Mudaraba copy

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Mudaraba copy

  1. 1. Mudaraba Mudaraba Financing AgreementTHIS AGREEMENT FOR FINANCING ON THE BASIS OFMUDARABAis made on the __________day of _________2012 Between[Name of the Client],_____________________________________, having itsplace of business at / resident of_______________________________ hereinafter referred toas the Client (which expression shall, where the context admits,mean and include its successors in profit and assigns) acting asMudarib of the ONE PART; And[ ], a banking company incorporated under thelaws of Egypt, having its Registered Office at________________________, hereinafter referred to as theInstitution, (which expression shall, where the context admits,mean and include its successors in interest and assigns) actingas Rab Al-Maal of the OTHER PART.Client in the Project Information Form shall be supplied by theInstitution for a period of ____________ months hereof anddeposited in the Account.as specified as following.a) All funds for the purpose of the project shall be disbursedonly through the Account by cheque or transfer against propersupporting invoices maintained by the Client.
  2. 2. REPRESENTATIONS OF THE CLIENTThe Client represents to the Institution that:a) The Client possesses all necessary powers and licenses toconduct its present business and the Project.b) The Client Information Form is true and correct.c) The Client is experienced and knowledgeable in all businessmatters relating to the Project.d) The Client has prepared with all due care the ProjectInformation Form and the Cash Flow and Revenue Projectionbased on his experience and knowledge .e) The Client Financials are true and correct according togenerally accepted accounting principles consistently appliedaccurately representing the Client’s financial status on the datesand the profit and loss for the periods .f) The Client has suffered no material adverse change inbusiness operation or financial position .REPRESENTATION OF THE INSTITUTIONThe Institution represents to the Client that on the date of thisAgreement:The Institution is a corporation organised under the laws of……….. and possesses all necessary powers and licenses toconduct its business and to finance the Project as provided bythis Agreement.GENERAL COVENANTS OF THE CLIENTThe Client undertakes to the Institution that the Client shall:a) Promptly give notice to the Institution of any change in the
  3. 3. information disclosed on the Client Information Form.b) Render the Management Services with due care and allreasonable commercial diligence expected of an experiencedbusinessman to ensure the success of the Project .c) utilize the Project assets exclusively for purposes of theProject as specified in the Cash Flow and Revenue Projection.d) disburse all funds for the purpose of the Project only throughthe Account by cheque or transfer against proper supportinginvoices maintained by the Client.e) maintain all Project assets in the name of the Client, butphysically segregated from other assets of the Client.f) submit the following to the Institution, prepared according tothe instructions of the Institution: (h) A balance sheet and income statement of the Clientprepared in accordance with principles utilized in the ClientFinancials consistently applied.i) supply to the Institution any information, material ordocument relating to the Project or to Client’s financial status.j) perform its obligations under this Agreement without violationof the principles of Islamic Shariah.. PARTICIPATION IN PROFITa) The participation in profit will be in accordance with thefollowing ratio:(i) [ ]% of the profit will be for the Management Services andpayable to the Client.(ii) [ ]% of the profit will be payable to the Institution.b) On Termination Date, the accounts of the Modaraba shall be
  4. 4. drawn up in accordance with accepted accounting principles, andthe profit if any due to the Client and the Institution shall beworked out and paid in the proportion specified above, subjectto adjustment of any provisional payments made, (plus theamount paid by the Institution after deducting loss if any).LOSSESa)(i) 100% of the loss in the Project will be borne by theInstitution(ii) The client will receive no compensation for his ManagementServices, and will be liable for the loss if it is proven that he hasbreached his obligations or is proven to be failing in thedischarge of his obligations under this Agreement.b) In the event of the Project showing losses during thecurrency of this Agreement the client shall forthwith give noticeof such losses to the Institution together with all accounts anddetails pertaining thereto and such other information andrecords as may be required by the Institution. Notwithstandingthe above .c)the Institution shall only be liable for the losses in the mannerspecified if the said losses have not been caused due tomisconduct on the part of the Client in out the Project’s businessand operations or as a result of his negligence or inefficiency,including non-compliance with the terms and conditions of thisAgreement. MANAGEMENT AND CONTROLSubject only to the express terms of this Agreement, completemanagement and control of the Project is exclusively vested inthe Client and the Client shall be solely responsible for themanagement and control of the Project.
  5. 5. . GENERALThe parties agree that:a) Any notice or other communication required or permitted bythis Agreement shall be deemed to have been given to the otherparty seven days after the day on which the same is posted byregistered mail, addressed to the address mentioned in thisAgreement or any other address given in writing to the otherparty, or one day after actual delivery at such address,whichever is earlier.IN WITNESS WHEREOF this Agreement is executed on thedate above mentioned by the parties. Witnessed ________________________ The Institution ________________________ The Client Witnessed 1. Name:________________________ 2. Name: ________________________

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