EQUIPMENT RENTAL AGREEMENT

IN CONSIDERATION OF the mutual covenants and promises in this Agreement, the receipt and sufficiency of which consideration is hereby acknowledged, the Owner leases the Equipment to the Hirer, and the Hirer leases the Equipment from the Owner on the following terms:

Definitions

1. The following definitions are used but not otherwise defined in this Agreement:

i.                "Casualty Value" means the market value of the Equipment at the end of the Term or when in relation to a Total Loss, the market value the Equipment would have had at the end of the Term but for the Total Loss. The Casualty Value may be less than but will not be more than the original purchase price of the Equipment.

ii.               "Equipment" means Pilates Reformer M8-Pro which has an approximate value of $5,290.00 OR Pilates Reformer R6 which has an approximate value of $3000.00.

iii.              "Total Loss" means any loss or damage that is not repairable or that would cost more to repair than the market value of the Equipment.

Lease

2. The Owner agrees to lease the Equipment to the Hirer, and the Hirer agrees to lease the Equipment from the Owner in accordance with the terms set out in this Agreement.

Term

3. The Agreement commences on                                              and will continue until the agreed lease completion in writing by either party (the "Term").

Rent and Deposit

4. The rent, inclusive of GST, will be paid in instalments of $52.00 OR $39.00 each week, in advance, beginning on the signed contracted date and will be paid on the Monday of each succeeding week throughout the Term (the "Rent").

5. The Hirer will pay a deposit of $250.00 (the "Deposit") before taking possession of the Equipment. The Owner will refund the Deposit to the Hirer at the end of the Term provided that the Hirer has performed all of the Hirer's obligations under this Agreement.

Residual Value

6. At the signing of this Agreement, the residual value of the equipment (the "Residual Value") is agreed to be $5,2900.00 OR $3,000.00. However, if and when the Hirer desires to purchase the Equipment, the Hirer and the Owner may negotiate a different residual value at that time.

This negotiated value will be the "Residual Value" for any such purchase.

Purchasing the Equipment

7. The Hirer has the option to purchase the Equipment at the end of the Term by paying the following amounts:

a.      the Residual Value of the Equipment; and

b.     any fees, taxes, and expenses related to the purchase of the Equipment.

8. After the Hirer has paid all of the costs and fees associated with purchasing the Equipment, the Owner will return the following amounts, or the remaining portions of these amounts, to the Hirer:

a. the Deposit; and

b. any money received from an insurance claim or action that is not used to repair or replace the Equipment.

Delivery of Equipment

9. The Owner will, at the Owner's own expense and risk, deliver the Equipment to the Hirer at to the address of the Hirer.

Use of Equipment

10. The Hirer will use the Equipment in a good and careful manner and will comply with all of the manufacturer's requirements and recommendations respecting the Equipment and with any applicable law, whether local, state or federal respecting the use of the Equipment, including, but not limited to, environmental and copyright law.

11. The Hirer will use the Equipment for the purpose for which it was designed and not for any other purpose.

12. Unless the Hirer obtains the prior written consent of the Owner, the Hirer will not alter, modify or attach anything to the Equipment unless the alteration, modification or attachment is easily removable without damaging the functional capabilities or economic value of the Equipment.

Warranties

13. The Equipment will be in good working order and good condition upon delivery.

14 . The Equipment is of merchantable quality and is fit for the purposes it is ordinarily used.

Loss and Damage

15. To the extent permitted by law, the Hirer will be responsible for risk of loss, theft, damage or destruction to the Equipment from any and every cause.

16. If the Equipment is lost or damaged, the Hirer will continue paying Rent, will provide the Owner with prompt written notice of such loss or damage and will, if the Equipment is repairable, put or cause the Equipment to be put in a state of good repair, appearance and condition.

17. In the event of Total Loss of the Equipment, the Hirer will provide the Owner with prompt written notice of such loss and will pay to the Owner all unpaid Rent for the Term plus the Casualty Value of the Equipment, at which point ownership of the Equipment passes to the Hirer.

Ownership, Right to Lease and Quiet Enjoyment

18. The Equipment is the property of the Owner and will remain the property of the Owner.

19. The Hirer will not encumber the Equipment or allow the Equipment to be encumbered or pledge the Equipment as security in any manner.

20. The Owner warrants that the Owner has the right to lease the Equipment according to the terms in this Agreement.

21. The Owner warrants that as long as no Event of Default has occurred, the Owner will not disturb the Hirer's quiet and peaceful possession of the Equipment or the Hirer's unrestricted use of the Equipment for the purpose for which the Equipment was designed.

Surrender

22. At the end of the Term or upon earlier termination of this Agreement, the Hirer will make the Equipment available for pick up at from the address of the Hirer. If the Hirer fails to make the Equipment available for pick up, the Hirer will pay to the Owner any unpaid Rent for the Term plus the Casualty Value of the Equipment plus 10% of the Casualty Value, at which point ownership of the Equipment will pass to the Hirer.

Indemnity

23. The Hirer will indemnify and hold harmless the Owner against any and all claims, actions, suits, proceedings, costs, expenses, damages, injuries as a result of using the equipment and liabilities, including legal fees and costs, arising out of or related to the Hirer's use of the Equipment.

Default

24. The occurrence of any one or more of the following events will constitute an event of default ("Event of Default") under this Agreement:

1. The Hirer fails to pay any amount provided for in this Agreement within seven days after same is due or otherwise breaches the Hirer's obligations under this Agreement.

2. The Hirer becomes insolvent or makes an assignment of rights or property for the benefit of creditors or files for or has bankruptcy proceedings instituted against it under the bankruptcy law of Australia or another competent jurisdiction.

3. A writ of attachment or execution is levied on the Equipment and is not released or satisfied within 10 days.

Remedies

25. On the occurrence of an Event of Default, the Owner will be entitled to pursue any one or more of the following remedies (the "Remedies"):

1. Declare the entire amount of the Rent for the Term immediately due and payable without notice or demand to the Hirer.

2. Apply the Deposit toward any amount owing to the Owner.

3. Commence legal proceedings to recover the Rent and other obligations accrued before and after the Event of Default.

4. Take possession of the Equipment, without demand or notice, wherever same may be located, without any court order or other process of law. The Hirer waives any and all damage occasioned by such taking of possession.

5. Terminate this Agreement immediately upon written notice to the Hirer.

6. Pursue any other remedy available in law or equity.

Assignment

26. THE HIRER WILL NOT ASSIGN THIS AGREEMENT, THE HIRER'S INTEREST IN THIS AGREEMENT OR THE HIRER'S INTEREST IN THE EQUIPMENT WITHOUT THE PRIOR WRITTEN CONSENT OF THE OWNER.

27. If the Hirer assigns this Agreement, the Hirer's interest in this Agreement or the Hirer's interest in the Equipment without the prior written consent of the Owner, the Owner will have recourse to the Remedies and will be entitled to all damages caused by the assignment.

28. THE OWNER WILL NOT ASSIGN THIS AGREEMENT, THE OWNER'S INTEREST IN THIS AGREEMENT OR THE OWNER'S INTEREST IN THE EQUIPMENT WITHOUT THE PRIOR WRITTEN CONSENT OF THE HIRER. THE OWNER WILL NOT ASSIGN OR TRANSFER THE OWNER'S RIGHT TO COLLECT RENT OR ANY OTHER FINANCIAL OBLIGATION OF THE HIRER.

29. If the Owner assigns this Agreement, the Owner's interest in this Agreement or the Owner's interest in the Equipment without the prior written consent of the Hirer, the Hirer will be entitled to terminate this Agreement without penalty.

Renewal

30. The Hirer may renew this Agreement for an additional Term if the Hirer has given the Owner 30 days' written notice of the Hirer's intention to renew and if the Hirer is not in default of any of the terms under this Agreement. Other than as agreed upon in writing between the Parties, the renewal will be on the same terms as this Agreement, except for this renewal clause.

Entire Agreement

31. This Agreement will constitute the entire agreement between the Parties. Any prior understanding or representation of any kind preceding the date of this Agreement will not be binding on either Party except to the extent incorporated in this Agreement.

Address for Notice

32. Service of all notices under this Agreement will be delivered personally or sent by registered mail or courier to the following addresses:

Owner: Purity Pilates Pty Ltd (T/A Purity Pilates Reformer Hire), 15 Adelaide Road, Gawler South SA 5118

Payment

33. All dollar amounts in this agreement refer to Australian dollars, and all payments required to be paid under this Agreement will be paid in Australian dollars unless the Parties agree otherwise.

Interest

34. Interest payable on any overdue amounts under this Agreement will be at a rate of 2.00 percent per annum or at the maximum rate allowed under applicable legislation, whichever is lower.

Governing Law

35. This Agreement will be construed in accordance with and governed by the laws of Australia and the Parties submit to the exclusive jurisdiction of the Australian courts.

Severability

36. If there is a conflict between any provision of this Agreement and the applicable legislation of South Australia (the "Act"), the Act will prevail and such provisions of the Agreement will be amended or deleted as necessary in order to comply with the Act. Further, any provisions that are required by the Act are incorporated into this Agreement.

General Terms

37. This Agreement may be executed in counterparts. Facsimile signatures are binding and are considered to be original signatures.

38. This Agreement will extend to and be binding upon and inure to the benefit of the respective heirs, executors, administrators, successors and assigns, as the case may be, of each Party to this Agreement.

39. Neither Party will be liable in damages or have the right to terminate this Agreement for any delay or default in performance if such delay or default is caused by conditions beyond its control including, but not limited to Acts of God, Government restrictions, wars, insurrections, natural disasters, such as earthquakes, hurricanes or floods and/or any other cause beyond the reasonable control of the Party whose performance is affected.

Notice to Hirer

NOTICE TO THE HIRER: This is a lease. You are not buying the Equipment. Do not sign this Agreement before you read it. You are entitled to a completed copy of this Agreement when you sign it.

The Hirer has duly affixed their signature under hand and seal and Purity Pilates has affixed its signature

by a duly authorised officer under seal on this day.