Loan Subordination Agreement Template for Belgium

This document is essential in complex financing structures where multiple creditors extend loans to the same debtor at different levels of priority. A Loan Subordination Agreement under Belgian law becomes particularly relevant in scenarios involving corporate group financings, acquisition financing, or debt restructuring. It ensures clarity in creditor rankings and payment priorities, crucial during both normal operations and insolvency scenarios. The agreement must comply with Belgian financial regulations and civil code requirements, particularly regarding enforcement and insolvency proceedings. It's commonly used in conjunction with facility agreements and security documents, forming part of a broader financing package. The document typically addresses specific Belgian law considerations regarding financial collateral arrangements and registration requirements.

1. Parties: Identifies all parties to the agreement, including senior creditor(s), junior creditor(s), and the debtor

2. Background: Sets out the context of the existing loans and the purpose of the subordination arrangement

3. Definitions and Interpretation: Defines key terms and establishes interpretation principles, including specific Belgian law concepts

4. Subordination: Core section establishing the subordination principles and ranking of debts

5. Payment Restrictions: Details restrictions on payments to junior creditors and permitted payments

6. Turnover of Receipts: Provisions requiring junior creditors to turn over any received payments to senior creditors

7. Filing and Priority in Insolvency: Addresses treatment of claims in insolvency proceedings under Belgian law

8. Protection of Subordination: Mechanisms to maintain the subordination arrangement's effectiveness

9. Representations and Warranties: Standard representations including capacity and authority to enter into the agreement

10. Undertakings: Ongoing obligations of the parties

11. Duration and Termination: Term of the agreement and circumstances for termination

12. Miscellaneous Provisions: Standard boilerplate clauses including notices, amendments, and severability

13. Governing Law and Jurisdiction: Confirms Belgian law as governing law and jurisdiction for disputes