Loan Agreement with Security (India) by OLL
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Loan Agreement with Security
THIS AGREEMENT is made at Mumbai on this ____ day of _______, 200__
BETWEEN
___________LTD, a Company incorporated under the Companies Act, 1956 having its Registered Office at ___________________________ (hereinafter referred to as "The Lender") which term or expression shall unless excluded by or repugnant to the subject or context hereof shall mean and include its heirs, successors and assigns of the One Part
AND
i. M/S 123 LIMITED, a Company incorporated under the Companies Act, 1956 having its Registered Office at ____________________ (hereinafter referred to as "The Borrower") which terms or expression shall unless excluded by or repugnant to the subject or context hereof shall mean and include its heirs, successors and assigns of the SECOND PART and
ii. M/S DEF LIMITED, a Company incorporated under the Companies Act, 1956 having its Registered Office at __________________ (hereinafter referred to as "The Pledger") which terms or expression shall unless excluded by or repugnant to the subject or context hereof shall mean and include its heirs, successors and assigns of the THIRD PART.
WHEREAS
A. The Borrower is one of the entities in the group of Companies, 123 LIMITED, a Company incorporated under the provisions of the Companies Act, 1956 having its Registered Office at ___________________________ hereinafter referred to as "The Borrower" has a paid up capital of Rs. ______ lacs as on _________ (date).
B. The Borrowers has approached "The Lender" for grant of inter corporate deposit of Rs. _______/- (Rupees __________ only) for a period of _____ days beginning from the date of disbursal of loan i.e._________.
C. The Lender has favorably considered the request of the Borrower and has agreed to lend and advance a secured interest carrying inter-corporate deposit of Rs. _________ (Rupees _________ only) to the Borrower on the terms and conditions and covenants as follows.
D. The Pledger has agreed to secure the timely repayment of the loan along with interest by creating in favour of the Lender Pledge with the securities fully stated in the Annexure Annexed hereto and treated as an integral part of this Agreement.
NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:
1. At the request of the Borrower the Lender lends an advance to the Borrower an inter corporate deposit of Rs. ____________ (Rupees ___________only) for a period of _______ days beginning from the date of disbursal i.e.________
2. The said inter corporate deposit shall carry an interest @ _____% per annum payable with ________ rests. In case of delay or default in payment, whether of the principal or of the interest or any part thereof the Lender shall be entitled and the borrower shall be liable to pay a penal interest @ _% per annum over and above the interest mentioned hereinabove.
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This is a legal template for a secured loan agreement involving a lender, a borrower, and a third-party pledger who provides security. It outlines the terms for an inter-corporate deposit, including interest rates, repayment schedules, and the pledge of equity shares as collateral.
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About this template
What is this template?
This is a tripartite secured loan agreement involving a Lender, a Borrower, and a Pledger. It contains specific mechanics for maintaining a collateral margin based on market price and requires the execution of a Demand Promissory Note. It is not an unsecured loan or a simple personal loan.
When should you use it?
Use this when a corporate loan is secured by listed shares and a third party provides the collateral. Use an Unsecured Loan Agreement instead if no collateral is being pledged.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1 | Loan Amount and Period | The Lender provides an inter-corporate deposit for a specific number of days starting from the date of disbursal. |
| 2 | Interest and Penalties | Specifies the annual interest rate and applies an additional penal interest percentage in the event of payment default. |
| 3 | Security and Pledge | The Pledger secures the loan by pledging fully paid-up equity shares of a specific company listed on a stock exchange. |
| 6 | Maintenance of Margin | Obliges the Borrower to pledge additional shares if the market price drops to maintain the agreed percentage margin. |
| 7 | Rights of Sale | Grants the Lender authority to sell the pledged shares in the open market if the loan or interest is not repaid. |
| 8 | Accretions on Securities | Deems any dividends, bonus, or rights issues related to the pledged shares as part of the security package. |
| 11 | Power of Attorney | Appoints the Lender as the Pledger's attorney to handle the pledged equity shares. |
Who it's for
- an Indian company seeking a short-term inter-corporate deposit from another corporate entity
- a group entity providing third-party share security for a borrower's corporate loan
- a lender requiring a listed equity share pledge with automated margin maintenance
How long it runs and how it's signed
Law it's drafted under
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