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Guarantee And Collateral Agreement Template for India

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Key Requirements PROMPT example:

Guarantee And Collateral Agreement

"I need a Guarantee and Collateral Agreement for a syndicated loan facility closing in March 2025, where three corporate guarantors will provide security over their assets including real estate, machinery, and receivables, with the security to be held by a security trustee for a consortium of five banks."

Document background
The Guarantee and Collateral Agreement is a crucial document in Indian financial and commercial transactions, used when a party requires both a guarantee of obligations and security over assets as credit support. This document is commonly utilized in lending transactions, corporate finance, project finance, and other commercial arrangements where additional security is required beyond a simple promise to pay. The agreement must comply with Indian security and guarantee laws, including the Indian Contract Act, 1872, SARFAESI Act, 2002, and other relevant legislation. It is particularly important in scenarios where multiple forms of credit support are required, combining the personal or corporate guarantee obligations with specific security over assets, thereby providing the beneficiary with multiple routes of recourse. The document typically includes detailed provisions regarding the maintenance of collateral, enforcement mechanisms, and the interplay between the guarantee and security aspects.
Suggested Sections

1. Parties: Identifies the guarantor, secured party/beneficiary, and principal debtor

2. Background: Explains the underlying transaction and purpose of the guarantee and security

3. Definitions and Interpretation: Defines key terms and establishes interpretation rules

4. Guarantee: Sets out the primary guarantee obligations and their scope

5. Nature of Guarantee: Specifies whether continuing guarantee, defines guaranteed obligations

6. Security Interest Creation: Creates the security interest over the collateral

7. Representations and Warranties: Standard and security-specific representations by the guarantor

8. Covenants: Positive and negative obligations regarding the collateral and guarantee

9. Rights and Obligations: Details the rights of the secured party and obligations of the guarantor

10. Events of Default: Lists circumstances constituting default and consequences

11. Enforcement: Procedures and rights for enforcing the guarantee and security

12. Power of Attorney: Appointment of secured party as attorney for enforcement purposes

13. Indemnity: Indemnification provisions for secured party

14. Expenses and Payments: Provisions regarding costs, expenses, and payment mechanics

15. Miscellaneous: Standard boilerplate provisions including notices, amendments, governing law

Optional Sections

1. Security Trustee Provisions: Required when security is held by a trustee for multiple beneficiaries

2. Currency Provisions: Required for cross-border transactions involving multiple currencies

3. Tax Provisions: Detailed tax provisions needed for complex transactions or cross-border deals

4. Priority Arrangements: Required when there are multiple secured creditors

5. Further Assurance: Detailed provisions for additional documentation or perfection requirements

6. Insurance: Detailed insurance requirements for specific types of collateral

7. Bank Account Control: Required when bank accounts form part of the collateral

8. Intellectual Property: Required when IP assets form part of the collateral

Suggested Schedules

1. Schedule 1 - Collateral Description: Detailed description of all assets subject to security

2. Schedule 2 - Secured Obligations: Detailed description of the obligations being guaranteed and secured

3. Schedule 3 - Perfection Requirements: List of all required filings and registrations

4. Schedule 4 - Forms of Notices: Standard form notices for third parties regarding the security

5. Schedule 5 - Existing Security Interests: List of permitted existing security interests over the collateral

6. Schedule 6 - Bank Accounts: Details of all bank accounts subject to security

7. Appendix A - Form of Accession Deed: Standard form for additional parties to accede to the agreement

8. Appendix B - Form of Security Power of Attorney: Standard form of power of attorney for enforcement

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions



















































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Relevant Industries

Banking

Financial Services

Real Estate

Infrastructure

Manufacturing

Technology

Telecommunications

Energy

Healthcare

Retail

Hospitality

Agriculture

Mining

Construction

Trading

Relevant Teams

Legal

Finance

Risk Management

Compliance

Treasury

Credit

Corporate Secretarial

Banking Operations

Business Development

Security Administration

Relevant Roles

Chief Financial Officer

Legal Counsel

Finance Director

Credit Manager

Risk Manager

Corporate Lawyer

Security Trustee

Loan Officer

Compliance Officer

Transaction Manager

Business Development Manager

Company Secretary

Financial Controller

Treasury Manager

Banking Relationship Manager

Industries







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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