North 79th Ave.  Suite# 309

                                   
Glendale, AZ 85308

       

                       5.11     Captions.
The paragraph headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this
Agreement.

       

                      
5.12     No
Partnership or Joint Venture. Nothing herein contained shall constitute a
partnership between or joint venture by the parties hereto.

       

                      
5.13     Assignability.  Successors.

       

                                   
(a) The
obligations of employee may not be delegated and, except as expressly provided
in this Section 5.13 relating to the designation of beneficiaries, Employee may
not, without the Company’s prior written 

                                    consent
thereto, assign, transfer, convey, pledge, encumber, hypothecate

       

            
or
otherwise dispose of this Agreement or any interest herein.  Any such
attempted delegation or disposition shall be null and void and without
effect.  Provided however, that Employee may assign all or any portion

                                   
of his rights to receive compensation hereunder to any corporation at least
fifty percent (50%) of the capital stock of which is owned or controlled by
Employee, to any other entity in which Employee owns or 

                                   
controls at least fifty percent (50%) of the total ownership interests, to
trusts for the benefit of the family of Employee, to charitable trusts or to
trusts for the benefit of any charitable purpose, or to any charity or
non-

                                   
profit organization. Notwithstanding any other provision hereof, Employee shall
not be permitted to establish loan-out companies to provide his services to the
Company and assign this Agreement thereto.

       

                                   
(b) The
Company and Employee agree that this Agreement and each of the Company’s rights
and obligations hereunder may be assigned or transferred by the Company to, and
shall be assumed by and be binding 

                                   
upon, any Successor to the Company.  The term “Successor” shall mean
any corporation or other business entity which succeeds to the assets or
conducts the business of the Company, whether directly or 

                                   
indirectly, by purchase, merger, consolidation or otherwise.  In the
event another corporation or other business entity becomes a Successor of the
Company, then the Successor shall, by an agreement in form and 

                                   
substance reasonably satisfactory to Employee, expressly assume and agree to
perform this Agreement in the same manner and to the same extent as the Company
would be required to perform if there had been no 

                                   
merger.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

                     
5.14      No
Mitigation; No Offset. Without limiting any other provision hereof, the
Company agrees that any income and other employment benefits received by
Employee from any and all sources (other than as set forth in Section 5.2)
before, or during this Agreement shall in no way reduce or otherwise affect the
Company's obligation to make payments and afford benefits
hereunder.

       

      6.            
Arbitration.

       

                                   
(a)  In the event of any controversy arising from or concerning the
interpretation of this Agreement or its subject matter (including, without
limitation, the interpretation, application, or enforceability of this Agreement

                                   
or the arbitrability of the controversy), the parties agree that such
controversy shall be resolved exclusively by binding arbitration before a single
neutral arbitrator selected jointly by the parties.  The Company and

                                    Employee
shall each be responsible for 50% of the fees and expenses of the
arbitrator.  Each party shall be responsible for its own attorneys’
fees and any other costs occasioned by the arbitration, without regard to

                                   
which party thereto prevails.  Provided however, that the arbitrator
may award attorneys’ fees and costs to a party under Section 5.2 of this
Agreement.  The parties to the arbitration shall have all rights,
remedies, and 

                                    defenses
available to them in a civil action before a court.  If, for any legal
reason, a controversy arising from or concerning the interpretation,
application, or enforceability of this Agreement requires judicial 

                                   
intervention, the parties agree that the controversy shall be brought in the
Maricopa County Superior Court or the U.S. District Court for the District of
Arizona.

       

                                   
(b) The parties hereby waive and agree not to assert (by way of motion, as
a defense or otherwise) (a) any and all objections to jurisdiction that they may
have under the laws of the State of Arizona or the United   

                                   
States, and (b) any claim (i) that it or [he/she] is not subject personally to
jurisdiction of such court, (ii) that such forum is inconvenient, (iii) that
venue is improper, or (iv) that this Agreement or its subject matter

                           
may not for any reason be arbitrated or enforced as provided in this
Section 6.0 (b).

       

                                    (c) Within
ten (10) business days after receipt of the notice submitting a dispute or
controversy to arbitration, the parties shall attempt in good faith to agree
upon an arbitrator to whom the dispute will be referred and 

                                   
on a joint statement of contentions. Each party hereby agrees that service of
process in such action will be deemed accomplished and completed when a copy of
the documents is sent in accordance with the notice 

                                    provisions
in Section 5.10 hereof.

       

                                   
(d) The arbitration shall be held within sixty (60) days of the appointment
of the arbitrator.  Discovery shall be conducted in accordance with
the Arizona Rules of Civil Procedure regarding discovery. The arbitrator

                                    shall
establish the discovery schedule promptly following submission of the joint
statement of contentions (or the filing of the answer to the demand for
arbitration) which schedule shall be strictly adhered to. To the 

                                   
extent the contentions of the parties relate to custom or practice in the
Company’s business model, or the technical industry generally, or to accounting
matters, each party may select an independent expert or 

                                   
accountant (as applicable) with substantial experience in the industry segment
involved to render an expert opinion or opinions. All decisions of the
arbitrator shall be in writing.  The arbitrator shall make all rulings
in 

                                   
accordance with Arizona law and shall have authority equal to that of a Superior
Court judge, to grant equitable relief in an action pending in Superior Court in
which all parties have appeared.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      7.            
Contractual
Nomenclature. All references herein to "Dollars" or "$" shall mean Dollars of the
United States of America, its legal tender for all debts public and private.
Wherever used herein and to the extent appropriate, the masculine, feminine or
neuter gender shall include the other two genders, the singular shall include
the plural, and the plural shall include the singular.

       

      8.            
Publicity.
Neither party shall issue any press release or announcement of or relating to
the execution of, or any terms, provisions or conditions contained in this
Agreement without the other party's prior approval of the content and timing of
any such announcement or announcements.

       

      9.            
Proof of
Right to Work.  For purposes of federal immigration law,
Employee will be required to provide the Company with documentary evidence of
his identity and eligibility for employment in the United States within three
(3) business days of Employee’s date of hire; otherwise, the Company may
terminate the employment relationship and this Agreement.

       

       

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

       

                      
Alternative Energy Development Corporation, a Nevada Corporation

       

      

       

                                   
By:  JERRY
ALVAREZ

            
                      
Jerry Alvarez, President, Director

       

      

                      
Employee

       

                                   

       

       

                                   
By:  JERRY
ALVAREZ

                                   
Jerry Alvarez, an IndividualEXHIBIT 10.1

  

 

 

 

EXHIBIT
10.1                                                      

                           

FORBEARANCE
LETTER

 

May 12, 2009

 

PRO-DEX, INC.

2631 McGaw Avenue

Irvine, CA 92614

 

Gentlemen:

 

            Reference is made to that certain Credit
Agreement dated as of November 1, 2007 (as amended from time to time, the
“Credit Agreement”) by and between Pro-Dex, Inc., a Colorado corporation
(“Borrower”) and Wells Fargo Bank, National Association (“Bank”).  Capitalized terms
used herein but not defined shall have the meanings set forth in the Credit
Agreement.

 

As evidenced by Borrower’s financial statements for the
fiscal quarter ending March 31, 2009, Borrower has violated Section 4.9(d) and
Section 4.9 (e) of the Credit Agreement (the “Existing Violations”).  Before
Bank can determine whether and under what conditions it might be willing to
waive the Existing Violations, Bank must conduct, and review the results of, a
collateral audit and a fixed asset analysis.  Borrower has requested that Bank
forbear from exercising its rights and remedies in connection with the Existing
Violations until July 2, 2009.  Bank is willing to do so, subject to the terms
and conditions set forth herein.

 

            Bank and Borrower hereby agree as follows:

 

            1.         Bank hereby agrees to forbear from
exercising its rights and remedies with respect to the Existing Violations
until July 2, 2009.  Such agreement to forbear shall not be deemed a waiver of
the Existing Violations, or an agreement to waive or forbear with respect to
any new violation which may occur, including without limitation any new
violation of the provisions which are the subject of the Existing Violations.

 

            2.         During the forbearance period set
forth above, Bank shall continue to make advances to Borrower under the Line of
Credit, subject to the terms and conditions of the Credit Agreement; provided,
however, during the forbearance period the maximum amount available under the
Line of Credit shall be reduced to One Million Dollars ($1,000,000.00).  The
Credit Agreement and the Line of Credit Note shall be deemed amended hereby to
reflect this reduction.

 

            3.         Except as expressly provided herein,
all terms and provisions of the Credit Agreement and the other Loan Documents shall
continue in full force and effect, without waiver or modification.

 

            4.         This letter agreement is entered into
for the sole protection and benefit of Bank and Borrower, and no other person
or entity shall have a direct or indirect cause of action or a claim in
connection herewith.

 

            5.         This letter agreement constitutes the
entire agreement between Bank and Borrower with respect to the matters
described herein, supersedes all prior negotiations, discussions and
correspondence concerning the subject matter hereof, and may only be amended or
modified by a written instrument executed by Bank and Borrower.

 

 

 

 

 

 

            6.         This letter agreement may be executed
in any number of counterparts, each of which shall be deemed an original and
all of which together shall constitute one and the same agreement.

 

            7.         This letter agreement shall not be
effective until Borrower has executed it in the space provided below and
returned it to Bank.

 

WELLS
FARGO BANK, 

NATIONAL ASSOCIATION

 

By:
/s/  MANISHI PARIKH

        Manishi Parikh

        Vice President

 

Acknowledged and Agreed to by:

 

PRO-DEX, INC.

 

By: /s/  JEFFREY J. RITCHEY

      Jeffrey Ritchey

      Chief Financial Officer,

      Treasurer, Secretary

 

By: /s/  MARK
MURPHY       

      Mark P. Murphy

      Chief Executive Officer

 

 

 

 

 

2

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