Exhibit 10.1
COMMERCIAL EQUIPMENT LEASE
AGREEMENT
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LESSOR:
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Forbes Energy
Services, LLC
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LESSEE:
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ALICE
ENVIRONMENTAL SERVICES, LP
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ADDRESS:
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3000 S.
Business Hwy 281
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ADDRESS:
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P.O. Box
1455
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Alice, Texas
78332
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Alice, TX
78333
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Lessor, in reliance on
Lessee’s selection of the equipment described below
(“Unit” or “Unit(s)”), agrees to acquire
and lease the Units to Lessee, and Lessee agrees to lease the Units
from Lessor, subject to the terms and conditions below:
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1
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SEE EXHIBIT
A – ATTACHED AND INCORPORATED HEREIN AS IF FULLY RECITED FOR
ALL PURPOSES
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SEE EXHIBIT A
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SEE EXHIBIT A
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2
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3
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4
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Gross Lease Amount:
Fifteen Million One Hundred Eighty
Seven Thousand Eight Hundred Nineteen and 22/100 Dollars
($15,187,819.22)
Lease Payments to be
paid: 60 payments of Two
Hundred Seventy Six Thousand Four Hundred Eighteen and 30/100
Dollars ($276,418.30). At the conclusion of the lease term,
Lessee has the right, but not the obligation, to purchase all of
the equipment in Exhibit A for 1 payment of Five Million Three
Hundred Fifteen Thousand Seven Hundred Thirty Six and 65/100
Dollars ($5,315,736.65). The first lease payment is due
October 15, 2008 and monthly thereafter as set forth in this
agreement.
Effective Date:
October 15,
2008
Lease Term: 60
Months
Residual:
$5,315,736.65
Location of Unit(s):
Lessee shall have the right to
operate the units in the United States and Mexico.
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ADDITIONAL PROVISIONS:
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RIDERS:
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Delivery & Insurance
Supplement
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n/a
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TERMS AND CONDITIONS OF
LEASE
1. LEASE TERM:
The Lease term for each Unit shall
start on its Delivery Date (the date (a) Lessor executes this
Lease, (b) Lessor takes title to the Unit, or (c) Lessee
or its agent takes control or physical possession of the Unit,
whichever is latest), provided the Delivery Date is on or before
the utilization date stated above, and shall continue for the
number of months stated above. If the Delivery Date is not on or
before the utilization date, Lessee shall, at the option of Lessor,
assume Lessor’s obligations to purchase and pay for the Unit.
Lessee shall execute and send Lessor’s Delivery Supplement to
Lessor promptly after delivery of a Unit.
2. RENT: Lessee shall pay to Lessor, at P.O. Box 2108,
Alice, Texas 78333 or such other location Lessor designates in
writing, rent for each Unit as stated above starting (a) on
its Delivery Date if the rent is to be paid in advance, or
(b) one month (or other period as stated above) after its
Delivery Date if the rent is to be paid in arrears. An amount equal
to the first rent payment for each Unit must
accompany this document when it is submitted to
Lessor. If Lessor executes this document, the amount shall be the
first rent payment. If Lessor does not execute this document, the
amount shall be returned to Lessee. If Lessor does not receive a
rent payment on the date it is due, Lessee shall pay to Lessor, on
demand, a late payment charge equal to five percent (5%) of
the rent payment not paid when due or the highest charge allowed by
law, whichever is less.
3. NO ABATEMENT:
Lessee shall not be entitled to
abatement or reduction of rent or setoff against rent for any
reason whatsoever. Except as otherwise provided, this Lease shall
not terminate because of, nor shall the obligations of Lessor or
Lessee be affected by, any defect in, damage to, destruction of, or
loss of possession or use of a Unit; the attachment of any lien,
security interest or other claim to a Unit; any interference with
Lessee’s use of a Unit; Lessee’s insolvency or the
commencement of any bankruptcy or similar proceeding by or against
Lessee, or any other cause whatsoever.
4. DISCLAIMER OF
WARRANTIES: Lessee
acknowledges and agrees that Lessor is not the manufacturer of the
Unit(s) and that Lessee has selected each Unit based on
Lessee’s own judgment without any reliance whatsoever on any
statements or representations made by Lessor. AS BETWEEN LESSOR AND
LESSEE, THE UNIT(S) ARE PROVIDED “AS IS” WITHOUT ANY
WARRANTIES OF ANY KIND. LESSOR HEREBY EXPRESSLY DISCLAIMS a) ALL
WARRANTIES OF MECHANTABILITY, b) ALL WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE, AND c) ALL WARRANTIES AGAINST INFRINGEMENT OR
THE LIKE. Lessor assigns to Lessee its interest in any of the
manufacturer’s warranties on the
Unit(s).
5. POSSESSION, USE AND
MAINTENANCE: Lessee shall
not (a) use, operate, maintain or store a Unit improperly,
carelessly, unsafely or in violation of any applicable law or
regulation or for any purpose other than in the conduct of
Lessee’s business; (b) abandon a Unit; (c) sublease
a Unit without the prior written consent of Lessor; or
(d) create or allow to exist any lien, claim, security
interest or encumbrance on any of its rights hereunder. A Unit is
and shall remain personal property regardless of its use or manner
of attachment to realty. Lessor and its agent shall have the right
(but not the obligation) to inspect a Unit and maintenance records
relating to it, and observe its use. Lessee, at its expense, shall
maintain each Unit in good operating order, repair and condition
and shall perform maintenance at least as frequently as stated in
any applicable operator’s guide, service manual, or
lubrication and maintenance guide. Lessee shall not alter any Unit
or affix any accessory or equipment to it if doing so will impair
its originally intended function or use or reduce its value. Lessee
shall not make any “non-reversible” addition (as
defined for federal income tax purposes) to a Unit without the
prior written consent of Lessor. Any alteration or addition to a
Unit shall be the responsibility of and at the sole risk of Lessee.
If an Event of Default has occurred and is continuing, all parts,
accessories and equipment affixed to a Unit shall become property
of Lessor.
6. TAXES: Lessee shall promptly pay or reimburse Lessor
for all fees and taxes of any nature, together with any penalties,
fines or additions to tax and interest thereon (all of the
foregoing hereafter the “Impositions”), levied upon
Lessor by any taxing authority with respect to or in connection
with a Unit from the time it is purchased by Lessor until it is
returned to Lessor. Excluded, however, are taxes measured by
Lessor’s net income but not excluded are net income taxes
which by the terms of the statute imposing the tax expressly
relieve Lessee or Lessor from the payment of any impositions which
Lessee would otherwise be obligated to pay or reimburse. If Lessor
is not entitled to an equal deduction with respect to any
imposition which Lessee is required to pay or reimburse hereunder
and payment or reimbursement constitutes income to Lessor, then
Lessee shall also pay to Lessor the amount of any Impositions which
Lessor is obligated to pay in respect of (a) the payment or
reimbursement by Lessee and (b) any payment by Lessee made
pursuant to this sentence. Lessee shall prepare and file, in a
manner satisfactory to Lessor, any reports or returns that may be
required with respect to a Unit. For purposes of this section,
“Lessor” shall include any affiliated group, within the
meaning of Section 1504 of the Internal Revenue Code of 1986,
of which Lessor is a member for any year in which a consolidated or
combined income tax return is filed for the affiliated
group.
7. TAX INDEMNITY: This Lease is entered into on the basis that
Lessee shall be entitled to (a) depreciation deductions with
respect to a Unit, in accordance with Section 168(a) of the
Internal Revenue Code of 1986, as amended (the “Code”),
based upon the applicable depreciation method and recovery period
specified in Sections 168(b) and (c) of the Code as identified
by Lessee; and (b) for state income tax purposes, deductions
analogous to (a) (all of the foregoing hereinafter the
“Tax Benefits”). If Lessor, for any reason other than
those stated in (i) through (iv) below, shall lose or
lose the right to claim or, if there shall be disallowed, deferred
or recaptured with respect to Lessor, any of the Tax Benefits with
respect to any Unit (any of the foregoing hereafter a
“Loss”), then, within thirty (30) days after
written notice to Lessee by Lessor that a Loss has occurred, Lessee
shall pay Lessor an amount which, in the reasonable opinion of
Lessor, will cause Lessor’s net after tax rate of return over
the term of this Lease in respect to the Unit to equal the net
after tax rate of return that would have been realized if Lessor
had been entitled to its anticipated utilization of all of the Tax
Benefits. Lessor shall not be entitled to payment for any Loss
arising solely as a direct result of any of the following:
(i) a failure of Lessor to timely or properly claim the Tax
Benefits for a Unit; (ii) a foreclosure by any person holding
a lien through Lessor on any Unit, which foreclosure results solely
from an act of Lessor; (iii) a Casualty Occurrence, if the
Casualty Value in connection therewith has been paid by Lessee; or
(iv) the failure of Lessor to have sufficient taxable income
or tax liability to utilize the Tax Benefits. Lessor shall be under
no obligation to contest any action that may result in a Loss.
Lesse