The Sub Loan Agreement is essential in structured finance transactions where multi-tier lending arrangements are required. This document type is commonly used when a primary lender provides funds to an intermediate entity, which then extends these funds to an end borrower. The agreement must comply with Canadian federal and provincial lending regulations, including the Interest Act, Criminal Code interest rate provisions, and applicable securities laws. The Sub Loan Agreement typically includes detailed provisions on interest calculations, repayment structures, security arrangements, and the relationship with the primary loan agreement. It's particularly relevant in project finance, real estate development, and corporate financing scenarios where complex funding structures are necessary to achieve specific business or tax objectives. The document needs to carefully balance the rights and obligations of all parties while ensuring compliance with Canadian lending regulations and maintaining consistency with the primary loan documentation.

1. Parties: Identifies all parties to the agreement including the primary lender, intermediate lender (sub-lender), and borrower

2. Background: Explains the context of the sub-loan, including reference to the primary loan agreement and the purpose of the sub-loan

3. Definitions: Defines key terms used throughout the agreement, including reference to definitions in the primary loan agreement where applicable

4. The Loan: Details the loan amount, purpose, and drawdown conditions

5. Interest: Specifies interest rate, calculation method, and payment periods in compliance with the Interest Act

6. Repayment: Sets out repayment terms, prepayment rights, and mandatory prepayment events

7. Conditions Precedent: Lists conditions that must be satisfied before the loan becomes available

8. Representations and Warranties: Contains standard and transaction-specific representations and warranties from the borrower

9. Covenants: Details positive and negative covenants of the borrower

10. Events of Default: Lists circumstances constituting default and corresponding remedies

11. Relationship with Primary Loan: Establishes the connection and dependencies with the primary loan agreement

12. Payments and Calculations: Details payment mechanics, calculation conventions, and business day adjustments

13. Changes to Parties: Addresses assignment and transfer provisions

14. Administration: Covers administrative aspects including notices and amendments

15. Governing Law and Jurisdiction: Specifies Canadian law as governing law and jurisdiction for disputes