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The Equipment Lease Purchase Agreement is utilized when a business or individual wishes to lease equipment with the option to purchase it at a later date, typically used for high-value capital equipment acquisitions in Canada. This hybrid agreement provides flexibility in equipment acquisition while potentially offering tax advantages and preserving capital. The document comprehensively covers both the leasing phase (including maintenance, insurance, and usage terms) and the purchase option details, ensuring compliance with Canadian federal and provincial regulations, particularly the Personal Property Security Act (PPSA), Sale of Goods Act, and relevant tax legislation. It's commonly used in commercial and industrial contexts where businesses want to test equipment before committing to purchase or need to structure equipment acquisition in a financially advantageous way.

1. Parties: Identifies and defines the Lessor and Lessee with their complete legal names and addresses

2. Background: Sets out the context of the agreement, including the Lessor's ownership of the equipment and Lessee's desire to lease with an option to purchase

3. Definitions: Defines key terms used throughout the agreement including Equipment, Lease Term, Purchase Option, and Payment Terms

4. Equipment Description: Detailed description of the leased equipment, including make, model, serial numbers, and condition

5. Lease Term and Payments: Specifies the duration of the lease and payment obligations, including amount, frequency, and method of payment

6. Purchase Option: Details of the purchase option, including price calculation method and process for exercising the option

7. Delivery and Acceptance: Terms regarding equipment delivery, inspection, and acceptance procedures

8. Title and Security Interest: Clarifies ownership during lease term and security interests under PPSA

9. Use and Maintenance: Lessee's obligations regarding equipment use, care, and maintenance

10. Insurance: Required insurance coverage and terms

11. Risk of Loss: Allocation of risk and responsibilities in case of damage or loss

12. Default and Remedies: Events of default and available remedies for both parties

13. Assignment: Terms governing ability to assign rights or obligations under the agreement

14. Indemnification: Mutual or unilateral indemnification provisions

15. Governing Law: Specifies applicable Canadian law and jurisdiction

16. Notice: Methods and addresses for formal notices between parties

17. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability