Exhibit
10.1
Javo Dispenser, LLC
MASTER EQUIPMENT LEASE
AGREEMENT
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1.
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LEASE-OWNERSHIP . On and subject to the terms and
provisions hereof, JAVO DISPENSER, LLC, a Delaware limited
liability company ("Lessor") hereby agrees to lease to Javo
Beverage Company, Inc., a Delaware corporation ("Lessee"), and
Lessee hereby agrees to lease from Lessor, the personal property
and equipment described in each Schedule of Equipment executed and
delivered by Lessor and Lessee from time to time pursuant to this
Master Equipment Lease Agreement (the "Agreement"), together with
all repairs, refurbishments, replacements and substitutions thereof
(collectively, the "Equipment"). Each Schedule of Equipment shall
be substantially in the form attached hereto as Exhibit A, which is
hereby incorporated herein by this reference, and shall contain any
additional terms and conditions as may be mutually agreed upon by
Lessor and Lessee. Each such Schedule of Equipment shall constitute
a separate lease, and may hereafter be referred to as a "Lease."
All Leases evidenced by Schedules of Equipment executed and
delivered pursuant to this Agreement shall commence on or before
July 30, 2007, and the maximum aggregate cost to Lessor of
Equipment covered (i) by any Schedule of Equipment shall be not
less than Twenty-Five Thousand Dollars ($25,000), and (ii) by all
Schedules of Equipment shall not exceed Two Million Dollars
($2,000,000). THIS IS A NON-CANCELLABLE LEASE FOR THE TERM
INDICATED. THIS TRANSACTION IS NOT A SALE OR A LOAN. The Equipment
is, and shall at all times herein remain, the personal property of
Lessor notwithstanding the fact that it may become affixed to
realty or improvements thereon, and the title thereto shall remain
in Lessor; and Lessee shall have no right, title or interest
therein or thereto except as expressly set forth in this
Agreement.
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2.
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SELECTION OF
EQUIPMENT - NO WARRANTIES - ACCEPTANCE.
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a.
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LESSOR IS NOT A
MANUFACTURER OR SUPPLIER OF THE EQUIPMENT, NOR A DEALER IN SIMILAR
EQUIPMENT, HAS NOT INSPECTED THE EQUIPMENT, AND HAS NOT MADE AND
DOES NOT MAKE, TO LESSEE OR OTHERS GENERALLY, ANY REPRESENTATION,
WARRANTY OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO THE
EQUIPMENT, OR THE DELIVERY, INSTALLATION OR TIMELINESS THEREOF, NOR
WITH RESPECT TO THE EQUIPMENT'S TITLE, DESCRIPTION, DESIGN,
CONDITION, DURABILITY, COMPLIANCE WITH SPECIFICATIONS OR
REGULATIONS, QUALITY SUITABILITY, FITNESS FOR USE OR FITNESS FOR
ANY PARTICULAR PURPOSE, OR MERCHANTABILITY, AND AS BETWEEN LESSOR
AND LESSEE, ALL EQUIPMENT SHALL BE ACCEPTED AND LEASED BY LESSEE
"WHERE IS," "AS IS" AND "WITH ALL FAULTS," AND LESSOR SHALL NOT BE
RESPONSIBLE FOR ANY PATENT OR LATENT DEFECTS THEREIN, OR ANY
DAMAGES WHETHER ACTUAL, SPECIAL, CONSEQUENTIAL OR INCIDENTAL
ARISING THEREFROM. LESSEE AGREES THAT ALL SUCH CLAIMS SHALL BE
ASSERTED AND/OR SETTLED DIRECTLY WITH THE MANUFACTURER(S) AND/OR
SUPPLIER(S) AND THAT NO SUCH CLAIMS SHALL BE ASSERTED AGAINST
LESSOR.
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b.
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IF THE
EQUIPMENT IS NOT PROPERLY INSTALLED, DOES NOT OPERATE AS
REPRESENTED OR WARRANTED BY THE MANUFACTURER OR SUPPLIER OR IS
UNSATISFACTORY FOR ANY REASON, LESSEE SHALL MAKE ANY CLAIM ON
ACCOUNT THEREOF SOLELY AGAINST THE MANUFACTURER AND/OR THE SUPPLIER
OF THE EQUIPMENT AND SHALL NEVERTHELESS PAY LESSOR ALL RENT PAYABLE
UNDER THIS LEASE. LESSEE HEREBY WAIVES ANY SUCH CLAIM AS AGAINST
LESSOR. Lessor hereby agrees to assign to Lessee, solely for the
purpose of making and prosecuting any such claim, all of the rights
that Lessor has against the manufacturer or supplier for breach of
warranty or other representation respecting the
Equipment.
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c.
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LESSEE
UNDERSTANDS, AGREES AND ACKNOWLEDGES THAT NEITHER THE SUPPLIER, THE
MANUFACTURER NOR ANY SALESMAN OR OTHER AGENT OF THE SUPPLIER OR THE
MANUFACTURER, IS AN AGENT OF LESSOR; NO SALESMAN OR AGENT OF THE
SUPPLIER OR THE MANUFACTURER IS AUTHORIZED TO WAIVE OR ALTER,
EITHER ORALLY OR IN WRITING, ANY TERM OR CONDITION OF THIS
AGREEMENT OR ANY LEASE, AND NO REPRESENTATION AS TO ANY MATTER BY
THE SUPPLIER OR MANUFACTURER SHALL IN ANY WAY AFFECT LESSEE'S DUTY
TO PAY THE RENT AND PERFORM ITS OTHER OBLIGATIONS AS SET FORTH IN
THIS AGREEMENT OR ANY LEASE. EXCEPT WITH RESPECT TO SUCH WAIVERS OR
ALTERATIONS OF THIS AGREEMENT AS ARE EXECUTED IN WRITING BY AN
AUTHORIZED OFFICER OF LESSOR, NO EMPLOYEE OR AGENT OF LESSOR IS
AUTHORIZED TO WAIVE OR ALTER ANY TERM OR CONDITION OF THIS
AGREEMENT OR ANY LEASE.
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d.
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LESSEE'S
EXECUTION OF LESSOR'S FORM "EQUIPMENT ACCEPTANCE NOTICE" SHALL BE
CONCLUSIVE BETWEEN LESSOR AND LESSEE AS TO THE RECEIPT IN GOOD
ORDER AND CONDITION OF THE EQUIPMENT AND ACCEPTANCE
THEREOF.
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e.
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EACH LEASE
UNDER THIS AGREEMENT SHALL BE A NET LEASE, AND ALL COSTS AND
EXPENSES OWED AND INCURRED IN CONNECTION WITH THE EQUIPMENT SHALL
BE THE RESPONSIBILITY OF LESSEE, AND LESSEE SHALL NOT BE ENTITLED
TO ANY ABATEMENT OF THE RENT OR ANY OTHER PAYMENTS DUE HEREUNDER OR
ANY REDUCTION THEREOF UNDER ANY CIRCUMSTANCES OR FOR ANY REASON
WHATSOEVER, INCLUDING TERMINATION OF LESSEE'S RIGHT OF POSSESSION
AND/OR THE TAKING OF POSSESSION BY LESSOR UPON A DEFAULT BY LESSEE
HEREUNDER.
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f.
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IN FURTHERANCE
OF THE ABOVE ACKNOWLEDGMENTS, LESSEE SHALL EXECUTE AND DELIVER TO
LESSOR CONCURRENTLY HEREWITH LESSEE'S WAIVERS AND ACKNOWLEDGMENTS
ATTACHED HERETO AS EXHIBIT B.
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1.
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TERM .
The term of each Lease subject to this Agreement shall commence,
with respect to an item of Equipment, on the earlier to occur if
(i) the date of acceptance of the Equipment, as set forth in the
Schedule of Equipment applicable to such item of Equipment, or (ii)
the date on which the installation of such item of Equipment has
been completed, as certified in a certificate of installation of
the supplier or vendor of such item of Equipment, and shall expire,
unless sooner terminated or extended as provided herein, on the
last day of the term set forth in such Schedule of
Equipment.
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2.
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RENT -
RENTAL ADVANCE - FACILITY FEE - SECURITY DEPOSIT
. Lessee agrees to pay,
for the term of each Lease, total rent equal to the amount of the
Monthly Rental Payment specified in each Schedule of Equipment
multiplied by the number of months of the term of such Lease
specified in such Schedule of Equipment. The Monthly Rental Payment
shall be calculated at the monthly rate of $0.03034 per each one
dollar ($1.00) of debt incurred by the Lessor for the purchase,
sales tax, delivery and initial installation of the Equipment,
including the price thereof and all sales and use taxes and all
shipping, insurance and other applicable charges up to a maximum of
$2,000,000 in debt. The first month rent specified on a Schedule of
Equipment shall be due and payable in advance on the commencement
date of the Lease evidenced by such Schedule of Equipment;
provided, however, that if the commencement date of any Lease shall
be other than the first day of a calendar month, Lessee shall make
one initial payment on the commencement date in an amount equal to
one-thirtieth of the Monthly Rental Payment set forth in the
applicable Schedule of Equipment multiplied by the number of days
from and including the commencement date through and including the
last day of the calendar month in which such Lease commences.
Subsequent rental payments shall be due monthly, in advance,
commencing on the first day of the calendar month after the month
in which such Lease commences.
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3.
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LOCATION . The Equipment shall be delivered to
the locations (the "Equipment Locations") specified in the Schedule
of Equipment, and may be moved from time to time by Lessee or at
Lessee's direction to various accounts for use by Lessee's
customers.
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4.
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USE - LABELS
- REPAIRS - ALTERATIONS . Lessee shall, at its own cost and
expense, pay all shipping charges and other expenses incurred in
connection with the shipment of the Equipment to the Equipment
Location and all charges and expenses in connection with the
operation of the Equipment. Lessee shall use, operate, maintain and
store the Equipment in a careful and proper manner, for the
purposes designated by the manufacturer or supplier of the
Equipment and comply with all federal, state, municipal, and other
laws, ordinances, regulations and insurance requirements applicable
in any way to the inspection, possession, use or maintenance of the
Equipment. Lessee shall only permit the Equipment to be serviced by
qualified (and if required by any law or regulation, duly licensed)
employees or contractors of Lessee. Lessee shall (a) maintain the
Equipment in good condition, repair and working order (ordinary
wear and tear resulting from the proper use thereof alone
accepted), (b) not permit abuse, weathering, wreckage, dilapidation
or waste thereof, and (c) to the extent necessary, assume the cost
and expenses of repair or reconditioning at or prior to surrender
of the Equipment to Lessor. Lessee shall not make any alterations,
additions, replacements, substitutions, or improvements to the
Equipment without Lessor's prior written consent. All alterations,
additions, replacements, substitutions, or improvements made to the
Equipment shall immediately become the property of Lessor. Lessee
shall affix labels stating that the Equipment is owned by Lessor
and/or Lessee and keep the same in a prominent place on each item
of Equipment. Where a piece of Equipment bears Lessee's standard
label indicating that Lessee is the owner of such Equipment, such
label shall be for the benefit of Lessor and shall not indicate
ownership by Lessee.
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5.
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SURRENDER . Upon the expiration or earlier
termination of each Lease and subject to Lessee's buyout option,
Lessor may require Lessee, at its expense and risk, to return the
Equipment in good condition and repair, ordinary wear and tear
resulting from proper use thereof alone excepted, by delivering it,
to such place or carrier as Lessor may specify, freight and
insurance prepaid. If Lessee fails to return the Equipment to
Lessor as specified in writing within ten (10) days of demand by
Lessor, Lessor may, at its option, pursue either of the following
specific remedies, in addition to any and all other rights and
remedies which Lessor may possess in such case against Lessee: (a)
take such actions as Lessor may lawfully take to repossess and/or
sell or lease the Equipment pursuant to the procedures and with
such rights as are specified in paragraph 14(c) hereof; or (b)
treat the Equipment as wrongfully converted by Lessee for its own
use and take legal action to recover from Lessee the then fair
market value of the Equipment. For the purpose of this paragraph
7(b), Lessor and Lessee agree that the fair market value of the
Equipment shall be conclusively presumed to be the higher of the
following: (i) the cost to one in a business similar to that of
Lessee of replacing the leased Equipment with like equipment of the
same age and description in good condition and repair (ordinary
wear and tear excepted), assuming the equipment to be in place
and/or in a going business; or (ii) the cost of replacement to
Lessor of like equipment of the same age and description in good
condition and repair in the open market. If Lessee fails to pay the
fair market value of the Equipment as determined under this
paragraph 7(b) within ten (10) days after demand for payment
delivered by Lessor to Lessee, Lessee shall further be obligated to
Lessor to pay interest on said amount calculated in the manner
provided in paragraph 13 hereof, plus all costs and expenses of
Lessor of collecting the fair market value of the Equipment,
including reasonable attorneys' fees and appraisal fees.
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6.
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LOSS - THEFT
- DAMAGE - DESTRUCTION . Lessee shall bear and hereby
assumes the entire risk of loss, theft, damage or destruction of or
to the Equipment from any cause whatsoever, and no such loss,
theft, damage or destruction of or to the Equipment, or any defect
therein or unfitness thereof, or any delay, deficiency, absence of
insurance proceeds, or unavailability, delay or failure of
supplies, parts, mechanisms, devices or services for the Equipment
or failure of the Equipment to function, for any cause, shall
relieve Lessee of the obligation to pay rent or of any other
obligation under this Agreement or any Lease. In the event that any
item of the Equipment as a result of any cause whatsoever, becomes
lost, stolen, destroyed or damaged, then Lessee shall, within
forty-eight (48) hours thereafter, fully inform Lessor of the facts
and circumstances surrounding such event, as well as the nature of
such loss, destruction or damage. If the damage is repairable,
Lessee shall immediately place the Equipment in good condition and
repair. If Lessor determines that any item of the Equipment is
lost, stolen, destroyed or damaged beyond repair, Lessee, at the
option of Lessor shall: (a) replace the same with like equipment of
the same age and description in good condition and repair (ordinary
wear and tear excepted); or (b) pay Lessor, in cash, all of the
following: (i) all amounts then owed by Lessee to Lessor under the
Lease; (ii) the unpaid balance, after payment of (i) above, of the
total rent for the initial or then current renewal term of the
Lease attributable to said item; (iii) the fair market value of
said item as same would be estimated to be at the termination of
the initial term of the Lease as if said item was not lost, stolen,
destroyed or damaged beyond repair. For the purpose of this
paragraph 8(b), Lessor and Lessee agree that fair market value
shall be conclusively presumed to be the higher of the following:
(i) the cost to one in a business similar to that of Lessee of
replacing equipment of the same age and description in good
condition and repair (ordinary wear and tear excepted), assuming
the equipment to be in place and/or in a going business; or (ii)
the cost of replacement to Lessor of like equipment of the same age
and description in good condition and repair (ordinary wear and
tear excepted) in the open market. In the event Lessor shall
receive, collect or recover any insurance payment or proceeds in
connection with the loss, theft, destruction or damage beyond
repair of the Equipment or any item thereof, said payment or
proceeds shall be deducted from the amount due to Lessor under (b)
above. Lessor may, at its option, elect:
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(i) to apply
all or any portion of said insurance to replace or repair the
Equipment; and/or
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(ii) to satisfy
all or a portion of Lessee's rental obligations hereunder. Lessee
shall be responsible for making all insurance claims and
prosecuting any other claims or actions which may arise in
connection with the loss, theft, destruction or damage beyond
repair of any item of the Equipment. Lessor shall not be obligated
to undertake, by litigation or otherwise, the collection of any
insurance or other claim against any person for loss of or damage
to the Equipment.
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7.
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INSURANCE . Lessee shall, at its expense, cause
each item of Equipment to be insured during and throughout the term
of the Lease applicable to such item for risks of physical loss or
damage in an amount not less than the fair market value of the
Equipment, which for purposes of this paragraph 9 shall be
determined as the cost of replacement of the Equipment with like
equipment of the same age and description in good condition and
repair (ordinary wear and tear excepted), and shall keep its
existing public liability, personal injury and property damage
insurance policies in effect at current levels throughout the term
of each Lease. Each such insurance policy shall name Lessor as an
additional insured. Upon signing each Schedule of Equipment, Lessee
shall instruct his insurance agent, broker or company to confirm to
Lessor in writing that the necessary insurance has been bound and
inform Lessor of the name of the insurance company binding this
insurance, the amount of insurance and the full description of the
coverage; and within ten (10) days after the date of the Lease to
forward to Lessor the original insurance policy or policies. All
such insurance shall provide for thirty (30) days' prior written
notice to Lessor of cancellation, restriction or reduction of
coverage. Lessee hereby irrevocably appoints Lessor as Lessee's
attorney-in-fact to make claim for, receive payments or return
premiums, and execute and endorse all documents, checks or drafts
under any insurance policy issued pursuant hereto. Certificates,
endorsements and copies of all policies of insurance shall be
promptly delivered to Lessor, but Lessor shall be under no duty to
ascertain the existence of nor to examine such insurance policy,
nor to advise Lessee in the event such insurance coverage does not
comply with the requirements hereof. In no event shall loss or
damage insurance on the Equipment be in an amount less than the
fair market value of the Equipment determined in the manner set
forth in this paragraph 10, as reasonably determined by Lessor. The
proceeds of said loss or damage insurance shall be payable to
Lessor, but Lessor shall remit all such insurance proceeds to
Lessee at such time as Lessee either (a) provides Lessor
satisfactory proof that the damage has been repaired and the
Equipment has been restored to good working condition and repair or
that the Equipment has been replaced with like equipment of the
same age and description in good condition and repair, or (b) has
paid to Lessor the amounts otherwise due to Lessor on loss of such
Equipment. It is understood and agreed that any payments made by
Lessee or its insurance carrier for loss or damage of any kind
whatsoever to the Equipment are not made as accelerated rental
payments or adjustments of rentals, but are made solely as
indemnity to Lessor for loss or damage to the Equipment. If Lessee
fails to purchase and maintain insurance in accordance with the
terms of this Lease, Lessor shall have the right, but shall not be
obligated, to effect such insurance and pay the premium for it. In
that event, Lessee shall repay to Lessor the cost thereof with the
next monthly rental payment due.
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8.
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LIENS, ETC.
AND TAXES . From and after the date specified
on each Schedule of Equipment, Lessee shall keep the Equipment
identified therein free and clear of all levies, liens,
encumbrances, restraining orders, stay orders, and seizures. Lessee
shall pay, when due, all license and registration fees and sales,
use personal property or other taxes or charges (local, state, and
federal) which may now or hereafter be imposed upon title,
ownership, leasing, rental, sale, purchase, possession, or use of
the Equipment, excluding, however, all taxes on or measured by
Lessor's income. If Lessee fails to pay said charges and taxes when
due, Lessor shall have the right, but shall not be obligated, to
pay said charges and taxes. In any event, Lessee shall pay to
Lessor the amounts thereof upon demand within ten (10) days of the
due date for payment thereof to the appropriate local, state or
federal authority, whether or not Lessor shall have advanced the
funds for Lessee, unless Lessee has previously paid such amounts,
which amounts shall be paid by Lessor to the appropriate local,
state or federal authority.
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9.
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DEFENSE OF
TITLE - INDEMNITY . Lessee shall at all times protect
and defend, at its own cost and expense, Lessor's ownership of the
Equipment against all claims, liens and legal processes of
creditors of Lessee and other persons claiming through Lessee. In
the event that Lessee fails to protect and defend Lessor's
ownership of the Equipment against any such claim, lien or legal
process, Lessor may, at its option, take such steps as it deems
necessary for such purpose. Lessee shall reimburse Lessor for all
of its costs and expenses in connection therewith upon demand by
Lessor. Failure to pay the amount specified in such demand shall
result in a default hereunder subject to the remedies specified in
paragraph 15 hereof. Lessee assumes liability for and hereby agrees
(whether or not Lessor is otherwise insured therefor) to indemnify,
protect, save, keep and hold harmless Lessor and its agents and
employees from and against any and all costs, expenses,
liabilities, obligations, losses, damages, penalties, claims, tax
claims, actions, suits and proceedings (including legal expenses,
hearing costs, experts' fees and reasonable attorneys' fees) of
whatsoever kind and nature, imposed on, incurred by or asserted
against Lessor because of the manufacture, design, purchase,
transportation, acceptance or rejection of the Equipment, and the
delivery, ownership (including warranty, product liability and
strict liability in tort by virtue of ownership), lease,
inspection, possession, use, operation, condition, maintenance,
valuation or return of the Equipment (including, without
limitation, latent or other defects, whether or not discovered by
Lessor or Lessee), and any claim for patent, trademark or copyright
infringement. Lesse
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