Master Loan Agreement Template for Saudi Arabia

The Master Loan Agreement is a fundamental document in Saudi Arabian banking and finance, designed to facilitate multiple financing arrangements under a single framework while ensuring compliance with Islamic Sharia principles and local regulations. It's 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 elements of Saudi Arabian law, including SAMA regulations and Sharia requirements, while providing flexibility for various Islamic financing structures such as Murabaha and Ijara. The agreement covers key aspects including facility structures, profit calculation methods, security arrangements, and enforcement mechanisms, all tailored to meet both commercial needs and religious requirements.

1. Parties: Identification of the lender and borrower, including their full legal names, registration details, and addresses

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

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

4. Facility Structure: Details of the master facility arrangement, including types of permitted facilities and Sharia-compliant structures

5. Conditions Precedent: Prerequisites for utilization of any facility, including Sharia compliance certificates and corporate approvals

6. Utilization Process: Procedures for requesting and documenting individual facilities under the master agreement

7. Payment Provisions: Terms for repayment, profit rates (avoiding interest terminology), and payment mechanics

8. Islamic Finance Principles: Specific provisions ensuring Sharia compliance and structure of profit-sharing arrangements

9. Representations and Warranties: Standard and Sharia-specific representations by the borrower

10. Covenants: Ongoing obligations of the borrower, including financial and non-financial covenants

11. Events of Default: Circumstances constituting default and consequential rights of the lender

12. Security: Framework for taking and maintaining Sharia-compliant security

13. Changes to Parties: Rules for assignments and transfers

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

15. Notices: Communication procedures between parties