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The Drawdown Loan Agreement is a fundamental financing document used in Saudi Arabia when a borrower requires flexible access to funds over time rather than a single lump sum. This agreement is particularly relevant for project financing, working capital facilities, and long-term corporate financing needs. It must comply with both Shariah principles and Saudi Arabian banking regulations, particularly those issued by SAMA. The document establishes the facility amount, drawdown procedures, profit calculation methodology, repayment terms, and security arrangements (if applicable). It includes specific provisions for compliance with Islamic finance principles, avoiding conventional interest structures, and incorporating appropriate Islamic financing concepts. The agreement is typically used in corporate and commercial financing transactions where the borrower needs to access funds in multiple tranches based on specific milestones or business needs.

1. Parties: Identification of the lender and borrower with full legal names and addresses

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

3. Definitions and Interpretation: Key terms used in the agreement, including Islamic finance terminology

4. The Facility: Core terms of the loan facility including amount, purpose, and profit rate (avoiding interest terminology)

5. Drawdown Conditions: Prerequisites and conditions for drawing down the loan, including documentation requirements

6. Drawdown Mechanics: Process and procedures for requesting and executing drawdowns

7. Repayment and Prepayment: Terms for repayment schedule, prepayment rights and obligations

8. Profit Rate and Fees: Shariah-compliant profit rate structure and associated fees

9. Representations and Warranties: Borrower's confirmations regarding legal status, capacity, and compliance

10. Information Undertakings: Borrower's obligations to provide financial and other information

11. General Undertakings: Borrower's general operational and business commitments

12. Financial Undertakings: Financial covenants and related obligations

13. Events of Default: Circumstances constituting default and consequences

14. Changes to Parties: Rules for assignment and transfer of rights

15. Payment Mechanics: Technical provisions for making payments

16. Notices: Communication procedures between parties

17. Calculations and Certificates: Rules for calculations and evidential value of certificates

18. General Provisions: Miscellaneous legal provisions including severability and amendments

19. Governing Law and Jurisdiction: Saudi law as governing law and jurisdiction of Saudi courts