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The Lending Agreement serves as the primary documentation for Sharia-compliant financing transactions in Saudi Arabia, establishing the legal framework for funds provision while ensuring compliance with Islamic finance principles and Saudi Arabian law. This document is essential when a party requires financing for business operations, asset acquisition, or project development, and must be structured to avoid conventional interest (riba) while providing a fair profit mechanism acceptable under Sharia law. The agreement comprehensively covers facility terms, profit calculations, security arrangements, and party obligations, incorporating necessary provisions for enforcement under Saudi jurisdiction. It requires careful drafting to ensure alignment with both the Banking Control Law and Islamic finance requirements, typically including review and approval by a Sharia advisory board.

1. Parties: Identification of the lender and borrower with full legal names and addresses

2. Background: Context of the lending arrangement and confirmation of Sharia compliance

3. Definitions: Key terms used throughout the agreement, including Islamic finance terminology

4. Facility Terms: Details of the lending facility, amount, purpose, and Sharia-compliant profit structure

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

6. Disbursement Mechanics: Procedures and requirements for drawing down the facility

7. Payment Provisions: Payment schedule, profit calculation method, and payment mechanics

8. Representations and Warranties: Statements of fact and assurances from the borrower

9. Covenants: Positive and negative obligations of the borrower during the facility period

10. Events of Default: Circumstances that trigger default and remedies available to the lender

11. Security: Details of collateral and security arrangements

12. Indemnities: Borrower's obligations to compensate the lender for specified losses

13. Costs and Expenses: Allocation of transaction costs and ongoing expenses

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: Confirmation of Saudi law application and jurisdiction

16. Execution: Signature blocks and execution requirements