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The Credit Agreement Between Two Parties is a fundamental legal document used in Saudi Arabia when one party (the lender) extends credit to another party (the borrower). This agreement is essential for documenting financial transactions in compliance with both Saudi Arabian law and Islamic Shariah principles, which prohibit conventional interest-based lending. The document encompasses crucial elements including facility terms, profit calculation methods, security arrangements, and compliance requirements with Saudi Arabian Monetary Authority (SAMA) regulations. It is particularly important in commercial financing, corporate lending, and business expansion scenarios where formal documentation of credit arrangements is necessary. The agreement provides legal protection for both parties while ensuring the transaction's Shariah compliance through appropriate Islamic financing structures.

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

2. Background: Context of the credit agreement, purpose of the loan, and relationship between parties

3. Definitions: Key terms used throughout the agreement, including financial terms, dates, and technical terminology

4. Facility Details: Specific details of the credit facility, including amount, purpose, and any sub-facilities

5. Islamic Structure: Description of the Shariah-compliant structure being used (e.g., Murabaha, Ijara, etc.)

6. Conditions Precedent: Prerequisites that must be satisfied before the facility becomes available

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

8. Payment Terms: Details of repayment schedule, profit rates, and payment mechanics

9. Security: Details of any collateral or security arrangements

10. Covenants: Positive and negative obligations of the borrower during the facility period

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

12. Termination: Circumstances and procedures for early termination or cancellation

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