Lease

j. Minimum lease payments.
i. From the standpoint of the lessee: The payments that the lessee is obligated to make or can be required
to make in connection with the leased property. However, a guarantee by the lessee of the lessor's debt
and the lessee's obligation to pay (apart from the rental payments) executory costs such as insurance,
maintenance, and taxes in connection with the leased property shall be excluded. If the lease contains a
bargain purchase option, only the minimum rental payments over the lease term (as defined in
paragraph 5(f)) and the payment called for by the bargain purchase option shall be included in the
minimum lease payments. Otherwise, minimum lease payments include the following:
(a) The minimum rental payments called for by the lease over the lease term.
(b) Any guarantee by the lessee 5 of the residual value at the expiration of the lease term, whether or
not payment of the guarantee constitutes a purchase of the leased property. When the lessor has
the right to require the lessee to purchase the property at termination of the lease for a certain or
determinable amount, that amount shall be considered a lessee guarantee. When the lessee agrees
to make up any deficiency below a stated amount in the lessor's realization of the residual value,
the guarantee to be included in the minimum lease payments shall be the stated amount, rather than
an estimate of the deficiency to be made up.
(c) Any payment that the lessee must make or can be required to make upon failure to renew or extend
the lease at the expiration of the lease term, whether or not the payment would constitute a
purchase of the leased property. In this connection, it should be noted that the definition of lease
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term in paragraph 5(f) includes "all periods, if any, for which failure to renew the lease imposes a
penalty on the lessee in an amount such that renewal... [continues]

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