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Corporate Loan Agreement for United Arab Emirates

Corporate Loan Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes the terms and conditions under which a financial institution provides a loan facility to a corporate borrower. The document incorporates UAE-specific regulatory requirements, including Central Bank regulations and optional Sharia compliance provisions where required. It details the facility amount, interest calculations, repayment terms, security arrangements, representations and warranties, covenants, and events of default, while ensuring compliance with UAE Commercial Code and Civil Code requirements.

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Corporate Loan Agreement

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What is a Corporate Loan Agreement?

The Corporate Loan Agreement is a fundamental financing document used in the United Arab Emirates when a financial institution extends credit to a corporate entity. It must comply with UAE federal laws, including the UAE Commercial Code, Civil Code, and Central Bank regulations, while potentially incorporating Sharia-compliant structures if required. The agreement typically covers facility amounts ranging from small corporate loans to large syndicated facilities, and can be either secured or unsecured. It includes detailed provisions for drawdown mechanics, interest calculations (subject to UAE interest rate caps), repayment terms, borrower covenants, and enforcement mechanisms that align with UAE legal requirements. The document serves as the primary contractual framework governing the lending relationship and must be carefully structured to ensure enforceability under UAE law.

What sections should be included in a Corporate Loan Agreement?

1. Parties: Identification of the lender(s), borrower(s) and any guarantors with their full legal names and addresses

2. Background: Context of the loan arrangement and brief description of the transaction

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement and interpretation rules

4. The Facility: Details of the loan amount, purpose, and availability period

5. Conditions Precedent: Documents and conditions required before the facility becomes available

6. Drawdown: Procedures and requirements for drawing down the loan

7. Interest: Interest rate, calculation methods, and payment provisions

8. Repayment: Terms of repayment including schedule, prepayment provisions, and mandatory prepayment events

9. Representations and Warranties: Statements of fact and assurances given by the borrower

10. Covenants: Positive and negative obligations of the borrower during the loan period

11. Events of Default: Circumstances constituting default and consequences

12. Security: Details of any security arrangements and enforcement rights

13. Changes to Parties: Provisions regarding assignment and transfer rights

14. Administration: Practical aspects of managing the loan including payments and notices

15. Governing Law and Jurisdiction: Choice of UAE law and jurisdiction provisions

What sections are optional to include in a Corporate Loan Agreement?

1. Syndication Provisions: Required for syndicated loans with multiple lenders, including voting rights and facility agent provisions

2. Islamic Finance Provisions: Required if the facility needs to be Sharia-compliant, including specific structural requirements

3. Increased Costs and Tax Gross-Up: Detailed provisions for dealing with changes in regulatory costs or tax requirements

4. Market Disruption: Provisions dealing with LIBOR/EIBOR disruption or replacement

5. Multiple Currencies: Required if the facility includes multiple currency options

6. Accordion Facility: Optional provisions for increasing the facility amount

7. Green Loan Provisions: Required if the facility is structured as a green loan with specific environmental requirements

What schedules should be included in a Corporate Loan Agreement?

1. Schedule 1 - Conditions Precedent: Detailed list of required documents and conditions

2. Schedule 2 - Form of Drawdown Request: Template for borrower to request loan disbursement

3. Schedule 3 - Repayment Schedule: Detailed amortization schedule if applicable

4. Schedule 4 - Form of Compliance Certificate: Template for periodic compliance reporting

5. Schedule 5 - Security Documents: List and copies of all security documents

6. Schedule 6 - Existing Security: Details of any permitted existing security over borrower assets

7. Schedule 7 - Group Structure: Corporate structure chart of borrower group

8. Appendix A - Financial Covenants Calculations: Detailed methodology for calculating financial covenants

9. Appendix B - Forms of Transfer Certificates: Ƶ for transferring loan participations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Ƶ

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions




















































Clauses



































Relevant Industries

Banking & Financial Services

Real Estate & Construction

Manufacturing & Industrial

Retail & Consumer Goods

Healthcare & Pharmaceuticals

Technology & Telecommunications

Energy & Utilities

Transportation & Logistics

Hospitality & Tourism

Trading & Distribution

Media & Entertainment

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit

Operations

Company Secretariat

Senior Management

Transaction Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Finance Manager

Legal Counsel

Compliance Officer

Risk Manager

Relationship Manager

Credit Officer

Corporate Banking Manager

Transaction Manager

Financial Controller

Company Secretary

Head of Legal

Chief Executive Officer

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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