The Shareholder Loan Agreement is commonly used when a company requires additional financing and opts to receive it from existing shareholders rather than external lenders. This approach is particularly common in German corporate practice, especially for medium-sized companies (Mittelstand) and start-ups. The document must comply with specific German legal requirements, including subordination provisions under the Insolvency Code (InsO), arm's length principles for tax purposes, and corporate law restrictions. The agreement typically includes detailed provisions on interest calculation, repayment terms, information rights, and potential conversion features. It's essential to properly structure these loans to avoid recharacterization risks and ensure compliance with German corporate and tax laws.

1. Parties: Identification of the Lender (Shareholder) and Borrower (Company), including registration details and addresses

2. Background: Recitals explaining the shareholding relationship and purpose of the loan

3. Definitions: Definitions of key terms used throughout the agreement

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

5. Interest: Interest rate, calculation method, and payment terms in compliance with German arm's length principles

6. Drawdown: Conditions and mechanics for drawing down the loan

7. Repayment: Terms and schedule for repayment, including any early repayment provisions

8. Subordination: Provisions regarding loan subordination in accordance with German insolvency law

9. Representations and Warranties: Standard representations and warranties from both parties

10. Information Rights: Borrower's obligations to provide financial and other information

11. Events of Default: Circumstances constituting default and consequences

12. Taxes: Treatment of taxes and withholding requirements

13. Notices: Communication requirements and contact details

14. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction