Account Pledge Agreement Template for United Arab Emirates

The Account Pledge Agreement is a crucial security document used in UAE financing transactions where bank accounts serve as collateral. It is commonly utilized in project finance, corporate lending, and structured finance transactions, providing lenders with security over the borrower's cash flows and account balances. The agreement must comply with UAE Federal Law No. 4 of 2020 and relevant banking regulations, requiring specific formalities for creation, perfection, and enforcement. It includes detailed provisions on account operations, permitted withdrawals, and enforcement mechanisms, while accounting for UAE's civil law system and regulatory requirements. The document is particularly important in the UAE market where account pledges are a common form of security in both conventional and Islamic financing structures.

1. Parties: Identification of the Pledgor, Pledgee (Security Agent/Bank), and Account Bank

2. Background: Context of the pledge, including reference to main facility agreement or underlying obligations

3. Definitions and Interpretation: Key terms used in the agreement, including defined terms from facility agreement if applicable

4. Creation of Pledge: Express creation of the security interest over the accounts, scope of pledge

5. Secured Obligations: Definition and scope of the obligations secured by the pledge

6. Perfection and Registration: Requirements for perfecting the pledge, including registration with relevant authorities

7. Pledgor's Representations and Warranties: Standard representations regarding ownership, authority, and absence of encumbrances

8. Pledgor's Covenants: Ongoing obligations of the pledgor regarding the pledged accounts

9. Account Operations: Rules governing operation of the pledged accounts, including permitted withdrawals

10. Enforcement: Rights and procedures for enforcing the pledge upon an event of default

11. Power of Attorney: Appointment of pledgee as attorney for enforcement purposes

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Specification of UAE law and jurisdiction