Subordinated Loan Agreement

Letterhead

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

SUBORDINATED LOAN AGREEMENT

This Subordinated Loan Agreement ("Agreement") is made and entered into on this {{day}} day of {{month}}, {{year}} ("Effective Date")

**BETWEEN:**

**{{Lender_Company_Name}}**, a company duly incorporated and registered under the laws of [Country, e.g., South Africa], with registration number {{Lender_Registration_Number}}, and having its registered office at {{Lender_Address}} (hereinafter referred to as "the Lender").

**AND**

**{{Borrower_Company_Name}}**, a company duly incorporated and registered under the laws of [Country, e.g., South Africa], with registration number {{Borrower_Registration_Number}}, and having its registered office at {{Borrower_Address}} (hereinafter referred to as "the Borrower").

**(Collectively referred to as the "Parties" and individually as a "Party")**

1. LOAN AMOUNT AND PURPOSE

1.1 The Lender agrees to lend to the Borrower the principal sum of {{Loan_Amount}} ({{Loan_Amount_Words}}) (hereinafter referred to as the "Principal Sum").

1.2 The Principal Sum shall be used by the Borrower exclusively for the purpose of {{Loan_Purpose}}.

2. INTEREST RATE AND REPAYMENT

2.1 The Principal Sum shall bear interest at a rate of {{Interest_Rate}}% per annum, calculated daily and compounded {{Compounding_Frequency}}.

2.2 Repayment of the Principal Sum and accrued interest shall be made in accordance with the repayment schedule attached hereto as Schedule A, or as otherwise agreed in writing by the Parties.

2.3 All payments shall be made in {{Currency}} to the Lender's nominated bank account: {{Lender_Bank_Details}}.

3. SUBORDINATION

3.1 Notwithstanding anything to the contrary contained in this Agreement, the Borrower hereby irrevocably and unconditionally agrees that its obligations to the Lender under this Agreement are and shall be subordinated in right of payment and in all other respects to all present and future Senior Indebtedness of the Borrower.

3.2 "Senior Indebtedness" shall mean all present and future indebtedness of the Borrower for or in respect of borrowed money, whether direct or indirect, actual or contingent, including, but not limited to, all amounts due and owing to its senior lenders, bankers, or financial institutions.

3.3 In the event of any liquidation, dissolution, winding-up, or bankruptcy of the Borrower, or any assignment for the benefit of creditors, or any other marshalling of the Borrower's assets and liabilities, the Senior Indebtedness shall first be paid in full before any payment is made on account of the Principal Sum or interest due under this Agreement.

4. REPRESENTATIONS AND WARRANTIES

4.1 Each Party hereby represents and warrants to the other Party that:

(a) It is duly organised, validly existing and in good standing under the laws of its jurisdiction of incorporation.

(b) It has all necessary power and authority to enter into and perform its obligations under this Agreement.

(c) The execution and delivery of this Agreement and the performance of its obligations hereunder do not and will not conflict with or violate any provision of its constituting documents or any agreement to which it is a party.

5. EVENTS OF DEFAULT

5.1 The occurrence of any of the following shall constitute an "Event of Default" under this Agreement:

(a) The Borrower fails to make any payment of Principal Sum or interest when due under this Agreement, and such failure continues for a period of {{Grace_Period}} days after written notice thereof from the Lender.

(b) The Borrower breaches any other material term or condition of this Agreement, and fails to remedy such breach within {{Remedy_Period}} days after written notice thereof from the Lender.

(c) Any representation or warranty made by the Borrower in this Agreement proves to be false or misleading in any material respect.

(d) The Borrower becomes insolvent, files for bankruptcy, or is unable to pay its debts as they fall due.

6. GOVERNING LAW AND JURISDICTION

6.1 This Agreement shall be governed by and construed in accordance with the laws of [Country, e.g., South Africa].

6.2 Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration in [City, Country, e.g., Johannesburg, South Africa] in accordance with the rules of the Arbitration Foundation of Southern Africa (AFSA).

7. ENTIRE AGREEMENT

7.1 This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations, and agreements, whether oral or written.

7.2 No amendment or modification of this Agreement shall be effective unless it is in writing and signed by authorised representatives of both Parties.

8. NOTICES

8.1 Any notice or other communication required or permitted to be given under this Agreement shall be in writing and shall be delivered by hand, registered post, or email to the addresses set forth above, or to such other address as a Party may designate by written notice to the other Party.

8.2 Notices shall be deemed to have been received upon delivery if delivered by hand, {{Notice_Period_Post}} days after posting if sent by registered post, and upon transmission if sent by email during business hours on a business day, or on the next business day if sent outside business hours.

9. SIGNATURES

IN WITNESS WHEREOF, the Parties have executed this Subordinated Loan Agreement as of the Effective Date first written above.

**LENDER:**

_____________________________

By: {{Lender_Signatory_Name}}

Title: {{Lender_Signatory_Title}}

**BORROWER:**

_____________________________

By: {{Borrower_Signatory_Name}}

Title: {{Borrower_Signatory_Title}}