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The Loan Restructuring Agreement is a critical document used when existing loan facilities need to be modified due to changes in the borrower's financial situation, market conditions, or business circumstances. This agreement, governed by Saudi Arabian law, must carefully balance commercial necessity with Sharia compliance requirements. It's typically employed when borrowers face challenges meeting their original payment obligations but remain viable businesses. The document comprehensively addresses revised payment schedules, profit rates, security arrangements, and covenant packages, all while ensuring compliance with Islamic finance principles and Saudi Central Bank (SAMA) regulations. The agreement includes essential provisions for monitoring the borrower's performance, reporting requirements, and remedies available to the lender, making it a crucial tool for managing distressed loans while maintaining regulatory compliance.

1. Parties: Identification of the lender(s), borrower(s), and any guarantors or security providers

2. Background: Details of the original facility, reasons for restructuring, and summary of existing security arrangements

3. Definitions and Interpretation: Definitions of terms used in the agreement and interpretation principles, including Sharia-compliant terminology

4. Restructuring Terms: Core terms of the restructuring including revised payment schedule, profit rate adjustments, and compliance with Sharia principles

5. Conditions Precedent: Conditions that must be satisfied before the restructuring becomes effective

6. Representations and Warranties: Updated statements of fact and assurances from the borrower about their financial condition and ability to perform

7. Continuing Security: Confirmation of existing security arrangements and their continuation under the restructured facility

8. Payment Provisions: Detailed mechanics of payments, including payment dates, amounts, and Sharia-compliant profit calculations

9. Covenants: Ongoing obligations of the borrower, including financial covenants and reporting requirements

10. Events of Default: Circumstances that would trigger a default under the restructured facility

11. Sharia Compliance: Specific provisions ensuring the restructuring complies with Islamic finance principles

12. Governing Law and Jurisdiction: Confirmation of Saudi law governance and jurisdiction of Saudi courts