DIMINISHING MUSHARAKA AGREEMENT

Dated : 01-01-2018

BETWEEN

BANK: ABC

AND

CLIENT: XYZ
THIS Diminishing Musharaka Agreement (“Agreement”) is made at __________ on 1st
January 2018
BETWEEN
THE BANK ABC, a banking company established under The Bank ABC having its registered office at
Mention Address . (Hereinafter referred to as the “Bank" which expression shall, where the context so
permits, mean and include its successors-in-interest and assigns)

AND

XYZ S/O KLM , resident of ( Mention Address) holding ( Mention CNIC Number ) (hereinafter
referred to as the “Co-owner”, which expression shall mean and include its successors in interests and
assigns).

IT IS AGREED BY THE PARTIES AS FOLLOWS:

PURPOSE AND DEFINITAIONS

1.01 This Agreement sets out the terms and conditions upon and subject to which, the Bank has
agreed to invest in the Project on the basis of Diminishing Musharaka with the Co-owner.
1.02 In this agreement, unless the contest otherwise requires:

“Business Day” means a day on which the Banks are open for normal business in
Pakistan;
“Co-owner” means the client/Co-owner having ownership to extent of his
/its share in the equity of the project;
“Default Obligation It is the additional amount undertaken to be paid in case of default
Amount” in payment of any amount which is required to be paid by the Co-
owner under the principal documents on a specific date and is not
paid on the date, part thereof or any other amount due under the
principal documents. It will be payable as defined fine in the
existing laws.
“Diminishing means this agreement and includes the appendixes “ A” and “B”;
Musharakah
Agreement”
“Event of Default” means any of the events or circumstances described in Clause 10
hereto;
“License” means any license, permission, authorization, registration,
consent or approval granted to the Co-owner for the purpose of
or relating to the conduct of its business;
“Obligation” His obligation includes the safeguarding of the project
“Parties” means parties to this Agreement;
“Principal means this Agreement and the Security Documents;
Documents”
“Project” As described in Appendix “A”;
“Project Shares” means shares representing the Project Value;
“Project Value” means the value of the Project as set out in Appendix ‘B’;
“Rupees” or “Rs.” means the lawful currency of Pakistan;
“Prudential means Prudential Regulations or other regulations as are
Regulations” notified from time to time by SBP or SECP;
“SBP” means the State Bank of Pakistan;
“SECP” means the Securities and Exchange Commission of Pakistan
established under the Securities & Exchange Commission of
Pakistan Act, 1997 and includes any successors thereto;
“Security as defined in Clause 3;
Documents” and
“Security”
Shariah Supervisory As defined in Section 19 A of the Bank ________;
Committee
“Taxes” includes all present and future taxes ( including central excise
duty and sales tax), levies, import duties, stamp duties, penalties,
fees or charges of whatever nature together with delayed
 payment charges thereon and penalties in respect thereof and “
Taxation” shall be construed accordingly ;
“ Bank” means the Bank XYZ as defined in the preamble.

1.03 The Appendixes to this Agreement shall form an integral part of this Agreement;
1.04 Clause headings are inserted for convenience of reference only and shall be ignored in the
interpretation of this Agreement. In this Agreement, unless the context otherwise requires,
references to Clauses and Appendixes are to be construed as references to the clauses of, and
Appendixes to, this Agreement and references to this Agreement include its appendixes;
1.05 Words importing the plural shall include the singular and vice versa and reference to a person
shall be construed as including references to an individual, firm, bank, corporation,
unincorporated body or persons or any state or any agency thereof.
2. THE PROJECT
2.01 The Parties have mutually agreed to purchase/ build the Project on the basis of Diminishing
Musharaka for the Project Value;
2.02 The Project Value shall be contributed by the Parties in the following ratio:
The Bank: Rs. 8,000,000/-- Maximum [80.00] %
Co-owner: Rs.2,000,000/- Minimum [20.00] %.

2.03 The Project Value shall be divided into Project Shares of face value of Rs.
[…………………..…………. ] each and such Project Shares shall be held by the parties in
proportion to their contribution in Project Value as specified in clause 2.02 above;
2.04 The parties are authorized to sell the shares to each other over time at any price as mutually
agreed between them;
2.05 The Bank’s and Co-owner’s share in the Project Value shall change with every sale and
purchase of the shares among both the parties as stipulated in clause 2.04.
2.06 The Bank shall advise the criteria for selection of the project by the co-owner.
2.07 The Bank shall not participate in the project if the project does not meet the criteria set by
the Bank.

3. SECURITY
3.01 The Co-owner has to execute such deeds and documents as may from time to time be
requested by the Bank for the purpose of more fully securing its shares in the project and/or
perfecting the security created or to be created in favour of the Bank;
3.02 Create such other securities and execute such further documents to secure the Co-owner's
Obligations under the Principal Documents as the Bank may require the Co-owner to furnish
from time to time.
(The above are hereinafter collectively referred to as the "Security").

4. PAYMENT AND ACCOUNTS

All payments to be made by the Co-owner in relation to his equity in the Project shall be made
in full, without any set-off or counter claim whatsoever, on the due date and when the due
date is not a Business Day, the next Business Day, free and clear of any deductions or
withholdings on the due date to the Bank.

5. FEES AND EXPENSES

The Co-owner shall pay to the Bank within 15 days of a demand being made, all expenses,
including legal and other ancillary expenses, incurred by the Bank in connection with the
negotiation, preparation and execution of the Principal Documents and of amendment or
extension of or the granting of any waiver or consent under the Principal Documents.

6. PRUDENTIAL REGULATIONS
The Co-owner shall comply with the Prudential Regulations and/or other regulations issued
by any Governmental regulatory body, as if such regulations are applicable and binding on
him.
7. REPORT OF BUSINESS
The Co-owner shall furnish any or all documents relating to his financial statement including
audited or unaudited financial reports within ten calendar days of the Bank requesting the
same.

8. INSPECTION
 The Co-owner shall permit, during the currency of the Agreement, persons authorized by the
Bank to enter and examine the condition of the Project.

9. INSURANCE, ACCIDENTS, INJURIES AND INDEMNIFICATION

9.01 The Bank, on behalf of the Co-owner and itself, shall procure insurance coverage from
reputable companies offering protection under Takaful. Risk to be covered by the bank will
be decided with mutual consent depending upon the nature of the property. The premium of
the insurance cover obtained under this clause has to be borne by the parties according to
their respective shares in the Project;
9.02 The Co-owner shall indemnify, and keep the Bank harmless, from and against, any and all,
claims, losses, costs, damages, suits, expenses, including attorney’s fees which the Bank may
sustain or incur as a result of any accident or injury, whether fatal or otherwise suffered by, or
any damage or loss occurring to any person or property and howsoever resulting from misuse
of any part of the Project by the Co-owner, or to any failure on part of the Co-owner to
observe and perform any of the obligations under this Agreement or the instructions
contained in the manufacturer’s and/or the supplier’s maintenance and operation manual or
any other instructions of the manufacturers and/or suppliers and the Bank;
9.03 The Co-owner further indemnifies the Bank against any loss or expense which the Bank shall
certify as rightly incurred by it as a consequence of the occurrence of an Event of Default or
arising out of any mis-representation;
9.04 All proceeds of insurance, accruing in respect of the insurance policies for the Project, shall
be applied as mutually agreed between the parties;
9.05 The Co-owner agrees to pay the Bank the cost of repair or replacement of the Project, or any
part thereof, due to any damage arising out of misuse of the Project;
9.06 The bank reserves the right to cover its risk in any manner as it deems fit and recover cost
from the Co-owner proportionately.
10. DEFAULT AND TERMINATION
10.01 There shall be an Event of Default if in the opinion of the Bank:
(a) Any representation or warranty made, or deemed to be made, or repeated by the Co-
owner in, or pursuant to, any document delivered under this Agreement, is found to
be incorrect;
(b) In the event of the Co-owner making an assignment of his shares for the benefit of its
creditors;
(c) In the event of the Co-owner:
1 voluntarily or involuntarily becoming the subject of proceedings under the
bankruptcy or insolvency law, or procedure for the relief of financially
distressed debtors;
2 Becoming unable or admitting in writing its inability to pay his debts as they
mature.
3 having taken or suffered any action for its reorganization, liquidation or
dissolution, or
4 having had a receiver or liquidator appointed for all or any part of its assets or
business;
(d) Any authority of, or registration with, governmental or public bodies or courts, required
by the Co-owner in connection with the execution, delivery, performance, validity,
enforceability or admissibility in evidence of the Principal Documents, are modified in a
manner unacceptable to the Bank or is not granted or is revoked or otherwise ceases to
be in full force and effect;
(e) The Project is used for purposes not agreed upon or opposed to the Principles of Shariah
and Public Policy;
(f) Any costs, charges and expenses to the extent of the share of the co-owner under the
Principal Documents having remained unpaid for a period of 14 days after notice of
demand in that behalf has been received by the Co-owner from the Bank;
(g) There is any change in the majority ownership and/or senior management of the Co-
owner without the consent of the Bank;
(h) The Project have suffered irreparable loss or damage in the opinion of the Bank;

10.02 If there is an Event of Default, the Bank may terminate this Agreement and become entitled
to the return of the Project. Notwithstanding any terms or conditions herein contained, the
Bank, at its sole discretion, in addition to any other remedy available to it, and without
obtaining a judgment, decree or any other order from a court, may at any time, without notice,
sell or lease to any other, or take control of the Project, and the Co-owner hereby authorizes
and empowers the Bank, or any of its officer, agents, or representatives to enter into the
Project, for the purpose of taking control /possession thereof, and on the happening of such
 an event or events the Co-owner hereby irrevocably appoints the Bank or any of its officers,
agents, or representatives as the Co-owner’s true and lawful attorneys to execute such
documents as may be necessary, for the purpose of regaining possession of the Project and
the accessories attached thereto; provided that after the determination of the actual loss
incurred including costs of repossession and deduction thereof, any remaining loss or profit
shall be proportionality divided amongst the bank and the co-owner, as per the share of each
party in the total equity of the project.

11. LIMITATIONS OF LIABILITY

11.01 It is understood and agreed that the Co-owner has selected the Project and ascertained the
suitability of the Project for his use and that the Bank shall not be liable or accountable to the
Co-owner for any loss, damage, claim, demand, liability, cost or expense of any nature or kind
sustained by the Co-owner directly or indirectly resulting from any inadequacy for any
purpose, or from loss or interruption of use thereof, or any loss of business or profits
consequential upon any defect of the Project of any nature whatsoever;
11.02 The Bank has not made and does not hereby make, to the Co-owner, any representation as to
the merchantability, condition or suitability of the Project or any other representation, with
respect thereto;
11.03 Whenever they fall due, the bank and the co-owner shall be liable to forthwith pay all taxes
relating to the ownership of the Project on the pro rata basis. In the event that any of the
above fees, duties, taxes, levies and penalties or any maintenance or operating costs are levied
and paid by either party, other party shall be responsible to reimburse the other party to the
extent of its equity in the Project.

12. ASSIGNEMENT
12.01 This Agreement shall be binding upon and be enforceable by the Bank, the Co-owner and
their respective successors, permitted assigns and transferees of the parties hereto, provided
that the Co-owner shall not assign or transfer any of its rights or obligations under this
Agreement without the written consent of the Bank. The Bank may assign all or any part of
its rights or transfer all or any part of its obligations and/or commitments under this
Agreement to any other financial institution or person.
12.02 The Co-owner shall not be liable for the costs of the assignment and/or transfer of
commitments hereunder by the Bank. If the Bank assigns, all or any part of its rights or
transfers all or any part of its obligations and commitments, as provided in the Clause 12.01,
all relevant references in this Agreement to the Bank shall thereafter be construed as a
reference to the Bank and/or its assignee or transferee, as the case may be, to the extent of
their respective interests;
12.03 The Bank may disclose to a potential assignee or transferee or to any other person who may
propose entering into contractual relations with the Bank in relation to this Agreement, such
information about the Co-owner as the Bank considers appropriate.

13. REPRESNTATIONS AND WARRANTIES

13.01 The Co-owner hereby represents and confirms that:

A. He is free to enter into this Agreement, and that this engagement does not violate
the terms of any agreement between the Co-owner and any third party;
B. The cost estimate/value of the Project provided by Co-owner in Appendix “B”
provides a true and fair estimate of the cost/value of the Project considering all
factors;
C. The execution, delivery and performance of the Principal Documents by the Co-
owner will not:
i. contravene any existing law, regulations or authorization to which the Co-
owner is subject,
ii. result in any breach of or default under any Agreement or other instrument
to which the Co-owner is a party or is subject to, or
iii. contravene any provision of the constitutive documents of the Co-owner
or any resolutions adopted by the Board of Directors or Members of the
Co-owner;
D. The financial statements, together with the notes to the accounts, and all
contingent liabilities and assets that are disclosed, represent a true and fair financial
position of the Co-owner, and there are no material omissions and/ or mis-
representations to the best of knowledge of the Co-owner,;
 E. All requisite corporate and regulatory approvals required to be obtained by the Co-
owner in order to enter into the Principal Documents are in full force and effect
and such approvals permit the Co-owner, inter alia, to perform its obligations
hereunder and that the execution of the Principal Documents by the Co-owner
and the exercise of its rights and performance of its obligations hereunder,
constitute private and commercial acts done for private and commercial purposes;
F. No material litigation, arbitration or administrative proceedings are pending or
threatened against the Co-owner or any of its assets;
G. Co-owner shall inform the Bank within 15 business days of an event or happening
which may have an adverse effect on his financial position, whether such an event
is recorded in the financial statements or not, as per International Accounting
Standards, as applicable in Pakistan;
H. The Co-owner has not defaulted in respect of any payment obligation, whether
relating to loan, finance or otherwise, or any other type of obligation owed to any
bank or financial institution; and
I. The Co-owner has not defaulted in payment of any taxes or other dues owed to
the government or any local authority.

14. CONDITIONS PRECEDENT

14.01 The Bank shall not be required to make its contribution to the Project value unless, at least
five Business Days prior to making such contribution, the Bank has received the following:
a) Documentary evidence that:
I. This Agreement has been executed and delivered by the Co-owner;
II. The Co-owner’s representatives are duly empowered to sign the Principal
Documents for and on behalf of the Co-owner;
III. The Co-owner has taken all necessary steps and executed all documents required
under, or pursuant to, the Principal Documents or any documents creating or
evidencing the Security in favour of the Bank and has perfected the Security as
required by the Bank;
IV. The Co-owner has executed all contracts and has procured all permissions, licenses
and consents necessary for the Project;
b) Certified copy of the Memorandum and Articles of Association of the Co-owner;
c) Certified copy of the Co-owner’s financial statements ;
d) The valuation certificate and Project Budget;
14.02 The obligation of the Bank to contribute its share to the Project Value shall be further
subject to the fulfillment of the following conditions:
a. Such contribution shall not result in any breach of any law or existing Agreement;
b. The Security has been validly created, perfected and is subsisting in terms of this
Agreement;
c. The Bank has received such other documents as it may reasonably request in respect
of the Project and their necessity for the conduct of the Co-owner’s business;
d. No event or circumstance which constitutes or which with the giving of notice or lapse
of time, or both would constitute, an Event of Default shall have occurred and be
continuing or is likely to occur;
e. Delivery by the Co-owner to the Bank of a true and complete extract of all relevant
parts of the minutes of a duly convened meeting of its Board of Directors approving
the Principal Documents and granting the necessary authorizations by the Board of
Directors; and
f. All fees, commission, expenses required to be paid by the Co-owner to the Bank or
vice versa have been received by the Bank.
14.03 Any condition precedent set forth in this section or any requirement under any other
clauses of this agreement may be waived and or modified by the mutual written consent of
the parties hereto.
GENERAL
15.01 This Agreement is governed by and shall be construed in accordance with the Pakistani law
and the recognized principles of the Islamic Shariah as may be determined by the Shariah
Supervisory Committee. All Competent Courts at ____________ shall have the non-
exclusive jurisdiction to hear and determine any action, claim or proceedings arising out of or
in connection with this Agreement;
15.02 No failure or delay on the part of the Bank to exercise any power, right or remedy under this
Agreement shall operate as a waiver thereof nor shall a partial exercise by the Bank of any
power right or remedy preclude any other or further exercise thereof or the exercise of any
other power, right or remedy. The remedies provided in this Agreement are cumulative and
are not exclusive of any remedies provided by law;
15.03 Nothing contained herein shall prejudice or otherwise affect the rights and remedies that may
otherwise be available under law to the Bank;
15.04 Any reconstruction, division, reorganization or change in the constitution of the Bank or its
absorption in or amalgamation with, any other person or the acquisition of all, or part of, its
undertaking by any other person shall not, in any way, prejudice or affect its rights hereunder;
15.05 The two parties agree that any notice or communication required or permitted by this
Agreement shall be deemed to have been given to the other party seven days after the same
has been posted by registered mail, or the next Business Day if given by a facsimile message
to telex or by any other electronic means, or the next Business Day as counted from the date
of delivery if delivered by courier mail;
15.06 During the currency of this Agreement, in case this Agreement or any provision thereof is
finally held by any court, tribunal or authority to be unenforceable or contrary to the
injunctions of Islam or not conforming with any of the Islamic modes of financing, as
prescribed by the State Bank of Pakistan or any other competent authority or if it is necessary
for any other reason whatsoever to amend or modify the terms or any provision of this
Agreement, then the parties hereto, whilst acknowledging that the terms and covenants herein
contained have been prepared in absolute good faith and in accordance with information and
knowledge currently available, agree that upon such happening, they shall forthwith suitably
substitute this Agreement or such of its provisions as may have been declared unenforceable
or contrary to the injunctions of Islam or not being in conformity with the Islamic modes of
financing prescribed by the State Bank of Pakistan or any other competent authority or which
are necessary to amend for any other reason whatsoever; provided always that the new terms
are in accordance with the directions of the court or tribunal or authority concerned.

IN WITNESS WHEREOF

The Parties to this Agreement have caused this Agreement to be duly executed on the date and
year first aforementioned.

For & on behalf of For and on behalf of

Co-Owner THE BANK ABC

________________ ________________
Mr. XYZ Authorized Signs Authorized Signs
S/O KLM
CNIC#
 APPENDIX “A”

THIS Appendix shall be attached to and form an integral part of the package of DIMINISHING
Musharaka AGREEMENT (the “Agreement”) made at _________ on this 1ST January 2018

BY AND BETWEEN

THE BANK OF ABC

AND

XYZ S/O KLM

Description of the Project

Need to mention specifically the description of the property

For and behalf of the

Co-owner

____________________
XYZ
S/O KLM
CNIC#
 APPENDIX “B”

THIS Appendix shall be attached to and form an integral part of the package of DIMINISHING
MUSHARAKAH AGREEMENT (the “Agreement”) made at __________ on this 1st January 2018

BY AND BETWEEN

THE BANK ABC

AND

XYZ

Cost/Value of the Project

=Rs. 10,000,000/-
(Rupees Ten Million Only)

For and behalf of the

Co-owner

_____________________
XYZ
S/O KLM
CNIC#
LEASE (IJARAH) AGREEMENT
Dated 01.01.2018

BETWEEN

THE BANK ABC

AND

XYZ
S/O
KLM
This Lease Agreement is (hereinafter referred to as the “Agreement”) made at _____________ on 1st
January 2018

BETWEEN

THE BANK ABC , a banking company established under The Bank _________________, having its
registered office at _______________. (Hereinafter referred to as “Lessor” which expression shall, where
the context so permits, mean and include its successors-in-interest and assigns),

AND

XYZ S/O KLM adult, resident of _______________________ holding National Identity Card
Number ________________(hereinafter referred to as the “lessee” which expression shall mean and
include its successors in interests and assigns).

NOW THEREFORE THE PARTIES FURTHER AGREE AS FOLLOWS

1. DEFINITIONS

1.01 In this Agreement, unless the context otherwise requires:

"Indebtedness" means any obligation of the Co-owner for the payment or repayment of
money, whether present or future, actual or contingent;
"Lease Documents" means and includes the Appendices "A" to “C” to this Agreement;
"Lease Period" means the tenure of the Lease as defined in item "C" of the Appendix B of
the Lease Documents;
"Lease Rentals" means the amounts by way of rental for the use of the Project payable by
the Customer to the Bank and on the dates mentioned in a schedule of Lease
Rentals according to clause 5 of this Agreement and more particularly set
out in Appendix “C”;
"Payment Date" means the respective dates for the payment of the Lease Rentals as set out
in Appendix “C” or if such respective due date is not a Business Day, the
next Business Day;
"Principal Documents" means this Agreement and the Security Documents;
"Promissory Note" As defined in Clause 3.01(a);
"Security Documents" As defined in Clause 3.01;
"Secured Assets" means any asset provided by way of security for the Lease Finances provided
hereunder;
“Value Date" means the date on which the lease commences under this Agreement;
Default Obligation It is the additional amount undertaken to be paid in case of default in
Amount payment of any amount which is required to be paid by the lessee under the
principal documents on a specific date and is not paid on the date, part
thereof or any other amount due under the principal documents. It will be
payable as define in the existing laws.

1.02 Clause headings are inserted for convenience of reference only and shall be ignored in the
interpretation of this Agreement. In this Agreement, unless the context otherwise requires,
 references to Clauses and Appendices are to be construed as references to the clauses of, and
Appendices to, this Agreement and references to this Agreement include its appendices;
1.03 words importing the plural shall include the singular and vice versa and reference to a person shall
be construed as including references to an individual, firm, institution, corporation, unincorporated
body of persons or any state or any agency thereof;
1.04 Words and expressions used in capitals and not defined herein this agreement shall have the same
meanings as defined in the Diminishing Musharaka Agreement.

2. LEASE
2.01 The Lessor hereby leases its share of the Project to the Lessee and the Lessee hereby agrees to take
on lease from the Lessor the share of the bank in the Project described in Appendix “A” of
Diminishing Musharaka Agreement for the Lease Period set out in Appendix “B” of this
Agreement upon the terms and conditions set forth herein;
2.02 The Lease Rentals shall be payable in advance on the dates laid down in the schedule of Lease
Rentals as set out in Appendix “C” of this Agreement.
2.03 The Lessee upon taking possession of the Project from the Lessor agrees and covenants that the
Project is in good condition and appearance and, in all respects, complete and satisfactory to the
Lessee as described in Appendix B.

3 SECURITY
3.01 As security for the payment of the Lease Rentals and use of the Project as per conditions set out
in this Agreement, the Lessee shall:
a) Execute a Demand Promissory note in favour of the Lessor for the amount of the Lease Rentals
receivable during the term of the lease; (the "Promissory Note");
b) Execute post dated Cheque for all Lease Rentals;
c) Execute such further deeds and documents as may from time to time be requested by the Lessor
for the purpose of more fully securing and or perfecting the security created or to be created in
favour of the Lessor; and

(The Promissory Note, negotiable instruments and other documents mentioned in clause 3.01 (a)
to 3.01 (c) hereinabove are hereinafter collectively referred to as the "Security Documents").

4. FEES AND EXPENSES

The Lessee shall pay to the Bank within 15 days of a demand being made, all expenses, including
legal and other ancillary expenses, incurred by the Lessor in connection with the negotiation,
preparation and execution of the Principal Documents and of amendment or extension of or the
granting of any waiver or consent under the Principal Documents.

5. PAYMENT OF LEASE RENTALS AND ACCOUNTS

5.01 The Lessee agrees to pay to the Lessor Lease Rentals for the use of the share of bank in the Project.
The amounts of the Lease Rentals and their respective Payment Dates are set out in Schedule of
Lease Rental as laid down in Appendix “C” of this Agreement;
5.02 The Lessor may revise the Lease Rentals in cases where any costs relating to the Lease and borne
by the Lessor, including without limitation insurance costs, are increased, with the consent of the
Lessee. Provided that every one year from the commencement of the Lease and at the end of each
successive one year period thereafter, the Bank may renegotiate the Lease Rentals with the Lessee.
5.03 All payments to be made by the Lessee under this Agreement shall be made in full, without any
set-off or counter claim whatsoever, on the Payment Date and when the Payment Date is not a
Business Day, the next Business Day and save as provided in Clause 5.04, free and clear of any
deductions or withholdings on the due date to the Lessor, and the Lessee will only be released from
his payment obligations hereunder by the credit/payment of the sums being received by the Lessor;
5.04 Whenever they fall due, the Lessor and the Lessee shall be liable to forthwith pay all taxes relating
to the ownership of the project on a pro-rata basis. In the event that any of the above fees, duties,
taxes, levies and penalties or any maintenance or operating costs are levied and paid by either party,
the other party should be responsible or reimburse the other party to the extent of its equity in the
project.
5.05 If at any time the Lessee is required to make any non refundable and non adjustable deduction or
withholding in respect of taxes from any payment due to the Lessor under this Agreement, the
sum due from the Lessee in respect of such payment shall be increased to the extent necessary to
ensure that, after making of such deduction or withholding, the Lessor receives on the Payment
Date, a net sum equal to the sum which it would have received had no such deduction or
withholding been required to be made and the Lessee shall indemnify the Lessor against any losses
or costs incurred by the Lessor by reason of any failure of the Lessee to make any such deduction
 or withholding. The Lessee shall promptly deliver to the Lessor, original, or copies of any receipts,
certificates or other proof evidencing the amounts, if any, paid or payable in respect of any
deduction or withholding as aforesaid.

6 DELAYED PAYMENTS

The Lessee hereby undertakes that where any amount is required to be paid by the Lessee under
the Principal Documents on a specified date and is not paid on that date, or any amount is payable
by the Lessee under the Principal Documents within one week of a demand being made by the
Lessor and is not paid by it within one week of the said demand being made, and such amounts
have to be recovered through litigation or otherwise, the Lessee shall pay, a sum according to the
Schedule of Default Obligation Amount, as set out in schedule of charges of the BoK for Islamic
banking operations, to be used by the Lessor for the purpose of charity, approved by the Shariah
Supervisory Committee of the Lessor.

7 USE OF THE PROJECT

The Lessee herby agrees and undertakes that:

7.01 The Lessee shall at all times use, and occupy the Project carefully and prudently;
7.02 The Project shall be used for the normal and usual purpose of the business/ other use, of the Lessee,
and except with the prior permissions of the Bank, for no other purpose whatsoever;
7.03 The Lessee shall, use Project in compliance with all relevant laws, rules, regulations, orders and
direction, whether of Federal or any Provincial Government or of any municipal or local authority
or of any court, tribunal or other competent authority;
7.04 The Lessee shall not sell, transfer, assign or otherwise dispose of, or sub-lease, let for hire, loan, give
on license, or part with possession of, or mortgage, hypothecate, pledge, charge or otherwise
encumber, the Project;
7.05 The Lessee shall not, without the prior written consent of the Lessor, make any alteration, addition,
or improvement to the Project or change the condition thereof; and all alteration, addition and
improvements of whatsoever kind or nature made, including replacement or substitution of any part
or component or accessory, shall become part of and an accretion to the Project leased hereunder
and shall be subject to the terms and conditions of this Agreement;
7.06 Nothing contained in this article shall release the Lessee from his liability for any use of the Project
or any part thereof, in breach of any of the terms and conditions contained herein or in a manner
contrary to any provisions or requirements of the insurance policy or polices intended to cover the
Bank’s liability as owner of Project, or in contravention of any law, rule, regulation, order, or
direction, whether of Federal or any Provincial Government or of any municipal or local authority
or of any court, tribunal or other competent authority;
7.07 The Lessee hereby agrees to indemnify, and save harmless the Bank from and against all claims and
demands made and all fines or penalties levied or imposed in respect of or arising out of the
occupation, use of the Project or any of them;

8 TITLE
8.01 The Lessee covenants and agrees not to do any thing, or perform any act prejudicial to the rights, title,
ownership of respective shares of the Lessor in the Project, and without limiting the generality of the
foregoing, not to do any act to encumber, convert, pledge, sell, assign, re-hire, under-let or lease,
lend, conceal, abandon, damage or destroy the Project, nor to claim any right, title or interest in the
Project otherwise than as a Lessee of the Project;
8.02 It is clarified, to avoid any doubt, that this Agreement is not, and shall not be construed as an
agreement of hire purchase or an agreement conferring on the Lessee any ownership or proprietary
right in the Project except as a Lessee as contemplated under this Agreement;
8.03 The Lessee shall be entitled, so far only as the Lessor is able to transfer the same, to the benefit of
all conditions, warranties, performance and other guarantees or other terms, expressed or implied,
relating to the Project, given by the supplier or the manufacturers of the Project to the Lessor.

9 DEFAULT AND TERMINATION

9.01 There shall be an event of default if in the opinion of the Lessor:
A) Any representation or warranty made, or deemed to be made, or repeated by the Lessee in, or
pursuant to any document delivered under this agreement, is found to be incorrect;
 B) The lease rentals payable under this agreement, remain outstanding for a period of more than 60
days;
C) The project or any other part thereof are dealt by the Lessee contrary to the provisions of this
agreement;
D) In the event of the Lessee making an assignment for the benefit of its creditors.
E) In the event of the Lessee:
a) Voluntary or involuntary becoming the subject of proceedings under the bankruptcy or
insolvency law, or procedure for the relief of financially distressed debtors.
b) Has been unable or has admitted in writing its inability to pay its debt as they mature.
F) if the project is misused, used unreasonably or in an abusive manner
G) Any costs, charges and expenses under the principal documents remain unpaid for a period of 14
days after notice of demand in that behalf has been received by the Lessee from the Lessor.
H) Any levy or execution or attachment upon the Lessee’s assets and goods are affected and/or the
project or if the project is confiscated, forfeited or seized by an authority;
I) The project or any part thereof are dealt with by the Lessee contrary to the provisions of this
agreement;
J) Irreparable loss or damage occurring to the project.

9.02 Each event of default is several and independent from any other events of default and shall not be
limited by references to another event of default;
9.03 If there is an Event of Default the Lessor may terminate this Lease and become entitled to the
return of the Project. Upon the occurrence of an Event of Default, the Lessor shall give notice of
such default to the Lessee and the Lessee shall be required to return the Project to the Lessor. In
case the Lessee fails to return the Project within the period required under the said notice, the
Lessor, at its sole discretion, in addition to any other remedy available to it and without obtaining
a judgment, decree or other order from a court, may at any time, without any further notice to the
Lessee take possession of the Project, and on the happening of such an event or events the Lessee,
hereby irrevocably appoints the lessor or any of its officers, agents, or representatives as the
Lessee's true and lawful attorneys to execute such documents as may be necessary, for the purpose
of regaining possession of the Project. The Lessee shall pay the costs of such repossession and any
charges that may be incurred in connection thereto.

10 TERMINATION OF LEASE AGREEMENT

10.01 This Agreement may be terminated by the mutual consent of the parties, subject to clause 10 in
respect of Events of Default hereto;
10.02 This Agreement and all its terms and conditions shall, notwithstanding the termination of the lease,
continue in full force and effect until all obligations of the Customer under this Agreement, are
discharged and all sums due hereunder have been paid to the satisfaction of the Bank provided
that nothing in this clause will be construed to entitle the Bank to charge Lease Rentals after the
Project has been destroyed without any fault of the Customer or returned to the Bank.

IN WITNESS WHEREOF
The Parties to this Agreement have caused this Agreement to be duly executed on the date and
year first aforementioned.

For and on behalf of For and on behalf of

_______________________________ _________________________
XYZ s/o KLM THE BANK ABC
(Lessee) Branch
 APPENDIX A

THIS Appendix shall be attached to and form an integral part of the package of the LEASE
AGREEMENT (the "Agreement") made at ________ on this ____________Day of 01st January 2018

BY AND BETWEEN

THE BANK ABC ( Lessor)

AND

XYZ ( Lessee)

Application for Project Lease

__________________
For and on behalf of

____________________
XYZ
S/O KLM
CNIC#
 APPENDIX “B"

THIS Appendix shall be attached to and form an integral part of the package of the LEASE
AGREEMENT (the "Agreement") made at ________________ on this ____ Day of _____________

BY & BETWEEN

THE BANK ABC ( Lessor)

AND

XYZ ( Lessee)

RECEIPT OF PROJECT(S)

Description and Address of the Project:

A. Total Cost of the Project including land, Rs: 10,000,000/-

Building, taxes, fees and equipment:

B. Monthly Lease Rental for the whole Project: RS. 76,267/-

it shall be shared in proportion to the shares held on any date):

C. Period of Lease: 10 years

D. Security Deposit: -----

E. Value Date: 01.01.2018

I have taken the possession of the above mentioned Project complete in all respects and in good
condition, suitable for residential/commercial purposes.

Transfer of possession dated: 01.01.2018

For & on behalf of

____________________
XYZ
S/O KLM
CNIC#
 APPENDIX “C"

THIS Appendix shall be attached to and form an integral part of the package of the LEASE
AGREEMENT ("Agreement") made at ____________ on this ____ Day of _____________

BY & BETWEEN

THE BANK ABC ( Lessor)

AND

XYZ ( Lessee)

Schedule of Lease Rentals

Lease Rentals will become due on _______ of each _________. The date of the first
_________________ payment shall be _________________.

Lease Rentals
Sr. No. Date
1
2
3
4
5 Schedule in Chapter
6
7
8
9
10
11

Lease rentals shall be shared in proportion of the shares held by the parties on the due date of lease
rentals

Signed for and on behalf of:

_____________________ _________________________
XYZ THE BANK ABC
S/O KLM Islamic Banking Branch
CNIC# (Lessor)
 Letter of Authority to Repossess Project(s)

To,

The Bank ABC (the “Bank”),

Dear Sir,

We refer to clause 9.03 of the Lease Agreement dated _______________ between the Bank and ourselves
in respect of the lease of Project mentioned therein.

Upon the happening of an Event of Default as per clause 9 of the Lease Agreement, and our failing to
return the Project to the Lessor as required by a notice to us, we hereby authorize and empower the Bank,
or any of its Officers, agents, or other representatives to take the possession of the Project and we hereby
irrevocably appoint the Lessor or any of its officers, agents, or representatives as our true and lawful
attorneys to execute such document, as may be necessary, for the purpose of regaining possession of the
Project.

We shall pay the costs of such repossession and any charges that may be incurred in connection with such
repossession.

____________________
For and on behalf of
XYZ
S/O KLM
CNIC#

(Words and expressions used in capitals and not defined herein shall have the same meanings as defined in the
LEASE AGREEMENT.)
 UNDERTAKING TO PURCHASE PROJECT SHARES

THE BANK ABC

Dear Sirs

We refer to the Diminishing Musharaka Agreement dated 01.01.2018 between the bank and ourselves.

NOW THEREFORE THIS LETTER WITNESSES AS FOLLOWS:

1. We hereby agree and undertake to purchase/share of the Project owned by the bank according to the
Schedule mentioned below;
2. Failure on our part to immediately purchase the Project Shares at the Purchase Price on the Purchase
Date in accordance with the schedule given below, within seven (7) days of notification to do so by
the Bank, shall be deemed to constitute an Event of Default under this undertaking.
3. In the Event of Default by us you are authorized and entitled to exercise all rights and remedies to
repossess the Project and sell it in the market to recover the Purchase Price and any other amounts
payable under the Diminishing Musharaka Agreement. We shall pay to you the difference (if any)
between the price at which the Project was sold by you and the Purchase Price relatable to the date
of termination of the Principal Documents along with any amounts payable under the Principal
Documents.
4. The first month shall end on ___________________.

Sr. No. Purchase Date Purchase Price

1 1st month
2 2nd month
3 3rd month
4 4th month
5 5th month
6 6th month AS PER SCHUDLE
7 7th month
8 8th month
9 9th month
10 10th month
11 11th month
12 12th month

5. The capitalized terms used herein shall have the same meaning as attributed thereto in the Diminishing
Musharaka Agreement, unless defined otherwise.

Yours faithfully,
For and on behalf of Co-owner

_________________
XYX
S/O KLM
CNIC#