The Demand Loan And Term Loan agreement is a sophisticated financial instrument used when a borrower requires a combination of flexible short-term funding (demand portion) and structured long-term financing (term portion) under Indian law. This document is particularly useful for businesses needing working capital alongside capital expenditure financing. The agreement incorporates comprehensive provisions for loan disbursement, security creation, repayment terms, and default remedies, all aligned with Indian banking regulations and RBI guidelines. It's designed to protect the lender's interests while providing clear operational guidelines for borrowers, including specific provisions for recall of the demand portion and structured repayment of the term portion. The document ensures compliance with Indian contract law, banking regulations, and debt recovery mechanisms.

1. Parties: Identifies and defines the Lender(s) and Borrower(s) with complete details

2. Background: Sets out the context of the loan agreement and purpose for which the loan is being granted

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Loan Amount and Purpose: Specifies the loan amount, facility type (demand/term), and permitted purpose of the loan

5. Interest and Fees: Details the interest rate, computation method, penal interest, and other applicable fees

6. Drawdown and Disbursement: Specifies conditions precedent and process for loan disbursement

7. Repayment Terms: Sets out repayment schedule, prepayment provisions, and demand loan recall conditions

8. Security: Details the security/collateral provided for the loan

9. Representations and Warranties: Lists borrower's representations and warranties regarding their legal and financial status

10. Covenants: Specifies positive and negative covenants binding on the borrower

11. Events of Default: Lists circumstances constituting default and consequences thereof

12. Rights and Remedies: Details lender's rights and remedies upon default

13. Governing Law and Jurisdiction: Specifies applicable law and courts having jurisdiction

14. Notices: Details how formal communications between parties should be made

15. Miscellaneous: Includes standard boilerplate provisions like severability, amendments, etc.