Governing any and all leases of the Equipment by SHAFTER EQUIPMENT COMPANY, LLC, a California limited liability company (“Lessor”). Lessor and Lessee (“Lessee”) are referred to singularly as a “Party” and collectively as the “Parties” on a generic basis.
1. The Equipment and its Lease.
1.1. Ownership of the Equipment. Lessor shall at all times be the sole and exclusive legal and equitable owner of the Equipment. Lessee shall not at
any time acquire any interest, power, privilege, right or title in the Equipment except the right to its possession, and operation and use pursuant to this Lease. Lessee also shall keep the Equipment free and clear of all liens, encumbrances, or levies, except those existing upon the Effective Date. This Lease constitutes a rental or a bailment of the Equipment and not a sale. This Lease is intended as a “true lease” and not a disguised sale.
1.2. Compliance with Laws. Lessee shall use the Equipment in a careful and proper manner and shall comply with and conform to all applicable
federal, state or local laws in any way relating to the possession or use of the Equipment. Lessee also shall further give all notices and comply with all federal, state and local codes, laws, ordinances, regulations, rules and other legal requirements, including, without limitation, those established by or pursuant to the Immigration Reform and Control Act of 1986, as amended, the Fair Labor Standards Act, as amended, and Federal Occupational Safety and Health Act of 1970, as amended (“OSHA”). To the extent applicable, Lessee shall be appropriately licensed, as required by all state and local authorities, to perform its duties, obligations and responsibilities under this Lease.
2. Rent and Related Matters.
2.1. Rent. As good and valuable consideration for this Lease, the adequacy of which is acknowledged, Lessee shall pay to Lessor as rent for the
Equipment during the Term the amount of the Rent (as identified in the Key Terms) (the “Rent”), due in advance on the Effective Date. The Rent shall be payable in lawful money of the United States in immediately available funds to Lessor at the address
stated herein or to such other entity or at such other place as Lessor may from time to time or at any time designate in writing.
2.2. Late Charges. If Lessee fails to pay the Rent within three (3) days from the due date, Lessee shall pay Lessor a late charge in an amount equal to five percent (5%) of any amount overdue and reimbursement for checks returned due to non-sufficient funds (NSF Fee). In addition, all late payments will accrue interest at ten percent per annum (10%/annum) until paid in full.
3. Term of This Lease.
3.1. Term. Subject to the earlier termination of this Lease pursuant to this Section 3, the term of this Lease shall commence on the Effective Date and continue in force for the period provided in the Key Terms (the “Term”).
3.2. Termination upon Default. Should either party default in the performance of its duties, obligations and responsibilities under this Lease, the non-breaching party may terminate this Lease by giving written notice to the defaulting party pursuant to Section 8.2.
3.3. Termination for Convenience. Either party may terminate this Lease for convenience by giving five (5) days’ written notice to the other party
pursuant to Section 8.2.
3.4. Redelivery and Surrender of the Equipment. Upon the expiration, cancellation or termination of this Lease, Lessee shall immediately return and surrender the Equipment to Lessor in a state of condition and repair as existed on the Effective Date, ordinary wear and tear excepted, and otherwise in working order, all at Lessee’s sole cost and expense without the right of reimbursement from Lessor.
3.5. Assignment and Subleasing. Lessee may not assign, hypothecate, sale, sublease or otherwise transfer any interest in all or any portion of
the Equipment without the prior written consent of Lessor as exercised in its sole discretion.
4. Warranty; Disclaimer. Lessor warrants that it is the sole and exclusive owner of the Equipment. Lessor further warrants and that the Equipment is in good repair, condition and working order as of the Effective Date. EXCEPT AS PROVIDED IN THIS SECTION 4, THE EQUIPMENT IS BEING LEASED TO LESSEE IN AN “AS IS”/”WITH ALL FAULTS”/”WHERE IS” CONDITION, AND LESSOR MAKES NO REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, REGARDING THE EQUIPMENT, INCLUDING, WITHOUT LIMITATION, ITS FITNESS FOR ANY PARTICULAR PURPOSE.
5. Use and Maintenance of the Equipment.
5.1. Use of the Equipment. Lessee represents and warrants that the Equipment shall be used and maintained solely and only for commercial or business purposes during the Term. So long as it is not in default of any provision of this Lease, Lessee shall be entitled to the absolute right to the control, custody, operation, possession and use of the Equipment during the Term. Lessee shall employ and have absolute control, supervision, and responsibility over any operators or users of the Equipment.
5.2. Maintenance; Operating Costs and Expenses. Lessee, at its own cost and expense without right of reimbursement from Lessor, shall both pay for the costs and expenses for operating the Equipment, and shall keep the Equipment in good repair, condition, and working order, furnishing any and all parts, mechanisms, and devices required to keep it in such good repair, condition, and working order.
Lessee shall not make any alterations, additions, or improvements to the Equipment without the prior written consent of Lessor.
6. Termination Upon Default.
6.1 Defaults under this Lease. Each of the following constitutes an event of default under this Lease:
a. Lessee fails to pay Lessor for amounts due, owing and payable under this Lease, including, without limitation, the Rent, either fully or timely when due;
b. A party fails to perform or observe any condition, covenant, provision or term of this Lease other than that specified in Section 6.1(a) to be performed or observed by that party and such default continues for ten (10) days after the non- breaching party gives the breaching party notice of such failure to perform; or,
c. A party files a voluntary petition under any bankruptcy, reorganization, or insolvency law of any jurisdiction; the party consents to or applies for appointment of a trustee, receiver, custodian, or similar official for itself or for all or substantially all its assets; a trustee, receiver, custodian, or similar official is appointed to take possession of all or substantially all of the party’s assets and will not be dismissed within thirty (30) days after appointment; the party makes any assignment for the benefit of creditors, or other arrangement or composition under any Laws for the benefit of insolvent persons; an order for relief is entered against the party under any bankruptcy, reorganization, or insolvency law of any jurisdiction and is not dismissed or stayed within thirty (30) days after its entry; or any case, proceeding, or other action seeking such order remains undismissed for thirty (30) days after its filing; or any writ of attachment, garnishment, or execution is levied against all or substantially all of the party’s assets; or all or substantially all of the party’s assets become subject to any attachment, garnishment, execution, or other judicial seizure, and the same is not satisfied, removed, released, or bonded within thirty (30) days after the date the writ was levied or the date of the attachment, garnishment, execution, or other judicial seizure.
6.2 Remedies. In the event of a default under Section 6.1, if applicable, the non-breaching party may, in its sole and absolute discretion, terminate
this Lease immediately upon giving written notice, and such termination shall be without prejudice to any other rights or claims the non-breaching party may have against the breaching party.
6.3. Force Majeure. If any party fails to perform its duties, obligations and responsibilities under this Lease because of acts of God, civil
commotion, embargoes, enemy or hostile governmental action, fire or other casualty, governmental regulations or restrictions, inability after reasonable attempts and efforts to obtain equipment, labor, materials or supplies, judicial orders, labor disputes, lockouts, strikes or other causes beyond the reasonable control of said party, then said party’s performance shall be excused for a period equal to the period of such cause for failure to perform.
7. Indemnification; Insurance.
7.1. Indemnification.
7.1.1. Generally. To the maximum extent permitted under California law, Lessee shall indemnify, hold harmless and defend Lessor and its parent, subsidiary or affiliated organizations, administrators, agents, attorneys, beneficiaries, conservators, custodians, directors, employees, executors, guardians, heirs, independent contractors, joint venturers, members, officers, partners, predecessors, representatives, servants, stockholders, successors, and all others acting for, under, or in concert with it, including associations, corporations, limited liability companies, and general or limited partnerships, past, present, and future, harmless of and from any and all actions, claims, costs, damages, expenses, liabilities
and losses, including, without limitation, attorneys’ fees and disbursements, arising out of or relating to in any way to the performance of Lessee’s duties, obligations and responsibilities under this Lease, and Lessee’s operation and use of the Equipment, except to the extent caused by the negligence or willful misconduct of Lessor.
7.1.2. Extent of Duty to Indemnify, Hold Harmless and Defend. Lessee’s duty to indemnify, hold harmless and defend Lessor under Section
7.1.1 is not limited in any way by any limitation in the amount or type of damages, compensation or benefits payable by or for the indemnifying party under worker’s or workmen’s compensation acts, disability benefit acts or other employee benefit acts.
7.1.3. Survival of the Indemnification Requirements. Each party’s duties, obligations and responsibilities under this Section 7.1 shall survive any expiration, termination, or cancellation of this Lease.
7.2 Insurance.
7.2.1. Generally. Lessee acknowledges, agrees, represents and warrants to Lessor that it has and shall maintain, at Lessee’s sole cost and expense without right of reimbursement from Lessor, insurance with a carrier or carriers acceptable to both parties, including Comprehensive or Commercial General Liability Insurance policy, Automobile Liability Insurance policy, and Worker's Compensation and Employer's Liability Insurance policies. Lessee shall pay all premiums and assessments charged for such insurance policies when due, owing and payable.
7.2.2. Amount of Coverage. All insurance coverages shall be in amounts described in this Section 7.2.2 and also for durations mutually agreeable to the parties. The Comprehensive or Commercial General Liability Insurance policy shall have a combined single limit of liability coverage for each
occurrence for bodily injury and property damage of at least One Million Dollars and No Cents ($1,000,000.00). The Automobile Liability Insurance policy shall have a combined single limit of liability for each occurrence for bodily injury and property damage of at least Five Hundred Thousand Dollars and No Cents ($500,000.00). The Employer's Liability Insurance shall have coverage for each accident of at least Five Hundred Thousand Dollars and No Cents ($500,000.00). Lessee shall also carry Worker’s Compensation insurance as required by statute.
7.2.3. Certificates of Insurance. Except for Workers’ Compensation Insurance, Lessee shall name Lessor as an additional insured under each of the aforementioned insurance policies. Lessee shall provide certificates of insurance for each of said insurance policies to Lessor as well as evidence of Lessee's payment of its premiums on said insurance policies upon Lessee's execution of this Lease and thereafter as either necessary, reasonable or when requested by Lessor. Said certificates of insurance shall provide that there shall be no cancellation or reduction of coverage, or material modification of the insurance policy without thirty (30) days prior written notice to Lessor.
7.2.4. Survival and Compliance with the Insurance Requirements. Each party's duties, obligations and responsibilities under this Section 7.2 shall survive any expiration, termination, or cancellation of this Lease. The failure of Lessee to obtain and then maintain the aforementioned insurance policies shall constitute a breach of this Lease.
8. General Provisions.
8.1. Attorneys’ Fees and Disbursements. In the event of any action at law or in equity between the parties hereto to enforce or interpret this
Lease, the unsuccessful party or parties to such litigation shall pay to the successful party or parties all costs and expenses, including reasonable attorneys’ fees, incurred therein by such successful party or parties and, if such successful party or parties shall recover judgment in any such action or proceedings, such costs, expenses and attorneys’ fees may be included in and as a part of such judgment. The successful party or parties shall be the party who is entitled to recover its costs of suit, whether or not the suit proceeds to final judgment. If no costs of suit are awarded, the court shall determine the successful party or parties.
8.2. Notices. Any and all notices, demands or communications required or desired to be given hereunder by any party shall be in writing and shall
be validly given or made to another party if served either personally or if deposited in the United States Mail, certified or registered, postage prepaid, return receipt requested. If such notice, demand or other communication is served personally, service shall be conclusively deemed made at the time of such personal service. If such notice, demand or other communication be given by mail, service shall be conclusively deemed given forty-eight (48) hours after the deposit thereof in the United States Mail, addressed to the person to whom such notice, demand or other
communication is to be given at the addresses set forth on the first page of this Agreement. Either party may change its address for purposes of this Section 8.2 by giving written notice to the other party.
8.3. Further Assurances. Each party shall execute and deliver any and all additional papers, documents or other assurances and shall perform
any further acts which may be reasonably necessary to carry out the intent of the parties and this Lease.
8.4. Binding Effect No Third Party Beneficiary. This Lease shall inure to and for the benefit of and be binding upon each party’s respective
agents, assigns and successors-in-interest. This Lease is made for the sole benefit of the parties and their respective agents, successors and permitted assigns and no other person or persons shall have any right of action hereon.
8.5. Entire Agreement; Modification. This Lease supersedes any and all other agreements, either oral or in writing, between the parties with
respect to the subject matter hereof and contains all of the covenants and agreements between the parties with respect to such matter. This Lease may be modified only by a written document signed by the parties.
8.6. Construction; Partial Invalidity; Waiver; Time is of the Essence. This Lease shall not be construed against the party drafting it but shall
be construed fairly and equitably as though it was the joint product of the parties. If any condition, covenant, provision or term of this Lease is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated. Notwithstanding any agreement between the parties, the waiver by any party of a breach of any provision of this Lease shall not be deemed a continuing waiver or waiver of any subsequent breach whether of the same or another provision thereof. Time is of the essence under this Lease.
8.7. Governing Law; Venue. This Lease shall be construed and enforced in accordance with the internal laws, and not the law of conflicts, of California (including, without limitation, Division 10 of the Commercial Code), where it is to be executed and delivered. This Lease is entered into in Kern County, California, and accordingly the only appropriate venue for a dispute under this Lease is in the Kern County Superior Court, Metropolitan Division.
8.8. Form W-9. Under Internal Revenue Code Section 6109, Lessor shall provide Lessee with the correct Employer or Taxpayer Identification Number in order for Lessee to file information returns to the Internal Revenue Service to report income paid to Lessor. Lessor shall complete all IRS required forms and return to Lessee as requested.
8.9. Separate Counterparts; Electronic Signatures. This Lease may be executed in counterparts (including by facsimile, e-mailed portable document format file, DocuSign or other electronic means), all of which shall constitute one document, and that by the signature(s) hereto, and the undersigned further agree that facsimile, e-mailed portable document format file, DocuSign or other electronic means signatures shall be effective for all purposes.
8.10. Effective Date. This Lease shall become effective as of the Effective Date upon its execution by all of the parties.