Corporate Guarantee For Bank Loan Template for United Arab Emirates

The Corporate Guarantee For Bank Loan is a critical security document in UAE banking transactions, typically required when a corporate entity wishes to guarantee the loan obligations of another company, often within the same group or for a significant business partner. This document is essential in the UAE banking sector where corporate guarantees form a fundamental part of security packages for commercial lending. The guarantee must comply with UAE Federal Law No. 5 of 1985 (Civil Code) provisions on guarantees, UAE Federal Law No. 14 of 2018 (Central Bank Law), and relevant Central Bank regulations. It includes specific provisions required under UAE law for enforceability, such as explicit statement of the guaranteed amount, conditions for calling on the guarantee, and corporate authorization requirements. The document is particularly relevant in scenarios where banks require additional security beyond the borrower's own assets or commitments.

1. Parties: Identification of the Guarantor (corporate entity), the Bank (beneficiary), and the Borrower (principal debtor)

2. Background: Context of the guarantee, reference to the underlying facility agreement, and the relationship between the parties

3. Definitions: Key terms used throughout the guarantee, including Guaranteed Obligations, Security Documents, and Events of Default

4. Guarantee and Indemnity: Core guarantee provisions, including scope of guaranteed obligations and indemnification commitments

5. Nature of Guarantee: Specification that this is a continuing security and primary obligation, not just a secondary guarantee

6. Representations and Warranties: Guarantor's confirmations regarding corporate existence, power, authority, and financial condition

7. Covenants: Ongoing obligations of the Guarantor, including information provision and maintenance of corporate existence

8. Payments: Payment mechanics, currency provisions, and tax gross-up obligations

9. Preservation of Rights: Bank's rights preservation, including ability to take additional security and variation of underlying facility

10. Event of Default: Circumstances constituting default under the guarantee

11. Enforcement: Bank's enforcement rights and remedies upon default

12. Costs and Expenses: Responsibility for legal and other costs related to the guarantee

13. Assignment and Transfer: Rights of parties to assign or transfer their rights under the guarantee

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction of UAE courts