Tripartite Agreement for Leasing Finance

This agreement is made this 10th day of June 2005 between AB Financial Services Limited, 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 First Part, CD Limited, 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 Second Part and Lease Financing Bank Limited, a Banking Company within the meaning of the Companies Act 1956 and carrying on business at…………..(hereinafter referred to as the bank which term shall include its successors and assigns) of the Third Part.
Whereas under an Agreement of Hypothecation dated 16th June 2005 executed by the lessor in favour of the bank, the bank granted to the lessor advance of a sum of Rs. 40 lakhs in Cash Credit Account to enable the lessor to purchase 20 Automatic Knitting Machines for the purpose of leasing out the same to the lessee against hypothecation of the said plant and machinery and on terms and conditions contained in the said agreement.
And whereas the lessor has entered into an Agreement of Lease with the lessee on 6th June 2005 leasing out the said plant and machinery subject to payment of lease rent and on terms and conditions contained in the said Lease Agreement.
And whereas the terms of sanction of the said loan of Rs. 40 lakhs by the bank to the lessor provided that the plant and machinery purchased by the lessor would be leased-out to the lessee subject to the bank's hypothecation and that the lessee should undertake that it would not assign or transfer in any manner its rights as a lessee in the said plant and machinery and that the lessee would undertake to pay the lease rentals directly to the bank, if so required, and that the moneys realised under any Insurance Policy would belong and be paid to the bank.
Now these presents witnesseth and it is hereby agreed by the parties as follows:
1. The lessee hereby confirms that the plant and machinery taken on lease from the lessor remain hypothecated to the BANK.
2. The LESSEE undertakes not to deal with the said plant and machinery in a manner prejudicial to the interest of the BANK as a hypothecatee.
3. The Insurance moneys that may be recovered for loss or damage to the said plant and machinery would be paid to the bank if demanded.
4. The lessee would pay the lease rentals to the bank as hypothecatee if so demanded by the bank.
5. In case of any dispute or differences between the lessor and the lessee the lessee undertakes to make direct payment to the bank of all lease rentals according to the Agreement of Lease dated 6th June 2005.
6. If the lessee makes default in payment of any lease rentals or commits any breach of any of the terms contained herein or in the Lease Agreement dated 6th June 2005 the bank will have the liberty to take appropriate action for enforcement of its hypothecation for recovery of its claim in respect of the said advance of Rs. 40 lakhs made to the lessor and will be at liberty to take possession of the said leased out plant and machinery.
7. The lessee undertakes to affix a board on the plant and machinery indicating that the same are remaining hypothecated to the bank.
8. The lessor agrees that in default of repayment of the said loan of Rs. 40 lakhs with interest in terms of the Hypothecation Agreement the bank would be at liberty to ask the lessee to pay the lease rentals in respect of the said plant and machinery directly to the bank.
9. The lessor shall from time to time keep the bank informed as to the lease rentals paid by the lessee or realised by the lessor under the said Lease Agreement.
10. The parties herein agree and declare that the terms and conditions contained herein will prevail over the provisions made in the said Lease Agreement and the said Hypothecation Agreement in case there is any conflict among them.
In witness whereof the parties hereto have executed these presents on the day, month and year first above-written.
Signed, sealed and delivered by
Mr………..pursuant
to Board   Resolution   of   AB
Financial Service Limited dated
5th June 2005 in the presence of:                                                       Signature
1.
2.
Signed, sealed and delivered by
Mr…………..
pursuant to Board Resolution
of 5th June 2005 of CD Limited
in the presence of:                                                                               Signature
1.
2.
Signed, sealed and delivered by
Mr…………..
pursuant to Board Resolution of
Lease Financing Bank Limited
Dated……5th June 2005 in  the
presence of:                                                                                         Signature