Tripartite Lease Agreement Between Lessor, Lessee And The Guarantor - Legal Draft

THIS

AGREEMENT of Lease made at_____________ on this__________ day of_____________

2000, between ABC Co. Ltd., a company incorporated under the Companies Act,

1956 and having its registered office at __________ (Hereinafter referred to as

"the lessor") of the FIRST PART and XYZ Co. Ltd., a company

incorporated under the Companies Act, 1956 and having its registered office at

____________ (Hereinafter referred to as "the lessee") of the SECOND

PART and M, son of ____________resident of_______________ (hereinafter referred

to as "the Guarantor") of the THIRD PART.WHEREAS

on the request made by the Lessee, the Lessor has agreed to purchase the

equipment, more particularly described in the Schedule hereto (Hereinafter

referred to as "the Equipment") at the price mentioned in the

proposal form signed by the LesseeAND

WHEREAS the Lessee has offered to take the equipment so purchased by the

lessor.AND

WHEREAS the Guarantor has agreed to stand surety for the payment of lease

rentals and observance and performance of covenants, stipulations and terms and

conditions of this agreement.AND

WHEREAS the Lessor has agreed to purchase and lease the said equipment to the

Lessee upon the terms and conditions hereinafter appearing.NOW

IT IS HEREBY AGREED AS FOLLOWS:1. In pursuance of the

said agreement and in consideration of the lease rent hereby reserved and of

the covenants, stipulations and terms and conditions herein contained and on

the part of the lessee to be observed and performed, the Lessor doth hereby

grant the lease of the equipment unto the Lessee upon the terms and conditions

hereinafter mentioned for the term of __________ years commencing on

the________ day of _______200-.2. The Lessee shall pay

to the Lessor lease rent at the rates on the days and in the manner specified

in the Schedule hereunder written without deduction or abatement in advance on

the 1Oth day of each calendar month, the first such payment to be made on

the____________ day of________ and if the lease rent is not paid on the due

dates, the Lessee shall pay interest thereon at the rate of______ % per month

from the due date till payment.3. The equipment shall

be delivered to the Lessee by the manufacturer at the Lessee's factory at the

address specified in the Schedule and the Lessor will not be liable for any

loss or damage caused to the equipment before or in the process of

transportation or delivery of the equipment.4. The Lessee

acknowledges, declares and agrees that:i.

the

equipment is of a size, design, capacity and manufacture selected by the

Lessee;ii.

the

Lessee has selected the equipment and the manufacturer based on its own

judgment;iii.

the

Lessor is not the manufacturer or supplier of the equipment and it has not made

any representations or statement about the equipment and the Lessee disclaims

any reliance on the statement made by the Lessor, if any relating to the

equipment;iv.

the

Lessee has not given any warranties express or implied on to any matter

whatsoever including the condition, fitness or merchantability of the equipment

or suitability of the same for any purpose;v.

the

Lessor will not be liable to the lessee for any liability, claim, loss, damage

or expenses of any kind or nature whatsoever arising from the leasing,

installation, use or operation of the equipment or its failure to operate or

perform or otherwise howsoever.5. The lessee shall

throughout the said term:i.

Pay

the lease rentals and other amounts regularly and punctually payable hereunder.ii.

Keep

and maintain the equipment in good and substantial repair and condition (fair

wear and tear excepted) and in case the equipment is required to be repaired,

to get the equipment repaired by the person, firm or body nominated by the

lessor and in the event of the lessee failing to do so, the lessor shall be

entitled to take possession of the equipment and get the equipment repaired and

in such case the lessee will forthwith repay to the lessor the full cost of

repairs incurred by the lessor.iii.

Install,

use and operate the equipment properly and carefully and in conformity with the

instructions given by the manufacturer in this behalf.iv.

To

pay or cause to be paid all rates, taxes, licence fees, duties, surcharges,

registration charges and other outgoings payable in respect of the equipment,

or its installation, use or operation thereof or in respect of the premises

where the equipment may be placed or kept for the time being and on demand

produce the receipts thereof to the lessor or his authorised representatives

and in case of failure by the lessee to pay the rates, taxes, etc., the lessor

shall be at liberty (but not bound) to make all or any of such payments and to

recover the amount thereof from the lessee forthwith.v.

Keep

the equipment at all times in its possession and control at the location shown

herein viz.______________ and will not remove the said equipment therefrom

without the prior written consent of the lessor.vi.

Not

cause or permit affixation of equipment to any immovable property.vii.

Insure

and keep the equipment insured during the term of the lease, at its own cost,

in the name of the lessor against loss or damage by theft, fire, accident, and

other risks and on such terms as the lessor may require with ________________

company Ltd. for an amount equal to the full value of the equipment, in the

event of the lessee failing to insure, the lessor may do so and recover the

cost thereof from the lessee forthwith. The Lessee shall pay the insurance

premiums and shall hand over the policies of insurance and receipts of payment

of premiums to the lessor.viii.

Not

to make any alteration, addition or improvement in equipment without the prior

written consent of the lessor and any alteration, addition or improvement when

made to the equipment shall be deemed to be part and parcel of the equipment

owned by and belonging to the lessor.ix.

To

permit lessor and all persons authorised by it at all reasonable times to enter

upon the premises where the equipment is placed or kept for the time being in

force and to inspect and examine the condition of the equipment.x.

Obtain

all necessary licences, permissions, etc. for the use and operation of the

equipment and not to use the equipment in contravention of the terms and

conditions of such licences, permissions, bye-laws or regulations of any local

or statuary authority for the time being in force.xi.

To

indemnify and keep indemnified the lessor against any claim, demand,

liabilities, proceedings or expenses, brought, filed or incurred against him

relating to the transportation, delivery, operation or use of the equipment

including injuries to or death of persons arising from or pertaining to the

transportation possession, installation, operation or use of the equipment.6. The lessee

acknowledges, declares and confirms that it holds the equipment as a mere

bailee and the lessor is and will be having sole and exclusive right, title and

interest in the equipment and the lessee will affix or place plate or makings

on the equipment indicating the lessor''s title and therein.7.i.

If

the equipment or any part thereof is lost, destroyed or damaged, the lessee

shall notify you the same to the lessor and receive the moneys from the

insurance company and hold the same on trust for the lessor and pay or apply

the same as directed by the lessor.ii.

If

in the opinion of the lessor, the equipment is lost, stolen or damaged to such

extent, which is incapable of repair; the insurance money will be applied to

make good the damages under the insurance policies.iii.

If

in the opinion of the lessor. the equipment can be repaired then the insurance

monies shall be applied in repairing or replacing the equipment with similar

type and quality and in such an event the replaced equipment shall be held by

the lessee under the terms of this lease.iv.

Save

as provided in above sub-clauses, the loss, theft or destruction of or damage

to the equipment shall not affect the continuance of the lease and the lessee

will continue to be liable to pay lease rentals in respect of the equipment.8. If the lessee-i.

fails

to pay lease rentals or part thereof or any other payments payable hereunder

for a period of one month; orii.

fails

to effect insurance of the equipment or fails to pay insurance premiums as and

when due or fails to reimburse the same to the lessor if paid by him; oriii.

sells,

mortgage, charge, demise, sub-let or otherwise dispose of or tries to sell,

mortgage, charge, demise, sub-let or otherwise dispose of the equipment; oriv.

fails

to perform or observe its covenants, stipulations, terms and conditions, to be

performed or observed by the lessee under this lease deed or in any other

document executed by the lessee in connection herewith and such failure or

breach continues for a period of one month after service of written notice to

the lessee; orv.

pass

a resolution of winding-up or have a petition for winding- up presented against

or if a receiver shall be appointed of the whole or part of the assets,

properties or undertakings of the lessee or shall compound with or enter into

any composition with its creditors;vi.

do

or suffer any act or thing or omits to do or suffer any act or thing, in

consequence of which the equipment may or is likely to be distrained,

endangered, attached or taken execution under any legal process or by any

public authority.'vii.

if

any judgment or order against the lessee shall remain unsatisfied for more than

fourteen days;viii.

if

he abandons the equipment.Then

and on the occurrence of any such event it shall be lawful for the lessor to

terminate this agreement, without prejudice to any action that it may take

against the lessee for any right or remedy under this agreement or otherwise at

law or to exercise all or any of the following rights or remedies viz:i.

to

take possession of the equipment and for that purpose enter upon any premises

where the equipment is or is believed by the lessor to be for the time being

situated and detach and dismantle the equipment;ii.

sell,

transfer, assign, lease or dispose of the equipment or part thereof by public

or private sale with or without notice to the lessee;iii.

require

the lessee to pay to the Lessor all sums due and payable under this lease,

interest on the due lease, rentals, liquidated damages for loss of a bargain

and not as a penalty and other expenses incurred by the lessor due to

termination of the lease before the term of the lease;iv.

exercise

any other right or remedy available to the lessor under any law for the time

being in force.It

is hereby declared that the lessee shall also be liable to pay all legal fees,

costs and expenses incurred by the lessor from the foregoing defaults or the

exercise of the lessors' remedies and the remedies referred to above are not

intended to be exclusive, but shall be cumulative and shall be in addition to

any other remedy available to the lessor under any law for the time being in

force.9. Any express or

implied waiver, by the lessor of any default shall not constitute a waiver of

any default by the lessee or waiver of any of the lessor's right. The lessor

shall not be deemed to have waived any of the lessor's rights or any provision

of this agreement or any notice given hereunder unless such waiver be provided

in writing by lessor.10. If the lessee having

paid all lease rentals and other amounts payable under the lease deed and

observed and performed all the covenants, stipulations, terms and conditions,

shall desire to renew this lease and shall give notice of such desire not less

than_________ months prior to the expiration of the term hereby granted, the

lessor shall grant renewal of the lease for a further period of ______ years

commencing on the date of expiration of this lease on the same terms and

conditions as those herein contained including the right of renewal, but at a

lease rental of Rs________ per month.).11. Upon expiry of the

lease term hereby granted or renewal hereof or sooner determination in terms of

this lease deed, the lessee shall at its own cost forthwith deliver or cause to

be delivered the equipment to the lessor at such place as may be intimated by

the lessor to the lessee.12. Time shall be the

essence of this agreement in so far it relates to the observance or performance

of all or any of its obligation, covenants or liabilities hereunder by the

lessee.13. During the term of

this lease, the lessee shall submit its Balance Sheet and Profit and Loss

Account as and when they are ready and other information, reports and

statements as may be required by the lessor.14. This agreement is

personal to the lessee and it shall not transfer, assign or otherwise dispose

of its rights or obligations hereunder.15. The Guarantor hereby

guarantees the payment of lease rentals and other moneys payable by the lessee

to the lessor under these presents and observance and performance of the covenants,

stipulations, terms and conditions by the lessee. The Guarantor also hereby

agrees to pay on demand any money due or which becomes payable under this

agreement and not paid by the lessee. The guarantor hereby further agrees that

any time granted to the lessee or any indulgence shown to him in respect of

this agreement shall not prejudice the lessor's right or relieve the guarantor

from his guarantee, which shall be a continuing guarantee and his liability

will be coextensive with that of the lessee and it will not be necessary for

the lessor to serve any notice to the guarantor for any default committed by

the lessee or any concession, or indulgence shown by the lessor to the lessee.16. The lessor hereby

assigns to the lessee the right of warranties provided by the manufacturer of

the equipment and the lessee shall be entitled to make any claim for any defect

or deficiency, for any breach of condition or warranty directly against the

manufacturer and for this purpose if the lessee requests to the lessor, the

lessor shall authorise the lessee for enforcing due performance of any

warranties or performance guarantees relating to the equipment.17. All disputes,

questions, differences and claims whatsoever arising from this agreement

between the parties and/or /their successors or assigns touching these presents

or any right or liability arising from these presents shall be referred to the

arbitration of two arbitrators, one to be appointed by each party and such

reference shall be deemed to be reference under and subject to the provisions

of Arbitration Act, 1996 or any statutory modification or re-enactment thereof

for the time being in force and arbitration proceedings will be held at

_______________18. Any notice or letter

required to be given herein shall be given to the parties hereto in writing by

RPAD at the addresses above mentioned or such other address as the parties may

hereafter substitute by notice in writing to the other parties.19. All prior agreements

or arrangements whether oral or written between the parties or relating to the

lease of the equipment by the lessor to the lessee shall be deemed to be

cancelled and superseded by this agreement.20. This lease deed shall

be executed in triplicate. The original shall be retained by the lessor,

duplicate by the lessee and triplicate by the guarantor.21. The stamp duty and

all other expenses in respect of this lease deed and duplicate thereof shall be

borne and paid by the lessee.22. The headings to the

clauses of this agreement are meant only for convenience of reference and shall

not in any way be taken into account in the interpretation of these presents.IN

WITNESS WHEREOF the parties hereto have executed these presents and duplicate

and triplicate copy thereof on the day and year hereinabove written.The

Schedule above referred toSigned

and delivered by the within named ABC Co. Ltd.,the

lessor by the hands of Shri.....................Managing

Director thereofSigned

and delivered by the within named XYZ Co. Ltd., the lessee by the hands of

Shri............... Managing Director thereofSigned

and delivered by the within named M, the guarantorWITNESSES;1.2.