Equipment Lease Agreement

Equipment Lease Agreement with an Independent Sales Organization

AGREEMENT made this day of by and between

Lessor and Lessee .

WHEREAS Lessor desires to lease certain equipment to the Lessee, and the Lessee desires to accept for lease certain equipment upon the following terms and conditions:

1. Lease of Equipment

Lessor agrees to lease to Lessee, and Lessee agrees to hire from Lessor, the equipment more fully described in the Approved Equipment Schedule annexed hereto ("Equipment"), and executed by the parties concurrently herewith and which may be, from time to time, hereafter executed by Lessee and accepted by Lessor.

2. Term of Lease

The term of this Agreement, as to all Equipment designated on the Approved Equipment Schedule, shall commence on the for the Equipment, and shall continue for an initial term of two years from the applicable Installation Date.

Thereafter, the term of this Agreement for all the Equipment shall be automatically extended for additional one year renewal terms until terminated.

This Agreement may be terminated by either party giving the other written notice three (3) months prior to the expiration of the initial term or any renewal term.

Any such termination shall be effective on the last day of the initial term or the last day of any successive renewal term.

Lessee's notice of termination shall be mailed to Lessor's corporate offices listed above.

Any notice of termination given by either party under this paragraph may not be revoked, without the written consent of the other party.

3. Rental and Payment

The monthly payment due from Lessee to Lessor for the Equipment is set forth in the Approved Equipment Schedule.

Rental shall begin on the Installation Date and shall be due and payable by Lessee in advance on the first day of each month.

If the Installation Date does not fall on the first day of a month, the first payment shall be a pro rata portion of the monthly rental, calculated on a thirty day basis, due and payable on the Installation Date.

Any payment which remains unpaid for thirty (30) days after the due date shall have a one and one-half percent (1 ½%) per month interest charge assessed against the unpaid balance from the date due until the date of payment.

4. Delivery and Installation

Lessor shall arrange for delivery of the Equipment to the installation site designated by Lessee on or about the date given to Lessee by Lessor after receipt and acceptance by Lessor of a signed lease agreement from Lessee.

In the absence of shipping instructions, Lessor shall select a common carrier on behalf of Lessee.

Lessor shall not be responsible for delays in delivery which are beyond Lessor's reasonable control.

Lessee shall undertake, at its own expense, to prepare and make available the installation site for each unit of Equipment.

After delivery, Lessor shall install, or cause to be installed, the Equipment, subject to the installation charges set forth on the Approved Equipment Schedule.

Upon installation, lessor shall notify Lessee that the Equipment is installed and ready for use, the installation shall be deemed to be completed and the date of Lessor's notification to Lessee shall be known as the Installation Date.

Lessor's installation report shall serve as such notification.

Any installation charges shall be due and payable by Lessee on the Installation Date and Lessor shall add such charges to its initial payment notice or invoice.

5. Shipment

The rental payments shown on the Approved Equipment Schedule annexed hereto and all shipments made hereunder are F.O.B. at the plant of each Equipment manufacturer identified in the Approved Equipment Schedule.

All transportation, rigging, drayage, insurance, and other costs of delivery of the Equipment to and from the delivery site shall be paid by Lessee, and if prepaid by Lessee, Lessor shall note the amount of such charges in the payment notice or invoice.

6. Title and Ownership

All Equipment leased hereunder is and shall remain the property of Lessor or its assigns and Lessee's interest therein is only that of Lessee.

Lessee further agrees that it will not pledge, loan, mortgage, or attempt in any other manner to dispose of the Equipment or to suffer any liens, encumbrances, or legal process to be incurred or levied on the Equipment.

Lessor may affix tags, decals or plates to the Equipment indicating Lessor's ownership and Lessee shall not permit their removal or concealment.

Lessor or its agents shall have free access to the Equipment at all reasonable times for the purpose of inspection and for any other purpose contemplated in this Agreement.

7. Location of Equipment

Lessee shall at all times keep the Equipment in its sole possession and control.

The Equipment shall not be moved from the location stated in the Approved Equipment Schedule without the prior written consent of Lessor.

8. Maintenance and Repairs

Lessee shall, during the term of this Agreement, at its expense, keep the Equipment in good working order and condition and make all necessary adjustments, repairs, and replacements and it shall not use or permit the Equipment to be used for any purpose which, in the opinion of Lessor, the Equipment is not designed or reasonably suited.

During the term of this Agreement, Lessee shall maintain an Equipment Maintenance Agreement with Lessor, and an Equipment Maintenance Agreement with the appropriate manufacturer for any Equipment not covered by Lessor's Equipment Maintenance Agreement, at its own expense.

Upon termination of this Agreement, Lessee shall, at its own expense, return the Equipment to Lessor in the same operating order, repair, condition and appearance as on the Installation Date, reasonable wear and tear excepted, with all engineering changes prescribed by the manufacturer prior thereto incorporated therein.

Lessee shall arrange and pay for any repairs which are necessary for the manufacturer or maintenance organization to accept the Equipment under contract maintenance at its then standard rates.

9. Default and Repossession

In the event Lessee shall default in making any payment due or in performing any other obligation required to be performed by Lessee and if such default remains uncured for a period of ten (10) days after written notice from Lessor, then Lessor shall have, among its other rights, the right to terminate this Agreement and repossess the Equipment.

In the event of termination, Lessor shall have the right to enter Lessee's premises for the purposes of such repossession and Lessee hereby consents to such entry.

10. Risk of Loss

When the Equipment is in transit or in the possession of Lessee, Lessee shall take good care of the Equipment and shall be solely responsible for any loss or damage to the Equipment.

During the term of this Agreement, Lessee shall, at its own expense, keep in effect an all risk insurance policy covering the Equipment for not less than its original cost to Lessor.

Lessor shall be named as a loss-payee on such policy, and a copy of such policy shall be delivered to Lessor.

Lessor shall secure insurance for the Equipment during shipment to Lessee's premises.

Lessee agrees to pay Lessor the charges for any such insurance upon receipt of an invoice therefor.

In the event that Lessee declines the foregoing insurance by written instructions to Lessor, Lessee shall be responsible for all risks of loss or damage to the Equipment upon delivery to the carrier.

11. Warranty

Lessor warrants that the Equipment delivered hereunder shall be free from defects in material or workmanship for a period of ninety (90) days after the date of delivery.

Lessor shall repair, or shall cause to be repaired, all Equipment subject to warranty.

Lessee shall not return any equipment to Lessor or to its Equipment suppliers without the prior written consent and instruction of Lessor or its suppliers.

It is the Lessee's responsibility to return defective Equipment to Lessor or its Equipment suppliers at Lessee's expense.

In the event Lessor determines that the Equipment returned for warranty correction is not defective within the terms of the warranty, Lessee shall be responsible for all costs of handling and transportation.

Lessor's sole responsibility under the warranty shall be, at Lessor's option, to either repair or replace any component which fails during the warranty period due to a defect in workmanship and/or material and provided Lessee has promptly reported same to Lessor in writing.

The above warranty is contingent upon proper use of the Equipment and does not cover equipment which has been modified without Lessor's approval, or which has been subjected to unusual physical or electrical stress, or on which the original identification marks have been removed or altered.

THE ABOVE IS A LIMITED WARRANTY AND IT IS THE ONLY WARRANTY MADE BY LESSOR. LESSOR MAKES AND LESSEE RECEIVES NO WARRANTY EXPRESS OR IMPLIED AND THERE IS EXPRESSLY EXCLUDED ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. LESSOR SHALL HAVE NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT FOR CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE STATED EXPRESS WARRANTY IS IN LIEU OF ALL LIABILITIES OR OBLIGATIONS OF LESSOR FOR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE DELIVERY, USE OR PERFORMANCE OF THE EQUIPMENT.

12. Option to Purchase

At any time during the initial term or renewal term of this Agreement, Lessee shall have the option, upon thirty (30) days' written notice, to purchase the Equipment leased hereunder.

If the Lessee elects to exercise this purchase option, the Lessee shall execute the Lessor Equipment Sales Agreement and any other associated documentation, and shall comply with all the terms of the Lessor Equipment Sales Agreement.

If the Lessee elects to exercise this purchase option, the Lessee shall be required to pay to Lessor the purchase price designated for the Equipment upon the terms provided in the Lessor Equipment Sales Agreement, which price shall be at Lessor's then prevailing price for the Equipment.

The Lessee shall be granted as a credit toward the purchase price, forty percent (40%) of all monthly payments paid under this Equipment Lease Agreement for the applicable Equipment.

13. Quiet Possession

Lessor agrees that Lessee shall quietly possess the Equipment subject to and in accordance with the provisions hereof so long as Lessee is not in default hereunder.

14. Infringement Indemnity

To the extent that Lessor has received from each of the Equipment manufacturers identified in the Approved Equipment Schedule an agreement to defend any claim or suit or proceeding brought against Lessor or Lessee based on a claim that the use or transfer of any Equipment delivered hereunder constitutes an infringement of any patent or property right in the United States, then Lessee shall be indemnified and defended against all such claims.

Lessee shall notify Lessor within ten (10) days after commencement of any suit and shall give fully authority, information and assistance to Lessor or such person as Lessor shall designate, for the defense of the suit.

Lessor shall not be responsible for any settlement or compromise made without its consent.

It is further provided that Lessor may, at any time, if it is concerned over the possibility of such an infringement, at its option and expense, replace or modify the items of equipment so that infringement will not exist, or remove equipment involved and refund to Lessee any pre-payments.

Lessor shall have no liability to Lessee under any provisions of this clause if any patent infringement or claim thereof is based upon the use of the Equipment delivered hereunder in connection or in combination with equipment, devices or software not supplied by Lessor or used in a manner for which the Equipment was not designated.

15. Liability

Except as expressly provided in this Agreement, Lessor shall not be liable for any loss or damage claimed to have resulted from the use of the Equipment or to be related in any way to the acquisition in the transaction to which this Agreement relates, regardless of the form of action, except for loss or damage resulting from the negligence of Lessor.

Lessee shall hold Lessor harmless from any such claims and shall indemnify it from any expense or cost incurred if any such claims are made.

IN NO EVENT SHALL LESSOR BE LIABLE TO LESSEE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR FOR ANY CLAIM THAT AROSE MORE THAN ONE YEAR PRIOR TO THE INSTITUTION OF SUIT THEREON.

Lessee shall indemnify and hold Lessor harmless for any liability, loss, claim or damage to persons or property arising out of Lessor's possession, operation or use of the Equipment or arising out of the fault or negligence of Lessee, its employees or agents.

16. Taxes

Lessee shall, in addition to the other amounts payable under this Agreement, pay all sales and other taxes, federal, state, or otherwise, however designated, which are levied or imposed by reason of the transactions contemplated by this Agreement.

Without limiting the foregoing, Lessee shall promptly pay to Lessor an amount equal to any such items actually paid, or required to be collected or paid by lessor.

17. Excusable Delays

Dates or times by which Lessor is required to render performance under this Agreement shall be postponed automatically to the extent that Lessor is prevented from meeting them by any causes beyond its reasonable control.

Non-performance of any of the obligations of Lessor to this Agreement due to delays beyond its reasonable control shall not be considered a breach of this Agreement.

18. Termination

Lessor shall have the right to terminate this Agreement:

(a) Upon ten (10) days' written notice in the event that Lessee, its officers or employees violates any provision of this Agreement including, but not limited to, payment;

(b) In the event Lessee terminates or suspends its business;

(c) In the event Lessee becomes insolvent, makes an assignment for the benefit of creditors, suffers or permits the appointment of a receiver, trustee in bankruptcy, or similar official for any substantial part of its business or assets;

(d) In the event Lessee shall avail itself of or become subject to any bankruptcy proceeding under the Federal Bankruptcy Code or any statute or any state relating to insolvency or the protection of the rights of creditors.

In addition to the right to cancel, Lessor shall receive reimbursement for its reasonable and proper cancellation charges.

Without limiting any of the foregoing, in the event of termination by reason of the Lessee's failure to comply with any of its obligations herein, the Lessee shall continue to be obligated for any payments due hereunder.

19. General

19.1 Entire Agreement

Each party acknowledges that it has read this Agreement, understands it, and agrees to be bound by its terms and further agrees that it is the complete and exclusive statement of the Agreement between the parties, which supersedes and merges all prior proposals, understandings and all other agreements, oral and written, between the parties relating to this Agreement.

This Agreement may not be modified or altered except by a written instrument duly executed by both parties.

19.2 Governing Law

This Agreement and performance hereunder shall be governed by and construed in accordance with the laws of the State of New York.

Any and all proceedings relating to the subject matter hereof shall be maintained in the courts of the State of New York or the Federal District Courts sitting in New York, which courts shall have exclusive jurisdiction for such purpose.

19.3 Enforceability

If any provision of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

19.4 Assignment

The Lessee may not assign without the prior written consent of Lessor, its rights, duties or obligations under this Agreement to any person or entity, in whole or in part.

19.5 No Waiver

The waiver or failure of either party to exercise in any respect any right provided herein shall not be deemed a waiver of any further right hereunder.