Loan Agreement with Security

A document that provides a lender a security interest in a specified asset or property that is pledged
as collateral. In the event that the borrower defaults, the pledged collateral can be seized and sold. A
security agreement mitigates the default risk the lender faces.

The object of loan agreement is that it determines the terms and condition between the lender and
borrower. The agreement is binding on both the parties and can be enforceable by law

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 DRAFT OF AGREEMENT WITH SECURITY

THIS AGREEMENT is made at ________on this ____ day of _______, 200__

BETWEEN

___________LTD, a Company incorporated under the Companies Act, 1956 or Companies

AND

      i. M/S ABC LIMITED, a Company incorporated under the Companies Act, 1956 or
Companies Act ,2013 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 CDE LIMITED, a Company incorporated under the Companies Act, 1956 or
Companies Act ,2013 having its Registered Office at __________________ (hereinafter
referred to as "The Lender") 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, ABC LIMITED, a
Company incorporated under the provisions of the Companies Act, 1956 or Companies Act,
2013 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 favourably 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 Lender 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.

3.  As a security towards timely repayment of loan along with interest, the Lender has agreed
to pledge in favour of the Lender, fully paid up equity shares, standing in the name of Lender
as stated in the Annexure annexed hereto and treated as an integral part of the agreement
in the equity capital of ABC Limited, a company incorporated under the provisions of the
Companies Act, 1956 or Companies Act, 2013 having its Registered Office at ___________.
The Equity shares of Equity International Ltd are listed at _______ Stock Exchange and the
current market price of shares is agreed to be Rs. ____/- per share.

4. In case the Lender sends the notice to the Borrower to make good the margin in the
securities (_____% in this case) and the Borrower fails and/or neglects to make good the
margin within the stipulated period as mentioned in the notice the Borrower shall be deemed
to have committed default of the terms of this agreement and in that event it shall be lawful
for the Lender (but not compulsory) to demand from the Borrower repayment of the loan
along with the interest then outstanding and the Borrower shall be liable to repay the loan in
full along with interest thereon without any objection and/or demur.

5. It is expressly agreed by and between the parties hereto that in case of downward revision
in the market price of the equity shares of ABC LTD, the Borrower/ Lender shall on its own,
pledge in favour of the Lender such other shares of ABC LTD so as to ensure ______ %
margin between the amount of loan along with interest and the securities.

6. In case the Borrower fails and/or neglects to repay the amount of loan or the amount of
interest on the due date it shall be lawful for the Lender to sell or dispose off, at the cost and
expenses of the borrower, all or some of the equity shares of ABC LTD either by way of
private arrangement or in the open market and to apply the net proceeds thereof towards
satisfaction of the amount of loan or the interest, then outstanding.

7. The Borrower agrees that any accretion the securities pledged with the Lender by way of
dividend, bonus/rights issue etc. accruing from time to time shall be deemed to be pledged
with the Lender and the Borrower shall, on its own take expeditious steps to create a pledge
in favour of the Lender.

8. It is agreed that the Borrower shall execute a Demand Promissory Note in favour of the
Lender.
9. The Borrower/ Lender agree and undertake to execute in favour of the Lender all such
documents/papers, including fresh transfer deeds, as may be required by the Lender from
time to time.

10. The Borrower/ Lender have agreed to constitute nominate and appoint the Lenders as its
true and lawful attorney to do all such deeds and things in respect of the said ______(No. of
Shares) Equity Shares of ABC LTD as may be pledged/hypothecated by the Borrower to the
Lender.

11.It is agreed that the liability of the Lender is jointly and severally along with the liabilities of
the Borrower and the same is co-extensive.

IN WITNESS WHEREOF the parties herein have signed this agreement in acceptance of all
terms stated above on the date and place mentioned hereinabove.

THE BORROWER

THE PLEDGER

THE LENDER