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-20- <br />remedies against the Vendor in default. Lessee shall advise Lessor of the steps it intends to take <br />in connection with any such default. Any amounts received by Lessee in respect of damages, <br />refunds, adjustments or otherwise in connection with the foregoing shall be paid to Lessor and <br />applied against Lessee’s obligations hereunder. <br /> Section 7.05. Advances. In the event Lessee shall fail to keep the Equipment in good <br />repair and working order or shall fail to maintain any insurance required by Section 7.02 hereof, <br />Lessor may, but shall be under no obligation to, maintain and repair the Equipment or obtain and <br />maintain any such insurance coverages, as the case may be, and pay the cost thereof. All <br />amounts so advanced by Lessor shall constitute additional rent for the then current Original Term <br />or Renewal Term and Lessee covenants and agrees to pay such amounts so advanced by Lessor <br />with interest thereon from the due date until paid at a rate equal to the Contract Rate (or the <br />Taxable Rate if then in effect) plus five percent (5%) per annum or the maximum amount <br />permitted by law, whichever is less. <br />ARTICLE VIII <br /> Section 8.01. Damage, Destruction and Condemnation. If, prior to the termination of the <br />Lease Term, (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is <br />damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any <br />part thereof shall be taken under the exercise or threat of the power of eminent domain by any <br />governmental body or by any person, firm or corporation acting pursuant to governmental <br />authority, (i) Lessee and Lessor will cause the Net Proceeds of any insurance claim or <br />condemnation award or sale under threat of condemnation to be applied to the prompt <br />replacement, repair, restoration, modification or improvement of the Equipment or such part <br />thereof and any balance of the Net Proceeds remaining after such work has been completed shall <br />be paid to Lessee or (ii) Lessee shall exercise its option to prepay the obligations hereunder in <br />accordance with Section 10.01(b) hereof. <br />If Lessee elects to replace any item of the Equipment (the “Replaced Equipment”) <br />pursuant to this Section 8.01, the replacement equipment (the “Replacement Equipment”) shall <br />be new or of a quality, type, utility and condition at least as good as the Replaced Equipment, <br />shall be of equal or greater value than the Replaced Equipment and shall provide at least the <br />same level of energy and/or operational savings expected in the aggregate from the Replaced <br />Equipment prior to such casualty, destruction or condemnation and shall have an expected <br />remaining useful life at least through the final Renewal Term. Lessee shall grant to Lessor a first <br />priority security interest in any such Replacement Equipment. Lessee shall represent, warrant <br />and covenant to Lessor that each item of Replacement Equipment is free and clear of all claims, <br />Liens, security interests and encumbrances, excepting only those Liens created by or through <br />Lessor, and shall provide to Lessor any and all documents as Lessor may reasonably request in <br />connection with the replacement, including, but not limited to, documentation in form and <br />substance satisfactory to Lessor evidencing Lessor’s security interest in the Replacement <br />Equipment. Lessor and Lessee hereby acknowledge and agree that any Replacement Equipment <br />acquired pursuant to this paragraph shall constitute “Equipment” for purposes of this Agreement. <br />Lessee shall complete the documentation of Replacement Equipment on or before the next <br />Rental Payment Date after the occurrence of a casualty event, or be required to exercise its <br />299