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MASTER EQUIPMENT LEASE AGREEMENT

Equipment Lease Agreement

MASTER EQUIPMENT LEASE AGREEMENT | Document Parties: Javo Beverage Company, Inc | Javo Dispenser, LLC You are currently viewing:
This Equipment Lease Agreement involves

Javo Beverage Company, Inc | Javo Dispenser, LLC

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Title: MASTER EQUIPMENT LEASE AGREEMENT
Governing Law: California     Date: 8/1/2008
Industry: Food Processing     Sector: Consumer/Non-Cyclical

MASTER EQUIPMENT LEASE AGREEMENT, Parties: javo beverage company  inc , javo dispenser  llc
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Exhibit 10.1

 

Javo Dispenser, LLC

 

MASTER EQUIPMENT LEASE AGREEMENT

 

1.

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.

 

2.

SELECTION OF EQUIPMENT - NO WARRANTIES - ACCEPTANCE.

 

 

a.

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.

 

 

b.

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.

 

 

 


 

 

 

 

 

c.

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.

 

 

d.

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.

 

 

e.

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.

 

 

f.

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.

 

1.

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.

 

 

2


 

 

2.

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.

 

3.

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.

 

4.

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.

 

5.

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.

 

 

 

3


 

 

 

6.

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:

 

 

 

(i) to apply all or any portion of said insurance to replace or repair the Equipment; and/or

 

 

 

 


 

 

4


 

 

(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.

 

7.

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.

 

8.

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.

 

 

 

5


 

 

 

 

 

9.

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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