FINANCING AGREEMENT

This Financing Agreement (hereinafter referred to as the “Agreement”) is made on [INSERT DATE] (hereinafter referred to as the “Effective Date”) between:

[INSERT NAME OF THE COMPANY], having registered office at [INSERT ADDRESS OF THE COMPANY] (hereinafter referred to as the “Lender” which expression shall, unless repugnant to the context or meaning thereof, means and includes its legal representatives, executors, administrators and permitted assigns); and 

[INSERT NAME OF THE COMPANY], having registered office at [INSERT ADDRESS OF THE COMPANY] (hereinafter referred to as the “Borrower” which expression shall, unless repugnant to the context or meaning thereof, means and includes its legal representatives, executors, administrators and permitted assigns).

The “Lender” and the “Borrower” together shall be referred to as “Parties” and individually as a “Party”.

WHEREAS

1. The Lender is engaged in the business of [INSERT TYPE OF BUSINESS] and is willing to provide financial assistance to the borrower.
2. The Borrower needs financial assistance for the Purpose of [INSERT PURPOSE].
3. The Lender and Borrower mutually agree to the terms and conditions outlined in this Agreement, which governs the working relationship between the parties.
4. The parties are duly authorized and have the capacity to enter into this agreement.
5. Both the parties affirm to understand the provisions contained herein and in case either party requires clarification as to one or more provisions, either party has had the right to seek clarifications or sought legal guidance.

NOW, THEREFORE, in consideration of the mutual promises contained herein and intending to, be legally bound, the Parties have agreed as follows:

1. DEFINITIONS
   1. ” Borrower” shall mean an individual or entity who is receiving the money from the lender.
   2. “Lender” shall mean an individual or entity providing financial assistance to the borrower as specified in this Agreement.
   3. “Loan Amount” refers to the principal amount lent by the lender to the borrower for the purpose stated hereof.
   4. “Interest Rate” shall mean to the fixed rate of interest on the Loan Amount.
   5. “Collateral” refers to the property or assets pledged by the borrower to the lender to secure the loan.
   6. Confidential Information" means any non-public information, data, documentation, trade secrets, know-how, or any other information disclosed by one party to the other party in connection with this agreement, whether in written, oral, electronic, or any other form, and identified as confidential or which the Parties should reasonably understand to be confidential.
2. TERM
   1. This Agreement shall commence on the effective date of [INSERT DATE OF AGREEMENT] and continue for [INSERT TERM PERIOD OF AGREEMENT IN DAYS/MONTHS/YEARS] as agreed by the parties. The Agreement may be terminated earlier in accordance with the termination provisions set forth herein, including termination upon mutual written consent or any other conditions specified within the Agreement that allow for early termination.
3. LOAN AMOUNT
   1. The Lender agrees to lend the principal amount to the borrower for a total period of [INSERT NUMBER OF DAYS OR MONTHS].
   2. The Borrower before receiving the loan amount will pledge [INSERT DESCRIPTION OF COLLATERAL] as collateral to the lender for security.
   3. The Borrower shall use the loan amount solely for the stated purpose hereof and shall repay the loan amount with interest to the borrower as agreed upon by the parties.
4. OBLIGATIONS OF THE BORROWER
   1. The Borrower agrees to repay the entire loan Amount to the Lender in accordance with the Repayment Terms set forth in this Agreement. The Borrower shall make timely and full payments on the due dates specified, without any delay or default. The Borrower shall pay the accrued interest on the outstanding Loan Amount at the agreed-upon Interest Rate.
   2. The Borrower shall use the Loan Amount solely for the Loan Purpose stated in this Agreement. The Borrower agrees not to divert or utilize the funds for any other purpose without prior written consent from the Lender.
   3.  In case the Loan Amount is secured by Collateral, the Borrower shall maintain the Collateral in good condition and shall not take any actions that may diminish its value or jeopardize its security.
   4. The Borrower shall promptly inform the Lender in writing of any material changes in the Borrower's financial condition, contact information, or any other circumstances that may affect the Borrower's ability to fulfill the obligations under this Agreement.
   5. The Borrower shall comply with all applicable laws, regulations, and governmental requirements related to the loan transaction, including but not limited to tax laws and reporting obligations.
   6. The Borrower shall maintain accurate records related to the loan transaction, including financial statements, receipts, and any other documentation as requested by the Lender. The Lender reserves the right to inspect and audit such records upon reasonable notice.
5. REPAYMENT
   1. The borrower shall repay the loan amount on [INSERT DATE] along with interest and charges if any due on the borrower on a [INSERT MONTHLY OR QUARTERLY] basis. The borrower may prepay the loan amount before the repayment date to the lender. On receiving the Loan amount with interest and all the charges accordingly, the Lender shall return the security or asset kept as collateral to the borrower.
6. SECURITY
   1. The Borrower hereby grants to the Lender a continuing, first-priority security interest in the Collateral described herein as security for the full and punctual performance of all obligations under this Agreement. The Borrower warrants that it has good and marketable title to the Collateral, free and clear of any liens or encumbrances except those expressly permitted by this Agreement.
   2. The Borrower shall not sell, transfer, lease, encumber, or otherwise dispose of any part of the Collateral without the prior written consent of the Lender. Any permitted disposition shall be structured so as not to impair the Lender’s security interest, and the Borrower shall remain liable for all obligations under this Agreement with respect to any disposed Collateral.
   3. The Lender shall have the right, upon reasonable notice, to inspect the Collateral or its records relating thereto to ensure compliance with the terms of this Agreement. The Borrower agrees to take all reasonable measures to preserve the value and condition of the Collateral and promptly notify the Lender of any event that might adversely affect it.
   4. Upon the occurrence of any default under this Agreement, the Lender may, at its option and without further notice or demand, exercise any rights and remedies available under applicable law. These rights include, without limitation, taking possession of the Collateral, selling or otherwise disposing of it in a commercially reasonable manner, and applying the proceeds to the satisfaction of the Borrower’s outstanding obligations. The Borrower agrees to cooperate fully in facilitating any such actions by the Lender.
7. FINANCIAL COVENANTS
   1. The Borrower shall furnish the Lender with periodic financial statements, including quarterly unaudited and annual audited financial statements, prepared in accordance with generally accepted accounting principles (GAAP) or other applicable standards. Such statements shall be provided within [INSERT SPECIFIC NUMBER OF DAYS] days following the end of each reporting period, along with any required management discussion and analysis.
   2. Throughout the term of this Agreement, the Borrower shall maintain a minimum current ratio of [INSERT SPECIFIC CURRENT RATIO] calculated in accordance with GAAP, a maximum debt to equity ratio of [INSERT SPECIFIC DEBT TO EQUITY RATIO] ensuring that total indebtedness does not exceed the specified multiple of the Borrower’s equity, and a minimum interest coverage ratio of [INSERT COVERAGE RATIO] calculated as earnings before interest and taxes divided by interest expense. The Borrower shall promptly notify the Lender if any of these ratios fall below or exceed the prescribed thresholds and shall take all necessary actions to restore compliance.
   3. The Borrower shall not incur additional indebtedness beyond short-term financing or working capital facilities, nor declare dividends, make material asset sales, or acquisitions without the Lender’s prior written consent if such actions would breach any financial covenants. In the event that any covenant is not met, the Borrower shall have a cure period of [INSERT CURE PERIOD DAYS] days from the date of the Lender’s notice to remedy the breach; failure to do so shall constitute an Event of Default, thereby granting the Lender the right to exercise all available remedies under this Agreement, including acceleration of the Loan Amount and enforcement of security interests.
8. PREPAYMENT PENALTY OR PREMIUM
   1. If the Borrower elects to prepay all or any portion of the outstanding Loan Amount prior to the scheduled due date, such prepayment shall be subject to a penalty calculated as [INSERT PERCENTAGE OR FORMULA] of the prepayment amount, thereby compensating the Lender for the anticipated loss of interest income on the prepaid funds. This prepayment penalty shall apply unless the prepayment occurs after [INSERT SPECIFIC NUMBER OF DAYS IN WHICH NO PENALTY IS IMPOSED] days, in which case no penalty shall be imposed, provided that the Borrower complies with any applicable notice requirements. The Borrower shall furnish the Lender with written notice of its intention to prepay at least [INSERT MINIMUM NUMBER OF DAYS FOR PRIOR NOTICE] days prior to such prepayment, and the Lender shall provide a detailed calculation of the prepayment penalty. Payment of the prepayment penalty shall be made concurrently with the prepayment. Failure to pay the prepayment penalty as required shall constitute a breach of this Agreement, entitling the Lender to exercise all available remedies under this Agreement and applicable law.
9. REPRESENATAION OF WARRANTIES
   1. Each Party represents and warrants to the other that it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation or formation; that it has the requisite power and authority to enter into and perform its obligations under this Agreement, and that the execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate or other actions; that this Agreement constitutes a legal, valid, and binding obligation enforceable in accordance with its terms; that the execution, delivery, and performance of this Agreement do not conflict with or violate any law, regulation, contractual obligation, or any other instrument to which such Party is bound; that, to the best of its knowledge, no litigation, arbitration, or other legal proceedings are pending or threatened against it that would have a material adverse effect on its ability to perform its obligations under this Agreement; and that all financial statements, reports, and other information provided to the other Party are true, complete, and accurate in all material respects.
10. RECORDS AND DOCUMENTS
    1. The Lender will keep a track of all the transactions made by the borrower and may from time to time remind the borrower for the remaining or outstanding loan amount to be paid by the borrower.
    2. A copy of all the records will be provided to the borrower by the lender.
11. DEFAULT
    1. In the event of any occurrence that may lead to a Default, the Borrower shall notify the Lender immediately, providing all relevant details and a proposed plan to remedy the Default. The Borrower will take all the necessary steps to repay the loan amount as per the agreed terms and conditions. Even after taking all the required steps the borrower defaults in repayment in such a situation the lender may take the collateral ownership.
12. NO OTHER RIGHTS GRANTED
    1. This Agreement does not grant any rights, licenses, or privileges to the Borrower beyond those explicitly stated in this Agreement. The Borrower acknowledges that the Loan Amount is provided solely for the Loan Purpose and that no ownership interest, intellectual property rights, or other rights of any kind are transferred or conveyed to the Borrower as a result of this loan. The Borrower agrees not to use the Loan Amount or any related information to infringe upon the Lender's rights or the rights of any third party. The Borrower shall not use the Lender's name, logo, or other identifying marks without the prior written consent of the Lender.
    2. This clause also applies to any collateral provided by the Borrower, which is solely used to secure the loan and does not transfer ownership or any rights to the Lender. The Lender has the right to enforce its Ownership right in the collateral only in the event of default, but this action does not grant the Lender any additional rights or interests in the collateral.
13. CONFIDENTIALITY
    1. Confidential Information shall not include any information that:
       1. is or becomes generally known to the public without either Party’s breach of any obligation owed to the other Party;
       2. was independently developed by a Party without other Party's breach of any obligation owed to that Party; or
       3. is received from a third party who obtained such Confidential Information without any third party's breach of any obligation owed to the Party.
    2. During and after the term of this Agreement, Parties will hold in the strictest confidence, and take all reasonable precautions to prevent any unauthorized use or disclosure of Confidential Information, and Parties will not
       1. use the Confidential Information for any purpose whatsoever other than as necessary for the performance of the Services on behalf of the other Party, or
       2. disclose the Confidential Information to any third party without the prior written consent of an authorized representative of the other Party.
    3. Parties agrees to protect the confidentiality of the Confidential Information in the same manner that it protects the confidentiality of its own proprietary and confidential information of like kind, but in no event shall the Parties exercise less than reasonable care in protecting such Confidential Information.
    4. The Parties shall not use any confidential information directly or indirectly to procure a commercial advantage over the other Party or otherwise use any designs, ideas or concepts created by or belonging to the other Party without the express written consent of the other Party.
    5. Upon termination/ expiration whichever is earlier, the Parties shall promptly return or certify the destruction of Confidential Information and all authorized copies thereof.
14. DISPUTE RESOLUTION
    1. The Parties shall endeavor to resolve any differences of opinion which may arise between them with respect to the provisions of this Agreement by negotiation between themselves personally or with the assistance of their attorneys and unless in the opinion of any party, acting reasonably, the matter in dispute is of such significant nature to warrant it being addressed otherwise, no party shall commence any public proceedings until the negotiations have failed to produce a resolution. In furtherance of the provisions of this paragraph, all Parties hereby agree to make themselves available on short notice and to negotiate promptly and in good faith, any matter any party may wish to negotiate.
    2. All disputes arising under this agreement shall be governed by and interpreted in accordance with the Arbitration laws of [INSERT COUNTRY/STATE OF ARBITRATION] , without regard to principles of conflict of laws. The parties to this agreement will submit all disputes arising under this Agreement to Arbitration in [INSERT COUNTRY/STATE OF ARBITRATION] before a single arbitrator. The arbitrator shall be selected by mutual agreement of the parties. The venue of Arbitration proceedings shall be [INSERT NAME OF COUNTRY AND CITY WHERE ARBITRATION SHALL BE CONDUCTED] No party to this agreement will challenge the jurisdiction or venue provisions as provided in this section. The decision of the Arbitrator shall be final and binding upon the parties.
15. APPLICABLE LAW
    1. This Agreement shall be governed by and constructed in accordance with the Laws, rules, orders and regulations of [INSERT THE COUNTRY/STATE OF APPLICABLE LAWS].
    2. The Parties shall resolve all disputes in connection with the validity or interpretation of this Agreement, unless otherwise expressly stated in the Agreement, in the following manner: 
       1. By direct negotiations between the Lender and Borrower
       2. If negotiations between the parties are unsuccessful, the matter shall be referred to the competent court sitting at [INSERT THE PLACE OF THE COURT WHICH SHALL HAVE EXCLUSIVE JURISDICTION IN CASE OF UNSUCCESSFUL NEGOTIATION] which shall have exclusive jurisdiction in all matters arising there from unless otherwise agreed between the Parties in writing.
16. FORCE MAJEURE
    1. Neither party shall be held liable for any failure or delay in performing its obligations under this Agreement if such failure or delay is caused by events beyond the reasonable control of the affected party, including but not limited to acts of God, natural disasters (e.g., floods, earthquakes, hurricanes), war, terrorism, riots, labour strikes, governmental actions, epidemics or pandemics, power outages, or other similar events ("Force Majeure Events").The affected party shall promptly notify the other party in writing of the occurrence of a Force Majeure Event, providing reasonable details of the event, its expected duration, and the steps being taken to mitigate its impact. Failure to provide timely notice may result in the affected party forfeiting its rights under this clause. If a Force Majeure Event continues for a period exceeding [INSERT THE NUMBER OF DAYS CONSTITUTING PERIOD EXCEEDING WHICH, IF THE FORCE MAJEURE CONTINUES, EITHER PARTY MAY TERMINATE THE AGREEMENT] days, either party may terminate this Agreement upon written notice to the other party without further liability, except for obligations accrued prior to the Force Majeure Event.
17. APPLICABLE LAW
    1. This Agreement shall be governed by and constructed in accordance with the Laws, rules, orders and regulations of [INSERT THE COUNTRY] .
    2. The Parties shall resolve all disputes in connection with the validity or interpretation of this Agreement, unless otherwise expressly stated in the Agreement, in the following manner: 
    3. By direct negotiations between the Lender and Borrower. 
    4. If negotiations between the parties are unsuccessful, the matter shall be referred to the competent court sitting at [INSERT THE PLACE] which shall have exclusive jurisdiction in all matters arising there from unless otherwise agreed between the Parties in writing.
18. NOTICES
    1. Any notice, request, demand, consent or other communication required or permitted under this Agreement shall be in writing and sent either via email on the email address as provided by the parties and shall be considered sent when the email is sent to the correct email address of the party or shall be given by personal delivery (including courier) by certified mail (confirmed by mail) addressed to the party for which it is intended at the address below and shall be deemed to be given on the day of delivery or transmission if within during normal business hours, or, if after business hours, on the next following Business Day, or if mailed by registered or certified mail, on the day which is [INSERT THE APPLICABLE NUMBER OF BUSINESS DAYS WITHIN WHICH THE NOTICE WILL BE DEEMED SERVED] Business Days after such notice is mailed during normal postal conditions.  In the event of a postal disruption, any notice mailed will be deemed received on the [INSERT THE APPLICABLE NUMBER OF BUSINESS DAYS WITHIN WHICH THE NOTICE WILL BE DEEMED SERVED] Business Day following resumption of regular postal service:
19. If to the Lender: [INSERT EMAIL ID OR/AND ADDRESS OF THE LENDER/ AUTHORITY]
20. If to the Borrower: [INSERT EMAIL ID OR/AND ADDRESS OF THE BORROWER/ AUTHORITY]
    1. Either party may change its address/email address for notices and other communications upon notice to the other party in the manner aforesaid.
21. ELECTRONIC SIGNATURES:
    1. This Standard Clause provides that parties may authenticate the agreement with an electronic signature. Each party agrees that the electronic signatures whether digital or encrypted, of the parties included in this Agreement are intended to authenticate this writing and to have the same legal force and effect as manual signatures.
    2. Electronic signature means any electronic sound, symbol or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including email electronic signatures.
22. MISCELLANOUS
    1. Modifications: Except as otherwise provided herein this Agreement shall not be amended or otherwise modified unless the modification or amendment is done in writing, signed and has been mutually agreed by both the parties.
    2. Language: The language of all communications between the parties pursuant to this Agreement, including notices and reports, will be the [INSERT LANGUAGE].
    3. Severability: If any provision of this Agreement shall, to any extent, be held to be invalid or unenforceable, it shall be deemed to be separate and severable from the remaining provisions of this Agreement, which shall remain in full force and effect and be binding as though the invalid or unenforceable provision had not been included.
    4. Entire agreement: This agreement along with all the Exhibits constitutes the entire understanding and agreement of the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties. This Agreement may be executed in identical duplicate counterparts, each of which shall be deemed an original, and both of which together shall constitute one and the same instrument. 
    5. No Waiver: Any failure or delay of any Party hereto in exercising any right or privilege with respect to this Agreement shall not be construed to be a waiver or to affect the validity of any part of the Agreement and shall not retrain any of the Parties to enforce any of the provisions of the Agreement.
    6. Amendments and Assignments:  Any amendments to this Agreement shall be made, only if, both Parties agree upon such amendment in writing. This Agreement shall not be assigned by either party without the express, written consent of the other party.
    7. Headings: The headings upon the various sections are solely for convenience and reference only and shall not affect the scope, meaning, intent or interpretation of the provisions of this Agreement, nor shall such headings otherwise be given any legal effect.
23. DECLARATION
    1. The Parties hereby acknowledge that the terms herein have been read, fully understood, and expressly agreed to, and hereby commit to performing their obligations with due diligence, honesty, and in good faith. The Parties hereby agree to foster a collaborative environment that promotes transparent communication and timely resolution of any issues, thereby ensuring compliance with all applicable laws and industry best practices.

IN WITNESS WHEREOF, the parties, intending to be legally bound, have each executed this agreement as of the effective date.

Signed, sealed and delivered on behalf of Lender

Name: [INSERT NAME OF LENDER/ SIGNING AUTHORITY AND DESIGNATION]

Signature:

Date: [INSERT SIGNING DATE OF LENDER]

Signed, sealed and delivered on behalf of Borrower

Name: [INSERT NAME OF BORROWER/ SIGNING AUTHORITY AND DESIGNATION]

Signature: 

Date: [INSERT SIGNING DATE OF BORROWER]