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Finance Agreement Template for United Arab Emirates

A comprehensive legal document governed by UAE law that establishes the terms and conditions of a financing arrangement between a finance provider and a borrower. The agreement incorporates provisions compliant with UAE Federal Laws, including the Civil Code and Commercial Transactions Law, and may include Sharia-compliant structures where applicable. It details the facility amount, purpose, repayment terms, security arrangements, representations and warranties, covenants, and events of default, while ensuring compliance with UAE Central Bank regulations and other relevant financial services laws.

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What is a Finance Agreement?

The Finance Agreement serves as the primary documentation for lending and financing arrangements in the United Arab Emirates, structured to comply with UAE Federal Laws and regulations. It is utilized when a party requires funding for business operations, acquisitions, development projects, or other commercial purposes. The agreement comprehensively details the financing terms, including facility amount, purpose, drawdown mechanics, repayment obligations, and security arrangements. It incorporates necessary provisions to ensure compliance with UAE banking regulations, Civil Code requirements, and where applicable, Islamic finance principles. The document can be adapted for various financing structures, from simple bilateral loans to complex syndicated facilities, and includes specific provisions for enforcement under UAE law.

What sections should be included in a Finance Agreement?

1. Parties: Identification of the finance provider and the borrower/obligor, including full legal names and address details

2. Background: Context of the financing arrangement, purpose of the facility, and any relevant preliminary agreements or conditions

3. Definitions: Comprehensive definitions of terms used throughout the agreement, including financial terms, calculation methods, and relevant dates

4. Facility: Details of the finance facility, including amount, purpose, and any tranches or sub-facilities

5. Conditions Precedent: Conditions that must be satisfied before the facility becomes available

6. Drawdown: Procedures and requirements for utilizing the facility, including notice requirements and drawdown mechanics

7. Interest and Profit: Interest or profit calculation and payment provisions, including default rates and payment dates

8. Repayment: Terms of repayment including scheduled payments, prepayment provisions, and final maturity

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

10. Covenants: Positive and negative undertakings of the borrower throughout the facility period

11. Events of Default: Circumstances constituting default and their consequences

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

13. Payments: Payment mechanics, currency provisions, and tax considerations

14. Changes to Parties: Transfer and assignment provisions

15. Notices: Communication requirements and contact details

16. Governing Law and Jurisdiction: Confirmation of UAE law governance and jurisdiction provisions

What sections are optional to include in a Finance Agreement?

1. Islamic Finance Provisions: Required if the facility is Sharia-compliant, including specific Islamic structure (e.g., Murabaha, Ijara) terms

2. Security Agent Provisions: Required in syndicated facilities where security is held by an agent

3. Syndication Provisions: Required for facilities that may be syndicated, including mechanics for syndication and voting rights

4. Regulatory Compliance: Specific provisions required for regulated borrowers or specific industry sectors

5. Guarantee: Required if there are third-party guarantors supporting the facility

6. Intercreditor Provisions: Required if there are multiple creditors or facilities ranking differently

7. Property Provisions: Required if the facility is secured by real estate, including specific UAE property law requirements

8. Tax Gross-up: Required if cross-border elements exist requiring tax provisions

What schedules should be included in a Finance Agreement?

1. Facility Terms: Detailed financial terms, pricing, and payment dates

2. Conditions Precedent Documents: List of required documents and conditions to be satisfied

3. Form of Drawdown Request: Standard form for requesting utilization of the facility

4. Repayment Schedule: Detailed schedule of repayment dates and amounts

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

6. Financial Covenants: Detailed financial covenants and calculation methodologies

7. Form of Compliance Certificate: Template for periodic compliance certification

8. Permitted Security: List of security interests permitted to exist

9. Form of Transfer Certificate: Standard form for transferring interests in the facility

10. Contact Details: Detailed contact information for all parties and agents

Authors

Alex Denne

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

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use

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