Promissory Note Credit Agreement Template for Saudi Arabia

The Promissory Note Credit Agreement is a specialized financing document used in Saudi Arabia when a lender provides credit facilities to a borrower with enhanced enforceability through a promissory note structure. This document type is particularly valuable in the Saudi Arabian market as it combines the detailed terms of a credit facility with the enforcement advantages of a promissory note, while ensuring compliance with Islamic finance principles. It is commonly used for corporate financing, project funding, and commercial loans where the lender requires additional security through the promissory note component. The document must comply with Saudi Arabian Monetary Authority (SAMA) regulations, the Commercial Papers Regulation, and Sharia law requirements, making it a robust instrument for financial institutions operating in the Kingdom.

1. Parties: Identification of the lender (usually a bank) and borrower with full legal names and addresses

2. Background: Context of the credit facility and confirmation of Sharia compliance

3. Definitions: Key terms used throughout the agreement including Credit Amount, Maturity Date, Payment Dates

4. Credit Facility Terms: Principal amount, purpose, and conditions precedent for drawdown

5. Promissory Note Terms: Specific terms of the promissory note including issuance, form, and delivery requirements

6. Payment Provisions: Repayment schedule, method of payment, and profit rate (compliant with Islamic principles)

7. Representations and Warranties: Standard declarations by the borrower regarding legal capacity and financial condition

8. Covenants: Ongoing obligations of the borrower during the term of the facility

9. Events of Default: Circumstances that trigger default and remedies available to the lender

10. Governing Law and Jurisdiction: Confirmation of Saudi law governance and jurisdiction of Saudi courts