An Equity Loan Agreement under German law is typically used in growth financing scenarios where traditional debt or pure equity financing may not be optimal. This hybrid instrument is particularly relevant for companies seeking flexible financing solutions while offering lenders potential equity upside. The document comprehensively addresses both the debt and equity aspects of the transaction, including loan terms, security arrangements, and equity-related rights, while ensuring compliance with German regulatory requirements, including the German Civil Code (BGB), Banking Act (KWG), and Securities Trading Act (WpHG). It's commonly used in scale-up financing, corporate restructuring, or strategic growth initiatives where the lender seeks a position between that of a pure creditor and a shareholder.

1. Parties: Identification of the lender and borrower, including full legal names, registration details, and addresses

2. Background: Context of the equity loan arrangement, purpose of the loan, and basic transaction structure

3. Definitions: Key terms used throughout the agreement, including financial terms, security-related definitions, and technical terminology

4. Loan Amount and Purpose: Specification of the loan amount, currency, and permitted use of proceeds

5. Equity Component: Details of the equity element, including share pledges, conversion rights, or equity-linked features

6. Interest and Fees: Interest rate structure, calculation methods, payment periods, and any additional fees

7. Drawdown Conditions: Prerequisites and conditions for loan disbursement, including required documentation

8. Repayment Terms: Repayment schedule, prepayment provisions, and maturity date

9. Security Structure: Details of collateral, guarantees, and security arrangements

10. Representations and Warranties: Statements of fact and assurances from the borrower

11. Covenants: Positive and negative obligations of the borrower during the loan term

12. Events of Default: Circumstances constituting default and consequences thereof

13. Boilerplate Provisions: Standard legal provisions including notices, amendments, governing law, and jurisdiction