Common use of CHARACTERIZATION OF LEASE Clause in Contracts

CHARACTERIZATION OF LEASE. It is the intent of Lessor and Lessee that this Lease be a true lease and not a lease intended as security or a conditional sales agreement. Lessor and Lessee agree to treat this Lease as a true lease for income tax purposes. Lessor and Lessee agree that this Lease is a "finance lease" as that term is defined by Section 10103(a)(7) of the UCC. With respect to the Equipment subject to each Schedule, Lessee acknowledges and warrants as of the date of such Schedule that (i) Lessee has received a copy of the contract(s) pursuant to which Lessor acquired the Equipment (the "Supply Contract"), or (ii) Lessee has reviewed and approved the Supply Contract, or (iii) Lessor has informed Lessee in writing that Lessee may have rights under the Supply Contract and that Lessee should contact the supplier for a description of any such rights. LESSOR AND LESSEE AGREE THAT THIS LEASE IS A "NET" LEASE, AND LESSEE'S OBLIGATION TO MAKE RENTAL PAYMENTS AND PAY OTHER SUMS WHEN DUE AND OTHERWISE PERFORM ITS OBLIGATIONS UNDER THIS LEASE SHALL BE ABSOLUTE AND UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO OR AFFECTED BY OR REDUCED BY ANY ABATEMENT, REDUCTION, SET-OFF, DEFENSE, COUNTERCLAIM, INTERRUPTION, DEFERMENT, RECOUPMENT OR OTHER RIGHT WHICH LESSEE MAY HAVE AGAINST LESSOR, THE MANUFACTURER OR SUPPLIER OF THE EQUIPMENT OR ANY OTHER PERSON. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NO DEFECT OR UNFITNESS OF ANY ITEM OF EQUIPMENT NOR OTHER CLAIM REGARDING CONDITION OR USE OF THE EQUIPMENT SHALL RELIEVE LESSEE OF THE OBLIGATION TO MAKE RENTAL PAYMENTS, PAY ANY OTHER SUM WHEN DUE OR OTHERWISE PERFORM ANY OTHER OBLIGATION DUE TO LESSOR AND ITS SUCCESSORS AND ASSIGNS UNDER THIS LEASE.