Financing Contract Agreement Template for India

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Key Requirements PROMPT example:

Financing Contract Agreement

"I need a Financing Contract Agreement for a Rs. 50 crore term loan from HDFC Bank to my manufacturing company, with quarterly repayments over 5 years starting March 2025, secured by company assets and personal guarantee."

Document background
The Financing Contract Agreement is a fundamental document used in Indian financial transactions to formalize lending arrangements between financial institutions and borrowers. This agreement is essential when any entity seeks formal financing in India, whether for business expansion, project funding, working capital, or asset acquisition. The document must comply with Indian banking regulations, RBI guidelines, and relevant financial legislation. It typically includes comprehensive details about the facility amount, interest calculations, security structures, representations and warranties, and enforcement mechanisms. The agreement's structure reflects specific Indian legal requirements while incorporating international best practices in financial documentation. It serves as the primary contract governing the entire lending relationship and associated obligations of all parties involved.
Suggested Sections

1. Parties: Identifies and defines the lender, borrower, and any guarantors with their complete legal details

2. Background: Sets out the context of the financing arrangement and purpose of the loan

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Facility Amount and Purpose: Specifies the loan amount, type of facility, and permitted use of funds

5. Conditions Precedent: Lists conditions that must be satisfied before the facility becomes available

6. Drawdown Mechanics: Details the process and requirements for drawing down the loan

7. Interest and Fees: Specifies interest rates, calculation methods, and all applicable fees

8. Repayment Terms: Sets out repayment schedule, prepayment provisions, and payment mechanics

9. Representations and Warranties: Contains statements of fact and assurances given by the borrower

10. Covenants: Details positive and negative obligations of the borrower during the loan term

11. Events of Default: Lists circumstances that constitute default and their consequences

12. Security: Describes the security structure and enforcement rights

13. Indemnities: Sets out the borrower's indemnification obligations

14. Costs and Expenses: Allocates responsibility for transaction costs and ongoing expenses

15. Notices: Specifies how formal communications between parties should be made

16. Governing Law and Jurisdiction: Specifies Indian law as governing law and jurisdiction for disputes

17. Boilerplate Provisions: Standard clauses including severability, amendments, counterparts, etc.

Optional Sections

1. Guarantees: Required when third-party guarantees are part of the security structure

2. Syndication Provisions: Needed for syndicated loans involving multiple lenders

3. Assignment and Transfer: Detailed provisions for when either party may need rights to assign the agreement

4. Currency Provisions: Required for multi-currency facilities or foreign currency loans

5. Insurance Requirements: Detailed insurance obligations when specific insurance coverage is required

6. Security Trustee Provisions: Needed when a security trustee structure is used

7. Intercreditor Provisions: Required when multiple creditors are involved with different priorities

8. Force Majeure: Specific provisions for handling unforeseen circumstances affecting loan performance

Suggested Schedules

1. Schedule 1 - Definitions: Detailed list of defined terms used in the agreement

2. Schedule 2 - Conditions Precedent Documents: List of all documents required before facility availability

3. Schedule 3 - Drawdown Notice Format: Template for drawdown requests

4. Schedule 4 - Repayment Schedule: Detailed amortization schedule if applicable

5. Schedule 5 - Security Documents: List and copies of all security documents

6. Schedule 6 - Financial Covenants: Detailed financial ratios and calculations

7. Schedule 7 - Fee Schedule: Detailed breakdown of all fees and charges

8. Appendix A - Form of Compliance Certificate: Template for periodic compliance reporting

9. Appendix B - Security Perfection Requirements: Checklist of security registration and perfection requirements

10. Appendix C - Know Your Customer Requirements: List of required KYC documentation

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Banking & Financial Services

Manufacturing

Real Estate & Construction

Infrastructure

Technology & Software

Healthcare

Agriculture

Retail & Consumer Goods

Energy & Utilities

Telecommunications

Education

Transportation & Logistics

Hospitality & Tourism

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Credit

Corporate Affairs

Operations

Company Secretarial

Banking Operations

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Compliance Officer

Risk Manager

Credit Manager

Finance Manager

Company Secretary

Investment Officer

Relationship Manager

Due Diligence Officer

Financial Controller

Banking Operations Manager

Industries
Indian Contract Act, 1872: Fundamental law governing contract formation, validity, performance, and enforcement in India. Essential for basic contract structure and enforceability.
Registration Act, 1908: Governs the registration of documents, particularly relevant if the financing agreement involves immovable property as security.
Banking Regulation Act, 1949: Regulates banking companies and financial institutions in India, including their lending activities and interest rate policies.
Reserve Bank of India Act, 1934: Contains provisions regarding interest rates, monetary policy, and general banking regulations that affect financing agreements.
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act): Relevant for enforcement of security interests and recovery of secured debts by banks and financial institutions.
Indian Stamp Act, 1899: Determines the stamp duty payable on financial instruments and agreements to make them legally admissible.
Foreign Exchange Management Act, 1999 (FEMA): Relevant if the financing involves foreign currency or cross-border transactions.
Information Technology Act, 2000: Applicable for electronic execution of financing agreements and digital signatures.
Prevention of Money Laundering Act, 2002: Ensures compliance with anti-money laundering regulations in financial transactions.
Recovery of Debts Due to Banks and Financial Institutions Act, 1993: Provides mechanisms for debt recovery and establishes Debt Recovery Tribunals.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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