The Non-Recourse Loan Agreement is a specialized financing instrument used in Malaysian business transactions where lenders agree to limit their recovery rights solely to specific collateral assets in the event of default. This type of agreement is particularly useful in project finance, real estate development, and asset-heavy industries where the underlying assets have substantial standalone value. The document must comply with Malaysian financial regulations, including the Financial Services Act 2013 and relevant Bank Negara Malaysia guidelines. It includes detailed provisions for asset identification, valuation, maintenance, and enforcement procedures, while explicitly limiting the lender's recourse to the designated security assets. This structure provides borrowers with asset protection while giving lenders clear rights over the secured assets, making it particularly attractive for large-scale project financing and asset-based lending in the Malaysian market.

1. Parties: Identifies and defines the Lender and Borrower with complete legal names and addresses

2. Background: Explains the context of the loan and confirms the non-recourse nature of the financing

3. Definitions and Interpretation: Defines key terms and establishes interpretation rules for the agreement

4. The Facility: Details the loan amount, purpose, and key terms including interest rate and repayment schedule

5. Security: Describes the specific assets securing the loan and confirms the non-recourse nature

6. Conditions Precedent: Lists conditions that must be satisfied before the loan is advanced

7. Drawdown: Specifies the process and requirements for drawing down the loan

8. Interest: Details interest calculation, payment dates, and default interest provisions

9. Repayment: Outlines repayment terms, prepayment rights, and mandatory prepayment events

10. Representations and Warranties: States the Borrower's confirmations regarding their status and the security assets

11. Covenants: Sets out ongoing obligations of the Borrower, particularly regarding the security assets

12. Default: Defines events of default and their consequences, limited to the security assets

13. Limited Recourse: Explicitly limits the Lender's recourse to the specified security assets

14. Costs and Expenses: Allocates responsibility for fees, costs, and expenses

15. Notices: Specifies how formal communications between parties should be made

16. Assignment and Transfer: Sets out rules for transferring rights or obligations under the agreement

17. Governing Law and Jurisdiction: Confirms Malaysian law as governing law and specifies jurisdiction for disputes