Guarantee Facility Agreement Template for Qatar

The Guarantee Facility Agreement is essential in Qatar's business environment where bank guarantees are frequently required for commercial transactions, particularly in construction, government contracts, and international trade. This document establishes the legal framework under which a financial institution provides guarantee facilities to a borrower, with support from a guarantor. The agreement must navigate Qatar's unique legal landscape, including Civil Code requirements, Qatar Central Bank regulations, and Shariah law considerations. It typically includes detailed provisions on facility limits, issuance procedures, guarantor obligations, enforcement mechanisms, and compliance requirements. Used when a company needs ongoing access to bank guarantees for its business operations, the agreement provides certainty and structure to the relationship between the facility provider, borrower, and guarantor.

1. Parties: Identification of the Facility Provider, the Borrower(s), and the Guarantor(s)

2. Background: Context of the guarantee facility arrangement and relationship between the parties

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including Shariah compliance declarations

4. The Facility: Details of the guarantee facility, including nature, purpose, and maximum limit

5. Conditions Precedent: Conditions that must be satisfied before the facility becomes available

6. Guarantee and Indemnity: Core guarantee obligations, scope, and indemnification provisions

7. Representations and Warranties: Statements of fact and assurances given by the Guarantor

8. Guarantor Covenants: Positive and negative undertakings of the Guarantor

9. Events of Default: Circumstances constituting default and consequences

10. Payments and Calculations: Payment mechanics, currency provisions, and calculation methods

11. Changes to Parties: Rules for assignment, transfer, and addition of new parties

12. Administration and Notices: Administrative provisions and communication requirements

13. Governing Law and Jurisdiction: Qatar law as governing law and jurisdiction provisions

14. Execution: Signature blocks and execution formalities