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Collateral In Loan Agreement for United Arab Emirates

Collateral In Loan Agreement Template for United Arab Emirates

A comprehensive legal document governed by UAE law that establishes and details the security interests granted over specific assets (collateral) to secure a loan facility. The document complies with UAE Federal and local laws, including the UAE Commercial Code and Civil Code, and addresses key aspects such as creation, perfection, and enforcement of security interests. It includes provisions for various types of collateral, registration requirements, enforcement mechanisms, and considers both conventional and Islamic finance principles where applicable. The document ensures compliance with UAE regulatory requirements while protecting the lender's security interests and establishing clear rights and obligations of all parties involved.

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What is a Collateral In Loan Agreement?

The Collateral In Loan Agreement is a crucial security document used in UAE financing transactions to create and perfect security interests over assets provided as collateral for loan facilities. This document is essential when a lender requires security over specific assets to mitigate credit risk in lending transactions. It must comply with UAE Federal Law No. 18 of 1993 (Commercial Code), Federal Law No. 5 of 1985 (Civil Code), and other relevant UAE legislation governing secured lending. The document is particularly important in the UAE context due to specific local requirements for security creation, perfection, and enforcement, including requirements for registration with relevant authorities and compliance with both conventional and Islamic finance principles where applicable. The agreement details the nature of the security interest, the secured obligations, maintenance requirements for the collateral, and enforcement mechanisms available under UAE law.

What sections should be included in a Collateral In Loan Agreement?

1. Parties: Identification of the Lender, Borrower, and any Security Providers

2. Background: Context of the loan agreement and security arrangement

3. Definitions: Key terms including Secured Obligations, Collateral, Security Interest, and Enforcement Events

4. Creation of Security Interest: Express provisions creating the security interest over the collateral

5. Description of Collateral: Detailed description of assets being provided as security

6. Secured Obligations: Definition and scope of the obligations being secured

7. Perfection Requirements: Steps required to perfect the security interest under UAE law

8. Representations and Warranties: Security Provider's confirmations regarding ownership, authority, and status of collateral

9. Covenants: Ongoing obligations regarding maintenance and preservation of collateral

10. Enforcement: Rights and procedures for enforcing the security interest

11. Power of Attorney: Appointment of lender as attorney for security-related actions

12. Costs and Expenses: Allocation of costs related to creation and maintenance of security

13. Governing Law and Jurisdiction: Confirmation of UAE law application and jurisdiction

What sections are optional to include in a Collateral In Loan Agreement?

1. Sharia Compliance: Required if the transaction needs to be Sharia-compliant

2. Multiple Security Providers: Required when there are multiple parties providing security

3. Cross-Border Provisions: Required when collateral is located in multiple jurisdictions

4. Insurance: Required when insurance over collateral is part of the security package

5. Security Agent Provisions: Required in syndicated facilities with a security agent

6. Priority Arrangements: Required when there are multiple secured creditors

7. Further Assurance: Optional provisions for additional security measures

8. Release and Discharge: Optional detailed provisions on release of security

What schedules should be included in a Collateral In Loan Agreement?

1. Schedule 1 - Collateral Description: Detailed technical or legal description of all collateral assets

2. Schedule 2 - Form of Notice: Standard forms for perfection notices to relevant parties

3. Schedule 3 - Security Documents: List and copies of additional security documents

4. Schedule 4 - Registration Requirements: Checklist of required registrations and filings

5. Schedule 5 - Form of Power of Attorney: Standard form of power of attorney for security actions

6. Appendix A - Property Documents: Copies of title documents and certificates for secured assets

7. Appendix B - Corporate Authorizations: Required corporate approvals and resolutions

8. Appendix C - Perfection Checklist: Step-by-step guide for security interest perfection

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions








































Clauses



































Relevant Industries

Banking and Financial Services

Real Estate and Construction

Manufacturing

Energy and Resources

Infrastructure

Transportation and Logistics

Healthcare

Retail and Consumer Goods

Technology and Telecommunications

Hospitality and Tourism

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Credit Administration

Corporate Banking

Islamic Banking

Operations

Security Administration

Asset Management

Documentation

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Compliance Officer

Risk Manager

Treasury Manager

Credit Manager

Loan Officer

Security Trustee

Corporate Secretary

Financial Controller

Banking Relationship Manager

Collateral Manager

Asset Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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