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The Drawdown Loan Agreement is a vital financing instrument in Pakistani banking practice, commonly used when businesses require flexible access to funding over time rather than a single lump sum. This document type is particularly useful for projects with phased funding requirements or businesses with varying capital needs. The agreement must comply with Pakistani banking regulations, including the Banking Companies Ordinance 1962 and State Bank of Pakistan directives. It typically includes detailed provisions for drawdown mechanics, conditions precedent, representations and warranties, covenants, and events of default. The structure allows borrowers to access funds as needed while providing lenders with necessary controls and security mechanisms. The agreement may be used for both conventional and Islamic banking arrangements, with appropriate modifications for Shariah compliance where required.

1. Parties: Identifies the lender and borrower with their full legal names, registration details, and addresses

2. Background: Explains the context of the loan facility and purpose for which it is being granted

3. Definitions and Interpretation: Defines key terms used throughout the agreement and sets out interpretation rules

4. The Facility: Details the loan amount, purpose, and basic terms of the facility

5. Drawdown: Specifies the drawdown mechanics, notice requirements, and conditions for each drawdown

6. Interest: Sets out interest rate, calculation method, payment dates, and default interest provisions

7. Repayment: Details repayment schedule, prepayment terms, and mandatory prepayment events

8. Representations and Warranties: Contains borrower's representations about its legal status, capacity, and financial condition

9. Conditions Precedent: Lists documents and conditions required before facility becomes available

10. Covenants: Sets out positive and negative obligations of the borrower during the loan term

11. Events of Default: Defines circumstances that constitute default and consequences thereof

12. Changes to Parties: Addresses assignment and transfer rights of the parties

13. Notices: Specifies how formal communications between parties should be made

14. Governing Law and Jurisdiction: Confirms Pakistani law as governing law and specifies jurisdiction for disputes