The Pari Passu Loan Agreement is designed for situations where multiple lenders provide financing to a borrower under a single agreement, with all lenders sharing equal ranking in terms of rights, payments, and security. This agreement structure is commonly used in Canadian financing transactions where the borrowing requirements exceed the capacity or risk appetite of a single lender. The document comprehensively addresses Canadian federal and provincial regulatory requirements, including compliance with the Bank Act, Interest Act, and provincial security legislation. It includes detailed provisions for loan administration, security arrangements, and coordination among lenders. The agreement is particularly suitable for complex financing transactions where maintaining equality among lenders is crucial, such as syndicated loans, club deals, or other multi-lender arrangements. The pari passu structure ensures fair treatment of all lenders while providing borrowers with access to larger funding amounts than might be available from a single source.

1. Parties: Identification of all lenders and the borrower(s), including their legal status and addresses

2. Background: Context of the loan arrangement and explanation of the pari passu nature of the lending

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. The Facility: Details of the loan facility, including amount, purpose, and availability

5. Conditions Precedent: Conditions that must be satisfied before the loan becomes available

6. Drawdown: Procedures and requirements for drawing down the loan

7. Interest: Interest rate, calculation methods, and payment dates

8. Repayment and Prepayment: Terms for scheduled repayments and voluntary prepayments

9. Pari Passu Ranking: Provisions ensuring equal ranking among lenders and sharing of payments

10. Representations and Warranties: Borrower's statements about its legal and financial condition

11. Covenants: Ongoing obligations of the borrower, including financial covenants

12. Events of Default: Circumstances constituting default and consequences

13. Changes to Parties: Rules for assignments and transfers by lenders or borrower

14. Administration: Procedures for communications and operational matters

15. Payments and Set-off: Payment mechanics and set-off rights

16. Notices: Methods and addresses for formal communications

17. Calculations and Certificates: Rules for calculations and evidence of amounts due

18. Governing Law and Jurisdiction: Choice of Canadian law and jurisdiction provisions