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Term Loan Agreement for United Arab Emirates

Term Loan Agreement Template for United Arab Emirates

A comprehensive financing agreement governed by UAE law that establishes the terms and conditions for a fixed-term loan facility. The agreement complies with UAE Federal Laws, including the Civil Code and Commercial Code, and incorporates relevant Central Bank regulations. It details the loan amount, purpose, drawdown conditions, repayment terms, security arrangements, and events of default. The document addresses both conventional and potential Islamic banking requirements, ensuring compliance with UAE interest rate regulations and banking practices. It includes provisions for representations, warranties, covenants, and reporting obligations specific to UAE jurisdiction requirements.

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What is a Term Loan Agreement?

The Term Loan Agreement is a fundamental financing document used in the United Arab Emirates when a lender provides a fixed-term loan facility to a borrower. It is particularly suited for medium to long-term financing requirements where funds are needed for specific purposes such as capital expenditure, acquisition financing, or project development. The agreement must comply with UAE Federal Law No. 5 of 1985 (Civil Code), Federal Law No. 18 of 1993 (Commercial Code), and UAE Central Bank regulations, including interest rate restrictions and banking practices. The document incorporates necessary provisions for both conventional and Islamic banking structures, ensuring flexibility in the UAE market. It typically includes detailed terms on facility amount, purpose, availability period, repayment schedule, security package, representations and warranties, covenants, and events of default, all tailored to UAE legal requirements and market standards.

What sections should be included in a Term Loan Agreement?

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

2. Background: Context of the loan facility and purpose of the agreement

3. Definitions and Interpretation: Defined terms, construction rules, and interpretation principles

4. The Facility: Key terms of the loan including amount, purpose, and availability period

5. Conditions Precedent: Documents and conditions required before drawdown

6. Drawdown: Mechanics and procedures for utilizing the loan facility

7. Interest: Interest calculation, periods, payment dates, and default interest provisions

8. Repayment: Terms and schedule for repayment of the principal amount

9. Prepayment: Voluntary and mandatory prepayment provisions

10. Fees and Expenses: All fees payable and cost allocation

11. Tax Provisions: Tax-related obligations and gross-up provisions

12. Representations and Warranties: Borrower's confirmations regarding its status and capacity

13. Information Undertakings: Obligations to provide financial and other information

14. General Undertakings: Positive and negative covenants of the borrower

15. Events of Default: Circumstances constituting default and consequences

16. Changes to Parties: Assignment and transfer provisions

17. Administration: Payment mechanics, calculations, and notices

18. Governing Law and Enforcement: Choice of UAE law and jurisdiction provisions

What sections are optional to include in a Term Loan Agreement?

1. Security: Required if the loan is secured, detailing security package and enforcement

2. Guarantee: Required if there are guarantors supporting the borrower's obligations

3. Islamic Finance Provisions: Required if the facility needs to be Shariah-compliant

4. Financial Covenants: Required for corporate borrowers, setting financial maintenance tests

5. Account Provisions: Required if specific accounts need to be maintained or monitored

6. Syndication Provisions: Required for syndicated facilities with multiple lenders

7. Agency Provisions: Required for syndicated facilities requiring facility agent appointment

8. Set-off Rights: Optional enhanced set-off rights beyond statutory provisions

9. Increased Costs: Protection for lenders against regulatory changes affecting costs

What schedules should be included in a Term Loan Agreement?

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

2. Schedule 2 - Form of Drawdown Request: Template for borrower to request loan disbursement

3. Schedule 3 - Repayment Schedule: Detailed amortization schedule if applicable

4. Schedule 4 - Form of Compliance Certificate: Template for periodic compliance certification

5. Schedule 5 - Financial Covenants Calculations: Detailed methodology for financial covenant calculations

6. Schedule 6 - Forms of Transfer Certificates: Templates for transferring loan participations

7. Schedule 7 - Security Documents: List and copies of all security documentation

8. Schedule 8 - Existing Security and Financial Indebtedness: Disclosure of existing obligations and security

9. Schedule 9 - Contact Details: Administrative and notice details for all parties

Authors

Alex Denne

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

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions












































Clauses































Relevant Industries

Banking & Financial Services

Real Estate & Construction

Manufacturing & Industrial

Energy & Utilities

Healthcare

Technology

Retail & Consumer Goods

Telecommunications

Transportation & Logistics

Hospitality & Tourism

Education

Agriculture & Food Production

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit

Operations

Company Secretarial

Executive Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Compliance Officer

Credit Risk Manager

Relationship Manager

Loan Officer

Corporate Banking Manager

Financial Controller

Company Secretary

General Counsel

Managing Director

CEO

Transaction Manager

Risk Officer

Industries








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