prpri Format of Loan Agreement between Holding & Subsidiary Company Format of Loan Agreement between Holding & Subsidiary Company

Download Format of Loan Agreement between Holding and it’s Subsidiary Company with the condition to convert it into Equity in case of default.

LOAN AGREEMENT

This Loan Agreement (this “Agreement”) is made on the __________, 2018 by and among:

XYZ Limited, a company incorporated under the Companies Act, 1956, and having its registered office at ______________, New Delhi-110030, India (hereinafter referred to as the “Borrower”, which expression shall, unless it be repugnant to the subject or context thereof, include its successors and permitted assigns), of the FIRST PART

WITH

ABC Limited, a company incorporated under the provisions of the Companies Act, 1956 and having its registered office at _______________New Delhi-110030, India (hereinafter referred to as “Lender,” which expression shall, unless repugnant to the context or meaning thereof, be deemed to mean and include its successors and permitted assigns) of the SECOND PART;

The Lender and the Borrower are collectively hereinafter referred to as the “Parties” and individually as a “Party.”

WHEREAS

1. The Borrower is the wholly owned subsidiary company of the Lender.

2. The Borrower deals in __________________etc. in many states in India and approaching banks for financing. In the meantime, the Board of Borrower decided to approach the Lender to provide finance for meeting the short term funding requirements.

3. At the request of the Borrower, the Lender has consented in its meeting held on_________, approved providing a short term loan for the purpose upto a maximum limit of Rs. ________(in words) in one or more tranches.

4. The Parties wish to record the terms of the Loan in the manner set forth in this Agreement.

NOW IT IS HEREBY AGREED as follows:

1. The Lender has sanctioned the loan not exceeding the amount of ______(in words) in one or more tranches as a Unsecured Loan to the Borrower for the stated purpose to be disbursed as and when so mutually decided by parties.

2. The Borrower shall repay the loan to Lender as and when demand is made by the lender or as may be mutually agreed between the Parties. However, the loan may be repaid any time by the Borrower.

3. The Borrower be and is hereby agreed to utilised the Loan facility exclusively for its business and operations.

4. The Loan is unsecured.

5. The Loan shall be payable on demand.

6. The Lender has the option for conversion of outstanding loan and interest, wholly or partially, into Equity at any time by giving a simple request/notice to the borrower Company, whether equity or preference at a price as may be decided by and between the parties in line with the applicable laws of the land.

7. Both the Parties are entitled to assign all or any part of its rights, obligations hereunder by giving intimation to each other. Lender may assign to any other person all or any part of its rights and benefits hereunder. In the event of any such permitted assignment as aforesaid, the assignee shall be substituted for the assignor for all the purposes hereof and shall have the same rights against the Borrower as it would have had if it had been a party hereto as a lender.

8. Any notice or other communication under or in connection with this Agreement is to be in writing in the English language and signed by or on behalf of the Party giving it. The notice or communication may be served by being delivered personally or sending it by facsimile transmission or by registered post to the Party due to receive the notice or communication at the address provided hereunder or such other address as that Party may specify from time to time in writing to the other Party. Communication address of both the parties:

a. Borrower’s address– ________________New Delhi-110030.

b. Lender’s address- __________________New Delhi-110030.

9. The Parties warrant that the individual executing this Agreement on behalf of each Party has been fully empowered to do so and that all necessary corporate actions required to authorize the execution of this Agreement have been taken by such Party, it being agreed that it shall not be necessary for either Party to enquire or verify whether such action has in fact been taken.

IN WITNESS WHEREOF the Parties hereto have executed these presents the day and year first hereinabove written.

SIGNED and DELIVERED for and on behalf of

XYZ Limited

________________________________

By: Name

Title: Authorized Signatory

SIGNED and DELIVERED for and on behalf of

ABC Limited

_________________________

By:

Title: Authorized Signatory

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Company: Federal-Mogul Goetze (India) Limited
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3 Comments

  1. mittal says:

    Will loan from ‘Holding private limited NBFC’ to its ‘associate private limited NBFC’ and vice versa come under ‘inter corporate deposit’ under Public Fund as per RBI Circular dated 01.09.2016, as in real sense there is no outside Public Fund is involved.

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