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Account Pledge Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Account Pledge Agreement

"I need an Account Pledge Agreement under Saudi law for a syndicated facility closing on March 15, 2025, where multiple USD and SAR accounts held by our manufacturing company will be pledged to a consortium of local and international banks, with HSBC acting as Security Agent."

Document background
The Account Pledge Agreement is a crucial security document used in Saudi Arabian financial transactions where bank accounts serve as collateral for financial obligations. This agreement is commonly utilized in various financing arrangements, including corporate lending, project finance, and Islamic banking facilities. It must comply with the Saudi Commercial Pledge Law, SAMA regulations, and Sharia principles, requiring specific provisions for creation, perfection, and enforcement of the pledge. The document typically includes detailed account information, control mechanisms, and enforcement procedures that align with Saudi Arabian legal requirements. It is essential for securing rights over bank accounts and establishing priority over other creditors, while ensuring all aspects of the security arrangement are valid and enforceable under Saudi law.
Suggested Sections

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

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

3. Definitions and Interpretation: Definitions of key terms and interpretation principles, including Sharia compliance declarations

4. Creation of Pledge: Express creation of the pledge over the account(s) and confirmation of Sharia-compliant security interest

5. Perfection Requirements: Steps required to perfect the pledge, including registration requirements under Saudi law

6. Pledgor's Obligations: Key obligations of the pledgor including maintenance of the account and restrictions on withdrawals

7. Representations and Warranties: Standard and specific representations regarding account ownership, capacity, and authority

8. Covenants: Ongoing obligations regarding account maintenance, notifications, and compliance with laws

9. Events of Default: Circumstances constituting default and triggering enforcement rights

10. Enforcement: Rights and procedures for enforcing the pledge in compliance with Saudi law and Sharia principles

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

12. Notices: Provisions for giving notices and communications between parties

13. Governing Law and Jurisdiction: Specification of Saudi law as governing law and Saudi courts' jurisdiction

Optional Sections

1. Multiple Pledgors: Additional provisions required when multiple entities are granting the pledge

2. Currency Provisions: Specific provisions for accounts held in multiple currencies

3. Regulatory Compliance: Additional provisions required for compliance with specific SAMA regulations

4. Account Bank Provisions: Specific provisions when the Account Bank is a party to the agreement

5. Security Agent Provisions: Required when a security agent is appointed to hold the pledge on behalf of multiple beneficiaries

6. Further Assurance: Additional provisions for future actions that may be required for pledge effectiveness

7. Amendments and Waivers: Specific provisions regarding modification of the agreement

8. Severability: Provisions addressing the impact of invalid provisions

Suggested Schedules

1. Schedule 1 - Pledged Account Details: Details of all accounts subject to the pledge, including account numbers and branches

2. Schedule 2 - Form of Notice to Account Bank: Template notice to be sent to the account bank regarding the pledge

3. Schedule 3 - Form of Account Bank Acknowledgment: Template acknowledgment to be signed by the account bank

4. Schedule 4 - Registration Forms: Forms required for registration of the pledge with relevant authorities

5. Schedule 5 - Existing Security Interests: List of any existing security interests over the accounts

6. Schedule 6 - Form of Power of Attorney: Template power of attorney for enforcement purposes

7. Appendix 1 - Regulatory Approvals: Copies of any required regulatory approvals or licenses

8. Appendix 2 - Corporate Authorizations: Copies of corporate approvals and authorizations

Authors

Alex Denne

Head of Growth (Open Source Law) @ 黑料视频 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Banking

Financial Services

Islamic Finance

Corporate Finance

Investment Banking

Real Estate

Construction

Manufacturing

Energy

Infrastructure

Trading

Retail

Healthcare

Technology

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Islamic Banking

Credit

Security & Collateral

Documentation

Corporate Secretarial

Transaction Management

Relevant Roles

Chief Financial Officer

Treasury Manager

Legal Counsel

Compliance Officer

Finance Director

Corporate Lawyer

Banking Relationship Manager

Security Trustee

Credit Risk Manager

Transaction Manager

Islamic Finance Specialist

Corporate Secretary

Senior Finance Manager

Legal Director

Banking Officer

Security Agent

Documentation Manager

Industries








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