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The Master Loan Participation Agreement is essential for financial institutions operating in the UAE market who wish to participate in loan facilities without establishing direct contractual relationships with borrowers. This document type, governed by UAE law and compliant with UAE Federal Law No. 14 of 2018 and Central Bank regulations, provides a comprehensive framework for loan participations. It is particularly relevant when banks seek to distribute risk, manage exposure limits, or participate in syndicated lending arrangements. The agreement covers crucial aspects such as participation mechanics, payment distributions, voting rights, and risk allocation, while accommodating both conventional and Islamic banking structures. Financial institutions use this agreement as a master document that can be supplemented with transaction-specific participation certificates for individual loans.

1. Parties: Identification of the grantor bank and participant(s)

2. Background: Context of the agreement and general purpose of the loan participation arrangement

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

4. Sale and Participation: Core terms of the participation, including participation percentage and purchase price

5. Payments and Distributions: Mechanism for sharing payments received from borrowers and distribution waterfall

6. Rights and Obligations of the Grantor: Grantor's responsibilities in managing the underlying loan and reporting to participant

7. Rights and Obligations of the Participant: Participant's rights regarding decision-making and obligations for funding

8. Administration of the Underlying Loan: Procedures for loan administration, modifications, and enforcement actions

9. Representations and Warranties: Standard representations by both parties regarding authority, enforceability, and compliance

10. Risk Allocation: Distribution of risks between grantor and participant

11. Confidentiality: Provisions regarding confidential information and permitted disclosures

12. Events of Default: Circumstances constituting default and resulting remedies

13. Termination: Conditions and procedures for terminating the participation

14. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction provisions

15. General Provisions: Standard boilerplate provisions including notices, amendments, and assignments