Exhibit 10.51
EQUIPMENT LEASE
AGREEMENT
THIS EQUIPMENT LEASE AGREEMENT (this
“ Agreement ”) is made and entered into as of
November 21, 2003 (the “ Effective Date ”), by
and between eMerge Interactive, Inc., a Delaware corporation (the
“ Manufacturer ”), and Excel Corporation, a
Delaware corporation ( the “ Lessee
”).
RECITALS
A. Previously, Manufacturer has
entered into a development agreement with the Lessee, dated January
25, 2002 (the “ Development Agreement ”),
regarding the development of its VerifEYE Carcass Inspection
System, and thereafter entered into an Equipment and Technology
License Agreement, dated March 12, 2003, relating to installing the
VerifEYE Carcass Inspection System in Lessee’s Schuyler,
Nebraska beef processing plant.
B. Lessee desires to have
Manufacturer install the VerifEYE Carcass Inspection System in
certain other of its beef processing facilities (each plant
referred to collectively as the “ Facility ”).
In this regard, Lessee desires to lease certain equipment and
technology and other intellectual property from Manufacturer
relating to the VerifEYE Carcass Inspection System, and
Manufacturer desires to lease such equipment and technology and
other intellectual property to Lessee, upon the terms and
conditions contained in this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of
the mutual covenants and conditions herein contained, and intending
to be legally bound, the parties mutually agree as
follows:
1. Lease .
(a) Grant . Manufacturer
hereby to Lease to Lessee the equipment described in
“Products and Services” on Exhibit A (the
“ Equipment ”) during the Term, along with a
non-exclusive license to utilize the Equipment and related
technology under all intellectual property rights in the equipment
and technology including, but not limited to, all rights held by
Manufacturer under U.S. 5,914,247, on the terms and conditions set
forth in this Agreement. Manufacturer further grants to Lessee for
the Term a non-exclusive license under all copyrights in any works
of authorship provided by Lessee to Manufacturer (“
Works ”) to reproduce, display, perform, or make
derivative works from such Works in the context of Lessee’s
use of the Equipment.
(b) Term . The term of this
Agreement (the “ Term ”) commences on the date
of this Agreement and ends, with respect to each Facility, upon the
third anniversary of the date of installation, unless earlier
terminated in accordance with the terms of this
Agreement.
(c) Fees . Lease fees for the
Equipment shall be payable in the amounts, at the times and in the
manners described in “Lease Price” and “Payment
Schedule” on Exhibit A (the “ Lease Fees
”). All amounts due under this Agreement shall be paid to
Manufacturer at its address as specified in this Agreement or at
such other place as Manufacturer may designate in writing, without
notice or demand, and without abatement, setoff, counterclaim, or
deduction of any amounts whatsoever, except as otherwise provided
in this Agreement. All amounts due and owing to Manufacturer under
this Agreement but not paid on the due date thereof shall bear
interest at the rate of the lesser of: (i) twelve percent per
annum; and (ii) the maximum lawful interest rate permitted under
applicable law. Such interest shall accrue on the balance of unpaid
amounts from time to time outstanding from the date on which
portions of such amounts become due and owing until payment thereof
in full. Any service fees shall be discounted from
Manufacturer’s standard rates by an amount of five
percent.
3. Time of Performance .
Manufacturer agrees to begin performance of its obligations upon
the execution of this Agreement promptly, and agrees that, subject
to Section 14 (Risk of Loss), Section 27(e) (Force
Majeure) or the acts or omissions of Lessee, the Equipment will be
delivered to Lessee at each Facility, undamaged and in good working
order, no later than as set forth under “Installation”
in Exhibit A (the “ Delivery Due Date ”).
Manufacturer and Lessee agree to communicate and to meet in good
faith during the time of performance to discuss the status of the
project and to help ensure that the Delivery Due Date is
met.
4. Damages for Late Delivery
. Subject to delays caused in whole or in part in connection with
or through the operation of Section 14 (Risk of Loss),
Section 27(e) (Force Majeure) or the acts or omissions of
Lessee, Manufacturer agrees to pay Lessee the amount of $500.00 for
each day by which the actual date of delivery of the Equipment at
any Facility exceeds that Facility’s Delivery Due Date, up to
a maximum of $10,000.00. Any such amount shall be payable
exclusively through deductions from the Lease Fees.
5. Limitation of Warranties by
Manufacturer .
(a) Manufacturer warrants that the
Equipment shall meet the descriptions and criteria and shall be as
warranted as set forth on Exhibit A . Manufacturer further
warrants that (i) all work shall be performed in a good,
workmanlike and professional manner and (ii) the Equipment shall be
(x) of the highest grade and quality unless otherwise specified and
shall conform to the specifications, drawings, samples, or other
description furnished by Manufacturer or specified by Lessee, (y)
fit and sufficient for the purpose disclosed by Manufacturer, and
(z) of good material and workmanship and free from defect.
Manufacturer further warrants that if the Equipment is subject to
the federal “Occupational Safety and Health Act” of
1970, as amended (“ OSHA ”), or OSHA’s
state equivalent, or the rules and regulations thereunder that, at
the time of delivery, the Equipment will, to the reasonable
knowledge
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of Manufacturer, conform to all applicable
standards and requirements set forth in OSHA or rules and
regulations in effect at the time of delivery. Manufacturer further
warrants that it has rights to grant a sublicense under U.S.
5,914,247 to Lessee in order to allow Lessee to use the Equipment
to fullest extent allowed under this Agreement and that
Manufacturer will notify Lessee promptly in the event
Manufacturer’s right to grant such sublicense is in danger of
being terminated or has been terminated. Manufacturer expressly
disclaims all other warranties.
(b) Manufacturer and Lessee
specifically agree that the Equipment is provided as an addition to
the Lessee’s food safety procedures only, and not as a
replacement for such procedures. The Equipment is designed to
detect varying levels of plant-based organic contamination which
can potentially be transferred from the meat animal hide and/or
digestive tract onto the meat surface, and could potentially
contain the bacteria commonly found in the digestive tract or on
the hide which can cause food borne illnesses. Manufacturer and
Lessee specifically acknowledge that the Equipment does not detect
bacteria, viruses or parasitic organisms. Accordingly, and in
addition to the limitations set forth in the Agreement, Lessee
agrees that, should Manufacturer be sued for personal injury
allegedly caused by the existence of bacteria, virus or parasitic
organisms in a product sold by Lessee, Lessee shall defend,
indemnify and hold harmless Manufacturer and Manufacturer’s
Representatives as set forth in Section 12 of the
Agreement.
(c) NEITHER PARTY, NOR ITS
TRANSFEREES OR ASSIGNS, SHALL BE LIABLE TO THE OTHER PARTY FOR ANY
INDIRECT OR CONSEQUENTIAL DAMAGES OR FOR ANY INTERRUPTION OF
SERVICE OR LOSS OF BUSINESS. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NO REPRESENTATION OR WARRANTY BY A PARTY AS TO THE
EQUIPMENT OR ANY OTHER MATTER BY A PARTY AS TO THE EQUIPMENT SHALL
BE BINDING ON THAT PARTY.
6. Representations
.
(a) Lessee hereby represents that,
with respect to this Agreement: (i) the execution, delivery and
performance thereof by Lessee have been duly authorized by all
necessary corporate action; (ii) the individual executing such
document is duly authorized to do so; and (iii) such document
constitutes a legal, valid and binding obligation of Lessee,
enforceable against Lessee in accordance with its terms, subject to
applicable bankruptcy law and equity.
(b) Manufacturer hereby represents
that, with respect to this Agreement: (i) the execution, delivery
and performance thereof by Manufacturer have been duly authorized
by all necessary corporate action; (ii) the individual executing
such document is duly authorized to do so; and (iii) such document
constitutes a legal, valid and binding obligation of Manufacturer,
enforceable against Manufacturer in accordance with its terms,
subject to applicable bankruptcy law and equity.
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7. Title . Manufacturer shall
at all times retain title to the Equipment, and Lessee shall not
represent otherwise to any person or entity. All documents of title
and evidences of delivery shall be delivered to Manufacturer.
Lessee shall not change or remove any insignia or lettering that is
on the Equipment or that is thereafter placed thereon indicating
Manufacturer’s ownership thereof; and at any time during the
term of this Agreement, upon request of Manufacturer, Lessee shall
affix to the Equipment, in a prominent place, labels, plates or
other markings supplied by Manufacturer stating the owner of the
Equipment. Manufacturer is hereby authorized by Lessee to file or
record and refile and rerecord Uniform Commercial Code Financing
Statements setting forth Manufacturer’s interest in the
Equipment. Lessee shall indemnify Manufacturer and defend
Manufacturer’s title against all persons claiming against
(through actions other than actions of Manufacturer) or through
Lessee, at all times keeping the Equipment free from any legal
process or encumbrance whatsoever resulting from, by, or under any
acts of Lessee including, but not limited to, liens, attachments,
levies and executions, and shall give Manufacturer immediate
written notice thereof and shall indemnify Manufacturer from any
loss caused thereby. Lessee shall execute and deliver to
Manufacturer, upon Manufacturer’s request, such further
instruments and assurances as Manufacturer deems reasonably
necessary or reasonably advisable for the confirmation or
perfection of Manufacturer’s rights hereunder. Lessee
acknowledges that this Agreement does not confer on Lessee any
rights to use Manufacturer’s graphic designs, copyrights,
trademarks, trade dress, trade secrets, know-how or any other
intellectual property owned or controlled by Manufacturer that is
not expressly included in the definition of Confidential
Information or “Equipment.” Such rights may only be
conferred on Lessee in a separate written license agreement
executed by both parties.
8. Care and Use of Equipment
. Manufacturer shall maintain and service the Equipment as
described in “Maintenance and Service” and
“Improvements” on Exhibit A . In all other
respects, except for damage or repairs due to the acts or omissions
of Manufacturer or its employees, agents or contractors, Lessee at
its own cost and expense shall maintain the Equipment in good
operating condition, repair and appearance, and Lessee shall
protect the same from deterioration, other than normal wear and
tear. Lessee shall use the Equipment in the regular course of
business only, within its normal capacity, without abuse, and in
the manner contemplated by the parties as of the date of this
Agreement. Lessee shall comply with all laws, ordinances,
regulations, requirements and rules with respect to the use and
operation of the Equipment, and shall not make (except in
conjunction with Manufacturer in accordance with Section 9
(Upgrades and Additions)) any modification, alteration or addition
to the Equipment. Neither Lessee nor its employees, agents or
representatives shall tamper with, disassemble, revise, engineer or
otherwise examine the manual workings of the Equipment. If through
the negligence of Lessee or the breach of this Agreement by Lessee
repairs are required of Manufacturer then Lessee shall reimburse
Manufacturer for all reasonable costs incurred by Manufacturer in
making such repairs or performing such maintenance, if Lessee has
not made such repairs or performed such maintenance within a
reasonable time following Manufacturer’s written notice to
Lessee. Manufacturer shall have the right during normal business
hours, upon reasonable prior notice to Lessee and subject to
applicable laws and regulations, to enter the Facility
in
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order to inspect, observe or, upon an Event of
Default (as defined below), remove the Equipment, or otherwise
protect Manufacturer’s interest, and Lessee shall cooperate
fully in affording Manufacturer the opportunity to do the same.
Lessee shall permit Manufacturer to review all documentary and
electronic information relating to the Equipment and the operation
of it.
9. Upgrades And Additions .
Additions, modifications, alterations and upgrades to the Equipment
shall be conducted only as described in “Improvements”
on Exhibit A , and each shall be conducted only with the
consent of and by Manufacturer, not to be unreasonably withheld or
delayed. In consideration of Lessee’s lease of the Equipment,
Manufacturer agrees to offer Lessee, at a price and upon terms to
be negotiated between the parties but at a discount from prices
offered to the rest of the meat packing industry, all improvements
made by Manufacturer to substantially similar Equipment sold or
licensed by Manufacturer during the term of this Agreement. All
additions, modifications, alterations and upgrades to the Equipment
and to Manufacturer Confidential Information shall be handled
pursuant to Article 7 of the Development Agreement.
10. Net Fees; Taxes . The
Lease Fees under this Agreement are net to the Manufacturer, and
Lessee shall pay to Manufacturer, when due, all taxes and charges
(other than income taxes imposed on Manufacturer), including all
sales, use, excise, personal property, stamp, documentary and ad
valorem taxes, license and registration fees, assessments, fines,
penalties, freight, transportation and similar charges imposed on
the ownership, possession, licensing, operation or use of the
Equipment during the term of this Agreement. In the event of a
continuing default by Lessee, Lessee shall pay to Manufacturer all
costs and expenses, storage, caretaking and repossession expenses
in connection with the enforcement of Manufacturer’s rights
under this Agreement.
11. Relationship of the
Parties . Lessee shall be considered to be an independent
contractor. The relationship shall not be construed to be that of
employer and employee, and shall not constitute a partnership,
joint venture or agency of any kind. Neither party shall have any
right to enter into any contracts or commitments in the name of, or
on behalf of, the other, or to bind the other in any respect
whatsoever. In addition, neither party shall obligate or purport to
obligate the other by issuing or making any affirmations,
representations, warranties or guaranties with respect to the
Equipment to any third party.
12. Indemnification
.
(a) Except to the extent caused by
the negligent acts or omissions of Manufacturer or its officers,
directors, employees, agents or contractors (the “
Manufacturer Representatives ”) or by the breach of
this Agreement by Manufacturer, Lessee shall indemnify, protect and
save Manufacturer and the Manufacturer Representatives harmless
from all claims, demands, suits or actions (including attorney fees
incurred in connection therewith) that may be asserted against
Manufacturer or any Manufacturer Representative relating to (i)
Lessee’s indemnification obligations
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contained in Section 5(b) , (ii) acts of
negligence or willful conduct by Lessee or any Lessee
Representative in connection with the Equipment, or (iii)
Lessee’s breach of this Agreement. These indemnification
obligations shall continue in full force and effect notwithstanding
th
