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Business Funding Agreement
"I need a Business Funding Agreement for a 10 million SAR Murabaha facility between Al Ahli Bank and my technology startup company, with the funding to be disbursed in three tranches starting March 2025, secured by company assets and personal guarantees."
1. Parties: Identification of the parties to the agreement, including full legal names, registration details, and addresses
2. Background: Context of the funding arrangement and brief description of the business purpose
3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including Shariah compliance declarations
4. Funding Amount and Purpose: Details of the funding amount, purpose, and any tranches or conditions for disbursement
5. Shariah Structure: Specific details of the Islamic finance structure being used (e.g., Murabaha, Musharaka, etc.)
6. Conditions Precedent: Conditions that must be satisfied before funding is provided
7. Disbursement Mechanics: Procedures and requirements for drawing down the funding
8. Payment Provisions: Payment terms, profit rates, and payment mechanics compliant with Shariah principles
9. Security and Guarantees: Details of security arrangements and any guarantees provided
10. Representations and Warranties: Standard and specific representations and warranties from both parties
11. Covenants: Positive and negative obligations of the parties during the term of the agreement
12. Events of Default: Circumstances constituting default and consequences
13. Remedies: Rights and remedies available to parties in case of default or breach
14. Term and Termination: Duration of the agreement and termination provisions
15. Governing Law and Jurisdiction: Confirmation of Saudi law governance and jurisdiction provisions
16. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment
1. Foreign Investment Provisions: Required when funding involves foreign investors, addressing specific requirements under Saudi Foreign Investment Law
2. Intercreditor Provisions: Required when multiple funders are involved, establishing priority and relationships between different funders
3. Special Purpose Vehicle (SPV) Provisions: Required when funding is structured through an SPV, including specific governance requirements
4. Regulatory Compliance: Additional section needed for regulated industries or when specific regulatory approvals are required
5. Tax Provisions: Detailed tax provisions when complex tax structures are involved or for cross-border funding
6. Intellectual Property Rights: Required when funding is tied to or secured by intellectual property
7. Environmental Compliance: Required for projects or businesses with significant environmental impacts
8. Employment Undertakings: Required when funding includes specific employment or Saudization requirements
1. Schedule 1 - Funding Details: Detailed breakdown of funding amount, profit calculation, and payment schedule
2. Schedule 2 - Conditions Precedent Documents: List of all required documents and conditions to be satisfied
3. Schedule 3 - Form of Drawdown Notice: Template for requesting disbursement of funds
4. Schedule 4 - Security Documents: List and copies of all security documents
5. Schedule 5 - Corporate Documents: Copies of relevant corporate approvals and documents
6. Schedule 6 - Financial Covenants: Detailed financial covenants and calculation methodologies
7. Schedule 7 - Form of Compliance Certificate: Template for periodic compliance reporting
8. Appendix A - Business Plan: Detailed business plan and use of funds
9. Appendix B - Shariah Structure Diagram: Visual representation of the Islamic financing structure
10. Appendix C - Key Personnel: List of key personnel and their roles in the funded business
Authors
Technology and Digital
Manufacturing
Real Estate and Construction
Healthcare
Education
Retail and Consumer Goods
Energy and Utilities
Transportation and Logistics
Financial Services
Agriculture and Food
Tourism and Hospitality
Mining and Materials
Telecommunications
Legal
Finance
Treasury
Compliance
Risk Management
Corporate Development
Investment
Credit
Operations
Strategy
Islamic Banking
Corporate Finance
Chief Executive Officer
Chief Financial Officer
Legal Counsel
Finance Director
Treasury Manager
Investment Manager
Compliance Officer
Risk Manager
Business Development Director
Corporate Finance Manager
Shariah Compliance Officer
Project Finance Manager
Credit Risk Officer
Commercial Director
Managing Director
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