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COMMERCIAL EQUIPMENT LEASE AGREEMENT

Equipment Lease Agreement

COMMERCIAL EQUIPMENT LEASE AGREEMENT | Document Parties: FORBES ENERGY SERVICES LTD. | ALICE ENVIRONMENTAL SERVICES, LP | Forbes Energy Services, LLC You are currently viewing:
This Equipment Lease Agreement involves

FORBES ENERGY SERVICES LTD. | ALICE ENVIRONMENTAL SERVICES, LP | Forbes Energy Services, LLC

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Title: COMMERCIAL EQUIPMENT LEASE AGREEMENT
Governing Law: Texas     Date: 11/14/2008

COMMERCIAL EQUIPMENT LEASE AGREEMENT, Parties: forbes energy services ltd. , alice environmental services  lp , forbes energy services  llc
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Exhibit 10.1

COMMERCIAL EQUIPMENT LEASE AGREEMENT

 

 

 

 

 

 

 

 

LESSOR:

  

Forbes Energy Services, LLC

  

LESSEE:

  

ALICE ENVIRONMENTAL SERVICES, LP

ADDRESS:

  

3000 S. Business Hwy 281

  

ADDRESS:

  

P.O. Box 1455

 

  

Alice, Texas 78332

  

 

  

Alice, TX 78333

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:

 

 

 

 

 

 

 

 

 

  

Description of Unit(s)

  

Serial#

  

Brand

1

  

SEE EXHIBIT A – ATTACHED AND INCORPORATED HEREIN AS IF FULLY RECITED FOR ALL PURPOSES

  

SEE EXHIBIT A

  

SEE EXHIBIT A

2

  

 

3

  

 

4

  

 

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.

 

 

 

 

 

 

ADDITIONAL PROVISIONS:

 

 

  

RIDERS:

Delivery & Insurance Supplement

 

 

  

n/a

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

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


 
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