The Sub Loan Agreement is utilized when parties wish to establish a subordinated lending arrangement under German law, typically in scenarios where additional financing is needed but must be structured to rank behind existing senior debt. This document is commonly used in corporate restructurings, acquisition financing, or growth capital situations where layered capital structures are required. The agreement must comply with German civil law requirements (BGB) and banking regulations (KWG), particularly regarding form requirements, interest provisions, and enforcement mechanisms. It includes detailed provisions on subordination mechanics, payment restrictions, and intercreditor relationships, while incorporating specific German law concepts and requirements. The document is essential for establishing clear ranking of debt obligations and protecting both lender and borrower interests within the German legal framework.

1. Parties: Identification of the lender and borrower, including registration details as required under German law

2. Background: Context of the subordinated loan, including reference to any senior facilities

3. Definitions and Interpretation: Key terms used in the agreement, including German law-specific concepts

4. The Facility: Details of the loan amount, purpose, and drawdown mechanisms

5. Subordination and Ranking: Provisions defining the subordinated nature of the loan and its ranking in relation to other debt

6. Interest: Interest calculation, periods, and payment provisions, including default interest

7. Repayment and Prepayment: Terms for scheduled repayment and voluntary/mandatory prepayment

8. Tax Gross-Up and Indemnities: Provisions for tax payments and indemnities under German tax law

9. Representations and Warranties: Standard and German law-specific representations and warranties

10. Information Undertakings: Requirements for financial and other information provision

11. General Undertakings: Positive and negative covenants applicable to the borrower

12. Events of Default: Circumstances constituting default and consequences

13. Changes to Parties: Transfer and assignment provisions

14. Payment Mechanics: Administrative provisions for payments

15. Notices: Communication requirements and methods

16. Miscellaneous: Standard boilerplate provisions

17. Governing Law and Jurisdiction: German law as governing law and jurisdiction provisions