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Guidelines for Islamic Modes of Finance, SBP

11 this agreement shall not be deemed to create a

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11. This Agreement shall not be deemed to create a partnership or company and in no event has the Client any authority to bind the Institution. In no event shall the Institution be liable for the debts and obligations of the Client incurred for other purposes, except as stipulated in this Agreement. 12. In the event of the Client making default in: i) Payment of due share of profit, file:///C|/Documents and Settings/Administrator/D...idelines for Islamic Modes by SBP/musharaka/1.htm (4 of 7) [2/23/2008 11:57:15 PM]
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State Bank of Pakistan - The Central Bank ii) Redemption of Institution s investment on the expiry/ termination of the Musharaka, or iii) Performance of any of the covenants under this Agreement provided such default remains un-rectified for a period of ____days from the date of notice served by the Institution, the Institution shall have the right to dispose of the securities defined in clause 16 hereto and adjust the sale proceeds thereof towards the amounts receivable by it. 13. i) Where any amount is required to be paid by the Client under the Principal Documents on a specified date and is not paid by that date, or an extension thereof, permitted by the Institution without any increase in the amount payable, the Client hereby undertakes to pay directly to the Charity Fund, constituted by the Institution, a sum calculated @ ------% per annum for the entire period of default, calculated on the total amount of the obligations remaining un-discharged. The Charity Fund shall be used at the absolute discretion of the Institution, exclusively for the purposes of approved charity. ii) In case (a) any amount(s) referred to in clause 10.01 above, including the amount undertaken to be paid directly to the Charity Fund, by the Client, is not paid by him, or (b) the Client delays the payment of any amount due under the Principal Documents and/ or the payment of amount to the Charity Fund as envisaged under Clause 10.01 above, as a result of which any direct or indirect costs are incurred by the Institution, the Institution shall have the right to approach a competent Court (c) for recovery of any amounts remaining unpaid as well as (d) for imposing of a penalty on the Client. In this regard the Client is aware and acknowledges that notwithstanding the amount paid by the Client to the Charity Fund of the Institution, the Court has the power to impose penalty, at its discretion, and from the amount of such penalty, a smaller or bigger part, depending upon the circumstances, can be awarded as solatium to the Institution, determined on the basis of direct and indirect costs incurred, other than the opportunity cost. 14. i) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the Institution, the Client and respective successors permitted assigns and transferees of the parties hereto, provided that the Client shall not assign or transfer any of its rights or obligations under this Agreement without the written consent of the Institution. The Institution may assign all or any part of its obligations and/or commitments
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