Non Recourse Loan Agreement for United Arab Emirates

Non Recourse Loan Agreement Template for United Arab Emirates

A comprehensive template for a Non-Recourse Loan Agreement governed by UAE law, designed for financing arrangements where the lender's recourse is limited solely to specific collateral assets. This agreement template incorporates key provisions compliant with UAE Federal Laws, including the UAE Commercial Code and Banking regulations, and can be adapted for both conventional and Islamic finance structures. The document addresses crucial aspects such as asset security, limited recourse provisions, enforcement mechanisms within UAE jurisdiction, and necessary safeguards for the lender while maintaining the non-recourse nature of the facility.

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What is a Non Recourse Loan Agreement?

The Non-Recourse Loan Agreement Template is specifically designed for use in the United Arab Emirates, where specific legal and regulatory requirements govern secured lending transactions. This template is intended for financing arrangements where the lender's recourse is strictly limited to designated collateral assets, without further recourse to the borrower's other assets or personal guarantees. The document incorporates essential provisions required under UAE Federal Law No. 18 of 1993 (Commercial Code) and UAE Federal Law No. 14 of 2018 (UAE Central Bank Law), while also considering potential Shariah compliance requirements. It's particularly suited for project finance, real estate, and asset-based financing transactions where the loan is secured by the financed asset itself.

What sections should be included in a Non Recourse Loan Agreement?

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

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

3. Definitions: Detailed definitions of terms used throughout the agreement

4. Facility: Details of the loan amount, purpose, and non-recourse nature

5. Conditions Precedent: Conditions that must be satisfied before the loan becomes effective

6. Drawdown: Procedures and requirements for accessing the loan funds

7. Interest: Interest rate, calculation method, and payment terms

8. Repayment: Repayment schedule, methods, and prepayment provisions

9. Security: Description of the specific asset(s) securing the loan and limitation of recourse

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

11. Covenants: Ongoing obligations of the borrower, particularly regarding the secured asset

12. Events of Default: Circumstances constituting default and consequences

13. Enforcement: Rights and remedies of the lender limited to the secured asset

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction provisions

What sections are optional to include in a Non Recourse Loan Agreement?

1. Islamic Finance Compliance: Required if the loan needs to comply with Shariah principles

2. Asset Management: Include if the secured asset requires specific management or maintenance

3. Insurance: Required if specific insurance coverage for the secured asset is needed

4. Tax Provisions: Include if there are specific tax implications or requirements

5. Security Agent: Required if multiple lenders are involved

6. Assignment and Transfer: Include if transfer of loan or secured asset rights is permitted

7. Force Majeure: Optional provisions for unforeseen circumstances affecting the secured asset

What schedules should be included in a Non Recourse Loan Agreement?

1. Schedule 1 - Facility Terms: Detailed terms of the loan including amount, interest rate, and tenure

2. Schedule 2 - Conditions Precedent: List of all documents and conditions required before drawdown

3. Schedule 3 - Asset Description: Detailed description and valuation of the secured asset

4. Schedule 4 - Repayment Schedule: Detailed payment dates and amounts

5. Schedule 5 - Form of Drawdown Notice: Template for drawdown requests

6. Schedule 6 - Security Documents: Forms of security documents and asset registration requirements

7. Appendix A - Asset Valuation Report: Independent valuation of the secured asset

8. Appendix B - Asset Insurance Details: Insurance requirements and certificates for the secured asset

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

Real Estate

Infrastructure

Project Finance

Aviation

Shipping

Mining

Energy

Construction

Commercial Property

Asset Finance

Islamic Finance

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Credit

Corporate Banking

Project Finance

Islamic Banking

Asset Management

Investment

Due Diligence

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Banking Relationship Manager

Credit Risk Manager

Compliance Officer

Treasury Manager

Project Finance Manager

Asset Manager

Investment Manager

Loan Officer

Due Diligence Officer

Transaction Manager

Islamic Finance Specialist

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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