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 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000.
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
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Tenant
shall pay to Landlord, at address as herein set forth, the following as
rental for the leased premises: $1 per
month.
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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 xxxxx 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 xxxxx 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.
0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
(b) If
to
Seller: AVT,
Inc.
000 Xxxxxx Xxxxxx, Xxxxx
000
Xxxxxx, XX 00000
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:
_______________________________________________
By: Xxxxxxx Xxxxxxx
Its: President
TENANT:
SWI Trading, Inc.
____________________________________________
By:
Its:
