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Loan Extension Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Loan Extension Agreement

"I need a Loan Extension Agreement for a manufacturing company that needs to extend their existing SAR 10 million facility with First Saudi Bank for an additional 24 months until March 2025, with quarterly payments and additional security over new equipment."

Document background
The Loan Extension Agreement is utilized when parties to an existing loan facility in Saudi Arabia need to extend the loan's maturity date or modify its repayment terms. This document is essential in situations where the borrower requires additional time for repayment but is otherwise in good standing, and the lender is willing to accommodate this request. The agreement must strictly comply with Saudi Arabian law and Sharia principles, particularly regarding the treatment of profit rates and payment structures. It typically includes updated conditions precedent, confirms the continuation of existing security arrangements, and may introduce additional requirements based on the borrower's current circumstances. The document needs to align with SAMA regulations and must be structured to be enforceable under Saudi law, often requiring specific formatting and execution requirements unique to the jurisdiction.
Suggested Sections

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

2. Background: Details of the original loan agreement, including date, amount, and purpose, and the reason for extension

3. Definitions: Definitions of key terms used throughout the agreement, including references to original loan agreement definitions

4. Extension of Term: Specific details of the extension period and new maturity date

5. Payment Terms: Modified payment schedule, profit rate (in compliance with Sharia), and payment mechanisms

6. Conditions Precedent: Conditions that must be satisfied before the extension becomes effective

7. Representations and Warranties: Updated confirmations and statements by the borrower regarding their financial condition

8. Continuation of Security: Confirmation that existing security arrangements continue to apply

9. Sharia Compliance: Explicit statements ensuring the extension complies with Islamic finance principles

10. Costs and Expenses: Allocation of costs related to the extension

11. Governing Law and Jurisdiction: Confirmation of Saudi law governance and jurisdiction for disputes

Optional Sections

1. Additional Security: Required when new security is being added as part of the extension

2. Guarantor Consent: Needed when the original loan has guarantors who must consent to the extension

3. Modified Financial Covenants: Include when original financial covenants are being adjusted

4. Additional Conditions: For situations requiring specific additional conditions for the borrower

5. Cross-Default Provisions: When the borrower has other financing arrangements that need to be addressed

6. Regulatory Compliance: When specific SAMA or other regulatory requirements need to be addressed

Suggested Schedules

1. Schedule 1 - Modified Payment Schedule: Detailed breakdown of new payment dates and amounts

2. Schedule 2 - Conditions Precedent Documents: List of documents required to be delivered before effectiveness

3. Schedule 3 - Existing Security Documents: List of security documents that continue to apply

4. Appendix A - Form of Effectiveness Certificate: Template certificate confirming satisfaction of conditions precedent

5. Appendix B - Sharia Board Approval: Copy of or reference to Sharia board approval of the extension terms

6. Appendix C - Corporate Authorizations: Copies of corporate approvals required for the extension

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

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Relevant Industries

Banking and Financial Services

Real Estate and Construction

Manufacturing and Industrial

Retail and Commercial

Healthcare

Technology and Telecommunications

Energy and Utilities

Transportation and Logistics

Agriculture and Food Production

Education

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit Administration

Sharia Advisory

Company Secretarial

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Compliance Officer

Sharia Compliance Manager

Credit Risk Manager

Relationship Manager

Corporate Banking Manager

Finance Manager

Company Secretary

Managing Director

Chief Executive Officer

Risk Officer

Documentation Officer

Industries






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