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The Debt Financing Agreement is a crucial document used in Saudi Arabian financial transactions where a party seeks to obtain Shariah-compliant financing. It is particularly important in the Saudi Arabian context due to the requirement to comply with both modern banking practices and Islamic finance principles. The agreement typically includes detailed provisions on the financing structure (often using Murabaha, Ijara, or Wakala arrangements), profit calculation methods, security arrangements, and compliance requirements. It is used when businesses or individuals require substantial funding for projects, acquisitions, or operations, and must be structured to meet the requirements of the Saudi Arabian Monetary Authority (SAMA) and Shariah boards. The document serves as the primary reference point for the rights and obligations of all parties throughout the financing period, including drawdown conditions, payment terms, and default scenarios.

1. Parties: Identification of the lender(s) and borrower(s), including full legal names and registration details

2. Background: Context of the financing arrangement, purpose of the facility, and confirmation of Shariah compliance

3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and currency conventions

4. The Facility: Details of the financing facility, including amount, purpose, and Shariah-compliant profit structure

5. Conditions Precedent: Prerequisites that must be satisfied before drawdown, including documentation and regulatory approvals

6. Drawdown Mechanics: Procedures and requirements for utilizing the facility

7. Payment Provisions: Payment terms, profit calculations, and payment mechanics in compliance with Shariah principles

8. Security: Details of security/collateral arrangements and enforcement rights

9. Representations and Warranties: Statements of fact and assurances from the borrower

10. Covenants: Positive and negative obligations of the borrower during the facility period

11. Events of Default: Circumstances constituting default and consequences thereof

12. Tax Provisions: Treatment of taxes and zakat obligations

13. Changes to Parties: Rules regarding assignment and transfer of rights and obligations

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: Saudi law as governing law and jurisdiction provisions

16. Execution: Signature blocks and execution formalities