Lease back arrangements Clause Samples

Lease back arrangements. Pursuant to the Finance Lease Agreement, the JV Company agreed to lease the Machinery and Equipment back to Sixian Hospital for a term of five years commencing from the day the JV Company makes the first payment to Sixian Hospital in accordance with the Sale and Purchase Agreement. The Machinery and Equipment comprised certain machinery and equipment including medical equipment such as X-ray machine, anesthesia machine, and monitoring equipment owned by Sixian Hospital. Pursuant to the Finance Lease Agreement, the amount of lease rent to be paid by Sixian Hospital to the JV Company was calculated based on the principal lease cost and the lease interest rate. The total principal lease cost under the Finance Lease Agreement was RMB30,000,000.00 (equivalent to approximately HK$35.4 million). The lease rent is calculated at the actual interest rate of 8.57% per annum during the lease term, subject to the adjustment pursuant to the adjustment of the interest rate published by the People’s Bank of China. Based on the aforementioned interest rate, the total lease rent payable by Sixian Hospital under the Finance Lease Agreement will be RMB37,200,580.00 (equivalent to approximately HK$43.9 million) subject to the adjustment of the interest rate. In accordance with the Finance Lease Agreement, the lease rent will be payable by Sixian Hospital every three months in twenty installments. In the event that Sixian Hospital fails to pay any sum payable under the Finance Lease Agreement when due, default interest may be charged for each day of late repayment, if more than one day of late repayment, at the rate of 0.1% per day of any sum payable. Sixian Hospital shall pay a refundable interest-free deposit of RMB3,000,000.00 (equivalent to approximately HK$3.54 million) to the JV Company as a guarantee of its obligation under the Finance Lease Agreement within two workings days after the JV Company makes the first payment in accordance to the Sale and Purchase Agreement. Such deposit shall be used to offset any default of repayment of Sixian Hospital. If there is no default of repayment of Sixian Hospital, such deposit may be used to offset part of the payment of the last installment payable by Sixian Hospital. The lease rent was determined after arm’s length negotiations between the parties to the Finance Lease Agreement by reference to the principal amounts of the lease and the prevailing market interest rate for finance leases of comparable machines and equipment.