Leasing of Plants and Machinery
This agreement is made this 6th day of June 2000 between AB Financial Services Ltd., a company registered under the Companies Act 1956 and carrying on business at …………………………………… (hereinafter referred to as the lessor which term shall include its successors and assigns) of the One Part and CD Ltd., a company registered under the Companies Act 1956 and carrying on business at ……………………………… (hereinafter called the lessee which term shall include its successors and assigns) of the Other Part.
Whereas the lessor carries on business as Lease Financing and leasing-out equipment and the lessee carries on business as manufacturer of and dealer in Hosiery goods and intends to take on lease certain plant and machinery from the lessor.
And whereas the lessor has agreed to give on lease such plant and machinery that may be required by the lessee.
And whereas the lessee has selected the plant and machinery from the manufacturer and seller thereof.
Now these presents witnesseth and the parties hereby agree as follows:
1. The lessee hereby agrees to lease out to the lessee and the lessee agrees to take on lease from the lessor the plant and machinery described in Schedule I hereunder.
2. The lessee hereby admits that the lessor has paid for the plant and machinery mentioned in Schedule I hereunder to the supplier thereof and the said plant and machinery have been installed in the factory of the lessee and are working satisfactorily. The lessee admits that the lessor is the sole owner of said plant and machinery.
3. The lease of the said plant and machinery shall be for a period of three years which may be renewed for another three years by mutual agreement.
4. The lessee agrees to pay the lease rentals at the rates specified in Schedule II hereunder. The lease rentals would be paid by lessee within 10 days of the same becoming due and payable.
5. In default of payment on due date, interest at 3% per month on each instalment due would be charged on the outstanding amount. The time for payment of the instalment is understood by the parties to be of the essence of the Lease Agreement.
6. The lessee expressly declares that the lessee has made the selection of plant and machinery based upon its own judgment and has not relied upon any statement or representation of the lessor.
7. The lessee undertakes to be responsible for all repairs, service defects and smooth running of the plant and machinery. The lessee will, however, be entitled to the benefits of the manufacturer’s warranties in respect of the plant and machinery.
8. No right, title or interest in the plant and machinery shall pass to the lessee by virtue of these presents and the leased-out plant and machinery mentioned in Schedule I hereunder shall remain the property of the lessor and the lessee undertakes not to sell, assign, sub-let, sub-lease, pledge or hypothecate or otherwise encumber or suffer lien upon or against any interest in the leased-out plant and machinery or in this agreement. The lessee further undertakes not to remove except for purposes of repairs the leased-out plant and machinery from the factory where they have been installed except with the prior written consent of the lessor and further undertakes not to allow any third person to use as the licensee or otherwise the said plant and machinery without the written consent of the lessor.
9. The lessee agrees and undertakes to comply with all laws and regulations and orders relating to the possession of, operation and use of leased-out plant and machinery and assumes all risks, responsibilities and liabilities arising from or pertaining to the possession, operation or use of the leased-out plant and machinery. The lessee hereby agrees and undertakes to keep the lessor fully indemnified against and harmless from any claims, costs, expenses damages and liabilities, whether civil, criminal or of any other nature whatsoever arising from or pertaining to the use, possession, operation or transportation of the leased-out plant and machinery.
10. The lessee undertakes to pay all fees, taxes, levies or other lawful charges and in default if the lessor has to pay the same, the lessee undertakes to reimburse the lessor of such payment. The Indemnity hereby granted by the lessee to the lessor shall operate in respect of all risks, or liabilities arising from possession, use, operation or storage of the plant and machinery and for injuries or deaths of persons or damages to property arising from possession, use or anything to do with the leased-out plant and machinery. Such indemnity shall survive the termination of this agreement.
11. The lessee will cause the leased-out plant and machinery to be operated in accordance with manufacturer’s Manuals and Instructions by competent and duly qualified personnel and in accordance with the applicable government regulations and for the lessee’s business purposes only.
12. During the term of the lease, the lessee shall at its own cost and expense keep the plant and machinery in good repair and working condition.
13. The lessee shall keep the plant and machinery fully insured and in case of loss, theft or damages beyond repair, the lessee shall pay the balance lease rentals forthwith and the lessor shall transfer its right title or interest in plant and machinery to the lessee so that the lessee could recover the insurance money. The lessee undertakes to keep the plant and machinery fully insured for the value thereof plus 10% and regularly pay the renewal premium.
14. During the term of this Agreement, the lessee shall furnish to the lessor Annual Audited Accounts duly reflecting the said plant and machinery taken on lease and the lease rentals payable for same.
15. The lessee agrees to bear and pay all extra or additional or new taxes or levies in relation to plant and machinery on leasing out the same to the lessee.
16. Upon expiry of the lease period or in case of default on termination of the lease by the lessor, the lessee undertakes to deliver up possession of plant and machinery to the lessor at specified storage space intimated by the lessor at the cost and expense of the lessee and in good and working condition.
17. In the event the lessee fails to pay the stipulated lease rent on the due dates in respect of two instalments or fails to perform or observe any covenant, condition or undertaking contained herein or becomes commercially insolvent or winding-up petition is filed against the lessee, the lessor shall be at liberty to terminate the agreement and declare the outstanding lease rentals, the late payment charges and quantum of interest at 30% per annum and future rentals payable by the lessee, and the lessee shall have option to pay the entire amounts due discounted at the rate of 12% per annum within 30 days of receipt of such declaration. If the lessee does not pay the outstanding amount due so discounted at 12% per annum within 30 days then the lessor will have the liberty to take action for recovery of the outstanding dues as liquidated damages for loss of bargain and not as penalty of the said total amount together with interest at 36% per annum.
18. On any default in payment of any lease rental or breach of any of the terms and conditions hereof the lessor would be entitled to take possession of plant and machinery mentioned in Schedule I hereunder and take such action as are permissible in law for recovery of the dues.
19. The waiver of any particular default or breach of the lessee by the lessor shall not be treated as waiver of any other default or breach of the terms and conditions of this agreement.
20. Any notice of demand required to be given shall be given by post or by hand-delivery to the addresses of the parties given hereinabove.
21. The lessee agrees and undertakes that its obligations to pay all lease-rentals and any other amount owing hereunder shall be absolute and unconditional. The lessee shall not be entitled to cancel or terminate this agreement without paying the entire lease-rentals.
22. All disputes and differences claims and questions whatsoever which could arise either during the subsistence of this agreement or afterwards between the parties and/or their respective representatives touching these Presents or any clause or thing herein contained or otherwise in any way relating to or arising from these Presents shall be referred to Arbitration of Mr. PQ of ……………………………… and shall be subject to the jurisdiction of the ………………… High Court. Such Arbitration shall be in accordance with and subject to the provisions of the Arbitration and Conciliation Act 1996 or any statutory modification thereof for the time being in force.
20 Automatic Vests Knitting Machines, Colour Motif, colour-in-colour, floating pattern, mesh pattern, plating horizontal and vertical stripes, etc.
And other particulars.
Total worth of rentals payable by the lessee … Rs. 51,78,800
And other particulars.
Lease rentals and due date
Rs. 5,56,980 payable quarterly beginning from 10th June 2000 and thereafter on 10th of every third month and the entire amount would be paid by 10th March 2003.
The Lease Rentals is in addition to the Lease Management fee of Rs. 51,788 payable at the time of signing of the agreement.
In witness whereof the parties herein have signed, sealed and delivered these presents on the day, month and year first above-written.
Signed, sealed and delivered by
pursuant to Board Resolution
of 1st June 2000 of CD Ltd. in
in presence of: Signature
Signed, sealed and delivered by
pursuant to Board Resolution of
2nd June 2000 of AB Financial
Services Ltd. in the presence of: Signature