Equipment Lease Agreement Dated - 11/1/96

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:


MALHORTA ENTERPRISES LTD.,
710 Ford Tower
633 -6th Avenue S.W.
Calgary, Alberta T2P 2Y5


(hereinafter called the "Company")


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SPECIALTY TESTING & CONSULTING LTD.,
1703 - 8th Street
Nisku, Alberta T9E 7S8


(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 Unit #3 - 962571 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 (2) 1245344 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 3
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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 4
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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 5
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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 ...