Rent Lessee shall pay Lessors rent for the use of the Equipment pursuant to the terms of this Paragraph 3 (“Rent”). Rent shall accrue during the Initial Term, and Lessee shall pay Lessors Rent attributable to the Initial Term at the expiration of the Term (in connection with Lessee’s payment under its purchase obligation pursuant to Paragraph 7 below), subject to Lessee’s right to pay Rent currently as it accrues. Lessee shall pay Rent to Lessors on a quarterly basis during each of the First Renewal Term, the Second Renewal Term and the Third Renewal Term, in each case if Lessee exercises the applicable renewal option. Rent during the Initial Term shall be equal to an annual rate of twelve percent (12%) of the Purchase Price (as defined in the Sale and Leaseback Agreement, taking into account the dates on which each installment of the Purchase Price is actually paid to Lessee), compounded quarterly. The Rent during the First Renewal Term shall be equal to an annual rate of thirteen percent (13%) of the Purchase Price (compounded quarterly if Lessee fails to pay Rent currently as required by this Paragraph 3). Rent during the Second Renewal Term shall be equal to an annual rate of fourteen percent (14%) of the Purchase Price (compounded quarterly if Lessee fails to pay Rent currently as required by this Paragraph 3). Rent during the Third Renewal Term shall be equal to an annual rate of fifteen percent (15%) of the Purchase Price (compounded quarterly if Lessee fails to pay Rent currently as required by this Paragraph 3). If any Rent or other amount payable by Lessee is not paid within five days after the day on which it becomes payable, Lessee will pay on demand, as a late charge, an amount equal to 5% of such unpaid Rent or other amount but only to the extent permitted by applicable law. All payments provided for herein shall be payable to Lessors at the address specified in Paragraph 23 below, or at any other place designated by Lessors. For purposes of calculating the amount of Rent that accrues during any period, the Purchase Price shall be reduced by 100/105ths of any amounts treated as a reduction of Exercise Price in accordance with the last sentence of Paragraph 7 below, as of the date such amounts are paid to Lessors.
