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EXHIBIT 10.37
EQUIPMENT LEASE AGREEMENT
AND OPTION TO PURCHASE
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THIS AGREEMENT made at Calgary, Alberta as of this 1st day of NOVEMBER, 1996.
BETWEEN:
XXXXXXXX ENTERPRISES LTD.,
710 Ford Tower
000 -0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
(hereinafter called the "Company")
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SPECIALTY TESTING & CONSULTING LTD.,
0000 - 0xx Xxxxxx
Xxxxx, Xxxxxxx X0X 0X0
(hereinafter called the "Lessee")
THIS AGREEMENT WITNESSES that in consideration of the premises and the
covenants and conditions hereinafter contained the Parties hereto covenant and
agree each with the other as follows:
1. The company does hereby lease unto the Lessee the equipment described
below (hereinafter called the "EQUIPMENT"), all of which the Lessee
hereby acknowledges to have received in good condition and working order
for a term of Twelve (12) months commencing form the date hereof and
expiring on October 31st, 1997.
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"EQUIPMENT":
EQUIPMENT SPECIFICATIONS AND IDENTIFICATION
TWO (2) 4900CHA-M4B1S-SPEC PPC Heat-Les Dryers
(Special Xxxx #0 - 000000 and Special Unit #4 - 9062639)
complete with following components:
- FOUR (4) PCC348004G97 6" 300# RF CS MSG
- EIGHT (8) POC1200SU CARTRIDGE
- EIGHT (8) PCC1200AF CARTRIDGE
- TWO (0) 0000000 GP-500 AUTODRAIN 300 PSIG 1/2" 115 VAC
RENT:
2. (a) The Fair Market Value of the EQUIPMENT is TWO HUNDRED AND
FORTY-FIVE THOUSAND SIX HUNDRED AND ELEVEN ($245,611.00) DOLLARS;
(b) The Lessee covenants and agrees to pay to the Company during the
term of this Lease, monthly and in advance, as rental for the use of
the EQUIPMENT the sum of TWENTY-ONE THOUSAND EIGHT HUNDRED AND
TWENTY-TWO DOLLARS and TWENTY CENTS ($21,822.20), which monthly
rental is due and payable on the 1st day of each consecutive month
for Twelve (12) months commencing on the 1st day of NOVEMBER, 1996
and concluding on the 1st day of OCTOBER, 1997 (the "Term"). IT
BEING
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UNDERSTOOD and agreed that time of payment is of the essence of this
Agreement. At the end of the Term the Lessee agrees that it will have
paid to the Company the total sum of (12 X $21,822.20) = $261,866.40. IT
IS UNDERSTOOD and agreed that G.S.T. will be added to all payments
hereunder by the Lessee.
OPTION TO PURCHASE AND TITLE:
3. Provided that the Lessee is not in default of any of the terms of this
Agreement, the Lessee during the period October 1st, 1997 to October
31st, 1997, may elect at its option, in writing, addressed to the
Company at its address hereinbefore provided, to purchase the EQUIPMENT
by then paying to the Company the sum of TWENTY-THOUSAND ($20,000.00)
DOLLARS (said amount hereinafter referred to as the "Payout Amount"). IT
BEING UNDERSTOOD AND AGREED the Lessee may, at any time during the Term
of this Lease, elect at its option to purchase the EQUIPMENT by paying
to the Company the aggregate sum of the number of months in the
unexpired portion of the Term (and for which rental has not been paid)
times Twenty-one Thousand Eight Hundred and Twenty-two Dollars and
Twenty Cents ($21,822.20) plus the sum of Twenty Thousand ($20,000.00)
Dollars (such aggregate sum hereinafter referred to as "Payout Amount
#2).
4. Title to the ownership of the EQUIPMENT shall remain in the Company
until full payment of the Payout Amount or Payment Amount #2 (which
ever is applicable) as hereinbefore provided has been made to the
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Company and all obligations hereunder, or otherwise, are met.
INSURANCE:
5. The Lessee will insure the EQUIPMENT at its expense with an insurance
company satisfactory to the Company. The insurance shall be evidenced by
an insurance policy, the original or a certified copy of which shall be
delivered by the Lessee to the Company within forty-five (45) days,
naming the Company as the insured with the permission to rent the
EQUIPMENT and shall be for the following coverages and for not less than
the following amounts ("the Insurance Policy"):
Public Liability, Property Damage for one million inclusive
limits and Comprehensive, including fire and theft with
deductibles acceptable to the Company for actual cash value.
6. Should any claim arise outside the provisions and protection afforded by
the Insurance Policy, then the Lessee shall be responsible therefor and
in the event of any payment being made by the Company for loss sustained
by it, the, in such case, the Lessee hereby covenants and agrees to
forthwith reimburse the Company for any such loss howsoever arising.
7. The Lessee agrees that it will increase any or all of the insurance
coverage obtained by it, as set forth herein, if instructed to do so by
the Company and the term "Insurance Policy" used herein shall
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include any amended or replacement policies of insurance from time to
time obtained with respect to the EQUIPMENT.
USE AND OPERATION OF EQUIPMENT:
8. The Lessee may use and operate the EQUIPMENT in the Provinces of
British Columbia, Alberta and Saskatchewan or outside the said
Provinces with the Consent of the Company, all in accordance with
the business of the Lessee.
9. The Lessee or its nominees shall at all times operate the EQUIPMENT
in accordance with due diligence and care.
10. The Lessee shall not make any material alterations to the EQUIPMENT
without the prior written consent of the Company. All equipment,
accessories, parts and replacements which are attached to or
incorporated into the EQUIPMENT shall become the property of the
Company.
11. The Lessee covenants and agrees with the Company not to operate or
permit the use or operation of the EQUIPMENT except in accordance
with the requirements of the Insurance Policy, which requirements
the Lessee acknowledges to be fully acquainted with and the Lessee
will not do or permit any act which would imperil or void the
Insurance Policy.
MAINTENANCE:
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12. The Lessee covenants and agrees that during the Term it will at
its own cost and expense:
(a) completely service and repair the EQUIPMENT to the extent and
with the frequency reasonably required and maintain the
EQUIPMENT in good condition and working order and replace such
parts thereof as may be necessary;
(b) provide safe and proper storage facilities for the EQUIPMENT.
INSPECTION:
13. The Company may at any time require the EQUIPMENT to be produced
for inspection at its place of business or that of its
representative, and in the event of the Lessee failing to
produce the EQUIPMENT as required, the Company shall be entitled
to terminate this Agreement and to exercise all remedies given
hereunder including seizing and repossessing the EQUIPMENT.
14. The Lessee shall allow the EQUIPMENT to remain on the Company's
premises for whatever time is reasonably necessary to complete
repairs or service and shall not be entitled to any reductions
of rentals therefore.
INDEMNITY:
15. The Lessee hereby assumes liability for, and hereby agrees to
indemnify, protect, save and keep harmless the Company and its
agents
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and servants, officers and directors, from and against any and
all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, costs, expenses and disbursements,
including legal expenses, of whatsoever kind and nature, imposed
or assumed by, incurred by or asserted against the Lessee in any
way relating to or arising out of the manufacture, order,
acceptance or rejection, purchase, ownership, delivery, lease,
possession, use, condition, sale return or other disposition of
the EQUIPMENT including, without limitation, any claim relating
to any latent and other defects whether or not discoverable by
Lessee and any claim in tort for strict liability. This Clause
shall be effective and in full force and effect from the date of
the execution of this Agreement, even though the Term may not
have yet commenced. The indemnities contained in this Clause
shall continue in full force and effect notwithstanding the
expiration or other termination of this Agreement and shall be
payable on demand.
COVENANTS OF THE LESSEE:
16. The Lessee irrevocably constitutes and appoints the Company its
Attorney with full and exclusive power to settle in its absolute
discretion any claim of any nature whatsoever which may arise
through the use or possession of the EQUIPMENT by the Lessee or
its nominees and the Lessee specifically agrees that no such
settlement shall
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effect or waive any obligation imposed or assumed by it under this
Agreement.
17. The Lessee further covenants and agrees:
(a) To advise the Company forthwith of any damage to or loss of the
EQUIPMENT and accept and carry out all instructions given by the Company
in respect thereto;
(b) the Lessee shall forthwith report any accident involving the EQUIPMENT
to the Company and provide the Company with all information and
documents regarding such accident which are in the power or possession
of the Lessee;
(c) Not to suffer or permit any charge or lien whether possessory or
otherwise to exist against the EQUIPMENT;
(d) To comply with all laws, statutes, bylaws and other legal enactments
government the use and operation of the EQUIPMENT and to do all things
necessary to ensure that the EQUIPMENT will be operated and used in
accordance with the aforesaid;
(e) To indemnify and save harmless the Company of and from any and all loss
or damage to the EQUIPMENT resulting from larceny or conversion of the
EQUIPMENT by any of the Lessee's employees or agents and to pay
promptly to the Company the amount of such loss or damage on demand;
(f) To use the EQUIPMENT in a careful prudent manner and not for any
unlawful purpose;
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(g) Not to deface the EQUIPMENT in any manner nor remove any
equipment attached to or placed on the EQUIPMENT by the Company
and to be solely responsible for any costs incurred by the
Company for removing any marks or signs placed on or applied to
the EQUIPMENT by the Lessee including the cost of repainting the
entire EQUIPMENT if the Company deems such repainting to be
reasonably necessary.
18. It is further expressly understood and agreed that:
(a) The EQUIPMENT is and shall at all times be and remain the sole
property of the Company and the Lessee shall have no right,
title or interest therein or thereto except as expressly set
forth herein;
(b) The Lessee acquires the right hereunder to operate the EQUIPMENT
for its own use and benefit so long as the terms and conditions
herein contained are fully complied with and all payments are
made promptly on the due dates hereof;
(c) The Lessee assumes all risk of, and shall pay for, any loss or
damage to the EQUIPMENT;
(d) The Lessee is not the agent of the Company at any time for any
purpose;
(e) The Company may assign this Agreement and all rights hereunder
of the Company without the Lessee's consent;
(f) The Lessee may not assign any interest of the Lessee under this
Agreement nor sublease the EQUIPMENT without the Company's
consent in writing;
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(g) The obligation of the Lessee to pay rent hereunder shall not in any way
be affected by any defect or failure in the performance of the
EQUIPMENT.
DEFAULT:
19. Time is of the essence of this Agreement. In the event of the Lessee
defaulting in the making of any payments due herein, whether rental or
otherwise on the due date thereof, or in the event of the Lessee failing
to comply with any of the terms, covenants and conditions herein
contained, or should the Insurance Policy be cancelled other than at the
direct request of the Company, or should the Lessee become insolvent or
should any proceedings with respect to the Lessee be taken in bankruptcy
(whether voluntary or otherwise), or by way of receivership or a winding
up, or should the Company in its absolute discretion deem itself
insecure or should it deem the EQUIPMENT to be in danger of misuse,
neglect, seizure or confiscation, the Lessee agrees that the Company
shall following Seven (7) days notice in writing of such default
(provided such default has not then been rectified) have the right to
immediately retake and repossess the EQUIPMENT to the Company. The
retaking and repossession of the EQUIPMENT may be either with or without
process of law and the Lessee hereby waives all claims for damages in
respect of such seizure or
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repossession. The Lessee hereby authorizes and empowers the Company
or its nominees to enter on any of the Lessee's lands or premises or
any other place where the EQUIPMENT may be found for the purpose of
taking possession of it and on the happening of such event, the
Lessee hereby appoints the Company as its true and lawful Attorney
to execute such documents as may be necessary to regain possession
of the EQUIPMENT. The Lessee shall pay the costs of such repossession
including transportation and storage charges. In the event of such
seizure or repossession, this Agreement shall terminate and be of no
further force and effect and the Company shall be entitled to
immediate possession of the EQUIPMENT but the Lessee shall still
remain liable and shall pay to the Company forthwith any rentals
and other payments or charges due hereunder, together with the cost
of and incidental to such seizure and repossession including legal
costs incurred by the Company on a Solicitor and client basis as
well as any other obligations undertaken by the Lessee.
LIMITATIONS OF LIABILITY:
20. The Company shall not be liable for any loss, damage, claim, demand,
liability, cost of expense of any nature or kind sustained by the
Lessee, directly or indirectly resulting from any inadequacy for any
purpose, or any defect or mechanical failure of the EQUIPMENT or from
loss or interruption of use, or any loss of business profits, or any
consequential or other damage of any nature.
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INTEREST:
21. The Lessee shall, without notice, pay interest at the rate of
twelve (12%) percent per annum on any overdue installments of
rent and upon notice from the Company, at the same rate on any
other amounts required to be paid by the Lessee hereunder.
MISCELLANEOUS:
22. The failure of the Company, in any one or more instances, to
insist upon the performance of any of the terms, covenants or
conditions of this Agreement, or to exercise any right or
privilege conferred by this Agreement, or to waive by the
Company any breach of the terms, covenants or conditions of
this Agreement, shall not be construed as thereafter waiving
any such terms, covenants, conditions, rights or privileges but
this Agreement shall continue and remain in full force and
effect as if not such forbearance waiver had occurred.
23. Any notice that may be or is required to be given may be given
by mailing the same in a prepaid envelope at any post office in
Canada addressed to the Party to whom it is to be given at the
respective addresses as set forth herein or at such other
addresses as such Parties shall advise from time to time in
writing and such notice shall be deemed to have been received on
the third day after such mailing. The Lessee shall immediately
notify the Company of any change of address.
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24. The Lessee hereby acknowledges that this Agreement constitutes
the whole agreement between the Parties and no representations
or warranties have been made to it except as herein contained.
25. Whenever the singular or the masculine or the body corporate is
used throughout this Agreement the same shall be deemed to
include the plural or the feminine or the body politic or
corporate also the respective heirs, executors, administrators,
successors and permitted assigns of the Parties hereto and each
of them where the context or the Parties thereto so require.
26. This Agreement and everything herein contained shall enure to
the benefit of and be binding upon the Parties hereto, their
respective heirs, executors, administrators, successors and
permitted assigns.
27. The undersigned hereby acknowledges that it is aware and has
been advised of the provisions of The Personal Property
Securities Act of the Province of Alberta and fully understands
the meaning of, the rights, benefits and protection given to it
by the said Act and that pursuant to the provisions of this
Agreement it has agreed to waive any benefits it may have
pursuant to the said Act or any replacement legislation.
28. The Company makes no representation and excludes any warranties
of any kind, nature or description, express or implied, or
arising by any law with respect to the EQUIPMENT including,
without limiting the generality of the foregoing, the condition
of the EQUIPMENT, its
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compliance with any applicable laws, and its merchantability or
its fitness for any particular purpose.
29. This Agreement shall be construed in accordance with the laws of
Alberta and the Parties agree to attorn to the jurisdiction of
the Courts of Alberta in respect of all matters pertaining to
this Agreement.
30. The Company shall not be required to carry out any of the terms
of this Agreement if prevented from doing so by any act of God,
the Queen's enemies, civil insurrection, riot, strike or other
causes beyond its control and shall not be responsible for any
resulting loss or damages sustained by the Lessee. If by reason
of legislation whether Municipal, Provincial or Dominion, the
Company is required to perform obligations and covenants in a
manner and to an extent in variance with those herein set forth,
then and in such event the Company shall be deemed to have
complied with such obligations and covenants if it complies with
such legislation.
IN WITNESS WHEREOF the Parties have duly executed this Agreement
the day and year first above written.
MALHOTRA ENTERPRISES, LTD.
Per: [ILLEGIBLE]
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SPECIALTY TESTING & CONSULTING LTD.
Per: [ILLEGIBLE]
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