Deed of Corporate Guarantee For Securing Repayment of Loan



THIS DEED OF GUARANTEE (this “Guarantee”) was executed at ________  this ____ day of _______ by:

ABC Ltd., a company registered under the Companies Act, 2013, with Corporate Identification Number- _____________ and having its registered office at ____________ (hereinafter referred to as the “ABC or Guarantor or Borrower”, which expression shall, unless repugnant to the context, be deemed to include its successors and permitted assigns).


XYZ Ltd., a Company incorporated under the provisions of the Companies Act, 2013, having its registered office at ________________ including its successor & assignees (hereinafter referred as “XYZ or Lender” which expression shall unless repugnant to the context, including its successors and permitted assigns).


a)  The XYZ has agreed to lend and advance to ABC a sum of Rs. 5 Crores (Rupees Five Crores ) for _________________________ upon the terms and conditions set out in the Loan Agreement dated ________ a copy whereof is annexure hereto (hereinafter referred to as the “Loan Agreement”)

b)  It is a term of the Loan Agreement that the borrower shall furnish to the XYZ, a Corporate Guarantee of Rs.5 Crores (Rupees Five Crores ) to secure repayment of the aforesaid loan of Rs.5 Crores (Rupees Five Crores).

c) The Guarantor has agreed unconditionally and irrevocable to guarantee repayment of the principal and  interest outstanding from the borrower under the terms of the Loan agreement to XYZ:

Now, therefore, in order to induce the XYZ, to make disbursements under the loan agreement, the parties hereto agree as under:

1. The guarantor absolutely, unconditionally and irrevocable guarantee the full, prompt and punctual payment by the borrower of the principal and interest, becoming due and payment in accordance with the terms of the Loan Agreement and in the event of default, agrees and unconditionally undertakes to pay to the XYZ the principal and interest, becoming due and payable under the Loan Agreement without demur.

2.The Guarantor agrees that the Guarantee hereby given shall be continuing guarantee and shall extend to cover any instalment or instalments of the loan sanctioned and/or disbursed under the Loan Agreement.

3.   No remedy herein or otherwise conferred upon, or reserved to the XYZ shall be considered exclusive of any other remedy; but the same shall be cumulative and in addition to every other remedy given hereunder, or now or hereafter existing at law or in equity or by status and every power and remedy available to the XYZ may be exercised from time to time and as often as may be deemed expedient. No  action and exercise or right, or remedy arising from any default or failure of the guarantor to fulfil the terms of this Agreement, or delay or omission in exercising such right, power or remedy shall impair, or be construed as a waiver of any such right, power or remedy or any other right, power or remedy.

4. The Guarantor shall not assign or transfer this agreement without having first obtained the written consent of the XYZ. All right and liabilities herein given to, or imposed upon, the respective parties hereto shall extend to and bind their several and respective successors; and to the extent that such rights and liabilities are assignable assigns of the parties hereto.

5. The Guarantor hereby agree that, in the event of default in the payment of any instalment or a  part of the loan borrowed,   under the loan agreement, the guarantor shall within Seven (7) days from the date of delivery by XYZ to the guarantor of a notice in writing of such default, fully discharge its obligations under this agreement, together with interest and other monies due and outstanding; guarantor hereby further agrees that, an intimation in writing by the XYZ to the borrower that a default in payment had occurred, shall be treated as final and conclusive proof of the facts stated in the said notice .

6.  The Guarantor also agrees to indemnify XYZ against all loss, damage, cost, charge and expenses, which XYZ may suffer as a result of any default or extending time for repayment of the aggregated due.

7.  The guarantor shall not be released from the obligations hereunder, except upon receipt by the XYZ of the last instalment of principal and interest outstanding and payable to the XYZ under the terms of the loan agreement.

8. The Guarantor hereby unconditionally and irrevocably undertakes to, and shall, without any demur, or dispute whatsoever, make all payments, in clear, unencumbered funds to the order of XYZ, of the said borrowed sum and interest thereon, without raising any objection, argument or reference of any nature or manner in respect thereof, or creating any delay, and within the time frame stipulated in the first written demand addressed by XYZ to the Guarantor and sent to the Guarantor. All payments to be made by the Guarantor to XYZ shall be made in full, free of any present or future taxes, levies, imposts, duties, charges, fees, expenses or withholdings and without any set-off or counter-claim or adjustment or any restriction, condition or deduction whatsoever.

9.   The Guarantor acknowledges and agrees that it shall not be necessary for XYZ to initiate or exhaust any other remedies before invoking this Guarantee and this Guarantee herein contained shall be enforceable against the Guarantor on first demand from XYZ notwithstanding any other securities which XYZ may have obtained or may obtain, which may at the time/s when this Guarantee is invoked be outstanding and unrealized.

10.This Guarantee shall be payable on demand and to further secure the repayment, the Guarantor hereby deposits a post dated cheque with XYZ for presentation on its becoming due.

11. Any matter, dispute, differences and/or claims arising out of or in connection with this agreement shall be settled by arbitration to be held at Indore in accordance with the Arbitration and Conciliation Act, of 1996 or any statutory amendment thereof and shall be referred to the sole arbitration of a person to be nominated/appointed by the Chairman of XYZ. In the event of death, refusal, neglect, inability or incapability of the person so appointed, XYZ may appoint a new Arbitrator and the Guarantor/s shall not take any objection in regard to the appointment of the Arbitrator. The Arbitrator’s award shall be final and binding on the Parties. The arbitration shall be conducted in Hindi and/or English.

12.The Guarantor declares that the Guarantor’s liability hereunder shall be continuing liability and the Guarantor shall remain liable at all times till the repayment of the aggregated due and further interest, if any, due thereon.

13.The Guarantor’s liability hereunder shall be binding on the Guarantor’s successors in interest and assigns and administrators.

14.A demand in writing by XYZ shall be deemed to have been duly given to the Guarantor by sending the same by speed post/registered post acknowledge due addressed to the Guarantor at the address first mentioned hereinabove and shall be effectual notwithstanding any change of office and such demand shall be deemed to be received after the posting thereof and shall be sufficient if signed by XYZ through its authorized representative.

15.The Guarantor hereby declares on oath that he is fully solvent to the extent of meeting any liability under this Agreement and also fully agree that Arbitration proceedings when initiated against the Guarantor shall be binding on him and the award published by the Arbitration shall be a binding order on the Guarantor. 

16.All Communications or Notices to this agreement shall be writing and shall be deemed to have been delivered upon receipt by the parties hereto ay the following address

(a)  Mail to
Managing Director

(b) Mail to
Managing Director

IN WITNESS WHEREOF, the within named Guarantor has caused this Guarantee to be executed on the day, month and year first hereinabove written,

BY the within named Guarantor, ______________ LIMITED,
by the hand of Mr. ____, its Authorised Signatory.  
Next Post »