Loan Master Agreement Template for Saudi Arabia

The Loan Master Agreement serves as the primary framework document for establishing multiple financing facilities in Saudi Arabia, ensuring compliance with both Shariah principles and SAMA regulations. It is typically used when a financial institution expects to provide multiple facilities to a borrower over time, avoiding the need to negotiate separate agreements for each facility. The document incorporates essential Islamic financing structures, profit calculation methodologies, and security arrangements, while addressing regulatory requirements specific to Saudi Arabia. This master agreement format provides efficiency and consistency in documentation while maintaining flexibility for various types of Shariah-compliant financing structures. It includes comprehensive provisions for facility utilization, profit payments, security arrangements, and events of default, forming the foundation for all subsequent financing transactions between the parties.

1. Parties: Identification of the lender and borrower, including full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the agreement, relationship between parties, and confirmation of Shariah compliance

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement, including Islamic finance terminology

4. Facility Structure: Framework for the establishment of individual facilities under the master agreement, including types of permitted facilities

5. Conditions Precedent: Prerequisites that must be satisfied before any facility can be utilized

6. Utilization Procedures: Process and requirements for requesting and obtaining loans under the facilities

7. Profit Payment: Structure of profit payments (instead of interest) to ensure Shariah compliance

8. Repayment Terms: General terms for repayment of facilities, including payment schedules and mechanisms

9. Security Structure: Framework for security arrangements and guarantees

10. Representations and Warranties: Standard and Shariah-specific representations and warranties from the borrower

11. Covenants: Positive and negative obligations of the borrower during the term of any facility

12. Events of Default: Circumstances constituting default and consequences thereof

13. Termination Rights: Circumstances under which the agreement can be terminated and the consequences

14. Governing Law and Jurisdiction: Application of Saudi law and jurisdiction of Saudi courts