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Hire purchase agreement for securing finance with guarantee

Document Cited in Related
Vincent
Updated atMarch 2010

THIS AGREEMENT is made at....... this......... day of.... between M/s....... & Co. Ltd., a Company having its registered office at....... Hereinafter referred to as 'the Company' of the First Part and Mr. X. carrying on business at.... Hereinafter referred to as 'the Hirer' of the Second Part and Mr. Y residing at..... Hereinafter referred to as the 'Guarantor' of the Third Part;

WHEREAS the Hirer is carrying on business of manufacturing........... And for the purpose of his business, he has agreed to purchase and import a machine the particulars of which are given in the Schedule hereunder written and which is hereinafter referred to as the said 'Machine'.

AND WHEREAS the Hirer has obtained import License for importing the said machine.

AND WHEREAS the Hirer is in need of a sum of Rs........ to pay the price by opening a Letter of Credit in favour of the foreign seller through the Hirer's Bankers.

AND WHEREAS the Hirer has requested the Company to advance the said amount as well as all moneys required for payment of Import and Custom duties and other charges required to clear the machine from the docks, to enable him to open the Letter of Credit and paying the other duties and charges and which the Company has agreed to do on the following terms and conditions and agreed to by the Hirer.

NOW IT IS AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS:

  1. The Company has agreed to advance to the Hirer a sum of Rs.... with interest thereon at the rate of Rs.... per cent per annum. The Hirer has executed in favour of the Company a Promissory note for the said amount and at the request of the Hirer the Guarantor has agreed to guarantee the repayment thereof, subject to the terms hereof.

  2. The Company shall pay the said amount to the (Bank) being the Bankers of the Hirer, direct to enable the Bank to issue a Letter of Credit for the said amount and to enable the Hirer to import the said Machine. The Company shall also pay an amount not exceeding Rs......... for payment of all Customs and Import duties and other charges required to clear the said machine.

  3. The said machine shall be deemed to be sold by the Hirer to the Company on payment of the said amount to the said Bank as well as the amount required to be paid for Custom and Import duties and other charges for clearing the said machine.

  4. On the importation of the said Machine the Hirer shall clear the same from the customs and other authorities by paying all custom and import duties and other charges and shall hold the said machine belonging to the Company as taken on hire from the Company with an option to purchase the same, on the following terms.

  5. This agreement shall be effective since the time the said machine is imported and taken possession of by the Hirer on behalf of the Company as aforesaid.

  6. If by any chance the said Machine is not imported, this agreement shall be null and void and the Company will be entitled to claim the amount advanced by Company from the Hirer and the Guarantor as a debt and the guarantee hereby given,

  7. The Hire-purchase price of the said machine is fixed at Rs.... being the amount agreed to be advanced by the Company as aforesaid and inclusive of interest payable by the Hirer for the hire period.

  8. During the pendency of this agreement the Hirer shall pay to the...

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