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The Subordinated Loan Agreement is a specialized financing document used when a lender agrees to provide debt financing that ranks behind other (senior) debt in terms of payment priority and security rights. This agreement is particularly relevant in South African corporate finance transactions, acquisition financing, or corporate restructuring scenarios. It must comply with South African legislation, including the Companies Act 71 of 2008 and relevant banking regulations. The document typically includes detailed provisions on payment restrictions, turnover of proceeds, limited enforcement rights, and often interfaces with senior facility agreements. It's commonly used in situations where additional funding is needed but senior lenders require their position to be protected, or in group company financing structures where parent company funding needs to be subordinated to external debt.

1. Parties: Identification of the Lender, Borrower, and any other relevant parties such as Security Agent or Facility Agent

2. Background: Context of the loan agreement and subordination arrangement, including the purpose of the loan and its relationship to senior debt

3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and calculation conventions

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

5. Subordination Provisions: Terms of subordination, ranking of debt, payment restrictions, and turnover provisions

6. Conditions Precedent: Documents and conditions required before the loan can be drawn

7. Drawdown: Process and requirements for drawing down the loan

8. Interest: Interest rate, calculation periods, and payment terms

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

10. Tax Gross Up and Indemnities: Provisions for tax-related payments and indemnities

11. Representations and Warranties: Statements of fact and assurances given by the Borrower

12. Information Undertakings: Obligations to provide financial and other information

13. General Undertakings: Borrower's ongoing obligations and restrictions

14. Events of Default: Circumstances constituting default and consequences

15. Changes to Parties: Rules for assignment and transfer of rights

16. Payment Mechanics: Procedures for making payments under the agreement

17. Notices: Rules for giving notices under the agreement

18. General Provisions: Miscellaneous legal provisions including amendments, waivers, and severability

19. Governing Law and Jurisdiction: Choice of South African law and jurisdiction provisions