Master Equipment Lease Agreement

EXHIBIT 10.3(b)





MASTER EQUIPMENT LEASE AGREEMENT



Blue Rhino Corporation F27125 __________________________________ (Lessee) No.______________





104 Cambridge Plaza Drive, Winston-Salem, NC 27104 09/24/96 __________________________________________________ (Address) Date____________



Forsythe/McArthur Associates, Inc. ("FMA" or "Lessor"), by its acceptance hereof, agrees to lease to Lessee, and Lessee agrees to lease from FMA, in accordance with the terms and conditions hereinafter set forth, the equipment ("Equipment") described in equipment schedules ("Schedule(s)") which are executed from time to time by FMA and Lessee. Each Schedule shall refer to and incorporate by reference this Agreement and, when signed by the parties, shall constitute a separate lease (a "Lease") for the Equipment therein described on the terms and conditions stated therein and, to the extent not inconsistent with such Schedule, on the terms and conditions stated in this Agreement.



1. TERM OF LEASE: The term of a Lease as to any item of Equipment shall commence (the "Commencement Date") on the date set forth in the Schedule on which such item of Equipment is described (herein a "related Schedule") and shall continue in force thereafter until the Lease is terminated as to such item of Equipment by either party upon not less than 90 days prior written notice to the other party; provided, however, that a Lease shall in no event be terminated as to any item of Equipment prior to the expiration of the minimum term specified therefor ("Minimum Term") in the related Schedule, and that no notice of termination shall be effective if given more than 180 days before the date of termination. Any notice of termination given by either party may not be withdrawn without the written consent of the other party. Except as otherwise expressly provided herein, each Lease is irrevocable for the full term thereof and for the aggregate rental therein provided. If, after notice of termination is given by Lessee with respect to a Lease in accordance herewith, Lessee and FMA agree in writing to renew such Lease prior to the end of the Minimum Term thereof, such renewal shall become effective on the later of (i) the last day of the Minimum Term of such Lease, or (ii) the date 45 days after the date of such agreement to renew, and such Lease shall continue in force until the effective date of such renewal.



2. RENTAL CHARGES & TAXES: The monthly rental charge ("Monthly Rent") for each item of Equipment as set forth in the related Schedule shall begin on the Commencement Date and shall be due and payable by Lessee in advance on the first day of each month thereafter (except for the first payment which shall be a pro rata portion of the Monthly Rent, calculated on a 30-day basis, due and payable on the Commencement Date). All payments payable by Lessee under a Lease shall be absolute and unconditional and shall not be subject to any defense, setoff, counterclaim or xxxxxx for any reason whatsoever, and such amounts shall be and continue to be payable in all events.



Lessee covenants and agrees to pay when due or reimburse and indemnify and hold FMA harmless from and against all taxes, fees or other charges of any nature whatsoever (together with any related interest or penalties not arising from negligence on the part of FMA) now or hereafter imposed or assessed during the term of a Lease against FMA, Lessee or the Equipment by any federal, state, county, or local government authority upon or with respect to the Equipment or upon the ordering, purchase, sale, ownership, delivery, leasing, possession, use, operation, return or other disposition thereof or upon the rents, receipts or earnings arising therefrom or upon or with respect to any Schedule (excepting only federal, state and local taxes based on or measured by the net income of FMA or any franchise tax upon FMA measured by FMA's capital, capital stock or net worth). FMA shall be responsible for the filing of all personal property tax returns relating to the Equipment and shall pay all taxes indicated thereon on behalf of Lessee. Lessee shall reimburse FMA for all taxes paid by FMA which are the responsibility of Lessee hereunder within 10 days of receipt of FMA's invoice therefor.



3. OVERDUE PAYMENTS: For each payment of Monthly Rent or other sum due hereunder that is not paid when due, and for each month in which such payment remains past due, Lessee agrees to pay FMA a delinquency charge at the rate of 1.5% of such payment, provided that such a delinquency charge is not prohibited by law, otherwise at the highest rate Lessee can legally obligate itself to pay and/or FMA can legally collect. Any sum due hereunder other than Monthly Rent shall be considered past due 5 days after the due date shown on FMA's invoice therefor.



4. USE OF EQUIPMENT: Each item of Equipment will be kept by Lessee in its sole possession and control, will at all times be located at the location stated in the related Schedule, and will not be removed therefrom without the prior written consent of FMA. All costs and expenses of every nature that may be incurred in connection with the permitted movement of the Equipment between locations (including any additional property taxes or other taxes resulting from such movement) shall be borne by Lessee. if Lessee fails to so notify FMA and, as a result of such failure, FMA has paid or is required by the jurisdiction where the Equipment was originally located to continue to pay taxes of the sort for which Lessee is responsible under this Agreement, then Lessee shall reimburse FMA for such taxes, which payment (less FMA's reasonable costs and expenses) will be refunded to Lessee if and when FMA receives a corresponding refund from said jurisdiction. Lessee will not make or permit to be made any alteration or addition to the Equipment (other than manufacturer's approved engineering changes).



FMA shall not be liable to Lessee for any loss, damage or expense of any kind or nature whatsoever and howsoever, directly or indirectly, caused (including, without limitation, any loss of business) by (a) any item of Equipment, (b) the use, maintenance, repair, service or adjustment thereof, (c) any delay or failure to provide any maintenance, repair, service or adjustment thereto or (d) any interruption of service or loss of use thereof.



5. LOSS OF OR DAMAGE TO EQUIPMENT - INSURANCE: Lessee shall be responsible for and hereby assumes the entire risk of the Equipment being lost, damaged, destroyed, stolen or otherwise rendered unfit or unavailable for use from the date of its shipment to Lessee until the date of return to and receipt therefor by FMA. If any item of Equipment is lost, damaged, destroyed, stolen or otherwise rendered unfit or unavailable for use, Lessee shall give FMA immediate notice thereof and the Lease to which such Equipment is subject shall continue in full force and effect without any abatement in the Monthly Rent applicable to such item of Equipment. Lessee shall determine, and notify FMA, within 15 days after the date of the occurrence of xxxxx damage to any item of Equipment whether such item can be repaired. In the event Lessee determines that such item of Equipment can be repaired, xxxxxxxx at its expense, shall cause such item to be promptly repaired. If an item of Equipment is lost, destroyed or stolen, or if Lessee determines that a damaged item of Equipment cannot be repaired, Lessee shall, at FMA's direction, within 30 days of such occurrence, either replace the item with an



Page 1 of 4 identical item of Equipment, the title to which shall thereupon vest in FMA and which thereafter shall be considered the item of Equipment subject to the related Schedule with no abatement in the Monthly Rent applicable thereto or, in FMA's sole discretion, pay to FMA an amount equal to the sum of (i) all unpaid Monthly Rent in respect of such item of Equipment through the end of the Minimum Term applicable thereto as set forth in the related Schedule (or the last day of any extended term then in effect with respect to such item) and (ii) FMA's estimate of the fair market value of such item of Equipment at the end of the Minimum Term applicable thereto as set forth in the related Schedule (or at the end of any extended term then in effect with respect to such item). Upon such payment, Lessee's obligation to pay Monthly Rent for such item of Equipment shall cease.



Lessee shall cause the Equipment to be insured against loss or damage for not less than the insurance value set forth in the related Schedule, and shall carry comprehensive general liability and property damage insurance covering the Equipment and its use. All such insurance shall be in form and amount and with companies approved by FMA and shall name FMA (or any Assignee, as hereinafter defined) as an additional insured, as its interest may appear. Lessee shall pay the premiums for such insurance and shall deliver said policies or duplicates thereof or certificates thereunder to FMA, together with endorsements thereon or independent instruments whereby each insurer agrees that it will give FMA a right to 30 days written notice before said policies can be altered or cancelled and the right to payment of premium without obligation. The proceeds of such insurance, at the option of FMA, shall be applied (i) toward the replacement, restoration or repair of the Equipment or (ii) toward payment of the obligations of Lessee under the Lease to which such Equipment is subject. Lessee hereby appoints FMA as Lessee's attorney-in-fact to make claims for, receive payment of, and execute and endorse all documents, checks or drafts for, loss or damage under any said insurance policies.



6. MAINTENANCE, REPAIRS AND INSTALLATION: Lessee shall, at its expense, (a) obtain and keep in full effect, throughout the term of a Lease, a contract from the manufacturer of the Equipment subject to the Lease (or from another reputable computer maintenance organization approved by FMA) providing for standard maintenance service (as that term is defined by the manufacturer) and (b) otherwise maintain the Equipment in good working order and appearance and make all necessary adjustments and repairs thereto. Lessee will provide required suitable electric current to operate the Equipment and a suitable place of installation for the Equipment with all appropriate facilities as specified by the manufacturer. Lessee will grant access to the Equipment to FMA, its designee, or the organization providing computer maintenance services for the Equipment during normal working hours for inspection, repair, maintenance, installation of engineering changes and for any other reasonable purpose. Lessee shall immediately notify FMA of all details concerning any accident arising out of the alleged or apparent improper manufacture, functioning or operation of the Equipment. Lessee will at all times cooperate with the manufacturer of the Equipment so as to permit the prompt installation of all engineering changes on the Equipment as and when determined necessary or desirable by the manufacturer. Prior to termination of a Lease as to any item of Equipment, Lessee, at its sole expense, shall return such item of Equipment in the same condition as when received by Lessee, reasonable wear and tear resulting from proper use thereof alone excepted, to FMA at such location as shall be designated by FMA. If any item of Equipment is maintained by other than the manufacturer thereof, Lessee shall cause such item of Equipment to be eligible, at Lessee's sole expense, for such manufacturer's standard maintenance service prior to its return to FMA and shall provide suitable evidence thereof.



7. TITLE AND UPGRADE: Each item of Equipment shall remain personal property of, and the title thereto shall remain in, FMA or its Assignee exclusively, and Lessee shall have no right, title or interest therein and no right to purchase or otherwise acquire title to or ownership of such item except as set forth in the related Schedule. All replacement parts, additions and accessories (excluding feature additions and model changes, as those terms are defined by the manufacturer) incorporated in or affixed to the Equipment after the commencement of a Lease to which such Equipment is subject shall be the property of FMA. Any feature addition or model change ("Upgrade") shall be incorporated in or affixed to the Equipment only with the prior written consent of FMA. FMA shall have the right of first refusal to match any proposal for the purchase or lease of an Upgrade. If an Upgrade has been incorporated in or affixed to the Equipment and such Upgrade was not leased by FMA, FMA shall have the option to purchase such Upgrade at the end of the Minimum Term of the related Schedule for the fair market value thereof (based on the average of three appraisals from dealers who deal in equipment of that type, one selected by FMA, one by Lessee and one by the other two). If FMA does not purchase such Upgrade, Lessee shall, at the request of FMA (and absent such request, at its option, Lessee may), before the related Schedule terminates, at Lessee's expense, remove the Upgrade and restore the Equipment using identical components removed therefrom (if any).



Lessee shall at its expense protect and defend FMA's title to the Equipment against all persons claiming against or through Lessee, at all times keeping the Equipment free from any legal process or encumbrance whatsoever, including, but not limited to, liens, attachments, levies and executions (except any placed thereon by FMA), and shall give FMA immediate written notice of any such legal process or encumbrance and shall indemnify FMA from any loss caused thereby. Lessee shall execute or obtain from third parties and deliver to FMA, upon FMA's request, such further instruments and assurances as FMA deems necessary or advisable for the confirmation or perfection of FMA's rights hereunder.



In the event a Lease is determined to be a security agreement, Lessee hereby (i) grants to FMA a security interest in the Equipment subject thereto to secure the payment and performance of Lessee's obligations thereunder and (ii) authorizes FMA, at Lessee's expense, to cause the Lease (including a carbon, photographic or other reproduction thereof), or any statement or other instrument relating to the Lease showing t ...