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Loan And Security Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Loan And Security Agreement

"I need a Loan and Security Agreement under Saudi law for a SAR 50 million facility to a manufacturing company, with security over machinery and receivables, to be executed by March 2025."

What is a Loan And Security Agreement?

The Loan and Security Agreement is a fundamental document used in Saudi Arabian financing transactions where a lender provides financing against security over assets, all structured in compliance with Islamic principles. This document is particularly important in the Saudi Arabian context as it must navigate both modern commercial requirements and Shariah compliance, incorporating specific terminology and structures accepted under Islamic finance principles. The agreement serves as both the primary financing document and security document, detailing the facility terms, profit calculation methods, security creation, and enforcement mechanisms. It is commonly used in commercial financing, project finance, and asset financing transactions, requiring careful consideration of Saudi Arabian banking regulations, SAMA guidelines, and the Commercial Pledge Law. The document must be structured to ensure enforceability under Saudi Arabian courts while maintaining its commercial efficacy.

What sections should be included in a Loan And Security Agreement?

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

2. Background: Context of the loan arrangement and purpose of the facility

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

4. Facility Terms: Details of the loan amount, profit rate (instead of interest), payment terms, and maturity

5. Security Creation: Establishment of security interests over specified assets

6. Conditions Precedent: Requirements to be satisfied before loan disbursement

7. Representations and Warranties: Statements of fact by the borrower regarding their legal and financial status

8. Covenants: Positive and negative obligations of the borrower during the loan term

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

10. Security Enforcement: Procedures for enforcing security interests under Saudi law

11. Payments and Calculations: Payment mechanics, profit calculations, and payment priorities

12. Changes to Parties: Rules regarding assignment and transfer of rights

13. Administration: Notice requirements, amendments, and other administrative provisions

14. Governing Law and Jurisdiction: Confirmation of Saudi law governance and dispute resolution mechanisms

What sections are optional to include in a Loan And Security Agreement?

1. Islamic Structure Provisions: Required when using specific Islamic financing structures like Murabaha or Ijara

2. Guarantees: Include when third-party guarantees are part of the security package

3. Intercreditor Provisions: Required when multiple lenders or ranking of security is involved

4. Agency Provisions: Include when a security agent or facility agent is appointed

5. Additional Security Rights: Include when specific types of assets require special security provisions

6. Tax Provisions: Detailed tax provisions when cross-border elements exist

7. Currency Provisions: Required when dealing with multiple currencies

What schedules should be included in a Loan And Security Agreement?

1. Facility Terms Schedule: Detailed terms of the facility including profit rates and payment dates

2. Security Assets Schedule: Detailed description of all assets subject to security interests

3. Conditions Precedent Schedule: List of all required documents and conditions

4. Form of Request: Standard form for drawdown requests

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

6. Security Documents: Forms of specific security documents required under Saudi law

7. Shareholders Schedule: List of shareholders if relevant to security structure

8. Calculation Schedule: Detailed profit and payment calculations

9. Form of Transfer Certificate: Standard form for transfer of rights under the agreement

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

Relevant legal definitions















































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Relevant Industries

Banking and Financial Services

Real Estate and Construction

Manufacturing and Industrial

Energy and Resources

Healthcare

Technology and Communications

Transport and Logistics

Retail and Consumer Goods

Agriculture and Food Production

Infrastructure Development

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Banking

Credit Analysis

Security and Documentation

Shariah Advisory

Operations

Relevant Roles

Chief Financial Officer

Legal Counsel

Finance Director

Treasury Manager

Credit Risk Manager

Compliance Officer

Shariah Compliance Manager

Security Documentation Officer

Relationship Manager

Corporate Banking Manager

Risk Assessment Officer

Financial Controller

Corporate Finance Manager

Banking Operations Manager

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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