Subordinated Loan Agreement Template

Business-in-a-Box's Subordinated Loan Agreement Template

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This subordinated loan agreement template has 6 pages and is a MS Word file type listed under our legal agreements documents.

Sample of our subordinated loan agreement template:

SUBORDINATED LOAN AGREEMENT This Subordinated Loan Agreement (the "Agreement") is effective [DATE], BETWEEN: [YOUR FULL NAME] (the "Lender"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE] with its address located at: [COMPLETE ADDRESS] AND: [SECOND PARTY NAME] (the "Borrower"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its address located at: [COMPLETE ADDRESS] WHEREAS, the Borrower is required to maintain certain financial resources as part of its regulatory obligations. WHEREAS, the Lender has agreed to lend [has lent] to the Borrower an amount as set out herein upon and subject to the terms contained in this Agreement. WHEREAS, the Borrower wishes to use the Loan as a Qualifying Subordinated Loan, the circumstances giving rise to the Loan and the effective subordination of the Loan. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: DEFINITIONS 1.1 "Agreement" means this Agreement and any amendment or variation hereto which has been agreed between the parties and which has received the prior consent in writing of the parties; 1.2 "Business Day" means any day except Saturday, Sunday or a national bank or public holiday; "Excluded Liabilities" means liabilities which are expressed to be, and, in the opinion of the Insolvency Officer of the Borrower do rank as junior to the Subordinated Liabilities in the Insolvency of the Borrower; "Insolvency" means and includes the commencement of the liquidation, winding up, bankruptcy and sequestration (whichever term may apply to the Lender or the Borrower) or the equivalent in any other jurisdiction to which the Lender or the Borrower may be subject; "Liabilities" means all present and future sums, Liabilities and obligations payable or owing by the Borrower (whether actual or contingent, jointly or severally or otherwise howsoever); "Loan" means the indebtedness of the Borrower to the Lender referred to in Sub-clause 2.1 of this Agreement; "Qualifying Subordinated Loan" means a qualifying subordinated loan on terms approved by the Lender and signed by the parties thereto; "Senior Liabilities" means all Liabilities except the Subordinated Liabilities and the Excluded Liabilities; "Subordinated Liabilities" means all Liabilities to the Lender in respect of the Loan made or deemed to be made hereunder and all interest payable thereon, where applicable. THE LOAN The Borrower hereby acknowledges its indebtedness to the Lender in] the sum of [ ] as an unsecured Loan [to be drawn down in cash] [drawn down in cash] upon and subject to the terms and conditions of this Agreement. The terms for repayment of the Loan are: [Detail terms for repayment]: INTEREST Until repayment of the Loan in full, the Borrower will pay to the Lender interest on the Loan, such interest to be calculated and to be payable as hereinafter provided. [Enter details of interest calculations and manner and time of payments.] Payments of interest at a rate not exceeding the rate provided for in Sub-clause 3.2 above may be made without prior notice to or prior written consent of the parties, except that no such payment may be made without the prior written approval of the Lender, where, immediately after the payment, the Borrower's Financial Resources would be less than or equal to the Financial Resources Requirements. REPAYMENT OF THE LOAN Subject to the provisions of Clause 7 of this Agreement, the Loan shall be repayable upon the expiry of (___) months' written notice given by the Lender to the Borrower, provided that: such notice shall cease to have effect if the winding up of the Borrower commences before the date on which such notice expires. EARLY REPAYMENT Subject to the provisions of Clause 7 of this Agreement, the Borrower may make an early repayment of the whole or any part of the Loan, provided that the Borrower must give to the Lender not less than (___) Business Days' prior notice of its intention to make such repayment, specifying the amount thereof and the date on which it is to be made (such notice to be ineffective if the winding up of the Borrower commences before the date on which the notice expires); and the Borrower shall simultaneously pay all interest accrued to the date of repayment. EVENT OF DEFAULT Subject to Clause 7, if, in respect of the Loan, default is made for a period of: Seven (7) days or more in the payment of any principal due; or Fourteen (14) days or more in the payment of any interest due; the Lender may enforce the payment by undertaking the procedures required to institute proceedings for the Insolvency of the Borrower after giving seven (7) Business Days' prior written notice to the Borrower of its intention to do so. If an order is made or an effective resolution is passed for the Insolvency of the Borrower, the Loan shall forthwith become repayable. No remedy against the Borrower other than as specifically provided by this Clause 6 shall be available to the Lender, whether for the recovery of amounts owing under this Agreement or in respect of any breach by the Borrower of any of its obligations under this Agreement. SUBORDINATION Notwithstanding the provisions of Clauses 3, 4, 5 and 6 hereof, the rights of the Lender in respect of the Subordinated Liabilities are subordinated in all respects to the Senior Liabilities, and, accordingly, payment of any amount (whether principal, interest or otherwise and whether by way of repayment or prepayment) of the Subordinated Liabilities is conditional upon: (Prior to the Insolvency of the Lender or the Borrower) the Borrower being in compliance with its Financial Resources Requirements prevailing at the time of payment by the Borrower, and accordingly, no such payment which would otherwise fall due for payment shall be payable, except to the extent that the Borrower could make such payment and still be in compliance with such Financial Resources Requirements immediately thereafter; (After the Insolvency of the Lender or the Borrower) the Borrower being "solvent" at the time of, and immediately after, the payment by the Borrower and accordingly, no such amount which would otherwise fall due for payment shall be payable, except to the extent that the Borrower could make such payment and still be "solvent"; and, in either case: For the purposes of Sub-clause 7.1.2 above, the Borrower shall be "solvent" if it is able to pay its debts (other than the Subordinated Liabilities) in full, disregarding: obligations which are not payable or capable of being established or determined in the Insolvency of the Borrower (for the avoidance of doubt, other than contingent obligations, which shall be treated as if matured in the full amount); and the Excluded Liabilities.

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Document content

This subordinated loan agreement template has 6 pages and is a MS Word file type listed under our legal agreements documents.

Sample of our subordinated loan agreement template:

SUBORDINATED LOAN AGREEMENT This Subordinated Loan Agreement (the "Agreement") is effective [DATE], BETWEEN: [YOUR FULL NAME] (the "Lender"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE] with its address located at: [COMPLETE ADDRESS] AND: [SECOND PARTY NAME] (the "Borrower"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its address located at: [COMPLETE ADDRESS] WHEREAS, the Borrower is required to maintain certain financial resources as part of its regulatory obligations. WHEREAS, the Lender has agreed to lend [has lent] to the Borrower an amount as set out herein upon and subject to the terms contained in this Agreement. WHEREAS, the Borrower wishes to use the Loan as a Qualifying Subordinated Loan, the circumstances giving rise to the Loan and the effective subordination of the Loan. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: DEFINITIONS 1.1 "Agreement" means this Agreement and any amendment or variation hereto which has been agreed between the parties and which has received the prior consent in writing of the parties; 1.2 "Business Day" means any day except Saturday, Sunday or a national bank or public holiday; "Excluded Liabilities" means liabilities which are expressed to be, and, in the opinion of the Insolvency Officer of the Borrower do rank as junior to the Subordinated Liabilities in the Insolvency of the Borrower; "Insolvency" means and includes the commencement of the liquidation, winding up, bankruptcy and sequestration (whichever term may apply to the Lender or the Borrower) or the equivalent in any other jurisdiction to which the Lender or the Borrower may be subject; "Liabilities" means all present and future sums, Liabilities and obligations payable or owing by the Borrower (whether actual or contingent, jointly or severally or otherwise howsoever); "Loan" means the indebtedness of the Borrower to the Lender referred to in Sub-clause 2.1 of this Agreement; "Qualifying Subordinated Loan" means a qualifying subordinated loan on terms approved by the Lender and signed by the parties thereto; "Senior Liabilities" means all Liabilities except the Subordinated Liabilities and the Excluded Liabilities; "Subordinated Liabilities" means all Liabilities to the Lender in respect of the Loan made or deemed to be made hereunder and all interest payable thereon, where applicable. THE LOAN The Borrower hereby acknowledges its indebtedness to the Lender in] the sum of [ ] as an unsecured Loan [to be drawn down in cash] [drawn down in cash] upon and subject to the terms and conditions of this Agreement. The terms for repayment of the Loan are: [Detail terms for repayment]: INTEREST Until repayment of the Loan in full, the Borrower will pay to the Lender interest on the Loan, such interest to be calculated and to be payable as hereinafter provided. [Enter details of interest calculations and manner and time of payments.] Payments of interest at a rate not exceeding the rate provided for in Sub-clause 3.2 above may be made without prior notice to or prior written consent of the parties, except that no such payment may be made without the prior written approval of the Lender, where, immediately after the payment, the Borrower's Financial Resources would be less than or equal to the Financial Resources Requirements. REPAYMENT OF THE LOAN Subject to the provisions of Clause 7 of this Agreement, the Loan shall be repayable upon the expiry of (___) months' written notice given by the Lender to the Borrower, provided that: such notice shall cease to have effect if the winding up of the Borrower commences before the date on which such notice expires. EARLY REPAYMENT Subject to the provisions of Clause 7 of this Agreement, the Borrower may make an early repayment of the whole or any part of the Loan, provided that the Borrower must give to the Lender not less than (___) Business Days' prior notice of its intention to make such repayment, specifying the amount thereof and the date on which it is to be made (such notice to be ineffective if the winding up of the Borrower commences before the date on which the notice expires); and the Borrower shall simultaneously pay all interest accrued to the date of repayment. EVENT OF DEFAULT Subject to Clause 7, if, in respect of the Loan, default is made for a period of: Seven (7) days or more in the payment of any principal due; or Fourteen (14) days or more in the payment of any interest due; the Lender may enforce the payment by undertaking the procedures required to institute proceedings for the Insolvency of the Borrower after giving seven (7) Business Days' prior written notice to the Borrower of its intention to do so. If an order is made or an effective resolution is passed for the Insolvency of the Borrower, the Loan shall forthwith become repayable. No remedy against the Borrower other than as specifically provided by this Clause 6 shall be available to the Lender, whether for the recovery of amounts owing under this Agreement or in respect of any breach by the Borrower of any of its obligations under this Agreement. SUBORDINATION Notwithstanding the provisions of Clauses 3, 4, 5 and 6 hereof, the rights of the Lender in respect of the Subordinated Liabilities are subordinated in all respects to the Senior Liabilities, and, accordingly, payment of any amount (whether principal, interest or otherwise and whether by way of repayment or prepayment) of the Subordinated Liabilities is conditional upon: (Prior to the Insolvency of the Lender or the Borrower) the Borrower being in compliance with its Financial Resources Requirements prevailing at the time of payment by the Borrower, and accordingly, no such payment which would otherwise fall due for payment shall be payable, except to the extent that the Borrower could make such payment and still be in compliance with such Financial Resources Requirements immediately thereafter; (After the Insolvency of the Lender or the Borrower) the Borrower being "solvent" at the time of, and immediately after, the payment by the Borrower and accordingly, no such amount which would otherwise fall due for payment shall be payable, except to the extent that the Borrower could make such payment and still be "solvent"; and, in either case: For the purposes of Sub-clause 7.1.2 above, the Borrower shall be "solvent" if it is able to pay its debts (other than the Subordinated Liabilities) in full, disregarding: obligations which are not payable or capable of being established or determined in the Insolvency of the Borrower (for the avoidance of doubt, other than contingent obligations, which shall be treated as if matured in the full amount); and the Excluded Liabilities.

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