Loan And Security Agreement for United Arab Emirates

Loan And Security Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that combines lending provisions with security arrangements, establishing the terms and conditions for a loan facility while simultaneously creating security interests over specified assets to secure the borrower's obligations. This document incorporates UAE federal laws, including the UAE Civil Code and Commercial Transactions Law, and can be structured to comply with Sharia principles when required. It details the loan terms, security package, representations, covenants, and enforcement mechanisms, while ensuring compliance with UAE security registration and perfection requirements.

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What is a Loan And Security Agreement?

The Loan and Security Agreement is a fundamental document in UAE secured lending transactions, used when a lender provides financing to a borrower while taking security over specific assets as collateral. This document is essential for various financing arrangements in the UAE, from corporate lending to project finance, and can be adapted for both conventional and Islamic financing structures. It must comply with UAE federal laws, including the Civil Code, Commercial Transactions Law, and specific security-related regulations. The agreement typically combines detailed facility terms (including drawdown mechanics, interest/profit calculations, and repayment provisions) with comprehensive security arrangements (covering creation, perfection, and enforcement of security interests). The document's structure reflects UAE legal requirements for security creation and registration, while potentially incorporating Sharia-compliant elements when needed for Islamic financing.

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

1. Parties: Identification of the lender, borrower, and any security providers

2. Background: Context of the loan arrangement and security package

3. Definitions and Interpretation: Key terms, construction rules, and interpretation principles

4. The Facility: Loan amount, purpose, availability, and drawdown conditions

5. Interest and Fees: Interest calculation, payment terms, and applicable fees

6. Repayment and Prepayment: Repayment schedule, prepayment terms, and conditions

7. Security: Creation and terms of security interests over secured assets

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

9. Covenants: Positive and negative obligations of the borrower

10. Events of Default: Circumstances constituting default and consequences

11. Enforcement: Rights and remedies upon default, enforcement procedures

12. Payments: Payment mechanics, currency, and tax provisions

13. Changes to Parties: Assignment and transfer provisions

14. Administration: Notices, calculations, and other administrative provisions

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

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

1. Islamic Finance Provisions: Required for Sharia-compliant structures, including commodity murabaha

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

3. Security Agent Provisions: Required for syndicated facilities with multiple lenders

4. Intercreditor Provisions: Include when multiple creditors have claims over same security

5. Property Security Provisions: Specific provisions for real estate security

6. Share Security Provisions: Specific provisions when company shares are secured

7. Registration Requirements: Specific provisions for security registration with various UAE authorities

8. Currency Protection: Include for cross-border transactions with currency risk

9. Tax Gross-up and Indemnities: Detailed tax provisions for cross-border transactions

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

1. Conditions Precedent: List of required documents and conditions for drawdown

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

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

4. Security Documents: Forms of various security documents and perfection requirements

5. Secured Assets Schedule: Detailed description of all assets subject to security

6. Form of Transfer Certificate: Template for transferring loan participations

7. Financial Covenants: Detailed financial ratios and calculations

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

9. Security Perfection Requirements: Checklist of security registration requirements

10. Contact Details: Administrative and notice details for all parties

Authors

Alex Denne

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

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate and Construction

Manufacturing and Industrial

Trading and Commercial

Technology and Telecommunications

Healthcare

Hospitality and Tourism

Energy and Natural Resources

Transport and Logistics

Retail and Consumer Goods

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Credit

Corporate Secretariat

Banking Operations

Investment

Documentation

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Treasury Manager

Risk Manager

Compliance Officer

Credit Manager

Investment Manager

Corporate Secretary

Finance Manager

Banking Relationship Manager

Security Trustee

Loan Officer

Transaction 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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