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The Loan Facility Agreement is a crucial financing document used in Pakistan when a lender (typically a bank or financial institution) provides credit facilities to a borrower. It captures all essential aspects of the lending relationship, including facility terms, security arrangements, and regulatory requirements. The agreement must comply with Pakistani banking laws, including the Banking Companies Ordinance 1962 and Financial Institutions (Recovery of Finances) Ordinance 2001, while potentially accommodating Islamic banking principles where required. This document is fundamental for both conventional and Islamic financing structures in Pakistan's dual banking system, requiring careful consideration of local security creation, registration requirements, and enforcement mechanisms.

1. Parties: Identification of the lender(s) and borrower(s) with their full legal names and addresses

2. Background: Recitals explaining the context of the facility and the parties' intentions

3. Definitions and Interpretation: Comprehensive definitions of terms used in the agreement and rules of interpretation

4. The Facility: Details of the loan amount, purpose, and availability period

5. Conditions Precedent: Conditions that must be satisfied before drawdown

6. Drawdown: Procedures and requirements for utilizing the facility

7. Interest and Fees: Interest calculation, payment dates, default interest, and applicable fees

8. Repayment: Terms and schedule of repayment, prepayment provisions

9. Representations and Warranties: Statements of fact and assurances given by the borrower

10. Covenants: Positive and negative undertakings of the borrower

11. Events of Default: Circumstances constituting default and their consequences

12. Security: Description of security arrangements and enforcement rights

13. Changes to Parties: Provisions regarding assignment and transfer rights

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: Choice of Pakistani law and jurisdiction provisions

16. Execution: Signature blocks and execution formalities