Pre Financing Agreement for United Arab Emirates

Pre Financing Agreement Template for United Arab Emirates

A Pre-Financing Agreement under UAE law is a comprehensive legal document that establishes the terms and conditions for providing financial facilities prior to the main financing arrangement. It operates within the framework of UAE Federal Laws, including the Commercial Code and Civil Code, while also considering UAE Central Bank regulations and potentially Islamic finance principles. The agreement details the preliminary commitments between the financing party and the recipient, outlining conditions precedent, facility terms, security requirements, and compliance obligations specific to the UAE legal environment.

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What is a Pre Financing Agreement?

The Pre-Financing Agreement serves as a crucial preliminary document in UAE financial transactions, establishing the framework for subsequent financing arrangements. This document is typically used when parties need to formalize their commitments and conditions before proceeding with the main financing facility. It addresses key aspects required under UAE law, including compliance with UAE Federal Law No. 18 of 1993 (Commercial Code) and UAE Central Bank regulations. The agreement outlines essential elements such as facility terms, conditions precedent, security requirements, and representations and warranties, while potentially incorporating Islamic finance principles where necessary. It's particularly relevant in the UAE's dynamic business environment, where complex financing arrangements often require careful preliminary structuring and clear documentation of parties' obligations.

What sections should be included in a Pre Financing Agreement?

1. Parties: Identification of the financing party (lender) and the recipient (borrower), including full legal names and addresses

2. Background: Context of the financing arrangement, purpose of the facility, and relevant business relationship between the parties

3. Definitions: Detailed definitions of terms used throughout the agreement, including financial terms, technical references, and document references

4. Facility Details: Specific details of the financing facility, including amount, purpose, and basic terms

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

6. Drawdown Mechanics: Procedures and requirements for accessing the financing facility

7. Interest/Profit Rate and Fees: Specification of applicable interest/profit rates (ensuring Sharia compliance if required), fees, and calculation methods

8. Repayment Terms: Schedule and mechanics of repayment, including early repayment provisions

9. Security and Guarantees: Details of any security or guarantees required to secure the financing

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

11. Covenants: Ongoing obligations of the borrower throughout the financing period

12. Events of Default: Circumstances that would constitute a default and their consequences

13. Governing Law and Jurisdiction: Specification of UAE law as governing law and relevant jurisdiction for disputes

What sections are optional to include in a Pre Financing Agreement?

1. Islamic Finance Provisions: Required when the financing needs to be Sharia-compliant, detailing specific Islamic finance structures and requirements

2. Assignment and Transfer: Include when either party may need to transfer their rights or obligations

3. Increased Costs and Tax Provisions: Relevant when cross-border elements exist or specific tax considerations apply

4. Agency Provisions: Required when multiple lenders are involved and an agent will act on their behalf

5. Account Bank Arrangements: Include when specific banking arrangements or account structures are required

6. Step-In Rights: Relevant for project financing or when lender may need to take control in certain circumstances

7. Force Majeure: Optional clause detailing circumstances beyond parties' control that may affect the agreement

What schedules should be included in a Pre Financing Agreement?

1. Facility Terms Schedule: Detailed terms of the facility including amounts, rates, and key dates

2. Conditions Precedent Schedule: Comprehensive list of all required documents and conditions to be satisfied

3. Form of Drawdown Notice: Template for borrower to request disbursement of funds

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

5. Security Documents: Forms of security documents and guarantees required

6. Fee Schedule: Detailed breakdown of all applicable fees and charges

7. Form of Compliance Certificate: Template for periodic compliance reporting by borrower

8. Contact Details: List of authorized representatives and contact information for both 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

Financing Agreement

Cost

Free to use
Relevant legal definitions
Relevant Industries

Banking and Financial Services

Real Estate and Construction

Manufacturing and Industrial

Trading and Commerce

Healthcare

Education

Technology and Communications

Energy and Utilities

Transportation and Logistics

Hospitality and Tourism

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Finance

Business Development

Credit

Operations

Company Secretariat

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Compliance Officer

Risk Manager

Corporate Finance Manager

Financial Controller

Business Development Director

Project Finance Manager

Investment Manager

Managing Director

CEO

Company Secretary

Credit Risk Officer

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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