Lease Agreement
Lease Agreement
This agreement is made at _______ on this day of ________, 2014
Between
__________________________, 112 B, Lahore (hereinafter called the Lessee which expression shall where the context so admits include its successors and assigns) of the One Part
And
Trust Modaraba (herein called TM which expression shall where the context so admits include its successors and assigns) of the Other Part
Witnesseth and is hereby agreed by and between the parties as under:
ARTICLE 1 (LEASE)
1.01 TM hereby Leases to the Lessee hereby agrees to take on the Lease from TM the property/equipment described in the schedule hereto attached or intended to be attached hereto and in such additional and supplementary schedules as from time to time hereafter may be executed by the parties hereto, which said additional and supplementary schedule shall thereupon form part of this agreement. The term “property/machinery/equipment” wherever used herein shall be construed to mean the property/machinery/equipment described in such schedules and all equipment and assessories at the time delivery and where the context requires, the singular shall include the plural.
1.02 Lease covenants and agrees to pay the amount of Rs. 3, 450, 000/- (Rupees Three Million Four Hundred Fifty Thousand Rupees) to TM on the execution of this Agreement as security deposit to be applied on the absolute desecration of TM in of any rent in default under this lease at any time or from time to time, lessee shall have no right of set off against such security deposit, but shall be entitled to return of the said deposit after deduction of any costs, charges or expenses at the end of the term of this Lease.
ARTICLE II (TERM OF LEASE AND RATE)
2.01 The term of the Lease and charges payable hereunder with respect to the property/machinery/equipment shall be as set forth in the aforementioned schedules attached hereto or intended to be attached from time to time. The monthly rates shall be payable monthly in advance on the first day of each month of the term of the Lease or any renewal thereof provided, however, if delivery of the leased property/machinery/equipment be made or tendered on or before the fifteenth day of a month, the rental term for such property/machinery/equipment shall commence as of the first day of the calendar month in which delivery is so made or tendered on or after the sixteenth of such month, as of the first day of the next succeeding calendar month.
2.02 Lessee agrees to pay to TM a penalty of Rs. 2, 660/- per day on all sums not paid by the Lessee to TM when the due owing under the provision of this lease.
The penalty contemplated here under shall not form part of the income of TM. Th amount recovered on account of ‘penalty’ shall be deposited in ‘penalty account’ to be separately maintained by TM and the amount so available in the said account shall be utilized charitable and religious purposes recognized by the ‘Sharia’ and in this account the amount available and disbursement thereof shall be specially audited and certified by the auditors along with other accounts.
2.03 All rates and other charges shall be payable at par in Pakistan at the office of the TM.
ARTICLE III (DELIVERY)
3.01 The property/machinery/equipment as set out in the schedule attached hereto shall be delivered by TM to the Lessee at the place stated in the schedule. All costs incurred in connection with delivery of the property/machinery/equipment to the Lessee from the place of TM to the place of the Lessee specified in the schedule shall be paid by the Lessee to TM immediately upon delivery.
3.02 Upon delivery of each item of property/machinery/equipment to the Lessee the Lessee shall execute and deliver to TM a receipt or acceptance thereof in the approved form. By such acceptance Lessee agrees that such property/machinery/equipment is in good working order, repair condition and appearance in all respects.
ARTICLE IV (USE OF PROPERTY/MACHINERY/EQUIPMENT)
4.01 Each item of property/machinery/equipment leased hereunder shall be used for the normal and usual purpose of the business of Lessee, provided that nothing in this paragraph shall derogate from the liability of the Lessee for any use and operation of each item of property/machinery/equipment leased thereunder in breach of any of the terms and conditions contained herein or of the insurance policy or policies intended to cover TM liability as owner and that each item of property/machinery/equipment leased thereunder shall be lawfully operated according to the lease of any jurisdiction to which the use and operation thereof may at any time be subject, the Lessee thereby agreeing to indemnify and save harmless TM of and from any and all fines or penalties levied or imposed in respect of the use and operation of each property/machinery/equipment, Lessee will immediately notify TM of any change of place of installation of any lease property/machinery/equipment shall be confined to geographical limits of Pakistan.
4.02 A property/machinery/equipment leased hereunder:
- a) Must not be subleased, let for hire or loaned by Lessee under any circumstances whatsoever;
- b) Must not be used by an untrained person
- c) The property/machinery/equipment shall at all times be housed and operated under the manufacturer’s laid down environmental requirements
- d) The Lessee shall at his own cost procure and install a voltage stabilizer for the operation of sensitive electrical equipment to the specification laid down by the supplier as being suitable for the equipment
ARTICLE V (MAINTENANCE OF LEASED PROPERTY, MACHINERY, EQUIPMENT)
5.01 Lessee agrees to maintain each item of machinery/equipment/property in reasonable conditions satisfactory to TM agrees to be solely responsible for all maintenance and operating cost and expenses which shall include but shall not be limited to fuel, oil and lubricants, repairs, replacement of components, periodic preventive maintenance costs, maintenance of electrical circuit switches, fuses and safely devices, partial and complete overhauls and other costs and expenses, fees, licenses and charges incurred in connection with or any way referable to the delivery, use and operation of each item during the lease term thereof. The Lessee also agrees to be responsible for and forthwith to pay all fees, taxes or penalties of every nature and kind whatsoever and by whomsoever payable (except income tax of TM) relating to the property/machinery/equipment. In the event of any maintenance or operating costs and expenses as aforesaid or fees, taxes and penalties or any other charges are not paid by the Lessee as herein required, TM may do so and Lessee shall forthwith upon demand reimburse TM thereof, it being the intention of the parties hereto that TM shall receive a fixed amount herein provided for as a net return on the property/machinery/equipment leased under.
ARTICLE VI (MAINTENANCE OF LEASED PROPERTY/MACHINERY/EQUIPMENT)
5.01 Lessee agrees to maintain each item of machinery/equipment/property in reasonable conditions satisfactory to TM Lessee agrees to be solely responsible for all maintenance and operating cost and expenses which shall include but shall not be limited to fuel, oil and lubricants, repairs, replacement of components, periodic preventive maintenance costs, maintenance of electrical circuit switches, fuses and safety devices, partial and complete overhauls and other costs and expenses, fee, licences and charges incurred in connection with or any way referable to the delivery, use and operation of each item during the lease term thereof. The Lessee also agrees to be responsible for and forthwith to pay all fees, taxes or penalties of every nature and kind whatsoever and by whomsoever payable (except income tax of TM) relating to the property/machinery/equipment. In the event of any maintenance or operating costs and expenses as aforesaid or fees, taxes and penalties or any other charges are not paid by the Lessee herein required. TM may do so and Lessee shall forthwith upon demand reimburse TM thereof, it being the intention of the parties hereto that TM shall receive a fixed amount herein provided for as a net return on the property/machinery/equipment leased under.
ARTICLE VI (INSURANCE)
6.01 TM as the owner of the property/machinery/equipment shall procure comprehensive insurance coverage for the leased property/machinery/equipment stated in the schedule and shall maintain the insurance coverage through the entire period of the lease. Prior to the delivery of the property/machinery/equipment proof of the comprehensive insurance cover will be provided to the Lessee. Charges for this insurance cover will be borne by the Lessor. The Lessee its agents and employees shall comply with all the terms and conditions of the said insurance policy, including the immediate reporting of the accidents and damage to TM and the insurance company and do all the things necessary or proper to the protect or preserve property/machinery/equipment in accordance to the appropriate clauses as mentioned in the Insurance Policy.
ARTICLE VII (TITLE)
7.01 Title, ownership and right of property in and to the property/machinery/equipment leased hereunder shall at all times remain vested in TM and the Lessee covenants and agrees not to do or perform any act prejudicial thereto. Without limiting the generality of the foregoing, Lessee agrees not to do any act encumber, convert, pledge, abandon, give up possession, damage or destroy the said property/machinery/equipment or any one or more of accessory and part thereof.
7.02 The Lessee hereby agrees to indemnify and save harmless TM from any loss or damage which TM any sustain as a result of any foregoing acts.
ARTICLE VIII (RETURN OF PROPERTY/MACHINERY/EQUIPMENT)
8.01 Return of the lease property/machinery/equipment shall be at the Lessor’s place of business as specified in the schedule. Any structural alteration, special equipment material alteration hereinafter required by the Lessee shall be added only with the approval of the Lessor and shall be removed at the Lessee’s expenses prior to the end of the lease term if requested by the Lessor. The Lessor shall be entitled to label the property/machinery/equipment.
8.02 The Lessor agrees to return the leased property/machinery/equipment at the end of the lease term or any extension thereof or earlier termination of the lease, in good operating condition and working order, free from any physical damage. In general, normal wear proportionate to the usage is to be expected. However any condition as a result of neglect or abuse is the sole responsibility of the Lessee.
8.03 At the termination of the lease and while returning the property/machinery/equipment in time, the property/machinery/equipment shall be in satisfactory operating condition. The Lessee or Lessor or their agents shall inspect the said property/machinery/equipment and provide a jointly signed report on the condition of the property/machinery/equipment.
ARTICLE IX (LIMITATIONS OF LIABILITY)
9.01 It is understood and agreed that TM shall not be liable or accountable to the Lessee for any loss, damage, claimed, demand, liability, cost or expenses of any nature or kind sustained by the Lessee directly or indirectly resulting from any inadequacy for any purpose, or any defect therein, mechanical failures of the property/machinery/equipment leased hereunder, or from loss or interruption of use thereof, or any loss of business, profits consequential or any damage of any nature TM shall not be required to carry out any of the terms of this agreement if prevented from so doing by Acts of God, or the state’s enemies viz, major strikes, substantial destruction of its plant or equipment or any other circumstances beyond its control and shall not be liable for any loss or damages sustained by the Lessee and resulting therefrom. If any property/machinery/equipment should be damaged but the capable of being repaired and if the applicable insurance proceeds be insufficient to pay the full repairing the same TM shall arrange repair and difference between the actual cost of repair and payment received for it from the Insurance Company shall be payable by the Lessor.
9.02 Any and all repairs, replacements or substitution of parts or equipment on the property/machinery/equipment shall be at the Lessee’s expenses, under the contract with Company’s Creditors Arrangement Act, or in the event of any levy of execution or attachment upon Lessee’s goods or should the Lessee suspend business or tax lien be filed against any of the Lessee’s property or should the property/machinery/equipment be confiscated, or forfeited or seized by any duly constituted authority or which is dealt with by the Lessee hereunder and in property/machinery/equipment covered by this lease Agreement shall forthwith terminate and TM shall have the right to take immediate possession of all property/machinery/equipment leased hereunder and Lessee shall immediately deliver to TM the said property/machinery/equipment or retain the property/machinery/equipment or retain the property/machinery/equipment TM may at his own option sell the property/machinery/equipment or retain the property/machinery/equipment free and clear of this lease and keep as liquidated damages and not as penalty all monthly rents and sale proceeds received, including any refunds and not as penalty all monthly rents and sale proceeds received, including any refund and other sums which otherwise would be payable to the Lessee hereunder. In the event that TM shall by become entitled to the return of some one or more or all of the property/machinery/equipment leased hereunder, then notwithstanding any terms of the conditions contained herein, writing the amount equivalent to the rent of the unexpired period and the Lessee hereby agrees and undertakes to pay the amount so demand and TM on receipt of the amount claimed shall transferred proprietary rights in the property/machinery/equipment to the Lessee or in addition to any other remedy upon to it, may without notice take possession of any or all of the said property/machinery/equipment without process of law and the Lessee hereby authorize and empowers TM its servants, agents or other representatives to be enter of any of the Lessee’s lands or premises, or any other place or places where any of the said property/machinery/equipment may be found, for the purpose of possession thereof, and on happening of such event or events, the Lessee hereby irreovocably appoints TM or any of its officers, as the Lessee’s true and lawful attorney to execute such document as may be necessary for the purpose of regaining possession of the said property/machinery/equipment or any of them and the accessories without attached thereto. The Lessee shall pay the costs of such repossession including transportation and storage charges.
ARTICLE X (ASSIGNMENT)
10.01 It is understood and agreed between the parties thereto that this Lease Agreement is personal to the Lessee and may not under any circumstances be transferred or assigned by the Lessee to any other person, firm or corporation without the written consent of TM. However, nothing herein contained shall be construed to in any way limit TM’s right to assign this Lease and in the event of such assignments TM assign shall succeed to all of TM rights hereunder.
ARTICLE XI (MISCELLANEOUS)
11.01 The TM and Lessee agree that:
- a) All schedules annexed hereto are and shall form an integral part of this agreement
- b) This agreement shall construed according to the laws of Pakistan
- c) Any notice or request to this Agreement shall be in writing and such notice or request shall be deemed to be duly given or made when it shall be delivered by hand or by mail telegram, cable or telex to the party to which it is required or permitted to be given or made at such party’s address the supplier and shall be deemed accessions to the property/machinery/equipment and title thereto shall vest and remain in TM.
ARTICLE XII (INDEMNITY)
12.01 The Lease Covenants and agrees with TM that, regardless of any insurance provided in clause 6, that it shall be all times and under all circumstances indemnify and save TM harmless from and against all fines and penalties, all liability and all claims, loss, cost damages, suits or contributed by, related to arising out of the possession operation or use of the property/machinery/equipment during the entire lease term thereof and such liability shall not be affected by any termination, or the lease with respect to any property/machinery/equipment.
ARTICLE XIII (DEFAULT AND TERMINATION)
13.01 This lease may be terminated by TM prior to the expiration of its maximum term with respect to any particular property/machinery/equipment which is the subject matter of this lease after the expiration of first twelve months of the term of this lease with respect to such property/equipment/machinery. Termination shall be affected by written notice given thirty days in advance of the proposed termination date, either personally or by registered mail addressed to the last known address of the other party and such notice shall be deemed to have been given on the date of deposit thereof in the post. This lease and all its terms and conditions, shall notwithstanding the giving of such notice with respect to any particular property/machinery/equipment covered by this lease.
13.02 TM shall have the right to control and to terminate this agreement with respect to one or all of the property/machinery/equipment covered at any time without notice on the following grounds:
- a) For failure by Lessee to pay any charges or sum whatsoever payable by the Lessee under the terms of this Lease as and when they shall become due.
- b) For a breach of any of the terms, covenants or conditions of this Agreement by the Lessee.
- c) For unreasonable or abusive use of any of the said property/machinery/equipment.
- d) If the insurance in this agreement mentioned shall for any reason be cancelled in whole or in part.
13.03 In any such event or in the event the Lessee shall make an assignment for the benefits of its creditors, or in the event a proceeding in bankruptcy, receivership or insolvency be instituted against the Lessee or Lessee’s property or any action is taken against the Lessee under any law for the relief of debtors, or of the Lessee shall make a proposal under the Bankruptcy Act, or take any proceedings for winding up or be specified in this Agreement or such other address of such party as shall have been designated by notice or making such request.
13.04 The Lease agrees and undertake with TM
- a) Time shall be essence of this Agreement. TM failure to strictly enforce any provisions of this lease shall not be construed as a waiver thereof lessee from future performance. This Lease and may be modified or amended only in writing properly executed by the parties and attached hereto.
- b) This is contract of Lease only and Lessee shall under no circumstances become the owner of the property/machinery/equipment leased hereunder or the agent of TM for any purpose whatsoever. Subject to the prohibition against assignment hereinbefore set out, this agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns.
IN WITNESS WHEREOF THE PARTIES HAVE HEREUNTO EXECUTED THIS AGREEMENT.
For and on behalf of for and on behalf of
Trust Modaraba Sunshine Cloth Limited
Manager Chief Executive Authorised Signatory
Witness Witness