LEASE AGREEMENT FOR EQUIPMENT
THIS LEASE AGREEMENT made at??????.this??????. day of??????. 20??????.between A. B. Co. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at??????.hereinafter called the Lessor (which expression unless it be repugnant to the context or meaning thereof shall mean and include its successors and assigns) of the ONE PART and X Y. Co. Pvt. Ltd., a company incorporated under the Companies Act, 1956 and having its registered office at??????.hereinafter called the Lessee (which expression, unless it be repugnant to the context or meaning thereof shall mean and include its Successors and assigns) of the OTHER PART.
WHEREAS
The Lessor is carrying on or engaged in the business of lease financing by leasing various assets, plants, machineries and equipments and the Lessee has requested the Lessor to purchase the plant and machinery, described in the Schedule hereunder written and given on lease to the Lessee, which the Lessor has agreed on the terms and conditions hereinafter appearing.
NOW THIS DEED WITNESSETH AS FOLLOWS:
(1) In pursuance of the said agreement and in consideration of the rent hereby reserved and of the terms and conditions, covenants and agreements herein contained and on the part of the Lessee to be observed and performed, the Lessor hereby gives on lease and the Lessee hereby takes on lease, the equipments more particularly described in Schedule hereunder for a period of??????.years, commencing from??????.day of??????.
(2) The Lessee shall pay to the Lessor at the address mentioned above or at such place or places as he may specify in writing from time to time the rent in such amounts and on such dates as specified in Schedule hereunder. If the said rents are not paid within ??????.days from the date mentioned in the Schedule, late charges at the rate of ...... % per month or part thereof will be payable by the Lessee from the due date of payment till the date of payment.
(3) On signing of this agreement, the Lessee shall pay a sum of Rs ??????.by way of lease management fees, which shall be non? refundable and a sum of Rs . ????as security deposit against his obligation hereunder
.
(4) The Lessee hereby confirms that he has selected the equipment and the supplier and the Lessor has not made any statements or representations about the same. The Lessor is not the manufacturer or supplier of the equipment and he will not be liable or responsible to the Lessee for any claim, liability, loss, damage or expense of any kind or nature whatsoever arising from the transportation and delivery of the equipment leased, its storage, installation, use or operation or its failure to operate or perform or otherwise howsoever. The Lessor hereby assigns to the Lessee the right to make any claim against the manufacturer or supplier of equipment for any defect or deficiency or claim for any breach of condition or warranty.
(5) The Lessee warrants that the execution of this lease agreement and the use and operation of the equipment by the Lessee will not?
(a)contravene any provision of any law, rules and regulations; and
(b)result in breach of any agreement or arrangement to which the Lessee is a party
(6) The Lessee declares that he has obtained all licences, approvals, consents, etc. as are necessary for or in connection with the execution, validity and enforceability of this lease and for the storage, installation, use and operation of the equipment and he undertakes to keep them effective and in force during the period of this lease.
(7) The Lessee hereby covenants with the Lessor as follows
(a)To pay the reserved rents on the days and in manner aforesaid.
(b)To use and operate the equipment carefully and in workmanship manner and to keep the equipment in good and serviceable repair condition (fair wear and tear excepted) and replace old, damaged or broken parts or accessories with parts or accessories of equal value.
(c) To keep the equipment in its control at its factory specified in the Schedule and not remove the same therefrom without the prior written permission of the Lessor.
(d) To pay all rates, taxes, licence fees, registration charges and other outgoings payable in respect of the equipment or storage, installation, use or operation thereof or of the premises where the same is kept and shall on demand produce to the Lessor receipts and other evidence of such payment
(e) To insure the equipment in the joint names of the Lessor and the Lessee with such insurance company as may be approved by the Lessor against all risks including fire, riot, lightening, explosion,
earthquake, strike, storm, tempest, flood, war, theft, civil commotion and such other risks (including third party risks) and keep the insurance in force during the term of the lease and will not do or omit to do, or be done or permit or suffer any act, deed or thing which might or could prejudicially vitiate or affect any such insurance.
In the event of any claim arising under any such insurance, to intimate the lessor about the same and comply with all instructions of the Lessor in connection therewith and to take steps, actions and proceeding as may be necessary and if so required by, the. Lessor, receive any monies, payable in respect thereof for and on behalf of and in trust for the Lessor and deliver the same to the lessor upon receipt thereof without claiming any part thereof on any account whatsoever.
(g) Notwithstanding anything contained in the preceding clause, the Lessor may at its option agree that any insurance proceeds received under the said insurance may be applied in making good the damage or in replacing the equipment or any items thereof by other similar equipment to which the terms of this lease shall apply:
Provided that if the equipment as a whole is destroyed or damaged in such a manner that it cannot be repaired, then the Lessor shall be entitled to terminate this lease and to retain any insurance proceeds received by him in respect thereof
(h) Not to transfer, assign, transfer or part with possession of the equipment or any part thereof.
(i) To permit the Lessor and his agents with or without workmen at all reasonable times for the
purpose of examining the state and condition of the equipment in the premises where the equipment is stored, used or lying and if the Lessor finds that any repairs are necessary to be done or replacements necessary to be made, he may serve upon the Lessee a notice in writing requiring the Lessee to carry out such repairs or replacements to be done and the Lessee shall forthwith execute such repairs or make such replacements and if the Lessee shall not within one month after the service of such notice executes the repairs or makes such replacements, then the Lessor may execute such repairs or make such replacements and the cost thereof shall be a debt due from the Lessee to the Lessor and be forthwith recoverable by action.
(j) Indemnify and keep the Lessor indemnified against any loss or seizure of the equipment under distress, execution or other legal process or from any claim, demands, proceedings or expenses arising out of the storage, installation, use or operation of the equipment or Any risk or liability for death or loss of limb of any person and hold the lessor harmless against all losses, damages, claims, expenses, suits, penalties or proceedings of whatsoever nature made, suffered or incurred consequent thereupon and for that purpose take out such insurance policies as may be necessary or customary in the business carried on by the Lessee or as may be directed by the Lessor in that behalf and keep such policy in full force during the term of the lease.
(k) Not to do or omit to be done any act, deed or thing whereby the Lessor is deprived wholly or partly from claiming any relief by way of deduction, allowance or grant, as owner of the equipment under the Income-tax Act, 1961 or under any statute, rules, regulations, guidelines or instructions issued by the Government of India or any statutory authority and to furnish to the Lessor at the end of each financial year such information as it may require to claim relief by way of any deduction, allowance or grant as the owner of the equipment under the Income-tax Act, 1961.
(l) To furnish audited balance sheet and Profit and Loss Account every year to the Lessor and such other information as may. be called for by the Lessor from time to time.
(8) The Lessor hereby covenants with the Lessee as follows:
(a) Not to sell, transfer, assign or otherwise dispose off the equipment during the term of the lease, except that the Lessor may create charge on the equipment in favour of its bankers, lender or financiers; provided that creation of such charge shall not affect the quiet and peaceful possession of the equipment by the Lessee during the term of the lease.
(b) On termination or expiry of the lease, in the event of sale of the equipment to give to the Lessee priority to purchase the said equipment at the market price of the equipment.
(9) It is hereby agreed and declared that these presents are on the express condition that the Lessor is and shall at all times remain the absolute owner of the equipment and the Lessee shall have the right, title or interest therein except as provided herein. The Lessee shall affix a name plate or other mark on the equipment identifying the sole and exclusive ownership thereof of the Lessor. The Lessee shall also not sell, assign, mortgage, hypothecate, pledge, encumber or otherwise create any charge on the equipment or in any way adversely affect the title, right and interests of the Lessor. The equipment shall at all times remain a movable property and the Lessee undertakes that he shall not affix or cause to be affixed permanently the equipment to any immovable property.
(10) If the Lessee regularly pays the rent hereby reserved and observe and perform all the covenants and conditions of this lease, the Lessor shall on the written request of the Lessee made three calendar months before the expiration of the term of the lease hereby created, grant to the Lessee a renewed lease of the equipment for further term as may be desired by the Lessee but not exceeding??????.years from the expiration of the terms of this lease at an enhanced annual rent of Rs . ..............
(11) The Lessor shall be entitled to terminate this lease upon occurrence of any event of default specified below
Provided that before termination of lease, the Lessor will give., a notice in writing to the Lessee of his intention to terminate the lease and if the default continues, after 30 days from the service of such notice, all the liabilities and obligations of the Lessee as regards future rentals and other sums payable under these presents shall immediately fall due:
(a)If the Lessee falls to pay the rentals on the dates or any part thereof and other payment required hereunder for a period of 30 days from the due date, whether the same shall or shall not be legally demanded or not.
(b) If the Lessee fails to observe and perform any covenants, stipulations or obligations hereunder or commits a breach of any of the terms, conditions or provisions of this Lease Deed on its part to be observed and performed.
(c)If the warranty or representation made or deemed to be made by the Lessee in these presents proves to be incorrect in any material respect or shall become incorrect in any material respect.
If the Lessee attempts to remove, sell, transfer, assign, mortgage, encumber or part with the possession or control of the equipment or in any way does any act, deed or thing which affects the Lessor's interest in the equipment.
(e) If the Lessee passed any resolution for winding up or allows a petition for winding up presented before a Court against it or if a receiver or liquidator is appointed of the whole or part of the assets, properties or undertakings of the Lessee or compounds with or makes any composition with its creditors.
(f)If the Lessee does or suffers any act or thing or omits to do or suffer any act or thing whereby the equipment may be attached, distrained or taken in execution under legal process or by public
authority.
(g) If the Lessee suffers any adverse material change affecting the financial position of the Lessee or by any act or omission of the Lessee, the Lessor has reasonable grounds to apprehend breach of the terms and conditions of this lease in future or that its rights may be prejudiced or be in jeopardy.
(12) Upon termination of lease on the occurrence of any default as provided hereinabove, the Lessor without prejudice to and in addition to his rights, shall be entitled to:
(a) Remove and repossess the equipment by itself, its servants or agents by entering upon any premises where the equipment is installed or stored or is reasonably believed to be situated for the time being and detach and dismantle the same and the Lessor shall not be liable for any damage caused to the Lessee by detachment or removal of such equipment and sell the said equipment at public or private auction or lease or hire to any person or use or dispose of the same in such manner, as the Lessor thinks fit.
(b)Forfeit all the lease rentals and security deposit.
(c) The lease rentals upto the unexpired residue of the term and other charges and sums which are payable by the Lessee under these present shall become due and payable by the Lessee
(d)To pay all costs, charges, fees, etc. including cost of legal proceedings incurred by the Lessor in consequence of termination of the lease.
(13) It is hereby expressly agreed between the parties as follows:
(a)Time shall be the essence of this lease, in so far as it relates to the observance and performance of the covenants and obligations by the Lessee.
(b)Until the Lessor and the Lessee shall advise each other by writing, the address for service of all notices and other communications shall be as under:
(i) For the Lessor.
(ii) For the Lessee
(c) If any dispute or question whatsoever shall arise between the parties hereto relating to interpretation of any clause of this deed or the rights, duties or liabilities of either party under this lease or otherwise in connection with these presents, the matter in difference shall be determined by a single arbitrator in accordance with the Arbitration Act, 1940 or any statutory enactment in that behalf for the time being in force.
(d) This Lease Deed shall be executed in duplicate. The original shall be retained by the Lessor and the duplicate by the Lessee.
(e) The stamp duty and all other expenses in respect of this Lease Deed and duplicate thereof shall be borne and paid by the Lessee.
(f)The marginal notes and the catch lines hereto are meant only for convenience of references and shall not in any way be taken into account in the interpretation of these presents.
IN WITNESS WHEREOF, the parties have caused their common seals to be affixed hereunto and a duplicate hereof on the day and year first above written.
The Schedule above referred to
WITNESSES The common seal of the within named A B Co. Ltd., the Lessor was hereunto affixed pursuant to the resolution of the Board of Directors passed on
1 ??????., in the presence of S/Shri??????.and ??????. Directors, who have signed these presents in token thereof
2. The common seal of the within named X Y Co. Ltd., the Lessee was hereunto affixed pursuant to the resolution of the Board of Directors passed on........ in the presence of S/Shri ??????.and??????. Directors, who have signed these presents in token thereof