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Line Of Credit Agreement for United Arab Emirates

Line Of Credit Agreement Template for United Arab Emirates

A comprehensive legal agreement template governed by UAE law that establishes a revolving credit facility between a financial institution and a borrower. This document outlines the terms and conditions under which the lender will make available a specified credit limit that can be repeatedly drawn down, repaid, and redrawn. The agreement incorporates UAE banking regulations, including Central Bank requirements, and can be adapted for both conventional and Islamic banking structures. It includes detailed provisions for utilization, interest calculations, security arrangements, and compliance with UAE financial regulations.

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Line Of Credit Agreement

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What is a Line Of Credit Agreement?

The Line of Credit Agreement Template is designed for use in the United Arab Emirates to establish revolving credit facilities between financial institutions and borrowers. This template addresses the specific requirements of UAE banking regulations, including Central Bank directives and commercial law provisions. It's particularly useful when setting up flexible financing arrangements that allow borrowers to draw down funds up to a predetermined limit, repay, and reborrow as needed. The document includes essential provisions for both conventional and Islamic banking structures, making it versatile for various financial institutions operating in the UAE. The template covers crucial elements such as facility terms, security arrangements, compliance requirements, and enforcement mechanisms, all aligned with UAE legal framework and banking practices. It's commonly used for business financing, working capital management, and ongoing operational funding needs.

What sections should be included in a Line Of Credit Agreement?

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

2. Background: Recitals explaining the purpose of the agreement and the parties' intentions

3. Definitions: Detailed definitions of terms used throughout the agreement

4. The Facility: Details of the credit line including amount, purpose, and availability period

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

6. Utilization: Process and requirements for drawing down the credit facility

7. Interest and Fees: Interest calculation method, rates, payment dates, and applicable fees

8. Repayment: Terms of repayment including minimum payments and final maturity

9. Representations and Warranties: Standard representations and warranties from the borrower

10. Covenants: Positive and negative covenants applicable to the borrower

11. Events of Default: Circumstances constituting default and consequences

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

13. Notices: Communication requirements and contact details

14. General Provisions: Miscellaneous legal provisions including governing law and jurisdiction

What sections are optional to include in a Line Of Credit Agreement?

1. Security: Required if the facility is secured by collateral or guarantees

2. Islamic Finance Provisions: Required if the facility needs to be Sharia-compliant

3. Multiple Currency Provisions: Required if the facility can be drawn in multiple currencies

4. Increased Costs: Optional provisions dealing with changes in regulatory requirements

5. Tax Gross-Up: Required if tax implications need to be addressed specifically

6. Market Disruption: Optional provisions dealing with market disruption events

7. Anti-Money Laundering: Detailed AML provisions if not covered in representations

8. Joint and Several Liability: Required if there are multiple borrowers

What schedules should be included in a Line Of Credit Agreement?

1. Schedule 1 - Conditions Precedent: Detailed list of required documents and conditions

2. Schedule 2 - Utilization Request Form: Standard form for requesting drawdowns

3. Schedule 3 - Pricing Schedule: Detailed breakdown of interest rates, margins, and fees

4. Schedule 4 - Repayment Schedule: If applicable, schedule of repayment dates and amounts

5. Schedule 5 - Security Documents: List and copies of security documents if facility is secured

6. Schedule 6 - Compliance Certificate: Form of compliance certificate for periodic submission

7. Appendix A - Calculation of Interest: Detailed methodology for interest calculations

8. Appendix B - Form of Notices: Standard forms for various notices under the agreement

Authors

Alex Denne

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

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions




















































Clauses







































Relevant Industries

Banking & Financial Services

Corporate Finance

Commercial Lending

Islamic Banking

Real Estate

Construction

Manufacturing

Retail

Healthcare

Technology

Energy

Trading & Distribution

Professional Services

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Banking

Islamic Banking

Risk Management

Business Development

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Credit Manager

Relationship Manager

Legal Counsel

Compliance Officer

Risk Manager

Corporate Banking Officer

Financial Controller

Business Development Manager

Account Manager

Islamic Banking Specialist

Senior Credit Analyst

Corporate Secretary

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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