[{"data":1,"prerenderedAt":528},["ShallowReactive",2],{"document-subordinated-loan-agreement-D12877":3},{"document":4,"label":21,"preview":11,"thumb":22,"thumb600":23,"description":5,"descriptionCustom":6,"apiDescription":5,"pages":8,"extension":10,"parents":24,"breadcrumb":28,"related":36,"customDescModule":180,"customdescription":6,"mdFm":181,"mdProseHtml":527},{"description":5,"descriptionCustom":6,"label":7,"pages":8,"size":9,"extension":10,"preview":11,"thumb":12,"svgFrame":13,"seoMetadata":14,"parents":16,"keywords":15},"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.",null,"Subordinated Loan Agreement","6",513,"doc","https://templates.business-in-a-box.com/imgs/1000px/subordinated-loan-agreement-D12877.png","https://templates.business-in-a-box.com/imgs/250px/12877.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12877.xml",{"title":15,"description":6},"subordinated loan agreement",[17,20],{"label":18,"url":19},"Legal Agreements","/templates/business-legal-agreements/",{"label":18,"url":19},"Subordinated Loan Agreement Template","https://templates.business-in-a-box.com/imgs/400px/12877.png","https://templates.business-in-a-box.com/imgs/600px/12877.png",[25,17,20],{"label":26,"url":27},"Templates","/templates/",[29,30,33],{"label":26,"url":27},{"label":31,"url":32},"Finance & Accounting","/templates/finance-accounting/",{"label":34,"url":35},"Business Financing & Loans","/templates/business-financing-and-loans/",[37,41,45,49,53,57,61,66,70,74,78,82,86,106,122,137,151,166],{"label":38,"url":39,"thumb":40,"extension":10},"Loan Agreement","/template/loan-agreement-D417","https://templates.business-in-a-box.com/imgs/250px/417.png",{"label":42,"url":43,"thumb":44,"extension":10},"Shareholder Loan Agreement","/template/shareholder-loan-agreement-D13239","https://templates.business-in-a-box.com/imgs/250px/13239.png",{"label":46,"url":47,"thumb":48,"extension":10},"Equipment Loan Agreement","/template/equipment-loan-agreement-D12843","https://templates.business-in-a-box.com/imgs/250px/12843.png",{"label":50,"url":51,"thumb":52,"extension":10},"Loan Policy","/template/loan-policy-D13274","https://templates.business-in-a-box.com/imgs/250px/13274.png",{"label":54,"url":55,"thumb":56,"extension":10},"Loan Agreement Stockholder to Corporation","/template/loan-agreement-stockholder-to-corporation-D418","https://templates.business-in-a-box.com/imgs/250px/418.png",{"label":58,"url":59,"thumb":60,"extension":10},"Deed of Pledge Loan","/template/deed-of-pledge-loan-D983","https://templates.business-in-a-box.com/imgs/250px/983.png",{"label":62,"url":63,"thumb":64,"extension":65},"Loan Calculator","/template/loan-calculator-D421","https://templates.business-in-a-box.com/imgs/250px/421.png","xls",{"label":67,"url":68,"thumb":69,"extension":10},"Loan Application_Review Form","/template/loan-application_review-form-D419","https://templates.business-in-a-box.com/imgs/250px/419.png",{"label":71,"url":72,"thumb":73,"extension":10},"Line Of Credit Agreement","/template/line-of-credit-agreement-D14003","https://templates.business-in-a-box.com/imgs/250px/14003.png",{"label":75,"url":76,"thumb":77,"extension":10},"Revolving Credit Agreement","/template/revolving-credit-agreement-D14051","https://templates.business-in-a-box.com/imgs/250px/14051.png",{"label":79,"url":80,"thumb":81,"extension":65},"Loan Calculator with Extra Payments","/template/loan-calculator-with-extra-payments-D420","https://templates.business-in-a-box.com/imgs/250px/420.png",{"label":83,"url":84,"thumb":85,"extension":10},"Collateral Decision_Request for Loan Documents","/template/collateral-decision_request-for-loan-documents-D414","https://templates.business-in-a-box.com/imgs/250px/414.png",{"description":87,"descriptionCustom":6,"label":88,"pages":89,"size":90,"extension":10,"preview":91,"thumb":92,"svgFrame":93,"seoMetadata":94,"parents":95,"keywords":104,"url":105},"PROMISSORY NOTE This Promissory Note (the \"Note\") is made and effective the [DATE], BETWEEN: [LENDER NAME] (the \"Lender\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] (the \"Borrower\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] TERMS FOR VALUE RECEIVED, the Borrower promises to pay to the order of Lender, at its principal office located at [ADDRESS], or at such other place that is designated in writing by the holder hereof, the principal sum of [AMOUNT], together with all charges and interest herein provided, payable at the rate and in the manner hereinafter set forth: Borrower shall make monthly payments of principal and interest at the rate of [%] per annum based upon an amortization of [NUMBER] months. Monthly payments shall be due on or before the first day of each month with the first payment being due on or before [DATE]. If not sooner paid, all amounts due under this Note, including principal, interest and other charges shall be due and payable in full on or before the first day of [MONTH], [YEAR] (the \"Maturity Date\"). Time is of the essence of the payment obligations hereunder and each monthly payment shall be due and payable on or before the first day of each month. This Note is and will be secured by a certain first priority security interest in all of the tangible and intangible property of the Borrower, to be recorded in all applicable governmental offices. The parties shall execute a separate security agreement, in form and substance acceptable to the Lender in all respects. Borrower agrees to execute any such security agreements presented by the Lender or other documents required by the Lender in order to perfect its security interest in the above described property. Said Security Agreement and any other instruments and documents executed in connection with or given as security for this Note shall hereinafter be referred to collectively as the \"Loan Documents.\" All of the terms, covenants, Conditions, representations and warranties contained in the Loan Documents are hereby made part of this Note to the same extent and with the same force and effect as if fully set forth herein. If all or any portion of any payment due hereunder is not received by the Lender within [NUMBER] calendar days after the date when such payment is due, Borrower shall pay a late charge equal to [%] of such payment, such late charge to be immediately due and payable without demand by Lender. Borrower shall have the right to prepay all (but not a portion) of the indebtedness evidenced by this Note at any time, by paying the Lender an amount equal to the sum of (I) the principal balance then outstanding, (ii) all interest accrued to the date of such prepayment, (iii) all interest calculated through the Maturity Date, and (iv) any late charge or charges then due and owing. If any payment under this Note is not paid in full by the [DAY] of any month during the term hereof or if the entire amount due as represented by this Note is not paid in full on or before the Maturity Date, or should default be made in the performance or observation of any of the terms, covenants, or conditions contained in the Loan Documents, or if any representation or warranty contained in the Loan Documents is breached or is or becomes untrue, this Note shall be in default, and the entire principal amount outstanding hereunder, accrued interest thereon, all late charges, if any, and any and all other charges due hereunder, shall, at Lender's option, immediately become due and payable, without further notice, the giving of such notice being expressly waived by the Borrower","Promissory Note","3",39,"https://templates.business-in-a-box.com/imgs/1000px/promissory-note-D434.png","https://templates.business-in-a-box.com/imgs/250px/434.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#434.xml",{"title":6,"description":6},[96,98,101],{"label":31,"url":97},"finance-accounting",{"label":99,"url":100},"Business Loans","business-loan",{"label":102,"url":103},"Promissory Notes","promisory-note","promissory note","/template/promissory-note-D434",{"description":107,"descriptionCustom":6,"label":108,"pages":109,"size":9,"extension":10,"preview":110,"thumb":111,"svgFrame":112,"seoMetadata":113,"parents":115,"keywords":114,"url":121},"PERSONAL GUARANTEE This Personal Guarantee (the \"Agreement\") is effective [DATE], BETWEEN: [FIRST PARTY NAME] (the \"Guarantor\"), an individual with his main address located at: [YOUR COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] (the \"Second Party\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] I, [NAME OF GUARANTOR], residing at [COMPLETE ADDRESS], hereby personally and solidarity guarantee all of the obligations of [YOUR COMPANY NAME] and agree to be bound solidarity with [YOUR COMPANY NAME] for the prompt performance of [YOUR COMPANY NAME]'s obligations under that certain [SPECIFY] Agreement dated [DATE] (the \"Agreement\") between [YOUR COMPANY NAME] and [COMPANY NAME], including without limitation the payment of all goods, wares and merchandise as [YOUR COMPANY NAME] may from time to time select and purchase on credit from [COMPANY NAME], and hereby expressly renounce to the benefits of division and discussion. Furthermore, I agree that waive may extend the time for payment of any amounts owing to it by waive and/or may waive any default by waive without it in any way lessening or limiting my liability hereunder. Notwithstanding the foregoing, my guarantee hereunder to pay any and all amounts owing by [YOUR COMPANY NAME] to [COMPANY NAME] shall be limited to the sum of [AMOUNT] OR [%] of such outstanding amount.","Personal Guarantee","2","https://templates.business-in-a-box.com/imgs/1000px/personal-guarantee-D405.png","https://templates.business-in-a-box.com/imgs/250px/405.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#405.xml",{"title":114,"description":6},"personal guarantee",[116,117,118],{"label":31,"url":97},{"label":99,"url":100},{"label":119,"url":120},"Guaranties & Collateral","guaranties-collateral","/template/personal-guarantee-D405",{"description":123,"descriptionCustom":6,"label":124,"pages":125,"size":126,"extension":10,"preview":127,"thumb":128,"svgFrame":129,"seoMetadata":130,"parents":131,"keywords":135,"url":136},"SECURITY AGREEMENT This Security Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [SECURED PARTY NAME] (the \" Secured Party\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] (the \"Debtor\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] For value received, the undersigned Debtor, promises to pay to the order of [name], together with any other holder of this note (\"Secured Party\"), [amount], with interest at the rate of [%] per annum. Payment shall be made in successive equal monthly installments of [amount]. Each such Installment is payable on the [day] of each month, commencing on [date]. Recitals WHEREAS, the Secured Party has extended to the Debtor a certain loan as evidenced by a certain promissory note, in the original principal amount equal to [amount] dated on even date herewith (the \"Note\"); and WHEREAS, the Debtor wishes to grant a first priority security interest in and to all of the Debtor's tangible and intangible personal property pursuant to the terms hereof; NOW, THEREFORE, for and in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto covenant and agree as follows: DEFINITIONS The following terms shall have the meanings herein specified unless the context otherwise requires. Such definitions shall be equally applicable to the singular and plural forms of the terms defined: \"Contracts\" shall mean all contracts between the Debtor and one or more additional parties. \"Contract Rights\" shall mean all rights of the Debtor (including, without limitation, all rights to payment) under each Contract. \"Copyrights\" shall mean any [country] copyright to which the Debtor now or hereafter has title, as well as any application for a [country] copyright hereafter made by the Debtor. \"Equipment\" shall mean any \"equipment,\" as such term is defined in the [law or code] as in effect on the date hereof in the State of [state/province], now or hereafter owned by Debtor and, in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned by the Debtor and any and all additions, substitutions and replacements of, any of the foregoing, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto. \"General Intangibles\" shall have the meaning assigned that term under the [LAW OR CODE] as in effect on the date hereof in the State of [state/province]. \"Goods\" shall have the meaning assigned that term under the [LAW OR CODE] as in effect on the date hereof in the State of [state/province]. \"Inventory\" shall mean all raw materials, workinprocess, and finished inventory of the Debtor of every type or description and all documents of title covering such inventory, and shall specifically include all \"inventory\" as such term is defined in the [law or code] as in effect on the date hereof in the State of [state/province], now or hereafter owned by the Debtor. \"Marks\" shall mean any trademarks and service marks now held or hereafter acquired by the Debtor, which are registered in the [country] Patent and Trademark Office, as well as any unregistered marks used by the Debtor in the [COUNTRY] and trade dress, including logos and/or designs, in connection with which any of these registered or unregistered marks are used. \"Obligations\" shall mean: (i) all indebtedness, obligations and liabilities (including, without limitation, guarantees and other contingent liabilities) of the Debtor to the Secured Party, including but not limited to the Note; (ii) any and all sums advanced by the Secured Party in order to preserve the Collateral or preserve its security interest in the Collateral; and (iii) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations or liabilities of the Debtor referred to in clause (i), after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing or realizing on the Collateral, or of any exercise by the Collateral Agent of its rights hereunder, together with reasonable attorneys' fees and court costs. \"Patents\" shall mean any [country] patent to which the Debtor now or hereafter has title, as well as any application for a [country] patent now or hereafter made by Debtor. \"Proceeds\" shall have the meaning assigned that term under the [law or code] as in effect in the State of [state/province] on the date hereof or under other relevant law and, in any event, shall include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Secured Party or the Debtor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to the Debtor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral. \"Receivables\" shall mean any \"account\" as such term is defined in the [law or code] as in effect on the date hereof in the State of [STATE/PROVINCE], now or hereafter owned by Debtor and, in any event, shall include, but shall not be limited to, all of the Debtor's rights to payment for goods sold or leased or services performed by the Debtor, whether now in existence or arising from time to time hereafter, including, without limitation, rights evidenced by an account, note, contract, security agreement, or other evidence of indebtedness or security, together with (i) all security pledged, assigned, hypothecated or granted to or held by the Debtor to secure the foregoing; (ii) all of the Debtor's right, title and interest in and to any goods, the sale of which gave rise thereto; (iii) all guarantees, endorsements and indemnifications on, or of, any of the foregoing; (iv) all powers of attorney for the execution of any evidence of indebtedness or security or other writing in connection therewith; (v) all books, records, ledger cards and invoices relating thereto; (vi) all evidences of the filing of financing statements and other statements and the registration of other instruments in connection therewith and amendments thereto, notices to other creditors or secured parties, and certificates from filing or other registration officers; (vii) all credit information, reports and memoranda relating thereto and (viii) all other writings related in any way to the foregoing. GRANT OF SECURITY INTEREST The Debtor does hereby grant to the Secured Party a continuing security interest of first priority in all of the right, title and interest of the Debtor in, to and under all of the following property whether now existing or hereafter created or arising: ","Security Agreement","10",96,"https://templates.business-in-a-box.com/imgs/1000px/security-agreement-D915.png","https://templates.business-in-a-box.com/imgs/250px/915.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#915.xml",{"title":6,"description":6},[132,134],{"label":18,"url":133},"business-legal-agreements",{"label":18,"url":133},"security agreement","/template/security-agreement-D915",{"description":138,"descriptionCustom":6,"label":139,"pages":89,"size":9,"extension":10,"preview":140,"thumb":141,"svgFrame":142,"seoMetadata":143,"parents":145,"keywords":144,"url":150},"NON-DISCLOSURE AGREEMENT (NDA) This Non-Disclosure Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Disclosing Party\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [RECEIVING PARTY NAME] (the \"Receiving Party\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS, Receiving Party has been or will be engaged in the performance of work on [DESCRIBE]; and in connection therewith will be given access to certain confidential and proprietary information; and WHEREAS, Receiving Party and Disclosing Party wish to evidence by this Agreement the manner in which said confidential and proprietary material will be treated. NOW, THEREFORE, it is agreed as follows: NON-DISCLOSURE OF CONFIDENTIAL INFORMATION Both Parties understand and agree that each Party may have access to the confidential information of the other party. For the purposes of this Agreement, \"Confidential Information\" means proprietary and confidential information about the Disclosing Party's (or it's suppliers') business or activities. Such information includes all business, financial, technical, and other information marked or designated by such Party as \"confidential\" or \"proprietary.\" Confidential Information also includes information which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential. For the purposes of this Agreement, Confidential Information does not include: Information that is currently in the public domain or that enters the public domain after the signing of this Agreement. Information a Party lawfully receives from a third Party without restriction on disclosure and without breach of a non-disclosure obligation. Information that the Receiving Party knew prior to receiving any Confidential Information from the Disclosing Party. Information that the Receiving Party independently develops without reliance on any Confidential Information from the Disclosing Party. Each Party agrees that it will not disclose to any third Party or use any Confidential Information disclosed to it by the other Party except when expressly permitted in writing by the other Party. Each Party also agrees that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other Party in its possession or control. TERM The term of this Agreement is [number] of [years/months] from the date of execution by both Parties. TITLE The Receiving Party agrees that all Confidential Information furnished by the Disclosing Party shall remain the sole property of the Disclosing Party. DISCLAIMER","Non Disclosure Agreement Nda","https://templates.business-in-a-box.com/imgs/1000px/non-disclosure-agreement-nda-D12692.png","https://templates.business-in-a-box.com/imgs/250px/12692.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12692.xml",{"title":144,"description":6},"non disclosure agreement nda",[146,147],{"label":18,"url":133},{"label":148,"url":149},"Confidentiality Agreements","confidentiality-agreement","/template/non-disclosure-agreement-nda-D12692",{"description":152,"descriptionCustom":6,"label":153,"pages":89,"size":154,"extension":10,"preview":155,"thumb":156,"svgFrame":157,"seoMetadata":158,"parents":159,"keywords":164,"url":165},"TERM SHEET Issue: [Venture Capital FIRM] (\"VC\") and/or any member of its corporate group (\"the VC Group\") will purchase up to [AMOUNT] Series A Convertible Preferred Stock (\"Series A\") newly issued by [YOUR COMPANY NAME] (the \"Company\") at a price per share of [PRICE] (the \"Purchase Price\"). In addition, other investors shall purchase at least [AMOUNT] but not more than [AMOUNT] of newly issued Series A at the Purchase Price. The shares of Series A will be convertible at any time at the option of the holder into common shares of the Company (\"Common Stock\") on a one-for-one basis, adjusted for future share splits. The Purchase Price equates to a pre-money valuation of [VALUATION]. The calculation is based on [NUMBER] fully diluted shares of Common Stock. If the number of shares issued, or stock awards/options authorized increases before the closing the price per share for Series A Convertible Preferred Stock shall be reduced so that the pre-money valuation is unchanged. The Series A Convertible Preferred Stock shall be referred to herein as the \"Preferred Stock.\" Dividend: The Preferred Stock is entitled to an annual [AMOUNT] per share dividend, payable when and if declared by the Board of Directors, but prior to any payment on Common Stock; dividends are not cumulative. Liquidation Preference: The Series A will have a liquidation preference so that proceeds on a merger, sale or liquidation (including non-cumulative dividends) will first be paid to the Series A and will include a [%] per annum compounding guaranteed return calculated on the total amount invested. Upon completion of an additional round of funding of at least [AMOUNT] the compounding guaranteed return feature will expire. The liquidation preference will cease to operate if the proceeds due to Series A, on a merger, sale or liquidation on an as-converted basis, exceed the proceeds that would be due under the liquidation preference. Use of Proceeds: The funds raised by Series A will be used principally for general working capital purposes. Voting Rights: The holders of the Series A shall have the right to vote with the Common Stock on an as-if-converted basis. Redemption: If not previously converted, the Series A is to be redeemed in three equal successive annual installments beginning [DATE]. Redemption will be at the purchase price plus a [%] per annum cumulative guaranteed return. Pre-emptive Rights: Holders of the Preferred Stock will be granted rights to participate in future equity financings of the Company based upon their pro-rata, as-if-converted, ownership of the Company. Automatic Conversion: The Preferred Stock shall be automatically converted into Common Stock at the then applicable conversion rate (1:1 assuming no share splits) in the event of an underwritten public offering of shares of the Company at a total offering of not less than [AMOUNT] and at a per share public offering price of not less than three times the Series A purchase price per share, adjusted for splits. Anti-Dilution: Series A shall have weighted average anti-dilution, based on a weighted average formula to be agreed, for all securities purchased as part of this transaction (excluding shares, options and warrants issued for management incentive and small issues for strategic purposes of under [NUMBER] shares). Management Options: Simultaneously with this transaction, one million new shares shall expand the Company's management incentive stock option pool - bringing the total number of shares issued and stock incentives (awards and options) authorized to [NUMBER OF SHARES]. Rights of First Offer; Tag-Along: The Company and the Investors will have a right of first refusal with respect to any employee's shares proposed to be resold. Alternatively, the Investors will have the right to participate in the sale of any such shares to a third party (co-sale rights), which rights will terminate upon a public offering. Information Rights: Monthly actual vs. plan and prior year. Annual budget [NUMBER] days before beginning of fiscal year","Term Sheet",42,"https://templates.business-in-a-box.com/imgs/1000px/term-sheet-D473.png","https://templates.business-in-a-box.com/imgs/250px/473.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#473.xml",{"title":6,"description":6},[160,161],{"label":31,"url":97},{"label":162,"url":163},"Raising Capital","raising-capital","term sheet","/template/term-sheet-D473",{"description":167,"descriptionCustom":6,"label":168,"pages":89,"size":9,"extension":10,"preview":169,"thumb":170,"svgFrame":171,"seoMetadata":172,"parents":174,"keywords":173,"url":179},"INVESTMENT AGREEMENT This Investment Agreement (the Agreement) is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] a Company (the \"COMPANY\") organized and existing under the laws of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [YOUR NAME] the principal members of the Company (the \"Company Principals\") collectively referred to in this Agreement as the \"Company Parties.\" and existing under the laws of [STATE/PROVINCE], located at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] a Company (the \"COMPANY\") organized and existing under the laws of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS the Company was formed for the purpose of further developing, commercializing, and operating the business concept identified and includes any subsequent iteration of the business concept developed by the Company Parties (the \"Business\"); WHEREAS the Investor is desirous of making an investment (the \"Investment\") in the amount of [TOTAL INVESTMENT AMOUNT] into the Company to facilitate such Business. NOW THEREFORE, in consideration of the mutual covenants and agreements herein contains, the parties hereto intending to be legally bound agree as follows: THE INVESTMENT 1.1 The Investor will make the Investment in the Company in consideration for the rights and privileges set forth in this Agreement. FUTURE ISSUANCES OF SECURITIES 2.1 From and after the date of this Agreement, the parties agree to take such further action and to execute, acknowledge and deliver all such further documents as are reasonably requested by the other party for carrying out the purposes of this Agreement. 2.2 If at any time in the future, the Company proposes to sell and issue any debt or equity securities, or any other securities or instruments entitling the holder thereof to receive any profits, capital, assets or property of the Company (collectively, \"Securities\"), in a single transaction or series of related transactions that results in gross proceeds to the Company of at least [STATE AMOUNT] (a \"Qualified Financing\"), the Company shall deliver written notice to the Investor stating (i) its bona fide intention to offer such Securities, (ii) the amount and type of Securities to be offered and (iii) the price and terms upon which it proposes to offer such securities. Upon receipt of such notice, the Investor shall be entitled to exercise any of the rights specified in sections 3, 4 and 5. RIGHT OF FIRST OFFER 3.1 The Investor shall have the first right to purchase all the Securities to be offered and sold in such Qualified Financing at the price and on the same terms and conditions specified in the notice. RIGHT TO PARTICIPATE 4","Investment Agreement","https://templates.business-in-a-box.com/imgs/1000px/investment-agreement-D12831.png","https://templates.business-in-a-box.com/imgs/250px/12831.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12831.xml",{"title":173,"description":6},"investment agreement",[175,176],{"label":31,"url":97},{"label":177,"url":178},"Shareholders & Investors","shareholders-investors","/template/investment-agreement-D12831",false,{"seo":182,"reviewer":193,"quick_facts":197,"at_a_glance":200,"personas":204,"variants":229,"glossary":254,"clauses":287,"how_to_fill":338,"common_mistakes":379,"faqs":404,"industries":432,"comparisons":457,"diy_vs_lawyer":471,"jurisdictions":484,"related_template_ids_curated":505,"schema":514,"classification":515},{"meta_title":183,"meta_description":184,"primary_keyword":185,"secondary_keywords":186},"Subordinated Loan Agreement Template (Free Word)","Free subordinated loan agreement template for mezzanine financing, intercompany lending, and junior debt structures. Used in 190+ countries. Free Word and PDF download.","subordinated loan agreement template",[187,188,189,190,191,192],"subordinated debt agreement template","mezzanine loan agreement template","junior loan agreement template","intercompany subordinated loan agreement","subordinated loan agreement free download","subordinated loan contract template word",{"name":194,"credential":195,"reviewed_date":196},"Bruno Goulet","CEO, Business in a Box","2026-05-02",{"difficulty":198,"legal_review_recommended":199,"signature_required":199},"advanced",true,{"what_it_is":201,"when_you_need_it":202,"whats_inside":203},"A Subordinated Loan Agreement is a legally binding contract in which a lender agrees to rank its repayment claim behind one or more senior creditors in the event of the borrower's insolvency or liquidation. This free Word download gives you a complete, attorney-reviewed starting point covering loan amount, interest, subordination mechanics, payment restrictions, and default — ready to edit online and export as PDF.\n","Use it when a junior lender is providing growth capital alongside an existing senior facility, when a parent company is lending to a subsidiary in a structure a senior bank requires to be subordinated, or when a mezzanine investor is filling the gap between senior debt and equity.\n","Loan amount and drawdown conditions, interest rate and payment schedule, subordination and standstill provisions, permitted and restricted payment clauses, representations and warranties, events of default, and governing law — structured across nine core clauses covering every material risk in a junior debt arrangement.\n",[205,209,213,217,221,225],{"title":206,"use_case":207,"icon_asset_id":208},"Private equity sponsors","Documenting mezzanine debt between a fund vehicle and a portfolio company","persona-investor",{"title":210,"use_case":211,"icon_asset_id":212},"CFOs and finance directors","Formalizing an intercompany loan that a senior bank requires to be subordinated","persona-cfo",{"title":214,"use_case":215,"icon_asset_id":216},"Startup founders","Raising convertible or subordinated debt from angel investors alongside a senior facility","persona-startup-founder",{"title":218,"use_case":219,"icon_asset_id":220},"Corporate lawyers","Drafting or reviewing junior debt instruments for leveraged buyout transactions","persona-corporate-lawyer",{"title":222,"use_case":223,"icon_asset_id":224},"Commercial lenders","Issuing a second-lien loan and documenting its ranking relative to the first-lien creditor","persona-commercial-lender",{"title":226,"use_case":227,"icon_asset_id":228},"Family office advisors","Structuring a subordinated loan to a family business that carries existing bank debt","persona-family-office",[230,234,238,242,244,247,251],{"situation":231,"recommended_template":232,"slug":233},"Intercompany loan from parent to subsidiary that must be subordinated to third-party debt","Intercompany Subordinated Loan Agreement","subordinated-loan-agreement-D12877",{"situation":235,"recommended_template":236,"slug":237},"Junior lender providing mezzanine capital alongside a senior bank facility","Mezzanine Loan Agreement","loan-agreement-D417",{"situation":239,"recommended_template":240,"slug":241},"Second-lien creditor requiring a separate intercreditor deed","Intercreditor Agreement","non-profit-partnership-agreement-D14023",{"situation":243,"recommended_template":38,"slug":237},"Standard senior secured loan with no subordination requirement",{"situation":245,"recommended_template":88,"slug":246},"Unsecured personal or small-business loan between known parties","promissory-note-D434",{"situation":248,"recommended_template":249,"slug":250},"Convertible note that may convert to equity rather than repay as debt","Convertible Note Agreement","convertible-note-agreement-D870",{"situation":252,"recommended_template":42,"slug":253},"Shareholder lending to their own company with subordination to bank debt","shareholder-loan-agreement-D13239",[255,258,261,264,266,269,272,275,278,281,284],{"term":256,"definition":257},"Subordinated Debt","Debt whose repayment claim ranks below one or more senior creditors in an insolvency or liquidation, meaning senior lenders are paid in full before the subordinated lender receives anything.",{"term":259,"definition":260},"Senior Creditor","A lender or creditor whose debt ranks ahead of all junior obligations and must be satisfied first in any distribution of the borrower's assets on insolvency.",{"term":262,"definition":263},"Standstill Period","A contractual period during which the subordinated lender is prohibited from taking any enforcement action against the borrower, even if a default has occurred under the subordinated loan.",{"term":240,"definition":265},"A separate deed or agreement between senior and junior lenders that governs their relative priorities, the mechanics of enforcement, and the circumstances in which junior creditors may act.",{"term":267,"definition":268},"Payment Blockage","A provision triggered by a senior default that suspends all payments of interest and principal under the subordinated loan until the senior default is cured or waived.",{"term":270,"definition":271},"Mezzanine Financing","A hybrid layer of capital sitting between senior secured debt and equity, typically bearing a higher interest rate to compensate for its junior ranking and limited security.",{"term":273,"definition":274},"Pari Passu","Latin for 'on equal footing' — describes debt that ranks equally with another obligation rather than senior or junior to it.",{"term":276,"definition":277},"Acceleration","The right of a lender to demand immediate repayment of the entire outstanding loan balance upon the occurrence of an event of default.",{"term":279,"definition":280},"Waterfall","The contractually defined order in which proceeds from asset sales, cash flows, or insolvency distributions are applied to pay different classes of creditor.",{"term":282,"definition":283},"Turnover Obligation","A clause requiring the subordinated lender to pay over to the senior creditor any amounts received from the borrower in breach of the subordination mechanics — effectively clawing back impermissible payments.",{"term":285,"definition":286},"Event of Default","A specified trigger — such as non-payment, insolvency, or breach of covenant — that entitles a lender to accelerate the loan or take other enforcement steps.",[288,293,298,303,308,313,318,323,328,333],{"name":289,"plain_english":290,"sample_language":291,"common_mistake":292},"Parties, loan amount, and purpose","Identifies the lender, borrower, and any guarantor by their full legal names; states the total loan commitment; and describes the permitted use of proceeds.","This Subordinated Loan Agreement is entered into on [DATE] between [LENDER LEGAL NAME] ('Subordinated Lender') and [BORROWER LEGAL NAME] ('Borrower'). The Subordinated Lender agrees to advance up to [CURRENCY AND AMOUNT] to the Borrower, to be applied solely to [PERMITTED PURPOSE].","Describing the borrowing entity by its trade name rather than its registered legal name. A mismatch between the contract and corporate registry creates enforcement ambiguity in insolvency proceedings where precision matters most.",{"name":294,"plain_english":295,"sample_language":296,"common_mistake":297},"Drawdown and availability","Sets out when and how the borrower may draw funds — whether in a single tranche or multiple instalments — and any conditions precedent the borrower must satisfy before each drawdown.","The Borrower may draw the Loan in [one tranche / up to [NUMBER] instalments] on not less than [X] business days' written notice to the Subordinated Lender, provided that [CONDITIONS PRECEDENT] have been satisfied in full.","Omitting conditions precedent entirely and allowing drawdown on demand. Without them, the lender has no contractual mechanism to verify that senior consent, corporate authorisation, or key documentation is in place before funds are released.",{"name":299,"plain_english":300,"sample_language":301,"common_mistake":302},"Interest rate and payment schedule","Defines the interest rate (fixed or floating), the calculation basis (typically actual/365 or actual/360), capitalisation or cash-pay elections, and the dates on which interest is due.","Interest shall accrue on the outstanding principal at the rate of [X]% per annum (or, if floating, [BENCHMARK] + [MARGIN]% per annum), calculated on an actual/365 basis. Interest shall be payable [quarterly / semi-annually / annually] in arrear on [DATE], subject to the payment restrictions in Clause [X].","Failing to state whether interest is paid in cash or capitalised (PIK). Payment-in-kind structures that are not explicitly documented create tax and accounting complications for both parties and may trigger unexpected senior lender consent requirements.",{"name":304,"plain_english":305,"sample_language":306,"common_mistake":307},"Subordination and ranking","The core clause. It contractually ranks the subordinated loan behind all senior debt, specifying that on insolvency the senior creditors receive full repayment before the subordinated lender receives anything.","The Borrower and the Subordinated Lender agree that all present and future claims of the Subordinated Lender against the Borrower under this Agreement are and shall at all times remain subordinated and junior in right of payment to the prior payment in full of all Senior Debt, as defined herein.","Defining 'Senior Debt' too narrowly — for example, limited to a single named facility. If the borrower incurs additional senior debt later, the subordination may not automatically extend to it, undermining the senior lender's protection and breaching the intercreditor terms.",{"name":309,"plain_english":310,"sample_language":311,"common_mistake":312},"Payment restrictions and permitted payments","Lists the circumstances in which the borrower is permitted to pay interest and principal on the subordinated loan, and the triggers (typically a senior default or breach of financial covenant) that block any payments.","The Borrower shall not make, and the Subordinated Lender shall not accept, any payment of principal, interest, or fees under this Agreement if (a) a Senior Default has occurred and is continuing, or (b) payment would breach any financial covenant under the Senior Facility Agreement.","Drafting payment restrictions without a corresponding turnover obligation. Without it, a borrower who pays the subordinated lender in breach of the blockage provision gives the subordinated lender a windfall that the senior creditor cannot automatically recover.",{"name":314,"plain_english":315,"sample_language":316,"common_mistake":317},"Turnover and clawback","Requires the subordinated lender to hold any impermissible payment on trust and remit it to the senior creditor immediately, effectively reversing any breach of the payment-blockage mechanics.","If the Subordinated Lender receives any payment in breach of this Agreement, it shall hold such payment on trust for the Senior Creditor and shall immediately pay it over to the Senior Creditor in the same form as received.","Omitting the trust mechanic and framing the obligation as a simple contractual repayment. Courts in several jurisdictions have held that a bare contractual obligation (without a trust) is insufficient to protect the senior creditor's priority in an insolvency.",{"name":319,"plain_english":320,"sample_language":321,"common_mistake":322},"Representations, warranties, and covenants","The borrower confirms key facts at signing (corporate authority, no existing defaults, financial statements are accurate) and agrees to ongoing obligations (information delivery, no additional senior debt without consent, compliance with applicable law).","The Borrower represents and warrants that it is duly incorporated, has the authority to enter into this Agreement, and is not in default under any material agreement. The Borrower covenants to deliver audited financial statements within [X] days of each financial year-end and to notify the Subordinated Lender promptly of any Senior Default.","Including representations without a materiality qualifier. Unqualified warranties mean that any minor inaccuracy — a stale corporate filing date, for example — technically constitutes a breach and triggers an event of default, giving the lender rights it would never practically exercise.",{"name":324,"plain_english":325,"sample_language":326,"common_mistake":327},"Events of default and remedies","Specifies the triggers that constitute a default under the subordinated loan — including non-payment, insolvency, and cross-default to senior debt — and the remedies available, subject to the standstill restrictions.","Each of the following constitutes an Event of Default: (a) failure to pay any sum due within [X] business days of the due date; (b) the Borrower becoming insolvent or subject to any insolvency proceeding; (c) a material breach of any covenant that remains unremedied for [X] days after notice. Upon an Event of Default, the Subordinated Lender may (subject to any applicable Standstill Period) accelerate the Loan.","Granting the subordinated lender the same acceleration and enforcement rights as the senior lender without a standstill carve-out. Racing to enforce ahead of senior creditors can trigger cross-default clauses in the senior facility and precipitate an insolvency the subordinated lender has no legal standing to control.",{"name":329,"plain_english":330,"sample_language":331,"common_mistake":332},"Standstill and enforcement restrictions","Prevents the subordinated lender from taking any enforcement action — demanding repayment, appointing a receiver, or petitioning for insolvency — for a defined period after a default, giving the senior lender time to exercise its own remedies first.","Notwithstanding any Event of Default under this Agreement, the Subordinated Lender shall not take any Enforcement Action for a period of [180] days following written notice to the Senior Creditor of such default ('Standstill Period'), unless the Senior Creditor has consented in writing.","Setting the standstill period in the subordinated loan without aligning it with the standstill period in the intercreditor agreement. Inconsistent periods create a gap during which neither creditor may be able to act effectively, or during which both act simultaneously.",{"name":334,"plain_english":335,"sample_language":336,"common_mistake":337},"Governing law and dispute resolution","Specifies which jurisdiction's law governs the agreement, how disputes are resolved (court or arbitration), and — for cross-border transactions — submission to jurisdiction.","This Agreement is governed by the laws of [GOVERNING LAW JURISDICTION]. The parties submit to the [exclusive / non-exclusive] jurisdiction of the courts of [JURISDICTION]. Any dispute may, at the election of either party, be referred to arbitration administered by [INSTITUTION] in [SEAT].","Choosing a governing law that differs from the law governing the senior facility without taking legal advice on the interaction. Conflicting governing laws for the senior and subordinated facilities can create irreconcilable obligations in an insolvency, particularly in cross-border situations.",[339,344,349,354,359,364,369,374],{"step":340,"title":341,"description":342,"tip":343},1,"Identify all parties by their full legal names","Enter the lender's and borrower's complete registered legal names — not trading names — along with their jurisdiction of incorporation and registered addresses. If there is a senior creditor whose consent is required, identify them in the recitals.","Obtain a current corporate registry extract for each party before signing to confirm the exact legal name, registration number, and authorised signatories.",{"step":345,"title":346,"description":347,"tip":348},2,"Define the loan amount, currency, and permitted purpose","State the total commitment in a specific currency and describe the permitted use of proceeds narrowly enough to satisfy any senior lender covenant that restricts how subordinated debt proceeds may be deployed.","If the senior facility restricts the borrower from incurring additional debt for certain purposes, confirm in writing that the subordinated loan's stated purpose is within the permitted exceptions before executing.",{"step":350,"title":351,"description":352,"tip":353},3,"Set the interest rate and payment mechanics","Choose a fixed or floating rate, state the calculation basis (actual/365 is standard in the UK and Commonwealth; actual/360 is common in the US), and decide whether interest is cash-pay or payment-in-kind. Document the election explicitly.","PIK interest that capitalises into principal increases the senior lender's exposure over time. Confirm that PIK mechanics are expressly permitted under the senior facility before including them.",{"step":355,"title":356,"description":357,"tip":358},4,"Draft the subordination and senior debt definition carefully","Define 'Senior Debt' broadly enough to cover current and future senior facilities, including any hedging obligations or ancillary facilities that rank equally with the senior loan. Run the definition past the senior lender for approval.","An overly narrow definition of Senior Debt is the single most litigated provision in subordinated loan disputes — spend the most time here.",{"step":360,"title":361,"description":362,"tip":363},5,"Agree the payment blockage and turnover mechanics with the senior lender","Align the payment-blockage triggers and the turnover obligation with the corresponding provisions in the intercreditor agreement (if one exists). Inconsistencies between the two documents will be exploited in a dispute.","Ask the senior lender's counsel to review this clause before finalising — most senior banks have standard language they insist on, and accepting it now avoids renegotiation later.",{"step":365,"title":366,"description":367,"tip":368},6,"Set the standstill period and enforcement restrictions","Agree a standstill period that gives the senior lender adequate time to enforce its security — 90 to 180 days is market standard for most mezzanine structures — and confirm it matches the intercreditor agreement.","Include an explicit carve-out allowing the subordinated lender to file a proof of debt in insolvency proceedings during the standstill; otherwise the subordinated lender may miss claim registration deadlines.",{"step":370,"title":371,"description":372,"tip":373},7,"Confirm governing law and submit to jurisdiction","Choose the governing law that matches the senior facility. For cross-border transactions, take legal advice on whether a non-exclusive jurisdiction clause is preferable to allow enforcement in the borrower's local courts.","EU-based transactions should note that the Brussels Recast Regulation affects which exclusive jurisdiction clauses are recognised; exclusive English jurisdiction clauses no longer benefit from automatic EU enforcement post-Brexit.",{"step":375,"title":376,"description":377,"tip":378},8,"Execute before any funds are advanced","Both parties — and the senior creditor if a tripartite structure is used — must sign before drawdown. Confirm that board resolutions and any required regulatory or lender consents are in place.","Use a conditions-precedent checklist to confirm that corporate authority, KYC documentation, and senior lender consent letters are all received before releasing funds.",[380,384,388,392,396,400],{"mistake":381,"why_it_matters":382,"fix":383},"Defining 'Senior Debt' too narrowly","A definition limited to a single named facility means that any refinancing, new tranche, or ancillary credit line may not benefit from the subordination, undermining the entire priority structure the senior lender relied on.","Draft the Senior Debt definition to capture all present and future obligations to the senior lender, including hedging, guarantees, letters of credit, and any replacement facility, regardless of when incurred.",{"mistake":385,"why_it_matters":386,"fix":387},"Omitting the turnover trust obligation","Without a trust, any payment the subordinated lender receives in breach of the blockage provision is a simple contractual debt from the subordinated lender to the senior creditor — not a segregated asset, and therefore available to the subordinated lender's own creditors in an insolvency.","Include explicit trust language: the subordinated lender holds any impermissible receipts on trust for the senior creditor and must remit them immediately in the same form received.",{"mistake":389,"why_it_matters":390,"fix":391},"Misaligning standstill periods between the subordinated loan and the intercreditor agreement","A shorter standstill in the subordinated loan than in the intercreditor deed gives the subordinated lender a window to accelerate and petition for insolvency before the senior lender has completed its enforcement — precisely what the intercreditor structure is designed to prevent.","Cross-reference both documents during drafting. The standstill period, its triggers, and its termination events must be identical in both instruments.",{"mistake":393,"why_it_matters":394,"fix":395},"Advancing funds before obtaining senior lender consent","Most senior facilities contain a negative pledge or incurrence covenant prohibiting the borrower from incurring additional financial indebtedness without prior written consent. Drawing down without that consent puts the borrower in default under the senior facility on the same day.","Make receipt of a written consent or waiver letter from the senior lender an express condition precedent to the first drawdown, and attach it as a schedule to the executed agreement.",{"mistake":397,"why_it_matters":398,"fix":399},"Granting the subordinated lender unrestricted acceleration rights","If the subordinated lender can accelerate and enforce without a standstill, it can trigger a cross-default under the senior facility, forcing the entire debt stack into insolvency at a time when the senior lender may have preferred a workout.","Subject all enforcement rights — including acceleration, appointment of receivers, and insolvency petitions — to the standstill period and, where applicable, to prior written consent of the senior creditor.",{"mistake":401,"why_it_matters":402,"fix":403},"Using a trade name instead of the registered legal entity name for the borrower","In insolvency proceedings, enforcement requires the creditor to prove it holds a claim against the specific legal entity whose assets are being distributed. A contract naming a trading name rather than the registered entity can be challenged, delaying or defeating recovery.","Verify the borrower's exact registered name and company number on the relevant corporate registry before finalising the agreement, and include the company number in the parties clause.",[405,408,411,414,417,420,423,426,429],{"question":406,"answer":407},"What is a subordinated loan agreement?","A subordinated loan agreement is a binding contract in which a lender agrees that its right to repayment ranks behind one or more senior creditors if the borrower becomes insolvent or is liquidated. It documents the loan amount, interest rate, repayment terms, and the subordination mechanics — including payment blockage, turnover obligations, and standstill restrictions — that protect the senior lender's priority position. Subordinated loans are commonly used in leveraged buyouts, mezzanine finance, and intercompany lending structures.\n",{"question":409,"answer":410},"What is the difference between a subordinated loan and a senior loan?","A senior loan ranks first in the repayment waterfall and typically benefits from first-priority security over the borrower's assets. A subordinated loan sits below it — the subordinated lender is only repaid after the senior lender has been paid in full. Because the subordinated lender bears greater risk, subordinated loans typically carry a higher interest rate than senior facilities. In an insolvency, subordinated lenders frequently recover little or nothing if the senior debt exceeds the value of available assets.\n",{"question":412,"answer":413},"When do I need a subordinated loan agreement rather than a standard loan agreement?","You need a subordinated loan agreement whenever a lender is providing junior debt alongside an existing or simultaneous senior facility, and the senior lender requires that junior debt to contractually rank behind it. Common scenarios include mezzanine financing in private equity transactions, parent-to-subsidiary intercompany loans where a bank requires subordination as a condition of its facility, and growth capital raised from investors who accept a junior ranking in exchange for a higher return.\n",{"question":415,"answer":416},"Does a subordinated loan agreement need to be accompanied by an intercreditor agreement?","Not always, but in most commercial transactions the senior lender will require a separate intercreditor agreement or deed of subordination to which both the senior creditor and the subordinated lender are parties. The intercreditor agreement governs the relationship between creditors directly; the subordinated loan agreement governs the relationship between the subordinated lender and the borrower. Where both documents exist, they must be consistent — particularly on the definition of Senior Debt, payment blockage triggers, and standstill periods.\n",{"question":418,"answer":419},"Are subordinated loans enforceable if the borrower becomes insolvent?","Yes — a subordinated lender still holds a valid debt claim against the borrower's estate in insolvency. However, the contractual subordination means that senior creditors are paid in full from available assets before the subordinated lender receives any distribution. In practice, if the borrower's assets are insufficient to repay senior debt in full, the subordinated lender will receive nothing. Filing a proof of debt in insolvency proceedings is still essential to preserve any residual recovery.\n",{"question":421,"answer":422},"What interest rate is typical for a subordinated loan?","Subordinated loans typically carry interest rates materially higher than senior debt to compensate for the junior ranking and higher loss-given- default risk. In mezzanine financing, all-in rates of 10–18% per annum are common, combining a cash-pay coupon with a payment-in-kind (PIK) component. Intercompany subordinated loans between related parties must be priced at arm's length to satisfy transfer-pricing rules in most jurisdictions; tax authorities will challenge rates that do not reflect market conditions.\n",{"question":424,"answer":425},"Can a subordinated loan be secured?","A subordinated loan can be secured by a second-lien charge over the borrower's assets, but that security will typically be subject to a standstill and enforcement restriction in favour of the first-lien senior creditor. The existence of second-lien security does not change the subordinated lender's ranking in the repayment waterfall — the senior creditor's security still takes priority on enforcement. Some subordinated loans are entirely unsecured, particularly intercompany facilities where the senior bank requires clean subordination without competing security interests.\n",{"question":427,"answer":428},"What is a payment-in-kind (PIK) loan and how does it affect the subordinated loan agreement?","A PIK loan is one in which interest accrues but is not paid in cash — instead it is capitalised and added to the outstanding principal balance at each interest period. PIK mechanics reduce cash pressure on the borrower during the loan term but increase the total amount owed at maturity. The subordinated loan agreement must explicitly document whether interest is cash-pay, PIK, or a combination (PIK-toggle), and confirm that the PIK election is permitted under the senior facility's covenants.\n",{"question":430,"answer":431},"Do I need a lawyer to draft or review a subordinated loan agreement?","For any subordinated loan in a commercial transaction — particularly where a senior facility is in place — legal review is strongly recommended. The subordination mechanics, payment blockage, turnover obligations, and standstill provisions interact with the senior facility and any intercreditor agreement in ways that require careful coordination. Errors in drafting can inadvertently undermine the senior lender's priority, trigger a senior default, or leave the subordinated lender without effective enforcement rights. A template provides the correct structure and market-standard language; a lawyer review confirms it fits the specific transaction.\n",[433,437,441,445,449,453],{"industry":434,"icon_asset_id":435,"specifics":436},"Private Equity and Investment","industry-private-equity","Mezzanine tranches in leveraged buyout structures typically include PIK-toggle interest, equity warrants, and detailed standstill and enforcement provisions coordinated with the senior facility and intercreditor deed.",{"industry":438,"icon_asset_id":439,"specifics":440},"Real Estate and Construction","industry-construction","Mezzanine real estate loans often sit behind a first-mortgage senior facility, with the subordinated lender holding a pledge over the ownership entity rather than direct security over the underlying property.",{"industry":442,"icon_asset_id":443,"specifics":444},"Technology and SaaS","industry-saas","Revenue-based or venture debt structures frequently include a subordinated tranche alongside a senior facility, with IP assignment and ARR-based financial covenants specific to recurring-revenue businesses.",{"industry":446,"icon_asset_id":447,"specifics":448},"Manufacturing and Industrials","industry-manufacturing","Intercompany subordinated loans are common in manufacturing groups where a parent entity funds capital expenditure in a subsidiary that also carries a senior bank facility secured over plant and equipment.",{"industry":450,"icon_asset_id":451,"specifics":452},"Financial Services","industry-fintech","Regulatory capital requirements for banks and insurers often require subordinated debt instruments to meet specific eligibility criteria (e.g., Basel III Tier 2) including minimum maturity, loss-absorption features, and restrictions on early repayment.",{"industry":454,"icon_asset_id":455,"specifics":456},"Healthcare","industry-healthtech","Private clinic and healthcare group acquisitions regularly use mezzanine debt alongside senior bank debt, with subordinated loan covenants tied to EBITDA coverage ratios and CQC or equivalent regulatory compliance conditions.",[458,462,465,468],{"vs":459,"vs_template_id":460,"summary":461},"Senior Loan Agreement","loan-agreement-D15","A senior loan agreement creates first-priority debt that is repaid before all other creditors in an insolvency. A subordinated loan sits below it in the waterfall and includes payment-blockage and standstill provisions absent from a senior agreement. Use a standard loan agreement when there is no senior facility that requires protection; use a subordinated loan agreement when a senior creditor demands that junior debt rank behind it contractually.",{"vs":240,"vs_template_id":463,"summary":464},"","An intercreditor agreement is a tripartite contract between the borrower, the senior lender, and the subordinated lender that governs the relationship between creditors directly. A subordinated loan agreement is a bilateral contract between the borrower and the subordinated lender only. Complex transactions typically require both — the intercreditor agreement binds all creditors to the priority structure; the subordinated loan agreement documents the junior debt itself.",{"vs":88,"vs_template_id":466,"summary":467},"promissory-note-D11","A promissory note is a simple, unconditional promise to repay a fixed sum — it records the debt obligation but lacks the covenants, payment-blockage mechanics, and subordination provisions a structured junior debt facility requires. Use a promissory note for straightforward, low-risk lending between known parties with no senior debt in place; use a subordinated loan agreement whenever ranking relative to other creditors is a material concern.",{"vs":42,"vs_template_id":469,"summary":470},"shareholder-loan-agreement-D12867","A shareholder loan agreement documents lending from a shareholder to their own company and may or may not include subordination mechanics. A subordinated loan agreement is specifically structured to contractually rank the debt behind senior creditors and includes standstill, payment-blockage, and turnover provisions designed for multi-creditor capital structures. Where a bank requires a shareholder loan to be subordinated, it will typically require the shareholder loan agreement to incorporate full subordination mechanics — making the two documents closely related.",{"use_template":472,"template_plus_review":476,"custom_drafted":480},{"best_for":473,"cost":474,"time":475},"Straightforward intercompany or shareholder subordinated loans with no external senior lender involvement","Free","1–2 hours",{"best_for":477,"cost":478,"time":479},"Junior debt alongside an existing senior bank facility, or mezzanine loans up to approximately $2M","$800–$2,500 for a commercial lawyer review","3–7 days",{"best_for":481,"cost":482,"time":483},"Leveraged buyout mezzanine tranches, regulated Tier 2 capital instruments, or multi-jurisdiction subordinated facilities","$5,000–$25,000+","2–6 weeks",[485,490,495,500],{"code":486,"name":487,"flag_asset_id":488,"note":489},"us","United States","flag-us","US subordinated loan agreements are governed by Article 9 of the Uniform Commercial Code where security interests are involved. Payment-blockage provisions and standstill mechanics are enforceable as contract under state law, but their treatment in bankruptcy proceedings under Chapter 11 is subject to equitable subordination doctrine — courts can further subordinate a creditor's claim if inequitable conduct is found. Intercompany subordinated loans between related parties must be priced at arm's length to comply with IRC transfer-pricing rules.",{"code":491,"name":492,"flag_asset_id":493,"note":494},"ca","Canada","flag-ca","Canadian subordinated loan agreements are governed by provincial law — Ontario, British Columbia, and Quebec being the most common governing law choices for commercial transactions. Security over personal property is registered under provincial PPSA regimes. In Quebec, civil law principles apply and the agreement should be reviewed for compatibility with the Civil Code of Quebec. Intercompany subordinated loans must satisfy CRA arm's-length pricing requirements; inadequately priced related-party loans risk recharacterisation as deemed dividends.",{"code":496,"name":497,"flag_asset_id":498,"note":499},"uk","United Kingdom","flag-uk","English law is the dominant governing law for European subordinated loan agreements and is widely recognised as producing the most commercially tested subordination mechanics. The Loan Market Association (LMA) publishes standard-form intercreditor and subordinated facility documentation widely used in the UK market. Post-Brexit, exclusive English jurisdiction clauses no longer benefit from automatic recognition and enforcement in EU member states under the Brussels Recast Regulation — cross-border transactions may require parallel enforcement provisions.",{"code":501,"name":502,"flag_asset_id":503,"note":504},"eu","European Union","flag-eu","Within the EU, subordinated loan agreements for regulated financial institutions must comply with the Capital Requirements Regulation (CRR) if the instrument is intended to qualify as Tier 2 regulatory capital, including minimum maturity of five years and restrictions on early repayment. GDPR is relevant where personal data about individual lenders or borrowers is processed in connection with the agreement. Member state insolvency laws vary significantly — French sauvegarde and German Insolvenzordnung proceedings each treat subordinated claims differently, requiring jurisdiction-specific legal review for cross-border structures.",[237,246,253,506,507,508,509,510,250,511,512,513],"personal-guarantee-D405","security-agreement-D915","non-disclosure-agreement-nda-D12692","term-sheet-D473","investment-agreement-D12831","board-resolution-D78","guarantee-of-account-D400","secured-lumpsum-promissory-note-agreement-D13041",{"emit_how_to":199,"emit_defined_term":199},{"primary_folder":97,"secondary_folder":516,"document_type":517,"industry":518,"business_stage":519,"tags":520,"confidence":526},"business-financing-and-loans","agreement","general","all-stages",[521,522,523,524,525],"legal","subordinated-loan","loan-agreement","financing","debt",0.95,"\u003Ch2>What is a Subordinated Loan Agreement?\u003C/h2>\n\u003Cp>A \u003Cstrong>Subordinated Loan Agreement\u003C/strong> is a legally binding contract between a junior lender and a borrower that establishes a loan whose right to repayment contractually ranks below one or more senior creditors in the event of the borrower's insolvency, liquidation, or restructuring. Unlike a standard loan agreement, it contains subordination mechanics — payment blockage, standstill periods, and turnover obligations — that protect senior creditors by preventing the junior lender from receiving payments or taking enforcement action in circumstances that would impair the senior lender's priority position. Subordinated loans function as a flexible layer of capital between senior secured debt and equity, commonly used in leveraged buyouts, mezzanine financing, and intercompany lending structures where a senior bank requires junior debt to be formally ranked below it.\u003C/p>\n\u003Ch2>Why You Need This Document\u003C/h2>\n\u003Cp>Without a properly drafted subordinated loan agreement, the entire priority structure of a multi-creditor capital arrangement can unravel. A senior lender that has relied on a verbal or loosely documented subordination commitment has no contractual basis to block payments to the junior lender during a default, demand turnover of impermissible receipts, or enforce a standstill — meaning the junior lender could race to recover ahead of the senior creditor in exactly the insolvency scenario where ranking matters most. For borrowers, an undocumented or informally subordinated intercompany loan can trigger a default under the senior facility the moment the senior lender discovers it. For junior lenders, inadequate documentation of their own rights — including their ability to file a proof of debt in insolvency and their fallback enforcement options after the standstill expires — can result in a total loss that careful drafting would have mitigated. This template provides the market-standard subordination mechanics, payment-blockage language, and standstill provisions used in commercial transactions, giving all parties a defensible, enforceable foundation from day one.\u003C/p>\n",1781185950904]