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Simple Security Agreement Template for India

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Key Requirements PROMPT example:

Simple Security Agreement

"I need a Simple Security Agreement under Indian law to secure a machinery loan for my manufacturing company, where the security will be created over our newly purchased equipment worth Rs. 2 crore, with the security to be effective from March 1, 2025."

Document background
The Simple Security Agreement is a fundamental document used in Indian financing transactions to create security interests over assets. It is typically used when a lender requires security over specific assets as collateral for a loan or other financial accommodation. The agreement must comply with Indian security laws, including the SARFAESI Act 2002, Transfer of Property Act 1882, and relevant state stamp duty laws. The document details the assets being secured, the obligations being secured, maintenance requirements for the security, and enforcement mechanisms. It's particularly important in corporate lending, project finance, and asset-based lending transactions where lenders require robust security packages to protect their interests. The Simple Security Agreement can be used for various types of assets, including movable property, receivables, and bank accounts, though separate forms may be required for immovable property under Indian law.
Suggested Sections

1. Parties: Identification of the security provider (borrower/guarantor) and the security holder (lender/beneficiary)

2. Background: Brief description of the underlying transaction and purpose of the security agreement

3. Definitions and Interpretation: Key terms used in the agreement and rules of interpretation

4. Creation of Security Interest: Specific provisions creating the security interest and describing the secured assets

5. Secured Obligations: Definition and scope of the obligations being secured by the agreement

6. Representations and Warranties: Security provider's confirmations regarding ownership, authority, and status of secured assets

7. Covenants: Ongoing obligations of the security provider regarding maintenance and protection of secured assets

8. Further Assurance: Obligation to execute additional documents and take further steps to perfect security

9. Enforcement: Rights and remedies of the security holder upon default

10. Power of Attorney: Appointment of security holder as security provider's attorney for security enforcement

11. Notices: Process and requirements for giving notices under the agreement

12. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction of courts

Optional Sections

1. Intercreditor Provisions: Required when there are multiple secured creditors to establish priority and enforcement rights

2. Security Margin: Include when the security requires maintaining a specific value ratio of secured assets to secured obligations

3. Insurance: Detailed insurance requirements when secured assets need specific insurance coverage

4. Costs and Expenses: Detailed provisions about who bears various costs when these need to be specifically allocated

5. Assignment and Transfer: Include when parties want to specifically regulate ability to transfer rights under the agreement

6. Entire Agreement: Include when there are multiple documents and need to clarify their relationship

7. Force Majeure: Include when security over operating assets where force majeure could affect security value

Suggested Schedules

1. Schedule 1 - Description of Secured Assets: Detailed description and/or list of assets over which security is created

2. Schedule 2 - Form of Notice: Standard forms of notices required under the agreement

3. Schedule 3 - Secured Obligations: Detailed description of secured obligations if complex or from multiple documents

4. Schedule 4 - Perfection Requirements: List of filings, registrations and other actions required to perfect security

5. Schedule 5 - Existing Security: Details of any existing security over the secured assets

6. Appendix A - Corporate Authorizations: Forms of corporate authorizations required for security creation

7. Appendix B - Security Value Calculation: Methodology for calculating value of security if relevant

Authors

Alex Denne

Head of Growth (Open Source Law) @ ºÚÁÏÊÓÆµ | 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

Infrastructure

Technology

Retail

Healthcare

Automotive

Energy

Agriculture

Telecommunications

Construction

Mining

Logistics

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit

Collections

Corporate Secretarial

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Finance Manager

Credit Manager

Risk Manager

Treasury Manager

Compliance Officer

Company Secretary

Security Trustee

Loan Officer

Corporate Banking Manager

Asset Manager

Collections Manager

Financial Controller

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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