The standard form for a financing lease contract for vehicles for individuals

==Start of PDF== [Image of Saudi Central Bank logo] In the Name of Allah, the Most Gracious, the Most Merciful Saudi Central Bank Headquarters Office of the Governor's Deputy for Supervision

Ref: 41038534 Date: 1441/06/01 AH Attachments: None

Circular Dear Sirs, Peace, mercy, and blessings of Allah be upon you, Subject: The Standard Form for a Financing Lease Contract for Vehicles for Individuals.

Based on the powers granted to the Bank under the Banking Control System issued by Royal Decree No. M/5 dated 22/02/1386 AH, the Financing Companies Control System issued by Royal Decree No. (M/51) dated 13/08/1433 AH, and the Financing Lease System issued by Royal Decree No. (M/48) dated 13/08/1433 AH. And based on Paragraph (2) of Article Ten of the Executive Regulations of the Financing Lease System, which stipulates "The Bank shall approve standard forms for financing lease contracts that consider the rights of the concerned parties."

And with the Bank's keenness to achieve the objectives of the Standard Form for a Financing Lease Contract for Vehicles for Individuals, and to safeguard the rights of the concerned parties, lessors must adhere to the Standard Form for a Financing Lease Contract for Vehicles for Individuals attached to this circular, and complete the necessary procedures according to their prevailing policies by no later than 1441/8/30 AH (corresponding to 2020/4/23 AD), and shall not conclude any contracts contrary to this standard form or make any amendments to it after this date.

Please accept my highest regards, [Signature] Fahd bin Ibrahim Al-Shathry Governor's Deputy for Supervision

Distribution Scope:

• Banks and banks operating in the Kingdom
• Financing companies operating in the Kingdom

Al-Rashidi P.O. Box 2992, Riyadh 11169, Tel: 4662300 - Fax: 4662543

==Screenshot for page 2== Contract No.: ....................

Vehicle Financing Contract under the Ijarah Format (for Individuals)

==Screenshot for page 3== Table of Contents

1. Financing Contract Summary - 3 -
2. Parties - 4 -
3. Contract Details - 5 -
4. Financial Obligations - 5 -
5. Guarantees - 6 -
6. Attached Appendices - 7 -
7. Definitions and Explanations - 7 -
8. Contract Execution and Effectiveness - 9 -
9. Contract Duration - 9 -
10. Promise to Transfer Ownership - 9 -
11. Lessor's Ownership of the Leased Asset - 9 -
12. Lessor's Delivery of the Leased Asset - 9 -
13. Lessee's Acceptance of the Leased Asset - 9 -
14. Lease Payment Terms - 10 -
15. Late Payment Terms - 10 -
16. Early Partial Payment Terms - 10 -
17. Early Ownership Terms - 10 -
18. Terms and Procedures for Transferring Ownership of the Leased Asset - 11 -
19. Costs, Expenses, Fees, and Taxes - 11 -
20. Lessee's Commitments and Declarations - 11 -
21. Lessor's Commitments and Declarations - 12 -
22. Inspection of the Leased Asset - 12 -
23. Modification of the Leased Asset - 12 -
24. Insurance - 13 -
25. Maintenance of the Leased Asset - 13 -
26. Total and Partial Loss of the Leased Asset - 13 -
27. Assignment of the Contract - 14 -
28. Breach and Contract Termination - 15 -
29. Lessee's Withdrawal from the Contract - 15 -
30. Expiration of the Contract without the Lessee Taking Ownership of the Leased Asset - 15 -
31. Lessee's Delay in Returning the Leased Asset and in Finalizing Ownership Procedures - 16 -
32. Death or Incapacity of the Lessee - 16 -
33. Contract Amendment - 16 -
34. Contract Registration - 16 -
35. Notifications - 16 -
36. Miscellaneous - 17 -
37. Applicable System and Jurisdiction - 17 - Appendix No. (1) Lease Payment Schedule - 18 - Appendix No. (2) Acceptance Certificate of the Leased Asset - 19 - Appendix No. (3) Ownership Transfer Certificate - 20 - Appendix No. (4) Fee Schedule - 21 -

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==Screenshot for page 4==

1. Financing Contract Summary Lessee Data Lessee Name: | Date: National ID or Resident ID No.: | Contract Reference No.:

Financing Data Details of Amount Payable | Amount in SAR | Financing Type Financing Amount | | Annual Percentage Rate (APR) Installment Cost Rate | | Contract Duration (in months) Installment Cost Amount | | Number of Installments Advance Lease Installment Amount | | Lease Installment Amount Lease Installment Due Dates | | Final Installment Amount Final Installment Due Date | | Advance Lease Installment Due Date Additional Notes | | Insurance | | Additional Costs* | | Total Amount Payable

Key Financing Contract Provisions Ownership Right | Article (7), (Definitions and Interpretations), page No. (7) Consequences of Late Payment of Installments | Article (15), (Late Payment Terms), page No. (10) Early Ownership Procedures | Article (17), (Early Ownership Terms), page No. (10) Procedures for Handling Collateral in Case of Decline (if any) | Article (20), (Lessee's Commitments and Declarations), page No. (11) Procedures for Handling Total and Partial Loss Cases | Article (26), (Total and Partial Loss of the Leased Asset), page No. (13) Procedures for Exercising the Right to Terminate the Financing Contract | Article (28), (Breach and Contract Termination), page No. (15) Withdrawal Right (if any)* | Article (29), (Lessee's Withdrawal from the Contract), page No. (16) Procedures for Handling Lessee's Death Case | Article (32), (Death or Incapacity of the Lessee), page No. (16) Lease Payment Schedule | (Lease Payment Schedule), Appendix No. (1), page No. (18) Subsequent Fee Schedule | (Fee Schedule), Appendix No. (4), page No. (22)

Notice: Reviewing this summary does not replace reading the entire financing contract and its appendices, nor does it exempt from the obligations stated therein. In case of any discrepancy between the contract summary and the lease payment schedule, the lease payment schedule shall prevail.

Lessee Signature upon Review and Receipt | And Stamp | Authorized Person Signature at the Financing Entity

• Insert the phrase "Not Applicable" if the relevant article does not apply to the financing contract.

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==Screenshot for page 5== Vehicle Financing Contract under the Ijarah Format Special Terms and Conditions Contract No.: Date: .../.../... AH (Corresponding to .../.../... AD)

2. Parties: Lessor: Name: Commercial Registration: Issue Date: Issue Place: National Address: Contact Data for Notifications: Contact Data for Objections and Complaints: Represented by signing by Mr./

Lessee: Name: Nationality: Date of Birth: ID Type: National ID / Resident ID No.: Issue Date: Issue Place: Expiry Date: Contact Address for Notifications: National Address: Home Phone: Office Phone: Mobile: Email: P.O. Box:

Guarantor: Amount: Guarantee Contract No.: Name: Nationality: Date of Birth: ID Type: National ID / Resident ID No.: Issue Date:

• If any.

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==Screenshot for page 6== Issue Place: Expiry Date: Contact Address for Notifications: National Address: Home Phone: Office Phone: Mobile: Email: P.O. Box:

3. Contract Details: 1-3 Leased Asset: Supplier / Agent | Manufacturing Company Vehicle Type | VIN / Chassis No. Vehicle Color | Warranty Duration from Agent Model | Vehicle Condition Other Specifications |

2-3 Financing Contract Duration: (Months/Years) Contract Start Date: .../.../... AH (Corresponding to .../.../... AD) Contract End Date: .../.../... AH (Corresponding to .../.../... AD)

3-3 Leased Asset Availability for Delivery: The Lessor shall make the Leased Asset available for delivery to the Lessee on: .../.../... AH (Corresponding to .../.../... AD), and the place of delivery of the Leased Asset shall be in the city of [City Name] at [any other details regarding the delivery location].

4. Financial Obligations: 1-4 Price of the Leased Asset: Saudi Riyals: .................... 2-4 Advance Lease Installment: Saudi Riyals: .................... 3-4 Financing Amount: Saudi Riyals: .................... 4-4 Installment Cost: The installment cost is fixed throughout the contract duration at a rate of ....... % of the financing amount, which equals ............ Saudi Riyals 5-4 Final Installment: Saudi Riyals: .................... 6-4 Additional Costs: Administrative fees and costs: ............ Saudi Riyals Insurance: ............ Saudi Riyals

• Insert the phrase "None" if the relevant item does not apply to the Leased Asset or is unknown at the time of contract signing.
• It does not include the installment cost, the advance lease installment, or other costs such as insurance, etc.
• The installment cost is calculated only on the financing amount, and is not calculated on other lessor expenses such as additional costs or otherwise. The advance lease installment is also not included in the calculation of the installment cost.
• If applicable. The Lessor must, upon concluding the contract, explain to the Lessee the payment mechanism for the final installment, mentioning the available payment options, including the option to pay the final installment in installments - if available - and clarify the installment cost calculation mechanism, and any additional fees.

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==Screenshot for page 7== License Plate Fees: ............ Saudi Riyals Vehicle Registration License Fees: ............ Saudi Riyals Value Added Tax: ............ Saudi Riyals Other Fees including ............: ............ Saudi Riyals Total: ............ Saudi Riyals (Please mark as appropriate and insert amounts)

7-4 Annual Percentage Rate (APR): % ............

8-4 Total Amount Payable: Financing Amount + Installment Cost + Unpaid Additional Costs: ............ Saudi Riyals

9-4 Lease Installments: Lease installments shall be paid on a (monthly/quarterly/semi-annual/annual) basis, and each lease installment shall be due on the [Day] of each Gregorian month (or its equivalent in the Hijri calendar) (provided that the Lessor - based on the Lessee's authorization - may deduct the relevant lease installment amount on its due date as stated in Appendix No. (1) (Lease Payment Schedule)). Deduction or withholding of the lease installment value on a date prior to its due date is prohibited. The due date shall be determined to align with the date of the Lessee's monthly salary deposit as referenced in Article (4-1). Monthly Lease Installment Amount: ....................

10-4 Payment Methods: Payment of lease installments and other obligations shall be made via one or more of the following methods: ( ) Deposit/Cash payment at one of the Lessor's branches or the branch designated by it ( ) Via the Sadd system to account [.] ( ) Authorization for the Lessor to directly deduct from his account No. [.] at Bank [.] on the date of lease installment payment ( ) Deposit into the Lessor's account with the following details: Lessor: Bank: Account Name: IBAN:

5. Guarantees: ( ) Guarantee (according to the approved form). ( ) Other .................... (Mark as appropriate)

• Added in case the Lessee grants the Lessor authorization for direct deduction from the account, provided that the payment schedule is designed according to expected salary deposit dates.
• The Lessor may apply to the Bank for additional accounts for deposit if needed.
• The appropriate guarantee for the Lessor shall be determined.
• If the guarantees are promissory notes: The Lessor shall not take any promissory note from the Lessee exceeding the value of the lease installments due from the Lessee annually according to the lease payment schedule, and commits not to present them to the competent executive authorities to claim amounts exceeding the unpaid and defaulted lease installment amounts. The Lessor must comply with Article (15) (Late Payment Terms) and Article (28) (Breach and Contract Termination) and all contract articles before presenting these notes to the executive authorities and claiming them. Additionally, the Lessor must return to the Lessee annually any promissory note for which the Lessee has paid the corresponding lease installments after stamping it to confirm the Lessee's payment of these installments. The Lessor must also bind its collection agencies or third-party collection service providers with the contract's clauses.

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==Screenshot for page 8== 6. Attached Appendices:

1. Appendix No. (1) Lease Payment Schedule.
2. Appendix No. (2) Acceptance Certificate of the Leased Asset.
3. Appendix No. (3) Ownership Transfer Certificate.
4. Appendix No. (4) Fee Schedule.

The Lessor and the Lessee have agreed that this contract consists of the General Terms and Conditions and the attached appendices mentioned, which together form a single integrated contract, and that this contract supersedes all prior negotiations, discussions, or additional agreements that conflict with it and were not included in the contract. The Lessee confirms receiving a copy of this contract before signing it, that he has reviewed it, studied its provisions, and understood it, and that he has received the necessary consultation and clear clarification from the Lessor to understand his rights and obligations under this contract and its appendices.

Lessee Signature

General Terms and Conditions Preamble: Whereas the Promisor to Lease (Lessee) has requested the Financing Entity (Lessor) to acquire the vehicle specified in this contract and lease it to him via a financing lease in accordance with the Financing Lease System issued by Royal Decree (M/48) dated 13/8/1433 AH and its executive regulations. And whereas the Financing Entity (Lessor) has acquired the vehicle specified in this contract and constructively received it in accordance with Sharia. Therefore, and whereas the Financing Entity (Lessor) wishes to lease the vehicle specified in this contract via a financing lease, and the Promisor to Lease (Lessee) wishes to lease it for personal use or any other lawful purposes, the Lessor's offer to lease the vehicle specified in this contract via a financing lease is bound by the Promisor to Lease's acceptance to lease the vehicle specified in this contract via a financing lease at the price stated in this contract and according to its terms and conditions. The provisions of the Financing Lease System issued by Royal Decree No. (M/48) dated 13/8/1433 AH and its executive regulations, the provisions of the Financing Companies Control System issued by Royal Decree (M/51) dated 13/8/1433 AH and its executive regulations, or the Banking Control System issued by Royal Decree No. (M/5) dated 22/2/1386 AH (as applicable), as well as the instructions issued by the Bank on this matter, shall apply to anything not stipulated in this contract. Based on the foregoing, and subject to the Special Terms and Conditions, the Lessor and the Lessee have agreed as follows:

7. Definitions and Explanations: 1-7 Definitions: Unless the context dictates otherwise, the following words and phrases in this contract shall have the meanings indicated alongside each of them as follows: "Late Notice": means the written notice provided by the Lessor to the Lessee in case of the Lessee's delay or refusal to pay any due lease installment on its due date for a specified period. The Lessor shall indicate in the notice the Lessee's delay in paying the due installment, and shall state in it that the Lessee's refusal to pay a certain number of installments or delay in their payment dates will result in the Lessee being considered in default and subject him (and the Guarantor, if any) to judicial and collection procedures at that time. This notice shall be sent in accordance with Article (35) (Notifications). "Default Notice": means the written notice provided by the Lessor to the Lessee in case of the Lessee's delay or refusal to pay a certain number of installments in accordance with Article (15) (Late Payment Terms) after the Lessor commits to sending all late notices to the Lessee. The Default Notice must include the following: (1) The reason(s) for default. (2) How to rectify and resolve the default. (3) The period granted to the Lessee to rectify the default before initiating the recovery of the Leased Asset through relevant authorities, which shall not be less than five (5) business days from the date of the Lessee's receipt of the notice. (4) How and under what terms to object to any of the claimed amounts. (5) The period granted after recovering the Leased Asset until the contract is terminated and enforcement procedures on the guarantees and disposal of the Leased Asset begin, which shall not be less than fifteen (15) business days. (6) How to halt the recovery procedures of the Leased Asset and the compensation due to the Lessor. This notice shall be sent in accordance with Article (35) (Notifications). "Leased Asset": means the Leased Asset specified in Article (3) (Contract Details). "Parties": means the Lessor and the Lessee. "Party" means either of them. "Partial Loss": means damage or deterioration of parts of the vehicle that diminishes or prevents its use, without exceeding the minimum threshold for total loss or damage determined by the competent authority in assessing vehicle damages. "Total Loss": means the total loss or damage of the vehicle such that repairing the vehicle is technically impractical or economically costly according to the standards approved by the competent authority in assessing vehicle damages. "Early Ownership": means accelerating the Lessee's ownership of the Leased Asset in accordance with the provisions of Article (17) (Early Ownership Terms).

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==Screenshot for page 9== "Advance Lease Installment": is the installment that the Lessee pays to the Lessor at the beginning of the contract to enable him to take possession of the Leased Asset. This installment is divided and amortized equally across all lease installments throughout the contract duration. "Primary Market": means financing contracts concluded between the Lessee and the Lessor. "Secondary Market": means the trading of the Lessor's rights arising from primary market contracts. "Basic Maintenance": means maintenance that is essential for keeping the Leased Asset in accordance with custom. "Operational Maintenance": means maintenance that the Leased Asset requires to continue its utility in accordance with custom. "Guarantor": means the party who committed to paying all or part of the Lessee's obligations arising from this contract. "Contract": means this contract, also referred to as the "Financing Contract" or "Financing Lease Contract". "Lessor (First Party)": means the party who leased the asset specified in this contract via a financing lease. "Lessee (Second Party)": means the party who leased the asset specified in this contract via a financing lease. "Bank": means the Saudi Central Bank. "Agent": means the agent of the relevant vehicle in the Kingdom of Saudi Arabia who acts on behalf of the manufacturing company and provides warranties on the vehicle. "Breach Status": has the meaning specified in Article (28) (Breach and Contract Termination). "Lease Installments": means the amounts to be paid by the Lessee throughout the contract duration according to the amounts and dates stipulated in Appendix No. (1) (Lease Installments), also referred to as the "Lease Installment" or "Installment". "Contract Register": means the register in which financing lease contracts concluded in the Kingdom or executed therein are recorded, as well as the sale contracts resulting from the financing lease, and any amendments to these contracts, in accordance with the provisions of the Financing Lease System and its executive regulations. "Acceptance Certificate of the Leased Asset": means the certificate issued by the Lessee specified in Appendix No. (2) (Acceptance Certificate of the Leased Asset) to confirm his thorough inspection of the Leased Asset, his acknowledgment that it matches the specifications, and his acceptance of it in its current state, in addition to serving as proof of the Lessee's receipt of the Leased Asset on the date of its signing. "Ownership Transfer Certificate": means the ownership transfer certificate according to the form shown in Appendix No. (3) (Ownership Transfer Certificate), which results in the transfer of ownership of the Leased Asset from the Lessor to the Lessee. "Early Ownership Value": means the amounts due upon the Lessee's desire for early ownership of the Leased Asset in accordance with Article (17) (Early Ownership Terms). "Ownership Right Value": means (1) The unamortized portion of the Advance Lease Installment related to the remaining lease installments for the period between the time of contract termination or rescission until the contract end date, (2) Plus: (a) The amount exceeding the Early Ownership amount from the compensation or amounts collected for the Lessor as a result of contract termination or rescission, in case the termination is due to a reason attributable to the Lessee. (b) Or the amount exceeding the remaining financing amount and what the Lessor pays to a third party due to the contract of non-refundable expenses from the compensation or amounts collected for the Lessor as a result of contract termination or rescission, in case the termination is due to a reason not attributable to the Lessee. Compensation and amounts refer to insurance payouts in case of damage to the Leased Asset or the Lessor's amount after contract termination or rescission. "Annual Percentage Rate (APR)": is the discount rate at which the present value of all installments due from the Lessee, representing the total amount payable, is equal to the present value of the financing amount installments available to the Lessee, on the date when the financing amount or its first installment is available to the Lessee, calculated according to the equation set forth in the Executive Regulations of the Financing Companies Control System. "Contract Documents": means this contract, including the Special Terms and Conditions, the General Terms and Conditions, and the attached appendices. "Guarantee Documents": means the documents endorsed in Article (5) (Guarantees) and submitted by or on behalf of the Lessee to secure the Lessee's obligations under this contract. "Business Day": means a day when banks in the Kingdom of Saudi Arabia normally operate, or a day when government authorities normally operate, specifically regarding registration, notarization, discharges, and other matters handled by government authorities.

2-7 Explanations: In this contract, and unless the context dictates otherwise: 1-2-7 The purpose of headings is solely to facilitate reference. 2-2-7 Reference to "Article" or "Appendix" is a reference to the Article or Appendix in this contract. 3-2-7 Words referring to the singular are intended to refer to the plural, and vice versa. 4-2-7 Reference to the "Contract" is a reference to the Special Terms and Conditions, the General Terms and Conditions, and the contract appendices, including any modifications, additions, or replacements (agreed upon in writing by the parties) that may occur from time to time.

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==Screenshot for page 10== 5-2-7 Reference to "Party", "Lessor", "Lessee", "Guarantor", or any other person shall be construed as references to their general and special successors, permitted assignees, and permitted transferees. 6-2-7 Reference to "Amendment" includes reference to any completion, replacement, re-drafting, or issuance, and the word "amended" shall be construed to include these meanings as well. 7-2-7 Reference to time is a reference to the Kingdom of Saudi Arabia time zone, and reference to years and months is a reference to them according to the Hijri calendar (unless otherwise stated). 8-2-7 "Saudi Riyal" or "SAR" means the official currency of the Kingdom of Saudi Arabia.

8. Contract Execution and Effectiveness: 1-8 This contract shall become effective as of the contract start date specified in Article (3-3). 2-8 The Lessor has leased to the Lessee a financing lease, and the Lessee has fully accepted the lease at the rent and manner specified in this contract in accordance with the terms and conditions stated herein and according to related systems. 3-8 The obligations of each party under this contract shall remain in effect (even after the contract end date) until they are fulfilled, or the contract is terminated, or one party accepts the other. 4-8 The Lessee shall submit all guarantee documents to the Lessor on the contract start date.

9. Contract Duration: The contract duration begins on the contract start date and ends on the contract end date as shown in Article (3-3), with the start and end dates included in the contract duration. If the contract is terminated before the end date, that earlier date shall constitute the contract end date.

10. Promise to Transfer Ownership: [Option One: The Lessor promises to transfer ownership of the Leased Asset to the Lessee at the end of the contract by way of sale, by signing the Ownership Transfer Certificate; subject to (1) the Lessee paying all amounts due from him under this contract. (b) and paying [the Final Installment] - if applicable -] [Option Two: The Lessor promises to transfer ownership of the Leased Asset to the Lessee at the end of the term by way of gift - by signing the Ownership Transfer Certificate - after the Lessee pays all amounts due from him under this contract].

11. Lessor's Ownership of the Leased Asset: The Lessor shall be the owner of the Leased Asset throughout the contract duration until the Lessee fulfills all amounts due from him, and except for the cases stipulated in this contract where the Lessee is entitled to the Ownership Right Value, and as stipulated in Article (10) (Promise to Transfer Ownership), the Lessee shall have no right or interest in the Leased Asset other than as a lessee.

12. Lessor's Delivery of the Leased Asset: 1-12 The Lessor commits to delivering the Leased Asset to the Lessee or making it available to him on the availability date at the agreed delivery location, and in any case, no later than (10) business days from the date the Leased Asset is made available, unless there is a reason beyond the Lessor's control preventing the delivery or making it available to the Lessee at the specified time. 2-12 In case the period mentioned in Paragraph (1-12) above is exceeded for a reason beyond the Lessor's control preventing him from delivering or making the Leased Asset available, the Lessor shall grant an additional period of (10) business days to deliver or make the Leased Asset available to the Lessee. If this period expires, the Lessee shall have the option to terminate the contract and recover the amounts he paid in full (including the Advance Lease Installment amount, administrative fees, and others) or grant the Lessor a new specified period to deliver the Leased Asset. 3-12 The Lessor commits to issuing the necessary authorization to enable the Lessee to use the Leased Asset, provided the Lessee has not delayed in paying his due installments in accordance with (Late Payment Terms) (which includes,