Intra Group Loan Agreement Template for Saudi Arabia

The Intra Group Loan Agreement is essential for corporate groups operating in Saudi Arabia who need to establish formal, Sharia-compliant financing arrangements between their related entities. This document is particularly important when parent companies provide funding to subsidiaries, or when group treasury operations require structured internal financing solutions. The agreement must comply with Saudi Arabian law, including Companies Law and Islamic finance principles, making it distinct from conventional loan agreements used in other jurisdictions. It typically includes detailed provisions for profit-sharing mechanisms (replacing conventional interest), repayment structures, security arrangements if applicable, and necessary corporate approvals. The document is crucial for maintaining proper corporate governance, ensuring regulatory compliance, and documenting financial relationships within corporate groups operating in Saudi Arabia.

1. Parties: Identification of the lender and borrower entities within the group structure

2. Background: Context of the intra-group loan, relationship between parties, and purpose of the financing

3. Definitions and Interpretation: Key terms used throughout the agreement and rules for interpretation

4. Sharia Compliance Declaration: Statement confirming the agreement's compliance with Islamic law principles

5. Facility Terms: Core terms including amount, profit rate structure, and payment mechanisms

6. Purpose and Utilization: Specified use of the loan funds and drawdown mechanisms

7. Conditions Precedent: Requirements to be satisfied before the loan becomes available

8. Repayment and Prepayment: Terms for scheduled repayments and early repayment options

9. Profit Rate and Calculation: Sharia-compliant profit sharing or alternative arrangement structure

10. Payment Mechanics: Procedures and timing for all payments under the agreement

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

12. Information Undertakings: Obligations to provide financial and other information

13. General Undertakings: Borrower's ongoing obligations throughout the loan period

14. Events of Default: Circumstances that allow the lender to demand immediate repayment

15. Changes to Parties: Rules for assignment and transfer of rights and obligations

16. Notices: Communication procedures between parties

17. Calculations and Certificates: Rules for calculations and evidential value of certificates

18. Governing Law and Jurisdiction: Saudi Arabian law as governing law and jurisdiction provisions