EXHIBIT 3.8
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MASTER LEASE AGREEMENT
(CAPITAL LEASE)
THIS LEASE AGREEMENT executed in the City of Etobicoke on the 12th day
of August 1997.
BETWEEN:
DURA SKID INC., a company duly constituted under the
laws of the Province of Ontario and having its
principal place of business at 00 Xxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
(the "LESSEE")
AND:
BOMBARDIER FINANCE INC, a company duly constituted
under the laws of the Province of Alberta and having
a place of business at 0000-X 00xx Xxxxxx Xxxxx Xxxx,
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
(the "LESSOR")
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WHEREAS the Lessor, at the request and upon the instructions of the
Lessee and conditional upon the execution of this Agreement, has agreed to
purchase the Equipment (as hereinafter defined) for the sole purpose of leasing
the said Equipment to the Lessee for Lessee's use in its business or enterprise
in accordance with the terms and conditions of this Agreement;
WHEREAS the Lessee acknowledges that the Lessor is neither the
manufacturer, dealer or distributor of the Equipment nor an expert with respect
thereto, and that the Manufacturer and the Equipment have been selected by the
Lessee;
WHEREAS the Lessee desires to lease the Equipment from the Lessor and
the Lessor desires to lease the same to the Lessee, at the Rental (as
hereinafter defined), payable as set forth herein and subject to and upon the
terms and conditions hereinafter provided; and
WHEREAS the Lessor, as a condition of (i) its leasing to the Lessee the
Equipment and (ii) entering into this Agreement with the Lessee, has required
the Guarantor to provide to the Lessor the Guarantee (as hereinafter defined)
and the Guarantor desires to provide the foregoing;
NOW THEREFORE, in consideration of the premises and of the Rentals to
be paid and the mutual covenants hereinafter provided to be observed and
performed by the Lessee, the Lessor hereby agrees to lease to the Lessee and the
Lessee hereby agrees to lease from the Lessor, for the Term (as hereinafter
defined), the Equipment, subject to and upon the following terms and conditions
and, in consideration of the premises and the mutual covenants hereinafter
provided to be observed and performed, the Lessor and the Lessee hereby agree as
follows:
1. DEFINITIONS AND INTERPRETATION
1.1 The following terms and expressions, whenever used in this Lease Agreement
including the preamble hereof, or any Schedules, Supplement or Appendix hereto
or thereto, shall, unless the context otherwise requires, have the following
meanings, and such meanings shall be equally applicable to both the singular and
the plural forms of the terms defined:
"ACCEPTANCE CERTIFICATE" means an acceptance certificate issued as provided in
Clause 3 and substantially in the form set forth in Schedule 2 hereof;
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"AGREEMENT" means this Lease Agreement together with the recitals and schedules,
supplements and appendices (which form an integral part hereof) as originally
executed or to be executed by the parties hereto, as the same may be amended,
modified or supplemented from time to time in accordance with the terms hereof
or as rights or obligations hereunder may be assigned or transferred from time
to time in accordance with the terms hereof;
"BREAKAGE COSTS" mean the amount equal to the financial cost, if any, incurred
or engaged or to be incurred or engaged by the Lessor, directly arising out of
the payment to the Lessor of the Casualty Value (as defined in Clause 7.4
hereof) for the Equipment or any Unit thereof or of the Stipulated Loss Value,
as the case may be, or any part thereof, including, but without limiting the
generality of the foregoing, the financial cost of unwinding any funding
relating to the Purchase Price or the Purchase Price per Unit, as the case may
be, or any part thereof, liquidating or redeploying deposits or swaps or
reinvesting such funds, including its own funds where such amount of money shall
be calculated as at the date of the actual payment by the Lessee of the
aforesaid Casualty Value or Stipulated Loss Value, as the case may be, or any
part thereof payable under this Agreement as a result of the same event which
has resulted in such costs being or to be incurred or engaged by the Lessor. The
Lessor shall use reasonable efforts to minimize such costs;
"BUSINESS DAY" means any day, excluding Saturday, Sunday and any other day which
shall be in the City of Toronto, Province of Ontario, a legal holiday or a day
on which the principal financial institutions therein are required by law or by
local proclamation to close;
"CONTAMINANT" means any contaminant, pollutant, dangerous substance, waste,
toxic substance, special waste or hazardous substance as defined, judicially
interpreted or identified as such in or pursuant to any applicable law;
"DEFAULT RATE" means the rate of interest specified in Clause 5.2 hereof;
"DELIVERY DATE" means a Business Day on which the Equipment or any Unit thereof
is delivered to and accepted by the Lessee under this Agreement;
"DELIVERY LOCATION" means the location specified in the Acceptance Certificate;
"DOLLARS" means the lawful money of Canada;
"EQUIPMENT" means and includes the equipment specified and described in a Lease
Supplement and the Parts thereof (each such unit being referred to as a Unit),
the total Purchase Price of which shall not exceed $3,100,000.00;
"EVENT OF DEFAULT" means any of the events or circumstances set out in Clause 15
hereof;
"EVENT OF LOSS" means, in relation to a Unit or, where applicable, the
Equipment, any of the following events:
(a) actual, constructive or agreed total loss of such Unit;
(b) the destruction or damage of the Unit rendering it unfit for its
use by the Lessee in its commercial operations if repair is, in the
reasonable opinion of the Lessor, uneconomic;
(c) the disappearance or theft of the Unit which results in a loss of
possession or use thereof by the Lessee for a period in excess of
thirty (30) consecutive days;
(d) the condemnation, confiscation, seizure or possession of a Unit for
a period of more than thirty (30) consecutive days or the requisition
for use or hire of the Unit (other than as referred to in (e)) for a
period of more than thirty (30) consecutive days by any government;
(e) requisition of title, forfeiture or any compulsory acquisition
whatsoever of the Unit (otherwise than by requisition for use or hire)
by any governmental or competent authority or by any person acting or
purporting to act by authority of the same and whether de jure or de
facto for a period in excess of thirty (30) days;
(f) the non-use of the Unit for a period of thirty (30) days as a
result of action by any governmental or competent authority.
"FINAL PAYMENT DATE" means, for any specific Unit, the date specified in the
Lease Supplement related to such Unit;
"FIRST PAYMENT DATE" means for any specific Unit, the date on which the first
Rental is payable, which date is specified in the Lease Supplement related to
such Unit;
"GUARANTEE" means the guarantee to be executed by the Guarantor, substantially
in the form set forth in Schedule 4 hereof;
"GUARANTOR" means the Dura Products International Inc.;
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"INTEREST" means the interest specified in Clause 5.2 hereof;
"LAST RENTAL" means the amount of the Rental referred to in Clause 5.1 and
specified in the Lease Supplement;
"LEASE SUPPLEMENT" means a lease supplement in relation to this Agreement,
substantially in the form and substance set forth in Schedule 1 hereto, to be
entered into between the Lessor and the Lessee on or before the Lease
Commencement Date;
"LEASE COMMENCEMENT DATE" means, with respect to each specific Unit, the date
the Lessor acquires title to the Equipment or such other date agreed between the
parties, such date to be specified in a Lease Supplement;
"LEASE TERMINATION DATE" means, with respect to a Unit, the date specified in a
Lease Supplement, except as otherwise specified in the Lease Agreement;
"LEGAL OPINION" means a legal opinion to be issued to the Lessor and to its
legal counsel by the Lessee's legal counsel, the content of the said legal
opinion to be acceptable to the Lessor and to its legal counsel;
"LESSEE'S LETTER OF CREDIT" means one (or more than one) irrevocable letter of
credit to be issued by a Canadian banking institution acceptable to the Lessor,
at the request of the Lessee, for an amount equal to thirty-five percent of the
Purchase Price of the Equipment leased hereunder, the provisions of which to be
acceptable to the Lessor and to remain valid throughout the Term, and which,
providing absence of an Event Default, may be reduced as specified a each Lease
Supplement;
"LESSOR'S INTEREST" means Lessor's ownership, title to and property interest in
the Equipment and each Unit;
"LOST UNIT" means a Unit of the Equipment referred to in Clause 7 hereof;
"MANUFACTURER" means the Person specified in the relevany Lease Supplement;
"OPTION TO PURCHASE" means the Option to Purchase the Equipment as set out in
Clause 18 of this Agreement;
"PART" or "PARTS" means all appliances, components, accessories, instruments,
modules, parts, appurtenances, accessories, furnishings or other equipment of
any kind (other than a complete Unit) which may from time to time be
incorporated or installed in or attached to the Equipment or any Unit;
"PAYMENT DATE" means the date specified in a Lease Supplement;
"PERSON" means any natural person, partnership, unincorporated association,
corporation, trustee, joint venture, public utility and governmental body,
however constituted or designated;
"PRIME RATE" means the rate of interest established from time to time by the
Canadian Imperial Bank of Commerce as its reference rate then in effect for
determining interest rates for commercial loans made by said bank in Canadian
Dollars expressed as an annual rate;
"PURCHASE OPTION DATE" means, for a Unit, the date specified in Clause 18 of
this Agreement;
"PURCHASE OPTION PRICE" means for each Unit, the purchase price payable by the
Lessee upon the exercise of the Option to Purchase on the Purchase Option Date
as set out in Clause 18 of this Agreement;
"PURCHASE PRICE" means the sum paid by the Lessor to acquire the Equipment and
specified in the relevant Lease Supplement or such other amount which may be
mutually agreed by the parties;
"PURCHASE PRICE PER UNIT" means the sum specified in the relevant Lease
Supplement or such other amount which may be mutually agreed by the parties;
"RENTAL" means, with respect to a Unit, the amount of money referred to in
Clause 5 hereof and set forth in a
Lease Supplement;
"REPURCHASE AGREEMENT" means a repurchase agreement to be entered into between
the Lessor and the Lessee, upon terms and conditions acceptable to the Lessor,
substantially in the form and substance set forth in Schedule 6 hereto;
"SECURITY INTEREST" means any mortgage, privilege, encumbrance, charge, lien or
any security interest whatsoever, howsoever created or arising;
"STIPULATED LOSS VALUE" at any date means, with respect to the Equipment or to
any Unit thereof as the case may be, the amount determined in accordance with
Appendix "A" to a Lease Supplement, to be completed by the Lessor in accordance
with its normal rental/leasing practice;
"SUCCESSOR CORPORATION" has the meaning ascribed to it in Clause 10.2.7 hereof;
"TERM" means, with respect to each Unit, the period of time commencing on the
Lease Commencement Date referred to in Clause 3.1 and specified in a Lease
Supplement and expiring on and including the Lease Termination Date, the whole
as morefully set forth in a Lease Supplement;
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"THIS AGREEMENT", "HERETO", "HEREIN", "HEREOF", "HEREBY", "HEREUNDER" and
similar expressions refer to this Lease Agreement and not to any particular
clause, sub-clause, paragraph or other portion hereof, and include any and every
instrument supplemental or ancillary hereto or in implementation hereof
(including without restriction, all schedules referred to herein or therein and
attached hereto or thereto);
"UNIT" means one unit forming part of the Equipment.
1.2 The Schedules and the Lease Supplement referred to herein and attached
hereto or to any Lease Supplement are an integral part of this Agreement.
1.3 The headings of Articles, Clauses, Subclauses or paragraphs herein and the
Table of Contents are inserted for convenience only and shall not affect the
construction or interpretation of this Agreement.
1.4 In this Agreement, unless otherwise specifically provided, the singular
includes the plural and vice versa, "month" means calendar month, and "in
writing" or "written" includes printing, typewriting or any electronic means of
communication, capable of being visibly reproduced at the point of reception,
including by telecopy.
1.5 Each accounting term used in this Agreement has the meaning assigned to it
under generally accepted accounting principles in Canada unless otherwise
defined herein and reference to any balance sheet item or income statement item
means such items as computed from the applicable statement prepared in
accordance with generally accepted accounting principles in Canada.
1.6 Unless otherwise indicated in this Agreement, any reference to a time shall
mean local time in the city of Toronto, Province of Ontario, Canada.
1.7 Any act or deed required to be observed, performed or done hereunder falling
on a day other than a Business Day shall be observed, performed or done on the
next succeeding Business Day.
1.8 Any reference in this Lease Agreement to any statute, rule, regulation or
provision thereof shall be deemed to be a reference to such statute, rule
regulation or provision as amended, re-enacted, substituted for or replaced from
time to time. Any reference in this Agreement to an agreement shall be deemed to
be, except as otherwise expressly provided, a reference to such agreement as
amended, modified or supplemented from time to time.
2. AGREEMENT TO LEASE
2.1 Subject to and conditional upon the observance and performance by the
Lessee, to the entire satisfaction of the Lessor, of the Lessee's obligations
under this Agreement or pursuant hereto, and to the execution by the Lessee of
the Lease Supplement(s) as contemplated herein, the Lessor hereby agrees to
lease the Equipment to the Lessee and the Lessee agrees to lease and to accept
the Equipment from the Lessor, for the Term, on the terms and subject to the
conditions set out in this Agreement.
3. DELIVERY AND ACCEPTANCE
3.1 Delivery and acceptance of the Equipment shall take place on the Delivery
Date at the Delivery Location, or such other location as the Lessor and the
Lessee may agree upon in writing. Immediately upon such delivery and acceptance,
the Lessee shall become liable to pay to the Lessor the Rental for the Units so
delivered in accordance herewith (the "LEASE COMMENCEMENT DATE") and as more
fully specified in the relevant Lease Supplement.
3.2 Concurrently with the delivery and acceptance of the Equipment or of any
Unit thereof pursuant to Clause 3.1, the Lessee shall execute the Lease
Supplement and the Acceptance Certificate relating thereto and deliver same to
the Lessor. Each Lease Supplement creates a lease by Lessee from Lessor of the
Equipment described therein for the Term and the Rentals and upon the terms and
conditions of this Master Lease Agreement.
3.3 Execution and delivery of a Lease Supplement and of an Acceptance
Certificate for any Unit by the Lessee shall evidence and constitute
irrevocable, final and conclusive acceptance of such Unit by the Lessee for all
purposes hereof and shall irrevocably confirm that such Unit is satisfactory in
all respects and complies with the requirements of this Agreement.
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4. INSIGNIA, LOGO, REGISTRATION AND LICENSING
4.1 The Lessee shall neither paint, affix or otherwise apply nor allow any
Person to paint, affix or otherwise apply on the Equipment the name, initials or
any other insignia or logo of any Person, other than the Lessor, as a
designation of ownership. Notwithstanding the foregoing provisions of this
Clause 4.1, the Lessee may cause the Equipment to be lettered with the names or
initials or other insignia or logo customarily used by the Lessee on equipment
of the same or a similar type used by the Lessee for convenience of
identification of the rights of the Lessee to use the Equipment as permitted
under this Agreement and in conformity with all applicable laws and regulations.
4.2 The Lessee shall make the registrations, filings, deposits and recordings in
respect of this Agreement and the Equipment at the Lessee's sole cost and
expense. The Lessor shall be identified on each such registering, filing,
depositing and recording as the owner of the Equipment leased to the Lessee
pursuant to a long-term lease agreement. The Lessee shall forthwith furnish to
the Lessor, unless done by the Lessor on behalf and at the costs of the Lessee,
certified copies or other evidence, in form and substance satisfactory to the
Lessor, of all such registering, filing, depositing and recording on or before
the delivery of the Equipment and on every anniversary thereof and any renewal
thereof.
5. RENTALS, DEFAULT INTEREST AND LOSS OF EQUIPMENT
5.1 Subject to the other terms and conditions of this Lease Agreement, the
Lessee covenants and agrees to pay to the Lessor the Rentals specified in the
Lease Supplement related to the Unit or Equipment;
5.2 Upon a default in payment of any Rental, or of any other amounts payable by
the Lessee pursuant to this Lease Agreement, Interest thereon (i) shall be
payable on demand and (ii) shall accrue at the annual rate of 15% or five
percent (5%) above the Prime Rate whichever is the higher, together with
interest on all overdue interest and on all other sums due by the Lessee
hereunder at the same increased rate from the date of such default for so long
as such default shall continue, before and after demand and judgment (the
"Default Rate").
6. TITLE
6.1 It is hereby agreed that this Lease Agreement is a true lease agreement and
that notwithstanding delivery of the Equipment to the Lessee hereunder or any
other matter whatsoever, the Lessor shall retain the Lessor's Interest, and
ownership and title to the Equipment shall be reserved to the Lessor.
Notwithstanding the foregoing, all risk of loss of, or damage to the Equipment
shall pass to and shall be borne by the Lessee as of the Delivery Date of the
Unit(s). No right, title or interest in the Equipment shall pass to the Lessee
other than, conditional upon the Lessee's compliance with and fulfillment of the
terms and conditions of this Lease Agreement, the right to maintain possession
and use the Equipment for the Term. The Lessee, at its expense, will protect and
defend the Lessor's title to the Equipment from and against all claims, liens
and legal process of creditors of the Lessee and take such action as is
necessary to discharge any such claim, lien, or legal process.
7. PAYMENT
7.1 All payments to be made and other charges to be paid pursuant to this Lease
Agreement shall be made in Canadian Dollars, for value on the day such amount is
due and if such day is not a Business Day, on the Business Day next succeeding,
by payment or transfer of immediately available funds to the Lessor at the bank
or location advised by the Lessor to the Lessee.
AL payment to be made and other charges to be paid pursuant to this
Lease Agreement shall be remitted by the Lessee to the Lessor in cash or by bank
transfer as follows:
Bombardier Finance Inc.
0000 XxxxxxxxXxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx
XXX 00000
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7.2 The Lessee shall pay the Rentals, and any other amounts owing hereunder on
the due date thereof. Notwithstanding anything herein contained or the
provisions of any statute or law, or the provisions of any other agreement
between the Lessor and the Lessee, the obligations of the Lessee to pay such
Rentals and other amounts shall be absolute and unconditional under all
circumstances, including, without limiting the generality of the foregoing,
damage to or the loss, theft or destruction of the Equipment, or any Unit, Parts
or accessories thereof, from any reason or cause whatsoever (subject to the
provisions of Clause 7.4 hereof). The Lessee shall have no right or claim
whatsoever, present or future, against the Rentals or other payment due
hereunder and agrees to pay the Rentals and other amounts to become due
hereunder regardless of any claim in the nature of an abatement, reduction,
set-off or compensation or otherwise which may be asserted by Lessee or on its
behalf.
7.3 Except as otherwise expressly provided herein, this Agreement shall not
terminate, nor the respective obligations of the Lessor or the Lessee be
otherwise affected as a result of: any defect in the title, condition, operation
or fitness for use of, or any damage to, or loss of possession or use of, or
destruction of, all or any of the Units or of the Equipment from whatsoever
cause; the prohibition of or other restriction against the use of all or any of
the Units by the Lessee or any other Person or the interference with such use by
any Person; the invalidity or unenforceability or lack of due authorization of
this Agreement or any other document or instrument referred to herein; any
breach, fundamental or otherwise, by the Lessor of any of the representations,
warranties or covenants of the Lessor contained herein; or any other cause
whether similar or dissimilar to the foregoing, any present or future law to the
contrary notwithstanding, it being the intention of the parties hereto that the
Rentals and other amounts payable by the Lessee hereunder shall continue to be
due and payable in all events in the manner and at the times herein provided
unless the obligation to pay the same shall be terminated pursuant to the
express provisions of this Agreement.
7.4 Upon the occurrence of an Event of Loss with respect to any Unit (a "LOST
UNIT") at any time hereunder, the Lessee shall, promptly after it shall have
determined that an Event of Loss has occurred, notify the Lessor thereof. The
obligation of the Lessee to pay the Rentals shall continue without abatement
regardless of the occurrence of such Event of Loss. The Lessee shall pay to the
Lessor, on the earlier of the next succeeding Payment Date (or in the event such
Payment Date will occur within 5 days after such notification, on the following
Payment Date) or upon the receipt of the insurance indemnity (such date being
hereinafter called a "CASUALTY PAYMENT DATE") a sum equal to the CASUALTY VALUE
(as hereinbelow defined in this Clause) of such Unit suffering an Event of Loss
as of the date on which such payment is made (regardless of the date on which
the determination that the Unit has suffered an Event of Loss is made) together
with all relevant taxes and Breakage Costs and the Lessor will promptly furnish
or cause to be furnished to the Lessee, as and if needed, revised Appendices "A"
and "B" which shall form part of the relevant Lease Supplement.
Upon payment by the Lessee to the Lessor of the Casualty Value of any
Unit of Equipment having suffered an Event of Loss, and in the absence of any
Event of Default existing and continuing hereunder, and of the other amounts, if
any, due hereunder, the Lessor's Interest in such Unit will terminate and the
Lessee or its insurers, as the case may be, shall have the absolute right to the
possession of, title to, and property in such Unit without further transfer or
action on the part of the Lessor, except that the Lessor, if requested by the
Lessee, will execute and deliver to the Lessee, at the expense of the Lessee, a
xxxx of sale in the form set forth in Schedule 3 hereto and such other documents
requested by the Lessee, acting reasonably, in order to perfect such transfer.
The CASUALTY VALUE of each Unit of the Equipment suffering an Event of
Loss shall be deemed to be the Stipulated Loss Value with respect to such Unit
on the Payment Date immediately following the Casualty Payment Date.
For better certainty and notwithstanding any of the foregoing, the
Lessee shall, on the Payment Date of the Last Rental, pay to the Lessor the
Casualty Value, determined as aforesaid, of each Unit which has suffered or be
the subject of an Event of Loss during the Term and in respect of which the
Lessee has not previously paid the said Casualty Value pursuant to this Clause
7.
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8. CONDITIONS PRECEDENT
8.1 The obligations of the Lessor hereunder and under any Lease Supplement are
subject to the following conditions precedent being fulfilled to the
satisfaction of, or waived in writing by, the Lessor:
8.1.1 the receipt by the Lessor from the Lessee contemporaneously with
the signing hereof of the following:
(a) three duly executed originals of this Agreement;
(b) three duly executed originals of the Guarantee;
(c) three originals Legal Opinion;
(d) one certified copy of the certificate of incorporation
and by-laws of the Lessee;
(e) one certified copy of the certificate of incorporation
and by-laws of the Guarantor;
(f) certificate of the Lessee setting forth specimen
signatures of the individuals authorized to sign on
its behalf this Lease Agreement and the instruments,
agreements, certificates, papers and other documents
provided for or contemplated herein;
(g) a certificate of the Guarantor setting forth specimen
signatures of the individuals authorized to sign on
the Guarantee and the instruments, agreements,
certificates, papers and other documents provided for
or contemplated therein;
(h) a Certificate of Status with respect to the Lessee;
(i) a Certificate of Status with respect to the Guarantor;
(j) a certified copy of a resolution of the Lessee
authorizing the transactions contemplated by the Lease
Agreement and authorizing the Lessee's Letter of
Credit and authorizing the signatories to execute the
documentation on its behalf;
(k) a certified copy of a resolution of the Guarantor
authorizing the Guarantee and authorizing the
signatories to execute the documentation contemplated
thereby;
(l) Release, waiver and discharge of any third party who
may be claiming a security interest in or on the
Equipment or encumbrances affecting the Equipment (if
applicable) and evidence of registration thereof;
(m such other documents the Lessor may reasonably
request;
(n) payment of the legal fees and expenses of the Lessor.
8.1.2 the receipt by the Lessor from the Lessee, on or before each
Delivery Date, of the following:
(a) a timely notice of the forthcoming delivery of the
Equipment specifying the particulars of the Units, the
Purchase Price per Unit, their respective serial
numbers and such other information the Lessor may
request from the Lessee;
(b) the Lease Supplement and the Acceptance Certificate(s)
as required by Clause 3.2 hereof, duly executed by the
Lessee;
(c) the original of the Lessee's Letter of Credit;
(d) evidence of the insurance specified in Clause 13 of
this Agreement;
(e) evidence of the registrations, filings, deposits and
recordings as required by Clause 4.2 of this
Agreement;
(f) Release, waiver and discharge of any liens or
encumbrances;
8.1.3 the Lessor having acquired title to the Equipment from the
Manufacturer or from other Person, as the case may be, free and clear
of any Security Interest.
8.2 The terms and conditions of Clause 8.1 are inserted for the sole benefit of
the Lessor and may be waived by the Lessor only, in writing, in whole or in
part, with or without terms or conditions, without prejudicing the rights of the
Lessor to assert such terms and conditions in whole or in part. If any of the
said conditions are outstanding on the Delivery Date, the Lessor shall not be
under any obligation under this Agreement and shall not incur any liability
hereunder or at law, and the Lessee agrees and undertakes
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to indemnify the Lessor and hold the Lessor harmless in respect of any losses,
damages, charges or liabilities, including, without limiting the generality of
the foregoing, to pay to the Manufacturer of the Equipment the equivalent of the
Purchase Price or such other amounts specified in the Manufacturer's invoice
(s), which the Lessor may incur as a result of the Lessee's failure to comply
with the terms and conditions of this Agreement.
9. LESSOR'S REPRESENTATIONS, WARRANTIES AND DISCLAIMER
9.1 The Lessor hereby represents and warrants as follows:
(a) The Lessor is a corporation duly incorporated and organized
and validly subsisting under applicable law of the Province of
Alberta with all requisite corporate power and authority to
enter into and perform its obligations under this Agreement;
(b) The Lessor has taken all necessary legal action to authorize
the persons who execute and deliver this Agreement on behalf
of the Lessor, to execute and deliver the same and thereby
bind the Lessor to all of the terms and conditions of the same
and to act for and on behalf of the Lessor as contemplated
hereby;
(c) This Agreement constitutes the legal, valid and binding
obligation of the Lessor enforceable against the Lessor in
accordance with its terms, subject only to such qualifications
with respect thereto relating to creditors' rights generally
and the enforcement of equitable remedies; and
(d) so long as an Event of Default shall not have occurred and
then be continuing under this Agreement and any Lease
Supplement, the Lessor will not interfere with the quiet
enjoyment of the Equipment by the Lessee after the Equipment
has been delivered to the Lessee.
9.2 THE REPRESENTATIONS AND WARRANTIES OF THE LESSOR HEREIN SET FORTH IN THIS
CLAUSE ARE MADE TO THE EXCLUSION AND IN LIEU OF ALL OTHER REPRESENTATIONS OR
WARRANTIES OF THE LESSOR, WHETHER LEGAL, EQUITABLE, STATUTORY, CONTRACTUAL OR
CUSTOMARY, WRITTEN OR ORAL, EXPRESS OR IMPLIED, AND THE LESSOR HAS NOT MADE AND
DOES NOT HEREBY MAKE, NOR SHALL IT BE DEEMED BY VIRTUE OF HAVING LEASED THE
EQUIPMENT TO THE LESSEE PURSUANT TO THIS AGREEMENT TO HAVE MADE ANY
REPRESENTATION OR WARRANTY AS TO THE MERCHANTABILITY, DURABILITY, OPERATING
FITNESS, FITNESS FOR A PARTICULAR PURPOSE, DESIGN OR CONDITION OF THE EQUIPMENT
OR AS TO ITS QUALITY.
9.3 THE LESSEE ACKNOWLEDGES AND AGREES THAT:
* THE EQUIPMENT AND THE MANUFACTURER THEREOF HAVE BEEN SELECTED BY THE
LESSEE ALONE;
* NEITHER THE LESSOR NOR ITS EMPLOYEES OR AGENTS OR REPRESENTATIVES IS
A MANUFACTURER, DEALER OR DISTRIBUTOR OF THE EQUIPMENT OR EXPERT
WITH RESPECT THERETO;
* THAT THE MANUFACTURER OF THE EQUIPMENT IS NOT, AND HAS NEVER BEEN,
AN EMPLOYEE, AGENT OR REPRESENTATIVE OF THE LESSOR WITH RESPECT TO
THE EQUIPMENT;
ACCORDINGLY, THE LESSEE WITHOUT PREJUDICE TO ANY RIGHTS WHICH
THE LESSEE MAY HAVE AGAINST THE MANUFACTURER OF THE EQUIPMENT OR OTHER PERSONS,
HEREBY:
* RELEASES AND FOREVER DISCHARGES THE LESSOR FROM ANY AND ALL ACTIONS,
CAUSES OF ACTIONS, DEBTS, DAMAGES (WHETHER CONTRACTUAL OR TORTUOUS
AND WHETHER DIRECT OR INDIRECT,
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CONSEQUENTIAL OR INCIDENTAL), COSTS, EXPENSES, CLAIMS, DEMANDS,
RIGHTS OR DEFENSES WHICH, AT ANY TIME NOW OR HEREAFTER MAY ARISE
FROM OR RELATE TO THE EQUIPMENT.
THE LESSEE ACKNOWLEDGES AND AGREES THAT THE LESSEE HAS MADE OR SHALL
MAKE ALL APPROPRIATE AND PRUDENT STUDIES IN CONNECTION WITH THE SELECTION OF THE
EQUIPMENT AND ALL THE TESTS AND INSPECTIONS THEREOF, AS WOULD A CAREFUL AND
PRUDENT PURCHASER OR LESSEE CARRYING ON THE BUSINESS CONDUCTED BY THE LESSEE OR
A SIMILAR BUSINESS.
AS TO ALL MATTERS OF SELECTION, DESIGN, PATENTS, TRADE MARKS,
MATERIALS, MANUFACTURING, CONDITION, SAFETY, FITNESS, CAPACITY, PERFORMANCE AND
DURABILITY OF THE EQUIPMENT AND ALL MATTERS WHATSOEVER WITH RESPECT TO THE
ACCEPTABILITY, POSSESSION, USE AND OPERATION OF THE EQUIPMENT, THE LESSEE SHALL
LOOK ONLY TO, AND SHALL RELY UPON THE MANUFACTURER OF THE EQUIPMENT, AND NOT TO
OR UPON THE LESSOR OR THE LESSOR'S DIRECTORS, OFFICERS, EMPLOYEES,
REPRESENTATIVES OR AGENTS.
9.4 THE LESSOR SHALL HAVE NO RESPONSIBILITY OR LIABILITY UNDER THIS AGREEMENT TO
THE LESSEE OR ANY OTHER PERSONS WITH RESPECT TO:
(I) ANY LIABILITY, LOSS OR DAMAGE (WHETHER CONTRACTUAL OR TORTUOUS
AND WHETHER DIRECT OR INDIRECT, CONSEQUENTIAL OR INCIDENTAL) CAUSED
OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY ANY INADEQUACY OF
ANY OF THE EQUIPMENT OR DEFICIENCY OR DEFECT THEREIN;
(II) THE DELIVERY, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR
REPLACEMENT OF ANY OF THE UNITS; OR
(III) THE POSSESSION, USE OR OPERATION OF THE EQUIPMENT OR OF ANY
UNIT THEREOF.
THE LESSEE'S ACCEPTANCE OF THE DELIVERY OF THE UNITS SHALL BE
CONCLUSIVE EVIDENCE AS BETWEEN THE LESSEE AND THE LESSOR THAT THE UNITS SO
DELIVERED ARE IN ALL RESPECTS SATISFACTORY TO THE LESSEE, AND THE LESSEE SHALL
NOT ASSERT ANY CLAIM OF ANY NATURE WHATSOEVER AGAINST THE LESSOR BASED ON ANY OF
THE FOREGOING MATTERS REFERRED TO IN CLAUSE 9.
9.5 THE LESSEE ACKNOWLEDGES AND AGREES THAT THE EQUIPMENT WAS ACQUIRED BY THE
LESSOR IN STRICT COMPLIANCE WITH THE LESSEE'S REQUEST AND INSTRUCTIONS AND ONLY
FOR THE PURPOSE OF LEASING SAME TO THE LESSEE AND THAT, EXCEPT TO THE LIMITED
EXTENT OTHERWISE PROVIDED HEREIN, THERE ARE AND SHALL BE NO AGREEMENTS OR
CONDITIONS, EXPRESS OR IMPLIED, WRITTEN OR ORAL, STATUTORY, CUSTOMARY,
COLLATERAL OR OTHERWISE, ON THE PART OF THE LESSOR RESPECTING OR IN CONNECTION
WITH THE EQUIPMENT, AND THAT THE LESSOR HAS UNDERTAKEN THIS TRANSACTION STRICTLY
IN RELIANCE AND CONDITIONAL UPON THE PROVISIONS OF THIS CLAUSE 9. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING PROVISIONS OF THIS CLAUSE 9, THE LESSEE
AGREES THAT ANY LATENT DEFECT IN OR ANY FAILURE OF ANY OF THE UNITS SHALL BE
CONCLUSIVELY DEEMED NOT TO BE OR CONSTITUTE A FUNDAMENTAL OR OTHER BREACH HEREOF
BY THE LESSOR, OR A FAILURE OF PERFORMANCE OR OF CONSIDERATION HEREUNDER ON THE
PART OF THE LESSOR.
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9.6 TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE HEREBY WAIVES ANY RIGHTS
HEREAFTER CONFERRED TO STATUTE OR OTHERWISE WHICH MAY REQUIRE THE LESSOR TO
MITIGATE THE LESSOR'S DAMAGES UNDER THIS LEASE AGREEMENT OR WHICH MAY OTHERWISE
LIMIT OR MODIFY ANY OF LESSOR'S RIGHTS OR REMEDIES HEREUNDER.
10. LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1 The Lessee and represents and warrants as follows:
10.1.1 the Lessee is a corporation duly incorporated and validly
subsisting under the laws of the Province of its incorporation
specified in a Lease Supplement, with full corporate power and
authority to own its properties and to carry on its business as
presently conducted in each and every jurisdiction and to enter into
and perform its obligations under this Agreement.
10.1.2 this Agreement has been duly authorized, executed and delivered
by the Lessee, and constitute a legal, valid and binding obligation of
the Lessee, enforceable in accordance with its terms, subject only to
such qualifications with respect thereto relating to creditors' rights
generally and the enforcement of equitable remedies.
10.1.3 no approval is required from any public regulatory body or
Person with respect to the entering into or performance of this
Agreement by the Lessee or if any such approval is required, it has
been properly obtained and evidence thereof satisfactory to the Lessor
is being delivered to the Lessor concurrently with the execution of
this Agreement.
10.1.4 the entering into, delivery and performance of this Agreement by
the Lessee will not result in any breach of, or constitute a default
under any indenture, mortgage, trust, loan, creditor security agreement
or any other instrument, deed or agreement to which the Lessee is a
party or by which the Lessee may be bound, or contravene any provision
of any law, statute, rule or regulation to which the Lessee is subject,
or any judgment, decree, order, permit or franchise applicable to the
Lessee.
10.1.5 there are no actions, suits or proceedings pending or, to the
knowledge of the Lessee threatened against the Lessee, its properties
or affecting this Agreement or the transactions contemplated hereby
which could, if adversely determined, affect the carrying out of such
transactions.
10.1.6 it holds all licenses, certificates and permits from applicable
agency or governmental authority for the conduct of its business as it
is presently conducted.
10.1.7 it has delivered all necessary returns to all relevant taxation
authorities and it is not in default in the payment of any taxes due
and payable.
10.1.8 it is not in default under any agreement to which it is a party
or by which it may be bound which would have a material adverse effect
on its business, assets or condition.
10.2 The Lessee hereby covenants, as to itself and to each other, with the
Lessor that:
10.2.1 the Lessee will duly and punctually pay the Rentals (including
any Interest on amounts in default at the Default Rate) as well as all
other amounts due hereunder, on the dates, at the places and in the
manner mentioned herein.
10.2.2 if and when requested by the Lessor, it shall furnish to the
Lessor or shall cause to be delivered to the Lessor, (i) no later than
one hundred and twenty (120) days from the end of each fiscal year of
the Lessee, as long as Rentals and all other amounts due hereunder are
still outstanding, a copy of the Lessee's audited financial statements
for such year in the same form provided to shareholders of the Lessee,
and (ii) within sixty (60) days from the end of each quarter, the
Lessee's unaudited statement of profit and loss for each such quarter,
and a balance sheet as at the end of such quarter, all in reasonable
detail and signed by its Vice President, Finance.
10.2.3 on or before the date of the Lease Supplement in each calendar
year hereunder, the Lessee furnish to the Lessor, in such number of
counterparts or copies as may reasonably be requested by the Lessor, an
accurate statement signed by the Vice President, Finance of the Lessee,
containing the description and manufacturer's serial numbers of the
Equipment then leased hereunder and
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such other information regarding the use, maintenance, condition and
state of repair of the Equipment as the Lessor may reasonably request.
10.2.4 the Lessee shall prepare and deliver to the Lessor within a
reasonable time prior to the required date of filing (or, to the extent
permissible, file on behalf of the Lessor) any and all reports to be
filed by the Lessor with any federal, state, provincial, local or other
regulatory authority by reason of the interest of the Lessor in the
Equipment or the lease thereof to the Lessee.
10.2.5 The Lessee shall promptly notify the Lessor of any requirements
by any governmental authority (of which it has knowledge or should have
knowledge as an operator) which shall require any action to be taken by
the Lessor in consequence of its ownership of any Unit and the Lessee
shall promptly furnish to the Lessor from time to time such information
as may be required to be filed by the Lessor with any governmental
authority because of the Lessor's Interest in any Unit.
10.2.6 it shall preserve and maintain its corporate existence in every
jurisdiction in which the character of the property owned or the nature
of the business transacted by it makes licensing or qualification
necessary.
10.2.7 it will not enter into any transaction or series of transactions
(including by way of reorganization, consolidation, amalgamation,
merger, liquidation, transfer, sale or otherwise) whereby all or
substantially all of its undertakings, property and assets would become
the property of any other person, or, in the case of any such
amalgamation, of the continuing corporation or resulting corporation
therefrom, unless:
* i) no Event of Default has occurred and is subsisting or would
result therefrom; and
* ii) such transaction or series of transactions is effected between
any or all of the Lessee's parent or sister companies and such
transaction preserves the rights and powers of the Lessor under this
Agreement and does not increase the financial risks to the Lessor
under this Agreement; and
* iii) such transaction or series of transactions does not affect the
validity and the enforceability of any of the rights of the Lessor
hereunder; and
* iv) such transaction or series of transactions is effected with a
party other than pursuant to Clause 10.2.7 (ii) and:
(A) such other Person or continuing corporation
(herein called "SUCCESSOR CORPORATION") is a
corporation constituted under the laws of Canada or
of a Province thereof; and
(B) the Successor Corporation shall execute, prior to
or contemporaneously with the consummation of such
transaction, such instruments, if any, as are in the
opinion of the Lessor necessary or advisable to
evidence the assumption by the Successor Corporation
of liability for all of the obligations of the Lessee
under this Agreement; and
(C) such transaction or series of transactions, in
the opinion of the Lessor shall be upon such terms as
to preserve and not impair in any respect any of the
rights and powers of the Lessor under this Agreement
nor increase the risks to the Lessor under this
Agreement; and
(D) such transaction or series of transactions do not
affect the validity and the enforceability of this
Agreement.
Whenever the conditions hereinabove specified have been duly
observed and performed, the Successor Corporation shall possess and
from time to time may exercise each and every right and power of the
Lessee under this Agreement, in the name of the Lessee or otherwise and
any act or proceeding under any provision of this Agreement required to
be done or performed by any directors or officers of the Lessee may be
done and performed with like force and effect by the directors or
officers of such Successor Corporation.
10.2.8 it shall not at any time, directly or indirectly, create, incur,
assume or suffer or permit to exist any mortgage, pledge, lien,
privilege, charges, encumbrance or other security interest or any claim
on or with respect to any Unit leased hereunder and the subject of a
Lease Supplement, except (i) the respective rights of the Lessor and
the Lessee as herein provided, (ii) liens or privileges or other
encumbrances which result from claims against the Lessor for which the
Lessee
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is not responsible pursuant to the terms hereof, (iii) any
security interest created by the Lessor in any Unit and any liens or
privileges arising out of liabilities of the Lessor.
10.2.9 it agrees to pay the Lessor's legal fees and other expenses
incurred by the Lessor in the preparation and execution of the
transactions and the documents contemplated by this Agreement.
10.2.10 it shall not change its domicile without a thirty days prior
written notice of its intent thereof to the Lessor.
10.2.11 it shall register the Equipment leased hereunder in each
jurisdiction in which the Equipment will be used and registration is
required.
10.2.12 throughout the Term hereof, the Lessee shall, and the Guarantor
shall cause the Lessee to, locate the Equipment or of any Unit thereof
in the location(s) as specified in the Lease Supplement and in such
other locations as the Lessee may advise from time to time and the
Equipment or any Unit thereof shall not remain located in any other
location for any period of time in excess of fifteen (15) days without
a thirty days prior written notice by the Lessee of its intent to do so
to the Lessor, unless the Lessee has filed the appropriate
documentation to protect the interest of the Lessor in the Equipment,
and a copy thereof has been previously received by the Lessor.
10.2.13 it shall, throughout the Term (or any renewal thereof) maintain
at all time (unless otherwise indicated), the following financial
ratios:
(a) Liquidity (Quick) Ratio to be at or above 2,5:1 for
fiscal year 1997. For fiscal year 1998 and following,
Liquidity (Quick) Ratio to be at or above 2,0:1. This
ratio shall be calculated by dividing the sum of
Cash, Shorts Term Investments and Accounts
Receivable, by Current Liabilities.
(b) Leverage Ratio (Total Debt/Tangible Net Worth) shall
remain at or below 1,25:1 This ratio shall be
calculated by dividing the Total Liabilities by
Tangible Net Worth.
10.3 The representations, warranties and covenants contained in this
Clause 10, other than those in 10.2.9, shall be deemed to be repeated
by the Lessee on and as of each Delivery Date and on and as of each
Payment Date as if made with reference to the facts and circumstances
existing on each such date.
11. MAINTENANCE, ALTERATIONS, INSPECTIONS AND USE
11.1 The Lessee shall, at its sole cost and expense, cause the Equipment to be
maintained and repaired, with no equipment discrimination toward the Equipment,
by competent and duly qualified personnel only, in a careful and proper manner
in accordance with the repair standards applicable to the Equipment and in
compliance with all relevant and applicable laws, statutes, rules and
regulations applicable or in any way related to the repair and maintenance of
the Equipment in every jurisdiction in which the Equipment may be maintained or
repaired, and otherwise keep the Equipment which is subject to this Agreement in
good order and repair, ordinary wear and tear excepted in accordance with all
Manufacturer's manuals, instructions, recommendations and warranties All parts,
mechanisms and devices, other than the profile extrusion dyes, installed or
affixed to the Equipment shall immediately, without further act, become part of
the Equipment for all purposes of this Agreement without cost to the Lessor. The
Lessee shall not alter or add to the Equipment without the Lessor's prior
written consent. All permitted alterations, additions and improvements of
whatsoever kind or nature made to the Equipment shall become the property of the
Lessor upon expiration or earlier termination of this Lease Agreement, except
that any of the foregoing which are not required pursuant to this Clause 11 and
are removed without damage to the Equipment, without adversely affecting the
Equipment's commercial value, useful life or originally intended use shall
remain the property of the Lessee.
11.2 The Lessor shall have the right (but no obligation), upon reasonable notice
to the Lessee and at the Lessor's sole cost and expense, by its authorized
representatives, to inspect the Equipment at all reasonable times during the
Lessee's business hours at such location or locations designated by the Lessee,
to review the state and condition of the Equipment and to confirm to the Lessor
the existence and proper maintenance thereof; provided, however, that the Lessee
shall not be liable, except in the case of gross negligence of the Lessee, or of
its employees or agents, for any damage, injury to, or the death of any Persons
exercising on behalf of the Lessor, the rights of inspection granted hereunder.
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11.3 The Lessee shall cause the Equipment to be stored, used and operated by
competent and duly qualified personnel only, in a careful and proper manner and
for lawful purposes only, in compliance with all relevant laws, statutes, rules
and regulations applicable or in any way related to the storage, use and
operation of the Equipment in every jurisdiction in which the Equipment may be
stored, used or operated including, without limitation, all such laws, statutes,
rules and regulations relating to the property of the environment or the
transportation of polluting or hazardous substances.
11.4 The Lessee shall cause the Equipment to be stored, used, operated,
maintained and repaired only within the territories of the Province of Ontario,
Canada. Further, the Lessor shall, prior to the removing ofany Unit from the
location specified in a Lease Supplement and relocating any such Unit in the
Province of Ontario, advise the Lessor in writing and the provisions Clause 4
shall apply mutadis mutandis.
12. INDEMNIFICATION
12.1 The Lessee shall indemnify and hold harmless the Lessor against and from
any and all charges and claims made against the Lessor, and against any and all
expenses, damages (whether contractual or tortuous and whether direct or
consequential), losses and liabilities (including, without limitation,
reasonable lawyers' fees and expenses, patent liabilities, product liabilities,
penalties and interest, liabilities arising from the presence or release or
possession of any Contaminant in any way related to the Equipment), or damage to
or impairment of the natural environment in any way related to the Equipment,
which the Lessor may incur in any manner by reason of entering into or of the
performance of this Agreement or by reason of the ownership of any Unit, or
which may arise in any manner out of or as the result of the ordering, purchase,
sale, lease, use, operation, maintenance, condition, delivery, transshipment,
rejection, storage or return of any Unit under this Agreement or in connection
therewith or the occurrence of any Event of Default hereunder or any event which
with the giving of notice, or lapse of time, or both, would become an Event of
Default. The Lessee shall further indemnify and hold harmless the Lessor against
and from any and all charges, claims, expenses, losses and liabilities on
account of any accident in connection with the possession, storage, use,
operation or condition of any Unit resulting in damage to property or the
environment or injury or death to any Person. The indemnities arising under this
Clause 12 shall survive the performance and completion of all other obligations
under this Agreement, the sale, assignment, transfer or other disposition of
this Agreement or any of the Equipment by the Lessor, and the termination of
this Agreement. In case any action, suit or proceeding is brought against the
Lessor in connection with any claim indemnified against hereunder by the Lessee,
the Lessee may, and upon the request of the Lessor shall, at the Lessee's
expense, defend such action, suit or proceeding, or cause the same to be
defended by counsel selected by the Lessee and acceptable to the Lessor and, in
the event of any failure by the Lessee to do so, the Lessee shall pay all costs
and expenses (including, without limitation, reasonable lawyers' fees and
expenses) as incurred by the Lessor in connection with such action, suit or
proceeding. Notwithstanding anything contained in this Agreement, the Lessee
shall not be obliged to so indemnify the Lessor in the event of the Lessor's
gross negligence or willful misconduct.
12.2 Upon the payment in full of any indemnity pursuant to this Clause 12 by the
Lessee, and provided that no Event of Default (or other event which with lapse
of time or notice, or both, would constitute an Event of Default) shall have
occurred and be continuing, either hereunder or under any other agreement
entered into between the Lessee and the Lessor, or between companies related
thereto or in the same group of companies, the Lessee may, upon written request
to the Lessor, be subrogated to any right of the Lessor in respect of the
matters against which such indemnity has been paid. (In the event of such
subrogation by effect of law, notwithstanding the foregoing, the rights of the
Lessee or of the Guarantor, as the case may be, shall be subordinated to the
rights of the Lessor, until full payment of all amounts due to the Lessor or a
related company are paid in full by the Lessee or a related company).
12.3 (a) The Lessee shall pay and indemnify and hold the Lessor harmless against
and from all taxes, withholdings, duties, levies, registration fees and other
imposts or charges (together with all interest, penalties or fines thereon or
other additions thereto), whether foreign or domestic, (other than corporation
income taxes and other than taxes paid by the Lessee to the Lessor and which
Lessor had to remit to any relevant authority) incurred by or imposed, levied or
assessed against the Lessor in connection with the financing, purchase, lease,
ownership, delivery, use, import or export, return or sale of the Equipment
(collectively, the "TAXES").
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17
(b) In the event any reports with respect to the Taxes are required to
be made, the Lessee shall either make such reports in such manner as to show the
interests of the Lessor in the Equipment, or notify the Lessor of such
requirement, and shall make such reports in such manner as shall be satisfactory
to the Lessor.
(c) In the event that, as long as any part of the Rentals or any other
amount payable under this Agreement are still outstanding, the Lessee becomes
liable for the payment or reimbursement of any Taxes pursuant to this Clause 12,
such liability shall continue, notwithstanding the expiration of this Agreement,
until all such Taxes are paid or reimbursed by the Lessee.
(d) The Rentals and all other sums payable by the Lessee to the Lessor
under this Agreement, including, without limitation the Casualty Value, the
Stipulated Loss Value, the Breakage Costs and the Purchase Option Price are
exclusive of any goods and services tax, sales tax, value added tax or similar
tax payable in respect thereof, wheresoever imposed. The Lessee shall in
addition to any other sums payable by the Lessee hereunder, pay to the Lessor
the amount of any such goods and services tax, sales tax, value added tax or
similar tax as may be required from time to time by law.
(e) If and to the extent that any sums payable to the Lessor by the
Lessee under this Agreement by way of indemnity or otherwise prove to be
insufficient, by reason of any taxation suffered thereon, for the Lessor to
discharge the corresponding liability to the relevant third party, or to
reimburse the Lessor for the cost incurred by it in discharging the
corresponding liability to a third party, the Lessee shall pay to the Lessor
such additional sums as (after taking into account any taxation suffered by the
Lessor thereon) shall be required to make up the relevant deficit together with
interest on the amount of such deficit at the Default Rate until payment by the
Lessee (after as well as before judgment).
If any sums (the "INDEMNITY SUM") constituting (directly or indirectly)
an indemnity to the Lessor under this Agreement or under the Guarantee, but paid
by the Lessee (or by the Guarantor, as the case may be) to any person other than
the Lessor, shall be treated as taxable in the hands of the Lessor and which
would not otherwise have been payable by the Lessor, the Lessee shall reimburse
the Lessor for any such Taxes suffered by it in respect of the indemnity sum
(after taking into account any taxation suffered by the Lessor on the
compensating sum) together with Interest thereon at the Default Rate (together
the "COMPENSATING SUM") calculated from the time of payment of any such Taxes by
the Lessor to the time of receipt of the Compensating Sum by the Lessor from the
Lessee.
13. INSURANCE
13.1 The Lessee shall, at its own expense, subscribe and maintain in effect in
every jurisdiction in which any of the Equipment or any Unit thereof is parked,
stored, possessed, used, operated, maintained or repaired, every minimum public
liability insurance (including insurance related to damage to the environment),
which is mandatory under the federal, state, provincial or local laws, statutes,
rules or regulations of the Province of Ontario or of any province of Canada
having jurisdiction on or over the Equipment, if any, in respect of the
Equipment, and, if necessary, such additional public liability insurance in
respect of the Equipment so that the resulting coverages for bodily injury
(including death) and property damage shall be for an amount of not less than
the amount specified in a Lease Supplement.
The Equipment, subject to an insurance deductible to be specified in a
Lease Supplement related to the Unit so leased hereunder, shall be kept insured
by the Lessee at the full actual cash value, (such actual cash value to be not
less than the Stipulated Loss Value), against all risks (including earthquake
and flood) of loss or damage.
All insurance referred to in this Clause 13 shall be in the joint name
of the Lessor and the Lessee with loss payable to the Lessor as its interest in
the Equipment may be, irrespective of any breach of warranty or other act or
omission of Lessee. The Lessee shall furnish the Lessor concurrently herewith
(or as otherwise specified in Clause 8.1.2 hereof, as the case may be) a
certificate of insurance and a copy of such insurance policy(ies) and a letter
from its insurance brokers, all evidencing, in terms and of substance
satisfactory to the Lessor, the coverage required herein, and said certificate
of insurance shall provide for thirty (30) days' notice of expiration,
cancellation, renewal or amendment by the insurer to the Lessor.
The Lessee shall ensure that all insurance policies required pursuant
to this Clause 13 are occurrence-based. Any insurance policy required pursuant
to this Clause 13 under which coverage is
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contingent upon the receipt or report of a claim (claim made basis) or of a
circumstance which might give rise to a claim during the policy period and any
renewal or replacement of such policy whether before or after the Lease
Termination Date, in relation to the Equipment, the location thereof and the
operations of the Lessee or any of them, and any discovery period or extension
of coverage under any such policy, shall name the Lessor as insured.
Furthermore, any such policy shall provide for a discovery period extending
coverage granted by the insurer for a period of not less than three years after
the effective date of cancellation or expiry of such policy. The Lessee
undertakes to purchase such discovery coverage under all such policies on the
earlier of i) the date on which any such policy shall be canceled or shall
expire without immediate renewal or replacement; or ii) the Lease Termination
Date.
14. SECURITY INTEREST
14.1 Notwithstanding that this Agreement is a true lease, in the event that it
is determined to be a transaction intended as financing lease transaction, the
Lessee hereby grants to the Lessor a security interest in favor of the Lessor in
the Equipment, the proceeds of any sale thereof, any sublease thereof, any
insurance proceeds with respect thereto and any other rights of the Lessee,
tangible or intangible, in and to the Equipment and in this Lease Agreement as
security for the payment of the Rentals and all other amounts of money due and
payable by the Lessee to the Lessor hereunder and the payment and performance of
all other present and future obligations, direct or indirect, consequential or
incidental, absolute or contingent, of the Lessee to the Lessor evidenced by or
arising pursuant to or in respect of this Lease Agreement or the transactions
contemplated hereunder. Furthermore, the Lessee hereby assigns and transfers to
the Lessor and grant to the Lessor a security interest in all of the Lessee's
equity in the Equipment and all its rights and interest therein or herein,
hereunder or at law as security for the performance of all of the Lessee's
obligations under this Agreement. The Lessee shall (or, if requested by the
Lessee, but at the Lessee's cost and expense, the Lessor will) prepare for the
Lessor's review all of the documentation necessary to protect and perfect the
security interest of the Lessor in the above and will file, record or register
such documentation at the Lessee's sole expense in all applicable jurisdictions
as requested by the Lessor and shall provide the Lessor with evidence thereof.
15. DEFAULT AND REMEDIES
15.1 The occurrence of any one or more of the following events (herein referred
to as the "Events of Default") shall constitute an Event of Default under this
Agreement:
(a) the Lessee fails to make any payment due hereunder in the manner
and by the date provided herein;
(b) the Lessee fails, at any time, to procure and maintain any of the
insurance coverage prescribed herein;
(c) the Lessee shall make or permit any unauthorized assignment or
transfer of this Agreement;
(d) the Lessee shall default in the observance or performance of any
other of the covenants, conditions and agreements on the part of the
Lessee contained herein and such default shall continue and remain
uncured for a period of thirty (30) days from the date the Lessor
notifies the Lessee of such default;
(e) the Lessee or the Guarantor shall become insolvent, commit any act
of bankruptcy, or if bankruptcy proceedings are begun by or against the
Lessee or the Guarantor, or if a receiver is appointed for the Lessee
or the Guarantor, or the Lessor shall reasonably determine the Lessee
or the Guarantor faces a significant risk of imminent insolvency;
(f) the Lessee or the Guarantor or any other company related thereto or
of the same group of companies shall default, as such term is defined
therein, under any other agreement (of any kind whatsoever, including
any other Installment sale agreement (conditional sale agreement) or
lease agreement) it may have with any Person (excluding for the purpose
hereof the Lessor and any company related thereto or of the same group
of companies), whether such agreement now exists or shall hereafter be
created and such default shall involve any risk of sale, forfeiture or
loss of any of the Equipment or endanger any of the rights or interests
of the Lessor herein, the whole subject
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to the provisions of Clause 7.4 hereof;
(g) the Lessee or the Guarantor ceases or threatens to cease to carry
on its business or to operate its enterprise;
(h) an encumbrancer takes possession of any substantial part of the
assets of the Lessee or of the Guarantor, as the case may be, thereby
impairing the operations of the Lessee or the Guarantor, or if a
seizure, distress or execution or any similar process is levied or
enforced thereagainst and remains unsatisfied for such period as would
permit such substantial part thereof, to be sold thereunder;
(i) if a writ, execution, attachment or similar process is issued or
levied against all, or a substantial portion of, the property of the
Lessee or of any Guarantor in connection with any judgment against the
Lessee or the Guarantor which affects the business and property of the
Lessee or the Guarantor, and such writ, execution seizure, attachment
or similar process is not released, bonded, satisfied, discharged,
vacated or stayed within 30 days after its issuance or levy unless
diligently contested by the Lessee or the Guarantor in good faith and
by appropriate proceedings;
(j) if the Lessee or the Guarantor or any company related thereto or of
the same group of companies fails to pay at maturity, or, in the event
a period of grace is provided, within any such applicable period of
grace, any obligation for monies borrowed or guaranteed or fails to
observe or perform any term, covenant or agreement contained in any
agreement by which it is bound evidencing or securing monies borrowed
or guaranteed, for such period of time as would cause or permit
(assuming the giving of appropriate notice if required) the holder or
holders, or beneficiary or beneficiaries, thereof or of any such
obligations issued thereunder to cause acceleration of the maturity
thereof or of any such obligation, if such failure on the part of the
Lessee or of the Guarantor could adversely affect the performance by
the Lessee of its obligations hereunder;
(k) if the Lessee or the Guarantor or any other company related thereto
or of the same group of companies shall default, as such term is
defined therein, and such default is continuing, under any other
agreement of any kind whatsoever it may have with the Lessor or any
other company related thereto or of the same group of companies,
whether such agreement now exists or shall hereafter be created.
15.2 Upon the occurrence of an Event of Default and at any time thereafter, the
Lessor may, at its option, declare this Lease Agreement to be in default and
may, in its sole discretion, exercise any one or more of the following remedies:
(a) the Lessor may, by notice in writing to the Lessee, declare this
Agreement terminated, whereupon all rights of the Lessee to the use of
the Equipment and of all the Units thereof shall absolutely cease and
terminate, but the Lessee shall remain liable as hereinafter provided;
and thereupon the Lessor may by its agents enter upon the premises of
the Lessee or other premises where any of the Units may be and take
possession of all or any of such Units without incurring any liability
for or by reason of such taking possession;
(b) the Lessor may proceed, by appropriate court action or actions
either at law or in equity, to enforce performance by the Lessee of the
applicable covenants of this Agreement or to recover damages for the
breach thereof;
(c) the Lessor may lease, sell or otherwise dispose of the Equipment or
of any Unit thereof free and clear of any right or interest of the
Lessee to any Person on such terms as seem advisable to the Lessor,
without any notice to the Lessee and the Lessee waives (to the extent
permitted by law) all rights of redemption, stay and appraisal which
the Lessee now has or may have at any time in the future under any law
now existing or hereafter enacted;
(d) the Lessor may give written notice to the Lessee requiring the
Lessee to pay to the Lessor on the date stipulated therein (which shall
not be earlier than the date which is three Business Days from the date
of such notice), an amount equal to the Stipulated Loss Value of the
Equipment or of the Units then leased to the Lessee hereunder (subject
to the provisions of Clause 7.4 hereof) computed as of the Payment Date
immediately preceding such notice together with any unpaid Rental due
on any Payment Date prior to such notice, any Casualty Value remaining
unpaid, all other amounts due and owing hereunder and Breakage Costs
together with Interest thereon from such Payment Date to the date of
actual payment of all such amounts at the Default Rate; upon
20
payment in full by the Lessee and receipt by the Lessor of all amounts
herein stipulated, the Lessor's Interest in the Equipment or in any of
the aforementioned Units shall transfer to the Lessee on an "as is,
where is" condition without any representation or warranty of any
nature whatsoever except the warranty that the Equipment is free and
clear of any Security Interest created by or through the Lessor; all
reasonable costs, expenses and fees (including legal fees and
disbursements) incurred by the Lessor related to or arising in
connection with the conveyance of the Equipment and all sales, excise,
value-added and consumption taxes, transfer, license or registration
fees or other governmental fees or assessments payable in connection
with such conveyance of the Equipment shall be borne by the Lessee and
paid when due or on demand, as applicable; the Lessee hereby
acknowledges and it shall be conclusively deemed that the amount
payable under this Clause 15.2(d) is a genuine and reasonable
pre-estimate by the parties of liquidated damages that will be suffered
by the Lessor upon the occurrence of an Event of Default and not as a
penalty;
(e) the Lessor may enforce any of its remedies under the security
interest created in its favor pursuant to Clause 14 hereof;
(f) the Lessor may enforce its rights and remedies under the
Guarantee(s);
(g) the Lessor may, upon the occurrence (and at any time thereafter) of
an event of a default, draw, in part or in whole, on the Lessee's
Letter of Credit.
THE LESSEE WAIVES ANY AND ALL RIGHTS TO NOTICE AND JUDICIAL HEARING
WITH RESPECT TO THE REPOSSESSION OR ATTACHMENT OF THE EQUIPMENT BY THE LESSOR IN
THE EVENT OF DEFAULT HEREUNDER BY THE LESSEE. The Lessee further expressly
waives any action, cause of action, claim or demand which it may have by reason
of any act which the Lessor, its assignee or their agents may do or leave undone
in connection with the repossession of the Equipment, and the Lessee releases
and discharges the Lessor of and from actions, causes of action, claims and
demands of every kind and nature which may arise as a result of any action of
the Lessor, its assignee or their agents in connection with this Agreement or
the Equipment, its repossession or resale or the condition or use thereof.
15.3 Pending the sale of the Equipment, the Lessor shall be entitled to fully
administer, manage, insure, maintain and repair the same and to employ, lease,
charter, operate or otherwise use the Equipment in such manner and for such
period as it thinks fit and to do all acts incidental thereto and to recover any
losses incurred as a consequence of taking any such action as aforesaid, and all
payments due to the Lessee by virtue of the leasing, hiring or other disposal of
the Equipment or otherwise howsoever arising prior to the enforcement hereof by
the Lessor shall immediately on receipt thereof be and become due to the Lessor
and be applied to the Stipulated Loss Value and to any other amount due under
this Agreement.
15.4 Upon any sale of the Equipment by the Lessor, the Lessee shall not be bound
or entitled to see or inquire whether the power of sale has arisen or remains
exercisable in the manner herein provided or whether the Lessor has given the
Lessee notice of its intention to sell, and the sale shall be deemed to be
within the power of the Lessor.
15.5 Any sale by the Lessor of the Equipment pursuant to the rights, powers and
remedies conferred upon it by this Agreement or by law may be for cash,
debentures or other debt instruments and the consideration may be payable or
deliverable forthwith or over a period of time. If any consideration for any
such sale is not in cash, that consideration shall immediately on receipt
thereof be and become charged in favor of the Lessor with the payment of all
sums at that time secured by this Agreement.
15.6 The powers conferred upon the Lessor under this Clause 15 are and shall be
cumulative and shall be in addition to every other power and remedy hereby
specifically conferred or now or hereafter existing at law or by statute. Each
and every power and remedy may be exercised from time to time and as often and
in such order as may be deemed expedient by the Lessor and the exercise or the
beginning of the exercise of any power or remedy shall not be construed or
implied to be a waiver of the right to exercise any other power or remedy at the
same time or thereafter. No delay or omission by the Lessor in the exercise of
any right or power or pursuant to any remedy shall impair any such right, power
or remedy or be construed or implied to be a waiver of any default on the part
of the Lessee or to be an acquiescence therein.
15.7 Except as otherwise specifically stipulated herein, the Lessor need not
before exercising any of the
21
rights, powers or remedies conferred upon it by this Agreement or by law:
(i) take action or obtain judgment against the Lessee or any other
person in any court; or
(ii) make or file any claim or proof in a winding-up or liquidation of
the Lessee.
15.8 The Lessor may, without prejudice to its rights with respect to any other
event which may constitute an Event of Default, waive in writing any Event of
Default or extend the time period for remedying any Event of Default.
15.9 The Lessor may, at its option, without prejudice and in addition to any of
the foregoing provisions of this clause, if the Lessee shall fail to duly and
promptly perform any of its obligations under this Lease Agreement with respect
to the equipment, perform any act or make any payment which the Lessor deems
necessary for the maintenance and preservation of the Equipment and the Lessor's
title thereto, including payments for satisfaction of liens, repairs, taxes,
levies and insurance, and all sums so paid or incurred by the Lessor, together
with any overdue or delinquent payment charges pursuant to Clause 4 hereof, and
any reasonable legal fees incurred by the Lessor in connection therewith, shall
be paid by the Lessee to the Lessor upon demand, together with Interest thereon
at the Default Rate.
16. ASSIGNMENT, POSSESSION AND USE
16.1 This Agreement shall be binding upon and enure to the benefit of the
Lessee, the Lessor and their respective successors and assign(s).
16.2 The Lessor shall have the absolute right to sell, transfer or assign to any
Person, the Lessee hereby agreeing to and accepting any such sale, transfer or
assignment, any or all of its rights, obligations, benefits and interests under,
in and to this Lease Agreement or the Equipment or any of them, provided that no
such sale, transfer or assignment shall render the Lessee liable for any
increased or additional costs, expenses or amounts of money, including, without
limitation, Taxes, for which the Lessee would not have been otherwise liable for
hereunder had such sale, transfer or assignment not been made. All the rights of
the Lessor hereunder shall enure to the benefit of the Lessor's purchasers,
transferees or assignees, provided that the Lessee shall not be required to pay
to or perform in favor of any such purchaser, transferee or assignee any of the
Lessee's obligations hereunder unless and until the Lessee shall have received
from the Lessor a written notice of such sale, transfer or assignment. Subject
to the foregoing, whenever the Lessor is referred to in this Agreement, it shall
apply and refer to each such purchaser, transferee or assignee of the Lessor. It
is hereby agreed that as long as the Lessee is not in default under this
Agreement, it will proceed to any such sale, cession or assignment to a direct
competitor of the Lessee without the Lessee's prior written approval.
16.3 The Lessee shall not assign, sublease or transfer its interest under this
Agreement and in the Equipment or any of them or delegate any of its obligations
or duties hereunder. In addition, the Lessee, at its own expense, will promptly
cause to be duly discharged any lien, security interest, charge or other
encumbrance (other than an encumbrance resulting from claims against the Lessor
not related to the ownership of the Equipment) which may at any time be imposed
on or with respect to any Equipment including any accession thereto or the
interests of the Lessor or the Lessee therein. The Lessee shall not part with
the possession or control of, or suffer or allow to pass out of its possession
or control, any of the Equipment, provided, however, that so long as no Event of
Default shall have occurred and be continuing at the time of such transfer of
possession, delivery or control, the Lessee may deliver possession of the
Equipment to the Manufacturer thereof or to any organization for testing,
repair, maintenance or overhaul work on the Equipment. The Lessee is not
entitled to sub-lease the Equipment or any Unit thereof.
17. MANUFACTURER'S WARRANTIES
17.1 The Lessor hereby assigns to the Lessee the benefit of any warranties and
service policies given by the Manufacturer of or for the Equipment or by the
vendors of items fitted thereto to the extent only that such warranties exist or
remain in force and to the extent only that the Lessor is able to make the
benefit of same available to the Lessee and provided further that the Lessee
shall be responsible for all costs incurred by the Lessee in connection with the
transfer of such benefits or the enforcement of entitlement hereunder; provided,
however, that upon the occurrence of an Event of Default or upon the return of
the Equipment as herein provided, all such benefit shall immediately revert to
the Lessor including all claims thereunder
22
whether or not perfected. The Lessor makes no representation that there are any
such warranties, Manufacturer's or otherwise.
Upon termination of this Agreement, the Lessee hereby assigns,
reassigns or otherwise makes available to the Lessor or to any Person designated
by the Lessor, and the Lessee is hereby deemed to have so assigned, reassigned
or otherwise made available to the Lessor or such Person, such rights as the
Lessee may have under all warranties, including without limitation, the right to
receive payment of all indemnities, insurance or otherwise, related to the
Equipment, to the extent that those rights are capable of being assigned,
reassigned or otherwise made available. To the extent that those rights are not
capable of being so assigned, reassigned or otherwise made available to the
Lessor or any Person designated by the Lessor, the Lessee agrees, at the request
of the Lessor, but at the expense of the Lessee, to use its reasonable efforts
to enforce such rights as the Lessee may have with respect thereto for and on
behalf of the Lessor or any Person designated by the Lessor.
Upon the occurrence of an Event of Default which is continuing, the
Lessee agrees, at the request of the Lessor, to assign, reassign or otherwise
make available to the Lessor or to any Person designated by the Lessor the
rights described in the preceding paragraph and to comply with the provisions of
such paragraph.
18. PURCHASE AND OPTION TO PURCHASE
18.1 Provided that the Lessee has paid to the Lessor all Rentals and
all other amounts due by the Lessee under this Lease Agreement, and
provided no Event of Default shall have occurred and be continuing,
the Lessee shall have the following purchase options ("OPTION TO
PURCHASE") on the dates ("PURCHASE OPTION DATE") and at the price(s)
specified below("PURCHASE OPTION PRICE"). The Lessee shall exercise
such option by giving written notice to the Lessor no later than
thirty days prior to the date of the intended purchase:
(i) at the end of the Term, unless the Lease shall have been
earlier terminated, to purchase all the Equipment or Unit
thereof but not less than all of them the subject to a Lease
Supplement on an "as is where is basis" for a Purchase Option
Price equal to ten percent (10%) of the Purchase Price for
such Equipment or Unit thereof, plus applicable taxes.
(ii) on any Payment Date, to purchase all the Equipment or Unit
thereof but not less than all of them the subject to a Lease
Supplement on an "as is where is" basis, for a Purchase Option
Price equal to the aggregate of (x) the then Stipulated Loss
Value increased by two percent (2%) of the value thereof, and
(y) the Breakage Costs (the "PURCHASE OPTION PRICE"), plus
applicable taxes. The Lessee shall exercise this Option.
18.2 Upon the exercise of the Option to Purchase by giving of the required
notice, there shall be a binding agreement for the sale, on the Purchase Option
date, of the Equipment so covered by a Lease Supplement, as specified in the
Lessee's notice, on the terms and conditions provided in Clauses 18 hereof.
18.3 On the effective date of purchase, the Lessee shall pay to the Lessor the
price determined under Clause 18.1)(i) or 18.(ii), as the case may be, hereof
for the Equipment together with all other amounts due or owing to the Lessor
under the Lease Supplement related to the Equipment so purchased. Upon receipt
in full of the foregoing amounts, the Lessor shall deliver to the Lessee a Xxxx
of Sale in the form set forth in Schedule 3 hereof and such other documents that
may be requested by the Lessee, acting reasonably, to evidence such transfer of
title. The Lessor shall not give any warranties or representations of any nature
whatsoever in connection with such sale ( excepted for the absence of liens or
encumbrances created by or through the Lessor) and thereupon this Agreement
shall terminate with respect to the lease of the said Aircraft so sold to the
Lessee.
Notwithstanding the conveyance of the Equipment to the Lessee pursuant
to this Clause 18, the Lessee shall not be relieved of its obligations and
covenants to the Lessor to pay any amounts due or owing hereunder, including
without limitation, its obligation to pay the overdue Rental Instalment, the
Casualty Value or the Stipulated Loss Value, as the case may be, which are still
unpaid under this Agreement.
18.4 If the Lessee has not exercised the Option to Purchase set forth in Clause
18.1 hereof, the Lessee and the Lessor shall negotiate (such negotiation to be
conducted before the expiry of the Term hereof) in good faith the extension of
the Term hereof, upon conditions, rentals and a term acceptable to both parties.
23
At the end of the Term as extended, the Lessee shall purchase all but not less
that all the Equipment subject to a Lease Supplement for one dollar ($1.00). In
the event the Lessee and the Lessor fail reach, before the expiry of the Term
hereof, an agreement with respect to an extension of the Term of this Lease
Agreement, then, the Lessee shall, on the expiry of the Term hereof, purchase
all the Equipment or Unit thereof but not less than all of them the subject to a
Lease Supplement, on an "as is where is basis" for a Purchase Option Price equal
to ten percent (10%) of the Purchase Price for such Equipment or Unit thereof
plus applicable taxes, and the provisions of 18.3 shall apply mutadis mutandis.
The Lessee shall also pay to the Lessor any amounts due or owing hereunder,
including without limitation, payment of any overdue Rental Instalment, the
Casualty Value or the Stipulated Loss Value, as the case may be, which are still
unpaid under this Agreement.
18.5 If the Lessee ever has to return the Equipment to the Lessor under this
Lease Agreement, the Lessee shall, at the request of the Lessor, or on the date
of termination of this Agreement, or on any other date thereafter requested by
the Lessor, remove, pack, ship and surrender the Equipment or the relevant Unit
thereof to the Lessor at the location to be advised by the Lessor, in an as good
condition as when delivered to the Lessee hereunder, ordinary wear and tear
excepted, with all the relevant certificates issued by any authorities as to the
condition, usability and registration of such Equipment. The Lessee shall be
responsible for all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, costs and expenses incurred or which are asserted
against it or the Lessor in connection with (a) the return of the Equipment and
(b) the removal of the Equipment from the site where it is located. When
returned to the Lessor, the Equipment shall be free and clear of all Security
Interest and encumbrances of any nature whatsoever and the Lessee shall reassign
to the Lessor any warranties in accordance with the provisions of this
Agreement.
18.6 In the event the Lessee remains in possession of the Equipment or of any
Unit thereof after the expiration or termination of the relevant Term, other
than under the provisions of Clauses 18.1 and 18.4 hereof, all provisions of the
Agreement shall continue to apply thereto, and Rentals shall continue to be
payable with respect to such Equipment or Unit until surrender as herein
provided. Nothing herein shall be construed or interpreted nor have the effect
of extending or renewing the Term of this Agreement or of any Lease Supplement
respecting the Equipment.
19. GUARANTEE
19.1 As a condition to the entering into and execution of this Lease Agreement
by the Lessor, the Lessee shall cause the Guarantor to, to execute and deliver
to the Lessor, concurrently with the execution of this Lease Agreement, a
Guarantee substantially in the form and of substance set forth in Schedule 4.
20. NOTICES
20.1 Any notice or other communication to a party hereof shall be in writing and
may be delivered personally or sent by prepaid mail, telex or telecopier to the
following mailing, telex or telecopier address, as applicable:
TO THE LESSEE: Dura Skid Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
tel: (000) 000-0000
fax: (000) 000 0000
Attention: The Vice President Finance
with copy to: Dura Products International Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx
00
Xxxxxx X0X 0X0
tel: (000) 000-0000
fax: (000) 000 0000
Attention: The Vice President Finance
TO THE LESSOR: Bombardier Finance Inc.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
tel: (000) 000-0000
fax: (000) 000-0000
Attention: The Manager, Industrial Division Financing
Any such notice or other communication, if personally delivered or
mailed or telecopied, shall be deemed to have been given when received and, if
telexed and the appropriate answer back received, shall be deemed received at
the time that the answer back is received. Any party may from time to time
notify the other in writing of a change of mailing, telex or telecopier address
in the manner set forth herein which thereafter, until changed by like notice,
shall be the address of that party for all purposes of this Lease Agreement.
21. RIGHT OF FIRST REFUSAL
The Lessee hereby grants to the Lessor a right of first refusal on any
future equipment financing on the part of the Lessee, its subsidiaries or
affiliated companies. The Lessee further undertakes to provide the Lessor with a
similar undertaking on the part of the Guarantor, such undertaking to be
delivered upon the execution of this Agreement.
22. ENTIRE AGREEMENT
22.1 This Lease Agreement together with its recitals and its Schedules
exclusively and completely states the rights of the Lessor and the Lessee with
respect to the lease of the Equipment and supersedes all other agreements, oral
or written, with respect to the sale of the Equipment. No variation or
modification of this Agreement and no waiver of any of its provisions or
conditions shall be valid unless in writing and signed by duly authorized
officers of the parties hereto.
23. SEVERABILITY; EFFECT AND MODIFICATION OF LEASE AGREEMENT
23.1 Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall be, as to such jurisdiction, ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
24. EXECUTION AND COUNTERPARTS
24.1 This Agreement may be executed by the parties in several counterparts, each
of which when so executed and delivered shall be deemed to be an original, and
in such case all such counterparts shall together constitute but one and the
same instrument.
25. GOVERNING LAW
25
25.1 This Agreement and any Schedules hereto, including any Lease Supplement,
shall be governed by, interpreted and construed in accordance with, the laws of
the Province of Ontario and the laws of Canada applicable therein.
25. EFFECTIVE DATE
25.1 This Lease Agreement and the obligations of the parties hereto shall be
effective as and from the date first written above.
IN WITNESS WHEREOF, the parties hereto have each caused these presents
to be duly executed by their authorized officers as of the date first
hereinbefore written.
LESSEE: DURA SKID INC.
_________________________________________
Name:
Title: President
_________________________________________
Name:
Title: Vice President Finance
LESSOR: BOMBARDIER FINANCE INC.
_________________________________________
Name:
Title: Vice President
_________________________________________
Name:
Title: Vice President
26
27
SCHEDULE 1
FORM OF LEASE SUPPLEMENT
LEASE SUPPLEMENT NO. * DATED ___, ___, 1997
(CLAUSE 3 OF THE LEASE AGREEMENT)
THIS LEASE SUPPLEMENT NUMBER * dated this _____ day of _________, 1997
(the "SUPPLEMENT") between Bombardier Finance Inc. (the "LESSOR") and Dura Skid
Inc. (the "LESSEE").
WITNESSES THAT:
WHEREAS the Lessor and the Lessee have entered into a Lease Agreement
dated as of __,, 1997 (the "LEASE AGREEMENT") which provides for the execution
and delivery of Supplement(s) in the form hereof for the purpose of the
long-term lease of the Equipment in accordance with the terms of the Lease
Agreement;
NOW THEREFORE, in consideration of the premises, and pursuant to Clause
3 of the Lease Agreement, the Lessee and the Lessor agree as follows:
1. DEFINITIONS AND INCORPORATION OF TERMS
All capitalized terms used herein which are defined in the Lease
Agreement shall have, for the purpose hereof, the respective meanings ascribed
thereto in the Lease Agreement. All provisions of the Lease Agreement are
incorporated herein to the same extent as if such provisions were fully set
forth herein.
2. DELIVERY AND ACCEPTANCE
The Lessor hereby delivers and leases to the Lessee, and the Lessee
hereby accepts delivery of, at the Delivery Location specified in the Acceptance
Certificate, and leases from the Lessor under the Lease Agreement, as hereby
supplemented, the Equipment described in APPENDIX "C" hereto or the Units
thereof, the specification and the serial numbers of which are set out in the
duly executed Acceptance Certificate, with effect from the date hereof (the
"DELIVERY DATE").
3. PAYMENT OF THE RENTALS AND PURCHASE BY LESSEE
The Rentals shall be payable in accordance with the provisions of
Appendix "B" hereof, which Appendix shall be replaced upon payment of the
Casualty Value with respect to a Lost Unit, and for all purposes of the Lease
Agreement, the following, apply to the Equipment or the Units thereof specified
in the Acceptance Certificate herein above referred to:
3.1 PURCHASE PRICE: $ *
3.2 PURCHASE PRICE PER UNIT: AS SPECIFIED IN APPENDIX "C"
3.3 RENTAL: AS PER APPENDIX "B" PLUS ANY APPLICABLE TAX
3.4 PAYMENT DATE: THE ___ DAY OF EACH MONTH DURING THE TERM
3.5 FIRST PAYMENT DATE:
28
3.6 FINAL PAYMENT DATE:
3.7 PURCHASE OPTION DATE AND PRICE:
DATE:
PRICE: _____________,PLUS ANY RELEVANT TAXES
3.8 LEASE COMMENCEMENT DATE:
3.9 LEASE TERMINATION DATE:
4. STIPULATED LOSS VALUE
For the all purposes of the Lease Agreement, the Stipulated Loss Value
of the Equipment or of a Unit, as the case may be, shall be the amount
determined in accordance with Appendix "A" hereto, which Appendix "A", as and if
needed, may be replaced from to time to time in accordance with the provisions
of Clause 7.4 of the Lease Agreement.
6. LOCATION OF EQUIPMENT
The Equipment specified in the Acceptance Certificate attached hereto
will be located at :
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
7. GUARANTOR
Name: Dura Products International Inc.
8. PROVINCE OF INCORPORATION
(i) Lessee: Ontario
(ii) Guarantor: Ontario
9. INSURANCE
(a) Liability: (i) Amount of Coverage: $
(ii) Deductible:
(b) Equipment: (i) Amount of Coverage: ___________
(ii) Deductible: ___________________
10. ACKNOWLEDGMENTS
The Lessee hereby represents, warrants and agrees that as of the date
of this Supplement: (i) possession of the Equipment specified in the Acceptance
Certificate referred to above has been transferred to the Lessee; (ii) the said
Equipment has been duly accepted by the Lessee under the Lease Agreement; (iii)
the said Equipment has become subject to and governed by the provisions of the
Lease Agreement; and (iv) the Lessee has become obligated to pay the Rentals,
together with all other amounts payable by
29
virtue of the Lease Agreement, as more fully provided for in the said Agreement.
11. REGISTRATIONS AND FILINGS
The Lessee has made all the registrations and filings, deposits and
recordings referred to in Clause 4.2 of the Lease Agreement and evidence thereof
has been delivered to the Lessor.
12. REPRESENTATIONS AND WARRANTIES
The Lessee represents and warrants that all the representations and
warranties contained in the Lease Agreement are true and correct on the date
hereof as if made on and as of the date hereof.
13. GOVERNING LAW
This Agreement and any Schedules hereto, including any Lease
Supplement, shall be governed by, interpreted and construed in accordance with,
the laws of the Province of Ontario and the laws of Canada applicable therein.
SIGNATURES ON THE FOLLOWING PAGE
30
IN WITNESS WHEREOF, the parties hereto have each caused these presents
to be duly executed by their authorized officers as of the date first
hereinbefore written.
LESSEE: DURA SKID INC.
_________________________________________
Name:
Title: President
_________________________________________
Name:
Title: Vice President Finance
LESSOR: BOMBARDIER FINANCE INC.
_________________________________________
Name:
Title: Vice President
_________________________________________
Name:
Title: Vice President
31
APPENDIX "A"
TO THE LEASE SUPPLEMENT NO. *
STIPULATED LOSS VALUE
The Stipulated Loss Value as of a Payment Date (after payment of the
Rental) is the percentage of the Purchase Price (or Purchase Price per Unit, as
the case may be) set forth in the table below under Column 2 opposite the
relevant Payment Date.
Purchase Price: $
Purchase Price per Unit: $
Term: 60 months
Payment Date:
PAYMENT DATE AND NUMBER COLUMN 2:
----------------------- ---------
No. 1 %
No. 2 %
00
XXXXXXXX "X"
TO LEASE SUPPLEMENT NUMBER ____
RENTALS
33
APPENDIX "C"
TO LEASE SUPPLEMENT NO.
DESCRIPTION OF THE EQUIPMENT
34
SCHEDULE 2
FORM OF ACCEPTANCE CERTIFICATE
(CLAUSE 3 OF THE LEASE AGREEMENT)
ACCEPTANCE CERTIFICATE NUMBER *
ATTACHED TO LEASE SUPPLEMENT NUMBER *
TO: BOMBARDIER FINANCE INC.
0000-X 00XX XXXXXX X.X.
XXXXXXX, XXXXXXX
XXXXXX X0X 0X0
Attention of the Vice President
The undersigned, a duly authorized officer for Dura Skid Inc. Inc.
being the lessee (the "Lessee") under the Lease Agreement made as of ____ __,
1997 (the "Lease") with Bombardier Finance Inc., (the "Lessor"), does hereby
certify that:
1. On behalf of the Lessee, I have accepted the Equipment listed in
ATTACHMENT A hereto, as conforming in all respects to the terms and
provisions of the said Lease Agreement.
2. On behalf of the Lessee, I further certify that by virtue of my said
acceptance of said Equipment the same has, on the date stated
herein, come under the Lease to the Lessee pursuant to the terms and
provisions of the said Lease Agreement.
3. The DELIVERY LOCATION is: 00 XXXXXXX XXXXX
XXXXXXXXX, XXXXXXX
XXXXXX X0X 0X0
DATED as of *, 1997. Dura Skid Inc.
_____________________________________
Name:
Title:
35
ATTACHMENT "A "
TO ACCEPTANCE CERTIFICATE NUMBER O
36
SCHEDULE 3
FORM OF XXXX OF SALE
(Clause * of Lease Agreement)
_________________________ (the "Seller") in consideration of the sum of
_______ Dollar(s) ($___) paid by o (the "Buyer") at or before the execution and
delivery of these presents, the receipt of which is hereby acknowledged, does
hereby grant, sell, transfer and set over unto the Buyer, its successor and
assigns, all of its rights, ownership, title and interest in the following
property:
DESCRIPTION: *
MANUFACTURER: *
SERIAL NUMBER: *
The Seller hereby warrants unto the Buyer that the Seller has good and
legal title, as, but only to such extent, acquired from the Manufacturer or from
other Person(s) of the property hereinabove specified to the aforesaid property
free and clear of all encumbrances which result from claims against the Seller.
THE AFORESAID PROPERTY IS BEING SOLD HEREUNDER ON AN "AS IS" "WHERE IS"
BASIS AND "WITH ALL FAULTS AND DEFECTS". THE SELLER MAKES NO WARRANTY, EITHER
EXPRESS OR IMPLIED, LEGAL OR CONTRACTUAL, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND EXPRESSLY DISCLAIMS
LIABILITY FOR LOSS OF PROFIT OR INCIDENTAL, CONSEQUENTIAL, OR COMMERCIAL LOSSES
AND ALL OTHER OBLIGATIONS OR LIABILITIES.
IN WITNESS WHEREOF the Seller has caused this instrument to be executed
in its name by its officers thereunto duly authorized on the * day of *
SELLER:
_______________________________________
By:
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SCHEDULE 4
FORM OF GUARANTEE (CORPORATE)
(CLAUSE 19 OF THE LEASE AGREEMENT)
DATE: JULY __, 1997
TO: BOMBARDIER FINANCE INC.
0000-X 00xx. Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
FOR VALUABLE CONSIDERATION, receipt whereof is hereby acknowledged, and
the agreement of BOMBARDIER FINANCE INC. (the "LESSOR"), to lease the Equipment
(as defined in the Lease Agreement hereinbelow referred to) to Dura Skid Inc.
(the "LESSEE"), a wholly owned subsidiary of DURA PRODUCTS INTERNATIONAL INC.
(the "GUARANTOR"), the Guarantor hereby unconditionally and absolutely
undertakes to be liable to the Lessor, as a primary and principal obligor and
not merely as surety, jointly and severally with the Lessee, for, and guarantee,
the full and punctual payment, due performance, completion and accuracy of all
the debts, indemnities, obligations, liabilities, indebtedness, covenants,
agreements, conditions and representations and warranties, respectively to be
paid, performed, observed, completed or kept by the Lessee under the Lease
Agreement entered into between the Lessor and the Lessee as of August __, 1997,
as supplemented by lease supplements executed from time to time (the "LEASE
AGREEMENT"), including, without limitation, the payment of Rentals, Stipulated
Loss Values, Casualty Values, Breakage Costs and all other amounts of money due
and payable or to become due and payable and at any time owing or remaining
unpaid by the Lessee to the Lessor under the Lease Agreement or under any other
instrument or agreement executed by or in favor of the Lessor ( collectively,
the "LIABILITIES"). The liability of the Guarantor hereunder is unlimited and
shall bear interest from the date of demand for payment until payment in full at
the rate per annum equal to the Default Rate ( as defined in the Lease
Agreement).
A. The Guarantor hereby agrees with the Lessor as follows:
1. The Lessor may grant time, renewals, extensions, indulgences,
releases and discharges to, take securities (which word as
used herein includes other guarantees), abstain from taking
securities or from perfecting securities of, cease or refrain
from giving credit or making loans or advances to, accept
compositions from and otherwise deal with, the Lessee or
others and with all securities as the Lessor may see fit, and
may apply all moneys at any time received from the Lessee or
others or from securities upon such part of the Liabilities as
the Lessor deems best and change any such application in whole
or in part from time to time as the Lessor may see fit, all
without in any way limiting or lessening the liability of the
Guarantor under this Guarantee, and no loss of or in respect
of any securities received by the Lessor from the Lessee or
others, whether occasioned by the fault of the Lessor or
otherwise, shall in any way limit or lessen the liability of
the Guarantor under this Guarantee.
2. This Guarantee shall be a continuing guarantee and shall cover
all the Liabilities, and it shall apply to and secure any
ultimate balance due or remaining unpaid to the Lessor under
the Lease Agreement.
3. The Lessor shall not be bound to exhaust its recourse against
the Lessee or others (including without limitation, other
guarantors) or any securities it may at any time hold before
being entitled to payment from the Guarantor of the
Liabilities; the Guarantor hereby renounces to all benefits of
discussion and division.
4. All indebtedness and liability, present and future, of the
Lessee to the Guarantor are postponed and subordinated to the
Liabilities, and all moneys received by the Guarantor
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after demand from the Lessor to the Guarantor with respect to
the Liabilities or any of them, are hereby assigned to the
Lessor and shall be received in trust for the Lessor and
forthwith upon receipt shall be paid over to the Lessor, the
whole without in any way limiting or lessening the liability
of the Guarantor hereunder; and this assignment, postponement
and subordination is independent of this Guarantee and shall
remain in full effect notwithstanding that the liability of
the Guarantor under this Guarantee may be extinct, provided
however that any such moneys irrevocably and indefeasibly
received by the Lessor shall be applied in reduction of the
liability of the Guarantor hereunder.
5. This Guarantee shall not be affected by any change in the name
of the Lessee or any change in the persons responsible for the
conduct of the business of the Lessee, or by the acquisition
of the Lessee's business by any other Person (as this term is
defined in the Lease Agreement), natural or corporate, or by
any change whatsoever in the objects, capital structure or
constitution of the Lessee or by the Lessee's business being
amalgamated with a corporation, but shall, notwithstanding the
happening of any such event, continue to apply to all the
Liabilities whether theretofore or thereafter incurred or
arising.
6. This Guarantee shall not be considered as wholly or partially
satisfied by the payment or liquidation at any time or times
of any sum or sums of money for the time being due or
remaining unpaid to the Lessor and all payments received by
the Lessor from the Lessee or from others or from estates
shall be regarded for all purposes as payments in gross
without any right on the part of the Guarantor to claim in
reduction of the liability under this Guarantee the benefit of
any such payment or any guarantee held by the Lessor or
proceeds thereof, and the Guarantor shall renounce any right
to be subrogated in any rights of the Lessor until the Lessor
shall have received payment in full of the Liabilities, and to
the extent so subrogated, the foregoing notwithstanding, the
Guarantor's rights shall be subordinated and postponed to the
Lessor's rights until Lessor has so received payment in full
of the Liabilities.
7. All moneys, advances, renewals and credits in fact borrowed or
obtained from the Lessor shall be deemed to form part of the
Liabilities, notwithstanding any lack or limitation of status
or of power, incapacity or disability of the Lessee or of the
directors, partners or agents thereof, or that the Lessee may
not be a legal or suable entity, or any irregularity, defect
or informality in the borrowing or obtaining of such moneys,
advances, renewals or credits, the whole whether known to the
Lessee or not; and any sum which may not be recoverable from
the Guarantor on the basis of a guarantee shall be recoverable
from the Guarantor as sole or principal debtor in respect
thereof and shall be paid to the Lessor on demand with
interest at the Default Rate.
8. This Guarantee is in addition to and not in substitution for
any other guarantee, by whomsoever given, at any time held by
the Lessor, and any present or future obligation to the
Lessor, incurred or arising otherwise than under a guarantee,
of the Guarantor or of any other obligant, whether bound with
or apart from the Lessee; excepting any guarantee surrendered
for cancellation on delivery of this instrument.
9. Subject to manifest error on the part of the Lessor, the
Guarantor shall be bound by any account rightfully settled
between the Lessor and the Lessee, and if no such account has
been settled immediately before demand for payment under this
Guarantee any account stated by the Lessor shall be accepted
by the Guarantor as conclusive evidence of the amount which at
the date of the account so stated is due by the Lessee to the
Lessor or remains unpaid by the Lessee to the Lessor.
10. This Guarantee shall be operative and binding upon the
Guarantor notwithstanding the non-execution thereof by any
other proposed signatory or signatories, and possession of
this instrument by the Lessor shall be conclusive evidence
against the Guarantor that this instrument was not delivered
in escrow or pursuant to any agreement that it should not be
effective until any conditions present or subsequent have been
complied with.
11. No suit based on this guarantee shall be instituted until
demand for payment has been made, and demand for payment shall
be deemed to have been effectually made upon the
39
Guarantor if and when a notice requesting payment of the
liabilities from the Guarantor is given to the Guarantor in
the manner set forth in Clause 20 of the Lease Agreement.
Moreover, when demand for payment has been made, the Guarantor
shall also be liable to the Lessor for all legal costs,
lawyers fees and all expenses incurred by or on behalf of the
Lessor resulting from any action taken or legal proceedings
instituted on the basis of this Guarantee. All payments
hereunder shall be made to the Lessor at the address appearing
hereinabove.
12. This instrument covers all agreements between the parties
hereto relative to this Guarantee and none of the parties
shall be bound by any representation or promise made by any
person relative thereto which is not embodied herein.
13. This Guarantee shall extend to and enure to the benefit of the
Lessor and its successors and assigns, and every reference
herein to the Guarantor is a reference to and shall be
construed as including the Guarantor and its successors and
assigns, to and upon all of whom this Guarantee and agreement
shall extend and be binding.
14. All capitalized terms used in this Guarantee and not otherwise
defined herein are used with the same meanings as ascribed to
them in the Lease Agreement
B. THE GUARANTOR REPRESENTS, WARRANTS AND COVENANTS AS FOLLOWS:
1. The Guarantor is a corporation duly incorporated and validly
subsisting under the laws of the state of its incorporation
specified in a Lease Supplement, with full corporate power and
authority to own its properties and to carry on its business
as presently conducted in each and every jurisdiction and to
enter into and perform its obligations hereunder.
2. This Guarantee has been duly authorized, executed and
delivered by the Guarantor and constitute a legal, valid and
binding obligation of the Guarantor, enforceable in accordance
with its terms, subject only to such qualifications with
respect thereto relating to creditors' rights generally and
the enforcement of equitable remedies.
3. No approval is required from any public regulatory body or
Person with respect to the entering into or performance of
this Guarantee by the Guarantor or if any such approval is
required, it has been properly obtained and evidence thereof
satisfactory to the Lessor is being delivered to the Lessor
concurrently with the execution of this Guarantee.
4. The entering into, delivery and performance of this Guarantee
by the Guarantor will not result in any breach of, or
constitute a default under any indenture, mortgage, trust,
loan, creditor security agreement or any other instrument,
deed or agreement to which the the Guarantor is a party or by
which the Guarantor may be bound, or contravene any provision
of any law, statute, rule or regulation to which the Guarantor
is subject, or any judgment, decree, order, permit or
franchise applicable to the Guarantor.
5. There are no actions, suits or proceedings pending or, to the
knowledge of the Guarantor, threatened against the Guarantor,
its respective properties or affecting this Guarantee or the
transactions contemplated hereby which could, if adversely
determined, affect the carrying out of such transactions.
6. It holds all licenses, certificates and permits from
applicable agency or governmental authority for the conduct of
its business as it is presently conducted.
7. It has delivered all necessary returns to all relevant
taxation authorities and it is not in default in the payment
of any taxes due and payable.
8. It is not in default under any agreement to which it is a
party or by which it may be bound which would have a material
adverse effect on its business, assets or condition.
9. If and when requested by the Lessor, it shall furnish to the
Lessor or shall cause to be delivered to the Lessor, (i) no
later than one hundred and twenty (120) days from the end of
each fiscal year of the Guarantor, as long as Rentals and all
other amounts due under the Lease Agreement are still
outstanding, a copy of the Guarantor's audited financial
statements for such year in the same form provided to
shareholders of the Guarantor, and (ii) within forty-five (45)
days from the end of each quarter, the Guarantor's unaudited
statement of profit and loss for each such quarter, and a
balance sheet as at the end of such
40
quarter, all in reasonable detail and signed by its Vice
President, Finance.
10. It shall preserve and maintain its corporate existence in
every jurisdiction in which the character of the property
owned or the nature of the business transacted by it makes
licensing or qualification necessary.
11. It will not enter into any transaction or series of
transactions (including by way of reorganization,
consolidation, amalgamation, merger, liquidation, transfer,
sale or otherwise) whereby all or substantially all of its
undertakings, property and assets would become the property of
any other person, or, in the case of any such amalgamation, of
the continuing corporation or resulting corporation therefrom,
unless:
* (i)no Event of Default has occurred and is subsisting or
would result therefrom; and
* (ii) such transaction or series of transactions is
effected between any or all of the Guarantor's parent or
sister companies and such transaction preserves the
rights and powers of the Lessor under this Agreement and
does not increase the risks to the Lessor under this
Agreement; and
* (iii) such transaction or series of transactions does
not affect the validity and the enforceability of any of
the rights of the Lessor hereunder; and
* (iv) such transaction or series of transactions is
effected with a party other than pursuant to Clause
10.2.7 (ii) and:
(A) such other Person or continuing corporation
(herein called "SUCCESSOR CORPORATION") is a
corporation constituted under a jurisdiction
satisfactory to the Lessor, at its sole discretion;
and
(B) the Successor Corporation shall execute, prior to
or contemporaneously with the consummation of such
transaction, such instruments, if any, as are in the
opinion of the Lessor necessary or advisable to
evidence the assumption by the Successor Corporation
of liability for all of the obligations of the
Guarantor under this Agreement; and
(C) such transaction or series of transactions, in
the opinion of the Lessor shall be upon such terms as
to preserve and not impair in any respect any of the
rights and powers of the Lessor under this Agreement
nor increase the risks to the Lessor under this
Agreement; and
(D) such transaction or series of transactions do not
affect the validity and the enforceability of this
Agreement.
Whenever the conditions hereinabove specified have been duly
observed and performed, the Successor Corporation shall possess and
from time to time may exercise each and every right and power of the
Guarantor under this Agreement, in the name of the Guarantor or
otherwise and any act or proceeding under any provision of this
Agreement required to be done or performed by any directors or officers
of the Guarantor may be done and performed with like force and effect
by the directors or officers of such Successor Corporation.
THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE PROVINCE OF ONTARIO AND THE LAWS OF CANADA APPLICABLE THEREIN..
EXECUTED on this __th day of August 1997.
DURA PRODUCTS INTERNATIONAL INC.
Name: ______________________________ Name: ___________________________
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Title: Title:
