As per Security Agreements, the term of the contract shall be specified. This agreement shall extend for a period of 24 months from the date of signing this document. On the date of closure of the Security Agreement, the outstanding amount shall be repaid in full.
1.4. Early Repayment
In case of prepayment of the loan, the borrower shall be liable for a prepayment penalty of Y%, which shall be included in the installment containing the prepayment as per the terms of this Security Agreement.
2. Collateral Details
As is customary with Security Agreements, the borrower shall pledge to the lender stocks and shares as collateral for the loan being offered. The details relating to the collateral are contained in Exhibit A of the Annexure of this Security Agreement. The terms of the collateral pledge are listed below:
2.1. Free from Lien
The collateral is wholly owned by the borrower and is free from any lien or pledge imposed on it from any other lenders.
2.2. Rights of heirs and successors
As is customary with Security Agreements, the terms relating to pledge of collateral shares and stocks is binding on all heirs and successors of the borrower. The borrower understands that any rights to the collateral by himself or any of his heirs and successors shall be waived until the loan amount is repaid.
3. Breach of Security Agreement
The security agreement shall be considered to be in breach under the following conditions:
3.1. Payment Default
As is customary with Security Agreements, the contract shall be in breach if the borrower fails to make repayments of the installment amount. The lender shall send three payment reminders and the borrower is required to settle outstanding dues within this time. If changes to the agreement are required to meet the obligations, approval from both parties is required before any modification is made.
3.2. Rights of the Lender in case of Defaulted Payment
This Security Agreement provides that in the event of default of repaying the installment amount and failure to agree on alternative terms, the lender has the right to convert the collateral into cash to settle the outstanding dues. Any excess amount from the sale over the outstanding loan amount, including interest and penalties, shall be transferred to the borrower.
4. General Conditions
As with all Security Agreements, the following general conditions shall apply to the contract:
In the event that any portion of this contract is deemed invalid or unenforceable, the relevant clause shall be reframed or disregarded. This does not affect the enforceability or validity of any of the other clauses in the agreement.
4.2. Governing Law
All Security Agreements shall be under the jurisdiction of the laws of the state of XXXX. If any component of this contract is contradictory to the statutory requirements of the state, it shall be disregarded from the terms of this Security Agreement.
4.3. Waiver of Rights
Both parties waive the right to contest or file suit against each other for dispute arising from this Security Agreement. Both parties agree to all terms within the agreement and in case of any dispute shall enlist an arbitrator to resolve the issue.
Both parties agree to the terms and conditions contained in this document to abide by them.