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The Guarantee Fee Agreement is essential in Saudi Arabian commercial transactions where one party provides a guarantee in favor of another for a fee. This document is commonly used in project finance, corporate lending, and commercial banking transactions where guarantees are required to secure obligations or performance. The agreement must carefully balance commercial interests with Sharia compliance requirements, particularly regarding fee structures and payment mechanisms. It includes detailed provisions for calculation methodologies, payment terms, and compliance with Saudi Arabian regulatory requirements, including SAMA regulations and Islamic banking principles. The document is crucial for establishing clear legal obligations while ensuring the fee arrangement doesn't contravene Islamic finance principles against uncertainty (gharar) or usury (riba).

1. Parties: Identification of the guarantor, beneficiary, and any other relevant parties

2. Background: Context of the guarantee arrangement and purpose of the fee agreement

3. Definitions: Key terms used throughout the agreement, including technical and financial terms

4. Guarantee Fee: Details of the fee structure, calculation method, and compliance with Sharia principles

5. Payment Terms: Timing, method, and currency of fee payments

6. Duration: Term of the agreement and conditions for renewal

7. Representations and Warranties: Standard declarations by parties regarding capacity and authority

8. Compliance: Adherence to Saudi laws, regulations, and Sharia principles

9. Termination: Circumstances and process for ending the agreement

10. Governing Law and Jurisdiction: Confirmation of Saudi law application and dispute resolution

11. Notices: Communication procedures between parties

12. Counterparts: Execution in multiple copies