TERMS AND CONDITIONS OF LEASE
The Lessee leases from the Lessor and the Lessor leases to the Lessee the personal property described above and in Schedule 1 (the "Lease") together with any parts, accessories or attachments relating thereto or affixed thereon (the "Equipment") upon the terms and conditions set forth in this Lease.
1. TERM: This Lease shall be effective from the date of acceptance by an authorized representative of the Lessor. The Lease term commences on the commencement date indicated above and, unless terminated earlier as provided for in this Lease, shall end upon payment to the Lessor of the number of payments specified under the terms of payment above, provided that all terms and conditions of this Lease shall apply until the Equipment has been physically returned to the Lessor. This Lease cannot be cancelled or terminated except as expressly provided.
2. RENTAL: The Lessee agrees to pay the Lessor the number of payments in the amounts specified together with all applicable provincial sales taxes and federal goods and services taxes and any other sums as may become payable under this Lease. Such rental payments shall be payable as follows: the first rental payment shall be due upon execution of this Lease by the Lessee and subsequent rental payments shall be due in advance on the first day of every four-week cycle following the date of delivery of the Equipment. Such payments shall be payable without demand or invoice, unless otherwise specified by the Lessor, at the address of the Lessor shown above or as otherwise directed by the Lessor. The Lessee shall pay or reimburse the Lessor for all expenses, fees, charges, claims and demands incurred or arising in connection with the registration, licensing or possession, transportation, use or operation of the Equipment and all taxes and duties on or relating to the Equipment. All other consequential or ancillary expenses relating to the Equipment on this transaction shall be borne by the Lessee. The rental and any other amounts payable under this Lease are payable unconditionally and absolutely net to the Lessor without abatement, set-off, diminution, compensation or other deduction whatsoever even if the Equipment does not operate as intended by the Lessee or at all or the Equipment is or becomes unacceptable for any other reason whatsoever.
3. ENTIRE AGREEMENT, REPRESENTATIONS AND WARRANTIES: This Agreement constitutes the entire agreement between the Lessor and Lessee and the Lessee acknowledges that there are no promises, inducements, representations, collateral warranties, warranties, conditions, options or terms, oral or written, express or implied or otherwise, made by or on behalf of the Lessor or operating in favour of the Lessee with respect to any aspect of the Equipment (including, without limitation, its condition, design, capabilities, operation, use, suitability, fitness, durability, quality, merchantability or history (e.g., new, used, reconditioned)) or with respect to the appropriate treatment of this Agreement or payments to be made pursuant thereto for the Lessee's accounting or tax purposes, other than as may be expressly stated in this Agreement. The Lessee acknowledges and agrees that the sole functional obligation of the Lessor in respect of the Equipment is to permit quiet possession of such Equipment on an "as is" basis as long as the Lessee is not in default. In the event of an action by the Lessor for failure to pay any amount owing, the Lessee waives all defences predicated on any failure of the Equipment to function or perform as intended by the Lessee or at all. The Lessor shall not be liable to the Lessee for any loss, cost, expense or damage of any kind or nature whatever caused directly or indirectly by the Equipment or the use, operation, ownership, or maintenance of it, or for any loss of business or other damages whatsoever and howsoever caused. In the event of any failure of the Equipment, it is the Lessee's express intention that any exclusion of liability operating in favour of the Lessor shall continue to bind the Lessee. No salesperson or agent or supplier is authorized to waive or alter any term or condition of this Lease or to add any provision to it. Without limiting the generality of the foregoing, any representation as to the Equipment or any other matter by the supplier shall in no way affect the Lessee's duty to pay the rent and perform its other obligations as set forth in the Lease. The Lessor hereby assigns to the Lessee, to the extent permitted by law, all warranties, if any, resulting from the sale of the Equipment by the supplier to the Lessor. Upon the prior written request of the Lessee, and at the Lessor's expense, the Lessor will co-operate with the Lessee, as may be reasonably necessary, in the enforcement of any warranty, guarantee or other obligation made by the supplier or manufacturer in respect of the Equipment.
4. TITLE: The Lessee acknowledges that ownership and title to the Equipment shall remain vested in the Lessor. The Lessee shall have no right, title or interest in the Equipment other than, conditional upon the Lessee's compliance with the fulfilment of the terms and conditions of this Agreement, the right to maintain possession and use of the Equipment for the Lease term. Such right to possession and use shall be exercised only by the Lessee and/or competent employees of the Lessee. The Lessor may require plates or markings to be affixed to or placed on the Equipment indicating the Lessor is the owner. The Lessor and Lessee confirm their intent that the Equipment shall always remain and be deemed personal or movable property, even though the Equipment may become attached or affixed to realty and regardless of the manner in which it may become affixed or attached. The Lessee shall be responsible for any damage done to any real estate, immovable property, building or structure by removal of the Equipment (whether removal be effected by the Lessee, Lessor or any third party) and shall indemnify and save harmless the Lessor from any and all claims, actions, suits, proceedings, costs, expenses, damage and liabilities whatsoever arising out of, connected with or resulting from the removal of the Equipment. The Lessee shall obtain any landlord or mortgagee waiver as the Lessor may require.
5. LOCATION AND USE: The Equipment shall be maintained and used at the place designated and not elsewhere without the prior written consent of the Lessor, which consent may be arbitrarily withheld. The Lessee shall, at its own cost and expense, cause the Equipment to be installed, maintained and operated prudently at all times and, in compliance with the manufacturer's recommendation and the terms and conditions of this Lease and all applicable laws and regulations, by competent and qualified personnel only and for business purposes only. No maintenance shall be performed on any of the Equipment by other than a maintenance supplier approved in writing by the Lessor. The Lessee agrees to readily accept any and all engineering changes made by any manufacturer of any Equipment or by a maintenance supplier who services such Equipment.
6. COMPLIANCE WITH LAWS: The Lessee, at its own cost and expense, shall comply with and conform to all applicable laws, ordinances, regulations and legislation in any way relating to the ownership, installation, testing, possession, use, operation, repair, maintenance, servicing, transportation, storage or bailment of the Equipment throughout the term of this Agreement and to the complete exoneration of the Lessor from liability. The Lessee, at its own cost and expense, shall keep the Equipment free of levies, liens and encumbrances and shall pay when due all licence fees, registration fees, assessments, charges and taxes (municipal, provincial and federal) which may be levied or assessed directly or indirectly against or on account of the Equipment or any interest therein or use thereof. If the Lessee shall fail to pay such items when due, the Lessor may pay such licence fees, assessments, registration fees, charges or taxes, as the case may be, in which event the cost thereof shall constitute so much additional rent which shall be immediately due and payable and the Lessor shall be entitled to all the rights and remedies provided in this Lease or otherwise in the event of default of payment of rent.
7. ENVIRONMENTAL LIABILITY: The Lessee assumes full liability for the storage, handling, release, or spill of any regulated or hazardous materials in or around the Equipment during the Rental Term. In the event of a spill, the Lessee must notify the Lessor within (2) business days and must comply with any applicable environmental laws and regulations. The Lessee indemnifies the Lessor for any and all cleanup costs, remediation costs, fines, or third-party claims relating to any environmental or contamination events.
8. MAINTENANCE AND INSPECTION: The Lessee shall at its own expense maintain the Equipment in a state of good repair, condition and working order and shall furnish the Lessee with all such parts or mechanisms required to keep the Equipment in the aforesaid conditions in the event that it be repossessed by the Lessor. The Lessee shall not without the prior written consent of the Lessor make any alterations, additions or improvements to the Equipment. All such alterations, additions or improvements so made shall belong to and remain the property of the Lessor. No loss or damage to the Equipment or any part of it shall affect or impair the obligations of the Lessee which shall continue in full force and effect. The Equipment shall be at the risk of the Lessee and the Lessee assumes the risk of liability and shall pay for any loss or damage arising from or pertaining to the possession, operation or use of the Equipment or from any cause whatever and, without limiting the generality of the foregoing, liability or loss arising from fire, theft, loss, confiscation or expropriation. The Lessor, its employees and specifically authorized agents shall at all reasonable times have access to the Equipment for the purpose of inspecting or testing it. The Lessee agrees that the Lessor may substitute for the Equipment or any item of Equipment other substantially similar Equipment in comparable condition to that of the Equipment.
9. INSURANCE: The Lessee shall obtain and maintain for the entire term of this Lease, at its own expense, property damage and liability insurance and insurance against loss or damage to the Equipment including, without limitation, loss by fire (including so-called extended coverage), theft, collision and such other risks of loss as are customarily insured by "all risks" policies on the type of Equipment leased and by businesses in which the Lessee is engaged, in such amounts, in such form and with such insurers as shall be satisfactory to the Lessor, provided however that the amount of insurance covering damage to or loss of the Equipment shall not be less than the full replacement value of the Equipment. Each insurance policy will name the Lessee as an insured and the Lessor as an additional insured, and loss payee thereof, and shall contain a clause requiring the insurer to give the Lessor at least thirty days' prior written notice of any alteration in the terms of such policy or of the cancellation of it. At the Lessor's request, the Lessee shall furnish to the Lessor a certificate of insurance or other evidence satisfactory to the Lessor that such insurance coverage is in effect, provided however that the Lessor shall be under no duty either to ascertain the existence of or to examine such insurance policy or to advise the Lessee in the event such insurance coverage shall not comply with the requirements of this Lease. Upon failure of the Lessee to provide evidence of insurance satisfactory to the Lessor, the Lessor may purchase or otherwise provide such insurance and the cost of it to the Lessor shall be deemed additional rent and shall be payable by the Lessee on demand. The Lessee appoints the Lessor or its agent and attorney to make claims and receive payment in accordance with the provisions of such policies. The Lessee further agrees to give the Lessor prompt notice of any damage to, or loss of, the Equipment or any part of it.
10. ASSIGNMENT: Without the prior written consent of the Lessor, the Lessee will not assign any of its rights or sublet any Equipment or permit any Equipment to be in the possession of anyone but the Lessee. The Lessor may assign or sell all or any portion of its right, title and interest in and/or grant a security interest in and to the Equipment on this Lease to any person or corporation or to lenders or other parties providing funding (the "Assignees"). The Lessee consents to such assignments and/or grants, agrees to promptly execute and deliver such further acknowledgement, agreements and other instruments as may be reasonably requested by the Assignee to effect such assignments and/or grants, from time to time, and agrees to comply fully with the terms of any such assignments and/or grants. In the event of any assignment, the Lessor shall notify the Lessee of such assignment and thereafter all references to the Lessor shall include the Assignee, provided however that the Lessor's failure to give such notice shall not affect the validity of the assignment or the right of the Lessee, Lessor or Assignee, and that the Assignee shall not be obligated to perform the obligations of the Lessor unless the Assignee expressly agrees to do so in writing.
11. EVENTS OF DEFAULT: The occurrence or happening of any one or more of the following events shall constitute an Event of Default:
(a) default and continuance thereof for three days in the payment of rent or other charge payable by the Lessee under this Lease;
(b) default in the observation or performance of any other term, covenant or condition of this Lease or any other Lease or other agreement between the Lessor and the Lessee whether before or hereafter made;
(c) any representation or warranty made by the Lessee, or any report, notice or other writing furnished by the Lessee to the Lessor in connection therewith, being untrue in any material respect;
(d) the Lessee suspending business;
(e) if all or any part of the Equipment is, or may be in imminent danger of being confiscated, sequestered or seized under process of law;
(f) any act by the Lessee reducing the value or usefulness of the Equipment, including failure to maintain or repair the Equipment as required;
(g) the subjection of the Equipment to any lien, levy, charge or encumbrance;
(h) the Lessee making a sale in bulk of its assets or becoming insolvent or bankrupt or unable to pay its debts as they fall due or any bankruptcy, reorganization, debt arrangement or other proceeding under any bankruptcy or insolvency law or any dissolution or liquidation proceeding being instituted by or against the Lessee and, if instituted against the Lessee and defended by the Lessee, remaining undismissed for [thirty] days;
(i) the private or court appointment of a receiver or receiver and manager or officer with similar powers over any part of the Lessee's property;
(j) if any insurance placed or maintained pursuant to the terms of this Lease shall lapse or be cancelled and shall not be replaced by another policy within ten days after notice from the Lessor to the Lessee;
(k) the Lessee parting with the Equipment;
(l) the Lessee, not having duly exercised for the time being the option to renew this Agreement pursuant to Section 16, shall fail to return all of the Equipment to the Lessor at the end of the initial term [or the end of the renewal term] in the state of repair, condition and working order required by Section 8, at the Lessee's cost, expense and risk.
12. REPUDIATION: If the Lessee shall fail to make any rental payment or other payment required when due and such failure shall continue unremedied for a period of three days after written notice by the Lessor, or the Lessee disposes of, abandons, conceals or encumbers, or attempts or purports to dispose of, conceal or encumber, any item of Equipment, it shall be conclusively presumed and deemed that the Lessee has repudiated this Lease. The Lessor may, at its option, choose to accept or ignore such repudiation or any other repudiation by the Lessee.
13. REMEDIES OF DEFAULT: Upon the happening of an Event of Default or in response to any repudiation, whether deemed or otherwise, the Lessor may at its sole option:
(a) enter upon the premises where such Equipment is located and take immediate possession thereof, whether it is affixed to realty or not, and remove the same, without order of the court and without liability to the Lessor for or by reason of such entry and taking of possession, whether for damage to property or otherwise, and sell, lease or otherwise dispose of the same for such consideration and upon such terms and conditions as the Lessor may reasonably deem fit;
(b) in the name of and as the irrevocably appointed agent and attorney for the Lessee and without terminating or being deemed to have terminated this Lease take possession of the Equipment and proceed to lease the Equipment to any other person, firm or corporation on such terms and conditions, for such rental and for such period of time as the Lessor may deem fit and receive such rental and hold the same and apply the same against any moneys expressed to be payable from time to time by the Lessee;
(c) terminate the Lease and, by written notice to the Lessee specifying a payment date not earlier than three days from the date of such notice, require the Lessee to pay to the Lessor on the date specified in such notice,
(i) arrears of periodic rental payments as of the date of Lease termination;
(ii) as a genuine pre-estimate of liquidated damage for loss of a bargain and not as a penalty, the present worth of the aggregate of all unpaid amounts yet to become due as rental or otherwise to the expiration of the term calculated by discounting such amounts at [6%] per annum;
(iii) the amount of any residual interest which the Lessor may have in the Equipment;
(iv) the Lessor's actual and/or estimated cost and expenses (as applicable) of retaking, holding, repairing, reconditioning, reconfiguring, processing, preparing for disposition and disposing of the Equipment including the Lessor's legal disbursements and fees on a solicitor-and-his-own-client basis, as specified in the Lessor's written notice to the Lessee; and
(v) the interest charges provided for in Section 15.
14. REMEDIES CUMULATIVE: All rights and remedies provided are cumulative and are not intended to be exclusive and in addition to any other right or remedy previously referred to or otherwise available to the Lessor at law or in equity, and any one or more of the Lessor's rights and remedies may from time to time be exercised independently or in combination and without prejudice to any other right or remedy the Lessor may have or may have exercised. The Lessee also expressly agrees that the remedies contained in this Lease are commercially reasonable in the circumstances. The amount received by the Lessor on any sale, lease or other disposition of the Equipment will be applied: first, against the Lessor's costs and expenses (as applicable) of retaking, holding, repairing, reconditioning, reconfiguring, processing, preparing for disposition and disposing of the Equipment including the Lessor's legal disbursements and fees on a solicitor-and-his-own-client basis, bailiff's fees and charges, and sales or leasing commission or brokerage charges paid by the Lessor; second, against interest accrued on sums past due; third, against arrears of periodic rental payments and/or other payments which arose prior to the date of Lease termination, applied in the order in which such arrears arose; fourth, against the genuine pre-estimate of the Lessor's damages for loss of bargain; and, fifth, the balance, if any, shall belong absolutely to the Lessor.
15. WAIVER BY THE LESSOR: No covenant or condition of the Lease can be waived except by the written consent of the Lessor and the forbearance or indulgence by the Lessor in any regard whatever shall not constitute a waiver of the covenant or condition to be performed by the Lessee to which the same may apply. Until complete performance by the Lessee of said covenant or condition, the Lessor shall not be entitled to invoke any remedy available to the Lessor under this lease or by law, despite said forbearance or indulgence.
16. INTEREST ON OVERDUE PAYMENTS: Should the Lessee fail to pay any part of the rent provided for or any other sum required to be paid to the Lessor by the Lessee on the due date thereof, the Lessee shall pay to the Lessor, on demand, interest at the rate of 18% per annum compounded monthly upon such moneys due and unpaid until such payments are paid.
17. RENEWAL: If the Equipment has not been returned to Lessor by the end of the Term, then this Lease shall renew automatically for additional 28-day cycles on and subject to the same terms, covenants and conditions including the covenants for renewal and payment of rentals. Notwithstanding the above, the Lessor may, at any time after the expiry of the initial term of the Lease, provide the Lessee with a notice to terminate the lease, such notice to be not less than 28 days' notice. For greater certainty, the Lease shall not be terminated until the Equipment has been returned in good order to the Lessor. There will be no proration of any 28-day renewal lease term if the Equipment is returned prior to the end of the then current 28-day renewal term.
18. RETURN OF EQUIPMENT: The Lessee shall provide not less than fourteen days' notice of the return of the Equipment to the Lessor. The Equipment must be returned clean and purged of material. The Lessee shall be responsible for all costs of Equipment repairs, maintenance and cleaning upon its return to the Lessor, as deemed necessary by the Lessor in its sole discretion.
19. FURTHER ASSURANCES: The Lessee agrees, at its expense, promptly upon the Lessor's written request, to execute and deliver such instruments and to take such other actions as may reasonably be necessary in the opinion of the Lessor to perfect and keep perfected as against third parties the property, title and interest of the Lessor in the Equipment. The Lessee authorizes the Lessor to record or register such documents at such times and at such places as the Lessor may consider appropriate and agrees to pay all costs in connection therewith. Without limiting the generality of the foregoing, the Lessee appoints the Lessor as its attorney to register a financing statement or other security interest in the Equipment in the favour of the Lessor pursuant to the British Columbia Personal Property Security Act or such other similar legislation in any other province. The Lessee further agrees that the Lessor may insert the model numbers and serial numbers of the Equipment leased under this Lease on a date subsequent to its execution and the Lessee designates the Lessor as the Lessee's attorney to insert such numbers and other identifying references to the Equipment, as well as the commencement date of the initial term, the commencement date of subsequent rental payments and the consequential adjustments of rental amounts as provided for in Section 2.
20. CREDIT INVESTIGATION: The Lessee hereby consents to the Lessor conducting a personal investigation or credit check on the Lessee subject to applicable legislation. Where Lessee provides a credit card for payment, Lessee irrevocably and unconditionally authorizes Lessor to immediately submit for payment on such credit card all estimated and actual charges coming due under this Agreement, including without limitation rental charges, damage costs, repair costs, replacement costs, and any applicable fees.
21. HEADINGS: The insertion of headings in this Lease is for convenience of reference only and shall not affect the interpretation.
22. SEVERABILITY: If any term, covenant or condition of this Lease or its application to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Lease, or the application of such term, covenant or condition to persons or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Lease shall be valid and enforced to the fullest extent permitted by law.
23. INTERPRETATION: It is agreed by and between the parties that, whenever the context of this Lease so requires, the singular number shall include the plural and vice versa and that words importing the masculine gender shall include the feminine and neuter genders and that, in case more than one Lessee is named as Lessee, the liability of such Lessees shall be joint and several.
24. NOTICES: Any notice required or permitted to be given under this Lease must be in writing and may be given by delivering or mailing the notice to the party to receive the same at the address set forth in the Lease or such address as such party may notify the other of in writing. Such notice shall be deemed to have been given on the day of delivery if delivered or on the second business day following the mailing if mailed.
25. MISCELLANEOUS: This Lease shall be binding on and enure to the benefit of the parties and their respective heirs, executors, successors and permitted assigns and Sub-Lessees. Time is of the essence with respect to this Lease and each and all of its provisions. This Lease shall be governed according to the laws of the Province of British Columbia and the laws of Canada applicable therein. The Lessee acknowledges having received a true copy of this Lease. Both parties have required that this Lease be drawn up in English. No variation or modification of this Lease shall in any way be valid unless signed by authorized officers of the Lessor and the Lessee. If more than one Lessee is named in this Lease, the liability of each shall be joint and several.
26. ENTIRE AGREEMENT: The parties acknowledge, understand and agree that they have read this Agreement and confirm that this Agreement contains the entire agreement between the parties and the terms of this Agreement are contractual and not a recital.
27. COUNTERPARTS: This agreement may be executed by the Parties in counterpart, which counterparts are to be of the same force and effect as if the Parties had signed the same document, and all executed counterparts will be construed together and will constitute one and the same Agreement. Faxed and/or emailed copies of the executed counterparts are binding.