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The Loan Indemnity Agreement is a crucial document in Indian lending transactions, designed to provide additional security and protection to lenders beyond the primary loan agreement. This document becomes particularly important in complex financing arrangements where multiple parties are involved or where specific risks need to be addressed separately from the main loan agreement. The agreement, governed by Indian law and compliant with the Indian Contract Act, 1872, sets out detailed provisions for when and how the indemnifier must compensate the lender for losses or liabilities arising from specified events. It is commonly used in corporate lending, project finance, and structured finance transactions where lenders require additional protection beyond standard loan security. The document typically includes comprehensive details about the underlying loan, specific indemnity obligations, trigger events, and enforcement mechanisms, making it an essential risk mitigation tool in Indian financial transactions.

1. Parties: Identification of the Indemnifier, Indemnitee, and any other relevant parties including the primary debtor if different from the indemnifier

2. Background: Context of the loan arrangement, relationship between parties, and purpose of the indemnity

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

4. Scope of Indemnity: Detailed description of the indemnity obligations, including specific losses, liabilities, and circumstances covered

5. Loan Details: Reference to the underlying loan agreement, amount, interest rate, and repayment terms

6. Indemnity Trigger Events: Specific events or circumstances that trigger the indemnity obligations

7. Payment Terms: Timing and method of indemnity payments, including any notice requirements

8. Duration of Indemnity: Term of the indemnity obligation and any survival provisions

9. Representations and Warranties: Standard representations by the indemnifier regarding capacity and authority

10. Covenants: Ongoing obligations of the indemnifier, including financial reporting if required

11. Default and Remedies: Events of default and available remedies for the indemnitee

12. Notices: Process and contact details for formal communications between parties

13. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for disputes

14. Boilerplate Provisions: Standard contract clauses including amendments, waiver, severability, and entire agreement