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VENDING MACHINE LEASE AGREEMENT <br /> <br />This vending machine lease agreement, entered into this 1st day of February, 2002, by and <br />between FM Vending, whose postoffice address is 2700 7th Avenue North, Fargo, ND 58102 <br />("Lessor"), and Cass County Jail, whose postoffice address is located in Fargo, ND ("Lessee"). <br />In consideration of the mutual covenants and agreements contained herein, both parties agree to <br />thc following: <br /> <br />Lessee hereby agrees to lease, from Lessor, various models and types of vending machines to be <br />located at the Cass County Jail (hereinafter referred to as Premises) for a period of one year <br />under the terms of this Agreement for thc initial term commencing March 1, 2002. Lessor shall <br />provide vending machines, on site service, routine stocking, cashless accounting system and <br />associated equipment to Lessee during the initial term in accordance with the terms of this <br />Agreement. This agreement shall automatically renew for a like period unless termination <br />notice, as provided for herein, is received at least thirty (30) days prior to the end of the initial <br />or any renewal term. <br /> <br />Both parties agree that Lessor will pay a commission to Lessee in the amount of 26.5% on gross <br />sales for candy/snack/convenience item sales; 15.0% on gross sales of sport drinks, juices and <br />water; and 20.5% on gross sales of bottled soda sales. Gross sales are defined as total sales less <br />any applicable sales taxes. Furthermore, both parties agree that Lessee shall, in all manner and <br />respects, be the sole operating entity for vending operations at the premises. <br /> <br />The vending machines are to be placed in a conspicuous location on the Premises approved by <br />Lessee and are to be offered for display and use. Lessee agrees to furnish electrical and water <br />connections to vending machines during the effective term. Both parties agree that Lessor shall <br />bear the entire cost of service and maintenance as required except that Lessee shall bear the <br />COSt. <br /> <br />Lessor or its agent shall have the authority to enter the premises for purposes of installing, <br />servicing, repairing or removing vending equipment leased pursuant to the provisions of this <br />Agreement. Lessor shall determine the location of each vending piece of equipment after <br />consulting with Lessee and subject to the approval of Lessee. Lessee agrees not to change the <br />approved location of any piece of vending equipment without the written consent of Lessor. <br />Lessor shall also have the right to enter the premises for purposes of removing the contents of <br />the vending equipment. The exercise of any right under this paragraph shall be done according <br />to a schedule given to Lessor by Lessee. Lessor shall use all reasonable means to ensure that <br />such rights are exercised in a manner that does not interrupt or interfere with Lessee's business. <br />Lessee agrees that, during the initial term of this agreement, they will not allow any other <br />person or Lessor to place food or beverage vending equipment on the premises without the <br />expressed written consent of Lessor. <br /> <br />Lessor shall service and maintain the vending equipment under this agreement as often as <br />necessary and keep the equipment in good working condition, clean, and in good appearance. <br />Lessee agrees to notify Lessor promptly of any machine needing service, either from an out of <br />stock or out of order condition. Lessor agrees to respond to any out of order and out of service <br />calls within two (2) hours and provide return to service within forty eight (48) hours. <br /> <br />Lessor agrees to assume liability for, and does hereby agree to indemnify, protect, save and hold <br />harmless Lessee from and against any and all liabilities, obligations, losses, damages, penalties, <br />claims, suits and judgments, attorney fees and other expenses or disbursements of any kind, <br />including damages for negligence of the contractor which becomes the obligation of Lessee <br /> <br />Vending Machine Lease Agreement Page I <br /> <br /> <br />