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Loan Agreement Between Two Companies
"I need a Loan Agreement Between Two Companies under UAE law for a AED 10 million secured loan to finance a real estate development project, with quarterly repayments starting March 2025 and including provisions for corporate guarantees from the parent company."
1. Parties: Identification of the lender and borrower, including full corporate names, registration details, and addresses
2. Background: Context of the loan arrangement, relationship between parties, and purpose of the loan
3. Definitions: Defined terms used throughout the agreement, including financial, technical, and legal terms
4. Loan Amount and Purpose: Specification of the loan amount, currency, and permitted use of funds
5. Interest Rate and Calculations: Details of interest rate (ensuring compliance with UAE laws), calculation methods, and payment periods
6. Drawdown: Conditions and procedures for drawing down the loan amount
7. Repayment Terms: Schedule of repayments, payment methods, and prepayment provisions
8. Representations and Warranties: Standard and specific representations made by the borrower regarding their legal and financial status
9. Covenants: Positive and negative obligations of the borrower during the loan term
10. Events of Default: Circumstances constituting default and consequences thereof
11. Security: Details of any security or guarantees provided for the loan
12. Costs and Expenses: Allocation of transaction costs, taxes, and ongoing expenses
13. Notices: Communication procedures and contact details for formal notices
14. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes
15. Execution: Signature blocks and execution requirements under UAE law
1. Islamic Finance Compliance: Required when the loan needs to be Sharia-compliant, including specific structures to avoid traditional interest
2. Assignment and Transfer: Include when either party may need to transfer their rights or obligations
3. Security Trustee Provisions: Required when there are multiple lenders or the security structure requires a trustee
4. Currency Provisions: Include when the loan involves multiple currencies or foreign exchange considerations
5. Tax Provisions: Detailed tax clauses needed when cross-border elements exist or specific tax arrangements are required
6. Increased Costs: Include when regulatory changes might affect the lender's costs
7. Force Majeure: Optional clause for unforeseeable circumstances, particularly relevant in long-term loans
8. Syndication Provisions: Required when the loan may be syndicated to other lenders
1. Conditions Precedent: List of documents and conditions required before drawdown
2. Repayment Schedule: Detailed schedule of repayment dates and amounts
3. Form of Drawdown Notice: Template for the borrower to request loan disbursements
4. Security Documents: Forms of security documents and guarantees
5. Financial Covenants: Detailed financial ratios and calculations
6. Form of Compliance Certificate: Template for periodic compliance reporting
7. Permitted Security Interests: List of existing or permitted security interests
8. Fee Schedule: Breakdown of all applicable fees and charges
Authors
Banking & Financial Services
Real Estate
Construction
Manufacturing
Trading & Commerce
Technology
Healthcare
Hospitality
Energy & Resources
Infrastructure
Retail
Logistics & Transportation
Professional Services
Legal
Finance
Treasury
Credit
Risk Management
Compliance
Corporate Banking
Commercial
Executive Leadership
Corporate Secretariat
Business Development
Chief Financial Officer
Finance Director
Legal Counsel
Corporate Lawyer
Treasury Manager
Financial Controller
Credit Manager
Risk Manager
Commercial Director
Business Development Manager
Company Secretary
Compliance Officer
Managing Director
CEO
Head of Corporate Banking
Relationship Manager
Investment Manager
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