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The Guarantor In Loan Agreement is a crucial security document used in UAE lending transactions where additional security is required beyond the borrower's own covenant. This document is particularly relevant when a lender requires extra assurance for loan repayment, common in both commercial and personal lending scenarios. The agreement must comply with UAE Federal Law No. 5 of 1985 (Civil Code) articles relating to guarantees (1056-1094), UAE Federal Law No. 18 of 1993 (Commercial Code), and relevant Central Bank regulations. It's essential in scenarios involving corporate groups where parent companies guarantee subsidiaries' obligations, or where individuals provide personal guarantees for corporate borrowing. The document includes detailed provisions on the guarantee's scope, enforcement mechanisms, and the guarantor's obligations, all structured to ensure compliance with both UAE law and Sharia principles.

1. Parties: Identifies all parties to the agreement: the Guarantor, the Lender, and the Borrower

2. Background: Explains the context of the guarantee, referring to the principal Loan Agreement and the basis for the guarantee

3. Definitions: Defines key terms used throughout the agreement, including references to the Loan Agreement terms

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

5. Nature of Guarantee: Specifies that the guarantee is continuing, irrevocable, and unconditional as per UAE law requirements

6. Guarantor's Representations and Warranties: Statements by the guarantor about their capacity, authority, and financial condition

7. Guarantor's Covenants: Ongoing obligations of the guarantor throughout the guarantee period

8. Payments: Terms regarding the timing, method, and currency of payments by the guarantor

9. Preservation of Rights: Lender's rights preservation clauses and mechanisms for enforcement

10. Islamic Finance Compliance: Provisions ensuring compliance with Sharia principles as required under UAE law

11. Costs and Expenses: Allocation of costs related to the guarantee's preparation and enforcement

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Specifies UAE law as governing law and relevant courts' jurisdiction